One Obstacle Gone, but Massive Debt Remains

Remaining true to what he said during the IBA Annual Washington Trip, former House Speaker John Boehner was able to procure, along with Senate Majority Leader Mitch McConnell, a deal with President Obama that has now passed both the House and the Senate. This deal calls for a two-year budget and raising of the debt ceiling. The importance of this budget cannot be overstated. It should help calm the financial markets, by creating certainty that the federal government will not be forced to shut down and will not default on its debt payments. However, the budget also increases overall spending by $80 billion, which has subjected both Boehner and McConnell to criticism by the more fiscally conservative members of both Chambers.

Also true to his word, Boehner has officially resigned as speaker and as a member of the House, and the House elected Paul Ryan as its new speaker on Oct. 29. Interestingly, Ryan was one of the critics of the new deal reached ‒ more for the secretive atmosphere in which it was negotiated than for the content ‒ but he stands to be its biggest beneficiary. Essentially this deal removes the largest obstacle that he would have faced next year, allowing him the freedom to foster harmony within the House Republican caucus.

While this package is significant, yet remaining is an omnibus spending bill that needs to pass in December to set specific budget levels for a variety of government agencies within the guidelines of the overall budget bill. The omnibus spending bill is basically a combination of the various agency-level budgets. Without it, separate bills to fund each agency of the federal government would need to be passed.

This new budget marks an important event in modern history. Unfortunately it does nothing to lighten the heavy debt the U.S. government has saddled onto the backs of future taxpayers. Instead it could bring us dangerously close to $20 trillion in debt, and that figure does not count the unfunded liabilities of Social Security and other government obligations. At some point, there simply will have to be cuts to government programming, so that we can reduce our debt level over time. I am befuddled that we continue to add programs such as the Consumer Financial Protection Bureau and the Affordable Care Act, while we remain mired in debt. The time to go on a shopping binge is not while deep in debt and struggling to make ends meet ‒ whether you are a business, a consumer or a government.

We can all hope that Speaker Ryan, plus a new administration in 2017, will bring fresh perspective as to how to manage the federal government. We are in desperate need to institute more fiscally sound principles than what we have been allowing to occur for the past couple of decades.

– S. Joe DeHaven

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