Fire Hydrant of Freedom
Politics, Religion, Science, Culture and Humanities => Politics & Religion => Topic started by: Crafty_Dog on April 13, 2010, 10:26:56 AM
-
Most of us here are quite clear on the need to cut government spending. The next question is what to cut. This thread is for a discussion of exactly that. Please try to include an analysis of how the cuts will actually be achieved politically.
Suggested starting point: The Glenn Beck show this week. Excellent discussion last night to kick things off.
-
Great category! Where to start?! May I suggest that no program is too small for mention. Chopping the small ones helps to set the can-do attitude for chopping the big ones.
There was a federal study of the sexual habits of female college freshman. We can get people do that for free, and when did that become an enumerated power?
A moratorium on UN dues.
Send NO ONE to the next climate change conference. Let them meet without us and see if we can get the conference notes free on the internet.
Social Security ratios should be indexed back to where it was solvent. In other words a floating retirement age that maintains a sustainable ratio of x workers for each retiree. Means test Social Security.
End all paid brand advertising for food stamps.
US government out of automobile manufacturing.
End insurance company bailouts, investment bank bailouts.
End all agricultural subsidies. (Keep the Food Safety Inspection Service.)
No retirement packages for elected officials.
End all public unions. If you work for 'we the people', there is no evil capitalist.
Privatize the mortgage business.
Strategic changes in military and defense: Bigger sticks, shorter wars, cut 10% off the budget.
Repeal Obamacare. Repeal Obamacare. Repeal Obamacare. That was worth repeating.
Severely limit paid congressional staff.
Shorten the Census form to its original purpose.
End earmarks.
Switch to flat tax and send home 90% of the IRS.
End federal funding of local transportation systems such as light rail.
Identify all the programs that are not the federal government's responsibility, for the ones that you can't end instantly phase them out on a 7-10 straight line cut to zero.
Sell off 10% of federal lands over 10 years and reduce land management staff by 10%.
-
Make welfare a saftey net rather than a cradle to grave program. make the benefits dependant on "contributory to self support" actions, and time limited.
Phase out all the industrial/agricultural subsidies so a free market sets prices free of coercive Govt influences.
Flat tax, make everyone interested in the budget process instead of extorting "free money" for an apparently limitless budget.
Make that flat tax semi permanent- use the same standard to change the tax rate that you need for an amendment.
Cull the bureaucracy, there are many positions that are check the form is filled right type positions, let a computer check the form and save 20 overpaid jobs.
Reformat the armed services. The only professional cadre for the services should be the "heavy units" like tanks, aircraft, SOF, and ships. The other units like Logistics, Infantry and such can be left in Reserve and National Guard units. Alot has been done in that direction, but more can be done. Having less deployable units would force the politicians to be less adventuresome. The Aircraft and new Drones are very capable of stepping on a major move severely enough to allow the infantry and tanks to get into place. (look how the balkans ended up immobilized by all of the bridge destruction, the Iraqi tank brigade taken out during OIF) Our job is not to be policeman or peacemaker, but simple self defense. The "world Police" and "arsenal for democracy" paradigms are not a crucial need anymore. The SOF could handle brushfires just fine with the firepower of the heavy air units. That would be a lot of money saved on wages/personnel.
Reformat the political process. Lobbiests should become the new RICO statute targets since they offer so much campaign funding that they drown out the real voice of the people. Instead of the electorate being the power broker, it is the organized special interests that are.
-
Glenn Beck made an interesting point last night concerning Social Security, and I paraphrase:
Its not a pension. It is Social Security INSURANCE. What is insurance for? Unexpected events. The unexpected event at the time SS was created was to outlive one's money. IIRC what he said, the life span was 62 at the time, and SS kicked in at 65. Now our life span averages 75 for men and 80 for women.
Bottom line, the age at which SS kicks in needs to be moved upwards. Certainly we should not change the rules for those close to 65, but overall the qualifying age needs to be moved upwards.
-
TTT
-
www.DownsizingGovernment.org
-
Editor's Note: After years of cost increases that exceeded population growth and inflation, the budgets of many American states plunged into crisis during the economic downturn. We asked four governors to tell us how they are coping and how they plan to save money in the future.
• Ed Rendell: Try Smart Shopping
• Arnold Schwarzenegger: Pension Reform Is Key
• Deval Patrick: Invest During Bad Times
• Bob McDonnell: Ever-Higher Budgets Can't Be the Norm
Try Smart Shopping
By Ed Rendell
Pennsylvania now spends $2 billion less to run state government than it did eight years ago. This didn't happen by accident; it's a direct result of the smart management measures we put into place.
Pennsylvania had more than 2,000 contracts for buying office supplies when I took office in January 2003. Some agencies paid full retail price. We immediately began applying good business practices to every aspect of state purchasing. We saved $14 million a year by putting office supplies out to bid and selecting the lowest-priced single supplier. Applying that same model to computer purchases saved taxpayers another $19 million a year. We allow local governments and school districts to piggyback on these contracts. These are just two examples of the procurement redesign that is saving taxpayers nearly $30 million a year.
Today, the skyrocketing cost of providing health care is squeezing taxpayers. Here, we've applied more cutting-edge strategies. To give our state workers greater responsibility for their own care, I imposed the first-ever employee contribution toward premiums. We also require employees to fully engage in a wellness program or face 50% higher monthly premiums.
Our wellness plan specifically focuses on reducing the costs of treating chronic illness, and it actively pushes employees to stay healthy. This approach enables us to keep the state's cost increases to less than 7% a year, well below that of most other states in the recent past. This is a true "win-win" for our employees and our taxpayers.
To save even more money without cutting services to taxpayers, we've asked the state legislature to place all 500 of our school districts into one combined health-insurance plan. Districts would enjoy new leverage in the insurance marketplace, leading to improved benefits and cost reductions of up to 30%.
Each of our cost-saving measures has faced some opposition from legislative leaders of both parties. Fortunately, taxpayers stood with us—they understand that common sense, innovation and political will are what it takes to make government work for them.
Mr. Rendell, a Democrat, is the governor of Pennsylvania.
Pension Reform Is Key
By Arnold Schwarzenegger
For years now, I have been trying to get lawmakers to reform public employee pensions in order to benefit private-sector job growth. The problem is stark: Over the last decade in California, spending on state employees' compensation rose nearly three times faster than state revenues. This has squeezed resources for programs, such as higher education and job training, that benefit private-sector workers.
This year, for the first time ever, our state was forced to spend more on retirement costs ($6.5 billion) than on higher education. This prevented us from, among other things, investing in more transportation and other infrastructure projects that are needed to accommodate the world's fastest-growing and most innovative companies.
Last week we finally got some good news: The state legislature agreed to pass my pension reforms as part of a hard-fought budget deal. These reforms cut spending in significant ways:
• Current employees will now be required to contribute more toward their pensions, saving nearly $800 million this year alone.
• For new employees, we will create a two-tier system that rolls pension levels back to pre-1999 levels. This will reduce pension costs by $100 billion over time.
• We ended the ugly practice of pension "spiking," where employees manipulated their compensation in their final year at work in order to boost their lifetime retirement benefits.
• We brought transparency to the system by exposing the deceptive pension fund accounting practices that were hiding hundreds of billions in pension debt from the taxpayers.
These reforms are creating a pension system that is fair to both state workers and to the private-sector workers who pay their salaries and benefits. It will free up more money for investing in critical programs like higher education and infrastructure, and help reduce tax burdens on the private sector.
It saddens me to see Democrats and some Republicans who seem intent on raising business taxes and reducing infrastructure investment in order to protect spending on public-employee compensation and retirement benefits. We believe that, on the contrary, private-sector job growth will be enhanced if public-sector retirement benefits are brought under control. All it takes is some lawmakers who are willing to stand up to the special interests and do what's right.
Mr. Schwarzenegger, a Republican, is the governor of California.
Invest During Bad Times
By Deval Patrick
Even before we began to feel the effects of the global economic collapse, we chose investments and reforms that we believed would build a stronger, better Commonwealth for a generation. We stuck with that strategy through the recession—and it's working.
Massachusetts increased its investment in education—because education is our calling card around the world—and sustained it because second graders don't get to sit out the second grade until the recession is over. We invested in innovation industries (like biotech, IT, clean and alternative energy, and related manufacturing) because our highly educated work force is uniquely suited to such enterprises. And we invested in health care, because we see health as a public good, and because we believe that people should have health security, especially in tough times.
We paid for these investments with government reforms and deep cuts in other spending. We cut $4.3 billion from a variety of programs and agencies, reduced employee head count by 3,000, negotiated wage and benefit concessions from state employee unions, and increased state employee health-care contributions. We also capped pensions and ended loopholes that some employees used to boost their retirement benefits, such as by claiming an entire year of service for working one day in a calendar year.
At the same time, we consolidated more than 20 transportation, business development and other state agencies. Civilian flaggers instead of police details were assigned to construction projects. We cut the business tax rate to 8.75% from 9.5%. We closed tax loopholes that favored multinationals over small businesses, which make up 85% of the businesses in our state. We increased our sales tax to 6.25% from 5%, but food and most clothing remain untaxed. A large rainy day fund and federal stimulus funds have also helped. Through this blended approach, we delivered four responsible, balanced budgets—on time—leading all the independent rating agencies to reaffirm our strong bond rating.
We're getting results. Massachusetts's rate of job growth is the highest in the nation, having added nearly 65,000 jobs so far since December. The state economy is growing at 6.4%, twice the annual rate. CNBC rates us the fifth best place in the U.S. for business.
Mr. Patrick, a Democrat, is the governor of Massachusetts.
Ever-Higher Budgets Can't Be the Norm
By Bob McDonnell
When I took office in January, we faced two massive budget shortfalls. The first was $1.8 billion in the fiscal year 2010 budget. To get this under control we cut spending and provided a financial reward for state workers to generate savings and not spend their entire agency budgets by the end of the fiscal year. Six months later we announced a $403 million surplus.
The second shortfall was $4.2 billion in the current biennial budget. Again, we cut a wide variety of programs (including in education and health), reducing state spending to 2006 levels. As a result we closed that shortfall without a tax increase—indeed we threatened a veto if the legislature passed the previous governor's proposed $2 billion tax increase. The legislature rejected the tax unanimously.
Virginia's state budget grew by 73.4% from 2000 to 2009, much faster than the rate of growth in population plus inflation. This is unsustainable and unacceptable, and the budget cannot be seriously restrained without addressing its two primary drivers: personnel and programs.
As a result, we supported a significant overhaul of Virginia's pension system. All state employees hired after July 1 of this year will now, for the first time in a generation, contribute to their own pensions. With pension-system reform, we will save an estimated $3 billion over the next 10 years. Actuaries estimate that in the long run, our reforms will reduce the total cost of Virginia's pension system by 10%.
Our second major reform was an immediate, statewide hiring freeze. We obtained enhanced authority from the legislature for the governor to order a freeze that covers all noncritical areas of state government, not just a select few agencies. This strict freeze, together with reductions in full-time positions, will save over $20 million a year.
Looking forward, we've also created a commission on government reform that is evaluating over a thousand ideas to save tax dollars, by doing everything from cutting and consolidating boards and agencies to creating a one-stop shop where businesses can access every license, permit and registration they need to operate. For too long, state governments have operated on the assumption that ever-higher budgets are the norm. We intend to redo the way government operates.
Mr. McDonnell, a Republican, is the governor of Virginia.
-
[youtube]http://www.youtube.com/watch?v=Ld05-5OOLRg&feature=player_embedded[/youtube]
The democrats, doing for America what they did for Detroit!
-
Yes indeed, hence the name of Savage's latest book:
'Trickle up poverty'!
-
http://pajamasmedia.com/instapundit/107915/
DAVID BROOKS WONDERS WHY THE GOVERNMENT CAN’T DO ANYTHING ANYMORE:
Why are important projects now unaffordable? Decades ago, when the federal and state governments were much smaller, they had the means to undertake gigantic new projects, like the Interstate Highway System and the space program. But now, when governments are bigger, they don’t.
The answer is what Jonathan Rauch of the National Journal once called demosclerosis. Over the past few decades, governments have become entwined in a series of arrangements that drain money from productive uses and direct it toward unproductive ones.
That’s exactly right, and Rauch’s book, Demosclerosis: The Silent Killer of American Government, remains just as timely as in the 1990s, when it came out.
-
http://townhall.com/columnists/DebraJSaunders/2010/11/30/you_can_stop_paying_for_al_gores_mistake/page/full/
In Greece earlier this month, Al Gore made a startling admission: "First-generation ethanol, I think, was a mistake." Unfortunately, Americans have Gore to thank for ethanol subsidies. In 1994, then-Vice President Gore ended a 50-50 tie in the Senate by voting in favor of an ethanol tax credit that added almost $5 billion to the federal deficit last year. And that number doesn't factor the many ways in which corn-based ethanol mandates drive up the price of food and livestock feed.
Sure, he meant well, but as Reuters reported, Gore also said, "One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee and I had a certain fondness for the farmers in the state of Iowa because I was about to run for president."
In sum, Gore demonstrated that politicians are lousy at figuring out which alternative fuels make the most sense. Now even enviros like Friends of the Earth have come to believe that "large-scale agro-fuels" are "ecologically unsustainable and inefficient." That's a polite way of saying that producers need to burn through a boatload of fossil fuels to make ethanol.
Gore also showed that most D.C. politicians can't be trusted to put America's interests before those of Iowa farmers. But there is one pursuit in which homo electus excels: spending other people's money.
Beware politicians when they promise you "the jobs of the future." Last week, the Washington Post ran a story about a federal grant program in Florida designed to retrain the unemployed for jobs in the growing clean-energy sector. Except clean tech isn't growing as promised. Officials told the Post that three-quarters of their first 100 graduates haven't had a single job offer.
In May, President Obama came to a Fremont, Calif., solar plant where he announced, "The true engine of economic growth will always be companies like Solyndra." This month, Solyndra announced it was canceling its expansion plans. The announcement came after voters rewarded the green lobby by defeating Proposition 23 -- which would have postponed California's landmark greenhouse gas reduction law AB32 -- because voters bought the green-jobs promise.
Back to Gore. There is a movement in Washington to end Gore's mistake. Republican Sens. Tom Coburn of Oklahoma and Jim DeMint of South Carolina have proposed ending the 45-cent-per-gallon subsidy on corn ethanol, which is set to expire on Dec. 31 unless Congress extends it.
As DeMint explained in an e-mail to the Washington Post's Greg Sargent, "Government mandates and tax subsidies for ethanol have led to decreased gas mileage, adversely effected the environment and increased food prices. Washington must stop picking winners and losers in the market, and instead allow Americans to make choices for themselves."
That's what free-market types who oppose corporate welfare -- like me -- have been saying for years.
So the question is: Will this new batch of Republicans have the intestinal fortitude to buck the farm lobby and agribusiness by weaning them from the public teat? Or are they no better than the farm-lobby-pandering Al Gore?
-
Every Republican member of Congress should sign the following pledge, being promulgated by Grover Norquist's Americans for Tax Reform:
"I promise not to vote for any expansion of the federal debt limit unless it is preceded or accompanied by significant cuts in federal spending."
We all know that the reason the federal government debt is exploding is the reckless spending policies of the Obama administration. From the time George Washington took the oath of office to the time Barack Obama did, Washington borrowed $9 trillion. Since Obama took office, two years ago, we have borrowed almost $5 trillion more!
Domestic discretionary spending (non-defense) has risen by an astonishing 41 percent in two years!!! Welfare spending, primarily Medicaid, has gone up by 54 percent in two years!!!! We must roll back these increases. (It is not increases in Social Security -- 14 percent -- or Medicare --16 percent that are the problem).
Obama will never allow spending cuts unless they are jammed down his throat, and his need for an expansion of his borrowing authority are the key chance to do so.
House Speaker John Boehner sounded an ominous note of possible capitulation even before the first shot was fired when he said: "We're going to have to deal with it (raising the debt limit) as adults. Whether we like it or not, the federal government has obligations, and we have obligations on our part."
Obligations? Sure. But don't we also have the obligation to stop the crazy spending even as we allow the debt limit to rise to pay for the spending that is already underway? Is this not the perfect time to demand spending restraint?
The American people will strongly support the spending restrictions as a precondition for raising the debt limit. Most don't want the limit raised at all. But almost everyone will see the wisdom of cutting the spending as we raise the debt limit.
Obama will resist and, if he vetoes the spending cuts, he -- not the Republican House -- will bear the onus for the ensuing government default. And he will blink just like he did over extending the George W. Bush tax cuts.
What spending cuts? Nothing complicated. The most important one is to roll back domestic discretionary spending to pre-Obama levels -- 2008 levels -- and freeze it there for three years. This step would cut the deficit by over $100 billion for each of the next three years (and, if we take the step now, for this year, as well). Let the federal agencies figure out what to cut. But force them to make these cuts.
We all lived pretty well in 2008 before the 41 percent hike in domestic discretionary spending (on things like transportation, Congress, EPA, Justice, Education, Energy, etc). Let's go back to those days and erase the legacy of the Obama stimulus package.
And we should also take two other steps:
-- Transform Medicaid into a block grant to the states, giving them the flexibility to spend it as they wish. Roll Medicaid back to 2008 levels, and include a modest annual inflator for increasing costs of about 3 percent.
-- And, we should only increase the debt limit by $500 billion (about three months' worth) so as to keep Obama on a short leash and make him keep coming back for more while we add restrictions and new cuts each time.
Republicans need to be smart to leverage their one-house control into real accomplishments, and there is no better place to start than with the debt limit vote next month.
-
Morris has it right. I like the 3 month idea, if not 30 days. Keep the heat on until something meaningful happens. Don't need to raise the debt limit much if the budget gets balanced.
BTW, may I suggest for the category: 'Hot to gut government spending'. It is not something superficial needed or a little trim job when we are bleeding a trillion dollars every 7 months now. Redefine entitlements and put zero based budgeting on everything. Justify every dollar, sunset it and start again from zero justifying again. Increased spending on interest means decreased funds for something else. Hold hearings on unintended consequences and negative behavioral affects of our social policies and put those on hold that have serious issues, which should be most of it.
Within the 3 months we should have a new, simple, lower, wider, flatter, fairer tax code passed through at least one house to match spending cuts as the way to stimulate the economic growth we so badly need.
-
Here is my list;
1. Cut the number of staff for congress as well as their pay. No more fancy offices with large staffs. Put them up in retired military posts so there will be no need for houses. Feed them in the chow hall. Bus them to and from work. Make congress a part time job not a full time career. Term limits= House 6 years; senate 12. And can not sit out a term then run again= limit is for life.
2. No retirement for congress except what they get on their own. No medical for congress except what they buy on their own.
3. Make congress adhere to all laws they pass and do not let them exempt themselves.
4. Do away with White house tsars and funding. If the job is not in the US Constitution; then don't pay for it. If the president wants them, he can pay for it out of his budget; and make that budget tight.
5. Kick the UN out of the USA and use that real estate for something useful. Stop paying them dues so they can blame us for everything.
6. Don't pay out any foreign aid until our bills are paid here at home. Then only give it to those contries who swear to stand by us not swear at us.
7. Do away with welfare as a career choice. Make it like unemployment= short term and make them actually get work.
-
Great list Ragsbo, great post! My favorite:
"Kick the UN out of the USA and use that real estate for something useful."
Personally, I would scale it back instead, pay one share not the lion's share, offer them Peoria not NY, let countries bring about 3 people each, no UN staff, let them meet and pass all the non-binding resolutions they want while we turn more to OECD or an association of democracies to work on larger issues.
The full cost of UN incompetence, over-reach and counter-productivity is hard to measure. The facade of the UN resolutions Saddam accepted in 1991 caused the war we are still fighting IMO. Now they seek carbon regulation and world taxes.
-
http://www.downsizinggovernment.org/balanced-budget-plan
-
Not exactly on point in that it addresses revenues, not spending but of interest nonetheless:
WSJ
It hasn't received much, if any, media attention, but there's some good budget news to report for a change. Federal tax revenues are rising briskly again, which should allow progress against deficits if the politicians can control their spending appetites.
The Congressional Budget Office reported last week that federal tax receipts climbed in December by $18 billion, following somewhat smaller gains in the previous two months. For the first quarter of fiscal 2011, revenues have climbed by $44 billion, or nearly 9%, to $531 billion. Especially encouraging is that these revenue gains came predominantly from individual income taxes, which rose 23% in the first three months to $256 billion. Individual tax receipts continued to fall in 2010 even as corporate receipts rose, so the current increase is a sign that wages and bonuses are rising again for workers who have a job.
It's true these increases come off historic modern lows, as receipts fell to a mere 14.9% of the economy in fiscal 2009 and 2010. The modern average is closer to 18.5%, which is the revenue the economy typically throws off when it's growing at a healthy clip. But the revenue increase is a reminder that the only sustainable cure for deficits is more rapid economic growth and the revenues that flow from it. We'll be fascinated to see if revenues continue to increase this year in the wake of the extension of the Bush-Obama tax rates and the one-year cut of two percentage points in the payroll tax. Payroll tax revenue will fall, but our guess is that individual income tax receipts will rise.
