Posts Tagged ‘Budget Control Act of 2011’

Captain Rick: The U.S. Federal Budget has grown 40% larger since Obama became president. America’s thirst for deficit spending has has quadrupled since. Deficit spending has grown from under 6% of the Federal Budget in 2007 to a whopping almost 24% in 2013. At the rate President Obama is increasing the U.S. National Debt, deficit spending will consume nearly 50% of the Federal Budget by the time he leaves office. It is obvious he is leading America on a suicide journey to the edge of the Fiscal Cliff.

The Sequester Cuts, that begin to go into effect today, represent only a tiny reduction of America’s deficit spending as demonstrated by the pie crumbs left after a nearly quarter-sized hunk of pie was removed. The Sequester cuts represent only 2% of the Federal Budget and less than 10% of deficit spending.

image

The Sequester Cuts are tiny contribution to begin to harness President Obama’s debt spending binge. Actually, the cuts will achieve little if deficit spending keep increasing during the next year at the same rate as the past four. A year from now deficit spending will have gone up by a much larger percentage than the tiny reduction realized from the Sequester Cuts. America is in serious fiscal trouble. The Sequester cuts are a start. Far more needs to be done to save America from fiscal destruction in a few short years.

It would have been better if Congress and the President could have agreed on which cuts should be made, but they could not, thus the previously agreed Sequester, signed by President Obama, went into effect today. I believe I speak for many Americans when I say that President Obama’s choice to free thousands of illegal aliens under the guise of Sequester cuts was politically motivated and used very poor judgment.

When will the Washington Circus end?

Americans are getting sick and tired of it … but then they are the ones responsible for electing the incompetents representing us in Washington. Perhaps the real problem lies on the shoulders of our voters … but then again … we often face ‘crappy’ choices at the poll. Intelligent voters in America are becoming a minority. I am doing my very best to help reverse that trend! I hope you will follow my blog and share it with your friends via the many social network buttons I have provided for you below. And please…don’t be bashful…share your comment with ANJ’s rapidly growing audience across America and around the world. Your voice is important!

I welcome your comments, likes and shares … below!

More info from previous reports:

Fiscal Cliff: https://atridim.wordpress.com/category/fiscal-cliff-course-101/

U.S. Debt Crisis: https://atridim.wordpress.com/category/u-s-debt-crisis/

Advertisements

Captain Rick: On March 1, 2013 President Obama becomes the owner of the “Sequester”. He will shoulder the blame for this travesty of American government breakdown as a result of the Budget Control Act he signed into law on August 2, 2011.

image

The U.S. Senate failed to pass both Republican and Democratic alternatives to head off across-the-board spending cuts, further ensuring Washington will blow past a Friday deadline to avoid or replace $85 billion in cuts that threaten economic growth, military readiness and jobs.

The Democratic alternative would have replaced the cuts, known as the sequester, through 2013 with a combination of a minimum 30% tax on millionaires and cuts to defense and farm programs. It failed 51-49.

The Republican alternative would have transferred sweeping authority to President Obama to force him to determine how to implement $85 billion in cuts instead of the across-the-board spending cut affecting most reaches of the federal government. The sequester exempts military personnel accounts and the social safety net including Social Security and Medicare. The GOP measure also failed, 38-62.

Both proposals needed a 60-vote super majority to pass, but either vehicle was dead from the start. The GOP-controlled House opposes the Senate Democrats’ proposal because it raises taxes. GOP lawmakers do not support using new taxes to turn off the sequester; rather they are seeking alternative spending cuts and entitlement reforms.

After a two-month sequester delay agreed to in a January tax deal, the cuts are scheduled to start kicking in March 1. There is about $85 billion in cuts scheduled through Sept. 30, the end of the federal fiscal year. In total, the sequester will trim $1.2 trillion in spending across the federal government over the next decade if left untouched.

The cutting mechanism is an unpopular budget tool that was included as a fail-safe in a 2011 budget law that required Congress to find $1.2 trillion in deficit reduction on their own. When they failed to do so in December 2011, they started a one-year countdown to the automatic cuts. In the past year, Congress and the White House have been unable to come up with an alternative to the sequester, or reach a long-term budget deal that would allow them to turn it off.

The president and congressional leaders will make a final attempt at a pre-deadline compromise at a White House meeting Friday morning, but top lawmakers conceded the prospects were dim for a deal in the short-term.

Captain Rick’s closing thoughts

I believe I speak for most Americans by saying … our government in Washington is totally broken. I welcome your comments below.  

