Federal Revenues Have More Than Tripled Since 1965
Overall tax revenues have risen despite a recent decline due to the recession. Congress cut income taxes and the death tax in 2001 and capital gains taxes and dividends in 2003, yet revenues continued to surge even after the tax cuts were passed.
INFLATION-ADJUSTED DOLLARS (2010)
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Source: White House Office of Management and Budget.
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 Edito
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, Aug 1 – Congressman Bill Posey (R-Rockledge) released the following statement regarding his vote against the debt limit deal:
“Our nation is deep in debt and plummeting deeper in the red every day. The Federal government is spending way beyond its means. The credit ratings agencies have warned that the U.S. will lose its AAA credit rating unless Washington enacts a credible, long-term plan to control spending and reduce the national debt. That is what is required.
“The last minute bill put forward today does not achieve this goal. Regardless of its enactment, the U.S. will still be at serious risk of losing its AAA credit rating. To date, the only plan introduced that passes muster for the credit rating agencies is the Cut, Cap and Balance legislation which passed the House with bipartisan support last week and is purposefully being blocked in the Senate.
“Today’s legislation includes a weakened Balanced Budget Amendment option. In my view, it makes no serious effort in bringing us closer to passing-on such a popular and necessary provision to the States for consideration. A Balanced Budget Amendment is needed to ensure that Washington’s addiction to spending is broken. Washington must begin to live within its means. Somehow that principle had to be tossed-out to get the Senate and Administration on board with this deal.
“This bill grows the debt to $16.7 trillion without implementing a long-term plan to control spending. The real crisis is not the Administration’s impending arbitrary deadline to raise the limit, but the lack of a plan to ever repay this money and reverse this terrible trend of deficit spending and debt accumulation.
“Again, I thank the Speaker for his efforts in filling the leadership void and for putting ideas out on the table.”
Federal Spending Grew More Than Ten Times Faster Than Median Income
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.
When federal spending grows faster than Americans’ paychecks, the burden on taxpayers becomes greater. Over the past few decades, middle-income Americans’ earnings have risen only 27 percent, while spending has increased 299 percent.
PERCENT CHANGE OF INFLATION-ADJUSTED DOLLARS (2010)
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Source: U.S. Census Bureau and White House Office of Management and Budget.
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
A new video from the Center for Freedom and Prosperity gives four reasons why big government is bad fiscal policy.
I particularly like the explanation of how government spending undermines growth by diverting labor and capital from the productive sector of the economy.
Some cynics, though, say that it is futile to make arguments for good policy. They claim that politicians make bad fiscal decisions because of short-term considerations such as vote buying and raising campaign cash and that they don’t care about the consequences. There’s a lot of truth to this “public choice” analysis, but I don’t think it explains everything. Maybe I’m an optimist, but I think we would have better fiscal policy if more lawmakers, journalists, academics, and others grasped the common-sense arguments presented in this video.
This Economics 101 video from the Center for Freedom and Prosperity explains that excessive government spending undermines prosperity by diverting resources from the productive sector of the economy. Moreover, the two main ways of financing government — taxes and borrowing — cause additional economic damage. www.freedomandprosperity.org
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And even if the cynics are right, we are more likely to have good policy if the American people more fully understand the damaging impact of excessive government. This is because politicians almost always will do what is necessary to stay in office. So if they think the American people are upset about wasteful spending and paying close attention, the politicians will be less likely to upset voters by funneling money to special interests.
Senator Mark Pryor wants our ideas on how to cut federal spending. Take a look at this video clip below:
Senator Pryor has asked us to send our ideas to him at cutspending@pryor.senate.gov and I have done so in the past and will continue to do so in the future.
On May 11, 2011, I emailed to this above address and I got this email back from Senator Pryor’s office:
Please note, this is not a monitored email account. Due to the sheer volume of correspondence I receive, I ask that constituents please contact me via my website with any responses or additional concerns. If you would like a specific reply to your message, please visit http://pryor.senate.gov/contact. This system ensures that I will continue to keep Arkansas First by allowing me to better organize the thousands of emails I get from Arkansans each week and ensuring that I have all the information I need to respond to your particular communication in timely manner. I appreciate you writing. I always welcome your input and suggestions. Please do not hesitate to contact me on any issue of concern to you in the future.
