Hospitals & Asylums

Balanced Account Deficit Act of FY 2007

John Boehner, House Majority Leader (R-OH) v. Rob Portman, Director of Office of Management and Budget (R-OH)

By Anthony Joseph Sanders (HA-OH)

Last Chance for a US Account Deficit More than $1 Trillion HA-26-9-06

1. Senate Majority Leader Bill Frist wrote, “I want to thank my colleagues and those in the blogosphere who were working so passionately to get this piece of legislation passed in a timely manner, in the Senate - fiscal responsibility won. This is a tremendous effort …that has led us to take this healthy step forward when it comes to responsible federal spending”. The FY-2007 spending bill was remanded for revisions saving $200 billion from Department of Defense and Homeland Security pork barrel overspending. Congress must overthrow the President not the Government and the House and Senate Majority leaders must support innovative new legislative approaches to balancing the Budget. American consumer have finally been spared from nearly 4% inflation although 3% is the legal limit but at the cost of a general economic slowdown in growth from 5.3% in the first two quarters and 2.4% in the second half. The Federal Funding Accountability and Transparency Act of 2006 will create a single, easily searchable database capable of tracking approximately $1 trillion in federal grants, contracts, earmarks and loans. Fiscal Year 2006 ends on 31 September 2006 and it is the nation’s last chance to account for an account deficit less than $1 trillion FY 2006. If the fat can be trimmed from the pork, as explained in this essay, Americans will sell more goods and the US will never have another $1 trillion account deficit, or so much as a budget deficit, again. 30 September is the end of the fiscal year when appropriations occur for the next fiscal year that begins on 1 October under 1USC(2)§105.

US Economic Statistics Estimated in billions by OMB 2000 – 2010, BEA 2003-2006 and Proposed by HA 2006-2010

Table 1	Int’l	Def	OASI	Rev	Exp	Def	Int. Trade	Acct. Def.	Debt	GDP	GNI
2000	12	294.50	411.68	2,025	1,788	87			5,628	9,719	6,400
2001	14	305.50	434.06	1,991	1,860	-33			5,770	10,022	6,666
2002	15	349.56	440.54	1,853	2,011	-317			6,198	10,339	7,000
2003	35	388.87	447.81	1,782	2,157	-375	-547	-922	6,780	10,828	6,666
2004	15	437.12	457.12	1,880	2,292	-412	-665	-1,077	7,355	11,552	7,500
2005	17	444.07	479.89	2,052	2,479	-400	-783	-1,183	8,058	12,227	7,921
2006	25	510.09	507.09	2,285	2,696	-411	-829	-1,240	8,448	12,294	8,078
2007	30	471	537.85	2,416	2,798	-312			8,760	13,617	8,500
2008	35	436.44	568.09	2,507	2,757	-251			9,010	14,349	9,000
2009	40	460.55	599.95	2,650	2,882	-233			9,343	15,111	9,500
2010	50	485.11	635.31	2,821	3,028	-207			9,530	15,906	10,000
Pro.
2006	33	400	400	2,193	2,400	-178	-800	-978	8,218	12,294	8,078
2007	50	365	400	2,416	2,426	24	-850	-826	8,300	13,617	8,500
2008	65	333	425	2,507	2,473	33	-900	-867	8,267	14,349	9,000
2009	75	333	450	2,650	2,565	50	-850	-800	8,183	15,111	9,500
2010	90	300	500	2,821	2,708	100	-850	-750	8,070	15,906	10,000

2. For the third year the US is reporting an account deficit over $1 trillion. A national account deficit is the combined deficit of both the national budget and international trade. The Republican majority cannot continue to support the President’s budget proposals for either FY 2006 or 2007 and must consider impeaching him and his henchmen entirely if he obstructs Congress or threatens the whistleblowers and scholars from the objective of balancing the budget to restore confidence in American goods on the international market. Congress cannot wait until 2009 for a 50% reduction in the federal budget based upon optimistic estimates in regards to the returns on tax relief for the rich programs. Congress must resolve now to set agency spending limits for the military and social security. The recent slowdown in growth inclines Congress to rethink our accounting of budget and trade policies before the end of FY 2006. We must claim export credit and debt forgiveness for our official development assistance. The Mid-Session Review of the Office of Management and Budget HA-7-8-06 optimistically predicted a budget deficit of $296 it was however undermined by the two quarter US economic slowdown noted in the World Economic and Social Survey, at the Substantive Session of the Economic and Social Council HA-5-7-06 and the real deficit can be predicted at a high estimate of $411 billion if the military and social security go unadjusted to as low as –$207 billion if the federal government can cooperate regarding the forfeiture of surplus federal funds before they become debt but will probably be closer to –$325 billion in the Historic Table of the President.