We should add that the deficit declined only modestly in the first fiscal quarter because spending rose by $26 billion to $902 billion. So the deficit remained a huge $371 billion. Spending is expected to be 25% of GDP for 2011, with a deficit of 10% of GDP. If Republicans in Congress can whittle away at spending while the economy throws off more revenue, the deficit should begin to decline again after the record chasms under Nancy Pelosi's Democrats. The keys are to cut spending and keep growth alive.
-
Here is something by Walter Williams I found interesting...
A MINORITY VIEW
BY WALTER WILLIAMS
RELEASE: WEDNESDAY, JANUARY 12, 2011
What Our Constitution Permits
Here's the House of Representatives new rule: "A bill or joint resolution may not be introduced unless the sponsor has submitted for printing in the Congressional Record a statement citing as specifically as practicable the power or powers granted to Congress in the Constitution to enact the bill or joint resolution." Unless a congressional bill or resolution meets this requirement, it cannot be introduced.
If the House of Representatives had the courage to follow through on this rule, their ability to spend and confer legislative favors would be virtually eliminated. Also, if the rule were to be applied to existing law, they'd wind up repealing at least two-thirds to three-quarters of congressional spending.
You might think, for example, that there's constitutional authority for Congress to spend for highway construction and bridges. President James Madison on March 3, 1817 vetoed a public works bill saying: "Having considered the bill this day presented to me entitled 'An act to set apart and pledge certain funds for internal improvements,' and which sets apart and pledges funds 'for constructing roads and canals, and improving the navigation of water courses, in order to facilitate, promote, and give security to internal commerce among the several States, and to render more easy and less expensive the means and provisions for the common defense,' I am constrained by the insuperable difficulty I feel in reconciling the bill with the Constitution of the United States and to return it with that objection to the House of Representatives, in which it originated."
Madison, who is sometimes referred to as the father of our Constitution, added to his veto statement, "The legislative powers vested in Congress are specified and enumerated in the eighth section of the first article of the Constitution, and it does not appear that the power proposed to be exercised by the bill is among the enumerated powers."
Here's my question to any member of the House who might vote for funds for "constructing roads and canals, and improving the navigation of water courses": Was Madison just plain constitutionally ignorant or has the Constitution been amended to permit such spending?
What about handouts to poor people, businesses, senior citizens and foreigners?
Madison said, "Charity is no part of the legislative duty of the government."
In 1854, President Franklin Piece vetoed a bill to help the mentally ill, saying, "I cannot find any authority in the Constitution for public charity. (To approve the measure) would be contrary to the letter and spirit of the Constitution and subversive to the whole theory upon which the Union of these States is founded."
President Grover Cleveland vetoed a bill for charity relief, saying, "I can find no warrant for such an appropriation in the Constitution, and I do not believe that the power and duty of the General Government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit."
Again, my question to House members who'd vote for handouts is: Were these leaders just plain constitutionally ignorant or mean-spirited, or has our Constitution been amended to authorize charity?
Suppose a congressman attempts to comply with the new rule by asserting that his measure is authorized by the Constitution's general welfare clause. Here's what Thomas Jefferson said: "Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated."
Madison added, "With respect to the two words 'general welfare,' I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators."
John Adams warned, "A Constitution of Government once changed from Freedom, can never be restored. Liberty, once lost, is lost forever." I am all too afraid that's where our nation stands today and the blame lies with the American people.
Walter E. Williams is a professor of economics at George Mason University. To find out more about Walter E. Williams and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.
COPYRIGHT 2011 CREATORS.COM
Boyo
-
Boyo:
An excellent question deserving of quality conversation , , , please post it on the Constitutional Law thread on our SCH forum :-)
Thank you,
-
Dick Morris is a good pollster, but IMHO he is a mediocrity on substance and sometimes gets in over his head. The piece that follows is adequate however for my purpose of bringing up an idea which, if I am not mistaken, was begun by Newt Gingrich: changing federal bankruptcy law to enable individual states to declare Chapter 9 Bankruptcy.
=================
Facing huge budget difficulties, New Jersey Gov. Chris Christie has been showing other states how to survive -- namely, by taking on the government-employee unions.
Christie's battles with the teachers unions over the past year have produced countless YouTube hits. And last month, he got a law passed to limit wage hikes from labor arbitrations between the state and public-employee unions to an average 2 percent annual increase.
As New Jersey, New York, California and Illinois -- the four with the highest insurance premiums on their bonds -- face life without a compliant Congress to approve their pleas for more cash, they'll increasingly have to follow Christie's example and rein in their unions.
As Margaret Thatcher famously said, the problem with socialism is that sooner or later "you run out of other people's money."
When the states come calling, the House must say, "No." What's more, it's time to amend the federal bankruptcy laws to create a procedure for state bankruptcies -- allowing states to abrogate their municipal-union contracts from the school-board level on up.
States, in bankruptcy court, should be able to reorganize their finances so as to put themselves back on a stable footing.
Initially, municipal-bond buyers will protest the lack of federal assistance and may even deny states and localities access to the bond market at any interest rate. But once the states reorganize, they should be able to proceed normally -- just as New York City did after its financial meltdown in the '70s.
Such reorganizations needn't require any ongoing federal involvement. The procedure would let the states help themselves, giving governors and legislatures a third way out of their financial mess. Raise taxes, cut spending or ... alter union contracts. Each state would face the choice of whether to wallow in overspending or take steps to correct it.
Initially, Democrats will oppose the idea of state bankruptcies. But when House Republicans make clear that no more aid will be forthcoming and that the stimulus spigot is turned off, at least some Democrats will realize this is their best option.
Then, fiscal necessity will have achieved what so many of us want -- a return of true local government.
No more will schools be run for the teachers and by the teachers -- nor will such unions as the Service Employees International Union and the American Federation of State, County and Municipal Employees dominate state legislatures. School choice, charter schools and even voucher programs will have a chance to flourish.
Some fear the U.S. Constitution prevents federal law from extending Chapter 9 to permit state bankruptcies because it would violate state sovereignty. Yet Chapter 9 is voluntary, so states would remain sovereign -- with merely the option of subjecting themselves to Chapter 9 constraints.
Giving insolvent states the power to break their union contracts would alter dramatically the balance of political power all across the nation. No longer would municipal unions have the financial ability to underwrite the Democratic Party. Gone from our politics would be $200 million that the American Federation of Teachers, the National Education Association, SEIU and AFSCME together spent on political action in the last election cycle.
Government would be returned to the people.
-
Excellent idea, Chapter 9 municipal bankruptcy for states. Extending the ability to reorganize to the states makes perfect sense. If they are already relying on federal subsidy, then they are already insolvent There has to be a relief valve. Union guarantees in the private sector mean nothing if they implode the company.
Just the option or threat of bankruptcy can be a powerful negotiating tool.
-
Members of the conservative Republican Study Committee in Congress have introduced the "Spending Reduction Act of 2011," a plan that lays out specific budget cuts amounting to $2.5 trillion over the next decade. The number sounds big, but it represents less than 10 percent of annual spending. The bill, according to Paul Bedard of US News, "would reduce current spending for non-defense, non-homeland security and non-veterans programs to 2008 levels, eliminate federal control of Fannie Mae and Freddie Mac, cut the federal workforce by 15 percent through attrition, and cut some $80 billion by blocking implementation of Obamacare." It's a good first step, but it's also just that -- a first step
-
By E.J. MCMAHON
As states struggle with enormous deficits and exploding pension costs, some analysts are urging Congress to enact a law enabling states to declare bankruptcy the way municipalities can under Chapter 9 of the federal bankruptcy code. This is a bad idea. A state bankruptcy provision could create more problems than it solves.
Bankruptcy proponents understandably worry that states such as California and Illinois are so deep in the hole they may end up petitioning Congress for federal relief. To forestall this possibility, the argument goes, even the threat of bankruptcy would give governors and legislators a powerful new weapon for forcing concessions from recalcitrant public employee unions.
Yet state officials committed to cutting costs already have options for putting the squeeze on their unions. One is the threat of mass layoffs, which most governors can impose unilaterally. Governors and legislators also can prospectively freeze wages or even cut them through involuntary furloughs, as California and several other states did over the past two years.
True, management (i.e., taxpayers) often starts from a weak position in contract talks with government unions. But governors and legislators have the power to change that, too—because the bargaining rights of state and local government unions are primarily a matter of state law.
By reopening their collective bargaining statutes, state officials can narrow the terms of future negotiations—restricting compulsory arbitration, say, or taking retiree health insurance off the table and making it a management prerogative. They can also pressure unions by revoking privileges such as the employer-collected dues checkoff. They can even eliminate future union contracts.
View Full Image
Corbis
.This is not as unlikely as it may sound. At least 18 states already outlaw collective bargaining with some categories of government employees; Virginia and North Carolina prohibit it for all public workers. Two newly elected Republican governors, Scott Walker in Wisconsin and John Kasich in Ohio, have threatened to dismantle their state bargaining statutes if unions fail to make concessions.
For constitutional reasons, any federal law enabling state bankruptcy would have to be voluntary, meaning states would have to invite federal judges to play tough with their unions. But if Gov. Jerry Brown and the California legislature are unwilling to rewrite their collective bargaining rules—signed into law by Mr. Brown himself, 33 years ago—why assume they would plead with a federal judge to do it for them?
It's more likely that a state like California would pursue bankruptcy if powerful unions and other budget-dependent interest groups saw this as a way to deflect some of the pain to bondholders. California is one of the states that constitutionally guarantees its general obligation debt, and whose bondholders are now seemingly untouchable. That could change with a bankruptcy option.
Such an option would certainly rattle the bond market—which bankruptcy proponents see as a good thing. Yet this ignores the potential for collateral damage and disruption. While bond spreads might get wider for the most troubled states, the enactment of a state bankruptcy law is likely to raise the cost of borrowing for all municipal issuers.
Much of the talk about state bankruptcy has centered on the solvency threat posed by unfunded public pension liabilities of as much as $3 trillion, according to an estimate by Joshua Rauh of Northwestern University. This is truly a significant concern, complicated in some cases by state constitutions that make it impossible to claw back unaffordable benefits for current workers.
However, while most public pension liabilities are pooled in statewide, off-budget trust funds, they largely reflect the cost of retirement benefits promised to teachers, cops and firefighters—who mainly work for municipalities, not state governments. This raises another complication: Could a judge in a state bankruptcy proceeding interfere with the pension obligations of localities?
A growing number of states are finally starting to get serious about pension reform. New Jersey Gov. Chris Christie, who confronts one of the nation's worst pension underfunding problems, is using the prospect of insolvency to push for significant pension reductions. Bankruptcy could complicate this task. If Mr. Christie somehow persuaded a Democrat-dominated state legislature to join him in asking a federal judge to reduce pensions, New Jersey's unions might be that much quicker to seek a federal bailout.
The focus of state bankruptcy advocates on employee compensation costs is somewhat misplaced. More than half of all state expenditures go to Medicaid, K-12 public school aid and other transfer payments. These are the areas—not current pension bills or debt service—that have been the prime source of unsustainable and unaffordable spending growth in state budgets.
The biggest state budget gaps will never be closed until politicians use the tools they already have to challenge the overweening power of public employee unions. Meanwhile, Washington can help by lifting some of the burdens it imposes on the states. Converting Medicaid into a block grant, for example, would remove one big excuse governors now have for failing to do more to control their health-care costs. By giving states more flexibility to deal with this program and other federal mandates, Congress will have greater justification for telling governors to fix their own problems.
Mr. McMahon is a senior fellow at the Manhattan Institute and its Albany-based Empire Center for New York State Policy.
-
"We're glad to see House Republicans pushing the Spending Reduction Act of 2011, which would trim $2.5 trillion from the budget over the next decade. It's a nice start, but not nearly enough. It's great to see so many undeserving, wasteful programs finally face the ax. But that's just what the Republicans' new plan to return the U.S. to fiscal responsibility would do. ...
The GOP bill would lower spending on 'non-defense, non-homeland security and non-veterans programs' to 2008 levels. That includes Fannie Mae and Freddie Mac, the bankrupt mortgage giants, which would no longer be under government control. The federal work force would be cut 15% through attrition, another major saving. All good, we say. But let's do the math. In the last two years alone, we've put up deficits of $2.7 trillion. In perspective, the proposed $2.5 trillion in cuts over a decade come to $250 billion a year. Our deficit will average $1.33 trillion a year for the next 10 years -- $13.3 trillion, total, according to the Congressional Budget Office. So even with the GOP's cuts, we'll still have $1 trillion a year in deficits. Even with all this cutting, we come up well short. ...
The GOP has done yeoman's work, taking a first whack at bringing our budget back into balance. But without entitlement reform, spending will continue to soar -- and we'll watch our debts surge from about $14 trillion today to $23 trillion or more in just 10 years. Cuts won't come easy, but they have to be made. The GOP plan is a decent down payment, but more cutting remains to be done." --Investor's Business Daily
-
Hamstrung by federal prohibitions against lowering Medicaid eligibility, governors from both parties are exercising their remaining options in proposing bone-deep cuts to the program during the fourth consecutive year of brutal economic conditions.
Gov. Jerry Brown of California, a Democrat, proposes cutting Medicaid by $1.7 billion.
Gov. Andrew Cuomo of New York is expected to propose at least $2 billion in cuts in his budget.
Because states confront budget gaps estimated at $125 billion, few essential services — schools, roads, parks — are likely to escape the ax. But the election of tough-minded governors, the evaporation of federal aid, the relentless growth of Medicaid rolls and the exhaustion of alternatives have made the program, which primarily covers low-income children and disabled adults, an outsize target.
In Arizona, which last year ended Medicaid payments for some organ transplants, Gov. Jan Brewer, a Republican, is asking the Obama administration to waive a provision of the new health care law so that the state can remove 280,000 adults from the program’s rolls. In California, the newly elected governor, Jerry Brown, a Democrat, proposes cutting Medicaid by $1.7 billion, in part by limiting the beneficiaries to 10 doctor visits a year and six prescriptions a month.
In the budget he will unveil on Tuesday, Gov. Andrew M. Cuomo of New York is expected to propose cutting even more — at least $2 billion from projected state spending on Medicaid, which totaled about $14 billion this year.
And Gov. Nathan Deal, the new Republican leader of Georgia, proposed this month to end Medicaid coverage of dental, vision and podiatry treatments for adults. South Carolina is considering going a step further by also eliminating hospice care.
The governors are taking little joy in their proposals. And many of them, particularly the Republicans, are complaining about provisions of last year’s health care overhaul, and of the stimulus package before it, that require the states to maintain eligibility levels in order to keep their federal Medicaid dollars.
“Please know that I understand fully the impacts of this rollback, and it is with a heavy heart that I make this request,” Ms. Brewer wrote this week in seeking a waiver, the first of its kind, from Kathleen Sebelius, the secretary of health and human services. “However, I am left with no other viable alternative.”
The shrinking of Medicaid programs, if approved by the state legislatures, would come at a tenuous moment for the Obama administration. Starting in 2014, the health care law calls for an enormous expansion of Medicaid eligibility that is expected to add 16 million beneficiaries by 2019.
Some states are now cutting benefits like prescription drugs and mental health treatment that will be required then. The federal government will cover the entire cost of the expansion through 2016, when states must gradually pick up a share, peaking at 10 percent in 2020 and remaining there.
Governors have known that this precipice was near for close to two years.
Medicaid, which covered 48.5 million people in 2009, up 8 percent in a year, is a joint state and federal program. The federal government provides the lion’s share of the money and sets minimum standards for eligibility and benefits that states may exceed if they wish.
In 2009, Congress provided about $90 billion for states in the stimulus package to offset the cost of surging Medicaid rolls. Last August, it extended the aid at a reduced level, adding $15 billion over six months. The relief raised the federal share to between 65 percent and 82 percent, depending on the state, up from between 50 percent and 75 percent.
While that money is widely credited with staving off catastrophe, deficits were so deep that 39 states cut Medicaid payments to providers in 2010, and 20 states pared benefits, according to the Kaiser Family Foundation.
On July 1, the enhanced federal aid will disappear, causing an overnight increase of between one-fourth and one-third in each state’s share of Medicaid’s costs. But because of the federal eligibility restrictions, the options for states are largely limited to cutting benefits that are not federally required; reducing payments to doctors, hospitals and nursing homes; and raising taxes on those providers.
“States have already cut payments to health care providers and scaled back benefits over the last few years, so these new proposed cuts are much more painful,” said Edwin Park, a health expert at the Center on Budget and Policy Priorities, a left-leaning research group.
A number of states, Texas and California among them, are considering further reductions of as much as 10 percent in payments to providers. Medicaid reimbursement is already so low that many physicians refuse to accept the coverage.
Several states also plan to raise co-payments for beneficiaries. And a number of governors, notably Rick Scott in Florida, are considering vast expansions of managed care plans in an attempt to control costs.
Mr. Brown’s proposed cap on doctors’ visits in California would affect only 10 percent of Medicaid recipients, said Toby Douglas, the state’s Medicaid director. But many of them would be among the sickest beneficiaries. Mr. Brown also has suggested eliminating an adult day care program that serves 27,000 people who might otherwise end up in nursing homes.
=============
“We are having to make proposals that are not the best choices for our most vulnerable beneficiaries,” Mr. Douglas said. “But given our limited resources, they are the best choices for the State of California.”
Lawmakers in a few states have discussed withdrawing from Medicaid, although Texas officials recently concluded that the loss of federal matching dollars would make it impractical. In at least one state, Minnesota, officials are expanding Medicaid eligibility to some childless adults before 2014, largely to win federal dollars for coverage that was being provided by the state.
Arizona’s waiver request will be a test of the new health care law’s flexibility, and of the White House’s disposition. Other states are watching. Twenty-nine Republican governors wrote Mr. Obama and Congressional leaders this month to urge repeal of the prohibition, which they called “unconscionable.”
Jessica Santillo, a spokeswoman for the federal Department of Health and Human Services, said the agency would not comment on Arizona’s pending request or the administration’s approach to waivers. “We want to continue our close partnership with the states and our nation’s governors,” she said.
Arizona is asking to remove 250,000 childless adults and 30,000 parents from Medicaid. They were granted eligibility by a 2000 referendum that made Arizona one of the few states to cover low-income childless adults.
The expansion was financed with proceeds from cigarette taxes and a tobacco lawsuit, but that money became insufficient in 2004. The state’s general fund has been making up the difference ever since. Eliminating the coverage would save $541 million, closing nearly half of the budget gap for the coming year.
In her letter to Ms. Sebelius, Ms. Brewer noted that Medicaid consumed 30 percent of her state’s general fund, up from 17 percent in 2007. And she emphasized that Arizona’s coverage was more generous than that in most states, a pointed reference to Kansas, where Ms. Sebelius was governor until two years ago.
-
By JANET HOOK
House Republicans are debating whether to propose new limits on the growth of Medicare and other entitlement programs, weighing a gamble that voters are more concerned about trimming the federal deficit than holding on to promised benefits.
Some Republicans are warning that the party faces a backlash if it fails to produce a budget that limits entitlement growth, given the anger at federal debt that drove the party's mid-term election gains.
"I believe strongly that we have to act on entitlement reform, and we have to do it sooner rather than later," said Rep. Devin Nunes (R., Calif.), a member of the committee that oversees Medicare and Social Security. "The longer we wait, the worse it gets."
Bill Kristol, editor of the conservative Weekly Standard, said: "You'd look ridiculous after the 2010 campaign to go mum on 60% of the budget.'' The magazine has urged Republicans to propose an entitlement overhaul in this year's budget process.
Efforts to curb entitlement spending have long been an element of the budget debate—often discussed, but rarely acted on because of their political sensitivity. Rather than aim immediately at entitlements, leaders of the new House Republican majority have focused on fulfilling their promise to cut domestic discretionary spending to 2008 levels, which would require about $100 billion in cuts.
But even cuts of that magnitude would only nick a federal deficit projected to reach $1.5 trillion this year. Discretionary spending accounts for about 33% of the federal budget. Entitlements such as Social Security, Medicare and Medicaid make up more than 60% of the budget.
"You still cannot have a long-term budget fix without doing entitlement reform," said Rep. Jack Kingston (R., Ga.), a senior member of the House Appropriations Committee
The Congressional Budget Office estimates that annual outlays will grow an average of 5.4% for Social Security and 6.8% for Medicare through the end of the decade, compared with a 1% increase in discretionary spending.
Talk of trying to revamp entitlements is also taking on prominence because one of the GOP's boldest advocates of such a change, Rep. Paul Ryan of Wisconsin, has become chairman of the House Budget Committee.
Lawmakers in both parties have long believed that it would be politically foolhardy to propose changes in Medicare or Social Security without bipartisan backing in Congress and support from the president.
When Republicans last tried to slow the growth of Medicare, under House Speaker Newt Gingrich in 1995, the plan became embroiled in a budget stand-off with President Bill Clinton that was widely viewed as a lasting political liability for the GOP.
Some recent polling underscores the political dangers. In a January survey for the Kaiser Family Foundation and the Harvard School of Public Health, 68% of respondents said the country's budgetary problems can be addressed without reductions in Medicare, while 28% said reductions to the program should be on the table.
But some lawmakers sense growing public support for slowing the growth of entitlement spending, and a Wall Street Journal/NBC News survey in August found broad acceptance for some possible changes.
Asked about various options for dealing with the federal deficit, 74% of respondents said it would be acceptable to make Medicare more needs-based, so that low-income seniors received larger subsidies than higher-income seniors. Some 64% approved of capping payment increases to doctors and hospitals.
