Category Archives: Debt and deficits

Impeach us all

Debt and deficits, Politics, U.S. Congress

By Steve Brawner
© 2014 by Steve Brawner Communications, Inc.

Impeaching the president would be bad for the country in many ways. It should not happen, and it will not happen.

But we columnists like to use this kind of thing to make a point, so here goes.

If the U.S. House of Representatives somehow were to vote for impeachment, there would be no point in asking whether or not the Senate would remove the president from office. Conviction requires a two-thirds vote in that chamber, and no Democrat there would vote for that.

Instead, a better question would be, if we’re going to start stripping constitutional duties, why stop with the president? Maybe we all should be replaced.

The president has failed to provide leadership on the most important long-term issue facing the federal government, one that will really matter long after the Benghazi and IRS scandals are long forgotten. The national debt was $17.68 trillion on Aug. 11 – more than $5 billion more than it was the day before and more than $11 trillion more than it was in 2000. The $500 billion that will be added to the national debt this year will be the best fiscal year the nation has had since President Obama took office. The debt is now equal to about $56,000 for every American man, woman and child. It’s still rising, and it will continue to rise unless something in Washington changes.

The country must have a serious conversation about its wants, needs and expectations, because it’s clearly living beyond its means. The president started that conversation by appointing the bipartisan National Commission on Fiscal Responsibility and Reform in 2010 to make recommendations for addressing the problem. At the time, he seemed interested in the subject. But no one in the White House is talking about fiscal responsibility and reform now.

The president sets the tone, but Article 1 of the Constitution gives Congress the responsibility for taxing, spending, and paying off debts. Clearly, Congress has been failing to fulfill those responsibilities for a long time. For the past few years, it has lurched from fiscal crisis to fiscal crisis, jeopardizing the full faith and credit of the United States and blunting the country’s economic recovery. Like a college freshman who parties all semester and then crams during finals week, it rarely acts anymore without an absolute deadline.

And yet despite the fact that, according to Gallup, only 13 percent of Americans approve of the job Congress is doing, being a member is a secure job. According to the Center for Responsive Politics, 90 percent of House incumbents and 91 percent of Senate incumbents running for re-election were sent back to Washington in 2012. Voters did not care that, during the fiscal year leading up to that election, the federal government had spent almost $1.3 trillion more than it had collected. In fact, they rewarded that behavior.

Ultimately, the White House and Congress reflect the will of the people, and the will of the people is to borrow and spend. Polls have made it clear that Americans are at least aware that the national debt is a problem, but they also oppose meaningfully cutting spending or raising taxes. In a survey last year by the Pew Research Center, respondents were presented 19 areas where spending could be cut. None were favored by a majority. Members of Congress and the president know this.

The Constitution reserves impeachment for “treason, bribery, and other high crimes and misdemeanors.” Americans today – the president, the Congress, and the voters – together have made the decision to steal trillions of dollars from our children and grandchildren. Stealing is a crime – in this case, a high crime. We’re committing treason against the future country they will inherit.

So maybe it’s time to stop talking about impeaching just a particular president and start talking about impeaching us all. We voters have proven unable or unwilling to perform our duties, and so perhaps those duties should be stripped from us and entrusted to the next in line – every American currently under 18. Put kids in the White House and in Congress. If we won’t make their future a priority, maybe they will.

I’m kidding, I guess. But at least my 12-year-old and nine-year-old know that stealing is wrong.

Real Americans tackle ‘Big Bad Budget’ in film

Debt and deficits, Politics

By Steve Brawner
© 2014 by Steve Brawner Communications, Inc.

If you and seven other Americans with different backgrounds and beliefs were given a weekend to balance the federal budget together, could you do it?

That’s the premise behind “Big Bad Budget,” a film that producer and host Tom Carroll calls a “high-brow reality show.”

Carroll, who owns an Albuquerque, N.M.-based marketing and PR firm, rounded up four local Republicans, three Democrats, and a Democrat-leaning independent. They were given information about the federal budget to digest for a week and then were brought together over two days in June 2013. Their mission was to balance the budget by finding $750 billion in spending cuts and/or tax revenue increases. The negotiations were filmed and then edited down to an hour.

Like other reality shows, there’s some conflict, though there’s no yelling or tearful confessionals. The two tribes – I mean, parties – were separated at times to strategize, and Carroll pulled individuals aside for brief interviews.

The show gave differing viewpoints a chance to be aired. Republican Seth Heath said this about food stamps: “Poverty isn’t supposed to be comfortable. It’s supposed to be painful. Otherwise you have no desire to achieve and to become a successful person.” Wanda Small, a human resources consultant and a Democrat, said most people are trying to succeed. While arguing against cutting unemployment benefits, she said one temporary position she tried to fill paying $10 an hour drew more than 150 applicants. “Nobody wants to be in a situation where they have to get a handout,” she said.

