Budget Control Act of 2011

Now that a final agreement has been painstakingly hammered out verbally behind closed doors, and shortly thereafter, reduced to writing, the “Budget Control Act of 2011″ can now be viewed on its designated parchment pages in the law books currently filed on the Internet, or, in person at appropriate government agencies. An unprecedented historically significant procedure that linked a routine increase of the “Debt Ceiling” to other economic issues which are obviously a top priority for a small yet steadfast minority group of freshman Congresspersons, and their legions of non negotiating unwilling to compromise supporters and strategic backers namely the “Teapublicans” This is the first time in our nation’s history that the rather mundane typically unpublicized standard practice of increasing our capacity to borrow additional funds for ‘Debt Service’ usage, i.e. paying our bills on time to maintain the nations solvency and a pristine credit rating, has been linked and subject to, such an intense barrage of scrutiny seemingly conducted with total disregard for potential consequences if by chance, this commingling of issues did not result in a successful outcome prior to the cutoff date of August 2 2011. At which time, the United States of America would have had to mitigate potential economic disaster, by prioritizing the payment of previously committed to obligations and managing payout flow to the best of its ability until one of two things occurred, an agreement to raise the debt ceiling materialized, or, we ultimately sunk into default.

It’s common knowledge, that prior to this stalemate in which I like to refer to as the “Incident”, this agenda item has historically been achieved swiftly, and in clean fashion without even the slightest attempt by either party, of political or ideological blockage. Both Republican and Democratic Presidents up until this last negotiation have accomplished this routine procedure without incident. After carefully analyzing the entire process from my unique vantage point and perspective, here is a list of “High Profile” Winners and Losers of the “Budget Control Act of 2011″

Winner/ Loser - President Barack Obama – He does not have to concern himself with another congressional action to raise the debt ceiling, the recently enacted “Act” increased the limit by $900 Billion through 2013. Big political win!! In stark contrast, his apparent inability or unwillingness to confront and or stand firm on certain basic fundamental principles portrayed him as a somewhat ineffective negotiator and deal facilitator. He lost credibility to a moderate degree.

Winner - “Teapublicans/ Tea Party” – This small extreme group of political activists, through strong arm and what I would assert borderline illegal activities, managed to get several full and or partial agenda items included in the act. However, this short term ideological gain may indeed be negated 100 fold in the 2012 election when voters decide if they wish to continue to endorse and support this kind of unprecedented “Brinkmanship”, at the expense of the well being of all American Citizens. Essentially, this extremely short term ideological win might turn out to be a political nightmare in the ensuing months leading up to the 2012 Presidential Election.

Winner/Loser - Speaker of the House John Boehner – Willingness to try and “Push Back” on the strong arm tactics of the “Tea Party” makes him a “Winner”. His apparent lack of leadership skills and mental stamina is a net negative.

Winner - House Minority Leader Nancy Pelosi – Winner,  if the American people did not have her wisdom, representation, and strong presence behind closed doors to spearhead the effort to protect and preserve Social Security & Medicare, the sovereignty and future of these two vital senior citizen programs, might have indeed been compromised. Representative Nancy Pelosi is once again recognized by the American people as a “Protector” of their “Golden Years”.

Loser - Rep. Eric Cantor – Many people feel that he appeared like a proverbial puppet complete with strings that were controlled and manipulated by the radical “Teapublican” element. At least that was the perception; hopefully this learning curve for the young seemingly bright congressman serves him well. Will he be better prepared in the future to engage in a more responsible and appropriate manner? Only time will tell.

Loser - Senator Mitch McConnell – An experienced and seasoned politician who could have “Whipped” up a Republican Party consensus with common sense concessions much sooner than he did. This timely action would have had a calming effect on the financial markets and turbulent reactions mitigated while ensuring a more orderly exchange flow. His political opportunism was clearly apparent.

Winners/Losers - The American People – After all the political theatre, ideological rhetoric, and strong arm tactics displayed during the entire process, we did manage to get the main goal accomplished namely raising the ‘Debt Ceiling”, it’s a “Win” for the People. The Brinkmanship displayed by certain elements and endured by the American people was unconscionable and it’s a huge “Loss”.

