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.

US

Day 20: Inside Trump’s White House

Published

1 hour ago

February 8, 2025

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👉 Follow Trump 100 on your podcast app 👈

Twenty days into Donald Trump’s second term, US correspondents James Matthews and Mark Stone are joined by Washington DC cameramen Ed Young and Michael Herd to take a step back and discuss what it’s like covering the White House under President Trump compared to President Biden.

They also share some of the moments they got close (perhaps too close) to the most powerful man in the world.

You can email James, Martha and Mark on trump100@sky.uk

US

Wreckage found in Alaska for missing Bering Air plane carrying 10 people

Published

1 hour ago

February 8, 2025

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Wreckage found in Alaska for missing Bering Air plane carrying 10 people

A small plane which crashed in western Alaska with 10 people on board has been found and the US Coast Guard (USCG) says there were no survivors.

The Bering Air flight left Unalakleet at 2.38pm on Thursday but contact was lost less than an hour later, the firm’s operations director David Olson said.

On Saturday, in a post on X, the coastguard said: “USCG has ended its search for the missing plane after the aircraft was located approx 34 miles southeast of Nome. 3 individuals were found inside and reported to be deceased.

“The remaining 7 people are believed to be inside the aircraft but are currently inaccessible due to the condition of the plane. Our heartfelt condolences are with those affected by this tragic incident.”

The Cessna 208B Grand Caravan – carrying a pilot and nine adult passengers – was flying across Norton Sound when tracking site Flightradar24 reported it at 5,300ft before contact was lost.

It was travelling from Unalakleet, a community of about 690 people in western Alaska, to Nome, a gold rush town just south of the Arctic Circle.

The flight time is normally just under an hour.

Mike Salerno, a spokesperson for the US Coast Guard, said rescuers were searching the aircraft’s last known location by helicopter when they spotted the wreckage. They lowered two rescue swimmers to investigate.

In a post on Facebook, Nome’s fire department issued an update: “The Nome Search and Rescue Team is spooling up with assistance from the Alaska Air National Guard with recovery efforts.

“From reports we have received, the crash was not survivable. Our thoughts are with the families at this time.”

On Friday, Lieutenant Benjamin McIntyre-Coble, from the Alaskan coastguard, explained that the plane suffered a rapid loss of altitude and speed, according to radar data, but did not expand on the potential cause.

Weather in Unalakleet at take-off time was -8.3C (17F) with fog and light snow, according to the US National Weather Service.

Bering Air serves 32 villages in western Alaska and air travel is often the only option of travelling long distances in rural parts of the US state, especially in winter.

It comes soon after two major air accidents in the US in recent weeks.

Sixty-seven people were killed when a jet and helicopter collided in Washington DC and seven died when a medical plane crashed in Philadelphia.

Science

Atmos Space Cargo’s Phoenix Capsule Set for First Orbital Test on SpaceX Mission

Published

1 hour ago

February 8, 2025

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Atmos Space Cargo’s Phoenix Capsule Set for First Orbital Test on SpaceX Mission

A cargo-return technology developed by Germany-based Atmos Space Cargo is set to undergo its first in-space test with an upcoming SpaceX mission. The company’s Phoenix capsule will be launched aboard the Bandwagon 3 rideshare mission, scheduled for no earlier than April. The capsule has been designed to facilitate the safe return of high-value materials from orbit, particularly benefiting the biomedical sector. The test mission aims to gather crucial data on the capsule’s subsystems, onboard payloads, and reentry performance.

Mission Objectives and Scientific Payloads

According to reports, the Phoenix capsule will carry four payloads, including a radiation detector from the German Aerospace Center (DLR) and a bioreactor from UK-based Frontier Space. The mission’s primary goals include testing Phoenix’s performance in orbit, evaluating data from customer experiments, and deploying its proprietary inflatable atmospheric decelerator (IAD) for reentry stabilisation. This technology, acting as both a heat shield and parachute, is intended to enable a controlled descent back to Earth.

Challenges in Returning Space Cargo

Industry experts highlight that while the cost and complexity of launching experiments into space have been reduced, bringing them back to Earth remains a challenge due to high costs, long turnaround times, and technical difficulties. Atmos Space Cargo has positioned Phoenix as a cost-effective and reliable solution for returning biomedical samples, microgravity-manufactured materials, and other sensitive payloads.

Future Prospects and Industry Impact

Despite expectations that Phoenix will not survive its debut mission, the collected data will contribute to future improvements. Larger iterations of the capsule are planned to carry heavier payloads, including potential returns of rocket stages. Advisory board member and former NASA Deputy Administrator Lori Garver has stated that advancements in reusable and affordable cargo return technology are critical for the future of orbital space operations. The initiative aligns with broader efforts to enhance accessibility to in-space manufacturing and research.