With the New Year and a new Congress, Washington is gearing up for a series of major budget fights. In the next month, the debt ceiling is going to be breached. A month after that, the sequestration cuts the fiscal cliff law ignored will be again debated. About a month after that, the federal government’s six-month Continuing Resolution runs out, meaning Congress must debate about the size of the federal government’s spending for the last six months of the 2013 fiscal year.
We’ll be keeping a close eye on all of these important debates and discussions, and will be reporting on them on this blog and through other media. However, here is the overview all Patriots should be aware of:
First, regarding the debt ceiling:
1. Many in the media claim if we breach the debt ceiling, America would default on its debt. This is not true. What is true is that the Secretary of the Treasury would have to prioritize what to pay and what to not pay. Congress is borrowing about 40% of what the federal government is spending, so this means Social Security, Medicare, defense, and interest payments could be covered without borrowing a single dollar.
2. Many politicians and pundits will (and some already are) claim raising the debt ceiling is important to pay for debt accumulated to this point in time. This is not true. A debt ceiling is like a credit card limit – it is only relevant to future spending. Any spending beneath that limit is irrelevant to the debt ceiling, no matter how much debt is built up.
3. The President has said he is unwilling to negotiate on the debt ceiling. He wants a clean raise. However, last time we hit the debt ceiling, our AAA rating was lowered. It would be good for Patriots to call their respective Members of Congress and remind them that the rating agencies and our creditors are watching congressional dysfunction and our increasing levels of debt with wary eyes.
1. Sequestration doesn’t actually cut spending. It merely slows the growth of spending.
2. Sequestration “cuts” a small amount of the federal budget each year for a decade and, as we’ve seen in the fiscal cliff fight, any future Congress can overturn past legislation. We must hold Congress to this and more in spending reductions.
3. Republicans oppose the spending reductions in defense. While it is entitlement spending that is the main driver of future deficits, as well as interest spending, cutting overspending in the Defense Department is very important to a financially secure America.
Finally, with regards to the Continuing Resolution (CR) in March:
1. The 2012 budget deficit will likely be over a trillion dollars for the fifth year in a row.
2. The Senate has refused to follow the law and pass a budget resolution since 2009. When media and big-spending Senators blame Tea Party-minded Republicans for the Continuing Resolutions because of alleged unreasonableness, it is important to remember the Senate is far more at fault for the existence of regular CRs than the House.
3. This will be the last chance to try and cut spending for Fiscal Year 2013.
Tea Party Patriots will be keeping an eye on all of these discussions, but this is a quick overview of some of the key points. We look forward to working with everyone on holding Congress responsible for its overspending.