Category Archives: spending out of control

The Stimulus Failed, (Part 1), Do you want your grandchildren to pay for your walking bridge?

July 6, 2011 – 4:07 pm

TWO RIVERS BRIDGE: Opening nears.

People just don’t understand how wasteful government can be and how giving government more control of our lives destroys much of the freedom that we should have. This series on the stimulus demostrates these points. This whole series started because of a post I did on July 6, 2011 about an post in the Arkansas Times Blog.

On July 6, 2011 on the Arkansas Times Blog I posted concerning the walking bridge in Little Rock that stimulus funds help build:

Tim Griffin spoke in Central Arkansas recently at a townhall meeting and mentioned that a couple of million of stimulus money went to build the walking bridge in Little Rock that will be opening this summer. Then he went on to show how it was silly for our government to try to stimulate the economy with our national credit card.
Steve Chapman rightly noted in his article “Stimulus to Nowhere” noted:

The federal government took out loans that it will have to cover with future tax increases … so states don’t have to. It’s like paying your Visa bill with your MasterCard.

The person using the username “Arkansas Panic Fan” responded:

Bridge = good stuff for Central Arkansas. Not sure why it is a bad thing. It is your money at work here being used for your benefit. I applaud this type of government activity. This is the type of project and progress you can see, touch, smell, hear.

That being said, Saline Republican, is this a waste of your money? You can use it as you wish.

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Let me respond with several points:

1. If the bridge is such a good thing then why can’t those who are excited about it get the funds to build it?

2. If you applaud the government for spending money for every good idea out there, ultimately where does all the money come from? Our grandchildren will be paying off this bridge in about 50 years if our country survives.

3. Building things with the government involvement is the most wasteful thing that you can do. How long does it take them to get the highway work done?  Turn the highways over to private enterprise and things would change radically for the good. Do you get great service from Fed Ex or the U.S.Post Office? I had two relatives tell me stories of working part time at the post office and each time they were told to “slow down or you will get us all fired.”

4. The stimulus approach taken by President Obama has been to blow up our deficit when he should have sought to cut spending because the signs were there at the end of the Bush era that the recession was deepening. Instead, he decided to increase the spending even more than Bush had.

J.D. Foster’s testimony on Feb 16, 2011 before Congress shows how stupid the spending stimulus was:

My name is J.D. Foster. I am the Norman B. Ture Senior Fellow in the Economics of Fiscal Policy at The Heritage Foundation. The views I express in this testimony are my own, and should not be construed as representing any official position of The Heritage Foundation.

At best, stimulus efforts based on government spending and tax cuts with little or no incentive effects have done no harm. At best. It is quite possible most of these efforts over the past couple of years have slowed the recovery while adding hundreds of billions of dollars to the national debt.

The record is all the more unfortunate because it is possible for a President and Congress to work together to stimulate the economy to faster growth during and after a recession. They can do so by improving incentives to produce and to work: for example, by reducing regulations and tax distortions. They can do so by reducing the uncertainties surrounding future policy. They can do so by expanding foreign markets for domestic goods and services. Recent efforts to stimulate the economy have been unsuccessful because they did little or none of these things. Regulations have increased. Uncertainty has increased. Tax distortions have been left in place or even increased in some areas. And efforts toward free trade have been anemic, at best.

Stimulus can work, but it has not worked because the Administration took another approach, emphasizing tax relief with little or no incentive effects combined with massive increases in spending. The President inherited a ballooning budget deficit and opted to grow it further. At best, this would be expected to be ineffectual. At best, because the resulting increased deficits infused economic decision-making with even more uncertainty about the consequences of massive deficit spending and how and when government will act to restore fiscal sanity.

Fortunately, the economy is showing clear signs of sustained recovery; uneven recovery to be sure, stronger in some areas than others both geographically and by industry, but recovery nonetheless. Despite the tremendous blows from the financial crisis and all that it entailed, the underlying strengths of our free market system once again are at work, giving expression to the vitality, energy, and innovation of the American people. Make no mistake: Our economy is recovering despite—not because of—the actions taken in Washington to grow it.

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

What does the Heritage Foundation have to say about our potential choices concerning federal spending:Study released May 10, 2011 (Part 5)

July 2, 2011 – 11:54 pm

   Thomas Sowell – Welfare

“Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity,” Heritage Foundation, May 10, 2011 by  Stuart Butler, Ph.D. , Alison Acosta Fraser and William Beachis one of the finest papers I have ever read. Over the next few days I will post portions of this paper, but I will start off with the section on federal spending reform.

Reforming the Federal Budget Process. When Congress established its current budget process in 1974, the United States was in debt by about a half-trillion dollars; it is now in debt over $14 trillion. Regrettably, for any proposal to deal with the nation’s fiscal problems, the budget process does little to help and in many ways impedes good and bold policy. For one thing, its focus on just 10 years diverts lawmakers from dealing with the mounting long-term challenges, such as retirement programs. For another, the lack of firm budget controls and enforcement procedures makes fiscal discipline very difficult. Reforming the budget process is therefore an implicit part of reforming the budget itself.

