Free Markets, Free People
So let’s see, the two votes I’ve seen on the two Obama budgets that at least one of the houses of Congress has voted on in the past two year, neither has garnered a single vote from any legislator regardless of party.
Yesterday the House voted unanimously against President Obama’s current budget. Last year the Senate went 0 for and 97 against his previous budget.
The House Democrats claim to have their own budget which closely mirrors the Obama budget deficits but differs in the details.
Senate Democrats have said they will not bring a budget to the floor this year, though Republicans in the chamber have talked about trying to at least force a vote on Mr. Obama’s plan there as well.
Thank you Harry Reid for your strong fiscal leadership. What is it? Well over 1,000 days and Senate Democrats have yet to produce a budget.
My guess is it’s Bush’s fault.
Remember when Nancy Pelosi, Harry Reid, the Democratic Congress and Barack Obama all told us that the cost of ObamaCare would only be $900 billion? And because of that, Obama said it “saved” us money. He also said that if it had been more than that, he wouldn’t have signed it.
Well, as the critics rightly pointed out, it was always more than that. It was just hidden from view, because of the way Democrats structured the law to hide most expenditures for a few years. That way, the CBO, who was charged with scoring it, would score it below a trillion dollars because the CBO, by law, can only score a law within a 10 year window.
Democrats employed many accounting tricks when they were pushing through the national health care legislation, the most egregious of which was to delay full implementation of the law until 2014, so it would appear cheaper under the CBO’s standard ten-year budget window and, at least on paper, meet Obama’s pledge that the legislation would cost "around $900 billion over 10 years." When the final CBO score came out before passage, critics noted that the true 10 year cost would be far higher than advertised once projections accounted for full implementation.
Today, the CBO released new projections from 2013 extending through 2022, and the results are as critics expected: the ten-year cost of the law’s core provisions to expand health insurance coverage has now ballooned to $1.76 trillion. That’s because we now have estimates for Obamacare’s first nine years of full implementation, rather than the mere six when it was signed into law. Only next year will we get a true ten-year cost estimate, if the law isn’t overturned by the Supreme Court or repealed by then. Given that in 2022, the last year available, the gross cost of the coverage expansions are $265 billion, we’re likely looking at about $2 trillion over the first decade, or more than double what Obama advertised.
“More than double”. We were flat lied too. We’re now stuck with another outrageously expensive entitlement program we can’t afford barring repeal or judicial overturn.
And yet, after the most deceitful, least transparent and most abusive legislative process I’ve ever seen used, you’re going to be asked to trust this guy with another 4 years at the helm.
Remember the official line from the White House when Obama rejected the pipeline in January?
Obama rejected a cross-border permit for the Keystone pipeline in January.
He said the decision was not based on the merits of the project, but instead in response to a 60-day permit decision deadline that Republicans demanded in a December payroll tax cut bill. Obama said the deadline would short-circuit review.
Of course the State Department had previously favorably reviewed the pipeline and recommended its approval (08/29/11)
David L. Goldwyn, who until earlier this year had served as Secretary of State Hillary Clinton’s Special Envoy and Coordinator for International Energy Affairs, said in an interview aired over the weekend that Clinton would likely approve plans for a contentious pipeline to deliver oil from Canada’s tar sands to the Texas Gulf Coast.
"I think that balancing jobs, energy security — a country which has increased production potentially the size of Libya — I think the case for a pipeline is overwhelming, and she will approve it," Goldwyn said, speaking to Platts Energy Week, an energy-themed television program.
On Friday, the State Department issued its final Environmental Impact Statement, concluding that the proposed 1,700-mile pipeline would have "no significant impact" on the environment and recommending that the project move forward, despite warnings from environmental groups that, among other things, the project would help accelerate the warming of the planet.
So, in reality, other than petulance, politics and an agenda, Obama had no real reason to not approve the pipeline. The review had been completed. In fact it seems clear, given his disapproval, that the process was irrelevant to him in reality and the Republicans were just the latest excuse not to approve the deal.
Republican Senator Sen. John Hoeven (R-N.D.) introduced an amendment to the transportation bill concerning the pipeline:
The amendment, unlike previous GOP efforts to simply create a deadline for an administration permit decision, would have bypassed the administration and approved construction, although the legislation would still require Obama’s signature.
Of course Obama didn’t want to be seen vetoing something which polls have repeatedly said the vast majority of the nation is for. So he actively lobbied against the passage of the amendment.