In the Senate, where Republicans are in the minority, GOP leader Mitch McConnell of Kentucky has said that no entitlement changes will be made without Mr. Obama taking the lead. Senate Budget Committee Chairman Kent Conrad (D., N.D.) is an advocate of entitlement curbs but has called for a bipartisan summit to get the ball rolling.
In the House, the larger fiscal battles will be fought in the Budget Committee when Republicans draft a blueprint setting spending and revenue targets for 2012. Mr. Ryan's allies say he will try to incorporate key elements of his "Roadmap for America's Future"—a deficit reduction plan that calls for, among other things, converting Medicare from a guaranteed-benefit insurance program into a voucher system for people who now are 55 or younger.
Mr. Ryan himself has tried to tamp down those expectations, saying he has to write a budget that can win broad support among Republican lawmakers.
-
By MICHAEL J. BOSKIN
The old bromide that citizens elect presidents for protection from other people's congressmen was reversed last November when a Congress was elected for protection from the president. This week House Republicans have been debating how to cut the ballooning budget. After ramming through an expansion of federal spending to levels not approached since World War II, President Obama is now calling for still more spending, with a renewed emphasis on infrastructure, that he claims will create jobs and economic growth.
Let's put this in perspective: With the Congressional Budget Office (CBO) now projecting a federal budget deficit this year of $1.5 trillion, Mr. Obama is on course to add as much debt in one term as all 43 previous presidents combined. Not surprisingly, the rating agency Standard & Poor's is warning of a Treasury downgrade.
Yes, the president is calling for a freeze on nondefense discretionary spending (18% of the budget). But this would leave that spending more than 20% higher than already- elevated 2008 levels, where Republicans would like to return. The freeze also cements in place a huge expansion of government originally sold as a temporary, emergency response to the economic and financial crisis.
Mr. Obama's Budget Director Jacob Lew asserts that the president has made tough choices, pointing to $775 million of proposed cuts—but that's one-tenth of 1% of nondefense discretionary spending. The Obama administration and its supporters dubiously claim higher spending will quickly strengthen the recovery and generate jobs, and that any "draconian" cuts would derail the recovery. Higher spending, deficits and debt are future problems, they argue, and even then higher taxes (especially on "the rich") won't harm the economy.
But government spending generally does little to boost the economy. Exhibit A is the failed 2009 stimulus bill, the president's American Recovery and Reinvestment Act (ARRA).
The strongest case for stimulus is increased military spending during recessions. But infrastructure spending, as the president proposes, is poorly designed for anti-recession job creation. As Harvard economist Edward Glaeser has shown, the ARRA's transportation spending was not directed to areas with the highest unemployment or the largest housing busts (and therefore the most unemployed construction workers). Indeed, last September Wendy Greuel, the City of Los Angeles controller, shocked the country when she revealed that the $111 million in ARRA infrastructure money her city received created only 55 jobs—that's a whopping $2 million of federal stimulus per job created.
Why is this so? Modern, large-scale public infrastructure projects use heavy equipment and are less labor-intensive than they were historically (WPA workers digging ditches with shovels in the 1930s). Federal transportation stimulus spending was $4 billion in 2009, leaving two problems with claims of "shovel-ready" projects: shovels and ready.
View Full Image
Chad Crowe
.The nation certainly has public investment needs, but federal infrastructure spending should be based on rigorous national cost-benefit tests. Most local officials are happy to have the rest of the country pay for spending on virtually any project, however modest the local benefits. Even so, several states have rejected high-speed rail subsidies as requiring unwise state spending despite the subsidies. California's estimates, for example, have soared.
Moreover, how will we pay for all this new spending? The CBO's 10-year projection sees the possibility of the debt-to-GDP ratio rising to an astounding 100%. Several recent studies (detailed on these pages in my "Why the Spending Stimulus Failed," Dec. 1, 2010) conclude that: 1) such high debt would severely damage growth, so fiscal consolidation is essential; 2) fiscal consolidation is likely to be far more effective on the spending than the tax side of the budget; and 3) substantially higher tax rates and spending cause permanent drops in income that are many times larger than the temporary fall caused by the recession. Thus, spending control is vital before debt levels or tax increases risk severely damaging growth for a generation.
In the 1980s and '90s, federal spending was reduced by more than 5% of GDP to 18.4% in 2000—a level sufficient to balance the budget at full employment and allow for lower tax rates. It was a remarkable period of growth, and there's no reason we can't repeat that success. In addition to rolling back ObamaCare and rolling up remaining TARP and stimulus funds, spending control should include these major reforms:
• Consolidate, eliminate, defederalize and, where feasible, voucherize with flexible block grants. I pointed out in 2007 that 42% of federal civilian workers were due to retire in the coming decade. Replacing half of them (with exceptions for national security and public safety) with technology could improve services and save hundreds of billions of dollars. Beyond the savings, it would make necessary services more efficient. For example, the federal government's many separate job-training programs should be consolidated and voucherized to enable citizens to obtain commercially useful training.
• A dopt successful business practices where possible. For example, consolidating IT infrastructure, streamlining supply chains, using advanced business analytics to reduce improper payments, and switching from expensive custom code to standardized software applications could save more than $1 trillion over a decade while upgrading and improving federal support and information services.
• Gradually move from wage to price indexing of initial Social Security benefits. This would eliminate the entire projected Social Security deficit without cutting anyone's benefits or raising anyone's taxes. Also, raise the retirement age over several decades, preserve early retirement and disability, and strengthen support for the poorest. On Medicare, former Clinton Budget Director Alice Rivlin and House Budget Committee Chairman Paul Ryan propose gradually moving to fixed government contributions to purchase insurance, for large savings and more informed care.
The immense growth of government spending and soaring public deficits and debt are the major sources of systemic economic risk, here and abroad, threatening enormous costs by higher taxes, inflation or default. The problem is not merely public debt. A much higher ratio of taxes to GDP trades a deficit problem for sluggish growth. In recent decades, the large advanced economies with the highest taxes have grown most slowly. And the high-tax economies did not have smaller budget deficits. Rather, higher taxes merely led to higher spending.
Elected officials too often ignore long-run costs to achieve short-run benefits. But government policies can neither revoke the laws of arithmetic nor circumvent the laws of economics. The time to start reducing spending is now.
Mr. Boskin is a professor of economics at Stanford University and a senior fellow at the Hoover Institution. He chaired the Council of Economic Advisers under President George H.W. Bush.
-
second post of day:
The Debt Bomb Showdown
112th Congress vs. Obama's Error of Big Government
"We must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude." Thomas Jefferson
This bomb will "fundamentally transform America"There's currently a lot of talk about deficits and debt among the new House Republican majority; much of it is contentious intraparty debate about whether to raise the "debt ceiling."
For the purpose of clarity, let me reiterate a few definitions.
The national budget deficit is the difference between the total spending budget (including interest on debt) authorized by Congress for each year, and total tax receipts. For this fiscal year alone (October 1, 2010, to September 30, 2011), the shortfall is projected to be 1.15 trillion dollars.
The national debt is the total of all outstanding U.S. Treasury obligations held by domestic and foreign individuals, institutions and governments, and is currently 14.05 trillion dollars.
The debt ceiling is the self-imposed limit Congress sets for what it can legally borrow to pay for all the government services that it can't afford. A year ago, Congress increased that limit to 14.29 trillion dollars. But since Congress has authorized spending almost five billion dollars a day more than it takes in, that debt ceiling will be hit sometime between the end of March and mid-May.
Complicating matters further, the then-Democrat-controlled Congress failed to set a new budget for the current year, instead opting for continuing resolutions (CR) that authorize the prior year's spending levels. They utilized this budget ruse in order to avoid greater accountability (greater losses) in the midterm election last year. The current CR expires on 4 March, and House Republicans are using that expiration date to force Barack Hussein Obama into budget-cutting submission.
Here is how the key Republican players in this crisis -- and it is a crisis -- have positioned themselves on the issue of deficits and the debt ceiling.
House Speaker John Boehner notes, "We have to work our will in the House. We have to work with our colleagues in the Senate and put something on the president's desk. If the president is going to ask us to increase the debt limit, then he's going to have to be willing to cut up the credit cards. ... [Default] would be a financial disaster not only for our country, but for the worldwide economy. Remember, the American people on Election Day said we want to cut spending and we want to create jobs. You can't create jobs if you default on the federal debt."
Rep. Austin Scott (R-GA), president of the powerful freshman class of the 112th Congress, adds, "If there is a vote put forward to increase the national debt ceiling and that is all the legislation does, I think it will fail overwhelmingly."
Budget Committee Chairman Paul Ryan (R-WI) is advancing a budget plan with $32 billion in spending cuts for the current budget year (FY11), well short of the Republican Pledge to America's "$100 billion in the first year alone."
But House Majority Leader Eric Cantor (R-VA) explains, "It fulfills the pledge because we said in a year's time we were going to cut spending by $100 billion. As you know, we are five-twelfths of the way through the fiscal year by the time the expiration occurs. We will be proposing this again in the next fiscal year, and if you look at it on an annualized basis, I assure you it will be over $100 billion."
It better be!
Rep. Cantor adds, "We are simply not going to accept an increase in the debt limit without serious cuts and reforms. ... What we need to do and are committed to doing is making sure that we achieve spending cuts and effect real reforms so that the spending binge ends. We look at the debt limit vote as an opportunity for us to accomplish those goals."
In the Senate, Tea Party favorite Jim DeMint (R-SC) says that Obama administration claims that holding the debt ceiling at current levels would be "catastrophic" are true only if the administration elects to default on interest and debt obligations.
His Senate colleague Pat Toomey (R-PA) has proposed the Full Faith and Credit Act, which would "require the Treasury to make interest payments on our debt its first priority in the event that the debt ceiling is not raised." However, Toomey is not prepared to hold the debt ceiling, noting, "Congress should make increasing our debt contingent on immediate cuts in spending and effective reforms of the spending process that helped get us into this mess. We can do so without jeopardizing the full faith and credit of our country -- and we should."
Sen. Rand Paul (R-KY), who along with DeMint is a member of that body's Tea Party Caucus, has proposed a much more aggressive plan, which cuts $500 billion from the federal budget this year alone. This plan is something of a straw-man target, especially its proposed cuts to defense spending at a time when that budget has been trimmed to limits that increase threats to our frontline warriors.
However, the other domestic spending cuts in Paul's budget should not be discounted, as those cuts have the overwhelming support of the aforementioned Tea Party, a formidable movement that continues to pick up steam across the nation.
Additionally, Sen. Claire McCaskill (D-MO) and my friend Sen. Bob Corker (R-TN) have introduced a bill to cap federal spending at about 20 percent of the U.S. GDP. That is still a very big budget, but it cuts out more than $8 trillion in spending over the next decade. It is, I believe, an admirable first attempt to establish a cap in a Senate where Republicans are still the minority party.
Of course, for his part, Obama is banking on the assumption that the American people are just too dullard to understand the consequences of the debt bomb he's dropping on the nation. This bombing mission was launched with the politically fortuitous collapse of the U.S. real estate and securities markets, which Obama rode into office in order to launch "the fundamental transformation of the United States of America."
To that end, Obama and his Socialist bourgeoisie will blame Republicans for the hardships -- and there will be hardships -- associated with moving toward a balanced budget.
Sen. Kent Conrad (D-ND), chairman of the Senate Budget Committee, was the first out of the gate with the Obama memo tactic: "Basically what [Republicans] are saying is 'pay China first.' We're going to forget about the American public and the things that they need? Somehow they're secondary? And paying the Chinese and the Japanese is the first priority of this country?"
In the debate about raising the debt ceiling, expect Democrats to deploy a plethora of slight variations on that theme.
Continuing his faux charade to somehow appear "Reaganesque," Obama proposed a paltry $775 million in budget cuts. To put that into perspective, view this budget graphic.
In the coming months, the Obama administration and its Leftmedia sycophants will attempt to perpetuate this obfuscation of the hard facts.
Fortunately, there is a congressional caucus which embodies the Reagan mantle, a group of conservative lawmakers which we have applauded since its inception. That caucus includes most members of the Tea Party caucus.
To sort the wheat from the chaff in the coming budget battles, I recommend you rely on the Republican Study Committee for clarity about which legislation to support, and on the Heritage Foundation for why to support it. Long before the advent of the Tea Party movement, the RSC was dedicated to "a limited and Constitutional role for the federal government, a strong national defense, the protection of individual and property rights, and the preservation of traditional family values."
(If that sounds familiar, see The Patriot's mission statement.)
Currently under the chairmanship of Ohio Rep. Jim Jordan, the RSC is our last best defense against detonation of the Obama debt bomb. If more Republicans will honor their oath to abide by our Constitution, as the RSC members endeavor to do, then the nation will avoid the economic catastrophe that looms.
However, if the Left successfully uses their "pay China first and forget about the American public" propaganda to derail the RSC/Republican effort to enact massive deficit and debt reductions, then batten down the hatches. I can assure you that when Obama's debt bomb detonates, it will completely transform America by breaking the back of free enterprise. The result will be the collapse of the dollar and mass unemployment accompanied by civil unrest. Of course, as I have speculated previously, that scenario comports with Obama's subversive vision to convert the USA to the USSA.
First Principles and Rule of Law as enshrined in our Constitution must trump propaganda if Liberty is to survive the Obama regime.
In the timeless words of George Washington, "No pecuniary consideration is more urgent, than the regular redemption and discharge of the public debt: on none can delay be more injurious, or an economy of time more valuable."
I second that motion!
Footnote: The Wall Street Journal reports, "Governors around the U.S. are proposing to balance their states' budgets with a long list of cuts and almost no new taxes, reflecting a goal by politicians from both parties to erase deficits chiefly by shrinking government." Of course, most governors are required by their state constitutions to balance their budget. It is high time, then, for a balanced budget amendment to our federal Constitution, which the RSC also advocates.
-
Times are tough, will you do your part?
--------------------------------------------------------------------------------
I HOPE YOU WILL PARTICIPATE AND DO YOUR PART!
The President has ordered the cabinet to cut $100 million from the $3.5 trillion federal budget.
I'm so impressed by this sacrifice that I have decided to do the same thing with my personal budget. I spend about $2000 a month on groceries, household expenses, medicine, utilities, etc, but it's time to get out the budget cutting ax, go line by line through my expenses, and cut back!
I'm going to cut my spending at exactly the same ratio -1/35,000 of my total budget. After doing the math, it looks like instead of spending $2000 a month; I'm going to have to cut that number by six cents! Yes, I'm going to have to get by with $1999.94, but that's what sacrifice is all about. I'll just have to do without some things, that are, frankly, luxuries. (Did he actually think no one would do the math?)
John Q. Taxpayer
-
Much to disagree with here, but I sure like the idea of selling off Amtrak! Extra points for the fact that to do so would really annoy VP Biden.
=======
Sale of the Century
The deficit debate remains fixed on tax hikes and spending cuts, but there is another option.
by Niall Ferguson
In my favorite spaghetti western, The Good, the Bad and the Ugly, there is a memorable scene that sums up the world economy today. Blondie (Clint Eastwood) and Tuco (Eli Wallach) have finally found the cemetery where they know the gold is buried. Trouble is, they’re in a vast Civil War graveyard, and they don’t know where to find the loot. Eastwood looks at his gun, looks at Wallach, and utters the immortal line: “In this world, there are two kinds of people, my friend. Those with loaded guns … and those who dig.”
In the post-crisis economic order, there are likewise two kinds of economies. Those with vast accumulations of assets, including sovereign wealth funds (currently in excess of $4 trillion) and hard-currency reserves ($5.5 trillion for emerging markets alone), are the ones with loaded guns. The economies with huge public debts, by contrast, are the ones that have to dig. The question is, just how will they dig their way out?
The conventional wisdom holds that, aside from resorting to inflation or default, debts can be reduced only through belt-tightening austerity measures—some mixture of higher taxes and spending cuts. And yet politicians are notoriously leery of proposing hikes or cuts big enough to make a real dent in the debt. President Obama’s latest budget proposal includes a five-year freeze on nondefense discretionary spending and tax increases on higher earners. But even if all goes according to plan, the gross debt will still rise above 105 percent of gross domestic product—and stay there.
The root of the problem is, of course, a lack of political will, extending down from the president himself to the lowliest Tea Party activist living on Social Security and Medicare. But a convenient excuse for ongoing borrowing is also provided by Keynesian economic theory, which states that a fiscal squeeze will tend to reduce economic growth, thereby widening the gap between revenues and expenditures. Fiscal hawks respond that a bond-market panic induced by excessive borrowing could be even nastier.
Yet there is another fiscal option that neither party seems to be considering. The U.S. needs to do exactly what it would if it were a severely indebted company: sell off assets to balance its books.
There are three different arguments against such asset sales. The first concerns national security. When Dubai Ports World bought the shipping company P&O in 2006—which would have given it control of facilities in a number of U.S. ports—the deal was killed in Congress in a fit of post-9/11 paranoia. The second argument is usually made by unions: private or foreign owners will be tougher on American workers than good old Uncle Sam. Finally, there’s the chauvinism that surfaced back in the 1980s when the Japanese were snapping up properties like Pebble Beach. How could the United States let its national treasures—the family silver—fall into the hands of inscrutable Asian rivals?
Such arguments were never very strong. Now, in the midst of the biggest crisis of American public finance since the Civil War, they simply collapse. First, standards of public safety and security are unlikely to be compromised by a change of ownership unless military technology is involved (and the U.S. has already sold a startling amount of that to foreigners, by the way). Second, the goal of public policy should not be to protect public-sector workers from market discipline that will raise their productivity. Finally, why is selling assets to Asians worse than paying them an annual rent called interest on the national debt?
The mystery is why freedom-loving Americans are so averse to privatization—a policy that has been a huge success nearly everywhere it’s been tried. From Margaret Thatcher’s Britain, where the word “privatization” was coined, to present-day China, selling off government-owned industries has not only improved the fiscal position of governments; it has usually enhanced the efficiency with which the sold assets are managed.
The figures are impressive. Since the 1990s, about 75,000 medium-to-large firms have been privatized all around the world, from Argentina to Zambia, as have hundreds of thousands of smaller enterprises. The total proceeds: $735 billion. The United States accounts for only a tiny fraction of that number. Other countries are miles ahead. On a visit to Beijing in November last year, I even heard a leading Chinese economist half-seriously recommend the privatization of the Great Hall of the People. Yet American fiscal reformers—including the boldest of them, Republican Rep. Paul Ryan—tend to steer clear of the P word.
So let’s get down to business. What can the U.S. federal government and the various bankrupt states put up for sale? No, not Yellowstone or Yosemite. Those natural wonders should always belong to the nation. And no, not Alaska, much as many moderate Republicans would love to sell Sarah Palin to the Chinese.
In fact, the U.S. government currently has about $233 billion worth of nondefense “property, plant, and equipment,” according to the Treasury’s Financial Management Service. That is almost certainly an understatement. The government owns somewhere between 600 million and 700 million acres of land, or about 30 percent of the country’s land surface, much of it in the Western states, where as much as half the land is federally owned.
Washington could also sell its stakes in the Southeastern Power Administration and related assets as well as the Tennessee Valley Authority’s electric-power assets. There’s Amtrak (which runs at a loss) and the extensive hydroelectric empire of the U.S. Army Corps of Engineers.
And then there are the assets that have the potential to be among the most lucrative of all: America’s highways. Plenty of other countries—Japan, Turkey, and even China, to name just three—have already privatized substantial parts of their transportation infrastructure, leaving private companies to manage both revenues and maintenance.
American highways sold to foreign investors? It may sound unthinkable, but it’s already happening. Indiana recently leased the operation of the state’s principal 157-mile highway to a consortium led by the Spanish company Cintra and the Australian investment bank Macquarie. For the next 75 years, the consortium will collect the tolls from motorists. Indiana got $3.85 billion upfront. The city of Chicago has done a similar deal, leasing out its Skyway toll bridge for $1.83 billion. A few other state governments have been moving hesitantly down this same path, usually by setting up public-private partnerships to manage stretches of highway.
But there’s so much more that could be done. California’s government has an estimated $103 billion in assets, including state highways with a book value of $59 billion. Are you telling me a sovereign wealth fund from, say, Singapore couldn’t do a better job of running those choked and often potholed roads? Yet one of Gov. Jerry Brown’s first acts since returning to office was to cancel a planned privatization of state-owned office buildings.
From sea to shining sea, American politicians are running scared from the only credible solution to the country’s fiscal crisis. Rather than publishing honest balance sheets with meaningful valuations of both their assets and liabilities, they’d rather maintain the fiction that it’s their job to invest billions in high-speed railroads and the like.
Let’s face it: if you want to see serious investment in America’s infrastructure—and the American Society of Civil Engineers estimates that a full upgrade would cost $1.3 trillion—it isn’t going to come from the likes of Governor Brown, much less President Obama. They’re broke, folks.
There are, remember, two kinds of economies in this world: those with guns and those who dig—those with piles of cash and those with mountains of debt. Sure, the debtors can keep on borrowing until their creditors revolt, or they can try to dig their way out with austerity budgets. But a better idea would be to get smart and start inviting bidders to what could be the sale of the century.
