Voila! Done! Finished! Stalemate in Congress eliminated. Democrats and Republicans in the House and Senate reach a compromise. No more government shut downs. We have a budget for 2014 and 2015. And there is a bonus. The Republican leadership slapped down the Tea Party segment. Whipper-snappers like Marco Rubio oppose it, but he got a tongue lashing from Florida Democrat leaders like the Tampa Bay Times. Let the good times roll.
Well, almost. The House did pass the bill which provides for $1.012 trillion for domestic and military spending. Not to be confused with the total of $3.7-$3.8 trillion the federal government spends. Oh, no one mentioned it? We’re just talking about discretionary spending, not the entitlements (Medicare and Social Security, Medicaid) that take up two-thirds of the budget. That $2 trillion isn’t going be touched. Neither is the debt which is the accumulation of all the yearly deficits.
However, I misspoke. Under the new budget, those deficits will drop and after 10 years will become surpluses. So, the debt continues to grow and then, somewhere around ten years out, it may stabilize. Except that no one really believes it will except maybe by being a smaller part of the whole as the economy grows. That is a valid way to handle debt, of course, but don’t forget about the two-thirds of the budget which is expected to go wild with baby boomers coming on line for benefits. Might also worry about the DemoCare (ObamaCare no longer applies) health plan which got funded. All bets are off on its costs, but it won’t be less than anticipated.
Oh, yeah. Back to the political settlement. By the time this column is published, the Senate may have (or not) passed the Bill. The House did overwhelmingly. But, some Senate Democrats are balking to add to balking Republicans like Marco Rubio, who are opposed. Democrats control the Senate. The biggest problem is that the budget cuts pension growth for both federal workers and military personnel. Not very popular. Security fee increases for people who fly hasn’t gotten much opposition. Nonetheless, the expectation is that there will be a budget agreement.
So, it isn’t all bad. No new taxes, no disturbing tax “reform” (someone else pays for what I now pay). There is something to be said for certainty and the elimination of chaos by a government shut down. Everyone hates to see the government leaders squabbling. Best to keep the status quo or approach the problems incrementally rather than wholesale (a la the health “solution”). This is incremental in that it incrementally deals with the so-called extreme elements of both parties – tax, tax, redistribute wealth vs. cut, cut, stand-on-your own two feet constitutionalists.
On the other hand, there is plenty of uncertainty out there. DemoCare is one. While 4 to 5 million health policies (10 to 15 million people) have been cancelled now, that figure is expected to increase to 70 million policies when everything is in place in 2014-2015. The program is a moving vehicle – changes in the law being made on the go and conditions within the law being either suggested or changes suggested or urged for insurance companies.
Then there is the little bit about raising the debt limit. That’s right. It is time to do that again. We need more money because we’re still spending more – and will continue to – than we are taking in. Will the Republicans take a stand again? The debt is $17 trillion and climbing toward an expected $20 trillion. The Federal Reserve is printing money to buy up treasury bonds. Better than the Chinese buying it? Anyway, that raises the issue of inflation in the future.
But, gee whiz. We probably have a budget and we might have peace in the family of government. If we can put off dealing with going broke for a while longer, we should all be happy.