Debt Ceiling Comopromise?

Apparently, there has been a deal struck between Joe Biden and House Speaker, Kevin McCarthy on the debt ceiling. And as I’ve said many times, it is something neither side is going to like, but knows they must accept to avoid the US defaulting on it’s debt on June 5th (the new date Janet Yellin said was the drop dead date).

Now the question becomes, will there be enough votes to get the bill through Congress? It contains a Biden demand that the debt ceiling last for two years, not less than one that the House bill Republicans passed. It does not set a specific spending limit to the debt ceiling, more of a timeline. It freezes, or has small cuts in spending for 2024’s budget that starts October 1st, rolling back to the 2022 budget and will only increase by 1% for the following six years according to a one-page GOP memo.

For the GOP, they got a couple of things they wanted too that Democrats will hate. The agreement increases the age in which food stamp recipients must work. Currently you must seek employment if you’re on SNAP and 49 years of age or under. That has been increased to 54 years of age. However, homeless and Veterans are exempt from the age increase. The deal does not effect spending on Medicaid, which the White House said the “MAGA Republicans” wanted to do away with (not true). And it keeps in place Biden’s student loan program (for now…until the Supreme Court releases it’s decision on the matter next month).

In the long run, is the bill good for the country? I’m wondering. I know we don’t want to default on the debt, that would be a huge catastrophe. But it seemed to me like the GOP gave much more than it got in these negotiations. Initially, the spending cuts were to total three times the amount of the debt ceiling increase. That will stay in place with little reduction next year, and will limit increases in the budget to 1% a year for a total of six years. However, according to someone that has seen the actual proposed bill, there are no “non-enforceable appropriations targets” after 2025, so even though they say the 1% increases are going to last six years, that doesn’t mean it’s written in stone.

One thing that the GOP wanted and got was a cutting of the full $80 billion in IRS additional spending over 10 years. That means that the IRS probably won’t be hiring those 57,000 additional agents to come and audit you. And the White House caved on a major energy permitting reform, making it easier for oil companies to drill for oil in this country.

McCarthy said last night that there were no new government programs added to this bill, and there were no new taxes included in it either, both of which should make the GOP folks rather happy.

Now the question becomes, will this pass muster in the House and Senate? It most assuredly will have to be a bi-partisan piece of legislation because the Freedom Caucus is already saying that it’s dead on arrival. Democrats aren’t at all happy with the fact that the spending is frozen at current levels with a slight reduction in certain non-defense programs next year, and they only get a 1% increase in 2025 (inflation will be more than that!).

I think passing the Senate will be a lot easier than passing the House, but I’m sure there will be enough Democrats that will join the non-Freedom Caucus folks and vote for it. There will be some Democrat dissention. I can imagine the Whack Job group that AOC heads up is going to most likely vote no on the deal. But this should pass the House as well, with some lubricant to various lawmakers.

McCarthy will post this today so that the members can take a look at it, and a vote will be scheduled for Wednesday. Once again, the government runs right up to the last possible moment before making something happen. I’m just surprised they didn’t kick the can down the road again…of course, you can say that they did when you look at what each side got. Spending won’t decrease, and the debt ceiling did increase.

Carry on world…you’re dismissed!

T-Minus 10 And Counting…And Who Is To Blame?

If you’re watching anything to do with the debt ceiling debate, you know as well as I do that the negotiations aren’t going very well. Of course, that depends on who you are listening to. But in case you’ve been busy getting ready for Memorial Day weekend coming up, there are 10 days left before the debt ceiling issue causes a default of the government.

And who is to blame?

Well, again, that is going to depend on where you get your information. The White House is still blaming the House Republicans for passing a debt ceiling increase that included going back to the 2022 budget, and cutting $4.5 trillion dollars from the overall spending over the next 10 years. It would raise the debt ceiling $1.5 trillion or until March 31, 2023, whichever comes first. Democrats have poo-pooed that and said they want a “clean debt ceiling bill”, without any negotiations on cutting spending. That’s what Democrats do, after all.

So, as I sit here and look at this and figure out who’s to blame for this mess, there are three places to put the blame.

