IBD: Babylon on the Potomac

As the president discusses "income inequality," Investor's Business Daily editors put that inequality into sharp perspective:

As of New Year's Eve, Washington's wastrels have overspent $17.2 trillion of your money. In their deficit-spending orgy, many have gotten filthy rich, developing a taste for diamonds.

Last month we noted the latest Census Bureau data reveal that four of the five richest communities in America are now in Washington — not Manhattan or Silicon Valley or any other business hub derided by class warriors as cauldrons of greed.

In fact, the nation's wealthiest denizens live in the Washington suburb of Falls Church, Va., just outside the capital, with $121,250 in median income. ...

Here's another stomach-turning factoid: Beltway contractors based in Democrat Rep. Jim Moran's small Northern Virginia district recently reaped $43 billion in annual federal contracts — roughly as much as the entire state of Texas.

These are the real beneficiaries of President Obama's economic stimulus. All this cash sloshing around Washington has created a permanent class of well-heeled insiders who are even more out of touch with average Americans than the pols of old.

In the past decade, the Beltway added 21,000 households in the nation's top 1%. No other area comes close. Forget Stamford or the Upper East Side, this is where the real One Percenters live.

They're not rapacious Wall Street titans. They're politicians and bureaucrats, contractors and lobbyists, all feeding at the same public trough.

And you're paying their lucrative salaries and benefits. You're funding their lavish lifestyles. ...

What does it say about a nation when its seat of government is also its seat of wealth, when its richest citizens work for government?

It says that nation will soon bankrupt itself.

Don't Blame Tax Cuts for Huge Deficits

A recent Congressional Budget Office (CBO) report puts to rest any misperception that tax cuts are the leading driver of our currently enormous budget deficits. Key findings:

• had there only been the tax cuts and no further spending measures, we would have enjoyed large and growing surpluses instead; and
• the main cause of today's huge deficits is increased mandatory spending in the form of Medicare prescription drug benefits, the TARP bailout and the 2009 stimulus. 

For more, see National Center for Policy Analysis synopsis of the CBO findings, or full paper by the Economic Policies for the 21st Century: How Did Federal Surpluses Become Huge Deficits? (Hint: It Wasn't Because of Tax Cuts for the Rich) by Charles Blahous, a research fellow with the Hoover Institution.

Lawless Disregard for Federal Budget Requirement

"Two top Democrats in Congress say the legislature doesn't really need to pass a budget," reports Investor's Business Daily.

"The fact is, you don't need a budget," [House Minority Whip Steny Hoyer] said last Tuesday. We can adopt authorization policies without a budget."
On Friday, Senate Majority Leader Harry Reid said: "We do not need to bring a budget to the floor this year. It's done, we don't need to do it."

Au contraire, says IBD.

Actually, "the fact is," Congress is required under the Congressional Budget and Impoundment Control Act of 1973 to pass a spending plan and then have it scored by the Congressional Budget Office and signed by the president. That none of this happens suggests a level of disrespect for the law and the people found only among criminals.

Note: The Democratic-controlled Senate hasn't passed a budget in nearly 3 years.