Therefore, I went to the website and sent this email below:
Agency/Program Funding Level Savings % Decrease
Misc ——- $43.481 B ——- Collection of Delinquent Taxes: Saves $3 billion
Page 36 of 37
Every year, the Internal Revenue Service (IRS) publishes the Federal Employee/Retiree Delinquency Initiative
(FERDI). This summary report shows the amount of civilian, military, and retired federal employees who are
delinquent in their federal income taxes.
In 2008, the FERDI showed $3.04 billion in back taxes owed. The amount has grown to $3.31 billion in 2009. Federal Pay Freeze: Saves $2 billion
During this recession, while most Americans have been forced to cut back, the amount of spending by the federal
government has drastically increased. Many Americans are without jobs and many more are not receiving pay raises.
Federal employees already receive generous pay and benefits, and President Obama has recently endorsed this
proposal.
This article appeared in Forbes on October 3, 2011
The desperate search for an acceptable Republican Party presidential candidate continues. Republican leaders apparently are pushing New Jersey Gov. Chris Christie, who previously said no, to jump into the race.
The GOP’s frustration is palpable. Mitt Romney has been running for four years but generates little enthusiasm. Rick Perry was an instant front-runner before losing much of his support after unimpressive debate performances. Michelle Bachmann briefly streaked across the political firmament but now barely registers in the polls. Newt Gingrich committed political seppuku shortly after announcing his candidacy. Ron Paul’s support is fervent but limited.
However, the real Republican problem is positions, not candidates.
The Republican Party cheerfully ran up the national debt before surrendering the keys to Capitol Hill and the White House. President George W. Bush’s promiscuous war-making cost the U.S. thousands of lives and hundreds of billions of dollars, while making Americans less secure. The GOP centralized more power in Washington. Republican lawmakers managed to turn laudable opposition to tax hikes into a deplorable defense of the status quo.
Most of the GOP presidential candidates offer little new. Mitt Romney, the ultimate political weathervane, implemented ObamaCare in Massachusetts before there was ObamaCare. He now fervently defends Social Security, despite its design as a public Ponzi scheme. Gov. Perry talks of domestic budget cuts but on foreign policy appears to be Bush-lite, yet another hawk disconnected from reality. The sharpest dissent from big government conservatism comes from the candidates least likely to win the nomination: Rep. Paul, former Utah Gov. Jon Huntsman, and former New Mexico governor Gary Johnson, who has been excluded from most of the debates.
President Barack Obama obviously is vulnerable, as well he should be. The problem is not that he is responsible for all of America’s economic woes — no president “runs” the $15 trillion U.S. economy. But this president has no solution for slow growth and high unemployment other than spending more money, increasing the deficit, and running up the debt.
Unfortunately for the Republicans, simply denouncing President Obama for every ill known to man may not lead to victory. Voters dislike much current GOP orthodoxy. President Obama could win an election which turns into competitive political demonization and personal destruction.
Republicans should offer a positive agenda while addressing the party’s past failings. First, they should explain that current budget policy is unsustainable on both a short- and a long-term basis. Economist Larry Kotlikoff figures that America’s real public debt is $211 trillion, 15 times the nominal national debt. Public finance in states like California already looks a lot like that in Greece.
Unless Americans want to turn their entire incomes over to government, public spending must be cut, and cut sharply. And it must be cut across-the-board.
However, to regain lost credibility GOP politicians should lead with proposals to cut spending benefiting “their” interest groups. Corporate welfare should top any Republican Party list of budget cuts. Too often Republican apparatchiks have been pro-business rather than pro-free market, attacking financial transfers to the poor while endorsing subsidies for corporate America.
The GOP also needs to support significant reductions in military outlays. There is no more important responsibility for the U.S. government than protecting America. However, most of the Pentagon’s current activities have little to do with protecting America.
