And Defend the Constitution

Investment Know-How by Kevin Powell

Those are the words that every President and member of Congress recites when they are sworn into office. Well, at least the ones that bother to attend their swearing-in.

In the past few weeks, while our country was staring down the gun barrel of the Sequester, elected officials were doing just about everything other than working to find a solution. I’m afraid that they have taken the Sequester term personally. Webster’s defines sequester as “causing one to withdraw into seclusion.”

The Constitution is a document that many seem to have forgotten and there seems to be little defense of it lately. The Constitution is the supreme law of our land. And just in case you were wondering, Sequester is not part of the Constitution. It’s a budget tool dreamed up by Congress during the Reagan era.

One of the framers of our Constitution, principal author of the Declaration of Independence, and the third President of the United States, Thomas Jefferson, was passionate about limiting the size and scope of government.

Jefferson was one of 74 delegates (55 that actually attended) who in less than 120 days, helped draft an entire Constitution. The backgrounds of the framers of the Constitution could not have been more diverse. They didn’t have the “luxury” of recognized political parties with established leaders. Our country had no money and was defaulting on our debt. Britain still held forts on U.S. soil. Foreign trade was being blocked by other nations and we had a whopping 625-man army. And yet these gentlemen were able to work through the worst of conditions and draft a document that changed our world forever.

Fast forward 226 years and the very men and women who have sworn to defend the Constitution can’t even come to terms on spending. Political agendas have replaced keeping America safe and secure. What happened to those self-evident truths and unalienable Rights including Life, Liberty and the pursuit of Happiness?

“I think that we have more machinery of government than is necessary, too many parasites living on the labor of the industrious.” Jefferson uttered those words more than 200 years ago. A recent Gallup survey found that 84 percent of Americans think it is “extremely important” or “very important” to deal with the federal budget deficit.

The Sequester that went into effect on Mar. 1 was designed to lead to a smaller deficit. It’s not necessarily the most effective way to get something accomplished but if we wait for the politicians, we might not ever see any changes. More than $85 billion in automatic cuts became reality last Friday. However, no cuts will actually take effect and no workers will have to be furloughed until one month from Mar. 27. That’s the next big deadline for Congress when stopgap funding expires and the government faces a shutdown. So there is still time for Congress and the President to finally pass meaningful legislation.

Many programs are exempt from the automatic cuts. One of the most offensive protected areas is pay cuts for members of Congress and the funds used to maintain their offices. Congressional offices get a total of $1.5 million to spend every year or nearly $1 billion in total for flowers, flat screens and folly. The largest expense is for staff salaries but there is ample excess that is now protected by law. If you were allowed to choose, would you furlough Congressional staffers or teachers and first responders? It’s obvious who politicians think are most important.

Both parties have resorted to scare tactics to press their points. This shameful tactic has to stop. Jefferson also said, “When the people fear their government, there is tyranny. When the government fears the people, there is liberty.”

The fact is that the Sequester is unlikely to wreck the economy. It’s doubtful that it will constrain business or cause another recession. It represents about 3 percent of current spending. To help put that in perspective, the cost of Hurricane Katrina was $45 billion.

A friendly reminder to our esteemed leaders — it’s tough to shake a fella’s hand when you are pointing your finger at him.

Kevin Powell has been a financial advisor for the past 27 years and can be reached at kpplanner1@aol.com.

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