spending – Page 9 – Lone Candle

Opinion – Elon Musk wants to ‘delete’ many Americans’ financial lifeline

Posted on January 18, 2025 by Lone Candle

“Elon Musk — who, along with Vivek Ramaswamy, has been tasked by President-Elect Trump with running a new Department of Government Efficiency — posted on his platform X that he wants to “Delete CFPB,” referring to the Consumer Financial Protection Bureau. The agency, Musk said, was part of a problem of “too many duplicative regulatory agencies” in Washington. But there are no other agencies in the federal government returning money to Americans’ bank accounts in the way the CFPB does.
Since its founding, the agency has returned more than $19 billion in cash to people who have been scammed by financial institutions, including predatory payday lenders and even some of the largest banks in the country. It has done so under Republican and Democratic presidents, including major actions against Wells Fargo and Equifax during President Trump’s first term in office, which, combined, returned $425 million to consumers. (Those actions both began under the Obama administration, but Trump’s CFPB directors oversaw the execution of those fines.)”

https://finance.yahoo.com/news/opinion-elon-musk-wants-delete-143000169.html

Federal Government Has ‘Grown Too Big, Promised Too Much, Subsidized Too Many,’ Warns Former GAO Boss

Posted on January 12, 2025 by Lone Candle

“Unless Congress puts the country on a different fiscal course, Walker believes there is a 70 percent chance of a serious debt crisis before the end of the decade. That crisis would have “serious adverse economic security, national security, diplomatic, and domestic tranquility consequences,” he warned, adding that the middle class would “be affected the most on a relative basis” if standards of living are suddenly hit with a debt-induced shockwave.
This week’s hearing was intended to highlight bipartisan agreement on the seriousness of the federal government’s fiscal problems, said Rep. Jodey Arrington (R–Texas), the committee’s chairman.

“We’ve got major fiscal problems and a completely unsustainable fiscal trajectory. I haven’t heard anyone, Democrat or Republican, witness or member, that [sic] doesn’t accept that fact,” he said. “We won’t know when the dominoes fall on us in a sovereign debt crisis, it’s going to be difficult to put the pieces back together and maintain our global leadership.”

Those remarks echo warnings issued in recent years by governmental entities like the GAO and the Congressional Budget Office, as well as outside groups like the Penn Wharton Budget Model. Since 2015 the gross national debt has doubled, from $18 trillion to over $36 trillion. Debt held by the public, which most economists consider the more significant measure, sits at more than $28 trillion, or 99 percent of GDP. Deficits of nearly $2 trillion are expected for the foreseeable future.”

https://reason.com/2024/12/13/federal-government-has-grown-too-big-promised-too-much-subsidized-too-many-warns-former-gao-boss/

This obscure budget procedure could be Trump’s biggest weapon

Posted on December 31, 2024 by Lone Candle

“The official definition of “impoundment,” per the Government Accountability Office (GAO) that oversees the practice, is “any action or inaction by an officer or employee of the federal government that precludes obligation or expenditure of budget authority.” In other words: any time someone in the federal government doesn’t spend money that Congress has ordered it to spend.

This takes two forms: rescission, and deferral. In rescission, the spending is simply canceled, while in deferral it is withheld temporarily, in theory to be spent in the future. Under the Impoundment Control Act, passed in 1974, both rescissions and deferrals can be passed by Congress at any time, and they can also be requested by the president. But any presidential requests have to be approved by Congress to take effect, and that has happened quite rarely.”

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“The GAO has also recognized a practice called “programmatic delay,” which it views as not technically impoundment but which is closely related. Programmatic delays occur when the government is trying to spend money Congress has instructed it to spend, but factors outside their control preclude this. The GAO has offered as an example a program in which the government is supposed to provide a certain amount of money in loans, but where there are few applicants so the program simply cannot lend out the total amount Congress has set aside for this purpose.
Another more recent example was Biden’s executive order upon taking office instructing a pause in the construction of border walls and fences with Mexico. While Congress had appropriated money specifically for border barriers, the GAO ruled that the Biden administration was merely “programmatically delaying” the project, because the delays were chalked up to environmental reviews and other hurdles that it was legally required to clear before continuing construction.

Programmatic delay does offer the executive branch some flexibility in spending, but only a bit. Otherwise, the Impoundment Control Act is very clear: The president cannot refuse to spend money that Congress has told him to spend. The GAO is empowered to challenge the president if it sees this limitation being contradicted, as it did when Trump withheld funds from Ukraine in 2019. In that case, the funds were eventually released and the incident led to Trump’s impeachment.”

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“The power becomes truly interesting, however, if Trump insists upon cuts that Congress will not approve. One could imagine a repeat of the 2017 fight to repeal Obamacare, except, when enough Republicans defect to doom the effort in Congress, Trump and Vought opt to simply impound funds for the Medicaid expansion and Affordable Care Act premium subsidies unilaterally. This would inevitably provoke a legal challenge that could make its way to the Supreme Court.”

https://www.vox.com/politics/388393/donald-trump-congress-impoundment-budget-supreme-court

How the debt could topple Trump’s growth agenda

Posted on December 17, 2024December 17, 2024 by Lone Candle

“Jeff Bezos, Larry Fink and Donald Trump’s Treasury pick Scott Bessent all agree: Turbocharging economic growth is the best route to reining in the U.S.’s massive $36 trillion debt. History is not on their side.
Bessent warns that this is the “last chance” for the country to grow its way out of the record debt without becoming a “European-style socialist democracy.” Fink, who heads the world’s largest asset manager BlackRock, urged the incoming administration in an Election Day op-ed to promote artificial intelligence and infrastructure investments to grow the economy and tame the deficit. And Amazon founder Bezos told economic power brokers at the DealBook Summit this month that the only way to solve the problem is to expand the economy by 3 to 5 percent a year while simultaneously trimming annual deficits.”

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“That’s a tall order that few modern presidents have managed to achieve for any sustained period. Bill Clinton famously generated budget surpluses while the economy soared at rates of more than 4 percent in the late 1990s. Ronald Reagan brought down deficits in 1984 and 1987 but otherwise ran up the red ink. And Trump himself will face even more significant challenges if he follows through on tax and tariff pledges that budget forecasters say could add $4.1 trillion to $15.6 trillion to the debt over the next decade.

Trump promised during the campaign that a combination of lower taxes, more energy production, looser regulations and punishing tariffs would generate “explosive” growth to pay down the debt. And government budgets would shrink by “trillions,” he said, with Elon Musk and Vivek Ramaswamy tasked with tackling government waste.

But Trump has also vowed that he won’t touch entitlement programs like Social Security and Medicare, which are by far the chief drivers of the debt and are projected to be insolvent by the mid-2030s. Imposing tariffs on imports could trigger reprisals that would harm growth, and even if they didn’t, many economists believe it would take a historic economic boom to meaningfully address the country’s fiscal challenges.

“You can’t improve this with growth,” said Tom Porcelli, the chief U.S. economist at PGIM Fixed Income. “You’d have to have 5 percent growth for a pretty decent amount of time to have any real notable impact.””

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” Fiscal watchdogs and credit-rating agencies have been clanging alarms for years about the U.S.’s growing debt, which is the accumulation of annual budget deficits. Rising deficits — which can be inflationary and push up interest rates — could become more acute as the population ages and spending for mandatory entitlement programs climbs. Even steep cuts to discretionary federal programs wouldn’t make a meaningful dent in the debt without extensive structural reforms.”

https://www.politico.com/news/2024/12/16/trump-ceos-american-debt-plan-00194362