Instead, most U.S. forces currently defend prosperous, populous allies around the world. Europe has a larger GDP and population than America, yet continues to rely on Washington to provide most of NATO’s combat capability. Japan long had the world’s second largest economy but nevertheless relied on America for its protection. South Korea has 40 times the GDP of its northern adversary, but nearly 30,000 U.S. military personnel remain in the South, creating a “tripwire” for war.
Equally wasteful and far more costly in human terms have been nation-building exercises in Somalia, Bosnia, Kosovo, Iraq, Afghanistan, and more. Going to war in 2001 to punish the Taliban for hosting terrorist training camps made sense. Staying at war a decade later in an attempt to create a competent, honest centralized government in Kabul is foolish.
Also required is an honest discussion of Social Security’s and Medicare’s funding crises. Neither is financially sustainable and both risk triggering generational conflict. The longer Congress puts off addressing these issues the costlier will be any solution.
The GOP should reaffirm its opposition to tax hikes, but emphasize that taxes can be kept low only if outlays are reduced. Endless borrowing threatens a financial death spiral of increased debt, higher interest payments, slower economic growth, and lower investor confidence. The U.S. now is on the road to fiscal ruin.
Moreover, Republicans should endorse President Obama’s attack on special interest tax breaks. Not all tax preferences are equally bad, but the narrower the tax break the more it approaches a special interest subsidy. The GOP should push legislation that simultaneously kills dubious tax “loopholes” and reduces overall marginal tax rates. Republicans should similarly respond to tax proposals from President Obama or congressional Democrats. Rather than defend the undefendable, the GOP should challenge yet another form of corporate welfare.
With job creation at issue, Republicans should develop a list of regulations and taxes which interfere with a growing economy. Political candidates enjoy denouncing “over-regulation” in the abstract, but they would be more convincing if they targeted specific policies costing real jobs. The House GOP should follow the example of its earlier majority which held hearings on regulatory abuses.
Republicans should challenge politically popular public agencies. For instance, the government-sponsored enterprises Fannie Mae and Freddie Mac were at the epicenter of the housing and financial crises. The GOP rightly criticized Democrats for not including the two GSEs in last year’s financial “reform” bill. But so far House Republicans have done nothing to close Fannie and Freddie, which continue to lose money.
Deregulation should include proposals to make more market friendly controls which are necessary even in a free society. After all, few Americans want to breathe dirty air or swim in dirty water. And there is no simple market solution to such problems. But people don’t want to needlessly waste money and destroy jobs when cleaning up the environment.
The Republicans also should offer a more restrained foreign policy. Doing so is necessary to curtail military outlays — in effect, the defense budget is the price of a nation’s foreign policy, since the more Washington seeks to do in the world, the more military force it requires. So long as the U.S. government is determined to dominate every region of the globe against every power, it will have to spend as much on the military as the rest of the world combined. Indeed, real, inflation-adjusted military outlays have doubled over the last decade, and today are higher than at any point during the Cold War, Korean War, and Vietnam War.
But a more humble foreign policy also would be a better foreign policy. Rather than engage in social engineering abroad, Republican politicians should leave friendly states with responsibility for international problems. If there is a problem in the Balkans or North Africa, Europe should address it. Japan, South Korea, Australia, and other democratic nations should cooperate to restrain potential Chinese aggressiveness. Only the Afghans can create a sustainable political order, of whatever form, in Afghanistan.
The GOP should simultaneously support a globally engaged America and Americans. For instance, international cooperation can help meet humanitarian, environmental, and other problems which transcend national boundaries. Whatever U.S. policy toward illegal aliens, Americans should expand the legal immigration of entrepreneurial professionals.
Trade benefits Americans. Washington’s failure to ratify the free trade agreement with South Korea is beyond foolish. A commercial war with China would hurt Americans while poisoning the most important bilateral relationship of the 21st century.
