Budgeting by Continuing Resolution Continues, Congress Earns its Dismal Approval Ratings
September 27th, 2008By David Bruggeman, Prometheus - The Science Policy Blog
Both NPR and Congressional Quarterly are reporting that amidst all of the financial bailout negotiations, Congress today did clear a Continuing Resolution (CR) to fund the government until early March 2009. This marks the third consecutive fiscal year (which starts October 1) in which the Congress has failed to pass even a majority of its appropriations bills before the start of that fiscal year. This is just one reason why their approval rating is lower than the President’s.
This professional incompetence is both not surprising and a bad sign for any programs depending on consistent funding - whether that funding is constant or promised with a constant rate of growth. I think research communities need to seriously consider finding alternative sources of funding. Independent of the twin fiscal drains of war and bailouts (the auto industry got $25 billion today), federal funding can no longer be counted on, even at the more meager levels. The biomedical community completely failed to manage its wealth of riches when the NIH budget was doubled, and they have too many students and too many researchers landing hard. I am concerned that all research communities in this country will be neither ready nor able to handle a decrease in resources. We’ve just been on the gravy train too long to see it crashing into the painted hole in the rock.
I’m afraid I can’t describe this in stark enough terms for people to act accordingly. If you thought science and technology were ignored before, get ready for fiscal apathy. If you think the expected crunch of the mid-90s following the Cold War was successfully avoided, consider the possibility that it was only delayed 15 years. To borrow climate science language - adaptation strategies are needed now that mitigation appears to be unsuccessful.
26 comments:
"I’m afraid I can’t describe this in stark enough terms for people to act accordingly. If you thought science and technology were ignored before, get ready for fiscal apathy." (Article)
LANL and LLNL are in for a big dose of this fiscal apathy. We were due for about $380 million worth at LANL this next year but will likely be saved by the budget CR. Not so for the fiscal years thereafter.
It would be reassuring to see LANS upper management preparing in some way to mitigate what's coming, but they are doing nothing.
They've largely dropped the ball on project diversification. They dropped the ball on efficiency. They drop the ball on any meaningful cost savings and in lowering the outrageous FTE labor rates.
I must say, though, that they are amazingly good at collecting that $80 million annual profit fee. On that one, they seem to never fail.
Nothing for health care. Nothing for science. Nothing for fixing up our decaying infrastructure. Over and over we've been told by the politicians: "We can't afford it!".
But $700 B to help bail out mega-rich Wall Street CEOs? Why, yes, sir, we'll get right to it. And in record time, too! How sickening.
This money could have been used to help keep people in their homes, thus stopping foreclosures and getting to the root cause of the problem and not just fix one of its many symptoms.
I'm disgusted to be called an American tonight. What has happened to this country? Somehow this whole sleazy episode is a fitting end to the failed Bush Presidency.
Don't you mean you're proud to be an American but disgusted with your government?
“Government, even in its best state, is but a necessary evil; in its worst state, an intolerable one.”
Thomas Paine
Can you really be proud to be an American despite your Government, or inspite of it?
Yes.
What happened with this bailout is as follows:
Wall Street just had a massive de-leveraging operation while the US Treasury just took on massive amounts of leverage (i.e., risk).
Realize that this is a serious game changer. It puts the US Government at a serious and very real risk of financially imploding. Can the US Government shoulder this massive new debt load? I don't know. The trump card of government taxing power is useless when citizens have no money to pay increased taxes. The borrowing power of the US Government is null and void if overseas lenders believe that our government is going broke.
Another key point that people need to realize is that the $700 B (and,yes, all of it will be spent) will only cover for about 10% of the estimated $7 trillion in bad mortgages out there in places like CA, FL, and NV! It's a drop in the bucket against a mightly tsunamai of toxic loans.
In the end, I doubt it will work and when it becomes clear that it has failed... well, let's not even talk about that right now.
On the positive side, if you never saved and invested, then you have no skin in this game, so why worry? You have lost nothing.
In fact, the "credit lubricating" effect of this Congressional action just made it easier to go out and get another loan to buy more Really Cool Stuff and then to NOT pay it back... YET AGAIN!!!
Neat, huh?
