Thursday, February 17, 2011

No Mo’ Money - State and Federal Budget Crises

The waste of money cures itself, for soon there is no more to waste.
                                                                                           ~M.W. Harrison

For anyone paying attention to the alarming numbers on the U.S. National Debt Clock (, it is obvious that government spending is spiraling out of control.

Ignoring popular support for fiscal discipline, President Obama this week unveiled a proposed budget that would increase spending from less than $ 3 trillion in 2008 to $ 3.82 trillion in 2011.  The Congressional Budget Office (CBO) shows that the federal government deficit for 2011 will total approximately $ 1 trillion for the third year in a row.  While Obama’s plan touts a five-year freeze in domestic spending, it is based on the elevated spending from the last two years, which included the stimulus and represents an 84 percent spending increase.  Freezing spending at that high rate would do little to address the escalating federal deficit.

House Republicans, led by Budget Chairman Paul Ryan and bolstered by the Tea Party freshmen congressmen, have proposed $ 60 billion in budget cuts for this year alone.  Appearing on Fox News Sunday, Ryan said, “Presidents are elected to lead, not to punt, and this President has been punting.”  H.R. 1, Full-Year Continuing Appropriations Act, 2011, was introduced in the House this week.

House Speaker John Boehner, in an NBC interview, said, “I think it’s incumbent on the leaders in Washington… to go out and help the American people understand how big the problem is.   Once the American people begin to get their arms around the size of the problem, then and only then should we begin to lay out an array of possible solutions to have that conversation.”

Meanwhile, back in Texas, legislators are struggling to find enough cuts to make up the multi-billion-dollar budget shortfall.  Deficit estimates vary widely from $ 15 billion to $ 27 billion.  There is a tug of war between those legislators who believe that revenue must be increased, either by increased taxation or legalized gambling, and those who advocate an across-the-board spending cut.  Talmadge Heflin of the Texas Public Policy Foundation maintains that the answer is reduced spending, stating, “Every expenditure must be on the table.” 

HB 1, Texas’ 2012-13 State Budget, would deliver a base budget within existing revenues.  Debate over specific cuts is ongoing.  HB 187, filed by freshman Representative Charles Perry (R-Lubbock), proposes a zero-based budgeting approach, which would require agencies to start from scratch in requesting their funding from the state.  SB 165, introduced by Senator Florence Shapiro (R-Plano), also relates to zero-based budgeting for certain entities funded by the state.  Lobbying your elected officials to support a zero-based budgeting approach will go a long way in helping lawmakers to address the looming budget shortfall

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