Thursday, January 8, 2009

Trillion dollar deficits

With Trillion dollar deficits “for as far as the eye can see”, Ultracon trots out an article from April of 2007 that appeared in the STAR BUSINESS WEEKLY, page D8. (One slight alteration from the STAR is the dropping of “ic” from “Democratic”, done for Mr. Howard Dean’s sake.)

If you doubt Ultracon’s budget figures, check out the latest budget history from the feds, toggle Bookmarks on the left and click on the third item: Table 1.1—SUMMARY OF RECEIPTS, OUTLAYS, AND SURPLUSES OR DEFICITS (–): 1789–2013. You’ll be on page 25 of Adobe Acrobat, but page 21 of the document itself. (Dial-up users: This 342-page PDF is almost 2.5 megabytes and might take 5+ minutes to download.)

One might quibble with Ultracon’s positing of a better than 50% rating for the GOP. This was based on not counting 1931, 1932 and the first 6 years of the Reagan terms. Although the GOP won the House in 1931, the House was organized, if memory serves, by Democrats due to GOP death(s). Also, during the first 6 years of Reagan, the House was in Democrat control, but cooperation from conservative Democrats, Blue Dogs, coupled with a GOP Senate allowed the GOP to have its way. But go ahead and count those 8 years for the GOP and the GOP still has a 40% rating at balancing the budget as opposed to the Democrat’s less than 10%. However, Ultran was counting 2001 and 2002 for the GOP, but the defection of Senator Jeffords in 2001 put the Senate under Democrat control. In any event, no matter how you look at it, the GOP has a better record at balancing the budget than Democrats. That is, if you think Congress is responsible for budgets.

Now it’s the Democrats’ turn to balance the budget
By Jon N. Hall

Back in 2002, Howard Dean told Greta Van Susteren on her Fox News Channel show: “No Republican president has balanced the budget in this country in 34 years. It seems only Democratic presidents do that.”

Dean was referring to fiscal 1969, the first year of the so-called Unified Budget. The Unified Budget mixes general fund revenue with off-budget revenue from dedicated taxes, such as Social Security. It allows off-budget surpluses to offset (and mask) on-budget deficits. And indeed, 1969 saw an on-budget deficit of $507 million.

But who are these “Democratic presidents” Dean refers to? Certainly not Carter, LBJ or JFK. The last president before Clinton to preside over a balanced budget was Eisenhower, and the last Democrat was Truman.

The biggest problem with Dean’s statement is this: NO president—neither Democrat, nor Republican, nor Whig—has ever balanced the federal budget. “It seems only [Congress does] that.”

Budgets are legislation. Bills. Presidents don’t vote on bills. Presidents only sign bills, which makes them laws. Or they veto them. Which is why Clinton needs to accept at least half of the responsibility for the government shutdown in 1995—he vetoed a budget that would have kept the government going.

The responsibility for the budget rests with Congress, as is illustrated by the current calls to cut funding for the Iraq war. No Congress should rubberstamp any president’s proposed budget. Congress has it within its power to reject any of a president’s budget proposals. Folks should direct their unhappiness over the return to deficits at Congress.

The Democrat establishment has for years laid responsibility for the budget at the feet of the president, crediting Clinton and blaming Republicans. But if Congress has the ultimate responsibility for the budget, why do Democrat congressmen deflect attention elsewhere?

It is because the only balanced budgets during the last 47 years occurred when Republicans controlled Congress.

That’s right. The last balanced budget produced by a Democrat Congress was in fiscal 1960. And going back to 1920, the only other times Democrats balanced the budget were in fiscal 1947, 1951, 1956 and 1957. And since Democrats controlled both houses of Congress for 52 of those years, it means their record is below 10 percent.

The Republicans have certainly disappointed fiscal hawks lately, but they balanced the budget in the 11 years from 1920 through 1930, and in 1948, 1999 and 2000. They controlled Congress for 27 of the years in question and so are averaging above 50 percent.

Democrats might object to the exclusion here of fiscal 1969. But we’re not including any years with Unified Budget surpluses if they ran on-budget deficits. That means we’re also not including 1949, 1998 and 2001, which would accrue to the Republicans’ record.

What does it take for a Democrat Congress to balance the budget? The top tax rate during the period when Democrats balanced the budget was 91 percent. When the top rate was lowered in the 1960s to 70 percent, Democrats never again balanced a single budget.

But now, after 12 years, the Democrats have another shot at balancing the budget. And they have a Trillion dollars more revenue to work with than in their last budget. They’re not used to such large sums. Will it be enough for them to balance the budget? Or will they launch more programs, more entitlements, and just spend it?

Democrat congressmen who continue to lay the responsibility for the budget on the president are doing nothing less than abdicating their own responsibility. And since Congress can pass rescission bills, the Democrats are, as of now, responsible for all the waste, fraud and abuse in the federal budget. (At least the Republicans killed the “bridge to nowhere”.)

Should the Democrat Congress be unsuccessful at balancing the budget, it will be interesting to see if they blame President Bush for it.

[This article originally appeared April 17, 2007 in STAR BUSINESS WEEKLY, put out by The Kansas City Star newspaper.]

Jon N. Hall is a programmer/analyst form Kansas City.

ULTRACON: the blog for Real Americans.

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