After several weeks of posturing, positioning, and virtual nonstop intense heated debate and political wrangling, to the point of legitimate questions being raised by the general public pertaining to the true underlying motives of certain members of congress, and the rather aggressive expressed and implied actions of their respective constituents, a final draft of the “Budget Control Act of 2011″ was finally agreed upon, successfully adopted, and hand delivered to President Barack Obama for his endorsement. According to reports, his signature was affixed within hours of receiving it. After all was said and done, if you ask any American citizen, International citizen, or member of the print, cable, or online press, who really had no choice but to cover the entire process practically verbatim from beginning to end due to the unprecedented significance of what was at stake, and potential consequences which might manifest subsequent to the haste fully written act being accepted by the President and signed into law, they would say it was indeed a relief once they were informed the meetings had concluded and the impending emergence of a bill was at hand.

Many casual observers and avid followers of this unprecedented historical process would agree, one of the most important considerations and conditions attached to the body of this legislation is the immediate creation of a “Bi Partisan” research and negotiating entity called the “Joint Select Committee on Deficit Reduction”. A 12 member team comprised of both Republicans (Mainly Tea Party Representatives & Loyalists) and Democrats who were handpicked by their respective leaders Nancy Pelosi, the Minority Leader of the House, and Senator Harry Reid Majority Leader in the Senate, on the “Progressive” side of the isle, and of course House Speaker John Boehner, who appeared to be visibly shaken throughout the entire process, and Senator Mitch McConnell Senate Minority Leader, on the “Conservative” side. Each of the 12 Ambassadors will be authorized to wield unfettered negotiating powers and act on behalf of all peers and constituents by entering into tentative and potentially binding agreements that in theory, will be designed to engineer a reasonable and feasible path forward to reach the ultimate goal, a balanced federal budget. The act calls for mandatory reductions in spending so this task force will be called upon to identify and implement substantial cuts while attempting to preserve the highest possible quality of life for all American citizens, and maintaining a corporate environment conducive to growing GDP and mitigating unemployment. A tall order indeed considering the monumental concessions already made by the “Progressive” Congress and President Barack Obama in an attempt to rush this initial budget legislation through and to avoid the inevitable consequences of failing to raise the “Debt Ceiling”. A downright ugly process and result of an unprecedented  “Congressional Paralysis” driven mainly by an extremely influential right wing element. It will be interesting to see how history recalls this brief intense period.

Automatic Trigger Mechanism

As a result of the negotiations and ultimate agreement forged by congress, the debt ceiling was initially raised by $900 Billion which satisfied those who were anxiously anticipating a favorable outcome pertaining to debt service, and spending was reduced by an equal amount. A spending cut “Guarantee” was also included and a major condition which was built into the body of the “Budget Act” in the form of “Automatic Triggers”. The “Triggers’ will be implemented without any further action by congress or the President, if certain criteria is not met by the “Joint Select Committee” within a specified time frame. Imagine a scenario where your car engine would automatically seize if you failed to reduce your daily driving by at least 50 percent, or, you automatically gained 5 pounds per day if you failed to cut your sugar intake by 50 percent. The afore-mentioned examples might appear at first glance to be a little extreme however, they are in theory, very accurate metaphors that in theory, accurately characterize similar demands expressed in the “Budget Control Act of 2011″. The only real difference is the “Act” deals with monetary consideration verses a metaphor of car breakdowns or pounds gained. Essentially, if the Joint Select Committee on Deficit Reduction comprised of this 12 member “Impartial Panel” fails to come to a meeting of the minds and compromise on reasonable cost cutting methods or ideas that will ultimately preserve the quality of life for lower income, middle, and upper middle class individuals and families, the “Automatic Triggers” will be implemented and drastic wholesale spending reductions will be the end result. A confirmation considered by many, of a broken system.

“Joint Select Committee on Deficit Reduction” – APPOINTEES

DEMOCRATS - SENATE MEMBERS = Sen. Max Baucus Montana / Sen John Kerry Massachusetts / Sen. Patty Murry Washington / / HOUSE MEMBERS = Rep. Xavier Becerra California / Rep. Jim Clyburn S.Carolina / Rep. Chris Van Hollen Maryland

REPUBLICANS - SENATE MEMBERS = Sen. Jon Kyle Arizona / Sen. Rob Portman Ohio / Sen. Pat Toomey Pennsylvania // HOUSE MEMBERS = Rep. Dave Camp Michigan / Rep. Jeb Hensarling Texas / Rep. Fred Upton Michigan

As the 2012 Presidential Election campaign gets into full swing and we the American people begin to see and hear from the growing field of mainstream verses Tea Party proxy Republican Candidates, and observe how incumbent President Barack Obama reacts to, and manages the inevitable future onslaught of criticisms and political rhetoric aimed at him and his entire administration by the opposite side of the isle, a clear preference for who we would like to see emerge victorious in 2012 should come into focus. This inevitable verbal barrage with only one clear goal in mind, to systematically, chip away at the Presidents overall leadership skills, policies, and general effectiveness as commander in chief will undoubtedly be played out via all cable news network’s for the world to see and pundits to analyze to the extreme.