More info from previous reports:

Fiscal Cliff: https://atridim.wordpress.com/category/fiscal-cliff-course-101/

U.S. Debt Crisis: https://atridim.wordpress.com/category/u-s-debt-crisis/

Captain Rick: The term “Fiscal Cliff” was coined by Ben Bernanke, 14th Chairman of the Federal Reserve, in his testimony before the House in February 2012. President Obama signed the Budget Control Act of 2011 in August of 2011. It provided that if the joint selected “Super Committee” did not produce bipartisan legislation, across-the-board spending cuts and tax increases would take place on January 2, 2013. That committee was not able to reach agreement and thus $600 billion in spending cuts and tax increases will take place in January 2013, unless congress and the president agree to a compromise. As of this date, a compromise seems unlikely. And that is good…because anything congress does to water down the “Fiscal Cliff” will haunt us all for years to come. I welcome you to follow this continuing story as I present why the “Fiscal Cliff” could have been better labeled as the “Fiscal Slope” to better economic times. In the mean time, I present the history of the “Fiscal Cliff”:

13145646-2560x1440+s2-f1-AWS-Fiscal Cliff+R-c

Fiscal Cliff Historic Timeline

March 23, 2010: President Obama signed into law the Patient Protection and Affordable Care Act. One of this law’s provisions is to impose new taxes on families making $250,000 per year or more starting in 2013.

December 17, 2010: Obama signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, patching the AMT through 2011 and extending the Bush tax cuts to the end of 2012.

August 2, 2011: The President signed the Budget Control Act of 2011. This act provided that, if the Joint Select Committee did not produce bipartisan legislation, across-the-board spending cuts would take effect on January 2, 2013. The Budget Control Act of 2011 was enacted due to the failure of the 111th Congress to pass a Federal Budget and therefore as a compromise to resolve a dispute concerning the public debt ceiling. Deficit spending previously appropriated by Congress was bringing the federal government’s total debt close to the statutory ceiling. Republicans in Congress refused to approve an increase in the ceiling unless there were deep spending cuts in order to come closer to a balanced budget and reduce the amount of national debt that was accruing. The Budget Control Act included an immediate increase in the debt ceiling. It also provided for automatic spending cuts to begin on January 2, 2013. The year-over-year changes for fiscal years 2012–2013 include a 19.63% increase in tax revenue and 0.25% reduction in spending. These changes would return tax revenue to approximately its historical average of 18% GDP, while continuing to spend at dollar levels held approximately the same since 2009. Some major programs, like Social Security, Medicaid, federal pay (including military pay and pensions), and veterans’ benefits, are exempted from the spending cuts. Spending for federal agencies and cabinet departments would be reduced through broad, shallow cuts referred to as budget sequestration.

February 22, 2012: Obama signed into law the Middle Class Tax Relief and Job Creation Act of 2012, which extended the following provisions until December 31, 2012: the 2% Social Security payroll tax cut, federal unemployment benefits and the freeze on Medicare physician payments.

February 29, 2012: Ben Bernanke popularized the term “fiscal cliff” in his testimony before the House Financial Services Committee.

July 3, 2012: IMF head Lagarde warned that the threat of “going over the fiscal cliff” could weaken the US economy. The IMF also reduced its projection for US growth in 2013 from 2.4 to 2.25 percent of GDP.

July 17, 2012: Bernanke pushed Congress to avoid the fiscal cliff, warning that a failure to do so will further dampen the sluggish economic recovery.

July 25, 2012: the U.S. Senate voted 51–48 to pass a bill supporting the President’s tax proposal which extended cuts for most taxpayers, while rejecting the Republican proposal of extending the tax cuts for all 45–54.

August 1, 2012: The U.S. House of Representatives rejected the President’s tax proposal, 170–257.

July 31, 2012: Reid and Boehner agreed on a continuing resolution that would pay for the day-to-day running of the government until the end of March 2013. This does not affect the fiscal cliff or the debt-ceiling.

August 7, 2012: Obama signed the Sequestration Transparency Act of 2012, which directed his administration to detail in 30 days how they plan to implement the automatic cuts mandated by the Budget Control Act.

September 14, 2012: Obama released his 400-page document detailing cuts: http://cdn.govexec.com/media/gbc/docs/pdfs_edit/091412cc1.pdf

October 22, 2012: At the third of three presidential debates, Obama says sequestration will not happen.

November 16, 2012: US leaders announced that they met to discuss the fiscal cliff and perhaps develop an approach that would be ready to present the week of November 26, 2012.

November 30, 2012: Obama is supporting an undeclared amount of spending cuts, $1.6 trillion in higher taxes over ten years, and cuts of $400 billion from Medicare and other benefit programs over a decade. Also, Obama wants to include “an extension of the 2 percentage point payroll tax cut” and spend “at least $50 billion” in 2013 “to boost the economy.”

Captain Rick: Obama’s desire to extend the 2% Social Security payroll tax cut is very wrong! Thankfully the “Fiscal Cliff” will kill this very stupid and reckless tax cut that has been raiding Social Security funds for the past several years.

December 2012: The U.S. Congress and President Obama remain in a stalemate…and that is good…because anything congress does to water down the “Fiscal Cliff” will haunt America for decades to come.

I welcome you to follow this continuing story as I present why the “Fiscal Cliff” could have been better labeled … the “Fiscal Slope” to better economic times.