Tag Archives: Debt Ceiling

Budget 101

On Tuesday, Congress returns from their August “District Work Period” — a/k/a Summer Vacation.    Normally, September in Congress is about appropriations bills, but this year September is going to be even more hectic due to the U.S. nearing its debt ceiling and other budget issues.  To explain this year’s mess, a little budget 101.

Like the typical household budget, the government’s budget consists of revenue/income and expenditures/spending.  However, the government’s revenue consists mostly of taxes.  While a handful of taxes have sunset provisions (i.e. they expire at a certain point in time unless Congress passes a new law extending them), most taxes are permanent (i.e. it takes a new law to change the tax).  But how much revenue is raised by a given tax in a given year depends upon multiple circumstances (how many people with large estates die, how the economy is doing, how much of certain goods are imported).  So for budgeting purposes, revenue is always an estimate.

Similar, on the expenditure side, there are “mandatory” expenses (think the equivalent of mortgage and car payments) and “discretionary” expenditure (think groceries, you have to spend something but you can decide whether to go store brands or name brands depending upon how your finances are).   On the mandatory side, for the government are interest payments and what is commonly called entitlements.  Entitlements have gotten a bad name from conservative spinmeisters, but the term is a legal term reflecting that, if somebody meets the legal criteria for a particular program, they have a legally enforceable right to receive the payments from that program whether that program is Social Security, unemployment compensation, or Medicaid.  The discretionary side on the hand is most federal agencies.  Representing about 25-33% of total spending, Congress has to annually appropriate the money for these agencies (ranging from the military to the national endowment for the arts). Continue Reading...

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A June to Remember/Fear?

There are times when, through the normal cycle, and discretionary decisions, events start to come in rapid procession.  June is shaping up to be one of those month between elections (both in the U.S. and abroad), the end of the Supreme Court term, and the matters currently on the plate of Congress.  We have already had the first major event of June — the decision by the Trump Administration to make America weaker by playing to his misinformed base on climate change and withdrawing from the Paris Accords.  It’s almost impossible to count the reasons why this decision is wrong,  here are a few:  1) the agreement was non-binding; 2) being a signator gave us a seat at the table in future discussions; 3) withdrawing makes China and the European Union more powerful; 4) state laws requiring an increasing percent of energy to come from renewal sources are still in effect and will contribute to the U.S. meeting its pledge anyway; 5) the federal courts have held that greenhouse gases are a pollutant requiring federal action under the Clean Air Act (even though the precise terms of the regulations to reduce greenhouse gases are not yet final) which means that we may have to meet or exceed the pledge anyway.

Moving to the Supreme Court, June is looking like immigration month.  May ended with a decision in the first of four immigration cases heard this term.  The case involved what types of sexual offenses against a child trigger deportation hearings for authorized immigrants (e.g., permanent residents).  The Supreme Court narrowly interpreted the statute, meaning that — for some sexual offenses (those that can be committed against a 16 or 17-year old — the first offense will not trigger deportation.  Two of the other three also directly or indirectly concern deportation.  In addition, with the lower courts having barred enforcement of the travel ban, the Trump Administration is asking the Supreme Court to stay those injunctions.  (The real issue is the enforcement of the restrictions on visas and entry.  It is likely that the Supreme Court will grant relief to some overbroad language in those bars that could be read as suggesting that the Trump Administration can’t begin work on revisions to the vetting process.)  There are 22 other cases to be decided this month, so immigration will not be the only big news this month.  And, even aside from the decisions in cases already argued, the Supreme Court will be deciding what cases to take next term and there are some potentially major issues that could be on the agenda for 2017-18.

Moving to U.S. elections, there are still three special elections — all of which will occur this month.  Two — in Georgia and South Carolina — involve vacancies created by the Trump cabinet appointment.  The other — California — arose from a vacancy created by filling the vacancy in the California Attorney General position created when the former AG won the U.S. Senate election last fall.  Because California uses a “jungle primary” (i.e.  one in which all candidates from all parties run in one primary with the top two advancing to the general election), we already know that the Democrats will keep this seat and the only question on Tuesday is which Democrat will be elected.  For the most part, both parties in choosing members of Congress to fill vacancies have followed the rule of only choosing people from “safe” seats.  As such, while the Democrats have so far — in the first round in California and in Montana and Kansas — run around 10% ahead of 2018, this success has not changed the winner of any seat. Continue Reading...

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