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Posts Tagged ‘budget’
February 5th, 2013 at 5:25 pm
CA’s Brown Faces Big Test over Shale Oil Fracking

It’s an interesting time to follow California politics.

Last month, Democratic Governor Jerry Brown announced that, thanks to the voter-approved tax hikes from last November, the state looks poised reap budget surpluses for the first time in years.

But instead of using those projections as an excuse to restore funding for programs pared back by budget cuts, Brown is promising to set aside the money in a rainy day fund.

Moody’s and S&P rewarded Brown’s announcement by upgrading California’s credit rating.

Now Brown faces an even bigger test.

There’s an estimated 15.4 billion barrels of oil in California’s Monterey Shale formation, or four times as much as North Dakota’s Bakken Shale reserves.  Another way to put it is that California is home to two-thirds of America’s projected shale oil reserves.  Opening it up would be a game changer for the nation’s oil security and California’s economy.

But here’s the rub, according to Walter Russell Mead:

The intrigues in this drama are many. Does California’s Democratic Party come down on the side of low income Californians, who desperately need the jobs and state services new oil extraction will fund? Or does it come down on the side of a green lobby that is heavily backed by some of the wealthiest people in the state? To what extent does the wealthy coastal elite control the future of the inland poor in California? Can the GOP use the issue as a wedge to rebuild its credibility in a state it once dominated? Will black gold bail out big blue California?

Bring lots of popcorn. This is going to be a terrific show.

January 23rd, 2013 at 8:01 pm
Senate Dems to Pass First Budget in Four Years

The Hill posted a jaw-dropping lead to describe just how broken is the federal budget process:

Senate Democrats on Wednesday said they will move a budget resolution through the Budget Committee and onto the Senate floor for the first time in four years.

Despite protests to the contrary, the move is in response to a House-approved measure to move the nation’s debt ceiling back from late February to early May.

It’s hard to applaud a group of adults for finally getting the regular budget process going in the Senate.  Still, it’s a sign of progress that a budget may actually be produced in accordance with federal law.

January 16th, 2013 at 8:12 pm
Calif. Has $1 Trillion in Oil, But Would It Stop Govt. Spending?

Mark Mills writing in The Wall Street Journal says that projections about California’s latent shale oil reserves could be the silver bullet for the state’s fiscal woes:

The overall economic benefits of opening up the Monterey shale field could reach $1 trillion. One can only imagine the impact on California’s education system, social programs, infrastructure, and even energy-tech R&D. Moreover, with that kind of revenue, Sacramento tax collections could wipe out debt and deficits.

But is it really plausible that California’s big-spending political class would use the $1 trillion windfall to pay off the state’s debts and seed a rainy day fund?  Call me cynical, but it seems way more likely that state spending would increase above and beyond whatever windfall comes from oil drilling.

That said, I’d love for Sacramento to prove me wrong.  Let the fracking begin!

January 14th, 2013 at 6:58 pm
Obama Misses Budget Deadline, Again

The Hill provides the text of a letter sent by the White House Office of Management and Budget to House Budget Chairman Paul Ryan (R-WI).

In it, the OMB’s Deputy Director for Management blames the late resolution of the “fiscal cliff” negotiations for causing the White House to violate the law by missing the February 4 deadline for submitting a budget to Congress.

But as The Hill notes, that excuse is nonsense when considered in light of the Obama Administration’s record on budgets:

Under the law, President Obama must submit a budget by the first Monday in February, but he has met the deadline only once. The annual budget submission is supposed to start a congressional budgeting process, but that has also broken down. The Senate last passed a budget resolution in 2009.

Left out of that tidy little summation is the fact that the House Republicans have never failed to pass a budget resolution during the entire time Obama has been president.

The failure of Washington to “work” in the Obama Era is not a failure of substance; both parties are relatively clear about their policy visions.  What’s grinding the system to a halt is the liberal disregard of legal procedures like statutorily defined deadlines.  Throw out the rules, and suddenly no one knows how to play the game.  As I said last week, unless the budget process is amended to enact meaningful punishment on parties who violate it, nothing else is likely to change.

