Copy of AFF Sentinel V21 #53-Very Lame Duck & Other Issues
- Steve Dittmer
- Jul 22
- 4 min read
Congress Knows Little About Cutting Spending
Steve Dittmer | AFF Sentinel
Colorado Springs, CO
Originally sent to subscribers 12/18/24
Congress’ lame duck session after this election was always going to be fraught.
We knew the Farm bill had not been finished and would be a difficult problem. Last weekend it was a major topic of discussion. Many ag groups wanted to take out climate change spending to make room for disaster spending for farmers and ranchers. Naturally, Democrats were not interested in de-emphasizing climate change spending and some Republicans would not vote for a bill that did not include supplemental disaster payments for those impacted in the two hurricanes this fall.
They eventually worked out a version they could live with, which apparently involved swapping conservation dollars out of the climate change provisions of the Inflation Reduction Act to pay for rebuilding the Bridge in Baltimore hit by a barge. The rest of the deal involves extending the current Farm Bill through the end of the fiscal year.
They were all up against a Friday, Dec. 20th deadline for expiration of the current Continuing Resolution for government spending. The House, moving to comply with their 72-hour time period for review, released the text of a 1,500-plus spending bill, Tuesday, which looks suspiciously like an end-of-the-calendar year omnibus.
The good news is that this Continuing Resolution takes the budget fight to March 14. There was fear the Democrats would try to do what they have done in the past, and set spending for the entire next fiscal year, so the new Congress and president would have their hands tied for their first year.
Probably the reason they didn’t is because forced cuts under the sequester kick in in April if a budget agreement for the fiscal year isn’t reached.
With all this pressure, Congress still managed to begin the process of changing Social Security rules so that more people could collect both Social Security and pensions from other sources in which they did not pay Social Security.
Senate Majority leader Chuck Schumer touted the bill as being fair to “Americans who at some point or another worked as teachers, firefighters, postal workers, or other public sector workers.”
The bill would cost close to $200 billion over the next decade, eating into Social Security that is already going insolvent because it is paying out more than it takes in. It’s estimated the costs of the bill would subtract a half year off the time Social Security is projected to run out of money.
The House already passed the bill awhile back and the Senate voted 73-27 to advance it over the first hurdle. It could come to a full Senate vote yet this week. It has both Republican and Democrat support, despite the fact that it would add to the Social Security problem, not help it.
Probably the biggest discussion point for 2025 revolves around how any reconciliation bills would be handled. With the speed and efficiency of any Congress in recent history in mind, there is concern about the order in which critical issues could be addressed.
Reconciliation budget bills are limited to programs that have budgetary connections and can be passed with a simple majority, instead of the 60-vote margin usually required in the Senate. They can do one for the current year and one for the next fiscal year.
The problem is that some leadership wants to do the “easy” stuff first, like border enforcement and boosting energy permitting and production, and leave the more difficult things like extending the 2017 tax cuts and adding new cuts and or cutting existing rates second.
The flaw in that argument is that every month new tax cuts are not enacted, the economy does not begin growing at a new, faster pace. New tax cuts or the knowledge of passed cuts already signed into law begin juicing the economy right away. And only professional politicians who get paid for dithering don’t care about getting more jingle in their jeans as quickly as possible.
We would suggest making it clear to your Congressional delegation that the sooner they get the hard stuff done -- after all, member of Congress do not consider letting you keep more of your money easy work -- the happier and more prosperous you will be. And happy voters keep members who make them happy.
The problem is that the hard stuff is really going to be hard. The debt has passed $36 trillion, the Pay-As-You-Go law itself will require $190 billion in cuts and certain other caps on discretionary spending will lapse. And bond buyers aren’t going to buy Treasury issues no matter what forever, unless Congress shows some ability to exercise spending restraint.
In other words, the sooner Congress enacts tax cuts and increasing the flow of revenue into the federal treasury, the better. Then they can figure out a host of cuts they can agree on.
Our address: Agribusiness Freedom Foundation, P.O. Box 88179, Colorado Springs, CO. 80908.
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