budgetary structures

Response-pol-06

Comments ( add 5) So in what other ways do these budgetary structures lead to situations like the debt ceiling and the debates about it? Any thoughts?

Response one pol-06

Recently, the U.S. experienced a government shutdown. Although it was for only a short period of time, the shutdown resulted in consequential disruptions of key services and facility closures, as well the temporary furlough of countless Federal Government employees.  The government shutdown was the result of a political impasse in Congress, where the Republican majority did not have sufficient votes in the U.S. Senate to garner the 60 votes required to pass the budget resolution.  It passed the House of Representatives with the required votes.

Senate Republicans and Democrats reached a probable compromise related to defense spending, border protection spending and protection for Deferred Action for Child Arrivals (DACA) aliens, with the Republicans focused on the two former and the Democrats focused on the latter. Initially, a bi-partisan Senate agreement was struck, but the President rejected the deal causing the political parties to return to impasse.  In this instance, Congress had reached a compromise, but the Executive Branch, specifically the President, chose not to accept the compromise causing the deal to collapse, resulting in the shutdown.  Within 72 hours following the shutdown, another compromise was struck to pass a continuing spending resolution to temporarily fund the Federal Government until February 8, 2018, upon which another vote would be required.  Partisan politics hard-lines, or hyper-partisanship, significantly reduce paths to compromise and it is the American people who suffer in the end.

Interestingly, however, partisan political positions can reverse over time due to changing circumstances.  In 2011 and 2013 during the Obama Administration, Congressional Democrats wanted to raise the U.S. debt ceiling to preclude the national debt from surpassing the limit set by law.  When the national debt reaches the debt ceiling, and when expenses exceed revenues, the U.S. Treasury cannot increase its borrowing; it may only fund expense for which there is sufficient available cash. 1 The Republicans, wishing to reduce government spending, and who also held the majority in Congress, opposed increasing the debt ceiling to further their own political agenda to cut government spending. 2 In 2013, Republicans used their vote for the debt ceiling to negotiate entitlement reform impacting the Affordable Care Act 3. President Obama responded by saying that he is not going to “negotiate on jeopardizing the full faith and credit of the United States.”2 The impasse resulted in a lapse in funding and a government shutdown.  Ultimately, Republicans succeeded in reducing government spending, but they were unsuccessful in their attempts to cripple the Affordable Care Act. 2

Fast forward to 2018, and the tables are turned.  With Republicans in control of both the White House and Congress, the Republicans want to raise the debt ceiling due to a forthcoming shortfall in revenue, partially due to Republican legislation to reduce taxes.  The Democrats, who oppose the new tax law but were powerless to stop it, now believe they have leverage by refusing to vote to raise the debt ceiling again.  In doing so, they would force a crisis where Republican spending on defense and border security would be jeopardized.  The vote also gives the Democrats leverage in their negotiations to further their own agenda items such as DACA and protection of other social programs.

The Congressional budget process requires responsible assessment of resource needs, including the cost of paying interest, and when possible, principle on the national debt, and detailed forecasts of potential revenues.  A fiscally responsible government should understand that it is untenable to have expenditures continually exceed revenues, requiring additional borrowing and increases to the national debt.  Eventually, the budget deficit costs will drive the debt to a level that is unsustainable and unrecoverable.  Such a significant portion of revenues will be required to pay interests on the debt that less and less money will be available for defense, government agencies, social support programs and coverage of Federal bonds and securities.

By using the debt ceiling and the threat of government shutdowns as bargaining chips for their own partisan politics, the White House and Congress play a dangerous game gambling with the welfare of the American people. 2

To prevent Congress from using the debt ceiling as a chip for their negotiations, Josh Hazan offers one alternative; “when Congress votes to appropriate funds, the debt ceiling should automatically rise to meet a shortfall if one exists. If Congress does not wish to increase the debt, it must choose to either increase revenues or decrease expenditures elsewhere to offset the new appropriations.” 3

If Congress cannot maintain sufficient discipline to appropriate funding within available streams of government revenue, additional measures must be considered to safeguard American solvency.  Balancing fiscal budgets must become the new standard of ethical governance.

1. Mindy R. Levit,    Clinton T. Brass   Thomas J. Nicola Dawn Nuschler  2013. “Reaching the Debt Limit: Background and Potential Effects on Government Operations”   Congressional Research Service.  Retrieved from file:///C:/Users/May/Downloads/CRS-Memorandum-R41633.pdf (6 Feb, 2018)

2. Ahuja, Gurwin. (2013) The Debt-Ceiling Crisis Why It Matters to Millennials. Center for American Progress. Retrieved from https://www.americanprogress.org/wp-content/uploads/2013/10/MillennialDebtCeiling-5.pdf (6 Feb, 2018)

3. HAZAN, JOSH. “Unconstitutional Debt Ceilings”. Retrieved from https://georgetownlawjournal.org/articles/172/unconstitutional-debt-ceilings/pdf (6 Feb, 2018)

4. Hinch, Phillips. 2012. “Facing the Fiscal Cliff.” Journal of Financial Planning 25 (8): 30-31. https://search-proquest-com.ezproxy2.apus.edu/docview/1033050859?accountid=8289.

