The U.S. Credit Rating Just Dropped. It’s Time for Radical Budget Reform.

Published

2 years ago

August 10, 2023

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Fitch Ratings just downgraded the U.S. government’s credit rating due in part to Congress’ erosion in governance. Indeed, year after year, we see the same political theater unfold: last-minute deals, deficits, and, all too often, the passage of gigantic omnibus spending bills without proper scrutiny, along with repeated debt ceiling fights and threats of shutdown.

But these are just symptoms of a budget-making process that remains in desperate need of reform. With legislators chronically delinquent about following their own rules, the change may need to be as much cultural as procedural. No matter how good the rules are, they’re useless if politicians ignore them. And in a world where politicians are rarely told no when it comes to creating or expanding programs, most simply refuse to have their hands tied or behave as responsible stewards of your dollars.

Adding insult to injury, the budget process has become a winner-takes-all competition, leaving the minority party with little to no voice in budgetary outcomes. Under these conditions, battles over the debt ceiling, continuing resolution votes, and threats of shutdowns are the only ways for the voiceless to state their demands.

Bad processes lead to bad outcomes. The lack of oversight and the general absence of a long-term vision is creating inefficiency, waste, and red ink as far as the eye can see. Without real reform, no one can stop it. So, let’s have some real reform.

What we need is a comprehensive budget process under which programs like Social Security, Medicare, and Medicaid are no longer permitted to grow without meaningful oversight. Combined with other mandatory, more-or-less automatic spending items, they make up more than 70 percent of the budget. Thus, they must be included in the regular budget process and subjected to regular review. Only then will our elected representatives be forced to stop ignoring the side of the budget that requires their attention the most.

This would also help deal with the fact that entitlement spending is, as every serious observer knows, unsustainable. Unless reformed, these programs will drain wealth not only from the government but from the economy. Ensuring their sustainability must be part of any serious budget process reform.

Enter a “Base Closure and Realignment Commission (BRAC)”-style fiscal commission, an idea promoted by the Cato Institute’s Romina Boccia. This commission would be staffed with independent experts appointed by the president. It would be “tasked with a clear and attainable objective, such as stabilizing the growth in the debt at no more than the GDP of the country, and empowered with fast-track authority, such that its recommendations become self-executing upon presidential approval, without Congress having to affirmatively vote on their enactment,” Boccia explains.

I’m uneasy about delegating the president power to appoint “experts.” Unfortunately, Congress has proven they will never seriously address the problem unless forced to. The idea is not unprecedented. Congress has already delegated a lot of its legislative power to administrative agencies and the executive branch. It’s also how the political class dealt with the closures of military facilities after the Cold Waranother set of hard choices they refused to make on their own.

What’s more, Congress would retain some veto power. If they disapprove of the proposal, the House and Senate can reject it through a joint resolution within a specified period. Whether it’s the best solution to address our fiscal problems remains to be seen, but it’s worth considering.

There are many more budget reform ideas out there. I’ll leave you with one more. For years now, Congress has failed to pass a budget, and in turn brought the country to the brink of a government shutdown by fighting over the need for a continuing resolutiona temporary measure that extends previous funding levels for a few months.

Making continuing appropriations automatic in case of a lapse could remove the threat of shutdowns. As explained in one senator’s proposal, if appropriations work isn’t done, “implement an automatic continuing resolution (CR), on rolling 14-day periods, based on the most current spending levels enacted in the previous fiscal year.” Further, to avoid overrelying on CRs, “all Members of Congress must stay in Washington, D.C., and work until the spending bills are completed.”

The road to reform is never easy. Entrenched interests and complexity, combined with congressional spinelessness, are a daunting challenge. But the stakes are too high to shy away. It’s time to completely rethink the way we approach the federal budget, grounding our efforts in the principles of transparency, accountability, and fiscal responsibility.

