by | ARTICLES, ECONOMY, OBAMA, POLITICS
Today we have reached 1600 days without an operating budget for our country. But who’s actually counting right now? And why should we care?
Currently, we have Syria at the forefront of discussion, which has put any substantive monetary debates on the back burner. Besides the question of whether or not to authorize and spend money on Syria, Congress also faces both if and how to fund the government past September 30 in the form of a CR, whether or not to defund Obamacare, and what to do with the impending debt ceiling limit.
So here’s a little primer on the fiscal State of the Union.
According to the US Debt Clock, we are $16,970,000,000 in debt. The US Debt Clock is an unofficial tally of our excessive spending.
The federal deficit increased by $146 billion in August, as reported by the CBO four days ago. Yet this conflicts with reports from the Treasury Department.
Yet as reported by CNSnews, “According to the Daily Treasury Statements that the Treasury publishes at 4:00 p.m. on each business day, the debt subject to the legal limit has remained at exactly $16,699,396,000,000–or about $25 million below the legal limit–every day since May 17.”
This makes 118 days, with the September 12 report being the most current, that the debt has stayed at $16,699,396,000,000.
Why is this important? The current debt ceiling limit is $16,699,421,095,673.60. According to the debt clock, however, and if CBO reports for June, July, and August were added to the Treasury statements amount since May 17th, we would be way past the debt ceiling limit. In fact, August alone would have crossed the threshold. So what is our current debt?
Incidentally, the reason why Congress even has to consider the question of funding the government or shutting it down past September 30 (the last day of the fiscal year) is that there is no operating budget. The last time the Senate passed a budget was April 29, 2009. Nearly the entirety of Obama’s time as President has been this way. For the Senate to abrogate its basic fiduciary responsibilities in such a major way is unconscionable.
Today also marksthe five year anniversary of the Lehman Brothers Chapter 11 bankruptcy filing on September 15, 2008, the largest in U.S. history. This event triggered the instability of the stock market and marks the starting point for the economic stress and downturn that has plagued the nation for the last five years.
Obama has been at the helm for the duration of this financial crisis. Yet his fiscal policies have failed to relieve the nation of high unemployment:
“The unemployment rate in September 2008 was 6.1 percent—up from a relatively stable 5 percent that had been the peak unemployment for the 30 months preceding December 2007. The unemployment rate steadily rose throughout 2008 and the beginning of 2009, spiking at 10.2 percent in October 2009. We still haven’t gotten back to the prerecession levels of unemployment. We haven’t even gotten back to the mid-recession unemployment of five years ago. The employment picture for this August was particularly bleak, with an Obama-presidency-low unemployment rate of 7.3 percent masking sharp downward revisions to the previous months’ jobs gains. At August’s rate of job growth, it’d take nearly two years for the economy to get back to 5 percent unemployment.
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Our fiscal health is poor today. Is the current state of our Republic how it was meant to be when our Founding Fathers created it? Thomas Jefferson wisely observed, “I place economy among the first and most important of republican virtues, and public debt as the greatest of the dangers to be feared”.
The CBO confirms the massive deficit spending that has characterized this administration. The Treasury reports reveal unexplainable debt data that don’t square up to with the CBO and may be masking a debt amount that has surpassed the statutory limit. And Obama’s Democrat-led Senate has failed to pass a budget in 1600 days, forcing an impending showdown for Congress and its excitable politicians who can’t decide whether to fund our government past another 15 days.
These are the fiscal realities facing the nation from the man behind the curtain at 1600 Pennsylvania Avenue.
by | ARTICLES, ECONOMY, NEW YORK
The recent ruling in finding NYC’s prevailing wage unconstitutional was the correct decision. Bloomberg understands the fundamental economic premise regarding paying a wage what the market dictates the worker is worth. Those that support the prevailing wage policies do not. It is both unfortunate and dangerous, because implementing a prevailing wage has two effects: 1) it devastates the very people its proponents think they are helping and 2) it erodes NYC’s economy by creating more barriers for businesses.