In addition, it will be interesting to see if the Republicans succeed in trying to diminish the significance of President Barack Obama’s lofty record of achievements to date, such as slowing down and ultimately mitigating the severe detrimental effects of the economic turmoil he inherited from day one of his presidency, along with his participation in the crafting of a related stimulus plan that helped to stave off the job loss free fall which began in 2010. A stimulus package of which many experts point to as prima facie evidence, which ultimately reversed the job loss trend and replaced it with encouraging job growth activity along with positive real time indicators within approximately twelve months.

There is no reason to believe the standard political gamesmanship will not be in the offing during this election year however, in this cycle, we have unique political considerations to be studied, weighed, and considered prior to entering the voting booth. A split between the parties so to speak, on how to proceed in the future when renewing or negotiating new “Debt Ceiling” legislation. If these last rounds of meetings are any indication of what could possibly happen in 2013, the next year in which the ceiling will inevitably need to be raised to ensure past obligations accrued are met, how would you as a tax paying citizen prefer to see your elected representatives proceed with negotiations? I believe the debate leading up to the recently passed “Budget Act” shed an additional unprecedented beam of light on the clear distinctions between the GOP and their cowering attitude toward the “My Way or No Way” Tea Party constituents who seem to hold all the proverbial decision making strings, and the rational, willing to compromise deal making Democrats.

Are you still willing to cast your vote for a “Teapublican” even after witnessing the budget fiasco? Willing to vote for a representative who apparently has total disregard for the financial security of our country, one who is willing to sacrifice a global financial collapse in an effort to fulfill a personal agenda or ideology? Or, will you cast a ballot box entry for a member of the opposition party who was ready, willing, and able to negotiate, compromise, and develop a serious plan of action while, protecting senior citizens supplementary and or primary, source of retirement income. I would assume your current financial status might be a deciding factor.

In this current age of immediate and instantaneous “News Bites” designed to fill cable air time for 24/7 media outlets, most Americans are unfortunately short sighted when it comes to political issues, especially now considering their pre-occupation with, and intense focus on, the instability and uncertainty of the jobs market and how it will affect them personally, despite the monumental efforts by this administration to improve conditions.

So even though many believe the unconscionable tactics used by a certain voting bloc of the GOP constituency, which were apparently designed to potentially endanger this country’s security and financial standing were blatant and intentional, will this kind of story have legs and survive the constantly churning news cycle until election 2012? And if it does survive, will it influence independent or conservative voters and to what degree, or will it have virtually no impact at all? It is very interested to see what the final outcome will be.

Will the first meeting of the “Joint Select Committee on Deficit Reduction”, consisting of 12 appointed members and which was established by and a condition of, the “Budget Control Act of 2011″, result in a feasible, common sense approach to deficit reduction?

Can and will congressional members who may have previously been subjected to manipulating influential forces from both within and outside respective parties, find a way to stave off this controlling force and move forward by actually participating in good faith negotiations to draft and implement a strategy intended to benefit all Americans? Can they find a way to leave partisanship at the door and genuinely attempt to establish a workable budget friendly action plan while at the same time, preserving vital retirement income streams such as social security and Medicare benefits which where earned by all participants via decades of payroll deductions? Will the plan also include the development and implementation of a cohesive strategy to maintain and eventually propel the current job growth trend steadily higher?

Will Republican committee members continue to cower as they have in the past, to Tea Party activists who have maintained an unwavering unrealistic strategy and policy of “Non Negotiations” when it comes to important “Negotiations”? A stance repeatedly taken in regard to what most experts consider is essential revenue generating adjustments to be procured via modest tax increases on top tier income earners?

If you research the contents of the recently passed “Budget Control Act of 2011″ you will find several consistent facts. Although most concessions seem to have been made by the Democratic side, such as the insistence of a mandatory vote on a Republican driven idea, the inclusion of a “Balanced Budget Amendment” to the Constitution, essentially, neither side really compromised core their principals. And if you study the legislation verbatim, you will find only the substantive or tangible cuts made; it might have already been predetermined and or planned months in advance, in line with the expectations of both parties.