World

Hamas names three Israeli hostages it says it will release today

Published

2 hours ago

February 8, 2025

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Hamas names three Israeli hostages it says it will release today

Hamas has released the names of three Israeli hostages it says it will release today in the fifth such swap of a fragile ceasefire in Gaza.

The hostages are Eli Sharabi, Ohad Ben Ami and Or Levy, Hamas armed wing spokesperson Abu Obeida said in a Telegram post.

An Israeli official confirmed Israel had received the three names from Hamas.

In return for the captives’ release, Hamas said it expects 183 Palestinian prisoners to be released.

Both Mr Ami, 56, and Mr Sharabi, 52, were taken from Kibbutz Be’eri during the 7 October attack. The cross-border attack saw around 1,200 Israelis killed and around 250 people taken hostage.

Mr Levy, 34, was abducted from the Nova music festival.

Of the Palestinian prisoners being freed, 18 have been serving life sentences, 54 were serving long sentences and the vast majority, 111, were detained in Gaza during the war.

Eli Sharabi

Mr Sharabi’s wife Lianne Sharabi was born in Bristol.

She, along with their children, 16-year-old Noiya and 13-year-old Yahel, were killed in the 7 October attack.

His brother Yossi was also killed after being taken hostage.

In a statement after news he would be released was announced, Mr Sharabi’s lawyers said the “family has already lost too much… [they] are pleased and relieved that Eli Sharabi is reportedly on the list for release by Hamas”.

It added: “It is long past time to bring Eli home.”

Or Levy

Mr Levy was captured by militants from a bomb shelter near the Nova music festival.

His wife Einav was killed during the 7 October attack. Their son Almog, a toddler, is staying with his grandparents.

Mr Levy is from the city of Rishon Lezion, where he worked as a computer programmer.

Some of Mr Levy’s family previously spoke about his kidnapping and the death of his wife.

Speaking around Hanukkah last year, his brother Michael Levy told Sky News’s Yousra Elbagir: “I have three little girls but it won’t be the same. Hanukkah is a happy holiday – you light candles, you sing and eat all sorts of things but for us it is not a real holiday without Or.”

Ohad Ben Ami

Mr Ben Ami, a father of three, was taken hostage with his wife Raz, who was released during the brief ceasefire period in November.

His daughter Ella Ben Ami previously spoke to Sky News about missing her dad Mr Ami, as she pleaded for his release.

“On the eve of Christmas, on the 24 December, it will be his birthday, and I don’t want to celebrate it without him,” she told Sky News in 2023.

Ms Ami was previously one of the first to tell the world what happened on 7 October, calling an Israeli TV channel while hiding.

Row over aid access

Earlier on Friday, Hamas accused Israel of breaching the ceasefire accord and held off announcing the names of the Israeli hostages until the deadline had passed.

The militant group claimed Israel delayed the entry of hundreds of trucks carrying food and other humanitarian supplies agreed under the truce deal and held back all but a fraction of the tents and mobile homes needed to provide people shelter in the devastated enclave.

“This demonstrates clear manipulation of relief and shelter priorities,” Hamas said in a statement.

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COGAT, the Israeli military agency that is overseeing the aid deliveries into Gaza, denied the accusation.

It added Israel would “not tolerate violations by Hamas”.

The claims and counter-claims highlight the fragility and uncertainty of the ceasefire.

This has been heightened by US President Donald Trump recently saying the US could take over Gaza and move the Palestinian population out.

Israel’s air and ground war in Gaza has killed more than 47,000 Palestinians, according to Gaza health officials, and displaced the majority of the strip’s population.

Fragile ceasefire deal

So far, 13 of the 33 female, older male and child hostages set to be released in the first phase of the multi-phase agreement have returned to Israel.

Five Thai hostages have also been released.

Hundreds of Palestinian prisoners and detainees have been released in exchange, often returning to large crowds.

Work on the second stage of the agreement, aimed at the release of around 60 male hostages and the withdrawal of Israeli troops from Gaza, has begun.

An Israeli negotiating team was expected to fly to Doha today, according to media reports.