Obama lobbied wavering Senate Democrats before yesterday’s vote. He urged them to reject an amendment to legislation funding transportation projects that would have overturned his administration’s decision to deny a permit for the pipeline until an alternative route was proposed to bypass an environmentally sensitive area in Nebraska.
But, as reported previously, many pipelines already criss-cross the Oglala aquifer in Nebraska with no problem. Additionally, the governor of Nebraska made it clear that it wasn’t necessary to reject the pipeline – there were some pretty easy workarounds.
So here, in the midst of rising gas prices and high unemployment, a politician is presented with a positive way to impact both and declines it based purely on ideology vs. what’s best for the nation.
Unfortunately he has allies in the Senate – enough to defeat the amendment that would have either allowed the pipeline to be built or forced Obama to veto it.
The vote was 56-42 with 11 Democrats defecting. Most of those, as you might imagine, are from states in which oil production is important.
And, as usual, opponents were scraping the bottom of the barrel for reasons not to vote for the amendment:
Sen. Ron Wyden (D-Ore.) and other Democrats opposed to the project argued oil would end up going to Asia, and that the pipeline could even raise costs in the U.S.
As well as the usual nonsense:
“Once again Republicans are trying to play politics with a pipeline project whose route has yet to be proposed, and despite the claims that this would somehow solve the pain families are feeling at the pump today, according to the company it would take years before it transported a drop of oil,” [White House spokesman Clark] Stevens said in a statement.
But history gives lie to Stevens claim. Remember when President Bush lifted the moratorium on oil and gas exploration on the East and West Outer Continental Shelf in 2008. Not a single well had been drilled when it was announced and the price of oil took a significant drop:
The politics at issue here are those which are detrimental to the nation.
And those would be the ideologically driven politics being played by the White House, and none other.
Watch this … it’s stunning (or it should be):
If you haven’t seen the Heritage Foundation report on government dependency for this year, you need to spend some time at least perusing it. Some of the charts will shock you.
I’m planning on looking at different parts of it over the next few weeks as appropriate and I get the time.
We often hear the Democrats cited as the reason we’re in this mess today, but that’s a cop out. The right in the guise of the Republican party are just as guilty as the Democrats. In fact, I’d argue they’re more guilty. The reason we’re in this mess today is because over the years the Republicans have accommodated the Democrats by compromising their principles.
The most recent examples are Medicare Part D and No Child Left Behind – two huge government programs one of which put a new entitlement in place and the other which increased federal control of education (at an equally huge cost).
Here’s a quote from the Heritage Foundation report I’d like you to focus on:
The last decade has seen a significant expansion of benefits provided by Medicare, including the new prescription drug benefit created under Medicare Part D. From 2004 to 2010, Part D was responsible for $214 billion in federal spending. Though the role of competition in its defined-contribution model has caused estimates of its 10-year cost to drop 41 percent from initial CMS projections, the program has added substantially to health care entitlement spending. Additionally, the publicly funded Part D program has crowded out private coverage alternatives. Research by economists Gary Engelhardt and Jonathan Gruber suggests that before Medicare Part D was enacted, 75 percent of seniors currently receiving public coverage held private drug coverage. Part D also increased average spending on prescription drugs by seniors, an expense that is funded by an increase in public spending of 184 percent, accompanied by a reduction in seniors’ out-of-pocket spending of 39 percent and private insurance plan spending of 37 percent.
First, remember that we’re talking about the “richest” demographic in our country when we talk about seniors. Yes, everyone knows that, like every demographic, there are exceptions, but for the most part, seniors are pretty well set.
Now, notice the effect that this program has had. It has “added substantially to health care entitlement spending” It has “crowded out private coverage alternatives”. And it has “increased the average spending on prescription drugs by seniors … funded by an increase in public spending of 184%”.
So A) it increased public spending in an ear in which we can’t afford increased public spending, B) it basically destroyed a market that was apparently working prior to its implementation C) the taxpayer is on the hook for more spending as seniors, who now pay less out of pocket, shift the cost to them.
This wasn’t a program supported just by the left, folks. This was negotiated, passed and signed into law with the blessing of a Republican President.
THIS is why we’re in the mess we’re in. THIS is where the precedent for ObamaCare was set.
As much as the other candidates want to hit Mitt Romney on RomneyCare (and they should), one should remember that Rick Santorum voted for Part D (although he now says that was a “mistake”) and Newt Gingrich lobbied for it.
It is those sorts of compromises and accommodations which have put us in the mess we’re in today. The party of smaller government has consistently caved in to larger government programs all the while hollering about the left.
