Tag Archives: Congressional Budget Office

How many new laws does Congress introduce and why?

5 May

079 Capitol Hill United States Congress 1993 If you had to guess how much new legislation is introduced in Congress each session (two years), what would you say? I’ll save you the trouble; the answer is about ten thousand new laws…that’s 10,000. While that is a big number, keep in mind that only a small fraction of that number of new bills goes anywhere. Most never see the light of day which is probably a good thing.

Think about the time, effort and money that goes into creating all those potential laws, think of the number of lawyers, staffers and those well experienced Senate and House interns just out of college who have to draft that stuff? So how many federal laws are there anyway? Good question; it appears no one actually knows.

The best I could find was 75,000 pages of laws for this or that federal agency, 75,000 for another and on and on which is not even a comment on the regulations, rules, etc. that go with each law that is approved. It’s mindboggling and that ain’t no exaggeration. But here is the real point, do we need more laws?

The problem with Congress is that it is in the business of creating more work for the federal government and turning a deaf ear to what happens once all this legislation is enacted. In effect, a law is passed, it is turned over to a government agency to write regulations and to enforce and then Congress forgets about it and moves on to more new legislation.

It seems to me that we would all be better served if Congress spent a little more time assessing the work of the federal government, the effectiveness and the real cost of the laws it has passed and also focusing on the real problems we face. . . Medicare, Medicaid, Social Security, all the expiring taxes at year-end, Fannie Mae, Freddie Mac, other major entitlement programs, etc. Here is just a small sample from one day’s update sent by the Congressional Budget Office of the new legislation it receives to review for budget impact.

New from CBO

What I find intriguing is when you hear people like Paul Krugman, who made the circuit on TV this past weekend, saying how now is no time for austerity, no time to trim budgets, we need to wait until the economic recovery takes hold; spend now, manage costs long-term.

When it comes to Congress no time is a good time to be prudent spenders. We don’t have to cut, slash and burn existing programs, we simply need to stop adding new ones we cannot afford. Stop for a minute and think before introducing a new law that will cost any money either directly or through required compliance and administration.

It’s not all that complicated, but you see it is not in their DNA. If Congress does not enact something new, it has nothing to sell to voters and God forbid doing the right thing for the long-term interests of the Republic comes before the desire to be re-elected. However, in the final analysis whose fault is this really? Seems to me it is the fault of voters who want more and more without regard to the consequences for the Country or their fellow taxpayers.

Have we taken that “government for the people” a bit too far and forgotten about “of the people and by the people?”

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Managing the deficit is not on anyone’s agenda

20 Feb
 Hundreds of millions in savings from winding down the Iraq and Afghanistan wars and we immediately find new ways to spend the money, not reduce the deficit or balance the budget.
President Barack Obama signs legislation in th...

And it's not even my money, cool huh?

A 2% payroll tax cut is about to expire (one that should not have occurred in the first place), the President appeals to the public to tell Congress what the loss of the $40 will mean to them and unthinking Americans respond in droves not caring where the money will come from, the inevitable consequences of our financial chicanery or the long-term impact on Social Security funding … Hey just get it from the “wealthy 1%.”

Congress extends the tax cut without funding it, adding more to the deficit.

Not a week goes by that another piece of legislation is not introduced adding more to federal spending.  There is more for everybody, just don’t pay for it or instead soak the top 5 percent of Americans.

There are several clear messages here. Americans want more, they know little and care less about Federal spending .  Obama is going to be re-elected because he is more than willing to buy the votes of the middle class.

It’s not all that complicated and Americans are going to get exactly what they deserve.

A CEO gets fired when he fails to deliver results, an important lesson

4 Feb

It’s not spending, it’s lower than expected revenue. Spin baby spin. The last time I checked there were two parts to an equation and they were supposed to be equal. One goes up the other goes down.
Read this from the Center for American Progress (man, do I love that word progress):

The federal budget deficit will again exceed $1 trillion this fiscal year, the Congressional Budget Office reported today. That news is sure to trigger another round of condemnations from politicians and pundits who have a political or ideological interest in pinning these deficits on the domestic spending policies of President Barack Obama.

Unfortunately for them, today’s report—along with dozens of other similar CBO reports in recent years—actually proves the opposite—that the current deficit is overwhelmingly the result of two factors: events that occurred before President Obama took office and tax cuts.

In fact, higher spending under Obama accounts for less than 20 percent of this year’s deficit, and nearly half of that was additional defense spending—not domestic spending. Bottom line: The narrative that an “Obama spending spree” caused our deficit problem is utterly false.

Events that occurred before Obama took office and tax cuts, ummmm, so what?  Tax cuts you say? I think you mean the tax rates in effect for more than four years.

Let’s think about this; Mr Obama ran for President knowing full well the state of the economy, all about the Bush bailouts, and the tax rates in effect then and now. He still promised hope and change.

