$15 Trillion And Counting

national_debt_clockBy George Noga


Sequestration – Gramm Rudman – Possible 2013

The national debt recently passed $15 trillion – a nightmarish milestone that is $4 trillion higher than when President Obama took office 3 years ago.

We are on track to add trillions more before 2020 at which time the debt could approach $25 trillion. At that pace the USA, as we now know it, will not exist as the debt will reach critical mass years before that date and our world will be forever altered.

With that $15 trillion debt as a backdrop, the failure of the super committee on deficit reduction (created by the Budget Control Act or “BCA”) may have come as a surprise. It shouldn’t have.

Failure was expected all along; in fact, deadlock was preprogrammed. Government snookered us all once again. Read on to learn why the super committee was set up to fail and why its work never was that important to begin with. Finally, read on to learn about a truly breathtaking possibility that could transform the USA in January 2013!

The Sequestration Ruse and Why it Never Will Happen

Say what you will about the fecklessness of politicians but they are in congress for a reason – they are good at charades. When they passed the BCA creating the super committee, they included several stealth provisos. Congress couldn’t agree on budget cuts when BCA passed and anticipated the super committee (a ruse ab initio) also would fail. So they did what they always do, id est kicked the can down the road. Following is what really happens.

1. The sequester doesn’t kick in until 2013; this was an integral part of the maskirovka. This buys congress over a year to change the sequester. The BCA sequester never will happen.

2. Many are concerned about the $500 billion putative hit to defense; it never happens – at least not $500 billion. Under BCA the president can shift expenses within various defense accounts requiring only congressional approval with no filibuster permitted.

3. Should sequester come to pass, congress can change its components. A stealth BCA provision allows congress to enact alternatives to across-the-board sequestration.

4. Even if $1.2 trillion of sequestration happened (it won’t), total spending in 2013 still would be $3.6 trillion, or 32% above CBO estimates a few years ago.

5. Surprise! BCA restored Gramm Rudman (“GR”). Under GR, 20 days after a sequester order, the majority leader in either house may offer a joint resolution to modify the order; such a resolution can be debated only 10 hours with no filibuster.

6. Nothing will happen until after the 2012 election and the new president and congress take office in 2013. This is where things get interesting as described infra.

A Shocking Scenario: How 2013 could be an Annus Mirabilis

President Obama intentionally put off difficult budget and other decisions (read Keystone Pipeline) until after the election. This is where Paul Ryan, by inserting the revival of GR into the BCA, may have snookered Obama and the democrats.

Let’s say in January 2013 there is a new republican president and republican majorities in both houses of congress; this is not altogether a far-fetched situation. Due entirely to the GR provisions inserted in the BCA, the law provides enormous powers to the congress and president in 2013. This sets the stage for a possible miracle year!

“Reform on a scale hitherto believed impossible
can happen the very instant the new president’s
hand comes off the Bible on January 20, 2013.”

Are you ready for this wild ride? On the very first day of the new congress, it could de-fund ObamaCare, reform entitlements, extend the Bush tax cuts and enact budget cuts. All this could happen, thanks to the restored Gramm Rudman provisions, with a simple majority vote with no filibuster possible.

Moreover, all such changes would be permanent. President Obama’s obsession with delaying all decisions until after the election has opened the door to a possible annus mirabilis in Washington that no one thought even remotely possible due to the democrats’ ability to filibuster in the senate. Thanks to GR, that is no longer the case.

It all comes down to the 2012 election as indeed we always have known it would. Nothing of any consequence will happen between now and January 2013. However, the possibilities now are staggering and reform on a scale hitherto believed impossible can happen the moment the new president’s hand comes off the Bible on January 20, 2013. Caveat: Don’t underestimate the chance republicans will turn this dream situation into a nightmare.

A Demi Dozen Pithy Short Takes

1. There are 20,000 missing Libyan surface-to-air missiles; the black market price is $4,000. Israel is equipping its civilian airliners with countermeasures. What is the USA doing and why is this not a huge story? This can have only one ending.

2. Humbug! The Obama administration announced a new tax on Christmas trees. They backed down only after public outrage.

3. Russia, Canada, Mexico, the Bahamas and Cuba are drilling adjacent to our borders. It would appear environmentalists trust the safety record of Cuba over the US.

4. There are 50,000 miles of pipeline in the US with nary a problem; but leftists oppose a $7 billlion project with 700,000 barrels a day and thousands of jobs. They prefer the pipeline in Canada, and shipping the oil 6,000 miles to Chinese refineries. The US then must replace this oil with imports using tankers which are riskier than pipelines. Where is the sense in this? Tell me again why environmentalism is not a religion.

5. Credit Suisse stated the Euro Zone needs a “momentous deal” by January to be saved.

6. A stupid or unnecessary expenditure doesn’t suddenly become good or wise just because it is “paid for” with higher taxes, more borrowing or projected future savings.

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