Tuesday, March 1, 2011

Small Progress on the Federal Budget

Not near what we wanted, which would be $60+ billion in cuts this fiscal year, but John Boehner got the Senate and Obama to blink by forcing $4 billion in cuts as the price for 10 more days funding of the federal government.

I am certain there will be complaints, but if we can get $4 billion in cuts every 10 days we are on a pace to exceed $70 billion for the rest of the year. The other great aspect of the debate is that it has the Democrats playing defense. Not a single new program is being offered, no new spending is being contemplated. The only question is how much can be cut. In the linked article, its clear that the Democrats are in disarray over how to handle the calls for budget cuts. They know it helps Republicans, but they can't bring themselves to sign up.

I think that American business would start investing and growing again if they could be assured that there would be no further tax increases and that the federal governments role would be stabilized. When you think of the Clinton and Reagan expansions, they were made possible due to a stabilization in the role of government, resulting in a predictable business climate. Clinton had help from Republican majorities, but when you think of the accomplishments of his administration, NAFTA, Welfare Reform, and a balanced budget, you would have thought we had elected a Republican to the White House.

I say, keep up the good work Speaker Boehner. $4 billion in cuts every ten days is the new gold standard.

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