Archive

Posts Tagged ‘spending’
January 21st, 2013 at 2:08 pm
Ramirez Cartoon: The Truth About Guns and Spending
Posted by CFIF Staff Print

Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez. 

View more of Michael Ramirez’s cartoons on CFIF’s website here.

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 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 3rd, 2013 at 2:13 pm
Christie Gets More Mileage Blasting GOP Over Sandy

After Chris Christie’s latest Hurricane Sandy-related misstep, don’t expect GOP bigwigs to be lining up behind any potential presidential bid in 2016.

First, there was Christie’s grinning, bear-hugging performance benefiting President Barack Obama at Mitt Romney’s expense.  Though politics should cease when disaster strikes, it was particularly irksome to many on the Right that the Republican Christie seemed to go out of his way to call the Democrat Obama “outstanding,” “wonderful,” and “deserv[ing] great credit.”  Occurring as it did in the final weeks of the presidential campaign, not a few politicos think Christie was not-so-subtly trying to shore-up his standing in a Blue State by hurting the GOP brand.

Now, Christie is back at it with his temper tantrum over the pork-laden Sandy relief bill that failed to pass the House before the 112th Congress ended.  Blasting House Speaker John Boehner and others for essentially lying to him, Christie accused House Republicans of “selfishness and duplicity,” “palace intrigue,” and “callous indifference to the people of our state.”

But as the Heritage Foundation, the Weekly Standard, and others have noted, House Republicans didn’t vote against disaster relief; they voted against awarding more than double the amount of requested relief to areas and projects that have nothing to do with Hurricane Sandy.

Thanks to Senate Democrats and liberals at the Obama White House the Sandy relief bill included such spending priorities as $28 billion for future disaster-mitigation projects, $100 million to Head Start, and $17 billion in Community Development Block Grants.  All of this and more is on top of the $20 billion scheduled to go to people and places actually impacted by Hurricane Sandy.

These non-Sandy-related giveaways were designed to get Red State senators to support the pork, but House members couldn’t swallow the bill after being served a bitter fiscal cliff deal.  To compensate the real victims of Hurricane Sandy, Boehner has promised to consider and pass a series of relief measures as early as tomorrow; without the wasteful, unrelated spending, of course.

As Christie gears up for what may be a tough reelection as New Jersey’s governor this year, polls show that his praise for Obama and tough talk on Hurricane Sandy have boosted his approval ratings in his Democrat-heavy state.  If all his high-profile Republican-bashing gets him reelected, it’s likely worth it for conservatives because of the fiscal reforms Christie is stewarding in the Garden State.  But if Christie decides to take his show on the presidential circuit, don’t be surprised if he finds a chilly reception among those for whom a discerning eye on government spending is a virtue, not a vice.

December 28th, 2012 at 12:16 pm
“America Works” Better With Less Welfare

Peter Cove writes in City Journal about the success of America Works, his for-profit company that specializes in getting jobs for long-term welfare recipients:

In the past 27 years, America Works has placed more than 250,000 poor people, with an average of five to six years on the rolls, in private-sector jobs, with an average starting wage of $10 per hour plus benefits. In our New York program, to take one example, more than half of these new workers were still on the job after 180 days. The employers that we have worked with include prestigious companies, such as Time Warner, Cablevision, Aramark, J. C. Penney, and American Building Maintenance Industries. Most of these employers keep coming back, asking for more of our referrals.

In his article, Cove recounts his transformation from welfare-state-liberal to work-first reformer.  The theme throughout is that long job training programs are colossal wastes of time and money compared to the America Works model:

…clients with shaky self-confidence are best served by early success in getting a job, not by long periods of preparation. Our weeklong training sessions are narrowly focused on the attributes and skills needed to land an entry-level job. Our trainers work with clients on the basics, such as maintaining a businesslike personal appearance, speaking properly, preparing a résumé, and showing up on time. Clients quickly learn that success depends on self-discipline and their own motivation and effort.

According to a report by U.S. Senator Tom Coburn (R-OK), as of February 2011, “Nine federal agencies spent approximately $18 billion annually to administer 47 separate employment and job training programs.”  Unfortunately, the Government Accountability Office says that “little is known about the effectiveness of most programs.”

Which do you prefer?  A for-profit company with 27 years of experience getting people into jobs they keep, or 47 cross-cutting initiatives that can’t prove whether or not they are effective?

