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Government programs & regulations, spending, deficit, and budget process
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Topic: Government programs & regulations, spending, deficit, and budget process (Read 256565 times)
Power User
Posts: 42558
BO's smoke and mirrors budget
Reply #750 on:
April 12, 2013, 12:03:14 PM »
BTW, an underreported element of BO's COLA adjustment is that it also applies to the indexing of tax brackets i.e. the lower COLA means that tax bracets will move up slower as well. In other words, it serves to increase taxes.
The 'Smoke and Mirrors' Budget
April 12, 2013
"The natural cure for an ill-administration ... is a change of men." --Alexander Hamilton, Federalist No. 21
Finally, after more than two months of delays and excuses, Barack Obama released his budget for fiscal 2014. "It's a budget that doesn't spend beyond our means," he boasted. Unless, of course, you consider a projected $744 billion deficit to be "beyond our means." Furthermore, he added, "it's a budget that doesn't make harsh and unnecessary cuts that only serve to slow our economy." That would be because he doesn't make any real cuts at all, much less harsh ones.
Obama's $3.8 trillion budget relies on further tax increases on the wealthy, despite his having just won a $660 billion tax increase on top earners at the beginning of the year. Now he wants to limit deductions and institute the "Buffett Rule" that households earning $1 million or more must pay at least 30 percent in taxes. In exchange, Obama threw in something new to ostensibly appeal to Republicans -- slowing the growth of Social Security and Medicare through revising benefit calculations and reimbursement rates. In reality, that allows him to reinforce that he's only doing it to "compromise" with the GOP, from whom he hopes to extract the aforementioned tax hikes.
The president claims $1.8 trillion in so-called deficit reduction over a decade, but all of the supposed deficit reduction is achieved through tax increases. As National Review's Veronique de Rugy points out, "$1.2 trillion of the $1.8 trillion number comes from replacing the sequester cuts" that are already in place. And his tax increases will likely add up to over $1 trillion -- nearly twice what he claims.
But not to worry, he says, "There's not a lot of smoke and mirrors in here."
On top of that, Obama's budget is not the "middle road" or "compromise" that his Leftmedia minions would have you believe. Under his plan $5.3 trillion will be added to the deficit over 10 years. Since he was off by $1.6 trillion on his first five-year projection, we'll pass on believing this one. Spending for FY2014 would be $170 billion higher than the Congressional Budget Office's baseline (which by the way is also twice this year's sequester), $240 billion higher than Paul Ryan's House budget and even $80 billion higher than the Senate Democrats' budget.
Other lowlights include the following:
He trims defense spending growth by a further $100 billion over 10 years, bringing it to just 2.4 percent of GDP -- lower than any year since before World War II. That's a disastrous gamble that displays the commander in chief's contempt for his constitutional duty to ensure national defense.
His budget caps tax-free retirement savings because, as the White House explains, some people are putting away "substantially more than is needed to fund reasonable levels of retirement savings." He proposes to "limit an individual's total balance across tax-preferred accounts to an amount sufficient to finance an annuity of not more than $205,000 per year in retirement, or about $3 million for someone retiring in 2013." So Obama now gets to decide how much of your hard-earned money you can save for retirement?
He increases the cigarette tax to $1.95 per pack (from $1.01 now and $0.39 when he took office) to pay for preschool for all four-year-olds from low- and moderate-income families.
He adds new or increased spending on infrastructure, high-speed rail, green energy, college tuition subsidies, job training, and so on and so on.
We would list the cost of ObamaCare, but the White House worked diligently to so spread and bury the burden that it's becoming difficult to identify. We do know that Obama admits the insurance exchanges will cost at least twice initial projections, and that's only counting the less-than-half of states that are participating. That doesn't bode well for the rest of ObamaCare, though it's certainly in line with what we feared all along.
None of this is to say we expected better of Obama. He's a tax-and-spend statist through and through, and it will take a change of administration to get this nation back on the right course.
Power User
Posts: 9484
Re: Government programs, spending, deficit, and budget process
Reply #751 on:
April 12, 2013, 03:55:42 PM »
This chart is from Scott G (and BEA):
Looking at the past 45 years we should constitutionally set federal spending limits at 19.5% of the economy. Below that is wishful thinking and spending above that is generational theft.
Power User
Posts: 42558
Re: Government programs & regulations, spending, deficit, and budget process
Reply #752 on:
April 12, 2013, 06:10:06 PM »
At the same time something we here need to include more in our analysis of BO's deficits in the unusually low percentage of tax revenues. What is our sound bite answer to somone who says that if revenues were 19.5% then the deficit would be "only" $xxx and "only "x& of GDP?
Power User
Posts: 9484
Re: Government programs & regulations, spending, deficit, and budget process
Reply #753 on:
April 12, 2013, 09:11:29 PM »
Quote from: Crafty_Dog on April 12, 2013, 06:10:06 PM
At the same time something we here need to include more in our analysis of BO's deficits in the unusually low percentage of tax revenues. What is our sound bite answer to somone who says that if revenues were 19.5% then the deficit would be "only" $xxx and "only "x& of GDP?
How does a retailer with anemic sales increase revenues? Raise the price? Never.
The amount of capital gains taxes the government is collecting from me is zero, same as it would be at the 100% tax rate. The transactions that don't happen because of high tax rates are impossible to measure. In a healthy, low tax rate economy, these same investments could have been sold and captured a new gain every 2 or 3 years. I made a point earlier about velocity. When things are moving, that same dollar can be paid to and earned and invested by many people and taxed many times in a year instead of once, or sitting still, or sitting on the sidelines.
Spending should be capped as percent of the economy. But with taxes, we need to maximize the dollars to pay for the expenses, not increase or maximize the percentage. When we try to maximize the percentage, we get the stagnation instead of revenue growth.
The other 'tax' is over-regulation. Also hard to estimate the amount of revenue that is killing.
Power User
Posts: 42558
Despite sequester, spending on UN going up
Reply #754 on:
April 17, 2013, 07:52:39 AM »
Power User
Posts: 9484
George Will: Funding the Welfare State - Until the Implosion
Reply #755 on:
April 21, 2013, 12:44:58 PM »
What's behind the funding of the welfare state
By George F. Will,
The regulatory, administrative state, which progressives champion, is generally a servant of the strong, for two reasons. It responds to financially powerful and politically sophisticated factions. And it encourages rent-seekers to exploit opportunities for concentrated benefits and dispersed costs (e.g., agriculture subsidies confer sums on large agribusinesses by imposing small costs on 316 million Americans).
Such government inevitably means executive government and the derogation of the legislative branch, both of which produce exploding government debt. By explaining these perverse effects of progressivism, the Hudson Institutes Christopher DeMuth explains contemporary governments cascading and reinforcing failures.
Executive growth fuels borrowing growth because of the relationship between what DeMuth, in a recent address at George Mason University, called regulatory insouciance and freewheeling finance. Government power is increasingly concentrated in Washington, Washington power is increasingly concentrated in the executive branch, and executive-branch power is increasingly concentrated in agencies that are unconstrained by legislative control. Debt and regulation are, DeMuth discerns, political kin: Both are legitimate government functions, but both are now perverted to evade democratic accountability, which is a nuisance, and transparent taxation, which is politically dangerous.
Todays government uses regulation to achieve policy goals by imposing on the private sector burdens less obvious than taxation would be, burdens that become visible only indirectly, in higher prices. Often the goals government pursues by surreptitious indirection are goals that could not win legislative majorities e.g., the Environmental Protection Agencys regulation of greenhouse gases following Congresss refusal to approve such policies. And deficit spending borrowing is, DeMuth says, a complementary means of taxation evasion: It enables the political class to provide todays voters with significantly more government benefits than current taxes can finance, leaving the difference to be paid by voters too young to vote or not yet born.
Two developments demonstrate, DeMuth says, how delegation and debt have become coordinate mechanisms of legislative abnegation. One is Congresss anti-constitutional delegation of taxing authority to executive-branch regulatory agencies funded substantially or entirely by taxes the agencies levy, not by congressional appropriations. For example, DeMuth notes, the Federal Communications Commissions $347 million operating expenses are funded by payments from the firms it regulates, and its $9 billion program subsidizing certain Internet companies is funded by its own unilateral tax on telecommunication firms. The Consumer Financial Protection Bureau, another freebooting agency not tethered to the appropriations process, automatically receives a share of the profits of the Federal Reserve banks.
A second development is the integration of regulation and debt-financed consumption. Recently, a Post headline announced: Obama administration pushes banks to make home loans to people with weaker credit. Here we go again subprime mortgages as federal policy. Is this because lowering lending requirements and forcing Fannie Mae and Freddie Mac to securitize the loans worked so well last time? This illustrates DeMuths point about how unfettered executive government uses debt-financed consumption and regulatory conscription of private markets to force spending vastly beyond what Congress could have appropriated in the light of day.
High affluence and new technologies have, DeMuth believes, led to unhealthy political practices. Time was, the three basic resources required for effective political action discretionary time, the ability to acquire and communicate information and persuasion skills were scarce and possessed only by elites. But in our wealthy and educated society, interest groups can pressure government without being filtered by congressional hierarchies.
Legislative leaders particularly, committee chairs have lost power as Congress has become more porous and responsive to importuning factions using new media. Congress, responding to the increased difficulty of legislating, has delegated much lawmaking to specialized agencies that have fewer internal conflicts. Congresss role has waned as that of autonomous executive agencies has waxed. The executive has driven the expansion of the consumption of benefits that are paid for by automatic entitlement transfer payments, by government-mandated private expenditures and by off-budget and non-transparent taxation imposed by executive agencies.
Government used to spend primarily on the production of things roads, dams, bridges, military forces. There can be only so many of such goods. Now, DeMuth says, government spends primarily for consumption:
The possibilities for increasing the kind, level, quality and availability of benefits are practically unlimited. This is the ultimate source of todays debt predicament. More borrowing for more consumption has no natural stopping point short of imploding on itself.
