04.25.2013
FAA Budget up 150%, Air-traffic Declines, So We Need More Spending?
original article written by Net Advisor™
WASHINGTON, DC. Does the FAA really need more money? The talk is that the FAA has to suddenly close 173 airports, and cut staffing by 10% because of the 2013 Sequester budget cuts. This is a completely fabricated argument as we will show you here.
Background
The U.S. government knew about planned fixed cuts in the budget almost 2 years ago this August. It was the Obama Administration who asked for the Budget Control Act of 2011 (“BCA”). The BCA was supposed to create across-the-board cuts in the federal budget. The thinking was there would be automatic budget cuts if Congress could not agree to specific cuts. The BCA delayed most budget cuts until 01-01-2013.
I wrote a 5-part series in 2011, that all the talk about President Obama cutting $1 Trillion from the deficit would amount to a trivial amount. The end result of budget cuts in 2011 was $352 Million (Report).
The U.S. deficit continued to soar in 2011, hitting an all time record in February 2012 with no progress on cutting anything from the deficit. In fact, President Obama’s deficit exceed President Bush’s deficit in just 4 years (report).
In 2012, the Budget Control Act became more commonly known as the “Fiscal Cliff.” Government couldn’t handle cutting the deficit as agreed to under the terms of the Budget Control Act of 2011. In a rare move, the GOP offered to give President Obama full discretion of how and where the cuts would be made. Mr. Obama would not allow himself to take any responsibility for cutting anything in government, so he threatened to veto that bill.
Most of the “Fiscal Cliff’s” problems were deferred indefinitely by adding $4 Trillion to the deficit (see the Congressional Budget Office Report and our more simplified report).
The balance of the 2011 budget cuts from the Fiscal Cliff was deferred from January 2013 until March 2013 called, “the Sequester” – delaying further budget cuts for three months. The amount of budget cuts under the Sequester for 2013 is $85 billion. So Congress has to cut about $85 billion from the budget this year.
When you add the $85 Billion in new taxes Obama raised on the poor, the middle-class and wealthy taxpayers (everyone) effective January 1, 2013, the increase in government revenues offset the entire amount of Sequester budget cuts (Report, Point [18]).
What Budget Cuts?
Now that we know there is no lack of funding in Washington DC, the Obama government moved to make sure there would be no real cuts to the deficit, by increasing the 2013 deficit by an additional $901 Billion. This funds the government for the rest of the fiscal year which ends September 30, 2013 or 5 months (PDF). This $901 Billion of new spending just slightly makes up for the $85 billion in Sequester budget cuts.
Obama Wants $1.1 Trillion New Taxes for 2014
On top of the new 2013 debt and higher taxes for everyone, President Obama wants to tack on $1.1 Trillion in new taxes in 2014. The Sequester cuts would be about $100 Billion in 2014, which is why we think Mr. Obama came up with the extra $100 Billion in new taxes. He wants the new taxes to offset the cuts.
So now you know how we got here. So does the FAA really need money since the entire concept of deficit reduction is a complete farce?
FAA Doesn’t Need More Money
President Obama has been trying to renege on his original 2011 Budget Control Act he asked for and signed, and cancel the Sequester agreements. Obama said he wants to stop the “cut backs.” The truth is, the FAA doesn’t need the money.
The facts are that the U.S. government INCREASED the FAA’s budget from about $2 Billion in 2008 to about $5 Billion in 2010 – a 150% increase. At the same time, air-traffic has DECREASED every year since 2005. Since air-traffic has declined for at least the last 8 years in a row, there was no need to increase the FAA’s budget by 150% in the first place.
Bottom Line
The bottom line is that we aren’t cutting anything from the deficit; it is all being off-set and moved around like a shell game with new taxes and new spending.
“…the White House said it supported Senate Majority Leader Harry Reid‘s proposal to replace the reductions by claiming savings from the drawdown of war spending.”
— Source: Reuters, 04-24-2013
We are not saving anything. It’s just an accounting gimmick. The Obama Administration is just playing politics trying to justify to stop or “temporarily” stop the (trivial) Sequester cuts, as the deficit bumps to a near Trillion this year anyway.
Obama tried to create the political illusion that not only we should not cut government spending, we need even more taxes, so we can increase spending further. This kind of economic policy has failed miserably in Europe, so why are we doing this in the U.S.?
If continued higher taxes, more and more government spending, and more deficits are the wave of the future, the end game is a financial disaster that will make the Great Depression and the Great Recession look like we were in an economic boom.
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Short link to this article: https://www.netadvisor.org/?p=18218
Graphic Credit: copyright © 2013 CNBC 04-23-2013
original content copyright © 2013 NetAdvisor.org®
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