Account Deficit = Budget Deficit + International Trade Deficit

3. There is indeed room for argument that as the result of a slowdown in revenues collections by the federal government the federal budget deficit will be significantly higher than predicted by the OMB in the Midsession Review. House Majority Leader (R-OH) and Rob Portman, Director of Office of Management and Budget (R-OH), former US Trade Representative, are charged with co-operating with the United Nations to bring FY 2006 to a conclusion with an account deficit less than $1 trillion. Whereas the CIA World Fact Book reported on 19 September 2006, US exports of $927.5 billion and imports of $1.727 trillion yielding a US trade deficit of -$829 billion any budget deficit greater than $171 billion would yield an account deficit greater than $1 trillion. The Midsession review was over reliant upon the fact that real GDP has grown at an annual rate of 5.6 percent for the first quarter of the year. OMB was overconfident that growth would continue as it has for the past 18 months, but it hasn’t and the past two quarters have been shown only 2.4% growth rate. Over reliance upon private sector growth and continued overspending in the military and social security indicate a dependency in the President’s budget proposal upon growth in the private economy and Congress will have to devote themselves to drafting a Balanced Budget as President Bill Clinton did in 2000.

Economic Growth = (x –y) / y

4. Economic growth is calculated whereby, x equals Gross Domestic Product (GDP) less y that equals the GDP of previous year, divided by the GDP of the previous year. Employment is the driving force behind the gross domestic product but GDP. GDP can be calculated as the total of wages, rent, interest and profits or the total of consumption, investment, government and net exports. People who are well paid spend more money on goods, which in turn affords the services of more happy workers. Spectacular 5.3% growth in the first two quarters of FY 2006 fizzled out and the last two quarter reported a growth rate of only 2.4%. Growth in employment has proportionally declined. In the first quarter of 2006 real GDP increased 5.6 percent. Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 2.9 percent in the second quarter of 2006. The Bureau of Economic Analysis (BEA) New Release No. 06-36 estimates that the annual GDP by quarterly estimate from fourth quarter 2005 was $11,163.8, for first quarter 2006 was $11,316.4 billion, second quarter 2006 was $11,397.6 billion. Whereas job growth cannot be expected to have improved in third quarter 2006, the close of FY 2006, third quarter growth can be estimated even lower at only 2.4% - $11,671.1 billion – an average growth rate of 4%-4.5% FY 2006.

Budget Deficit = Revenues – Expenditures

5. The President’s Budget projected a -$423 billion federal budget deficit for FY 2006. The Office of Management and Budget (OMB) Mid session review budget deficit estimate of -$296 billion seems low in light of the two quarter economic slowdown that Congress must strive to eliminate by setting agency spending limits for defense and social security beginning in this last week of FY 2006 and all of FY 2007. In FY2006, from 2005 to 2006, receipts are projected to grow 11 percent ($246 billion), more than twice as fast as the economy itself. Since the tax relief was fully implemented in 2003, tax receipts have increased over 34.6 percent. The Midsession needs to be recalculated whereas the assumption that, “Since the beginning of 2003, real, or inflation-adjusted,GDP growth has averaged 4.0 percent per year, exceeding the post-World War II average of 3.4 percent per year. The projected rate of real economic growth is expected to remain strong through 2006 and into 2007, and to moderate only slightly for the remainder of the forecast period, 2008–2011” has been proven falsely reliant upon Keynesian economic in a post Keynesian world and must be recalculated. Whereas growth in revenues from 2004-2005 was from $1,880 billion to $2,052 billion, 9.2% when growth was steady at 5.5%, and revenue growth has dropped to 4.5% a 22% decrease in growth rate from 2005 it can be estimated that revenues grew only 7% in FY 2006 to - $2,193 billion in revenues – a real budget deficit of $503 billion if no adjustments are made to limit spending from $2,696 billion to less than $2,500 billion.

President’s Budget Deficit Projection, HA Balanced Budget and OMB Actual (in billion) 2004-2007

Table 2	2004	2005	2006	2007	2008	2009	2010	2011
President’s Budget Projection	-521	-427	-423 -503 (high)	-339	-188	-157	-123	-127
OMB Actual	-413	-318	-296 (low)
HA Petitioned			-307 (adjusted)	24	33	50	100	111

6. Congress has remanded the Homeland Security and Defense appropriations bills, for review to assure cost effective safety and security of the American people are our highest priority. The two bills as proposed by the President provide nearly $550 billion to support our military and protect our homeland, including key readiness programs critical to the Global War on Terrorism. The Defense appropriations bill provides a 2.2 percent pay raise for all military personnel, along with medical benefits, and will fund a 512,400 Army and 180,000 Marine end strength. The $63 billion directly for our forces in Iraq and Afghanistan FY 2007 must be eliminated whereas these programs must be funded by the regular military budget, no war profiteering. FY07 Department of Homeland Security Appropriations Bill, which passed the Senate in July and contains more than $14 billion for sea and land border defenses. This legislation authorized funding for 1,000 new border patrol agents and 2,000 new detention beds. Having passed both houses of Congress, the bill awaits final passage after a House and Senate conference committee. This military overspending is compromising the balanced budget by $200 billion. The supplemental to Afghanistan and Iraq must be discontinued as promised. The federal government is forbidden to finance jails. There is more than enough money in the regular defense budget to support our troops and give them their deserved cost of living increase. To save $50 billion in annual maintenance costs the Department must eliminate their cold war nuclear arsenal FY2007.

