FEDERAL GOVERNMENT
BASELINE BUDGETING

Baseline budgeting is an accounting procedure for creating a budget for future spending. It assumes future budgets will equal the current budget plus any adjustments for inflation and growth rates.

The Federal Government uses baseline budgeting for establishing future funding requirements. The more expansive and intrusive the government gets, the bigger the baseline budget is, and the more money the Federal Government needs to take from the private sector to fund itself.

The increasing cost of the Federal Government is an economic burden on the private sector economy.  

Federal Government revenues are resources taken out of the private sector free enterprise system to support government spending. A limited Government that honors a balanced budget is a viable Government. A Government that refuses to enact a budget and spends faster than it can print money and expects to use that spending as baseline budgeting is irresponsible and an economic danger to society.

Instead of reducing the size of government, politicians resort to creative ways to take more money out of the private sector to make up for bad economic Government policies. This increasing cost of big Government on the private sector suppresses your realization of new money making ideas and ultimately reduces potential revenues to the Government..

The Federal Government uses baseline budgeting for establishing future funding requirements over a ten year projection. Twice a year the Congressional Budget office (CBO) prepares a baseline budget projection of government revenues; government costs and projected surplus or deficits.

This analysis is supposed to be designed as a reference point for assessing possible future economic policy changes. The system cannot work when one party thinks that the way to solve the out of control Government deficit problem is to massively increase Government spending.

The baseline budget basically refers to the current year's spending levels plus an automatic three to eight percent funding increase authorized by "continuing resolutions" referred to as baseline budgeting for every single agency in government for the following year.

The assumption of a baseline budget is that there is no waste fraud or abuse in Government that can be cut. 


What is Sequestration?

This automatic baseline budget spending cut is called "sequestration." Sequestration is the fiscal policy procedure adopted by Congress in Nov of 2011 called the Budget Control Act of 2011 (BCA) as a means of withholding a marginal amount of the yearly baseline budget increase if Congress could not agree on ways to reduce the size of the Federal government's budget deficit.

Sequestration is a procedure that tries to cut back on some of the excessive spending and limit the out of control growth of the federal debt.

Because Congress could not agree on ways to cut the federal budget deficit, an "automatic" form of baseline budget spending cutbacks was introduced by the President and was agreed upon in congress as a condition for raising the Government debt limit.

The sequestration allowed the President to raise the debt limit by $2.1 trillion which is currently estimated to be sufficient only through early 2013. That equates to $2.1 trillion Government spending over and above Government revenues in just over one year. In other words, that is 2.1 trillion dollars borrowed in just over one year.

The current sequestration means that only a portion of the automatic baseline budget increase was cut. There will be no less spending this year than last year. It is only the built-in automatic increases that have a portion of their automatic increases reduced. In-other-words, those "draconian"  government spending cuts that the President and his administration, the democrat surrogates and the left stream media are trying to scare the American public with, is only a political stunt to blame the bad economic outlook on the sequestration and the Republicans in Congress. To try to score the maximum political points from the sequestration, Obama will be sure to make the sequestration (reduced INCREASE in spending) as painful as possible to the American people and blame the Republicans for his petulance. All while Obama refuses to cut back on other areas of blatant waste fraud and abuse.

The sequestration only imposes caps on Government discretionary programs in an attempt to reign in government deficit spending by only $1.2 trillion over the next TEN years, relative to the Government baseline spending of 2010. 

Sequestration was originally scheduled to take effect on Jan. 2, 2013. However, it was delayed until March 1, 2013, by a deal struck on New Year's Eve, called the American Taxpayer Relief Act of 2012.


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