President Obama’s job speech reacted to by Heritage Foundation scholars (Part 4)
Ernest Istook at the Saint Paul Tea Party Rally 4/16/2011 Part 1
Ernest Istook, US Congressman, Heritage Foundation, http://www.heritage.org, spoke at the Saint Paul Tea Party Rally 4/16/2011. Hosted by North Star Tea Party Patriots, and Sue Jeffers.
Heritage’s experts watched President Barack Obama’s jobs speech delivered to a joint session of Congress. Here are some of their immediate reactions:
President Calls for Ill-advised Federal School Construction
As expected, tonight President Obama called on taxpayers to send their hard-earned money to the federal government so that Washington can pour that money into public school construction. In an attempt to boost job growth, the president suggested spending billions on school infrastructure projects to “modernize 35,000 public schools.”
Since President Obama came into office, spending on public education has skyrocketed:
Education budget in 2008: $59.2 billion
Education budget in 2011: $69.9 billion
Department of Education “stimulus” award (Spring 2009): $98 billion
“Edujobs” public education bailout (Summer 2010): $10 billion
And state and local school construction spending has also seen significant increases.
By some estimates, inflation-adjusted school construction spending has increased 150 percent in the last two decades. And unfortunately, profligacy and waste are the norm. Remember the $500 million RFK high school in Los Angeles, built last year after a California bond referendum was enacted? There are certainly schools in ill-repair, but this maintenance should be a local concern. Washington should not be in the business of school window repair, updating facilities, or repainting buildings. Schools don’t need increased federal funding for school repairs; they need more flexibility with funding to be able to use dollars for needs they consider pressing.
The president’s proposal to funnel more taxpayer dollars into school construction has both constitutional and pragmatic problems. School construction has historically been – and should remain – the job of states and localities. Federal forays into school construction have been rare and indirect. Federally-funded school construction is also a terribly expensive way to build schools: Washington-funded jobs must pay prevailing wages, increasing costs on average by 22 percent.
In calling for federally-funded school construction, President Obama is once again supporting Washington overreach in education. But he’s also behind the game in terms of the direction school policy is trending. As states and localities begin embracing online learning – and as education shifts to a world outside of the walls of physical school buildings – President Obama is pushing to subsidize the old model. The administration might think “school construction” polls better than other government “jobs” projects, but it’s just as destined to be a waste of taxpayer money, and a public policy failure.
– Lindsey Burke
Not A ‘Jobs Plan’ — Just Stimulus Redux
What President Obama calls a “jobs” plan is really just stimulus redux: a typical Keynesian-style set of infrastructure, school construction, teacher pay, unemployment benefits, and temporary tax breaks that have demonstrably failed in the two-and-a-half years since the $825-billion Recovery Act.
Obamanomics has left the economy with a growth rate just a fraction above 1 percent, nearly 2 million fewer Americans working, and an unemployment rate higher now than when he took office. Government cannot “grow the economy” (as if it were a field of strawberries), and it cannot create private sector jobs. It can only maintain conditions conducive to growth — limiting government spending and regulation, keeping tax rates low, and removing the uncertainties caused by feckless public policies.
I love Milton Friedman’s film series “Free to Choose.” In that film series over and over it is shown that the ability to move from poor to rich is more abundant here than any other country in the world. This article below reminded me of that that.
A version of this column appeared originally in THE DAILY BEAST.
Do proposed cuts in federal programs threaten to deny the downtrodden any chance for “a meaningful and productive life,” as claimed by one of the most prominent progressives in Congress?
The question is preposterous and the answer is obvious: long before Washington created such programs, millions of underprivileged citizens found ways to climb out of poverty and to build decent homes and brighter futures for their families.
But the office of Representative Andre Carson of Indiana issued a statement insisting that the “Tea Party agenda jeopardizes our most vulnerable and leaves them without the ability to improve their economic standing.” Jason Tomcsi, Carson’s official spokesman, made these claims in an e-mail to the press, attempting to explain previous remarks in which the Congressman told an approving crowd in Miami at a Congressional Black Caucus event that “some of them in Congress right now of this Tea Party movement would love to see you and me hanging on a tree.”
This outrageous accusation led Representative Alan West of Florida, one of two African-American Republicans in the House, to threaten to remove himself from the Congressional Black Caucus.
But while Carson’s office refused to apologize and stood behind the admittedly “strong language” in the charges of murderous Tea Party racism, their defense actually compounded the problem by insulting not just conservative activists, but smearing every American who receives federal assistance. To suggest that budget cuts would leave them “without the ability to improve their economic standing” suggests that recipients of government aid aren’t just “vulnerable” but helpless.
According to the official explanation, Carson’s “hanging on a tree” comment came “in response to frustration voiced by many in Miami and in his home district in Indianapolis regarding Congress’s inability to bolster the economy.”
Leaving aside the questionable notion that our political and economic system actually allows Congress to “bolster the economy”, the statement entered even more dubious territory by declaring: “We are talking about child nutrition, job creation, job training, housing assistance and Head Start, and this is just the beginning. A child without basic nutrition, secure housing, and quality education has no real chance at a meaningful and productive life.”
In other words, the many children who currently lack these advantages (despite lavish federal funding for programs meant to provide them) might as well give up, not only abandoning efforts to compete with kids from more fortunate backgrounds, but also renouncing all hopes for a life worth living.
Fortunately, Carson’s own grandmother – the late Congresswoman Julia Carson – never accepted that message. Born in Kentucky in 1938, long before the Civil Rights revolution or the costly Great Society programs her grandson now defends, she worked her way up to a job as a secretary in a union office, and then won a position in the Indiana Legislature.
