Submitted by David Stockman via Contra Corner blog, [9]
There are few political hacks in Washington more deserving of everlasting ignominy than retiring speaker John Boehner. So here’s a vehement good riddance to the man who has single-handedly destroyed whatever pathetic semblance of fiscal responsibility that remained in Washington.
The so-called bipartisan budget deal he confected as a parting gesture doesn’t even deserve to be called a farce. It’s actually just an extension of Washington’s pathological lying to the American public about the monumental fiscal calamity now brewing.
The chart below shows the patented formula—– employed for the second time since the sequester mechanism was put in place during the debt ceiling crisis of 2011.
It will increase spending by $85 billion in the here and now by busting the FY 2016 and 2017 caps. This new red ink will then, purportedly, be off-set way down the road with gimmicks, imaginary IRS audit revenues and hazy disability benefit reforms which will never materialize. Never.
Indeed, these people are beyond shame. The big bulge of $33 billion of savings shown for the never never land of 2025 is due to a sharp increase in assumed discretionary spending cuts and Medicare benefit reductions. That is, the very same programs that are being pumped up during the next three years!
And that’s the same thing the Ryan-Murray budget did two years ago with respect to FY2014-15. In combination these 11th hour bipartisan shams have thus added $143 billion of real money to the national debt for the years before 2021, “paying” for them with imaginary savings to be realized after 2021. That is, until we get there—– at which time anything which bites into the gravy train will be predictably deferred.
So in a nutshell here’s Johnny Lawnchair’s odorous record of fiscal betrayal since 2011. First he broke the will of fiscal conservatives just when they had Washington over the debt ceiling barrel in August 2011 with the promise of $1.5 trillion of entitlement savings via the Super Committee.
The latter didn’t even try and hardly even met——–defaulting instead to an allegedly equivalent savings from the automatic sequester mechanism. But when those caps started to bite in 2013, Boehner sent out his budget lapdog, pedigreed fiscal phony and now designated successor, Paul Ryan, to negotiate relief for the military-industrial complex and to insure plentiful pork for GOP candidates in the 2014 election.
Apparently there is another election coming up in 2016. So, predictably, Boehner folded so fast on the looming debt ceiling crisis that the mainstream media barely knew he had gone to the White House.
Yet on a lickety split basis Johnny Lawnchair not only jettisoned two more years of the sequester, but also blew any other inconvenient fiscal restraint lurking between now and 2017. That includes a perfectly reasonable and long scheduled increase in Medicare Part B premiums for the better off elderly and the impending action-forcing exhaustion of funding for the runaway social security disability program.
In the best kick-the-can style, however, the latter will be funded by raiding $150 billion from the retirement trust fund, while pretending that Washington bureaucrats at the Social Security Administration will write new rules to prevent abuse of a program that is totally out of control.
Really? The program’s budget cost has tripled in real terms just since 1990, mainly due to an explosion of “back pain” and “mental illness” cases. Those dubious diagnoses now account for fully 55% of recipients compared to less than 15% in 1961.
So here is an entitlement crying out for sweeping statutory reform and faced with a complete cessation of benefits before the 2016 election due to the impending exhaustion of the DI trust fund. But what’s the point of exercising that kind of rare fiscal leverage when you have Johnny Lawnchair doing the negotiating?
[10]
In any event, sooner or later workers will get socked with another round of payroll tax increases to bailout the entirety of the OASDI trust fund, which I demonstrated a few months ago will be totally exhausted by 2026 anyway. But in the interim the military-industrial complex is surely tickled pink by Boehner’s parting betrayal of US taxpayers.
It turns out that discretionary spending authority will be increased by $112 billion over the next two years. This includes the $80 billion increase in the discretionary spending caps plus another $32 billion increase for war contingencies and other national security programs not subject to the sequester.
Not surprisingly, $72 billion or nearly two-thirds of that goes to the war contingency and state department security programs. Apparently that’s all needed to contain the Russian bugaboo, especially now that Putin has shown how you actually fight terrorists in Syria, and not by spending $500 million on 50 trainees—-all of whom were captured, shot or deserted within weeks of being placed in the field.
But the military-industrial complex always needs more. With this further largesse, total US national security spending will touch nearly $800 billion next year, including military and foreign aid, veterans and related spending. That’s two-thirds of Russia’s entire current GDP of $1.2 trillion!
Of course, we don’t have a real industrial state enemy in the world that could actually threaten the security and safety of citizens in Lincoln NE and Boston MA. But that has not stopped Johnny Lawnchair from folding on the fiscal issue time after time in order to make a deal with liberal big spenders to get more funding for the military-industrial complex.
Can you say post-retirement lobbying, consulting and speaking gigs? Don’t bother. Boehner has been working on that for years.
At the end of the day, however, the Speaker’s most egregious sin has been to run out the clock on the possibility of fiscal retrenchment. With this agreement, there is no possibility of a true budget deal until the summer of 2017. That means no real impact on the budget numbers until FY 2020—-since its takes several quarters to crank-up any meaningful revenue measure or entitlement reform.
So lets see. That point in time (October 2019) would be exactly 123 months since the so-called Great Recession ended. Have we ever had an economic expansion that long—-even during the years when the American economy was riding high and when the Fed had not yet exhausted its ability to goose credit and spending with easy money?
No we haven’t. Johnny Lawnchair has compromised the nation’s fiscal plight right into the next recession and the renewed outbreak of trillion dollar annual deficits. That is, to a point when Washington will once again be paralyzed with fear that actually paying our bills would drive the stumbling US economy further into the drink.
[11]Historical Length of Recoveries
And what possible excuse did Johnny Lawnchair have for delivering the nation into this absolutely certain fiscal catastrophe?
He didn’t wish to demand that the President employ his constitutional powers to allocate and prioritize spending in the event Uncle Sam had exhausted his legal authority to borrow.
Folks, a crisis driven resort to prioritized spending cutbacks is the only mechanism left to prevent a rapidly aging society and failing economy from drifting into fiscal calamity; and during the Obama era it was always in the power of the House Speaker to force that procedure.
That’s why Johnny Lawnchair deserves everlasting infamy—–or at least until Paul Ryan comes up with new excuses for burying future generations in terminal debt.
