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CRs, Shutdowns, Debt Ceilings: The Quick and Dirty Primer

The budget of the USA runs from October 1 through September 30 of each year. The current budget for 2013 ended on September 30, 2013.

In the annual budgetary process when a budget is agreed upon by the Congress for the  October 1st through September 30th fiscal year, Congress passes legislation that sets an amount of money to fund the government for the ensuing year. However not all the money in the budget is allocated to specific agencies and departments. Congress subsequently authorizes those allocations through what is called “appropriations” whereby it sets the specific amounts allocated to each department or agency to fund their operations.

Only Congress may appropriate money for the operation of the federal government. Translation: Congress must pass separate spending bills (after the that appropriations process has been negotiated by the House and Senate) to fund the operation of government. And what if specific appropriations do not becomes law?  Then there is no budget set for certain government agencies and departments and that can trigger many government functions to cease immediately. This is exactly what has has happened to our nation.

In order to prevent the interruption of government services- to avoid a shutdown like we are experiencing- Congress and the President could have passed, as is routinely done, what is known is a continuing resolution (“CR”). A CR authorizes the government to fund agencies at the levels at which they are currently operating until the  earlier of (i) the CR’s expiration, or (ii) an appropriations bill being passed by Congress and signed into law by the President.

The Republican Congress has refused to pass a CR that does not defund- that is, strip funding for- Obamacare. The President and the Democratic Senate have refused to sign into law other than a “clean CR” with no conditions attached. The President has taken the position that the time to debate funding for Obamacare is during the 2014 budgetary process. The Republicans contend that the President’s refusal to negotiate the CR is the cause of the shutdown;  the President and the Democrats blame the Republican Congressional caucus for trying to do an end-run around the budgetary process by way of attaching an unacceptable condition to the CR. The Republicans claim “we are open for negotiation”- knowing well good that the President and the Democrats in the Senate will not defund Obamacare.

What may seem like a Chinese standoff- and regardless of whom you may blame- the reality is that both sides will negotiate. Veterans being turned away from the Vietnam Memorial, federal employees not being paid for averting a driver assaulting the White House and the Congress, children being turned away for treatment at the National Institute of Health, a powerful storm in the Gulf posing a threat to Gulf states at a time when FEMA had been cut back-we’ve already witnessed legislation introduced in the Republican House to fund certain governmental agencies that the public supports. Many politicians and Americans don’t like “big government”, until they need it.

Raising the Debate Ceiling and not passing a CR may collide soon. By mid-October the US Treasury will exceed its statutory capacity to borrow the funds necessary to pay creditors of the United States. There is little disagreement on either side of the aisle that a government default must be avoided- although nothing would surprise me at this point. The collision I refer to goes like this. So long as there is no CR, the closer our nation comes to the time when lawmakers will have to resolve both the continuation of the partial shutdown and the necessity of raising the Debt Ceiling.

It is a common misconception that raising the Debt Ceiling raises the Budget Deficit. The two have absolutely nothing to do with each other. In seeking the raise the Debt Ceiling, The Treasury is simply seeking authority to pay obligations which Congress has already incurred- obligations that are reflected in a budget deficit or surplus. Again: raising the Debt Ceiling does not increase the Budget Deficit.

Think of raising the Debt Ceiling as an exercise in figuring out how to pay for bills you have already incurred. Let’s say you lose your job but have good credit or ample savings. In figuring out how to, say, pay your mortgage you would have two choices: borrow or dip into your saving to pay your monthly mortgage payment, or default on the payment. Regardless of what you may choose to do, neither will change your income and contractual expenses for the year, be they a surplus or a deficit. If you choose to borrow or dip into your savings, then you have made a decision to raise your personal Debt Ceiling. You will not owe more money that you did before: you extinguish debt owed on your mortgage and increase borrowing from another source. The net effect is neutral in terms of your personal surplus or deficit for they year.

