Congress and the Debt Aftermath: What is next? Jobs and other things?

The Federal Debt Limit increase has been signed into law. The posturing, crowing and bickering on this matter are over for the time being. Congress has fled Washington for the about a month or so. Back home to ride in parades, attend town halls and raise campaign funds.

A quick comment on the aftermath because listening to the liberals and reading the press, one could conclude the end is near. Poor people will be eating cat food, the birds will quit singing and Americans will be moving to Mexico to find work. Stop the whining! The fact is-and everyone knows this-the debt limit so-called spending reductions will have a bare minimum effect on government spending. There are no drastic reductions. Government spending will still increase, Federal debt will not diminish, it will increase at the rate of about $4 billion a day. None of the decisions are actually binding on future legislatures; they can change anything they want at any time. In a sense, the entire process was more symbolic than substantive.

 There were no tax increases. Not the end of the world. The bonus depreciation (a Democrat proposal) for corporate jets still exists. There is certainly a disappointment there for the liberals. However, there is an inconsistency also. Do they really want tax increases or just taxes on certain greedy groups? Is there any real desire to reduce the deficit? The Administration wants to extend the 2% employee tax reduction on payroll taxes, about $110 billion a year. I think that is a good idea. It is interested in giving AMT relief, extending the Research and Development tax credit. So what is it? More taxes or not? Deficit reduction or not?

 For one who has been involved in all of this, there is a sense of lull, not relief.  In this pause, let’s take a look ahead. In the next few months, it is all now about the Special Joint Committee of twelve to be appointed to come up with additional billions in “savings” before November 23. The 12 apostles will have a hard job. Lots of moving parts. As I have stated, I think the formation of this Supergroup is a bad, bordering on idiotic idea but that is the way it is now. If Congress does not approve whatever this group comes up with, in theory, there will be some automatic cuts in specific areas of spending. In about 2 weeks, we will know the identity of these “deciders”. However, they will be handpicked, under enormous pressure from outside groups and their colleagues and most likely taking instructions from their respective leadership.

 Another item coming up which does not get much attention is the actual funding of the Government through the appropriations process. The new fiscal year starts October 1. All the appropriation bills are out there at various stages of approval but since it will be September before any of them are considered again, it is unlikely any of the major ones will be enacted. Therefore, the Government will have to pass some type of Continuing Resolution to keep going. Now, that will also be interesting as the House has a set of “policy riders” to curb the regulatory excesses of the Administration beyond the horizon. Another showdown looms. How exciting.

Our President, desperate at any cost to be re-elected, has announced he will now turn his attention to “job creation”. What? Jobs? The last Congress squandered about $800 billion in an ineffective stimulus program. The Fed is about tapped out and interest rates as low as they can go. The Administration has unleashed the anti-business dogs of regulation on about everything. The Financial Regulation bill from the last Congress has scared the wits out of banks to lend; instead they now make their money on interest rate differentials subsidized by the Fed. U. S. multinational companies are flush with cash but do not want to invest here with no demand from consumers and better conditions elsewhere.  Housing prices continue to lag or plunge. Good luck, Mr. President, you have no bullets in the chamber, no arrows in the quiver.

Finally, a couple of other items. Just when Vice President Biden was moving away from him image as a motor mouth to a more constructive influence. He reportedly called the tea party “ terrorists”. Excuse me Mr. VP but terrorists are people who blow up stuff, kill Americans or behead innocent people. Biden, of course has apologized or said it was out-of-context or whatever. However, the sad part is, I believe this is the way Biden actually thinks of his fellow Americans and it has no place in public discourse-for Republicans or Democrats. No wonder there is so much antagonism out there.

The last thing is the FAA authorization. Congress left town without extending funding to part of the FAA. These are the guys who make sure we do no sit in a plane going down.  As a result, the Government-desperate for revenue according to the liberals-is forgoing about $30 million a day in ticket taxes and has had to lay off a number of workers. The dispute is about two things. The first is the subsidy for rural airports (Democrats want to preserve them) and the second is a change in the union organizing rules newly brought in by the Obama Administration. (Republicans want to go back to the rules in place since the beginning of time). The failure to resolve this, to compromise this is also lunacy, stupid and potentially dangerous.  

 

 

 

Comments

[Timberland Outlets]

Don't know what is wrong what is rite but i know that every one has there own point of view and same goes to this one