Big Government Cannot Pay Its Bills, Again

by Andrew P. Napolitano

Recently by Andrew P. Napolitano: The Case for Austerity

Since Barack Obama became president on Jan. 20, 2009, the federal government has not had a budget. It did not have one for the first two years of his presidency, when Democrats controlled both houses of Congress, and it did not have one for 2011, when the Democrats controlled the Senate and the Republicans controlled the House.

The Senate – continuously under Democratic control during the entire Obama presidency – has not voted out and sent on to the House any annual budget since George W. Bush was president. The House sent a budget to the Senate a year ago, but the Senate rejected it and sent nothing back in return.

In the nearly three years that Obama has been in office, the government has been collecting revenue, borrowing cash and spending ravenously on the basis of what the government calls continuing resolutions – known in Washington by the initials "CR."

When Congress enacts a CR, it basically authorizes the government to operate for a finite and brief period of time. The period of time does not coincide with the government's fiscal year. The federal government's fiscal year runs from October 1st to September 30th. Here we are at the beginning of a new calendar year, and your government does not have a budget for its fiscal year that began more than three months ago.

Instead, the feds have operated under 15 continuing resolutions throughout the Obama presidency. Some of these CRs have been for as long as nine months, and one was as short as 24 hours. There was a time when the end of a continuing resolution would have brought intense media scrutiny. Will the government stay open? Will it shut down? Who will get blamed? Will Congress let the president spend money the government doesn't have? None of this produces drama any longer, because the bizarre has now become the routine.

This new year will bring certain new tax rates, specifically for the payroll tax. The payroll tax is what you pay and what your employer pays to fund Social Security. Social Security is a Ponzi scheme: It pays out more than it takes in, and the government lies about its solvency. It once had a cushion, called the Social Security Trust Fund, but Congress took that money and spent it.

Can you think of any crimes here? Running a Ponzi scheme is a crime – just ask Bernie Madoff. And spending money you have lawfully agreed to hold in trust for someone else can get you in a lot of hot water, and likely criminal charges. Just ask Jon Corzine.

So here we are, at the beginning of a new year, and employers and employees don't know what their payroll taxes will be in March. You cannot run a business, and you should not run your household, without knowing months in advance what your regular expenses will cost you. But when you have a government in which both wings of the Big Government Party – that's the Republican wing as well as the Democratic wing – think they can bribe the people with their own money and the only difference between the two is how much of a bribe, when both wings think they can write any law, regulate any behavior and tax any event, no matter what the Constitution says, no matter what federal law says and no matter what the laws of economics say, is it any wonder the government is dysfunctional?

All of this demonstrates that the government lives in its own world. It writes laws for the rest of us and breaks them itself. It requires openness of corporations that trade publicly, but it won't be transparent itself. It doesn't read the laws it writes, and it doesn't care about the Bill of Rights. What can you do? If you live in New Hampshire, you can vote for a game changer next week. There is only one on the ballot.

Reprinted with the author's permission.

January 6, 2012

Copyright © 2012 Andrew P. Napolitano

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