A Budget Is Born


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Despite all the rancor and political infighting on both sides of the aisle, the final Continuing Resolution (CR) for fiscal year 2011 was passed by comfortable margins in both chambers of Congress.  In the House, the vote was 260-167, with 59 Republicans and 108 Democrats rejecting the deal.  In the Senate, the final vote was 81-19 with 14 Republicans and 5 Democrats dissenting.  It will head to the president’s desk where Mr. Obama is expected to sign it.  Thus, the latest threat of a government shutdown has been averted.  But much like the president’s 2012 budget plan just unveiled Wednesday, the remainder of the 2011 budget is an exercise in fuzzy numbers deception. And probably as many Republicans as Democrats are hoping that the public won’t take notice of the ruse.

First, the compromise itself.  Republicans, under pressure from their freshman class in Congress, many of whom were the beneficiaries of Tea Party politics, started out with the intention of lopping $100 billion from the 2011 budget. $100 billion became $61 billion in fairly short order, already upsetting many of the new members who expressed their displeasure when 54 of them voted against the last continuous resolution designed to prevent the government from shutting down.  When an 11th hour compromise among the president, House Speaker John Boehner, and Senate Majority Leader Harry Reid was reached, the number had been whittled down to $38 billion, with Boehner calling it the “best deal [Republicans] could get,” and president Obama touting it as the “biggest annual spending cut in history.”

Both men were apparently wrong.  According to a Congressional Budget Office (CBO) estimate, the “make-or-break” deal funding the federal government through the remainder of the fiscal year saves only $352 million.  Much of this is due to the kind of sleight-of-hand accounting in federal budgeting that makes hard numbers elusive, to say the least.  For example, $8 billion in cuts to domestic programs and foreign aid are offset by nearly equal increases in defense spending.  Other “cuts” come from projected spending that may never occur, and still others from seemingly arcane budget rules which allow them to be declared as such if they take away spending from one program, even if the money is used to fund increases in other parts of the legislation.  Such “savings” amount to $17.8 billion, yet virtually none of it is used to actually reduce the deficit.  Another factor is timing:  since the current fiscal year is more than half over, cuts in new spending authority, along with slower spending grants used for infrastructure projects, won’t be immediately registered on deficit summaries.

Some Republicans expressed their disdain.  First-year Rep. Tim Huelskamp (R-KS) characterized the deal as “phantom savings” and promised to vote against it.  “It’s worse because of the expectations,” said an aide to another conservative House member. “We knew that not all of the $39 billion would be real cuts, but to find out that almost none of it was real was very disappointing.” An aid for the GOP senator questioned the deal as well.  “We were getting $2 billion a week,” he offered. “Then we end up with $350 million for six months?”

Yet Republican leadership successfully endeavored to keep yesterday’s vote in context, saying that it was the result of “cleaning up the Democrats’ mess from last year,” a reference to the fact that the Democratically-controlled 111th Congress punted on their obligation to enact a budget for 2011.  This was the first time since modern standards were adopted in 1974 that Congress failed to enact an annual budget, which is why a series of continuing CRs–including this one–became necessary.  GOP leaders further reminded their members that this budget had to be resolved before the far more important work on the 2012 budget could begin.

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  • davarino

    Who cares about the political landscape in 2012 if our last best chance to save the American economy is squandered and it all caves in anyway. Some one needs to role the dice and go for it. There is no playing chicken, this is for real. There should be no deal making, because soon there wont be any deals to make.

    Here, have a truck load of dollars, you throw em away.

    • Truthteller

      You have no way to 'save' the American economy, after Greenspan/Bush conservativism destroyed it. Even the reason bi-partisan commission showed the lie to Paul Ryan's 'fix': his so-called dramatic budget cuts, over ten years, would lead to a SLIGHT INCREASE IN THE DEFICIT. So we might as well keep to the current plan, in which the RICH GET RICHER AND THE POORER GET POORER. Either way, you get your wish: destroy the poor, and the American economy in the process.