January 9th, 2013 at 1:50 pm
Amend Budget Act, Not Constitution to Cut Spending?

Here at CFIF we’ve promoted the idea of a Balanced Budget Amendment to the U.S. Constitution that would require Congress to pass balanced budgets every year with certain 60 percent supermajority thresholds for raising taxes or the debt ceiling.

The idea comes with a stellar pedigree since conservative icons like Ronald Reagan, Jack Kemp, and the Contract with America all supported various Balanced Budget Amendments.

Alas, the BBA has yet to become law, and with the current lineup of liberals running the U.S. Senate and White House, it will be awhile before such an idea can be seriously discussed in Washington.

That said, Byron York says that Republicans might have an opening in the coming fight over raising the debt ceiling to get closer to a balanced budget; albeit by amending a statute, not the Constitution.

On its face, the Congressional Budget Act of 1974 sets out a clear deadline for passing a budget by April 15 every year.  The problem, however, is that there is no enforcement mechanism to punish Congress if it fails to do so.  With Harry Reid (D-NV) and Senate Democrats failing to pass a budget for the last 1,351 days as of today, the budget law’s impotency is on full display.

York reports:

“The law doesn’t have teeth,” says a Senate aide involved in the fight.  “Sen. Sessions and others have proposed process reforms to give the budget law teeth (one reform would make it harder to pass spending bills without a budget), but the debt ceiling is the strongest leverage we have on this. This is the opportunity.”

In other words, it is precisely because the budget law has no enforcement provision that Republicans believe they need some other form of leverage, in this case the debt ceiling deadline, to force Reid and his fellow Democrats to move.  In addition, whatever happens in the debt ceiling standoff, it seems clear that the original budget law should be amended to include some sort of enforcement method.

This strategy strikes me as a great way to get real value in return for raising the nation’s debt ceiling.  Imagine how much different Obama’s first term would have been if instead of ignoring the House Republicans’ Paul Ryan-inspired budgets, the President and Senate Democrats had to negotiate its terms up against a hard deadline.  Liberals would have been forced to debate conservatives on specifics instead of substituting scare tactics for policy.

So far, Republicans have said they want entitlement reform in exchange for upping the ceiling, and for good reason since spending on Social Security, Medicare, and Medicaid alone account for about 44 percent of the federal budget (other entitlements push the total to 62 percent).  Moreover, since entitlement spending is not discretionary, meaning it isn’t determined in the normal appropriations process but by eligibility formulas, reining in federal spending will require statutory changes that can only be gotten when the stakes are very high.

But if York is right, then Republican strategists would be wise to include changes to the Congressional Budget Act along with spending reforms to entitlements.  Winning both would improve the nation’s long-term fiscal outlook by helping conservatives change the way Washington does business.

January 7th, 2013 at 12:16 pm
Sizing Up the Hagel Nomination

Former Nebraska Republican Senator Chuck Hagel is poised to be nominated as the next Defense Secretary.  Politico’s Josh Gerstein has an interesting round-up of the five constituencies most likely to oppose Hagel, but I want to see how President Barack Obama’s pick articulates his position on military spending cuts.

After the fiscal cliff mess, Republicans are aiming to reform entitlements, while Democrats would prefer to ax the Pentagon.  If Hagel can give a reasoned defense for eliminating some unnecessary programs – such as projects that serve to stimulate local economic development rather than national security – then a way could be opened for responsible spending reductions over a wider array of budget areas.  Unlike the automatic spending sequester scheduled to reappear at the end of February, a Hagelian contribution like the one I’m imagining could go a long way to getting on the table real cuts that the broader public can accept.

We’ll see if Hagel makes good on the opportunity.