December 27th, 2012 at 8:00 am
The Fed Taxes Savers to Pay for Govt. Spending

Richard Rahn explains how the Federal Reserve’s low interest rate manipulation taxes savers to help government spend more of taxpayers’ money:

By artificially holding down interest rates to lower-than-expected real market rates, the Fed is, in effect, expropriating interest income (an implicit tax) that savers normally would be expected to enjoy. This interest manipulation enables the government to fund its debt at less than what would be real market rates at the expense of savers, making the deficit appear much smaller than it really is.

And don’t forget that the main reason given for not auditing the Federal Reserve and opening it up to other oversight measures is that it’s supposed to be an independent government agency staffed by experts who operate above the political fray.

Right…

December 22nd, 2012 at 3:36 pm
Silver Linings to Fiscal Cliff-Diving?

Avik Roy:

…despite all of the dramatic hyperbole about the “fiscal cliff,” it’s important to remember that going over the fiscal cliff will reduce the budget deficit by $503 billion in 2013, and $682 billion in 2014, relative to the “solutions” being bandied about on Capitol Hill.

Moreover, since President Barack Obama and his fellow liberals in Congress refuse to link tax increases with entitlement reform, perhaps it’s better to go over the fiscal cliff than accede to some tax increases and no reforms.  At least then Obama & Co. would own the tax-and-spending system their intransigence created.

December 20th, 2012 at 8:44 am
Rothenberg: GOP May Be Right, But Raise Taxes Anyway?

Stuart Rothenberg perfectly articulates the difficult post-election position of fiscal conservatives:

Republicans may well be correct that the nation’s biggest problem is that “the government spends too much, not that it taxes too little,” but at some point political realities rather than ideological beliefs or past party dogma ought to guide both party leaders and members of its rank and file.

The Roll Call columnist also shows just how much Beltway logic drives his analysis.  If Republicans are right that “the government spends too much, not that it taxes too little,” then Republicans are justified in pushing for reduced spending and resisting tax increases.  And, if Republicans are right, then President Barack Obama and his fellow liberals are wrong to demand the opposite.

That’s not ideology, just math and common sense.  Political calculations may end up trumping both eventually, but that doesn’t mean that fiscal conservatives within the Republican Party are wrong as a matter of logic from defending their position.

December 5th, 2012 at 8:40 am
Text of Paul Ryan’s Speech to Jack Kemp Foundation

Greta Van Susteren has the transcript of Rep. Paul Ryan’s keynote address to the Jack Kemp Foundation last night.  For fans of Kemp and his notion of The American Idea (i.e. broad-based economic growth, equal opportunity, and cultural renewal), Ryan’s speech is an inspiring formulation of Kemp’s program for the 21st century.  An excerpt:

Americans are a compassionate people. And there’s a consensus in this country about our obligations to the most vulnerable. Those obligations are beyond dispute. The real debate is how best we can meet them. It’s whether they are better met by private groups or by government – by voluntary action or by government action.

And I would add that it’s about finding the most cost-effective way to meet those obligations so that they are financially sustainable.  This is critically important for at least three reasons.  First, it means that promises made to today’s beneficiaries can be kept.  Second, it means that tomorrow’s taxpayers won’t be left with the short end of the stick, being made to pay more than they receive in benefits.  And third, it frees up money; both in the federal budget for other worthy spending, and as a greater share of income retained by taxpayers.  Long-term federal entitlements are the real social contracts in our nation, and Americans owe it to ourselves – through our elected representatives – to reform the entitlement system to ensure its stability and fundamental fairness.

December 4th, 2012 at 1:34 pm
Two More Tax “Firsts” from ObamaCare

Forget the fiscal cliff negotiations.  If you’re a high-earning worker wondering if your taxes will go up in January, Reuters spotlights two new taxes coming your way courtesy of Obamacare:

The 3.8 percent surtax on investment income, meant to help pay for healthcare, goes into effect in 2013. It is the first surtax to be applied to capital gains and dividend income.

The tax affects only individuals with more than $200,000 in modified adjusted gross income (MAGI), and married couples filing jointly with more than $250,000 of MAGI.

The tax applies to a broad range of investment securities ranging from stocks and bonds to commodity securities and specialized derivatives.

The 159 pages of rules spell out when the tax applies to trusts and annuities, as well as to individual securities traders.

Released late on Friday, the new regulations include a 0.9 percent healthcare tax on wages for high-income individuals.

Together, the two taxes are estimated to raise $317.7 billion over 10 years, according to a Joint Committee on Taxation analysis released in June.

These two new taxes take effect January 1, regardless of whether President Barack Obama and Congressional Republicans agree to raise other taxes on high-earning Americans.

