Budget Chicanery Has Already Doomed the Super Committee
Defense spending for the war on terrorism is reclassified as Overseas Contingency Operations (OCO) which is exempt from spending caps. Disaster relief is exempt. However, it is limited by a formula using disaster spending from the last 10 years. While this sounds reasonable, it allows you to move money subject to the discretionary spending caps to money that is exempt. Rather than fund disaster relief each year and include it in the budget, Congress will eventually pretend that we will have no disasters in the following year to allow them to spend the money elsewhere. Then when a hurricane hits, they will be able to get more funding that is exempt from the caps to pay for the recovery.
Finally, any spending that the president and Congress agree is an “emergency” is also exempt from the caps. This is the largest loophole of all. This gimmick was used repeatedly over the past few decades to evade spending caps imposed by the old Gramm-Rudman-Hollings Act.
These are just a few of the problems in the Budget Control Act. You also have to look at all of the spending that is not yet included. The BCA assumes that in January, the Alternative Minimum Tax (AMT) will be allowed to increase. This is a provision of the Tax Code created in 1969 to ensure that the very rich pay at least some income tax. It was to affect only about 200 people originally.
Unfortunately, it was not indexed for inflation. Over time it has grown to impact millions of people who would not be considered to be rich even under President Obama’s standards. Consequently, Congress has passed a series of short-term corrections over the past four decades to prevent the full impact of the AMT. The BCA assumes that no more corrections will be made and the full impact of the AMT will be allowed to hit several million unsuspecting taxpayers beginning in 2012. This allows Congress to assume over $650 billion in deficit reduction under the BCA
That isn’t the only expiring provision of that Tax Code that the BCA has already counted as reducing the deficit. There is more than $4 trillion in additional deficit reduction from many other expiring tax provisions that the BCA assumes will not continue over the next ten years in order to achieve its $2.1 trillion in deficit reduction.
On the spending side of the ledger, the BCA has also booked savings from payments to physicians from Medicare. This gimmick has been used by Congress for more than a decade. Congress always claims to get savings by canceling inflation adjustments for Medicare reimbursements in the future. But when the future arrives, the inflation adjustments are restored with a promise to cut them even further in the future.
The future has arrived again and in January current law says doctors will have all of these inflation adjustments erased and their payments cut by about 30 percent for treating Medicare patients. Since many doctors are already treating Medicare patients at a loss to their practice, they won’t absorb this cut and would stop treating Medicare patients. Every year since 2003, this cut has been put off.
If we assume that there will be no 30 percent cut and no increases in payments due to inflation over the next 10 years, that will cost about $300 billion. A more realistic assumption would be that payments to doctors will need to keep pace with inflation which would push the cost north of $450 billion.
All of this means that the $2.1 trillion in deficit reduction assumed in the Budget Control Act is about as realistic as the accounting Enron officials used.
These costs need to be addressed in a realistic manner. The paltry figures being bandied about by the super committee of possible deals they might agree to are just silly. They are avoiding the major policy decisions that need to be made and are continuing to book phantom savings.
That is why the Budget Control Act and its Frankenstein creation, the super committee, are a failure. Every penny of increased debt will be spent before the federal government has to make cuts to programs in 2013.
It is precisely this deal that came out of Washington that the financial markets deemed a failure. It is precisely why Standard & Poor’s downgraded this nation’s credit rating after the passage of the BCA.
One could pick nits, of course — his freelordship seems to believe in scraps of paper an’ barks of sound more than a perfectly rational creature would. But ¿why fiddle around at the margins? Obviously his freelordship would much prefer to be a subject of Standard & Poor’s than a citizen of the United States of America.
I think we ought to at least look into the possibility of accomodating him.
Happy days.
You know, you read stuff like this and you really wonder who Congress is working for, the American people or the Chinese. Because as our debt explodes because of the greed, corruption, and incompetence of our Congress, the only people who will be making money off of our debt are the Chinese. In some ways this IS a form of treason. Congress knows what it needs to do and what is financially best for the country, yet not only do they NOT do it, they make the problem even worse. So knowingly engineering the financial downfall of this nation can only be seen as an act of treason, since Congress’ actions will ultimately result in our downfall.
But I have a suggestion. What if Congress actually DID save a lot of money. Their approval ratings stands at about 10%, so they really have nothing to lose. And if they are worried about angering constituents, who is left to anger when your poll numbers are at 10%, their parents? Slash the budget and surprise America with an act of responsibility. Who knows, it may even make their poll numbers go up.