Funding the welfare state by vast borrowing and regulatory taxation hides the costs from the public. Hence its political potency. Until the implosion.
Power User
Posts: 42558
Re: Government programs & regulations, spending, deficit, and budget process
Reply #756 on:
April 21, 2013, 04:43:17 PM »
This seems to me a very powerful observation by Will. Would you please post it in the American Creed thread as well please?
Power User
Posts: 7843
Economist - time for Supreme Court to scrap affirmative action
Reply #757 on:
April 27, 2013, 12:36:25 PM »
Damn - just when I was about to become a minority as a white man. After 10 of millions of illegals are granted amnesty. Why stop at 33 million amnesties? Why not simply replace the ENTIRE work force of the United Staes with poorer people from around the world who would love to come here work harder for less? But I digress:
Power User
Posts: 7843
GM losing money on E cars
Reply #758 on:
May 01, 2013, 11:15:34 AM »
I put this under government programs. I notice a lot of liberal media blowback about gasoil potential (through fracking) in the form of recent articles about the "huge" potential of electric cars, methane, biofuels, wind and still with the solar.
****GM Still Taking Taxpayers for a Ride
By Rich Duprey | More Articles | Save For Later
May 1, 2013 | Comments (9)
Last September when Reuters calculated that General Motors (NYSE: GM ) was losing almost $50,000 on every Chevy Volt it sold the carmaker was apoplectic with indignation at the "grossly wrong" numbers being thrown around. Sure they were losing money, every new technological advance does, but as they built more cars and then released Volt 2.0 they would become profitable.
Well, GM has certainly built more Volts over the last six months or so and they've even sold a few more, too, but then so has Tesla Motors (NASDAQ: TSLA ) and Nissan (NASDAQOTH: NSANY ) . In fact Tesla sold more of its all-electric Model S cars in the first quarter of the year than GM did with its Volt, and Nissan turned itself around enough so that its LEAF outsold the Volt in March.
We'll get the April sales numbers in a day or so to see if any traction has been made as spring has gotten under way, and if GM was able to recover from March sales plunging 35%. One thing hasn't changed month to month and that is that the Volt is still a money-losing proposition for GM and for the taxpayers who bailed it out.
In a presentation yesterday, CEO Dan Akerson admitted GM is still losing money on every Volt sold and will continue to do so for the foreseeable future. So what's the solution? Not to admit defeat, that's for sure, at least certainly not when the taxpayer is still nominally footing the bill for your company. Nope, what you do is double down and say you're going to make even more of your money-losing cars than you did before and you're going to make them even cheaper than they are now!
Akerson didn't say how much GM was losing on each Volt, but he did say that if it ever hoped to make a profit on them the carmaker would need to cut as much as $10,000 from the cost of production. That, however, won't be happening until the next-gen model is introduced, which won't be until 2015 or 2016 at the earliest.
The already heavily subsidized Volt starts at less than $40,000 before a $7,500 tax credit kicks in. Last year the Congressional Budget Office estimated that the government's efforts to foist electric vehicles on a public that doesn't really want them will cost taxpayers $7.5 billion through 2019, including grants of $2.4 billion to lithium-ion-battery makers (you know, like bankrupt A123 Systems and Ener1). So how GM will be able to take that much cost out of building the Volt without eliminating any of its features is anyone's guess.
Despite generous rebates, ridiculously low leasing offers, and using fleet sales to juice monthly sales numbers the Volt remains rather unpopular among the car-buying public. In the meantime, though, taxpayers can enjoy the ride GM is taking them on.
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Power User
Posts: 9484
Re: Government programs & regulations, spending, deficit, and budget process
Reply #759 on:
May 01, 2013, 11:53:50 AM »
Yes, unfortunately the electric car is a government program. General Motors still needs a subsidy?? In the US the electric car runs on coal more than any other fuel source, so the fuel emission argument over gasoline is false. Like Ethanol. Don't tell the taxpayers and motorists paying for it. If we shifted our electricity to all-nuclear, the electric car would be CO2-free, but we aren't. The best advancement we could make right now would be to encourage more vehicles to run on compressed natural (CNG). To go down that road we would have to legalize fracking. The environmental protesters don't want us to even use sand:
Power User
Posts: 42558
JPM's manipulative schemes alleged
Reply #760 on:
May 02, 2013, 11:40:35 PM »
JPMorgan Warned Over Manipulative Schemes in Energy Markets
Government investigators have found that JPMorgan Chase devised manipulative schemes that transformed money-losing power plants into powerful profit centers, and that one of its most senior executives gave false and misleading statements under oath.
The findings appear in a confidential government document, reviewed by The New York Times, that was sent to the bank in March, warning of a potential crackdown by the regulator of the nations energy markets.
The possible action comes amid showdowns with other agencies. One of the banks chief regulators, the Office of the Comptroller of the Currency, is weighing new enforcement actions against JPMorgan over the way the bank collected credit card debt and its possible failure to alert authorities to suspicions about Bernard L. Madoff, according to people who were not authorized to discuss the cases publicly.
Power User
Posts: 7843
Cato Institute: Privatization of Social Security?
Reply #761 on:
May 04, 2013, 11:57:46 AM »
Instead of my rambling in a somewhat unorganized fashion here is one post from a think tank. I will try to explore more on these sites.
Last Edit: May 04, 2013, 12:08:43 PM by Crafty_Dog
Power User
Posts: 42558
Revenues up 12%
Reply #762 on:
May 08, 2013, 10:23:15 AM »
Power User
Posts: 9484
Re: Revenues up 12%
Reply #763 on:
May 08, 2013, 03:53:04 PM »
Quote from: Crafty_Dog on May 08, 2013, 10:23:15 AM
Let's keep an eye on this, tax revenues are a pretty good measure of economic activity.
"In April alone the federal government ran a $112 billion surplus."
April is always a 'surplus' tax collection month.
If we are seeing a year to year improvement right now, it is in the context of comparing with a record fifth straight trillion dollar deficit year, not exactly the gold standard of fiscal performance.
Power User
Posts: 42558
Pravda on the Beach: Deficit declining faster than predicted
Reply #764 on:
May 15, 2013, 02:18:07 PM »
OK, gents, some challenging data in here. How do we explain? Regarding alleged slower rise of medical costs due to Obamacare is what I posted the other day in the Health Care thread from the WSJ-- that other forces, market forces were in play prior to Obamacare. This may be a tough point to make in sound bite form however , , ,
By David Lauter, Washington Bureau
May 14, 2013, 6:56 p.m.
WASHINGTON The federal deficit is shrinking more quickly than expected, and the government's long-term debt has largely stabilized for the next decade, the Congressional Budget Office said Tuesday in a report that could strengthen the Obama administration's hand in the budget battles with congressional Republicans.
The budget office continues to say the federal government faces a long-range budget problem mostly caused by the costs of an aging population but its new forecast pushes the crunch point for that problem off into a considerably more distant future: well after the 2020 presidential election.
The deficit projection for this year $642 billion is almost 25% less than the deficit the budget office had forecast as recently as February. At the new level, the annual deficit would be back to where it was before President Obama took office. It would continue to fall for the rest of Obama's tenure, the budget office now projects. By contrast, the deficit for fiscal year 2012 came in at just over $1 trillion.
Three major factors account for most of the long-term improvement: a better economy, a continued slowdown in the rate of medical inflation which reduces the cost of Medicare and Medicaid and higher taxes that Congress approved as part of the "fiscal cliff" deal in January, the budget office said.
In addition, the automatic budget cuts that took effect this spring have reduced spending in the short term. The government also will benefit this year from dividend payments it is getting from the two giant housing finance agencies bailed out during the financial crisis.
The federal government's annual deficit this year amounts to about 7% of the gross domestic product. By 2015, the budget office forecasts, the deficit will fall to just over 2% of GDP, a level that most economists would consider relatively insignificant. At that point, the deficit would begin to climb slowly again, reaching about 3.5% of GDP by the end of the decade.
The report also forecasts that the federal debt will shrink relative to the size of the economy for the rest of Obama's term. The budget office expects the debt to begin to rise slowly after 2018 as the effects of an aging population increase the cost of retirement programs.
The federal deficit is the gap between what the government spends each year and its revenue, mostly taxes. The government has run a deficit almost every year for the last half-century. The federal debt represents the accumulated money that the government borrows to cover that deficit.
The numbers have an important political impact. Republicans have pushed for big reductions in government programs this year, arguing that the country could face a debt crisis if spending is not curtailed. The Obama administration and congressional Democrats have argued that big new reductions have less urgency because the budget picture is already getting better. The new figures from the budget office, which both parties rely on as a nonpartisan arbiter, will probably give more impetus to the Democrats' position.
The report also signaled that the next confrontation in Washington's budget wars may not come until late fall. Republican leaders have planned to push for budget cuts when Congress next votes on raising the federal debt ceiling. Because the debt is now growing more slowly than expected, the deadline for that vote probably won't come until October or November, the report says.
Underscoring the political dynamic, Republicans, who trumpeted news of higher deficits during Obama's first term, fell largely silent in reaction to the new figures.
The office of House Speaker John A. Boehner (R-Ohio) declined to comment. The House Budget Committee, chaired by Rep. Paul D. Ryan (R-Wis.), issued a short statement calling the report a "fresh reminder of Washington's out-of-control spending" and noting that by decade's end the federal government will collect $5 trillion in tax revenue.
Liberal Democrats, by contrast, said the new numbers showed that government spending was falling too fast and that the sharply lower deficits amounted to an austerity policy that is hurting economic growth.
"It would be nice if policymakers recognized that we need less austerity now and more health savings [and revenue] later," Jared Bernstein, a former administration economic advisor, noted on his blog. The deficit, he wrote, "is coming down too fast given the still weak economy."
Other Washington deficit hawks reacted cautiously. Maya MacGuineas, head of the Campaign to Fix the Debt, issued a statement calling the updated numbers "a good sign" but added that the country still faced a "long-term fiscal imbalance."
"We need to keep making steady improvements to keep the good news coming," she said.
