Category Archives: spending out of control

Sen. Marco Rubio on the debt ceiling

July 21, 2011 – 1:36 pm

Published on Jul 17, 2011 by

Sen. Marco Rubio (R-Fla.) spoke with Bob Schieffer on what he truly feels caused the country’s current debt crisis and the provisions he feels necessary to be included in a compromise for him to vote on raising the debt ceiling.

Senator Rubio is one of the upcoming stars of the Tea Party and he has some great insights on the issue of the debt ceiling.

  • MARCH 30, 2011

Why I Won’t Vote to Raise the Debt Limit

Everyone in Washington knows how to cut spending. The time to start is now.

By MARCO RUBIO

Americans have built the single greatest nation in all of human history. But America’s exceptionalism was not preordained. Every generation has had to confront and solve serious challenges and, because they did, each has left the next better off. Until now.

Our generation’s greatest challenge is an economy that isn’t growing, alongside a national debt that is. If we fail to confront this, our children will be the first Americans ever to inherit a country worse off than the one their parents were given.

Current federal policies make it harder for job creators to start and grow businesses. Taxes on individuals are complicated and set to rise in less than two years. Corporate taxes will soon be the highest in the industrialized world. Federal agencies torment job creators with an endless string of rules and regulations.

On top of all this, we have an unsustainable national debt. Leaders of both parties have grown our government for decades by spending money we didn’t have. To pay for it, they borrowed $4 billion a day, leaving us with today’s $14 trillion debt. Half of that debt is held by foreign investors, mostly China. And there is no plan to stop. In fact, President Obama’s latest budget request spends more than $46 trillion over the next decade. Under this plan, public debt will equal 87% of our economy in less than 10 years. This will scare away job creators and lead to higher taxes, higher interest rates and greater inflation.

Betting on America used to be a sure thing, but job creators see the warning signs that our leaders ignore. Even the world’s largest bond fund, PIMCO, recently dumped its holdings of U.S. debt.

We’re therefore at a defining moment in American history. In a few weeks, we will once again reach our legal limit for borrowing, the so-called debt ceiling. The president and others want to raise this limit. They say it is the mature, responsible thing to do.

In fact, it’s nothing more than putting off the tough decisions until after the next election. We cannot afford to continue waiting. This may be our last chance to force Washington to tackle the central economic issue of our time.

“Raising America’s debt limit is a sign of leadership failure.” So said then-Sen. Obama in 2006, when he voted against raising the debt ceiling by less than $800 billion to a new limit of $8.965 trillion. As America’s debt now approaches its current $14.29 trillion limit, we are witnessing leadership failure of epic proportions.

I will vote to defeat an increase in the debt limit unless it is the last one we ever authorize and is accompanied by a plan for fundamental tax reform, an overhaul of our regulatory structure, a cut to discretionary spending, a balanced-budget amendment, and reforms to save Social Security, Medicare and Medicaid.View Full Image

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Chad Crowe

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There is still time to accomplish all this. Rep. Dave Camp has already introduced proposals to lower and simplify our tax rates, close loopholes, and make permanent low rates on capital gains and dividends. Even Mr. Obama has endorsed the idea of lowering our corporate tax rate. Sen. Rand Paul, meanwhile, has a bill that would require an up-or-down vote on “major” regulations, those that cost the economy $100 million or more. And the House has already passed a spending plan this year that lowered discretionary spending by $862 billion over 10 years.

Such reductions are important, but nondefense discretionary spending is a mere 19% of the budget. Focusing on this alone would lead to draconian cuts to essential and legitimate programs. To get our debt under control, we must reform and save our entitlement programs.

No changes should be made to Medicare and Social Security for people who are currently in the system, like my mother. But people decades away from retirement, like me, must accept that reforms are necessary if we want Social Security and Medicare to exist at all by the time we are eligible for them.

Finally, instead of simply raising the debt limit, we should reassure job creators by setting a firm statutory cap on our public debt-to-GDP ratio. A comprehensive plan would wind down our debt to sustainable levels of approximately 60% within a decade and no more than half of the economy shortly thereafter. If Congress fails to meet these debt targets, automatic across-the-board spending reductions should be triggered to close the gap. These public debt caps could go in tandem with a Constitutional balanced budget amendment.

Some say we will go into default if we don’t increase the debt limit. But if we simply raise it once again, without a real plan to bring spending under control and get our economy growing, America faces the very real danger of a catastrophic economic crisis.

I know that by writing this, I am inviting political attack. When I proposed reforms to Social Security during my campaign, my opponent spent millions on attack ads designed to frighten seniors. But demagoguery is the last refuge of the spineless politician willing to do anything to win the next election.

Whether they admit it or not, everyone in Washington knows how to solve these problems. What is missing is the political will to do it. I ran for the U.S. Senate because I want my children to inherit what I inherited: the greatest nation in human history. It’s not too late. The 21st century can also be the American Century. Our people are ready. Now it’s time for their leaders to join them.

Mr. Rubio, a Republican, is a U.S. senator from Florida.

Sen. Marco Rubio on the debt limit

The president is “more interested in delivering a tax increase to please the base of the party than he is about solving the problem.” Senator Marco Rubio appeared on Sean Hannity’s radio show this afternoon to talk about the debt limit debate and the out-of-control spending in Washington.

Here is one of my favorite videos on this subject below:

What Is The Debt Ceiling?

Published on May 19, 2013

What is the debt ceiling and why does it matter? Find out:http://BankruptingAmerica.org/DebtCei…

Congress’s dance with the debt limit can be confusing and, frankly, the details can be a real snooze fest for many Americans. Sometimes a little humor clarifies the absurdities of Washington antics better than flow charts and talk of trillions.

The 31-second video and accompanying infographic “The Debt Ceiling Explained” by Bankrupting America offers the facts, leavened with a dose of levity. The conclusion is serious, however: The country’s debt threatens economic growth, and spending cuts are the answer.

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It is obvious to me that if President Obama gets his hands on more money then he will continue to spend away our children’s future. He has already taken the national debt from 11 trillion to 16 trillion in just 4 years. Over, and over, and over, and over, and over and over I have written Speaker Boehner and written every Republican that represents Arkansans in Arkansas before (Griffin, Womack, Crawford, and only Senator Boozman got a chance to respond) concerning this. I am hoping they will stand up against this reckless spending that our federal government has done and will continue to do if given the chance.