The blame rests squarely with the Democrats, and they don’t care what anyone but their pet “constituencies” think.
Their objective is the same as it has always been; pay off their voting blocs, launch new programs in keeping with their worldview (think; stop AGW at all costs!), and gut defense (to prove what wonderful, egalitarian, forward-thinking internationalists they are). If they run short of money, raise taxes- and spend that revenue before it arrives. So they can raise taxes again, and again, and again.
They believe fervently that at some point, all “reactionaries” will die of apoplexy (saving them the trouble of slaying them themselves) and Utopia will somehow occur spontaneously. Then The World Will Be Perfect And They Will Rule It Forever As They Deserve And Are Destined To Do.
The trouble is- it hasn’t worked yet, and never will.
But since the progressives’ worldview is based on their own delusions, they will never see it, or admit it. They will simply keep on doing what their dogmas demand, until either our civilization collapses, leaving them the ruins they believe they can build their perfect world upon.
Or until the last “progressive” is dragged off to an insane asylum, in a straitjacket, while proclaiming himself King Of The World and demanding the beheading of everyone who is not bowing.
(Cue “Mrs. Robinson” by Simon & Garfunkel.)
clear ether
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In response to Libertyship, I would say that Congress is working for themselves and for their re-election. Certainly they no longer work for the country. What is curious, however, is that while their “approval rating,” whatever that is, stands at 10%, the incumbency reelection rate stands near 85%. So it would seem that ‘our’ guy is just terrific at bringing home the budget-busting bacon, and that it’s the ‘other’ guys doing the same who are the problem. Earth to voters: please look in the mirror.
You hit the nail on the head and polling underscores what you say. If you poll constituents on their individual member of congress, they generally get fairly high marks and most people want to see their member re-elected. If you poll people in general and ask what they think of congress as a whole that’s where you get the 10% approval rating. It’s the nature of the beast and the beast will ALWAYS win.
I’ve always loathed the idea of the super committee to begin with. I don’t believe it’s constitutional.
Has anyone noticed—that the U.S. has faded since the 1950′s? Korea was a 58 thousand dead military standoff (look at North Korea today), Viet Nam was an unmitigated defeat. Carter’s four years were a disaster, domestically and diplomatically, except for the failure of the USSR, Reagan’s administration was only a remedy for Carter’s failures. Under Bush One, Iraq/Saddam Hussein was evicted from Kuwait, but Hussein couldn’t be taken out in Bagdad. In Clinton’s 8 years, China received both out guidance/telemetry technology and all of our nuclear weapon technology, and the disastrous “Most Favored Nation” recognition of China (the beginning of the deluge of Chinese imports and industry exodus to China). Now, we have two wars in Southwest Asia, a growing Chinese military (with our money), a sick economy with no improvement in sight Deep cuts have already been made in OUR military, drastic ones projected if the “gang of twelve” doesn’t agree by Nov. 23. The national debt has topped 15 trillion, with 50 billion added every day. Near riots in the streets of major cities, with worse possible soon. A Republican victory next year is the only remedy, and even that will be very difficult, since many programs established by Obama will hard to end or correct. Interesting time to be alive, especially for a historian…..
Actually, Korea and Vietnam were “started” by democrats (continuing the multipolar post World War One pattern of WW1 and WW2), the conflicts either won or stabilized by republicans (unlike the prior world war years when democratic presidents won), and then the bipolar era police action is consolidated or “lost” by the democrats when the “police action” gets to politically expensive (blamed as a pacification failure by the corrupt indigenous government rather than on the American’s democratic congress). Republics and the logic of empire often conflict. Currently Iraq and Afghanistan (“police actions” initiated by republicans in response to “acts of war”) seem to be validating that democratic pattern of puking out police actions on schedule to please their base and the election cycle.
Probably a dumb question, but why are Welfare and Medicade NEVER on the chopping block when Defense seems to be the first thing out of their mouths. I think I know the answer but would like confirmation.
Embarrassment: I know it’s spelled Medicaid. Damned autocorrect on my iPhone.
The answer is simple. No politician is willing to cut spending on anything that large numbers of voters or donors support because that will cost them votes or money. Democrats are willing to cut military spending mainly because they think it won’t cost them much support – their base will love it and they assume most people who benefit from military spending are likely Republican voters anyway.