-
Selling off from our federal government assets is IMO the right answer to the wrong question. It is what do we do next when we finish reducing the size and scope of government, balancing the budget, and find ourselves sitting on a mountian of debt - and a mountain of assets, literally. Regulate the forest, not own all of it.
Also for government's role is so called in so-called global warming, pull every non-emergency government vehicle off the road before you curtails ours. Fewer and smaller buildings with fewer employees less heat and air conditioning. Sell the building, lease back only the space required, scaled back - at all levels of government. Smaller foot print, smaller carbon footprint.
-
By FRED BARNES
Republicans won a blockbuster victory in November's election after a campaign focused on cutting government spending and reducing debt. Then they got the bad news: Americans are leery of cutting specific programs.
These include Social Security, Medicare, Medicaid, national defense, veterans' benefits, education, highways, mass transit, unemployment benefits, agriculture and the environment. A post-election poll by YouGov/Polimetrix found that the public favors cuts only in foreign aid.
So since House Republicans decided that their 2012 budget, to be released in April, would take on a wide range of popular programs as well as entitlements, Democrats have been elated. They believe Republicans have foolishly walked into a trap.
Perhaps not. Republicans have a better chance of succeeding with an agenda of budget cuts than at any time since President Ronald Reagan pushed significant reductions through Congress in 1981. Yes, their task will be arduous—but they have grounds for optimism.
To be sure, Republicans will need to organize far more support for cuts—high-profile, high- decibel support—than they have. They must be persuasive in countering the Democratic argument that preserving individual programs is more critical to the well-being of Americans than is rolling back overall spending to keep the country from decline. And, like Reagan, they must sound positive and upbeat to offset the nation's anxious mood.
View Full Image
Associated Press
Rep. Paul Ryan (R., Wis.), left, and Sen. Jeff Sessions (R., Ala.)
.The situation Republicans are in has been compared to the 1990s. Back then, Republicans had a mixed record of cutting spending, and fiscal issues were not front-and-center in their campaign to capture Congress in 1994. But fiscal issues (including repeal of ObamaCare) were central to their midterm campaign last year. In 1994, state and local governments were not suffering as shockingly from mounting debt as they, and Washington, are today. "It's a different day," says Bill Paxon, a key House Republican leader in the 1990s. People realize there is a fiscal crisis, he says. "It's pervasive. They know you can't kick the can down the road."
Mr. Obama has acknowledged as much, although his 2012 budget scarcely deals with the problem. By keeping cuts to a minimum and ignoring entitlements, he's all but dared Republicans to move first. Once they do, they'll be criticized for imposing cruel cuts and impeding job creation.
This age-old Democratic strategy has worked before, which is why Republicans need a political juggernaut to overcome it. The worst that can happen is a repeat of President George W. Bush's bid to enact Social Security reform in 2005. His year-long crusade attracted little support, even from Republicans.
One can imagine Paul Ryan, the chairman of the House Budget Committee and the architect of the GOP spending cuts and entitlement reforms, making the same mistake this year. To avert that, Mr. Ryan needs a broad coalition to surround his spending initiative with visible support. That would give the cuts and reforms credibility. They would look not quixotic but achievable, as they indeed are.
Sen. Ron Johnson (R., Wis.) on the budget battles in Washington and back home.
.House Republicans—having united behind spending cuts for the remainder of the fiscal year 2011 budget—are ready to back Mr. Ryan's 2012 budget. But the Senate is another story. The GOP budget should get strong backing from Jeff Sessions, the ranking Republican on the Senate Budget Committee, and Minority Whip Jon Kyl. Mr. Kyl believes a handful of Democrats may be ready to vote for "a certain number" of spending cuts. If all 47 Republican senators vote for the House Republican budget, or major parts of it, only four Democrats would be required for passage.
But for now Senate Republican Leader Mitch McConnell is not fully on board. He has said repeatedly that entitlement reform "will not be done except on a bipartisan basis with presidential leadership." Such a basis doesn't exist today, but that may change. A bipartisan group of six senators—Democrats Richard Durbin of Illinois, Mark Warner of Virginia, and Kent Conrad of North Dakota, and Republicans Tom Coburn of Oklahoma, Mike Crapo of Idaho, and Saxby Chambliss of Georgia—is devising a plan to impose mandatory spending caps and corral entitlement costs in a proposal similar to the $4 billion in debt reduction urged by the president's debt commission last year. The Democrats hope Mr. Obama, who declined to endorse the commission's recommendation, might sign on if they reach a deal.
An indication of where the Senate may be headed occurred on Feb. 1. Nearly 40 senators from both parties gathered in the Capitol Visitors Center to listen to two hedge-fund managers, one a Democrat, the other a Republican. Their message: Soaring debt threatens growth, job creation and America's preeminence in the world. Asked what single thing Congress could do to relieve the anxiety of financial markets, their answer was "fix Social Security."
Outside of Congress, it will be easy to recruit Republican governors to promote spending cuts and an overhaul of entitlements. Many of them, such as New Jersey's Chris Christie and Wisconsin's Scott Walker, are already involved with this struggle on the state level. But the GOP will also need the active support of its presidential candidates, movement conservatives, tea party folks, libertarians and political independents.
And their message is critical. Bragging about painful but necessary cuts to Medicare scares people. Stressing the goal of saving Medicare won't. Talking about the need for austerity is a loser. The idea here is to produce prosperity. Pain isn't the issue. Relief is.
Mr. Ryan insists that he won't be deterred by bad poll numbers. But better poll results, from asking good questions, would be reassuring. Instead of asking about Medicare cuts, ask if reforms rather than tax hikes and borrowing should be used to make Medicare sustainable. Ask if billionaires should get the same Social Security benefits as the middle class. Ask if bigger deficits and more debt should be incurred to protect every individual program.
Republicans have a second objective beyond restoring proper fiscal priorities: setting the stage for electing a Republican president in 2012. With Democrats in charge of the Senate and Mr. Obama in the White House, deep spending cuts and real entitlement reform may not happen this year or next. But a serious and very public effort to get them can improve the chances of Republican presidential candidates next year.
The Democratic strategy of bewailing cuts in every domestic program has become an anachronism. The public knows there's something larger at stake. Rarely has there been a better opportunity to do the right thing for the country. And Republicans have a chance to seize it.
Mr. Barnes is executive editor of the Weekly Standard and a commentator on Fox News Channel.
-
By DAMIAN PALETTA
The U.S. government has 15 different agencies overseeing food-safety laws, more than 20 separate programs to help the homeless and 80 programs for economic development.
These are a few of the findings in a massive study of overlapping and duplicative programs that cost taxpayers billions of dollars each year, according to the Government Accountability Office.
A report from the nonpartisan GAO, to be released Tuesday, compiles a list of redundant and potentially ineffective federal programs, and it could serve as a template for lawmakers in both parties as they move to cut federal spending and consolidate programs to reduce the deficit. Sen. Tom Coburn (R., Okla.), who pushed for the report, estimated it identifies between $100 billion and $200 billion in duplicative spending. The GAO didn't put a specific figure on the spending overlap.
The GAO examined numerous federal agencies, including the departments of defense, agriculture and housing and urban development, and pointed to instances where different arms of the government should be coordinating or consolidating efforts to save taxpayers' money.
The agency found 82 federal programs to improve teacher quality; 80 to help disadvantaged people with transportation; 47 for job training and employment; and 56 to help people understand finances, according to a draft of the report reviewed by The Wall Street Journal.
Instances of ineffective and unfocused federal programs can lead to a mishmash of occasionally arbitrary policies and rules, the report said. It recommends merging or consolidating a number of programs to both save money and make the government more efficient.
"Reducing or eliminating duplication, overlap, or fragmentation could potentially save billions of tax dollars annually and help agencies provide more efficient and effective services," the report said.
There have been multiple efforts to cull the number of federal programs in recent years, but they often run into opposition from lawmakers in both parties who rush to defend individual spending provisions. In fact, GAO's recommendations are often ignored or postponed by federal agencies and lawmakers, particularly when they could require difficult political votes.
The report says policy makers should consider creating a single food-safety agency because of a number of redundancies. The Food and Drug Administration makes sure that chicken eggs are "safe, wholesome, and properly labeled" while a division of the Department of Agriculture "is responsible for the safety of eggs processed into egg products."
Spokespeople for the Department of Agriculture and FDA pointed to the Obama administration's creation of the Food Safety Working Group, which works to better coordinate the government's regulators.
The report says there are 18 federal programs that spent a combined $62.5 billion in 2008 on food and nutrition assistance, but little is known about the effectiveness of 11 of these programs because they haven't been well studied.
The report took particular aim at government funding for surface transportation, including the building of roads and other projects, which the administration has made a major part of its push to update the country's infrastructure.
The report said five divisions within the Department of Transportation account for 100 different programs that fund things like highways, rail projects and safety programs.
One program that funnels transportation funds to the states "functions as a cash-transfer general-purpose grant program, rather than as a tool for pursuing a cohesive national transportation policy," the report said. Similarly, it chided the government over encouraging federal agencies to purchase plug-in hybrid vehicles while having policies that agencies reduce electricity consumption. It said government agencies have purchased numerous vehicles that run on alternative fuels only to find many gas stations don't sell alternative fuels. This has led government agencies to turn around and request waivers so they didn't have to use alternative fuels.
A spokesperson for the Department of Transportation said the president's budget for fiscal year 2012 "proposes to cut waste, inefficiency and bureaucracy by consolidating over 55 separate highway programs into five core programs, and by merging six transit programs into two programs."
On teacher quality, the report identified 82 programs that often have similar descriptions and goals and are spread across 10 federal agencies, including the Department of Education, the Department of Energy and the National Aeronautics and Space Administration. Nine of these programs are linked to science, technology, engineering and mathematics. Fifty-three of the programs are relatively small, receiving $50 million or less, "and many have their own separate administrative processes."
The GAO highlighted 80 different economic development programs at the Department of Commerce, HUD, Department of Agriculture and Small Business Administration, that spent a combined $6.5 billion last year and often overlapped. For example, the four agencies combined to have 52 different programs that fund "entrepreneurial efforts," 35 programs for infrastructure, and 26 programs for telecommunications. It said 60% of the programs fund only one or two activities, making them "the most likely to overlap because many of them can only fund the same limited types of activities."
The report took aim at several military programs, which could prove thorny because many lawmakers from both parties are wary to cut defense spending. It said there were 130,000 military and government medical professionals, 59 Defense Department hospitals and hundreds of clinics that could benefit from consolidating administrative, management and clinical functions.
For example, it said the government "may have developed duplicate" programs to counter improvised explosive devices, with the Marine Corps and the Army paying to develop similar "mine rollers." The Marine mine roller costs $85,000, and the Army mine roller costs $77,000 to $225,000. "Officials disagree about which system is most effective, and [the Pentagon] has not conducted comparative testing and evaluation of the two systems," the report said. The Pentagon didn't immediately respond to a request for comment.
The GAO study was required by a provision inserted by Sen. Coburn into a law that raised the federal borrowing limit last year. This report is the first produced in response to the provision.
-
Editor's Note: Steve Chapman is on vacation. The following column was originally published in October 2007.
Here's how the American free enterprise system works. You have an idea for a business. You find the money to start it up. You try to give customers something they want at a price low enough to keep them happy but high enough to earn a profit. Either your plan works, allowing you to make a living, or it doesn't, indicating you should find a different line of work.
Unless, of course, you are a farmer, in which case all this may sound unfamiliar. A lot of American agriculture operates in an environment where none of the usual rules apply -- where the important thing is not catering to the consumer, but tapping the Treasury. It's a sector that, ever since the Great Depression, has been a ward of the government, both coddled and controlled.
By any reasonable standard, federal agriculture policy is past due for a major overhaul. But judging from the latest farm legislation moving through Congress, not much is going to change.
Back in the 1930s, when the economy was a wreck, the survival of capitalism was in doubt and Oklahoma was blowing away, you could understand the impulse for Washington to intervene on behalf of farmers. But the days when agriculture meant a lifetime of toil for a meager living are just a memory. Today, farmers monitor soil conditions by computer, drive air-conditioned tractors and have a higher average income than nonfarmers.
Yet many of them continue to enjoy treatment other industries can only dream about. Imagine the government rigging the market to assure high prices to people selling concrete or cameras. Dairy farmers and sugar growers get exactly that, courtesy of the Department of Agriculture. Farmers who plant a host of other crops receive compensation anytime their prices fall below a fixed minimum.
That's not the strangest part. These days, you don't have to grow anything at all to harvest federal crop subsidies. Instead, Washington will send you a check based on the amount of a product you raised in the past, even if you don't feel like growing it anymore.
Homeowners in one Texas subdivision found themselves getting federal money because their land was formerly used to cultivate rice. Some farmers pocket the payments they get for one commodity but plant something else, enabling them to earn two incomes for the price of one crop.
All this is sweet for the lucky few who happen to be holding buckets when the federal cash falls out of the sky. But someone has to foot the bill, and that someone is anyone who 1) eats or 2) pays taxes. Government meddling raises the price of products at the grocery, while burning up billions of dollars in federal revenues. A study by Sallie James and Daniel Griswold of the Cato Institute, a free-market think tank, put the total cost of farm programs at $430 billion over the past decade.
Some farmers, and some urbanites, assume that agriculture would plunge into a death spiral if the government ever stopped furnishing all this help. In fact, the majority of people plowing fields would never miss it. In 2005, 85 percent of all federal payments went to just four crops -- corn, wheat, cotton and rice. Two-thirds of all farmers are locked out of the largesse.
"For most commodities (such as fruits and vegetables, hay, meat products, ornamentals), there is little government involvement or income support," report economists Bruce Gardner of the University of Maryland and Daniel Sumner of the University of California at Davis. Not only that, but the commodities that get no help are just as profitable as those that do.
Yet Congress shows little interest in ridding us of this extravagant waste. President Bush proposed to trim costs and reduce payments to the richest growers, but the five-year farm bill approved by the House of Representatives in July omitted these modest reforms. A more ambitious bill to significantly reduce the federal role in agriculture, meanwhile, was cut down like a weed. The Senate is currently considering its own version, but the Agriculture Committee has indicated it's quite content with the status quo.
The American economy has undergone radical transformation in the past 75 years, and the majority of farmers have shown they can prosper outside a government-run hothouse. Yet our leaders seem to think that what was good enough for Ma and Pa Kettle is good enough for us.
-
MARCO RUBIO
Americans have built the single greatest nation in all of human history. But America's exceptionalism was not preordained. Every generation has had to confront and solve serious challenges and, because they did, each has left the next better off. Until now.
Our generation's greatest challenge is an economy that isn't growing, alongside a national debt that is. If we fail to confront this, our children will be the first Americans ever to inherit a country worse off than the one their parents were given.
Current federal policies make it harder for job creators to start and grow businesses. Taxes on individuals are complicated and set to rise in less than two years. Corporate taxes will soon be the highest in the industrialized world. Federal agencies torment job creators with an endless string of rules and regulations.
On top of all this, we have an unsustainable national debt. Leaders of both parties have grown our government for decades by spending money we didn't have. To pay for it, they borrowed $4 billion a day, leaving us with today's $14 trillion debt. Half of that debt is held by foreign investors, mostly China. And there is no plan to stop. In fact, President Obama's latest budget request spends more than $46 trillion over the next decade. Under this plan, public debt will equal 87% of our economy in less than 10 years. This will scare away job creators and lead to higher taxes, higher interest rates and greater inflation.
Betting on America used to be a sure thing, but job creators see the warning signs that our leaders ignore. Even the world's largest bond fund, PIMCO, recently dumped its holdings of U.S. debt.
We're therefore at a defining moment in American history. In a few weeks, we will once again reach our legal limit for borrowing, the so-called debt ceiling. The president and others want to raise this limit. They say it is the mature, responsible thing to do.
In fact, it's nothing more than putting off the tough decisions until after the next election. We cannot afford to continue waiting. This may be our last chance to force Washington to tackle the central economic issue of our time.
"Raising America's debt limit is a sign of leadership failure." So said then-Sen. Obama in 2006, when he voted against raising the debt ceiling by less than $800 billion to a new limit of $8.965 trillion. As America's debt now approaches its current $14.29 trillion limit, we are witnessing leadership failure of epic proportions.
I will vote to defeat an increase in the debt limit unless it is the last one we ever authorize and is accompanied by a plan for fundamental tax reform, an overhaul of our regulatory structure, a cut to discretionary spending, a balanced-budget amendment, and reforms to save Social Security, Medicare and Medicaid.
View Full Image
Chad Crowe
.There is still time to accomplish all this. Rep. Dave Camp has already introduced proposals to lower and simplify our tax rates, close loopholes, and make permanent low rates on capital gains and dividends. Even Mr. Obama has endorsed the idea of lowering our corporate tax rate. Sen. Rand Paul, meanwhile, has a bill that would require an up-or-down vote on "major" regulations, those that cost the economy $100 million or more. And the House has already passed a spending plan this year that lowered discretionary spending by $862 billion over 10 years.
Such reductions are important, but nondefense discretionary spending is a mere 19% of the budget. Focusing on this alone would lead to draconian cuts to essential and legitimate programs. To get our debt under control, we must reform and save our entitlement programs.
No changes should be made to Medicare and Social Security for people who are currently in the system, like my mother. But people decades away from retirement, like me, must accept that reforms are necessary if we want Social Security and Medicare to exist at all by the time we are eligible for them.
Finally, instead of simply raising the debt limit, we should reassure job creators by setting a firm statutory cap on our public debt-to-GDP ratio. A comprehensive plan would wind down our debt to sustainable levels of approximately 60% within a decade and no more than half of the economy shortly thereafter. If Congress fails to meet these debt targets, automatic across-the-board spending reductions should be triggered to close the gap. These public debt caps could go in tandem with a Constitutional balanced budget amendment.
Some say we will go into default if we don't increase the debt limit. But if we simply raise it once again, without a real plan to bring spending under control and get our economy growing, America faces the very real danger of a catastrophic economic crisis.
I know that by writing this, I am inviting political attack. When I proposed reforms to Social Security during my campaign, my opponent spent millions on attack ads designed to frighten seniors. But demagoguery is the last refuge of the spineless politician willing to do anything to win the next election.
Whether they admit it or not, everyone in Washington knows how to solve these problems. What is missing is the political will to do it. I ran for the U.S. Senate because I want my children to inherit what I inherited: the greatest nation in human history. It's not too late. The 21st century can also be the American Century. Our people are ready. Now it's time for their leaders to join them.
Mr. Rubio, a Republican, is a U.S. senator from Florida.
-
Thank you Crafty for posting the Marco Rubio piece. It is VERY significant. Somehow he frames the entire issue in its correct context and importance where others just sound negative, divisive or wonkish. His position is as extreme as anyone on the right, and more specific, but his appeal includes winning a key swing state by more than a million votes. I wish everyone in America would read this piece or hear him put this central question of our time in proper perspective.
He isn't saying any different than what people voted for in 2006, 2008 and 2010:
"Raising America's debt limit is a sign of leadership failure." So said then-Sen. Obama in 2006, when he voted against raising the debt ceiling by less than $800 billion to a new limit of $8.965 trillion. As America's debt now approaches its current $14.29 trillion limit, we are witnessing leadership failure of epic proportions.
http://online.wsj.com/article/SB10001424052748704425804576220670543010068.html -(full text in Crafty's post)
-
. . . Charlie Sheen or the federal gov?
[youtube]http://www.youtube.com/watch?v=dNsdwTbvV90&feature=player_embedded[/youtube]
-
William H. Gross of PIMCO in the firm's April 2011 "Investment Outlook":
That adorable skunk, Pepé Le Pew, is one of my wife Sue's favorite cartoon characters. There's something affable, even romantic about him as he seeks to woo his female companions with a French accent and promises of a skunk bungalow and bedrooms full of little Pepés in future years. It's easy to love a skunk—but only on the silver screen, and if in real life—at a considerable distance. I think of Congress that way. Every two or six years, they dress up in full makeup, pretending to be the change, vowing to correct what hasn't been corrected, promising discipline as opposed to profligate overspending and undertaxation, and striving to balance the budget when all others have failed. Oooh Pepé—Mon Chéri! But don't believe them—hold your nose instead! Oh, I kid the Congress. Perhaps they don't have black and white stripes with bushy tails. Perhaps there's just a stink bomb that the Congressional sergeant-at-arms sets off every time they convene and the gavel falls to signify the beginning of the "people's business." Perhaps. But, in all cases, citizens of America—hold your noses. You ain't smelled nothin' yet.
I speak, of course, to the budget deficit and Washington's inability to recognize the intractable: 75% of the budget is non-discretionary and entitlement based. Without attacking entitlements—Medicare, Medicaid and Social Security—we are smelling $1 trillion deficits as far as the nose can sniff. Once dominated by defense spending, these three categories now account for 44% of total Federal spending and are steadily rising. . . . [A]fter defense and interest payments on the national debt are excluded, remaining discretionary expenses for education, infrastructure, agriculture and housing constitute at most 25% of the 2011 fiscal year federal spending budget of $4 trillion. You could eliminate it all and still wind up with a deficit of nearly $700 billion! So come on you stinkers; enough of the Pepé Le Pew romance and promises. Entitlement spending is where the money is and you need to reform it.
-
We can't even get 1/3 of a french fry cut out of the Big Mac meal.
