Biden, Schumer, McConnel and McCarthy’s ‘Fiscal Irresponsibility Act’ of 2023

Ordinary Americans work hard, pay their taxes and pay off their debts. It’s the smart, wise and common sense thing to do. We all go into debt for various reasons, e.g. pay for our education, buy a home, or a car. But we the people know that going into debt requires self-control and planning how to get out of debt.

Successful individuals, companies and organizations stay out of debt. With one exception—governments.

Whenever or wherever you find any government activity deeply in debt you know that it is run by those elected officials who don’t care about using our tax dollars wisely and staying out of debt.

Debt

In 2012 Reuters reported on 10 States With Enormous Debt Problems. Reuters reported,

America’s 50 state governments owe $4.19 trillion, including outstanding bonds, unfunded pension commitments and budget gaps, according to a new report.

At $617.6 billion, California had by far the biggest total debt, more than twice the total of No. 2, New York, with $300.1 billion owed, according to State Budget Solutions, a research and non-partisan advocacy group.

Texas, with $287 billion owed, New Jersey, with $282.4 billion, and Illinois, with $271.1 billion, ranked next among states with the biggest total debt, according to State Budget Solutions. Vermont had the smallest debt load at $5.85 billion.

The annual study said state governments had benefited in the last year from smaller budget gaps and reductions in loans taken from the federal government during the worst of the Great Recession to pay unemployment claims.

Those trends helped reduce total debt, which includes medical insurance due retired government workers, from last year’s $4.24 trillion of total debts owed by the 50 states, according to State Budget Solutions.

“Our states are in trouble and no amount of budget gimmicks, political posturing or hiding bills will fix the massive debt that they face,” said Bob Williams, president of State Budget Solutions. “Drastic reforms, innovations and political courage are needed to put our states back on the road to fiscal survival.”

Today, we additionally have our national government addicted to spending our hard earned tax dollars irresponsibly.

On June 3, 2023  on LewRockwell.com President Ronald Reagan’s OMB Director David A. Stockman wrote,

If there was ever any doubt, now we know: Speaker Kevin McCarthy has straw for brains and a Twizzlers stick for a backbone. He was within perhaps a few days of breaking the iron grip of America’s fiscal doomsday machine, yet inexplicably he turned tail and threw in the towel for a mess of fiscal pottage.

We are referring, of course, to the impending moment when the US Treasury would have been forced to forgo scheduled vendor or beneficiary distributions in order to preserve incoming cash for interest payments and other priorities. That act of spending deferrals and prioritization would have obliterated the debt “default” canard once and for all, paving the way for a nascent fiscal opposition to regain control of the nation’s wretched public finances.

And there should be no doubt that we were damn close to that crystalizing moment. After all, Grandma Yellen herself forewarned just last week on Meet The Press that absent a debt ceiling increase, the Treasury Department would have to prioritize payments and leave some bills unpaid:

“And my assumption is that if the debt ceiling isn’t raised, there will be hard choices to make about what bills go unpaid,” Yellen said on NBC’s “Meet the Press…….“We have to pay interest and principle on outstanding debt. We also have obligations to seniors who count on Social Security, our military that expects pay, contractors who’ve provided services to the federal government, and some bills have to go unpaid….”

And, of course, that prioritization and deferral could have been easily done. Federal receipts are now running about $450 billion per month, meaning that after paying $61 billion of interest, $128 billion for Social Security, $26 billion for Veterans and $47 billion for military pay and O&M there would still be $188 billion left to cover at least 50% of everything else.

Read more.

Fiscal irresponsibility is not by accident. Today big government is the opiate of the people’s elected officials from the school house to the White House.

The Bottom Line

By passing Schumer, McConnel and McCarthy’s ‘Fiscal Irresponsibility Act’ of 2023 and Biden signing it into law according to David A. Stockman here’s his fiscal projections for the United States government, near and long term, by category:

Current 10-Year CBO Baseline for FY 2024-2033:

• Revenues: $60 trillion;
• Spending: $80 trillion;
• New Debt: $20 trillion;
• Mandatory Spending & Net Interest: $59 trillion;
• Discretionary Spending for Defense & Veterans: $12 trillion;
• Total Spending Exempted From Cuts in McCarthy Deal: $71 trillion;
• % of Baseline Spending Exempted From Cuts: 89%

OMB Record of National Defense Outlays, FY 2017 to FY 2023 and McCarthy Deal Amount for FY 2024:

• FY 2017: $599 billion;
• FY 2018: $631 billion;
• FY 2019: $686 billion;
• FY 2020: $725 billion;
• FY 2021: $754 billion;
• FY 2022: $766 billion;
• FY 2023: $815 billion;
• FY 2024P: $909 billion.

