Balancing our Budget

I've been posting on how we teach kids about math and money. For many reasons, we try to help them understand that spending less than what you have is the best long-term financial strategy.

Of course, that isn't the case in all situations,. We sometimes borrow money, to (1) buy a house, (2) buy a car, (3) pay for college, etc. In the government, we borrow for major events too - building highways, paying for wars, starting off new programs before the taxes roll in, etc.

Today our federal government is finally getting around passing a bill to balance its budget.

Go here to download a copy of the proposal.

If you are not a financial news analyst, you'll probably be letting someone else read it. In fact, I skimmed through its 74 pages for you, and have this to report:

• There aren't any pictures!

• There are lots of big words - such as sequestration: 
• a. to renounce or disclaim, as when a widow appears in court and disclaims any interest in her deceased husband's estate; she is said to sequester; 
• b. to take something controversial out of the possession of contending parties and deposit it in the hands of a third person; this neutral party is called a sequestor;  
• c. denotes the act of seizing property by court order;  
• d. the isolation of a jury from the public, or the separation of witnesses to ensure the integrity of testimony.

• There are plenty of tricky math and money problems in the proposed law:   
• "reduced by a dollar amount calculated by multiplying the enacted level of non-exempt budgetary resources in that account, at that time, by the uniform percentage necessary to offset the total dollar amount by which outlays are not reduced in military personnel accounts"

• There are calculations requiring careful clockwork:
• Two hours of debate, equally divided and controlled by the proponent and an opponent ... all debatable motions and appeals shall be limited to not more than 20 hours, which shall be divided equally between the majority and minority leaders ... any single debatable motion or appeal may not exceed 1 hour, divided equally between those favoring and those opposing. All time used for consideration of the joint resolution, including time for quorum calls and voting, shall be counted against the total 20 hours.

• There are fancy calendar calculations too:
• Not later than 7 calendar days (excluding Saturdays, Sundays, and legal holidays) after the date of enactment of any discretionary appropriation ... outlays for the current year, if any, and the budget year, and each outyear ... shall equal the baseline levels of new  budget authority and outlays using up-to-date concepts and definitions, minus those levels using the concepts and definitions in effect before such changes.
• The term ‘Outyear’ means a fiscal year one or more years after budget year; that is, further away in the future

• We have adjustments for "emergencies", based on history:
• DISASTER FUNDING - if during 2012 through 2021, appropriations for disaster relief [are made by Congress] the fiscal year [budget] shall be adjusted but the total is not to exceed the average funding provided for disaster relief over the previous 10 years, excluding the highest and lowest years.
• The term ‘emergency’ means a situation that: 
• a. requires new budget authority and outlays flowing therefrom, for the prevention or mitigation of, or response to, loss of life or property, or a threat to national security; and this emergency is unanticipated, ie
• b. sudden, which means quickly coming into being or not building up over time
• c. urgent, which means a pressing and compelling need requiring immediate action
• d. unforeseen, which means not predicted or anticipated as an emerging need
• e. temporary, which means not of a permanent duration

• It's not very interesting reading, but it takes lots of concentration to follow:
• Unless a joint committee bill achieving an amount greater than $1,200,000,000,000 in deficit reduction as provided in section 401(b)(3)(B)(i)(II) of the Budget Control Act of 2011 is enacted by January 15, 2012, the discretionary spending limits listed in section 251(c) shall be reduced ... {with} half of the total reduction calculated pursuant to paragraph (3) for that year to discretionary appropriations and direct spending accounts within function 050 (defense function) and half to accounts in all other functions (nondefense functions).
  

•  Finally, there are goals and aspirations, turned into law:

• Effective on the date of enactment of this section, for the purpose of enforcing section 201, the Chairman of the Senate Committee on the Budget shall reduce any balances of direct spending and revenues for any fiscal year to 0 (zero).

Wouldn't seem easier to say "spend less than you take in?" That's what my grandfather told me when I was a kid, and I understood what he meant even then.