Why don’t the Republicans  just vote no on the next increase to the debt ceiling limit. I have praised over and over and over the 66 House Republicans that voted no on that before. If they did not raise the debt ceiling then we would have a balanced budget instantly.  I agree that the Tea Party has made a difference and I have personally posted 49 posts on my blog on different Tea Party heroes of mine.

What would happen if the debt ceiling was not increased? Yes President Obama would probably cancel White House tours and he would try to stop mail service or something else to get on our nerves but that is what the Republicans need to do.

I have written and emailed Senator Pryor over, and over again with spending cut suggestions but he has ignored all of these good ideas in favor of keeping the printing presses going as we plunge our future generations further in debt. I am convinced if he does not change his liberal voting record that he will no longer be our senator in 2014.

I have written hundreds of letters and emails to President Obama and I must say that I have been impressed that he has had the White House staff answer so many of my letters. The White House answered concerning Social Security (two times), Green Technologies, welfare, small businesses, Obamacare (twice),  federal overspending, expanding unemployment benefits to 99 weeks,  gun control, national debt, abortion, jumpstarting the economy, and various other  issues.   However, his policies have not changed, and by the way the White House after answering over 50 of my letters before November of 2012 has not answered one since.   President Obama is committed to cutting nothing from the budget that I can tell.

 I have praised over and over and over the 66 House Republicans that voted no on that before. If they did not raise the debt ceiling then we would have a balanced budget instantly.  I agree that the Tea Party has made a difference and I have personally posted 49 posts on my blog on different Tea Party heroes of mine.

_________________________

By Everette Hatcher III | Also posted in President Obama | Tagged , , , , | Comments (0)

Brummett is fooled by Pryor’s assurance that gang of 6 offers real cuts now

July 21, 2011 – 9:16 am

John Brummett in his article, “By Pryor prediction, gang of 6 emerges,” Arkansas News Bureau, July 21, 2011 asserts:

So what’s in this great new plan from the Gang of Six? Only about $4 trillion in real deficit reduction achieved by deep defense cuts, commission-delegated reductions in spending for Medicare, Medicaid and Social Security, plugging of assorted tax code loopholes and — get this — an elimination of the alternative minimum tax and an over-all actual reduction in personal income taxes attainable, presumably, by the credibility and depth of the spending cuts.

The problem with Brummett’s comments is that he is totally fooled by “procedural gimmicks that promise Congress will do in the future what it won’t do now to control spending.” Dav id Addington rightly has noted, “Congress should not raise the debt limit without getting spending under control. Debt limit legislation should put America on the path to driving down federal spending and borrowing, while preserving our ability to protect America, and without raising taxes. Conservatives should stop the Gang of Six Plan. To control federal overspending and overborrowing, America doesn’t need more empty promises of future action — America needs action now.”

David Addington wrote an excellent article, “Gang of Six: Promises, Promises,” Heritage Foundation, July 19, 2011 that breaks down the proposal of the gang of six. Here is the article:

A group of U.S. Senators called the Gang of Six has cobbled together the third Senate-originated half-baked idea this week that would lead to hiking the debt limit. All three Senate approaches — the McConnell Plan, the McConnell-Reid “Just Borrow More” Plan, and now the Gang of Six “Maybe Later in the Year” Plan — have one thing in common: procedural gimmicks that promise Congress will do in the future what it won’t do now to control spending. The time has passed for procedural gimmickry — Congress should cut spending and cut it now.

The Gang of Six circulated a plan that has Congress enact a law now whose principal elements (1) make unspecified spending cuts and unspecified tax increases to yield a $500 billion reduction in the federal deficit, and (2) impose spending caps on discretionary spending, but not on Social Security, Medicare, Medicaid and welfare programs that are the main cause of out-of-control spending.

Then the Gang of Six promises — an unenforceable promise — that some time in the next six months Congress will enact a second law with all kinds of Christmas presents for everybody. As an imaginary present for Republicans, for example, the Gang of Six promises to eliminate the Alternative Minimum Tax, drop the top individual tax rate to 29 percent, and drop the corporate tax rate to 29 percent. And, as an imaginary present for the Democrats, the second law would have what appears to be a $3.4 trillion tax hike over the next 10 years, so the size of government can just keep on growing. Of course, enactment of the second law is just a promise, or, in the case of the huge tax hike, a threat.

Although the “Gang of Six” claims that their plan is separate from the debt limit increase, everyone in Washington including President Obama thinks its precise purpose is to pave the way for a debt limit hike. Under the Gang of Six Plan, Congress will pass some easy stuff now, but punt the hard stuff to the future, promising that Congress will pass it some time within the next six months. There’s plenty in the Gang of Six Plan for President Obama — he gets his tax hikes and, in reality, he gets to borrow lots more money. But the American people don’t really get much of anything, except the usual empty promise of action in the future.

Congress should not raise the debt limit without getting spending under control. Debt limit legislation should put America on the path to driving down federal spending and borrowing, while preserving our ability to protect America, and without raising taxes. Conservatives should stop the Gang of Six Plan. To control federal overspending and overborrowing, America doesn’t need more empty promises of future action — America needs action now.

By Everette Hatcher III | Also posted in Taxes | Comments (0)

Brummett: Congress abdicates political responsibility to make wise cuts, but we don’t need balanced budget amendment (Part 3)

July 21, 2011 – 5:36 am

John Brummett in his article “It may get personal in debt-limit end game,” Arkansas News Bureau, July 19, 2011 noted:

The White House is quietly encouraging the Reid-McConnell talks.

Meantime, there is talk of pandering to the tea party radicals in the unwieldy House by letting them pursue referral of a balanced-budget amendment to the Constitution.

Ratification would take years. If enacted, such an amendment would amount to the same abdication of political responsibility to make wise and responsible cuts in spending as has been evident in the debt-ceiling debate.

It is obvious to me that the Balanced Budget Amendment is needed because of the “abdication of political responsibility to make wise and responsible cuts in spending” that Brummett is talking about and we have all seen for decades.

The real debate in my view should be which variety of amendment should we pass. This is a series of posts I am doing on that subject. They come from Brian Darling’s excellent article, ” The House and Senate Balanced Budget Amendments: Not All Balanced Budget Amendments Are Created Equal,” Heritage Foundation, July 14, 2011. 

Abstract: Republicans in the House and Senate have announced that they will force votes on balanced budget constitutional amendments. While the Senate and House versions of the current BBA are similar, there are some important differences that Members of Congress and the American people need to understand. For example, the Senate version makes it more difficult to enact revenue-neutral tax reform, while the House version would waive its tax limitation in times of military conflict. How Congress resolves these differences could determine whether future Congresses and Presidents balance the budget without increasing taxes.