10-Year Baseline Spending That The McCarthy Deal Leaves Unscathed:

• Social Security: $18.8 trillion;
• Medicare: $14.8 trillion;
• Medicaid, Obamacare and Child Health: $8.0 trillion;
• Veterans Disability and Comp: $3.0 trillion;
• Earned Income Tax Credit and Child Credit: $0.9 trillion;
• Aid to Aged, Blind and Disabled: $0.7 trillion;
• Military retirement: $0.9 trillion;
• Total Mandatories Unscathed: $47.1 trillion;
• % of CBO Mandatories Baseline: 98%;

Non-defense Discretionary Outlays:

• FY 2017: $610 billion;
• FY 2018: $639 billion;
• FY 2019: $661 billion;
• FY 2020 $914 billion;
• FY 2021 $895 billion;
• FY 2022: $912 billion;
• FY 2023: $936 billion;
• 6-Year Increase: +53%

Numbers don’t lie. But politicians who are addicted to bigger and bigger government do.

David A. Stockman concludes his column thusly, “[T]he ‘compromise deal’ is a hideous joke, and Kevin McCarthy truly does have sawdust for brains and a Twizzlers stick for a backbone. There is no other way to interpret the facts. In fact, just five months into his Speakership, McCarthy has already earned his place on the Wall of Shame right along side of Speaker John Boehner and Speaker Paul Ryan.”

Add to this list of those who have sawdust for brains and a Twizzler stick for a backbone Senators Chuck Schumer, Senator Mitch McConnell and Joseph Robinett Biden, Jr.

Florida Congressman Matt Gaetz in and email wrote,

On Wednesday night, the House of Representatives took one of the most consequential votes of the 118th Congress, passing the Fiscal Responsibility Act of 2023 and raising the national debt ceiling. Nothing about this piece of legislation is fiscally responsible. In reality, the Biden-McCarthy debt limit deal is a major win for the Democrat party, as it papers over America’s problems with unknowable sums of debt and gaslights reckless inflation-inducing spending. Americans are already suffering through Bidenflation, and this bill guarantees that it’s only going to get worse.

Last year, the American people gave Republicans the majority in the U.S House of Representatives because they wanted us to rein in the Democrat party’s out-of-control spending for woke and weaponized agencies. Yet Speaker McCarthy and President Biden chose to go behind the backs of hard-working Americans and negotiate a deal that cements the historically high COVID-era spending levels as the baseline for future spending. This bad deal adds $4 trillion to the debt in less than two years, funds 87,000 new IRS agents, and ensures Democrats don’t have to deal with the political fallout of raising the debt ceiling prior to the 2024 election. I can’t imagine a better deal for Democrats and a worse deal for our nation.

Even the purported policy “wins” are largely cosmetic budget gimmicks or waivable at Biden’s whims. It is disgraceful we have Establishment Republicans celebrating “work requirements” being traded for reforms that make the SNAP program more costly for taxpayers and more accessible to the homeless.

Only four Republicans remain in Congress who have never voted to raise the debt limit, and I’m proud to be among them. One of the principal mandates members of Congress have with their voters is to fight inflation. I refuse to be complicit in this bipartisan bankruptcy, and I will remain steadfast in my fight to put America First.

We agree with Bob Williams, president of State Budget Solutions, that “Drastic reforms, innovations and political courage are needed to put our states [and federal government] back on the road to fiscal survival.”

We need more politicians who put America and Americans first by stopping any effort to raise the debt limit. Cut spending, don’t increase the debt needs to be the rallying cry of every American.

Time to “Make America Fiscally Sound Again!”

Time to drain the swamp of these spineless spendthrift wonders.

©2023. Dr. Rich Swier. All rights reserved.

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