For the last two years of the Bush Administration and the first two years of the Obama Administration Mr Obama’s party controlled the Congress providing ample opportunity for both hope and change (the good kind).

Knowing the tax rates and the state of the economy, it is no magical leap to estimate federal revenue thereby allowing a prudent manager to adjust spending accordingly if there is any goal to reduce or at least not increase the deficit. Instead the President spent most of his time with failed attempts to stimulate the economy and seeking out scapegoats from successful Americans to insurance companies and even the Supreme Court.

Are we to believe that the President of the United States, a man who seeks and accepts the most difficult job in the world is not responsible for dealing with events that occurred before he took office?  Bush increased the deficit, we get it. Obama increased it even more, we get that too. I haven’t received a raise in three years, to cope I watch my spending closely, and do not increase my debt, most Americans get that.

The view that taxes being too low is the cause of the deficit has got to be a reflection of the ass backwards thinking of the generation now in charge of our country.  A generation that grew up thinking uncontrolled spending and little saving had no consequences.
If an executive seeks a potentially lucrative CEO position with a company heading for bankruptcy and fails to turn the company around claiming that events leading to the bankruptcy occurred before his tenure caused his failure, he gets fired.  The buck stops with the person in charge.  Need I say more.

Where is Harry Truman when you need him?

CBO sounds the budget alarm…again

24 Jun

I chuckle (not really, I actually cringe) when I read experts and special interest groups saying there is no real problem with the major entitlement programs, they are in fine shape and need only a bit of a tweak to continue business as usual.

Those folks and you should read the most recent blog posts from the Congressional Budget Office (CBO).

Here is a sample:

The implications of this analysis are clear: There is a substantial mismatch between what the government would have to spend to maintain existing programs in their current form and the revenues that taxpayers are accustomed to providing the government to pay for those programs.

To keep deficits and debt from climbing to unsustainable levels, policymakers will need to increase revenues substantially as a percentage of GDP, decrease spending significantly from projected levels, or adopt some combination of those two approaches. Making such changes while economic activity and employment remain well below their potential levels would probably slow the economic recovery. However, the sooner that medium- and long-term changes to tax and spending policies are agreed on, and the sooner they are carried out once the economy recovers, the smaller will be the damage to the economy from growing federal debt. Earlier action would permit smaller or more gradual changes and would give people more time to adjust to them, but it would require more sacrifices sooner from current older workers and retirees for the benefit of younger workers and future generations.

You can (and should) read the full article by linking to the CBO Directors blog under Blogroll on the right side of this page.

How much do you think older Americans and retirees are willing to sacrifice for their children and grandchildren? Not much I’m guessing if the voice of the AARP is any indication. Our fixation with seemingly “free” or buried in someone elses taxes entitlements has gotten us into not only class, but generational warfare and that ain’t good.

We have built the worlds largest Ponzi scheme and the new investors are disappearing.

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Federal spending on health care only going up…and it is not because of insurance premiums. Check the CBO for yourself

3 Feb

I give up, let's just go with their assumptions

You have heard of the savings generated by the health care reform law, but what you don’t hear is that savings are spent elsewhere.  Rarely do you receive the full story on costs and budget projects.  Many observers tend to focus on the benefits of programs such as health care reform, but fail to look closer at the reality of costs and their implications.  Many changes are indeed important and we do need to assure all Americans have access to good health care (yet to be defined), but we also must avoid pushing ahead without knowing where the costs are leading us.

Here is what CBO says about popular entitlements:

[S]pending on the government’s major mandatory health care programs—Medicare, Medicaid, the Children’s Health Insurance Program, and health insurance subsidies to be provided through insurance exchanges—along with Social Security will increase from roughly 10 percent of GDP in 2011 to about 16 percent over the next 25 years. If revenues stay close to their average share of GDP for the past 40 years, that rise in spending will lead to rapidly growing budget deficits and surging federal debt. To prevent debt from becoming unsupportable, policymakers will have to substantially restrain the growth of spending, raise revenues significantly above their historical share of GDP, or pursue some combination of those two approaches.

From a Heritage Foundation Tweet

Both Democrats and Republicans like to use the Congressional Budget Office to support their position, generally in misleading ways.  While the CBO is nonpartisan, it makes its estimates based on the laws as presented by Congress and must assume that the law will be implemented as stated and stay that way during the entire period for which an estimate is based, generally not more than ten years.  For example, if HHS grants a number of waivers under PPACA that was not in the original CBO estimate.  If the law is changed so that business to business transactions do not have to issue a 1099, that was not in the original assumptions (by the way that change will cost $ 17,000,000,000 over ten years  based on the original estimates). Of course, the original cost projections also included the infamous Medicare Part B reduction to physician payments which did not happen and never will.

None of this is secret, you can read it all for yourself.  I urge you to visit the CBO Directors Blog and the CBO website and read for yourself the actual words used and the caveats incorporated in CBO reports, most of which never find their way into the media or out of the mouths of politicians.

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