Democrats bungle fiscal policy, inflict harm on U.S. economy

WASHINGTON — The 2010 federal fiscal year ended unceremoniously last week — a political and substantive fiasco for the Democrats. It included a cascade of miscalculations that could haunt the party in the Nov. 2 elections. But that pales in comparison to the serious harm they've inflicted on the American economy.

Never before has a party so bungled fiscal policy in the United States, leaving citizens, businesses, and investors with head-spinning uncertainty.

Failure to pass a budget earlier this year began the debacle, but the cavalcade of missteps continued this week with the passage of a so-called Continuing Resolution (CR) to avoid an Oct. 1 government shutdown.

Let's start with the annual budget plan — or lack thereof.

Facing one of the worst long-term debt and deficit crises in the past half century, Democrats in Congress decided to kick the can and skip developing a blueprint this year. This is unconscionable. How can the Democrats — with large majorities in the House and the Senate — look voters in the eye and say, "We have no plan — no long-term schematic to ensure America won't become another Greece."

The only thing more unbelievable is that they apparently got away with it because no one seemed to notice.

This dereliction of duty is unprecedented. Never in the history of the modern process— dating back more than a quarter of a century— have both the House and the Senate failed to pass a budget resolution.

Investors would dump shares of a business that projected massive amounts of future debt, but told shareholders, "Sorry, we don't have a plan to deal with it." It's one of the reasons political markets put a strong "sell" signal on the Democratic majority.

The majority party's "dog-ate-my-homework" approach means fiscal year 2011 spending bills languish; funding levels for all of next year's programs are uncertain; and deficit projections rival faith healers in terms of their trustworthiness.

Because Congress failed to pass a budget or enact any appropriations bills this year, lawmakers will have to rely on a CR to avoid a government shutdown.

But even a CR, which some will pitch as a "freeze at last year's spending levels," is a fiscal charade — the second act in this year's budget fiasco.