World

‘Let’s do a deal’: Zelenskyy touts Ukraine’s rare earth stores to Trump

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2 hours ago

February 8, 2025

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'Let's do a deal': Zelenskyy touts Ukraine's rare earth stores to Trump

Volodymyr Zelenskyy has told Donald Trump “let’s do a deal” as he offered the US a partnership over Ukraine’s stores of rare earth and minerals.

Earlier this week, Mr Trump said he wanted Ukraine to supply the US with critical resources in exchange for financial support in its war with Russia.

In an interview with Reuters on Friday, Mr Zelenskyy said: “If we are talking about a deal, then let’s do a deal, we are only for it.”

While emphasising that Kyiv was not proposing “giving away” its resources, he said he was open to a mutually beneficial partnership to develop them jointly.

Ukraine-Russia war latest: Ukrainian forces seize land inside Russia

Rare earths are a group of 17 metals that are vital in the production of high-performance magnets, electric motors and consumer electronics.

Mr Zelenskyy touted the country’s reserves of titanium and uranium as Europe’s largest.

According to the World Economic Forum, Ukraine also has the potential to become a key supplier of lithium, beryllium, manganese, gallium, zirconium, graphite, apatite, fluorite and nickel.

Showing a map of Ukraine’s mineral deposits, he then said Russia currently has control of less than 20% of the country’s mineral resources – but that includes about half its rare earth deposits.

“Putin is not just grabbing them [minerals] along with the land, he is already thinking about how to get other partners in his alliance – North Korea, Iran… and he will give them access,” Mr Zelenskyy said.

“This is very rich land. This does not mean that we are giving it away to anyone, even to strategic partners. We are talking about partnership…

“Let’s develop this together, make money, and most importantly, it’s about the security of the Western world.”

The Ukrainian president added that Kyiv and the White House were discussing the idea of using the country’s underground gas storage sites to store American liquefied natural gas, calling it “very interesting”.

He also said he would like to discuss the US having priority when it came to rebuilding Ukraine, saying it would amount to “a lot of money for business”.

‘Not accepting Russia’s ultimatums’

He also insisted that Mr Trump must meet with him before he meets with the Russian president, “otherwise it will look like a dialogue about Ukraine without Ukraine”.

He added: “I don’t know what compromises can be discussed at the negotiating table, we have not reached that point…

“It is important for people to understand that Ukraine is negotiating, not accepting ultimatums from Russia.”

He also stressed Ukraine’s need for security guarantees from its allies as part of any settlement.

It comes as Mr Trump said he may meet with Mr Zelenskyy in the White House as early as next week. The two last met in New York in September last year.

Mr Trump also repeated his interest in meeting the Russian president with whom he said he always had a “good relationship”.

Speaking to reporters while meeting with Japanese Prime Minister Shigeru Ishiba, Mr Trump said: “I’d like to see it end, just on a human basis. I’d like to see that end. It’s a ridiculous war.”

Mr Zelenskyy also told Reuters in his interview that thousands of North Korean soldiers have now returned to fight Kyiv’s forces in the Kursk region of Russia.

A Ukrainian special forces commander told Sky News last month that it appeared that North Korean troops had been temporarily pulled back from the frontline after heavy losses.

The commander, who went by the codename “Puls,” claimed the forces had been seen blowing themselves up with grenades rather than risk capture.

World

Will Trump make space great again?

Published

2 hours ago

February 8, 2025

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The US is back in the race to the moon but this time, the competition is China. Determined not to lose, President Donald Trump is pushing for America to return to the moon, backed by billionaires like Elon Musk and Jeff Bezos. But as costs rise and delays mount, could the focus shift from the moon to Mars?

On the Sky News Daily podcast, Tom Cheshire speaks to Science and Technology editor Tom Clarke and space journalist Eric Berger about the escalating price of securing America’s place in the space race – and whether Mars could be the next “MAGA mission”.

Producer: Emma Rae Woodhouse
Editor: Paul Stanworth