In the Heritage plan, we change the budget process to impose enforceable caps to reduce total federal spending to 18.5 percent of GDP by 2021 (including entitlement programs) and then keep spending at that level. Within those overall caps we also cap non-defense discretionary spending at 2.0 percent of GDP. Anti-poverty spending is also capped, as described above. These statutory restrictions on future spending are to be no higher than the modern historical level of federal revenues.

We also propose amending existing federal laws that provide permanent or indefinite appropriations for federal agencies or programs (including and especially entitlement programs), or that allow agencies or programs to spend funds they receive from fees or other sources, rather than depositing them in the U.S. Treasury, so as to retrieve congressional control of spending for those agencies and programs. Within our specific reforms for Medicare and Medicaid we also include a fixed budget amount for each program.

To make the budget process more visible, understandable, and accountable to the American people, we require Congress to estimate and publish the projected cost over 75 years of any proposed policy or funding level for each significant federal program. Any major policy change should also be scored over this long-term horizon.

Finally, in addition to calculating the costs of proposed congressional actions without regard to the response of the economy to those actions (known as “static” scoring), we require a parallel calculation that takes account of that response (known as “dynamic” scoring) so as to make more practical and useful cost information available to Congress when it decides whether to pursue the actions.

The Bottom Line

Runaway federal spending threatens to drown the nation in taxes and debt for generations to come. Promoting economic prosperity requires streamlining government, cutting spending, and empowering families and entrepreneurs.

The Heritage plan achieves those objectives by focusing Washington on performing a limited number of appropriate duties well rather than a wider range of questionable duties poorly. It transfers more power to state and local governments, which are closer and more responsive to the people; transfers functions to the private sector that the market can perform better; targets federal spending more precisely to those in need; and eliminates wasteful, unnecessary, and duplicative spending.

These steps will unleash the power of the private sector to meet market demands, create jobs, and raise living standards. Taking these steps, combined with entitlement and tax reform, means that Americans can look forward to opportunity and prosperity rather than a future of debt and economic decline.

By Everette Hatcher III | Comments (0)

What does the Heritage Foundation have to say about our potential choices concerning federal spending:Study released May 10, 2011 (Part 4)

July 1, 2011 – 11:50 pm

Welfare Can And Must Be Reformed

“Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity,” Heritage Foundation, May 10, 2011 by  Stuart Butler, Ph.D. , Alison Acosta Fraser and William Beachis one of the finest papers I have ever read. Over the next few days I will post portions of this paper, but I will start off with the section on federal spending reform.

Replacing Farm Subsidies with Farmer Savings Accounts. Intended to
remedy low crop prices and farmer poverty, the current farm subsidy system does
neither. Farm subsidies encourage overplanting, which drives prices down
further, necessitating even more subsidies. Moreover, rather than focusing on
low-income farmers, most farm subsidies go to commercial farmers who report an
average annual income of nearly $200,000. Claims that the agriculture industry
could not survive without large subsidies are contradicted by the fact that
nearly all subsidies go to growers of just five crops (wheat, cotton, corn,
soybeans, and rice), while fruit, vegetable, livestock, and poultry operations
thrive with almost no government aid.

The real problem—yearly income fluctuations due to crop and weather
unpredictability—can be solved inexpensively with farmer savings accounts. Under
the Heritage plan, growers of all crops, not just the “big five,” can save money
during boom years in tax-deductible IRA-style accounts and withdraw those funds
during bust years as taxable income, thus smoothing out their yearly income
fluctuations. An improved no-net-cost crop insurance system will assist when
major disasters deplete most farmers’ accounts. All farmers can participate in
the new system regardless of income or crop grown and at a fraction of the
current cost to taxpayers.

Capping and Reforming Antipoverty Spending. Since 1990, federal
antipoverty spending, including Medicaid, has expanded 236 percent faster than
inflation, from $190 billion to $639 billion (an increase of 2.2 percent of
GDP). Antipoverty spending has grown as much as Social Security, Medicare,
defense, and education spending combined. Overall, the federal government
spends approximately $28,000 per family with children in the bottom third of the
income table without encouraging independence. Many of the programs do not
include enforced work requirements and continue to reward illegitimacy and other
destructive behaviors that block the road to independence.

Once the unemployment rate drops back to normal levels (projected in 2014),
the Heritage plan returns total federal antipoverty spending to its 2007 level
(adjusted for inflation) and then caps total spending growth at the inflation
rate (using the medical inflation rate for the health care portion). Congress or
states could shift spending among antipoverty programs to increase effectiveness
as long as total spending does not exceed the cap. This cap and flexibility will
force lawmakers at all levels to reexamine the size and goals of the welfare
state and tailor assistance more efficiently to help families escape poverty and
dependence and achieve independence.

Other Spending Reforms. Multiple federal programs should be returned
to the state or local levels. For instance, there is no compelling reason for
Washington to finance local job training, justice, environmental, or community
and economic development programs. Therefore, the plan eliminates these federal
grant programs with the expectation that state and local governments will
determine whether to address these local issues with local funds and be held
accountable by local voters. Energy research and development spending that is
commercial in nature is moved to the private sector. Lawmakers are also expected
to pare $15 billion in costs associated with the estimated $125 billion in
annual federal payment errors.