As the saying goes, if you want less of something, tax it.  You’d think liberals could see that taxing high-earners into extinction very quickly guts the very social programs Big Government types love.

November 23rd, 2012 at 5:23 am
Ramirez Cartoon: The Fiscal Cliff
Posted by CFIF Staff Print

Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

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.

October 19th, 2012 at 7:06 pm
Obama Has Spent 56% More than Taxes Brought In

Larry Kudlow: “…reporter Jeffrey H. Anderson uses a Treasury Department study to chronicle the 7-Eleven presidency. In fiscal year 2012, ending September 30, the government spent nearly $11 for every $7 of revenues taken in. The exact figures are $2.5 trillion in tax revenues and $3.5 trillion in spending. In other words, it spent 44 percent more than it had coming in. Previous fiscal years look even worse: The government spent 56 percent more than revenues in fiscal year 2011 and 60 percent more in fiscal year 2010.

“All in all, according to Mr. Anderson, the government under the Obama administration received $6.8 trillion in taxes and spent $10.7 trillion — 56 percent more than it had available.”

Repeat after me: The government doesn’t have a revenue problem.  It has a spending problem.

October 16th, 2012 at 6:01 pm
5 Points Romney Should Make in Tonight’s Debate

The Heritage Foundation tees up five issues that so far haven’t been mentioned in the Romney-Obama or Ryan-Biden matchups:

1)      Welfare Reform

2)      Trade

3)      Medicaid

4)      Federal Spending and Debt

5)      American-Produced Energy

Each of these is not only critical to American prosperity, but also conveniently is attached to a disastrous policy decision by the Obama Administration.

This summer Obama’s HHS gutted the work requirement for receiving welfare checks that was the hallmark of the mid-1990’s reform.

The President and his fellow liberals in Congress held hostage free trade agreements negotiated by the Bush Administration as a favor to labor unions, and in the process damaged our international standing.

Obamacare is scheduled to hit Medicaid doctors with a 19 percent pay cut starting in 2014.

This is the fourth consecutive year of $1 trillion budget deficits presided over by President Obama, and there is no indication the incumbent will do anything differently if reelected.

As for domestic energy production, Obama’s rejection of the Keystone XL pipeline angered not only consumers paying high gasoline prices, but also the unionized labor that stood to benefit from short- and long-term job creation.

Mitt Romney should look for ways to insert these failures of leadership into his answers during tonight’s townhall debate with Barack Obama.  People need to be reminded that the President’s kneejerk liberalism is bankrupting the country.

October 11th, 2012 at 2:37 pm
New Cato Study Shows Tea Party Governors Delivering on Promises
Posted by Troy Senik Print

The Cato Institute came out this week with its Fiscal Policy Report Card on America’s Governors and the results are very good for Tea Partiers. The nation’s top five chief executives in terms of fiscal stewardship are virtually all proud limited government advocates who have followed through on their promises of reining in government:

1 (tie) — Sam Brownback (R-Kansas); Rick Scott (R-Florida)

3 (tie) — Paul LePage (R-Maine); Tom Corbett (R-Pennsylvania)

5 (3-way tie) — Bobby Jindal (R-Louisiana); Jack Dalrymple (R-North Dakota); John Lynch (D-New Hampshire)

Lynch deserves some credit for being the sole Democrat to crack the top of the list, but not nearly as much as the Republicans who swept to huge majorities in the Granite State’s legislature and forced the governor to abide by New Hampshire’s “live free or die” ethos.

And the nation’s worst fiscal leaders? Is it any surprise that it’s a cadre of blue state liberals?:

46. Christine Gregoire (D-Washington)

47. Neil Abercrombie (D-Hawaii)

48. Mark Dayton (D-Minnesota)

49. Dan Malloy (D-Connecticut)

50, Pat Quinn (D-Illinois)

The full report is here.

October 5th, 2012 at 2:02 pm
CBO Announces: Fourth Consecutive Trillion-Dollar Deficit Under Obama
Posted by Timothy Lee Print

Before Barack Obama, America had never seen a trillion-dollar deficit.  Under Obama, we have now endured four in a row.

Today, the Congressional Budget Office (CBO) announced that the deficit for fiscal 2012 totaled $1.1 trillion, after trillion-plus deficits for 2009 (which Obama falsely attributes to Bush), 2010 and 2011.  Keep in mind that Obama originally promised that the deficit would be down to $557 billion this year, in addition to his infamous promise to “cut the deficit in half by the end of my first term.”   Moreover, the expiration date on his all-purpose alibi of the last recession has long since passed, since that recession ended over three years ago in June 2009.

