Happy Anniversary

by Douglas Holtz-Eakin

The world is a confusing place. After all, a quick consultation with http://www.dictionary.com tells me that a budget is:

1. an estimate, often itemized, of expected income and expense for a given period in the future.

2. a plan of operations based on such an estimate.

And that a resolution is:

1. a formal expression of opinion or intention made, usually after voting, by a formal organization, a legislature, a club, or other group.

2. a resolve or determination

So it would seem pretty straightforward that because the Congressional Budget Act of 1974 directs the Congress to pass a budget resolution, the Senate would be determined to vote and pass a ten-year estimate of expected federal income and expenses, as well as plans for the use of those funds.

Fat chance and Happy Anniversary. On Sunday, it will be exactly three years since the Senate did its budgetary duty.

What does that say about Senate Majority Leader Harry Reid, Senate Democrats, and President Obama? Most people find not doing their jobs embarrassing, so it certainly attests to their shamelessness. But it is worse.

If any other American didn’t budget, we’d end up bankrupt, foreclosed, and unable to borrow another dime. We’d suffer immediate and drastic consequences. The Senate Democrats’ apparently don’t grasp that the U.S. will also suffer consequences, some immediate and some drastic.

Since the Senate Democrats last adopted a budget, the U.S. has suffered a downgrade; Obama’s Treasury has issued another $4.5 trillion in debt; and the federal debt is now larger than the U.S. economy. Historically, debt burdens this large impose a growth penalty — one percentage-point-slower growth every year — that is the equivalent of killing 1 million jobs each year. That’s immediate and drastic.

But it is worse. The debt burden raises the chances of a Greek-style debt and financial crisis. Americans still suffer in the aftermath of the 2008 financial crisis; it is dangerous and irresponsible to tolerate any risk of another episode.

But it is worse. Without a budget that undertakes fundamental reforms to taxes and entitlement programs, the debt will continue to explode — to the point that the Treasury will have to borrow just to pay interest on previous debt. The nation will be reduced to the moral equivalent of getting a new credit card to pay off the old one.

The Senate Democrats have no budget. Again.

Their willingness to place the government on autopilot as it sails toward what Erskine Bowles labeled “the most predictable crisis in history” is simply dangerous.

Happy Anniversary.

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