The revised outlook comes as congressional Republicans are trying to figure out a budget strategy that can unite their disparate factions.
In January, GOP leaders got a deal through the House to avert the so-called fiscal cliff, but only by relying on Democratic votes. Aides to the leadership admit that no consensus exists among their members about how to raise the debt ceiling and avoid a default by the government when the deadline hits.
The president maintains that the debt ceiling should be raised without any conditions attached. Republicans are expected to continue to insist upon some concessions either new budget cuts or, perhaps, a commitment to reforming the federal tax code.
"We're going to have a big conversation with our members to talk about a way forward," Boehner said last week. "Dealing with the long-term structural spending problem we have, frankly, is at the core of it. But we also know we can't cut our way to prosperity. We need real economic growth."
House Ways and Means Committee Chairman Dave Camp (R-Mich.) and House Majority Leader Eric Cantor (R-Va.) have been meeting with members to discuss options for a tax reform plan. Camp said last month that he expected a tax plan to pass the House but did not hazard a guess about whether agreement could be reached with the Democratic majority in the Senate.
Power User
Posts: 15533
Re: Government programs & regulations, spending, deficit, and budget process
Reply #765 on:
May 15, 2013, 02:44:10 PM »
Gee, panic liquidation of assets boosts taxes received for now...
Bet you won't see this trend continue.
Power User
Posts: 9484
Re: Government programs
Reply #766 on:
May 27, 2013, 09:33:53 AM »
Happy Memorial Day everyone.
Now back to coverage of our bloated and badly run government. How is it that in $7 trillion in new debt and going on $30 trillion in Obama spending none of it found its way into repairing or rebuilding the third(?)(4th?)(5th?) federal interstate bridge to fall? We were just too focused on the important stuff, like paying people not to work.
Power User
Posts: 15533
Re: Government programs & regulations, spending, deficit, and budget process
Reply #767 on:
May 27, 2013, 09:49:51 AM »
There were serious cuts to diplomatic security under this president. Funny that they aren't highlighting that accomplishment.
Power User
Posts: 9484
Re: Government programs, Culturally based Smoking Cessation
Reply #768 on:
May 27, 2013, 10:34:15 AM »
Yes, strange that none of the savings on Benghazi security found its way into Interstate bridge maintenance. Where else did the money go? Who else besides me was worried about funding smoking cessation studies for government funded sex change recipients? No worries, those programs were fully funded. The bridge can wait.
Taxpayers Spend $536,526 to Study Smoking Cessation for LGBT Community
By Fred Lucas May 23, 2013
(CNSNews.com) The National Institutes of Health issued a $536,526 grant to the University of Illinois, Chicago, for a two-year program ending in July to study the smoking cessation of lesbian, gay, bisexual and transgender population.
The purpose of this study is to develop and evaluate the benefits of culturally targeted smoking cessation intervention for lesbian, gay, bisexual and transgender smokers, the NIH grant description said. Findings will contribute to the scientific literature on reducing smoking-related health disparities among underserved populations.
The funding began on Sept. 30, 2010 and will conclude on July 31, 2013.
Last Edit: May 28, 2013, 10:08:30 AM by DougMacG
Power User
Posts: 42558
WSJ Muni bond fraud
Reply #769 on:
June 01, 2013, 08:39:12 AM »
The Many Ways That Cities Cook Their Bond Books
The $3 trillion municipal debt market is rife with creative accounting.
By STEVE MALANGA
It has been a busy few weeks for the Securities and Exchange Commission. In May, the SEC charged two citiesHarrisburg, Pa., and South Miami, Fla.with securities fraud for allegedly deceiving investors in their municipal bonds.
This follows similar fraud charges against states, New Jersey in 2010 and Illinois in March, after SEC investigators uncovered what they called "material omissions" and "false statements" in bond documents related to those state's pension funds.
With Harrisburg, however, the SEC has gone further and charged the city government with "securities fraud for its misleading public statements when its financial condition was deteriorating and financial information available to municipal bond investors was either incomplete or outdated." The SEC says this is the first time the regulator has "charged a municipality for misleading statements made outside of its securities disclosure documents."
The Harrisburg charges are part of a broader SEC effort to scrutinize state and local government issuers in the nation's $3 trillion municipal-bond market. "Anyone who follows municipal finance knows that budgets can sometimes be a work of fiction," says Anthony Figliola, a vice president at Empire Government Strategies, a Long Island-based consulting firm to local governments. "Harrisburg is the tip of the iceberg."
And a mighty iceberg it is. The 2012 State of the States report, released in November by Harvard's Institute of Politics, the University of Pennsylvania's Fels Institute of Government and the American Education Foundation, found state and local governments are carrying more than $7 trillion in debt, an amount equal to nearly half the federal debt. Often, the report said, "States do not account to citizens in ways that are transparent, timely or accessible."
Consider the practices of Stockton, Calif., which last June became the nation's biggest city to file for bankruptcy. In 2011, Stockton's new financial managers issued a blistering critique of past accounting practices and acknowledged that the city's previous financials had hidden significant costs, including the real cost of employee compensation and retirement obligations. Bob Deis, the new city manager, declared that Stockton's financials bore "eerie similarities to a Ponzi scheme."
If so, the city's bondholders have been taken for a ride. In bankruptcy court earlier this year, a judge ruled that Stockton could suspend payments on its bonds even while continuing to fund its employee retirement system.
Similarly, when another California city, San Bernardino, went bust last year, some city officials alleged that it had been filing inaccurate financial records for nearly 16 years. At best, officials said, the city's bookkeeping had been "unprofessional." The SEC began an investigation last fall. Meanwhile, the city has defaulted on bond payments, leaving investors in the lurch.
One area that has come under special scrutiny is pension-fund accounting, because states have latitude in choosing how to value their retirement debts. The SEC noted that Illinois used accounting that funds a larger percentage of an employee's pension costs near the end of his career, a method that increases the risks that the system could go bust. The SEC said Illinois didn't properly reveal the risks posed by this sophisticated accounting wrinkle.
The SEC accused New Jersey of failing to disclose to investors that it wasn't sticking to a plan to adequately fund its pension system. In this, the Garden State isn't alone. Many states underfund their pension systems, even by their own accounting standards.
A June 2012 study by the Pew Center on the States found that 29 states didn't make their annual required contribution for pensions in 2010, the last year for which data were available. It isn't clear how many of the more than 3,000 local government pension systems follow the same practice, although a survey this January by Pew of 61 large cities found nearly half didn't make their full contributions.
In the South Miami case the SEC zeroed in on a complex bond deal that changed over time in a way that threatened the tax-free status of the securities. The SEC essentially warned South Miami that municipalities that employ such schemes need to fully understand the consequences for investors. In this particular case, South Miami paid $260,000 to the Internal Revenue Service to preserve the tax-free status of the bonds for investors.
Municipal investors have often ignored such questionable practices thanks to a generation of low default rates. Many also assume that even when a local government gets into financial trouble, bondholders are always first in line to be paid.
But officials in some troubled cities are pushing back against the notion that investors should get the best deal among creditors. Harrisburg City Council members have balked at a state-proposed bailout plan because they claim it places much of the burden on taxpayers without penalizing investors. Last year, City Councilman Brad Koplinski called the plan's 1% increase in the state-imposed income tax on Harrisburg residents "a bad decision for the people of Harrisburg, people who did nothing to get our city into our fiscal crisis.''
Investors will hear more of this talk as municipalities face growing budget pressures. Recently, former New York Lt. Gov. Richard Ravitch warned the municipal bond industry that the promises governments have made to repay investors may not take precedent over other obligations. States and cities face "a unique challenge," he said, "in trying to maintain services and meet their retirement commitments to workers," emphasizing that this was "not necessarily a good message" for investors.
Under these circumstances muni-bond investors should be practicing a stronger form of "buyer beware." Yet even that is difficult if governments issue reports designed to disguise their true financial condition. If investors finally catch on to this, it might put an especially deep chill on the market for municipal securities. Less than forthcoming city and state governments will deserve the consequences.
Mr. Malanga is a senior fellow at the Manhattan Institute.
Power User
Posts: 42558
Re: Government programs & regulations, spending, deficit, and budget process
Reply #770 on:
June 15, 2013, 05:12:03 AM »
"The fore horse of this frightful team is public debt. Taxation follow that, and in
its turn wretchedness and oppression."
--Thomas Jefferson, Letter to Samuel Kerchival, 1816
Power User
Posts: 7843
Paid as full time government employee AND side consultant.
Reply #771 on:
June 16, 2013, 10:39:26 AM »
This is legal?
What is this?
****Weiner wife Abedin being probed over employment status
By GEOFF EARLE, Bureau Chief
Last Updated: 1:31 AM, June 15, 2013
Posted: 8:15 PM, June 14, 2013
Anthony Weiner and Huma Abedin
WASHINGTON One of the Senates most aggressive investigators is probing longtime Hillary Rodham Clinton aide Huma Abedins employment status, asking how she got a sweetheart deal to be a private six-figure consultant while still serving as a top State Department official.
Abedin, one of Clintons most loyal aides, is married to former Rep. Anthony Weiner, whos in the midst of a vigorous effort to beat back his own scandal and become mayor.
The inquiry by Sen. Charles Grassley (R-Iowa), compiled in a three-page letter to Abedin and Secretary of State John Kerry, adds drama to Weiners bid.
Abedin has been essential to his attempt to move past his sexting scandal.
The couple hauled in as much as $350,000 in outside income on top of Abedins $135,000 government salary after Weiner quit Congress amid a sexting scandal when he got caught sending out Tweets of his crotch.
Abedin, who served as Clintons deputy chief of staff when Clinton was secretary of state, later became a special government employee who was able to haul in cash as a private contractor.
The change in status came to light only last month. Abedin took on the new assignment after she gave birth to son Jordan and began working from New York.
One of the clients she did consulting work for while on the government payroll was Teneo Holdings, a firm founded by longtime Bill Clinton aide Doug Band.