It's as if Congress went to the casino and put all of our borrowed money on the color red, and then yelled at the roulette croupier, "Spin the wheel!"
Rather than making this painful and slow transition from capitalism to socialism, let's just cut to the quick and go straight to communism.
All hail the Great Leader! Oceania must be destroyed!
NEW YORK (AP) Sept 29 -- Financial markets endured another difficult session Monday ahead of a planned House vote on an unpopular $700 billion plan to rescue troubled financial companies and as investors examined a deal for Wachovia Corp. The Dow Jones industrial average fell nearly 300 points, while demand for safe-haven buying in government debt remained high ahead of the vote.
Wall Street fears the government's plan to buy up toxic debt wouldn't be sufficient to resuscitate nearly frozen credit markets.
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Quick! Somebody please go tell Rep. Barney Frank that it's time to Double-Down on the bet!
Breaking News! Massive amounts of more Federal Reserve "easy money" is suddenly coming on top of today's astronomical $700 billion Treasury buy out of toxic mortgage debt.
This is quickly becoming an "all or none" type situation for the US economy. It's the Mother of All Bailouts.
The amount of US Treasury bonds that will soon need to be floated for all this activity is going to be enormous. When we get to the other side of this nightmare, either the US economy will have been saved or we'll have a new United States that people will no longer recognize as such (and I don't mean that in a good way).
Let's all hope and pray it works!
* Fed Pumps Further $630 Billion Into Financial System *
Sept. 29 (Bloomberg) -- The Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash to alleviate the worst banking crisis since the Great Depression.
The Fed increased its existing currency swaps with foreign central banks by $330 billion to $620 billion to make more dollars available worldwide. The Term Auction Facility, the Fed's emergency loan program, will expand by $300 billion to $450 billion.
Almost every poster here seems to think the so-called "bailout" is a bad idea. Has anybody paid atttention to what was already happening in the short term paper markets? Can you name one company of any size at all that can stay in business without short-to-mid term loans to, for instance, maintain retail inventory, hire subcontractors and buy materials for a construction job, or even make payroll? Jeez, folks, this wasn't a "bailout" for Wall Street CEOs, it was an exercise in stabilizing a variety of financial markets that were about to crash and burn, worldwide. THAT would make $700B look like chump change.
The question for us in northern New Mexico is: How will the addition of 700 Billion to the negative side of our federal check-book affect out government's ability to support the lab's 2 Billion price tag, along with all of the other entitlement programs, repair highways (funding for infrustructure) etc? We should be prepared to see cuts that only live in the minds of John Dingel and Mr. Barton....We in northern New Mexico are already a 3rd World economy, without LANL to feed the north, will we be eligiable for foriegn aid?
"This money could have been used to help keep people in their homes, thus stopping foreclosures and getting to the root cause of the problem and not just fix one of its many symptoms."
Man I am so sick of the "keep people in their homes" line. You can stay in your home if you keep paying the mortgage. That's how it is, that's how it's always been. You can't pay, you're out. You signed a loan for 10x your annual income and now you can't afford it... tough nuts. The root of the problem is that houses are too expensive and everyone is living on easy credit. Trying to prop up house prices at unreasonable levels is not a solution. The DOW needs to get back down to 7-8000 range, homes at 3x income, 20% cash downpayment. Then it will be fixed.
2:43 pm: "The question for us in northern New Mexico is: How will the addition of 700 Billion to the negative side of our federal check-book affect out government's ability to support the lab's 2 Billion price tag, along with all of the other entitlement programs, repair highways (funding for infrustructure) etc?"
If you think that is the "question for northern New Mexico" you are an idiot. The question for EVERYONE is "how does the US economy survive if there is no money to be had by anyone by borrowing?" The answer is, if credit dries up, EVERYONE goes broke, including all the businesses you are used to getting what you need from on a daily basis. They will be boarded up within weeks. Wake up!! If your attitude is that provincial, you will be one of the first to starve, and wonder why your local Walmart just closed its doors.
9:06, yes but you don't seem to understand my point. What about northern New Mexico?
Best guess.
Northern New Mexico goes back to subsistence farming.
