Did you notice in President Obama’s speech on July 31, 2011 that he said cuts would be made in a 10 yr period but because of our sensitive economy we would spared in the near future? Will cuts ever come or is the government addicted to spending too much?
In making his case for tax increases last night, President Obama described past deals in which Democrats promised spending cuts in return for tax increases, and said:
The first time a deal passed, a predecessor of mine made the case for a balanced approach by saying this: “Would you rather reduce deficits and interest rates by raising revenue from those who are not now paying their fair share, or would you rather accept larger budget deficits, higher interest rates, and higher unemployment? And I think I know your answer.” Those words were spoken by Ronald Reagan. But today, many Republicans in the House refuse to consider this kind of balanced approach.
Well, yes, those words were spoken by Ronald Reagan (in August of 1982) in reference to TEFRA—the Tax Equity and Fiscal Responsibility Act—which congressional Democrats promised would involve a ratio of $3 in spending cuts for every $1 in tax increases (which they said would consist only of closing loopholes). TEFRA passed later that year, and the tax increases certainly happened but, as Reagan later put it in his autobiography, “the Democrats reneged on their pledge and we never got those cuts.”
TEFRA was one of Reagan’s great regrets about his time in the White House, and should serve as a warning to Republicans contemplating similar grand bargains. Obama’s reference to it only highlights the fact that he tried to pull off something much like TEFRA. Luckily, he appears to have failed.
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
The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 9)
Will Rogers has a great quote that I love. He noted, “Lord, the money we do spend on Government and it’s not one bit better than the government we got for one-third the money twenty years ago”(Paula McSpadden Love,The Will Rogers Book,(1972) p. 20.)
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.
_______________________________
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.”
Still of Alan Alda, John Candy, Kevin Pollak, Rip Torn, Michael Moore and Rhea Perlman in Canadian Bacon
Michael Moore is a liberal movie director and his films have been pitiful. However, I did enjoy the movie “Canadian Bacon” which was very funny. Above is a clip from that movie.
On his Twitter feed Monday, the Oscar-winning film director also blamed the 2008 economic collapse on Standard & Poor’s — apparently because it and other credit-ratings agencies did not downgrade mortgage-based bonds, which encouraged the housing bubble and let it spread throughout the economy.
“Pres Obama, show some guts & arrest the CEO of Standard & Poors. These criminals brought down the economy in 2008& now they will do it again,” Mr. Moore wrote.
Standard & Poor’s, one of three key debt agencies, stripped the U.S. federal government of its AAA status Friday night and reduced it to AA+ for the first time in the nation’s history.
___________________________
I don’t think that Standard and Poors did anything wrong and I think they would have been wrong if they did not act because of all the political pressure they were receiving from the Obama administration. My views are much closer to those below.
The GOP‘s cadre of anti-Obama presidential candidates are hammering their nemesis for the first credit downgrade in U.S. history.Late Friday night, following months of bruising, rancorous debate in Washington over the debt ceiling and America’s future deficit, the credit ratings agency Standard & Poor’s downgraded the country’s sterling AAA credit rating to AA+. The other two major ratings agencies — Moody’sand Fitch — maintained the nation’s AAA rating.”America’s creditworthiness just became the latest casualty in President Obama‘s failed record of leadership on the economy,” said former Massachusetts Gov. Mitt Romney in a statement.
“Standard & Poor’s rating downgrade is a deeply troubling indicator of our country’s decline under President Obama. His failed policies have led to high unemployment, skyrocketing deficits, and now, the unprecedented loss of our nation’s prized AAA credit rating.”
The Obama administration slammed the credibility of the analysis S&P used to downgrade the nation’s credit rating, insisting there was a $2 trillion error in S&P’s calculations. The ratings agency conceded the error, but did not alter its conclusion.
Tea Party darling Rep. Michele Bachmann — who voted against the debt-ceiling deal — also laid into Obama, declaring that the “President has destroyed the credit rating of the United States.”
Former Utah Gov. Jon Huntsman described the downgrade as a result of a “lack of leadership in Washington,” adding that “for far too long we have let reckless government spending go unchecked and the cancerous debt afflicting our nation has spread.”
