Currently our country is facing a complex set of issues. How we respond to the government shutdown, appropriations bills and Continuing Resolutions to fund and reopen the government, the debt ceiling, America’s annual deficits and accumulated debt, and how these issues interplay with the Affordable Care Act will significantly impact America’s future.
Background: America’s Financial Condition
America has blown through the $17 trillion debt mark, the worst in our history. In the past five years, America has run up five consecutive deficits averaging more than $1 trillion per year, again, the worst in history.
Stated differently, in the last five years, the federal government borrowed 30% of its operational costs. How many American families or businesses could avoid bankruptcy if, year after year, 30% of their operational costs was borrowed money? Not many, and not for long.
Economic principles don’t care if you are a family, a business, or a country. If you borrow more than you can pay back, you go bankrupt. Too many Washington politicians pander to next election voters without caring one twit about America’s future.
President Obama’s own appointees are reaching the same conclusion I have about America’s precarious financial condition.
In January 2013, in a cover letter for the financial statements of the United States of America, President Obama’s Comptroller General Gene Dodaro warned Congress and the President that America is on a financially “unsustainable path”. I have been involved in government as a state legislator, a district attorney, and a county commissioner. I have seen many government financial statements. The phrase “unsustainable path” is the strongest warning I have ever seen concerning a governing body’s financial condition.
President Obama’s former Chairman of the Joint Chiefs of Staff, Admiral Mike Mullen, similarly warned Congress in his testimony that America’s greatest national security threat is not Iran, not Al-Qaeda, not China, not Russia . . . it is our debt. Admiral Mullen’s testimony is prophetic. In recent history, no enemy has done as much damage to America’s military and national security as have debt and sequestration. Unless the law changes, debt and sequestration will have reduced America’s armed forces to the smallest number of operational aircraft in the history of the U.S. Air Force, reduced our numbers of men and women in uniforms to the smallest number since before World War II, and reduced our Navy to its smallest number of operational naval vessels since 1916.
Buttressing the Obama Administration’s warnings about America’s financial condition is economic history unfolding before our eyes. For example, Greece is further down the debt path than America. Greece’s unemployment rate is 27% - worse than any year in America’s Great Depression and roughly four times worse than the unemployment rates that ail America.
Cyprus is also further down the debt path than America. Earlier this year, the Cypriot government confiscated as much as 60% of their citizens’ checking and savings accounts in an effort to bolster their government’s balance sheets.
Detroit, Michigan and Stockton, California are already in bankruptcy court. Municipal services have been savaged. Municipal employees are battling in bankruptcy court in an effort to protect as much of their retirement pensions as possible.
Government Funding, Shutdown, and Debt Ceiling History
Congress has not passed a budget in more than five years. But this is not fatal to federal government operations because in Washington the word “budget” has a very different meaning than what the word “budget” means to city, county and state governments across America. By analogy, in Washington, the word “budget” refers to a game plan, much like a football coach’s playbook. Just as a playbook does not gain a single yard, a federal budget does not spend a single dime.
In Washington, money is spent via “appropriations bills”. “Continuing Resolutions” to fund the government are used as a crutch if and when Congress fails to pass appropriations bills. Without going into detail, Continuing Resolutions are a very bad way to fund the government and hurt the Tennessee Valley’s Redstone Arsenal-based economy.
There are 12 appropriations bills that must be enacted to fully fund the federal government. Each bill covers a segment of what the federal government does.
This year, the House of Representatives passed appropriations bills that funded national defense, energy and water, homeland security, military construction, and veterans affairs. Of particular note, the national defense appropriations bill fully funded our military and eliminated the adverse effect of sequestration on our defense capabilities. Each of these appropriations bills passed in June or July of 2013. Remarkably, none of these appropriations bills restricted spending on Government-Run Healthcare in any way.
In contrast, the Senate passed ZERO appropriations bills. In fact, Senate Majority Leader Harry Reid refused to allow a single Senate floor vote on a single appropriations bill. Senator Reid’s decision contributed to the House’s decision to not pass the remaining of the 12 appropriations bills.