Asset Sales. The federal government currently owns and controls vast
assets, including huge swaths of commercial land, especially in the West; power
generation facilities; valuable portions of the electromagnetic spectrum;
underutilized buildings; and financial assets. Given the federal government’s
huge debt, it makes sense to sell at least a portion of these assets, especially
those that are currently generating revenue below market levels (in which case
the sale value would be above the present value of the current income on the
assets). Sales of assets would immediately reduce the government’s operating
deficit and debt, reducing future interest costs.

The Heritage plan includes a program of asset sales totaling approximately
$260 billion over 15 years. This includes partial sales of federal properties,
real estate, mineral rights, the electromagnetic spectrum, and energy-generation
facilities.

By Everette Hatcher III | Comments (0)

What does the Heritage Foundation have to say about our potential choices concerning federal spending:Study released May 10, 2011 (Part 3)

June 30, 2011 – 11:47 pm

Federal Spending by the Numbers

“Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity,” Heritage Foundation, May 10, 2011 by  Stuart Butler, Ph.D. , Alison Acosta Fraser and William Beachis one of the finest papers I have ever read. Over the next few days I will post portions of this paper, but I will start off with the section on federal spending reform.

Scaling Back K–12 Education Spending and Reforming Higher Education
Spending. Federal spending on K–12 education has grown 192 percent faster
than inflation since 2000, yet this sharply increased federal spending and
federal micromanagement of school districts has not improved student
performance. Under the Heritage plan, total federal K–12 spending is reduced to
2000 levels (adjusted for inflation), in part by eliminating many of the
numerous small education programs that Washington uses to micromanage school
districts. This will allow states and school districts to manage and meet the
needs of their students more effectively.

Higher education reforms, including the new deduction for college tuition in
the Heritage tax reform, ensure that students receive enough financial
assistance to attend college. Shifting from grants to student loans ensures that
most college costs will be financed by the college graduates themselves, who
benefit the most from their degrees, and not by other Americans.

However, thanks to a key provision in the Heritage plan’s tax reform, higher
education costs are partially defrayed through the simplified and generous tax
deduction for higher education tuition. Families whose incomes are too low for
them to benefit fully from this tax deduction are eligible for a Pell Grant with
a value up to the tax deduction. The direct student loan program is retained
with loan limits high enough to guarantee college access but with rates set to
ensure that there are no budgetary costs, including the costs associated with
deferred repayment until graduation as well as the costs of loan forgiveness
programs.

Thus, all Americans will have access to financial aid in attending college,
but it will not be a free ride at the taxpayers’ expense.

Making Public Health Service Spending More Efficient. Public health
service spending has grown 56 percent faster than inflation since 2000. While
health research is vital, the Heritage plan eliminates waste and inefficiencies
that have accumulated. For example, by consolidating redundant facilities and
laboratories, the Heritage plan saves the National Institutes of Health $1
billion annually. States take over the financing and operation of health
centers, health professions programs, and the substance abuse block grant. The
Centers for Disease Control and Prevention sees savings over $2 billion annually
by reducing travel, ending questionable public campaigns, and focusing its role
on interstate coordination. Finally, converting Indian Health Service aid into a
premium-support system (where possible) and reforming the Food and Drug
Administration save a combined $1 billion annually.

Funding an Adequate Defense. The most important core function of the
federal government is ensuring America’s national security, but it needs to be
accomplished as economically and efficiently as possible. The Defense Department
will focus on identifying and addressing its significant levels of wasteful
spending and initiating significant reforms and efficiencies in logistics and
acquisition processes so that those funds can be reprioritized into the most
important uses to protect America and our allies by maintaining a strong,
modern, and effective military.

The war on terrorism has increased defense spending to approximately 5
percent of GDP, yet it remains well below the 9 percent spent during in the
1960s and the 6 percent spent during the 1980s. While the Heritage plan
recognizes that predicting precise funding requirements for overseas contingency
operations is impossible, it is reasonable to expect that the phasedown in those
efforts will permit reducing defense spending to approximately 4 percent of GDP
and maintaining it at that level. Ultimately, of course, defense spending will
have to be whatever it takes to protect America and its interests around the
globe.

While this proposal for maintaining sufficient levels of defense spending
assumes that future military personnel will be brought under the broader
proposals for health care and retirement reform outlined in this report, it also
provides for tailored transition options for current military personnel and
retirees. Importantly, reforms in compensation and benefits must maintain
effective recruitment and retention of, and honor reasonable commitments to,
members of the armed forces.

Repealing Obamacare. If fully implemented, Obamacare will add
trillions of dollars in long-term government spending to a health care system
that is already unaffordable. It also increases federal controls and mandates
and will impose heavy costs on states, businesses, and households. As noted
earlier, the Heritage plan repeals Obamacare and replaces it with the improved,
consumer-centered health care system.

By Everette Hatcher III | Comments (0)

How should Congress address Debt Ceiling?