Differences Between S.J. Res. 23 and H.J. Res. 1

Waivers for War or Military Conflict

Both the Senate and House versions of the BBA provide for a waiver during a war or military conflict because an unyielding requirement to balance the budget during such times might unduly constrain the U.S. military, but these waiver provisions differ dramatically and warrant close scrutiny. Specifically, the House provision would suspend the entire BBA, while the Senate version would permit only a partial waiver when the U.S. is engaged in a congressionally authorized “military conflict.”

Both the Senate and House versions of the BBA provide for a waiver during time of declared war. The House version would waive all provisions of the BBA, and the Senate version would waive all provisions of the BBA with the exception of Section 4, which requires a two-thirds vote in each chamber to increase taxes.

The Senate version requires a higher threshold for waiver during “military conflict” than for official declarations of war. Section 6 of the Senate version allows for Congress to waive certain provisions of the BBA “for any fiscal year in which a declaration of war against a nation-state is in effect” by a majority vote of both chambers. Section 7 allows for Congress to waive certain provisions “in any fiscal year in which the United States is engaged in a military conflict that causes an imminent and serious military threat to national security and is so declared by three-fifths” of both the House and Senate.

The House version allows Congress to waive the whole BBA “for any year in which a declaration of war is in effect” or “any fiscal year in which the United States is engaged in military conflict which causes an imminent and serous military threat to national security and is so declared by a joint resolution.” The House waiver provision would go into effect with a simple majority vote of each chamber.

Neither the House nor the Senate version would require a declaration of war as a predicate to waive certain provisions of the constitutional amendment. The Senate version requires a supermajority to authorize a waiver, whereas the House version requires a mere simple majority to waive during time of authorized “military conflict.”

For example, if a majority, but less than three-fifths, of each chamber authorized a wavier of the BBA during military conflict, the House version would allow Congress to waive the entire amendment and deficit-spend in areas unrelated to the military conflict. The Senate version would not allow a waiver, because both chambers would have to approve a waiver by a three-fifths vote. For the House version, the declaration of “military conflict” allows a waiver by majority vote of both chambers, whereas the Senate version would allow a waiver only if three-fifths of both chambers voted affirmatively. This is a significant difference in the two approaches to securing a waiver during a “military conflict.”

Additionally, the Senate BBA requires that, even if the United States were in a state of declared war or a military conflict, the House and Senate would still have to pass a revenue or tax measure by a supermajority roll-call vote. The House version does not contain such a requirement.

A specific condition on the nature of funding a “military conflict” appears in Section 7 of the Senate version but is absent in the House version. This condition would require Congress to specify the amount necessary for the military conflict as part of the budgeting process. The Senate resolution states that “such suspension must identify and be limited to the specific excess of outlays for that fiscal year made necessary by the identified military conflict.” The deficit for a fiscal year envisioned in the Senate version is limited to the cost of the military conflict itself, and in no circumstances can it be used to justify deficit spending elsewhere in the government.

The House waiver provision, on the other hand, is exceptionally broad in that it would give Congress carte blanche authority to deficit-spend on non-military items such as education, entitlements, transportation, or any other area where the federal government spends taxpayer dollars.

The requirement for a simple majority vote, coupled with the provision allowing non-military spending to breach a balanced budget requirement during times of military conflict, weakens the practical effects of the House BBA. Since the United States has been in a continuous state of “military conflict” since 2001 and may continue in such a state for the foreseeable future, the House language could be used to justify budget deficits for many years to come.

Effective Date

The two versions of the BBA have different effective dates. Both dates, however, give Congress and the President time to prepare to meet the BBA’s balanced budget requirement.

Section 11 of the Senate version of the BBA states that the budget must be balanced “beginning with the fifth fiscal year beginning after [the amendment’s] ratification.” Section 9 of the House version makes the effective date “beginning with the later of the second fiscal year beginning after [the amendment’s] ratification or the first fiscal year beginning after December 31, 2016.”

The Senate version allows for Congress to take five years to balance the budget no matter what year the states ratify the constitutional amendment—a provision that gives Congress five years to develop a plan to chip way at overspending.

If it were to be ratified this year, the House version gives Congress until 2016 to balance the budget. But what if it takes five years for Congress to ratify the amendment? The House version would give Congress two years to put the budget in balance. For a Congress that has had a hard time coming even close to balancing the budget, this requirement might prove rather daunting.

Total Outlays v. Total Receipts

The House and Senate versions of a BBA include a procedure by which more than a majority is necessary for Congress to pass an unbalanced budget. This provision in both measures allows some flexibility in the operation of a BBA. There may be a time when a supermajority of House and Senate Members deems it necessary to spend more than is taken in for a specific fiscal year.

The House and the Senate versions differ on the percentage of votes required to pass an unbalanced budget for a given fiscal year. Section 1 of the Senate version provides for a “two-thirds” vote of each chamber to pass an unbalanced budget; Section 1 of the House version provides for a “three-fifths” vote of each chamber.

If the House version were to become part of the Constitution, the House would need 261 votes and the Senate would need 60 votes to pass an unbalanced budget. If the Senate version were to become an amendment to the Constitution, the House would need 290 votes and the Senate would need 67 votes to pass an unbalanced budget. The House version would create a lower threshold to run budget deficits.

Clearly, the Senate version makes it tougher for Congress to waive the BBA during a time when the U.S. is at peace with other nations.

Prohibition on Court-Ordered Tax Increases

Section 8 of the Senate BBA states that “no court of the United States or of any State shall order any increase in revenue to enforce this article.” This provision would prohibit activist federal judges from ordering tax increases as a means to balance the budget. This provision is absent in the House version.

While preventing the courts from raising revenue is certainly prudent, it is not enough. The courts can still meddle with a BBA—for example, by issuing declaratory judgments or choosing how to balance the budget. The only way to prevent activist judges from intruding on political questions such as spending choices is a complete ban on judicial enforcement of the amendment. Any BBA should contain such a complete and explicit ban on judicial enforcement.[9]

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By Everette Hatcher III | Also posted in President Obama | Comments (0)

Brantley: Republicans will pay for opposing tax increases

July 20, 2011 – 4:23 pm

Today on the Arkansas Times Blog Max Brantley asserted:

 A growing number of polls show Republican voters think their representatives in Congress are too extreme — opposing any tax increases — and have not done enough to work out the debt ceiling problem.

Tim Griffin, Rick Crawford and Steve Womack don’t need no stinkin’ polls.

