“You ain’t seen nothin’ yet. B-,b-,b-, baby, you just ain’t seen na,na,nothing yet. Here’s somethin’ that you’re never gonna forget. B-,b,-,b-, baby, you just ain’t seen na,na,nothing yet.”
Now, while our prophetic brothers to the North weren’t speaking about our current congress while riffin' in 1974, it sure does help me find some bit a levity – even if it is extremely small and superficial – when I think about what’s coming down the pike.
While the entire country and economic markets took a big fat sigh of relief in response to the last minute “deal” in congress, the rest of us super sleuths found ourselves bug eyed and terrified with what was missing…and what’s to come.
You heard many a Republican House member complain about the deal struck by the Senate. They may be on to something. Part of the “fiscal cliff” that had everyone up in a tizzy was the sequestration (automatic across the board cuts). Instead of compromising and making the hard cuts now ($1.2 Trillion over ten years) congress “kicked the can” down the road to March. While still potentially potent all on its own, sequestration by itself is just the tip of the iceberg. Unfortunately, sequestration is just one part of the trident of budgetary terror that is heading our way.
In addition to the sequestration, congress will need to decide what to do with the continuing resolution (CR) which funded the federal government through March 27th. This means that the federal government is currently operating in Fiscal Year 2013 under Fiscal Year 2012’s budget. And on March 27th, unless congress acts, the federal government will run out of operating money and shut down.
Moreover, if that wasn’t enough, a term made famous in 2011 by the Tea Party Republicans is back…again… like the Terminator, “The Debt Ceiling.” That’s right, come the end of February/early March, it will once again be time for the federal government to pay its bills. Actually, the U.S. hit its statutorily mandated debt level ($16.4 trillion) a few days ago but Treasury Secretary Timothy Geithner has a couple of dollars lying around; at least enough to make it to March anyway. Let’s be clear… we are talking about money that was ALL READY BORROWED AND SPENT will need to be paid. All raising the ceiling means is that we will pay our bills, just like you do every month. Well, some of you (snicker). However, like last time, the Republicans are refusing to pay their bills unless they get something in return; some sort of “deal” that will make them happy and reduce the deficit. What makes this situation uniquely harrowing is that President Obama has stated, unequivocally – several times I might add—that he will not negotiate on the Debt Ceiling. Period. End of story??
"Let me repeat: We can’t not pay bills that we’ve already incurred. If Congress refuses to give the United States government the ability to pay these bills on time, the consequences for the entire global economy would catastrophic – far worse than the impact of the fiscal cliff."
"People will remember, back in 2011, the last time this course of action was threatened, or entire recovery was put at risk. Consumer confidence plunged. Business investment plunged. Growth dropped. We can’t go down that path again."
Did you read that? He said, “the consequences for the entire global economy would be catastrophic…” Not only would the government shut down, our credit rating will be downgraded, costs will rise, and we will drop back into a recession. The Republicans would like to use this piece of paradise as a bargaining chip.
Who’s keeping score?
FIRST: We have sequestration that will force the government to take action and use a scalpel to trim back the federal budget before a hatch does it for congress resulting in cuts to most federal agencies (including the military) and potentially resulting in furloughs and shutdowns.
SECOND: We have the CR that will require action by congress to continue funding the federal government for the rest of the fiscal year. Without action, the federal government will shut down… period. It must have money to function.
THIRD: The Debt Ceiling. Congress MUST act. Congress MUST pay their bills. If not, the results will be “catastrophic.” We will take yet another reduction to our credit limit, the government will shut down, interest rates will rise for EVERYONE, and WE WILL go into another recession (if not depression).
Did you get all that? Good. To dodge ALL of these bullets, we will need a slightly modified version of THIS congress to agree. Not just on ONE of these issues… but all three. All three huge issues to stave off catastrophe. Concerned yet?
It appears that while looking or a solution to our budgetary problems, we’ve created a MONSTER.
Can our congress do big things anymore?