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You would think that this poll showing "Americans' confidence in Congress is not only at its lowest point on record, but also is the worst Gallup has ever found for any institution it has measured since 1973" would be so embarrassing to those on Capital Hill that they would take immediate steps to change the situation.
S&P must feel as if it just can't do anything right when it comes to rating the U.S. debt.
Financial markets and investors largely ignored Standard & Poor's when it downgraded U.S. debt in August 2011 in the wake of Congress and the White House narrowly averting a debt ceiling crisis by enacting the Budget Control Act. In fact, in spite of S&P's new assessment that they weren't as good an investment, interest rates went down rather than up as Wall Street did what it typically does in the face of increased uncertainty: It bought more Treasuries.
And with interest rates falling and their constituents' personal finances unaffected, members of Congress ignored the downgrade.
In other words, the S&P action had virtually no impact. The only thing that took a hit was S&P's own corporate reputation.
Here’s something you haven’t heard from anyone else: Tax reform is at least three years away...and even that may be optimistic. In fact, I'm not expecting a serious tax reform effort until 2017.
Note that I said "effort" rather than a bill. Comprehensive tax reform is far more likely to be enacted towards the end of the decade than it is to be in place before the 2016 presidential election.
Yes, I know that absolutely is not the common wisdom. House Ways and Means Committee Chairman Dave Camp (R-MI) has been saying all year that he wants to put tax reform on a fast track so it can be enacted this year. Just a few months ago House Republicans were threatening to make a process for tax reform the price of their supporting the next increase in the federal debt ceiling. And when Senate Finance Committee Chairman Max Baucus (R-MT) (D-MT) announced that he wasn’t going to run for re-election, there was a flurry of speculation about how that decision would make tax reform more likely to happen this year.
Thank you to all of the CG&G readers who were concerned enough about my disappearing act the past three weeks to check up on me. To asnwer some of the comments...No, I wasn't in an accident. Yes, my health is great. No, I wasn't in a witness protection program.
Thanks for asking...really...It was, and is, much appreciated.
This was the longest I've been away from CG&G since it began close to six years ago. I had to get away: I had become so angry about the federal budget situation that the few posts I tried to write were somewhere between a rant and a screed.
Thanks to lots of exercise (down three pounds) and several long walks with my Beautiful and Talented Wife (The BTW) and Gracie the Wonderdog, I've worked my way through this fiscal mid-life crisis and am now back on the case.
That's not to say I'm not still angry, however. After all, how can you not be?
Sunday, May 19, 2013, was one of the saddest and most notorious moments in the sordid history of the federal budget.
Let's start from the beginning.
It's December 2012 and House Republicans are facing a number of politically very difficult and unpalatable choices because taxes will go up automatically on January 1, the sequester will go into effect on January 2 and the by-now- commonplace-but-still-called "extraordinary" measures the Treasury has been using for several months to deal with the problems caused by not raising the debt ceiling are about to be exhausted.
The tax problem was dealt with by agreeing to a smaller increase than was set to happen under current law and then blaming the White House for it. The sequester was postponed until March 1 when both the GOP and the administration thought that the threat of cuts to domestic and military programs, respectively, would cause the other to back down.
But it was the unique and disgraceful way the debt ceiling was handled that deserves the scorn.
There was a time when a $200+ billion reduction in the federal budget deficit would have been big news and hailed as a singular achievement worthy of either fiscal sainthood or a dance-on-the-table party...or both.
Yet yesterday's Congressional Budget Office report showing that the fiscal 2013 federal deficit will be $642 billion, $203 billion less than CBO's previous estimate of $845 billion, did not create any spontaneous cannonizations or celebrations. It also didn't change the still-stalemated and crisis-oriented federal budget debate by even a small amount.
The bottomline: It's in almost no one's interest to be happy about the budget news that should have made everyone happier.
Here's why.
What do you call the effort that will be made in the House of Representatives this week to pass a budget-related bill that will never be enacted, won't work as promised even if it somehow does get signed into law and uses the legislative process for purely political purposes?
"Typical" may be the most common answers. My suggestion? That tried-and-true federal budget phrase so often used to complain about federal spending: "Waste, fraud and abuse."
The legislation is the Full Faith and Credit Act, a bill that supposedly would make payments to federal bond holders the priority if the federal debt ceiling isn't raised and the government doesn't have enough cash to pay all its bills when they come due. The legislation would allow the Treasury to borrow more than allowed by the statutory debt ceiling to make these payments.
