SalemNews.com, Salem, MA

September 25, 2013

Anderson: Government shutdown? Don’t blame the GOP

Barbara Anderson
The Salem News

---- — So here we are, in late September, being told that the government might shut down next week and then default on its debt in mid-October. And it’s all some Republicans’ fault.

Let’s make sure I understand this. Starting with the basics:

Unlike our state and local budget years that begin on July 1 (with mandated balanced budgets, by the way), the federal government budget year begins on Oct. 1. The House has the constitutionally mandated responsibility to initiate all spending bills, including budgets. The Senate then agrees or disagrees; the president gets to sign or veto. This last step is supposed to be done by Oct. 1.

There is no requirement that the federal budget be balanced: If expenditures exceed revenues, the federal government can borrow the difference and add it to the national debt – which, as of last weekend, was $16,745,555,054, of which my twin grandchildren owe $105,746.

Sometimes the federal government borrows from other countries, like Japan and China; sometimes it borrows from itself, or a form of itself called the Federal Reserve, which buys government bonds. Where does the Federal Reserve get the money to buy the bonds? Thank you for asking, but it’s not your job to question where the money comes from.

It’s your job to spend it, perhaps by taking out loans to start a business even if you don’t have any particular interest in starting a business, which the market may or may not want. Or you should borrow money to buy a house you can’t really afford even with Fed-determined low interest rates, so you can default someday like over-extended homeowners in the last decade. Spend — so that jobs are created to provide what you are spending on, even if most of the money involved in this process is borrowed/printed/made up or taken in taxes from people who then can’t spend their own money or save it in accounts from which it can be borrowed for genuine economic activity.

Some of the stimulus money has gone to create more public-sector jobs, which must still somehow be funded by someone when the stimulus money ends.

To make it all so much more interesting, this year the new budget year coincides with implementation of the Affordable Care Act (“Obamacare”), a law that passed in 2010 with only Democratic support; those who questioned its size and complexity were told by House Speaker Nancy Pelosi that, “we have to pass the bill so that you can find out what’s in it.”

So, to find out what’s in it, I bought the “ObamaCare Survival Guide” by Nick J. Tate, who made an admirable effort to sort it all out as objectively as possible. But now my copy is stuffed with newspaper clippings telling about things that have been found wrong with it: There are already exemptions for certain privileged groups, which may not include you. Some headlines: “Limits on consumer costs in health care law delayed” (no longer so “affordable”?); “Multiple companies changing insurance plans due to Obamacare” ; “State lawmakers raise concerns about navigating Obamacare health exchanges.” So, former Speaker Nancy (Republicans took over the House in 2010 by running against Obamacare, so she lost her speakership): “what’s in it” seems to be creating problems.

Therefore, many congressional Republicans are trying to prevent what Sen. Max Baucus (a Democrat — helped lead the fight to pass it) calls a “train wreck.” The House, passing the federal budget for which it is responsible, removed funding for Obamacare, which, along with its administrative chaos, is estimated by a Senate Budget Committee study to cost $2.6 trillion over 10 years.

Obama and Democratic leaders want bipartisan compromise, i.e., they want it all done their way. They seem to think that our Founding Fathers made a mistake in giving the House the “power of the purse”; the president and Senate insist on their own version of the budget, which will include Obamacare.

As for raising the debt ceiling: quoting Nancy Pelosi again, resistance to adding even more debt is “completely juvenile … legislative arson.” President Obama tells us that “raising the debt ceiling, as we have done over a hundred times, does not increase our debt; it does not somehow promote profligacy. All it does is it says you got to pay the bills that you’ve already racked up.”

Say what? Yes, you’ve got to pay the bills that you racked up under the present debt ceiling, from your existing budget revenues. Raising the ceiling says you intend to borrow even more. How does he think the debt got to almost $17 trillion?

So, what do you think? Should Republicans roll over, fund the train wreck, uncomplainingly agree to another unbalanced budget, borrow until the national debt doubles again?

As I write this, the Republican House has passed a budget. If the Democratic Senate and president refuse to accept it, they, not Republicans, will be shutting down the government.

Here’s one possible compromise: Agree on another “continuing resolution” to fund existing essential government services, and put a hold on Obamacare until 2015. Then ask American voters in 2014 to choose representatives who support Obamacare and unlimited spending/debt, or those who want fiscal responsibility. Our decision, our country’s future.

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Barbara Anderson of Marblehead is president of Citizens for Limited Taxation and a Salem News columnist.