Back to Washington. If the Debt Ceiling and the CR become bargaining chips in return for defunding Obamacare or cutting government expenses, is that political malpractice? Some believe so, given that the Congress and the President can strike a deal to pass a clean CR, raise the Debt Ceiling and then engage in budgetary battles over taxes, expenditures and funding Obamacare during the budgetary process. With the GOP controlling the House and the Democrats controlling the Senate and the White House, both parties have “no go” leverage, and every  incentive to negotiate assuming they desire to move the peoples’ business forward.

In today’s dysfunctional democracy that might just make too much sense.

Lastly let me remind you: politicians work for you. They are our employees. They are not rock stars. If you are unhappy with their performance, then exercise the one right you have that no amount of money can deny you: your Vote. As a nation we have only ourselves to blame for failing to exercise our voting rights every two years to hire and fire the lawmakers we send to Washington.

 

Ungovernable

I have never been witness to such insanity. Aside from Americans voting against their own self-interest we now have a Republican Party which is in the midst of an outright mutiny.

We the people are the losers. The USA has reached the tipping point or, at best, inches toward it. The winners are special interests for which political parties have become mere proxies.

As I ask myself I will of you: why have we become so complacent? Why is there no active resistance on the part of Americans? Why are there not 100,000 people rushing Congress?

 

Making an ounce of difference this Holiday season

Now that Black Friday madness has all but become a national holiday in and of itself it’s long past due for a different path to our Holiday giving. You can take it slow at first so as to avoid remorseful and/or guilty feelings about your commercial shopping choices. Simply supplement all those commercial excesses that drive retail sales during the Holidays with contributions to charitable organizations. And fiscal hawks worry not: giving to non-profits is as stimulative to the economy as is shopping at the mall.

The premise is simple. Instead of buying another bangle or sweater or tie that for a member of your family or a friend, how about making a donation in their honor? I have been doing all of my Holiday shopping by way of charitable contributions for several years. Augmenting your Holiday giving through charitable giving comes much closer to what I understand to be the essence of Christmas and the path that that Jesus would have followed (for those of you who ascribe to non-secular beliefs.)

This year I’ve uncovered a really special organization that yields a bang for your buck that can’t be beat. My charity of choice is the Ounce, a Chicago-based non-profit which is the leader in the formation of early childhood development (ECE) curricula that cut at the heart of the achievement gap, advocacy of of ECE programs to opinion leaders and government officials and design of a roadmap for the evolution of model ECE facilities nationwide. Focused on America’s most vulnerable low-income children (six million of whom live in poverty) the Ounce is setting a new bar in interrupting the cycle of deprivation that, if not redressed, affects a majority of these infants, toddlers and pre-K children for their lifetimes. I have visited Ounce facilities, become acquainted with its research results, advocacy and outreach efforts and struck up personal relationships with members of its staff as well as investigators from North Carolina-based Frank Porter Graham Child Development Institute who are benchmarking the Ounce’s performance.

You can make an online Tribute Gift to the Ounce and thereby invest in America’s future. There’s no single return that rivals the enduring benefits of early childhood education: estimated by Nobel Prize winning economist James Heckman at $8 for every $1 invested. It’s a fiscal valley.

Whether you choose to join me in supporting the Ounce, consider making a lasting tribute to your friends and family by way of a donation to a charity of your choice. It’s the ultimate feel-good present.

Happy Holidays to all.

Jim

 

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Let Americans exercise their right to Bear arms

Come on America get with the program. A bunch of white folks gunned down in Colorado and it’s a national calamity. A bunch of black kids killed every single day of every single year and America yawns. It takes a Columbine or an Aurora to get people’s attention despite gun violence echoing in backyards all across the nation.

Reading all of the platitudes pouring in and press accounts after an event like Aurora- we know that in no time they will subside. That- notwithstanding the reality that we live on a border with a nation to our north where gun violence is a blip and traffic arms to drug lords in Mexico that foment mass violence. America is a nation that imprisons people for selling marijuana but provides safe haven to people who sell weapons of mass destruction.

So let’s get real. You and I are more interested in protesting about civil indignities than we are about murder and violence. Thirty thousand people died from gun death in the US in 2001, about seven times as many as perished in 9/11.