US Gross Aggregate Military Expenditure as Requested and Limited (in billion) FY2004-2010

Table 3	2004	2005	2006	2007	2008	2009	2010
President’s Military Spending Request	437	444	510	471	436	460	485
Congressional Spending Limit	N/a	N/a	400	365	333	333	300

7. Congress must come to grips with the budget deficit and be firm with the Rules of the Gross Aggregate Military Expenditure (GAME) – the US must reduce spending from 50% of global spending to less than 25% and forfeit Cold War weapons for lower maintenance costs, wherefore the USA will be proportionally more peaceful with the money spared from the arms trade. Congress must make their final accounting for the military in FY 2006 and forfeit money held in excess of 25% of annual appropriations a move that is expected to reduce US military expenditure from $500 to $400 billion. It is prohibited for a military agency to keep more than 25% of annual operating costs in reserve to prevent the accumulation of bad money. China, the second largest military, has a budget of only $81.48 billion, France with $45 billion, Japan with $44.31 billion, United Kingdom with $42.84 and South Korea with $21.06 billion the US is not only at peace with these other nations but we are allies and believe that the US faces no organized military opposition and must cease military over spending so as not to give credence to our fears. In FY 2007 the Judiciary Committee shall ensure that all War on Terrorism financing and irregular operation funds in Afghanistan and Iraq cease and the military budget will be limited to not more than $365 billion. FY 2008-2009 $333 billion. To keep moving in the right direction in FY2010 Congress will seek $300 billion. In FY2007 Congress shall enforce these provisions pertaining to the elimination of fraudulent war contracts and impeachment of war criminals, as explained for the protection of whistleblowers in the Constitution in Crisis, the Downing St. Minutes. The Department of Defense Appropriations Act, 2007 (HR.5631) of $404,000,000,000 is reduced by $71,000,000,000 below to the amount of $333,000,000,000 in order to keep defense spending within $365 billion in FY 2007 taking into consideration $10 billion in military construction and other unforeseen costs. Most reductions will take place in the category of Operation and Maintenance that shall be afforded with widespread disarming of cold war weapons thereby eliminating maintenance costs. Payroll is untouched to afford troops a cost of living increase and keep morale up for the difficult task of steadily working on smaller budget. Expectations of troop strength should go down for more savings.

Beginning
TITLE I
Military Personnel, Army $29,080,473,000

Military Personnel, Navy $23,186,011,000
Military Personnel, Marines $9,246,696,000

Military Personnel, Air Force $22,940,686,000

Reserve Personnel, Army $3,304,247,000

Reserve Personnel, Navy $1,760,676,000

Reserve Personnel, Marine Corps $535,438,000

Reserve Personnel, Air Force $1,329,278,000

National Guard Personnel, Army $5,258,080,000

National Guard Personnel, Air Force $2,369,255,000

TITLE II
Operation and Maintenance, Army $23,980,180,000 – 7,000,000,000 = 16,980,180,000

Operation and Maintenance, Navy $30,779,084,000 –10,000,000,000 = 20,779,084,000

Operation and Maintenance, Marine Corps $3,739,862,000 – 750,000,000 = 2,911,862,000

Operation and Maintenance, Air Force $30,053,427,000 – 10,000,000,000 = 20,053,427,000

Operation and Maintenance, Defense Wide $19,919,175,000 – 10,000,000,000 = 9,919,175,000

Operation and Maintenance, Army Reserve $2,158,278,000 – 1,000,000,000 = 1,158,278,000

Operation and Maintenance, Navy Reserve $1,275,764,000 – 250,000,000 =1,025,764,000
Operation and Maintenance, Marine Corp Reserve $208,811,000

Operation and Maintenance, Air Force -$2,624,300,000

Operation and Maintenance, Army National Guard $4,655,565,000 – 1,500,000,000 = 3,655,565,000

Operation and Maintenance, Air Force National Guard $5,008,392,000 – 2,000,000,000 = 3,008,392,000

United States Court of Appeals for the Armed Forces $11,721,000
Environmental Restoration, Army $413,794,000
Environmental Restoration, Navy $304,409,000
Environmental Restoration, Air Force $423,871,000

Environmental Restoration, Defense-Wide $18,431,000
Environmental Restoration, Formerly Used Defense Sites $282,790,000
Overseas Humanitarian, Disaster, and Civic Aid $63,204,000
Former Soviet Union Threat Reduction Account $372,128,000
TITLE III
Air Craft Procurement, Air Force $3,354,729,000 – 1,000,000,000 = 2,354,729,000

Missile Procurement, Army $1,266,967,000 – 500,000,000 = 766,967,000

Procurement of Weapons and Tracked Combat Vehicles, Army $2,092,297,000 – 1,000,000,000 = 1,092,297,000
Procurement of Ammunition, Army $1,948,489,000 – 1,000,000,000 = 948,489,000
Other Procurement, Army $7,724,878,000 –4,000,000,000 = 3,724,878,000

Aircraft Procurement, Navy $10,135,249,000 – 5,000,000,000 = 5,135,249,000

Weapons Procurement, Navy $2,558,020,000 – 1,000,000,000 = 1,558,020,000
Procurement of Ammunition, Navy and Marine Corps $799,943,000

Shipbuilding and Conversion, Navy $10,393,475,000 – 3,000,000,000 = 7,393,475,000
Other Procurement, Navy $4,731,831,000 –1,000,000,000 = 3,731,831,000

