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..........Here we are, almost a month into the federal government's new fiscal year and they have yet to agree on the budget for 2000. As usual when this happens, the government proceeds with business as usual by adopting "continuing resolutions." This means that they agree to continue operations on the basis of last year's budget allocations until the new budget is resolved. Unlike 1995, there's no debt ceiling involved and little possibility of a shut down. They can continue borrowing money to pay off and replace national debt securities maturing to the tune of about $5 billion per day, 365 days of the year. Despite what the talking heads of media say, there is practically no chance that the government will shut down again. After all, we would hate to see those "non-essential" government employees forced into another paid vacation now wouldn't we?
..........American Indians had a trick of wrapping an enemy in wet leather or wet strips of rawhide and then leaving him in the sun or the heat of day. As the leather dried, it became tighter and tighter until the victim suffered loss of limb or life. It's much the same with our government's budget situation.
..........Without solving any of the problems that cause discretionary spending's share of the budget to shrink year after year, the government is left trying to decide what limbs to cut in agriculture, education, defense, etc., in order to balance the budget. Even their unified budget and accounting tricks will not solve or disguise this problem. It's pretty much right out in the sun.
..........................................................How did this happen?
..........The 12 years of the Reagan and Bush era were highlighted by a phenomenal combination of borrowing on the open market and stealing from trust funds. There's no argument over this. The figures speak for themselves.
..........Ronald Reagan put the nation on the path of a huge national debt by straightforward honest borrowing. Selling Treasury securities on the open market, securities all backed by the American public and due to be paid by our children, went from about a half trillion in 1980 to its current $5.6 trillion mark. The interest alone against this debt has recently reached more than a billion dollars a day, without any true payment against principal, none whatsoever.
.....................................The national debt rose $130 billion in fiscal 1999 and,
.....................................according to the Treasury's Bureau of Public Debt to
.....................................the penny, currently stands at $5.674 trillion as of the
.....................................date of this article.
..........On top of this debt, the Reagan administration turned Social Security's relatively small excess trust fund account into a large slush fund for government coffers. Since the Greenspan Commission recommended, and in 1983 Congress quickly adopted a plan to raise FICA taxes way beyond what is needed to provide for the retired and disabled, the federal government has had a viable source of extra cash for the budget. Until recently, they referred to this as "off budget" revenue. Now, they just call it "stealing" or "plundering" Social Security. Last year, fiscal 1999, this windfall bonus was about $80 billion. This year, fiscal 2000, it will be close to $100 billion.
..........And Social Security isn't the only place where they steal money meant for something else. They steal from Medicare, gas taxes, airport and airline taxes, and many other entitlements. Social Security just happens to be the largest source to plunder, thanks to Alan Greenspan.
..........What's more, the federal government could do this with almost any entitlement trust fund they set up. The Greenspan plan would work if it were applied to Medicare or it would work against a new tobacco tax collected to pay medical bills caused by cigarettes. This method of extortion just happened to be tried with Social Security first.
..........Every time the government steals entitlement money, they leave promissory notes behind. These notes go against the national debt and mean that the public, the very same people who paid this excess in the first place, is now responsible for someday replacing it. It's double taxation plain and simple, the crime of the century. Distrust funds currently account for 34 percent of the national debt or a total of more than $1.9 trillion that you or your children owe largely due to this theft and misuse of your payments.
..........To the government's credit, running a deficit by honest borrowing has virtually stopped. The first two years of the Clinton administration were just as bad, if not worse, than the Reagan-Bush years but it became internationally unpopular to run deficits. By 1995 we were having arguments over "balancing the budget" and a strong Republican stand by Newt Gingrich and Bob Dole not to raise the debt ceiling from $4.9 trillion unless the administration went along with the republican "contract with America." This is what caused the shutdowns of 1995-96 and even brought fearful talk of possible government default on Treasury securities.