My own grandfather, Harry Medved, had less success in the US after his 1910 immigration from Ukraine. He worked as a barrel-maker his entire life but somehow managed to raise a son (my father) who made his way through college and graduate school. My grandparents (who I remember vividly) would have laughed at the notion that they depended on generous funding from governmental bureaucracies for the chance they seized to create a “meaningful and productive life.”
On most occasions when Democrats and Republicans fight over the value of federal anti-poverty efforts they argue about the effectiveness of these programs. Many conservatives believe that these well-intentioned initiatives often do more damage than good because they foster a sense of dependence and discourage individual initiative and accountability, while most liberals insist that government plays a useful role in assisting the poor. But Carson’s statement suggesting that disadvantaged families are hopeless and helpless without Washington’s sustaining, life-giving hand–that they can’t possibly move ahead on their own without federal intervention–conveys a dismissive view of the poor that might be considered racist and bigoted had it come from a white conservative.
Moreover, the wildly exaggerated view of government’s power to transform lives, and the sad contention that the impoverished can’t possibly change their circumstances with any other form of aid, combine to illustrate the profound truth in an observation by best-selling author and radio host, Rabbi Daniel Lapin. “The Democratic Party is filled with ardent idealists who have decided to worship the little g – government – and feel uncomfortable with any worship of the big G – God.”
Though Congressman Carson presents himself as a devout Muslim, his recent comments leave no doubt as to which “g” inspires his deepest faith and most fervent prayers.
Michael Medved
Michael Medved’s daily syndicated radio talk show reaches one of the largest national audiences every weekday between 3 and 6 PM, Eastern Time. Michael Medved is the author of eleven books, including the bestsellers What Really Happened to the Class of ’65?, Hollywood vs. America, Right Turns, The Ten Big Lies About America and 5 Big Lies About American Business
Heritage’s experts watched President Barack Obama’s jobs speech delivered to a joint session of Congress. Here are some of their immediate reactions:
The Absurdity of Obama’s Spending Offsets
It is absurd that this President — who ignored the recommendations of his own fiscal commission, and then sought to raise the debt ceiling without a nickel of spending reductions — now demands the super-committee created in the debt-ceiling negotiations to come up with additional savings to pay for his jobs proposal.?? ?
– Patrick Knudsen
And When, the Rest of the Story, Mr. President?
In giving his big jobs speech this evening before a rare Joint Session of Congress, also gave us a classic “Paul Harvey” moment.
Paul Harvey was a famous radio commentator and personality with one of the longest running national radio programs in history. His trademark was to tell the audience the big lead into a big story and then break for a commercial. When he came back he would then announce, “And now, (pause) the rest of the story”. We’re still waiting for Barack Obama to give us the rest of the story.
In his jobs speech, the President laid out a bunch of retread policy ideas that two years after they were first tried managed to create an arithmetic novelty – exactly zero job growth in August. In total, the President is calling for more new spending on proven policies that are proven failures, and he says these will all be paid for with budget reductions elsewhere.
But he refused to give his proposals for offsetting the cost of his proposals. Desserts only, no spinach?. We’re still waiting for “the rest of the story”. Was he unable to decide in time on what to propose? Did he think perhaps no one would notice? Why put out what is literally a half-baked plan?
– J.D. Foster
Rising Deficits Drive U.S. Debt Limit Higher, Faster
Everyone wants to know more about the budget and here is some key information with a chart from the Heritage Foundation and a video from the Cato Institute.
Congress first placed a statutory limit on total federal debt in 1917, in the Second Liberty Bond Act. Since 1962, Congress has altered the debt limit through 74 separate measures, raising it 10 times since 2001. Since 1990, the debt limit has been raised a total of $10.1 trillion, but nearly half of that increase has occurred since September 2007.
U.S. DEBT LIMIT
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Source: Congressional Research Service and White House Office of Management and Budget (Table 7.3, Historical Tables).
The charts in this book are based primarily on data available as of March 2011 from the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO). The charts using OMB data display the historical growth of the federal government to 2010 while the charts using CBO data display both historical and projected growth from as early as 1940 to 2084. Projections based on OMB data are taken from the White House Fiscal Year 2012 budget. The charts provide data on an annual basis except… Read More
Authors
Emily GoffResearch Assistant
Thomas A. Roe Institute for Economic Policy StudiesKathryn NixPolicy Analyst
Center for Health Policy StudiesJohn FlemingSenior Data Graphics Editor
I thought what we did here in Arkansas was the best until I looked around and found this story out of Tennessee. I am glad that so much effort was given to recognize our soldiers and their service at all the games throughout the SEC this week. I know at the Arkansas game several soldiers were recognized.
Former Vol football player Patrick Lenoir carries an American flag in honor of his brother who was killed in the Sept. 11, 2001 attacks as he runs through the “T” with the football team at Neyland Stadium Saturday, Sept. 10, 2011. (AMY SMOTHERMAN BURGESS)
KNOXVILLE — For 10 years Patrick Lenoir couldn’t talk about it. Not a word. Not to newspapers. Not to church counselors. Not to anyone but his closest friends and family.
Early September would roll around, another somber 9/11 anniversary having arrived, and Lenoir would refuse all requests to discuss his brother Rob, who perished in the World Trade Center’s south tower in New York City that awful Tuesday morning, reportedly attempting to help others to safety.
“It just hurt too much,” Patrick said. “I even went to a grief counseling group at church. When it came my time to say something, I couldn’t do it. I never went back.”
But then the University of Tennessee, where he once played college football, called his Chattanooga home this past week. UT officials wanted him to hold the American flag during Saturday’s national anthem, then carry it through the “T” just before the Cincinnati game.