The “Act” for its entire theatrical splendor, turned out to simply be a potential “First Step” in the overall process that did not address revenue enhancers in any meaningful way. But nevertheless, it was a process that illuminated political strategy or lack thereof, on both sides of the isle which will hopefully pave the road to create a solid foundation more conducive to results based future negotiations. It is essential that an agreement be struck through efforts of the “Joint Select Committee” or, the automatic triggers contained within the law will be released to make wholesale across the board spending reductions if additional budget deficit legislation as a result of a meeting of the minds, cannot be established.

So the next important step in the process will indeed require some degree of compromise by all parties and party members. Most would agree, lower income and working class Americans have already sacrificed enough over the past few years by enduring a deep, perfect storm style recession which left millions in search of full or part time work to replace a lost job, intermittent stock market corrections, which have fortunately been negated somewhat by a recent twelve month long up tick, but nonetheless still an overall negative on most workers 401K Retirement Plans. A systemic real estate correction that began in 2006 which resulted in a modest devaluation and reduction in equity for many home owners, once again, a modest rebound in property prices over the last couple years has worked in our favor, recouping approximately 50 to 75% of lost value depending on geographical location. All sacrifices the majority of Americans have had to endure within the past five years. So when we say “Everyone needs to chip in and help out with the deficit reduction and budget issue”, it is a fact that the working class has already been doing so for over half a decade.

So now, we await the final verdict of the “Subcommittee”. Can they reach across the proverbial isle and shake in agreement regarding a “Fair and Equitable” deal? One which will require everyone to contribute to the budget balancing effort, including the wealthy via slight to modest tax increases? Let we find if it will be “Civil Discourse & Compromise, or Triggers”

The initial spending cuts contained within the “Budget Control Act of 2011″ will effect two major job categories, namely defense department spending and incidental related industries, and certain administrative aspects of Medicare. The trickledown effect resulting in potential force reduction could inevitably and unavoidably take hold of secondary and or tertiary sub business units which play a vital support role to the primary industries. Typically, within the rigidly structured defense industry, there is a highly dedicated chain of supply and service entities which have become highly dependent and sensitive to abrupt changes in financial policy that could adversely affect their ability to conduct day to day operations as a result of even the slightest modifications of budgetary considerations. What some experts would consider the inevitable “Collateral Damage” soon to emerge from the implementation the terms or conditions included in the ACT, may be easy to predict for the professional economist, but the extent to which it stifles and or inhibits future job growth, cannot be accurately determined nor underestimated until a reasonable amount of time elapses between passage of the legislation which occurred on August 2, 2011, and the implementation of all new laws contained within the pages.

What type of defense jobs will be targeted for elimination? The constant drum beat by Republicans of pledging to shrink the Federal Government to the point of starving any infrastructure or related nationwide improvements, and inhibiting or even eliminating our government’s ability to administer basic programs necessary to maintain our current quality of life, is uttered in speech form at virtually every debate and public forum. Clearly, the defense department is an integral element of the Federal Government and includes an almost infinite number of agencies and sub agencies that currently employ millions of Americans, and, it’s main function is pledge to serve and protect the Untied States of America and its citizens. So where do you even begin to cut jobs? The Pentagon, where actual strategy and preventative measures are discussed and put into action almost daily? Military bases around the world, some essentially stand idle while others still maintain a very active presence? And once these crucial decisions are made, how many jobs will be lost and respective families be affected as a result? Only time and the associated strategic plan of action which is partially included in the “Act”, will tell.

With all the uncertainties attached to potential job losses as a result of the Republicans willingness and for some eagerness, to adopt a non negotiable “Spending Cuts” policy or philosophy, verses a embracing a balanced approach which would have included revenue enhancement aspects designed to shore up the overall budget, how can the GOP continue to maintain the current campaign trail “Mantra” defining themselves as the “Job Creation Candidates” and or party? It is a very interesting dichotomy indeed. In the same speech, they promise unrealistic significant job creation if elected, then, in the very same breath, espouse an anti Federal Government philosophy which will inevitably equate to massive downsizing leading of course to massive job cuts. A force reduction once again according to the GOP’s own words, of unprecedented proportions. Interesting to say the least!!