Grassley, the top Judiciary Committee Republican, wrote that he was concerned Abedins status blurs the line between public- and private-sector employees, especially when employees receive full-time salaries for what appears to be part-time work.
He peppered Abedin and Kerry with 13 questions about her employment. Among them: Who authorized the change in status in your official title? and Who was made aware of the change in status?
A State Department official, noted there were 100 such consultants at the agency, saying, Miss Abedins status was approved through the normal process.
The official couldnt immediately answer who signed off on the consulting deal, saying Abedin submitted it to the ethics office in June of last year.
A person close to Abedin said she voluntarily disclosed that she worked for Hillary Clinton personally to allow Huma to begin planning for [Clintons] activities post-State, as well as for the Clinton foundation and Teneo Holdings.
The person added that Teneo conducts no business with State and that Abedin did not provide political intelligence.
One source diagnosed the situation this way: She has the Clinton disease. When your husband gets knocked down, get up right away or else.
Grassleys letter quotes from Teneos Web site, on which the firm calls itself the next chapter in strategic advisory.
In what ways did the department interact with the companies for which you consulted? the letter asks
Grassley suggested Abedin was providing clients political intelligence.****
Power User
Posts: 7843
There is nothing wrong with single motherhood if the mother
Reply #772 on:
June 16, 2013, 10:53:52 AM »
is responsible and not expecting taxpayers to pick up the tab. Unfortunately single mothers who get government pay checks form a huge voter block. They will nearly ALL vote for Hillary. This article celebrates food stamps by celebrating Rosa Diaz who of course is just trying to feed her children. It sounds like she has NO other income and the only money for food is food stamps. I thought food stamps are supposed to supplement not be the total sum to buy food.
Deep in the article is this, "For Diaz, who is five months pregnant, this means less anxiety about being able to feed her family all month long". Instead of outrage we are supposed to accept the food stamp program as a blessing offered to feed *the children*.
Or this line, "At $384 a month, she usually pitched in an extra $100 of her own money to keep her family fed." As though adding $25 bucks a week of her "own money" is doing US a favor! Folks most of the time we are being robbed. I doubt half of the food stamp program could be considered legitimate.
****Food stamp hike helps families cope
$210M is likely to flow through Tenn.'s economy
Jul. 1
An increase in food stamp benefits in April under the federal stimulus package has helped single mother Rosa Diaz, 21, stock the pantry for her family, including her 2-year-old son, Reco Diaz, and her sister. BILLY KINGSLEY / THE TENNESSEAN
An increase in food stamp benefits in April under the federal stimulus package has helped single mother Rosa Diaz, 21, stock the pantry for her family, including her 2-year-old son, Reco Diaz, and her sister. BILLY KINGSLEY / THE TENNESSEAN
Written by
Bonna Johnson
Who will benefit from the nearly $5 billion in federal stimulus money that is expected to flow into Tennessee? The Tennessean goes to the front lines for a weekly report on how the money is being spent. Read more at tennessean.com/stimulus.
The food stamp program was renamed the Supplemental Nutrition Assistance Program (SNAP) last October, although most people still refer to the monthly benefits as food stamps. In April, the federal stimulus program increased monthly benefits about 13 percent.
SNAP benefits can be used to purchase these items:
Breads and cereals
Fruits and vegetables
Meats, fish, poultry
Dairy products
Seeds and plants that produce food for the household to eat
But not these items:
Beer, wine, liquor, cigarettes or tobacco
Pet food
Soap, paper products and household supplies
Vitamins and medicines
Food that will be eaten in the store
Hot foods
SOURCE: U.S. Department of Agriculture
The food stamp program in Tennessee has grown dramatically as more households seek assistance in the worsening economy and as monthly payments got a boost in April through the federal stimulus package.
Month | Individuals | Households | Food stamps
May 2008 910,872 411,010 $93.4 million
March 2009 1.06 million 487,784 $122 million
April 2009 1.08 million 489,680 $144 million
May 2009 1.09 million 500,059 $146 million
SOURCE: Tennessee Department of Human Services
Slowly cruising the aisles of her favorite grocery store, Rosa Diaz kept an eye out for specials to help her stock up on staples, like fruit juice and packaged snacks for her 2-year-old son.
"That's a decent price," Diaz said as she placed a couple of large jugs of orange juice, advertised at two for $3, in her shopping cart.
Ever since her food stamps increased in April from $289 a month to $375 the 21-year-old single mother can afford to fill up the pantry for her small family, which also includes her younger sister, and keep them fed until she gets more money the next month.
"Sometimes we came to the end of the month, and we didn't have any more food," said Diaz, who stretches her monthly allotment by staying away from expensive name brands and searching out sales at the H.G. Hill store near her apartment in Madison.
As part of the federal stimulus package, families on food stamps across the country got a boost in their monthly benefits of about 13.6 percent. On average, a family of four received an $80 increase per month, according to the U.S. Department of Agriculture.
The stimulus-funded bump in food stamp payments is intended to not only increase the purchasing power of poor families but also help the economy grow by infusing millions more into grocery stores, which in turn pay their employees and suppliers, and trickling down to the farmers growing crops and even the truckers hauling food.
In just the first three months since the increase in payments, an additional $49 million in stimulus funds has been spent in food stamps in Tennessee, according to Michelle Mowery Johnson, spokeswoman for the Tennessee Department of Human Services.
Over the course of the next fiscal year, which started July 1, some $210 million in stimulus funds is expected to flow through the Tennessee economy because of the increase in food stamps, she said.
Anti-hunger advocates don't expect recipients to start purchasing caviar and Perrier now that they have more money.
"I think the impact is probably that it's going to help people buy more food," said Brian Zralek, executive director of Manna Inc., a Nashville anti-hunger group.
For Diaz, who is five months pregnant, this means less anxiety about being able to feed her family all month long. Indeed, benefit amounts have not kept pace with the cost of groceries and needed to be increased anyway, said Richard Dobbs, policy director for food stamps at DHS.
"It's really helped," Diaz said. "They needed to do something."
At the same time, though, it's not going to help her buy a new car or pay her rent, she said. The worsening economy, plus a bit of bad luck, has made it increasingly difficult for the young mother to make ends meet.
She had been working with her mother and sister in a cleaning business, but as the economy took a downward turn, they lost clients. After her car was wrecked recently, she's had no regular transportation to get to the clients they have left.
"Things are still hard," Diaz said.
A second stimulus
Diaz isn't the only one feeling the limitations of President Barack Obama's $787 billion stimulus package approved in February. There is already talk of a second stimulus even as Republicans criticize the current package for not working and failing to create jobs.
Enrollment in the food stamp program, which was recently renamed the Supplemental Nutrition Assistance Program, has been rising in Tennessee as layoffs mount and the Tennessee unemployment rate climbed above 10 percent in May.
While the aim is to help poor families weather the recession, they likely would have gotten the same increase in October, when the federal government usually applies a cost-of-living adjustment anyway, Dobbs said. Because of the April increase, there won't be another increase this year, he said.
At the same time, though, he sees the higher payments as a way to help protect the jobs of cashiers and shelf stockers. And, "the more benefit we provide to (recipients) to purchase food, that frees up more income to pay rental expenses or utility bills or medical bills," Dobbs said.
Many grocers, though, have not noticed the extra injection of money into the economy and said it may take more time.
"The initial thought is that they haven't seen a direct impact from the food stamp increase," said Jarron Springer, president of the Tennessee Grocers and Convenience Store Association.
Christy Davis, a clerk with Johnny Howell Produce at the Nashville Farmers Market, said she's not noticed any change now that her food stamp customers have more to spend. About one-third of sales of Howell's farm-fresh produce are paid through food stamps, she said.
At the Madison H.G. Hill, business is up, but not so much from higher food stamp payments, said owner Todd Reese. "More people are going to the grocery store instead of eating out," he said.
Pump primer
Some economists credit an increase in food stamp amounts along with unemployment benefits as being the most effective way to prime the economy's pump.
"People who receive these benefits are very hard-pressed and will spend any financial aid they receive within a few weeks," wrote Mark Zandi, an economist with Moody's Economy.com, in a 2008 report. "These programs are also already operating, and a benefit increase can be quickly delivered to recipients."
Infrastructure spending, no matter how "shovel-ready" the projects, won't help the economy so quickly, Zandi wrote in a forecast earlier this year.
Critics, though, say higher food stamp payments won't help the economy grow faster and instead will expand welfare spending to unaffordable levels.
"Every dollar Congress hands out from food stamps must be taxed or borrowed from someone else," said Brian Riedl, a senior federal budget analyst at the conservative Heritage Foundation, a critic of the stimulus package.
"You're taking water out of one side of the pool and dumping it into another side of the pool, but you haven't raised the water level."
Raising food stamp payments may be a humane policy, Riedl said, "but that doesn't mean you're growing the economy any faster."
It's perfectly fair to say you don't want people to starve, Riedl said, and that's what officials should use as a line of argument instead of claiming that the increase in food stamp payments will stimulate economic growth.
For Makeesha Ayodele, 30, it all comes down to feeding her two children, ages 10 and 4.
At $384 a month, she usually pitched in an extra $100 of her own money to keep her family fed.
When her payment rose to $440 in April, she could use some of that extra hundred bucks "to help pay part of my rent and keep the cell phone on," said Ayodele, who was back at the Nashville food stamps office last week trying to get back on the program after losing her benefits in May.
Contact Bonna Johnson at 615-726-5990 or firstname.lastname@example.com.****
Last Edit: June 16, 2013, 11:03:59 AM by ccp
Power User
Posts: 9484
Re: Huma Abedin: Paid as full time government employee AND side consultant.
Reply #773 on:
June 17, 2013, 10:45:12 AM »
Quote from: ccp on June 16, 2013, 10:39:26 AM
This is legal?
What is this?
