If Washington Needs a Reason to Restrain Spending, This Would Be It (See Update - Wait Until December for Fair Comparison)
Spending in the current autopilot situation is showing every sign of being out of control much higher during the first two months of the fiscal year, as shown in the Monthly Treasury Statement released this afternoon:
(Note: See Update below for discussion of timing of spending.)
Receipts, as I suspected would be the case a couple of months ago (near end of post), are coming in only 5% ahead of last year, while spending is ahead by double digits, at a rate that would lead to $2.9 trillion by the end of the fiscal year. That’s over 6% more than last year, or more than twice the rate of inflation (last year’s total spending, per the Treasury Statement, was “only” $2.73 trillion). That’s inexcusable.
I should remind readers that the current Congress officially began to be jointly responsible with the President for federal budget results effective October 1. Before that, we were living predominantly with the budget passed by the 2005-2006 Congress and agreed to by the President.
I would say that some serious holding of the line needs to be done in the coming days. A supply-side tax cut that would increase revenues would be nice, but given that spending as a percentage of GDP is in essence about as high as it has ever been in a non-wartime period, that side of the ledger needs the immediate attention.
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UPDATE: Further review of the last Daily Treasury Statements for November 2007 and November 2006 give me reason to believe that November 2007’s higher spending is due to the month having five Fridays instead of the usual four which was the case in 2006 (see my comment below for an example). If that’s correct, then I would expect December 2007’s spending with four Fridays to come in way lower than December 2006, which had five. But it’s not clear that this will occur, because there was very little difference between December 2006 (5 Fridays) and November 2006 (4 Fridays) spending (see the Monthly Treasury Statement for that).
So to be fair, we’ll have to see how the year-over-year spending numbers look at the end of December. I would be the first to report being pleased if the spending increase ends up being at or below inflation.
Regardless of this nuance, I would think that it’s hard to argue that including $9.5 billion in earmarked items (i.e., pork) that are apparently under consideration is a go0d idea. If David Obey wants to carry through with his threat to zap them all, I say by all means, do it. Then, if anyone has the nerve, which they don’t, we can have an up-or-down vote on each one. There’s probably a lot of other spending that could be jettisoned with very little real pain.
To what would we attribute these increased outlays even without a budget for 2008??? Would that be the ever increasing social security pay outs as more people retire???
If you can sense a restrained rant, you’re right, and you wonder why the Dems are despirately wanting the AMT issue to drop so taxes will increase??? If W makes an issue of the AMT not being indexed, the wheels on the Dem tax hike bandwagon will fall off. Don’t get me wrong, it’s not the senior’s fault for retiring, the Dems are between a rock and a hard spot on this since for every new retiree, that just that much less excess SS fund money that can be pilfered for vote buying scams. 2017 is coming and that means the end of raiding Social Security to fund vote buying scams. The bill is coming due, tick, tick, tick, 9 years and counting!
Comment by dscott — December 12, 2007 @ 4:43 pm
#1, Good question, dscott. I haven’t tracked major spending like I have major receipt line items, though it’s in the Daily Reports.
Having looked at them….
Nov. 30, 2006
Nov. 30, 2007
….. I’m hoping that it’s the fact that Nov. 2007 had 5 Fridays and Nov. 2006 had 4. Checks and direct deposits tend to get sent on Friday to maximize the float.
e.g., Nov. 2007 Medicare and Medicaid was $115 bil vs. $80 bil in 2006. That’s the whole diff right there.
Luckily, Dec. 2007 has 4 Fridays and Dec. 2006 had 5, so if I’m right, it should reverse itself in December. We’ll have to see.
I updated for this in the post.
Comment by TBlumer — December 12, 2007 @ 6:03 pm