Tag: Budget

Render to Caesar the Things That Are Caesar’s…

 

The people who sued Little Sisters of the Poor are now angry that Christians aren’t practicing their faith.

The White House released a proposed budget that would cut funding for many agencies and eliminate a few programs entirely. For those who want government only to grow, this is intolerable. So instead of focusing on our $20 trillion debt or the ineffectiveness of our leviathan government, the left yanked the heartstrings.

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Pathway to a Balanced Budget Begins with a Fixed Debt Limit that Provides Flexibility

 

According to the Bipartisan Budget Act of 2015 (Public Law 114-74), the current suspension of the debt ceiling expires at the end of the day Wednesday, March 15. Following this date, the US Treasury can avoid defaulting on the federal debt only by using “extraordinary measures.” Indeed, Treasury Secretary Mnuchin sent a letter to Speaker Ryan on March 8, stating that the Treasury will start using these measures on March 16. He also asked Congress address the matter in a way that avoids jeopardizing the full faith and credit of the US government. These measures (i.e., accounting steps) will most likely allow the federal government to make it to early fall before it runs up against a hard ceiling on the debt.

Suspension or No Suspension?

The first question facing Congress on the debt ceiling is whether to set a new debt ceiling or simply to extend the current suspension. What should Congress do? Without hesitation, I recommend that Congress set a new ceiling that aligns with the state of the art balance budget amendment that is being proposed by the States.

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Illinois on the Fiscal Brink

 

shutterstock_203635339Illinois — a state that has long embraced progressive fiscal policies — has moved one step closer to the financial abyss. Last week, Moody’s Investors Service issued the jarring announcement that it was downgrading Illinois’s general obligations bonds to Baa2 from Baa1, which is just two levels above junk bond status. The next day, Standard & Poor’s followed suit by lowering its rating to BBB+, or three levels above junk bond status. In one important sense, this is really not news at all, since Illinois had 13 bond downgrades under its previous governor, Patrick Quinn, even though it passed a temporary tax increase that collected an additional $31 billion in revenues between 2011 and 2015, 90 percent of which was funneled into pension payments for public employees.

The reason Illinois’s credit ratings have declined is that the state has been unable to live within its means. Even with its tax increases, Illinois has not had a balanced budget since 2001, though one is required under its Constitution. The latest credit downgrade stemmed from the inability of key players in the state to agree on any budget at all for the coming year. It is therefore no surprise that Moody’s observes: “The rating downgrade reflects continuing budget imbalance due to political gridlock that for more than a year has kept Illinois from addressing revenue lost due to income tax cuts that took effect in January 2015.” This remark reflects the bias of rating agencies to worry more about the condition of government balance sheets than the overall health of the state economy. Reduced expenditures are another, superior way to bring a budget into balance, which is necessary, for — as Moody’s ruefully notes — Illinois is running a structural budget gap of about 15 percent of its general fund expenditures.

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The US Debt Situation Is as Good as It’s Going to Get

 

011916CBO1This may be as good as it gets regarding the US debt situation. This from the CBO:

In 2016, the federal budget deficit will increase, in relation to the size of the economy, for the first time since 2009, according to the Congressional Budget Office’s estimates. If current laws generally remained unchanged, the deficit would grow over the next 10 years, and by 2026 it would be considerably larger than its average over the past 50 years, CBO projects. Debt held by the public would also grow significantly from its already high level.

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New Budget Deal Puts National Debt Back on the Rise

 

Washington in action! From the New York Times:

The House on Friday morning overwhelmingly approved a $1.15 trillion spending measure, as part of a sweeping, year-end fiscal deal that also includes a package of tax breaks worth more than $620 billion for businesses and low-income workers. The Senate was also set to approve the legislation, bundled into a single bill, in a fast-track series of votes later Friday morning. …

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After the Budget Agreement, a Budget Process in Shambles

 

shutterstock_269057810Now that the budget agreement has been reached, many in the public may believe that the federal government is starting to work in a way that gets the people’s business done. Wrong. The agreement itself is doing further damage to an already-weakened process by which Congress establishes the budget and enacts the required follow-on legislation to change spending and revenue laws so that they conform to that budget.

Accordingly, House and Senate leaders need to pay heed to Senate Budget Committee Chairman Mike Enzi’s comments on this problem, which appeared on November 3 in U.S. News and World Report, and take steps to restore the process and return to the regular budget order. This process starts by recognizing that the only reform step with enough strength to restore responsible budgeting in Washington is to adopt a debt-limiting, balanced budget constitutional amendment—which is now gaining momentum in the states.

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Do We Still Need Aircraft Carriers?

 

08_uss_nimitz_cvn_68Have you seen Mr. Jerry Hendrix’s writing against aircraft carriers in National Review? I’m a sucker for speeches against the sophisticated, so I took the time to read the 2,700-word piece. Then I found this reply by Mr. Seth Cropsey, whose work I read as often as I can, and Mr. Hendrix’s rejoinder.

These capable, honored men are quarrelling about the status of the aircraft carrier in American strategy. World War II, the Cold War, and the coming Chinese war are the past and imagined political conflicts in which the aircraft carrier features prominently.

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Would the Sun Still Rise if we Eliminated the Susquehanna River Basin Commission?

 

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You may find this hard to believe, but it seems “the dreaded sequester” missed some wasteful spending. Based on media reports, you are likely under the impression that bureaucrats are resorting to dumpster-diving for meals and public schools are issuing abaci because they can no longer pay the electric bill. However, after five minutes of research, I found that this is not the case.

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Rearranging Chairs on the Sun Deck

 

Over the long holiday weekend, America’s national debt crossed the $18 trillion mark. This, combined with the incompetence of a public sector that is fast squeezing out the private, is a partial reason for the GOP’s historic victory in the midterms. Voters might not be clamoring for a smaller government (would that they were), but they certainly want a functional one.

Don’t worry, America. Help is on the way:

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