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.
Prices of goods and services normally rise year to year, but federal spending has risen even faster. Although spending grew substantially after 9/11, less than half of the increase can be attributed to defense and homeland security spending.
YEAR-TO-YEAR PERCENTAGE CHANGE
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Source: U.S. Bureau of Labor Statistics 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
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:
Federal Communications Commission
Agency/Program Funding Level Savings % Decrease
FCC $7.650 B $2.150 B 22%
There is no reason for the rapid expansion of this agency, which monitors and regulates the speech of the airways.
Continued funding growth will only encourage the Federal Communications Commission to continue trying to expand
its power in the lives of individuals and businesses, such as its recent steps to regulate the Internet without
congressional authority.
Is Mark Pryor sincere about wanting to cut the spending when he supported Obama?
Before the 2010 elections Clinton came back to Little Rock and said the Democrats would have a tough time winning because the voters had a memory problem. What is his spin on the Tea Party? Max Brantley of the Arkansas Times noted:
A friend sent a link to Politico coverage of a panel discussion and unscripted remarks by Bill ClintonFriday that were part of three days of events marking the 20th anniversary of his announcement of a run for the White House. He responds forcefully here to those who’d credit Republicans for some of his ideas.
I liked what he had to say about the Republican/Tea Party controlling message of the moment:
“I’m telling you this to point out that we need a coherent narrative,” he said. “The No. 1 rule of effective politics, especially if the people you’re running against have a simple narrative — that government is always the problem, there is no such thing as a good tax or a bad tax cut, there’s no such thing as a good program or a bad program cut, no such thing as a good regulation or a bad deregulation — if you’re going to fight that, your counter has to be rooted in the lives of other people.”
His speech included an attack on the tea party governing philosophy.
“We need to understand that one of the things that tends to tilt things toward the Republicans’ anti-government narrative is our country was born out of a suspicion of government,” Clinton said. “King George’s government was not accountable to us. That’s what the Boston tea party was about. When the tea party started out, at least they were against unaccountable behavior from top to bottom. Then it morphed into something different. If you want to go against that grain, you’ve got to tell people you understand it’s a privilege and a responsibility to spend their tax money, but there’s some things we have to do together. And that’s what the purpose of government is, to do the things that we have to do together that we can’t do on our own.”
“If we can make that choice credible,” he added, “then our candidates — starting with the president — and our principles will be fine.”
The tea-party contingent in Congress drove the Republican leadership to bargain harder than it otherwise would have on last week’s debt-ceiling deal. Liberals have rightly concluded that the tea party is changing political outcomes. Their response has been to equate tea-party members with terrorists.
Vice President Biden recently told House Democrats that tea-party Republicans had “acted like terrorists.” And a New York Times columnist claimed that “Tea Party Republicans have waged jihad on the American people.” Many people on the left no doubt take their cues from the vice president and the Times, so we should expect more such venomous rhetoric castigating the movement as an enemy of America.
Ironically, the movement being portrayed this way takes its name from an iconic event in American history. The Boston Tea Party of 1773 helped establish the principle of “no taxation without representation.” And the members of the current tea-party movement clearly believe in the American system of representative government. They worked to change Congress through the election of 2010, and now they expect their efforts to bear fruit in the form of new policies.
Even if their anger is understandable, liberals should be ashamed of their over-the-top anti-tea party rhetoric.
“Tea Party Patriots” — the name of one tea-party organization — is closer to the truth. Far from being enemies of America, these people believe deeply in the nation’s history, promise, and Constitution.
Differing visions
The liberal anger toward the tea party is justified in one sense. The tea-party movement’s vision of America is distinct from the reality of the welfare state the country has built since 1936. So a powerful tea party is understandably disturbing to liberals — even if their recent campaign of vilification against it is reprehensible.
But is the tea-party movement really all that powerful? The budget deal, after all, hardly restrained the growth of spending over the next year, when the government will still run a deficit in excess of $1 trillion. Even with the restraint prescribed by last week’s deal over the long term, the federal government will still be spending $4.25 trillion a year. The deal may lower federal spending, but it clearly will not bring about a substantially smaller government.