“I was a little surprised,” Lenoir said during halftime of the Volunteers’ 45-23 rout of the Bearcats. “But I decided to give it a try. I thought it would be a real treat for my family.”
Family. On this day above all days, we are a family of 312 million people strong, all of us deeply touched in one way or another by the terrorist attacks of Sept. 11, 2001.
Or as Lenoir said, “Everybody in this country was affected. Everybody was hurt. I just had a little more personal experience with it than some.”
But his father, John, had begun to talk to media outlets the last few weeks as the 10th anniversary swiftly approached. Patrick followed suit with The State paper in Columbia, S.C., mostly because that’s where he lived the first time he visited Neyland Stadium in 1982, the year Rob would throw the key block on a Duke kickoff return that would do in the Big Orange.
“I was for Duke that night,” Patrick said. “But then my parents moved to Memphis and I became a Vol.”
So 20 years after he’d last run through the “T” as No. 65 in the UT game program, nine years and 364 days after one of the two worst days in this nation’s history and the worst day of the Lenoir family’s life, here came Patrick running down the middle of Neyland Stadium’s perfect grass field, the Stars and Stripes held high, 94,207 roaring their approval.
“I was pumped in the locker room,” he said. “It was just like 20 years ago. I was slapping helmets, telling guys to go get ’em. They probably thought, ‘Who the heck is this guy?'”
In truth, they all knew who he was.
“That meant a lot,” said senior linebacker Austin Johnson. “That day is a tragic day for all of us, but just seeing him, seeing everybody come together, is a great sign.”
Patrick was the last Lenoir to quit looking for some sign that his brother would return home 10 years ago to his wife and children.
“I think my dad knew right away,” said Patrick, who has yet to visit Ground Zero. “I held on for two or three days. I just kept telling everybody that Rob was out there somewhere, that his cell phone just wouldn’t work, that he’d call one of us any minute.”
Instead, every year at this time, “The television channels all run videos of the planes hitting the building. I never get to let it go.”
But something different happened this year. Perhaps it was the gentle, comforting love of his wife, the former Kristy Dobson, who once starred for the UT volleyball team.
Maybe it was strong encouragement from his close friend Andy Kelly, the former UT quarterback for whom Lenoir once blocked.
Perhaps it was the endless support of his Chattanooga friends, the ones who phoned and sent food all those years ago, or the ones he didn’t even know who “wrote three- and four-page letters of support.”
Maybe it was the hugs of his three children: sons Jackson and Bailey, who caught two touchdown passes Friday night for East Hamilton, and daughter Emma.
Perhaps it was even the May killing of Osama bin Laden, the evil mastermind of the 9/11 attacks.
“That was special,” Patrick said. “You’re crazy if you think that will stop terrorism. But, hopefully, the world will be more peaceful now.”
Or maybe, hopefully, the passage of 10 years finally has brought some peace to the entire Lenoir family and all those other families whose lives were torn apart that awful Tuesday morning.
Perhaps to that end, when asked how he intended to spend anniversary No. 10, Lenoir said, “I’ve never actually been to a 9/11 service, but I’m going to go tomorrow.”
In last week’s campaign speech disguised as an address to Congress, President Obama said, “Warren Buffett pays a lower tax rate than his secretary — an outrage he has asked us to fix.”
Writing recently in The New York Times, the famed chairman of Berkshire Hathaway complained that his federal income tax last year was “only 17.4% of my taxable income” — less than $7 million on a taxable income of about $40 million.
Buffett claimed that, like himself, other “mega-rich pay income taxes at a rate of 15% on most of their earnings,” but that is not at all common. The average income-tax rate of those earning between $1 million and $10 million was 29.5% in 2009.
Obama used Buffett’s uniquely low 17.4% tax as proof that “a few of the most affluent citizens and most profitable corporations enjoy tax breaks and loopholes that nobody else gets.” That is not true.
To hold out the tax policies of 1977 or 1992 as examples of effective ways to raise more revenue is ludicrous.
Anyone whose income is almost entirely composed of realized capital gains or dividends would “pay income taxes at a rate of 15% on most of their earning.” Investors with modest incomes also pay a tax rate of 15% on dividends and capital gains, although that rate is scheduled to rise to 18.8% under the Obama health law (and much higher if Congress enacted the “reforms” Obama will propose next Monday).
Before 2003, when the tax on dividends was made the same as the tax on capital gains, Berkshire Hathaway was a handy tax dodge — a way to own dividend-paying stocks without paying taxes on the dividends. Buffett is famous for collecting stocks with a generous dividend yield without Berkshire itself paying any dividend.
The dividends Berkshire receives are reinvested in buying more stocks, so the holding company ends up with more assets per share which results in capital gains that would be taxable only if the shares are sold.
Warren Buffett is the second wealthiest person in America, but he reports surprisingly little taxable income for someone who owns more than $50 billion of Berkshire shares. Increasing the tax rate on salaries and interest income would barely affect him.
He pays himself a salary of just $100,000, which explains how he pays less than his employees do in payroll taxes. He dodged the estate tax by donating his wealth to the Bill and Melinda Gates Foundation. He doubtless reduces his taxable income with other donations to charity, which explains why he repeatedly refers to taxable income rather than adjusted gross income.
Mr. Buffett ends by appointing himself tax czar and declares he “would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more … (he) would suggest an additional increase in rate.”
Since he only reports $100,000 of salary, he has nothing to lose by advocating a higher tax rate on salaries. Nearly all of his income in 2010 consisted of capital gains on sales of Berkshire shares, because those shares pay no dividends. But Buffett could just as easily hang onto appreciated shares rather than selling them, or he could donate them to charity.
