September 14, 2013 by David K. Sutton
Federal Budget Deficit At Five Year Low, But Republicans Still Plan To Take Country Hostage
Republican lawmakers in Washington plan to take the country hostage this fall until their demands are met. Never mind that the federal budget deficit for 2013 is on track to hit a five year low.
The U.S. Treasury reports that the budget gap dropped 35% from this time last year, and the Congressional Budget Office (CBO) expects a surplus through September. When the fiscal year ends on September 30th, the CBO is projecting an annual deficit of $642 billion. Remember it was only 4 years ago that the deficit topped out at $1.4 trillion. So the deficit will be less than half the final Bush-era budget (2009 budget year started while George W. Bush was still in office).
The deficit is shrinking because of restrained spending (yes, you read that correctly), increased tax revenue from economic growth, sequester cuts, expiration of the Social Security tax break, and an increased tax rate for high income earners. About that restrained spending — nobody is denying that the federal government spends a lot of money and that the deficit is large, but the year-over-year spending increases during the Obama era has been historically low. The issue is that the president inherited an exploding budget, but that is changing, with the deficit improving each year. And it’s proof that you can fix a budget gap mostly on the revenue side. If Republican obstructionists in congress didn’t stand in the way, the economy could be better than it is, which would further reduce the deficit.
So things are heading in the right direction, right? Not according to Republicans, who still say things like “Obama has gone on a spending spree” and other related nonsense. Republicans will not be satisfied until all their demands are met. In other words, they are hostage-takers. With a new budget year on the horizon in October, Republicans want even bigger spending cuts, and most importantly, they want Obamacare repealed. They want to strike a deal that gives them everything they want or the country gets it. Of course there’s zero chance the Affordable Care Act will be repealed, but that won’t stop delusional Tea Party Republicans from trying.
The threat of government shutdown would be bad enough, but another October deadline looms, the debt ceiling. October 18th is the projected date when federal spending will reach the debt limit. Congress needs to vote to increase the debt limit or the United States faces defaulting on it’s fiscal obligations. Remember, raising the debt ceiling does not authorize new deficit spending. When the government reaches the debt ceiling, it’s because of previous congressional authorized spending. If any members of congress hate the idea of raising the debt ceiling, they shouldn’t have voted to increase spending in the past.
If the past 5 years has paved an uncertain economic future, I don’t want to know what the future looks like when the world cannot trust the United States to pay it’s bills. But that’s the gamble these radical Republicans are willing to take with the country and the world. We saw this play out once before in 2011, and it resulted in a downgrade of America’s credit rating for the first time ever. How far are Republicans willing to go this time?
Economy • Government • News