Obama and his media apologists will naturally trumpet this morning’s lackluster jobs report, yet today’s deficit announcement by the CBO provides a broader perspective on his utter, unprecedented failure as president.

August 13th, 2012 at 7:50 pm
With Ryan, ObamaCare Deficits Front and Center

I’ll add my voice of support to the chorus here, and say I think Paul Ryan is an inspired choice to be Mitt Romney’s running mate.  One of the benefits of selecting Ryan, is that Romney gives conservatives a chance to articulate the dramatically different trend lines between the parties when it comes to reforming Medicare.

Under ObamaCare, $700 million is ripped out of an already teetering Medicare system to pay for new entitlements.  By contrast, Ryan’s reform grandfathers current seniors while converting Medicare into a voucher program for younger Americans.  Whereas ObamaCare creates new spending commitments with the same pile of money – thus spiking deficits – Ryan’s reform (and by extension, Romney’s) caps Medicare’s subsidy at a level that makes federal spending more sustainable over the long haul.

The campaign just got serious.  I’m looking forward to the next 12 weeks.

June 14th, 2012 at 2:39 pm
CATO: Obama Admin Rewrites Cost-Effectiveness Rules Because Pet Projects Are Too Expensive

Look!  In the street!  Is it slow?  Is it expensive?  Then it must be a federally subsidized streetcar project!

Randal O’Toole (pdf), a transportation scholar at the Cato Institute, explains how the Obama Administration is literally rewriting the rules to make an inefficient mode of transportation easier to fund:

The Obama administration is currently rewriting the rules for Small Starts [a federal program to subsidize local mass transit projects], and the draft rules, issued January 25, 2012, effectively eliminate the cost-effectiveness requirement.  Instead, the administration proposes to judge projects by how well they promote “livability,” which Secretary of Transportation Ray LaHoood defines as, “If you don’t want an automobile, you don’t have to have one.”  In this case, it evidently also means, “If you don’t want to take a bus, taxpayers will provide an expensive rail alternative.”

Why the need to change the funding criteria?  O’Toole explains:

When the [Federal Transit Administration] applied the [cost-effectiveness] rules to the Small Starts program, however, streetcar advocates complained that the rules discriminated against streetcars because streetcars did not save time.  Instead, advocates argued, the FTA should evaluate streetcars based on their perceived contributions to livability and economic development.

Among other uses “livability” is code for “high density,” a term that translates into smaller living spaces crowded together in apartment buildings instead of single family homes with a yard.

California Governor Jerry Brown is notorious for preaching an “era of limits” that lets the state’s freeway system decay in order to force people into high density housing in the urban core.  With everybody living on top of each other, cars become unfeasible and mass transit suddenly becomes relevant.

But even in this Orwellian vision, streetcars like the ones favored by the Obama administration don’t make economic sense because buses can go faster, seat more people and cost less to operate because they don’t depend on railway lines to move.

No matter.  With the new rules in place 45 cities are lining up to qualify for streetcar subsidies.

If the Feds are paying, who cares about the costs?

June 7th, 2012 at 4:56 pm
Senate Angling for Lame Duck Deal on Taxes, Spending

Politico reports that a group of Democratic and Republican senators are “quietly pushing to have a major tax and budget package ready by September so a bill can be introduced immediately after the November elections and passed by Christmas.”

In other words, during a lame duck session.  Only in the U.S. Senate could people seriously think that a multi-trillion dollar deal negotiated in secret and passed by a Congress that no longer reflects the electoral will of the people somehow counts as statesmanship.

This isn’t to say a lame duck Congress should never hold consequential votes.  A terrorist attack, a foreign military invasion, or an asteroid hitting the earth all qualify as legitimate reasons to let retiring and dethroned members decide national policy.  But the fear of falling off a “fiscal cliff” that’s been approaching for years – unsustainable deficits, exploding entitlements, budget sequesters that gut the Defense Department, expiring Bush tax cuts that raise rates on individuals – certainly does not.

It’s been said, rightly, that major reforms need bipartisan support.  But that’s only half of the equation.  Major reforms of the magnitude now being contemplated need to be road-tested on the campaign trail.  The 2012 election is one of the most important electoral moments in the modern era.  If there are good ideas brewing in the Senate, members should establish some consensus and make it part of the public debate.  Otherwise, enjoy the perks of office and let the next Congress, and the next President, decide.