Archive for the ‘Budgets’ Category
Wisconsin Rep. Paul Ryan, chairman of the House Budget Committee, said Sunday that his new budget includes the repeal of President Obama’s health-care reform law known as ObamaCare.
Ryan told “Fox News Sunday” that the new proposal will make enough cuts to balance the federal budget in 10 years, compared to his previous one that tried to achieve that goal in 25 years.
“We think we owe the American people a balanced budget,” the Republican congressman said.
Ryan said the focus of the ObamaCare repeal would be to stop the expansion of Medicaid, the federal program that provides medical services to low-income U.S. families.
“Our budget does promote repealing ObamaCare,” said Ryan, who was not clear whether his 2014 budget is based on a full repeal.
Ryan, the Republican 2012 vice presidential nominee, said he wants states to run Medicaid through federal block grants.
Ryan said his proposal attempts to reach a balanced budget, in part, by slowing the rate of federal spending from 4.9 percent to 3.4 percent. Other parts include consolidating federal job-training programs and reforming the federal Food Stamp program to ensure only qualified applicants receive the benefits.
“I’ve very confident this is the way to go,” said Ryan, whose budget would have a better chance of passing the Republican-controlled House than the Democrat-controlled Senate.
by Amy Payne
If you had to cut your family’s budget, where would you cut?
Would you immediately start starving your children and stop wearing shoes? Of course not. You would look at the extras in your life—whether they were coffee shop lattes, movie tickets, or restaurant meals.
It’s a good thing the President wouldn’t be handling your budget. As Dan Holler of our sister organization, Heritage Action for America, has said: “If President Obama were making the decision for your family… he’d tell you to stop buying gas for your car and explain how you could only eat five days a week.”
Now that President Obama has turned against sequestration, he is suggesting that spending cuts to federal agencies must result in dire consequences. Firefighters, emergency responders, and teachers will all be cut, he claims. Media outlets have played up these sob stories, copying White House releases in their local news stories and soliciting sad testimonials from people who supposedly would be affected by these cuts.
But the question remains: Why would federal agencies cut their most vital assets instead of trimming around the edges? After all, the sequestration cuts are only 2.4 percent of federal spending.
Take a couple of examples.
President Obama said that “Air traffic controllers and airport security will see cutbacks, which means more delays at airports across the country.”
It won’t come as a surprise to most Americans that there is waste and inefficiency at the Transportation Security Administration (TSA). In fact, a congressional report “found that TSA is wasting hundreds of millions of taxpayer dollars.” Another report found that the TSA “has continually grown its ranks despite fewer travelers.”
President Obama said that “Thousands of teachers and educators will be laid off.”
First of all, as Heritage researchers have pointed out, “No federal education program operated by the Department of Education directly funds teacher salaries—this is a state and local responsibility.” And there are plenty of programs where inefficiencies are burdening our education system. A congressional report listed a number of duplicative or ineffective education programs that could be cut.
As if these exaggerations weren’t enough, Reason.com reported that the Office of Management and Budget warned of sequestration cuts to an agency that doesn’t even exist. As Reason’s Mike Riggs noted, this raises questions about the accuracy of the Administration’s attempted impact statements.
There is one area where the sequestration cuts will have harsher impacts—national defense. Heritage has warned of the impact on military readiness and America’s ability to defend itself, because defense bears a much larger portion of the cuts than the rest of the budget. The President is now acting concerned about the military after paying it little mind throughout the sequestration debate, using a shipyard as his backdrop for today’s anti-sequestration pep talk.
It makes no sense to hit defense the hardest with these cuts, while sequestration leaves major entitlement programs like Social Security and Medicaid untouched. Congress should reprogram these spending cuts to target the waste and inefficiencies it has already identified in federal agencies—like those listed above. Heritage’s Patrick Louis Knudsen, the Grover M. Hermann Senior Fellow in Federal Budgetary Affairs, even helpfully outlined places to find $150 billion in spending cuts that would make a lot more sense.
