Wednesday, January 27, 2010

Hip-Hip-Hooray for President Obama!

See! We told you we would salute him when he has ‘done good!’

The President of the United States just called for a spending freeze on federal discretionary spending in the upcoming budget request for FY 2011 in his State of the Union address tonight.

On top of that, he proposed bringing back the only budget tool that has ever worked to curtail overall spending by the federal government, the PAYGO (pay-as-you-go) budget mechanism. (more on PAYGO in a future posting)

To that we add a hearty: “Way to go, Mr. President!”

With an addendum: “It is about darned time!”

(And a caveat: We don't think this 'one small step for mankind' will qualify Mr. Obama for a Nobel Prize in 'Budget Balancing' anytime soon.

And Deep-Six the budget commission executive order; that is a dumb idea since we already know from hundreds of previous commissions what the problems are (entitlements) and Congress is our only duly-elected, Constitutionally-established 'budget commission' in the first place)

His brief comments on budget discipline made us think about the walk-on basketball player from a small college who gets into the final seconds of a game against Duke or Carolina and makes a free throw. Even though they are down by 95 points.

But the crowd still goes wild! Both sides.

Why is that? It is because every fan wants that average guy who has been working hard every day at practice for 4 years to hit a free throw and get his name up on the scoreboard and into the record books. Forever.

Same tonight with President Obama. After last year when it seemed as if he, his advisors and the current leaders of Congress could not find the ‘off’ switch (they didn't) when it came to spending more of your money on everything and anything and borrowing trillions from the Chinese, we are glad to see that he has finally hit a free throw.

Even though we are down 12 trillion points (in national debt dollars) heading towards a colossal blowout of 20 trillion if we don’t watch out, that one free throw makes it a little more 'respectable'.

Ok, so let’s take a closer look at this 'budget freeze' proposal:

  1. The 'freeze' is on discretionary budget items only.
  2. It only affects less than 1/6th of the budget.
  3. It will save ‘only’ $15 billion in the first year, the naysayers say. (Hey! What is wrong with saving $15 billion of your tax money anywhere nowadays!?)
  4. Everything else is ‘off-limits’…for now at least. (Everything needs to be ‘on-limits’, if that can be a word)
  5. Defense, Homeland Security, Medicare, Medicaid, Social Security and Interest on the National Debt, the ‘Six Horsemen of the Apocalypse’ in budgetary terms, are not included....for now. (They will have to be if we are ever going to balance the budgets in your lifetime as if you need to be reminded once again)
  6. It will save between $100-$250 billion over the next decade depending on your point of view and economic forecasts and projections.
  7. Everyone will scream bloody murder and wave the bloody shirt: “How dare you slice and dice the education/environmental protection/justice/welfare (fill in the blank, take your pick) program like the Slap Chop hawked by that crazy guy on TV! What are you trying to do, make us a third world country?”

If we don’t control our spending and bring it back into some sort of balance with what the American people are willing to pay in taxes (18% of GDP is about their limit and average based on the past 40 years), then we are well on our way to becoming a banana republic, with all due respect to the banana republics of the world.

Of course, none of this will happen if Congress doesn't pass even this teeny-tiny effort at restoring some sense of fiscal sanity in Washington. Here’s the real deal on anything budget-related, folks: The President of the United States is MR. IRRELEVANT* when it comes to passing anything in the federal budget. He can’t even sign or veto his own budget submission to Congress, for goodness sakes!

Due to the ominous-sounding Budget and Impoundment Control Act of 1974, the President and OMB are asked to formulate annual budgets because it was a lot easier to do it over there at the White House than with 535 would-be, wannabe presidents in Congress and their staffs trying to do it each year.

After the annual budget is submitted, Congress can kick it into the dustbin of history if they want to…but they don’t. They usually fight over, let’s say, oh, maybe about 2% of the budget priorities in a good year and between 5-10% in a bad year. That would mean all this fussing and fighting that goes on every year is over between $150-$300 billion nowadays, peanuts when compared to the gargantuan $3.6 trillion federal budget of today.

The President is an 'influencer', the only person elected by the entire country and as a result, he has the bully pulpit to use anytime he wants to shape public opinion. Even the smallest whisper of 'fiscal restraint' in this tiny budget freeze request is a heckuva lot better than anything we have heard in Washington since 2000. And we all know the White House and Congress was controlled by President George Bush and the Republicans until 2007.

So President Obama gets credit for being the first leader in Washington to say the word 'freeze' at least in close to a decade. Hear, hear!

One side will carp and say this budget freeze is a ‘draconian’ budget cut that will devastate western civilization as we know it. Others on the right will say this is just for show and doesn’t mean anything.

But 80% of people in the middle want both sides in Congress to 'just shut their yappers' as Chris Farley used to say, lock themselves in Congress for a couple of months, balance these budgets, stop borrowing all this money and go home. 

(Does the concept of a Senator-elect named 'Scott Brown' from the Great Commonwealth of Massachusetts mean anything to anyone in Washington for goodness sakes?)

Balancing our national spending with our current willingness to pay for them through taxes on us now currently-living souls (not our defenseless children and grandkids) is all about 'sustainability' and 'good stewardship' really, isn't it?

That is what the American people are clamoring for..that plus some statesmen-like leadership.  

*''Mr. Irrelevant' is the last football player chosen in the annual NFL Draft. Sometimes, he makes the team and has a decent career. But most of the time, he is 'ignored' and cut from the squad after a few tryouts.

Rick Barry picture courtesy of www.sportsthenandnow.com

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