I do not think that the American people want their taxes raised right now. That may be contrary to what President Obama thinks though. In the article, “Myths of Tax Cuts for Rich, Spending Cuts for Poor,” published on May 3, 2011 by Brian Riedl, the case is made that the rich pay a higher percentage of the total taxes than they have in a long time. He notes, “The nonpartisan Congressional Budget Office reports that the richest 20 percent of taxpayers now shoulder a record 86 percent of the federal income tax burden. By comparison in 1981 it was 64 percent and in 2001 it was 81 percent.

Below is the complete article:

Conventional wisdom becomes dangerous when it contradicts analysis and evidence. On the federal budget, for example, we’re told that the rich are evading their fair share of the tax burden while the poor are seeing their spending slashed.

These assumptions have consequences. The president’s deficit commission — which maintains that everything is on the table — left the $638 billion federal anti-poverty budget virtually untouched. Others assert that finally soaking the rich will close the budget deficit.

Basic government data reveal this conventional wisdom to be flat wrong: Anti-poverty spending is at record levels. The rich are shouldering more of the tax burden than ever. The federal budget is more redistributive than ever.

First, let’s examine taxes. The nonpartisan Congressional Budget Office reports that the richest 20 percent of taxpayers now shoulder a record 86 percent of the federal income tax burden. This is substantially higher than when Ronald Reagan took office (64 percent) and even higher than when George W. Bush took office (81 percent).

How could the tax code become even more progressive after President Bush’s tax cuts? Imagine an income tax cut that reduces Montgomery Burns’ tax from $95,000 to $85,000 and Homer Simpson’s tax from $5,000 to $0. Mr. Burns saves more dollars, but the Simpsons see a larger percentage reduction in their taxes. As a result, Mr. Burns goes from paying 95 percent of the combined tax burden up to 100 percent.

This happened with the 2001 and 2003 tax cuts. Although Mr. Bush reduced taxes for wealthy individuals, he also cut the lowest income tax bracket by one-third and doubled the refundable child tax credit — taking 10 million low-income families off the income tax rolls. In fact, the poorest 40 percent of households now pay zero income taxes, and many actually receive checks from Washington on April 15.

Examining all federal taxes — including corporate, payroll and excise taxes — doesn’t significantly change the story. In 1980, the richest 20 percent financed 55 percent of all federal revenue. Today, they finance a record 69 percent. In that time, the portion of all taxes paid by the top 1 percent has doubled. The portion paid by the bottom 40 percent has dropped nearly in half.

The data are clear. Nearly every year, the federal tax burden tilts even further toward upper-income taxpayers. Seekers of a more progressive tax policy should answer two questions: If 86 percent of the income tax burden is not enough, how much should the top 20 percent of taxpayers pay? And if the bottom 40 percent paying no income taxes is not sufficient, what is?

The flip side of the “tax cuts for the rich” mantra has been “spending cuts for the poor.” Again, the official government data flatly contradict the conventional wisdom.

According to the White House’s Office of Management and Budget, federal anti-poverty spending has soared from $190 billion in 1990 to $348 billion in 2000, and to a staggering $638 billion this year (all adjusted for inflation). The growth since 2000 has been particularly remarkable in the Children’s Health Insurance Program (470 percent), food stamps (229 percent), energy assistance (163 percent), child care assistance (89 percent) and Medicaid (80 percent).

These expansions have been bipartisan: Mr. Bush — unfairly derided as bad for poor people — became the first president to spend more than 3 percent of the nation’s income on anti-poverty programs. President Obama then pushed it above 4 percent. In fact, since 1990, anti-poverty spending as a share of national income has expanded as fast as Social Security, Medicare, defense and education — combined.

So why the perceived “spending cuts for the poor”? Because anti-poverty spending increases (as large as $60 billion annually) occur automatically, and therefore go largely unnoticed. Yet any lawmaker proposing to shave even $1 billion off that growth is loudly attacked for “declaring war” on the safety net.

Missing is any broader context. Also missing is serious engagement with Robert Rector’s research displaying the ineffectiveness of much of this spending.

Washington faces enormous budgetary problems, including trillion-dollar deficits and the exploding costs of Social Security and Medicare. A lack of redistribution of wealth from the rich to the poor is not one of those problems.

Brian Riedl is the Grover M. Hermann fellow in federal budgetary affairs at the Heritage Foundation

By Everette Hatcher III | Also posted in Taxes | Tagged , , , , | Comments (0)

Senator Jim DeMint critical of fellow Senator Mitch Mcconnell

July 20, 2011 – 3:27 pm

Uploaded by on Jul 19, 2011

Sen. Jim DeMint (R-SC) is no stranger to fights with party leadership. And he’s not holding back in his criticism of the so-called “Plan B” that’s being developed by Senate Minority Leader Mitch McConnell (R-KY) and Senate Majority Leader Harry Reid (D-NV).

“It seems to be a cover-up,” DeMint said this afternoon in an exclusive interview with Heritage. “It’s like leaving the door to the federal vault open and looking the other way and saying we had nothing to do with the robbery.”

It seems to me that the Democrats are in calling the shots. Take a look at the points that Mike Brownfield makes today:

All of the clever rhetoric and recasting of history is designed to distract from the reality on the ground. The U.S. government has racked up $14 trillion in debt. For more than 800 days, the U.S. Senate has failed to pass a budget. President Obama continues his calls for “compromise” and “shared sacrifice,” all while insisting on tax increases to fund spending—a philosophy that was roundly rejected at the polls last November. That is not a manner of governance that President Reagan would have endorsed.

It’s also a line of argument that has no grounding in reality. Last night, the U.S. House passed the Cut, Cap, and Balance plan, which would impose a cap on federal spending and allows for an increase in the debt ceiling by $2.4 trillion on the condition that the House and Senate approve a balanced budget amendment. To date, it is the only plan to raise the debt limit that has passed either chamber, and it is the only plan whose details can be seen in the light of day.

But amid the good news last night, another plan emerged from the shadows promising to answer the nation’s budget woes. Its authors are a group of U.S. Senators known as the Gang of Six, and their plan offers to 1) make unspecified spending cuts and unspecified tax increases to yield a $500 billion reduction in the federal deficit and 2) impose spending caps on discretionary spending but not on Social Security, Medicare, Medicaid, and welfare programs that are the main cause of out-of-control spending.

