Skip to comments.
This Budget ‘Deal’ Looks Even Worse; Everything Goes Up Except Fiscal Sanity
Hotair ^
| 07/25/2019
| Taylor Millard
Posted on 07/25/2019 7:50:33 AM PDT by SeekAndFind
The budget ‘deal’ being touted by President Donald Trump and House Speaker Nancy Pelosi will do nothing to solve the federal government’s fiscal issues. It’s more likely this ‘compromise’ is going to make problems even worse, especially once the debt markers are called in – whenever that happens.
One of the (if not the) biggest problems in the ‘agreement’ is the fact spending can go up without any worry about hitting some sort of artificial barrier.
2. The Agreement modifies the discretionary spending caps imposed by the Budget Control Act (BCA) for fiscal years 2020 and 2021 pursuant to the table below. The spending cap adjustments are intended to reflect the elimination of the BCA sequester for two years, plus a slight increase in spending for both defense and non-defense programs.
3. The parties agree to partially offset the Agreements modifications to the discretionary spending caps legislation by extending the BCA mandatory sequester and customs user fees to achieve a total offset level of $77.4 billion as scored by the Congressional Budget Office.
4. The debt limit will be suspended for two years, through July 31, 2021. No additional restrictions will be placed on the Secretarys extraordinary measures authorities. The debt limit suspension, spending cap adjustments, offsets, and any necessary procedural matters, will be included as part of a single piece of legislation.
Supporters of the bill will say the offsets will help pay for any spending changes. However, this doesn’t appear to be the case if the number crunching by Committee for a Responsible Federal Budget is correct.
The deal reportedly also includes $55 billion of offsets, including extending the sequester on mandatory spending. These offsets would cover only a sixth of the direct cost of the bill and less than 5 percent of the ten-year impact. As a result, the plan would add roughly $1.7 trillion to the national debt, causing it to rise from 78 percent of Gross Domestic Product (GDP) this year to a projected 97 percent by 2029, compared to 92 percent under current law.
The number discrepancy from $55B in offsets versus the $77B Pelosi cities appears to be because CRFB is citing the part which will actually end up going into the deficit. It’s a clever little piece of number manipulation by Pelosi – and, more than likely, Trump – to make politicians feel ‘better’ about the amount of cash which is actually be saved. Plus, $77B sounds a lot better than $55B to voters.
CRFB’s policy analysts went a bit further in an email on how the $77B in offsets is not factual.
For instance, if some of the money in the first year gets allocated to a construction project or a long-term grant, the check might actually be written in year 2 or 3. Outlays represent what actually gets spent.
Much of the difference is that Congress is reducing spending in 2028 and 2029, near the end of the budget window used for estimating legislation. Some of the allocation that is being cut in 2029 wouldnt have actually been spent until 2030 or 2031 outside the window for scoring legislation. And some of the allocation might not ever have been spent at all, so those savings wouldnt ever materialize.
The ‘deal’ is indefensible no matter which way you slice it. Suspending the debt limit is a blank check, plus avoiding the sequester means we could see the deficit hit levels not seen since 2009. The CBO even warned debt could be at the highest in the nation’s history if Washington didn’t decide to actually do something about it.
Of course, the “do something” is what politicians tend to ignore. It’s much easier to essentially let things keep down the current financial road because any sort of change could lessen the chances of re-election. The fiscal sanity the so-called Tea Party rolled into Congress on in the 2010s has been replaced by politicians who conveniently forget their ideals when faced with an actual vote for lower spending. This is something no one should forget and constantly hammer their representatives on for failing to do.
The American public deserves a little bit of the blame for consistently re-electing so-called leaders who are able to continuously vote for the bare minimum – while railing on other hot button issues which may or may not matter in the grand scheme of things. It’s also possible the public really doesn’t care about spending unless they’re finding out their financial burden could increase over the short-term. Several friends of mine complained about the 2017 tax cuts reducing their overall IRS “refund” in April. Logic would dictate the “refund” would go down if the government was taking in less money paycheck to paycheck. Why no one considered it is beyond me, but not everyone gets invested in tax policy.
This deal is bad for Americans both now and in the future. Whatever economic greatness Trump is promoting would be much, much higher if government spending were much, much lower. The government would prefer people to think government expenses happen in a vacuum when the reality is much different. The bill will eventually come due when whoever owns the debt needs an infusion of cash. The fact it hasn’t is simply enabling politicians to keep spending more and more money.