“I understand the U.S. Treasury is going back to Standard and Poor’s to say that a two trillion dollar mathematical error by S&P contributed to the downgrade,” he said. “So, in addition to blaming President Bush for all of its problems, now the White Houseis blaming S&P – but this happened on the President’s watch – and he has to deal with it.”
President Obama really believes that we must raise taxes in order to balance the budget. Nevertheless, conservatives argue that the bloated federal spending should come down to a level where he can balance the budget. Take a look at the excellent article “Unbalanced,” by Michael D. Tanner
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.
During his brief media appearance on Monday responding to S&P’s downgrade of the U.S. credit rating and the subsequent stark market plunge, Pres. Barack Obama once again renewed his call for a “balanced approach” to debt reduction, combining modest entitlement reform with tax increases. This was the same formulation repeated endlessly by the president, Democrats in Congress, and much of the media throughout the recent negotiations over raising the debt ceiling.
But beyond raw ideology, there is no reason to believe that coupling tax hikes with spending cuts would solve our debt problems.
President Obama usually couches his call for tax hikes in terms of fairness. How, he asks, can we cut programs that help people without also asking the wealthy to “sacrifice” something as well? Setting aside the fact that this formulation establishes a false moral equivalence between giving less to people who have not earned it and taking more from the people who have, this ignores the fact that the wealthy in America already pay a disproportionate share of taxes.
The richest 1 percent of Americans earn 20 percent of all income in America but pay 38 percent of income taxes. The top 5 percent earn slightly more than one-third of U.S. income while paying nearly 59 percent of income taxes. At the same time, roughly half of Americans pay no federal income tax. One might suggest, therefore, that the wealthy already pay their fair share, and then some.
Of course other taxes, such as payroll taxes, property taxes, sales taxes, and the like, tend to be more regressive. But even if you include all types of federal, state, and local taxes, the wealthy pay a considerably higher proportion of taxes than their share of income would warrant.
Others less prone to moral posturing argue for including tax hikes along with spending reductions on the grounds that it is “impossible to balance the budget through cuts alone.” But the evidence strongly suggests that cutting spending alone may be the only way to really balance the budget. Indeed, by including tax hikes, we slow economic growth, thereby making it harder to balance the budget.
Simply look to those European countries today that have adopted such a “balanced” approach to debt reduction. Britain, Greece, Portugal, and Spain have all included major tax hikes as part of their austerity packages. The result across the board has been anemic economic growth and scant progress toward debt reduction. Britain, for instance, imposed a new 50 percent top income-tax rate, hiked the capital-gains tax rate from 18 percent to 28 percent, and increased the VAT rate from 17.5 percent to 20 percent. The result: During the first quarter of 2011, the British economy grew at just 0.5 percent, barely enough to offset the 0.5 percent decline during the last quarter of 2010.
Paul Krugman and others have argued that it was the spending cuts, not the tax hikes, that slowed economic growth. Others more plausibly have suggested that the continuing shocks that are buffeting the world economic system have reduced economic growth generally and made it difficult to judge the effectiveness of any particular policy or group of policies.
But the body of evidence from outside the current economic crisis tends to confirm the hypothesis that additional taxes would slow economic growth, making it harder to reduce the debt. For example, a study by Harvard economists Alberto Alesina and Silvia Ardagna looked at more than 100 debt-reduction efforts in 21 countries between 1970 and 2007. They found that a combination of spending cuts and revenue reductions was actually more likely to result in debt reduction than a combination of spending cuts and revenue increases.
History shows us that countries as divergent as Canada, Ireland, New Zealand, and Slovenia successfully reduced the size of their governments relative to their economies and lowered their debt burden substantially. They did so by controlling spending, not by raising taxes.
In this country, look to the end of World War II. The U.S. government cut spending by nearly two-thirds, from $84 billion in 1945 to just $39 billion in 1946. While the country ran a budget deficit of nearly 21 percent of GDP in 1945, it was running a surplus by 1947. At the time, many economists predicted that cuts of that magnitude would destroy the U.S. economy and bring about Depression-era levels of unemployment. Instead, civilian employment actually grew, and an era of economic expansion began that would last throughout the 1950s.