-
The Ryan Plan. Discuss.
http://www.redstate.com/dhorowitz3/2011/04/05/ryans-budget-a-conservative-view-the-excellent-the-good-and-the-need-for-improvement/
-
"Well, so much for dodging entitlements. This year's trendy complaint, shared by the left and the tea party, that Republicans hadn't tackled the toughest budget issues was blown away yesterday with the release of House Budget Chairman Paul Ryan's budget for 2012. We'll now separate the real reformers from the fiscal chickenhawks. Mr. Ryan's budget rollout is an important political and policy moment because it is the most serious attempt to reform government in at least a generation. The plan offers what voters have been saying they want -- a blueprint to address the roots of Washington's fiscal disorder. It does so ... by going to the heart of the spending problem, especially on the vast and rapidly growing health-care entitlements of Medicaid and Medicare. The Wisconsin Republican's plan is a generational choice, not the usual Beltway echo. That choice is clear enough by comparing the Ryan blueprint with the 2012 budget that President Obama rolled out only two months ago. ... Mr. Ryan proposes to spend $6.2 trillion less, return spending to its modern average of roughly 20% of GDP, and add $4.7 trillion less to the national debt. Mr. Obama would keep spending at 24% of GDP even before ObamaCare fully kicks in, while running annual deficits of $600 billion a year or more despite trillions of dollars in tax increases. ... Since they only control the House, Republicans can't expect to pass all or even most of these reforms this year. But in rising to meet our main fiscal challenges, they are honoring their pledge to voters last year and offering voters a serious governing platform. Mr. Ryan is showing Americans that there is an alternative to Mr. Obama's vision of the U.S. as a high-tax, slow-growth, European-style entitlement state." --The Wall Street Journal
-
The Ryan plan gives me hope that we might do the right thing, finally.
-
http://www.youtube.com/watch?feature=player_embedded&v=Xwv5EbxXSmE
longer comment when i get my computer fixed.
-
The Ryan plan is the only ship sailing in that direction. My advice if so inclined is get on board. To the critics who (always) say this will instantly starve the weakest among us, I would point out this the only 'austerity' plan on the table still offers 995 billion in first year deficit spending (FY2012) takes only 0.16 trillion off of Obama's 2012 proposal and still offer26 more years of deficits. Is that not enough compromise with big spenders?
I don't take much stock in 20, 30, 40 year projections for either side.
How do you negotiate with Obama in the executive branch or with Reid, Schumer, Durbin, Boxer, Franken, Klobuchar et al in the Senate? You can't start with larger cuts than you are willing to stand by because they will be used against you politically anyway. The numbers put out by Ryan should be the end point, not just the starting point to negotiations. The funding of government should only be at the lower of the levels that those 3 bodies can agree on. If the House passes the maximum they will fund and the others want more, let them propose and argue that AFTER the government is funded at agreed levels.
Ryan block grants Medicaid back to the states, freezes so-called discretionary spending at 2008 levels, postpones the social security debate, reduces the corporate rate, reduces individual rates, frees up drilling, incorporates efficiency improvements in Defense advocated by Gates, and repeals ObamaCare lock, stock and barrel.
Usual suspects say the usual groups will be hit hardest. I would argue the opposite. This plan still funds a ginormous federal government and actually might save it so that these groups can continue to be funded for another generation, just as other governments and bloated organizations are falling.
The proposal to bring spending below 20% of GDP needs to be constitutional, not institutional, IMO.
Paul Ryan in WSJ: http://online.wsj.com/article/SB10001424052748703806304576242612172357504.html
Favorable critique by Kudlow, not surprisingly: http://www.realclearpolitics.com/articles/2011/04/07/paul_ryans_growth_budget_109477.html
Here are a couple of opponents of the Ryan Plan writing pieces, Bill Maher and Paul Krugman. Of the two, I find Maher to be more sober and coherent, where Krugman just can't get past the word 'voodoo' or the fact that we grew the economy and the revenues to the Treasury the last 3 times tax rates were cut:
http://www.rollingstone.com/politics/blogs/national-affairs/bill-maher-on-paul-ryans-budget-bs-20110408
http://www.nytimes.com/2011/04/08/opinion/08krugman.html?_r=1
-
Wow, Boehner has to go. He sucks big time frank and simple. This is a joke. And bamster claims he asked for 78 billion knowing full well Reid would cover for him and get less. Now bamster can claim he tried to be more aggressive towards the debt. And naturally the big time liar every bit as obnoxious as Clinton is out there taking credit. What a disgrace we cannot have an honest President.
Reflubicans were to go for a lousy 100 bill and I thought the deal was going to be around 70 - even worse they couldn't even get half. The Dems won this big time. Again the joke on taxpayers. Again the free loaders in America win. :cry: :x :?
****Congress reaches deal to avert shutdown
House Republicans and Senate Democrats agreed on a deal late Friday night to pass a short-term funding bill to keep the government open through the end of next week. Senate Majority Leader Harry Reid, Nevada Democrat, holds a press conference following the democratic caucus at the Capitol in Washington, D.C., Friday, April 8, 2011. (Rod Lamkey Jr./The Washington Times) By Stephen Dinan, Seth McLaughlin and Kara Rowland
-
The Washington Times
With little more than an hour to go before a midnight government shutdown, President Obama and congressional leaders said Friday night they struck a tentative deal to give themselves more breathing space as they finalize a long-term bill to cut $37.7 billion in spending.
Early Saturday morning, when the government technically had run out of money, Congress passed and sent a short-term spending bill to the White House that keeps the government open until the end of next week. During that reprieve, the House and Senate are expected to pass a broader bill that funds the government for the rest of fiscal year 2011, which ends Sept. 30.
The leaders said the cuts are “historic,” and congratulated each other for reaching a deal, but a small rebellion was brewing among conservative Republicans who said it does not make the kinds of deep reductions they were seeking and that the House passed earlier this year.
“Tomorrow, I’m pleased to announce that the Washington Monument as well as the entire federal government will be open for business,” Mr. Obama said at the White House late Friday, minutes after House Speaker John A. Boehner announced the deal at the Capitol.
The Senate passed the short-term bill by voice vote, while the House passed it on a roll call vote.
“Like any worthwhile compromise, both sides had to make tough decisions and give ground on issues that were important to them,” Mr. Obama said. “That’s what the American people expect us to do. That’s why the sent us here.”
The spending cuts amount to $78.5 billion below what Mr. Obama had requested for 2011. The final number means discretionary spending will total $1.049 trillion this year, with $513 billion for the Defense Department.
Mr. Boehner reached the deal after weeks of negotiations with Senate Majority Leader Harry Reid, Nevada Democrat.
“I’m pleased that Senator Reid and I and the White House have been able to come to an agreement that will in fact cut spending and keep our government open,” Mr. Boehner said.
Mr. Reid, for his part, told colleagues on the Senate floor: “This is historic, what we’ve done.”****
-
I'll be interested to hear Dick's take about the 37 bill. deal. Here is his take prior to this "great dea". (Drudge is calling this a big win for cans???):
*** NO SURRENDER ON BUDGET CUTSA BUDGET DEAL: REPUBLICAN SUICIDE
By Dick Morris And Eileen McGann 04.8.2011
We all watched in amazement and horror as the Democratic Party led its minions off the cliff and made them vote to jam through Obama’s health care law. We knew it was mass suicide, but we watched with incredulity as they bravely stepped up to drink the Kool-Aid. Now it is the turn of the Republicans freshmen — the very people who inherited the seats of those who walked the plank — to march off a cliff of their own.
The electorate that impelled the GOP triumph in 2010 will not tolerate a breaking of the Republican promise to cut $100 billion from the budget. They will accept, of course, the pro-rated share of the advertised total — $61 billion over seven months — but not anything less. It is a simple matter of keeping one’s campaign promises.
Any freshman who votes for a budget deal below $61 billion will face a primary and likely defeat either for the nomination of in the general election. That is just the fact of political life.
The Tea Party supporters and the aroused Republican electorate will not stand for it. The myopia which obscures Boehner’s and Cantor’s view of this reality is as blinding as that which made Pelosi, Obama, and Reid sacrifice their majority over health care.
If Boehner comes to a deal below $61 billion, he will face the massive defection of his own party. A fundamental split between Tea Party and establishment Republicans will have opened up and will not heal for the balance of the session. If Boehner needs to cross the aisle to borrow Democratic voters to pass the deal, he will become a coalition speaker — a coalition of donkeys and RINOs. The real Republican conservatives will be in the minority. But they will have with them the vast bulk of the GOP electorate, a re-alignment which will become painfully clear in 2012′s primaries.
If senior Republicans back a deal of less than $61 billion, they need to pay heed to the fates of Utah Senator Bennett, Delaware Congressman Mike Castle, and Florida Governor Charlie Crist. And they need to note as well the legion of senior Democrats from seemingly invulnerable districts who lost their seats in 2010. That may well be their fate.
And why are Boehner and Cantor marching off the cliff? The Republican Party will win a government shutdown. It will be the defining event of the 2011-2012 cycle. Faced with a choice between more spending and less spending, the American people will back less spending. The lessons of 1995-1996 do not apply. Clinton won that shutdown (in which I was instrumental) because the fight was about Medicare. Had the battle been merely quantitative — as this fight would be — the Republicans would easily have prevailed.
When John Boehner and Eric Cantor sit down to decide whether to take a deal or not, here are the stakes:
If they take a deal below $61 billion, they will split their party, alienated their supporters, trigger a mass of primary fights, lose their ability to strike deals over the debt limit or the 2012 budget, and terminate the revolution of 2010. And Obama will be re-elected.
If they reject such a deal and shut down the government, they will galvanize their supporters, paint Obama into a liberal corner, force the Democrats to accede to their budget cuts, and win the fights over the debt limit, Obamacare repeal, EPA, NLRB, and the 2012 budget because the Democrats will be too petrified to weather another shut down. And Obama will be defeated.
Those are the stakes for the leaders.
For the members, the decision as to whether to follow their leaders off a cliff is simple: Do you value your seat in Congress you worked so hard to win?
-
We "won" less than 1/3rd of a french fry.
Awesome. :roll:
-
Elections have consequences. I think we agreed last year this is a two election cycle opportunity to change the direction of the country. In 2010 the people (as I see it) took back one chamber. Yes Reid et al and Obama have to deal with Boehner and Boehner has to deal with his new members who actually meant what they ran on. The 'deal' for this year was a third of a french fry. The part they could have shut everything down for was another third of a french fry. The question remains - who owns the issue going forward. If an R wins the White House and if R's take 4-5 seats in the Senate for a small majority and hold the House - all that is possible - it will STILL be hard to cut much. It always boils down to the will of the people and that still needs to shift significantly in the direction of limited government.
-
http://www.nationalreview.com/articles/print/264288
April 9, 2011 4:00 A.M.
Ending America as We Know It
The Democrats’ solution to the problem is to deny there is one.
Hey, it’s the weekend, and everyone’s singing the same maddeningly catchy refrain! Rebecca Black’s “Friday”? Nah, that was last week’s moronic singalong. This week’s is even perkier! “Paul Ryan proposes to end Medicare as we know it,” sings former Clinton chief of staff John Podesta. “It would end Medicare as we know it,” sings Sen. Max Baucus of Montana. “It’s going to end Medicare as we know it,” sings Nadeam Elshami, communications director for Nancy Pelosi. “It does end Medicare as we know it,” sings Sen. Tom Harkin of Iowa. I drove all night to watch Paul Ryan e-e-end Me-edi-ica-a-are as we-e kno-o-o-o-o-o-o-o-o-w it, sing all 24 semi-finalists on the Céline Dion round of “American Idol.”
Sadly, Rep. Debbie Wasserman-Schultz, incoming chair of the Democratic National Committee, lost the sheet music and was forced to improvise. “This plan would literally be a death trap for seniors,” she ululated. Close enough!
Ending Medicare as we know it? Say it ain’t so! Medicare, we hardly knew ye! It’s an open question whether Americans will fall for one more chorus of the same old song from Baucus, Harkin, Podesta, and the other members of America’s wrinkliest boy band. But, if this is the level on which the feckless patronizing spendaholics of the permanent governing class want to conduct the debate, bring it on:
Paul Ryan’s plan would “end Medicare as we know it.”
The Democrats’ “plan” — business as usual — will end America as we know it.
Literally, as Representative Wasserman-Schultz would say. One way or another, Medicare as we know it is going to end. So, if you think an unsustainable 1960s welfare program is as permanent a feature as the earth and sky, you’re in for a shock. It’s just a question of whether, after the shock, what’s left looks like Japan or looks like Haiti.
My comrade Jonah Goldberg compares America’s present situation to that of a plane with one engine out belching smoke. But, if anything, he understates the crisis. Air America doesn’t need a busted engine, because it’s pre-programmed to crash. Our biggest problem is Medicare and other “entitlements”: They’re the automatic pilot of Big Government. Whoever’s in the captain’s seat makes no difference: The flight is pre-programmed to hit the iceberg, if you’ll forgive me switching mass-transit metaphors in mid-stream.
For some reason, Obama, Reid, Pelosi, Harkin, & Co. don’t seem to mind this. If you recall the smile on the face of Airplane!’s “automatic pilot” as he’s being inflated, that’s pretty much the Democrats’ attitude to binge spending as a permanent fact of life.
For a sense of Democrat insouciance to American decline, let us turn to the president himself. The other day, Barack Obama was in the oddly apt town of Fairless Hills, Pa., at what the White House billed as one of those ersatz “town hall” discussions into which republican government has degenerated. He was asked a question by a citizen of the United States. The cost of a gallon of gas has doubled on Obama’s watch, and this gentleman asked, “Is there a chance of the price being lowered again?”
As the Associated Press reported it, the president responded “laughingly”: “I know some of these big guys, they’re all still driving their big SUVs. You know, they got their big monster trucks and everything. . . . If you’re complaining about the price of gas and you’re only getting eight miles a gallon — (laughter) . . . ”
That’s how the official White House transcript reported it: Laughter. Big yuks. “So, like I said, if you’re getting eight miles a gallon you may want to think about a trade-in. You can get a great deal.”
Hey, thanks! You’ve been a great audience. I’ll be here all year. Don’t forget to tip your Democrat hat-check girl on the way out: At four bucks a gallon, it’s getting harder for volunteers to drive elderly voters from the cemetery to the polling station. Relax, I’m just jerking your crank, buddy! And it’s not four bucks per, it’s only three-ninety-eight. That’s change you can believe in!
Message: It’s your fault. The same day as the president was doing his moribund-economy shtick, my hairdresser told me that she’d bought her mid-size sedan second-hand in 2004. She’d also like to ask the president if there’s a chance of gas prices being lowered again. But he’d have the same answer: Buy a hybrid. Wait till the high-speed rail-link is built between Dead Skunk Junction and Hickburg Falls. Climb into the fishnets and the come-hither smile and hitch.
America, 2011: A man gets driven in a motorcade to sneer at a man who has to drive himself to work. A guy who has never generated a dime of wealth, never had to make payroll, never worked at any job other than his own tireless self-promotion literally cannot comprehend that out there beyond the far fringes of the motorcade outriders are people who drive a long distance to jobs whose economic viability is greatly diminished when getting there costs twice as much as the buck-eighty-per-gallon it cost back at the dawn of the Hopeychangey Era.
So what? Your fault. Should have gone to Columbia and Harvard and become a community organizer.
Another ten years of this, and large tracts of America will be Third World. Not Somalia-scale Third World, but certainly the more decrepit parts of Latin America. There will still be men with motorcades, but they’ll have heavier security and the compounds they shuttle between will be more heavily protected. For them and their cronies, the guys plugged in, the guys who still know who to call to figure out a workaround through the bureaucratic sclerosis, life will be manageable, and they’ll still be wondering why you loser schlubs are forever whining about gas prices, and electricity prices, and food prices.
What’s about to hit America is not a “shock.” It’s not an earthquake, it’s not a tsunami, it’s what Paul Ryan calls “the most predictable crisis in the history of our country.” It has one cause: spending. The spending of the class that laughs at the class that drives to work to maintain President Obama, Senator Reid, Senator Baucus, Senator Harkin, and Minority Leader Pelosi’s “communications director” in their comforts and complacency.
The Democrats’ solution to the problem is to deny there is one. Unsustainable binge spending is, as the computer wallahs say, not a bug but a feature: We’ll stimulate the economy with a stimulus grant for a Stimulus Grant-Writing Community Outreach Permit Coordinator regulated by the Federal Department of Community-Organizer Grant Applications. What’s to worry about?
I said the Democrats’ plan is to “end America as we know it,” but even that has been outsourced to others. The choice is between letting Paul Ryan end Medicare as we know it, or letting our foreign lenders determine the moment to end America as we know it. I would not presume to know Chinese or Russian or Saudi or even European inclinations in this respect, although certain shifts in the ratio between short-term and long-term debt holdings suggest foreign governments give more thought to the implications of U.S. government spending than the U.S. government does. But I do know their interests are not ours, and that there will come a day when Beijing and others, in the words of King Barack to his lowly subject, “may want to think about a trade-in.”
-
Mark Steyn has it right on the money. How do you go about spending 4 trillion a year when you're already 14 trillion behind - just throwing money around, not pay for 40% of it, not be able to even borrow that part anymore, just print 70% of what you were pretending to borrow, devaluing what is already borrowed - and owned, propose continuing these trends out forever - only to get worse, and look us in the eye and say crisis? What crisis? Then they criticize Glen Beck and the tea party for getting all negative about it. Good grief.
BTW, isn't "death trap for seniors" for a third of a french fry from the head of the DNC a little further over the top than anything about calling end of life consultations death panels? I am shocked at the lack of outrage.
-
There is such a culture of denial in the country, it's amazing to me.
Future generations will rage at our collective stupidity and irresponsibility.
-
Washington "insiders" should listen more to Morris than Rove IMO:
IT’S NO DEAL, IT’S A SELLOUT
By Dick Morris And Eileen McGann 04.9.2011 Share this article
John Boehner has just given away the Republican victory of 2010 at the bargaining table. Like the proverbial Uncle Sam who always wins the war but loses the peace, he has unilaterally disarmed the Republican Party by showing that he will not shut down the government and will, instead, willingly give way on even the most modest of cuts in order to avoid it. He now has no arrows left in his quiver.
Having failed to stand firm for just $61 billion in cuts in a budget of $3.7 trillion, how can we expect him to stand firm over the debt limit extension or the 2012 budget? We can’t. The excellent budget proposals of Paul Ryan are no more than a pipe dream now. Boehner has He sold us out now and he’ll sell us out again.
It is the duty of every Republican Congressman to vote no on this terrible deal. It violates our campaign promises to the American people. We promised $100 billion of cuts and we delivered $38 billion ($62 billion on a twelve month basis). In the Republican House’s first real test out of the box it has broken the promise over which it was elected. Only in Meat Loaf’s music is “two out of three not bad.”
This concession makes it clear that:
* Obamacare will not be defunded.
* The EPA will not be blocked from regulating carbon.
* The NLRB will not be stopped from forcing an end to secret ballots in union contests.
* Medicaid will not be block granted and turned over to the states.
* Welfare spending will not be cut nor work requirements imposed.
* The FCC will not be stopped from regulating talk radio.
In short, we have accomplished nothing by our hard work in 2010.
Except we have learned a lesson.
And the lesson is this: We need to purify our party and purge it of the likes of John Boehner and all those Congressmen who vote for the budget sellout. The Tea Party must take the lead in this purifying fire. We must not let the RINOs win!
DickMorris.com will post prominently (and permanently) the names of all GOP freshmen who vote for this rotten deal. It will be in a column headed: THESE ARE THE SELLOUTS. Check it out and back their primary opponents!
-
For the first time ever the Economist (since I have subscribed) has praised a Republican. Of course a little grudgingly, and with caveats, like these:
"Too much of the gain goes to the rich, and too much of the pain is felt by the poor."
and
"Some of his figures are deeply suspect"
Yet this is a landmark for this magazine which is definitely left leaning. They even criticize the One and don't tend to support him anymore. The road ahead is becoming clearer. The Crats will be coming out with their deficit cutting plan. Included will be increase taxes and revenues with the all out assault on attcking the "rich" the "corporation", "protecting women", "the poor" "the minorities", "middle class rights", and all the rest of their mantra.
I am not sure if Bamster will follow his cowardly pattern of letting Reid com out with a plan and then play like he is above it all and the great compromiser etc. or if he will come out with his plan. But the left is going to HAVE to counter the Ryan plan. Then Americans will have to choose which one they will want. But the deficits cannot be ignored anymore.
****The Republican budget
Praising Congressman Ryan
At long last somebody is trying to grapple with America’s fiscal troubles
Apr 7th 2011 | from the print edition
Tweet BARACK OBAMA, as we unhappily noted when he produced his budget in February, has no credible plan for getting America’s runaway budget deficit under control. Up to now the Republicans have been just as useless; they have confined themselves to provoking a probable government shutdown in pursuit of a fantasy war against the non-security discretionary expenditures that make up only an eighth of the total budget, rather than tackling the long-term problem posed by the escalating costs of entitlements. The only people with the guts to talk about such things have been various independent commissions which the two parties have ignored.
Now that has changed. On April 5th Paul Ryan, the young chairman of the House Budget Committee, laid out a brave counter-proposal for next year’s budget and beyond (see article)—brave both in identifying the scope of the problem and in proposing the kind of deeply unpopular medicine that will be needed to cope with it. It is far from perfect; but it is the first sign of courage from someone with actual power over the budget.
