On the budget deal, government shutdowns and Obamacare

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Congress has announced a budget deal for 2014 that is, without a doubt, a complete sellout by Republicans. Spending, which was finally getting under control because of sequestration, now goes up $63 billion over the next two years.

This in exchange for new fees on airplane tickets and some long-term savings on entitlements. Anybody who has watched how things happen in Washington knows that the fees will stay and the long-term savings will be overturned by some future Congress.

Click here for a nice chart that details the supposed future savings.

To summarize, this budget deal is an excrement sandwich for anybody who cares at all about the debt and keeping the size of the federal government reasonable. And here’s the kicker: supporting it may just be the smartest thing to do.

Democrats are absolutely desperate to change the subject from Obamacare. They are praying ardently and vocally for another government shutdown and looking for any excuse to create one. They have gone on record as supporting this budget deal, so they are stuck — they must support it.

If Republicans don’t support this budget deal, we get three more months of “government shutdown fever,” with a compliant media turning the tea party into the bad guys. And attention once again drifts from the debacle of Obamacare.

Small government people would, in the long term, lose even more. There is a chance to for Republicans to retake the Senate and to hold the House and to keep focus on the failures of Obamacare all the way until 2016.

Make no mistake: there is no way to support this budget deal. Unless of course you care about the long-term consequences of even more nightmares created by Democrats in the future.

If you have better ideas, or disagree with my analysis, I am open to being convinced otherwise.

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About Geoff B.

Geoff B graduated from Stanford University (class of 1985) and worked in journalism for several years until about 1992, when he took up his second career in telecommunications sales. He has held many callings in the Church, but his favorite calling is father and husband. Geoff is active in martial arts and loves hiking and skiing. Geoff has five children and lives in Colorado.

18 thoughts on “On the budget deal, government shutdowns and Obamacare”

  1. Well, I, for my part, totally agree with your analysis and conclusion. Congress is not willing to cut spending and to live within its means. That’s for sure.

    I live in Germany. Germany just recently has amended its constitution. The amendment (it’s not really an amendment but a real change of the constitution, but that’s not the important thing here) prohibits the federal government to have a budget deficit of more than .35 % by 2016. In this case the federal constitution has a direct impact on the constitution of the states. They are prohibited from having any budget deficit at all beginning 2020.

    Sure, there are some loopholes like natural disasters and some other ways to go around this policy. But overall the deficit limit is there and the feds and the states will have to live within their means for the first time ever. The only way around it is to raise taxes (revenue). But you will have to sell it to you constituency.

    So besides the flaws and loopholes this might even be a blueprint for the U.S. Amend the constitution prohibiting a federal deficit. But i think we all agree that won’t happen.

  2. Klaus, always nice to hear a European perspective. There are problems with a constitutional balanced budget amendment, and it would be difficult to pass. First, it would need to go through either Congress or some convention, then it would need to pass 37 state legislatures. There are enforcement issues. But in general I favor the idea of a balanced budget on a federal and state level (except in the cases of some limited emergencies). Will it happen? Probably not.

  4. Short term, it is a terrible budget. Long term, it may be a good thing. Given that for the last many years businesses have been unable to plan because Congress hasn’t not given them a budget, means that this 2 year budget will allow for some stability for business (esp for small business).

    Second, it takes the focus away from budget problems, and allows it to stay on Obamacare, NSA, IRS, etc. If we can keep the American people from falling asleep, they will continue being angry a year from now, and maybe we can get a Republican Senate.

    Do I hope for a Libertarian federal government? Sure. But I also hope to someday win the lottery without ever buying a ticket (my odds are about the same, whether I buy a ticket or not). Until then, I can hope that Paul Ryan and a few other budget wonks can gain control and begin paring down government. Some is better than none.

  5. Geoff, I can’t believe I’m saying this, but I think you’re being unfair to Paul Ryan. The “concession” from Republicans was basically to bring it back to pre-sequester levels (half of it defense spending) – no new taxes. How is that a win for the Dems?

    In Ryan’s own words:

    “I’m proud of this agreement. It reduces the deficit—without raising taxes. And it cuts spending in a smarter way. It’s a firm step in the right direction, and I ask all my colleagues in the House to support it.”

  8. “If Republicans could give up their fear of defense cuts, they would dominate.”

    Yes. (I am hard on Paul Ryan because the main reason for abandoning the sequester is to satisfy defense hawks upset about automatic defense cuts).

    Yes, there are new taxes on airplane tickets (a fee is still a tax).

    I am unclear how this reduces the deficit. The existing law would have had spending that is $65 billion lower over the next two years. Ryan has effectively *increased* spending $65b over the next two years, so the deficit is higher not lower. Ryan is saying that we save money long-term, but this implies that some Congress three years ago does not change the law, which is not a good bet.

  10. This proves that in politics, you have to pick your battles. Republicans felt they strategically couldn’t spend any more of their precious capital on another government shutdown, because it is all being used to fight Obamacare, which was a lost cause to begin with. If they really wanted more concessions on the budget, they shouldn’t have gotten distracted.

  11. I think that this is not as good as the sequester, but about as good a long-term deal that this Congress could get. Maybe Ryan has or could have negotiated a deal to allow a vote on a “clean” Obamacare repeal in the Senate. That would allow a huge uncomfortable vote for dems, but the budget would be the same in the end. Even if some dems switched and voted for repeal, Obama would just veto the clean bill. McConnell may need to try something like this to save his job.

  13. The German economy, as the US often points out, is dreadfully dependent on exports. That sounds great, and maybe it will continue (German & Swiss engineering is has several hundred years of “brand equity”), but the moment other nations start consuming less German goods, is when their economy crumbles. You might say the same for any country, but most macroeconomists will tell you the heavy export oriented German economy creates issues of its own.

  14. Well good grief, I didn’t write an ode or paean to the perfection of German economic philosophy; I merely pointed out that I’m impressed they are taking balanced budgets seriously. Sheesh.

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