Procurement, Marine Corp $1,151,318,000

Aircraft Procurement, Air Force $11,096,406,000 – 1,000,000,000 = 10,096,406,000

Missile Procurement, Air Force $3,975,407,000 – 1,000,000,000 = 2,975,407,000

Procurement of Ammunition, Air Force $1,046,802,000
Other Procurement, Air Force $15,510,286,000 – 5,000,000,000 = 10,510,286,000

National Guard and Reserve Equipment $340,000,000
Defense Production Act Purchases $68,884,000
TITLE IV
Research, Development, Test and Evaluation, Army $11,245,040,000 – 1,000,000,000 = 10,245,040,000
Research, Development, Test and Evaluation, Navy $17,048,238,000 – 2,000,000,000 = 15,048,238,000

Research, Development, Test and Evaluation, Air Force $23,974,081,000 – 3,000,000,000 = 20,974,081,000

Research, Development, Test and Evaluation, Defense-wide $20,543,393,000 – 3,000,000,000 = 17,543,393,000

Operational Test and Evaluation, Defense $187,520,000
TITLE V

Defense Working Capital Fund $1,345,998,000
National Defense Sealift Fund $616,932,000
Pentagon Reservation Maintenance Revolving Fund $18,500,000
TITLE VI
Defense Health Program $21,409,863,000

Chemical Agents and Munitions Destruction, Army $1,277,304,000
Drug Interdiction and Counter-Drug Activities, Defense $978,212,000
Office of the Inspector General $216,297,000
TITLE VII
Central Intelligence Agency Retirement and Disability System Fund $256,400,000
Intelligence Community Management Account $597,011,000

8. Much of our collective sense of freedom and safety comes from our community’s commitment to a few key values: democratic governance, respect for fundamental rights, rule of law and equal rights for the poor. The Census Bureau Reported that Income Climbs, Poverty Stabilizes, Uninsured Rate Increases in the Income, Poverty and Health Insurance Coverage in the United States that was compiled from information collected in the 2006 Annual Social and Economic Supplement (ASEC) to the Current Population Survey (CPS). Real median household income in the United States rose by 1.1 percent between 2004 and 2005, reaching $46,326, according to a report released today by the U.S. Census Bureau. Meanwhile, the nation’s official poverty rate remained statistically unchanged at 12.6 percent – 37 million in 2005. The percentage of people without health insurance coverage rose from 15.6 percent to 15.9 percent (46.6 million people). Poverty rates remained statistically unchanged for blacks (24.9 percent) and Hispanics (21.8 percent). The poverty rate decreased for non-Hispanic whites (8.3 percent in 2005, down from 8.7 percent in 2004) and increased for Asians (11.1 percent in 2005, up from 9.8 percent in 2004). The poverty rate in 2005 for children under 18 was 12.9 (17.6 percent) remained higher than that of 18-to-64-year olds that was 20.5 million (11.1 percent) and that of people 65 and older 3.6 million (10.1 percent). There were 7.7 million families in poverty in 2005, statistically unchanged from 2004. The poverty rate for families declined from 10.2 percent in 2004 to 9.9 percent in 2005. The poverty rate is likely to have increased FY 2006 and in FY 2007 both employers and social security must be accountable for the relief of all people living below the national poverty line of $1,200 a month with reasonable minimum wages and $1,000 monthly benefits checks to give the disabled and discriminated a fighting chance to afford the prevailing cost of living and save.

9. Joanne Barnhart the Commissioner of Social Security reported to Congress: A major new computer system supports the Disability Service Improvement initiative. The State Disability Determination Services (DDS) will continue to make the initial determination. Individuals who are clearly disabled will have a process through which favorable determinations can be made within 20 calendar days after the date the DDS receives the claim. A Medical and Vocational Expert System (MVES) will enhance the quality and availability of the medical and vocational expertise that our adjudicators at all levels need to make timely and accurate decisions. A new position at the Federal level—the Federal Reviewing Official, or FedRO—will be established to review state agency determinations upon the request of the claimant. We intend to have well-trained attorneys serve as FedROs and we expect that this level of review will help ensure more accurate and consistent decision making earlier in the process. The right of claimants to request and be provided a de novo hearing conducted by an administrative law judge is preserved. The record will be closed after the administrative law judge issues a decision, with provisions for good cause exceptions. Two key improvements are embedded in the process. First are improvements in documenting the record at each step, so that all relevant information is available to adjudicators, and the claimant fully understands the basis for whatever decision is made. Second is a greatly strengthened in-line and end-of-line quality review process. In addition, quality feedback loops at every level will foster continuous improvement documented in the Social Security Bulletin Vol. 66. No. 3 2005/2006. To take advantage of high levels of literacy and waning confidence in the US Mail, Social Security will have to become email literate in correspondence with petitioners.