All this implies that we should find a way to cut spending. And that brings us back to President Obama’s press briefing. At the end of his remarks, the president once again laid out his plans for the future, and called for more spending: more spending on education, more spending on unemployment insurance, more spending for an infrastructure bank, more, more, more.
Perhaps that, and not a mythical “balance,” is what really lies behind his calls for higher taxes.
And now, an embarrassing debt ceiling debate that resulted in our country losing its sterling credit rating while China justifiably wagged its finger in our direction. It’s time for voters to get their pink slips ready.
It was embarrassing because THERE ARE NO MEANINGFUL CUTS IN THIS DEBT DEAL. THIS MEANS WE WILL BE WHERE GREECE IS NOW IN A FEW YEARS!!!! If nothing is done about entitlements then federal spending could consume as much as 50% of economic output by the time the Baby Boom generation is fully retired. In 2001 it was 18.2% and currently it has risen to about 25%.
Dan Mitchell of the Cato Institute rightly noted:
The hard-core conservatives are upset that the deal is mostly smoke and mirrors on the spending side and that there may be a tax-increase trap on the revenue side.
Take a look at this excellent article:m “The Next Greece” by Daniel J. Mitchell
Daniel J. Mitchell is a senior fellow at the Cato Institute, a think-tank based in Washington.
Added to cato.org on August 4, 2011
This article appeared in National Poston August 4, 2011.
America is on a path to becoming a Greek-style welfare state. Thanks to the Bush-Obama spending binge, the burden of federal spending has climbed to about 25% of national economic output, up from only 18.2% of GDP when Bill Clinton left office.
But that’s just the tip of the iceberg. Because of a combination of demographic forces and poorly designed entitlement programs, federal spending could consume as much as 50% of economic output by the time the Baby Boom generation is fully retired.
One symptom of all this excessive spending is that Washington is awash in red ink. The United States is now in its third consecutive year of trillion-dollar deficits and the politicians just had to increase the nation’s US$14.3-trillion debt limit.
But it wasn’t easy getting there. Just as happened with the “government shutdown” debate in March, Republicans and Democrats had fierce disagreements over the right approach. They bickered until the last minute and then finally agreed to more than US$900billion of supposed spending cuts and the creation of a “super-committee” charged with proposing another US$1.5-trillion of deficit reduction.
So which side won this fight? Republicans are bragging that they got spending cuts today, a promise of spending cuts in the future, and no tax increases. Democrats, meanwhile, are chortling that they took the debt issue off the table until after the 2012 elections, protected their favourite programs and created a super-committee that will seduce the GOP into a tax increase.
Ignore that bragging. The easy answer is that politicians of both parties were the victors and taxpayers are the ones left in the cold.
In other words, the budget deal was a victory for the political establishment.
Here’s why Republicans are winners. They get to tell their Tea Party activists that they forced Obama to cut spending. It doesn’t matter that federal spending will actually be higher every year and that the cuts were based on Washington math (a spending increase becomes a spending cut if outlays don’t climb as fast as some artificial benchmark).
They also get to tell their anti-tax activists that they held the line. Perhaps most important, the super-committee must use the “current law” baseline, which assumes that the 2001 and 2003 tax cuts expire at the end of 2012. But why are GOPers happy about this, considering they want those tax cuts extended? For the simple reason that Democrats on the super-committee therefore can’t use repeal of the “Bush tax cuts for the rich” as a revenue raiser.
This means that most Republican incumbents are well-positioned to win re-election.
Here’s why Democrats are winners. Thanks to the magic of government math, despite all the talk of budget cuts, discretionary spending will be more than US$100-billion higher in 2021 than it is this year. And since defence spending in Iraq and Afghanistan presumably is winding down, this means even more money will be available for domestic programs.