****Weiner wife Abedin being probed over employment status ...
ccp, Thanks for finding this. Huma is pretty close to the center of the political universe. Huma is/was Hillary's closest confident. The right wing nuts (anyone to the right of me) were sure she was Hillary's lesbian lover; Huma accompanied Hillary everywhere. Then she was the 'Muslim' in the inner circle affecting our diplomatic policies. She has relatives with ties to CAIR etc.(?) Then she was set up to be Anthony Weiner's wife, a powerful and outspoken congressman - before his bizarre weiner scandal. They had Muslim-Jewish wedding?? Then she was the wife standing by him, sort of. Clintons did not endorse Weiner for mayor - yet. A soft spot for sex scandals? Huma is still with Hillary? Still with Weiner. Now this scandal breaks. Yes, she takes full time pay, sells access or whatever it is she is selling on the side, and we don't get to know who is involved or how this operation works.
I really don't want to spend another decade studying Clinton scandals!
Power User
Posts: 15533
Re: Government programs & regulations, spending, deficit, and budget process
Reply #774 on:
June 17, 2013, 10:49:03 AM »
Muslim women are forbidden from marrying non-muslims, so it's suspected Weiner has said the shahada.
Power User
Posts: 9484
Re: Government programs & regulations, spending, deficit, and budget process
Reply #775 on:
June 17, 2013, 10:55:13 AM »
Quote from: G M on June 17, 2013, 10:49:03 AM
Muslim women are forbidden from marrying non-muslims, so it's suspected Weiner has said the shahada.
As with Bill-Hillary, it could just be a sham marriage. Who knows and who has time to care... Ughh.
But still, if and when Huma becomes first lady, after her husband survives his scandal to become NYC Mayor and then the first Jewish President, and after our Attorney General survives his scandal to become the first African American VP as his just reward for not investigating IRS, Benghazi or anything else, Huma will be one of the most powerful people in the Weiner-Holder administration.
Power User
Posts: 15533
Re: Government programs & regulations, spending, deficit, and budget process
Reply #776 on:
June 17, 2013, 10:59:26 AM »
How very optimistic, Doug!
You're assuming we'll still have elections by then....
Power User
Posts: 9484
Government programs: Cash is the biggest crop in the farm bill
Reply #777 on:
June 17, 2013, 12:06:48 PM »
Editorial: Cash the biggest crop in this farm bill
Most of $955 billion approved by Senate goes for food stamps and crop subsidies.
We find remarkable that the Senate approved Monday a so-called "farm bill" that calls for nearly $1 trillion in questionable spending and hardly a discouraging word has been heard on Capitol Hill.
Chalk that up to still-fresh outrage over revelations of the Obama administration's monitoring of Americans' phone records, Internet accounts and credit card transactions, and still-simmering concerns about Internal Revenue Service abuses and Justice Department abrogation of press freedom.
Article Tab: Sen. Debbie Stabenow, D-Mich., chairwoman of the Senate Agriculture Committee, speaks to reporters as the Senate votes on a farm bill that sets policy for farm subsidies, food stamps and other farm and food aid programs for the next five years, at the Capitol in Washington, June 10. At rear is Sen. John Hoeven, R-ND. Officially known as the Agriculture Reform, Food and Jobs Act of 2013, the agriculture policy measure would cost taxpayers $100 billion annually with the bulk of that amount allocated to the federal food stamp program.
Sen. Debbie Stabenow, D-Mich., chairwoman of the Senate Agriculture Committee, speaks to reporters as the Senate votes on a farm bill that sets policy for farm subsidies, food stamps and other farm and food aid programs for the next five years, at the Capitol in Washington, June 10. At rear is Sen. John Hoeven, R-ND. Officially known as the Agriculture Reform, Food and Jobs Act of 2013, the agriculture policy measure would cost taxpayers $100 billion annually with the bulk of that amount allocated to the federal food stamp program.
Anyway, the Agriculture Reform, Food and Jobs of Act of 2013 cleared the Senate floor by a comfortable 66-27 vote. The spending bill will cost the taxpayers $955 billion. That's 60 percent more than the previous farm bill, in 2008.
Most of the outlays in the bill actually have nothing to do with crops. In fact, 80 percent of spending goes to the Supplemental Nutrition Assistance Program, better known as food stamps.
The welfare program the "Food" part of the Agriculture Reform, Food and Jobs Act has grown 70 percent over five years, with a record 23.1 million households currently enrolled.
More at link:
Power User
Posts: 9484
Planet Government - The Regulated States of America
Reply #778 on:
June 19, 2013, 09:24:29 AM »
WSJ excerpt,
Niall Ferguson: The Regulated States of America
Tocqueville saw a nation of individuals who were defiant of authority. Today? Welcome to Planet Government.
...On foreign policy, it may still be true that Americans are from Mars and Europeans from Venus. But when it comes to domestic policy, we all now come from the same place: Planet Government.
As the Competitive Enterprise Institute's Clyde Wayne Crews shows in his invaluable annual survey of the federal regulatory state, we have become the regulation nation almost imperceptibly. Excluding blank pages, the 2012 Federal Registerthe official directory of regulationtoday runs to 78,961 pages. Back in 1986 it was 44,812 pages. In 1936 it was just 2,620.
True, our economy today is much larger than it was in 1936around 12 times larger, allowing for inflation. But the Federal Register has grown by a factor of 30 in the same period.
The last time regulation was cut was under Ronald Reagan, when the number of pages in the Federal Register fell by 31%. Surprise: Real GDP grew by 30% in that same period. But Leviathan's diet lasted just eight years. Since 1993, 81,883 new rules have been issued. In the past 10 years, the "final rules" issued by our 63 federal departments, agencies and commissions have outnumbered laws passed by Congress 223 to 1.
Right now there are 4,062 new regulations at various stages of implementation, of which 224 are deemed "economically significant," i.e., their economic impact will exceed $100 million.
The cost of all this, Mr. Crews estimates, is $1.8 trillion annuallythat's on top of the federal government's $3.5 trillion in outlays, so it is equivalent to an invisible 65% surcharge on your federal taxes, or nearly 12% of GDP. Especially invidious is the fact that the costs of regulation for small businesses (those with fewer than 20 employees) are 36% higher per employee than they are for bigger firms.
Next year's big treat will be the implementation of the Affordable Care Act, something every small business in the country must be looking forward to with eager anticipation. Then, as Sen. Rob Portman (R., Ohio) warned readers on this page 10 months ago, there's also the Labor Department's new fiduciary rule, which will increase the cost of retirement planning for middle-class workers; the EPA's new Ozone Rule, which will impose up to $90 billion in yearly costs on American manufacturers; and the Department of Transportation's Rear-View Camera Rule. That's so you never have to turn your head around when backing up.
President Obama occasionally pays lip service to the idea of tax reform. But nothing actually gets done and the Internal Revenue Service code (plus associated regulations) just keeps growingit passed the nine-million-word mark back in 2005, according to the Tax Foundation, meaning nearly 19% more verbiage than 10 years before. While some taxes may have been cut in the intervening years, the tax code just kept growing.
I wonder if all this could have anything to do with the fact that we still have nearly 12 million people out of work, plus eight million working part-time jobs, five long years after the financial crisis began. ...
Power User
Posts: 9484
Re: Government programs - The 'Farm Bill' failed in the House
Reply #779 on:
June 24, 2013, 10:28:11 AM »
The opponents included most Democrats, because there is a "$1 billion cut" in the food stamp program (readers here know a cut is not a cut), along with some Republicans that doesn't believe a welfare program belongs in the farm bill. The urban Democrat - rural Republican, big government coalition has been fractured.
Separate the two and let them stand on their own merits, says Stephen Moore, WSJ
Maybe someone can tell me what states in this union cannot afford to feed their own people in 2012, requiring a federal program, and how a monstrous bill like this is justified by a simple mention in the constitution of regulating interstate commerce.
Power User
Posts: 42558
Well, at least Obama got to spend $100M going to Africa
Reply #780 on:
July 02, 2013, 07:28:50 AM »
Power User
Posts: 42558
WSJ: $279B here and there and pretty soon you're talking real money
Reply #781 on:
July 02, 2013, 06:27:09 PM »
If you think the federal student-loan program looks like a bad deal for taxpayers, imagine how it would look with honest accounting. And now you don't need to imagine thanks to a new report that's receiving far too little attention. Turns out that the official "savings" for taxpayers of $184 billion over the next decade really add up to $95 billion in losses.
Here's the scam: Lawmakers peddle what is a massive subsidy for universities while claiming that student loans generate a windfall for the taxpayer. This phony windfall is conjured by creative accounting that politicians mandated via the Federal Credit Reform Act of 1990. Specifically, the law requires a deliberate under-counting of the cost of defaults.
This is partly how a Democratic Congress and President Obama managed to enact ObamaCare in 2010 while claiming that their big entitlement expansion would reduce costs. The health plan was paired with legislation that made the U.S. Department of Education the originator of roughly 90% of all student loans, which in turn generated billions in imaginary budget "savings."
To its credit, the Congressional Budget Office has noted on various occasions that while the law forces it to use this Beltway math, CBO knows it's not accurate under fair-value accounting. And in a new report on the costs of student loans made in the decade ending in 2023, CBO quantifies the size of this discrepancy at $279 billion. CBO adds with its typically wry understatement that Washington's mandated accounting method "does not consider some costs borne by the government."
That's for sure. Now keep in mind that the $95 billion net loss for taxpayers happens under current law. This includes Monday's doubling of rates that pushed subsidized Stafford loans for undergrads up to 6.8% from 3.4%. Politicians on both sides of the aisle say they don't want the rate increase to stick, and they are working on a bipartisan compromise that would be retroactive to July 1.
It's too much to hope that the politicians will swear off fraudulent accounting or try to reduce defaults. But one positive development is a growing bipartisan consensus that student-loan rates should rise as the government's own costs of borrowing rise.
The House has already passed a bill that would prevent student rates from doubling but would also protect taxpayers in the future by floating the rates at some spread above the 10-year Treasury note rate, depending on the type of loan.