Other issues also deserve attention — such as expanding educational opportunities for children stuck in poorly performing public schools. Even here, however, the GOP needs to break with recent Republican Party orthodoxy. President Bush and the Republican Congress centralized even more authority in Washington with the “No Child Left Behind” legislation.
Perhaps Chris Christie or some other late electoral entrant will revolutionize the GOP presidential sweepstakes. But without good ideas well-expressed, the GOP could still end up outside the White House looking in. The Republican Party deserves to win in 2012 only if it recognizes that it deserved to lose in 2008.
The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 10)
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.
Tipton Calls for Common Sense, Balanced Approach to the Debt Ceiling
“The American people can’t call their banks and arbitrarily raise their spending limits; they have to cut back and tighten their budgets to live within their means, and they expect Washington to play by the same rules.”—Rep. Scott Tipton
WASHINGTON, D.C. – Stressing that Washington needs to start spending within its means like American families and businesses, Rep. Scott Tipton (CO-R) called for a common sense, balanced approach to the debt ceiling and spending problem.
“This is not a Democrat or Republican issue, but an American issue. It is my hope that we can come together to reach a solution that embraces the common sense principles of living within our means and acting responsibly,” Tipton said. “We have an opportunity to cut, cap and balance, and chart a sustainable course in this country, rather than just cut and run. This is the balanced approach that the president has been asking for.”
The Cut, Cap and Balance Act of 2011 seeks to cut $111 billion in spending in FY2012 and $5.8 trillion over ten years, cap federal spending to under 20% of GDP by 2017, and pass a balanced budget amendment for passage by the states. Tipton plans to vote in favor of the Act later today.
“Forty-nine of our fifty states have some form of a balanced budget requirement. The President’s comment that a balanced budget is unrealistic for the federal government is out of touch,” Tipton said. “American families and small businesses balance their budgets every day; the states do it every day; it’s time that Washington does the same. With unemployment above 8 percent for 29 consecutive months, American families know all too well what it’s like to face a real debt ceiling. The American people can’t call their banks and arbitrarily raise their limits; they have to cut back and tighten their budgets to live within their means, and they expect Washington to play by the same rules.”
While House Republicans have passed a budget, and put forward solutions to curb Washington’s runaway spending and prevent Medicare and Social Security from going bankrupt, the President and Senate Democrats have yet to propose any plan.
“We are still waiting to see a plan from the President, and the silence has been deafening,” Tipton said. “The President cannot continue to punt on this issue. The time to act is now, and that’s what Republicans are doing by passing this plan to Cut, Cap, and Balance.”
What business owners are saying about the debt ceiling in the Third District:
“I’ve operated a small business for 25 years– meeting payrolls, keeping a balanced budget and never taking on more debt than we were able to payoff quickly. It’s time Washington politicians take off their political hats, start thinking like business owners and start living within their means. The American people and the business community want to see fundamental changes in the way Washington does business. That means standing on principle to cut spending and putting a stop to our country’s unsustainable debt before raising the debt ceiling.”—Tom Abbott, Owner, Montrose Ford-Nissan
“If Washington can raise the debt ceiling every time they decide to spend beyond their ability to pay, then what is the point? In my business, I can’t call the bank and tell them that I need more money if I decided to spend beyond my ability to pay. It should be no different for Washington. Washington needs to get serious and find a solution that fixes the root of the spending problem and pay down our debt before it’s too late to reverse the course.”—Doug Simons, Owner, Enstrom Candies, Grand Junction.
“It’s time we draw a line in the sand. We cannot continue to live off of future promises from Washington that fade away with every new spending increase. We don’t need more lip-service from Washington promising to fix things eventually, we need them to act now and get spending under control now. Our children’s future is at stake.”—Dean Matthews, Independent Electrical Contractor, Cortez
I loved reading this article below. (Take a look at the link to other posts I have done on Steve Jobs.) David Boaz makes some great observations:
How much value is the Post Office creating this year? Or Amtrak? Or Solyndra? And if you point out that the Post Office does create value for its customers even though it loses money every year, I would ask, how much more value might its competitors create, if it allowed competition?