LANL disappears (more precisely - has its budget decrease between 1 and 1.5 billion). The town of Los Alamos shrivels, at least for a while.
The income to Northern New Mexico decreases by about 2.5 billion.
Sandia and Kirtland also take big hits.
Also, since much of this deficit will be put on a charge card for our children to pay, they will be poorer.
As a point of interest, since both Udall and Pearce voted against the bailout, why should either of them become the junior Senator from New Mexico? Where were Bingaman and Domenici during this fiasco?
It seems that out representatives, instead of watching out for their constituents or even 'leading,' voted 'present.'
LANL will take some heavy hits. 2000-3000 jobs will be lost, the housing market will be dire, and northern New Mexico will suffer to the tune of the 1920's. This is not a drill.
Sen Pete Dominici is very busy as of late trying to cover up for the US Attorney's firing. He and Heather Wilson are under investigation for wrong-doing. What a country, how long can we last with these people in power?
A loss of 2000 employees sounds about right to me given the draconian NNSA budget cuts that will probably be issued and passed by the next Administration.
However, don't expect Sen. Tom Udall to offer much help when these cuts hit the lab. That's already clear from his track record as our Congressman. And if by some unlikely fate we see the name of Sen. Pearce instead of Sen. Udall, Pearce will likely be powerless as he'll be dealing with both an Administration and a Congress that is hostile to his party. There are few good options left for LANL with the loss of our patron saint, St. Pete.
That shortage of scientists keeps growing.
http://triangle.bizjournals.com/triangle/stories/2008/09/29/daily28.html?ana=yfcpc
"GlaxoSmithKline said Tuesday that it is trimming another 850 jobs from its payroll in the United States and United Kingdom.
This round of job cuts is concentrated on the pharma giant’s research and development personnel. The restructuring is expected to shave off some 6 percent of R&D staff.
The cuts will affect Glaxo’s RTP facility, where the company employs more than 4,000 people, but no specifics were released.
“These changes are necessary as part of GlaxoSmithKline's longer-term strategy to ensure that we can invest in key areas of future growth and evolve our business to compete effectively in what is a rapidly changing and challenging environment for pharmaceutical companies,” said Melinda Stubbee, a spokeswoman from Glaxo’s Philadelphia office.
In June, the company said it would cut 2 percent of its global R&D force, or about 350 workers, at sites in the U.S., London and Italy.
A month later, Glaxo (NYSE: GSK) announced that it will double its research and development staff in China over the next few years. The company expects Shanghai to have more than 350 R&D personnel in the next few years.
Earlier this year, GSK eliminated some 70 jobs from its Zebulon facility."
"LANL will take some heavy hits. 2000-3000 jobs will be lost, the housing market will be dire, and northern New Mexico will suffer to the tune of the 1920's. This is not a drill.
9/30/08 2:14 PM"
It will be the same for the whole country. We will be like Bangladesh but with nukes and fat people.
8:01 pm: "We will be like Bangladesh but with nukes and fat people."
And guns, don't forget guns. Got yours?
"As a point of interest, since both Udall and Pearce voted against the bailout, why should either of them become the junior Senator from New Mexico? Where were Bingaman and Domenici during this fiasco?
It seems that out representatives, instead of watching out for their constituents or even 'leading,' voted 'present.'"
9/30/08 1:51 PM
They were correct to vote against it, and with even more pork now added by the Senate, they should vote against it again tomorrow.
Glaxo's firing of scientists here in America and hiring them like crazy over in China is a growing trend for most US corporations. Companies like IBM are doing the same thing.
The result of this trend will be to shift the control of the world's intellectual power to Asia. This shift will be complete when the Chinese and other Asians start buying up US companies like Glaxo and IBM.
The Asian buyouts of America's great companies are right around the corner. A economically sick and defeated America won't be able to deny these buyouts. We need the cash!
10/3/08 11:24 AM ... Where have you been? Asia and India are the holders of the present intellectual acumen and are postured to take irreversable control. Thanks to the dumbing down of our schools and the culture of brainwashed kids that have learned to demand anything they want and get it without paying the dues to earn it on their own. Ethics and morals are gone in this country. Tattoos and thuggery prevail over the learned.
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