  • wingwiper

    The most effective tactic may well be to encourage Congress to speed up the pace of this failure to enact what is painfully necessary. At least that way the inevitable catastrophe will appear sooner, and will spare us all another decade or two of their current insanity. The venerable TAO TE CHING mentions the parable of a foolish man attempting to get his horns out of the brambles by stubbornly driving forward – never works.

  • Steve Chavez

    How can we cure a Capitalist problem with Socialist and Communist ideas? The U.S. economic system is the envy of the world but there are those in Congress who read the daily talking points propaganda at the Communist Party USA website, CPUSA.ORG AND PWW.ORG! Go there and see if you can tell the difference between the Democrats and the Communists! They attend each others meetings and conventions!

    Now the Communists, and Closet Communists in Congress, are making Americans feel guilty for the salaries we earn, the homes we live in, the cars we drive, the toys we own, what we eat, and what we think! ! These P.C. POLICE are handcuffing our way of life! Some of their biggest voices are the biggest hypocrites like Michael Moore who is a "Capitalist PIG!"

  • http://www.chick.com Raymond

    The Ten Planks That Are Destroying Our Country – COMMUNIST MANIFESTO.

    1. Abolition of private property: The foundation of this nation was ownership of property. The settlers came here to insure private ownership of land and our Founding Fathers made it unlawful for government to own land except for the ten square miles of Washington D.C. and such as may be needed for erection of Forts, Magazines, Arsenals, Dockyards and other needful buildings. Today you don’t OWN your home, car, farm or most property. You are just allowed to use it as long as you pay your property taxes, buy a car license, pay for building permits and get permission from the zoning commission. Individual OWNERSHIP is only by virtue of government. To USE property we must be in accordance with law and subordinate to the powers of government.

    2. Heavy Progressive Income Tax: I believe all Americans understand the IRS. What most of them don’t realize is that we didn’t have an Income Tax until 1913. Before that year Income Taxes were considered unconstitutional.

    3. Abolition of all rights of Inheritance: We now have Estate Taxes, Inheritance Taxes, also called the Death Tax. Many a farm and small business could not be passed on to the next generation, but had to be sold in order to pay the estate taxes. Many times the IRS forces the sale, as it did in the case of the Roy Rogers Museum sale.

    4. Confiscation of property of all emigrants and rebels: Government seizures, tax liens, private land under Eminent Domain, the IRS taking property without due process and even taking “suspected” drug money from anyone carrying large amounts of cash is nothing but government confiscation of private property

    5. Central Bank: The Constitution called for Congress to “coin Money and regulate the Value thereof,” but since 1913 the Federal Reserve Bank has taken over that duty. The Federal Reserve is a “private” bank that sets interest rates and creates money out of thin air.

    6. Government control of Communications & Transportation: Today we have the Federal Communications Commission, Department of Transportation, Interstate Commerce Commission and the Federal Aviation Administration. You are not allowed to drive your car without a license.

    7. Government control of factories and agriculture: Our government has gained control of the banking industry, finance, automobile production, energy and health care. Department of Commerce, Department of Interior and the Bureau of Land Management, Department of Agriculture; all of which control land use.

    8. Government control of Labor: The Department of Labor, Occupational Safety and Health Administration and the minimum wage law control all aspects of American businesses.

    9. Corporate Farms, Regional Planning: Corporate Agriculture now controls markets and prices of farm production. We now have Planning and Reorganization and zoning all across the nation.

    10. Government control of Education: State and Federal Departments of Education, National Education Association, Outcome Based Education, No Child Left Behind; all paid for with tax dollars.

    Karl Marx stated that these ten planks in the Communist Manifesto would be the test whether a country had become communist or not. Is America a Communist nation? Study the manifesto and the laws that have been passed by our Republican and Democrat politicians, and “you determine” if we are or if we are not a Communist Country.

    • sodizzy

      AWESOME. Thank you for reminding us by including these Ten Points.

