Democrats and the 2010 Budget Fiasco - This dereliction of duty is unprecedented.

[Sandra]

Democrats and the 2010 Budget Fiasco - This dereliction of duty is unprecedented.

URL Source: http://www.weeklystandard.com/blogs/democrats-and-2010-budget-fiasco
Published: Sep 30, 2010
Author: Gary Andres

The 2010 federal fiscal year ended unceremoniously this week – a political and substantive fiasco for the
Democrats. It included a cascade of miscalculations that could haunt the
party in the November elections. But that pales in comparison to the
serious harm they’ve inflicted on the American economy.

Never before has a party so bungled fiscal policy in the United States, leaving
citizens, businesses, and investors with head-spinning uncertainty.

Failure to pass a budget earlier this year began the debacle, but the
cavalcade of missteps continued this week with the passage of a
so-called Continuing Resolution (CR) to avoid an October 1 government
shutdown.

Let’s start with the annual budget plan – or lack thereof. Facing one of the worst long-term debt and deficit crises in
the past half century, Democrats in Congress decided to kick the can and
skip developing a blueprint this year.

This is truly unconscionable. How can the Democrats – with large majorities in the House and the Senate –
look voters in the eye and say, we have no plan – no long term
schematic to ensure America won’t become another Greece. The only thing more unbelievable is that they apparently got away with it because no one seems to notice.

This dereliction of duty is unprecedented. Never in the history of the
modern process – dating back more than a quarter of a century – have
both the House and the Senate failed to pass a budget resolution.

Investors would dump shares of a business that projected massive
amounts of future debt, but told shareholders, ‘Sorry, we don’t have a
plan to deal with it.’ It’s one of the reasons political markets put a
strong ‘sell’ signal on the Democratic majority.

The majority party’s ‘dog ate my homework’ approach means fiscal year 2011 spending
bills languish; funding levels for all of next year’s programs is
uncertain; and deficit projections rival faith healers in terms of their
trustworthiness.

Because Congress failed to pass a budget or enact any appropriations bills this year, lawmakers will have to rely on
a CR to avoid a government shutdown.

But even a CR, which some will pitch as a “freeze at last year’s spending levels,” is a fiscal
charade – the second act in this year’s budget fiasco.

Freezing spending at current levels sounds good at first blush. But as the
Heritage Foundation pointed out in an August report, non-defense
discretionary spending already grew at 28 percent over the past two
years. The Congressional Budget Office estimates that non-defense
discretionary spending is now at 4.5 percent of GDP – the highest level
in 25 years. A CR just “freezes” spending at these already higher
levels.

Today’s politics demands a “melt,” not a freeze. In other words, a CR should not just continue the status quo, but also
acknowledge the public’s demand for a least some kind of fiscal
belt-tightening.

Yet even modest cuts in spending offend many congressional Democrats’ ideological predispositions. Keynes is still
king in their minds, particularly liberals in safe districts, insulated
from distractions of viable Republican challengers or pesky swing voters
concerned about the size of government.

The third act of the fiasco concerns tax policy’s future. The media focuses on whether or not
rates should snap back to their 2001 levels for everyone or only those
for individuals earning over $200,000 or families making over $250,000.

Republicans say no one’s taxes should go up; Democrats want to increase
rates on individual, family and small business income over $200,000
(individuals) or $250,000 (families). Why not schedule a vote to
alleviate the uncertainty? Well, it’s Because the Republican position
would likely prevail. Speaker Pelosi and Senate Leader Reid are using
their unchallenged rules powers to sidestep a vote.

Democrats’ budget fiasco also caused an avalanche of other tax ambiguity. What are
the taxes on inheritance (now zero because the old rates expired at the
beginning of this year)? How about rates on capitals gains and
dividends? Then there is the issue of the Alternative Minimum Tax and
child tax credits.

This fiscal indecision has harmed businesses, individuals, and investors seeking certainty. No one knows what they
will pay in future taxes – confusion that freezes needed capital
investments and job creation decisions.

Democrats this year presided over a fiscal policy catastrophe. Their inability to craft a
sensible budget plan, their failure to use the CR to signal spending
restraint, and the sea of confusion they created over tax policy,
provides voters with a host of reasons to pull the plug on a
congressional majority already in critical condition.

[Sandra]

I think Reid will be, not sure about Stretch, people in California are still brain dead in her area.. They just don't seem to get it... All of them need to be FIRED over this mess, can you imagine walking off a job unfinished?