A contrast In fiscal responsibility

Editor’s note: Sam T. Sicard is president and CEO of Fort Smith-based First Bank Corp.

Opinions, commentary and other essays posted in this space are wholly the view of the author(s). They may not represent the opinion of the owners of Talk Business & Politics.

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The past few months have provided a stark contrast in the fiscal responsibility of Fort Smith city government versus the lack thereof in Congress.

Congress once again had to increase the debt ceiling to pay for the obligations they made without generating the revenues to meet those obligations. While raising the debt ceiling was a necessity to avoid a financial and economic crisis, Congressional Republican leadership and the Obama Administration managed to do the unfathomable:  tie the debt ceiling increase with a deal to agree to even more unfunded spending, with of course more promises to cut spending a decade from now.

Just when Congress had begun to show some fiscal discipline earlier this decade with the Budget Control Act that reduced discretionary spending and reduced our record-high federal deficits, they continue to reverse course by agreeing to blow through the spending caps and offset them with budget gimmicks and future promises. To those of us who believe in fiscal responsibility, it is incomprehensible that they would raise total spending when we already owe more than $18 trillion and when the independent Congressional Budget Office estimates our cumulative deficits over the next decade will add another $7 trillion to the debt even if we had stayed within the spending caps.

It should be noted that both Arkansas Senators and 3 of 4 Arkansas Congressmen voted against this deal. Nevertheless, it was approved by significant majorities in both the Republican controlled Senate and House by both Republicans and Democrats.

More recently, Congress approved a transportation funding bill that would be “paid for” by using yet another budget gimmick from a one-time unrelated monetary reserve fund held at the Federal Reserve (see Budgetary Sleight of Hand by Ben Bernanke) and selling our strategic emergency oil reserves (when it may be the worst possible time to be selling oil) instead of being fiscally responsible and paying for this spending with either offsetting spending cuts or through raising the gasoline usage fee to inflation since it hasn’t been adjusted to inflation in more than two decades.

Even worse, the transportation bill included a completely unrelated $3 billion spending increase by reversing previously agreed to crop insurance reforms.

Meanwhile, our local Fort Smith city government has also had to address major fiscal challenges. The biggest challenge has been addressing a pension plan that is facing substantial shortfalls due to overpromises made in the past without a funding source to cover these future pension payouts. Our City Directors could have blamed past poor decisions before they were in office as a reason to do nothing and kick the can down the road by depleting our city reserves just like Congress and the President are doing. Instead they had the political courage to take numerous difficult votes to resolve the fiscal challenges our city government is facing now and in the future. Our Directors did all of this through a series of spending cuts and adjustments to benefits plans to make the pension plan and city government solvent in the long run.

The end result of these hard decisions was a significant reduction in the general fund budget for spending, which was on top of a reduction in the budget made the prior year. These are the same hard decisions many local businesses and families have faced in difficult times and from other unexpected financial challenges and adversities they have faced in life.

Maybe Congress and our President should watch what the majority of our Fort Smith directors have done to instill fiscal responsibility and fiscal discipline in government, even when it has necessitated making hard, unpopular decisions no one would like to have to do.