Unlike Mr Obama, Mr Ryan puts fiscal responsibility at the centre of his plan: it aims to bring the budget into primary balance as early as 2015 and federal government spending down to below 20% of GDP in 2018. He also outlines a simplification of America’s mad tax code, bringing the top rate for both individuals and businesses down to 25% by eliminating loopholes. Above all, he aims at the core of the problem, the ever-rising cost of health care for the elderly.
At the moment, retirees in America are entitled to Medicare, an all-you-can-eat buffet of care provided by the private sector but paid for by government-run insurance. Under Mr Ryan’s scheme, future retirees would have to take out private insurance plans, helped by a government subsidy. The effect would be a bit like changing from a defined-benefit pension to a defined-contribution one. The savings come because the subsidy would not cover everything that is currently provided: people will either end up with less lavish care or have to pay more. Mr Ryan also wants to turn Medicaid, government-financed health care for the poor, over to the states in the form of “block grants”. This would force them to manage their budgets more responsibly than they have needed to when they have been able to send much of the tab to Washington.
Let the debate begin
There is plenty wrong with Mr Ryan’s plan. Too much of the gain goes to the rich, and too much of the pain is felt by the poor. Some of his figures are deeply suspect. Mr Ryan should not have ruled out any revenue gain from broadening the tax base. He says nothing substantive about Social Security. He would cancel Obamacare, which though flawed addresses one of America’s great problems. And there are practical difficulties: his proposals are far too radical to engender the sort of compromise needed in Washington. Even if the plan passes the Republican-controlled House (by no means certain), it will fail in the Democrat-controlled Senate.
Yet at least Mr Ryan accepts that the present system is unaffordable and destined to collapse. Everyone else, including Mr Obama, is pretending that it isn’t. Mr Ryan’s willingness to confront the scale of the problem has set a standard by which other proposals will now have to be judged. And there might even be political mileage in telling the truth. Two years ago, when Britain’s prime minister, Gordon Brown was unable to mention the word “cuts”, George Osborne, the Tories’ shadow chancellor, made a speech saying they were inevitable. It changed the political debate. Mr Brown’s protestations looked increasingly ridiculous. Mr Obama should take note.****
-
"The multiplication of public offices, increase of expense beyond income, growth and entailment of a public debt, are indications soliciting the employment of the pruning knife." --Thomas Jefferson, letter to Spencer Roane, 1821
-
""The multiplication of public offices, increase of expense beyond income, growth and entailment of a public debt, are indications soliciting the employment of the pruning knife." --Thomas Jefferson, letter to Spencer Roane, 1821"
That's beautiful talk but until republicans can answer the concerns of the middle class and the growing dipsarity of wealth it is a perpetual uphill fight.
A township can't give Walmart a property tax break that they do not offer to anyone else.
If Walmart comes in buys up a lot of land, and builds a big center that no one else can afford or risk the investment that is fine. But we cannot have governments offering breaks to some and not others.
That is discrimination and unfair.
-
Here it comes. Bamster's vision for reducing deficits. Rob successful people to pay down debt.
No surprise.
Well I have yet to hear Republicans successfully counter this other than with indirect deflecting answers,
"trickle down"
"job creation"
"stimulate growth"
They have to be more specific. I don't want to see the same demogougery against them about the poor, those "who need it most", hurting women etc etc.
They look like the heartless white boys everytime.
When will they learn?
Just capitulating ala Rove doesn't work.
I am not sure a ram it through despite being painted as heartless ala Morris is quite the answer either.
They have got to come up with better talking points that counter the usual charges against them.
-
REAGAN.
Growth
Opportunity
Savings/Investment
God & Country, Strength & Honor
Freedom & Responsibility
-
Crafty,
I believe these arguments are a penny short -
"Opportunity
Savings/Investment"
Tell that to a crowd that is forever struggling to pay bills, working harder while not keeping up with inflation, Wall Street bailed out, Banks doing better, and more and more wondering if ain't just easier to go on disabilty if they can get a doctor to write for it.
Plain ideals just don't cut it for more and more Americans.
I still don't hear why people should think they are better off without government benefits when 50% rely on them or are ripping the rest of us off taking the free lunch.
Simple Reagan theories ares not enough of a compreshensive argument anymore. Not when you have 60% getting more than they pay in. To them it is let the "rich" pay.
-
"But we cannot have governments offering breaks to some and not others. That is discrimination and unfair."
Thank you for that CCP! That is the central point of my objections to our entire 'targeted' tax and spend system. Lower the rates until you don't need exemptions. Nothing is a mandate that requires a thousand organizations exempt. Lower the burden to the point that you would apply it to anyone, even yourself. Stop trying to keep everyone else for driving when you golf with a ten SUV motorcade.
An attempt, CCP, at answering your point about our opponents' spending/wealth transfer and disparity arguments:
Economic freedom, like democracy appears ugly as you look too closely at it. People bought pet rocks with their prosperity and someone got rich off of it. People on wall street appear to sit, appear to make a few phone calls and investments and make absurd amounts.) It is just better than all the alternatives where nobody makes any money or serious production or innovation.
People should note that the Republicans of 2012 like Paul Ryan are not proposing an unregulated, untaxed, undistributed private economy. They are proposing 3.5 trillion a year of federal moving of money around instead of 3.8 or so and rising more rapidly. R's actually are proposing to make the welfare state permanent and sustainable instead of headed off the cliff.
When a company like Walmart finds a better way of doing things, there is an economic shift and dislocation. No one small can compete with head-on with a company that large, like an auto maker, but anyone who wants to can put any part of their savings into publicly traded shares of a retailer or automaker or start a business that benefits from having a major retail outlet in town. Michael Moore in the movie 'Roger and Me' documented how GM had provided all paychecks to all these family members in Flint Michigan for all these generations and implyied that should go on forever. But GM was building lousy cars that people didn't want and labor was part of the problem. People needed to figure out quickly something else they can do that adds value to the economy, just like others adapting people have learned to do for tens of thousands of years of economic survival. The bigger and stronger the social programs, the longer that process takes and the more people learn instead to survive off of someone else. Every law, regulation, program and tax that I know of acts to slow or prevent the process of the transition that needs to happen like innovating, changing, to provide for your family.
Retail selling of ordinary household goods to compete with Walmart is a lousy business these days. But what is supposed to be our reaction to that? Prohibit and limit the Walmarts or prop up competitors with failed programs that fight against market forces? Pay people to not work? That's not facetious, we are doing these things all over the place. What is the failed result? People are slower to respond to changing circumstances, or never do. The programs ultimately hurt the 'beneficiary' of the program (IMHO), besides hurting all the other businesses and producers with the tax burden.
Show me a persuasive argument about the dangers of disparity in a growing economy and I will show you flawed and deceptive analysis. Income mobility is the answer. At different points in your life it goes income moves in different directions.
Dems, as you suggest, will point back at disparity questions during the good times past, characterized with false analysis, but those times were far better than what has happened since. They need to also answer to their own failed results. Certainly no one can say we are better off since Nov. 2006/Jan. 2007 when Pelosi Reid Obama won and took the power and majorities in Washington. The disparity challenges during 50 consecutive months of job growth during Bush (that ended with the Dem, elections) or during a quarter century since Reagan pale in comparison IMO to the fact of doubling unemployment, the foreclosure mess, $5 gasoline, bankrupt states, etc. They are going to run on THAT record and at some point they will look petty and hopeless as they still blame Bush.
As far as this thread goes, greater government spending has not been the solution to any of our problems. Disparity was 'improved' with the tens of trillions in destruction in wealth. How did that help working people on a budget?
-
Doug,
Thanks for the reply.
I hear you and don't disagree. Yet most Americans might.
Your argument (standard Republican) does not address this. If anyone wonders why Cans always have to fight and fight and fight to win a majority this is why plain and simple:
Cut With Entitlements Secured
By Heidi Przybyla and Mike Dorning - Dec 10, 2010
Former Comptroller General David Walker said, “The idea that we can solve our structural-deficit problems merely by asking more of the well-off is totally unrealistic.”
The one place Americans are willing to see sacrifice is in the wallets of the wealthy and Wall Street. Photographer: Daniel Acker/Bloomberg
Americans want Congress to bring down a federal budget deficit that many believe is “dangerously out of control,” only under two conditions: minimize the pain and make the rich pay.
The public wants Congress to keep its hands off entitlements such as Medicare, Medicaid and Social Security, a Bloomberg National Poll shows. They oppose cuts in most other major domestic programs and defense. They want to maintain subsidies for farmers and tax breaks like the mortgage-interest deduction. And they’re against an increase in the gasoline tax.
That aversion to sacrifice is at odds with a spate of recent studies, including one by President Barack Obama’s debt panel, that say reductions in Medicare, Social Security, military and other spending are necessary to curb a deficit that totaled $1.29 trillion in the fiscal year ended Sept. 30, or 9 percent of the gross domestic product.
“The idea that we can solve our structural-deficit problems merely by asking more of the well-off is totally unrealistic,” said David Walker, who was U.S. comptroller general from 1998 to 2008 and now leads a group advocating against deficits. “The math simply doesn’t work.”
According to the Dec. 4-7 poll, taken days after Obama’s commission sounded an alarm over the nation’s “unsustainable fiscal path,” the public still believes it’s more important to “minimize sacrifice” than to take “bold and fast” action to pare the $13.7 trillion national debt.
‘Deficit Cutting Hurts’
If anything, the poll shows that public concern over the deficit has ebbed: Forty-eight percent of Americans say the budget shortfall is “dangerously out of control,” down from 53 percent who said that in an October survey.
“The reality is deficit cutting hurts, and the American public is in no mood for further hurt than the slow economy and high unemployment is delivering,” J. Ann Selzer, president of Selzer & Co., a Des Moines, Iowa-based firm that conducted the nationwide survey.
Investors are worried about a widening of the budget gap. Treasuries tumbled for two days after Obama announced a plan to extend Bush-era tax cuts and reduce payroll taxes, stoking concern over more borrowing. The 10-year yield rose 35 basis points in its biggest back-to-back increase in more than two years. Treasuries rebounded yesterday on uncertainty over the prospects for the tax cuts. The 10-year Treasury yield slipped five basis points to 3.22 percent at 4 p.m. in New York.
Sacrificing the Rich
The one place Americans are willing to see sacrifice is in the wallets of the wealthy and Wall Street.
While they say they strongly support balancing the budget over the next 20 years, when offered a list of more than a dozen possible spending cuts or tax increases, majorities opposed every one of them except imposing a bigger burden on the rich.
A majority backs raising the cap on earnings covered by the tax on the Social Security retirement program above the current limit of $107,000. Two-thirds would means test Social Security and Medicare benefits. Six of 10 would end tax cuts for the highest-earning Americans. And 7 of 10 favor a tax on Wall Street profits.
“We give billions of dollars to these corporations, and in my eyes they pretty much just put it in their pocket,” said Donald Froemming, a 57-year-old independent voter and unemployed diesel gas mechanic from Moose Lake, Minnesota.
Divided on Taxes
While Republican congressional leaders have opposed increases in taxes paid by high-income families, sentiment among the party’s rank and file is mixed. Republicans are divided on eliminating the tax cuts for the wealthy, with 50 percent opposing and 47 percent supporting. An increase in the cap on earnings subject to Social Security taxes splits Republicans almost evenly.
The poll shows there’s little appetite across all parties and demographic groups for changes to entitlements.
Eighty-two percent of respondents opposed benefit cuts to the Medicare health-insurance system for the elderly, with about half of Republicans wanting to see both the current Medicare and Social Security systems preserved. Just 35 percent of all respondents back a system in which government vouchers would help people pay for their own health insurance.
“Nobody wants to fail to take care of children who need medicine or the elderly,” said Tea Party supporter Randy Thorman, 45, a high school social studies teacher in Pryor, Oklahoma. “We don’t want to throw people out without some type of help.”
Backing Social Security
Support for keeping the current structure of the Social Security program is strong, at 55 percent. Lower-earning Americans are especially averse to any big changes.
Cathy Freeman, a 64-year-old Republican and retired bookkeeper from Waco, Texas, said the deficit should be addressed by ending tax breaks for the wealthy and corporations, not slashing the entitlement programs her family relies on.
“We need to look at that before you start hurting the little guys,” Freeman said. “Let’s look at some things that aren’t fair in our system.”
A majority of 72 percent also opposes reducing benefits for the Medicaid health program for the poor. This is true even of Tea Party supporters who have built a movement around smaller government, with 66 percent against reducing Medicaid benefits. Seventy-two percent of those earning $100,000 or more also are opposed.
Raise the Cap
In Social Security, the only areas for change that have support are raising the cap on wages subject to the payroll tax and reducing benefits for the wealthy. The wealthy themselves are willing to sacrifice. Those making $100,000 or more are most supportive of raising the cap, at 59 percent. That compares with 45 percent of those making $25,000 or less.
Overall, 67 percent of Americans want means-testing and 51 percent think the payroll tax cap should be raised. Just 31 percent want to see cost-of-living increases trimmed and 37 percent say the government should gradually raise the age of Social Security eligibility to 69.
Partisan differences over the deficit are strong, with Republicans more than twice as likely as Democrats to see the fiscal situation as imperiled. Still, the shortfall is also a potential source of conflict within each party’s coalitions.
Tea Party supporters, who played a key role in Republican victories in the midterm elections, are more likely to back strong action than are rank-and-file Republicans; a 49 percent plurality favors a dramatic overhaul of Social Security, compared with 41 percent of Republicans. Tea Party backers want a Medicare overhaul by 52 percent to 43 percent, while Republicans narrowly prefer to keep the current system.
Splitting the Coalition
The deficit also divides the coalition Obama assembled to win the 2008 election. Political independents, whom he carried then, consider the deficit a more immediate threat than do Obama’s fellow Democrats. Fifty percent of independents said the deficit is “dangerously out of control” versus 29 percent of Democrats.
The poll suggests a possible opening for a new sales tax. Americans are split on a 6.5 percent national sales tax to bring down the deficit, with 46 percent in favor and 49 percent opposed.
Still, three-quarters of the country opposes a 15-cent gasoline tax across party lines. Even among those who want bold action, 7 out of 10 oppose a higher gas tax.
A freeze on nondefense discretionary spending, which some Republican congressional leaders have proposed, is opposed by 53 percent against 43 percent in favor. Cuts in defense spending are opposed by 51 percent versus 45 percent in favor.
The Bloomberg National survey of 1,000 U.S. adults has a margin of error of plus or minus 3.1 percentage points.
To contact the reporters on this story: Heidi Przybyla in Washington at hprzybyla@bloomberg.net; Mike Dorning in Washington at morning@bloomberg.net
-
"I hear you and don't disagree. Yet most Americans might."
IMO we aren't trying to cut out another trillion (root canal politics) to close trillion dollar gap. We only need to cap, freeze and control spending. You close the gap by growing the economy full speed ahead and that is the supply side. You raise 1 trillion by growing by 5 trillion. You can't grow $5 trillion while fretting disparity and micromanaging it. As you say, the laws need to apply evenly. Someone needs to point out that opportunity for everyone expands in a robust economy. As JFK put it: a rising tide lifts all boats.
-
JFK ran on cutting taxes to spur the economy. Funny how that's forgotten now.
-
From Paul Revere to Paul Ryan
Paul Ryan Responds to President Obama
by Newt Gingrich
Monday was the 236th anniversary of Paul Revere’s midnight ride to warn John Hancock and Samuel Adams that British troops were coming to arrest them and seize colonial arms at Concord. While riding, Revere stopped at houses along the way to warn everyone that “the British are coming.” His warning galvanized patriots to meet the British at Lexington and Concord, leading to the “shot heard around the world” and the first military battle of the American Revolution.
This year the anniversary fell on the same day income taxes were due. It was unfair taxation that sparked the protests in Massachusetts and other colonies against British rule that came to shape the Founders’ view of limited government. Today, an out-of-control government spending our nation into a debt crisis has sparked another rebellion.
Today, Congressman Paul Ryan has been our generation’s Paul Revere, warning his fellow Americans about the coming danger and rallying us to a plan to meet the threat head on.
Paul Ryan’s Path to Prosperity
The 2012 “Path to Prosperity” budget plan Paul Ryan wrote was passed by the House last week. His plan stands in stark contrast to the 2012 budget proposed by the White House earlier this year. Unlike Ryan’s plan, President Obama’s budget proposal did not deal with entitlement spending, which encompasses the largest share of the federal budget. This led to the president’s budget being widely panned as unserious about the urgent challenge of our time.
In a tacit admission that he had failed to provide leadership on the deficit, President Obama wanted a do-over. Last week he gave a speech to try and regain the high ground and compete with the serious proposal offered by Ryan. Instead, he offered a campaign-style partisan response that only served to diminish him.
In last week’s newsletter, I proposed two big tests by which to measure the president’s plan to tackle our looming deficit crisis.
The first was whether his plan would create jobs or destroy them. Trying to balance the budget without addressing unemployment is futile. The most immediate step necessary to move towards a balanced budget is to employ the policies that lead to job-creation. The more people taken off the welfare roll and moved onto payrolls will decrease the need for food stamps and unemployment compensation. Working people pay tax dollars instead of receiving them through welfare.
The second was whether his plan to control the cost of entitlements relied on merely squeezing the current systems through rationing, reduced benefits and cost controls or if he proposed fundamental structural reforms that would deliver better results at lower costs.
On both tests, the president failed spectacularly. The president proposed nearly $2 trillion in tax increases that would destroy jobs and flatly rejected the idea of fundamental reform of Medicare and Medicaid, proposing instead to kick the can to a board of unelected bureaucrats to find ways to save money within the boundaries of the current system, through even more rationing than what has already been enacted under Obamacare.
In his speech, the president lauded the effort of Republicans and Democrats to work together to balance the budget in the 1990s. Yet the solutions he proposed in his speech are precisely the opposite of what Republicans did when I was Speaker.
We passed the first tax cuts in sixteen years to encourage the private sector to create jobs, including what Art Laffer called the largest capital gains cut in history. This led to a drop in unemployment from 5.6% to below 4%. We also successfully reformed welfare to lift the poor out of poverty in much the same way Paul Ryan proposes to save Medicaid. And we actually increased defense spending as opposed to Obama who proposes to cut it. Through those pro-growth and pro-freedom measures, we balanced the budget and paid off over $405 billion in debt.
Just as troubling as the bad plan put forward by the president was the extraordinary partisan spectacle he engaged in when he slandered Paul Ryan and the GOP 2012 budget. The distortions the president employed while describing the Ryan plan were so malicious, that I wanted to give Congressman Ryan the opportunity to respond himself in this newsletter.
The following is from Congressman Ryan and refutes the president’s most erroneous claims.
Paul Ryan Responds
Two months ago, the president introduced an unserious budget that locks in Washington's spending spree, adds $13 trillion to the debt over the next decade, and accelerates our nation toward a fiscal crisis. His budget imposes $1.5 trillion in tax increases on job creators and American families, stifling the private-sector job creation that we urgently need. His budget commits seniors to bureaucratically rationed health care, burdens families with ever-higher taxes, and consigns our children and grandchildren to a diminished future.
Two weeks ago, House Republicans advanced their Fiscal Year 2012 budget resolution – The Path to Prosperity. The House Republican budget spurs economic growth and job creation, strengthens the social safety net for those in need, fulfills the mission of health and retirement security for all Americans, and lifts our crushing burden of debt. The Path to Prosperity prevents the president’s tax increases and instead focuses on the root cause of our debt problem: wasteful Washington spending. The House Republicans’ budget reduces government spending by $6.2 trillion over the next decade, and puts the budget on a path to balance in the years ahead.
The Path to Prosperity has reshaped the budget debate – giving the American people an honest assessment of our fiscal challenges and delivering real solutions that restore the promise of our exceptional nation. In the wake of criticism that House Republicans were leading where his budget had failed, the president followed with a speech intended to show that he shared our concerns about the nation’s most urgent fiscal challenges. Unfortunately, instead of delivering solutions, the president delivered a partisan campaign speech, heavy on overheated rhetoric and light on ideas. Where the president did offer ideas, it was more of the same: huge tax increases and a plan for Medicare that builds on last year’s government takeover of health care and involves restricting seniors’ access to care.
As I noted last week, the president’s speech was excessively partisan, dramatically inaccurate, and hopelessly inadequate to the task of averting a fiscal crisis.
Let’s examine further the factual missteps and egregious errors in the president’s speech.
Discretionary Spending
CLAIM: “A 70% cut to clean energy. A 25% cut in education. A 30% cut in transportation. Cuts in college Pell Grants that will grow to more than $1,000 per year. That’s what they’re proposing.”
REALITY: The House Republican budget simply returns non-defense discretionary spending to below 2008 levels. What the president is inadvertently admitting is that he and his party’s leaders in Congress have increased spending by these breathtaking amounts. Americans elected a new Republican majority in 2010 in part because they were appalled at this lack of spending discipline. The House Republican budget simply adheres to our mandate to stop the Democrats’ unchecked spending spree.
CLAIM: “These aren’t the kind of cuts you make when you’re trying to get rid of some waste or find extra savings in the budget…These are the kind of cuts that tell us we can’t afford the America we believe in.”