Social Security Budget (in billion) 2006-2007

Table 4	Appropriations	Interest Income	Benefits tax	Total Income	Expenditure	Balance
OASI FY 2006	472.8	79.0	14.6	566.3	399.8	166.6
OASI FY 2007	400	81	14.7	495.7	420	75.7
DI FY 2006-07	80.3	10.0	1.1	91.4	85.4	6
HI FY 2006-07	171.4	15.2	8.8	199.4	182.9	16.5
SMIFY2006-07	154	1.4		154	153.5	0.5

10. Medicare and Social Security provide cash and in-kind benefits to over forty million people each year. The Federal Old-Age and Survivors Insurance (OASI) Trust Fund was established on January 1, 1940, as a separate account in the United States Treasury. The Federal Disability Insurance (DI) Trust Fund, another separate account in the United States Treasury, was established on August 1, 1956. The Medicare program, created in 1965, also has two parts, each with its own trust fund: the Hospital Insurance (HI), Part A and Supplementary Medical Insurance (SMI) Trust, Part B, Funds. On December 8, 2003, the President signed into law the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) that, beginning in 2004, added to the SMI Trust Fund a second major account, referred to as Part D that is financed with premiums and Congressional appropriations. Both houses of Congress have overwhelmingly passed the Pension Protection Act of 2006, and it was quickly signed into law by the president on Aug. 17. Called "the most sweeping pension overhaul in 30 years" by House Majority Leader John Boehner, R-Ohio, the law contains many provisions that are designed to bolster corporate-defined benefit pension plans by imposing additional financial and administrative regulations on employers and agencies alike. The Trust Funds paid benefits of nearly $521 billion in calendar year 2005 -- an increase of $27 billion from 2004. There were 48 million beneficiaries and 150 million with covered earnings at the end of the calendar year. So as not to break the economy before the baby boomers retire In FY 2007 the Old Age Survivors Trust Fund must greatly decrease their funding request from Congress and begin to utilize interest earnings to cover the cost of administrating benefits so that the baby boomers will have something trustworthy to retire on. Other trust funds will need to remain pegged to the cost of benefits and have less need for savings than the retirement fund.

11. The 2006 Social Security Trustees Report states, at the end of 2005, the status of the trust funds were poor. 48 million people were receiving benefits: 33 million retired workers and their dependents, 7 million survivors of deceased workers, and 8 million disabled workers and their dependents. During the year an estimated 159 million people had earnings covered by Social Security and paid payroll taxes. Total benefits paid in 2005 were $521 billion. Income was $702 billion, and assets held in special issue U.S. Treasury securities grew to $1.9 trillion at a cost of only $5.3 billion for the administration 1% of total expenditures. The 2006 Medicare Trustees Report states, in 2005, 42.5 million people were covered by Medicare: 35.8 million aged 65 and older, and 6.7 million disabled. Total benefits paid in 2005 were $330 billion. Income was $357 billion, expenditures were 336 billion, and assets held in special issue U.S. Treasury securities grew to $310 billion. With continued growth in Medicare program expenditures and the retirement of the “baby boom”generation, Medicare faces growing strains on its financing sources. Total Medicare expenditures were $336 billion in 2005. The Office of Economic Policy in the US Department of Treasury released Social Security and Medicare Trust Funds and the Federal Budget in May 2006 explaining that when a trust fund invests in U.S. Treasury securities, it has, in effect, loaned money to the rest of the government. The loan either reduces what the other government fund has to borrow from the public if the unified budget is in deficit or, if the budget is in surplus, reduces the amount of publicly held debt.

Trust Fund Balance Accumulation (in billion) Proposed and Adjusted 2005-2010

Table 5	OASI	OASI bal	DI	DIbal	HI	HIbal	SMI	Smibal	Total Savings
2005	479.89	1,603	81.472	192.78	161.36	274.2	115.23	18.60	2,088.6
2006	507.09	1,769	86.104	201.76	172.14	291.7	182.86	41.84	2,304.3
2007	537.85	1,954	91.333	210.76	182.41	308.4	194.58	49.61	2,522.8
2008	568.09	2,159	96.469	219.54	193.08	326.9	204.07	53.65	2,759.1
2009	598.95	2,381	101.71	226.49	204.00	345.8	216.11	56.65	3,032.8
2010	635.31	2,625	107.88	234.90	216.71	365.4	229.88	59.94	3,285.2
Adj. Year	OASI	Bal	DI	bal	HI	bal	SMI	bal	Total bal
2006	500	1,769	86.104	201.76	172.14	291.7	182.86	41.84	2,296
2007	400	1,816	91.333	210.76	182.41	308.4	194.58	49.61	2,385
2008	425	1,975	96.469	219.54	193.08	326.9	204.07	53.65	2,576
2009	450	2,000	101.71	226.49	204.00	345.8	216.11	56.65	2,629
2010	500	2,100	107.88	234.90	216.71	365.4	229.88	59.94	2,760

