August 12 2013
Hooray for the Sequester!
Okay, sometimes even Mondays can be cheerful.
And today there is some unexpected good news: federal spending is down and the reason is the sequester.
Wall Street Journal economics columnist Stephen Moore writes:
This reversal from the spending binge in 2009 and 2010 began with the debt-ceiling agreement between Mr. Obama and House Speaker John Boehner in 2011. The agreement set $2 trillion in tight caps on spending over a decade and created this year's budget sequester, which will save more than $50 billion in fiscal 2013.
As long as Republicans don't foolishly undo this amazing progress by agreeing to Mr. Obama's demands for a "balanced approach" to the 2014 budget in exchange for calling off the sequester, additional expenditure cuts will continue automatically. Those cuts are built into the current budget law.
In other words, Mr. Obama has inadvertently chained himself to fiscal restraints that could flatten federal spending for the rest of his presidency. If the country sees any normal acceleration of economic growth (from the anemic 1.4% growth rate so far this year), the deficit is on a path to drop steadily at least through 2015. Already the deficit has fallen from its Mount Everest peak of 10.2% of gross domestic product in 2009, to about 4% this year. That's a bullish six percentage points less of the GDP of new federal debt each year.
The numbers are good. The Congressional Budget Office has annual outlays peaking at $3.598 trillion in fiscal 2011. Many feared that this would rise to $4 trillion by 2014. Instead, spending is falling. Spending could fall to below $3.45 trillion by the end of next month, the end of the fiscal year. Spending hasn’t fallen two consecutive years since the end of the Korean War.
This decline in spending was bought with blood, sweat, and tears in the House. If you got furious with Congress every time we faced a new budget battle loomed, stop for a minute and appreciate what the House did. The GOP in the House may be, as the president sees it, obstructionist. But they obstructed more spending. They had the guts to let the sequester, the administration’s own idea, proposed as so radical the GOP would have to stop it, go into effect.
You may hear the occasional Democrat bring up the slight decline in the budget as a sign that Obama’s policies are working. Don't let them steal this thunder and use it to start spending more.
The GOP, which bought this success by having the guts to let the unpopular sequester go ino effect, should be taking credit.
This is cheering news. A glimmer of hope.
For another glimmer, I urge you to read our profile on the homepage of the Goldwater Institute’s Darcy Olsen, who says that state constitutions can be used to halt the seemingly unstoppable expansion of the federal government.