The first is squarely on Joe Biden. For a guy that said initially that he wouldn’t negotiate with Kevin McCarthy on anything that included a reduction in spending to go along with the debt ceiling increase, he once again, apparently has lied. Or changed his mind…or read the polls that said it would be his fault if we defaulted on the debt. Biden hasn’t come out publicly and said that he has negotiated anything, and neither necessarily has his team that’s meeting with the Republicans. We haven’t heard of him budging from his “clean bill” status. McCarthy has moved the needle some, saying that the GOP has come off of the 2022 budget and have increased spending somewhat more than that. He hasn’t said how much.

Most Americans blame the Democrats at this point because they don’t believe that Biden is negotiating in good faith. Usually, negotiations are a give and take. You aren’t going to get everything you want and neither is the other guy. And if Biden is sticking to his guns that there won’t be any spending reductions, he is at fault and there is no question there.

McCarthy is right that he isn’t going to be able to pass a clean bill through the House. And while most Americans will blame the Democrats on this one (until the media slams the GOP), you have to understand that the Republicans are also at fault here.

Yes, the debt ceiling and over-spending is traditionally a Democrat caused problem. After all, it was the Democrats that have increased the spending on the federal budget by 30% just through three programs, Social Security, Medicare, and Medicaid. That said, it was their programs that have put us in the position where all three of those programs are going to have to face draconian cuts up the road. But the Republicans have gone along with it. And if you look at who has raised the debt ceiling the most, it’s been the Republicans. Donald Trump raised it twice. George HW Bush raised it four times, George W. Bush raised it seven times for a total of 13 times. Bobo Obama raised it seven times, and Bill Clinton four for a total of 11 times.

The problem here isn’t which party raises it the most, or who wants the “clean bill” passed. It’s that neither party wants to do anything substantive about it. What they need to do is pass a balanced budget amendment to the Constitution that would not allow Congress to spend a nickel more than they have taken in from taxes and fees. As it stands now, the American people don’t have a clue how much Congress is really spending. If they saw it in the form of tax increases every time Congress spent more than they took in (kind of like an assessment given to members of clubs at the end of the year), there would be all sorts of hell to pay. A balanced budget amendment is the only way to go. States must balance their budgets. So must cities and municipalities. Why can’t the federal government do the same thing?

And it’s both parties that have balked at this. Neither has issued a strong effort to pass a balanced budget, even though they controlled both Houses of Congress. It needs to be done, and the sooner the better!

T-Minus 10 and counting…

Carry on world…you’re dismissed!

Would Biden’s Social Security Fix Work?

And before I answer that question, just let me say, this is probably the first time since Joe Biden took office that he’s given out a solution to what our country is facing that I could actually live with. Not that it would ever come to fruition. Not that it’s actually feasible. But Biden has a four-point plan to fix Social Security. And truthfully, except for the fact that it doesn’t “fix” Social Security, it’s not all that bad.

Let’s examine it, shall we?

The first thing Biden wants to do is to increase taxes (NO! REALLY???) on people making $400,000 or more (and actually, it’s COUPLES making $400,000 or more). That much is necessary because Social Security is dying. As to WHY it’s dying, there are really only two reasons. First is the people that are getting Social Security have been expanded to more than just retirees. Second, the federal government has been raiding the Social Security accounts ever since the money started flowing into them. Why? Because they could…and because the account was just one big slush fund of money. Had individual accounts been used where YOUR money was in YOUR account, they never would have touched it. But Biden is right that somebody needs to increase the financial contribution into the Social Security account.

Second thing Biden wants to do is change the cost of living index that’s used. Currently, the government uses a thing called a CPI-W, which is the index for urban workers and clerical workers. There is nothing necessarily either urban or clerical about the retirees. What Biden wants to do (and should have done back in 1975 when they made the change to CPI-W) is change it to CPI-E for elderly cost of living. Those in retirement have a much different cost basis in their lives than someone working. Healthcare costs are usually the number one expense, but that’s not reflected in the current CPI-W model. So, when healthcare costs go up 35%, and inflation overall is 4%, retirees get a 4% raise and see a 35% increase in the amount taken out of the Social Security checks to pay for Medicare. This move would fix that. It would also increase the cost of the Social Security program.

Third thing Biden wants to do is increase the “Primary Insurance Amount” based on age. Starting at age 78 and going to 82, the PIA amount would increase by 1% a year over the five years. Since 80% of the amount you spend on healthcare occurs in the last 20% of your life, it becomes the biggest struggle for retirees. Again, this increases the cost of the Social Security program, and doesn’t necessarily keep it running longer.