Raising tax rates on dividends and capital gains sounds easier than it is. Nobody with substantial wealth can be forced to realize taxable gains by selling appreciated assets. A realized gain is no more valuable than an unrealized gain. On the contrary, it is less valuable by the amount of the tax.
Nobody can be forced to hold dividend-paying stocks either. They can instead buy Berkshire Hathaway shares if the tax on dividends goes up, as Buffett understands.
Despite his personal and professional dependence on capital gains, Buffett nevertheless feigns total ignorance of who pays the capital gains tax and why. He says, “I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9% in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain.”
Well, the Dow Jones industrial average was 831 at the end of 1977 — down from 969 at the end of 1965 — so somebody was having trouble finding investments that would still look sensible after paying a 39.9% tax.
In any case, for Buffett to focus on the act of buying stocks or property is all wrong. The capital gains tax is not a tax on buying assets. It is a tax on selling assets. If you don’t sell, there is no tax. And when the capital gains tax is high, very few people are willing to sell.
In 1977, when the capital gains tax was 39.9%, realized gains amounted to less than 1.57% of GDP. From 1987 to 1996, when the capital gains tax was 28%, realized gains rose to 2.3% of GDP. Since 28% of 2.3 is larger than 39.9% of 1.57, the lower tax rate clearly raised more tax revenue.
From 2004 to 2007, when the capital gains tax was 15%, realized gains amounted to 5.2% of GDP. Since 15% of 5.2 is larger than 28% of 2.3, the lower tax rate again raised more tax revenue. The government cannot afford to raise this tax, particularly on those most likely to pay it.
Buffett focuses on the 400 tax returns with the highest reported incomes, which are often one-time capital gains from the sale of a business or real estate.
“In 1992,” he writes, “the top 400 had aggregate taxable income of $16.9 billion and paid federal taxes of 29.2% on that sum. In 2008, the aggregate income of the highest 400 had soared to $90.9 billion — a staggering $227.4 million on average — but the rate paid had fallen to 21.5%.”
In 1992 only 39% of reported income of the top 400 came from capital gains and dividends because those tax rates were so high. With most reported income coming from salaries, the average tax rate was high.
By 2008, 67% of reported income of the top 400 came from capital gains and dividends because both were taxed at 15%. That diluted the average tax rate, yet nevertheless resulted in much more taxes paid because the amount of reported income was so much larger.
The big change was not in actual income, but merely in what the IRS counts as income. People were hiding more of their wealth in 1992 than they did in 2006-2008, and they were hiding even more in 1977.
It is easy to advocate a higher tax rate on capital gains, but it is even easier to avoid paying that higher tax rate. Simply hold onto assets that went up and sell those that went down, and never realize gains until you have offsetting losses.
The evidence is undeniable that affluent investors and property owners report far fewer gains whenever the capital gains tax goes up. Choosing to pay tax on capital gains and dividends is usually voluntary, and when the rate gets too high we run short of volunteers.
With the super-high 1977 tax rates of 39.9% on capital gains and 70% on dividends and salaries, federal revenues were 18% of GDP. In 1992, revenues were only 17.5% of GDP. In 2007, thanks in large part to a 15% tax rate on capital gains and dividends, revenues were 18.5% of GDP.
To hold out the tax policies of 1977 or 1992 as examples of effective ways to raise more revenue is ludicrous. It didn’t work then, and it wouldn’t work now.
A video by CF&P Foundation that builds on the discussion of theory in Part I and evidence in Part II, this concluding video in the series on the Laffer Curve explains how the Joint Committee on Taxation’s revenue-estimating process is based on the absurd theory that changes in tax policy – even dramatic reforms such as a flat tax – do not effect economic growth. In other words, the current system assumes the Laffer Curve does not exist. Because of congressional budget rules, this leads to a bias for tax increases and against tax cuts. The video explains that “static scoring” should be replaced with “dynamic scoring” so that lawmakers will have more accurate information when making decisions about tax policy. For more information please visit the Center for Freedom and Prosperity’s web site: http://www.freedomandprosperity.org.
Why not pass the Balanced Budget Amendment? As you know that federal deficit is at all time high (1.6 trillion deficit with revenues of 2.2 trillion and spending at 3.8 trillion).
On my blog www.HaltingArkansasLiberalswithTruth.com I took you at your word and sent you over 100 emails with specific spending cut ideas. However, I did not see any of them in the recent debt deal that Congress adopted. Now I am trying another approach. Every week from now on I will send you an email explaining different reasons why we need the Balanced Budget Amendment. It will appear on my blog on “Thirsty Thursday” because the government is always thirsty for more money to spend.
As Congress considers what to do about federal overspending and overborrowing, conservatives must maintain focus. We must pursue the path that drives down federal spending and borrowing and gets to a balanced budget, while preserving our ability to protect America and without raising taxes. An important part of that conservative agenda is adoption of a sound—repeat, a sound—Balanced Budget Amendment.[1] A Balanced Budget Amendment is not sound if it leads to balancing the federal budget by tax hikes instead of spending cuts. Thus, a sound Balanced Budget Amendment must prohibit raising taxes unless a two-thirds majority of the membership of both Houses of Congress votes to raise them. Without the two-thirds majority requirement, the Balanced Budget Amendment becomes the means for big spenders to raise taxes.