Senate liberals like Tom Harkin (D., Iowa) came into the debate demanding that subsidized Stafford loans remain at a fixed 3.4%. Freshman Elizabeth Warren (D., Mass.) even introduced a plan to lend to kids at the Federal Reserve's discount window rate, currently 0.75%. Senator Warren claims to understand finance, by the way.
Refreshingly, someone at the White House budget office figured out that offering low fixed rates to students could be disastrous as the Treasury's own borrowing costs start to go north. Since Mr. Obama and Democrats have driven private firms almost entirely out of this market, the private lenders can't be squeezed anymore to pay for the next round of subsidies. So the President's budget also calls for tying rates to the 10-year Treasury note, though his plan is more taxpayer-unfriendly than the House bill.
The President's baby step toward fiscal sanity seems to have caught his liberal allies by surprise. Hence the recent hilarious spectacle of Ms. Warren, a Democrat, resisting a GOP effort to force a vote on the President's proposal.
Ms. Warren feared the vote because moderate Democrats increasingly accept that rates have to be tied to something resembling economic reality. Last week Senators Joe Manchin (D., W.Va.) and Tom Carper (D., Del.) joined Maine Independent Angus King and Republicans Lamar Alexander, Richard Burr and Tom Coburn to introduce a compromise plan that ties rates to the 10-year Treasury.
But bitter-enders including Majority Leader Harry Reid still want to gore the taxpayer with a fixed 3.4% rate, financed by tax increases. When Congress returns after this week's recess, expect Mr. Reid to force a vote on a one-year extension of his sweetheart rate for colleges. Fortunately for taxpayers, the Senate will also likely vote on the bipartisan plan that moves toward market rates.
If Mr. Reid wins, a $95 billion taxpayer hit will look like a lowball estimate. Either way, you can count on politicians like him to keep claiming they're saving you money.
Power User
Posts: 42558
Anybody here predict this?
Reply #782 on:
July 15, 2013, 10:26:11 PM »
Deficit? What Deficit?
Brian S. Wesbury - Chief Economist
Bob Stein, CFA - Deputy Chief Economist
Date: 7/15/2013
Hope that title caught your attention, but, you should know, we are only half joking. In June, the federal government recorded a $116.5 billion surplus! Yep, you read that right surplus! the largest surplus for any June ever. Government spending fell to $170 billion for June, 47% below last year.
Dont get to thinking Ronald Reagan and Bill Clinton have returned - they havent. Deficits will return in the months, quarters, years, and decades, ahead. Nonetheless, the size of the surplus surprised analysts and created a brighter near- to mid-term outlook for the budget. In the long-term there are still major really major issues looming, mainly entitlements.
Also, we dont want you thinking the June numbers were completely kosher. Some big one-off factors played a large role. Fannie Mae made a $59 billion payment to the Treasury, or should we say to the taxpayers. And in the arcane world of federal budget accounting this counts as negative spending. Go figure. Meanwhile, with June 1 on a Saturday, $34 billion in monthly payments were sent on May 31, instead of June. Add those two back into spending and the picture looks different.
Still, some good things are happening. Tax receipts rose 10% from a year ago on the back of a recovering economy. While some will say its tax rate changes from earlier this year, tax receipts have risen for four consecutive years.
Spending growth, even adjusting for the one-off factors, has slowed sharply with total federal spending basically flat the past four years. Federal spending has dropped from 25% of GDP back down to 21% since 2009.
We say that with some enthusiasm because we want spending as a share of GDP to be falling. Lower spending as a share of GDP mean higher P-E ratios and stronger economic growth. But dont get too excited. Federal spending is still way too high. At 21% of GDP its higher than any year from 1947 through 1974, or 1995 through 2008.
But the slower spending trend, combined with higher tax revenues, will contain the deficit. The deficit should be about 4% of GDP this year, down from over 10% in 2009. In 2014, it should be more like 3%, and then lower still in 2015. With deficit shares of GDP this low, the debt-to-GDP ratio will start heading south.
None of this alleviates our long-term problem with entitlements from eventually turning the ship back toward rougher and colder waters. Nothing looks like it will get done on this front anytime soon. The Obama Administration would rather declare victory with smaller deficits and avoid serious long-term budget negotiations. Theres no money we mean votes in it for the Democrats the party that supports these programs of redistribution.
As a result, we are left with a situation in which we have to content ourselves with recent gradual progress, hope spending hawks can maintain the sequester as long as possible, and lay the groundwork for entitlement reform under the next president, whether a Republican or a Democrat.
You read that right: whether a Republican or a Democrat. In fact, because politics is backwards, we may need a Democrat in power to actually fix these programs. The reason: people view Republicans as mean-spirited and un-caring. Its not true, but Nixon went to China, Carter deregulated airlines and trucking, and Clinton reformed welfare. Bush was more protectionist than Obama. If our next president wants to boost economic growth, the only way is by reforming entitlements.
Power User
Posts: 42558
WSJ: The Sequester is a success
Reply #783 on:
August 12, 2013, 10:14:42 AM »
by STEPHEN MOORE
The biggest under-reported story out of Washington this year is that the federal budget is shrinking and much more than anyone in either party expected.
Consider the numbers: According to the Congressional Budget Office, annual outlays peaked at $3.598 trillion in fiscal 2011. After President Obama's first two years in office, many in Washington expected that number to hit $4 trillion by 2014. Instead, spending fell to $3.537 trillion in fiscal 2012, and is on pace to fall below $3.45 trillion by the end of this fiscal year (Sept. 30). The $150 billion budget decline of 4% is the first time federal expenditures have fallen for two consecutive years since the end of the Korean War.
This reversal from the spending binge in 2009 and 2010 began with the debt-ceiling agreement between Mr. Obama and House Speaker John Boehner in 2011. The agreement set $2 trillion in tight caps on spending over a decade and created this year's budget sequester, which will save more than $50 billion in fiscal 2013.
As long as Republicans don't foolishly undo this amazing progress by agreeing to Mr. Obama's demands for a "balanced approach" to the 2014 budget in exchange for calling off the sequester, additional expenditure cuts will continue automatically. Those cuts are built into the current budget law.
In other words, Mr. Obama has inadvertently chained himself to fiscal restraints that could flatten federal spending for the rest of his presidency. If the country sees any normal acceleration of economic growth (from the anemic 1.4% growth rate so far this year), the deficit is on a path to drop steadily at least through 2015. Already the deficit has fallen from its Mount Everest peak of 10.2% of gross domestic product in 2009, to about 4% this year. That's a bullish six percentage points less of the GDP of new federal debt each year.
Admittedly, this fiscal progress follows the gigantic budget blowout that began with the last year of George W. Bush's presidency and the first two years of Mr. Obama's. In fiscal 2009 alone, federal spending surged by $600 billion. That same year, outlays as a share of GDP reached a post-World War II high of 25.2%. But by the end of this fiscal year, outlays as a share of GDP could fall to as low as 21.5%. At least for now, the great Washington spending blitz of the Obama first term is over.
Some $80 billion of the outlay savings have come from one-time partial repayments back to the government for the hundreds of billions spent on the bailouts of banks and of Fannie Mae and Freddie Mac. And defense hawks won't be happy that at least half of the fiscal retrenchment has been due to cuts in military spending. The defense budget is on a pace to hit its lowest level (as a share of GDP) since the days of the post-Cold War "peace dividend" during the Clinton years. These deep cutbacks could be dangerous to national security, but as the wars in Afghanistan and Iraq were winding down, defense would have been cut under any scenario. To their credit, at least Speaker Boehner and House Republicans have made sure that the defense drawdown has gone toward deficit reductioninstead of being spent on domestic social-welfare programs, as happened after the Vietnam War.
The sequester cuts in annual budgets for the military, education, transportation and other discretionary programs have also been an under-appreciated success, with none of the anticipated negative consequences.
Discretionary spending soared to $1.347 billion in fiscal 2011, according to the CBO, but was then cut by $62 billion in 2012 and another $72 billion this year. That's an impressive 10% shrinkage. And these are real cuts, not pixie-dust reductions off some sham baseline. Discretionary spending as a share of the economy hit 9.4% of GDP in fiscal 2010 but fell to 7.6% this year and is scheduled to slide to 6.4% in Mr. Obama's last year in office.
The sequester is squeezing the very programs liberals care most aboutincluding the National Endowment for the Arts, green-energy subsidies, the Environmental Protection Agency and National Public Radio. Outside Washington, the sequester is forcing a fiscal retrenchment for such liberal special-interest groups as Planned Parenthood and the National Council of La Raza, which have grown dependent on government largess.
But the fiscal story isn't all rosy. The major entitlements remain on autopilot and are roaring toward insolvency. Thanks in large part to Mr. Obama's aversion to practical fixes, the Congressional Budget Office calculates that through July of this year Social Security, Medicare and Medicaid spending are up $73 billion from just last year. This doesn't include ObamaCare, which is scheduled to add $1 trillion of new costs over the next decade.
So the fiscal progress reported here is no excuse for complacency. But it does call into question the wisdom of a government-shutdown confrontation over the budget this fall or a debt-default showdown that runs the risk of suspending the spending caps and sequester and revitalizing an increasingly irrelevant president.
Liberals had hoped that re-electing Mr. Obama, the most pro-spending president since LBJ, would unleash another four years of Great Society government expansion. Instead, spending caps and the sequester are squashing these progressive dreams. Welcome to the new fiscal reality in Washington. All Republicans need to do is enforce the budget laws Mr. Obama has already agreed to. Entitlement reforms will come when liberals realize that the unhappy alternative is to allow every program they cherish to keep shrinking.
Mr. Moore is a member of the Journal's editorial board.
Power User
Posts: 9484
Re: Government spending, deficit, and budget process: David Malpass
Reply #784 on:
August 30, 2013, 05:12:21 PM »
Optimism or impending train wreck? You make the call. The deficit is falling temporarily and then forecast to skyrocket.
On their present course, spending and debt are forecast to rise sharply starting in 2015, even with severe underfunding of national defense. Government health-care spending will more than double over the next decade to $1.8 trillion annually in 2023, while annual debt-service costs will quadruple to $823 billion as interest rates normalize.
