Articles on US fiscal policy crisis

CHRISTIAN NEWS: SOURCES–Obama and Republicans Gear Up for Next Fiscal Fight

Published: January 5, 2013

WASHINGTON — In dueling weekly addresses, the White House and Republicans drew lines in the sand for their next fiscal showdown, which could be as soon as next month, when a Congressional fight is expected on raising the nation’s borrowing limit.

Democrats have warned Republican leaders not to use the debt authorization for political leverage. In his weekly address, President Obama again said he would not trade spending cuts for an increase in thedebt limit.

One thing I will not compromise over is whether or not Congress should pay the tab for a bill they’ve already racked up,” he said. “If Congress refuses to give the United States the ability to pay its bills on time, the consequences for the entire global economy could be catastrophic.”

Mr. Obama also repeated his new demand that future spending cuts be met with commensurate tax increases. “Spending cuts must be balanced with more reforms to our tax code,” he said. “The wealthiest individuals and the biggest corporations shouldn’t be able to take advantage of loopholes and deductions that aren’t available to most Americans.”

A similar standoff over raising the debt limit in 2011 led Standard & Poor’s for the first time to downgrade its rating of United States Treasury debt by one notch, suggesting a higher risk of default. The impasse caused a slump in the market, and analysts fear that another one could cause yet more damage.

Many Republicans have said they do not plan to lift the country’s statutory borrowing limit unless Democrats agree to significant spending cuts, particularly to entitlement programs like Social Security and Medicare.

In the Republican address, Representative Dave Camp of Michigan, the chairman of the powerful Ways and Means Committee, argued that Congress needed to focus on cutting spending and simplifying the tax code.

Many of our Democrat colleagues just don’t seem to get it,” he said. “Throughout the fiscal cliff discussions, the president and the Democrats who control Washington repeatedly refused to take any meaningful steps to make Washington live within its means. That position is irresponsible and fails to acknowledge what every family in America already knows: when you have no more money in your account and your credit cards are maxed out, then the spending must stop.”

Just after the new year, Congress agreed to raise taxes on the wealthiest Americans and delay for two months significant cuts to the discretionary budget, brokering the deal to avoid the worst of the tax increases and spending cuts known collectively as the “fiscal cliff.” But the deal, which will cut the deficit by an estimated $650 billion over 10 years, is far smaller than the trillions of dollars in deficit reduction initially sought by negotiators.

It also left several issues for the 113th Congress to resolve, including raising the debt ceiling, trying to defuse some of the mandated discretionary-spending cuts and averting a government shutdown. Those will come to a head in February and March. If Congress fails to lift the ceiling, a cash management crisis will result, as the Treasury will lack the money to pay all the country’s bills on time.

McConnell: Tax issue ‘finished,’ focus should turn to spending cuts

WND By Sam Baker – 01/06/13 09:12 AM ET

 Senate Minority Leader Mitch McConnell (R-Ky.) on Sunday said Republicans will demand steep spending cuts during the next round of budget negotiations.

McConnell, in an interview with ABC’s “This Week,” said President Obama had won all he’s going to get on taxes in last week’s agreement to extend the Bush-era tax rates for most taxpayers.

The tax issue is, finished, over, completed. That’s behind us now. The question is: what are we going to do about the biggest problem confronting us and our future,” McConnell said.

McConnell said next round of negotiations over a deal to raise the debt-ceiling would need to include Democratic concessions on spending.

President Obama in his weekly address Saturday warned Republicans that a protracted fight over the debt-limit could have disastrous effects on the economy and said he wanted the borrowing limit raised and issues on spending and entitlements resolved separately. 

Republicans, though, believe the debt-limit debate gives them leverage to force Democrats to accept greater cuts and entitlement reform. Some conservatives have suggested allowing the U.S. to hit the debt ceiling if President Obama refuses to concede on further budget cuts, but others fear failing to raise the ceiling would likely cripple the U.S. economy.

The Senate GOP leader, though, disclosed little about his negotiating strategy, declining to say whether he’s willing to let the U.S. hit its debt limit without further cuts. 

It’s not even necessary to get to that point. Why aren’t we trying to settle the problem?” he said. “We don’t need to use the deadline. We could go through regular order.”

McConnell also punted on whether he would back a partial shutdown of the federal government in the spending battle, a threat his leadership colleague Sen. John Cornyn (R-Texas) made last week.

McConnell, though, said he expected lawmakers’ focus to be on spending and that other issues including gun control, will likely see no action for the first few months of the year.

None of these issues are going to have the priority that spending and debt are going to have,” McConnell said. “That’s going to dominate the discussion in Congress for the next two or three months at least.”
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MorningStar Prophetic Bulletin: Rick Joyner on US democracy: Has Democracy Failed?

Entitlements and waste now has the federal Government spending almost twice as much as it takes in. The fiscal insanity of our present leaders was very much on display by the deal reached to avoid“the fiscal cliff.” The ultimate deal came out raising about forty-one dollars in new taxes for every one dollar of spending cuts according to The Congressional Budget Office. The President called this “a balanced approach.”

     What this deal truly was is an even greater strangling of the American economy that is already struggling to breathe. Taxes are resources taken straight out of the economy. The mentality of “taxing the rich” more is to take more from those who obviously know how to manage their resources and give it to a government that has become the most incompetent entity on the planet in managing its resources. Managed efficiently, our federal government should only be about one-fifth of its present size, doing five times as much work at least five times as fast. Managed efficiently, we could cut the federal budget by 50 – 70 percent without even touching entitlements.

     In 2012, the International Monetary Fund released a report on the real debt of the United States that included future obligations, mostly   entitlements, and estimated it to be over one hundred trillion dollars. The conclusion was that America could tax all of its citizens one hundred percent of their income and it would not pay for our obligations. Yet, through programs such as Obamacare, we keep dramatically increasing the obligations.

     No other organization could get away with the foolishness of our federal government and survive, and it will not survive it much longer either. The only thing that has kept us from collapsing the entire system already has been our ability to just print more money, but that will catch up with us soon. If we keep going in the direction we are now headed, we will go through, at a minimum, the collapse of our currency. It will take the greatest national leader in our history to get us through that and restore the Republic. Right now there does not seem to be such a leader on the radar.
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