Supporters of the Balanced Budget Amendment rightly want to force the federal government to live within its means—to spend no more than it takes in. Because the government has failed for decades to follow that balanced budget principle, America is now $14.294 trillion in debt, a debt of more than $45,000 for every person in the United States.[2]
President Obama is making things worse. In discussions with congressional leaders, he has pushed hard to get authority to borrow yet more trillions of dollars and hike taxes. And the White House reiterated this week that President Obama opposes amending the Constitution to require the federal government to balance its budget.[3]
A Sound Balanced Budget Amendment Must Require Two-Thirds Majorities to Raise Federal Taxes
Like 72 percent of the American people, The Heritage Foundation favors passage by the requisite two-thirds of both Houses of Congress and ratification by the requisite 38 states of an effective Balanced Budget Amendment to become part of our Constitution.[4] Heritage has made clear that an effective Balanced Budget Amendment must control spending, taxation, and borrowing; ensure the defense of America; and enforce, through the legislative process and without interference by the judicial branch, the requirement to balance the budget.[5] A sound Balanced Budget Amendment will drive down federal spending and end federal borrowing.
To date, Congress has proposed one largely sound Balanced Budget Amendment for consideration—Senate Joint Resolution 10, often called the Hatch-Lee Amendment after its main proponents.[6] It has a number of important features, such as an annual federal spending cap of not to exceed 18 percent of the economy’s annual output of goods and services (called the gross domestic product, or GDP) that Congress cannot exceed, except by a law passed with two-thirds majorities in both Houses of Congress or in specified circumstances involving military necessity.
A crucial feature is included in section 4 of the Balanced Budget Amendment proposed by Senate Joint Resolution 10: “Any bill that imposes a new tax or increases the statutory rate of any tax or the aggregate amount of revenue may pass only by a two-thirds majority of the duly chosen and sworn Members of each House of Congress by a roll call vote.” The requirement that no tax hikes occur without the approval of 290 Representatives and 67 Senators is essential in a sound Balanced Budget Amendment. Without the requirement for two-thirds majorities for any tax increase, the Balanced Budget Amendment becomes a sword for big spenders to use to raise taxes, instead of a shield to protect Americans from tax hikes. Those who seek to anchor into our Constitution a requirement to balance the budget must always remember that, if the only requirement is “balance,” that can be achieved two ways—cut spending or hike taxes. A sound Balanced Budget Amendment will balance the budget by driving down federal spending and not by driving up federal taxes.
Balanced-Budget States That Allow Simple Majorities for Tax Hikes Face Situations Very Different from That of the Federal Government
Some look at the experience of states that have requirements in their constitutions for a balanced state budget and draw the wrong conclusion about the need for two-thirds majorities for taxation. They mistakenly conclude that a requirement merely for simple majorities in state legislatures to raise taxes suffices to keep state taxation under control and therefore that a federal Balanced Budget Amendment should require only simple majorities in Congress to raise taxes. But the balanced budget requirement at the state level occurs in a very different context from such a requirement at the federal level.
As a practical matter, state legislators regularly work and live among the people they represent, often do their legislative work face-to-face with their constituents, and often depend upon direct contact with voters to persuade voters to keep the legislators in office. As a result, state legislators tend to be closely attuned and responsive to the need of their constituents for reasonableness in taxation. In contrast, U.S. Senators and Representatives spend much of their time distant from the people they represent, often deal with their constituents through the insulation of large staffs, and amass large campaign funds through political fundraising that allow them to depend more upon expensive mass communications than upon direct contact with voters to persuade the voters to keep them in office. As a result, U.S. Senators and Representatives tend to be less directly attuned and responsive to the need of their constituents for reasonableness in taxation than state legislators are. Accordingly, while a requirement for merely simple majorities in state legislatures to raise taxes may suffice to keep taxes under control in that state, simple majorities are not likely to keep taxes under control at the federal level—as the experience of federal tax increases in the last 50 years proves.
Some who recognize the need for taxpayer protection by requiring supermajorities, rather than just simple majorities, of the two Houses of Congress to raise taxes think a supermajority of three-fifths of both Houses would suffice. While three-fifths would add a modicum of taxpayer protection in the House, three-fifths would add little if anything in the way of taxpayer protection in the Senate, which already often requires a three-fifths majority to proceed to consideration of legislation. The existing three-fifths rule in the Senate has often failed to protect taxpayers from federal tax increases in the past. A sound Balanced Budget Amendment would add protection for taxpayers in both Houses of Congress by a requirement for two-thirds majorities of the membership of both Houses to raise taxes.
Conclusion: Adopt the Two-Thirds Majority Requirement for Tax Hikes, to Make the Balanced Budget Amendment the Instrument of Spending Cuts and Not Tax Hikes
America’s soon-to-be New Minority—people who pay federal income tax—need protection from unreasonable taxation.[7] When all Americans have the right to vote, but only a minority has the duty to pay the federal income taxes from which all Americans benefit, the risk is high that a non-taxpaying majority will elect a Congress pledged to adopt taxation that oppresses the taxpaying minority. The impulse to seek something for nothing has regrettably taken root in the American body politic in the past century. The requirement in the Balanced Budget Amendment of a two-thirds majority of the membership of both Houses of Congress to raise taxes will protect a taxpaying minority against oppressive taxation.
As Congress continues on the path toward adopting a joint resolution to recommend a Balanced Budget Amendment to the states for ratification, Congress should ensure that the Amendment includes a requirement for approval by two-thirds of the membership of the two Houses of Congress for tax hikes. Absent such a requirement, the Balanced Budget Amendment will encourage tax hikes instead of spending cuts as the means to balance the budget, making the Amendment the friend of the tax, spend and borrow crowd, instead of the friend of those who believe in limited government, free enterprise, and individual freedom.
Edwin Meese III is the Ronald Reagan Distinguished Fellow in Public Policy and Chairman of the Center for Legal & Judicial Studies at The Heritage Foundation.
Edwin Meese III is a prominent leader, thinker and elder statesman in the conservative movement – and America itself.