I’ll spoil the ending: They balanced the budget by raising tax revenues by $250 billion and cutting spending by $500 billion, including $200 billion from defense, or about a third of the defense budget. The vote was 7-0, with one abstention. Heath accepted higher taxes along with smaller spending cuts than he preferred. Small agreed to reduce unemployment benefits from 99 weeks to 18 months and to cut Social Security by $75 billion.

It’s hard to miss the point.

“Congress needs to see that it needs to put its own personal interest behind the national interest, and if regular Americans can get together and over a short period of time with the information make the hard decisions, then why can’t Congress?” Carroll told me.

Granted, the comparison with Congress is imperfect. The participants had only one task – make the numbers add up. Members of Congress must balance many competing interests, and not just personal ones. Quickly cutting $200 billion from the defense budget would send shock waves through the economy, for example.

Still, the show demonstrates that, when Americans are given the facts and a reason to work with people with whom they disagree, a consensus can emerge. The first thing that happened was the Democrats proposed cutting $10 billion from the Department of Homeland Security. Republicans, annoyed at government intrusion in general, quickly agreed. Both sides proposed spending cuts and tax increases early in the process because they knew compromise would be required. There was some venting, and then it was just a matter of giving and taking and finding common ground.

“Big Bad Budget” has aired in Albuquerque and is being shopped around public television stations. AETN has recorded the show but hasn’t decided if it will run it. Carroll hopes it will be available on Netflix. It’s available on DVD at bigbadbudget.com.

Something like this needs to happen in cities across America and include more than eight Americans. Congress reflects the will of the people, and we the people don’t understand the national debt very well. According to the polls, we don’t want to cut spending or raise taxes. You can’t balance the budget without doing one, the other or both.

On the other hand, the show demonstrates the inadequacy of polling. Questions are usually asked over the phone and in isolation, such as, “Do you favor raising the such-and-such tax?” By itself? Of course not. In this case, Americans made difficult choices because they had an opportunity to make thoughtful decisions in the context of the big picture. They raised taxes, but they cut spending twice as much and balanced the budget.

Failure to compromise meant failure, period. They didn’t want to fail. So even though this wasn’t exactly like Congress, much applies. In Albuquerque and in Washington, people are more likely to succeed when given the right incentives. If it really had to, Congress could balance the budget. As Carroll said, “Right now they’re stuck in their positions, but if you told them that they had to do it or they’d all be thrown out of office, they’d do it in a weekend.”

Here’s the trailer.

Why did Rep. Crawford, a veteran, vote against VA funding? Here is his reasoning.

Debt and deficits, Elections, Politics, U.S. Congress

By Steve Brawner
© 2014 by Steve Brawner Communications, Inc.

In 1988, U.S. Rep. Rick Crawford was an Army bomb technician serving in Pakistan. It was his job to keep things from exploding. On July 30, he played with a little fire.

Crawford, a Republican who represents eastern Arkansas’ 1st District, was one of only five U.S. House members voting against a bill providing $10 billion for private providers to serve veterans when the VA system is overloaded. The bill also will provide money to the VA to hire additional medical staff and lease 27 new medical centers, and it made it possible for senior executives to be fired at will by the secretary of veterans affairs. Because some of the spending is offset by cuts elsewhere in the department, it will add $10 billion to the national debt over 10 years. Only three in the Senate voted no.

The bill was passed remarkably quickly for a Congress that doesn’t accomplish much even slowly. No one wanted to be seen as voting against veterans, especially not amidst the current scandal over long wait times, poor care, and records manipulation. The department reported in July that about 636,000 veterans have been waiting at least a month for medical appointments. Crawford’s Democratic opponent, Heber Springs Mayor Jackie McPherson, quickly held a press conference with veterans denouncing the vote.

Why did Crawford, a veteran and the son and grandson of veterans, vote no? In a phone interview, he said he opposed adding $10 billion to the national debt by giving it to a bureaucracy that has misused what it had. He said management, not money, is the big issue at the VA, where funding has increased 57 percent since 2008 at the same time the patient load has increased 14 percent. He said the VA already had the statutory authority to send patients to private providers when it’s backlogged.

Crawford said Congress should have given incoming Secretary of Veterans Affairs Robert McDonald time to assess the situation at the agency and then make recommendations. Instead, he said, Congress reacted to the problem by writing a blank check.

“These veterans have sacrificed a heck of a lot more than to have to go on borrowed money to get their health care,” he said.

The rest of Arkansas’ congressional delegation voted for the bill, including its three House members who also are veterans.