June 30, 2011 – 3:14 pm

The United States Debt Limit Explained – (CR) Heritage Foundation

Michael A. Needham has the best answer that I have heard so far:

Heritage Action is a “no” and will remain a “no” unless a deal rises to the level of the substantial fiscal challenges which face our nation.

Debt negotiations are intensifying and conservatives are growing increasingly skeptical that the Obama administration and Democrats in Congress are willing to do what it takes to put America back on a path to prosperity. On Wednesday, Heritage Action’s CEO Michael A. Needham sent a letter to Congress outlining our position on the debt ceiling.

The text of the full letter is below:

June 29, 2011

Dear Congressman,

Over the next month, you will face tremendous pressure to accept a deal to raise our nation’s debt ceiling. Heritage Action for America will key vote the deal to raise the ceiling.

Heritage Action is a “no” and will remain a “no” unless a deal rises to the level of the substantial fiscal challenges which face our nation. A deal to raise our debt ceiling must include historic reforms that will save the American dream for our children and grandchildren. The Heritage Foundation laid out what such a package might look like: 1) cut current spending; 2) restrict future spending; and, 3) fix the budget process. Currently, there is only one plan on the table that meets this test and that is the plan embodied in the Cut, Cap and Balance Pledge. This is an example of a plan that matches the historical moment that we currently face as a nation.

In order to achieve reforms of this magnitude, Congress must do everything possible to eliminate the uncertainty surrounding Treasury Secretary Timothy Geithner’s August 2 deadline. Congress cannot negotiate with a clear mind if the administration is constantly invoking the specter of default. As Heritage Foundation economist J.D. Foster, Ph.D. points out:

Both immediately and long after it reaches the debt limit, the government would have far more than enough revenue coming in that the Secretary of the Treasury could use to pay interest on the debt. Nor would preserving the current debt limit put at risk the full faith and credit of the United States government, as the President’s chief economic adviser has claimed. The government would continue to pay net interest as it comes due.

In the event that liberals will not allow us to raise the debt ceiling because they cannot stomach substantive, systemic changes to put the country back on sound footing, conservatives must develop a responsible plan. Congress must exercise their constitutional power of the purse, building upon the framework of the Toomey-McClintock legislation, and prioritize federal spending.

Finally, Heritage Action will require at least 72 hours to review the details of any deal to increase our nation’s debt ceiling. The Washington inclination to go behind closed doors and strike a grand deal is unacceptable. Heritage Action, and the hundreds of thousands of Americans we represent, demand transparency and accountability. Americans must feel confident their Members of Congress understand what they are voting on. There must not be another “pass the bill so that we can find out what is in it” moment. We will reserve the right to score retroactively any vote if we are given less than 72 hours to review the details.

Our nation’s problems have grown so large they are impossible to ignore. If we allow the status quo to persist, or move forward with half–measures and gimmicks, we will be sentencing our children and grandchildren to permanent economic malaise while at the same time condemning this current generation to the same fate. Indeed, the crisis is not on the distant horizon. It is here now.

We have a unique opportunity and singular responsibility before us to change course. We must rise to the challenge of the moment.

Sincerely,

Michael A. Needham
Chief Executive Officer

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

What does the Heritage Foundation have to say about our potential choices concerning federal spending:Study released May 10, 2011 (Part 2)

June 28, 2011 – 11:44 pm

Government Must Cut Spending

 

“Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity,” Heritage Foundation, May 10, 2011 by  Stuart Butler, Ph.D. , Alison Acosta Fraser and William Beachis one of the finest papers I have ever read. Over the next few days I will post portions of this paper, but I will start off with the section on federal spending reform.

The Details

Returning Most Non-Defense Discretionary Spending to 2008 Levels.
Non-defense discretionary spending has expanded 21 percent faster than
inflation over the past three years. Returning to 2008 levels still leaves
typical programs nearly one-third larger than they were in 2000 (adjusted for
inflation). Freezing this spending at 2008 levels through 2015 and then capping
subsequent growth at the inflation rate would save more than $2 trillion in the
first decade and even more thereafter.

Many of these savings are achieved by reducing the size of the federal
bureaucracy, overhauling the federal pay system, permanently eliminating many
earmarked accounts, and consolidating duplicative functions. Yet not all
programs are affected equally. For example, Coast Guard and other important
security spending rises under the plan, while lower-priority spending, such as
subsidies to public broadcasting, AmeriCorps, the National Endowment for the
Arts, and the National Endowment for the Humanities, is left to the private
sector.

Devolving or Privatizing Most Transportation Spending. Under the
federal highway program, Washington collects the 18.3 cents-per-gallon gas tax
from states, subtracts a large administrative fee, and returns the remaining
funds to the states with numerous strings attached, including many requirements
to spend the dollars on congressional earmarks and for specific uses that may
not coincide with local needs. The Heritage plan reforms this inherently
wasteful system by devolving the highway program and gas tax to the states,
thereby eliminating the federal middleman and allowing states to retain the gas
tax revenues and spend them on their own highway priorities, provided they
maintain a minimum standard of interstate highway maintenance.

