Oct 19, 2015

Washington Replays Same Broken Budget Strategy, Expects Different Result

Post by Derek Yale

Arlington, VA – As Washington approaches another budget negotiation, President Obama and Democrats in Congress are already rolling out a laundry list of items that are off the table. Despite agreeing to reasonable, bipartisan spending limits just a few years ago, Democrats now say that they will demand higher discretionary spending, but reject any reforms to entitlement programs driving us toward bankruptcy. If Democrats follow their normal negotiation tactics, they will reflexively blame anyone who refuses to accept their terms unconditionally as unreasonable.

Freedom Partners Spokesman James Davis issued the following statement:

“Instead of more wasteful Washington spending, we need more efficiency, more effectiveness, more accountability and real solutions. Democrats’ demands to increase spending while ignoring looming entitlement insolvency is an irresponsible position that increases the likelihood of a government shutdown now and a fiscal crisis down the road.”

Despite Warnings From Congressional Budget Office, Congressional Democrats Refuse To Address Entitlements In Budget Talks:

Democrats “Will Reject Any Effort To Make Changes To Entitlement Programs As Part Of The [Budget] Talks.” “Democrats are drawing an early line in the sand for this fall’s budget negotiations, saying they will reject any effort to make changes to entitlement programs as part of the talks, according to a source familiar with the discussions.” (Burgess Everett, “Democrats Rule Out Entitlement Changes In Budget Talks,” POLITICO, 10/15/15)

“The Declaration Effectively Limits The Scope Of The Budget Talks To A Small-Ball Deal To Fund The Government For One Year, Possibly Two.” (Burgess Everett, “Democrats Rule Out Entitlement Changes In Budget Talks,” POLITICO, 10/15/15)

Congressional Budget Office: “Unless substantial changes were made to the major health care programs and Social Security, spending for those programs would equal a much larger percentage of GDP in the future than in the past.” (Congressional Budget Office, “The 2015 Long-Term Budget Outlook,” cbo.gov, 6/16/2015)

Obama’s Refusal To Negotiate On Debt Ceiling At Odds With Past 20 Years Of Increases:

Obama “Will Not Negotiate An Increase In The Debt Ceiling.” “President Barack Obama said Friday that he will not negotiate an increase in the debt ceiling as part of budget talks with Congress. ‘When it comes to the debt ceiling, we’re not going back there,’ the president said at a news conference at the White House.” (Jennifer Bendery, “Obama On Budget Talks: ‘We’re Not Going To Negotiate’ On Debt Limit,” Huffington Post, 10/2/2015)

Majority Of Debt Ceiling Increase Over Past 20 Years Were Included With Other Legislation. “In the last 20 years, the United States has enacted 19 increases in the debt limit. Of those 19 increase, 3 were stop-gap measures: a temporary increase with a scheduled fall-back in the absence of superseding increase (P.L. 103-12), and two increase that allowed for uninterrupted operations of the Social Security program (P.L. 104-103, P.L. 104-115). Of the remaining 15 ‘permanent’ increases, all but 3 were either passed as part of other legislation or pursuant to a now abandoned rule that precluded a vote in the House of Representatives, the so-called ‘Gephardt Rule.’” (Gordon Gray, “The Fallacy of the ‘Clean’ Debt Limit Increase – 2014,” americanactionforum.org, 1/30/14)

“Debt Limit Increases Enacted As Part Of Broader Measures Also Tend To Last Longer.” “It should be noted that debt limit increases enacted as part of broader measures also tend to last longer. The duration of pure standalone debt limit increases is far shorter than that of debt limit increases enacted as part of broader legislative changes. Standalone measures lasted an average of 288 days, about two-thirds the 422-day duration of packaged increases.” (Gordon Gray, “The Fallacy of the ‘Clean’ Debt Limit Increase – 2014,” americanactionforum.org, 1/30/14)

Obama Wants To Eliminate Spending Caps Despite Deficit Reductions, Potential Debt Crisis:

Obama Refuses To Keep Spending Caps In Place. “President Obama has vowed not to sign government funding bills that keep in place spending caps favored by Republicans, setting up a showdown as Congress works toward passing a budget. … Asked if he would sign a bill that kept the caps in place, Obama responded, ‘I will not, and I’ve been very clear.’” (Joseph Lawler, “Obama Vows Not To Sign Bills That Keep Spending Caps In Place,” The Washington Examiner, 3/21/2015)

Spending Caps Have Helped Reduce The Deficit. “Since then, a slowly improving economy and annual spending caps agreed to in a 2011 budget deal have steadily reduced the deficit. It has declined for six straight years when measured as a percentage of the economy.” (Christopher S. Rugaber, “US Budget Gap For 2015 At $439 Billion, Lowest In 8 Years,” The Associated Press, 10/15/2015)

CBO Warns That Projected Spending Levels Are Unsustainable. “How long the nation could sustain such growth in federal debt is impossible to predict with any confidence. At some point, investors would begin to doubt the government’s willingness or ability to meet its debt obligations, requiring it to pay much higher interest costs in order to continue borrowing money. Such a fiscal crisis would present policymakers with extremely difficult choices and would probably have a substantial negative impact on the country.” (Congressional Budget Office, “The 2015 Long-Term Budget Outlook,” cbo.gov, 6/16/2015)

CBO: “The large amount of debt could also compromise national security by constraining defense spending in times of international crisis or by limiting the country’s ability to prepare for such a crisis.” (Congressional Budget Office, “The 2015 Long-Term Budget Outlook,” cbo.gov, 6/16/2015)