The evident rage among liberals, however, may have more to do with the battles to come than it does with the battle they’ve just lost (or won). We stand at the beginning of a long struggle. For the next few years — and maybe many more — our politics will be occupied by the same kind of fights over spending, deficits, and taxes.
These battles will be about more than just money. They reflect two different ideas of what the U.S. government should be. On one side is the tea party’s vision. On the other is the welfare state of Franklin Roosevelt, Lyndon Johnson, and President Obama, which taxes and spends more and more in pursuit of security and fairness for its citizens.
As recently as 2008, the big-government vision seemed poised to win the day. Then came the tea-party mobilization of 2009, which led to the election outcome of 2010.
Here to stay
That victory was remarkable but, in a way, unconvincing. After all, protest movements have emerged, affected elections, and then disappeared before. The Reform Party of Ross Perot comes to mind. Last year, it was far from certain that the tea party would be more than a memory by the summer of 2011.
Even before the election of 2010, tea-party leaders were concerned that electing fiscally responsible members of Congress would not be enough to save the nation from financial ruin. They knew they had to follow up their victory with oversight to ensure that new members would remember who had elected them and why. The recent pressure on House Speaker John Boehner from tea-party representatives reflected that strategic choice.
Political scientists tell us that to bring fundamental change to the nation, political movements must become permanent organizations. The civil rights movement accomplished such a transformation. Will the tea party also become a permanent part of our politics?
It’s too soon to say, of course, but the debt-ceiling deal suggests the answer may be yes. In fact, the Republican Party might be the permanent organization the tea party becomes.
Even if their anger is understandable, liberals should be ashamed of their over-the-top anti-tea party rhetoric. The tea party could become a lasting force in American politics — one that slowly ends the long era that began with the New Deal. Though it’s often criticized as rooted in the past, the tea party may be a harbinger of the future.
o The federal government spent about $3.6 trillion in FY2011, more money than any government has ever spent in a 12-month period in the history of the world.
o The FY2011 budget is nearly double the burden of federal spending just 10 years earlier, when federal outlays consumed “only” $1.86 trillion.
o The federal budget in FY2011 consumed about 24 percent of national output, up sharply compared to a spending burden in FY2001 of “just” 18.2 percent of GDP.
o Defense spending is too high, and has increased by about $400 billion since 2001, but the vast majority of the additional spending is for domestic spending programs.
o Federal tax revenue in FY2011 will be about $2.25 trillion, an increase of 7-8 percent over FY2010 levels.
o Economic stagnation has affected tax revenues, which are lower than the $2.6 trillion level from FY2007.
o Federal receipts amount to about 15.3 percent of GDP, below the long-run average of 18 percent of GDP.
o The Congressional Budget Office does predict that revenues will rise above the 18-percent average – without any tax increases – by the end of the decade.
o Record levels of government spending, combined with low revenues caused by a weak economy, will result in a $1.3 trillion deficit.
o This is the third consecutive deficit of more than $1 trillion.
o The publicly-held national debt (the amount borrowed from the private sector) is now more than $10 trillion.
With budget numbers like these, no wonder America has a fiscal hangover.
Fortunately, there is a solution. All we need to do is restrain the growth of federal spending, as explained in this video.
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But we also know that it is difficult to convince politicians to do what’s right for the nation. And if they don’t change the course of fiscal policy, and we leave the federal government on autopilot, then America is doomed to become another Greece.
The combination of poorly designed entitlement programs (mostly Medicare and Medicaid) and an aging population will lead to America’s fiscal collapse.
