Thursday, 30 April 2009

Congress Passes $3.56 Trillion Budget Resolution

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MoneyOn April 29, Congress passed a nonbinding $3.56 trillion budget resolution for the 2010 fiscal year. The resolution (S. Con. Res. 13) first passed the House on a vote of 233-193, followed by Senate passage by 53-43. Not one Republican in either house voted for the measure, but 17 Democrats voted against it in the House and four in the Senate.

"This budget was hugely important for the president," Congressional Quarterly quoted Senate Budget Chairman Kent Conrad (D-N.D.) "This is the starting point for everything he wants to do."

Passage of the resolution drew contradictory comments from opposite sides of the aisle. Speaker of the House Nancy Pelosi (D-Calif.) said: "Today, for the first time in many, many years, we have a president's budget on the floor that is reflective of our national values. It is a foundation for how we go forward into the future."

However, House Minority Leader John A. Boehner (R-Ohio) called the budget resolution "nothing short of an audacious move to a big socialist government in Washington, D.C."

And Senator Lindsey Graham (R-S.C.) warned sternly: "If this budget passes, you're going to have a hard time looking the next generation of Americans in the eye and say, 'You're going to have a chance to do better than people who are alive here today,' because what it does is, it doubles the national debt."

An analysis of the budget blueprint, reported by CQ, stated: "Under the Democrats' budget plan, the debt held by the public would rise from $7.7 trillion in fiscal 2009 to $11.5 trillion in fiscal 2014. When measured as a percentage of the economy, the method preferred by economists, the debt would rise from 55 percent of gross domestic product to 66.7 percent of GDP."

Those estimates make the impartial observer wonder where Speaker Pelosi studied math, considering the following statement quoted by AP: "It's a budget that reduces taxes, lowers the deficit and creates jobs. It honors the three pillars of the Obama initiatives: energy, health care and education." (Emphasis added.)

Such statements are typical of the smoke-and-mirrors tricks long used by big spenders in Washington to justify their largesse. As Associated Press writer Andrew Taylor noted on April 30:

Under the plan, the deficit would drop to $523 billion in 2014 [after first rising], but even that figure depends on several unrealistic assumptions, notably that Congress will devote only $50 billion a year for operations in Iraq and Afghanistan for 2011 and beyond, and unrealistic projections of costs for core Pentagon operations.

As for that supposed $523 billion deficit reduction, a Reuters news report notes: "The budget forecasts $1.2 trillion in red ink for fiscal 2010 before falling to $523 billion by 2014." 2014 is five years away, a lifetime in politics during which almost anything can happen. Few voters will remember five years from now who voted in the debt that they will be struggling to pay off.

Supporters of the mammoth budget blueprint advanced various justifications for the economy-busting budget. Democratic Senator Kent Conrad, chairman of the Senate Budget Committee, told reporters, "For every one of [President Obama's] key priorities, reducing dependence on foreign energy, making possible healthcare reform, a focus on excellence in education, none of those things could have been pursued effectively without this budget."

Conrad neglected to cite which portions of the Constitution give the federal government authority to spend the taxpayers' money on healthcare or education.

While the votes on this budget resolution may appear to cast Democrats in the role of big spenders and Republicans as misers, that assessment would be incorrect. A CQ writer observed on April 29: "Democrats scoffed at [Sen. Lindsay Graham's] type of criticism, noting the debt had grown sharply under the Republicans' watch during the George W. Bush administration. Neither party has made a major effort at debt and deficit reduction in recent years. Both have been climbing steeply over the past year due to the economic downturn and the government's attempt to soften its impact."

That report hits the nail right on the head.

The following scenario may help to illustrate how the two major parties must share equal blame for our nation's current fiscal crisis:

Three colleagues, a Democrat, a Republican, and a Libertarian went out to dinner. And the Libertarian, against his normal instincts, allowed the others to talk him into splitting the dinner tab equally. Doing his part to help keep the bill down, the Libertarian ordered the $9.99 dinner special and a sparkling water. The Republican had a Scotch on the rocks and the Democrat had a vodka and tonic before dinner, and the Republican ordered the $29.99 sirloin steak while the Democrat had the $34.99 lobster dinner. Then both the Democrat and Republican had an after-dinner liqueur at $5.99 each, while the Libertarian had a cup of coffee. The check came to over $100 — over $125 with tax and tip.

However, to add insult to injury, about the time the waiter brought the check, the Democrat got a call on his cellphone and had to step outside to talk. And the Republican looked at his watch, said he was late for an appointment, excused himself, and hurriedly left.

When the Libertarian protested at being left to pay the entire bill, which he had to put on his credit card to cover, the Republican said: "But I saved you money by spending five dollars less than the Democrat." And the Democrat said: "You can't blame me for the high bill, because the Republican spent over $40 all on his own!"

And so it goes with Congress.