Mark Sanford...slaying an already tamed deficit

Congratulations to Mark Sanford for his victory Tuesday in South Carolina’s First Congressional District. 

Sanford’s campaign message was pretty simple.  Elect him and he would totally focus on reigning in federal spending in order to cut the budget deficit.

Well, in a strange ironic coincidence The Washington Post ran a story on the same day Sanford was elected with this lead, “After four years of trillion-dollar deficits, the red ink is receding rapidly in Washington.”

Federal spending is down and revenue is up. 

According to The Washington Post story, “Defense spending has been declining rapidly with the end of the war in Iraq and the ongoing drawdown of forces in Afghanistan. A surprising — and apparently durable — slowdown in health-care costs has sharply reduced projected spending on Medicare and Medicaid. And the falling jobless rate and improving economy have helped push federal tax collections up 16 percent over last year, according to figures out Tuesday.”

Throw in sequester cuts, Social Security tax cuts going away and households with more than $450,000 income paying just a little more in taxes and you get the reduced red ink.  In fact the federal government is expected to actually make a small payment to reduce the national debt in June.

Now none of this will stop Mr. Sanford from pushing for the type of failed austerity measures that have crippled the European economies.  But this good budget news should make those in Washington pay less attention to his deficit-hawk voice in Congress.   And that is a good thing for a country that needs to invest in infrastructure, education, healthcare and other areas to rebuild a stronger economy that will create more tax revenue to get us closer to a balanced budget.

Good news for the majority of Americans

I have some good news or some bad news for you.  It all depends on your political disposition.

If you are in favor of severe austerity measures to shrink the evil national budget deficit or if you believe that the Environmental Protection Agency has overused its powers to control greenhouse gasses, this is a doubly bad news day for you.

The Congressional Budget Office says that the federal budget deficit last month shrank by $25 billion compared to January of 2012.  The reason was not cutting government spending but a 15% increase in revenue from a little higher income tax on the wealthy and expiration of the payroll tax holiday.  Plus there are new restrictions on tax deductions this year.  We still will have a sizeable budget deficit in 2013 but it will be a lot lower than it has been in many years.

A new Duke University survey is out showing that 64% of the public support government (i.e. the EPA) “regulating greenhouse gas emissions from power plants, factories and cars and requiring utilities to generate more power from ‘clean’ low-carbon sources.” However this poll has some bad news for proponents of a carbon tax to reduce carbon emissions…the public doesn’t like the idea.

So if you aren’t a climate denier or austerity proponent, you can go into the weekend smiling.