Concerning spending cuts Reagan believed, that members of Congress “wouldn’t lie to him when he should have known better.” However, can you believe a drug addict when he tells you he is not ever going to do his habit again? Congress is addicted to spending too much money. Lee Edwards wrote in his article “Golden Years” about Ronald Reagan:
Sometimes Reagan went along with a pragamatist like chief of staff James Baker, who persuaded the president to accept the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), which turned out to be the great tax increase of 1982 — $98 billion over the next three years. That was too much for eighty-nine House Republicans (including second-term Congressman Newt Gingrich of Georgia) or for prominent conservative organizations from the American Conservative Union like the Conservative Caucus and the U.S. Chamber of Commerce, which all opposed the measure.
Baker assured his boss that Congress would approve three dollars in spending cuts for every dollar of tax increase. To Reagan, TEFRA looked like a pretty good “70 percent” deal. But Congress wound up cutting less than twenty-seven cents for every new tax dollar. What had seemed to be an acceptable 70-30 compromise turned out to be a 30-70 surrender. Ed Meese described TEFRA as “the greatest domestic error of the Reagan administration,” although it did leave untouched the individual tax rate reductions approved the previous year. (TEFRA was built on a series of business and excise taxes plus the removal of business tax deductions.)[xxx]
The basic problem was that Reagan believed, as Lyn Nofziger put it, that members of Congress “wouldn’t lie to him when he should have known better.”[xxxi] As a result of TEFRA, Reagan learned to “trust but verify,” whether he was dealing with a Speaker of the House or a president of the Soviet Union.
Dan Mitchell, Senior Fellow at the Cato Institute, speaks at Moving Forward on Entitlements: Practical Steps to Reform, NTUF’s entitlement reform event at CPAC, on Feb. 11, 2011.
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I am disappointed in some of the Republicans who do not want to take the bull by the horns on this issue.
Michael Tanner is a senior fellow at the Cato Institute and coauthor of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution.
There was telling moment during the CNN Republican presidential debate: Asked about the possibility of repealing George W. Bush’s Medicare prescription-drug benefit, which is adding some $17 trillion to Medicare’s unfunded liabilities, every one of the candidates pledged varying degrees of fealty to the program. No one came out for significantly cutting this vestige of Bush-style big-government conservatism, let alone repealing it. This put the current crop of Republicans to the left of John McCain, who at least campaigned in favor of means-testing the program in 2008.
The failure to stand up against one of the Bush administration’s most obvious mistakes is not just a case of hypocrisy; it is part of a disturbing trend toward ducking the tough decisions on budget cutting among the Republican aspirants. For all the sound and fury, and the charges and countercharges surrounding entitlement reform, the GOP candidates have been remarkably reluctant to put forward actual proposals.
Former Massachusetts governor Mitt Romney, for example, has been attacking Texas governor Rick Perry over Social Security from the left, praising the program as “an essential federal program,” that has been a “success” for more than 70 years. But for all his criticism of Perry, Romney has been much vaguer about his own plans for reform. At times he has sounded almost like Obama, suggesting that there are lots of reform ideas — raising the retirement age, means testing, changing the wage-price indexing formula — that are “on the table,” but not actually endorsing any of them. One reform that Romney has taken off the table is allowing younger workers to privately invest a portion of their payroll taxes through personal accounts. In his book, No Apology, Romney endorses so-called “add on” accounts, allowing workers to save in addition to Social Security, but not carving out a portion of their current taxes. “Given the volatility of investment values that we have just experienced, I would prefer that individual accounts were added to Social Security, not diverted from it,” Romney wrote.
The Republican candidates all talk about reducing government spending. But they cannot do that unless they commit to real entitlement reform.
On Medicare, Romney has avoided specifics as well, praising Paul Ryan’s proposed reforms for example as “taking important strides in the right direction,” but not endorsing them.
For his part, Governor Perry has been forthright about the flaws of Social Security but has offered nothing in the way of a proposal for reform. As Romney has pointed out endlessly, Perry suggested in his book that Social Security might be returned to the states. But Perry has since disavowed that idea, claiming that he was only referring to state employees, some 7 million of whom are currently outside the Social Security system. Perry has also praised the privatized system for public employees in Galveston and two other Texas counties, suggesting that he might be open to some type of private investment option. But “suggesting” is as far as he goes.