When a government takes taxpayer money, it takes it as a fiduciary; that is, it implies a relationship — legal, ethical, and economical — between “trustee” (government) and beneficiary (taxpayer).Therefore, the government has a moral, if not legal, obligation not to spend more money or pay anything more than the market demands.
The very act of paying $10 for something that costs $8, under the notion of “prevailing wage”, would put any other private businessman in trouble. Prevailing wage theory is not the government acting out of the kindness of heart, like its proponents would have you think. It raises the cost of goods to all constituents, increases the cost of living, and slows down the local economy.
The judge, although he ruled correctly, did so reluctantly — seemingly only under the technicality that the “law contravened state law”. He described how, “this court believes that the prevailing wage law could benefit the people of New York and does not see wisdom in the mayor’s zeal for the possibility of welcoming to New York City a business that would pay its building service employees less than the prevailing wage”. Bloomberg, however, hit the nail on the head when he countered that “legislation like this makes it harder for companies to invest in New York City.”
Here’s what the prevailing wage campaigners fail to discuss or flat out don’t understand from fundamental economics. The extra money being paid in a prevailing wage only benefits people that you can see. You do not see the hidden costs that add up to the employer, which create a net loss to the economy (deadhead costs). When you pay $10 for $8 worth of labor, it is identical to imposing a tax from an accounting point-of-view. What you see is the extra $2 going into the employee’s pocket. What you don’t see is the effects of the price increase on the business owner or the economy — how he absorbs the cost, offsets the cost, changes or slows production, cuts back hours or product, and so forth. That is the unspoken deadhead cost, a loss which has a ripple effect on the rest of the economy.
Prevailing wage is a scourge that must be stopped in its entirety, or else it will continue to grow. It doesn’t matter that one judge in open court halted the process. The people pushing for its policy must come to understand the basic economic premise — that when you artificially raise the price of something, you get less of it. Ergo, if you artificially raise the price of wages, you get less of that too — because many companies cannot afford the additional costs (or they would have to pass on the higher costs, but at the higher price there would be fewer buyers).
Artificial wage prices impede a business’ ability to grow and invest. There are many arguments against a “prevailing wage”, chief among them the burden on businesses — which are already struggling. The failure to understand the true effect of artificial wage control on the economy-at-large is frustrating. Such faulty logic is representative of the current trend to focus on feel-good rules rather than economic well-being for all. At least Mayor Bloomberg, who has been a successful businessman, (despite all his other faults) was willing to fight against measures like a “prevailing wage” that would keep NYC’s economy both depressed and sluggish.
by | ARTICLES, BLOG, ECONOMY, HYPOCRISY, OBAMA, OBAMACARE, POLITICS
Eye-opening words of HHS Secretary Sebelius yesterday:
“This is no longer a political debate; this is what we call the law,” Sebelius told a group that includes Democrats and Republicans, elected officials, political appointees and bureaucrats. “It was passed and signed three years ago. It was upheld by the Supreme Court a year ago. The president was re-elected. This is the law of the land.”
Except when it is not.
If this is the law of the land, why is our President of the United States picking and choosing the parts of law that he wants to implement and/or delay?
Just this morning, Forbes is reporting “that another costly provision of the health law—its caps on out-of-pocket insurance costs—will be delayed for one more year”.
Recently, there was a delay in the employer mandate.
Before that, “there was the announcement, buried in the Federal Register, that the administration would delay enforcement of a number of key eligibility requirements for the law’s health insurance subsidies, relying on the “honor system” instead”
And for starters in April 2012, there was a delay of Obamacare’s Medicare cuts until after the election.
Oh, and don’t forget the security flaws and delays recently revealed. Deadlines for security safeguard have been missed, and the date to implement that system has been moved to September 30 (one day before the exchanges open).
Here’s the problem. Sebelius and the Obama Administration want to use the argument “It’s the law of the land!” when they are criticizing Republicans for questioning Obamacare. At the same time, they are not followign the “law of the land” when they are moving deadlines, delaying implementation of the law, and using the honor system.