The Heritage plan ends federal funding for passenger rail, saving money on
projects that invariably have ridership that is far below projections and costs
that far exceed initial budgets. Amtrak subsidies are phased out over three
years, the President’s costly high-speed rail program is terminated, and
subsidies to for-profit freight railroads are ended. This relieves states of the
upkeep and maintenance burdens associated with rail programs that Washington is
currently pressuring them to undertake. The private sector and state governments
can either take over or terminate these rail programs as they see fit.

Finally, all non-safety functions of the Federal Aviation Administration
(FAA) are transferred to the private sector, and most FAA fees are eliminated.
The air traffic control system will be transferred to the private sector, where
it belongs, and financed by flight ticket user fees. The airport improvement
program is also terminated, with airlines, state government, and private
investment taking the place of the federal taxpayer.

By Everette Hatcher III | Comments (0)

What does the Heritage Foundation have to say about our potential choices concerning federal spending:Study released May 10, 2011 (Part 1)

June 27, 2011 – 11:43 pm

Senator John Thune Discusses Federal Spending, Elena Kagan, and the new START treaty

“Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity,” Heritage Foundation, May 10, 2011 by  Stuart Butler, Ph.D. , Alison Acosta Fraser and William Beachis one of the finest papers I have ever read. Over the next few days I will post portions of this paper, but I will start off with the section on federal spending reform.

Additional Major Spending Reforms

Summary

Over the past decade, Congresses and Presidents have undertaken a
surge of spending that has accelerated America’s speed along the road to
economic ruin. Since 2000, non-defense discretionary outlays have expanded 50
percent faster than inflation. Antipoverty spending has risen 83 percent faster
than inflation, and other programs have grown rapidly. Despite multiple
government audits that have shown many programs to be duplicative or
ineffective, no significant federal program has been eliminated in more than a
decade. Government continues to grow, financed by taxes on Americans and an
explosion of borrowing that is imposing huge additional burdens on future
generations.

Thus, although the major entitlement programs are the primary driver of
long-term spending and debt, Congress must take tough action on discretionary
programs and smaller entitlement programs to reach a balanced budget and ensure
that federal spending is smaller, more effective, and more efficient.

Under the Heritage plan, non-defense discretionary spending—appropriated
programs such as foreign aid, K–12 education, transportation, health research,
housing, community development, and veterans health care, which account for 4.5
percent of GDP—is reduced to 2.0 percent of GDP by 2021. These reforms will
reduce the burden of government, thereby empowering families and entrepreneurs
and promoting economic prosperity.

In addition, antipoverty spending is reformed. Obamacare is repealed, as
noted earlier, and replaced with an alternative solution to uninsurance and high
costs. Agriculture and education programs are structurally reformed. The central
goal for defense is to guarantee national security as prudently and economically
as possible. With improvements in efficiency, we estimate that defense needs
will require spending approximately 4 percent of GDP for the foreseeable
future.

Rather than across-the-board spending reductions, which would not set true
priorities for government, the Heritage plan follows six guidelines in designing
reforms:

  • The federal government should focus on performing a limited
    number of appropriate governmental duties well while empowering state and local
    governments, which are closer to the people, to address local needs creatively
    in such areas as transportation, justice, job training, the environment, and
    economic development.
  • Functions that the private sector can perform more efficiently
    should be transferred to the private sector.
  • Duplicative programs should be consolidated both to save money
    and to improve government assistance.
  • Federal programs should more precisely target those who are
    actually in need, which means reducing aid to large businesses and upper-income
    individuals who do not need taxpayer assistance and enforcing program
    eligibility rules better.
  • Outdated and ineffective programs should be eliminated.
  • Waste, fraud, and abuse should be cleaned up wherever found.

By following these six guidelines, the Heritage plan produces a more
effective and efficient government and promotes stronger economic growth.

By Everette Hatcher III | Also posted in Healthcare, Social Security, Taxes | Comments (0)

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

June 8, 2011 – 8:25 am

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)

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Ernest Istook at the Saint Paul Tea Party Rally 4/16/2011 Part 1

Ernest Istook, US Congressman, Heritage Foundation, http://www.heritage.org, spoke at the Saint Paul Tea Party Rally 4/16/2011. Hosted by North Star Tea Party Patriots, and Sue Jeffers.

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Several weeks ago I heard Republican Congressman Tim Griffin say that it was time for the people in Congress to put on their grown-up pants  and tackle the federal spending problem. I wondered where he got that phrase, but now I know. The one thing that remains to be discovered is will Senator Pryor ( Arkansas’ only Democrat left in Washington) follow suit with the other five from Arkansas and support a solution to the federal spending problem?

This month’s KARN/AFP-Arkansas Conservative Luncheon Series will feature the Heritage Foundation’s Ernest Istook. 

As usual, the lunch will kick-off at 11:30 a.m. on Wednesday, June 29 at the Hilton Little Rock Metro Center (925 South University Ave). Ernest Istook wrote a great article, “America’s Budget Debate is a time for Grown-ups,” Heritage Foundation, April 11, 2011. It reflects my views on the federal spending debate.

