The House on Wednesday passed legislation that directs President Obama to submit a balanced budget plan to Congress this spring.DBA (Dead Before Arrival)
The Require a Plan Act (H.R. 444) compels Obama to submit a supplemental budget by April 1 if his fiscal 2014 budget blueprint does not include a plan to balance the government’s books. That supplemental budget would outline a long-term deficit reduction strategy and timeline for balancing the budget. The chamber approved the legislation, shepherded by Rep. Tom Price, R-Ga., and the GOP leadership, after debating it Wednesday morning.
The Democratic-controlled Senate is unlikely to take up the bill.
Given the senate will not take the measure up, the bill is nothing more than political grandstanding. Besides, there is not much merit to the idea anyway.
Congress is in control of the budget, so it is up to Congress to present a plan to balance the budget (which, other than Senator Rand Paul, they will not do).
No Delay in Automatic Spending Cuts?
Here's one for the "I hope it's true, but I'll only believe it when I see it category" : Boehner Opposes Delay in Spending Cuts Without ‘Reforms’.
House Speaker John Boehner said he will oppose any delay of $1.2 trillion in automatic U.S. spending reductions set to begin March 1 unless Congress replaces them with other “cuts and reforms.”Mish Point of View
“At some point, Washington has to deal with its spending problem,” Boehner, an Ohio Republican, told reporters at a Washington news conference today. “I’ve watched them kick this can down the road for 22 years that I’ve been here. I’ve had enough of it. It’s time to act.”
The March 1 deadline marks another fiscal showdown between the administration and Republicans, who control the House of Representatives. Boehner and other Republicans have said for weeks that they expect the spending reductions to take effect, and that they won’t accept any tax increase to prevent them.
“Deep, indiscriminate cuts to things like education and training, energy and national security will cost us jobs and slow down our recovery,” Obama said at the White House yesterday in urging adoption of a short-term plan. “This doesn’t have to happen.”
Democrats who control the Senate debated alternatives for replacing the spending cuts during their retreat yesterday in Annapolis. They agreed they should pursue a measure to replace the cuts with a combination of new tax revenue and a different set of spending reductions, said a Senate Democratic aide who spoke on condition of anonymity because the meeting was private. The lawmakers didn’t decide on details or how long the spending cuts should be delayed, the aide said.
Congress is squabbling over $20 billion here and $12 billion there. The deficit is over a trillion dollars a year for as far as the eye can see.
Reporters, Obama, and Democrats all talk as if there is "$1.2 trillion in automatic U.S. spending reductions" on the way. There isn't, and reporters ought to know better.
In fact, there are no cuts at all that I can see. Rather, there is a reduction in projected increases, and even those reductions are back-end loaded.
Even if the reductions represented true cuts, the cuts are spread out over 10 years, a pathetic $120 billion a year, when a total of a $1 trillion in cuts is needed to balance the budget.
Furthermore, the above math assumes the economy will grow as fast as the Congressional budget office assumes (and I assure you it won't).
The very best thing that could theoretically happen would be automatic "cuts" coupled with additional, meaningful "real" cuts. The odds of that combination are roughly zero percent.
The best one could possibly hope for in practice is for the automatic cuts to kick in. Unfortunately, Spoiled Brat Syndrome is highly likely to get in the way.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