Michael McConnell wrote an excellent piece last month in the WSJ entitled ” Obama Suspends the Law: Like King James II, the president decides not to enforce laws he doesn’t like. That’s an abuse of power”
He points out the simple fact that “Article II, Section 3, of the Constitution states that the president “shall take Care that the Laws be faithfully executed.” This is a duty, not a discretionary power. While the president does have substantial discretion about how to enforce a law, he has no discretion about whether to do so”.
Indeed. When Obama decides to pick and choose the parts of the law he wishes to execute, he is not upholding “the law of the land”.
Is Obama using Obamacare to set up a series of precedents for which he easily dispenses with troubling or inconvenient laws or statutes, in order to expand his Presidential powers?
There are many reasons why Americans should continue to be wary of Obamacare. These include:
Fiscal — Staggering costs of the system, rising costs of premiums, etc
Medical — Not being able to keep your doctor or healthplans as promised. Concerns about rationing, death panels, etc.
Personal — Your information is, at this time, not secure, and is overseen by unregulated “navigators” (think TSA)
Operational — Obamacare was signed into law in March 2010. It was expected to be fully implemented January 1, 2014. Yet in those almost four years, Americans have seen delays, missed deadlines, cost changes, and more. If Obamacare can’t even be implemented without substantial missteps along the way, what confidence does the public have that it will run efficiently and properly?
Constitutional — Obama is ignoring deadlines contained in the law and delaying parts that are problematic
Americans will have varying opinions as to which of these concerns above is most acute. However, the Constitutional aspect might very well be the most troublesome. Invoking the “law of the land” when chastising your political opponents, while simulataneously ignoring the “law of the land” is the height of executive hubris. An expansion of power by the Executive Branch undermines our entire American system of government.
by | ARTICLES, BLOG, BUSINESS, ECONOMY
Detroit is not too big to fail.
The city of Detroit must take its lumps, as difficult as they may be to swallow. But the city of Detroit is to blame. They made a very bad calculated error. They thought their decades of cronyism and sweeping promises were good and economically viable. The people didn’t realize, or really didn’t care, that they were sold a lot of snake oil from public service sectors and unions that were promised too-good-to-be-true benefits and rewards.
But Detroit must not be bailed out because there are a great many other localities in the same boat as Detroit, that operated on the same premises. We simply cannot afford this financial baggage. Thatcher warned us decades ago, “The problem with socialism is that you eventually run out of other people’s money.”
One of the most difficult facets of Detroit’s economic woes is the fact that the state of Michigan constitutionally protects the rights of public service pensions. But pensions systems function as a vendor as a budget item to be paid; therefore, there should be no (other) protection for them than any other vendor — to do so is a clear form of cronyism. It is typically very difficult to get constitutional provisions passed at all, and yet some states, like Michigan and New York for example, managed to get it done. So this mindset of economic self-protection has clearly long been pervasive; these states have had the constitutional pension protection in place for some time.
The constitutional protection for public pensions is rather duplicitous because of how such money is protected when finances or the economy sours. You see, when states and cities raise money via taxes, the purpose is not for profit-making, and they don’t make decisions based on profits and such. First and foremost, their job is to take care of citizens. You would think with that being the case, it would therefore be really important to the elected leaders to make certain that the bondholders (who execute money in large quantities to help finances projects to benefit the citizenry) would know that their bond money is protected first and taken care of first. This is common sense.
A lot of the time in municipalities, the bonds that are issued are General Obligation (GO) bonds. GO Bond money is usually considered first in line for protection because of the enormous sums of money issued. Bondholders have to be promised by the locality that they get paid back first as an element of protection, a form of collateral if you will. In exchange for that guarantee, the GO Bonds are usually issued at lower rates than other types of bonds. That iron clad arrangement enables the GO Bonds rates to be very affordable for projects (think “smart money”), specifically because the bond has the guarantee of the locality that the money is financially protected. Other bonds don’t have that guarantee and therefore have a higher rate.
But if there are constitutionally protected items (like a pension system), they get put at the top of the list for protection, even ahead of GO bonds. This is an enormous problem. GO bonds have no actual and true collateral — only the “full faith and credit” of the borrowing locality. What kind of hypocrisy is it now to say to the bondholders that the money which was was borrowed to pay for education and teachers and government projects for the betterment of Detroit citizens now won’t get paid back — because we have to first pay for the teachers and unions and public service retirement pensions?
