Federal Debt - Some Would Call it Treason
September 30, 2013
Congress has been required by federal law to pass a budget every year since 1921. Until 2009 the law was followed. Historically each February the President proposed a budget. It passed through both houses and went back to the President for signature.
Senate Democrats have the necessary 51 votes to pass, but Obama’s budget never gets through. The President ignores the Congressional requirement, as Senate Democrat Majority Leader Harry Reid ignores the law. Reid has not allowed a budget vote since 2009. Media goes along with the Obama/Reid wink and nod abdication of the law.
President Obama laments “I sent a budget to Congress, but it did not pass.” He implies it is the fault of political opponents. Obama declares that Republicans don’t like his budget, but have none of their own. That is not true. Republicans have crafted a budget every year. In 2012 Paul Ryan submitted a budget which focused on tax reform, spending cuts and controls, and redesign of the Medicare and Medicaid programs; it was approved by the House, and did not get a vote in the Senate. Senators Mike Lee, Rand Paul, and Patrick Toomey each put forward budget proposals which were blocked by Reid.
Politicians circumvent the budget law through “continuing resolutions” to keep government running. Continuing resolutions provide legal authority for the executive branch to receive money, and the resolutions set a limit on funds that can be expended. A seemingly never ending continuing resolution to increase the debt ceiling has our current debt at over $16 Trillion. Obama wants the limit raised again. He accuses Republicans of wanting to shut down government, if he does not get another increased spending limit.
The democrat narrative regarding the federal budget is as filled with fiction as the Benghazi cover up was with a story about a silly video causing riots and the death of four brave Americans.
Long term entitlement programs of Medicaid, Social Security, Medicare, and Food Stamps are not reflected in the federal budget. They are called mandatory spending and are funded by Congressional appropriations. U.S. Treasury provides the funds for the approved limits of mandatory spending. Mandatory spending was 57.4% of total federal outlays in 2012.
There are two kinds of federal debt, public debt and intra-government debt. Public debt is created when American investors, foreign investors, and foreign nations such as China; buy bills, notes, or bonds from the Treasury. Intra-government debt is held in a “trust fund” (Al Gore called it a “lock box”) which is filled with government IOU’s. In 2012 the federal debt was roughly the same size as our Gross Domestic Product that year. Economists consider this a red line.
Treasury Secretary Jack Lew wrote that Treasury has been using emergency steps since May, and emergency measures would be exhausted by October 17.
Harry Reid’s Senate is expected to pass a bill to fund the government thru November. When it goes to the House, Republicans might negotiate to raise the debt ceiling for a year in exchange for a delay in implementation of Obama Care, changes in Medicare, and an overhaul in the tax code. The White House responded that there should be no conditions placed on raising the debt limit and it will not negotiate.
Charles Krauthammer: “ ‘Barack Obama has zero interest in cutting spending.’ Churchill once said ‘I did not become the King’s first minister to preside over the liquidation of the British Empire. ‘Obama is saying, ‘I did not become president to preside over the liquidation over the welfare state or the contraction of it.”