    • sky

      make copies of this and spread this around.A lot of people dont have computers

  • Wesley69

    $100 billion in cuts
    $61 billion in cuts
    $38 billion in cuts
    $352 million in cuts

    Who got the better of the deal?? Obama and Democrats, while the country gets screwed.

    This budget battle is behind us, the 2012 Budget lies ahead. Representative Ryan, at a risk to himself, proposed a budget of fiscal sanity that will gradually reduce the role of government in our lives. President Obama's proposals attack the evil rich and demands that they pay higher taxes because of FAIRNESS, not increased tax revenue. He proposes cuts in defense at a time that the Mideast is going to hell, China is strengthening it military muscle and terrorism is still a danger to this country.

    If he is serious and honest with the American people about wanting to reduce spending and the deficit WHY DID OBAMA TURN DOWN TWICE – TWICE A FREE SOFTWARE PROGRAM FROM IBM THAT COULD CUT MEDICARE AND MEDICAID FRAUD BY ALMOST A TRILLION DOLLARS??

    The Republicans need to hold the line on raising the debt ceiling in exchange for ACTUAL concessions from Obama and the Democrats.
    They need to investigate the truth behind the above incident and EXPOSE it.
    They need to pass a balanced budget amendment.
    They need to pass Ryan's Path to Prosperity Budget. Let the chips fall where they may.

    One should not forget that, Obama used stopping military pay as a threat in the Shutdown debate against the Republicans. This is not worthy of a Commander-in-Chief. It is a disgrace.

  • 080

    The deficit has hardly been cut at all. That means that the government now has to balance its budget by covering the deficit from the economy or from abroad. It has to have a dollar to spend a dollar. So it can (1) tax (2) borrow (3) print the money it needs and (4) order you to spend your money (like with health insurance). These four differ in their second order effects, with printing the money being the worst in its obnoxious effects. But they all have one thing in common: they take money out of the private sector and spend it in the public sector. That weakens the private sector. Unfortunately the only way to get out of the morass is for the private sector to grow. Taking such large bites out of the private sector will make it difficult for the economy to function. That will happen now. Don't think that the deficit is handed over to the next generation. It will the covered now. The next generation will also pay a price. They will inherit a lop-sided bureacratic economy which does not produce much.

  • guest

    Expect the dollar to continue to drop.
    It is like as if a Muslim took control of the white house.

    Ask him for his full signed birth certificate, and where his law degree for him and his wife is. It shows him how much you CAIR.

  • http://www.chick.com Raymond

    Part 1)…Our Lying Media And The Budget Battle

    I don’t know when I have ever seen a bigger bunch of lies, distortions and deliberate misstatements by our national media than in the so-called budget debate that’s been taking place in Washington, D.C.

    My nominee for the biggest offender is ABC News, which a week ago told the nation that “Republicans in Congress are prepared to shut down our government, and deny pay to our troops fighting overseas, in order to defund Planned Parenthood.”

    Got that? Not only are Republicans the evil, nasty culprits responsible for the whole controversy. They will go so far as to deny pay to our soldiers, if necessary.

    The only part of this pack of lies that had even a kernel of truth to it concerned the remarks about Planned Parenthood. I’ll get to that in a moment. But first, let me revisit some recent history about the dishonest and irresponsible politicians who created this mess in the first place.

    Let me begin by pointing out that what’s at issue here is the budget for the Federal government’s operations for a fiscal year that began last October. In other words, our representatives are still arguing about how much to spend in a year that is already more than half over.

    Why didn’t they come up with a budget before the year began? That’s what they’re supposed to do. That’s what the law says they should do. And frankly, that’s when they could have done anything they wanted, without all the current posturing and deceit. They had all the votes they needed to spend any amount they wanted on whatever their redistributionist little hearts desired.

    Whose fault is it that the Democrats never came up with a budget back then? Clearly, the blame rests squarely on Barack Obama’s White House, Nancy Pelosi’s House and Harry Reid’s Senate. They had all the votes they needed. Why did they just sit on their hands?