And finally, Biden wants to boost the special minimum benefit. If you were a lower paid worker, and never made much for the 30 years or more that you were on the job, you can never make more than $1,033.50 a month (plus cost of living increases). Biden wants to up that because that’s only a little more than $12,000 a year, and the poverty level is $14,580 for a single person. So, he wants to increase the minimum amount you can make through Social Security to 125% of the poverty level. Again, this helps seniors, but doesn’t do a damn thing in keep Social Security solvent.

In fact, the Urban Institute, a Washington-based think tank has said that Biden’s plan would only extend the life of Social Security an additional five years. Then it’s broke. So it’s not a real solution. There needs to be some other things added to his four-point plan.

First of all, Social Security should be a needs-based program. If you’re net worth is say $1,500,000 or more, you shouldn’t be getting a check for Social Security. You have enough to live on. Yes, you paid into it, but should you really take from someone that needs it and doesn’t have other money? That was after all, the original intent of Social Security. It was to make sure that the widows of those men that were working would be taken care of after the men died off.

Second, it needs to go back to what it was originally intended to be. We need to stop all of the disability payments, and the payments to the kids who’s parent passed away while they were still a minor. While that money is great for the kid, it shortens the life of the program immeasurably.

And, Congress needs to come clean. Democrats have argued for years that they don’t want to see Social Security “privatized”, meaning they don’t want to see it invested in the stock markets. Why? You’ve heard all of the noise about people like Nancy Pelosi making millions in the stock market, right? Why would you deny seniors that ability? And what’s really stupid in that line of thinking is that everyone in the workplace that currently has a 401k is already IN the stock market. That’s where the money, or most of it, is invested. To not allow that to happen is ridiculous!

While I’m on Congress’ case, they need to set up individual accounts for people that are just getting into Social Security. That way, the money will be there for them. And a law needs to be passed that Congress can’t touch that money for any reason, ever! That money belongs to the eventual retiree. If they were to pass away before reaching retirement age, the money is added to their beneficiary’s account. It’s not there for Congress to raid. That has to stop now.

And, there has to be a plan for Congress to pay back the money they’ve stolen from the retirees. I’m sure it’s in the trillions of dollars by now, but it’s something they need to do. They cry about how America pays it’s debts, but yet, they don’t have a problem stealing from the most vulnerable people in their own country. How shameful! Those people should be locked away!

Social Security was a Democrat idea back in the 1940’s (thanks, FDR!), and as such, it has ballooned, like every single Democrat program into a unwieldy monster that has a life of it’s own and still grows each and every day. Fixing it? There is no way to really fix it that is going to cost less than $22 trillion in a lot of estimates. And we have Democrats to thank for that.

Carry on world…you’re dismissed!

The McCarthy/Biden Meeting

Later today, long after I wrote this blog, Joe Biden will meet with “The Big Four”, the top members of Congress in each party. Hakeem Jeffries will be there. Mitch McConnell and Chuckles Schumer will be there, and yes, Kevin McCarthy will be there. They will meet in the Oval Office at 4pm. As I write this, the meeting hasn’t taken place. But I’m going to tell you what happened.

No, I don’t have a crystal ball. I have some common sense.

The meeting started out cordial as coffee was served to all of the participants. Then Biden explained his position that the United States has never defaulted on debt, and we can’t afford to do so now. Everyone in the room agreed with that statement. But Biden continued to say that he would be happy to have discussion about the spending limits that are currently in place, but now isn’t the time to do so. We need to act fast (before June 1st) and raise the debt ceiling or better yet, get rid of it altogether, so we never have that problem again.

Kevin McCarthy answers that he believes that the reason we’re in this mess in the first place is because of the over-spending. Both from the COVID pandemic, which cost the country trillions, and years of lost opportunities, and the many bills that the president has put forth that have spent roughly $4 trillion. Add to that the fact that the president has proposed a spending bill for the next fiscal year totaling over $6 trillion and we can easily see that the two are forever intermingled. We can’t separate them, because without one, you don’t have the other. When you have one, you have both.

And that’s the way the meeting went. McConnell tries to play conciliatory and tries to find common ground, but in the ends concedes that most of the Republicans in the Senate aren’t in favor of separating the two and it’s going to become very tenuous if a vote is taken on a “clean” debt ceiling bill. McCarthy chimes in that he can’t get a clean bill passed through the House. He just doesn’t have the votes to do it, and the fact that his bill did indeed pass the House was proof of that.