So no, we don’t have to fire firefighters and teachers and airport screeners. What Congress should be doing is what every American family does—tightening its budget by cutting things that are unnecessary.
For two months, reporters and lawmakers have ignored a devastating report from the federal government itself, which warns that the nation’s current fiscal policy will lead to economic collapse.
The Government Accountability Office (GAO)—the personal auditor of President Obama and the federal government—released its assessment of the federal government on January 17, 2013. The report’s findings illuminate just how dire America’s spending problem is and, therefore, how little the current cuts debated by Congress do to fix it.
The findings of the paper include these excerpts (emphasis added):
“The projections in this Report indicate that current policy is not sustainable… Preventing the debt-to-GDP ratio from rising over the next 75 years is estimated to require some combination of spending reductions and revenue increases that amount to 2.7 percent of GDP over the period.”
“It is estimated that running primary surpluses that average 1.0 percent of GDP over the next 75 years would result in the 2087 debt-to-GDP ratio equaling its level in fiscal year 2012, which compares with primary deficits that average 1.7 percent of GDP under current policies.”
“It is noteworthy that preventing the debt-to-GDP ratio from rising over the next 75 years requires that primary surpluses be substantially positive on average. This is true because projected GDP growth is on average smaller than the projected government borrowing rate over the next 75 years.”
“If the primary surplus was precisely zero in every year, then debt would grow at the rate of interest in every year, which would be faster than GDP growth.”
“The differences between the primary surplus boost starting in 2023 and 2033 (3.2 and 4.1 percent of GDP, respectively) and the primary surplus boost starting in 2012 (2.7 percent of GDP) is a measure of the additional burden policy delay would impose on future generations. Future generations are harmed by a policy delay of this sort, because the higher the primary surplus is during their lifetimes the greater the difference is between the taxes they pay and the programmatic spending from which they benefit.”
While President Obama and his media allies boast from their ivory towers that America “doesn’t have a spending problem” but rather a “health-care problem,” they are sweeping reality under the rug and spouting lies to the American people.
This is the reality: when President Obama’s personal auditor says the federal government has a spending problem, it indeed has a spending problem—and one that is growing rapidly.
The most devastating part of the report is the fact that the federal government must run surpluses over the next century to keep the same debt-to-GDP ratio it has today. Meanwhile, Congress and President Obama are throwing a fit over the looming sequester—which will cut a mere 1.2 percent of total deficits (not total debt) over the next ten years—and the Senate has not produced a budget for close to 1,400 days.
A balanced budget will not be enough to cover the rapid growth of interest payments owed on U.S. national debt in the future. The federal government currently pays $223 billion—roughly $3,000 per taxpayer—in annual interest payments. This number is expected to increase to $857 billion by the end of the decade, a 290 percent increase.
If the federal government does not fix the spending problem detailed in this report, it will have to take out more and more loans to pay for the already-outstanding interest payments on the federal government—loans to pay off loans.
Thus, the question remains: what happens when no one will grant Congress more loans?
I’m so impressed by this sacrifice that I have decided to do the same
thing with my personal budget. I spend about $2,000 a month on
groceries, household expenses, medicine, utilities, etc., but it’s
time to get out the budget cutting axe, go through my expenses, and
I’m going to cut my spending at exactly the same ratio (1/35,000) of
my total budget. After doing the math, it looks like instead of
spending $2,000 a month, I’m going to have to cut that number by
Yes, I’m going to have to get by with $1999.94, but that’s what
sacrifice is all about.
I’ll just have to do without some things, that are, frankly, luxuries
– six cents worth.
Did this President actually think no one would do the math? Please
send this to everyone on your list so people understand how idiotic a
$100 million cut is in a $3.5 trillion budget – ludicrous.
“There are two ways to conquer and enslave a nation…
“One is by sword…The other is by debt.”