Detroit must be allowed to go through the proper process and not be propped up. This is a city that continuously and consciously made outrageous and untenable financial decisions with no accountability. A bailout for this behavior and operation will have a rippling effect on other localities which practiced this same kind of cronyism. Why should other taxpayers now be responsible for shouldering such gross economic negligence of a city rife with economic corruption?
by | BLOG, ECONOMY, OBAMA, POLITICS
On Wednesday, Obama tried to change the national conversation about the long string of questions dogging the White House. He decided he is back to being serious about jobs. Very serious. Serious enough to talk about jobs for an hour at Knox College in Galesburg, Illinois. This speech was touted as the kick-off to a series of events and talks aimed to get refocused on jobs.
A funny thing happened on the way to the recovery. In the midst of his speech, Obama slips in a scolding remark to his critics:
“But with this endless parade of distractions and political posturing and phony scandals, Washington has taken its eye off the ball. And I am here to say this needs to stop. (Applause.) This needs to stop”
He is very brazen. To come out and call the scandals “phony” is downright delusional. What’s worse, by inserting it in the context of his speech about jobs and the economy, it purposely gives the suggestion that Obama’s critics are at fault.
“If only they would stop bothering me and asking me questions about what we are doing. Don’t they know I’m in charge, anyway? They won’t leave me alone to fix the economy and create jobs. They are being mean.”
Be aware. This tactic is going to continue to be repeated during his jobs apology tour and into the fall before election season. Obama is shaping the narrative that the Republicans et al. are too busy criticising him to tackle real issues, and it’s their fault the economy is still sluggish.
Keith Koffler, the White House watchdog reporter, makes a great point — if this was President Bush, you know darn well that the Democrats and media would not let up on talking about and reporting about these “phony scandals”.
by | ARTICLES, BUSINESS, ECONOMY, OBAMA, TAXES
There is an erroneous sentiment perpetuated by the media that our government gives corporate tax breaks for moving jobs overseas, implying that our tax laws favor countries like China and India over the United States. This is simply untrue. Expenses that companies and businesses incur while doing business are rightly deductible (“a tax break”) but no specific tax benefits exist in our tax code for companies who relocate outside of our country.
What you don’t hear in the media, however, is that the real reason jobs are moving overseas is because of terrible business policies here at home. Companies operating abroad can undersell us — not so much because wages and costs are lower, but more importantly because their ability to conduct day to day business is not burdened by a) government at all levels hampering their every move, b) very high tax rates, and c) courts that allow frivolous and anti-business litigation to become a significant cost of doing business. We are part of a global economy now, but the foreign countries are rapidly becoming more user friendly than our own.
We are overburdening our businesses with convoluted tax codes and paperwork. The host of local, state, and federal regulations and taxes becomes a cost of every product we make and every service we sell. Additionally, the costs of our legal system itself — not just the direct costs of dealing with frivolous lawsuits but also the need to defensively organize business records and processes — constitutes a large and growing tax on conducting business.The end result makes it more expensive to produce a job here and many companies must move overseas to a friendlier business environment in order to remain financially solvent.
I have a close relative who is an owner and executive of a substantial manufacturing operation that he started in Shenzhen, China because of its business friendly environment. I’ve heard from him many times that he went into business, not to comply with government regulations, but to make things. The wages he pays and his operating costs are much lower than they would be here in the US, but that is substantially offset by less skilled workers and high transportation costs. But his taxes are much less than what they would be in the US, and his total legal expenses would be at least 50 times higher here. And he has not suffered a single expensive lawsuit since he started business in China 25 years ago! Is there any wonder why China’s economy is thriving while ours is stagnating?