The failure of Congress to pass any appropriations bills forced Congress to consider resorting to its “crutch”: a Continuing Resolution to fund the government.
As you are likely aware, a significant majority of Congressmen were elected by citizens who wanted Government-Run Healthcare repealed or defunded. Simply stated, a majority of the citizens who elected these Congressmen did not want to spend money America does not have on a socialized medicine program that undermines the quality of health care for too many Americans while simultaneously increasing deficits and putting America’s solvency at greater risk.
During the past 30 months, the House has passed 40+ bills that repealed or defunded Government-Run Healthcare in whole or in part. Unfortunately, Senate Majority Leader Harry Reid refused to allow a Senate vote on any of these bills, thus putting the House of Representatives into the position of seeking a strategy that would seek to force the Senate to vote on the Government-Run Healthcare issue.
The House first passed a Continuing Resolution that fully funded the federal government with one exception: it defunded Government-Run Healthcare for one year. I voted for this Continuing Resolution that would have prevented a government shutdown. The Senate rejected the House position by passing a Continuing Resolution that fully funded Government-Run Healthcare and all other parts of the federal government without addressing any of the deficit or debt issues that have put America into its precarious financial condition.
The House counter-offered with a Continuing Resolution that fully funded the federal government while delaying Government-Run Healthcare for one year (a position the House thought was quite reasonable given polling data suggesting that a majority of Americans dislike Government-Run Healthcare, coupled with how inept the “rollout” of the program has been . . . an unpleasant reminder of the risks associated with turning personal, private, life-saving health care decisions over to federal government bureaucrats). I voted for this Continuing Resolution that would have prevented a government shutdown. The Senate again rejected the Continuing Resolution and refused to negotiate by sending back a bill with the same language as before.
The House then passed and extended a third Continuing Resolution to the Senate. I voted for this Continuing Resolution that would have prevented a government shutdown. It fully funded the federal government (including Government-Run Healthcare) while doing two other things:
(1) It delayed Government-Run Healthcare’s “Individual Mandate” for one year, thus giving American citizens the same rights afforded by President Obama when he violated the Government-Run Healthcare Act by unilaterally giving employers a one year delay in certain Government-Run Healthcare obligations. This one year delay would have preserved personal liberty and prevented the federal government from forcing American citizens to purchase health care products they did not want and prevented the federal government from fining American citizens who did not purchase the health insurance products dictated by the federal government.
(2) It forced Congressmen, Senators, Congressional staffers, Senatorial staffers, the President, the Vice-President, and certain Presidential political appointees to be subject to the same Government-Run Healthcare as the rest of America’s citizens and denied each of them the employer health care supplements currently received by all other federal employees.
As a result of this impasse between the House and Senate, a government “shutdown” ensued on October 1. By way of reference, the “shutdown” was partial. Roughly 83% of federal government spending continued uninterrupted.
On September 30, at the House’s initiative, Congress passed and the President signed the “Pay Our Military Act” that appropriated all sums necessary to fully fund members of our Armed Forces and all Department of Defense civilian employees and contractors who “are providing support to members of the Armed Forces” which, by definition, includes every defense worker and contractor since their sole function is to provide support to the Armed Forces. Of particular importance, the Act funded these defense workers and contractors regardless of whether they were declared “essential” by the President or Secretary of Defense.
Unfortunately, the President and Secretary of State disobeyed the Pay Our Military Act and ordered the furlough of 400,000defense workers plus numerous private sector contractor workers. The illegal defense worker furloughs lasted one week. I gave three days’ of House floor speeches highlighting the President’s violation of law. After a week of unnecessary pain inflicted on defense workers and contractors, and under the glare of increasing public pressure, the White House admitted its error, reversed course, and recalled the bulk of America’s furloughed defense workers and contractors back to work.
