Archive

Posts Tagged ‘cut’
December 22nd, 2011 at 12:32 pm
We Can’t Afford a Payroll Tax Cut Extension

Quin makes some excellent points about the PR disaster that is the payroll tax cut extension debacle.  In addition, the spin on the debate is missing two important angles: (1) the Senate GOP’s apparent backstabbing of House Speaker Boehner, and (2) the fact that a trivial 60 day pay raise (the most any taxpayer will save is $40 per paycheck) won’t make a difference in anybody’s bottom line.  If the payroll tax “holiday” is extended, however, it will take another misguided step toward eliminating the tax permanently.  Recently, former Bush press secretary Ari Fleischer explained why that’s bad (requires WSJ subscription):

Make no mistake, if the payroll-tax cut is extended, it will become permanent. Social Security will become another welfare program as the tie between what someone pays and what they receive gets broken. To a large degree, the tie has already been broken. Social Security’s trust fund has been raided for years by both parties and Medicare is already significantly financed through general revenues instead of through its dedicated trust fund.

Instead of squabbling over how to extend the payroll tax break, the GOP should concentrate on revising the tax code so it promotes growth and jobs, while reforming our entitlements.

Quin’s right.  Republicans need to use the payroll tax cut debate to educate the American public.  Phony nickel-and-dime policies like a 60 day, $40 tax cut are not solutions to Washington’s deficit addiction.  Neither, frankly, is a year-long tax holiday that moves Social Security from an under-funded to an unfunded mandate.

Since the Senate went home and President Barack Obama is in Hawaii on vacation, it looks like a great opportunity for Boehner to call a primetime press conference to explain why good policy is good politics.

March 1st, 2011 at 7:29 pm
Higher Ed Sector Bracing for Cuts in Funding, Eventually Enrollment

A sobering bit of news for college administrators about to go on spring break:

“The current prolonged recession means that we can no longer expect new revenue to pay for increasing attainment in higher education,” said Jane V. Wellman, Executive Director of the Delta Cost Project, which does a study every year on the cost of higher education. “In the next decade, we are going to be lucky to hold onto the resources we have. That means that all institutions – from the Ivies to the community colleges –are going to have to develop investment strategies that support goals for attainment. That will require new habits: looking at spending, and promoting the values of efficiency and cost effectiveness as co-partners to the never-ending search for new revenues.”

At first, one might be tempted to think that higher education needs to take a financial haircut just like the rest of the economy.  While that is undoubtedly true, the consequences will be enormous.

Federal higher education loans like Stafford and Grad Plus (and their state counterparts) are used like entitlements, though you’d never hear a recipient saying so.  Though only 1 in 4 Americans eventually graduate with a college degree, nearly everyone qualifies for the loans to finance one.

Because the cost of attendance continues to grow at several times the rate of inflation, grads and non-grads are piling up huge debt loads; prompting some to call the looming student loan crisis our next financial disaster.

The coming cuts in state and federal budgets for higher education financing will significantly decrease the subsidies available to students.  That means fewer students going to college, leaving enrollments peopled with those able to count on private financing.

Since passage of the 1944 GI Bill an essential part of the American dream has been having the opportunity to go to college by removing cost as a consideration.  The same bill did the same thing to spur home ownership via the VA-backed mortgage.  We all know how slippery that slope turned out to be.

Austerity is coming to America.  Hopefully, we can adjust to reduced expectations.

February 19th, 2011 at 7:38 pm
House GOP Gets 60% of its $100 Billion Loaf

After originally pledging to cut $100 billion in spending this year the House GOP leadership settled for a cut of $30 billion.  Then, the Tea Party-backed freshman caucus weighed in and forced a rethink.  Early this morning, the House voted to cut $60 billion in this year’s budget.

That’s real, measureable progress.  Getting 60% of a loaf may not satisfy everyone’s hunger for budget cuts, but it is still a victory for fiscal conservatives.  Well done.

February 18th, 2011 at 6:36 pm
The Mayhem in Madison

If you ever doubted the indivisibility of disparate Leftist causes, then for proof look no farther than Madison, WI.  A community organizer-turned-POTUS is sending his minions to supplement Badger State public employee unions.  Jesse Jackson is leading a march in support of workers’ rights.  (Apparently, the only color in Jackson’s Rainbow/PUSH Coalition these days is red.)

All we need now is a cadre of eco-friendly celebrities to descend on the Wisconsin state capitol and declare their love for collective bargaining (while demanding A-list treatment in their next film contract).  With the battle over union overreach spreading to other states, this may the beginning of a very tense year in states across the country.

February 18th, 2011 at 5:44 pm
U.S. House Unleashed

The Wall Street Journal’s Kimberly Strassel describes perfectly the triumph of democracy that House Speaker John Boehner (R-OH) made possible this week by opening up the budget bill to floor amendments from anyone.

Neglected questions were once again asked. Should we get rid of federal funding for the arts? Should the government be designating federal monuments? What’s the role of NASA? And Congress finally got to air some dirty secrets.

One of this week’s more symbolically rich cuts came from Arizona’s Republican Jeff Flake, who won an amendment erasing $34 million for the National Drug Intelligence Center in Johnstown, Pa. The center, despite serving no real purpose, had been protected for decades, via earmarks, by the late Defense appropriations chair John Murtha.

A little later, Strassel identifies the best aspect of Boehner’s new regime:

This week’s exercise forced members to read the underlying spending bill; to understand the implications of hundreds of amendments; to remain on the floor for debate; and to go on record with votes for which voters will hold them accountable.

Indeed, John Murtha and corrupt legislative processes are dead.  Long live this new era under Speaker Boehner’s new House rules where members of Congress can finally earn their money.

February 17th, 2011 at 7:20 pm
Military Engine Few Want Finally Gets Voted Down

A funny thing happened when House Republicans opened up the process to allow amendments to spending bills: a bipartisan coalition voted overwhelmingly to cancel a $3 billion boondoggle.

Interestingly, the project killed was the F-35 Joint Strike Fighter’s alternative engine.  Following a well-trodden path to budgetary immortality, contractors General Electric and Rolls Royce spread the work around many states hoping enough Congress members would vote to keep the money flowing to their districts.

No more.  Both the Bush and Obama administrations have called for the termination of the alternative engine program as a way to cut waste in the Pentagon’s budget.  After years of work and billions in spending everyone involved anticipates billions more in appropriations before the engine becomes operational.

With yesterday’s vote to stem the tide of red ink on the books, let’s hope there are more chances for an open budget process that saves taxpayers money.