In addition to telling the pro-spending lobbies that the gravy train is still on the tracks, they also get to tell the classwarfare crowd that there’s an improved likelihood of higher taxes for corporate jet owners and other “rich” people. Notwithstanding GOP assertions, nothing in the agreement precludes the supercommittee from meeting its US$1.5-trillion target with tax revenue. The 2001 and 2003 tax legislation is not an option, but everything else is on the table.
This means that most Democratic incumbents are well-positioned to win re-election.
It’s worth pointing out that this doesn’t mean all Republicans and all Democrats are happy about the deal. The hard-core conservatives are upset that the deal is mostly smoke and mirrors on the spending side and that there may be a tax-increase trap on the revenue side.
The hard-core liberals, by contrast, are angry that there are any spending cuts, even ones based on Washington math. Moreover, they want higher tax rates on upper-income taxpayers today, not a super-committee that may or may not follow through on soak-the-rich policies in the future.
One group of people, however, unambiguously got the short end of the stick in this budget deal. Ordinary Americans are caught in the middle. They’re not poor enough to benefit from the federal government’s plethora of income-redistribution programs. But they’re not rich enough to have the clever lobbyists and insider connections needed to benefit from the highdollar handouts like ethanol subsidies and bank bailouts.
Instead, middle-class Americans play by the rules, pay ever-higher taxes, and struggle to make ends meet while the establishment of both parties engages in posturing as America slowly drifts toward a Greek-style fiscal meltdown.
The Tea Party members in the Republican Party voted against the debt deal and have even claimed that the debt deal did not cut enough out of the budget and that is why the USA got a downgrade in the credit rating. Below I have the comments on the downgrade from two of those representatives.
First, I want to call attention to one of our local candidates. Yesterday Tom Cotton who is a Republican who is running for the congressional seat being vacated by Democrat Mike Ross commented on the debt deal. Here is a portion of the article concerning that by Jason Tolbert:
Tom Cotton, who is currently the only announced candidate for the Fourth Congressional District open seat for either party, appeared on KARN’s Dave Elswick show yesterday afternoon where he answered questions from listeners for over an hour
Responding to one question, he said he would not have voted for the final legislation voted on last week regarding the compromise to extend the debt ceiling while making around $2.3 trillion in spending cuts over the next ten years. All four Arkansas Representatives and both Senators voted for the final bill.
Cotton explained that he would have supported the Cut, Cap, and Balance proposal passed by House Republicans before being defeated in the Senate, but that he had serious concerns over the details of the final debt compromise and could not have vote for it. He pointed to the many closed-door, back-room meetings that went into the bill and said he would want to see a more transparent process. In addition, he said the structure of the spending cut triggers have the potential to cause too many cuts to defense spending that could weaken our military.
Cotton said if he is elected, he would want to see not only spending cuts, but structural changes to the way the federal budgets are implemented.
WASHINGTON, DC – Congressman Jeff Landry (R, LA-03) issued the following statement after Standard & Poor’s (S&P) lowered the United States’ long-term credit rating:
“It should come as no surprise, that after Washington has recklessly spent, borrowed, and bailed out everything under the sun with taxpayer money, America’s credit rating has been downgraded. For the first time in 70 years, the United States is not the world leader in financial investment. And with the S&P slashing our credit rating from AAA to AA+, our markets are sure to be tested and our neighbors could face interest rate changes to their mortgages, credit cards, and car loans.
As I said when I voted against it and the S&P acknowledged when they made the downgrade, the Washington debt deal initiated by the Senate and signed into law by the President did not do enough to end the government’s addiction to spending. It is evident that Harry Reid and his Senate Democrats were wrong and should have followed the House’s lead with Cut, Cap, and Balance.
Making deals to continue kicking the can down the road is not the answer. We need a plan that cuts spending, simplifies and decreases the tax rates, reforms entitlement programs, and sends a Balanced Budget Amendment to the states; anything less will not solve the real budgetary problems Washington faces nor return our AAA rating.”
