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The Budget - Toxic Politics
a political fight of epic proportions looms over America’s fiscal future
Eric LaMont Gregory
The latest budget passed by Congress is but an interlude in an on-going budget deadline drama,
its an interesting skirmish, but will not put millions of Americans back to work
its an interesting skirmish, but will not put millions of Americans back to work
There are two additional budget battles looming on the horizon, the debt ceiling which will be reached towards the end of February, and the current continuing resolution that funds government operations expires on the 27th of March.
The dramatic element in these battles is naturally rhetorical. On the one hand some Republicans insist that they are prepared to force at least - a temporary partial government shutdown - rather than raise the debt ceiling without substantial reductions in government spending. While on the other hand President Obama maintains that he is no longer willing to debate the issue of an increase in the nation's borrowing limit.
The problem with the current debate about taxes and spending is that the fight is being fueled by agendas of a political nature and not by an earnest effort to do what is best for the American economy.
Furthermore, although precious little attention is paid to it in the popular media, nonetheless it is disingenuous to suggest that government spending is the sole culprit driving up our national debt. Other factors and policies such as, the dollars status as a reserve currency - the Triffin Dilemma, our balance of payments, as well as soaring increases in American investments abroad, each contribute to our debt and substantially so.
Succinctly stated, the fiscal cliff was the prospect of having both the tax cuts which began in the GW Bush era and Obama's payroll tax cuts expire, and at the same time if not averted, automatic cuts in federal spending on defense and domestic programs, and unemployment benefits for several million Americans would be triggered.
The net result of the fiscal cliff - $600 billion in cuts and tax increases, an economy that would shrink by nearly 3 percent, and raise unemployment above 9 percent once again.
The combined effect of the cuts and increases would push the economy back into recession.
In February, some congressional Republicans believe, albeit erroneously, that they have the upper hand in future negotiations with the White House, because failure to reach an agreement on spending would result in a default on the US debt. Senator Toomey (R-Pennsylvania), for example, suggests that Republicans need to be willing to tolerate a temporary partial government shutdown.
If congressional Republicans choose that path, given the fact that President Obama has warned that he will not have another debate with Congress about whether or not they should pay the bills they have already racked up. The President can invoke the Fourth Section of the Fourteenth Amendment - the plighted faith - decision of the Supreme Court in the case of Perry v United States, 294 US 330 (1935), and simply continue to borrow and pay the bills of the US Government, eroding further the powers of an already weakened legislature.
In the Perry v United States case, Chief Justice Hughes states that, "Clearly and constitutionally Congress cannot repudiate the debt of the US Government, since Congress has not been vested with the authority to alter or destroy such obligations. see: http://www.theoxfordscientist.com/power.html
The issue of default, imports that the Congress can disregard the obligations of the government at its discretion, or when Congress finds their fulfillment inconvenient, therefore rendering the credit of the United States an illusory pledge."
The Court has given no sanction to such a conception of the obligations of the United States. To default, even temporarily and partially as some members of Congress contemplate, may prove useful politically, but constitutionally to do so would be an act contrary "to the highest assurance the Government can give, its plighted faith."
Before venturing on such a course, it may prove prudent to consider that there is little doubt that the Obama Administration, the Executive Branch of our Government, as signaled in his statement is willing to invoke the - plighted faith - ruling to forestall any attempt by Congress to cause the US Government to default on its obligations. And, in so doing yet another legislative power would then reside within the executive branch of our government. The prospect of the national budget being the subject of a series of Executive Orders for the next four years becomes a real possibility.
Those members of Congress who believe that the Supreme Court, as constituted presently, might rule in favour of the Congress in a battle over this issue, exhibit less of an understanding of the Constitution and the Court than they suggest the Obama Administration exhibits.
Perhaps, Congress and the White House will have time between their press conferences and talk shows to, at least, think about the fact that there are few problems in the great nation of ours that economic revitalization would not go a long way towards solving, and concentrate on economic revitalization and spend less time on the
symptoms of the lack of a robust economy.
The dramatic element in these battles is naturally rhetorical. On the one hand some Republicans insist that they are prepared to force at least - a temporary partial government shutdown - rather than raise the debt ceiling without substantial reductions in government spending. While on the other hand President Obama maintains that he is no longer willing to debate the issue of an increase in the nation's borrowing limit.
The problem with the current debate about taxes and spending is that the fight is being fueled by agendas of a political nature and not by an earnest effort to do what is best for the American economy.
Furthermore, although precious little attention is paid to it in the popular media, nonetheless it is disingenuous to suggest that government spending is the sole culprit driving up our national debt. Other factors and policies such as, the dollars status as a reserve currency - the Triffin Dilemma, our balance of payments, as well as soaring increases in American investments abroad, each contribute to our debt and substantially so.
Succinctly stated, the fiscal cliff was the prospect of having both the tax cuts which began in the GW Bush era and Obama's payroll tax cuts expire, and at the same time if not averted, automatic cuts in federal spending on defense and domestic programs, and unemployment benefits for several million Americans would be triggered.
The net result of the fiscal cliff - $600 billion in cuts and tax increases, an economy that would shrink by nearly 3 percent, and raise unemployment above 9 percent once again.
The combined effect of the cuts and increases would push the economy back into recession.
In February, some congressional Republicans believe, albeit erroneously, that they have the upper hand in future negotiations with the White House, because failure to reach an agreement on spending would result in a default on the US debt. Senator Toomey (R-Pennsylvania), for example, suggests that Republicans need to be willing to tolerate a temporary partial government shutdown.
If congressional Republicans choose that path, given the fact that President Obama has warned that he will not have another debate with Congress about whether or not they should pay the bills they have already racked up. The President can invoke the Fourth Section of the Fourteenth Amendment - the plighted faith - decision of the Supreme Court in the case of Perry v United States, 294 US 330 (1935), and simply continue to borrow and pay the bills of the US Government, eroding further the powers of an already weakened legislature.
In the Perry v United States case, Chief Justice Hughes states that, "Clearly and constitutionally Congress cannot repudiate the debt of the US Government, since Congress has not been vested with the authority to alter or destroy such obligations. see: http://www.theoxfordscientist.com/power.html
The issue of default, imports that the Congress can disregard the obligations of the government at its discretion, or when Congress finds their fulfillment inconvenient, therefore rendering the credit of the United States an illusory pledge."
The Court has given no sanction to such a conception of the obligations of the United States. To default, even temporarily and partially as some members of Congress contemplate, may prove useful politically, but constitutionally to do so would be an act contrary "to the highest assurance the Government can give, its plighted faith."
Before venturing on such a course, it may prove prudent to consider that there is little doubt that the Obama Administration, the Executive Branch of our Government, as signaled in his statement is willing to invoke the - plighted faith - ruling to forestall any attempt by Congress to cause the US Government to default on its obligations. And, in so doing yet another legislative power would then reside within the executive branch of our government. The prospect of the national budget being the subject of a series of Executive Orders for the next four years becomes a real possibility.
Those members of Congress who believe that the Supreme Court, as constituted presently, might rule in favour of the Congress in a battle over this issue, exhibit less of an understanding of the Constitution and the Court than they suggest the Obama Administration exhibits.
Perhaps, Congress and the White House will have time between their press conferences and talk shows to, at least, think about the fact that there are few problems in the great nation of ours that economic revitalization would not go a long way towards solving, and concentrate on economic revitalization and spend less time on the
symptoms of the lack of a robust economy.
