Category Archives: Taxes

Open letter to Senator Boozman: Copy of my letter to President Obama on Socialism (Part 116.7)

December 19, 2012 – 5:32 am
Senator John Boozman, 320 Hart Senate Office Building Washington, DC 20510 Phone: (202) 224-4843 Fax: (202) 228-1371
Dear Senator Boozman,

I want to thank you for taking the time out of your busy day to respond to my earlier letter to you on this same subject.

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.

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. However, his policies have not changed. He is committed to cutting nothing from the budget that I can tell.

Evidently the Republicans have proposed raising tax rates as a possible compromise to avoid going over the fiscal cliff. Let me make a few comments about that.

First, if raising the debt ceiling is part of this agreement then we are losing our leverage over President Obama. We have enough votes to block a debt ceiling increase. We want a balanced budget but if President Obama does not get a debt ceiling increase then he will have to balance the budget immediately.

Second, spending is our problem and it is not tax revenue. The problem in Washington is not lack of revenue but our lack of spending restraint. We almost had a balanced budget in 2007 and if we had frozen spending at 2007 levels then we would be close to a balanced budget now. Instead of controlling spending our spending has gone from 2.7 trillion to 3.8 trillion in just 5 short years!!!

Third, my blog has exploded the last few days with clicks on past posts I have done like the one below. Take a look at this post below and see why it is one of my most popular. You will notice that it is an open letter  that I sent to President Obama about socialism.

Fourth, I have included some wise words from a fellow Tea Party favorite like you below. Mo Brooks’ words are true now like they were in August of 2011 when he voted against the debt ceiling increase then.

Fifth, let me share these two videos with you that make very good points concerning this issue:

This video belows shows how silly the federal government is when they pass “spending cuts.”

The problem in Washington is not lack of revenue but our lack of spending restraint. This video below makes that point.

Please take the time to read Mo Brooks’ words and respond to me and tell me if you will vote against the debt ceiling increase. It is the only leverage we have on President Obama. Others have responded to me in the past including you and for that I am very grateful.

Thank you for your time.

Sincerely,

Everette Hatcher, 13900 Cottontail Lane, Alexander, AR 72002, cell ph 501-920-5733, lowcostsqueegees@yahoo.com, www.thedailyhatch.org

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Hayek on Socialism

Uploaded by on Aug 21, 2009

Friedrich Hayek talks about socialism.

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President Obama c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President,

I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on what is going on out here. 

Socialism tries to plan out everything and it hurts the free market. We can see how this has played out especially in the last four years in the USA.

Glenn Beck Presents F A Hayek’s “The Road to Serfdom” Part 1

Uploaded by on Jun 13, 2010

This video via user TheConservatube; thank you!

What F.A. Hayek saw, and what most all his contemporaries missed, was that every step away from the free market and toward government planning represented a compromise of human freedom generally and a step toward a form of dictatorship–and this is true in all times and places. He demonstrated this against every claim that government control was really only a means of increasing social well-being. Hayek said that government planning would make society less liveable, more brutal, more despotic. Socialism in all its forms is contrary to freedom.

Nazism, he wrote, is not different in kind from Communism. Further, he showed that the very forms of government that England and America were supposedly fighting abroad were being enacted at home, if under a different guise. Further steps down this road, he said, can only end in the abolition of effective liberty for everyone.

Capitalism, he wrote, is the only system of economics compatible with human dignity, prosperity, and liberty. To the extent we move away from that system, we empower the worst people in society to manage what they do not understand.

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Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733, lowcostsqueegees@yahoo.com

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Here is another Tea Party hero you need to listen to:
Rep. Brooks on Fox Business: BBA and the Debt Ceiling Vote

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Rep. Mo Brooks To Vote No On Obama-Reid-Boehner Debt Ceiling Bill

08/01/11

Washington, D.C. – Today Congressman Mo Brooks (R-AL) made the following statement concerning his vote on the Budget Control Act of 2011:

Summary

The Obama-Reid-Boehner Debt Ceiling Bill is bad for America, bad political process, bad for national defense, does not prevent unsustainable budget deficits, kicks the debt ceiling crises down the road to 2013 (when America will have more debt and less financial strength with which to fix the problem), and fails to satisfactorily decrease the risk of an American credit rating downgrade.

Overview

America must, and will, raise the debt ceiling.  The question is not whether Congress will raise the debt ceiling; the question is when and how.  Regardless of when the debt ceiling is raised, every bill and obligation of America to its citizens and creditors will be paid in full (albeit, with the exception of creditors, some payments may be delayed).

I have voted to raise the debt ceiling provided the debt ceiling bill makes America’s financial condition better, not worse.

I voted to raise the debt ceiling on July 22, 2011, when I voted for the Cut, Cap and Balance Plan (cutting FY 2012 expenditures by a modest $111 billion in the context of a $1.5 trillion deficit; capping federal government expenditures within historically justifiable 18-20% ranges; and passing a Balanced Budget Constitutional Amendment that protect future generations of Americans from revisiting the financial mess we face).

I voted to raise the debt ceiling on July 29, 2011, when I voted for the Boehner Plan (which included a Balanced Budget Constitutional Amendment requirement).