Will the super committee fail? How could it not? I mean … just look at who’s on it! Are you kidding me? Are we supposed to expect something, I dunno, *rational* to come out of ANY group that has a Patty Murray on it? No no no. The only answer is to kick Reid & Co. out of the majority and start over with NEW Republican leadership. Who gives a damn whether this stupid committee agrees to anything? The Democrat Congress, despite two years of filibuster-proof control, has not had the guts to come up with a BUDGET since King Barry took to the throne three years ago. And so GOP conservatives are supposed to put their heads together with chickenshit Democrat socialists to hammer out a solution to America’s FIFTEEN TRILLION DOLLAR DEBT!? Absolutely not. Here’s what we do, Senate Minority Leader McConnell: Nothing. We do nothing, just as they have done nothing for three years. We pass. We tell them: See you in November. Because until we “fundamentally change” both the executive & legislative branches in this country (the judiciary will have to wait) there is nothing that actual conservative members can do to change things for the better. So just walk away. See to your guns. And keep your powder dry for the day when you can put it to good use.
You guys don’t understand. We need to tax rich people much more than we do. Rich people are always, universally stupid, and they will not change their behavior one bit, even if we tax *all* of their money away from them. They’ll be like Wile E. Coyote running off the cliff, not realizing he’s in mid-air until they look down. This will give us the money to spend on all the good things government supports (like getting Democrats reelected indefinitely). So what if we have overspent our budgets to a disasterous level, that’s the problem of a future generation, and we really don’t care about them; they can’t vote us out of office, and by the time they can, we’ll be retired with enormous pensions which the public will have to pay, even if they starve to death! Don’t you see how brilliant this is?
Folks, unless and until we start living by the New Testament, it ain’t gonna’ get no better! When we elect perverts, killers, dummys, sexual predators, communists, atheists, we get “what we got”. We have to wise up and do it God’s way- or pay the price. Lets throw every single one of them out and try it with an entirely new batch, committed to New Testament morality and constitutional polity.
I absolutely agree with you. “If my people, who are called by my name, will humble themselves and pray and seek my face and turn from their wicked ways, then will I hear from heaven and will forgive their sin and will heal their land.” 2 Chron. 7:14
Gotcha. Chronicles 7:14. Splendid. Just what this discussion of the Super Committee on the U.S. debt needed: a Bible verse.
“… perverts, killers, dummys [sic], sexual predators …” Are you for real? We have serious issues to deal with here. We don’t need crazy. I am as God fearing as you are. But you make no sense here. You sound like a loony tune. You sound like the sort of caricature that the Left loves to portray us as. Judgement Day will come for all of us, in the meantime …
P.S., turn your spell check on, dummy.
What exactly is your idea of “doomed”.
All those Doomers on this Super Committee -what and why is it super – are still there, many to remain in their highly privileged postions for the next 6 years and beyond. Laughing gleefully while the ship of which they are officer crew founders thanks to their navigation. Passengers hiring them even knowing they have directed the ship into the shoals if not worse.
The Doomers and their Doomees have a bizarre idea of what the job as “representative – servants” of the passengers/citizens is. Laughing or snickering behind their hands in their absolute disregard, oft actual sneering at the Constitution and their oaths to same. While the doomees wring their hands, call names, and with shock-horror battle one another instead of facing up to the real enemy of the people, their own elected “representatives”. The same who when riding off into the sunset do so with very nice index linked pensions, medical insurance and other perks lifelongaid by the suckers and their progeny who they have and are mugging. You couldn’t make it up. A comic-book world this politics.
I have just about come to the conclusion that the American people as a whole have absolutely no idea of what they want. To wit, today’s poll results at “Real Clear Politics” show the following:
President Obama Job Approval
RCP Average
Approve
43.7
Disapprove
49.8
Spread -6.1
Congressional Job Approval
RCP Average
Approve
12.3
Disapprove
81.7
Spread -69.4
Generic Congressional Vote
RCP Average
Democrats
44.2
Republicans
41.4
Democrats +2.8
Direction of Country
RCP Average
Right Direction
20.0
Wrong Track
73.3
Spread -53.3
So, to review: 1) the President is a disaster; 2) Congress is the pits; 3) the country is going in the wrong direction by a four to one margin;, and 4) the Democrats are ahead by nearly three percent in the generic Congressional race. What?