And Hakeem Jeffries calls the whole thing a white supremacy attempt to take over the world and keep the black man down. He calls for reparations to be included in the debt ceiling bill, and that all of the prisons in America be open, and people of color be released. He praises Alvin Bragg for turning his back on crimes committed by people of color while focusing on Donald Trump’s paying off some porn star to keep their affair secret.

And that’s the way it goes.

Well, in the grand scheme of things, this is the next “big thing” that Congress has to deal with. And as we’ve all learned over the past decade, Congress only acts when their backs are up against a wall some place. And I’m not talking about a border wall here. So, Congress will debate and cajole. They will argue and fight. And in the end, there is going to have to be compromise between the two sides. It has to happen that way.

It’s just a matter of who blinks first.

I don’t think that will be McCarthy. I think the GOP is actually right on this one, CBS did a poll recently that showed that 70% of Americans want the debt ceiling to be raised. However, they don’t necessarily want to see any spending cuts taken in the areas of Social Security, Medicare, or Medicaid. They want things cut in other areas. And in the end, there will be somewhat of a compromise similar to the one that Joe Biden himself negotiated back in the Obama regime. That brought us the reconciliation bill that no one liked. If they couldn’t agree on spending cuts, Congress would have automatic cuts across the board, with the military and social programs axed. While I’m a proponent of spending more on the military, especially in light of China and Russia’s aggression, there are a lot of programs that need to be cut. There are agencies we currently have that really could be dismantled and done away with (like Education, which is usually handled at the local level anyway).

I think Biden is going to have to eat some crow on this one at some point. He originally said he wouldn’t negotiate with McCarthy, yet here he is…negotiating with McCarthy! He’ll eventually come back to the table with a proposal that cuts spending somewhat. Not much, and certainly not the three times that the debt ceiling is raised. But it’ll have to be substantial if Biden wants to get it through Congress. I don’t think blaming the GOP for a default of debt payments is going to work this time. The GOP has already passed a solution. It’s the Democrats that are stalling on getting it passed.

Carry on world…you’re dismissed!

EXTRA! What ChatGPT Says About The Debt Ceiling Debate

The following wasn’t written by me. I asked ChatGPT to write an essay regarding the debt ceiling and spending cuts. The only restriction I placed on the chatbot was that the essay be about 500 words. Here’s what it came up with!

As the United States continues to grapple with the issue of its national debt, the concept of a debt ceiling has become a highly politicized and contentious topic. The debt ceiling, which limits the amount of debt the government can incur, has been raised numerous times over the years, but not without debate and controversy. One of the most persistent arguments in these debates is the need for spending cuts to be included in any debt ceiling increase. In this essay, I will argue that such cuts are essential to addressing the national debt crisis.

To understand why spending cuts are necessary, it’s important to first understand the root causes of the national debt. At its core, the debt is the result of government spending that outpaces its revenue. The government’s ability to borrow money has allowed it to continue operating despite these deficits, but that borrowing comes at a cost. Interest payments on the debt eat up an ever-increasing share of the federal budget, limiting the government’s ability to invest in other areas and increasing the likelihood of a fiscal crisis.

Given this context, it’s clear that the government needs to take action to address the national debt. While there are several approaches that could be taken, including raising revenue through taxes or reducing spending on certain programs, I believe that spending cuts are the most viable option for several reasons.

First and foremost, spending cuts are a direct way to address the root cause of the national debt. By reducing spending, the government can decrease its reliance on borrowing and begin to bring deficits under control. This is a more sustainable solution than simply continuing to borrow money to finance government operations, which only exacerbates the problem in the long run.

Second, spending cuts are politically feasible in a way that tax increases are not. While tax increases may be necessary in the long term to address the debt, they are often met with significant resistance from both the public and elected officials. In contrast, spending cuts can be targeted at specific programs or agencies, making them more palatable to some politicians and voters.

Finally, spending cuts can be implemented in a way that minimizes harm to vulnerable populations. While some programs may need to be cut in order to reduce spending, there are many areas where the government could make reductions without negatively impacting those who rely on government assistance. For example, the government could cut spending on wasteful programs or reduce spending on military operations overseas, while maintaining support for critical social safety net programs.

Of course, there are those who argue that spending cuts are not necessary, or that they will do more harm than good. Some believe that increasing revenue through taxes is the best way to address the national debt, while others worry that spending cuts will lead to job losses and economic instability. While these concerns are valid, I believe that spending cuts are ultimately the most viable and effective solution to the national debt crisis.