If you watched the media reporting as it related to negotiations or lack thereof, leading up to and during the final phases just prior to reaching a conclusion, all items and conditions annotated in the Budget Control Act of 2011″ were to a large degree, dictated by the Republican Party. The entire process was indeed monopolized by their GOP mainstays and underlying influences. This is the main reason why many have come to the logical conclusion which is as follows. The Republicans own this piece of legislation from word one to the closing sentence, for better or for worse, and all negative consequences that may materialize as a result of passage such as massive layoffs, Medicare administrative incidents, or even loss in revenue. We can directly attribute all the preceding to those who acquired title to the process “The Republican Party”.

• “Debt Ceiling” – Raised an initial $400 Billion without further negotiations or congressional actions. This provision is included in the act and requires no other conditions to become effective.
• Joint Select Committee on Debt Reduction – A 12 member congressional committee consisting of 6 Democrats and 6 Republicans. Objectives to meet and negotiate further spending cuts to avoid built in automatic “Triggers” which take effect and result in substantial predetermined budgetary adjustments if an agreement cannot be reached between Joint Select Committee Members.
• All future “Debt Ceiling” increases must be accompanied by at least an equal amount of spending cuts.
• The final agreement materialized within 48 hours of the deadline to raise the “Debt Ceiling”.
• There must be a congressional up or down vote on a “Balanced Budget Amendment”.
• Enacted August 2, 2011, less than 48 hours before the deadline.
• Passed by the 112th Congress.
• No tax increases or revenue enhancers are included in the bill.
• The ratio of spending reductions verses debt ceiling increases favors reductions.
• Deadline to pass legislation was August 3, 2011.
• An initial debt limit increase of $900 billion was established in the bill.
• The “Joint Select Committee on Debt Reduction” must introduce new debt reduction legislation by November 23, 2011.
• The new legislation introduced by “Select Committee” must pass through congress by December 23, 2011 or automatic “Triggers” are implemented.
• A minimum of an additional 1.2 Trillion in cuts must be identified by the “Joint Select Committee” to avoid “Triggers”.
• If the “Joint Select Committee” fails to identify 1.2 Trillion in budget cuts, the “Debt Ceiling can still be increased by an equal amount with the “Trigger Mechanisms” automatically cutting 1.2 Trillion in defense and or non defense related items.
• Almost all spending cuts in the bill are to be implemented within a ten year time frame.
• A vote on a “Balanced Budget Amendment” must be conducted between October 1, 2011 and the end of calendar year 2011.
• “Pell Grant” funding was increased via the bill.
• 174 Republicans and 95 Democrats voted in favor of the “Budget Control Act of 2011″.
• 95 Democrats and 66 Republicans voted against the “Budget Control Act of 2011″.
• The “Act” passed the United States Senate by a vote of 74 in favor to 26 opposed.
• As a result of the partisan brinkmanship, Standard & Poor lowered the United States Credit Rating from “AAA” to AA+.
• Despite the lowering of the “Credit Rating”, Warren Buffet as reported by the news media is on record as stating, in paraphrase “If there was a credit rating of “AAAA” I would give it to the United States”.
• Senator Mitch McConnell during the final hours of negotiations apparently bypassed a meeting with his peers in congress and went directly to President Barack Obama to present his concerns and issues.
• On July 31, 2011, the media reported that an agreement had been reached to adjust the budget.
• White House Officials contemplated using the apparent inherent powers of the United States Constitution to raise the “Debt Limit” in the event of a failure by congress.
• Pell Grant repayment incentives will be eliminated as of July 1, 2011

According to recent media reports, which suggest as a result of the Republican Tea Party’s reluctance, either genuine or artificially induced by extreme right wing elements, to concede modestly on tax specific items related to the “Budget Act”, and reasonably compromise on what most experts consider essential budget balancing revenue generating options, self made billionaire Warren Buffet used his media access to become somewhat vocal in expressing his disappointment regarding the missed opportunity to raise the existing tax rate on upper echelon income earners, to at least the levels that were implemented during the robust economy expanding 1990′s. Always the consummate humble philanthropist willing to donate his time and a generous percentage of enormous wealth to charities and a whole host of other worthy causes, Warren Buffet has earned a reputation over the past few decades for being a very knowledgeable elder statesman when it comes to economics, job creation and or the nature of stimulus necessary to produce a thriving prosperous environment, and how the drafting of related legislation can be shaped to reflect a feasible plan of action.