Meese holds the Ronald Reagan Chair in Public Policy at The Heritage Foundation, where he is responsible for keeping the late president’s legacy of conservative principles alive in public debate and discourse.
He also is Chairman of Heritage’s Center for Legal and Judicial Studies, founded in 2001 to educate government officials, the media and the public about the Constitution, legal principles and how they affect public policy.
These two Heritage “hats” keep Meese, a trusted counselor to Reagan before becoming Attorney General, among the major conservative voices in national policy debates at an age when most men and women enjoy quiet retirements.
In 2006, for example, Meese was named to the Iraq Study Group, a special presidential commission dedicated to examining the best resolutions for America’s involvement in Iraq.
Immediately after Reagan’s death in 2004, and in the years since, Meese appeared on the major cable and broadcast news programs to discuss the lasting impact of his old friend, mentor and boss. He often summarizes the Reagan legacy in three accomplishments: 1) Reagan cut taxes and kept them low. 2) He worked to defeat and end the Soviet Union and its worldwide push for communism. 3) He restored America’s faith in itself after years of failure and “malaise.”
“I admired him as a leader and cherish his friendship,” Meese wrote in a 2004 essay for Heritage members and supporters. “Ronald Reagan had strong convictions. He was committed to the principles that had led to the founding of our nation. And he had the courage to follow his convictions against all odds.”
Meese spent much of his adult life working for Reagan, first after the former actor, sports announcer and athlete was elected Governor of California in 1966 and then when he sought and won the presidency in 1980.
Meese served as the 75th Attorney General of the United States from February 1985 to August 1988. As the nation’s chief law enforcement officer, he directed the Justice Department and led international efforts to combat terrorism, drug trafficking and organized crime.
From January 1981 to February 1985, Meese held the position of Counsellor to the President – the senior job on the White House staff – and functioned as Reagan’s chief policy adviser. In 1985, he received Government Executive magazine’s annual award for excellence in management.
Meese joined Heritage in 1988 as the think tank’s first Ronald Reagan Distinguished Fellow – the only policy chair in the country to be officially named for the 40th president.
His relationship with Heritage began eight years earlier, however, when Meese met with senior management to discuss the think tank’s landmark policy guide, Mandate for Leadership, prepared for the incoming administration. Meese later recalled that Reagan personally handed out copies of the 1,093-page book to members of his Cabinet and asked them to read it. Nearly two-thirds of Mandate’s 2,000 recommendations would be adopted or attempted by the Reagan Administration.
Meese took on a new role as Chairman of Heritage’s Center for Legal and Judicial Studies more than a decade after joining the think tank. Under his guidance, the center has counseled White House staffers, Justice Department officials and Senate Judiciary Committee members on the importance of filling judicial vacancies with qualified men and women who are committed to interpreting the Constitution according to the founding document’s original meaning.
The center also became known for hosting “moot court” practice sessions to sharpen the arguments of attorneys slated to bring important cases before the Supreme Court. Those cases addressed constitutional issues ranging from property rights to racial preferences in primary and secondary schools to restrictions on free speech in campaign finance law.
Meese headed the center’s Advisory Board for the writing and editing of the best-selling book, The Heritage Guide to the Constitution (Regnery, 2005). The book assembles 109 experts to walk readers through a clause-by-clause analysis of the Constitution. Sen. Tom Coburn (R-Okla.) was among those keeping the reference work handy during Judiciary Committee hearings on Supreme Court nominees.
Meese’s other books include Leadership, Ethics and Policing (Prentice Hall, 2004); Making America Safer (Heritage, 1997); and With Reagan: The Inside Story (Regnery Gateway, 1992).
He also is a Distinguished Visiting Fellow at the Hoover Institution at Stanford University in California and lectures, writes and consults throughout the United States on a variety of subjects.
As both Attorney General and Counsellor to President Reagan, Meese was a member of the Cabinet and the National Security Council. He also served as Chairman of the Domestic Policy Council and the National Drug Policy Board.
After Reagan won the White House in the 1980 election, Meese headed the transition team. In the campaign, he was the Reagan-Bush Committee’s senior official.
During the Reagan governorship, Meese served as Executive Assistant and Chief of Staff from 1969 through 1974 and as Legal Affairs Secretary from 1967 through 1968. He previously was Deputy District Attorney in Alameda County, Calif.
Reagan never forgot Meese’s loyalty and hard work over the years. During a press conference at which reporters questioned Meese’s actions at the Justice Department, Reagan replied: “If Ed Meese is not a good man, there are no good men.”
Meese had a career outside government and politics. From 1977 to 1981, he was a Professor of Law at the University of San Diego, where he also directed the Center for Criminal Justice Policy and Management.
He was an executive in the aerospace and transportation industry as Vice President for Administration of Rohr Industries Inc. in Chula Vista, Calif. He left Rohr to return to the practice of law, doing corporate and general work in San Diego County.
Edwin Meese III was born Dec. 2, 1931, to Edwin Jr. and Leone Meese in Oakland, Calif. He graduated from Yale University in 1953 and holds a law degree from the University of California-Berkeley. A retired Colonel in the Army Reserve, he remains active in numerous civic and educational organizations.
He and his wife, Ursula, have two grown children and reside in McLean, Va.
Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 43)
This post today is a part of a series I am doing on the 66 Republican Tea Party favorites that resisted eating the “Sugar-coated Satan Sandwich” Debt Deal. Actually that name did not originate from a representative who agrees with the Tea Party, but from a liberal.
Rep. Emanuel Clever (D-Mo.) called the newly agreed-upon bipartisan compromise deal to raise the debt limit “a sugar-coated satan sandwich.”