In conclusion, the national debt is a complex and pressing issue that requires action from the government. While there are several approaches that could be taken, I believe that spending cuts are essential to addressing the root cause of the debt and putting the country on a sustainable fiscal path. By reducing spending in targeted areas and implementing cuts in a way that minimizes harm to vulnerable populations, the government can begin to rein in deficits and address the national debt crisis.

If only we could get Joe Biden to listen to a chatbot!

Carry on world…you’re dismissed!

McCarthy’s Next Battle

I think Speaker of the House, Kevin McCarthy has already taken a step to winning his next big battle, after passing the Republican side of the debt limit argument. He has now got Joe Biden to back off of the “I’ll never negotiate on anything but a clean debt limit increase bill”, to the point where now he almost HAS to sit down with the GOP. And it’s slated for the next week or so.

Biden can thank Janet Yellen for that.

Yellen announced to Congress this past week that yes, we will indeed need to increase the debt ceiling by June 1st, or we are possibly going to have to shut down the government, run out of money, and default on our loans (which no one wants to do). That has forced Biden’s hand to say he’ll sit down with the top four leaders in Congress (Mitch McConnell and Chuckles Schumer from the Senate, and McCarthy and Hakeem Jefferies from the House) and talk to them. Ah, but Biden is still demanding (at least for now) that the spending cuts be separate from a debt ceiling increase.

So, the next battle that Kevin McCarthy is going to have to wage is to convince Biden, Schumer, and Jefferies that if you don’t have spending cuts of some kind in the bill to increase the debt ceiling, it won’t pass the House, and it will cause a default. Just for the record, the United States has never defaulted on it’s debt payments…at least yet.

The question at this point is, will McCarthy be the one to cave, or will Biden? My initial feel is that it will be Biden. I will say this. While a lot of people thought it demonstrated weakness that McCarthy needed fifteen votes in the House to actually become Speaker, I take it as a badge of courage of sorts. If McCarthy were at all weak, he could very easily have backed down and let someone else take the job. He didn’t care how long it took, he stood his ground. When it was obvious that in order for the GOP to put it’s mouth where the money was in passing their own debt ceiling bill, McCarthy stood firm, and negotiated a deal that allowed a majority in the House to get on board. Even though that bill will never see the light of day in the Senate, and Biden will be long dead and buried before it gets signed, it shows the American people that McCarthy could indeed be the man for the job.

Now the next test is how well he stands up to Biden with these negotiations. We are all aware that Congress can’t pass gas without a deadline. They have to scream at each other and finger point until the last possible minute before they teeter on the brink of disaster before passing something controversial. That’s why we don’t have anything passed about immigration reform. There is no deadline. And McCarthy has to stand firm. It’s actually very easy to do.

All McCarthy has to do is tell the Dems that there is no way that a clean debt ceiling increase bill is going to pass the House. And if they want to default on the debt, they are headed in the right direction by not negotiating in good faith. Any deal must include at least a three times increase in the debt ceiling in spending reduction. Without that, there is no further discussion needed, and it will be sung from the highest rooftops that it was the Democrats who decided to balk at this. It has nothing to do with reduction in social spending. It has to do with the fact that we just plain can’t keep spending money this way.

Remember back in the Obama Administration, it was Biden that went up to Capitol Hill and negotiated a bill that neither side liked, but both sides accepted. And if Biden could negotiate that back in 2011, he can certainly do it again. McCarthy and McConnell just have to be very firm. After all, nothing passes either chamber of Congress without the Republicans on this issue.

If McCarthy holds fast, and I really pray he does, he can change the course of Biden’s drunken spending spree. It’s something the country needs. We can’t afford another two years like the last two years!

Carry on world…you’re dismissed!

Giving McCarthy Some Credit!

Kevin McCarthy’s job is something I certainly wouldn’t envy. The guy has to heard a bunch of whining, screaming cats every single day he shows up at work. He has to get cohesiveness out of Jello, and make it look like caviar. And he actually did it with what has to be his biggest coup of his short career as Speaker of the Houe or Representatives.

He passed a bill showing the Democrats what the Republicans actually want in order to raise the debt ceiling.