Steve Jobs created a lot of new jobs, but President Obama’s stimulus did not stimulus much of anything but waste in government. Take a look at the final paragraph:
Instead of another bag of taxpayers’ money for state and local governments and politically favored businesses, a real jobs program would encourage the next Steve Jobs to create value. What would that involve? Keep taxes on investment and creativity low. Reduce the national debt and its threat of huge tax hikes to come. Ease the burdens of regulation, especially regulations that make it difficult to open a business, hire and keep the best employees, and develop new ideas. Open the huge, stagnant postal and schooling businesses to competition, innovation, and entrepreneurship. Repeal some of the licensing laws that now afflict 1,100 occupations. Renew progress toward free trade. Make it smart for businesses to invest their time, money, and brainpower in productive activity, not lobbying.
The all-too-early death of Steve Jobs was reported on the day that President Obama made another defense of his so-called jobs bill. Which one actually benefited (or would benefit) Americans and the American economy? Lots of people have talked about the way Steve Jobs changed technology, changed business, changed the world. And I trust there’ll be no more churlish complaints about his alleged lack of philanthropy. As Dan Pallotta definitively pointed out,
What a loss to humanity it would have been if Jobs had dedicated the last 25 years of his life to figuring out how to give his billions away, instead of doing what he does best…. [T]he world has no greater philanthropist than Steve Jobs. If ever a man contributed to humanity, here he is.
Two years ago Portfolio magazine did a great graphic on “The Steve Jobs Economy,” trying to assess just how much value he himself had created for the economy. The conclusion: Jobs’s personal wealth at the time was estimated at $5.7 billion. But he was generating $30 billion a year in revenue for Apple, its partners, and its competitors (who were spurred to get better). Here’s the analysis (sorry for the imperfect tear sheet):
Click image to enlarge. And for text but not graphics at Portfolio, click here.
According to Portfolio and the experts it consulted, Jobs was producing $30 billion a year in value for various companies. And of course that means that consumers believed they were getting at least that much value themselves, or they wouldn’t buy the products. That’s a wealth creator. And that number pales in comparison to this one: After returning to Apple in 1997, Jobs took the total value of the company from about $2 billion to $350 billion.
How much value is the Post Office creating this year? Or Amtrak? Or Solyndra? And if you point out that the Post Office does create value for its customers even though it loses money every year, I would ask, how much more value might its competitors create, if it allowed competition?
Instead of another bag of taxpayers’ money for state and local governments and politically favored businesses, a real jobs program would encourage the next Steve Jobs to create value. What would that involve? Keep taxes on investment and creativity low. Reduce the national debt and its threat of huge tax hikes to come. Ease the burdens of regulation, especially regulations that make it difficult to open a business, hire and keep the best employees, and develop new ideas. Open the huge, stagnant postal and schooling businesses to competition, innovation, and entrepreneurship. Repeal some of the licensing laws that now afflict 1,100 occupations. Renew progress toward free trade. Make it smart for businesses to invest their time, money, and brainpower in productive activity, not lobbying.