On Medicare, Perry has been equally murky. At times, he has suggested that we should “transition away from” the current Medicare system, but without saying what we should transition to. His aides point out that Perry has only recently joined the race and hasn’t had time to develop specific proposals. But given his fiery talk on the issues, until he does he will seem more hat than cattle.
Rep. Michelle Bachmann has also largely tried to have it both ways on entitlement reform. She voted for the Ryan plan in Congress but promptly put out a statement distancing herself from it, claiming that her vote came with an asterisk. On Social Security, Bachmann once called the program a “monstrous fraud,” but has now joined Romney in attacking Perry’s “Ponzi scheme” description. She says that a key difference between her and Perry is that she believes Social Security “is an important safety net and that the federal government should keep its promise to seniors.” But with Social Security currently facing more than $20 trillion in unfunded liabilities, the question is how it will keep that promise.
Second-tier candidates, with less to lose, have been more willing to spell out their proposals. Businessman Herman Cain, for example, supports both the Ryan plan and Chilean-style personal accounts for Social Security. Former Pennsylvania senator Rick Santorum takes similar positions, as does former New Mexico governor Gary Johnson. Former Utah governor Jon Huntsman has endorsed the Ryan plan but has not spelled out his views on Social Security reform. Newt Gingrich, on the other hand, has focused on cutting “fraud, waste, and abuse,” rather than fundamentally altering the structure of those programs. Ever the iconoclast, Rep. Ron Paul opposes both the Ryan plan and personal accounts for Social Security, since he opposes a federal role in either health care or retirement on principle.
The facts are both simple and frightening. The unfunded liabilities of Social Security and Medicare run between $50 trillion and $110 trillion. Those two programs, along with Medicaid, are the primary drivers of our future indebtedness. In fact, by 2050, those three programs alone will consume 18.4 percent of GDP. If one assumes that revenues return to and stay at their traditional 18 percent of GDP, then those three programs alone will consume all federal revenues. There would not be a single dime available for any other program of government, from national defense to welfare.
The Republican candidates all talk about reducing government spending. But they cannot do that unless they commit to real entitlement reform. There’s time, and lots of debates, to hear specifics from them. But so far, the omens are not auspicious
The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 5)
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 (DC) Congressman Ben Quayle (R-AZ) released the following statement Monday after voting against the amended Budget Control Act:
“Last week I voted for the Boehner plan because— while imperfect—it made adequate strides to get our fiscal House in order. The final debt-ceiling bill, however, goes in a direction that I cannot support. Due to the design of the bill’s trigger mechanism, I am concerned that President Obama will be able to use the threat of tax hikes and drastic defense cuts to continue to amass record levels of spending.
“Though I didn’t support today’s bill, I want to commend Speaker Boehner and the House Republican Leadership for changing the culture in Washington and compelling Congressional Democrats and the Obama Administration to finally recognize how central America’s debt problem truly is.
“On another note, it was a very special moment seeing Congresswoman Gabby Giffords cast her vote on the House Floor tonight. Both sides of the aisle greeted her with a loud standing ovation. It was a nice way to end what has been a very tense few days in the House.”
The showdown in Wisconsin has generated competing claims about whether state and local government bureaucrats are paid too much or paid too little compared to their private sector counterparts.
This is a fair point, so we need to find some objective measure that neutralizes all the possible differences. Fortunately, the Bureau of Labor Statistics has a Job Openings and Labor Turnover Survey, and this “JOLTS” data includes a measure of how often workers voluntarily leave job, and we can examine this data for different parts of the workforce.
Every labor economist, right or left, will agree that higher “quit rates” are much more likely in sectors that are underpaid and lower levels are much more likely in sectors where compensation is generous.
Not surprisingly, this data shows state and local bureaucrats are living on Easy Street. As the chart illustrates, private sector workers are more than three times as likely to quit their jobs.
This helps explain why the unions are treating the Wisconsin debate as if it was Custer’s Last Stand. The bureaucrats know they have comfortable sinecures and they are fighting to preserve their unfair privileges.