12. To Balance the Budget the federal government must savor the $2 trillion social security trust fund balance since 2005. Social Security programs, including retirement insurance, must begin to limit their appropriations to cost of benefits and make sure that the trust funds invest at least a portion of their revenues in benefits to keep these funds alive. Social Security’s assets are invested in interest-bearing securities of the U.S. Government. At the end of 2003, the combined assets of the OASI and the DI Trust Funds were 306 percent of estimated expenditures for 2004. In 2004 the combined trust fund assets earned interest at an effective annual rate of 6.0 percent. Assets of the trust funds provide a reserve to pay benefits whenever expenditures exceed income. Assets increased by $152.8 billion in 2003 and $164.1 billion in 2004 because income to each fund exceeded expenditures. The plan is to ensure disability determinations are rendered in 20 days, increase employment of people with disabilities, improve service through technology focusing on accuracy, security and efficiency, provide support to the Administration and Congress in developing legislative proposals and implementing reforms to achieve sustainable solvency for Social Security and to reduce the ratio of SSI beneficiaries below 70% of poverty to 16% by 2010 and reduce the percentage of people dependent on SSI for more than 90% of their income to 45% by 2010. It is high time that social security capitalized upon their assets for the benefit of the people. FY 2006 it is hoped to keep funding for the Old Age Survivor Trust Fund to $500 billion and in FY 2007 to $400 billion so as to utilize a portion of income interest in order to assure the future solvency of the trust funds.

13. International trade in a post industrial “service” economy where only 0.7% are still engaged in farming, forestry, and fishing, 22.9% in manufacturing, extraction, transportation, and crafts, and 34.7% in managerial, professional, and technical, 25.4% in sales and office and 16.3% in other services the US must greatly increase their production of goods and must capitalize upon their education by accounting for research reports and development contracts. Only by keeping their services oriented to good deeds, such as balanced budgets and international development assistance, can the US hope to improve their balance of international trade. The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) accords to all people treatment no less favourable than that it accords to its own nationals with regard to the protection of intellectual property. With regard to the protection of intellectual property, any advantage, favour, privilege or immunity granted to the nationals of any other country shall be accorded immediately and unconditionally to the nationals of all others without constituting any arbitrary or unjustifiable discrimination against anybody. The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations. In formulating or amending their laws and regulations, the people may adopt measures necessary to protect public health and nutrition, and to promote the public welfare in sectors of vital importance to their socio-economic and technological development.

Top 5 US Trading Partners 2005

Table 7	Total	Rank	Exports	Rank	Imports	Rank
China	-201,545	1	41,925	4	243,470	2
Japan	-82,519	2	55,485	3	138,008	4
Canada	-78,486	3	211,899	1	290,384	1
Germany	-50,567	4	34,184	6	84,751	5
Mexico	-49,744	5	120,365	2	170,109	3

14. To be competitive the US must export more goods and be more effective in implementing the policy of import substitution as our major trading partners do to manage their trade balance. The US must pay particular attention to the credit that gained from having foreign assistance accredited as Official Development Assistance by the United Nations in both the debt forgiveness and export credit that gives us the resolve to never again have a $1 trillion account deficit or $800 billion trade deficit again. The US Census Bureau and Bureau of Economic Analysis Report on US International Trade in Goods and Services was prepared with optimistic data from 1997 through the first three months of 2006 CB06-87, BEA06-26, FT-900 (06-04). The Bureau of Economic Analysis reports that the export of goods and services decreased $1.3 billion in July to $120.0 billion, reflecting a decrease in goods exports. On 19 September 2006 the CIA World Fact Book declared. The CIA World Fact Book estimates of 19 September 2006 with exports of $927.5 billion and imports of $1.727 trillion yielding a US trade deficit of -$829 billion seem reasonable for the aggregate deficit of US goods and services on the international market FY 2006. If the US will balance their budget and make significant reductions in their spending on the arms trade US made goods will sell much better in international markets and the domestic economy will be more successful in import substitution. Services need to be more tightly linked to the sale of intellectual property, copyrights, trademarks and patents, for the US to claim export credit. The US must support, in a non discriminatory fashion, their international entrepreneurs and scholars by entering into bilateral and multilateral agreements for the benefit of their citizens.

US International Trade: January – December (in million)

Table 6	Trade Def	Exports	Imports	Petroleum	Exports	Imports	ODA
2003	-547,302	713,415	1,261,717	-120,402	12,693	133,095	35,000
2004	-665,410	807,516	1,472,926	-163,378	17,082	180,460	15,000
2005	-782,740	894,631	1,677,371	-229,191	22,664	251,856	17,000
2006	-829,000	925,500	1,727,000	-278,000	22,000	300,000	25,000

15. The single most volatile commodity in foreign exchange with the US is petroleum. The Report on US International Trade in Goods and Services reports that in 2005 the US exported $22.7 billion and imported $251.9 billion in petroleum for a trade deficit of –229.2 billion in petroleum alone. The US must begin to exploit new Alaskan oilfields or at least enjoy the benefits of labor on oil extraction construction and environmental contracts as the plan offers to reduce US dependency on foreign petroleum in the long run and create tax revenues from labor in the short term. Petroleum is the single largest deficit in a commodity, the most precious to the account balance of US International Trade in Goods. The mean estimate of recoverable oil under American-Made Energy and Good Jobs Act (H.R. 5429) in Alaska’s northern coastal plain is 10.4 billion barrels, a 50 percent increase in total U.S. proven reserves. A Congressional Research Service (CRS) report concludes that safe energy exploration and production on ANWR’s northern coastal plain could raise $111 to $173 billion in federal royalties and tax revenues for an investment of $728 billion in Alaska. It is estimated that the oil exploration and construction project would to take from seven to ten years to begin producing $45 billion in oil revenues annually, an estimated $30 billion in taxes and $14.3 billion in federal royalties, depending of course on the price of oil that has conveniently for the consumers of regular gasoline but not yet for those of diesel, gone down to nearly pre-price increase prices. On 22 September the Associated Press reported that the oil leaks in Prudhoe Bay, Alaska, attributed to corrosion, led to a spill of 267,000 gallons and loss of 400,000 barrels a day around Aug. 6 and Aug. 10. BP expects to run Department of Transportation approved diagnostic tests that should take a week when 200,000 more barrels of oil a day shall be produced as production is restored to normal.

