February 27, 2013
Lawmakers in D.C. have identified $45 billion in unspent money which could be used to offset the $85 billion shortfall associated with the Sequestration. Representative Tom Price and Senator Marco Rubio introduced legislation today that would require the director of the White House Budget Office to rescind funds that haven’t yet been obligated. Senator Tom Colburn has also identified multiple programs at the Pentagon and other agencies that duplicate services or provide unneeded research or projects.
Sequestration would cut about 3% from the federal budget. It seems that we can cover much of this by eliminating waste and duplication. More details here.
February 22, 2013
Victor Davis Hanson asks how we’ve changed over the past few years:
When did 7.8% unemployment become the new normal?
Are we always to borrow $1 trillion a year?
Will the national debt always rise, never decline?
When did the idea of citizenship largely disappear?
When did we expect the elite to enjoy their wealth and to rail against its acquisition?
When did the 47% — or is it the 50%? — pay no federal income taxes?
Will we soon be charged by the banks for “protecting” our deposits?
Did we notice our newsreaders are virtual government employees?
Something strange has insidiously happened to the old notion of hypocrisy. Does it even exist any longer?
Of course, Hanson offers some answers in his essay. What do you think?
February 21, 2013
The President proposed it, Congress voted for it, and the President signed it. They can blame whomever they want, but they all own it. (I assume they are aware of this.) For the rest of us …
The Center on Budget and Policy Priorities explains How the Across-the-Board Cuts in the Budget Control Act Will Work in accessible yet detailed language. The bottom line:
The $984 billion in budget cuts is spread in equal dollar amounts over each of the nine years 2013-2021, or $109.3 billion per year. Those cuts themselves are divided equally between the “national defense” budget function and all other budget functions: $54.7 billion per year in defense and $54.7 billion per year in non-defense programs.
For perspective, you’ll find a breakdown of actual government spending here. The federal government has spent over $3.5 trillion each year for the past four years. So the ratio for the annual cuts would be approx. $109,000,000,000 to $3,500,000,000,000 or 109/3500 or 3%.
Sequestration would result in about a 3% cut in annual spending.
Now, because these cuts are not targeted, but “across the board,” Sequestration would most likely result in a “spending gap” triggering a temporary government shut down of non-essential services. This would be the 18th time the US government has shut down since 1976. (A good history of these can be found here.)
The longest shut down happened in 1996, lasted 21 days and furloughed 800K federal workers for that period. Parks, museums, and monuments were closed. Applications for visas, passports, as well as alcohol, tobacco, firearms, and explosives applications were not processed. Services through the NIH, CDC, Superfund and Veteran’s Services were suspended. About 20% of federal contractors were adversely affected by the shut down.
Sequestration would result in a temporary government “shut down” of non-essential services and furlough affected federal employees.
All this could have been avoided in 2010 when the President and Congress were negotiating the budget. The White House organized a bi-partisan panel, chaired by Erskine Bowles and Alan Simpson, who proposed a fiscal plan for budget development and deficit reduction. This proposal was rejected by the White House and not offered to Congress. However, this panel is still active, and has presented a second approach to avoiding sequestration.
A balanced, bipartisan approach to budget development and deficit reduction has been made available to the President and Congress.
Will the President reconsider the Bowles-Simpson plan? Is Congress willing to negotiate the tax-related elements of this plan (primarily closing loop holes)? We will see. But given that the President has spent trillion dollar deficits each year he has been president, and given that the Senate hasn’t even had a budget for the last 3+ years, it seems that their interest in responsible budgeting and fiscal management is not strong.
Some are saying that Sequestration may be the only way to reduce our deficits and begin to control our exploding debt. After the “great shut down” of 1996, President Clinton and Congress were able to negotiate a balanced budget for 1997 and the next few years. It would be nice to think that something positive could come out of this self-inflicted crisis.
February 18, 2013
From President Washington’s Farewell Address (1796):
The basis of our political systems is the right of the people to make and to alter their constitutions of government. But the constitution which at any time exists ’til changed by an explicit and authentic act of the whole people is sacredly obligatory upon all. The very idea of the power and the right of the people to establish government presupposes the duty of every individual to obey the established government.
All obstructions to the execution of the laws, all combinations and associations, under whatever plausible character, with the real design to direct, control, counteract, or awe the regular deliberation and action of the constituted authorities, are destructive of this fundamental principle and of fatal tendency. They serve to organize faction; to give it an artificial and extraordinary force; to put in the place of the delegated will of the nation the will of a party, often a small but artful and enterprising minority of the community, and, according to the alternate triumphs of different parties, to make the public administration the mirror of the ill-concerted and incongruous projects of faction rather than the organ of consistent and wholesome plans, digested by common counsels and modified by mutual interests.
However combinations or associations of the above description may now and then answer popular ends, they are likely in the course of time and things to become potent engines by which cunning, ambitious, and unprincipled men will be enabled to subvert the power of the people, and to usurp for themselves the reins of government, destroying afterwards the very engines which have lifted them to unjust dominion.
Toward the preservation of your government and the permanency of your present happy state, it is requisite not only that you steadily discountenance irregular oppositions to its acknowledged authority, but also that you resist with care the spirit of innovation upon its principles, however specious the pretexts. One method of assault may be to effect in the forms of the Constitution alterations which will impair the energy of the system, and thus to undermine what can not be directly overthrown. In all the changes to which you may be invited remember that time and habit are at least as necessary to fix the true character of governments as of other human institutions; that experience is the surest standard by which to test the real tendency of the existing constitution of a country; the facility in changes upon the credit of mere hypothesis and opinion exposes to perpetual change, from the endless variety of hypothesis and opinion; and remember especially that for the efficient management of your common interests in a country so extensive as ours a government of as much vigor as is consistent with the perfect security of liberty is indispensable.
Liberty itself will find in such a government, with powers properly distributed and adjusted, its surest guardian. It is, indeed, little else than a name where the government is too feeble to withstand the enterprises of faction, to confine each member of the society within the limits prescribed by the laws, and to maintain all in the secure and tranquil enjoyment of the rights of persons and property.