January 1st, 2013 at 11:36 am
Why House Conservatives May Vote Yes

In a very lengthy post at The American Spectator, I explain why the castor oil produced last night might be more good than bad for conservative digestions — by just a tiny amount, to be sure, and even then only if conservatives start playing their cards better in the coming months, but still an amount worth considering.  Please do take the time to follow the link and read the whole thing, but for now, the main point is that this deal actually does retain the lower spending levels (on discretionary spending) that conservatives had wanted. This fact should not be lost in the din of wailing and gnashing of teeth.

For purposes of this post, let me add to that AmSpec mini-essay to focus on two aspects of this deal that conservatives should truly celebrate.

Both involve “permanent” (in legislative lingo) solutions to vexing tax issues that conservatives have long sought.

First, this bill would permanently establish a $5 million threshold before the death tax kicks in. This is a huge achievement, protecting the vast majority of small businesses and family farms from this horrible tax. Even better, it indexes the threshold to inflation — so the exemption from the death tax will only grow over time. This is terrific. It is good economics, good policy… in short, a very good win.

Second, this bill permanently protects tens of thousands, probably hundreds of thousands, of taxpayers, from the evil Alternative Minimum Tax. How? Again, by permanently indexing the current threshold for inflation. Rather than leaving this hidden time bomb ticking, forever threatening to explode, subject to repeated “fixes” at the last minute by harried congressmen, this now enshrines into law the protections that all current taxpayers still below the AMT level now enjoy.

These are not achievements to scoff at. Sometimes it makes sense to bank some gains and come back to fight another day for other things of importance.

November 19th, 2012 at 2:06 pm
Will 2013 Be Like 1937?

If you’re a conservative looking for reasons to be thankful this November, don’t read Amity Shlaes’ column at Bloomberg today.  In it, the author of books on Calvin Coolidge and the Great Depression identifies four factors that make 2013 seem like 1937 – a pre-election government spending spree; talks of deficit reduction thereafter; presidential attacks on high-income earners; and the economic fallout from first-term “comprehensive reforms” like Social Security and Obamacare.

According to Shlaes, the combination caused “the depression within the Depression.”  Not something one wants to think about this time of year.

September 29th, 2012 at 6:11 pm
Obama’s Clinton Conundrum

Politico on why the Obama campaign is using former President Bill Clinton so often:

As the campaign acknowledges, Clinton brings credibility to the connection between an Obama presidency and a strong economy, reinforcing the idea that there’s a straight line between Obama’s proposals and Clinton’s legacy of budget surpluses and middle class prosperity.

It’s only a credible connection if you don’t consider the wildly differing contexts.

As Tim pointed out earlier this month, “the so-called “Clinton surpluses” didn’t arrive until 1998, four years after Newt Gingrich and the Republicans captured Congress for the first time in four decades, and six years after Clinton was elected.  Given the fact that Congress controls the budget under our Constitution, it is therefore disingenuous for Clinton and his apologists to claim sole credit.”

Thus, if in 2012 the Obama camp really wants to make the case that a national economic recovery is just around the corner, it should have prayed for a complete conservative takeover of Congress in 2010.  Had he been faced with an entire branch of government – not just the House – passing real budgets, chances are the Obama White House would have had a Clintonesque opportunity to make a deal.

Instead, Obama has had no incentive to move to the middle for the sake of compromise because Senate Majority Leader Harry Reid (D-NV) has been willing to abdicate his chamber’s constitutional responsibility to pass a new budget for the last three years of Obama’s term of office.  And so the President dithers while the economy sputters.

Call it the Clinton Conundrum.  Both Clinton and Obama are doctrinaire liberals whose policy impulses created pushes to nationalize health care.  Both prefer to raise taxes and spend money.  But Clinton, unlike Obama, was saved from oblivion when Republicans took over both houses of Congress in 1994 and (implicitly and unintentionally) made him an offer he didn’t refuse: either adopt our reform agenda or face defeat in reelection.  Clinton accepted and has benefited ever since.  Obama’s choice was between Senate Democrat dithering and House Republican reform.  He sided with his party and hasn’t governed since.