When my friend and eminent Constitutional law scholar Walter Dellinger lost the case he argued before the Supreme Court regarding gun laws in our nation’s capital, I took him a keepsake: a stuffed bear with two arms that I had bought at a toy store. Justice Scalia would no doubt welcome the argument that the Second Amendment’s guarantee of the “right to ‘bear arms’ ” might well have been satisfied.

 

GAME ON !


A TIME cover story from 2007 couldn’t have seemed more wickedly hollow than it did yesterday on what was a historic June 28th in America. The fireworks included Congress voting to hold Attorney General Eric Holder in contempt of the Congres, distinguishing him as the fist cabinet member to be cited for criminal contempt of Congress in US history. Seventeen Democrats joined Republicans in passing the contempt charge.  Minority Leader Nancy Pelosi and other Democrats left the chamber in a show of disgust with what they perceived to be a political stunt. Political stunts beget political stunts. The whole contempt proceeding was a B grade movie produced by Republican Representative Darrell “Jet” Issa of California. The same gang that was ready and willing to allow the US to default on its debt during the debate over increasing the budget ceiling last year was back at it again.

 

Down in Florida somewhere along Hanging Chad Alley a Federal District Court Judge denied  a DOJ request for a restraining order to block Republican Florida Governor Rick Scott’s voter purge of 2,600 suspected illegal voters. In reality, many of the 2,600 folks purged are naturalized citizens eligible to vote. Voter fraud is being trumpeted as a national calamity championed by The Tea Party and the policy-in-a-takeout box American Legislative Exchange Council (ALEC). That organization churns out model legislation to peddle across state houses controlled by the GOP. It is in fact an insidious suppression of  the voting rights of persons who typically vote Democratic. Voting laws in the Sunshine State continue to confound reason.

The big news of the day was Obamacare surviving its own purge by the Supreme Court on a narrow 5-4 vote and the emergence of Chief Justice John Roberts as the hero. Legal scholars were perhaps the only ones not surprised; the rest of us were reading tea leaves with respect to every utterance from Justice Kennedy during oral arguments. After Roberts’ confirmation in 2005 I felt that as years went by, we would witness a slow relaxation of his rigidly conservative  bona fides. (My thinking was influenced by one case on which he worked pro bono.) Today may have marked a fork in the road.

If for but a day Chief Justice John Roberts was America’s leading man. He looks the part. He earned the role.

 

 

Like the 50 million Americans lacking healthcare insurance, I am ecstatic that the Supreme Court upheld the Affordable Care Act. However that decision has only fueled the rage of conservatives determined to run the President out of town on a rail. Fueled by frustration, fear, callousness and propaganda yesterday’s tweets about those threatening to move to Canada- a bastion of “socialized medicine”- only underscores how ill-informed the electorate is about health care and policies in America.

This election is going to be a war. Campaign finance is not going to be the game changer pundits and the Obama and Romney camps spin. By now nearly everybody who is going to vote knows who is running. The election war isn’t going to be won by a broadcast, aerial carpet bombing; it is going to be won on the ground. Democrats must get first-time and new people registered and to the polls. If they don’t, Mitt Romney will be our next president. He will have the opportunity to appoint at least one Supreme Court Justice to replace the ailing Justice Ginsburg, and perhaps as many as three others: Justices Scalia, Kennedy and Breyer.

Game On means that it is time to get busy registering voters. Pick up registration forms from your county Democratic party or county board of elections and load you clipboards and backpacks with the forms. Then get to work registering people at aisles in grocery stores, bars, churches and community meetings and bathroom lines. Set a goal you can attain each day. Never be reluctant to ask people you register if they will do likewise for family and friends; provide them with forms and your contact information or that of the state board of elections. You will be surprised by how many Americans are not registered.

Most of all do not assume that other organizations such as OFA will handle new voter registration. They can not cover the map. As a free lancer I have registered almost 100 new voters in the most unlikely places.

Registering voters is the best way to right the man who was knocked down by the recession and can not get up on his own. He needs a helping hand, not a tax credit. Extend him your hand- and make sure he is registered to vote and knows who he is going to vote for.

 

JWN

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