  • http://www.chick.com Raymond

    Part 2)..So of course it’s the Republican majority in the House—something that didn’t exist before last November—that’s getting the blame now for the budget imbroglio.

    Let me note in passing that even if government had been forced to shut down, every soldier and sailor serving Uncle Sam anywhere in the world would have been paid on time and in full. That’s also part of the law. They are considered “essential personnel” and are exempt from any furlough, even if much of government has to be shut down.

    You will be aghast to learn that so are members of Congress and their staffs. Oh, some of them would probably have gone back to their home districts, to show their support for all of the folks being hurt by a shut-down. But you can bet that their paychecks would have continued to have been deposited in their banks when they were due.

    Something else you need to know about this whole insane mess: We are talking about peanuts. Let’s look at the numbers for a moment. Currently, the Federal debt amounts to $14.2 trillion. Our masters in Washington have borrowed every penny the law allows. In fact, that’s the reason for the current war of words. If Congress won’t raise the debt ceiling, the government can’t borrow any more money. If it can’t borrow any more money, it can’t pay for all the boondoggles and giveaways that are already law.

  • http://www.chick.com Raymond

    Part 3)..The deficit is already scheduled to grow by $1.6 trillion this year. In other words, even if Congress can’t agree on spending one more dollar this year, we taxpayers are already on the hook for our government to fork over $1.6 trillion more than it collects in taxes.

    The deficit for February (the shortest month of the year!) was $223 billion. That was the largest single deficit of any month in our country’s history.

    Let me put it another way: The same day that Republicans in the House voted to cut spending by $6 billion, our national debt jumped by $72 billion. That’s $72 billion in new deficits, every day of the week, every week of the year.

    Here’s an analogy your neighbors might understand. Say a penny represents $1 billion. Right now, our Federal debt equals 15,800 pennies. The pile is growing by 72 pennies every day.

    So far, Republican budget cutters have removed 10 pennies. Meanwhile, the Democrats offered to remove 4.5 pennies. That’s it; that’s all the fat they said could be found in the budget. That comes to about one-sixteenth of the number of new pennies they want to borrow each and every day to fund their favorite socialist schemes.

  • WilliamJamesWard

    It may be that we can never elect and honest Congress and Senate nor
    President. We may be doomed to live at the hand of liars and thieves.
    The reason is that to many Americans have forgotten our moral base
    or have never been taught morals, ethics and civics in leftist schools.
    A great struggle for life and liberty is in the making, choose sides
    and know who your friends are, time is running out, leftists are telling
    you that you are unable to do anything to keep America free, they
    have poisoned our thinking over years of propaganda, we need a
    rebirth of our American system but without the professional liars,
    Failure is not and American trait, I am going for The Donald and
    Allen West………………………………………………………………William

  • geez

    Obama 2012: "Kinetics you can believe in" Time to send the BoyMan back to his homeland in Kenya.

  • skyghost

    This was a sell out by John Boehner and we all know that. He does not have the guts to stand and argue and this was by far not the best deal that could have been reached by someone determined to get what the nation wants. Boehner's race must be targeted in 2012 with a strong conservative. This guy is a RINO and he has proven it. We should fire him as Speaker of the House and put in a conservative Tea Party backed candidate. They have the guts and determination to go toe to toe with any of the Democrats on these budget bills. We cannot compromise. Compromise is losing with Obama and his gang. The Speaker has to fight from bell to bell and the finish with what he wants not what they want. Not what a compromise brings and surely no one gives a crap about Joe Biden and his off the wall threats. Boehner should resign and let someone with guts to he job that needs to be done.

  • http://www.wastewatchersinc.org Richard Ahern

    This Budget is a scam-Speaker John Boehner and President obama must be removed from office. When 2012 Election Comes this must happen. Government is out of control. We sent them there to cut spending and return to physcial sanity, which has not happened. Government has been cultural of corruption.
    http://www.wastewatchersinc.org http://www.judgenap.com

  • Jim_C

    Just how intellectually dishonest do you have to be to find that book worthwhile?