Was Crawford’s vote the right one? Your answer to that probably depends on whether you think it addressed the problem or merely threw money at it. If there’s any area where the government should deficit spend – even be willing to waste a little – it’s this one.

Whether or not it was the right vote, it certainly was a courageous one, especially during an election year. Of course, Crawford did once defuse bombs for a living.

***

It wasn’t Congress’ best week from a fiscal responsibility standpoint. Congress voted to replenish the Highway Trust Fund so that it will remain solvent through May. Had it not acted, the fund, which pays for 70 percent of Arkansas highway construction, would have been empty, and states would have been reimbursed only as money became available. It’s hard to plan mutli-year highway projects that way.

The main additional funding mechanism is pension smoothing, which lets companies delay contributing to their employees’ retirement plans. Doing so increases the companies’ taxable incomes in the short term, though they will have to make up the difference later, which will lower their taxable incomes then. The measure will increase highway revenues for six years and then start reducing them as companies replenish their pension funds. So once again, Congress has borrowed from the future to pay for present needs.

There were options. The Senate voted for a bill that would have funded highways into December without the pension smoothing provision. The House didn’t budge.

Arkansas’ four House members voted for the pension smoothing bill. Its senators voted for the gimmick-free Senate version and then voted for the final version. Sen. John Boozman also voted for an amendment that would make states responsible for most highway funding. It did not pass.

Some say Congress should stop the games and just raise the gas tax, which hasn’t changed since 1993. Of course, there’s a reason for that. According to an Associated Press-GfK poll released Tuesday, only 14 percent of Americans support a gas tax increase, while 58 percent oppose it. Other proposals that would increase revenues drew little support. So Congress is reflecting the will of the people.

Something has to give. The country’s infrastructure is decaying and congested. Congress isn’t willing to buck popular opinion or create a different set of funding priorities. Maybe it’s time to rethink our transportation system, but into what?

I don’t know, but this governing by crisis while relying on accounting gimmicks is no way to run a railroad. Or fund highways.

Welcome to America, kids – eventually

Business and economics, Debt and deficits, Politics

By Steve Brawner
© 2014 by Steve Brawner Communications, Inc.

The question of what to do with these 50,000 Central American children sent to America alone by their parents to escape violence and poverty in their homelands – that’s a tough one. What do we do? Let some of them stay? Send them all home?

Eventually, we’ll be asking young immigrants to come.

We will do that because the decisions we have made, politically and personally, will leave us with no better choice. Let’s look at some statistics to see why.

In 1946, the World War II generation returned home from overseas and made a bunch of babies. From that year until 1964, 80 million baby boomers were born, and now they are beginning to retire in massive numbers and living longer than previous generations. Social Security’s framers did not plan for this influx of long-living beneficiaries when it was created. Life expectancy was 64 for a program that started paying benefits at age 65. There was one beneficiary for every 16 workers paying into the system.

Now there are three workers supporting each beneficiary. By 2025, the ratio will be 2.3 to one. The baby boomers themselves did not make enough babies, and then Congress messed it all up by raiding Social Security to pay for other programs.

This isn’t just a problem for the Social Security system. Entire sectors of the economy will be looking for workers. For example, the trucking industry, which pays pretty well, is expecting a deficit of 300,000 drivers over the next decade.

Could we just wait for people to make more babies who will grow up and fill the void? Not really. According to the Census Bureau, the median age for American females in 2013 was 39. That means a lot of us are too old to make babies. We’d have a real problem if it weren’t for the Hispanics already here (average age: 27).

Let’s review. We’ve promised benefits to an entire generation of retiring senior citizens, but we don’t have enough young people working to pay for those benefits, fill jobs in certain sectors, or make babies themselves.

We need an influx of young people – fast. Where could we find them? Obviously, south of the border and across the ocean.

At some point, regardless of all the political yelling, the United States will loosen its immigration laws. Those already here will be given a path to citizenship, or at least a path to something. The door into America will open wider. It might be attached to a wall, but the door will be open.

Is this the right thing to do? It won’t matter, because no one will have a better idea.

We ultimately will do this because we will have no better alternative as a result of the choices we have already made. Politically, we could have raised the retirement age enough to compensate for our increased lifespans. We have chosen not to do that. Our society could have fostered the expectation that the care of the elderly would be primarily the responsibility of their children. We decided, for many good reasons, to also rely quite a bit on Social Security, Medicare and Medicaid. We could have had a sensible immigration policy. We chose to squabble about it. As individuals, we could have had more kids. We, including my wife and I, decided that two were enough.

The choices we have made over the past 50 years, when we have had lots of alternatives, will dictate the choices we will make in the future, when we will have far fewer alternatives. So welcome to America, kids – if not now, then eventually.