Pending Fiscal Cliff and the Lame Duck Session

The election results are in and status quo was maintained after both major party candidates spent nearly $6 billion on the election. For the next 51 or so days Congress will meet in the "Lame Duck" session to tackle issues that will get our economy growing more that 1.4% it is currently growing at. The dark cloud hovering overhead is the looming "Fiscal Cliff". If Congress and the President are unable to cobble an alternative plan the Bush Era tax-cuts will expire at the start of the year and $1.2 trillion is cuts will take place - half in discretionary spending and the other half in defense spending.

The Congressional Budget Office has reported, http://cbo.gov/sites/default/files/cbofiles/attachments/08-22-2012-Update_to_Outlook.pdf, that if nothing is done the United States will face recession style numbers. Government spending would drop to 4% of GDP with GDP declining over the year by 0.5% and unemployment could top 9%. Going forward, 2014-2022, the CBO projects revenues would remain below 19% - when historically they average 18% - and spending would rise to 24% - yet current spending was 26% - of GDP. The dirty little secret to our budget issues is baseline budgeting that started back in the '70's.

The "Fiscal Cliff" would produce a short term pain with little long term gain as the CBO states but that is because after the "Fiscal Cliff" our government goes back to the same budgetary processes that has us in this mess to begin with. Granted I am not an economist but if our historically average revenues range, per the CBO, 16-18% of GDP then creating a budget that spends anything more than that range results in deficit spending.

That being said, if I had the ear of Congress and the President I'd encourage them to start by removing baseline budgeting and go back to zero based budgeting process. Make these programs, departments and areas that our Government spends money on prove to Congress that they require the money or need an increase in the budget.

Then I'd ask Congress and the President to establish guidelines that dictate the level of spending going forward. The guideline would be simple - spending is not to exceed 85% of revenues until our deficit represents 25% of GDP. Once we reach 25% of GDP in regards to debt then Congress can raise spending to 95% of revenues. Paying down our debt will allow interest rates to come up without fear of increasing our expense on existing debt while ensuring that Congress and the President works to keep debts low going forward too.

First Presidential Debate Eve!!!!

Tomorrow night President Obama and Governor Romney will square off in the first in a series of Presidential debates. A lot of rhetoric has already taken place from Romney taking about 47 % to Obama claiming that Washington cannot be fixed from the inside. Per an NBC/WSJ poll recently conducted, 40% of those polled view the debates as "important" which may impact voting come November.

On my way to get my eldest son I was listening to POTUS on Sirius radio, one of the benefits to owning a new Ford Focus, and the gentleman on - show ended at 5 pm - was having people call in and say what questions do they want to see from this debate asked of the candidates. Now I am new to this channel on Sirius radio but the host, for the fifteen minutes I listened, appeared to be fair and balanced. That is not to say he was a Fox News anchor just that he seemed to be middle of the road on the partisan spectrum.

The debate tomorrow night will be moderated by Jim Lehrer and it will take place in Denver, Colorado. The main topic or theme of the night is to be the economy, health care and governing. Interestingly enough no topic will touch on gun control. That being said, here are some questions I'd like to see asked of the candidates based on the topics mentioned above. To be brief I will keep them to a top ten style list.

1. With spending at 26% of GDP and current revenues at 14% of GDP when historically revenues are between 16-18% of GDP - what plans do you have to erase the 8-10% gap between current spending levels and historically average revenue levels?
2. Since both of you have successfully passed mandated health care, can either you of you provide proof that it bent the cost curb of medical expenses?
3. The current deficit is projected to hit $16T by the end of 2012, what will you do as President to cut the deficit in half over the next 4 years?
4. England is starting to see a shortage of qualified doctors due the rate of reimbursement and pay scales set forth under their Universal health care, what assurances do we have that a similar vacuum of talent won't take place here in the United States?
5. The Supreme Court upheld the Constitutionality of the Affordable Health Care Act based on Congresses ability to tax. How can Congress use the tax code to curb unwanted pregnancies or reduce our carbon footprint?
6. We hear a lot of Presidential candidate tout that they will reform/change Washington D.C. What criteria will you employ as President to ensure lobbyist or special interest groups are not part of your Cabinet, advisors or staff?
7. The US Constitution established three separate but equal branches of Government - How will you as President use Executive Privilege to ensure equality among the three branches?
8. Unemployment sits above 8% and the number of people actively looking for work has declined by over 500,000 people - What is your plan to get the American workforce back to work?
9. For the past year we have reduced they payroll tax by 3% resulting in $105B no longer going into the SSN coffers. People in the 40's are already being told that they can expect 70% of the benefit at retirement age - What plans do you have to ensure solvency of SSN for future generations?
10. A study was done in Minnesota to see if a hospital could sustain itself on Medicare patients alone last year. The conclusion was that it couldn't. Now the Affordable Health Care Act looks to reduce reimbursement rates for Medicare patients seen. How do you propose hospital and clinics recoup lost revenues without changing level of care or raising the cost of health care for those of us not using Medicare?

Those would be ten questions I'd like to see answered. What questions would you like to see asked?