If Barack Obama wants Bill Clinton’s success, he’ll have to adopt Bill Clinton’s policies.  In large part, that means adopting conservative budget reforms so that he can claim credit for a rebounding economy.

August 24th, 2012 at 6:11 pm
Paul Ryan’s Magic Numbers: 190; 72; 1,050

They aren’t lotto numbers; they are the number of times Paul Ryan’s name and budget ideas have appeared in the Wall Street Journal, Weekly Standard & National Review, and on Fox News, respectively, since the presidential election of 2008.

According to Politico, the unequaled access to conservative opinion leaders came as a direct result of Ryan’s deliberate strategy to cultivate conservative pundits and think tank-types so that they in turn would promote Ryan’s ideas to the American public, and ultimately, back onto Ryan’s colleagues in Congress.

To say the strategy worked is an understatement.  To read how Ryan did it would be time well spent.

May 18th, 2012 at 2:19 pm
More Evidence CA Govt Doesn’t Know How to Prioritize Spending

Businessweek provides a snapshot of California state government’s fiscal insanity:

California Governor Jerry Brown is seeking a 38,000 percent spending increase for a proposed high- speed rail system, even as he plans to raise taxes, cut state worker pay and reduce social programs to narrow a $15.7 billion deficit.

The “38,000 percent” translates into a requested budget increase from $15.9 million to $6.1 billion for construction costs of California’s fantastical high-speed rail project.  The kicker: all that money builds only the first 130 miles of an estimated 800 mile route from Los Angeles to San Francisco.

A lot of internet ink has been spilt rightly decrying this total waste of taxpayer money.  What I want to emphasize in this post is that Governor Brown’s budget request should anger liberals even more than conservatives.

Can it really be true that with California’s budget deficit recently surging from $9.2 billion to more than $15.7 billion that welfare and salaries must be cut and taxes raised so that someone’s bullet train dream can come true?

This is insane.  If Californians – the unions included – can’t rouse themselves to kill high-speed rail for the sake of preserving food stamps and health care for the poor, the rest of the nation should wash its hands of the state and let it implode.

Ending any and all spending related to the L.A.-S.F. bullet train should be done today.  It’s a no-brainer.  Unfortunately, that’s also true of the folks in charge of the public fisc.

May 16th, 2012 at 7:11 pm
Congress Votes Down Obama’s 2012 Budget: 513 – 0

You read that right.

After the House voted down President Barack Obama’s budget proposal 414 – 0 in March, today the Senate defeated it 99 – 0.  There are 51 Democrats in the Senate (and two Independents that caucus with them).  Not one voted for their president’s budget.  There are 190 Democrats in the House.  Not one voted for their president’s budget.

There are only 535 members in Congress.  As of today, 513 are on record opposing Barack Obama’s 2012 budget.  No one is on record supporting it.

By contrast, Paul Ryan’s budget passed the House on March 29th with 228 Republican votes, and only 10 party members against.  Today, 41 of 47 Republicans voted for Ryan’s budget; short of the 51 needed for passage.

Only one party is trying to govern.  The other is refusing to.  The American people should take notice and vote accordingly.

May 7th, 2012 at 7:31 pm
Arnold Schwarzenegger, Progressive Caveman

Meditate on this excerpt from an op-ed by former California Governor Arnold Schwarzenegger:

“An inclusive party would welcome the party’s most conservative activists right alongside its most liberal activists,” the actor-turned-politician said. “There is room for those whose views, I think, make them sound like cavemen. And there is also room for us in the center, with views the traditionalists probably think make us sound like progressive softies.”

As usual, Schwarzenegger is being too soft on himself.  After promising to “blow up the boxes” in Sacramento and get tough on a legislature full of “girly men,” Schwarzenegger passed seven laughably unbalanced budgets that everyone acknowledged were premised on accounting gimmicks that are illegal in the private sector.  He signed into law AB 32, the global warming regulatory scheme that burdens California’s economy without making a single degree of difference in the global temperature.  He supported a multi-billion dollar bond initiative to fund embryonic stem cell research despite the industry’s pivot toward adult stem cells as an ethically better, more scientifically promising avenue for treatment.

