Newsletter - May 2017 Part 1

The situation in Washington D.C. is  more than ever tumultuous and contentious.  The election of Donald Trump has brought out every negative fiber of those on the left and those who are convinced that the only way to move forward is to follow their direction.

Because of the legislative decisions being voted on in D.C. it might be useful to review some facts. There is a lot of talk and much confusion about the budgeting process in Washington D.C. and the discussions about the proposed tax plan.  Here are some facts.

The United States government operates on a budget calendar that runs from October 1 through September 30th.  Congress appropriates a specific amount of money to each department, agency and program to provide funding for operations, personnel, equipment and activities.  The House of Representatives and the Senate agree on a budget resolution in the spring that is then used to determine spending limits for 12 regular appropriations bills.  Those 12 bills then appropriate the funding that the federal government uses in the next budgetary year. The appropriations bills must be signed by the President although the budget resolution itself is not subject to Presidential approval. 

If Congress does not appropriate the necessary funds for the federal government, there is a government shutdown as a result of the Antideficiency Act which forbids federal officials from entering into financial obligations for which they do not have funding, such as buying ink, paying for electricity or paying employees.

Congress can avoid a government shutdown by passing a continuing resolution.  

In the last years, there has been no formal budget because the parties could not agree.  There have been continuing resolutions.  The current Congress is working with the last Obama budget and this does not end until September 30, 2017.

Between fiscal year 1977 and fiscal year 2015, Congress only passed all 12 regular appropriations bills on time in four years – fiscal years 1977, 1989, 1995 and 1997.

If you are paying attention to all the chatter going on in Washington D.C. you know that many are very upset with the continuing resolution that the President has agreed to.  The Democrats are speaking as if they have totally won everything and the President has totally lost. 

An opposing view might be that there will be no government shutdown at this time which the Democrats and the media always blame on Republicans.   The military got more money and money is there to repair or replace parts of the border wall.  This is work that must be done and which will not require new permitting.  School choice is in the resolution.

Is everything in this continuing resolution perfect?  Of course not!  It is necessary to remember that the left and some on the right are tossing every obstacle they can in the President’s way.  However, there is no need to jump on board the Democrat bus which only has negative statements about the President and the Republicans in Congress.  It appears that the President is not going to do battle right now about the budget.  He appears to be ready to deal with it in September, the start of the new fiscal year.  Let’s remember that the President has to deal with 535 members of Congress, most of whom have exalted opinions of their own importance and their own agenda.

Now, there is another issue that is going to be argued and clouded by politicians.  The tax plan is coming up.  Of course, the left will go on and on about tax cuts for the rich.  They have been yelling since the Reagan administration that tax cuts led to huge federal government deficits, contrary to “supply side economics” which states that lower tax rates would lead to higher tax revenues.

Collection of federal income taxes during every year of the Reagan administration were higher than the revenues collected from federal income taxes during any year of any previous administration.

How did that happen?  TAX RATES AND TAX REVENUES are two very different things.  They can move in the same direction or in opposite directions depending on the economy. Official statistics regarding federal revenues and expenditures going back for decades is in the annual “Economic Report of the President.” 

Tax revenues increased during the Coolidge, Kennedy, Reagan and G.W. Bush administrations when tax rates were lowered.  The problem is the spending side of the equation.  There appears to be no limit to how much any Congress can spend. 

The turmoil in Washington and especially in California has many people in this state depressed. Many Republicans have decided to register as Decline to State.  The assumption is that this is a way to express disappointment with the Republican Party and let party leaders feel their anger.

Understanding the anger is not difficult.  However, registering as Decline to State is a rather useless act.  People registered as Decline to State in California results in not being able to vote in the Republican primary election.  The increase in Decline to State registrations has not done anything to improve the situation in California.  We now have all state offices held by Democrats and a Democrat majority in the state legislature. 

A message to unhappy Republicans and Decline to State voters:  Democrats work 24/7.  They do not give up.   Republicans want to work, recreate and spend time with their families.  Politics is work.  The only way to affect change in California is for more voters to elect strong, principled Republican local and state candidates.  It is necessary to remember that the nice guy in your neighborhood who runs for office as a Democrat will vote the Democrat party line.  A person does not last long in the Democrat Party if they stray from the party line on a regular basis.

If unhappy voters really want to affect change, they might want to get behind the move to repeal Proposition 14 which limits the general election ballot to the top two vote getters in the primary. The result of this freedom limiting proposition is that many races in California only have two Democrats running in the general election.  Now, that is a tragedy.


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