All Trick No Treat for Taxpayers: Congress Poised to Once Again Chooses Big Government Over Taxpayers

The Taxpayers Protection Alliance (TPA) has been keeping a close eye on the House, Senate, and White House as they have been going back and forth trying to resolve the current impasse that has kept the government closed (or at least slowed down many services) since the fiscal year began on October 1. Now, with the debt ceiling deadline less than 48 hours away and the threat of default a very real possibility, it appears that leadership on both sides of the aisle in Senate have reached a deal that would both extend the debt limit and keep the government open into early 2014. The crisis is by no means over, and it remains to be seen how this will play it out in the House, where many Republicans are wary to accept a clean Senate bill. The uncertainty is still very much a real factor in all of this, but one thing clear: this deal highlights another failure of elected officials to protect taxpayers, and instead is another sign that the era big government is still very much alive.  It is also a sign that Congress will continue to budget by crisis and not by common sense and fiscal responsibility.  It is almost fitting that this fiscal fiasco plays out in October, a month known for Halloween and scaring people.

The parameters of the deal being negotiated by Senate Majority Leader Harry Reid (D-Nevada) and Senate Minority Leader Mitch McConnell (R-Ken.) would reopen the government until January 15^th, 2013 and raise the debt ceiling though early February 2013. TPA was critical of the rhetoric and failure to come up with a solution that ultimately led to a government shutdown, noting that the constant “governing by crisis” that has plagued Washington over the last several years must stop if we are to ever get serious about getting our long-term debt and deficits under control. While the reopening of the government and a plan to avoid default that focuses on reduced spending is preferable to TPA, what is also important is that the spending levels negotiated in the Budget Control Act (BCA) of 2011 are kept in place.  And, this is where the current deal becomes problematic. A senior aide to the Senate told Defense News that, “BCA numbers to remain in effect for the duration of the CR.” While this may look good, this is a red flag that taxpayers and fiscal hawks should be extremely worried about because the deal actually undermines the BCA.  And, this deal appears to be gaining momentum over the last 24 hours.

The deal would keep in place the spending caps from BCA 2011 through the early part of 2014 but in the three months in between now and early 2014 the goal would be to alter the sequester.  For some lawmakers and the President the goal appears to be to get rid of it altogether, and TPA is fully opposed to such a resolution. Sequestration called for more than $1 trillion in budget cuts over a ten year period if a deal could not be reached by a set date to identify specific long-term cuts as agreed to by a Super Committee. The Super Committee failed, and sequestration began earlier this year with a first round of cuts set for 2013, to be followed by another round of cuts in the coming months, here is a breakdown:

Here is a list of cuts that took place during sequestration in 2013:

• $42.7 billion in defense cuts (a 7.9 percent cut)
• $28.7 billion in domestic discretionary cuts (a 5.3 percent cut)
• $9.9 billion in Medicare cuts (a 2 percent cut)
• $4 billion in other mandatory cuts (a 5.8 percent cut to nondefense programs, and a 7.8 percent cut to mandatory defense programs)

Here are the cuts slated for fiscal year 2014:

• $54.7 billion in defense cuts (a 9.8 percent cut)
• $36.6 billion in domestic discretionary  (a 7.2 percent cut)
• $11.2 billion to Medicare (a 2 percent cut)
• $6.9 billion in other mandatory domestic (a 7.2 percent cut)

Since last spring when sequestration first took effect, two things have become crystal clear: first, the world has not collapsed despite the fear mongering from elected officials and agency bureaucrats on all sides. Second, there is a real effort to undo sequestration and this would set a dangerous precedent for the hundreds of billions of dollars still outstanding that are set to be cut over the next several years as part of the 10-year $1.2 trillion spending reduction plan put in place in the BAC 2011 law.

There have been many lessons learned over the last few months, but one thing has been consistently obvious: leadership is lacking from all areas of the federal government. The Senate and House are essentially dysfunctional and the American public has next to no confidence in their ability to lead. The President has been intransigent with declarations saying he will “not negotiate!” This is not what politicians are supposed to be doing on the taxpayer dime. The government shuts down (or slows down or partially closes depending on who you talk to) while Americans feel the pain in ways they don’t necessarily have to, backroom deals are being cut that undermine the spirit of real leadership, and betray the trust of taxpayers who are looking to their elected members of Congress to do something to get the fiscal crisis we face under control.  A debt of $17 trillion is scary, and it is real. Assuming interest rates remain low, taxpayers will be shelling out nearly $400 billion on interest payments alone for the debt! This is not only unacceptable, this is unsustainable and if elected officials are already trying to find a way out of a 10-year across the board deficit-reduction plan two years into the cuts, then we face a serious crisis of leadership that only magnifies the fiscal crisis we are looking at over the long run.