“This deal is a sugar-coated satan sandwich. If you lift the bun, you will not like what you see,” Clever tweeted on August 1, 2011.
WASHINGTON, D.C. – Montana’s Congressman, Denny Rehberg, released the following statement regarding the rejection of Senator Reid’s debt limit plan by the U.S. House.
“The House has passed two bills to cut current spending, control future spending and finally bring the same fiscal accountability to the federal government that Montana families and 49 states already have. Now, finally, the Senate has proposed a plan and put it down on paper. That’s a huge step, and while it’s certainly not the plan I would prefer, at least now we can sit down and try to find common ground to bring this crisis to a responsible end. As it’s currently written, Senator Reid’s plan relies on more budget gimmicks instead of real spending reductions. It delays necessary spending control until after the election. And it brings absolutely no accountability to the federal government. It may be good politics for the President’s re-election, but it’s not good policy for the hardworking American taxpayer. But it’s a start, and I’m eager to role up my sleeves and find a solution that can pass.”
Over and over I have said that if we want to save some money then we need to eliminate the Dept of Education. Here is another reason to mentioned in this fine article below:
Senator Marco Rubio has just written to Secretary of Education Arne Duncan, requesting that he not break the law. At issue is the administration’s plan to offer states waivers from the No Child Left Behind act if they agree to adopt national standards or pursue other educational goals of the administration. Rubio states that these conditional waivers violate the U.S. Constitution, the Department of Education Organization Act, and the No Child Left Behind Act. He’s right.
No provision of a program administered by the Secretary or by any other officer of the Department shall be construed to authorize the Secretary or any such officer to exercise any direction, supervision, or control over the curriculum, program of instruction, administration, or personnel of any educational institution, school, or school system… .[Section 3403(b)]
‘Nothing in this title shall be construed to authorize an officer or employee of the Federal Government to mandate, direct, or control a State, local educational agency, or school’s specific instructional content, academic achievement standards and assessments, curriculum, or program of instruction. [Section 1905]
The Secretary’s conditional waivers from NCLB mandates, in return for dancing as he desires on national standards, seem to violate all of the above. I wonder if any education reporter will have the temerity to ask Arne Duncan on what grounds he believes he is entitled to ignore these laws? Senator Rubio’s letter certainly gives them a golden opportunity to do so.
Republican Bob Turner shocked the Democrats in New York and won the 9th district of the House of Representatives seat and it will be the first time since 1922 that a Republican has held that seat.
Max Brantley of the Arkansas Times Blog commented, “It is also a district that will disappear in a year.” (Arkansas Times Blog, Sept 14, 2011). Here Max misses the point. Remember Scott Brown’s shocking upset and the result in the 2010 elections that followed. The same probably is true here.
Another point that I differ with Brantley on is the fact that this seat will go back to the Democrats so soon. Do you think the Democrats will defeat Turner and Brown in 2012 when the unpopular Democratic president is on the ticket too?
WASHINGTON, Sept. 14, 2011 /PRNewswire-USNewswire/ — Independent Women’s Voice (IWV) – which sent more than 87,000 phone calls into targeted households throughout New York’s 9th Congressional District over the last four days, urging a vote for Republican Bob Turner in today’s special election – congratulates Turner for his victory over Democrat David Weprin.
“The victory in New York demonstrates that Americans of all political affiliations increasingly recognize that the big government policies advanced by this Administration and Democrats in Congress are damaging the economy and weakening our country,” said IWV CEO Heather R. Higgins. “Rep. Turner will join the ranks of those committed to ending government’s assault on private business, repealing ObamaCare, and cutting the wasteful spending that is burying our country in debt. He’ll represent New York well, and we’re pleased to have been able to play a part in his victory.”
In this overwhelmingly Democratic district – registered Democrats outnumber registered Republicans by almost 3-to-1 – Independent Women’s Voice ran a sophisticated phone operation to identify Democrats and Independents who were open to persuasion, then followed up with targeted messages to them, including calls touting former Democratic Mayor Ed Koch’s endorsement of Turner, and a call from Democratic Assemblyman Dov Hikind, who crossed party lines to endorse Turner last week.
“When we looked at the registration figures,” said Higgins, “it became clear that turning out all the Republicans in the district wouldn’t be enough. So we worked to identify Democrats and Independents who were open to persuasion, then communicated to them about the importance of using their vote to send a message.
“Former Mayor Koch’s endorsement played a big role, and so did Assemblyman Hikind’s,” Higgins continued. “All we did was take their messages – and, in the case of Assemblyman Hikind, the messenger himself – and send them directly into the households of targeted voters, via phone calls.
“IWV is proud to have played a role in educating New York voters about the stakes in this race,” Higgins concluded. “We firmly believe that Independents and moderate and conservative Democrats are open to messages about the destructive impact of government over-reach, and Bob Turner’s success in this overwhelming Democratic district confirms that.”
I just started a series on this subject. In this article below you will see where the name “Ponzi scheme” came from and if it should be applied to the Social Security System.
Ponzi! Ponzi! Ponzi! There, I said it. To the extent people believe there are trust funds with their names on them, Social Security is absolutely a Ponzi scheme. So is Medicare. People need to hear it.
Many people think that when the government takes payroll tax from their paychecks, it goes to something like a savings account. Seniors who collect Social Security think they’re just getting back money that they put into their “account.” Or they think it’s like an insurance policy — you win if you live long enough to get more than you paid in. Neither is true. Nothing is invested. The money taken from you was spent by government that year. Right away. There’s no trust fund. The plan is unsustainable. Medicare is worse.
Mitt Romney and other Republicans who scoff at Rick Perry shamelessly pander to older voters. They should tell people the truth.
