With the Federal deficit set to shrink this year, just maybe, to a tad under a trillion dollars (not counting, of course, the Social Security/Medicare accrual of multi-trillions that must not be discussed in polite company), perhaps we should check in on the state of the debate over next year's budget. Big news: the Senate has actually made a budget proposal for the first time in four years! The President, required by law to put forth his own budget proposal by the first Monday in February, hasn't done it; but there's talk that he might actually produce a budget this year, perhaps as early as April. Could this mean there is actually a sense of seriousness in Washington?
No. In the humble opinion of the Manhattan Contrarian, the Federal government's spending and commitments to future spending need to shrink by about half. Nobody dares even mention that. Last night Sean Hannity had Paul Ryan as his guest for an extended interview to talk about the "bold" Republican House budget plan. Bold? Both Hannity and Ryan immediately began emphasizing that there was no suggestion here of actual cuts in government spending or commitments. Instead spending under this plan would increase by 3.4% per year, a good deal faster than the economy has been growing in the current "recovery." But there won't be any tax increases!!!!! Well, exactly how does tax revenue increase faster than economic growth without tax increases? The answer is inflation plus bracket creep, which in my view is tax increases of the most insidious sort. I don't mean to be too harsh on Ryan. To his credit, he does propose substantially to de-fund the black hole of Obamacare.
But even as Ryan and his team try to put the slightest limits on the spending gusher, it just takes a little reading of the news to see the infinite credit card mentality rolling on. Start with the President's State of the Union Address: With no idea how much Obamacare is going to cost, he just goes on to propose another huge Federal program, universal pre-K. No price tag given for that either -- budgets are for babies!
On March 12 the Agriculture Department released data showing that food stamp recipients reached an average of 46.6 million in 2012, up from just 26.3 million in 2007. The program now runs over $80 billion per year, metastasizing on autopilot like all the other entitlements.
In this morning's New York Times, we have Senator Jay Rockefeller, Democrat of West Virginia, proposing a big increase in Federal funding to speed up internet connections in elementary and secondary schools. “'As every educator knows, digital information and
technology will continue to play an increasing role in education, so we need to
think about how we are going to meet the broadband infrastructure needs of our
schools and libraries,' Mr. Rockefeller said." In Mr. Rockefeller's world, the term "think about" something means only one thing, namely, have the Federal government write a big check without ever giving a moment's thought to where the money comes from.
Or here in my e-mails this morning, Mark Alcott (partner of my next door neighbor law firm Paul Weiss, former President of the New York State Bar Association, member of House of Delegates of the American Bar Association) touting the successful efforts of the New York delegation to the ABA to get that organization to lobby to avoid any cuts to the Federal courts or to the Legal Services Corporation from the "sequestration." LSC is just lawyers lobbying for more money for lawyers as far as I can see. Does Mr. Alcott think he has any obligation to specify what should be cut if his pet causes should not? Of course not.
But here is my favorite one of the day: Senator Schumer announces where a couple of billion dollars of the Hurricane Sandy relief money will go. How about $750 million for "beach restoration" for the 83 miles from Fire Island to Montauk? Well, $750 million is just a rounding error in this exercise, but am I really the only one offended by this giveaway to the very richest people in America, the Long Island oceanfront homeowners? They were trying to get this money from the Feds back when I owned a house there in the 90s. The Clinton Administration, to its credit, said no. Now, with Hurricane Sandy, we can use those sad Staten Islanders as cover to sneak through $750 million for the richest of the rich.
As I say, it's just fundamentally unserious.