John Adams 1826
Everybody wants an “A” but nobody wants to study. Everybody wants to be rich but nobody wants to save. Everybody wants to lose weight but nobody wants to exercise. Everybody wants to go to heaven but nobody wants to die. No matter how you say it, the desire for something without the willingness to do the hard things required to achieve it, will always lead to disappointment. This is the cadence of the conundrum, the drumbeat of the do-nothing dreamer, the national anthem of the nihilist; the perennial I want but I will not work formula for failure.
The signature phrase for the conservatives of this generation of Americans should be, “We all want a sound economy but we aren’t willing to endure the life-style changes it would take to get there.”
Case in point: the coming Fiscal Cliff, the looming disaster of sequestration that every talking head on every network blathers about endlessly, “It will happen” “It won’t happen.” Pick a side and it will be argued back and forth hour after hour, “The President won’t let it happen, “The President wants it to happen.” Over and over we are barraged by the same few people who constitute the pundocracy of America debate what will happen. There is only one thing they are all agreed upon. If we go over this cliff, created by a vote of Congress and a signature by the President it will be terrible for our country. Why stop there? It will be terrible for the entire world.
Just think, if we Americans raise our taxes and reign in our drunken sailor spending binge it will be a disaster for us and for everyone who draws breath on this planet. Not to worry we, the poor unwashed in fly-over country, don’t have to scratch our pumpkin heads and wonder why it would be a disaster if our country took the steps necessary to save our economy the network appointed chatter chiefs are quick to tell us.
One side says raising taxes on anyone in a weak economy may push us over into a recession. This of course comes from the people who evidently don’t buy their own bread, pump their own gas, or know any of the millions who are now permanently out of work, in other words personally prosperous people who believe the Great Recession actually ended. The other side says raising taxes on anyone they don’t consider rich would be a disaster.
Both sides agree that at least half of the spending cuts would be a disaster. One side points at defense spending as a surrender of national security. While the other side points at cuts in entitlements as throwing grandma off the cliff.
The answers they propose are as predictable as a Hallmark Christmas movie. The Progressive Democrats say raise the taxes on the evil rich and cut spending to the defense department. The Progressive Republicans say raise revenues by closing loop holes and cut spending on entitlements. The problem with this is that just like Representative Paul Ryan’s draconian budget it still never gets us to a balanced budget let alone paying down the principle on the National Debt. Both sides favor plans that keep on borrowing even if it might be at lower levels than at present. Maybe we will only borrow thirty six cents of every dollar instead of forty six. Wow! That should really make our arrival at the ash heap of History a few moments later.
And that is the heart of the problem. Or as another old saying tells us nobody wants their own ox gored. It is the “Not in my backyard syndrome” applied by everyone to something. We all want cuts in spending but not in our spending. We all agree that wasteful programs should die but every program has its supporters. This is where reality takes a bite out of dreams. Unless we balance our budget and reverse the slide into bankruptcy our days as a great power, let alone our days as the world’s only super power, are numbered, and everyone knows China is counting off the numbers.
Looking around in the cloistered world of self-appointed opinion writers I hate to have to be the one to tell my fellow Americans this but we have to do the work to get the “A,” save the money to get rich, do the exercises to lose the weight, and we most assuredly will have to die to go to heaven.
We, through our elected representatives, have spent like there was no tomorrow until tomorrow is mortgaged to pay for today without asking the question, “How are we going to pay for tomorrow?” I guess we have always figured we could use the day after tomorrow for collateral. That may work for a while or at least until our children and grandchildren have been sold into slavery to the highest bidder.
Unfortunately my generation, the Boomers who proudly offered Bill Clinton and George Bush the Younger as our contribution to the pantheon of American Presidents, has kicked the can down the road while paraphrasing Louis XV on the eve of the French Revolution, “After me the flood.” Or as many fellow boomers have phrased it to me, “It won’t crash in my lifetime.”