16. The 2006-2007 Foreign Operations, Export Financing, and Related Programs Appropriations Act (HR 3057) estimates that the federal government gives a total of $20,693,675,572 in foreign assistance HA-26-8-05. The $4,442,300,000 Foreign Military Financing Program with $2,280,000,000 for Israel not less than $595,000,000 of which for advanced weapons systems including research and development, $1,300,000,000 for Egypt transferred to interest bearing account in New York, $206,000,000 for Jordan, $41,600,000 for expenses of the USA, $373,000,000 for Department of Defense; continues to be the most expensive of all categories of foreign assistance expenditures as the result of the arms race to achieve the number 0 and cannot be given development or export credit. The USA is therefore attributed with a starting ODA of $15 billion. Private donors can be estimated to have contributed another $15 billion to UN accredited programs. $9 billion by a consortium led by former President Bill Clinton and several billion more by outstanding citizens such a the Bill and Melinda Gates Foundation. In F”Y 2006 it can be estimated that the US contributed $30 billion. To seal with the United Nations Congress is recommended to pay no less than $3 billion for multilateral assistance total for a total ODA of $33 billion so as to be credited with $66 billion in credit towards the elimination of the account deficit - $33 billion in international debt forgiveness and $33 billion in export credit to Establish a tied aid credit program 12USC(6A)§635q whereby the Secretary of State shall exercise his authority in cooperation with the Administrator of the Agency for International Development to claim credit for Official Development Assistance that meets the approval of the United Nations.

Beginning
TITLE I--EXPORT AND INVESTMENT ASSISTANCE
Export-Import Bank of the United States
SUBSIDY APPROPRIATION $125,000,000 through 2009; 31,250,000 in 2006
ADMINISTRATIVE EXPENSES $73,200,000
Overseas Private Investment Corporation
NONCREDIT ACCOUNT $42,274,000
PROGRAM ACCOUNT $20,276,000
TRADE AND DEVELOPMENT AGENCY $50,900,000
TITLE II--BILATERAL ECONOMIC ASSISTANCE
UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT
CHILD SURVIVAL AND HEALTH PROGRAMS FUND $1,497,000,000: $347,000,000 for child survival and maternal health; $25,000,000 for vulnerable children; $350,000,000 for HIV/AIDS; $200,000,000 for other infectious diseases; and $375,000,000 for family planning/reproductive health, $65,000,000 to The Vaccine Fund, $6,000,000 Operating Expenses of USAID
DEVELOPMENT ASSISTANCE $1,460,000,000: $214,000,000 trade capacity building, $365,000,000 basic education, $15,000,000 women’s leadership, $15,000,000 drinking water in East Africa
INTERNATIONAL DISASTER AND FAMINE ASSISTANCE $356,000,000: $20,000,000 famine relief and prevention
TRANSITION INITIATIVES $50,000,000
DEVELOPMENT CREDIT AUTHORITY $21,000,000 until September 30, 2008 for assistance to East Europe and Baltic States; $7,000,000 in 2006; $700,000,000 to subsidize loan principal
PAYMENT TO THE FOREIGN SERVICE RETIREMENT AND DISABILITY FUND $41,700,000
OPERATING EXPENSES OF THE UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT $630,000,000: $25,000,000 until September 30, 2007