I will not vote for the Obama-Reid-Boehner Debt Bill (herein the “Debt Bill”) because it is not up to the financial challenges America faces. 

Background:  The Problem

Years of spending binges by the federal government have come home to roost.  America’s debt exceeds $14 trillion.  America has suffered three consecutive years of trillion dollar deficits (and faces trillion dollar deficits into the foreseeable future).

Annual deficits and accumulated debt force America to confront two major financial threats, both with one common cause: unsustainable budget deficits.

In the short term, America faces a debt ceiling crisis.  Over the longer term, America faces a debt crisis. 

If trillion dollar deficits continue indefinitely, America’s insolvency and bankruptcy is certain, thereby risking America’s national defense, Social Security, Medicare, Medicaid, NASA, and everything else the federal government does.

Debt Bill Deficiencies That Compel a “No” Vote

The accumulative deficiencies in the Debt Bill compel me to vote “No.”  The deficiencies are:

1. Minimal Time for Consideration and Deliberation.

The Debt Bill is 74 pages of interwoven, complicated legal and budgetary terms.  I have read and studied the Debt Bill in the limited time available.  The Debt Bill forces onto our children and grandchildren another $2.4 trillion in debt burden, yet we are expected to vote on it with less than 24 hours notice.

This is insufficient time to thoroughly understand the Debt Bill’s nuances, for budget experts to digest the Debt Bill and offer their insights, for the public to analyze the legislation and share their insight, and for Congress to make a wise and deliberative decision.

While some argue the Debt Bill must pass by the White House’s August 2 deadline; I believe it is better to act wisely than in haste.  The economy will be much worse if Congress, in haste, makes a $2.4 trillion error. 

2. Significant Defense Cuts in FY 2012 & 2013.

In FY 2012, the Debt Bill cuts national defense by $2 to $17 billion (the variance is due to different Debt Bill interpretations by the House Armed Services Committee).

The Debt Bill creates a 12-member Joint Select Committee (six Senators and six Congressmen; six Republicans and six Democrats).  By November 23, the Committee must recommend $1.2 trillion in deficit reduction measures (spending cuts and/or tax increases).  If the Committee makes a recommendation, Congress must vote on the recommendation on or before January 15. 

If the Committee splits 6-6 and makes no recommendation, or if either House of Congress rejects the Committee’s recommendation, then the Debt Bill mandates that the Defense budget be cut $60 Billion in FY 2013 (i.e. – in the fiscal year beginning 14 months from now, on October 1, 2013).

National defense is the top priority of the federal government.  If the Debt Bill passes, there is an unnecessary and substantial risk that it will trigger risky defense cuts in just 14 months that undermine the defense capabilities of America.

3. The Bill Does Not Fix the Underlying Problem.

The Bill makes America’s financial challenges worse by inadequately addressing unsustainable deficits that threaten America with insolvency and bankruptcy and force debt ceiling increases.

The Debt Bill’s “cuts” bind no future Congresses.  Hence, the only “cuts” that count are those for Fiscal Years 2012 and 2013.

In FY 2012, the Debt Bill cuts discretionary federal government spending by only $7 billion (versus FY 2011 levels), while overall federal government spending actually increases (“discretionary spending” is less than 30% of total federal government spending). 

In FY 2013, the Debt Bill increases discretionary federal government spending by $4 billion (over FY 2012 levels).  Overall federal government spending again increases significantly.

Hence, in both FY 2012 and 2013, the federal government deficit is estimated to exceed $1 trillion/year if the Debt Bill passes and, under the best of scenarios, the Debt Bill’s “solution” increases America’s debt by $2.4 trillion in less than two years, which makes America’s debt problem much worse, not better.

4. Balanced Budget Constitutional Amendment. 

The Debt Bill requires a vote of Congress on a Balanced Budget Constitutional Amendment but does not require that Congress pass a Balanced Budget Amendment. 

The July 29 Boehner Bill required passage of a Balanced Budget Amendment before the Phase II debt ceiling increase would occur.  The Debt Bill eliminates the requirement for a Balanced Budget Amendment, thereby eliminating the only long-term fix to America’s unsustainable deficits. 

5. Punting the Debt Ceiling Crisis to 2013. 

Because of 2012 election considerations, the Debt Bill “kicks the can down the road” to 2013, when a financially weaker America will be less capable of facing yet another debt ceiling crisis. 

America will be weaker because debt service burdens will be $2.4 trillion more and the total debt of $16.7 trillion will likely be subject to higher interest rates and more onerous payment obligations.

America must face its unsustainable deficit issue while it is stronger, not weaker.  The longer America waits, the worse the economic outcome will be.

6. Credit Rating Cuts.

In my judgment, the Debt Bill substantially increases the long-term risk of a cut in America’s credit rating. 

Standard & Poor stated on July 14, 2011, that America’s credit rating is at risk if Washington has “not achieved a credible solution to the rising U.S. government debt burden and [is] not likely to achieve one in the foreseeable future.”  Standard & Poor president Deven Sharma reiterated this concern on July 27, 2011 when he testified before the House Financial Services Committee that, “The more important issue is really the long-term growth rate of the debt… that is the more important issue at hand.”