This Center for Freedom and Prosperity video looks at all of the data and reveals a pecking order. Federal bureaucrats are at the kings and queens of compensation. State and local bureaucrats are like the nobility. And private sector taxpayers are the serfs that worker harder and earn less, but nonetheless finance the entire racket.
The video closes with a very important point that the right pay level for many bureaucrats is zero. This is because they work for programs, departments, and agencies that should not exist.
The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 4)
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. – Congressman Trent Franks (AZ-02), on the heels of his vote against the debt ceiling plan proposed yesterday, released the following statement, reiterating his remarks last night on the House floor emphasizing the vital importance of a Balanced Budget Amendment:
“It is simply undeniable at this point that Democrats do not grasp the threat posed by our perpetual deficit spending and ever-ballooning debt. Even as the debt ceiling has been raised yet again, Democrats, who claim to support a Balanced Budget Amendment, despite having opposed BOTH Balanced Budget Amendment proposals that passed the House, have again made certain to include numerous exceptions into the debt ceiling legislation, so that a Balanced Budget Amendment to permanently fix our deficit spending problem is not a requirement, but an option they can opt out of at a later date.
“Lip service to a balanced budget it no longer enough. All financial budgets will eventually balance. That includes the budget of the United States government. The question before our nation now is whether our budget will balance due to proactive work by those of us sent to fix the broken system in Washington, or by financial calamity due to the unwillingness of so many to stop a looming disaster when we had the opportunity to do so.”
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Congressman Franks is serving his fifth term in the U.S. House of Representatives and is a member of the Judiciary Committee, where he serves as Chairman of the Subcommittee on the Constitution and a member of the Subcommittee on Courts, Commercial and Administrative Law. He is also a member of the Armed Services Committee, where he serves on the Strategic Forces Subcommittee and the Subcommittee on Emerging Threats and Capabilities.
Congressman Franks is serving his fifth term in the U.S. House of Representatives and is a member of the Judiciary Committee, where he serves as Chairman of the Subcommittee on the Constitution and a member of the Subcommittee on Courts, Commercial and Administrative Law. He is also a member of the Armed Services Committee, where he serves on the Strategic Forces Subcommittee and the Subcommittee on Emerging Threats and Capabilities.
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.
In a private conference call with a handful of university students across the country, GOP Presidential hopeful — and President Obama’s former Ambassador to China — Jon Huntsman argued in support of one of the most far-reaching, controversial elements of the conservative political agenda.
As first reported in a broader piece by theHuffington Post, Huntsman argued in favor of a constitutional amendment requiring the federal government to maintain a balanced budget — an innocuous-sounding, but radical plan pushed by Sen. Jim DeMint (R-SC) and numerous other congressional conservatives.
“We’re going to have to fight for a balanced budget amendment,” Huntsman said. “Every governor in this country has a balanced budget amendment. It keeps everybody honest. It’s the best safeguard imaginable.”
At its core, a balanced-budget amendment would make it unconstitutional for the government to spend more than it collects in revenue — a requirement that, without safeguards, would make stimulus and emergency spending impossible.
Faced with a similar requirement, states responded to the recession with budget cuts that exacerbated the downturn.
But Republicans on the Hill have taken the idea a step further to the right by including a provision that would make it functionally impossible for the government to raise taxes. The goal, then, is to force future Congresses to slash or eliminate federal spending programs — which disproportionately benefit the needy and elderly — to bring them in line with a revenue base that’s likely to shrink over time.
It’s unclear whether Huntsman supports this version of a Balanced Budget Amendment, or a less extreme one. But the nature of the idea is such that it allows conservatives to signal their support for slashing programs without providing the unpopular details. And in the GOP primary, this will likely be a key test for candidates hoping to curry favor with influential conservatives like DeMint.
Federal Spending Grew More Than Ten Times Faster Than Median Income
Total Government Spending Has More Than Doubled Since 1965
The Daily Hatch 