Simply put, due to government interference, if a company is going to lose money here, it is going to leave. The real reason for jobs moving overseas is that higher taxes, expensive and complex regulations, and stifling legal environment have rendered the United States less globally competitive. Without major changes, we are destined to become a declining force in the business world.
by | BLOG, BUSINESS, ECONOMY, NEW YORK
I Love NY (money)
Knowing that Gov. Cuomo’s is considered a possible contender for 2016, his use of taxpayer funds in this regard is appalling. My latest on Canada Free Press this morning:
It is an outrage that Gov. Andrew Cuomo is spending up to $140 million of taxpayer money and funds received for disaster relief, to publicize the advantages of conducting business in New York. New York is indisputably one of the most unfriendly business states, with a Legislature that piles huge administrative burdens onto businesses and a Department of Taxation that is among the most aggressive in the country.
Thanks to the NY Legislature, the state demands a payment of an LLC fee every Jan. 30, causing large administrative burdens disproportionate to a small amount of additional tax revenue. It also requires a high minimum-wage, creating an unnecessary and expensive burden on small businesses.
The state also introduced a brand new “MTA” tax with new forms to fill out as a separate levy, simply because they did not want to take the heat for raising existing rates. When a huge outcry against this ridiculous tax was made, the state’s “fix” was to exempt some lower income businesses while making the complications for the remaining businesses even worse.
New York State recently created a new burden on all employers requiring every employer to make specific annual reports to each of its employees in significant detail, a provision clearly intended more to provide fodder for employer lawsuits than to protect the rights of workers. As long as Sheldon Silver continues as Speaker of the NYS Assembly (and a current partner in an anti-business civil litigation law firm), the legislature will continue to make it inordinately difficult to carry on with business in New York. It should be noted that some well known restaurant organizations have sworn never to open any new facilities in New York State, specifically due to its impossible and litigation-friendly business environment.
The Legislature continues to add the latest nanny state employment regulations each year, making New York a gold mine for lawyers to sue employers over technicalities. Its insistence on giving enormous amounts to its public-service unions guarantees that the tax burden will keep growing in the years ahead. And New York has the “only one in the world” statute (called the Triborough Amendment) — that requires the state to continue paying its public service employees on the items contained within an expired contract — making it impossible to negotiate any austerity.
The New York Department of Taxation is no better, as it ruthlessly goes after extra New York City taxes paid by state residents and New York state taxes paid by non-New York state residents. It demands huge and automatic penalties built into tax law on each assessment, penalties that are used as levers to get the New York taxpayer or business owner to agree to compromises that they often don’t really owe.
One anecdote that encapsulates this mentality is the individual who lived with his family out-of-state. He bought a home for his elderly parents in Staten Island and was successfully taxed as a NY City resident. The state’s determination? He had a key to the front door, and a few items of clothing in the closet!
Clearly, for the average person in New York, it is an onerous state in which to do business. If Mr. Cuomo wants to create a better business image, he must make the state a better and more business-friendly place from the ground up. Instead of trying to deceive people with taxpayer funded propaganda into thinking that New York has a healthy business climate, use that $140 million to reform his deplorable Legislature and Department of Taxation. Any non-NY business that falls for Gov. Cuomo’s propaganda campaign gets what it deserves.
by | BLOG, ECONOMY, NEW YORK, POLITICS
That’s me!
Senator Kirsten Gillibrand’s website proudly proclaims “as the mother of two young children, Senator Gillibrand knows that working families are struggling in this difficult economy.” But Sen. Gillibrand’s positions regarding the economy don’t support such a statement.
When Gillibrand appeared on Meet The Press on April 21, she stated that she refuses to support even the trivial chain “CPI” adjustment of Social Security benefits “because it is not significantly affecting the current deficit”. This reform (backed even by President Obama in his April 7 budget) changes the formula for calculating cost-of-living increases in Social Security, thereby reducing future raises slightly. Gillibrand’s extreme position, on the other hand, flatly spurns any changes that will reduce the looming catastrophe of Social Security.
Gillibrand is well aware that the reason that the current deficit is not being significantly affected is that her children’s future retirement payments are being confiscated, being used to pay for current retirees (whose retirement payments were similarly confiscated). This is the well known Ponzi method of entitlements – taking money from current workers who think — and are being told by Ms. Gillibrand – that they are paying for their own retirement, when in fact the money is being stolen to pay for others whose money was similarly taken under false pretenses.