..........By 1997, we had finally resolved an agreement that set the year 2002 as the date to accomplish a balanced budget. The agreement became law. It's the Balanced Budget Act of 1997 and was passed by an overwhelming majority in Congress. At the same time, John Kasich, House Budget Committee Chairman, slipped in a provision that raised the national debt limit to $5.9 trillion. Without discussion or argument, this too became law, making certain there would not be any hullabaloo when we hit the $5.5 trillion mark set in 1996. Just think, in the last four years the national debt has risen more than $750 billion.
..........Knowing full well that a balanced budget agreement would eventually be reached, a newly re-elected President Clinton stepped to the podium and, in his inaugural address of January, 1997, announced that Social Security was "in trouble." It needed to be saved. We needed to "fix the roof while the sun is shining." He used the preposterous argument that "76 million baby-boomers" were looming on the horizon in order to frighten the public and to promise devoting the entire year to public forums and a search for solutions. From that point forward, almost two years have been devoted to arguments over how to save Social Security, an organization that doesn't require saving from anything except the plundering of the federal government itself.
......................................................Where are we now?
..........In May of this year, Congress almost unanimously passed (416 to 12) H.R. 1259, the so-called Safety Deposit or Lock-Box bill. Flawed though it is, the central idea is not to touch Social Security moneynot to steal the excess FICA taxes collected in the year 2000. Discussions on the House floor and recorded in the daily record would stand up in any court of law as confessions to the crime of stealing entitlement monies; i.e., embezzlement or the misappropriation of funds.
..........The lock-box bill has been in the Senate for more than five months now and may die there. The reason it has gone no further is that our illustrious Senators are waiting to see if it's necessary to steal this money again in fiscal 2000 before passing this bill, putting it into effect next year, or just letting it die a natural death on the shelf.
..........Trouble is that the House and Senate Budget Committees, Finance Committees, Appropriations Committees, GAO and all others who work on the budget continuously all considered Social Security as part of their "off budget" revenue for fiscal 2000. This time they counted on close to $100 billion from Social Security alone when they made up their budget.
..........Now, if they don't steal the Social Security "surplus" as usual, if they truly keep their grubby hands off it, then they're left with their backs against the wall and only two possible ways out of the situation:
.....................1. Clinton and the democrats want to "raise the money" lost by
.........................giving up Social Security's booty. Clinton has proposed two ways
........................ to do this: (a) raise income taxes, or (b) put a fifty-cent tax on.every
........................ pack of cigarettes sold in the United States. The latter would be on
........................ top of the huge tax every state has already levied against cigarettes,
........................ supposedly to cover medical expenses caused by smoking but seeming
........................ to produce the same sort of "surplus" or windfall bonus that the federal
........................government has.enjoyed from Social Security for the last sixteen years.
.....................2. The republicans want to cut discretionary spending across the board.
........................ They want to take whatever percentage Social Security's money would
......................... have been to the total budget and subtract that percentage from each and
......................... every element of education, agriculture, defense, health and all other
..........................elements of discretionary spending. This is the more normal way to make
......................... major cuts to budgets. There are no judgement calls, no elimination of
..........................wasteful or pork barrel plans. Everything is cut equally.
..........Would anyone like to bet on which way they will eventually decide? Too bad Jimmy the Greek isn't around to tell us what the odds would be on stealing the Social Security surplus again.
..........And don't forget it was just a few weeks ago that the republicans were pushing for a tax cut of almost $800 billion spread over the next ten years. A tax cut that everyone knew Clinton was going to veto. But supposing he hadn't vetoed it. How would they ever have afforded such a tax break when they can't even manage their annual budget without robbing Social Security and other entitlements?
..........Obviously, the tax cut idea was nothing more than election year posturing now spread over almost two years. The republicans can say that they tried but the democrats squashed them.
..........Is there really any point to voting any of these people back into office? Do you hear any candidates who seem to recognize the problems outlined above?
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