The Cliff

     We find ourselves again debating between taxes and spending cuts.  Washington continues to equate tax rate reduction to spending by saying it needs to be "paid for".  We look at our budget and see one big unmanageable mess.  The basic budget has been intertwined with social security and highway-infrastructure budgeting. 
     When social security was introduced, it was in the premise that it would be financed by FICA taxes and would be "pay as you go".  This should have been kept seperate from the national budget and the financing should have been invested in Triple A bonds, including federal, business and even foreign.  Never should Congress have raided this account for financing governmental expenditures.  The same was true with the Highway funds, supposedly to be financed by excise taxes on fuel, and again should have been accounted seperately.
     In the 70's there was much todo about the lower income earners struggling because of the FICA tax.  The reduction of FICA withholding would have crippled the social security "lock box", so the Earned Income Credit was devised.   The purpose was to refund to the tax payer the amount that was paid into FICA and offer relief.  This could be done in two way, but a refundable credit on the income tax return, but the employer could refund it by means of the Advance Earned Income Credit.
    Once this was instituted, the general fund was related to the social security funds.  The Earned Income Credit has been greatly expanded to include many other than the lower income brackets.  Washington has forgotten that the EIC was a refund of FICA and now wants to reinvent the wheel and offer FICA relief to all taxpayers.   This is again robbing from the social security trust fund. 
     Another problem is that people on disability are included in the social security trust fund and pays individuals who have not paid into FICA long enough to draw from this fund.  While disability is a basic need for many people who cannot be employed, this should have been handled and financed at the state level.  California, for example, took 2% of the employees wages and called it SDI, State Disability Insurance, and was used to help people who were disabled.  All states could have and should have taken this into their own responsiblity just as welfare belongs at the state level.
    The federal budget has included many areas that are not the responsiblity of the federal government.  Too many charitable organizations are tax exempt and are given grants from the fedeeral treasury.  AARP, ACORN, Public Broadcasting, Planned Parenthood and many many more agencies should not be given grants from the federal treasury.  If they are good agencies and are tax exempt, the donations are tax deductibled, they will be funded by the general public in their own personal charitible donations. 
     Washington is not the "Rich Uncle" we all run to for help, it is the adhesive that holds our states together, and the states are each responsible for the welfare of their own citizens.  Were Washington not taxing the citizens at such outrages rates, there would be a much greater revenue base for each state.  The founding fathers never envisioned the federal government we have now, but the power base was suppose to be at the state level.  We have lost our way, will we ever find our way back?