Should members of the LSU Board of Supervisors disclose who receives their scholarships?|
Story Archives: A fraud if there ever was one
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|A fraud if there ever was one|
Some independent observers of the political process in Washington say the Budget Act of 2011 represents a positive step in the right direction because it marks the beginning of an era of austerity on Capitol Hill.
Others – particularly Tea Party conservatives – say the budget act doesn't go far enough.
Make no mistake, the Budget Act of 2011, which the Congress hashed out over the weekend and President Obama signed into law Tuesday, is a fraud from head to toe.
Let us remember that we arrived at this unfortunate fork in the road of having to digest a half-hearted stab at controlling government spending because the government – namely the Congress – has spent too much money for decades. Deficits have accumulated, creating a situation in which Uncle Sam was no longer in a position to borrow more money to pay the government's bills unless the Congress signed off on raising the nation's debt limit by Aug. 2.
The government's accumulated deficit totals more than $14 trillion. The Budget Act allows the U.S. Treasury to accrue another $2 trillion in debt over the next 10 years – supposedly.
We're told the Budget Act will allow the Treasury to pile on another $900 billion in debt immediately. The new debt supposedly is needed so the government can meet its day-to-day obligations. Additional borrowing will occur later.
In exchange for allowing the Treasury to increase the nation's indebtedness, some $917 billion in cuts in government spending must take effect over the next 10 years. However, no one seems to know which government programs or services will undergo the budget-cutting knife. The only thing we know for sure is the government's spending on health care – the most expensive budget item there is – is off limits. At least that's what the Budget Act ordered.
Between now and Thanksgiving, according to the Budget Act, a special committee of the Congress must identify up to $1.5 trillion in additional cuts in government spending. Again, no one seems to have an idea which government programs or services will be cut, but we do know for sure that government expenditures for health care are not to be touched.
When he made an appearance Tuesday to announce the Budget Act had been signed into law, Obama did what he does best – he took responsibility for nothing and blamed someone else for the partisan bickering we've witnessed over the past few weeks over the budgetary crisis. He particularly singled out Republicans, who, according to Obama, must accept tax increases at some point in the future to chip away at the nation's debt.
Let's pause for a moment and recognize that the Budget Act dictates the Congress must cut government spending by $25 billion beginning with the fiscal year that begins Oct. 1. The following year, appropriators can increase spending by $4 billion. Each year thereafter, spending can grow to keep pace with inflation.
To surmise, when the year 2021 arrives the nation's debt will be larger than it is today. Worse, when 2021 arrives the nation's debt could equal as much as 80 percent of all economic activity in America. Even if the Congress rolls back the Bush-era tax cuts, which Obama and other liberals favor, the debt in 10 years could equal 76 percent of all economic activity in the United States.
Though Obama, most Democrats and the Republican leadership in the Congress applauded their own efforts for reaching an agreement that paved the way for the Budget Act to become a reality, the credit rating agencies weren't impressed. Standard & Poor and Moody's, in particular, indicated the U.S. government's AAA credit rating could be downgraded because the Budget Act failed to achieve what the Congress and the president must do to get the nation's fiscal house in order. That's disheartening to say the least.
According to many independent analysts as well as Standard & Poor, the Congress needs to find $4 trillion in cuts in government spending over the next 10 years to stabilize the nations' debt to economic output ratio. That's exactly what Obama called for a few weeks ago when he and Speaker of the House John Boehner were embroiled in discussions to cut government spending in exchange for raising the debt limit. Obama lost the edge with Boehner, though, over his insistence that Republicans accept tax increases as part of deal to cut $4 trillion in spending. Tax increases are a non-starter among Republicans thanks to the heat the Tea Party has interjected into the political debate in Washington and beyond.
And that brings us to this point.
We most likely would not have witnessed the Congress and the president butt heads over the past few weeks over government spending and raising the nation's debt limit had it not been for the Tea Party and the millions of Americans who say they identify with it. Like it or not, the Tea Party has emerged as a player in the political process in America.
Though the Tea Party has arrived, so to speak, it wasn't strong enough to stop the Congress and president from passing along that fraud, the Budget Act of 2011.