Ignoring the laws of fiscal gravity?  Cursing the sun while your neighbors grow their economies?  Defying science to serve a political ideology?  Who’s the real caveman in all this Mr. Schwarzenegger?

H/T: Catalina Camia at USA Today

April 9th, 2012 at 5:24 pm
Chart: ObamaCare’s True Costs

The Heritage Foundation breaks down the numbers of what ObamaCare was promised to save, and what it actually costs:

 

Combine this spending monstrosity with the $787 billion stimulus bill and you’ve got nearly $1.5 trillion added to the federal deficit before any other Obama Era policy has been discussed.  Lard on the costs of EPA regulations, the uncertainty of Dodd-Frank’s implementation, and the specter of all the Bush tax cuts vanishing next January and it’s no wonder the American economy is stagnant.  The liberals in Washington, D.C. are spending and regulating us into oblivion.

April 2nd, 2012 at 1:24 pm
The 6 Groups Responsible for California’s Budget Mess

Joe Mathews blogs at NBC Bay Area on the people and institutions most at fault for California’s budget fiasco.

The system makes the decisions, not lawmakers. And that system — the formulas and court decisions and constitutional spending mandates and tax restrictions — does not exist in any particular place that can be protested.

That’s the strange genius of this system, which is really a set of complex formulas. You can’t picket a formula’s house.

Indeed, protesting at the Capitol may be counterproductive — because it advances a false public narrative that the legislature is the problem here. The problem is the people of California, especially voters of the present and of the past.

Two years ago, in this piece for Fox & Hounds Daily, I suggested five alternative locations for protests: highways, gas stations, the prison guards’ union, retirement communities, and unsold homes.

Since then, I have one additional idea: California cemeteries.

Many of the spending mandates and tax restrictions that are strangling the budget, and higher education in particular, were put in place long ago by voters.

So long ago that many of those voters are dead. What better way to represent this problem of the dead governing the living than by taking the protest to those voters?

And what better way to show the crisis of California’s politics than to act as if politically-imposed spending formulas can’t be politically reformed?

March 23rd, 2012 at 12:43 pm
California Passes Blank Budgets, Fills in the Details Later

Remember when Nancy Pelosi said of ObamaCare that Congress would need to “pass the bill so [the public] can see what is in it”?  Two years ago, Pelosi & Co. refused to make the contents of ObamaCare public until just before voting was allowed on the bill.

Well, it looks like Pelosi’s fellow liberals in California state government are doing her one better.  From the Los Angeles Times:

In an annual quirk of California government, lawmakers approved 78 budget bills on Thursday — and they were all blank.

The bills function as shells. As negotiations continue and tax revenues are tallied, they will be amended with actual budget details, then quickly passed by the Legislature and signed by the governor.

Calling this practice a quirk obscures the fact that California’s big-spending liberals are deliberately perverting the legislative process to hide their intentions.  Just like ObamaCare, California’s majority Democrats negotiate with themselves behind closed doors and demand an up-or-down vote on budget bills within hours of making them public.

This kind of process-destroying behavior cannot be allowed to continue.  The public needs accurate information to judge policies and politicians, not shell games that cost billions.

March 8th, 2012 at 8:11 pm
Sunset Every Federal Law

Philip K. Howard, author of Life Without Lawyers, has a thought-provoking essay in the Atlantic about how to repeal old laws in order to make room for new policies that will unleash American ingenuity and discretion:

Fixing what ails America is impossible, indeed illegal, without a legal spring cleaning. The goal is not mainly to “deregulate” but to restate programs in light of current needs and priorities.

As a practical matter, this requires Congress to authorize special commissions to make proposals, area by area. Using the base closing commission model, these proposals would be submitted to Congress for an up or down vote.

Going forward, Congress should incorporate sunset provisions in all laws with budgetary impact. The goal is not to end good programs but to impose a discipline that is essential for a functioning democracy that must constantly make tough tradeoffs.