The liberals in Arkansas have all have kept their heads in sand concerning the future of our nation concerning the entitlements. John Brummett, Pat Lynch, Gene Lyons, and Max Brantley have all acted like Paul Ryan is a nut for even addressing the issue. Mark Pryor says he wants to put everything on the table concerning possible cuts, but then he has voiced much criticism to the Ryan plan. We are still waiting on his plan, but while we wait we will hear criticism of Ryan’s plan by Senator Pryor:

“A budget reflects our priorities as a nation, and I strongly believe that caring for the elderly should remain a core value of America. The Ryan plan takes a different approach, destroying Medicare as we know it. Dismantling this safety net for our seniors is unacceptable, but providing tax cuts to the wealthiest Americans on the backs of our seniors is inexcusable. I will oppose this plan,”

 

It is my view that Paul Ryan’s plan takes a serious look at our nation’s problems and confronts them. Below is an article by Ernest Istook that is excellent:

House Budget Chairman Paul Ryan (R-WI) has proposed a budget for grown-ups.

Washington’s big spenders have responded with the tired clichés we expect from defenders of big government:

“Pulling the rug out from under seniors,” says Sen. Debbie Stabenow (D-MI).

“Waging war on American workers,” says Rep. Xavier Becerra (D-CA).

“A path to poverty for America’s seniors and children,” claims House Minority Leader Nancy Pelosi (D-CA).

“The tea party has hijacked the Republican caucus,” says House Budget Committee Ranking Member Chris Van Hollen (D-MD).

Pee Wee Herman could have delivered more creative comebacks. But adult conversations about serious issues are lacking in Washington, D.C. Ryan’s plan should be rated at least R for Realism, while the dismissive comments are PG for Politically Guided.

Ryan’s plan is a big deal. A very big deal. Its proposed $6.2 trillion of savings (compared to Obama’s budget) over ten years is literally 100 times larger than the $61 billion that the GOP tried to cut this year — and that Democrats fought against ferociously.

Changing Medicare to a defined contribution plan is a good course to pursue, and of course a tough sell. But it makes a huge difference in controlling spending and reducing deficits. The same with revising Medicaid to give states flexibility to deliver care more efficiently — yet with limited federal outlays. 

As The Heritage Foundation’s annual Index of Dependency notes, dependence on government is skyrocketing. Ryan’s plan would address that.

Spending limitations, rollbacks and freezes. Repeal of Obamacare. Cutting corporate welfare (including farm subsidies) as well as overly generous giveaways to individuals. Structural reform for federal health care programs, which are the biggest runaway spending items. Ryan is serious in a way that few other politicians are.

But his “Path to Prosperity” is about economic growth, not just spending. Tax simplification is one aspect, and so is lowering corporate taxes so businesses are not pushed overseas by what is now the world’s highest rate. A Heritage Foundation analysis finds this would create a million jobs a year for starters, and double that rate in short order.

It’s not perfect. Our national defense needs are greater than Ryan projects. Social Security’s problems are not addressed. And welfare reform should go beyond what he lays out.

But Ryan’s proposal is good, tough stuff — strong medicine that we need, not politically correct placebos that the plan’s opponents are already peddling.

We live in a time when cute sound bites substitute for debate and false claims are used to justify inaction despite our fiscal crisis. While most of his critics carp without offering any alternatives, Ryan has delivered a needed challenge before we fall totally over the fiscal cliff.

Paul Ryan respects Americans — especially taxpayers. He speaks to us like adults. For the rest of Washington, it’s time to put away childish things.

Ernest Istook is a distinguished fellow at The Heritage Foundation.
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I respect Senator Pryor’s political instincts, and I do think he will find his political views moving more to the conservative side of many of the issues because Arkansas is now turning more conservative than ever.  

On Wednesday April 19th at the Political Animals Club in Little Rock, Senator Mark Pryor said he will not vote to raise the federal government’s borrowing limit unless there is a “real and meaningful commitment” to debt reduction by cutting spending and overhauling the tax code.

Is Senator Pryor  starting to be more conservative in his political views? It probably did not go without notice that of the five federal offices up for election in November of 2010, only the one Democrat Mike Ross was able to get re-elected. In fact, Democratic Senator Blanche Lincoln was not even able to get 36% of the vote. 

Senator Pryor has asked for spending cut ideas, and I have sent him  several dozen ideas myself. I have received two generic replies. On May 24th Senator Pryor wrote: 

“I am deeply concerned about current spending levels and our ever-growing national debt. I have consistently said that everything must be on the table when it comes to reducing our debt and deficit, and I mean it… I believe we can create a long-term budget plan that significantly reduces our national debt while maintaining adequate funding for our nation’s priorities. This challenge must include reducing spending, addressing entitlement programs, and reforming the tax code.”  

It is my view that cutting spending is the only way to balance the budget. Currently the tax revenues are around 2.1 billion and spending is over 3.7 billion. Senator John Boozman favors a balanced budget amendment, but Senator Pryor opposes it. 

Federal spending has grown 62 percent faster than inflation since 2000. Anti-poverty spending has surged 89 percent faster than inflation since 2000. Nearly half of this increase occurred in the past two years. Since 2000, Medicaid and Food Stamp rolls have expanded by nearly 20 million. This has resulted in increased government dependency. 