Over the last century, government's fiscal machinery has been mostly gas pedal, little brake. In 1913, the 16th Amendment gave Washington open-ended power to tax income and borrow against it, with no offsetting restraint on spending or debt.
Constitutional limits on the scope of federal activity have gone unenforced. Automatic entitlement spending sidesteps the constitutional requirement that "No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law."
Going a step further, Congress has embedded the Consumer Financial Protection Bureau inside the Federal Reserve, giving it access to limitless funding (up 80% from 2012 to 2013, reaching over $500 million) and no congressional control over spending, mission creep or staff. CFPB unionized on May 9 and is expected to have over 1,500 employees in 2014, double the number in 2012.
Power User
Posts: 7843
Funding the patent office with private money and having stellite offices?
Reply #785 on:
September 01, 2013, 12:30:36 PM »
I understand the point of having those who use the government "service" pay for it (akin to those who drive over certain roads are the ones who pay the tolls for the upkeep) but this also means the government employees are all beholden to these companies. A similar situation exists at the FDA with at least part of it's' budget being paid for by pharmaceutical/medical device companies. Of course there is bias and conflict of interests.
Corruption will invariably be even worse than it already is.
*****Silicon Valley patent office shelved
SAN JOSE, Calif. (AP) Silicon Valley's high-tech firms are fighting what they consider a deeply personal federal cut this summer that shelves a planned patent office in this innovation-fueled region.
While most of the country is feeling some pinch from the automatic budget cuts known as sequestration, tech leaders say this one is unique and unfair, because the Commerce Department's promised satellite patent offices were never going to be funded by taxpayers. Instead, they're supported by the $2.8 billion in annual patent fees collected from inventors, entrepreneurs and companies.
"We were really upset," said Emily Lam, a director at the Silicon Valley Leadership Group, an association representing local high tech firms. "It makes absolutely no sense that an office funded almost entirely by fees would be subject to sequester."
But U.S. Patent and Trademark Office chief financial officer Tony Scardino said the government's across-the-board austerity policy doesn't make exceptions for fee-supported programs. And if there's a "continuing budgetary stalemate" this fall, he said that could cause further delays.
Silicon Valley firms seek more U.S. patents than any other region in the world, and San Jose is the nation's top patent-producing city, with 7,074 patents last year. And California is the nation's patent leader, with seven of the top 10 patent-producing cities.
The U.S. Patent Office currently has a backlog of 590,000 nationwide, and it can take more than two years to have an application reviewed.
Until two years ago, the only U.S. Patent and Trademark Office was in Arlington, Va. Silicon Valley companies often would have to send a chief scientist to Arlington for a few days to meet with examiners, losing valuable time and money.
..View gallery."
David P. Clark, CEO of Petzila, poses with Bella, the
David P. Clark, CEO of Petzila, poses with Bella, the company's mascot, on Wednesday, Aug. 28, 2013,
Then a 2011 law raised patent fees in exchange for promises from officials to use those new revenues to speed up the patent process and establish four satellite offices for the first time in the agency's 200-plus year history.
But that's not exactly what happened.
With budget cuts came a federal decision that 8.6 percent of all patent fees are immediately diverted from the Patent Office into the U.S. Treasury; in total, the U.S. Patent and Trademark Office will lose between $120 million and $130 million in patent fees it collects this year.
There are three satellite office projects underway: the first opened in Detroit in July, 2012, and permanent locations for others were selected in Denver and Dallas before sequestration.
Last month, the General Services Administration which owns and operates federal properties said it was suspending its search for permanent patent office space in Silicon Valley, dashing hopes of local startups.
"It was terribly disappointing," said Dave Clark, who launched a high tech pet products startup called Petzila in San Jose this year with his business partner Simon Milner.
Eight months into the pet-friendly technology business, they say at least 20 percent of their energy has gone toward getting a patent. That's time they'd rather spend developing, manufacturing, marketing and financing their first product: a wall mounted system called PetziConnect that allows pet owners to remotely say hello to their dog and, at the click of an icon, give Fido a treat.
..View gallery."
David P. Clark, CEO of Petzila, poses with Bella, the
David P. Clark, CEO of Petzila, poses with Bella, the company's mascot, on Wednesday, Aug. 28, 2013,
"It would be a godsend if we could meet with a patent examiner; It would cut our costs and time in half, and cut our anxiety by 60 percent," said Clark. "Nothing compares to a face-to-face conversation."
A local patent office staffed with as many as 150 new examiners would have provided entrepreneurs with nearby staff familiar with high tech, and a streamlined process, business leaders said.
"The more educated about the technology the examiners are, the better job they're going to be able to do in figuring out what applications are patent worthy and which should be rejected," said senior patent counsel Suzanne Michel at Google, which has tens of thousands of applications pending.
A local Congressional delegation is now seeking a sequestration exemption for the office.
Rep. Mike Honda, D-Calif., whose district includes Silicon Valley, said shelving the office "is going to set us back in terms of our own competitive edge, like trying to run a race with your ankles hobbled."
"It's too bad," said Jonah Probell, who writes semiconductor intellectual property patents for a small firm in Sunnyvale, Calif.
For now, Silicon Valley Patent Office Director Michelle Lee, a former Google patent law division head, is working out of a small, temporary space with just a handful of administrative judges in rooms borrowed from another government agency in Menlo Park, Calif. not nearly enough to meet the needs of the region.
Meanwhile, lawmakers and bureaucrats on the East Coast will decide when they can release funds to open a permanent, fully staffed Silicon Valley Patent Office. To date, officials have said they plan to go ahead with it, but they have provided no timetable.
"Which, who knows, that might be never," said Probell.*****
Power User
Posts: 9484
Re: Government programs, budget process - De-fund Obamacare debate
Reply #786 on:
September 04, 2013, 11:52:18 AM »
Sean Hannity had a recent radio debate with Sen. Mike Lee and Karl Rove. Both sides the debate, meaning that we are screwed.
Mike Lee could not answer how he would get suport from more than 44 Senators much less Pres. Obama to ever sign a bill that will defund the signature accomplishment of his Presidency. Rove could not answer how else he would stop it before it is fully implemented and too big with too much momentum to stop.
Rove who is a polling expert said that the American people side with Republicans in opposing Obamacare but don't side with Republicans if it leads to a government shutdown.
Lee argues that Obamacare, if funded right now with Republicans fingerprints in both chambers, will never be repealed. Lee refuses to accept responsibility for a government shutdown if the Republican majority House fully funds all of government except Obamacare, while the Democrat majority Senate and President refuses to pass and sign that bill.
Rove says we have been through this before and Republican lost. Lee says no, there was nothing equivalent to Obamacare at stake in 1995 or 2011.
Actually the shutdowns from November 14 through November 19, 1995 and from December 16, 1995 to January 6, 1996 led to better spending discipline and a balanced budget that Democrats now brag about. The more recent brinksmanship led to at least a pause in the trillion dollar deficits.
I side with Mike Lee; do what is right and let polling take care of itself. In reality this strategy will fail because Republicans will not stand together while Democrats own the bully pulpit and the message from the media.
Power User
Posts: 15533
Re: Government programs & regulations, spending, deficit, and budget process
Reply #787 on:
September 04, 2013, 12:09:22 PM »
Let the low information voters bask in the obamacare awesomeness!
At this point, let it burn. Let's just find out exactly what's in it.
Power User
Posts: 9484
Re: Government programs & regulations, spending, deficit, and budget process
Reply #788 on:
September 04, 2013, 12:45:51 PM »
Quote from: G M on September 04, 2013, 12:09:22 PM
Let the low information voters bask in the obamacare awesomeness!
At this point, let it burn. Let's just find out exactly what's in it.
We already know a hundred trillion dollars of unfunded liabilities does not scare these people or force change.
To the Republicans in congress: If you fund it, it is YOUR failure. Did you get nominated and elected by telling your constituents you would vote to continue whatever programs flaming liberals that preceded you passed? Or did you promise to do everything in your power to stop this.
My advice: Do what you said you would do when you were elected. Vote only for government that you support. Our government should be the size and scope of the smallest of what the House, Senate and President all support, and larger only when you control all three.
Power User
Posts: 15533
Re: Government programs & regulations, spending, deficit, and budget process
Reply #789 on:
September 04, 2013, 12:54:52 PM »
They haven't really felt the pain yet. If the mostly spineless 'pubs actually were able to defund O-care, it'd still be a trainwreck, but the STATE Media would of course push the narrative that it was going to be healthcare eutopia until the mean republicans took it all away because racism!
Quote from: DougMacG on September 04, 2013, 12:45:51 PM
Quote from: G M on September 04, 2013, 12:09:22 PM
Let the low information voters bask in the obamacare awesomeness!
At this point, let it burn. Let's just find out exactly what's in it.
We already know a hundred trillion dollars of unfunded liabilities does not scare these people or force change.
To the Republicans in congress: If you fund it, it is YOUR failure. Did you get nominated and elected by telling your constituents you would vote to continue whatever programs flaming liberals that preceded you passed? Or did you promise to do everything in your power to stop this.
My advice: Do what you said you would do when you were elected. Vote only for government that you support. Our government should be the size and scope of the smallest of what the House, Senate and President all support, and larger only when you control all three.
Power User
Posts: 9484
Re: programs, spending, deficit, budget - The Government - Spend it or Lose it
Reply #790 on:
September 10, 2013, 10:58:57 PM »
This show is a take off on 'The Office' called 'The Government', set at the U.S. Department of Every Bureaucratic Transaction (U.S. DEBT). See the first two episodes of 'Spend it or Lose it, the continuing story of a federal agency trying desperately to spend its way to a bigger budget' at the links:
Power User
Posts: 42558
Re: Government programs & regulations, spending, deficit, and budget process
Reply #791 on:
September 13, 2013, 10:41:14 AM »
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Power User
Posts: 42558
Where's Plan B?
Reply #792 on:
September 19, 2013, 10:45:52 AM »
Morning Jolt
. . . with Jim Geraghty
September 19, 2013
What Do You Mean, We're Flying into a Budget Dogfight with No Parachute?