I have to give the California Republican (yes, Virginia, there ARE some Republicans in Cali!) credit. Not only did he craft a bill that got all but four Republicans on his side, but he did so and stayed true to his prinicples. Yes, he raised the debt ceiling by $1.5 trillion or until March 31st of next year, whichever comes first. But in return, he got cuts to the eight billion new IRS agents, slashed Green New Deal spending in the infrastructure bill, and basically lowered the federal debt by some $4.5 trillion over the next decade. That’s not a bad start.

Now, you and I both know that McCarthy’s work is lost. It won’t go anywhere. It’s dead on arrival in the US Senate, and Chuckles Schumer probably won’t even entertain it, much less get people to vote for it. And even if he did, and if miracles happened and it passed, Joe Biden would pull out the veto pen faster than he trips going up the steps to Air Force One.

So, we can begin by saying the bill isn’t going anywhere. It was never meant to become law or to get Democrats on board. Biden had basically said, “Show us your bill if you don’t like mine!” And he did just that. So he took Biden’s shot, and slammed back across the net. Now it’s the president’s turn to do something with it. We saw what Biden wanted. We see what McCarthy wants, and let’s see if Biden is man enough to actually do what he said he was going to do all along…work across the aisle to get things done. My guess is he’s not going to.

Traditionally, Republicans are the ones that always seem to get the heat when it comes to shutting down the government, or threatening to not increase the debt ceiling. Democrats don’t seem to mind however large the debt ceiling is. They just want to keep spending. Because that’s what liberals do. They spend until they run out of other people’s money. Then they blame the Republicans (in this case) for not getting them more money. But in this case, McCarthy has made the case that Democrats need to come to the table and at the very least talk about getting a debt ceiling increase. It’s not going to happen automatically. And that’s what should happen.

Biden is going to have to back down from his wish for a clean debt ceiling bill. And McCarthy is going to have to back down from erasing the eight billion IRS agents, and cutting all of Biden’s cherished Green New Deal money that he hid in his inflation relief bill, and his infrastructure bill. Neither will get what they want. That’s called politics.

So, where does it go from here? Well, it is going to be a long hot, humid summer in Washington. And we’re going to see exactly what Kevin McCarthy is made of. Is he going to do what the Republicans typically do and cave on everything in his bill? Or his he going to stand firm, even at the thought of the US defaulting on it’s debt? It’s probably going to be one way or another. And IF he decides to back down, what does that say for his credibility? He will basically lose everything he has built up to this point.

McCarthy is in a very tough spot if you think about it. And I think he has only one play. Get as much of his bill through, but he has to get something additional besides a “clean debt ceiling bill”. If he doesn’t do that, he may as well resign as Speaker now, and save the country the trouble of watching him twist in the wind for the next year and a half or so.

I will give Nancy Pelosi this…she was very tough when it came to getting her people in line, and holding that line against whatever the opposition had to say. I’m just wondering if McCarthy was cut from the same cloth, or if that’s just a San Francisco thing?

Carry on world…you’re dismissed!

GOP Debt Ceiling Bill “A Good Start”

Kevin McCarthy took a while to get it done, but the Democrats have been clamoring for the Speaker of the House to stop whining about negotiations on the debt ceiling, and come up with a solution that would show what the GOP position was.

Well, he did it.

Now, McCarthy has to at least try to get it through the House. It’s obviously going to be dead on arrival in the Senate, where I doubt Chuckles Schumer will even give it the time of day. And to be honest, it’s a decent start. It’s not going to help our economy. It’s not going to put the US on better footing in terms of our debt, but it’s a starting point. And hopefully, McCarthy has learned during his time in DC, that the Democrats always play the long-game. They do things incrementally, and that’s I think what this does.

If you haven’t seen what’s in the bill, it’s pretty simple. Basically, it raises the debt ceiling by $1.5 trillion or until March 31st of next year whichever comes first. And to do that, it basically reverts all spending back to this year’s levels which will nix the automatic increases that spending programs always get. That will save about $4.5 billion.

Well Democrats…you wanted it. You got it.

This isn’t the overall solution to our money problem. This is a band aid. What really needs to happen is to not allow Congress to spend more money than it takes in, and to be able to focus on paying down the federal debt to reasonable levels. And no, $32 trillion is not considered a reasonable level.