(DODGE CITY, KAN.) – Congressman Tim Huelskamp issued the following statement when Standard & Poor’s announced Friday evening that it had decided to downgrade the United States’ AAA credit rating:
“In April, I said that the threat of downgrade should be a ‘wake-up call’, but unfortunately not everyone agreed,” Congressman Huelskamp said. “Now, the decision of the majority of Washington to hit the snooze button on Standard & Poor’s alarm will have major ramifications not just for Washington, but for the entire economy.”
“S&P gave Washington plenty of warning that lawmakers needed to deal with the debt, yet the warning went unheeded. Big spenders in Washington decided to interpret the markets’ warnings as an instruction to borrow more when instead the markets wanted Washington to stop the reckless borrowing and unchecked accumulation of debt.”
“This is embarrassing, but it certainly was preventable. Washington has known all along that markets needed a strong solution to deal with the country’s long-term spending and borrowing habits. The ‘Cut, Cap, Balance’ Act was just such a plan with appropriate short-term cuts and caps on future spending the rating agencies said were needed. Yet, Washington produced a politically-expedient plan that was an insufficient answer to the real problem, a plan that tackled the need to borrow, but ignored the even greater need to reduce spending.”
The Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 8)
Will Rogers has a great quote that I love. He noted, “Lord, the money we do spend on Government and it’s not one bit better than the government we got for one-third the money twenty years ago”(Paula McSpadden Love,The Will Rogers Book,(1972) p. 20.)
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
August 1, 2011. This act increases the debt limit by between $2.1 and $2.4 trillion, the biggest explosion of debt in American history. It allows the government to avoid spending reductions for the next two years while squandering our last best hope of averting a sovereign debt crisis.
I am opposed to this measure for the following reasons:
1. The purported cuts, even if realized, are far below the $4 trillion deficit reduction that credit rating agencies have warned is necessary to preserve the Triple-A credit rating of the United States Government.
2. It blows the lid off the House budget passed in April by more than a half-trillion dollars over ten years.
3. It makes no significant spending reductions for at least the next two years, essentially freezing spending at an unsustainable level. While the debt increase occurs this year, deficit reductions are to be spread over many years and could be reversed by future acts of Congress.
4. The spending caps are easily circumvented by declaring appropriations to be an emergency, a response to a “major disaster,” or necessary for the “Global War on Terror.”
5. The balanced budget amendment provisions are illusory because the amendment is completely undefined.
Let’s also remember a critical reason for this expansion was our decision to reduce taxes in 1981. I’m sure many of you know it was very difficult getting this through the Congress, although with your help we achieved it. And despite all the predictions of high inflation from our opponents, our tax cuts not only fueled our expansion, they had a benefit that surprised some people: Far from reducing the amount of money the Federal Government collected in tax revenues, over the long run, those collections actually increased due to the economic activity sparked by the tax cuts. In fact, tax revenues from 1981 to 1987 actually went up $255 billion. Of course, this meant we had enough to pay for our defense buildup and some left over to help get our deficit spending problems under control. But instead of using new revenues to cut the deficit, the Congress decided to spend even more.
In 1982, for example, TEFRA, as it was called, the Tax Equity and Fiscal Responsibility Act, raised taxes by $131 billion over 4 years, with Congress pledging to slash spending by $3 for every dollar of increased revenue. Instead, 4 years later, taxes had gone up the expected $131 billion, but spending over this same period had risen by $244 billion. In fact, every dollar in increased revenue since 1980 had been matched by $1.25 of increased spending.
Now, 3 days ago, I called on the congressional leaders to meet with me early next week to outline our deficit reduction plans. And as we move toward a budget settlement, it’s good to remember that there’s a fundamental difference here inWashingtonon one critical issue. I’m proud that since 1913 my party has reduced taxes 10 times and increased them only once. And that’s why I hope members of the Democratic Party will follow President Kennedy’s lead of some years ago and remember that lower taxes mean higher growth.
But the simple fact is that all sides must contribute to this process if it is to succeed and if a package is to be developed that keeps taxes and spending as low as possible. This effort must also address the flipside of our twin deficit problem. I mean, here, our trade deficit, a problem that would only be worsened by protectionist legislation. So, let’s keep the stock market healthy and sound, and let’s do it by avoiding protectionist legislation and by keeping taxes and spending down so we can keep interest rates and inflation rates low.
