More On Legal & Compliancefrom The Advisor's Professional Library
- The New and Improved Form ADV Whether an RIA is describing its investment strategy in advertisements or in the new Form ADV Part 2, it is important the firm articulates material risks faced by advisory clients and avoids language that might be construed as a guarantee.
- Nothing but the Best Execution Along with the many other fiduciary obligations owed by RIAs, firms owe a duty to seek best execution of clients transactions. If they fail to do, RIAs violate Section 206 of the Investment Advisers Act.
A war of words over the federal budget dominated the Sunday talk shows following the House of Representative’s passage of a 2011 budget bill on Saturday that calls for cuts of $61 billion from a range of programs. There was little talk of specifics as, despite mentions of compromise, both sides danced around the potential for a government shutdown in a showdown over the budget.
On This Week with Christiane Amanpour, Democratic political strategist and former Clinton Administration official Donna Brazile called the proposed budget “primal scream politics.” She added that the budget cut “essential, vital, necessary services,” termed cuts that included such items as Pell grants and Head Start “draconian,” and said that cutting $61 billion at current spending levels was “bad for the country. It’s bad for the economy. And it slows down economic growth at a time when things are finally moving up.”
While George Will said that Democrats would have to decide “whether, out of a $3.7 trillion budget, there isn't $60 billion of inessential spending,” the talk quickly moved on to the possibility of a government shutdown. Senior political correspondent Jonathan Karl said that it was a real possibility, citing the short timeline for Congress to work out an agreement before the expiration of the existing continuing resolution that funds the government.
Karl said that, although Speaker of the House John Boehner (R-Oh.) has said privately that he will not allow a government shutdown, “[t]he House and the Senate are gone for the next week. They have four days when they get back to work out some kind of an agreement. [under the 2011 Continuing Resolution, the working budget for the Federal government expires on March 4 absent action by the Congress]. Karl said bluntly on Sunday: “If they don't do it by the end of the four days, we are at a government shutdown.”
Feelings ran high on other programs about the cuts as well. On Face the Nation, Rep. Chris Van Hollen, D-Md., said that the Republican budget would cost 800,000 jobs. Saying that such deep cuts would jeopardize the economy, he pointed out, “The bipartisan commission on fiscal responsibility specifically warned against deep, immediate cuts in the year 2011. Why? Because it would hurt a fragile economy and put people out of work.” He added, “In fact, there are estimates that about 800,000 Americans would lose their jobs if you do this in a reckless manner.”
Van Hollen went on to criticize Boehner for a “callous” attitude regarding job losses for Americans, and said that instead “[w]e need to close some of the tax loopholes for special interests like the oil companies—$40 billion worth of loopholes.”
Rep. Paul Ryan (R-Wis.), chairman of the House Budget Committee, also on the program, said he expected that the Senate would not pass the House’s proposed budget, but envisioned “some short-term extensions while we negotiate these things with spending cuts.” He went on to say, “Look, we're not looking for a government shutdown. But at the same time, we're also not looking at rubber-stamping these really high elevated spending levels that Congress blew through the joint two years ago.”