I loved reading this article below. (Take a look at the link to other posts I have done on Steve Jobs.) David Boaz makes some great observations: How much value is the Post Office creating this year? Or Amtrak? Or Solyndra? And if you point out that the Post Office does create value for its […]
Steve Jobs’ 2005 Stanford Commencement Address Uploaded by StanfordUniversity on Mar 7, 2008 Drawing from some of the most pivotal points in his life, Steve Jobs, chief executive officer and co-founder of Apple Computer and of Pixar Animation Studios, urged graduates to pursue their dreams and see the opportunities in life’s setbacks — including death […]
Things you may not know about Steve Jobs: Steve Jobs leans against his wife, Laurene Powell Jobs (Lea Suzuki/San Francisco Chronicle/Corbis) For all of his years in the spotlight at the helm of Apple, Steve Jobs in many ways remains an inscrutable figure — even in his death. Fiercely private, Jobs concealed most specifics about […]
Steve Jobs passed away on October 5, 2011. I personally am very grateful to him for helping the world so much with his ideas and I have written about tha before. Dan Mitchell of the Cato Institute noted: He’s built a $360 billion company. That presumably means at least $352 billion of wealth in the […]
Did Steve Jobs help people even though he did not give away a lot of money? (I just finished a post concerning Steve’s religious beliefs and a post about 8 things you may not know about Steve Jobs) Uploaded by UM0kusha0kusha on Sep 16, 2010 clip from The First Round Up *1934* ~~enjoy!! ______________________________________________ In the short film […]
Heritage’s experts watched President Barack Obama’s debt reduction and tax increase proposal. Here are their immediate reactions:
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The President’s Debt Reduction Proposals: The Wrong Diagnosis
The President’s “debt reduction” proposals released today are a fine statement of liberal ideology, but a poor attempt at fiscal policy. His so-called “balanced approach” – using a mix of spending reductions and tax increases – is the wrong formulation to start with. It merely perpetuates a misunderstanding of the fundamental problem: deficits and debt are symptoms; the underlying illness is excessive and uncontrolled spending.
The federal government today is claiming roughly one-fourth of total economic output – about 25 percent of gross domestic product (GDP) – a post-World War II record. This is dead weight on the economy, because every dollar of spending gets paid for – through taxes, borrowing, fees, offsetting receipts, etc. – and hence is no longer available to growth producing activities in the economy. That is why spending is considered one of the best measures of the size and scope of government. As Professor Allen Schick has written, fundamentally government is what it spends.
But even more problematic than the level of spending is its trajectory – especially in federal entitlements. According to the latest figures by the Congressional Budget Office, entitlement spending is projected to rise at a rate of about 5.3 percent per year. That is faster than projected inflation, and faster than nominal GDP. So even if the gap between spending and revenue were closed, entitlements would immediately begin outrunning taxes again, resurrecting deficits.
As is well known, the problem is most acute in the Big Three entitlements: Social Security is growing at a rate of 5.8 percent per year, Medicare at 6.3 percent, and Medicaid at 9 percent. Clearly, these growth rates cannot be lowered by trimming around the edges of the programs, cutting wasteful spending and overpayments, and squeezing medical providers. It requires fundamental reforms that alter the incentives toward overutilization and inefficient delivery of medical services. But these are exactly the kinds of things the President has ruled out. He expressly rejects adjusting benefits or eligibility. He claims his proposal will save $248 billion in Medicare, of which 90 percent would come from reducing overpayments, not from restructuring the program. This is not a serious proposal for addressing the government’s spending and debt problems.
Similarly, he claims savings “that build on the Affordable Care Act” almost entirely from vague improvements in efficiency: “by reducing wasteful spending and erroneous payments, and supporting reforms that boost the quality of care.” Nevertheless, it is curious that his vaunted health care program – which was advertised as reducing deficits – is so inefficient that it is already projected to generate $320 billion in overspending over the next 10 years.
In addition to all these failings, the President takes credit for a whopping $2.3 trillion in spending reductions that either are already assumed, or are based on manufactured spending projections.
First he claims $1.2 trillion in savings (including debt service reduction) from the spending caps in the Budget Control Act. Those are not new savings.
Even more exotic is his $1.1 trillion in savings from drawing down military activities in Iraq and Afghanistan. The President’s budget proposed a total of just $576.5 billion over 10 years for Overseas Contingency Operations (OCO). This amount consists of a $126.5-billion request for fiscal year 2012, and then placeholders of $50 billion a year through 2021. In other words, the 10-year total is largely illusory. Even if it were real, however, it would be impossible to save $1.1 trillion in war spending when the President proposed to spend only about half that amount. It appears the savings are measured against a Congressional Budget Office (CBO) baseline hat assumed the peak, 2010 “surge” level for war spending, and then inflated it for subsequent years. This was an unreal figure to begin with – and one CBO removed in estimating discretionary savings in the Budget Control Act – and yet the President assumes the savings. This is emblematic of just how disingenuous his debt reduction plan truly is.
