Federal Financial Catastrophe(s)
Many readers know that I have observed and interacted with Washington political folks for over 50 years. When asked what this means I say, “My job is to watch and report on how government screws things up.” And that’s the truth.
Let’s look at a topic that continues to unfold. It encompasses the many forces that shape the federal budget, forces of law, corruption and ineptitude. Our Constitution designates the “power of the purse” to Congress. The House specifically must originate and authorize work, appropriate funds to perform that work, define and collect taxes to meet appropriations, and borrow money as needed. It does not specify how Congress should exercise these powers or any role for the President in the process.
There are five basic steps in the budget process that have evolved:
- President submits a budget request to Congress (but the current President has usually chosen not to do so)
- House and Senate pass budget resolutions independently
- House and Senate Appropriations Committees each pass independent bills
- House and Senate reconcile differences in various appropriation bills
- President signs each appropriation bill; that element of the budget becomes law
“Element” means department and/or function to which funds are directed as separately defined by an authorization bill, which specifies mission or task, including authority to spend money. Remember, an appropriations bill must pass Congress annually, but authorization bills do not need yearly approval.
The vision of our democracy is that government activities reflect the values and desires of a majority of Americans. We wish this were true. But we live in an America that often ignores, for practical purposes, the will of the people. Here we talk about honest, knowledgeable citizens, not the ill-informed and uninformed among us. We cannot do much about these “disruptions” except what society has been remiss in doing for decades, which is coercing responsible, personal behavior among the citizenry. This would be done via measures that are the antithesis of politicians’ selfish interests, spending tax and debt money to curry favor for election.
Let’s get specific. The U.S. government has spent 50 years and $21.5 trillion (taxes and debt) on the War on Poverty. When it really started in 1967, 27% of Americans lived in poverty. It was 29% in 2012. Between these years, real GDP (in first-quarter 2014 dollars) rose 127.3%. So, a family of four needed to capture a proportionate share of 26.9% in 1967 but only 12.1 % in 2012.
This social-welfare program has not been a failure but a national catastrophe. It is largely driven by a societal state of high crime, breakdown of family structure, correction of the public education system (which has become dangerous and dysfunctional in most urban areas), a general public malaise that countenances corruption by politicians of both parties, and what can be stated simply as “no guts” by the public to do anything about it.
It is rarely reported in the news, but the public should hear our “progressive” president declare “fiscal victory,” saying the federal deficit is down and it is time to get past “mindless austerity.” (Obama’s words, not mine.) Nobody comes out and says “stop spending and wasting tax money,” but sleazy politicos in the press suggest that “government should implement so-called counter-cyclical fiscal policies like deficit spending.” My mother used to call this “weasel words,” and it was a significant offense.
As of now, the federal debt of $18 trillion is at 74% of GDP, a higher percentage than at any point in U.S. history, and is expected to rise to ~78% in 2024 ($26.2 trillion) and to 106% in 2039. Meanwhile, the U.S. has a $4 trillion budget wish-list this year and a current deficit expectation of about $475 billion. You’ve got to be kidding!
It’s time for the American public to tell their elected politicians to stop spending money and force the federal bureaucracy to perform a competent and frugal job or get fired, a concept foreign to federal employment practices. If you and yours do not take such actions soon, it will be too late to recover our republic from the brink of the disasters mentioned here.