5. Zigmond, Jessica. 2013. “New Budget Battle Erupts.” Modern Healthcare 43 (37): 4. https://search-proquest-com.ezproxy2.apus.edu/docview/1433853852?accountid=8289.

Response two pol-06

I heard on the news, Tuesday, February 6, 2018, that the house voted to “kick the can down that budgetary road” again until March 23 to give themselves more time to debate the merits of raising the debt ceiling…again.  Oi vey, again and again we go through this.  I was a single mom and had to raise six children on a very slim budget and had to work three and four jobs many times to put food on the table.  But I had to depend on myself.  And budget my money.  Even now, although my children are all adults, I still have to budget my money.    Congress uses other peoples’ money (that they tax away from us) or they just print more money and can’t seem to trim the fat by even five percent.  Or they say, let’s use Keynesian economics and spend our way out of debt.  How much sense does that make?  That would be like me using credit cards to pay for things while I was raising my children.  I would never have gotten out of debt.

In 2011, there was a “balanced budget amendment”[1] voted on whereby sixty-two percent of Congress voted for passage of the amendment.  Those who voted for this proposed amendment included “twenty-five Democrats and all but four Republicans.”[2]  The author of the article posits that the reasons why it was voted down were three provisions in it, including government shutdowns, Federal Reserve “hanky panky” (my words), and one key provision that was totally unacceptable.  Eventually, after much work, it became a much better bill.[3]  It still did not pass.

As of 2012, the nation debt was twice as large than the four years prior, and went to $15.2 trillion.  By statute there is national debt ceiling.[4]  But that did not seem to matter to those members of congress who ran for office on lowering the debt.  Once they got voted into office, they gave every excuse in the world why they needed to raise the debt ceiling.  Ceiling means that you cannot go any higher.

In the fall of 2013, congress was experiencing “budget gridlock.”[5]  Apparently, this had been going on since July of that year.  The author of this article (who by the way is anonymous which tells me that they did not have the intestinal fortitude to put their name on the article), states that, congress is up to its old tricks of continuing resolutions and debt ceilings. Further, that we should just get used to this shell game and become accustomed to CR’s as the new “business as usual” budget model.[6]

In November of 2015, President Obama signed into law the suspension of the nation’s debt limit which then allowed the borrowing of $1.5 trillion in one fell swoop.  The debt at that time was $18.15 trillion.  Additionally, ending the spending caps of 2011, meant much more debt looms large in the future and undoes “one of the only successful fiscal restraint mechanisms in a generation.”[7]

So how did Newt Gingrich and the Republican Congress under Bill Clinton balance the budget?  They came up with the “Contract with America,”[8] a reform agenda.  This was spearheaded by Newt Gingrich, who assumed the post of Speaker of the House (the first Republican Speaker of the House of Representatives in forty years).[9]  So unusual was this contract, that the Republicans running for office that year made it part of their campaigns for public office.  In less than one hundred days, that cadre of Republican congressmen passed more legislation that had not been seen since FDR’s New Deal.  There were 367 Republicans who signed the contract on the steps of the Capitol (I watched the news when they did this) on September 27, 1994.  They publicly pledged: “If we break this Contract, throw us out.”[10]  There were ten items in the contract and it contained a balanced budget (what a novel idea), “environmental regulations and Medicare and Medicaid reforms.”[11]  Then based on it, ran their campaigns, as did Senatorial candidates, state candidates and even some local races.[12

The size of the federal government had become bloated and voters were tired of it.  At the time this piece was written, in 1995, the size of the “permanent staff” on Capitol Hill was approximately 20,000.  So, what Gingrich did was draw attention to what the contract said by being specific and detailed.  Instead of saying that we are going to cut taxes, he explained how.  How effective was this?  Nine of the ten items were passed in the first one hundred days. And on their first day they passed nine major reforms.  The only major item that did not pass was a constitutional amendment on term limits (too bad).[13]

That is why I keep harping on those who to Washington and say this is too hard to get anything done and you can’t do this and you can’t do that.  Really?  Tell that to Newt Gingrich.  What is going to happen if congress does not mend its ways?

Davidson has it correct when he says, “excessive amounts of deficit spending today mean larger financial burdens for the next generation…Spending on entitlement programs, such as social security and medicare, absorbs an ever-increasing proportion of federal dollars, which then are unavailable for other important social, domestic, or security needs.  Universal health care is another redistributive issue because of concern over how to finance it and who would pay the program’s cost, estimated to be $1.5 trillion over the next decade.

When redistributive issues are at stake, federal budgeting is almost marked by conflict.  In recent years, the conflicts have tended to be over how to cut entitlements.  Various techniques have been employed to disguise cuts and to make them more palatable.  Omnibus budget packages permit legislators to approve cuts en bloc instead of one by one, and across the board formulas (such as freezes) give the appearances of spreading the misery equally to affected groups.  In all such vehicles provisions of this sort are added to placate the more vocal opponents of change.”[14]

To answer the question “What does the 2011 and 2013 Congressional debate over raising the federal debt ceiling indicate about the Congressional budget process and the nature of American politics and government?”