The Heritage Foundation’s David Addington explains how the back-room strategy behind the Gang of Six plan paves the way for a debt limit hike and why the American people lose out:

Under the Gang of Six Plan, Congress will pass some easy stuff now, but punt the hard stuff to the future, promising that Congress will pass it some time within the next six months. There’s plenty in the Gang of Six Plan for President Obama — he gets his tax hikes and, in reality, he gets to borrow lots more money. But the American people don’t really get much of anything, except the usual empty promise of action in the future.

That’s not the only plan floating around Washington this week, though. There’s the McConnell Plan and the McConnell-Reid “just borrow more” plan, neither of which does the work that the American people have elected Congress to do—get spending under control right now without raising taxes, without raising spending, and without punting tough decisions on spending down the road for future Congresses and Presidents to cope with.

That path should be one in which Congress doesn’t raise taxes, preserves our ability to protect America, and gets spending and borrowing under control before raising the debt limit. Getting there will take strong leadership and an ability to clearly communicate a message to the American people—both of which are lacking among the left in the debt limit debate today. No wonder they’re looking to Reagan for help.

By Everette Hatcher III | Also posted in Current Events, Taxes | Tagged , , , , , | Comments (0)

Brummett: Congress abdicates political responsibility to make wise cuts, but we don’t need balanced budget amendment (Part 2)

July 20, 2011 – 5:16 am

John Brummett in his article “It may get personal in debt-limit end game,” Arkansas News Bureau, July 19, 2011 noted:

The White House is quietly encouraging the Reid-McConnell talks.

Meantime, there is talk of pandering to the tea party radicals in the unwieldy House by letting them pursue referral of a balanced-budget amendment to the Constitution.

Ratification would take years. If enacted, such an amendment would amount to the same abdication of political responsibility to make wise and responsible cuts in spending as has been evident in the debt-ceiling debate.

It is obvious to me that the Balanced Budget Amendment is needed because of the “abdication of political responsibility to make wise and responsible cuts in spending” that Brummett is talking about and we have all seen for decades.

The real debate in my view should be which variety of amendment should we pass. This is a series of posts I am doing on that subject. They come from Brian Darling’s excellent article, ” The House and Senate Balanced Budget Amendments: Not All Balanced Budget Amendments Are Created Equal,” Heritage Foundation, July 14, 2011. 

Abstract: Republicans in the House and Senate have announced that they will force votes on balanced budget constitutional amendments. While the Senate and House versions of the current BBA are similar, there are some important differences that Members of Congress and the American people need to understand. For example, the Senate version makes it more difficult to enact revenue-neutral tax reform, while the House version would waive its tax limitation in times of military conflict. How Congress resolves these differences could determine whether future Congresses and Presidents balance the budget without increasing taxes.

 

The House BBA

In the House of Representatives, conservatives are considering two competing versions of the BBA. On June 15, 2001, Representative Bob Goodlatte (R–VA) introduced House Joint Resolution 1 (H.J. Res. 1),[7] which the House Judiciary Committee subsequently approved. Representative Joe Walsh (R–IL) introduced House Joint Resolution 56 (H.J. Res. 56)[8] as a companion measure identical to the Hatch version (S.J. Res. 10) on April 6, 2011. The House is expected to move forward on H.J. Res. 1.

H.J. Res. 1, which the House Judiciary Committee approved by a 20–12 vote, reads as follows:

  • Section 1.Total outlays for any fiscal year shall not exceed total receipts for that fiscal year, unless three-fifths of the whole number of each House of Congress shall provide by law for a specific excess of outlays over receipts by a rollcall vote.
  • Section 2.Total outlays for any fiscal year shall not exceed 18 percent of economic output of the United States, unless two-thirds of each House of Congress shall provide for a specific increase of outlays above this amount.
  • Section 3.The limit on the debt of the United States held by the public shall not be increased unless three-fifths of the whole number of each House shall provide by law for such an increase by a rollcall vote.
  • Section 4.Prior to each fiscal year, the President shall transmit to the Congress a proposed budget for the United States Government for that fiscal year in which total outlays do not exceed total receipts.
  • Section 5.A bill to increase revenue shall not become law unless two-thirds of the whole number of each House shall provide by law for such an increase by a rollcall vote.
  • Section 6.The Congress may waive the provisions of this article for any fiscal year in which a declaration of war is in effect. The provisions of this article may be waived for any fiscal year in which the United States is engaged in military conflict which causes an imminent and serious military threat to national security and is so declared by a joint resolution, adopted by a majority of the whole number of each House, which becomes law.
  • Section 7.The Congress shall enforce and implement this article by appropriate legislation, which may rely on estimates of outlays and receipts.
  • Section 8.Total receipts shall include all receipts of the United States Government except those derived from borrowing. Total outlays shall include all outlays of the United States Government except for those for repayment of debt principal.
  • Section 9. This article shall take effect beginning with the later of the second fiscal year beginning after its ratification or the first fiscal year beginning after December 31, 2016.

The House is expected to debate H.J. Res. 1 during the week of July 18, 2011.

—Brian Darling is Senior Fellow for Government Studies in the Department of Government Studies at The Heritage Foundation.

By Everette Hatcher III | Also posted in President Obama | Comments (0)

3 myths about debt ceiling

July 19, 2011 – 3:37 pm

I got the info below from ReasonTV:

Uploaded by on Jul 18, 2011

According to Treasury Secretary Timothy Geithner, the U.S. government will reach its legal borrowing limit–the debt ceiling–on August 2. What will happen if the White House and congressional Republicans don’t reach an agreement before then? Will the U.S. be forced to default on its debt? In her latest appearance on Bloomberg TV, Reason columnist and Mercatus Center economist Veronique de Rugy explains the facts about the debt ceiling by separating economic myth from economic reality.

Myth 1: If a deal is not reached by August 2, the U.S. will default on its debt.
Fact 1: The Treasury Department can prioritize payments in order to avoid a default.

Myth 2: If the debt ceiling isn’t raised the government won’t be able to pay Social Security benefits.
Fact 2: There are approximately $2.6 trillion dollars in the Social Security Trust Fund. Those assets can be used to pay benefits. Furthermore, there is already trillions of dollars of interagency debt that counts toward the $14.29 trillion debt limit. Treasury Secretary Timothy Geithner could convert that interagency debt into publicly-held debt, preventing not only a technical default but also preventing any delay in government payments.

Myth 3: The Treasury cannot use the Social Security Trust Fund to delay a default past August 2.
Fact 3: While the Treasury can’t use money from the Social Security Trust Fund, it can “disinvest” from other trust funds to pay for benefits.