What the end game for the Republicans should be is to introduce and get through Congress a Constitutional amendment for a balanced budget. This would require all bills, and all expenditures to be less than the amount of money the government takes in throughout the year in taxes and fees. And, if they were smart, they’d fix the amount that could be spent at say, 85% of the amount they take in so the other 15% could go to the debt. That is the way to fix this problem. Yes, it would be incredibly painful for the social spending side of things. And it would be painful if all of a sudden China decides to invade Taiwan and we’re stuck with no money in the pot because we’ve spent it all. But that’s what budgets are for actually, and it’s time our federal government steps up and actually follows it’s federal budget for once.

There are so many carve outs and additions to what belongs on the budget and what is spending that goes above and beyond the budget that it’s not funny. And this would have to be addressed in any amendment. Do you think, for instance, that the money we’re sending to Ukraine is being budgeted? Nope. There’s no where in the federal budget that the money we’re spending on Ukraine shows up.

And of course, if the Constitutional Balanced Budget amendment is tried, you’re going to hear how Republicans are trying to take money away from the indigent and the elderly. They have told us that 70% of all spending goes to either Medicare or Social Security. That’s true. What they aren’t saying is that they got away from what each of those two programs were initially designed to do. You aren’t supposed to be able to actually live on Social Security. And Medicare isn’t supposed to be a free pass at the doctor’s office and at the hospital.

Instead, now anyone that loses a parent, gets injured and can’t work, or is destitute can get hold of extra money that wasn’t ever supposed to go to them through the federal government programs. But Democrats have fought to get those programs expanded to the point that they’ve created a monster that they can’t tame. It continues to go belly up as more and more baby boomers are retiring and getting on the government’s money train. And there aren’t enough Millennials and Gen-X’ers out there to make up the difference. That and the fact that early on, the government saw fit to not give you an individual account with the money you and your employer paid into Social Security and Medicare. Instead they robbed that fund over and over again to pay for other socialist programs, most of which haven’t worked. And, here we are, once again proving by example that liberalism doesn’t work. It’s works fine until you run out of money. And this crop of liberals are going to have to come up with some sort of solution to get out of the jam their former members put them in.

And the ones that get hurt? We The People.

Carry on world…you’re dismissed!

Budget Bustin’

Joe Biden hasn’t even followed through with a law that says he needs to have a budget for the next fiscal year sometime between the first Monday in January, and the first Monday in February. He was late. His came in on Wednesday, March 8th. And it was a budget to admire…if you like impossibly large numbers.

The numbers themselves are staggering.

Now, before we get into the numbers themselves, we need to deal with some of the rhetoric behind the numbers. Biden says that his budget actually reduces the federal debt. But as you and I look at it, that’s not the case. You and I look at where we are going to be at the end of this fiscal year, which is around $32 trillion in debt, and then we look at where we will be in 2033 according to Biden’s budget, which is $51 trillion in debt, and we wonder what drugs this guy is taking? What’s happening is we are looking at two different things. Biden looks at where his budget is versus the “baseline”, which increases every year. If you compare the two, what Biden is saying is correct. His budget will increase the federal debt slower than the baseline budget would. You and I look at it and say his budget almost doubles the debt in a very short period of time.

Next, we hear House Speaker, Kevin McCarthy (R-CA), say that the budget is dead on arrival in the House. It has zero chance of making it even into committee. So, the GOP will write their own budget. It will probably be somewhat smaller that Biden’s. It won’t pass the Senate however, so we are going to be looking at a conference committee, and it will take us up to September 30th, the last day of the current fiscal year before anything gets done.

The bloated budget Biden proposed is for $6.9 trillion! In contrast, the budget for the current fiscal year ended up being in the neighborhood of $1.582 trillion. That is for discretionary spending and doesn’t include things like Medicare, Medicaid, or Social Security. Biden’s budget raises some $4.7 trillion in NEW taxes (mostly on the wealthy and in corporate taxes, which will get passed on to consumers). And it spends $1.8 trillion more in 2024 than it takes in. So, no, it doesn’t lower the federal debt. It raises it.

And what does Biden spend the money on? Social programs. Programs like “climate change” that haven’t been proven to anybody anywhere outside computer models that have yet to be right. Oh, there will be boatloads of cash for child care, for daycare, for universal pre-school, and for paid leave for everyone!

This is exactly the type of irresponsible governing that needs to stop if the United States will continue to be a first world country. It’s obvious that Biden’s vision stops at the border. Of course, not the southern border. His vision doesn’t get that far. But in a world where you’ve got China and Russia teaming up, Russia mired in Ukraine and China waiting until we deplete our military hardware sending it to Europe to fight Putin before they then try to take over Taiwan, Biden has nothing to say for it. If he isn’t under the thumb of the communist party in China, he certainly is more lenient toward them than any of his predecessors have been.

