Tag Archive for 'national security'

Making hard financial decisions

Congress and the Obama Administration are in a great debate over our current financial condition of deficit spending. For several years, the U.S. government has been spending more than it takes in, which for governments, businesses and households alike, is a scenario that cannot go on forever.

In order to appreciate the budget balancing task, it’s important to understand that the federal budget is made up of two key financial commitments:  discretionary spending, which Congress has to renew each year, and mandatory spending, which renews automatically. Social security, Medicare, Medicaid and certain national defense items comprise mandatory spending.

The mandatory stuff amounts to about 60% of the annual federal budget, with about 35% for discretionary and 5% to pay interest on the national debt. But about half of the discretionary budget is discretionary defense spending, which only leaves about 18% of annual federal spending for everything else.

So, there you have it:  The easiest part of the debate is over less than 20% of the federal budget. Since all of this piece of the pie can’t be eliminated, you should be getting the picture that in order to move the deficit cutting needle enough to reverse the current deficit trend, hard decisions will have to be made in defense and entitlements. And that’s the hard part of the debate.

But debate it and fix it we must. Because, while the U.S. still has more assets than liabilities, that won’t last long if we continue to spend more than we take in.

We wanted to know what you thought about this issue, so last week we asked this question in the Newsletter and on our website: Funding for “entitlements,” like Social Security and Medicare, are a major part of the U.S. government’s unsustainable long-term budget deficit. Would you be willing to include changes to these programs to reduce the long-term deficit?  The results were impressive.

Those who believe everything should be put on the debate table represented 83% of our respondents. Those who think entitlements should be off the table came in at just 11%, with the remaining 6% saying they were not sure.

One thing is for sure: The question is not whether difficult financial decisions will be made - that is coming, sooner rather than later. The question is whether Americans can gin up the discipline and leadership to make the hard decisions ourselves before our non-American creditors have to do it for us.

Based on our poll results, the electorate seems to be more disciplined than our political leaders.

Thanks for being part of my community. I’ll see you on the radio - and on the Internet.

Recently on The Small Business Advocate Show, I talked with my friend and Brain Trust Member, Rich Galen, publisher of Mullings.com and talking head of the Republican persuasion,  and Ted Fishman, author of China, Inc. and Shock of Gray, about our current budget crisis. Click on the links below, take a few minutes to listen and leave your thoughts.

Who caused America’s current budget crisis? with Rich Galen

Has the U.S. debt become a national security issue? with Ted Fishman

Kiplinger reports on employment, COBRA and privacy

One of the confusing issues associated with all of the government’s involvement in the economic recovery is the new and adjusted regulations, especially with regard to human resources.  A perfect example of this is changes that affect the health care insurance provision for severed employees, COBRA. Be sure to check with an HR professional to make sure you’re keeping up.  Compliance with all of these issues is one reason many small business owners outsource their payroll functions and, sometimes, all HR functions. 

Recently on The Small Business Advocate Show, Kiplinger Washington Editors‘ Senior Editor, Joan Pryde, joined me to report on employment growth prospects, changes in the COBRA laws and the tension between our nations balancing national security with privacy issues. Joan is a long-time member of my Brain Trust and has been reporting on the Kiplinger Letter with me since 1999. Take a few minutes to listen to what Joan has to say and, as always, leave your own thoughts. Listen Live! Download, Too!




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