The current total Social Security liabilities, per the Annual Trustees Report, has ballooned to $20.5 trillion. The liabilities are the promised future payments to workers currently paying into the system. Gillibrand is aware that each year that goes by significantly increases the burden to her own children – and ours, which weakens the economy. For her staunch advocacy of this position, she should be granted the well-earned title of PONZI MOM.
by | ARTICLES, ECONOMY, NEW YORK, POLITICS
In a twist of irony, “Big Government” Bloomberg has admitted that NYC is at the edge of a fiscal precipice.
“There is no practical ways to pay our workforce given the current environment, current tax structure, current other obligations we have more than what we have been doing, with the possible exception of dramatically raising taxes”.
Bloomberg points to public service unions as being among the biggest roadblocks to any meaningful fiscal health in the city.
Currently in NYC, most of the unions are refusing to negotiate contracts right now. This is completely legal. If the contract is not re-negotiated, the current terms continue. The unions are trying to hold out for more money until a new mayor is elected, in the hopes that a new mayor will cave to their demands. One thing Bloomberg wants — which is met with hostility — is to “force union workers to pay part of the health care costs”. Imagine that! “Unless we do something those expenses will bankrupt us,” Bloomberg said.
Additionally, when Bloomberg mentions “obligations”, he’s talking largely about the pension system.
Living in NYC, I am no fan of Bloomberg’s at all. I do want to give him a little (tiny) credit — he’s been sounding the alarm about this for the past few years. Even back in 2010, Bloomberg told CrainsNY that
“city pension funds have set unrealistically high assumed rates of return on investments, at 8%, which may require spending more than has been budgeted for retirement benefits…The pension system itself provides defined benefits that can’t be reduced under guarantees the Legislature has placed in the state constitution. While it permits new, less-expensive benefit tiers for future employees, savings wouldn’t be realized for 10 or 15 years”
The New York pension system is out of control. In addition to the extravagant, irresponsible and under-reported negotiated levels of benefits, there is an additional characteristic of the system that is never talked about. There is a huge break that goes to New York retirees; anyone who gets a retirement pension from New York State, or any locality or agency (teacher, firefighter, etc) pays no city or state income tax on that pension money. This hearkens back to the days when New York workers were so underpaid that this benefit was warranted.
It should be noted that nearly a decade ago, that provision of New York state law was declared federally unconstitutional. It was determined that New York state could not exclude federal retirees from the tax exemption. The courts gave New York two options: make New York government pensions taxable, or add federal workers to the list of non-taxable agencies. Of course, New York chose the latter, thereby adding to the state budget deficits.
Even though historically, public sector employees earned less than what those skills would command in the private sector, that is clearly not the case today. Study after study has shown that public sector compensation – which includes retirement pensions – has steadily outpaced its private sector counterparts in recent years. New York is among the worst offenders.
This state of affairs must be reversed. Allowing the exempted retiree pensions to be taxed the same way other retiree pensions would accomplish two goals: 1) lessen the compensation disparity with private sector employees, and 2) severely reduce the New York budget deficit by providing additional revenue to the state.
But it won’t happen. Too many people are entangled in the system as it is and don’t want to give up their tax-free benefit. And with the unions unwilling to budge on anything with Bloomberg, the likelihood that any real reform will take place — be it pension reform, benefit reform, or anything where the public service union employee might have to pay a little more — is very remote.
How is NYC going to afford all the tsunami it has created? Bloomberg warns that taxes could go up 50% if the unions are given what they want once a new Democrat mayor is elected. For high income earners, federal/state/local taxes combined already total 54%! More than half of your income going to the government. This is legal plunder.
Frederic Bastiat characterized “legal plunder” as a “fatal idea” in “The Law”. He wrote, “Imagine that this fatal principle has been introduced: Under the pretense of organization, regulation, protection, or encouragement, the law takes property from one person and gives it to another; the law takes the wealth of all and gives it to a few”
and also this:
“Now, legal plunder can be committed in an infinite number of ways. Thus we have an infinite number of plans for organizing it: tariffs, protection, benefits, subsidies, encouragements, progressive taxation, public schools, guaranteed jobs, guaranteed profits, minimum wages, a right to relief, a right to the tools of labor, free credit, and so on, and so on. All these plans as a whole — with their common aim of legal plunder — constitute socialism”.