Still, I’m not convinced Perry has more than a sound bite. In his USA Today op-ed this week, the most he says is, “We must consider reforms to make Social Security financially viable.” He doesn’t say what kind of reforms.
Charles Ponzi promised to make money for investors by taking advantage of price differences in coupons for postage stamps. Trouble is, he paid some early “investors” with money wheedled from later “investors.”
What sustains a Ponzi scheme is deception. If people really knew how it worked, they wouldn’t sign on.
Social Security and Medicare are different. You could say no to Ponzi. I wouldn’t advise saying no to the government. Not if you want to stay out of prison.
Social Security is nothing more than a promise from politicians. The next gang can break the promise.
Twice the government has argued before the Supreme Court that Social Security is not insurance. In 1960, Health, Education and Welfare Secretary Arthur Sherwood Flemming submitted a brief to the courts stating: “The contribution exacted under the Social Security plan is a true tax. It is not comparable to a premium promising the payment of an annuity commencing at a designated age.”
In a ruling that denied a man’s property claim to Social Security benefits, the Supreme Court said, “It is apparent that the noncontractual interest of an employee covered by the Act cannot be soundly analogized to that of the holder of an annuity, whose right to benefits is bottomed on his contractual premium payments.”
So anyone who believes Social Security is an investment plan really has only himself to blame.
If you want evidence, listen to how politicians talk about your Social Security “contributions.” They are taxes and nothing more. No one pretends they are premiums. In fact, President Obama and the Republicans want to stimulate the economy by extending a cut in the payroll tax for workers and cutting the employer’s share of the tax — but without reducing Social Security benefits.
Now, I like tax cuts more than the next person, but as Freeman editor Sheldon Richman points out, this one has a complication the politicians don’t seem to care about:
“President Obama’s jobs program calls for cuts in both sides of the payroll tax. That tax finances Social Security and Medicare. Social Security and Medicare are already taking in less money than they need to pay retirees. So they will have to cash in more of the Treasury IOUs left behind when previous surpluses were used to finance general expenditures. But the Treasury is also already running a deficit, a trillion dollars-plus. So it will have to borrow more in the capital markets in order to pay back the Social Security and Medicare funds. Unless Obama makes up the lost revenue by changing the tax code. But then money will be withdrawn from the economy in the form of higher taxes so it can be put back into the economy through the payroll-tax cut. Somehow that’s supposed to stimulate the economy.”
Like all jobs programs, Obama’s latest plan is a scam. The economy would create ample opportunities to earn income — and make it easier for people to look after themselves in retirement — if the government would just slash spending, taxes, regulation and privilege.
Ponzi scheme or not, we wouldn’t need Social Security.
John Stossel
John Stossel is host of “Stossel” on the Fox Business Network. He’s the author of “Give Me a Break” and of “Myth, Lies, and Downright Stupidity.” To find out more about John Stossel, visit his site at johnstossel.com.
The Daily Hatch 
President Obama’s job speech reacted to by Heritage Foundation scholars (Part 3)
I love going to the Heritage Foundation website because of articles like this:
Heritage’s experts watched President Barack Obama’s jobs speech delivered to a joint session of Congress. Here are some of their immediate reactions:
The Absurdity of Obama’s Spending Offsets
It is absurd that this President — who ignored the recommendations of his own fiscal commission, and then sought to raise the debt ceiling without a nickel of spending reductions — now demands the super-committee created in the debt-ceiling negotiations to come up with additional savings to pay for his jobs proposal.?? ?
– Patrick Knudsen
And When, the Rest of the Story, Mr. President?
In giving his big jobs speech this evening before a rare Joint Session of Congress, also gave us a classic “Paul Harvey” moment.
Paul Harvey was a famous radio commentator and personality with one of the longest running national radio programs in history. His trademark was to tell the audience the big lead into a big story and then break for a commercial. When he came back he would then announce, “And now, (pause) the rest of the story”. We’re still waiting for Barack Obama to give us the rest of the story.
In his jobs speech, the President laid out a bunch of retread policy ideas that two years after they were first tried managed to create an arithmetic novelty – exactly zero job growth in August. In total, the President is calling for more new spending on proven policies that are proven failures, and he says these will all be paid for with budget reductions elsewhere.
But he refused to give his proposals for offsetting the cost of his proposals. Desserts only, no spinach?. We’re still waiting for “the rest of the story”. Was he unable to decide in time on what to propose? Did he think perhaps no one would notice? Why put out what is literally a half-baked plan?
– J.D. Foster
Rising Deficits Drive U.S. Debt Limit Higher, Faster
Everyone wants to know more about the budget and here is some key information with a chart from the Heritage Foundation and a video from the Cato Institute.
Congress first placed a statutory limit on total federal debt in 1917, in the Second Liberty Bond Act. Since 1962, Congress has altered the debt limit through 74 separate measures, raising it 10 times since 2001. Since 1990, the debt limit has been raised a total of $10.1 trillion, but nearly half of that increase has occurred since September 2007.
U.S. DEBT LIMIT
Chart 26 of 42
In Depth
Policy Papers for Researchers
Technical Notes
The charts in this book are based primarily on data available as of March 2011 from the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO). The charts using OMB data display the historical growth of the federal government to 2010 while the charts using CBO data display both historical and projected growth from as early as 1940 to 2084. Projections based on OMB data are taken from the White House Fiscal Year 2012 budget. The charts provide data on an annual basis except… Read More
Authors
Emily GoffResearch Assistant
Thomas A. Roe Institute for Economic Policy StudiesKathryn NixPolicy Analyst
Center for Health Policy StudiesJohn FlemingSenior Data Graphics Editor