Where is the accountability? Official Washington grinds on, spending your money, on what Congress insists are priorities. Meantime, members of the US House and Senate make a minimum of $174,000 of your money – for their hard work. Leadership members, like House Speaker Nancy Pelosi (D-CA), pocket $223,500 dollars of your money. All is fair in love and war, right?
Not quite. In an extraordinary irony, the same Congress that pays a House Speaker a quarter million dollars, has a hard time balancing budgets – and vocally opposes common sense measures to reign in federal debt with a roll-back of massive spending on entitlements and unnecessary discretionary programs.
In a sense, nothing ever changes. Each year, we are in more debt. When Ronald Reagan took office in 1981, after double-digit inflation and unemployment under Jimmy Carter – America had a one-million-dollar deficit.
When he left office, the cost of rejuvenating the economy with tens of millions of new jobs, restoring the American military and bringing down the Soviet Union left America with a $2.6 trillion-dollar debt. Reality was, however, that the private sector was poised to reduce that debt – and did.
Now, fast forward. When Obama left office, the US suddenly faced a $20 trillion-dollar debt. The Obama years are punctuated by an average growth rate of less than 1.5 percent, which is empirically worse than the prior dozen administrations.
And that is effectively where we are today, with one exception. President Trump, like Reagan before him, has refocused national and international attention on restoring America’s private sector growth, methodically incentivizing employment, investment, consumer spending and confidence, while driving unemployment to the lowest level in half a century across every demographic.
The effect of these pro-growth policies has been a whipsaw, elevating the growth rate to as much as 4 percent during the past year, consistently boosting value for investments, the US currency, American wages and productivity. Notably, most economists remain in a state of wonder, or perhaps shock, since they tend to be stronger believers in government spending than lower taxes, less regulation and limited government.
All that said, we are now at another inflection point. The nation faces a need to raise the legal debt limit, while trying to agree – between Congress and White House – on a two-year spending bill that will prevent automatic cuts in discretionary programs, including the military.
This odd moment, a sort of government witching hour, recurs periodically – and it upon us now. How will it end? In short, the president has said that he is not interested in destabilizing the markets with a battle over the debt limit, so that will likely be increased – since there is little way to get it down by simply failing to extend it. Needed is fiscal – that is spending – discipline, which must start in Congress.
On the other hand, boosting the debt limit is now politically tied to agreeing on a two-year spending bill that will elevate military preparedness, without breaking the bank. The President has suggested $516 billion dollars in cuts that will be offsets (reductions) to allow military preparedness to be secured.
But on the other side of the aisle, the well-paid US House Speaker wants none of it. She has said she wants more spending for a range of discretionary non-military federal programs, and that is the only way she will agree to more military preparedness spending. Her team has also called the suggested presidential cuts to federal spending growth “nonstarters.” So, in short, what she wants is to spend more of your money on her priorities, not yours or the president’s priorities.
When and where will this 2019 spending battle end? It will likely end within the next month, since that is when the debt ceiling and linked federal spending dispute must legally end. But how? Probably with minimal effect on the markets, but with increased military and civilian discretionary spending going up, along with the immutable rises in entitlement programs, like social security and Medicare.
Is all this good for America? In the near term, the world will go on. The military will get what it needs, and the Democratic House will get what it wants, and the rest of us will put up with what they tell us is necessary – including a lack of accountability, a Democratic push for higher taxes and even more government control over our lives.
In the longer term, this spending and debt ceiling debate should be – even if most in Congress do not see it this way – an alarm bell. America cannot go on spending wildly, failing to seriously reform and make solvent our social security system. We cannot continue the fiction that debt does not matter. We cannot pretend that spending our children’s and grandchildren’s money is moral.
In the end, a more serious future Congress – one that cares about America in the future, not their blessed salaries – will have to act on the ballooning debt issue. If they do not, we will see an insolvent social security system, sky high taxes for average Americans, bankrupting of small businesses, plummeting currency value, rising inflation, and real market instability.
That state of affairs is not around the corner, but it is within view. That is why a return to fiscal responsibility is – even with a strong military and limited government – needed. Speaker Nancy Pelosi, who pulls down the biggest salary in Congress, should stop for a moment and remember that Americans know the score. We are not in the dark. We know what Congress is doing, what she makes and how much of what we make she is spending – on unnecessary and unsustainable federal programs. Where is the accountability?