This is not a serious effort to address the government’s very real spending and deficit crisis – which has worsened significantly in the past two-and-a-half years. It is, to repeat, ideology, not policy.
Patrick Louis Knudsen Grover M. Hermann Senior Fellow in Federal Budgetary Affairs
Tax Hikes Not the Answer, but Obama Wants Them to Be
President Obama seems intent on not solving our budget and debt crisis. Indeed, he seems almost fixated on making it worse. His latest plan would immediately ramp up spending to “jolt” job creation in ways that have proven to fail. Once again, Obama is sticking to his strategy of ramping up spending thus “locking in” higher levels that make the job of budget cutters more difficult. Somehow, he maintains, this is necessary and right for America, making it seem that this spending is inevitable and inexorable. Thus, the only thing we can do is to hike taxes.
Riiiiiiight.
Tax hike are not the answer. Plain and simple. Unless we fundamentally tackle entitlement programs taxes will have to be perpetually raised to keep pace with dramatic growth in spending as Medicare, Medicaid and – yes Mr. President — Social Security grow like a giant tsunami blowing toxic red ink all over the budget and the economy.
Yes, the President did propose spending cuts. Teeeeensie tiny ones. $250 billion to Medicare and $72 billion to Medicaid likely over ten years. But bear in mind these are two of the biggest and fastest growing programs in the budget. Medicare this year alone is over $500 billion and over the next ten years will likely reach $7.5 trillion. But here, the devil is in the details. The small changes he may propose that would affect retirees will be backloaded – until after any possible second term. And he abandons future retirees by taking any changes to Social Security off the table. He’s right that spending cuts alone aren’t the solution – the policies must be right too.
Obama is demanding a “balanced” approach as though somehow hiking taxes is both fair and necessary. But this notion that he is pushing – half tax hikes and half spending cuts – is beyond the class warfare message it sends. It is a tactic. A tactic to stall the real reforms that our leaders in Washington must undertake now in order to avert a fiscal, economic and moral crisis.
The simple fact is that our budget and debt crisis can be solved without hiking taxes. Saving the American Dream, the Heritage Plan to Fix the Debt, Cut Spending and Restore Prosperity is a bold, innovative plan that does just that. It transforms our entitlement programs, rolls back wasteful and inefficient spending, protects the nation and overhauls our punitive, inefficient and uncompetitive tax code.
Federal Spending needs a complete do-over. We must return to our roots our founding fathers’ laid out – of a limited government. A low tax, low spending and fast growing nation. One where our kids can enjoy the same kind of opportunity as their parents and grandparents. One where our seniors know they can go into retirement with the economic security that they will be able to access quality health care that works for them, and a Social Security benefit that will protect them from poverty.
President Obama’s newest plan is simply his April speech cast under the lighting of the Super Committee with the election as a backdrop. The nation needs more.
The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 9)
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
Tonight, I voted against the Budget Control Act. It leaves real cuts in federal spending to another day. We don’t need congressional super committees and triggers to do the heavy lifting for which Members of Congress were elected.
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Nunes favored the bill below:
Cut, Cap and Balance Statement Debt Limit Plan
Washington, Jul 20 – Congressman Nunes issued the following statement on passage of the Cut, Cap and Balance Act:
“The Cut, Cap and Balance Act is not a perfect bill but it is certainly one that under any other circumstance would have garnered the unanimous support of conservatives across America. It contains a spending cap that would inoculate us against spending excess, while forcing budget reforms to ensure the federal government lives within its means. Leading up to the debate, I joined critics who desired more immediate spending reforms, including to our nation’s entitlements, and sought to have those reforms included. However, I ultimately sided with 233 of my Republican colleagues in supporting Cut, Cap and Balance recognizing the debate is not over. The bill will be considered in the Senate on Saturday.”
The Top 10 Percent of Earners Paid 70 Percent of Federal Income Taxes
Federal Revenues by Source
Federal Spending Is Growing Faster Than Federal Revenue
Federal Spending Is Outpacing Inflation
The Daily Hatch 