Washington is once again in a deal making mode, and you are about to lose again. When Congress passed the massive debt increase bill earlier this year, it abdicated legislative responsibility to craft a solution to the spiraling debt. They gave the legislative responsibility to what Congress calls the Joint Select Committee on Deficit Reduction.
The committee was then loaded with legislative “veterans” to limit the influence of the recently elected Tea Party Republicans. Since its inception, the committee has been pushing a mountain of tax increases using the popularity of the concept of balancing the Federal budget. The only question at this point is how much the two sets of Washington elites will raise taxes.
Obama and the Democrats have laid down the gauntlet. They will accept not one penny less than one trillion in new taxes, Republicans have already agreed to raise taxes by at least 250 to 300 billion. We favor another path, no agreement.
Now if you talk to the governing elite in Washington DC the resulting chaos of no agreement is the end of the world. According to the earlier passed law if the taxes are not increased, then we may actually see a decrease in the rate of spending growth.
According to this agreement, spending will be cut across the board in non-entitlement programs by a mere 75 billion a year in military expenditures and 75 billion a year in non-defense discretionary programs. Remember in Washington-speak the budget that is cut can still increase in real terms.
According to the Wall Street Journal, “Total domestic discretionary spending doubled to $614 billion in 2010 from $298 billion in 2000. Even if there were a 10-year $1.2 trillion "cut," total discretionary spending would still rise by $83 billion by 2021 because those cuts are calculated from inflated "current services" projections.”
This sleight of hand is accomplished by the way Washington budgets. The cut is actually an increase.
So expect to hear lots of scary talk over the course of the next few days about the end of the world as you know it. Children will starve, schools will close, police and fire protection will end, planes will fall from the sky and scariest of all our enemies in Iran and North Korea will rejoice.
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