This is one reason there’s so much disgust on the right with the party, at least among activists and Tea Party types.
As I said, I’m going to be spending some time on this report, but this is one area that needs to be illuminated and discussed. If the GOP ever wants to recover its soul, it has to quit compromising its principles and find a way to explain, in a compelling way, why programs like this are the wrong way to go. They managed that with ObamaCare. They need to take that lesson and translate it into all future actions.
They need to back away from the trough of federal money and truly embrace smaller less costly government. In terms of entitlement and dependency, if we’re not at a tipping point, we’re very close. The critical nature of this upcoming election can’t be over emphasized.
If ObamaCare becomes law, we’re sunk. I believe it was Margaret Thatcher who said the reason she wasn’t able to accomplish as much as Ronald Reagan was because of the National Health Service.
Unfortunately, since Reagan’s time subsequent Republican administrations have helped build one here.
Most of us have known about it for decades:
A U.S. senator from Alabama directed more than $100 million in federal earmarks to renovate downtown Tuscaloosa near his own commercial office building. A congressman from Georgia secured $6.3 million in taxpayer funds to replenish the beach about 900 feet from his island vacation cottage. A representative from Michigan earmarked $486,000 to add a bike lane to a bridge within walking distance of her home.
Thirty-three members of Congress have directed more than $300 million in earmarks and other spending provisions to dozens of public projects that are next to or within about two miles of the lawmakers’ own property, according to a Washington Post investigation.
This is why earmarks need to go away for good.
Ask yourself how a person elected to office who essentially has nothing (in comparative terms) and ends up sleeping in his or her office to save rent somehow, after years in office, ends up going home worth millions.
It’s a common DC success story. And yet, no one seems to question it. It’s just quietly accepted as something that just happens apparently. It certainly isn’t a result of their salary, unless they are budget wizards and live on dust and water.
Most disturbing though is this:
Under the ethics rules Congress has written for itself, this is both legal and undisclosed.
Talk about the fox guarding the hen house.
Earmarks have long been controversial, with the focus on spending that unduly favors campaign donors or constituents. The Post’s review is the first systematic effort to examine the alignment of earmarks with lawmakers’ private interests.
Earmarks are a fraction of the federal budget, and the numbers uncovered by The Post are relatively small in the scheme of the overall Congress, but the behavior by lawmakers from both parties points to a larger issue at a time when confidence in Capitol Hill is at an all-time low.
Earmarks are a fraction of the federal budget – that’s true. But they are a perk that Congress has granted itself where lawmakers have the ability to loot the treasury in the name of their own interests (while using the façade of helping their district or state).
And it’s not the only perk. Insider trading for instance. President Obama brought it up in the SOTU address:
In response,the Senate last week passed legislation that would require lawmakers to disclose mortgages for their residences. The bill, known as the Stop Trading on Congressional Knowledge (Stock) Act, would also require lawmakers and executive branch officials to disclose securities trades of more than $1,000 every 30 days.
I have about as much hope for that happening as Congress moving to prevent the use of earmarks. At the same time the Senate introduced the insider trading legislation it defeated an amendment, 59-40, that would have permanently outlawed earmarks.
Read the whole article – it’s a litany of what is wrong with our system. It incentivizes behavior like this and, it leave the policing of that system to the very people who benefit from it.
It is the very definition of “dysfunctional”.
When someone, anyone, is “paying” for it.
A tax cut, as I understand the term, means taxes are cut – not made up somewhere else. In other words, it is a revenue loss for government. Period.
Not so with the latest payroll “tax cut”. In the case of the 2 month extension recently passed, government isn’t going to be out any revenue. Other tax payers will be paying the freight as they refinance their houses.
Just before Christmas, American workers got a rare gift from Washington politicians – the current payroll tax cut would be extended for two more months.
At the time, both President Barack Obama and House Speaker John Boehner lauded the move to avoid a tax increase for millions of working Americans.
But there’s something the politicians weren’t bragging about – the fact that they’re paying for the two-month tax cut with what has turned into a brand new fee on home buyers.
The new fee is a minimum of one-tenth of 1 percent on Fannie Mae- and Freddie Mac-backed loans, and is likely to go much higher.
It will be imposed for the next 10 years on most mortgages and refinancings and it lasts for the life of the loan.
Got that? This is simply unacceptable. If you get a loan backed by Freddie or Fannie within the next 10 years, you will pay a “fee” (read TAX) that will “pay for” this supposed “tax cut”.
