Commenting on the federal budget the other day, House Minority Leader Nancy Pelosi said “the cupboard is bare. There’s no more cuts to make.”
As policymakers begin fighting over this year’s appropriations, the Congressional Budget Office has released a long-term projection that puts today’s budget battles in broader context. The federal government is in the most unique and dangerous fiscal situation that it has ever been in during peacetime.
I was struck by a photo and story in the Washington Post and Baltimore Sun earlier this week. A group of high-powered politicians had assembled at the Port of Baltimore for a ceremony to roll out a federal grant for seaport investment. The group included the vice president of the United States, the two U.S. senators from Maryland, the Secretary of Transportation, and numerous other important political leaders.
The Washington Post’s Steve Pearlstein published a lengthy diatribe against corporate profits yesterday. Or at least it was against firms wanting to earn profits now in the current quarter rather than some time period later on.
Downsizing Government has a new tool allowing readers to chart spending for more than 500 federal agencies with the click of a mouse. It’s pretty cool. Hopefully it will help citizens, reporters, and policymakers understand how the budget has grown to a colossal $3.5 trillion a year.
With Congress reconvening, members will soon be battling over discretionary-spending levels for fiscal year 2014, which begins October 1. They will decide whether to abide by current federal budget caps, which are designed to keep discretionary spending roughly flat over the next few years. The problem is that many lawmakers have become so used to rising budgets that a spending freeze seems impossibly tight-fisted to them.
A new essay at Downsizing Government focuses on infrastructure investment. The essay discusses problems with federal infrastructure spending and the advantages of privatizing infrastructure to the full extent possible.
Unfortunately, the current administration’s infrastructure policy has been mainly focused on increasing spending on misguided activities such as high-speed rail. But here are some of the problems with such a federal-led approach to infrastructure:
As federal policymakers gear up to battle over federal spending and the budget sequester this Fall, it is interesting to consider past efforts at restraint. President Calvin Coolidge, for example, held the federal budget down to about $3 billion seven years in a row, while cutting taxes and bringing the federal debt down from $22 billion to $17 billion.
Rivers of red ink continue to flow from the federal budget, and we still face an entitlement spending crisis. But you wouldn’t know it from the priorities of the two political parties: President Obama has been busy pushing for more “investment” spending, and the Republicans have been consumed by the administration’s scandals.
Federal tax policies are a powerful factor in encouraging or impeding business investment, job creation, and international competitiveness. For small businesses and growth companies, capital gains taxation plays a particularly important role.