Deficit

Although it's far from a surprise and has long been predicted, it's finally a reality: Social Security is now officially paying out more than it is taking in.

Of course, Social Security has taken in more than it has paid out pretty much since its inception...which would lead a normal person to think there's a big fat piggy bank just waiting to pay out all those benefits, right?  Wrong.  The truth is that the government has faithfully borrowed every dime of that surplus over the years and spent it on, well, everything.

Bruce Krasting looks at the public data on the Social Security "Trust Fund" and points out that the numbers are headed in the wrong direction...pointing out that this wasn't expected to happen for another five years or so.

This is the cost of the protracted recession and the failure of the
economy to generate new jobs. The 2008-2009 increase in benefits was at
a nosebleed level of 9.5%. That level has collapsed to 3.9% in the
2009-2010 period.  ...  read more »

From the long list of ironies when it comes to our government and how it operates, comes the news that Obama's bipartisan deficit commission is about to run out of operating funds.

If you remember, this was the commission that Obama created by executive order back in April because he didn't want to go along with a congressional version being pushed by Republicans that would have taken tax increases off the table in terms of recommendations that the commission could make (and force to a vote in Congress).

From the Fiscal Times:

The 18-member commission faces the daunting challenge of coming up with proposals by Dec. 1 to tame the federal government’s trillion-dollar budget deficit.  But the panel’s own budget is only $500,000, barely enough to cover office rent and the salaries of four staff members.  read more »

In years past, most major political blowups over American fiscal policy that altered the political landscape were over the revenue side of the equation, meaning taxes.  People begin to feel the pinch of higher taxes and they fight back, demanding that elected officials cut taxes, and supporting political candidates who promise that they will do just that.  In some states, they've even been able to get initiatives on the ballot and push tax cuts themselves - California's prop 13 comes to mind.

But as Michael Barone points out, the new Tea Party related political activism over fiscal issues is different from the fiscal fights of the past.  Now it's about spending.

What we are seeing is a spontaneous rush of previously inactive citizens into political activity, a movement symbolized but not limited to the Tea Party movement, in response to the vast increases in federal spending that began with the Troubled Asset Relief Program legislation in fall 2008 and accelerated with the Obama Democrats' stimulus package, budget and health care bills.  read more »

As pretty much anyone and everyone who's paid any attention to the news for the past generation knows, Social Security, as it is currently configured, is going to run out of money.  It's simple math.  But it has always (to a great many people) seemed like a distant prospect, not something that demanded to be dealt with right now.

For decades and decades, the program has muddled along, with a few tweaks here and there, running a surplus of funds paid it by workers versus benefits paid to retirees.  And, of course, the federal government "borrowed" those surpluses from the Social Security fund and spent them on just about everything else under the sun.  Which means there has been an ever growing IOU in the "trust fund".  Couple this with the beginning retirements of baby boomers, and many people have pointed out that it's going to be a problem sooner rather than later.

Well, guess what?  That day of reckoning is here.  Via USA Today:  read more »

So, what kind of impact will Obama's budget "freeze" actually have on the budget?  Since, as they say, a picture is worth a thousand words, the following video says quite a bit...

Pass it on.

Not as though this should be a shock to anyone, but over the weekend the government's Chief Actuary for Medicare and Medicaid gave their official estimate of the impact of the Senate's version of health care reform on the government's balance sheet.

The result?  Red ink.  Two-hundred and eighty billion worth over the coming decade.

Via Human Events:

Regarding “Coverage,” CMS estimates that the measure will “reduce the
number of uninsured from 57 million under current law to 23 million”
primarily by increasing eligibility for Medicaid.  What this does is
shift the cost burden from the federal government to cash-short states.
It’s an accounting gimmick, not a cost savings. ...  read more »

Although it's easy to get down about the state of things, especially our government, along comes a poll that gives you at least a little faith in the common sense of average Americans.

Via Rasmussen:

Seventy-eight percent (78%) of voters nationwide say it’s at least
somewhat likely that the health care reform legislation working its way
through Congress will cost more than projected. A new Rasmussen Reports
national telephone survey finds that just 14% believe the costs are not
likely to exceed projections.

Eighty-one percent (81%) also think passage of the legislation is at least somewhat likely to lead to higher middle-class taxes.

The survey finds that 68% believe the legislation will
increase the federal budget deficit. Only 11% say the program will
achieve its stated goal of deficit reduction.

Ronald Reagan once said that a government program was the nearest thing to eternal life we'll ever see on this Earth.  You could probably add "eternal growth" to that as well.  read more »

Before the debate over health care reform really got started, President Obama said that the final result of reform should NOT increase the deficit (and debt).   In fact, he said he would not sign a bill that added "one dime" to the deficit.

Well, we're about to find out how serious that promise was, because it turns out that the calculator at the Congressional Budget Office doesn't work so well.  In its first look at the Senate version of the bill, the CBO showed a savings, leading Obama was able to take to the stage and declare "mission accomplished", saying:

"This bill with strengthen Medicare and extend the life of the program.
Because it’s paid for and gets rid of waste and inefficiency in our
health care system this will be the largest deficit reduction plan in
over a decade. In fact, we just learned from the Congressional Budget
Office that this bill will reduce our deficit by $132 billion over the
first decade of the program, and more than one trillion dollars in the
decade after that."

But it turns out that it's easy to show a bill costs less than it really does if you count the "savings" twice.  Which is what the CBO just admitted that it did in its analysis of the bill.

The result?  A 170 BILLION dollar hole in the deficit.  read more »

The Democrats gave yet another unwanted Christmas present to America's future generations this past weekend as they voted for a monstrous pork-filled Omnibus spending bill (omnibus or consolidated because the Democrats could not get their work done this year by passing the required 12 separate spending bills to keep the government functioning.)   

Incredibly, 3 Republicans joined virtually all the Democrats in voting for this $1.1 TRILLION bill loaded with thousands of pork-projects glommed on to the legislation.  The three Republican Senators who voted for this irresponsible spending bill were Susan Collins from Maine; Thad Cochran and Richard Shelby (up for reelection next year) from the very conservative states of Mississippi and Alabama respectively.  If these three Republican Senators had voted no on the "breaking the Republican filibuster vote," the Democrats would not have been able to even vote on this abominable bill.  

The $1.1 trillion bill is now part of the Democrats' whopping $3.6 trillion annual budget for Fiscal Year 2010 and the president is expected to sign it into law.  The Democrats, contrary to their promises (and the president's campaign promises), increased federal spending by a crushing 12%, by far, the largest increase in many years.    read more »

The Christian Coalition of America will be rewarding those 28 Democrats  --  who joined every single Republican in the House of Representatives voting yesterday  --  with a positive score in its next Christian Coalition of America Congressional Scorecard regarding the bloated and pork-filled Omnibus money bill the House Democrats passed by a margin of 221-202 (with one Democrat voting president, ala state senator Barack Obama who voted present numerous times worried about his political viability if he took a position on many issues; 7 Democrats and 3 Republicans did not vote.) 

Voting for this gigantic spending bill is an absolute disgrace besides the fact that provisions in the bill attack the American family and our culture.  The official name of the bill is the "Consolidated Appropriations Act for FY 2010," H.R. 3288.  The reason the Democrats call it a "consolidated" spending bill or an "omnibus" spending bill is that they could not get their job done, as they promised they would, repeatedly, during the 2006 and 2008 campaigns.  They got only 5 of the 12 spending bills signed into law this year, a record worse than most Republican Congresses.     read more »