For additional information, see de Rugy’s article “The Facts About the Debt Ceiling.” http://reason.com/archives/2011/07/18/the-facts-about-the-debt-ceili

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Is Ron Paul the only Republican who does not want to kick the can down the road?

July 19, 2011 – 2:57 pm

When I hear all these big numbers that the Republicans want to cut trillions out a long time from now but very little out this year. It appears to me that they are cowards. Ron Paul is different though. President Obama is scared to cut too.

Kick the Can or Kick the Habit?

by Jagadeesh Gokhale

Jagadeesh Gokhale is a senior fellow at the Cato Institute, member of the Social Security Advisory Board, and author of Social Security: A Fresh Look at Policy Options University of Chicago Press (2010).

Added to cato.org on July 19, 2011

This article appeared on The Daily Caller on July 19, 2011

President Obama’s dire alarms over the approach of the federal debt ceiling, and subsequent calls for $4 trillion in debt reductions over 10 years, are starkly lacking key ingredients: substance and coherence as to what such a fiscal package should contain.

House Republicans, by contrast, have a program for long-term economic stewardship — Cut, Cap and Balance — that would deliver much larger savings than anything the president has put on the table. Before appreciating why such a program would be better, one must consider why a deal to achieve $4 trillion in savings over the next decade — whatever its contents — would be insufficient.

Given the weak economy, budget savings of $4 trillion will not be implemented immediately, but will be back-loaded with a multiple-year lag. However, estimates made by the Social Security and Medicare trustees and actuaries suggest that those two programs face cumulative, inflation-adjusted, long-term (75-year) fiscal gaps totaling $39.2 trillion. This implicit debt will accrue interest and grow larger over time. The cumulative interest cost of that shortfall over 10 years, under a conservative, inflation-adjusted interest rate of 2.9 percent per year (the rate used by the Social Security actuaries), amounts to $13 trillion — implying that not making any fiscal adjustments for the next 10 years will increase the budgetary imbalance to $52.2 trillion. Thus, scheduling a heavily back-loaded reduction of those costs by just $4 trillion through 2020 is unlikely to improve the federal government’s fiscal condition.

The alternative to increasing the debt limit without sufficiently large spending reductions will amount to kicking the deficit can ahead, to just beyond the 2012 elections.

These are conservative estimates, because they include only shortfalls in entitlement programs and assume that the recent health care reform (the Patient Protection and Affordable Care Act of 2010) will appreciably reduce Medicare’s net unfunded obligations. But these estimates exclude the sizable increases in non-entitlement shortfalls and increases in future state Medicaid costs resulting from health care reform — not to mention the fact that Congress is likely to strike the proposed future reductions in Medicare, as it has routinely done for decades.

Thus, for a 10-year, $4 trillion budget deal to significantly reduce the nation’s long-term fiscal imbalance, we will have to stick to fiscal discipline well beyond 2020, which means not enacting new unfunded entitlement benefits or rapidly increasing spending. The fate of the 1990 Budget Enforcement Act, which was abandoned as soon as budget surpluses emerged, does not bode well for a similar deal now unless it is accompanied by constraints against reversals by future Congresses — constraints that the Cut, Cap and Balance program would introduce.

In order to prevent lawmakers from initiating new entitlement (or “investment”) programs with inadequate funding schemes, those constraints should be an integral part of the next budget deal. And such a budget process constraint should itself be protected from repeal except through a large supermajority in Congress. The political price of voting for tax increases to fund new benefits would dampen lawmakers’ enthusiasm to expand entitlements — in contrast to the adoption of the Medicare prescription drug benefit in 2003 or last year’s health care reform, where lawmakers were shielded from the political costs of actually paying for the new programs.

Jagadeesh Gokhale is a senior fellow at the Cato Institute, member of the Social Security Advisory Board, and author of Social Security: A Fresh Look at Policy Options University of Chicago Press (2010).

 

More by Jagadeesh Gokhale

The alternative to increasing the debt limit without sufficiently large spending reductions will amount to kicking the deficit can ahead, to just beyond the 2012 elections. We’ll then tolerate fierce campaigns soliciting support for liberal and conservative visions of a long-term budget fix. Chances are, however, that a polarized electorate won’t yield an unambiguous mandate for the direction of fiscal adjustments beyond 2012.

President Obama is exhorting legislators to swallow bitter medicine now because doing so will only become more difficult as the 2012 election draws closer. But had he seized the pro-budget-reform momentum generated by his own Simpson-Bowles deficit reduction commission last year, things may have turned out better for him politically and for the nation economically. Now we may remain in the current policy limbo until after next November, caught between the irresistible force of entitlement spending and the immovable object of Republican opposition to tax increases.

Along the way, we’ll increase the debt limit, one back-loaded bit at a time, without much prospect of avoiding an even larger fiscal calamity down the road. Maybe it’s time for the one sure way of curing this disease: to shred and discard the federal credit card by enacting Cut, Cap and Balance.

By Everette Hatcher III | Also posted in President Obama | Tagged , , , , | Comments (0)

Brummett: Congress abdicates political responsibility to make wise cuts, but we don’t need balanced budget amendment (Part 1)

July 19, 2011 – 7:28 am

Published on Jul 15, 2011 by

During his third news conference on the debt crisis, President Obama says Congress does not need a constitutional amendment to do its job, the constitution “tells us to do our job.”

_______________________

The problem with President Obama’s comments above is that he really does not see the tremendous increase in federal spending as the problem. He blames everything else!!!! He says we do not need the balanced budget amendment but uncontrolled federal spending is the reason we need it!!!

John Brummett in his article “It may get personal in debt-limit end game,” Arkansas News Bureau, July 19, 2011 noted:

The White House is quietly encouraging the Reid-McConnell talks.

Meantime, there is talk of pandering to the tea party radicals in the unwieldy House by letting them pursue referral of a balanced-budget amendment to the Constitution.

Ratification would take years. If enacted, such an amendment would amount to the same abdication of political responsibility to make wise and responsible cuts in spending as has been evident in the debt-ceiling debate.

It is obvious to me that the Balanced Budget Amendment is needed because of the “abdication of political responsibility to make wise and responsible cuts in spending” that Brummett is talking about and we have all seen for decades.

The real debate in my view should be which variety of amendment should we pass. This is a series of posts I am doing on that subject. They come from Brian Darling’s excellent article, ” The House and Senate Balanced Budget Amendments: Not All Balanced Budget Amendments Are Created Equal,” Heritage Foundation, July 14, 2011. 

