Posted 4/13/11 (Wed)
By Neal A. Shipman
For those Americans who enjoyed watching the political fireworks last week as Congress went to the 11th hour before coming to a compromise that prevented the shutdown of the federal government, get ready for Round 2.
Yes, it was nice to see that our national parks remained open and the federal government didn’t have to shut down and spoil the Cherry Blossom Parade in Washington, D.C.
And with both political parties coming out and claiming major victories in the compromise agreement that kept government going, one would think that Congress had finally found a way to kick its spending habit and bring the United States back from financial ruin. But if that is what you thought, you would be wrong. Yes, the Republicans were able to win some budget cuts from the Democrats. But in reality, the actual cuts only amounted to $38 billion, or just under 1.1 percent of President Obama’s original 2011 budget.
With the way that Congress throws around money, $38 billion in federal budget cuts is nothing more than chump change.
So after six weeks of political grandstanding by both parties, the U.S. government is back in business and all is well and good in Washington, D.C.
Next month, Congress gets to take its show on the road again. This time the debate is going to deal with whether or not Congress is going to raise the country’s debt limit.
Currently, the United States has a debt limit of $14.3 trillion, and if Congress doesn’t raise that limit, once again the government is going to run out of money sometime around mid-May. And that means a government shutdown for real.
And already the battle lines of the debate have been drawn. President Obama and the Democrats just want the debt limit raised. Republicans, on the other hand, want major spending cuts tied to any raising of the debt limit.
Obviously, the challenges facing Congress are grave. On the one hand, the United States needs to raise its debt limit or it will begin to default on its obligations to foreign countries, like China. And defaulting on our country’s obligations could very well send this country’s less than robust economy into a free fall.
But on the other hand, it would be extremely unwise for Congress to simply up the debt limit without seriously looking at ways to cut government spending and start dealing with the $1.3 trillion budget deficit and the $14.2 trillion national debt.
The fact that Congress has found it necessary to raise the debt ceiling 74 times since 1962, according to the Congressional Research Service – nine times in the past 10 years alone – speaks directly to how we got into the fiscal predicament our country finds itself in today.
At some point and time, Congress is going to have to deal with the nation’s looming debt crisis. The choices that our elected officials are going to have to make if they choose to cut government spending will not endear them to the hearts of the people that are benefitting the most from the variety of government handouts that have resulted in this massive debt.
But to simply ignore the problem and shove it off for another year is not fiscally prudent. America got into the financial mess it is in because most members of Congress found it much easier to give away the money even if they had to borrow it than to say “no” to reckless spending.
Some would question whether or not this is the time and place when Congress should be debating the pros and cons of a balanced budget amendment, making significant budget cuts or slashing spending to entitlement programs.
But in reality if you don’t answer those questions in a time of financial peril, when will you?
So how will Congress deal with this next budget battle? That’s hard to say. So sit back and watch the show as Round 2 plays out over the next month and half.