During the two weeks of government shutdown, the House passed numerous funding bills to reopen the government: and fully fund Veterans Affairs, Head Start, the Food & Drug Administration, food stamps, national parks, Federal Emergency Management, National Institute of Health, and the like. Unfortunately, Senator Harry Reid and his allies refused to allow the Senate to vote on any of these bills, so these programs were not exempted from the government shut down.
During this process, the debt ceiling issue began to interact with the funding and government shutdown issue. Secretary of the Treasury Jack Lew claimed that the federal government would “default” on or about October 17 if the debt ceiling was not raised.
For clarity, there is plenty of federal government revenue to fully and timely pay all of our creditors. Tax revenues approximate $2.8 trillion/year. According to the General Accountability Office, interest payments on America’s debt approximate $251 billion/year. That is an 11 to 1 revenue to interest ratio, providing plenty of money to timely pay all creditors. During the debt ceiling debate, the President and Treasury Secretary repeatedly used an expanded definition of the word “default” to include not only creditor obligations but also spending desires. As they used the term, the federal government would be in “default” if one welfare check was late one day.
The Final Resolution
On October 16, the Senate introduced and passed a bill that brought this matter to a close. The bill did the following things:
(1) It fully funded and reopened the federal government for all of three months ... until January 15, 2014, at which time another government shutdown may occur.
(2) It increased America’s debt ceiling by an unlimited amount for all of four months . . . until February 7, 2014 . . . at which point another debt ceiling battle may resume.
In exchange for these three and four month delays, the debt ceiling will be increased more than half a trillion dollars.
I voted “No” on the above proposal. In the Alabama delegation to Congress, the following joined me and voted “No” to increasing America’s debt burden by more than half a trillion dollars: Senator Shelby (R), Senator Sessions (R), Congressman Aderholt (R), Congressman Roby (R), and Congressman Rogers(R). Only Congressman Sewell (D) and Congressman Bachus (R) voted “Yes”.
In my news release explaining my reasons for my “No” vote, I stated, in part:
“While it is good to fully open the federal government and raise the debt ceiling, it is necessary that Washington do it in a financially responsible way.
The Senate Bill is financially irresponsible. It further deteriorates America’s financial solvency and, over the long haul, creates an unhealthy funding environment that will slowly but surely bleed NASA and national defense of the money they need to carry out their missions.
The federal government is in this financial mess because of years of out-of-control spending and deficits, followed by higher and higher debt burdens. Yet, in exchange for raising America’s debt by more than a half trillion dollars, the Senate Bill fails to give American taxpayers one cent in spending cuts, or any other substantive measures that address the cause of America’s financial difficulties.
Rather, the Senate Bill does the very thing that has gotten America into this financial mess. It kicks the can down the road a few months, thereby forcing America to revisit the government shutdown and debt ceiling issues with one major difference: America will have another half trillion dollars in additional debt that undermines our ability to fix the problem, thus creating an even greater threat to America’s solvency and survival as a world power and nation.
I am more than willing to vote to properly fund the federal government and raise the debt ceiling so long as Congress simultaneously passes a balanced budget constitutional amendment or spending cuts that both address the underlying deficit problem and give our children and grandchildren, and America, a brighter future.
Deficits and debt are a potentially fatal disease eating away at America. The Senate Bill prescribes pain-killing drugs that mask the symptoms yet does nothing to cure the otherwise fatal disease.
As we have to pay our creditors more money because of increased debt loads and rising interest rates, there is less money available to fund productive programs like NASA and national defense, Long-term, this half-trillion increase in debt burden significantly and adversely affects our ability to properly fund NASA and national defense missions.
Some claim this battle over financial responsibility was a loss for the Republican Party. I disagree. It was a loss by the American people, particularly our youth, who are going to have to pick up this tab that is already in the neighborhood of $58,000 for every man, woman and child in America. More than $110,000 for every man, woman and child in America who is in a family that pays income taxes.
I am frustrated and disappointed that this generation of irresponsible elected officials in Washington care so little about the future of our children and grandchildren. We enjoy the prosperity we enjoy today because of the generations who sacrificed before us. We have the same obligation to our posterity, yet we have totally and completely discarded that principle.
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