Read More »"/> Read More »"/>
It’s back! It was just two weeks ago that the U.S. Congress delayed a scheduled presentation of federal government shutdown theater until the holidays, and now that the holidays have come, the U.S. Congress has… delayed what could have been a Christmas pageant episode of federal government shutdown theater for another month. Mike DeBonis and Erica Werner of The Washington Post have the story:
Congress passed a stopgap spending bill Thursday, averting a partial government shutdown at midnight Friday but pushing into January showdowns on spending, immigration, health care and national security.
Among the issues still to be resolved is federal aid for victims of recent hurricanes and wildfires. The House on Thursday passed a separate $81 billion disaster relief bill, but the Senate did not immediately take it up amid Democratic objections.
The stopgap extends federal funding through Jan. 19 and provides temporary extensions of the Children’s Health Insurance Program, which has languished politically since it expired in October, a veterans health-care program and a warrantless surveillance program set to expire Jan. 1.
In the interest of helping everyone concerned about the ever-looming showing of federal government shutdown theater make it through the holidays, we’re going to present University of Georgia economist Jeffrey Dorfman’s list of 10 Things You Need To Know About The Debt Ceiling And Potential Government Shutdown in the political environment of late 2017 and early 2018. Here are the first eight:
1. Congress must do something to authorize government debt.
2. Extraordinary measures are really just internal borrowing between accounts.
3. Not raising the debt ceiling does not mean a default or not paying our debts.
4. Not raising the debt ceiling does not mean not paying for things already bought.
5. Spending can be cut to balance the budget, but not without cutting entitlements.
6. In the case of a government shutdown, the president gets to decide who is essential and keeps working.
7. Government workers will be paid in the end.
8. Congress was supposed to have this all done before October 1, but is fighting over how much more to spend.
Dorfman provides a short commentary for each item in his article, which are well worth the time to read. MyGovCost readers may most appreciate items #9 and #10 from the list, which we’re quoting in full:
9. We keep hitting the debt ceiling because of spending.
Even with sequestration, the federal government is not in a bind because of too little spending. Federal government spending, even after adjusting for population growth and inflation has grown by $1.1 trillion since the end of President Clinton’s second term. That means that in real, per capita terms, the federal government is spending over 35% more than it did just 17 years ago. Spending is the root of our budget problems.
10. It’s not the tax cuts.
Federal government revenue is actually up 4.6% since the end of the Clinton presidency after adjusting for population growth and inflation. Even with the Bush tax cuts (mostly made permanent under President Obama), the federal government collects more money today than it did when it last had a budget surplus. The government doesn’t need more money; it needs to do and spend less.
The following chart showing the Congressional Budget Office’s projected spending and tax collections for the U.S. government both before and after the 2017 Tax Cuts and Jobs Act confirm the source of the problem is primarily the result of excessive spending that has not yet been adequately addressed.
Putting the federal government’s spending onto a slower growth trajectory needs to be a high priority for the U.S. Congress in 2018. Whether or not it will be is doubtful given that both major parties would like to increase spending (be sure to read Dorfman’s comments for Item #8 on his list!)
Have a happy holiday and Merry Christmas season from all of us here at the Independent Institute‘s MyGovCost!