Now the handwriting is on the wall, the torches and pitchforks are seen on the horizon, and it is becoming obvious though the end may not come on December 21, 2012 it isn’t too far off. Anyone who isn’t comatose in the cultural soma of social media and the game can see you can’t continue to spend more than you bring in forever. The interest on the National Debt is going to eat us alive. Our creditors won’t keep lending us more and more once they realize our only answer is to print our way out of debt. Ask any scam artist trying to live by charging their Visa to the MasterCard when the shop keepers start cutting up the cards the happy days aren’t here anymore.
What we need to do is go over the fiscal cliff, and instead of using the ensuing economic contraction as an opportunity to re-launch the United States in a fundamentally new direction tighten our belts. We have got to go through a period of austerity to return to reality.
Endlessly printing money always leads to money that isn’t worth anything. Even if our current leaders think they have figured out a soft landing for this lead balloon they haven’t, and when that bubble pops the economy stops.
Our fiscal conservatives who want to return to a gold standard should tell everyone that doing that will cause a contraction in the value of money that will resemble a train going 100 miles an hour hitting a brick wall. There just isn’t enough gold in the world to value every American dollar at one dollar. A return to gold would give us an economy based on real money, and that would be a good thing. However the proponents of this course need to be honest about the transition from funny money to real money: there will be a great deal of pain on the way back to reality.
There are plans to do something from the right. There is the plan to cut off Social Security at 55. Everyone younger having paid into the world’s greatest Ponzi scheme all their lives get another deal. Even if it is a better deal they will still feel like they are getting ripped off because they are. There is also the plan to cut all the wasteful spending out of Medicare but leave it all over at the Pentagon. These plans won’t fly because they only have one wing.
The left has a plan too. Raise taxes on the rich, and keep on spending. This may eventually pass due to the President’s perceived strength and the Republican leadership’s Progressive inclinations and acceptance of defeat but it will only continue our progress towards national suicide.
The fact is we can either choose to cut the spending, raise revenues, and save the future or we can continue to stagger like drunken sailors spending our children’s as yet unearned money until our creditors pull in the leash. I know calling for higher tax revenues is heresy to most conservatives, and I am not in favor of the government taking one more cent than necessary for Constitutional purposes. Saving the country from ruin is the ultimate Constitutional purpose.
Like any household that is buried in debt we need more money and less spending; the trick is getting both. The slight-of-hand artists in Washington are great at striking Grand Bargains for taxes now and spending cuts that never materialize. That never has worked and it certainly won’t work now. We could do it without tax increases. Without taxes the spending cuts would have to be much deeper and more painful, and we can’t get anyone to sign on for the pain of cuts with taxes.
Here’s the secret of raising revenues with taxes. We can’t raise rates which merely increases tax avoidance. A flat tax would bring in increased revenues by growing the economy and would indeed be fair. In contrast raising rates in a progressive tax system is merely punitive and is a populist trick to buy the votes of those who earn less.
If we don’t endure the pain now, if we don’t endure the necessary radical fiscal surgery despite years on life support, decades of refusing to take our medicine will finally cause our economy, and with it our dreams of a brighter future, to die. However, we won’t get to go to heaven. Instead we will go into debtor’s prison as our beloved nation sinks beneath mountains of debt into the second or third rank. We will watch as a tomorrow which could have been ours becomes someone else’s.
When our children and grandchildren ask us, “Where’s my inheritance?” we will have to say, “We spent it yesterday.” When they ask, “Where’s our future?” we will have to say, “We spent that too.”
Instead of being pushed over the cliff, let’s dive over and then resist any attempt to restore the spending. Let’s take the pain so our children can gain.
Dr. Owens teaches History, Political Science, and Religion. He is the Historian of the Future @ http://drrobertowens.com © 2012 Robert R. Owens firstname.lastname@example.org Follow Dr. Robert Owens on Facebook or Twitter @ Drrobertowens / Edited by Dr. Rosalie Owens