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Congress is robbing Peter to pay Paul … and Mary

In Business, National News, Opinion, Politics, Uncategorized on January 8, 2013 at 8:53 pm

Deer In Headlines

By Gery L. Deer

debt calamityAnytime you take resources originally allocated for one use and direct it towards another, you are “robbing Peter to pay Paul.” Although there’s some dispute about the origins of the old saying there seems to be no doubt about its meaning, particularly with the United States Congress. Given the scope of the debt and the amount of money coming in, perhaps the saying should really be, “robbing Peter to pay Paul and Mary.“

Now that we’re past the overblown, media-hyped and mostly imaginary fiscal cliff, the next challenge is to get both sides of the congressional aisle to come together on how to pay America’s bills.

Just like the rest of us, the government takes in a certain amount of revenue every day and congress decides how it is going to be spent. In recent years, however, money coming in doesn’t come close to what has to be paid out – an issue all too familiar to their constituents.

To be fair, juggling America’s money is no easy task and trying to comprehend the full scale of fiscal goings on in Washington would be impossible in this short essay. So, let’s just focus on a single day in the life of the almighty federal dollar; say, February 15th.

On that day alone, according to a recent CNN report, the Treasure will take in only $9 billion. Sounds like a lot of money, right? Not when you consider the government is already committed to pay out $52 billion. Deciding how to allocate spending is the major challenge taking into account the kinds of bills that need to be paid.

On our random date, February 15th, again from the CNN report, America’s bills include $30 billion in interest on the national debt; $6.8 billion in IRS refunds; $3.5 billion in federal salaries and benefits; $2.7 billion in military active pay; $2.3 billion in Medicare and Medicaid payments; $1.5 billion to defense vendors; $1.1 billion in safety net spending, including for food stamps and unemployment benefits; and $4.4 billion in other spending.

Just like balancing your home checkbook, there is only so much money to go around and you have to decide what to pay and when. The stakes are a bit higher at the federal level, of course. If you don’t pay your electric bill the power company disconnects you. It’s inconvenient, but unless you’re on some kind of life-sustaining device, you aren’t likely to die from it.

If congress fails to pay Medicare or Medicaid or the salaries of our military, it becomes far more than an inconvenience. People could lose their homes, hospitalization and child support.

That said, the danger is also a bit over dramatized for the evening news. What happens next is a game of musical bucks, shifting and reallocating funds from one program or department to another until the immediate needs are covered without causing too much uproar in the area from which the money originated. Sound familiar?

It should. This is how most middle-class families balance their budgets every month; choosing which bills get paid over the ones that are less urgent. It’s more about weighing consequences and trying to keep from adding more debt to the pile than actually paying off the amount owed.

The debt ceiling is one of the determining factors in reallocating resources. If the debt ceiling is higher, they get more time to cover certain bills, thus allowing them to pay other, more critical ones.

Every bill passed by congress has “pork” in it; pet project funding that really benefits no one but the congressman or senator who sponsored it. In most cases elimination of that kind of spending would ratchet up the country’s bank account and allow more debt to be paid down, instead of using it for a study like how long it takes a cockroach to eat a bar of chocolate.

Congress has several fiscal deadlines coming up and, as usual, Democrats and Republicans are already posturing to gain ground before debate even begins. But in the end, the American people will be the ones paying the price; higher taxes, higher energy costs and more wasted money on a congress that has simply failed to do its job.

 

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