Wednesday, August 3, 2011

Budget Control Act of 2011

WOW! Where do you start? I have not commented on "The Great Debt Debate of 2011" because everytime I thought I had something to comment on they would change the parameters as fast as you would change a two month old's diapers! So I decided to wait until the dust settled a little.

The Budget Control Act of 2011 is now law and nobody likes it. WOW! Big surprise! So who won this debate if no one likes the bill? In my opinion the Patriot/Tea Party Conservatives won a small victory. The Republican Establishment in general does not like it because it is imperfect as described by Speaker Boehner. The Democrats hate it because it does not tax Millionaires, Billionaires and Corporate Jet owners and anyone who makes $250,000 or more. The Patriot/Tea Party Conservatives do not like it because it does not cut enough nor does it balance the budget.

Just for the hell of it lets go over the outline as presented by Speaker Boehner in his 7-31-11 Debt-Framework Power Point presentation to the House Republicans. If you want a more detailed look at the actual bill that was passed you can click this link to the Budget Control Act of 2011.

Emerging framework has three main features:
(1) cuts government spending more than it increases the debt limit;
(2) implements spending caps to restrain future spending;
(3) advances the cause of a Balanced Budget Amendment
Framework accomplishes this without tax hikes, which would
destroy jobs, while preventing a job-killing national default.
Sounds good doesn't it? Of course the devil is in the details.

(1) Same as House-passed bill, the framework includes no tax hikes.
(2) Under the framework, the Joint Committee of Congress will work off a current-law baseline, as required by the 1974 Budget Act, effectively making it impossible for Joint Committee to increase taxes.
On the surface this sounds great. Anyone with any common sense will tell you that you "DO NOT RAISE TAXES" in a recession. Now if you can find any tax increases or new taxes in the Budget Control Act of 2011 please post them in the comment section below.

I am very curious to see how this so called "Joint Committee of Congress" will work or get anything accomplished.

(1) Same as House-passed bill, framework includes spending cuts that exceed the amount of the increased debt authority granted to POTUS.
(2) Would cut & cap discretionary spending immediately, saving $917B over 10 years (certified by CBO) & raise the debt ceiling by less – $900B – to approximately February.
(3) Before debt ceiling can be raised, Congress and the president must enact spending cuts of a larger amount first.
This is where this debate gets messy. Fist of all, projecting anything beyond two years is absolutely ridiculous. They have no idea what is going to happen and this is nothing but a play on the numbers.

In 1998 did Congress foresee the economic calamity of the Fall of 2008 coming? Of course they didn't. Did Congress foresee the housing bubble that began to pop in the spring of 2008? Of course they didn't. Did Congress foresee the huge spike in oil prices in the fall of 2007 to the summer of 2008? Of course they didn't. If they could we would not be in as bad of a situation as we are in today.
(1) As in House-passed bill, framework imposes spending caps that
would set clear limits on future spending & serve as barrier against gov’t expansion while economy grows.
(2) Failure to remain below these caps triggers automatic across the board cuts (“sequestration”). Same mechanism used in 1997 Balanced Budget Agreement.
Okay, okay you can stop your snickering now. We all know that Congress does such a bang up job at obeying the law and their own rules. Had they obeyed the "1997 Balanced Budget Agreement" we would have paid or be well on our way to paying off the "National Debt." What a concept.
(1) Same as House-passed bill, framework requires both House & Senate to vote on a BBA after Oct. 1, 2011 but before the end of year.

(a) Joint Committee cuts spending by greater amount than the requested debt limit hike,
(b) A Balanced Budget Amendment is sent to the states.
(3) Creates incentive for previous opponents of a BBA to now support it.
Now this a fantastic idea. I do not know of anyone who is against a "Balance Budget Amendment" but, of course I do not hang out with Socialist. I do have a concern though. I want to the language of that amendment before I give my support.

Now folks we all know that the Balance Budget Amendment will not pass the Senate so this is probably dead for now.
(1) Sets up a new sequestration process to cut spending across the board and ensure that any debt limit increase is met with greater spending cuts if the Joint Committee fails to achieve at least $1.2T in deficit reduction.
(2) If this happens, POTUS may request up to $1.2T for a debt limit increase, and if granted, then across the board spending cuts would result that would equal the difference between $1.2T and the deficit reduction enacted as a result of Joint Committee.
(3) Across the board spending cuts would apply to FYs 2013-2021, and apply to both mandatory & discretionary programs.
(4) Total reductions would be equally split between defense and non-defense programs. Across-the-board cuts would also apply to Medicare. Other programs, including Social Security, Medicaid, veterans, and civil & military pay, would be exempt.
(5) Sequestration process is designed to guarantee that Congress acts on the Joint Committee’s legislation to cut spending.
Ahhh yes, the Elephant in the room "Entitlement Reforms and Savings." We all know that we have to do something about Social Security, Medicare and Medicaid and I will not go into those subjects right now.

My concern is if the so called "Joint Committee of Congress" fails to reach the cuts specified and across the board cuts are enacted equally between Defence, Non-Defence Programs and Medicare how will that affect our ability to support our troops in the field? That's a question I would like answered.

As it stands IF Congress lives up to its word (I know that's a big if) this will be a good victory for the Patriot/Tea Party movement but it is only one victory in a very long war against the Progressive Democrats. Obviously it is not everything we wanted but we should give a standing ovation to all of Conservatives who stood their ground and were able to make this victory a reality. They are truly Patriots!

Our work is far from complete. We need to defeat as many Democrats in November 2012 as we can. It is imperative that we send our "Conservative Patriots" more re-enforcements. We need to increase our numbers in the House." Take control of the Senate with enough "Conservative Patriots" to keep the Democrats from causing lots of trouble. Of course it includes kicking Barack Obama and his entourage out of the White House once and for all.

Be sure to comment in the Comment Section below.

You can also follow me on Twitter @95SVTCobraVA


No comments:

Post a Comment