Surprise! Budget Control Act leads to Debt Hike
President Obama is asking for another $1.2 trillion debt hike – the final installment of the now-failed Budget Control Act (BCA). From the the so-called super committee to hidden spending, this summer’s debt deal was nothing short of a disaster. As part of the BCA, the President must inform Congress he is raising the debt ceiling, allowing Congress a chance to vote no. It is nothing more than a political show vote, allowing many of the politicians who voted for the debt deal in August to cast a political vote against an already approved increase.
None of that is surprising, especially for Washington. But as I point out in my weekly column, the dirty little secret is that Washington is still addicted to spending:
This is the real, untold story; just three months after striking a “historic” deal to reduce America’s debt and cut spending, the Washington Establishment lost its collective will to tackle our nation’s most pressing problem and instead reverted to its old, wasteful habits.
The failure of the so-called “super committee” confirmed what most of us knew from the start; the Budget Control Act (BCA) would not work as advertised. In exchange for increasing the nation’s credit limit by a record $2.1 trillion, Americans received a promise that Washington would reduce the amount of debt it planned to accrue over the next ten years by the same amount.
Of course, Washington’s penchant for profligate spending means they will blow through their newly extended credit limit in less than 18 months. They will then spend the next 102 months trying to “offset” their newly acquired debt. In Washington, however, reducing “future debt” is not necessarily synonymous with reducing spending. And through it all, Washington will continue to borrow.
The rest of the story, as they say, is available here.