REALITY: Incorrect. By returning spending to below 2008 levels, they are the kind of cuts that tell us we cannot afford the Democrats’ unsustainable spending spree. The president has every right to defend his spending record, but implying that common-sense spending restraint is un-American crossed the line.
Medicare
CLAIM: “[The House Republican budget is] a vision that says America can’t afford to keep the promise we’ve made to care for our seniors.”
REALITY: The president’s commitment to the status quo will end Medicare, period. According to the non-partisan CBO, Medicare will go bankrupt in nine short years. The president announced in his speech that he would rely on strict limitations on how much care seniors could receive in order to achieve savings. Contrary to the president’s opinion, CBO does not believe this would result in lower costs. Current seniors would receive less care through Medicare against a backdrop of relentlessly rising health care costs.
This stands in sharp contrast to the House Republican Budget, which gives seniors the tools to fight back against rising costs by empowering them in a personalized Medicare program, giving future generations the same kinds of health care choices members of Congress now enjoy.
CLAIM: “It says that ten years from now, if you’re a 65 year old who’s eligible for Medicare, you should have to pay nearly $6,400 more than you would today.”
REALITY: This is a false comparison based on a false reality. As mentioned above, the CBO reports that Medicare’s trust fund will become insolvent in nine years unless we act. This would necessitate harsh restrictions on seniors’ access to care – the kind of restrictions that the president himself alluded to later in his speech. The president is taking CBO numbers out of context and omitting the CBO’s clear warnings about Medicare’s impending bankruptcy.
That’s why comparing a Republican plan that saves Medicare to an unsustainable status quo means comparing a real solution with a false reality.The Medicare program as it exists today cannot exist in the future.The real choice is this: Do we act now to protect the program for current seniors while building a strengthened Medicare for future generations? Or do we restrict access to care for current and future seniors, as the president has proposed, while ignoring our crushing burden of debt until it becomes a fiscal crisis?
CLAIM: “It says instead of guaranteed health care, you will get a voucher.”
REALITY: The changes in the House Republican budget will not affect those in and near retirement in any way. When younger workers become eligible for Medicare, they will be able to choose the kind of plan that best suits their needs from a list of Medicare plans that are guaranteed to offer coverage to all beneficiaries regardless of pre-existing conditions. Medicare would then provide a payment to subsidize the cost of the plan. This is not a voucher – it is a payment that flows through to whatever plan recipients choose.
CLAIM: “And if that voucher isn’t worth enough to buy insurance, tough luck – you’re on your own.”
REALITY: Under the House Republican Budget, Medicare will provide increased assistance for lower-income beneficiaries and those with greater health risks, guaranteeing that Medicare will be there for those who need it most. Wealthy seniors will receive less assistance, and the Medicare benefit will grow every year, while using competition to lower costs and make health care for seniors more affordable.
CLAIM: “Put simply, it ends Medicare as we know it.”
REALITY: The president’s plan – a commitment to the status quo – condemns Medicare to a bankrupt future. The greatest threat to the health security of America’s seniors is the president’s plan to deeply and systematically ration Medicare.
Medicaid
CLAIM: “This is a vision that says up to 50 million Americans have to lose their health insurance in order for us to reduce the deficit.”
REALITY: Republicans have a vision for patient-centered health-care that requires the removal of the partisan roadblock to reform that the president and his party’s leaders enacted last year. Our budget repeals the government takeover of health care to make way for reforms that will make health insurance more affordable and accessible for Americans.
Contrary to the president’s false claims that the House Republicans’ Medicaid reform plan would leave millions without coverage, Medicaid spending grows every year under our budget. The Medicaid program is already failing those who need it most, because excessive federal mandates have made it so that the only way for states to control costs in the current system is to lower doctor reimbursement rates. This is why so many doctors refuse to see Medicaid patients. States need to be able to tailor their Medicaid programs to the needs of their unique populations. Our reforms help them create better programs. The president’s approach is just to throw more money at a broken system.
Taxes
CLAIM: “Worst of all, this is a vision that says even though America can’t afford to invest in education or clean energy; even though we can’t afford to care for seniors and poor children, we can somehow afford more than $1 trillion in new tax breaks for the wealthy.”
REALITY: The House Republican budget keeps revenue within its historical range of 18-19 percent of GDP. The president’s distortion is based on the fact that our budget prevents $1 trillion in tax increases. Many Democrats have claimed that our plan includes huge new tax cuts for the rich. This is completely false. Our plan calls for revenue-neutral tax reform along the lines of what the president’s Fiscal Commission proposed – lower rates with a broader base. The president appeared to have endorsed this idea in his speech, but he also called for higher rates. Despite this contradiction on tax policy, the president was clear in his intent to raise taxes again on job creators and American families.
Deficit reduction
CLAIM: “Today, I’m proposing a more balanced approach to achieve $4 trillion in deficit reduction over twelve years. It’s an approach that borrows from the recommendations of the bipartisan Fiscal Commission I appointed last year, and builds on the roughly $1 trillion in deficit reduction I already proposed in my 2012 budget. It’s an approach that puts every kind of spending on the table, but one that protects the middle-class, our promise to seniors, and our investments in the future.”
REALITY: The president’s plan lacks credibility. For one thing, is simply does not put “every kind of spending on the table” – the president ruled out changes to Social Security and exempted 90 percent of all federal spending from his debt-reduction as “failsafe.” For another, the president’s use of a 12-year budget window is bizarre – it is clearly contrived to make the president’s proposal appear to come close to matching the House Republicans’ proposal in terms of deficit reduction, when it actually falls a full trillion dollars short.
Conclusion
The president had an opportunity to reach across the aisle and work with Republicans by putting serious deficit-reduction ideas on the table. Instead, he decided to use this opportunity to kick off his 2012 campaign. It is no wonder that a few days after the president’s speech, rating agency Standard and Poor’s downgraded the U.S. debt outlook to negative, expressing skepticism about the president’s approach and implying that his stated position would make it harder, not easier, for the two parties to reach agreement on a serious plan before the 2012 election.
House Republicans will be here if the president changes his mind and decides that the next generation is more important than the next election. Until then, we will continue to lead.
-Congressman Paul Ryan
Lack of faith in Americans
In addition to the misleading and demonstrably false description of Paul Ryan’s budget and the consequences of his own plan, there is a deeper problem with President Obama’s message, one that reveals a fundamental misunderstanding of American Exceptionalism.
The president pretends to speak in the language of hope, change, optimism and compassion. Scratch the surface of his message, however, and you will see that it reveals a profound cynicism about the character of the nation he leads.
During his speech last week, and at subsequent campaign stops, the president said “The America I know is generous and compassionate.” Yet, in describing the generosity and compassion of America, the president cites government programs instead of the countless acts of charity Americans engage in every day without the involvement of government.
This is a profoundly different view of American compassion than the one experienced by most Americans. Throughout our history, it has been through a strong and vibrant civil society – the actions of charities, churches, civic organizations and associations - that Americans have expressed their compassion, not through big government.
In fact, the founding fathers believed that America’s strong volunteer ethic was essential to defend liberty because civil society fulfills roles that government is always tempted to assume. This puts the big government programs that President Obama and liberals want to preserve and expand profoundly at odds with the traditional American model of limited government and vibrant civil society. As big government expands, civil society gets crowded out by taking more money and resources away from civil society and directs it towards government. It also erodes the sense of personal responsibility Americans feel to take care of themselves and their neighbors by shifting that responsibility to government.
This brings us back to the issue of compassion, which President Obama seems to be setting up to be the aspirational “hope and change” of the 2012 campaign.
The president is trying to argue that Republican plans to reduce government spending reveal they do not believe in a compassionate America. He is 180 degrees wrong.
By placing faith in government, not civil society, to help those Americans in need, it is President Obama and the left who defend and want to expand the big government welfare state and who do not believe in a compassionate America.
Rather than a compassionate American people, the left believes in compassionate politicians compensating for uncompassionate Americans by taking their money and spending it on what they consider more benevolent things.
So when President Obama and the left try to take the moral high ground and say that an America with less big government is not the compassionate America they know, remember it is because their low view of the American people is not the same as what we know is true.
Your Friend,
Newt
-
By JOHN B. TAYLOR
Palo Alto, Calif.
Americans are clamoring for a fact-based debate about the budget, but the numbers they're hearing from Washington are terribly confusing. Here's an example: Speaking at a Facebook town hall meeting here on Wednesday, President Obama sometimes talked about saving $4 trillion, at other times $2 trillion, and he varied whether it was over 10 years or 12 years, never mentioning any one year.
A simple chart, like the one nearby, would greatly clarify the debate. It shows total federal government spending year-by-year for the two decades starting in the year 2000. Spending is shown as a percentage of GDP, which is a sensible and quite common way to assess trends: When the percentage rises, government spending rises relative to total income or total goods and services produced in our economy.
For the past decade, the chart shows the recent history of government spending. For the next decade—the window for the current budget—it shows three different spending visions for the future.
The uppermost line shows outlays under the official budget submitted by Mr. Obama to Congress on Feb. 14. The lowest line shows the House Budget Resolution submitted by House Budget Committee Chairman Paul Ryan on April 5, while the third line shows year-by-year outlays I estimated from the 12-year totals in the new budget proposed by the president on April 13.
The chart clearly reveals a number of important facts that are not coming up in town hall meetings. Most obvious is the huge bulge in spending in the past few years. In 2000 spending was 18.2% of GDP. In 2007 it was 19.6%. But in the three years since 2009 it's jumped to an average of 24.4%.
Second, and perhaps even more striking, the chart shows that Mr. Obama, in his budget submitted in February, proposed to make that spending binge permanent. Spending would still be more than 24% of GDP at the end of the budget window in 2021. The administration revealed its preference in the February budget for a much higher level of government spending than the 18.2% of GDP in 2000 or the 19.6% in 2007.
Third, the House budget plan proposed by Rep. Paul Ryan (R., Wis.) simply removes that spending binge—it gradually returns spending as a share of GDP back to a level seen only three years ago.
.View Full Image
..When I show people this chart they ask why Washington is even having the debate. They say: If government agencies and programs functioned with 19% to 20% of GDP in 2007, why is it so hard for them to function with that percentage in 2021, when GDP will be substantially higher and with many opportunities for reforms and increased efficiencies? And if GDP and employment grow more quickly, as they would if private investment increased as a result of lower government spending and debt, then that 19% to 20% share of GDP could provide much more in the way of public goods.
Fourth, the chart shows that the second Obama administration budget, submitted a week after the Ryan House budget, is substantially different from the first administration budget. It is highly unusual for an administration to decide to submit a second budget, and the effect of this revision is to move the administration's spending vision closer to that of the House. But it still leaves a big chunk of the spending binge in place.
Fifth, and perhaps most important for economic growth, the chart shows that the House budget effectively deals with the deficit and brings the debt down as a share of GDP without a tax increase. Under the current tax system, revenues as a share of GDP were 18.5% in 2007, so that the budget deficit was only 1.1% of GDP that year. With higher real incomes moving people into higher tax brackets, it is quite likely that under the current tax system revenues will be higher as a share of GDP when the economy fully recovers, perhaps in the 19% to 20% range.
This means that the House budget plan, with spending in the same range, approximately balances the budget with no increase in taxes. This is good news for economic growth. In contrast, balancing the first or even the second Obama budget requires substantial tax increases—more than the administration has yet to propose.
Mr. Taylor, a professor of economics at Stanford and a senior fellow at the Hoover Institution, is the author of "Getting Off Track: How Government Actions and Interventions Caused, Prolonged and Worsened the Financial Crisis" (Hoover Press, 2009).
-
I'm going to answer BD's proposed budget on this thread, which, now that I think about it seems to me a better place for discussing his proposal (and the rest of ours to come no doubt :wink: ) because it will encourage us to tap into what we already have on this thread:
BD writes:
"about 60% of the discretionary budget is military. Therefore, we have to start there."
I have two major disagreements with this:
1) National Defense spending in my opinion is of a different category. Indeed, in my opinion, it is the essence of non-discretionary. If it needs to be spent, it should be apart from budegetary considerations. If not, it shouldn't.
2) I disagree with the syllogism in and of itself. The great majority of our problems are PRECISELY because of what we define as ENTITLEMENTS!!! (i.e. non-discretionary) and then mask with BASELINE BUDGETING.
-
I use Congress's definition because Congress passed the law with the description, passes the budget, and raises the money. You don't have to like the definition, but I will accept it because I am not an activist president.
-
Diagree. Non-dsicretionary spending is only because some previous Congress said so and some previous president signed it. We can do the same and make it descretionary again.
If you are not an activist president in this regard you will fail in solving the problem.
-
http://www.mercatornet.com/sheila_liaugminas/view/9565/
-
This article makes much more sense to me, and it is written by a guy who was Bill Clinton's pollster:
http://online.wsj.com/article/SB10001424053111903927204576574513428610454.html?mod=djemEditorialPage_t
Voters Want State Government Reform
By DOUGLAS E. SCHOEN
Americans believe that bold action to restrict spending is necessary to stabilize the finances of state government.
Last month, in a wide-ranging national survey of 1,000 randomly selected, registered voters, and in 10 polls in individual states each with 400 respondents, my polling company found that voters strongly favor measures to pare the compensation of current and future public employees. They strongly oppose higher taxes.
Specifically, over three-quarters (78%) say their state faced a budget crisis this year, and 68% say that the crisis was resolved with spending cuts. Overwhelmingly they blame politicians for creating and exacerbating the problems: 48% say "elected state officials made careless and self-serving decisions," while only 6% say "state governments did not tax enough."
The top priorities for resolving current fiscal issues are to cut government spending (47%) and to ask for greater sacrifice from current public employees, by having them contribute more towards their benefits (31%). By almost two-to-one, they think that current public employees should have to contribute more toward their pension benefits because of budget problems.
A majority (51%) say they would not be willing to cut "social service programs provided by your state" to maintain the compensation of public employees; and 60% say that "education and health care" should not be cut so that "the salaries and benefits of public employees could be paid at current levels."
Further, by 48% to 40%, voters say that public employees' salaries should be "frozen," and they should be required to contribute more towards their benefits when states face the type of crises they are now facing. Close to two-thirds (64%) say they would not be willing to have their taxes raised as a means of keeping salaries and benefits of current employees at current levels.
However, there is a clear distinction in voters' minds between what current public employees should be asked to contribute and what retired public employees should be asked to contribute. Sixty-nine percent say retirees should "not have to" contribute more towards their health-care benefits or take a reduced pension because of state and local government budget problems.
A majority (56%) supports reducing certain state services to address state budget crises if programs need to be cut. Voters are most inclined to cut libraries and parks services and least inclined to cut education, health care, police and fire protection. However, a whopping 60% of voters oppose "increasing state sales, income or other taxes" to reduce budget deficits.
While there is a clear sense that cutting spending and reducing salaries and benefits will result in fiscal stability for state governments, there is no similar linkage between reforming the collective bargaining process and achieving fiscal well-being for individual state governments.
Put simply, the voters don't see a connection between the two.
Collective bargaining is not overwhelmingly popular in the abstract. A majority (50%) agrees that "public employees should not bargain collectively and use union power to limit or delay the delivery of important government services." Moreover, 60% of voters feel that collective bargaining is a benefit "and can be changed and negotiated based on economic circumstances," while 30% see it as "essential" and "a basic right of labor." In the recent "disputes between state governments and public unions over collective bargaining," voters side with state officials by 46% to 39%.
However, this skepticism towards collective bargaining does not translate directly into support for the steps that Governors Scott Walker of Wisconsin and John Kasich of Ohio took in their individual jurisdictions.
Nationally, the Wisconsin law to restrict public employee collective bargaining rights was opposed 49% to 45%, and the similar Ohio legislation was opposed by 45% to 40%. In the states, there was similar opposition. Wisconsin voters oppose Mr. Walker's measure, 52% to 45%, and Ohio voters oppose Mr. Kasich's measure, 52% to 43%.
Yet the reason for this apparent movement against collective bargaining reform is that unlike reducing state spending and benefits, voters nationally and in those two states are not convinced that clear savings will result from reforming the labor relations process. By 56% to 33%, voters nationally say "it is unclear how much money will actually be saved by limiting" collective bargaining rights.
Voters also reject the notion that reforming collective bargaining will make government more efficient in each of these two states. A solid majority (55%) rejects that notion in Wisconsin, and a 45% to 41% plurality in Ohio rejects this notion as well. By large margins in both states—59% to 17% in Ohio and 43% to 28% in Wisconsin—voters say it is more important to reform public employee salaries and benefits than it is to reform collective bargaining.
On other measures that restrict current public employee rights and benefits, voters say that tenure for teachers should be phased out, 56% to 39%. Fundamental reform of public sector pension plans is strongly favored. Voters support "moving all new public employees from a defined benefit plan to a defined contribution plan" by 69% to 17%.
One of the reasons voters feel so strongly about reducing the level of compensation for state employees is that they believe that they are earning disproportionately high wages relative to those in the private sector.
There is a clear belief that public employees are better compensated than those in the private sector: 41% of voters think "the salaries and benefits of most public employees are too high for the work they do," while 32% think they're "about right" and 13% think they're "too low."
Voters also think that while public sector workers generally can retire with full benefits at about age 57 years old, this is too early. Generally they say the normal retirement age should be 65.
It is clear that American voters endorse a very specific agenda to reduce spending, pare back employee benefits, and hold the line on taxes wherever and whenever possible. The electorate clearly shows sympathy with the concept of limiting collective bargaining rights, but so far has not seen or come to accept the direct linkage between restricting that benefit and assuring the ongoing fiscal well-being of their state.
Mr. Schoen, who served as a pollster for President Bill Clinton, is author of "Hopelessly Divided: The New Crisis in American Politics and What It Means for 2012 and Beyond."(Rowman and Littlefield, 2012). The national survey discussed in this op-ed was conducted on Aug. 5-10. The states individually surveyed on Aug. 29-Sept. 5 were Florida, Illinois, Indiana, Michigan, Montana, North Carolina, New York, Ohio, Pennsylvania and Wisconsin. All surveys were conducted for the Manhattan Institute.
On Sep 20, 2011, at 6:24 AM, epo wrote:
Is Obama’s proposal winning him reelection?
Bob
http://capitalgainsandgames.com/blog/bruce-bartlett/2368/updated-tax-polls
Updated Tax Polls
19 Sep 2011
Posted by Bruce Bartlett
<image001.jpg>
I have previously posted a table showing that people support raising taxes as part of deficit reduction by a 2-to-1 margin over the Grover Norquist/Club for Growth/Tea Party position that the deficit must be reduced only by spending cuts without a penny of higher taxes. In light of President Obama's new budget plan, which includes higher taxes, I am posting an updated table, including a poll on Friday showing that three-fourths of people support higher taxes and only 21 percent support the doctrinaire right-wing position.
Can/Should the Budget Deficit Be Reduced with Spending Cuts Alone or Should There Be Some Increase in Taxes?
Poll
Date
Some/All Taxes
No Taxes/
All Spending
New York Times/CBS News
9-16-11
74
21
Bloomberg
9-14-11
48
38
Associated Press
8-26-11
69
29
Gallup
8-10-11
66
33
CNN
8-10-11
63
36
McClatchy/Marist
8-9-11
68
29
New York Times/CBS News
8-4-11
63
34
CNN
8-2-11
60
40
Ipsos/Reuters
7-26-11
68
19
Rasmussen
7-25-11
56
34
CNN
7-21-11
64
34
Washington Post/ABC News
7-19-11
66
32
NBC News/Wall Street Journal
7-19-11
62
27
CBS News
7-18-11
69
28
Quinnipiac
7-14-11
67
25
Gallup
7-13-11
73
20
Washington Post/ABC News
6-9-11
61
37
Ipsos/Reuters
6-9-11
59
26
Bloomberg
5-13-11
64
33
Ipsos/Reuters
5-12-11
61
27
Gallup
4-29-11
76
20
USC/Los Angeles Times
4-25-11
62
33
New York Times/CBS News
4-22-11
66
19
Washington Post/ABC News
4-20-11
62
36
Washington Post/ABC News
3-15-11
67
31
Washington Post/ABC News
12-12-10
62
36
Associated Press/CNBC
11-26-10
65
33
Average
64.5
30
Scott Grannis
http://scottgrannis.blogspot.com
-
By GLENN HUBBARD
After two months of talks, the super committee announced failure on Monday to agree on reducing federal deficits by $1.2 trillion over the next decade. But as the late economist Herb Stein once remarked: If something cannot go on forever, it won't. That applies to the mounting budget shortfalls. But how?
President Obama's answer is higher taxes. But he can't be serious. Just accommodating his spending plans over the next decade requires across-the-board tax increases of 20%. Over the next 25 years, taxes would need to rise across the board by 60%.
Instead, what is needed is spending reform that offers goals, specifics and ways to blend fiscal responsibility with modernizing government. This includes near-term action on discretionary spending and longer-term action to reform entitlements and reduce the growth of Social Security and Medicare. Then revenue contributions can be addressed in the context of tax reform.
The first goal is to reduce federal spending to a healthier 20% share of GDP from today's bloated 25% within a decade. A tall order, yes, given the profligacy of the last few years. But it can be accomplished by eliminating unnecessary federal programs, empowering states, and reforming and streamlining government.