If Senator does get re-elected he may find that he is the only Democratic Senator from the South left in the Senate after the elections of 2014. It will be interesting to see how the drama plays out this summer concerning the effort to  raise the federal government’s borrowing limit above 14.3 trillion.

Below are some of the previous posts I have made about Senator Pryor:

 The Debt Bomb: A Decade of DC Spending is Driving America Closer to an Economic Apocalypse Alexis Garcia reports on America’s exploding debt. Experts blame entitlements like Social Security and government spending. But what is the solution? Can we raise taxes without crushing the economy and the middle class? Does Obama really want to lower […]

Balanced Budget Amendment the answer? Boozman says yes, Pryor no, Part 32 (Input from Dan Mitchell of the Cato Institute Part 4)

Mark Levin discusses the two amendments needed to re-establish Constitutionalism as well as other things that need to be done to fix the issues facing the nation. Mark is brilliant at keep his eye on the objective and does this every night on http://www.marklevinshow.com. This excerpt is from 1/27/2011. Steve Brawner in his article “Safer […]

Balanced Budget Amendment the answer? Boozman says yes, Pryor no, Part 31 (Input from Dan Mitchell of the Cato Institute Part 3)(Milton Friedman worked with Senator Hatch on amendment)

Mark Levin interviews Senator Hatch 1/27/2011 about the balanced budget amendment. Mark is very excited about the balanced budget amendment being proposed by Senator Orin Hatch and John Cornyn and he discusses the amendment with Senator Hatch. Senator Hatch explains the bill it’s ramifications and limitations. Senator Hatch actually worked on this bill with renowned […]

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)

By Everette Hatcher III | Also posted in Cato Institute | Edit | Comments (0)

Brummett:We must increase debt ceiling or disaster will occur (Part 3) (Royal Wedding Part 7)

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

Brummett:We must increase debt ceiling or disaster will occur (Part 8)

June 7, 2011 – 12:07 am

Schumer: Not raising debt ceiling could cause recession

Bob Schieffer spoke with Sen. Charles Schumer (D-NY) and Sen. Jeff Sessions (R-Ala.) on the specific agreements and cuts made in the budget deal and the debate over raising the debt ceiling.

John Brummett in his article “Dear visa, my debt ceiling is capped,” April 25, 2011, Arkansas News Bureau, he observes:

Here is how real fiscal responsibility works: You repay the debt that you have incurred to date. You make spending reductions prospectively by showing sufficient discipline to reduce the future pace at which you incur debt. You dare not let your existing debt go unpaid lest your credit score suffer and you get denied the next time you find yourself in a bit of a pinch and need to finance a refrigerator at Sears.

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The problem I have with Brummett’s comment is that he does not realize that all the tea party people want is to get $2 cut for every $1 they allow the debt ceiling to be raised until eventually the budget is balanced. I have written on this several times before and that is the principle that the Republicans are fighting for. Take a look at some of my earlier posts:

House rejects raising debt ceiling, John Brummett:We must increase debt ceiling or disaster will occur (Part 6)

New Congress Debates Raising Debt Ceiling Harry Smith spoke with Rep. Michele Bachmann (R-MN), Rep. Debbie Wasserman Schultz (D-FL), Rep. Anthony Weiner (D-NY), and Rep. elect Mike Kelly (R-PA) on how, with a shift in power, will congress set aside disagreements and work together to solve such issues as deficit reduction, job creation, and turning […]

Bill Clinton: Warned against not raising debt ceiling (Part 2)

Clinton: We Will Have Bipartisan Resolution on Budget During a fiscal summit sponsored by the Pete Peterson foundation Wednesday, Gwen Ifill talked to former President Bill Clinton about the economy, politics and foreign policy. CNN Money reported on May 25, 2011: Ryan, who spoke after Clinton at the summit, wasn’t asked directly about the New […]

Brummett:We must increase debt ceiling or disaster will occur (Part 3) (Royal Wedding Part 7)

John Brummett in his article “Pryor’s words drift in gentle breeze,” Arkansas News Bureau, April 24, 2011 asserted: Raising the debt ceiling is essential to paying our debts and keeping the national and world economy functioning. Spending cuts must be made in the future, not by reneging on debt from the past. It is disingenuous

Brummett:We must increase debt ceiling or disaster will occur (Part 4)

John Brummett in his article “Dear visa, my debt ceiling is capped,” April 25, 2011, Arkansas News Bureau, he observes: The first thing I intend to do is join the tea party. Then I’m going to refuse to raise my debt limit. Then I’m going to call the Visa people. “Y’all have me down here […]

Brummett:We must increase debt ceiling or disaster will occur (Part 2) (Royal Wedding Part 4)

John Brummett in his article “Dear visa, my debt ceiling is capped,” April 25, 2011, Arkansas News Bureau, he asserted: Nine times in the last decade the federal government has crept near its debt ceiling and Congress has voted to raise it. Tea party types say they intend this time to tie their votes to […]

Brummett:We must increase debt ceiling or disaster will occur (Part 1) (Royal Wedding Part 2)