I don't oppose the Ted Cruz-Mike Lee plan for brinksmanship on stopping Obamacare . . . I just wish there was a clear backup plan in case it doesn't work.
________________________________________ Mad Women Debate 2013 ________________________________________
When you raise that question, you often hear a response of, "if we don't fight now, when will we fight?" That's a valid but separate argument. That's an argument for trying it; my question is about what the GOP should do if it doesn't work. And if you don't think there's at least a chance that the public recoils from a government shutdown and overwhelmingly blames the Republicans for this . . . well then, you're willfully blind. This isn't something that is guaranteed to work as long as we believe in it enough. This isn't Tinkerbell.
Because it looks like a government shutdown's dead ahead:
House Republican leaders bowed to conservative demands and announced plans Wednesday to strip out money for President Obama's healthcare law in a stopgap spending bill to keep the government running after Sept. 30.
The reversal by Speaker John Boehner (R-Ohio) raises the stakes in a fiscal fight that could shutter much of the federal government. The continuing resolution (CR) the House plans to vote on as soon as Thursday is likely to be dead on arrival in the Senate, where Democratic leaders have vowed to reject any attempt to unravel Obama's signature domestic policy achievement.
During a closed-door meeting Wednesday morning, GOP leaders also told members they would move legislation in the next week to raise the federal debt ceiling while also delaying the implementation of ObamaCare for a year and laying out a path forward for tax reform and the construction of the Keystone XL oil pipeline all Republican priorities.
Conservatives applauded the shift, a week after they rebelled against a leadership plan that would merely have forced the Senate to vote separately on a measure defunding the healthcare law.
"It looks like they did exactly what we wanted them to do," Rep. Mick Mulvaney (R-S.C.) said.
Obama seems convinced that if there's a government shutdown, he wins -- which suggests that he won't flinch as the deadline approaches. And his side is getting ready for one:
The White House told federal agencies on Tuesday to prepare for a government shutdown.
President Obama's budget director Sylvia Matthews Burwell in a memo to agencies said they should set their plans in case Congress fails to pass a funding measure by the end of the month. The government would shut down Oct. 1 without action by Congress.
Moe Lane: "I support defunding, but let me be blunt: I've been covering politics for over a decade, and I've never seen 'and then a miracle happens' work as part of a legislative strategy. Absent use of Orbital Mind Control Lasers, this scenario almost certainly ends with the Republican leadership having to decide whether to play chicken with the US economy. In their place, I'd be damned hesitant to pull the trigger, too."
Power User
Posts: 9484
Re: Government programs & regulations, spending, deficit, and budget process
Reply #793 on:
September 22, 2013, 11:57:17 AM »
I can't for the life of me figure out why disability claims go up in a recession. Wouldn't workplace injuries be going down with 5 million more out of the workforce? It's almost as if they are doing it for the money...
The disability program is increasingly becoming a long-term unemployment program, said Richard Burkhauser, a Cornell University professor who co-wrote a book on disability policy and has testified before Congress about the program. We see a lot of it now because of the effects of the recession.
Power User
Posts: 15533
Re: Government programs & regulations, spending, deficit, and budget process
Reply #794 on:
September 22, 2013, 04:56:45 PM »
Quote from: DougMacG on September 22, 2013, 11:57:17 AM
I can't for the life of me figure out why disability claims go up in a recession. Wouldn't workplace injuries be going down with 5 million more out of the workforce? It's almost as if they are doing it for the money...
The disability program is increasingly becoming a long-term unemployment program, said Richard Burkhauser, a Cornell University professor who co-wrote a book on disability policy and has testified before Congress about the program. We see a lot of it now because of the effects of the recession.
Power User
Posts: 9484
Re: Government programs & regulations, spending, deficit, and budget process
Reply #795 on:
September 23, 2013, 03:51:11 PM »
Quote from: G M on September 22, 2013, 04:56:45 PM
Quote from: DougMacG on September 22, 2013, 11:57:17 AM
The disability program is increasingly becoming a long-term unemployment program, said Richard Burkhauser, a Cornell University professor who co-wrote a book on disability policy and has testified before Congress about the program. We see a lot of it now because of the effects of the recession.
[The disability program is increasingly becoming a long-term unemployment program, said Richard Burkhauser, a Cornell University professor who co-wrote a book on disability policy and has testified before Congress about the program. We see a lot of it now because of the effects of the recession.]
Yes, now that we know plow-horse equals soup-line.
Power User
Posts: 42558
WSJ: Saving the sequester
Reply #796 on:
September 25, 2013, 09:33:08 PM »
Saving the Sequester
While the defund distraction plays on, Congress tries to gut the spending caps..
One cost of the media circus around Ted Cruz is that almost no one is following the classic Washington misdirection play over the automatic sequester spending cuts. While right and left are preoccupied with their hero or bugbear, the politicians are attempting to break the spending caps.
The exceptions are Republican Senators Tom Coburn of Oklahoma and Jeff Flake of Arizona, a pair of genuine fiscal conservatives who are sounding the alarm on this fiscal jail break. House Speaker John Boehner and Senate Minority Leader Mitch McConnell had better pay attention or the hard-fought budget victories of 2011 will vanish in this year's fiscal showdown.
Readers may have forgotten about the sequester since President Obama predicted hellfire and national damnation when it started to take effect earlier this year. In 2011, Mr. Obama proposed and Republicans agreed to 10 years of caps on discretionary spending (not including entitlements like Social Security) as part of the debt-ceiling deal, which created the Budget Control Act.
Mr. Obama proposed the automatic cuts only because he thought Republicans would never be able to live with them, and he now regrets it. The horrors the President predicted never did take place as government agencies found ways to save the roughly 5% in 2013 without hitting essential services. But the cuts have been effective at accomplishing one of the GOP's (and the Tea Party's) stated goals: cutting the economic burden of government spending.
Total federal outlays are down from a high of $3.6 trillion in fiscal 2011 to an estimated $3.45 trillion in the 2013 fiscal year that ends on September 30. Assuming no recession and adherence to the caps, federal expenditures will keep shrinking as a share of the economy over the rest of the Obama Presidency. Federal discretionary spending hasn't declined for two consecutive years since the Truman Administration.
The spending cap for 2014 is pegged at $967 billion. Republicans in the Houseat the behest of defense hawkshave already made the mistake of raising that number to $986 billion in the continuing resolution budget bill that the House passed last week. The House earmarks all of that extra $19 billion for defense, as it should, but Senate Democrats will shift most of that to domestic spending.
House conservatives were so busy patting themselves on the back for adding the ObamaCare provision that they failed to notice the higher spending level. Or maybe they didn't care. One of the "defund" ringleaders in the House is Georgia's Tom Graves, who is now in favor of the extra $19 billion. It's no accident he's on the Appropriations Committee that decides where the spending goes.
Meanwhile, as the ObamaCare histrionics continue in the Senate, Majority Leader Harry Reid wants to raise the caps for 2014 by as much as another $70 billion to closer to $1.058 trillion in discretionary spending. That was the spending marker that Democrats put down earlier this year in their 2014 budget resolution (which was never reconciled with the House). By focusing so much on the futile effort not to fund ObamaCare, Republicans may let Democrats gut their single biggest fiscal achievement since 2010.
Conservative activists outside of Congress would normally be blowing the whistle on this. But the folks at Heritage Action and the Tea Party Patriots are focusing on the political theater of defunding ObamaCare while downplaying the political reality of what the government actually spends. These are the very folks who are accusing Republicans for being spineless for not joining the defund chorus that has little or no chance of succeeding while President Obama occupies the White House.
What they're forgetting is that the sequester is the best political leverage Republicans have to gain a concession from Democratson ObamaCare or anything else. The ever-tighter spending caps on domestic discretionary spending are squeezing the liberal constituencies that live off government. As the likes of Planned Parenthood and welfare and other transfer payments get squeezed, the political pressure increases on Democrats to give up something tangible in return for easing the caps.
The shrewder Republicans understand this, which is why they've been hoping to use the sequester as part of the negotiation over the federal debt limit that will hit next month. An offer to ease the sequester has a far better chance to win entitlement reforms worth the name, perhaps including a delay in some or all of ObamaCare, than does a government shutdown that Mr. Obama would welcome so he can blame Republicans one more time.
The "defund" drama is Beltway kabuki that is distracting from the real fiscal choices that will be made in the coming weeks. What a shame it would be if by focusing so much on the health-care defunding they can't accomplish in the budget fight, Republicans gave up the sequester spending caps that are their best hope for delaying part or all of ObamaCare.
Power User
Posts: 42558
Steyn channels Churchill
Reply #797 on:
September 30, 2013, 09:45:17 PM »
"As Churchill would say, had his bust not been bounced from the Oval Office, never in the field of human spending has so much been owed by so many for so little."
Power User
Posts: 9484
Re: Government programs & regulations, spending, deficit, and budget process
Reply #798 on:
October 02, 2013, 08:21:22 AM »
I wrote these words of encouragement to my Republican congressman last night:
Please stay strong. I am proud of you! The President, who now thinks he heads a one-branch government, voted against both Justices Roberts and Alito, and he voted against raising the debt limit when it involved spending on a program he opposed. Now you have the power of a co-equal branch and the power of the purse.
I like the strategy of passing piecemeal funding bills. That way any worthy program the President says should not be shut down by the House is one Senate vote and his signature away from being funded.
It is crucial to not fund the one program Republicans were elected to stop. Any vote to fund Obamacare will mean you (we) own it - perhaps forever.
In the debate over tactics, I never heard a credible answer to question of how we will stop it later, if not now. What other failed program have we ever ended later - after one more election?
These are historic times. Thank you for being there and for staying strong.
Power User
Posts: 15533
Re: Government programs & regulations, spending, deficit, and budget process
Reply #799 on:
October 02, 2013, 10:13:01 AM »
I like the piecemeal funding bills too! That's the way to make them account for every program and justify it.
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