Exit comment from Congressman Thomas Massie:
This isn’t going to end well. The only question is when.
TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: budget; congress; debt; deficit; inflation; spending; swamp
Navigation: use the links below to view more comments.
first 1-20, 21-22 next last
To: SeekAndFind
Give the people what they want! Guns or Butter? Why not both, and tax cuts besides!
2
posted on
07/25/2019 7:56:53 AM PDT
by
babble-on
To: SeekAndFind
This is the TEOTWAWKI scenario that is most realistic. You cannot spend a trillion dollars (and rising)of imaginary money every year, with no intention of ever paying it back, without the bottom falling out eventually. The only question is when. And the longer it takes, the harder the fall will be.
To: SeekAndFind
It’s either this or financial collapse followed by WWIII.
The economy is a big balloon with a hole in it that is continually getting bigger. We can’t fix the hole, so the only solution is to pump as hard as we can until the hole is so big that it’s losing air faster than we can pump it in.
i.e. all any federal budget has been doing for the last twenty (or more) years is staving off the inevitable. It’s all they CAN do.
To: SeekAndFind
Rant, rave, whine, bicker......
The budget voted on indicates that almost all involved had much bigger fish to fry.
They chose not to engage is a fruitless and actually meaningless political battle to which the eventual end result is now in the bag
5
posted on
07/25/2019 8:08:16 AM PDT
by
bert
( (KE. NP. N.C. +12)There were Democrat espionage operations on Republican candidates)
To: circlecity
>
This is the TEOTWAWKI scenario that is most realistic. You cannot spend a trillion dollars (and rising)of imaginary money every year, with no intention of ever paying it back, without the bottom falling out eventually. The only question is when. And the longer it takes, the harder the fall will be.
>
Shame we don’t have a Constitutional Republic anymore, the illegal spending would be...illegal.
Today, the People allow their govt to enslave themselves & our progeny w/o a whimper.
6
posted on
07/25/2019 8:11:12 AM PDT
by
i_robot73
(One could not count the number of *solutions*, if only govt followed\enforced the Constitution.)
To: SeekAndFind
Its much easier to essentially let things keep down the current financial road because any sort of change could lessen the chances of re-election. Let us indulge in some out-of-the-box thinking and postulate the unthinkable: a Democrat politician captures control of the party and preaches fiscal conservatism.
I know, crazy but stranger things have happened in politics. The party of slavery and Jim Crow now professes to be the Savior of all colored races. The party that was soft on the Soviet Union are all hawks. The party that wanted to control the border and immigration now wants open borders.
So, to play along let's accept the postulate and address the question, what would happen if leaders of the Democrat party campaigned for a balanced budget?
The world would invert. The media would suddenly become deficit hawks. All of the institutions controlled by the Democrat party, which means virtually every modern American institution, would line up in support. It would become politically incorrect to propose excessive spending. Those who did not get on board would be marginalized as racists, economic science deniers. Republicans who object in public to balancing the budget by higher taxes would be mauled.
In short, the tail would wag the dog.
Does that tell us anything about the state of American politics? Does it tell us anything about how we govern ourselves?
7
posted on
07/25/2019 8:24:38 AM PDT
by
nathanbedford
(attack, repeat, attack! Bull Halsey)
To: SeekAndFind
In spite of anything I expected Trump to do, and in spite of anything he has done that I have liked, I never ever thought he would fight tooth and nail as a fiscal conservative. I expected tax cuts without big spending cuts, and that’s what we got. The tax cuts buy off the corporate GOPers and the lack of spending cuts tries to buy off “moderates” and some Dims. The Washington D.C. political swamp is always extatic when it does not have to make hard decsions.
8
posted on
07/25/2019 8:35:57 AM PDT
by
Wuli
To: SeekAndFind
Nothing will be done about spending until entitlement programs start becoming insolvent.
9
posted on
07/25/2019 8:40:01 AM PDT
by
Kazan
To: SeekAndFind
I assume this will take the GOP and POTUS Trump want you to die because they want to cut the Budget off the Table for this Election Cycle.
No blaming the GOP and POTUS Trump for a Government Shutdown.