Sounds a lot like NYC. It is running out of other people’s money. Of course, Bloomberg never mentions cutting govenment spending and waste as a dent in the abyss, but that’s a whole other matter. The current fiscal trajectory is unsustainable. Higher taxes are unsustainable too. What happens when a Democrat once again gets elected as mayor, and what happens when the union negotiations begin in earnest again? The people of New York City have no idea about the financial mess that will inevitably hit them.
by | ARTICLES, ECONOMY, OBAMA, POLITICS
Four years without a budget — it’s delicious!
April 29, 2013 marks four years without a true operating budget for our country. 1461 days and running. In the realm of budget history, April 29 is an historic day.
First, an interesting juxtaposition exists between April 29, 1909 and April 29, 2009. On April 29, 1909, the world’s biggest Superpower — Great Britain — introduced the “People’s Budget”, which is famously noted for being the first budget in the history of Britain with the “expressed intent of redistributing wealth” among the British people. A century later, on April 29, 2009, the world’s biggest Superpower — the United States — passed its last operating budget, the first budget in the history of the United States with the expressed intent to run a trillion dollar deficit.
Back in Great Britain, it took both a full year and the threat of adding additional Liberal “peers” (seats) in Parliament by the British King to garner enough votes in Britain to actually pass the “People’s Budget”. This ultimately succeeded exactly a year later on April 29, 2010. Winston Churchill’s biographer observed that this budget, which Churchill supported, was a “revolutionary concept”.
Here in the United States, it has taken Congress a full four years of continuing resolutions, Supercommittees, Fiscal Cliffs, Sequestrations and trillion dollar deficit spending, and still we have failed to pass a new budget for the people of the United States.
Of course, there have been budget attempts. President Obama, for his part, submitted a budget late to Congress every year except for 2010. His last two budgets prior to this year’s submission, however, were so outrageous that not even one Democrat from his own Party either year would sponsor or vote for his budget proposals.
In 2010, the Democrat-led Senate chose not to offer their budget plan on the Senate floor. The GOP-led House of Republicans passed a budget for $1.2 trillion.
In 2011, the GOP-lead House passed a budget for FY2012, cutting $6 trillion in comparison to Obama’s budget, which failed 0-97 in the Senate. The Senate did not offer their own budget that year. Senate Majority Leader Harry Reid said that would be “foolish”, while Senator Schumer remarked ““To put other budgets out there is not the point.”
In 2012, the GOP-lead House passed a budget for FY2013, while Senate Majority Leader Harry Reid announced in February that the Senate would not consider a budget yet again. The House this time voted on President Obama’s $3.2 trillion budget, which failed 0-414.
Now in 2013, both the GOP-lead House and the Democrat- led Senate passed their own budgets for FY2014 (the first for the Democrats in four years) President Obama presented his budget 2 months late on April 10, totaling $46.5 trillion over the next 10 years without ever balancing. It is also noted for even more taxes on the wealthy to pay for more social programs, a generous helping of wealth redistribution. But nothing has been agreed upon by Congress.
This past Saturday, President Obama described the “pain” of the current operating scenario from sequestration, and further urged,
“There is only one way to truly fix the sequester: by replacing it before it causes further damage…A couple weeks ago, I put forward a budget that replaces the next several years of these dumb cuts with smarter cuts; reforms our tax code to close wasteful special interest loopholes; and invests in things like education, research, and manufacturing that will create new jobs right now.”
Sounds similar to the threats of the British King used to pass the “People’s Budget”.
So here we are, 4 years without an operating budget for our nation. We also now consistently have yearly, trillion dollar deficits on top of the additional, higher taxes. Many will likely observe that — to borrow from their UK counterparts a century ago — this budget status, this new modus operandi for the United States is also a “revolutionary concept” for the land of the free and the home of the brave.
Today we have reached 1600 days without an operating budget for our country. But who’s actually counting right now? And why should we care?