An Obama administration official defended the mortgage fee, calling it "modest." She said it’s "unlikely to negatively affect borrowers" because increases "will be phased in over the next two years." And it will "help bring private capital back into the mortgage market, which [is] good for borrowers over the long term."
Here, take this poison — it will be good for your long term.
Here’s how it breaks down for those who are or are planning on buying or refinancing a loan in the next 10 years:
It’s bad news for Patty Anderson, who’s buying a home in Virginia.
Anderson will save a couple hundred dollars from having her payroll tax cut extended but her mortgage broker told her the new fee would cost her almost $9,500.
"I was absolutely startled that it would add up to that much," she said.
Well yeah, it’s only about $7.50 a month for every $100,000 in mortgage you’re committed too – for the life of the loan.
I think Bill Burnett, president of the Virginia Association of Mortgage brokers said it best, and, by the way, summed up in one sentence what has become routine in DC:
"Your pocketbook is being raided in order to pay for a tax policy issue decided at the last minute by probably people who didn’t understand fully what they were legislating on."
Remember “we have to pass the bill to find out what’s in the bill”? Well here we are again.
At least one representative figured it out, but couldn’t find anyone interested in the problem. Rep.Allen West:
"I read the legislation and raised the flag. Unfortunately nobody paid attention to what I was saying at the time," he said, calling the fee a backdoor tax increase on the middle class.
Of course it’s a backdoor tax and calling it a fee doesn’t change that.
Your government at work.
The editors of the Washington Examiner consider the probable effects of the new CAFE standards (being imposed by the EPA now instead of NHTSA) and ask a pertinent question:
Getting from the current 35 mpg CAFE standard to 54.5 can be achieved by such expedients as making air conditioning systems work more efficiently. We have a bridge in Brooklyn to sell to anybody who thinks that’s even remotely realistic. There is one primary method of increasing fuel economy — weight reduction. That in turn means automakers will have to use much more exotic materials, including especially the petroleum-processing byproduct known as “plastic.” But using more plastic will make it much more difficult to satisfy current federal safety standards. The bottom-line will be much more expensive vehicles and dramatically fewer kinds of vehicles.
Total costs, as calculated by the EPA, will exceed $157 billion, making this by far the most expensive CAFE rule ever. For comparison, the previous rule in 2010 cost $51 billion, according to the EPA. But the EPA doesn’t include this fact in its calculation: Annual U.S. car sales are 14-16 million units, yet over time, this rule will remove the equivalent of half a year’s worth of buyers. Will that be when the EPA takes a cue from Obamacare and issues an individual mandate that we all must buy Chevy Volts?
I’m just curious, for those who support the individual mandate dictated by Obamacare, what is the argument that such an electric car mandate isn’t possible? If the federal government can force us to purchase insurance from the companies it allows to offer the product based on the idea that health care is a national issue, how is promoting cleaner air and more energy security not the same thing? Indeed, it would seem that the arguments are even stronger for forcing everyone to buy electric cars if furthering the “common good” is the only real restriction on federal power.
So what is the difference from a legal, constitutional standpoint? Is there one?
Speaking of the record compiled under the Obama administration, the CBO provides plenty of ammo for the GOP:
The Congressional Budget Office on Tuesday predicted the deficit will rise to $1.08 trillion in 2012.
The office also projected the jobless rate would rise to 8.9 percent by the end of 2012, and to 9.2 percent in 2013.
That’s because it has revised its previous estimate as the GDP growth numbers for last year were revised down.
Additionally, and reading between the lines, it also means that the administration and Congress has yet to even begin to get a handle on the main problem – spending.
Of course part of that stands to reason when you take into consideration the Democratic controlled Senate hasn’t passed a budget in over 1,000 days.
The Hill, ever the master of understatement, gives you a peek at what should be obvious:
A rising deficit and unemployment rate would hamper President Obama’s reelection effort, which in recent weeks has seemed to be on stronger footing.
“Hamper"?” It should put it in the crapper. Or so you would think. But then there’s the GOP primary going on, huh?
CBO Director Doug Elmendorf told reporters that Congress will have to make important choices this year regarding the supercommittee trigger and tax policy that will have huge effects on the deficit.
While unable to recommend choices, Elmendorf said that addressing the deficit sooner rather than later is easier.
The deficit was $1.4 trillion in 2009, $1.3 trillion in 2010 and $1.3 trillion in 2011. The largest deficit recorded before that was $458 billion in 2008.
Well, of course addressing the deficit sooner rather than later is a lot easier. Haven’t we been saying that for years? Decades?