John Brummett in his article “Dear visa, my debt ceiling is capped,” April 25, 2011, Arkansas News Bureau, he observes: The first thing I intend to do is join the tea party. Then I’m going to refuse to raise my debt limit. Then I’m going to call the Visa people. “Y’all have me down here […]

Mark Pryor will not vote for debt limit increase unless there are real spending cuts (Conspirator part 9)

In the article “Mark Pryor: I won’t vote to raise debt limit without reforms,” April 20, 2011, Arkansas Business reports: U.S. Sen. Mark Pryor says he won’t vote to raise the federal government’s borrowing limit unless there is a “real and meaningful commitment” to reducing the nation’s debt by cutting spending and overhauling the tax […]

Tim Griffin’s interview with Talk Business’s Roby Brock (Part 2)

Congressman Griffin discusses the federal debt ceiling crisis.

By Everette Hatcher III | Comments (0)

Brummett:We must increase debt ceiling or disaster will occur (Part 7)

June 3, 2011 – 8:42 am

The Debt Limit: Made Simple

This video takes you to the United Estates–a gated community in sunny Florida–to help you understand the impact of Congress decision to annually raise our nations debt limit without addressing the out-of-control spending that keeps us buried in debt.

John Brummett in his article “Dear visa, my debt ceiling is capped,” April 25, 2011, Arkansas News Bureau, he observes:

The first thing I intend to do is join the tea party. Then I’m going to refuse to raise my debt limit. Then I’m going to call the Visa people…

“Thank you, and remember: Vote Palin-Bachmann.”

You are thinking this is absurd. You are right, of course.

But you are not intellectually entitled to call it absurd if you are among the seven in 10 Americans telling pollsters you don’t want the federal government’s debt ceiling raised. You are not intellectually entitled if you are one of these right-wing politicians pandering to this tea-drunken grandstand by threatening to vote not to raise it.

Here is how real fiscal responsibility works: You repay the debt that you have incurred to date. You make spending reductions prospectively by showing sufficient discipline to reduce the future pace at which you incur debt. You dare not let your existing debt go unpaid lest your credit score suffer and you get denied the next time you find yourself in a bit of a pinch and need to finance a refrigerator at Sears.

I think the answer to this is simple. We must have deep cuts in the budget  in order to get enough Republicans on board to raise the debt ceiling. Several Democrats agree with this too.

Reuters reported on June 1, 2011:

More than 150 economists back House of Representatives Speaker John Boehner’s call to match any increase in the debt limit with spending cuts of equal size, according to a letter released by the Republican leader’s office on Wednesday.

The letter will give Boehner an important talking point as he and his fellow House Republicans meet with President Barack Obama at 10 a.m. to discuss the debt limit and other fiscal issues.

“An increase in the national debt limit that is not accompanied by significant spending cuts and budget reforms to address our government’s spending addiction will harm private-sector job creation in America,” the letter said.

Signatories include Nobel laureate Robert Mundell of Columbia University and economists from schools like New York University and Georgetown University, as well as conservative think tanks like the American Enterprise Institute.

The Treasury Department has warned that the country could face a default that could push it back into recession and roil markets across the globe if it does not raise the $14.3 trillion debt limit by Aug 2. Treasury has been tapping federal employee pensions and other funds to pay the nation’s bills since it reached the current debt limit on May 16.

Republicans say they will not back any increase that does not include steep spending cuts and other limits to ensure that debt stays at a manageable level.

Michael Tanner made some great observations in his article “Debt-Ceiling Myths,” National Review Online, May 11, 2011. 

Michael D. Tanner is a senior fellow at the Cato Institute and author of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution. Here is a portion of this recent article: 

Now that Osama bin Laden has been successfully dispatched to the eternal damnation he so richly deserves, Washington is ready to return to the more mundane question of whether the Obama administration will be allowed to spend this country into oblivion.

The next big fiscal fight will be over when and how to increase the debt limit. The administration has been hard at work trying to shape the message and public opinion. Unsurprisingly, much of that message is less than 100 percent accurate. Here are some myths about the debt ceiling and the upcoming debate about raising it:

5. Only Republicans oppose raising the debt ceiling. The media and the administration want to turn this into a partisan fight. The ongoing narrative is that radical Republicans in thrall to the Tea Party want to wreck our finances, while Democrats responsibly want to pay our bills. In truth, a number of prominent Democrats are on record opposing a debt-limit increase without substantial reductions in spending. They include Sen. Kent Conrad (D., N.D.), Mark Pryor (D., Ark.), and Joe Manchin (D., W. Va.). Even Sen. Amy Klobuchar (D., Minn.) normally a reliable liberal vote, has been expressing ambivalence. And the most prominent spending limit liable to be offered as a condition for raising the limit, the CAP Amendment proposed by Sen. Bob Corker (R. Tenn.) is cosponsored by Sen. Claire McCaskill (D., Mo.). The real story is that a small group of extreme liberals wants to keep spending more in the face of bipartisan opposition.

So far, Republicans have not been very good about presenting their message. If they want to win this fight, they are going to have to do a lot more to correct the record.

Below info from ReasonTV:

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