Biden is going in the total opposite directions that he needs to go in. Rather than spending more money, we need to be spending less. A lot less! We need to pass a balanced budget amendment to the US Constitution, so that if the government only takes in $2.1 trillion in taxes, that’s all they can spend. And actually, they should spend less than that so we can begin whittling down the debt that has been accrued over the past few decades. And you can’t blame just the Democrats for the debt. Republicans have been involved as well. In fact, I broke down the figures. Eight Democrat presidents contributed $12.786 trillion to our overall debt so far. Seven Republican presidents added $17.82 trillion! That’s over the last 60 years.

The only way out of this mess is to first make sure the government only spends money on what it needs for basic government. Social programs already not promised need to be forgotten, and they need to see what other social programs can be cut. A 25% cut (not according to baseline, but an across the board cut) is a decent start for one year. That means that instead of $1.582 trillion in discretionary spending, chop it down to $1.1865 trillion. If Congress can’t get it figured out, let me have a crack at it. It shouldn’t take more than an hour or two to knock a half trillion out of the budget!

Carry on world…you’re dismissed!

The Biden Budget

Joe Biden is set to roll out his 2024 Fiscal Year Budget on Wednesday. It’s going to be a mish-mash of tax increases, and over-spending, but that’s basically what we’ve come to expect from this guy. As it looks now, based on what’s leaked out, if you make more than $400,000 a year, you are going to hate it.

Biden’s budget however, stands zero chance of becoming the final budget. That’s because the House Republicans have already declared it “dead on arrival”. Basically, here’s what is and isn’t in it.

There is a push to lower the deficit a little bit. Not much, seeing how it’s at $31.5 trillion, and rising every minute of every day. But Biden says this budget will lower the deficit by $2 to $3 trillion over the next 10 years. He plans massive tax increases on anyone making over $400,000 a year, as well as corporations. This is met with cheers from the Dems, and hoots from the GOP. Everyone knows that when you raise taxes on corporations and businesses, they get passed along to the customers of those businesses, so in effect, it IS a tax on people making less than $400,000. The only way around that is to tell businesses that they can’t raise their prices in the coming year. That’s not going to happen.

Biden says he’s going to be able to save Medicare and Social Security, no small feat! He plans on raising taxes (again) on all sorts of wealthy folks and businesses in each account. In the Medicare realm, he hopes to extend the life of Medicare is set to go belly-up in 2026, a scant three years from now. Biden says he will be able to extend the life of the program 25 years through his tax increases. Also planned is to make it easier for beneficiaries to cut their costs when filing.

The president also plans to “strengthen” Social Security, though we haven’t seen how just yet. I’m sure it will include more taxes on those making the most money. As it is, anyone making over $160,200 this year will not have to pay tax on the amount over the $160,200 figure. Biden’s plan will greatly increase that number to include more people paying more money into the program. There are currently no plans from either party to actually cut Social Security, or Medicare, which makes up about 70% of the federal budget.

One thing that both sides are going to be looking hard at is the defense budget. Democrats want to cut spending in that arena to allow more social spending programs. Republicans are worried that if the defense budget isn’t increased greatly we face a major hurdle, especially with the funding continuing for the war in Ukraine, and the threat of China invading Taiwan. If those things continue on their present course, there is no way that the US can afford to spend the money necessary to fight a two-front war. That’s never something the Pentagon wants to do in the first place.

Overall, it looks like Biden’s budget is going to go the way of most presidential budgets, and that’s straight into the waste basket. The Republicans in the House have vowed to come up with their own budget, and they are committed to cutting spending in a lot of areas. You can bet defense isn’t going to be one of those areas. They’ve already said that cuts to Social Security and Medicare are off the table, so that doesn’t leave much room for any other growth as far as social programs go. I would think that we are going to see a major fight all summer long as to whether the GOP and the Dems can get together and actually pass a budget, or whether we’re going to be faced with more rounds of “budget reconciliation” like we had during the Obama administration.

Anyway you look at it, the US is in a world of hurt when it comes to spending money. What we really need is a balanced budget amendment to the Constitution that stops the federal government from spending more money than it takes in. And ideally, it should only spend 85% of what it takes in, so we can send the other 15% to lowering that massive deficit!

Carry on world…you’re dismissed!