There are so many in office that are obstructionists.  Rather than do what is good for the country, they refuse to do what is right and good for the country and want to fight over every little thing (that includes the elite establishment Republicans).  We need to go to the process by which Newt Gingrich and that congressional cadre accomplished all that they did.

Trish

Sources:

Anonymous, “Congressional Budget Gridlock,” 30, no. 1, Washington, (2013): 21,

 https://search-proquest-com.ezproxy2.apus.edu/docview/1508505336/fulltext/B13A49FC02ED4178PQ/1?accountid=8289 (accessed February 7, 2018).

Boyer, Dave, “$20 Trillion Man:  National Debt Nearly Doubles During Obama Presidency,” The Washington Times, November 1, 2015, https://www.washingtontimes.com/news/2015/nov/1/obama-presidency-to-end-with-20-trillion-national-/(accessed February 7, 2018).

Davidson, Roger, Oleszek, Walter, and Lee, Frances, Congress and Its Members, 12th ed., (Washington, D.C.: CQ Press, a division of Sage, 2009.

Gayner, Jeffrey, “The Contract with America: Implementing New Ideas in the US,” The Heritage Foundation, October 12, 1995, https://www.heritage.org/political-process/report/the-contract-america-implementing-new-ideas-the-us, (accessed February 6, 2018).

McCulloch, J Huston, “An Improved Balanced Budget Amendment,” The Independent Review, Fall 2012, 17, no 2, http://www.independent.org/pdf/tir/tir_17_02_05_mcculloch.pdf, (accessed February 4, 2018).

 

Response Three pol-06

the debate over raising the debt ceiling in the United States has been an ongoing debate for decades. Of course, no one likes using the phrase “raise taxes” nor do the citizens want to be told that a specific public service is going to be reduced or cut all together. This becomes a delicate game of juggling, especially in different parts or regions of the country. Generally, citizens who live in rural America are opposed to higher taxes to provide more government sponsored services due to their independent life style; they view the public services as unnecessary. Likewise, citizens who live in Cities and metropolitan areas are accustomed to and prefer the conveniences offered by public services, again, generally speaking. So the juggling game must be between these two juxtaposing views allowing for the citizens in the middle to ebb and flow with the slight adjustments. Now this break down of the forces or opinions on government spending and borrowing is rather simplistic, yet it lends itself to explain the deep polarization we have within the Congress when it comes to the budget process. During the last four years of President Obama’s term, the American public became accustomed to hearing the term “sequestration”. Many have not heard of it and were not aware what it meant. Basically it means an automatic reduction in the budget (Myers, 2014). This was done to prevent more spending, which would drive up the amount of debt and possibly hit the “ceiling”. Depending on which side of the aisle you stand, sequestration can be interpreted as either a mechanism to lower government spending or systematic budget reductions due to the lack action by politicians (Myers, 2014). To me it is the latter; relying on sequestration means arbitrary cutting in budgets that may critically need the funding and by blindly cutting the funding out could exacerbate an economical challenge or create a whole new challenge. As pointed out in our lesson this week, the Congress’ biggest tool of power given to them in the Constitution is the power of the purse (Grulke, 2018). Although there are checks and balances to limit or restrict some aspects of this responsibility, the fact that the Government seems to always be on the brink of “shutting down” is unacceptable. I could only imagine what would happen to my job if by the middle of January (our budget submission deadline) I just did not submit my budget. Yet the people keep voting in the same folks to Congress. Why are we rewarding people with a job and nod of approval if the approval rating is so low for Congress? Something does not seem right; something is broken. The process of Congressional budgeting is broken. The art and civility of debate and compromise is broken, that is what is indicated about the nature of American politics and government. I am not an advocate for irresponsible spending nor am I proposing unrealistic taxes, but a rational, responsible, and intelligent way of balancing the two is possible. These tasks are possible if the lobbyists, corporations, and donors of the Congress are shut out and the People are put first again.

References

Grulke, Eric, “Week : Congressional Budget Ceiling Debate”, American Military

University,  accessed February 5, 2018, https://edge.apus.edu/portal/site/366584/tool/ac046166-37b2-492d-8e6e-b208146732e9/ShowPage?returnView=&studentItemId=0&backPath=&errorMessage=&clearAttr=&source=&title=&sendingPage=1493987&newTopLevel=false&postedComment=false&addBefore=&itemId=4284554&path=push&addTool=-1&recheck=&id=

Meyers, R. T. (2014). The Implosion of the Federal Budget Process: Triggers, Commissions, Cliffs,

Sequesters, Debt Ceilings, and Shutdown. Public Budgeting & Finance, 34(4), 1-23. doi:10.1111/pbaf.12049

 

Response four pol-06

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