Abstract: Republicans in the House and Senate have announced that they will force votes on balanced budget constitutional amendments. While the Senate and House versions of the current BBA are similar, there are some important differences that Members of Congress and the American people need to understand. For example, the Senate version makes it more difficult to enact revenue-neutral tax reform, while the House version would waive its tax limitation in times of military conflict. How Congress resolves these differences could determine whether future Congresses and Presidents balance the budget without increasing taxes.

Congress is preparing for a historic debate over what role—if any—a balanced budget amendment (BBA) to the U.S. Constitution should play in relation to the United States’ statutory debt ceiling. Some conservatives in the U.S. House of Representatives and the U.S. Senate have demanded a vote on a balanced budget amendment. Other conservatives have gone as far as to demand passage of a BBA in the House and Senate as a precondition to passing a debt limit increase.

If the Senate and House were to pass identical versions of a BBA, the constitutional amendment would then be sent to the states for ratification.[1]

Republican leaders in the House and Senate have declared that a vote will be scheduled in both chambers on their respective versions of a BBA. The differences between the two versions are significant: Clearly, not all BBAs are created equal.

The provisions that vary between the House and Senate versions of the BBA may have dramatic policy implications for federal spending. For instance, the two versions of the BBA diverge significantly on such threshold questions as how each amendment’s provisions apply during times of “military conflict” and the number of votes required to waive the constitutional mandate that the budget be balanced during a fiscal year.

According to Roll Call, Republicans in the House and Senate have announced that they will force votes on balanced budget constitutional amendments.[2] The Senate is expected to vote the week of July 18, 2011, while the House is expected to vote on another version of the BBA during the same week.

While the Senate and House versions of the current BBA are similar, there are some important differences that Members of Congress and the American people need to understand. How Congress resolves these differences could determine whether future Congresses and Presidents balance the budget without increasing taxes.

The Senate BBA

Senator Mike Lee (R–UT) and Senator Jon Kyl (R–AZ) introduced a BBA that would cap spending as a percentage of gross domestic product (GDP), require supermajority votes to increase the debt limit or raise taxes, and prohibit the judiciary from using a BBA as authority to unilaterally order tax increases to balance the budget.[3]

Senator Lee’s version of the BBA included the following three pillars:

  • Requiring a balanced budget for each fiscal year;
  • Limiting federal spending to no more than 18 percent of GDP; and
  • Requiring a supermajority vote in both Houses of Congress in order to increase taxes, raise the debt ceiling, or run a specific deficit in a particular year.[4]

This version of the BBA, Senate Joint Resolution 5 (S.J. Res. 5), departed from the Contract with America version in that prior incarnations of the BBA did not include a spending cap.

Senator Orrin Hatch (R–UT) drafted a BBA that garnered unanimous support from all 47 Republican Senators. Senator Hatch introduced this BBA, referred to as Senate Joint Resolution 10 (S.J. Res. 10), on March 31, 2011.[5]

On June 29, 2011, Senate Minority Leader Mitch McConnell (R–KY) introduced an identical measure, Senate Joint Resolution 23 (S.J. Res. 23),[6] which was then read onto the Senate Calendar on June 30. The McConnell BBA contains the following provisions:

  • Section 1.Total outlays for any fiscal year shall not exceed total receipts for that fiscal year, unless two-thirds of the duly chosen and sworn Members of each House of Congress shall provide by law for a specific excess of outlays over receipts by a roll call vote.
  • Section 2.Total outlays for any fiscal year shall not exceed 18 percent of the gross domestic product of the United States for the calendar year ending before the beginning of such fiscal year, unless two-thirds of the duly chosen and sworn Members of each House of Congress shall provide by law for a specific amount in excess of such 18 percent by a roll call vote.
  • Section 3.Prior to each fiscal year, the President shall transmit to the Congress a proposed budget for the United States Government for that fiscal year in which—
    1. total outlays do not exceed total receipts; and
    2. total outlays do not exceed 18 percent of the gross domestic product of the United States for the calendar year ending before the beginning of such fiscal year.
  • Section 4.Any bill that imposes a new tax or increases the statutory rate of any tax or the aggregate amount of revenue may pass only by a two-thirds majority of the duly chosen and sworn Members of each House of Congress by a roll call vote. For the purpose of determining any increase in revenue under this section, there shall be excluded any increase resulting from the lowering of the statutory rate of any tax.
  • Section 5.The limit on the debt of the United States shall not be increased, unless three-fifths of the duly chosen and sworn Members of each House of Congress shall provide for such an increase by a roll call vote.
  • Section 6.The Congress may waive the provisions of sections 1, 2, 3, and 5 of this article for any fiscal year in which a declaration of war against a nation-state is in effect and in which a majority of the duly chosen and sworn Members of each House of Congress shall provide for a specific excess by a roll call vote.
  • Section 7.The Congress may waive the provisions of sections 1, 2, 3, and 5 of this article in any fiscal year in which the United States is engaged in a military conflict that causes an imminent and serious military threat to national security and is so declared by three-fifths of the duly chosen and sworn Members of each House of Congress by a roll call vote. Such suspension must identify and be limited to the specific excess of outlays for that fiscal year made necessary by the identified military conflict.
  • Section 8.No court of the United States or of any State shall order any increase in revenue to enforce this article.
  • Section 9.Total receipts shall include all receipts of the United States Government except those derived from borrowing. Total outlays shall include all outlays of the United States Government except those for repayment of debt principal.
  • Section 10.The Congress shall have power to enforce and implement this article by appropriate legislation, which may rely on estimates of outlays, receipts, and gross domestic product.
  • Section 11. This article shall take effect beginning with the fifth fiscal year beginning after its ratification.

The Senate is expected to commence debate on S.J. Res. 23 during the week of July 18, 2011.

—Brian Darling is Senior Fellow for Government Studies in the Department of Government Studies at The Heritage Foundation.

Related posts:

Balanced Budget Amendment the answer? Boozman says yes, Pryor no, Part 34 (Input from Dan Mitchell of the Cato Institute Part 6)

Classic Ron Paul: “I expect deficits to explode, not come down” 4/9/1997, C-SPAN Steve Brawner in his article “Safer roads and balanced budgets,” Arkansas News Bureau, April 13, 2011, noted: The disagreement is over the solutions — on what spending to cut; what taxes to raise (basically none ever, according to Boozman); whether or not […]

Ernest Istook: “it’s time to put away childish things” and tackle deficit, will Senator Mark Pryor do it?