An interesting and inspirational financial genius in many aspects, who spent time with co-billionaire extraordinaire, and we assume close friend, Bill Gates (Microsoft Co-Founder), on an enlightening “Question & Answer Seminar Television Tour” which was apparently designed to re-introduce himself to a segment of the general public, mainly the younger generation, who may not be familiar with his great American success story or significant accomplishments as Chairman of one of the most successful business enterprises of our time, namely Berkshire Hathaway. Not a bad achievement for a kid who came from very humble beginnings born and raised in the heartland of Omaha Nebraska. Warren Buffet’s extensive experience in running one of the largest and most successful companies in the world is certainly one legitimate reason why the entire “Wall Street” and universe lends an ear when he offers up a few proverbial choice pearls of investment or financial wisdom. Unfortunately his ideas and suggestions about the inclusion of tax rate adjustments of an equal percentage or possibly even higher than the effective rate of the previous decade, where not made public prior to, or, during the heated congressional negotiations which ultimately lead to the creation of the “Budget Control Act of 2011″.

His welcomed endorsement and push for what he apparently considers a common sense approach to closing a deficit gap, which would include asking the wealthiest Americans to contribute a small insignificant portion of their robust income stream, even if the requirement called for temporary participation in a mere token way. This participation at a minimum, would inevitably send a symbolic message to the financial world that America’s elite community of ultra wealthy millionaires and billionaires, are now ready, willing, and able to set aside what some would consider a money motivated protectionism, in favor of adopting a more generous attitude and moral policy toward shouldering their fair share of the deficit burden by contributing in a monetary way to help alleviate this nations financial stresses. Even if the gesture of good will was only valid for the short or intermediate term, and or temporary in nature subject to expiration in the future.

And now, with the “Super Committee”, which is comprised of equal number of both Democrats and Republicans, soon to begin its initial round of what many media pundits are expecting to be another unnecessary monumental struggle by reasonable members of congress to persuade some “Tea Party” loyalist Republicans not only to merely attend and raise a hand to indicate their meeting presence, but actually participate by offering legitimate workable ideas, solutions, and reasonable concessions, we can only hope in the interim until these meetings begin, knowledgeable influential icons like Warren Buffet and others of his stature, will continue via cable television air waves and online web sites, to communicate his message to all peers and corporate entities. An effort to convince all who are listening, to follow his lead and at least acknowledge the importance of the pending issue and ultimately accept the responsibility of contributing a token amount at minimum, if not volunteering to give their entire fair share via a modest tax adjustment.

Most experts in the field would agree, trying to project overall future economic impacts of the newly drafted “Act, whether negative or positive, are purely subjective and speculative at best. Once you research and discover only a small portion of the entire spending cut picture is represented in the law that just recently passed through congress and signed by the President, it’s very difficult even for the consummate professional, to accurately calculate or predict the consequences with the bulk of budgetary considerations yet to be determined and or finalized. The balance of outstanding budgetary decisions will come about in either one of the two following ways. As a result of good faith negotiation and compromise by the two political parties via the newly established “Joint Select Committee” which is comprised of representation from both major political parties, or, as a result of embedded “Trigger Mechanisms” which are designed to make immediate, drastic, across the board cuts automatically without the need for additional congressional action, in the event of a failure by committee to draft a satisfactory agreement.

At this point in time I think most would agree, trying to make an accurate projection of the effects if any, the provisions contained within the pages will ultimately produce for the intermediate and longer term, is unquestionably an exercise based almost exclusively on prognostication verses core factual data and the inevitable handicapping I assume, will indeed be performed by no less than a myriad of experts and presumably novices alike. However, there are a few apparent segments within the new law that will be rolled out in phases over the course of the next ten years, which seem to indicate specific targeted cuts in two major areas. The first area subject to the new law is Medicare. According to most interpretations, actual tangible monetary benefits such as co-pays and prescription drugs etc., will not be adjusted, but the underlying structure of the social safety net program will more than likely be modified and or “Tweaked” so to speak, in an effort to streamline the overall administration aspects such as current data filing and access. A thorough fine tuning from top to bottom is to ensure peak efficiency and time saving experience for both employees and Medicare recipients. Will this include more computerized interaction and storage? If so, jobs may be lost on the administration end but could possibly be regained on the technical side if for instance new Computer Programmers or related specialists are deemed necessary. So there are indeed many different variables to consider at this early stage, and trying to predict the positive or negative economic effects going forward is virtually impossible, but it’s something to monitor closely as the changes take effect.  Most of us may be watching intently to see what kind of concrete changes are made and in what way if any, they effect both the domestic and international economies.

