One More Chance for the House to Save the Economy
Even after agreeing to establish a "Super Committee" and kicking the can down the road, the U.S. House of Representatives still has one more card to play if there are enough Congressmen with guts.
FY 2012 begins on October 1st of this year -- a scant month and a half from now. Absent a "continuing resolution" by both Houses of Congress, there is no authority to spend any money after September 30th because there is no FY 2012 budget yet.
The committee chairmen of the House could quickly prepare a FY 2012 budget by picking a budget from history (like, perhaps, the budget for FY 2000) and copying the spending side thereof for all departments. The totals would not be the same because of the automatic spending for entitlements, but the resulting budget should produce significant savings by comparison to FY 2011 and will present the "Super Committee" with a fait accompli, forcing them to concentrate on entitlements to reach the paltry cuts agreed to in the debt ceiling debacle.
It is hard to believe that some of the members of the House of Representatives have not already thought of this. It certainly could be the way to force spending cuts that will not even be considered otherwise.
Moreover, when the Senate gets this "budget" from the House, there will be very little time remaining before the end of the fiscal year. The Senate will have to act, and since there will be no entitlement cuts, any resistance can easily be described as wanton spending. The president will face pressure to sign the budget bill or risk more fights over spending, making himself look like the big spender that he is.
This action should reassure markets and promote the idea that the U.S. government is at last indicating a responsible attitude towards spending. It might also promote economic growth since all parties would know what the government is going to spend for the entire 2012 fiscal year.
Without action like this, there is a great danger that the president and the Congress will delay, making the problem harder and harder to address because of what will be a higher debt and higher interest costs impacting future budgets. It is therefore imperative that something be done now to get a grip on spending. The debt ceiling opportunity was wasted. Can the House use its one remaining pressure point?