Wednesday, January 30

Congress on budget promise what they can't keep

Congress on budget promise what they can't keep

John W. Schoen, NBC News

Next time, when you hear that someone in Washington come the federal budget balance with a long-term plan, take it with a medium-sized Capitol grain of salt.

As the control and the battle rages on in the capital spending are Democrats and Republicans swear to replace temporary, stop-gap budget measures with a long-term plan, the gap between how much the Government raises in taxes and how much Congress agrees to spend.

Although bitter over like it to pull out divided, both sides agree that a plan step by step, long term, budget balancing would do less harm to the economy than the steep rate cuts short-term issues effectively in a few weeks. Earlier this week, House Republicans set a 10-year schedule for the income and expenditure into line.

"The budget over the next 10 years means that we save the future for our children and our grandchildren balancing", said House Speaker John Boehner, R-Ohio, was announced as the business.

Even if every Member of Congress agreed with this goal, it is a promise that none of them can hold.

Every budget in the long term is subject to a long list of unknown - from disasters and wars, recessions and Finanzkrisen-, which can quickly knock it off course. The list includes a future Congress, which decides to break the plan into pieces and replace with a new one.

"You can talk about a budget as an institution, a sense of direction, but you can not talk on a budget get in the long term as a precise point," said William Galston, senior fellow at the Brookings Institution and political adviser in the Clinton administration. "All sorts of things can change the assumptions underlying long-term planning."

Congress press the "Pause" in the current budget battle this week) due to the delay of a looming deadline, to prevent that the Government of the borrowing to its bills to pay. The business allows the Treasury Department continues to make the distance between the taxes, collects sell bonds and the Congress has the issues.

The measure effectively the debt ceiling crunch until mid-May, moved. The precise date is difficult to predict because the Treasury able to juggle its bills for a few weeks, the borrowing Cap approaching.

The next hard deadline comes with automatic budget cuts - the expenditure side of the so-called "fiscal cliff" - which delayed until March 1 and fell from $24 billion in the last minute, to the end of the year deal, taxes were raised for the richest households.

These cuts, so called "were secrete" in July 2011 after the last debt issued ceiling standoff.

The hope was that the impact of the cuts would be so bad, that the deadline for a compromise in the long-term average of deadlock would compel. Republicans and the White House remain on a collision course over a long-term plan which sequester to replace clever concept for spending cuts of meat.

Both sides agreed a long-term financial plan - invade or to forego their salaries. (This is easier than kept another promise. The 27th amendment envisages that any modification of the selected trust men salaries apply only to the next session of Congress. So the move is largely for map.)

Replace the short-term measures budget with a 10-year plan begins with a set of assumptions about future spending, which are impossible to make. Will the United States fight a war in the next ten years? How many natural disasters such as Superstorm Sandy calls emergency spending? Are health care costs rising faster than the rate of inflation next?

There are more wild guesses embedded in the economic forecasts used to estimate how much money that the Government takes taxes. It will enter a recession in the next 10 years? If so, will it be mild or severe? Short or long?

As all of them have long-term plan a relatively small miss a great influence on the street this estimate. If the current $16 trillion U.S. economy in the historical average speed 50 years by around 3 percent, for example, in 10 years gross is growing gross domestic product - a rough measure of the income of the country is $21, hit 5 trillion. If the growth rate at the current, meets only about 2 percent pace, GDP $19.5 of trillion less tax revenue from businesses and households to generate, even if tax rates remain stable.

"A lot of problems, you can resolve if you simply create in the kind of economic performance we've seen in the last six years by Reagan or the last five of Bill Clinton," said Galston. "It is possible to do everything on paper, if you do not what you do."

0 коммент.:

Post a Comment

Site Search