The obvious place to begin is repealing ObamaCare and its expansion of spending. Programs like the federal Community Development Fund, which should fall under state and local or private responsibilities, can be axed. So can intercity and high-speed rail grants, which lack plans to make rail competitive, and duplicative education programs.
We should also let states experiment with alternatives to our current one-size-fits-all federal solution. The best example is Medicaid, which should be converted into a block grant. Replacing federal matching support with block grants eliminates state incentives to attract additional federal subsidies, while allowing states to manage Medicaid more efficiently. Federal Medicaid costs should be capped at growth of 1% over the inflation rate.
The federal work force can shrink through attrition, and employee compensation can be adjusted to private levels. We should cut costly applied research in fields such as renewable energy at the Department of Energy, focusing only on basic research. And the Davis-Bacon Act, which inflates the price of federal construction projects by requiring high-cost union labor, has to be repealed.
These three approaches would bring federal spending down to 20% of GDP. Yet as ambitious as they are, these won't solve our long-term budget problems, which reflect yawning deficits in Social Security and Medicare.
Regarding Social Security, the program first needs to be made solvent and sustainable over the long term. In particular, program outlays need to grow more slowly to allow for rising costs in health-care entitlements. Second, we must modernize Social Security by making it more effective in protecting low earners and more conducive to personal saving and the longer work lives needed in today's economy. These changes will require a strong minimum benefit, gradual increases in the retirement age, and slowing benefit growth for more affluent Americans.
As a pro-growth measure, we should also eliminate the Social Security payroll tax for all individuals age 62 and older to encourage individuals to keep working and to increase their attractiveness to employers. In that vein, we should also eliminate the retirement earnings test that reduces benefits for early retirees who continue to work.
Our long-term budget problems are dominated by Medicare's unfunded liabilities of tens of trillions of dollars. But changes must preserve Medicare's role of assisting lower- and moderate-income Americans. As with Social Security, Medicare's eligibility age should be increased gradually, and we should promote work by eliminating the Medicare payroll tax for individuals 62 or older.
A more modern version of traditional Medicare would replace Parts A, B and D with comprehensive benefits including coverage for catastrophic costs and prescription drugs. Simpler cost-sharing would be offered—with one deductible for inpatient and outpatient services and a common coinsurance rate for all services.
Medicare would be placed on a budget through premium support, which would let beneficiaries choose among competing health plans, much like federal employees do now. Subsidies would be larger for lower-income or higher-health-risk individuals. The annual growth would be determined by Congress along with other spending priorities.
And what about taxes? Incorporating revenue increases into forward-looking budget planning requires care. For the plan to be pro-growth, marginal tax rates must not be raised. That leaves base-broadening by reducing tax expenditures and tax preferences. With this in mind, Congress should agree on a revenue target for the decade, then deliver on this target via tax reform.
Merely extending the 2001 and 2003 tax cuts is not the most pro-growth policy. Fundamental tax reform need not be revenue-neutral, as the Bowles-Simpson Commission plan—which would raise net revenue through broadening the tax base—indicates. And reform can be progressive. But tax reform is important for ensuring that deficit reduction promotes economic growth as well as budget austerity.
It is unfortunate that many members of Congress and much of the public don't understand that America's fiscal problems can be solved almost entirely by altering the trajectory of government spending. President Obama's leadership failure here is obvious.
If something cannot go on forever, it will stop. But even with the super committee's failure we may be able to avoid a sudden, calamitous stop—and provide a government worthy of the 21st century for all Americans.
Mr. Hubbard, dean of Columbia Business School, was chairman of the Council of Economic Advisers under President George W. Bush.
-
Ahhh to be a government worker... If only private industry had their protections.....
We would all be broke.
http://www.latimes.com/news/local/la-me-prison-mailroom-20111126,0,2558276.story
-
We are all broke, California in particular.
-
I have queried in this forum as to how much we have been spending via the IMF for the Euro collapse. This piece answers that (much smaller than I had feared but substantial nonetheless.) Regardless, this would be a wonderful place to cut spending.
======================
By JIM DEMINT
If the United States wants to help Europe find a way out of its current debt crisis, we must be a strong, world economic leader, not merely the lender of last resort.
American taxpayers sent $40 billion to Greece last year, through the International Monetary Fund, to stave off an economic collapse. But the bailout did not prevent Greece's day of fiscal reckoning. It only delayed it. Austerity measures are still needed throughout Europe's socialized economy and the debt contagion has not been stopped. Financial chaos has spread from Greece to Ireland, Portugal, Italy and Spain, and it now threatens the very future of the 17-member euro zone.
Undeterred, President Obama last month told the press after breaking from a closed-door meeting with European leaders, "the United States stands ready to do our part to help them resolve this issue." He would do better to focus his attention stateside. The most dangerous threat to the U.S. economy is not across the pond. It's in the swampland of Washington, D.C.
The very problems that have roiled Europe's economy are coming to a slow boil in the U.S. Just as European leaders must limit deficit spending, reform unfunded entitlement programs, and resolve the underlying systemic problems in their financial systems, so must the politicians in Washington. Yet the Obama administration is burning taxpayers at each end of the dollar by bailing out failed socialist policies abroad and, at the same time, forcing them into place here at home.
Although every country's finances are unique, the U.S. is unquestionably in the danger zone.
Greece's economy reached its tipping point and was bailed out when government debt topped 137% of its gross domestic product. Despite all the measures that have been taken to aid it, Greece's debt-to-GDP-ratio is even higher now, at 160%. Ireland was bailed out at 74% of GDP and is now at 80%. Portugal was bailed out at 94% of GDP and is now expected to top 100%. The bailouts have arguably made the European debt crisis worse, not better.
Total U.S. debt, including entitlement liabilities, reached 100% of GDP when Congress increased the debt ceiling in August. Our $15 trillion debt now rivals the size of the entire U.S. economy.
Enlarge Image
CloseMartin Kozlowski
.When he first took office, President Obama promised to cut the federal deficit in half by 2013. But instead he's increased it by more than $4 trillion. Indeed, under his direction, the U.S. government spent about $1 trillion on a Keynesian-style stimulus that failed to create the jobs promised, will spend trillions more creating a European-style health-care entitlement with ObamaCare, and has more Americans on welfare than ever before.
With President Obama in the White House, liberals have succeeded in their longstanding quest to make America more like Europe. Problem is, their idealized version of Europe's collectivist government is now in shambles. If the U.S. continues to mimic our European allies we'll fall to pieces, too.
It is under these circumstances that high-level members of the Obama administration, including the president himself, are negotiating with international leaders over how best to solve the European debt crisis. This week, Treasury Secretary Tim Geithner met central bankers and European leaders days ahead of this Friday's emergency EU summit in Brussels, where a last-ditch rescue effort is expected to be announced. France and Germany are pushing for EU rule changes to enforce stricter budget discipline on member nations in exchange for further bailouts. The International Monetary Fund, which the U.S. funds at a higher percentage than any other nation, is expected to aid the rescue. The only question is how big a role the IMF and U.S. taxpayers will play.
This year the U.S. sent about $67 billion to the IMF, which represents 17.7% of the IMF's yearly budget—nearly three times more than any other nation. On top of that, taxpayers provided an additional $108 billion credit line to the IMF in 2009.
In 2010, the IMF sent nearly $40 billion in assistance to Greece, which did nothing to prevent the country's economic collapse in 2011. On Monday, the IMF approved another $2.95 billion worth of bailout funds for the struggling country.
If this is what President Obama meant when he said the "United States stands ready to do our part," it's time for him to part ways from his European friends seeking the same kind of assistance that has been provided to Greece.
American policy makers must send an unmistakable signal that the era of bailouts is over once and for all.
Earlier this year, I offered an amendment to repeal the IMF's authority to use the additional $108 billion credit line to provide any more bailouts. It was overwhelmingly rejected by the Democrat-controlled Senate. Forty-four senators voted for it; only one was a Democrat.
I will soon give my colleagues another chance by forcing a vote to stop Mr. Geithner from supporting any more taxpayer-funded bailouts of the European economy, as well as nullifying previously expanded IMF bailout authority.
Members of the Obama administration must focus all of their efforts on strengthening the U.S. economy and balancing our budget, rather than on continuing to borrow from China to pay for Europe's out-of-control debts.
President Obama and Mr. Geithner have lectured European leaders on the need for them to take decisive action to stabilize their economies. They should practice what they preach and set a positive example for the world to follow.
Lending isn't leading. Balancing the budget would be.
Mr. DeMint, a Republican, is a senator from South Carolina.
-
I know not the other side of this, but here is POTH on some efforts to cut spending (i.e. increase spending less)
Published: March 9, 2012
The hard-fought deal that settled last year’s debt-ceiling fight made painfully deep cuts in spending, but it promised one thing: a year’s peace from the destructive Congressional battles that led to threats of government shutdowns and defaults. By signing the pact, Republican and Democratic leaders set spending levels for 2013, putting off further budget wars until after the election.
But now a coalition of extreme conservatives in the House wants to break the budget agreement and cut spending below the agreed level, and the House Budget Committee seems willing to go along.
Reneging on the agreement would not only endanger vital programs like Head Start, but it would erase the thin residue of trust left in Congress. It would clearly demonstrate that the current House cannot be trusted to live up to its own pledges.
When Republicans created the debt-ceiling crisis in August, their principal goal was to cut spending, and they got their wish. By threatening a government default, they forced an agreement, negotiated by Speaker John Boehner, that cut $2.3 trillion from the budget over a decade without a dime of new taxes. That includes more than $800 billion cut from nondefense discretionary spending, in vital areas like education, housing assistance, transportation, public health and veterans benefits.
For fiscal year 2013, the agreement set a discretionary spending level of $1.047 trillion. Though far too low, that level at least let appropriators in both the House and Senate know how much they had to spend, and House Republicans crowed about it at the time. “The Budget Control Act represents a victory for those committed to controlling government spending and growing our economy,” said Representative Paul Ryan, the chairman of the House Budget Committee. Now members of the Republican Study Committee, the most right-wing members of the House, want to bring the 2013 level down to $931 billion, an unimaginable 11 percent cut in a single year. House officials say Mr. Ryan’s committee is unlikely to cut that much but could bring 2013 spending down to $1.028 trillion.
That $19 billion cut, on top of the ones already agreed to, could have terrible consequences. Assuming it was applied evenly to all nondefense programs, it would mean that 50,000 children would lose access to Head Start; 20,000 families would lose child-care slots; and 10,500 teachers and their aides would lose their jobs.
With the Senate sticking to the agreed-upon spending limit, a lower House number could lead to a clash between the chambers that raises the prospect of another government shutdown. Democrats say they are furious that the agreement could be undercut. “If House Republicans walk away from the agreement their own speaker made less than a year ago, then they will show that a deal with them isn’t worth the paper it’s printed on,” said Senator Patty Murray, who led the Democrats on the budget “supercommittee” last year. If Mr. Boehner is to retain any credibility as a leader of the House and a responsible lawmaker, he needs to extinguish this rebellion and make it clear that a deal is a deal.
-
http://online.wsj.com/article/SB10001424052702304636404577299720000883712.html?mod=WSJ_Opinion_LEADTop
Its no surprise that the White House has denounced Paul Ryan's new House budget as the end of welfare-state civilization. The puzzle is why some conservatives are taking shots at the best chance in decades for serious government reform.
A pair of freshman Republicans, Tim Huelskamp of Kansas and Justin Amash of Michigan, joined every Democrat in voting against the budget in committee last week, claiming it didn't balance the budget fast enough. The budget passed 19-18, but if the rebellion spreads it will play into the hands of Nancy Pelosi, who wants to show that Republicans can't govern.
Then there's Chris Chocola, the former Member of Congress who now runs the Club for Growth political donors' group, who groused that "on balance" Mr. Ryan's budget is "a disappointment for fiscal conservatives." Mr. Chocola says the proposal doesn't get to balance fast enough and waives the automatic defense cuts from last year's debt-limit deal with President Obama.
The GOP critics are wrong on the economics and politics. Mr. Ryan's plan may not balance the budget within 10 years, but that's the wrong policy guidepost. Mr. Obama can easily balance the budget faster—by raising taxes.
Mr. Ryan wants to avoid a tax increase and reform the tax code because he realizes that the budget will never balance over the long term without economic growth faster than today's 2% a year. By stressing budget balance over growth, Mr. Chocola and the tea-party critics are falling into Mr. Obama's deficit and tax trap.
Enlarge Image
CloseGetty Images
House Budget Chairman Rep. Paul Ryan
.They are also playing by the Beltway's big-government budget rules. The critics on the right are judging Mr. Ryan's budget according to Congressional Budget Office estimates that assume little or no economic benefit from better policy. Mr. Ryan's official budget proposal follows CBO scoring, but he is also trying to break out of that straitjacket.
He has also issued a second budget estimate based on evidence from the 1960s, 1980s and 2000s that tax reform and spending restraint will increase GDP by about 0.5 to one percentage point a year. This means the Ryan budget reduces the debt to GDP ratio to 50% in 10 years from 74.2% this year (and heading higher) and thus steers the U.S. away from the Greek fiscal rocks. Since when has the Club for Growth favored static Beltway revenue analysis?
Mr. Ryan is also proposing to cut spending to 19.8% of the economy in 2021 from 24.1% in 2011. That is hardly spendthrift. It will also be hard to pass given the resistance to change in Washington.
But what really matters on spending over the long term is entitlement reform, and on that score Mr. Ryan goes further than any Republican Congress or President since 1995. He understands that without converting Medicare into a market-based program with more choices for seniors, and without devolving Medicaid to the states and repealing ObamaCare, tax increases will soon become the political default option.
The entitlement state wasn't built in a year, and it can only be fixed with reforms that save money over time. Conservatives who really want to limit government should focus on major reform, not on hitting some unlikely balanced budget target in some future year.
As for automatic defense cuts—the so-called sequester—everyone knows those are too draconian to be sustained. That's why Mr. Obama insisted on them. He wants to use them as leverage to get Republicans to raise taxes. Defense is already scheduled to be cut by some $450 billion under the current 10-year budget caps. The sequester would cut an additional 10% from the national security budget in 2013 and roughly another 10% in 2014.
Mr. Ryan's budget would cancel the additional defense cuts of $55 billion a year under the sequester and replace them with savings in the entitlements that are the real drivers of long-term debt. His Medicare and Medicaid reforms would generate future savings many times greater than would be gained from gutting the defense budget. The tea partiers who want to hack away at defense as much as they do at earmarks are going to fracture the GOP coalition in Congress that still contains more than a few defense hawks.
Voters have every reason to be skeptical of Republican promises, but Mr. Ryan's budget is hardly a status quo document. It's light years better than the Tom DeLay budgets of the 2000s.
Mr. Ryan is thinking ahead of his critics by focusing on the two most important priorities: growth and reform. Without both, limited government will be nothing more than a tea party slogan and a balanced budget will be nothing more than a tax-increase trap.
-
Ryan has courage and expertise in a very dry, important subject. This a serious plan for governing, not a Ron Paul plan where we say cut - no problem, but never get the votes to do it. The Ryan plan could actually be the blueprint. Really it is stop tha crazy increases and hold spending within sight while we try to grow the economy.
They say Ryan would likely accept the VP slot if chosen. That is a nice option to have available. I lean toward Rubio at this point. Save Ryan maybe for Speaker of the House.
-
The next time someone moans about Washington "austerity," tell them about the Senate's food stamp votes on Tuesday. Democrats and a few Republicans united to block even modest reform in a welfare program that has exploded in the last decade and is set to spend $770 billion in the next 10 years.
Yes, $770 billion on a single program. And you wonder why the U.S. had its credit-rating downgraded?
When the food stamp program began in the 1970s, it was designed to help about 1 of 50 Americans who were in severe financial distress. But thanks to eligibility changes first by President George W. Bush as part of the 2002 farm bill and then by President Obama in the 2008 stimulus, food stamps are becoming the latest middle-class entitlement.
Enlarge Image
CloseAssociated Press
A sign outside of a store in Sioux Falls, S.D., tells customers that food stamps are welcome.
.A record 44.7 million people received food stamps in fiscal 2011, up from 28.2 million as recently as 2008. The cost has more than doubled in that same period, to $78 billion, and is on track to account for 78% of farm bill spending over the next decade. One in seven Americans now qualifies.
Once there was a stigma to going on the dole, and it was seen as a last resort. But now the Agriculture Department runs radio and TV ads prodding people to get the free food, as in a recent campaign that says food stamps will help you lose weight. A federal website boasts about strategies that have "increased program participation" with special emphasis on Hispanics because "our data show that many low-income Latinos simply don't apply for [food stamps] even though they're eligible."
In the 1990s Bill Clinton boasted that welfare reform took Americans off the dole. The Obama Administration boasts about how many it has added.
Enter Alabama Republican Jeff Sessions, who proposed reforms to limit the worst excesses. One proposal would have established a federal asset test to ensure that food stamps aren't going to families that may not have an income but have tens of thousands of dollars in savings or may even live in a million-dollar home. Some 39 states have no real asset test for food stamps, which means wealthy families without anyone in the job market are eligible, and 27 have gross-income limits that are above 130% of the federal poverty guidelines.
That amendment lost 56-43, with every Democrat except Missouri's Claire McCaskill opposing it. New England Republicans Scott Brown, Susan Collins and Olympia Snowe and Nevada's Dean Heller joined the antireformers.
Mr. Sessions also tried to end the preposterous federal policy of paying some $500 million in bonuses to states that sign up more people for food stamps. This is the way government becomes a permanent feedback loop promoting even bigger government. That amendment lost 58-41, with every self-described Democratic "deficit hawk" opposed.
Still to come is an amendment on another egregious practice that lets some 15 states automatically enroll families for food stamps if they get federal home-heating subsidies. Some states mail heating subsidy checks of as little as $1 a month so families can qualify for federal food stamp benefits of as much as $130 a month. That amendment too is expected to fail.
It's true that the recession and feeble recovery have expanded the number of people who need food assistance, but Mr. Sessions's reforms would have harmed no one who really needs help. His amendments would have saved at most some $20 billion over 10 years, which would still leave some three-quarters of a trillion dollars in outlays.
Earlier this year, House Republicans passed their own food stamp reform that will save some $34 billion over a decade. That bill will now go to a House-Senate farm bill conference, and perhaps some savings can be salvaged. But the news in the Senate vote is that the political class still isn't remotely serious about reforming government. The voters are going to have to clean out a lot more spenders in November if they want real change.
-
http://www.theblaze.com/stories/with-fiscal-cliff-looming-obama-orders-raise-for-biden-members-of-congress-other-federal-workers/
-
http://www.nytimes.com/2016/02/09/us/politics/half-built-nuclear-fuel-plant-in-south-carolina-faces-test-on-its-future.html?_r=1
-
http://fullmeasure.news/news/politics/afghan-air
-
http://www.forbes.com/sites/adamandrzejewski/2016/12/23/10-ways-donald-trump-can-cut-waste-our-advice-from-openthebooks-com/#5df5168352b9
-
https://www.washingtonpost.com/business/economy/through-his-budget-a-bottom-line-look-at-trumps-new-washington/2017/03/12/29739206-05be-11e7-b9fa-ed727b644a0b_story.html?utm_term=.94997403db41&wpisrc=nl_most&wpmm=1
-
http://thehill.com/policy/finance/334768-here-are-the-66-programs-eliminated-in-trumps-budget#.WSTP2Sybe7g.facebook
-
http://www.foxnews.com/politics/2018/01/02/mapping-swamp-report-finds-30000-feds-earn-more-than-any-governor.html
-
http://www.aei.org/publication/if-entitlement-reform-is-too-hard-lawmakers-can-take-baby-steps/?mkt_tok=eyJpIjoiTWpkbE5UazVaVEpsTTJFeCIsInQiOiJ1Q0F1ZUhubU9KVVJaUm45ZjRNdHRRajRxbjYya0cyKzEwbkMxVVR3eXkyUlV4MXRhc0ZsZnpFTjN1K2ZLSGlkUUxYdFYrVURmRkVKaERwbGEzMUZiSzFjbU04Qkp4Nm5YXC9aNmxpOUxYTEFcL09qYVUxOUJaU3dRT2JubTV0Zm9DIn0%3D
-
http://thehill.com/homenews/administration/373441-the-federal-programs-trump-proposes-cutting-in-2019-budget?userid=188403
-
http://thehill.com/homenews/administration/373441-the-federal-programs-trump-proposes-cutting-in-2019-budget?userid=188403
Wouldn't it be great if this came true!
It's possible that our friend Dr. Ben Carson is having some quiet success behind the scenes decoupling government and poverty.
-
Presidents budgets are usually DOA and as such tend to contain much posturing.
-
https://www.heritage.org/budget-and-spending/commentary/these-5-changes-would-fix-the-nations-budget-woes?utm_source=THF_Email&utm_medium=email&utm_campaign=TheAgenda&mkt_tok=eyJpIjoiTlRabU1ERmtaVEEyWVdabSIsInQiOiJzcDNla1hNZEc5RFwvVG1sVzlHS0FZbVJIQzc3MTRqQkR6NlZ5V3ZpSEpkeHVYd1czMlAydUNtWThUVmIyR1wvMUxLaENDMjluUHVzbVRBdjBKbWFjMjMrVlhaZk9RSzJwZDRPdGFmZmpieitQWFl0VlorZ21SRk1lRlFiZTc5TUQ4In0%3D