Senate Narrowly Passes First Budget in Four Years
So finally, the Senate passes a budget. (Wall Street Journal) How is it possible to run a country without a budget? Well, simple really, the government doesn’t have to play by the same rules you and I do. Can you imagine if you just didn’t keep track of your finances for four years? Just continue to spend like there was no tomorrow and if you felt like you were getting too deep in debt, just announce that you are going to extend or raise the amount of debt you are going to have?
The U.S. Senate narrowly passed the budget. Do they ever pass anything with everyone in agreement? I doubt it. The budget plan was passed by a 50-49 vote in the Democratic-controlled chamber. Four Democratic senators facing tough re-election campaigns in 2014 joined all the Senate Republicans in opposing the measure, which seeks to raise nearly $1 trillion in new tax revenues by closing some tax breaks for the wealthy.
I’m a bit confused as to how the government method of accounting works. They’re going to raise $1 trillion by closing some tax breaks, OK, I guess I buy that, although I think it is more speculation than fact. But I recently heard the president say that by increasing the debt ceiling to $16 trillion instead of $18 trillion he has reduced our National debt by $2 trillion.
…What?
Congress will be out of town for a two-week spring recess.
I guess after three months of work, Congress is worn out and needs a little va-ca. I guess passing a major tax increase, raising the federal debt limit, allowing $85 billion in spending cuts to take effect and enacting a bill to keep the government operating only through Sept. 30, really takes it out of you.
This budget mess is not over. It still needs to pass the house and we all know that it is not going to be that easy. With the Democrat controlled Senate and Republican controlled House, it seems like nothing ever gets done. Well, nothing of any importance. If there is a spotted, ring-neck, hootie bird spotted in a field in Whocares county in the state of Ridiculous, they have no problem agreeing that there should be millions spent of studying it and determining why it will only crap when it is facing north. …or some such nonsense.
The problem is that each side has a different view on how our country should be run. The Democrats, keeping up the stereotype, seem to be all about tax and spend and “entitlement” programs with no regard for a budget, whereas the Republicans appear to be for a smaller government and controlled spending.
The House wants a balanced budget by 2023
The House plan ostensibly brings the government’s taxes and spending into balance by 2023 with cuts to domestic spending even below the levels of automatic across-the-board cuts roiling federal programs now, and it orders up dramatic and controversial changes to Medicare and the tax code.
The Senate plan, by contrast, includes $100 billion in upfront infrastructure spending to bolster the economy and calls for special fast-track rules to overhaul the tax code and raise $975 billion over 10 years in legislation that could not be filibustered. Even with that tax increase and prescribed spending cuts, the Senate plan would leave the government with a $566 billion annual deficit in 10 years, and $5.2 trillion in additional debt over that window.
As if all of this isn’t enough to make your head explode, coming this summer… Congress must again raise the government’s statutory borrowing limit or risk defaulting on the federal debt. …The good ole Debt Ceiling problem is coming back.
So the Senate passed a budget, the first in 4 years, but guess what? It will never be passed into law as it is. …and no one seems to every compromise.
I think it’s better for me to just stick my head back in the sand and stop watching the news.
…I have had just about enough.
Change in Terms: Credit card reform, is it in your best interest
Relief is on the way – but at a price.
The Credit Cardholders’ Bill of Rights Act of 2009 has landed on President Obama’s desk after passing the House Wednesday.
When signed into law, it will affect the pocketbook of every man, woman – and yes, teenager – who uses credit cards, only to find interest rates inexplicably jacked up and teaser rates that seem to last just minutes before ballooning to double digits. It will revolutionize the market by restricting when and how a card company can raise an individual’s interest rate, who can receive a card and how much time people are given to pay their bill.
“The legislation will level the playing field for consumers by eliminating ‘gotcha’ practices such as double-cycle billing and anytime-any reason interest rate hikes,” said Greg McBride, senior financial analyst at Bankrate.com in North Palm Beach.
It’s not without a cost: “Even consumers with very good credit will see lower credit limits, higher rates and higher fees than they have been accustomed to in recent years,” McBride said.
Yet, consumers with good credit say they already have been targeted for lower credit limits, sharp rate hikes or both.
Patrick Johnson, 28, of North Palm Beach, a biomedical equipment technician, said HSBC Master Card took too long to process his online payment, then said he was late and raised his interest rate to 29 percent. “It will be years before I pay this off,” he said.
Rafi Davidoff, a Delray Beach resident and recent college graduate, said his Royal Bank of Scotland credit card shot up from 6.99 percent to 15.99 percent without notice.
“When I called them to ask for the reason why my interest rate went up, they said in order for them to stay in business, they raised my rate,” Davidoff said.
Other frustrated consumers have complained to the Florida Attorney General’s Office in increasing numbers. There were 836 credit card complaints in all of 2006; there have been 640 already this year.
Banks, which opposed the legislation, say they will need to make up the cost somewhere, and cardholders who pay off their balance in full each month could see new annual fees and lucrative rewards programs canceled. Credit could become harder to come by, too.
That may happen sooner rather than later. Most reforms will not take effect for nine months. “In the meantime, brace yourself,” McBride said.
McBride points out that since the Federal Reserve approved similar new rules for the credit card industry in December, card issuers have been rushing to raise rates and cut credit limits before those regulations take effect in 2010.
Nick Bourke, manager of the Safe Credit Cards Project at the Pew Health Group, insists that companies already offering transparent pricing won’t have to drastically change how they do business. Lenders probably could cover costs with small annual fees in the $15 to $20 range or increase upfront interest rates, he said.
“Nothing requires pricing to go up and benefits to go down,” Bourke said. “The only thing that is required is that the price offered actually reflects the cost of using the card.”
Johnson is hopeful the new legislation will change some credit card practices, but, he said, “I don’t have too much faith in it. I am sure there will be loopholes.”
DEBTHELPER.COM 