The House of Representatives passed a bill today that would extend funding for the federal government an extra two weeks. The bill calls for a $4 billion cut in current spending levels and would prevent the government from shutting down. Now the legislation needs to be approved by the Senate.
A government shutdown isn’t quite as ominous as it sounds. Essential services would continue to run while non-essential services, like national parks, would be temporarily closed. As Rand Paul explained:
What about an in-between solution? What about we ‘spend what we take in?’ We bring in 200 billion dollars a month. Couldn’t we just spend what we have instead of saying ‘Oh, we have to shut down government?’
It’s utterly amazing in and of itself that $200 billion each month is not enough to run the federal government. But it certainly should be enough to keep things going while the politicians figure out the magnitude of our debt problem. It’s just about all that is talked about on Capitol Hill these days, yet the President’s budget plan would still add $4 trillion to the debt over five years and the Republican House plan $3 trillion over the same period. We’re scheduled to butt up against the current debt ceiling sometime between April 15th and May 31st. The ceiling needs to be raised because the US cannot afford to default on any of its obligations, which would have adverse effects on our credit rating. On the other hand, it’s not very wise to bump up the debt ceiling without any controls put in place to curtail future spending. Until legislation is produced which takes into account the gravity of our debt ails, politicians will just continue to spend.
The best such piece of legislation I’ve seen comes from Rand Paul. His plan would cut the deficit by $500 billion, a number that most representatives in DC find overly dramatic. Interestingly, this dramatic plan only addresses one third of the deficit problem. Cuts of $30 billion and the like literally have no impact on the debt situation; which is why I’m not overly impressed by the $4 billion cut passed in the bill to extend funding for the federal government. It’s an absolute drop in the bucket.
Paul’s budget plan doesn’t address entitlements but that would be the next step in his mind: start with $500 billion in cuts and then reform Social Security.