In stark contrast, it appears as if military and or defense programs will have their respective budgets gone over with a proverbial fine toothed comb in preparation for substantial cuts or adjustments which should result in additional savings. Whether or not this will include reducing or eliminating our physical active armed forces presence currently deployed and stationed at numerous military bases scattered throughout the globe, is a question that will be answered as the “Act” and subsequent legislation is signed into law and rolled out for implementation. In which area will the spending cuts be targeted? Will they be geared toward pentagon staff or overall manpower reduction for example, or, actual military might savings such as canceling future equipment replacement contracts, or, postponing research and development related to new fighter aircraft or naval vessels, or, a combination of both? In any event, regardless of the makeup of specific cuts, the economic impact of the “Budget Control Act of 2011″ can and probably will range anywhere between minimal to substantial, or even greater depending on the severity of direct impacts, and the indirect trickle down residual effects to a whole host of closely tied sub contractors and other related product or service providers.

Threatening to remove a person from their job if they do not adhere to an extreme anti government agenda or anti tax stance? Is this a legal maneuver or strategy? Is it constitutional? Forcing a member of congress to ignore the constitutional amendment which clearly states “The validity of the public debt of the United States SHALL NOT BE QUESTIONED” by having that member sign a “No Tax Increase Pledge”, an action that clearly places an ideology ahead of the constitution of the United States and best interest of the American people. Entering into congressional negotiations with the apparent intent to obstruct progress on an agreement which would be engineered in part, to adhere to the requirements of the 14th Amendment, understanding you do not have the American people’s best interest in mind? In my opinion, these are all questions and scenarios that should be addressed and studied to avoid future situations and possible infractions of the supreme law of the land.

The following excerpt found in Section #4, was taken verbatim from the United States Constitution – 14th Amendment

Section 4. “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.”

The preceding annotation of the 14th Amendment and it’s possible usage by the President to bypass a stalemate in congressional proceedings, and automatically increase the debt ceiling by executing inherent presidential powers or “Executive Privilege”, was first articulated and brought to the debate forefront by Treasury Secretary Timothy Geithner, most believe in attempt to induce action by a seemingly paralyzed or immorally manipulated Republican Party.

The suspicious behavior and apparent inability or unwillingness to concede even a minimal amount of ground necessary to secure a vital budgetary agreement which would be in the best interest of the entire nation, coupled with a blatant intentional attempt by some “Teapublicans” to systematically undermine negotiation talks for political gain, to the point of actually forcing a deadline expiration which could have ultimately led to a potential debt default in a worst case scenario, has been and should be under intense scrutiny to determine motive. Each member of congress on their first working day, recited an oath to uphold the “Constitution of the United States”, not to pledge an allegiance to “Revenue Enhancement Stagnation” or to circumvent the constitution, which is essentially what each member who signed a now publicized pledge did during the Budget Control Act meetings. I think most Americans found the blatant nonchalant and cavalier attitude toward the meetings which essentially held the financial fate of the entire world in its hands, immoral and disturbing to say the least.

Were the actions or more accurately characterized inactions, by the “Teapublicans” illegal? Immoral, disturbing, unconscionable, maybe so, but did their influence over the Republican Congress cross the line and enter the realm of possible illegal activities? I’m certainly not a Constitutional Lawyer or any other Bar Member however, I believe one aspect to consider for those in this field, is the extremely close intertwined relationship between the GOP and the Tea Party, and their apparent pursuit of a specific agenda at the expense of the best interest of the American people and the country as a whole. Take a good look at the following excerpt and decide what the literal interpretation is and if infractions occurred during negotiations of “The Budget Control Act of 2011″. It reads as follows:

“The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.

We conclude this in depth look with a reiteration. The above passage can be found in the United States Constitution, The same Constitution in which all Republican Members of Congress recited an oath to defend. And now, we as a people must decide if there was an infraction of the above amendment. Was there an intentional effort to circumvent, disregard, or even undermine this supreme law in favor of political gain, ideology, or other undisclosed reason? I do hope in the next round of meetings scheduled for November 2011 by the “Joint Committee”, will be free of the even the slightest perception of strong arm tactics that can be construed as infractions of the law of the land.