Anyone think it will be addressed in this next year? Consider what the CBO recommends:
The deficit will be much higher if Congress takes several actions that many expect.
If the Bush tax rates are extended, for example, the deficit would rise.
It would rise if Congress patches the Alternative Minimum Tax, which lawmakers have routinely done to prevent higher taxes from being imposed on middle class taxpayers.
It would also rise if Congress continues to pass the “doc fix” that prevents a cut to Medicare payments to doctors, something that Congress has done on a near-annual basis.
Finally, if Congress does not follow through on cuts mandated by the failure of the supercommittee, the deficit will grow. Lawmakers are already talking about canceling scheduled cuts to the Pentagon’s budget.
So, let’s see – raise taxes, lower taxes, subsidize and cut spending. Or is that last one, cut projected spending?
The “doc fix”, unless passed, will see Doctors leave Medicare in droves. I certainly would if I were in their shoes. Any guesses how that turns out?
And while the Democrats only want the “rich” to pay higher taxes, if the current tax rates (also known as the “Bush tax cut”) are allowed to revert to their prior percentages, taxes will increase 30% on everyone by 2014. Catch 22?
The amount of money the federal government takes out of the U.S. economy in taxes will increase by more than 30 percent between 2012 and 2014, according to the Budget and Economic Outlook published today by the CBO.
At the same time, according to CBO, the economy will remain sluggish, partly because of higher taxes.
You don’t say? Stupid if you do, damned if you don’t? Nice position we’ve gotten ourselves in, no?
And finally, sequestration will “cut” 10% across the board, to include defense which has already taken that sort of a cut. Dangerous.
However, for the rest of the government, I expect the usual accounting tricks with no real cuts in spending if sequestration is enacted.
As for taxes increasing, the increase is fairly dramatic at a time the economy can’t absorb such increases:
The anticipated percentage increase in federal tax revenue is not only large when calculated in dollar terms but also when calculated as a share of GDP. The jump from 15.4 percent of GDP in fiscal 2011 to 20.0 percent of GDP in fiscal 2014 equals an increase of 29.8 percent. The jump from 16.3 percent in fiscal 2012 to 20.0 percent in fiscal 2014 equals an increase over two years of 22.7 percent.
Federal tax revenues have averaged “about 18 percent of GDP for the past 40 years,” according to CBO. So, in the next two years federal tax revenues will rise from a level that is below the modern historical average to a level that is above it.
Again I’m reduced to saying “what a freakin’ mess”. When I say over and over again, “we’ve been ill served by our political class for decades”, it is this to which I point.
Yes, all of this and the never mentioned additional 200 plus trillion in unfunded future mandated liabilities that have been amassed.
Here’s a little fact to keep in mind when considering the current cuts to spending at DoD (and let’s be clear, there is nothing wrong with appropriate cuts to defense spending), besides all the other ramifications it promises:
Defense accounts for less than 20 percent of the federal budget but already exceeds 50 percent of deficit-reduction efforts. And for every dollar the President hopes to save in domestic programs, he plans on saving $128 in defense.
And that’s without the looming sequestration cuts (keep in mind, most war fighting costs are not included in the budget) of another half trillion dollars.
Or said another way, the administration has decided that it will attempt to cut spending primarily with cuts to national defense. There is no serious program afoot to cut back the myriad of other government agencies and branches. In fact, many are expanding (see EPA, IRS, etc.).
As for sequestration, Democrats are bound and determined to see it through, because, you know, national defense is less important than winning an ideological struggle.
Charles Hoskinson of POLITICO’s Morning Defense reports (btw, if you don’t subscribe to it, you should):
BUT REPUBLICANS AND DEMOCRATS are still far apart on one key issue: taxes. We caught up with SASC Chairman Levin at a breakfast Thursday and he said he’s counting on public pressure to push the GOP to accept new tax revenues as part of any solution – something they’ve so far refused to consider. Meanwhile, Levin and other Democrats won’t budge on reversing sequestration except as part of a complete package. "The dam has got to be broken on revenues, and what I believe will break it is the threat of sequestration," he said.
Shorter Levin, “we’re more than willing to hold national security hostage and see it gutted to get our way on taxes”.
It is rather interesting approach for an administration which is hung up on everyone paying their ‘fair share’. It seems that the lion’s share of what it will surely tout during the upcoming campaign as serious budget cutting, will come from the one Constitutionally mandated duty it has – national defense.
As for all the programs that have a future funding liability of 200 trillion dollar?