Tag Archives: Discretionary spending

Pictures vs. Words

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Yesterday John Hinderaker at Power Line posted an article quoting a leak to the Washington Post on President Obama’s proposed budget. The Washington Post reported: “With 2015 budget request, Obama will call for an end to era of austerity:”

It has always been my belief that a picture is worth a thousand words. From Yahoo.com:

federalspending

Where is the austerity?

However, there is more to the problem.

John Hinderaker reminds us:

But wait! Democrats and Republicans agreed on discretionary spending levels that supposedly were binding for a decade to come in the Budget Control Act, which included the sequester. Just a few months ago, the Ryan-Murray compromise modified the sequester and increased discretionary spending. That bipartisan agreement was supposed to put spending debates to rest for at least the next couple of years. Now, apparently, the Obama administration intends to throw all prior agreements into the trash can, and demand still higher spending.

This illustrates a point that I have made over and over: all budget agreements that purport to achieve savings over a long period of time, usually a decade, are a farce. The savings always come in the “out years,” but the out years never arrive. Once you get past the current fiscal year, budget agreements are not worth the paper they are printed on. For Republicans to agree to more spending today in exchange for hypothetical cuts in later years is folly–those cuts will never come.

Leadership in both political parties do not desire to cut federal spending. Their debate is only over which party will control the massive spending. That is why it is imperative that we change the establishment leadership of the Republican party. The Republicans used to be the party of small government, there is hope that they can be again. The Democrats have always supported big government. The only solution to this problem is new leadership in the Republican party.

 

 

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What Spending Cuts?

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John Hinderaker posted an article at Power Line about the omnibus spending bill recently passed.

The article states:

…Which illustrates, for the umpteenth time, a point I have made over and over: budget/spending deals that purport to dictate spending many years into the future are a joke. No Congress can bind a future Congress. When a Congressman tells you that a purported ten-year deal cuts spending in the “out years,” grab your wallet and run. The out years never come.

***Because the defense cap was lower in 2014 under the original Budget Control Act, defense spending does not meaningfully increase from 2013 enacted levels. Nondefense spending, however, receives an increase that is 10 times larger than defense. The 5 percent rate of growth of nondefense spending is almost three times the projected 1.7 percent rate of inflation (see table below).

Spending Chart 02

As you can see, the budget does not decrease–it increases! Then why is the only actual cut the decrease in the cost of living adjustment (COLA) to military retirement?

The article concludes:

The other point that emerges from these spending numbers is that discretionary spending is relentlessly being squeezed out by entitlements. The real constraint on the growth of both defense and non-defense discretionary spending is the explosion in entitlements–Medicare, Medicaid, Social Security and now Obamacare. With the Democrats vowing to fight to the last ditch to resist any sort of entitlement reform, and with federal debt having risen to more than $17 trillion–another budget-crusher as soon as interest rates rise again–there is simply no money for the social spending boondoggles that the Democrats would dearly love to finance. I suppose we should count our blessings.

***This paragraph is taken from a Senate Budget Committee report.

 

 

 

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I’ve Heard This Song Before

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About the only thing good I can say about the Congressional Budget deal is that there is a Congressional Budget deal. After that it gets a little foggy. Part of the problem was that neither side was really in a strong position to negotiate–the Republican establishment is still slamming the Tea Party for the shutdown and President Obama’s approval ratings are sinking like a stone. The establishment Republicans and the President are both desperate for a political victory. As usual, courtesy of the establishment Republicans, the Tea Party is out in the cold. The sad part of that fact is that the Tea Party is the only group in Washington that does actually represent a change from our self-destructive spending habits.

Heritage.org posted an article this morning stating three things in the budget agreement that indicate things in Washington have not changed:

The deal announced yesterday raises discretionary spending above the bipartisan spending agreement forged in 2011 as part of the Budget Control Act. Spending for defense and non-defense domestic programs would be raised by $45 billion in 2014 and by $18 billion in 2015.

… The agreement says that the increased spending is fully offset elsewhere in the budget, using a mix of spending cuts and non-tax revenue. Make no mistake, raising revenue to spend more is simply taxing and spending.

…It spends now and delays savings till later. The budget deal would spend $63 billion over the next two years—but take 10 years to make up for this splurge. This is a common Washington gimmick.

Until Americans are willing to elect people to Congress who will actually cut spending, we are going to see more of the same. It will be interesting to see who supports this deal. It is a deal that is pleasing to the Washington establishment. It may be the best deal the Republicans could have gotten, but it is not a good deal.

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A Different Perspective

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On Monday, Peter Beinart posted an article at the Daily Beast about the recent government shutdown with a different perspective than we have heard in the past few days.

Mr. Beinart believes that the shutdown is a Republican victory. He states:

Republicans, being less supportive of federal spending on things like “education, energy and medical research,” were more supportive of the sequester. Indeed, as recently as last month, GOP leaders described locking in the sequester cuts—via a “clean” continuing resolution (CR) that extended them into 2014—as a major victory. In a memo to fellow Republicans on September 6, House Majority Leader Eric Cantor boasted that by “signing a CR at sequester levels, the President would be endorsing a level of spending that wipes away all the increases he and Congressional Democrats made while they were in charge and returns us to a pre-2008 level of discretionary spending.”

…It’s not just that Obama looks likely to accept the sequester cuts as the basis for future budget negotiations. It’s that while he’s been trying to reopen the government and prevent a debt default, his chances of passing any significant progressive legislation have receded. Despite overwhelming public support, gun control is dead. Comprehensive immigration reform, once considered the politically easy part of Obama’s second term agenda, looks unlikely. And the other items Obama trumpeted in this year’s state of the union address—climate change legislation, infrastructure investment, universal preschool, voting rights protections, a boost to the minimum wage—have been largely forgotten.

The end of the shutdown was not a Republican victory–generally speaking, they caved. However, if we have successfully moved the point of baseline budgeting back to pre-TARP levels, that is wonderful. For anyone who is not familiar with baseline budgeting, it is the procedure Washington used to increase spending while claiming that they have cut the budget. If a department’s budget was going to increase 10 percent and only increases 5 percent, that is considered a cut. They are still spending more, but it is considered a cut.

Fiscal responsibility should not be a political issue. Both parties need to realize that we cannot go on printing money forever. I am glad that the shutdown is over and that the World War II veterans will again be able to visit their memorial, but fiscal sanity needs to come to America.

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