Thursday, January 03, 2013

FASTEN YOUR SEAT BELT: The "fiscal cliff" is just the beginning of a bunch of these fights!

So you hated the "fiscal cliff" & up to the last minute votes?

Get ready because there is a lot more coming.  It will happen for two reasons:

1) Spending is out of control; and more importantly,

2) Pres BO will not lead and make a grand bargain that includes spending cuts.

Here is a preview from Conn Carroll:

"First, in about six weeks, the Treasury Department will reach its legal borrowing limit.

At that point, Treasury Secretary Tim Geithner will not be allowed to finance government spending by issuing new debt and will have to pick and choose which of the federal government’s many spending obligations it will and will not pay. Contra what some on the left believe, the 14th Amendment of the U.S. Constitution does not authorize Geithner to ignore the debt limit. What it does do is obligate him to make sure the federal government pays off its lenders first.

And since the federal government is constantly taking in more money in taxes than it owes in debt service, there is zero danger the U.S. will default on its debt.

But everyone else who gets payments from the federal government will be in danger of not getting paid. Since the federal government plays such a large role in economic affairs this will create chaos in the U.S. economy until the issue is resolved.

Then, after the debt limit is settled, Congress and the White House will have to decide how to resolve the scheduled $1.2 trillion in scheduled spending sequester cuts that were passed into law the last time the debt limit was raised and were delayed for two months as part of last night’s fiscal cliff deal.

Failing to resolve those scheduled spending cuts would again force the Obama administration to stop making payments to many Americans expecting that income.

Then, after the debt limit and sequester is settled, Congress and the White House will have to pass legislation authorizing government funding for the next year.

The Democratically controlled Senate has not passed a budget since Obamacare became law and as a result the federal government has been operating on a series of continuing resolutions ever since.

The last one, passed in September 2012, expires March 27th. If no agreement is made on federal spending before that date, the federal government will be forced to shut down."

Most experts agree that Pres BO got a "little victory" out of this fiscal cliff round.

I don't think that he will be so lucky the next time around.

First, you can file "tax increases" for a while.  There won't be anymore talk of the rich paying their fair share.

Second, Speaker Boehner won't be the face of the GOP in the next round.   The voices of the GOP will be Sen Rubio, the new Sen Cruz from Texas and a bunch of popular governors around the country.

I am not knocking Speaker Boehner.  However, he is not the most media friendly guy in town.  Rubio & Cruz are!

Third, the next debate will be about government spending and the debt ceiling.  The GOP can win those arguments!

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