The enemy controls the Media, so every issue is automatically blamed on the GOP and POTUS Trump.
We are so far beyond Fiscal Sanity it is a waste of time and energy.
To: SeekAndFind
The tax cuts were supposed to give us more revenue. Where is that money????? The military budget is getting pretty hefty. Both areas contributed to the debt.
11
posted on
07/25/2019 10:23:24 AM PDT
by
napscoordinator
(Trump/Hunter, jr for President/Vice President 2016)
To: Kazan
Lol. That will never happen. In fact, God forbid we get a democrat congress and president again someday. Free everything!!!!!
12
posted on
07/25/2019 10:26:15 AM PDT
by
napscoordinator
(Trump/Hunter, jr for President/Vice President 2016)
To: napscoordinator
RE: The tax cuts were supposed to give us more revenue. Where is that money?????
Our revenue DID increase, BUT, SPENDING INCREASED MUCH FASTER !
This budget is $380 MORE than last year’s, an almost 10% INCREASE !!
13
posted on
07/25/2019 10:26:16 AM PDT
by
SeekAndFind
(look at Michigan, it will)
To: SeekAndFind
Good grief! I dont see if ever stopping. I see 50 trillion debt by 2050 easily.
14
posted on
07/25/2019 10:27:16 AM PDT
by
napscoordinator
(Trump/Hunter, jr for President/Vice President 2016)
To: napscoordinator
What should be done, is to increase the budget by the inflation rate plus a little for population growth. It DEFINITELY SHOULD BE MUCH LESS the $380 Billion increase over last year.
15
posted on
07/25/2019 10:29:23 AM PDT
by
SeekAndFind
(look at Michigan, it will)
To: nathanbedford
Let us indulge in some out-of-the-box thinking and postulate the unthinkable: a Democrat politician captures control of the party and preaches fiscal conservatism. That happens whenever a Republican is in the White House. And when a Democrat is in the White House then suddenly the Republicans become deficit hawks, bound and determined to balance the budget. And the deficits keep rising.
And keep in mind that this trillion dollar deficit is at a time when the economy is roaring along at a rate not seen in decades. When the economy slows down and slides into an economic downturn then what will the deficits be? Two trillion dollars? Three?
To: nathanbedford
Very astute comment and the answer is Yes, it tells us a lot about ourselves. The Republicans claim to be the party of fiscal responsibility. However, starting with Reagan they have implemented a cut taxes and spend agenda when they hold the power. This has caused the deficit and debt to explode. Obummer even copied this approach by cutting the payroll tax by 2 percent during his time (and a few other taxes).
The most fiscally successful President we have had from Reagan on is Bill Clinton. He actually lowered the deficit and was on track to have a surplus. There were many factors that caused this but one is that he and the democrats raised taxes in their first budget.
Republicans only seem to care about fiscal responsibility when the democrats are in power and the same with the democrats. At least the current crop of democrats are proposing additional revenue to pay for their schemes.
The reason the parties do this is because of us. Most Americans don’t want to face the fact that we either need to cut spending or raise revenue (taxes) or a combination of the 2. Any politician that would propose this will be resoundingly beaten at the ballot box.
I think part of being fiscally responsible is to actually pay for the programs the majority of Americans have said and continue to say they want.
To: SeekAndFind
Republicans always talk a good fiscal talk until they get into power. What ever happened to the fair tax????
To: SeekAndFind
The really sad thing is these threads about the budget and deficit use to draw 100s of responses, but now that “our” guy is in there, they die a quick death.
To: All
Retirees, people near retirement & fixed income people watch out, this type of budget and current kowtowed Fed add up to big time inflation. The “$100. Hamburger” won’t be just for weekend pilot joy rides in a few years! A large majority of House Dems vote “aye” on this budget that has no new wall or ICE money in it...says a lot. Let’s hope the Senate nixes large parts of it...not holding my breath.
20
posted on
07/26/2019 1:35:13 AM PDT
by
Drago
Navigation: use the links below to view more comments.
first 1-20, 21-22 next last
Disclaimer:
Opinions posted on Free Republic are those of the individual
posters and do not necessarily represent the opinion of Free Republic or its
management. All materials posted herein are protected by copyright law and the
exemption for fair use of copyrighted works.
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson