It’s Good Friday, and the markets are closed for the day. European markets have a four-day weekend, as they are also closed for Easter Monday. But one group that gets a great two-week spring break is Congress.
Unfortunately, our senators and representatives left a few things undone before they left town. Things like passing a Flint, Mich., aid package … addressing the Supreme Court opening … and passing a bona fide budget for the fiscal year that starts in October.
Two of these items could still remain unsolved even after the August recess. But the one that could drag on the longest is the one that has the biggest impact on our great country’s citizens.
On Feb. 9, President Obama submitted his final budget … a staggering $4.15 TRILLION. It’s the largest budget in our country’s history, and it boosts federal government spending by 4.9%.
His 2017 fiscal-year budget, which starts Oct. 1, will result in a $503 billion deficit. That’s down from $616 billion in 2016, but substantially up from $438 billion last year. This shortage is equal to 3.2% of the country’s GDP (for 2016 it was 3.3%), and it exceeds the 3% level economists consider necessary to grow our economy.
Plus according to the Office of Management and Budget, the budget increases the national debt from $19 trillion to $27.4 trillion over the next decade. Taxes would surge by $2.6 trillion — nearly double the amount Obama sought and failed to achieve in last year’s budget.
This assumes that, during those 10 years …
• The economy will continue to grow by 2.5%.
• Congress will pass a $10-a-barrel tax on oil, raising $319 billion.
• Congress will enact immigration reform bringing in another $170 billion in revenue from all the new taxpayers coming into the system.
• War spending will drop by $636 billion.
On top of those optimistic assumptions, there is yet another roadblock that could keep Obama’s budget from ever making it to the floor for a vote …
The Presidential election has been getting all the press recently. But don’t forget 469 seats in Congress (34 Senate seats and all 435 House seats) are up for grabs this November, too.
They want to keep their jobs. And they’re terrified to make tough decisions in an election year for fear of offending one group of constituents or another. So they’ll hide by playing the "blame game."
“President Obama will leave office having never proposed a budget that balances — ever.” — House Speaker Paul Ryan
The Senate will blame the House for the stonewalling; the Republicans will blame the Democrats; the Democrats will blame the Republicans, and around and around we go, so everyone wins.
Except of course, us taxpayers.
And it’s already begun …
House Speaker Paul Ryan (R-Wisc.) said that
"President Obama will leave office having never proposed a budget that balances — ever. This isn’t even a budget so much as it is a progressive manual for growing the federal government at the expense of hardworking Americans. We need to tackle our fiscal problems before they tackle us."
What’s more, the House and Senate budget committees declined to even invite Obama’s budget director, Shaun Donovan, to testify about the President’s proposal.
In response to that break from tradition, White House Press Secretary Josh Earnest stated:
"Part of me suspects that that might be because Republicans don’t relish the opportunity to have a discussion about budget priorities like this administration does. That may be an indication that they want to avoid some tough questions about their budget priorities, and they’re taking a page from Donald Trump’s playbook and ducking the tough questions."
Two Republican senators who are up for reelection threw up a clever smoke screen. They argued that a budget isn’t needed because congressional leaders struck a deal in October that sets the top-line spending numbers for the annual appropriation bills.
A 14% approval rating, and darn proud of it!
We send Representatives and Senators to Congress with the hope that they’ll at least try to solve our country’s problems, including the mind-blowing rising deficit. But this Congress seems fine with their 14% approval rating and do-nothing attitude.
Don’t let them get away with it. This financial insanity has to stop.
It’s time to hold elected officials accountable. The solution they’re selling … more spending, more bailouts, more entitlements, and more lollygagging … doesn’t cut it.
If they can’t come up with a plan, tell them they should find a new career. And that you’ll be watching what they do before casting your ballot on Nov. 8.
Good luck and happy investing,