U.S. Sen. Mark Pryor at the 2009 DPA J-J Dinner U.S. Sen. Mark Pryor at the 2009 Democratic Party Jefferson Jackson Dinner, Arkansas’s largest annual political event. (Did you notice that besides Mike Ross, EVERY OTHER DEMOCRAT THAT PRYOR MENTIONS DOING SUCH A GREAT JOB IN WASHINGTON IS NO LONGER IN OFFICE, SNYDER, LINCOLN, and BERRY)

Balanced Budget Amendment the answer? Boozman says yes, Pryor no, Part 29 (Input from Dan Mitchell of the Cato Institute Part 1)(Milton Friedman past posts)

Constitutional Balanced Budget Amendment Steve Brawner in his article “Safer roads and balanced budgets,” Arkansas News Bureau, April 13, 2011, noted: The disagreement is over the solutions — on what spending to cut; what taxes to raise (basically none ever, according to Boozman); whether or not to enact a balanced budget amendment (Boozman says yes; […]

Balanced Budget Amendment the answer? Boozman says yes, Pryor no, Part 28 (Input from Norm Coleman, former Republican Senator from MN)

  It’s Simple to Balance The Budget Without Higher Taxes Steve Brawner in his article “Safer roads and balanced budgets,” Arkansas News Bureau, April 13, 2011, noted: The disagreement is over the solutions — on what spending to cut; what taxes to raise (basically none ever, according to Boozman); whether or not to enact a […]

Balanced Budget Amendment the answer? Boozman says yes, Pryor no, Part 27 (Input from Newt Gingrich, Mike Coffman)

Debunking White House Pro-Tax Increase Propaganda This Center for Freedom and Prosperity Foundation mini-documentary debunks White House pro-tax propaganda with a point-by-point rebuttal of a video narrated by Austan Goolsbee of Obama’s Council of Economic Advisers. http://www.freedomandprosperity.org Steve Brawner in his article “Safer roads and balanced budgets,” Arkansas News Bureau, April 13, 2011, noted: The […]

Balanced Budget Amendment the answer? Boozman says yes, Pryor no, Part 26 (Milton Friedman tells us how to stay free Part 5)

Steve Brawner in his article “Safer roads and balanced budgets,” Arkansas News Bureau, April 13, 2011, noted: The disagreement is over the solutions — on what spending to cut; what taxes to raise (basically none ever, according to Boozman); whether or not to enact a balanced budget amendment (Boozman says yes; Pryor no); and on […]

By Everette Hatcher III | Also posted in President Obama | Tagged , , , , | Comments (2)

Will we get an agreement on debt ceiling?

July 19, 2011 – 12:46 am

Excellent article by Reason TV below:

Uploaded by  on Mar 1, 2011

[Editor’s Note: Go to http://reason.com/blog/2011/03/01/raising-the-debt-limit-it-just for details, charts, and links]

Some say the world will end in fire and some say in ice.

But in Washington, a lot of people say it will end if we don’t continually raise the debt ceiling.

The statutory debt limit, or debt ceiling, represents the maximum amount of debt the federal government can carry at any given time. The limit was created in 1917 so that Congress wouldn’t have to vote every time the government wanted to increase the amount of debt (which was becoming a more and more frequent occasion). Since then, the Treasury Department has had the authority to issue new debt up to whatever the limit is to fund government needs. Last year, the limit was raised to $14.3 trillion, an amount that is about to reached.

As it approaches, Federal Reserve Chairman Ben Bernanke has said failing to raise the limit would likely mean the U.S. would default on its debt, creating “real chaos” in place of the fake chaos that’s out there now. Treasury Secretary Timothy Geithner has said that failing to raise the limit would be “deeply irresponsible” and and Austan Goolsbee, President Obama’s chief economic adviser, has said that not raising the limit would create “the first default in history caused purely by insanity.”

Eh, maybe.

As Reason columnist and Mercatus Center economist Veronique de Rugy, has pointed out, we’ve maxed out the nation’s credit card in the past without such dire results. In the mid-1980s, the mid-1990s, and in 2002, for instance, the debt limit wasn’t raised for months at a time and the government got along just swell. The government has a big bag of tools it can use, ranging from playing around with the amount of spending that is liable to the limit to prioritizing interest and debt payments over other outlays. Interest on the debt for this year is projected to be about $225 billion and government revenue is expected to be around $2.2 trillion, so the government can easily pay the vig and avoid defaulting.

What it shouldn’t do is simply keep piling on the debt. The limit has been raised no fewer than 10 times in the past decade. When Republicans ran the White House and the Congress, they voted overwhelmingly to charge it and Democrats, including Sen. Obama, hollered bloody murder. In 2006, he called the need to yet again increase the debt limit “a sign of leadership failure.” Now that Dems run the show, the GOP has suddenly rediscovered its inner cheapskate.

So it goes.

The boldest plan to rein in spending and debt comes from newcomer Sen. Mike Lee (R-Utah), a Tea Party favorite who dispatched Republican incumbent Bob Bennett in the primaries before coasting to victory in the general election last fall. Lee has vowed to block passage of a debt-limit increase unless Congress signs on to his balanced-budget amendment which would cap annual federal spending at 18 percent of Gross Domestic Product (GDP). The amendment would require a super-majority of two-thirds in the Senate and House of Representatives. Lee’s bill is competing with another Republican proposal from Sens. Hatch (Utah) and Cornyn (Texas) to cap spending at 20 percent of GDP. The Hatch-Cornyn bill has weaker rules on its higher cap as well.

In 2010, spending came to about 24 percent of GDP and it’s expected to come in around 25 percent of GDP in 2011. Since 1950, total federal revenues have averaged 17.8 percent and have reached higher than 20 percent exactly once. Spending over the same time has averaged just under 20 percent.

Whether Lee’s proposal carries the day — and there’s a strong case that its passage would do more to calm financial markets than simply bumping up the federal credit line — neither the Democratic nor the Republican leadership has yet to advance a serious proposal to cut spending and reduce outstanding debt. Indeed, both the president’s budget proposal for 2012 and the generally non-existent Republican response are not only deeply irresponsible but clear signs of insanity.

That ain’t right. But it does help explain why a government that has increased spending over 62 percent in real dollars can no longer get by on a $14 trillion debt ceiling.

For more info, go to http://reason.com/blog/2011/03/01/raising-the-debt-limit-it-just

Video written and produced by Austin Bragg. Article text by Nick Gillespie.

By Everette Hatcher III | Also posted in President Obama | Comments (0)