CAPITAL INVESTMENT FUND $77,700,000: $55,800,000 for Capital Security Cost Sharing Program
OPERATING EXPENSES OF THE UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT OFFICE OF INSPECTOR GENERAL $36,000,000 until September 30,2007; 12,000,000 in 2006
OTHER BILATERAL ECONOMIC ASSISTANCE,
ECONOMIC SUPPORT FUND $2,558,525,000 until September 30, 2007; $1,279,262,500 in 2006: $240,000,000 for Israel, $495,000,000 for Egypt, $250,000,000 for Jordan, $20,000,000 for Cyprus, $40,000,000 for Lebanon, $225,000,000 for Afghanistan,
INTERNATIONAL FUND FOR IRELAND $13,500,000 until September 30, 2007; $6,750,000 in 2006
ASSISTANCE FOR EASTERN EUROPE AND THE BALTIC STATES $357,000,000 until September 30, 2007; $178,000,000 in 2006
ASSISTANCE FOR THE INDEPENDENT STATES OF THE FORMER SOVIET UNION $477,000,000, until September 30, 2007; $238,500,000 in 2006: $52,000,000 to combat infectious diseases,
Independent Agencies
INTER-AMERICAN FOUNDATION $19,500,000 until September 30, 2007; $9,750,000 in 2006
AFRICAN DEVELOPMENT FOUNDATION $20,500,000, until September 30, 2007; $10,250,000 in 2006
PEACE CORPS $325,000,000 until September 30, 2007; $162,500,000 in 2006
MILLENNIUM CHALLENGE CORPORATION $1,750,000,000
Department of State
GLOBAL HIV/AIDS INITIATIVE $1,920,000,000: not less than $200,000,0000 and up to $600,000,000 for the Global, AIDS Tubercolosis and Malaria Fund,
INTERNATIONAL NARCOTICS CONTROL AND LAW ENFORCEMENT $437,400,000 until September 30, 2008; $145,800,000 in 2006: $10,000,000 demand reduction programs, $33,484,000 administrative expenses
ANDEAN COUNTERDRUG INITIATIVE $734,500,000 until September 30, 2008; $244,833,333 in 2006: $19,015,000 for administration of Department of State and $7,800,000 for USAID
MIGRATION AND REFUGEE ASSISTANCE $790,720,000
UNITED STATES EMERGENCY REFUGEE AND MIGRATION ASSISTANCE FUND $30,000,000
NONPROLIFERATION, ANTI-TERRORISM, DEMINING AND RELATED PROGRAMS $400,350,000: $37,500,000 Nonproliferation and disarmament fund,
Department of the Treasury
INTERNATIONAL AFFAIRS TECHNICAL ASSISTANCE $20,000,000 until September 30, 2009; $5,000,000 in 2006
DEBT RESTRUCTURING $65,000,000 until September 30, 2008; $21,000,000 in 2006
TITLE III--MILITARY ASSISTANCE
INTERNATIONAL MILITARY EDUCATION AND TRAINING $86,744,000
FOREIGN MILITARY FINANCING PROGRAM $4,442,300,000: $2,280,000,000 for Israel not less than $595,000,000 of which for advanced weapons systems including research and development, $1,300,000,000 for Egypt transferred to interest bearing account in New York, $206,000,000 for Jordan, $41,600,000 for expenses of the USA, $373,000,000 for Department of Defense
PEACEKEEPING OPERATIONS $177,800,000
TITLE IV--MULTILATERAL ECONOMIC ASSISTANCE
FUNDS APPROPRIATED TO THE PRESIDENT
INTERNATIONAL FINANCIAL INSTITUTIONS
CONTRIBUTION TO THE INTERNATIONAL DEVELOPMENT ASSOCIATION $950,000,000
CONTRIBUTION TO THE MULTILATERAL INVESTMENT GUARANTEE AGENCY $1,741,515
CONTRIBUTION TO THE INTER-AMERICAN INVESTMENT CORPORATION $1,741,515
CONTRIBUTION TO THE ENTERPRISE FOR THE AMERICAS MULTILATERAL INVESTMENT FUND $1,741,515
CONTRIBUTION TO THE ASIAN DEVELOPMENT FUND $115,250,000
CONTRIBUTION TO THE AFRICAN DEVELOPMENT BANK $5,638,350
CONTRIBUTION TO THE AFRICAN DEVELOPMENT FUND $135,700,000
CONTRIBUTION TO THE EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT $1,015,677
CONTRIBUTION TO THE INTERNATIONAL FUND FOR AGRICULTURAL DEVELOPMENT $15,000,000
INTERNATIONAL ORGANIZATIONS AND PROGRAMS $328,958,000

WAR CRIMES TRIBUNALS DRAWDOWN $30,000,000

17. Is it possible for the US to declare less than a $1 trillion account deficit for FY 2006? Both Democrats and Republicans must join together to take responsibility for the federal budget at the close of FY 2006 and beginning of FY 2007 this 31 September. The federal budget deficit is so bad that the resilient US economy has slowed down for the past two quarters and OMB will need to redo their figures before declaring the budget deficit in the Historic Tables. The government must uphold their end of the bargain and make progress balancing the budget far more swiftly and thoroughly than the President’s plan. If the budget and international trade balance go unadjusted the US is facing a $1,240 billion account deficit for FY2006. This is the third year the account deficit is above $1 trillion. With proper monitoring Congress can reign in government over spending and promote import substitution and the export of research reports and development contracts. If Congress can levy the forfeiture of $100 billion from defense reserves and $100 billion from the Old Age Survivor Insurance Trust Fund with the cooperation of all federal agencies and holding institutions in this last week of FY 2006 the budget deficit can be reduced to the manageable amount of $211 billion. If the US exchanges their foreign assistance for both export credit and debt forgiveness from the United Nations the US can reduce their account deficit another $66 billion whereas the $33 billion in official development assistance is in such demand that international creditors and exporters will give this money full credit particularly if it is sealed with the first quarterly installment of $3 billion war reparations to Afghanistan HA-9-11-06 . The federal government really needs to harmonize the US$1.6 trillion in foreign reserves and US$9.6 trillion in domestic financial sector assets with the UN Millennium Development Goals to get credit from the UN. If the aforementioned reforms are made a total of $266 billion in savings could bring the US permanently below the $1 trillion account deficit level of the past three years this FY2006. In any case the strategy in this Act gives Congress firm guidance on bettering the President’s trade and budget policies FY2007. Congress is sought to establish a $1 million fund to make reasonable $1,000 payments for research balancing the budget and international trade.

Anthony J. Sanders