Until next week, thanks for listening, and God bless you.
Note: The President spoke at 12:06 p.m. from Camp David, MD.
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.
You asked for ideas to cut spending, but you voted for the 800 billion dollar stimulus that did not help the economy at all. I have included an article below that makes a very good point about the Balanced Budget Amendment and the stimulus:
Lee believes there are several key components to a balanced budget amendment which he outlines in his book, including making tax increases contingent on a two-thirds vote in Congress so that the option to increase taxes is not the default maneuver to balance a budget. He believes the amendment should require Congress spends no more than it takes in, and in fact should cap the spending at a fixed percent of GDP (the proposal submitted in the Senate caps it at 18 percent of GDP, just about the historical average). There would also be a supermajority vote required to raise the debt ceiling.
And for those who argue that stimulus packages wouldn’t have been possible under the amendment, Lee sees little difficulty responding.
“That’s exibit A for why we ought to have it,” Lee said of the Obama stimulus package.
As Washington spends the summer arguing over its spending addiction, GOP Sen. Mike Lee of Utah has a solution to help prevent the same crisis for future generations: a balanced budget amendment.
The House made news last week when, in the heat of negotiations over raising the debt ceiling, they announced a vote on a balanced budget amendment this Wednesday. Though the Senate GOP introduced a one earlier this year, President Obama has stated emphatically otherwise, telling Americans last week during a press conference that the country does not need a balanced budget amendment.
“Yes, we do,” Lee told Townhall when asked to respond to the president, adding later when talking about simultaneously raising the debt ceiling and cutting spending, “We can’t bind what a future Congress will do. We can pass laws that will affect this year, but there will be a new Congress that takes power in January of 2013, and then another new one that will take power in January 2015. And they will make their own spending decisions then — we can’t bind them unless we amend the Constitution to do so.”
Lee points out that the American people support the idea of a balanced budget – 65 percent, according to a Sachs/Mason Dixon poll from this year – but politicians have been reluctant to wade into the debate.
“The fact that we’re in this debate, the fact that we’re sort of deadlocked, or we’ve reached a point of gridlock in the discussions, is indicative of the problem that we have,” Lee said.
In fact, Lee thinks a balanced budget amendment is so important to the future of the country that he’s written a book on it: The Freedom Agenda: Why a Balanced Budget Amendment Is Necessary to Restore Constitutional Government.
Lee even takes the argument a step beyond fiscal issues, saying a balanced budget amendment safeguards individual liberties.
““The more money it [Congress] has access to, whether it’s through borrowing or through taxation, either way, that’s going to fuel Congress’ expansion, and whenever government acts, it does so at the expanse of individual liberty,” Lee said. “We become less free every time government expands.”
Lee believes there are several key components to a balanced budget amendment which he outlines in his book, including making tax increases contingent on a two-thirds vote in Congress so that the option to increase taxes is not the default maneuver to balance a budget. He believes the amendment should require Congress spends no more than it takes in, and in fact should cap the spending at a fixed percent of GDP (the proposal submitted in the Senate caps it at 18 percent of GDP, just about the historical average). There would also be a supermajority vote required to raise the debt ceiling.
And for those who argue that stimulus packages wouldn’t have been possible under the amendment, Lee sees little difficulty responding.
“That’s exibit A for why we ought to have it,” Lee said of the Obama stimulus package.
Lee also pointed out that his balanced budget amendment includes an exception to the spending restriction in time of war – “not a blank check, but to the extent necessary.” Congress would also be able to supersede the amendment with a two-thirds vote.
“We wanted to make it difficult, but not impossible, for Congress to spend more than it had access to,” Lee said, citing as an example a massive or immediate crisis created by a national emergency or natural disaster. “What this is designed to do is to make it more difficult – to make it impossible – for Congress to just do this as a matter of course.”
Elisabeth Meinecke
Elisabeth Meinecke is Associate Editor with Townhall.com
The Daily Hatch 