Howard’s point about including sunset clauses into all new laws with budgetary impact would be a HUGE step in the right direction.  In Texas government, where I once worked as a legislative staff member, every state agency is subject to elimination pending the outcome of a once-a-decade review.

Each session the legislature is given the option to continue, modify, or eliminate state agencies falling within a policy area (e.g. all agencies having jurisdiction over education).  In practice, very few agencies are eliminated completely, but the many are consolidated and streamlined.  In every case, legislators get a chance to think through issues like whether the agency is meeting its mission; if not, why not; and if so, is there a better way?

There’s a case to be made that reforms that do little more than add to the existing body of law are, in practice, de-forms of public policy.  We don’t need more laws; we need less of the ones we have, and better versions of those.

March 1st, 2012 at 8:11 pm
Growing Support for Medicare Reform Shows that Elections Matter

Fred Barnes has a terrific column in today’s Wall Street Journal explaining the origin, structure and philosophy of Paul Ryan’s Medicare reform proposal.  The most intriguing paragraph explains how Ryan’s reform ideas went from minority alternative to majority consensus in just two years.

But House passage alone was a milestone. When Mr. Ryan first proposed premium support in 2008, 14 House Republicans signed on as co-sponsors. But when his budget cleared the House in 2011—with Medicare reform its most controversial provision—only four of the 241 Republicans voted against it. Of the 87 GOP freshmen, only one voted no. In the Senate, all but five of the 47 Republicans declined to back Mr. Ryan’s plan.

After weathering some resistance in the beginning:

Premium support is now Republican orthodoxy. But absent a GOP landslide this fall, that’s not sufficient to win congressional approval. Besides, entitlements are best enacted on a bipartisan basis. Otherwise, they may wind up like ObamaCare—unpopular, under legal challenge, and the target of endless partisan attacks.

Barnes is right that entitlement reform is best enacted on a bipartisan basis, but there’s every indication that a conservative victory this year that keeps the House and wins the Senate, supplemented with smart liberal support from the likes of Senator Ron Wyden (D-OR) and others, would certainly be considered bipartisan.

According to Barnes, a handful of Democrats in the Senate and House have told Ryan they are willing to go public with their support for Medicare reform after the 2012 elections.  Momentum is building for real reform of the largest deficit driver in the federal budget.  This should be a motivator for every fiscal conservative to make this election the year Ryan’s reforms become law so America can get its finances in order.

February 21st, 2012 at 12:01 pm
John Stossel Depicts Obama’s Budget Insanity

From John Stossel’s blog:

What would happen if you planned your family’s budget the way the politicians plan theirs? I showed people this chart:

Everyone agreed that this would be a ridiculous household budget.

But that’s the federal budget, if you just add 8 zeroes!

February 16th, 2012 at 8:14 pm
Bad Week for Obama Budget Director

It’s been a bad week for Office of Management and Budget Director Jeff Zients, the man tasked with defending President Barack Obama’s 2013 budget proposal.

In testimony before the House Budget Committee Zients told Rep. Scott Garrett (R-NJ) that the penalty for not complying with ObamaCare’s mandate to buy health insurance is not a tax increase.  (Subscription wall.)  In response, Rep. Garrett said, “Okay.  I just want to be clear on that because that’s not the argument the Administration is making before the Supreme Court.”

Before the Senate Budget Committee Zients was even more out-of-touch.  Under questioning from Senator Jeff Sessions (R-AL), Zients claimed that Obama’s 2013 budget contained spending cuts – a distortion Sessions would not tolerate:

Mr. Zients, there are no spending cuts in this budget. This budget increases spending. Surely you know that. It increases taxes. So to say you cut $2.50 in spending for every dollar in tax increase is beyond the pale.

So too is the entire shell game about ‘deficit reduction’ when what liberals like Obama really mean is tax increases to pay for spending increases.  If the President won’t admit it at least his budget director will be made to.