Despite the call for a fair and balanced approach to budget adjustments contained within the “Budget Control Act of 2011″ , a call echoed by the vast majority of American citizens and numerous high profile business community members, once again it appears as if the old cliché’ of “Money is Power” has proven to be true. Not only is this scenario clearly evident in the fast paced realm of corporate competition where daily jostling is common place in an effort to try and obtain even the slightest edge that might propel a company to the apex of profit making splendor, but after observing the negotiations and overall process which ultimately culminated in the drafting of the Budget Control Act, and subsequently leading up to the President’s signature, unfortunately, the perception that money also seems to be a significant factor in influencing the content and or shaping of extremely important legislation such as the afore-mentioned newly enacted law, is clearly evident.

The apparent use of monetary enticement to gain a potentially unfair immoral advantage is really nothing new in concept, and it probably comes as no major surprise or revelation to avid observers who follow politics in general and recognize the inherent relationship which has evolved over the decades between Wall Street, Main Street, Pennsylvania Avenue, and it’s respective “Agents of the People”. It is common knowledge to those who study and follow history, since this country’s inception, subsequent decades have fostered an atmosphere conducive to the development of a tightly interwoven relationship between corporate entities and politics. And by now, as we emerge from the so called “Experimental Stage” and enter the cutting edge twenty first century, this “Money for Power” game has unfortunately become an integral element stitched into the fabric of our overall system of governing, and now, simply accepted as standard practice. Sadly, we as Americans have been conditioned throughout history, to expect a certain degree of legislation manipulation as a direct result of campaign donation and finance, a process which has been a reality since the days of our founding fathers. Is this cozy relationship between wealthy America and politics once again, the main reason why tax adjustments to enhance revenue generation were not included in the “Act”? We may never find the true answer.

Do Corporate Tax Breaks Really Create Jobs? Did The Wealthy Simply Get Another Pass? 

There is a wealth of historical data available to the general public as a result of extensive non partisan studies on the subject of “Corporate Tax Breaks” and the related long and short term effects on job creation and the overall employment market. Some study results tend to support assertions that there is a direct connection between generous corporate tax cuts and an increase in jobs created as a result, however, in stark contrast, the opposite was found to be true in certain cases where job stagnation or even loss occurred. If you analyze results of the past decade spanning from roughly 2002 thru 2011, it appears as if the “Bush Tax Cuts” for the wealthiest Americans and largest corporate entities which were implemented in 2002, have fallen far short of initial GOP expectations who predicted substantial job creation, growth, and stimulation, which now leads many experts from both sides of the isle to question not only the effectiveness of tax cuts as an overall economic stimulus strategy, but the true motive by some representatives for championing the implementation of the unprecedented massive cuts. According to some estimates submitted by leading economists and experts in the field, the action was a complete failure, and actually may have contributed to impeding job creation. presumably an unexpected consequence. I guess differing opinions on why the tax reductions fell far short of stimulating the economy will be left for historians to sort out, however, one fact has indeed been documented, the fact that job growth has unquestionably been anemic at best over the past decade, even with the recent renewal which allowed the tax breaks to remain in place without change.

This leads me to this common sense question. Why did the “Budget Control Act of 2011″ simply dismiss revenue generating provisions that would have called upon the wealthiest of citizens and or corporations, to pitch in a little and share the financial burden in an effort to help mitigate future budgetary concerns?

Essentially, the wealthiest Americans have had a proverbial “Free Pass”, enjoying a relaxing 10 year tax exemption coupled with a fun filled vacation in the Bahamas while low income and working class Americans have struggled heroically just to try and make ends meet. A typical scenario in which most believe has been common place for too long. From personal observations and study, I’ve found that Corporate Tax Breaks alone do not necessarily equate to significant job creation, and, as a matter of fact, can actually lead to the exact opposite result, namely “Corporate Stagnation”. A strategy employed of just flipping the corporate cruise control switch to the “ON” position and gliding along by simply using the billions in tax monies to maintain status quo, not hiring, not firing, and just going through the motions regardless of underlying fundamentals or how the actual business is performing.

I believe any noteworthy Economist or professional would certainly agree with the fundamental fact that the most important essential job growth element is unquestionably “Demand”. It’s just economics 101. Regardless of the staggering size of a company’s bank account whether it be accrued and maintained via earned revenues or tax breaks, if demand for the product or service is flat or spiraling downward, the odds of that corporate entity hiring more workers are extremely unfavorable. Do “Tax Breaks” alone guarantee job creation? My recommendation would be to study the facts and discard rhetoric to find the true answers.