Similarly, Moody’s stated on July 13, 2011 that, if the debt ceiling is raised, America’s credit rating outlook “would very likely be changed to negative… unless [there is a] substantial and credible agreement [on] long-term deficit reduction.”

The Debt Bill does not cut America’s short or long-term deficits enough to minimize the risk of downgrade in America’s credit rating… a downgrade that will, in turn, drive up America’s debt service cost and reduce funding for all other federal government programs.  To make matters worse, if America’s interest rates go up; state, local and private interest rates are likely to also go up… thereby hurting all Americans at every level.

The Solution

The best solution that protects America from the short term debt ceiling and long term insolvency threats is a debt ceiling increase coupled with a Balanced Budget Constitutional Amendment that is phased in over a 5 year period.

Inasmuch as constitutional amendments often take years to pass, time that America may not have, the debt ceiling should be raised in a two-step process.  The first step partially raises the debt ceiling when Congress passes a substantive and effective Balanced Budget Amendment.  If the Senate and House concur, this can be done in as little as a week.

The second step raises the rest of the debt ceiling requirement when the states ratify the proposed Balanced Budget Amendment.  This process gives the states an incentive to ratify the Balanced Budget Amendment in less than one year (or trigger the effects of not raising the debt ceiling).

By Everette Hatcher III | Also posted in Milton Friedman, President Obama, spending out of control | Comments (0)

Raising tax rates will cause people to change their behavior in many cases

December 19, 2012 – 1:14 am

Will Taxing the Rich Fix the Deficit?

Published on Jul 2, 2012

The government’s budget deficit in 2009 was $1.5 trillion. Many have suggested raising taxes on the rich to cover the difference between what the government collected in revenue and what it spent. Is that a realistic solution? Economics professor Antony Davies uses data to demonstrate why taxing the rich will not be sufficient to make the budget deficit disappear. He says, “The budget deficit is so large that there simply aren’t enough rich people to tax to raise enough to balance the budget.” Instead, it’s time to work on legitimate solutions, like cutting spending.

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Ignoring incentives is stupid. We can not ignore the fact that raising tax rates will cause people to change their behavior in many cases.

Lesson for Warren Buffett: British Millionaires’ Response to Tax Increases

Emily Goff

November 29, 2012 at 6:30 pm

As the fiscal cliff approaches, Congress and President Obama continue to debate tax increases, even though spending is the problem. Investor Warren Buffett recently opined that tax hikes on the wealthy would not curtail investments or hurt the economy. His logic, like President Obama’s, assumes that incentives don’t matter.

Oh really? News that Great Britain saw its number of millionaires decline by two-thirds due to a steep top tax rate tells a different story.

The year after former Labour Prime Minister Gordon Brown introduced a 50 percent top income tax rate, the number of people filing as millionaires dropped 63 percent, from 16,000 to 6,000. Tax revenue also declined by nearly £7 billion.

No single reason explains the drop. Some millionaires probably earned less money due to the slow-growing European economy, or they may have simply worked less. Others may have shifted the timing of their income or moved it to less-taxed forms. Still others might have physically left the country.

Here’s the bottom line: All these reasons are economically important and show that incentives matter.

That fact is so obvious it’s hardly newsworthy. When faced with a tax increase, Britain’s millionaires readily “voted with their feet.” Whether they actually fled the country or not doesn’t really matter. But the fact that their productivity level changed—and in such a drastic way—does.

As for Buffett’s claim that investors don’t change their decisions based on tax rates—who does he think the people who left Britain are? They are highly productive people who earn high incomes and invest their earnings. High earners are the most able to respond to changing incentives, and their response to a tax increase was loud and clear. Their change in behavior means there will be less investment in Great Britain and, therefore, fewer jobs.

America had better listen up. Highly productive workers here at home would respond to the incentives under Obama’s tax hike policy, which has a top tax rate of over 40 percent, factoring in the return to pre-Bush tax cut rates and the hospital insurance payroll tax rate increase in Obamacare.

Upper-income earners would certainly shift their income; they would also have less incentive to work more hours knowing that over 40 percent of their additional earnings would go straight to Washington—even before their state and local governments get into the act. What does Buffett think will happen to investment when these peoples’ incomes plummet and they have less to invest?

California’s unfriendly business climate also proves the point. In 2011, 254 companies took some or all of their businesses out of the state, a 26 percent increase from the previous year. This November, Californians approved a “temporary” income surtax on people making more than $250,000, as well as a sales tax increase. Such tax hikes will hardly compel businesses and investors to stick with the Golden State and may continue having the opposite effect.

Growing cities in low-tax states, such as Austin, Texas, will cheer the news, as they’ll continue to welcome refugees from California’s punishingly high taxes—especially high-skilled workers and cutting-edge tech companies.

Taxes do matter, because investors respond to incentives. Hardly surprising, but a good reminder—one that President Obama should heed.

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

Representative Crawford reads and responds to my letter

December 18, 2012 – 9:29 am

 

RAISE TAXES: Report says Rick Crawford will break from GOP and back millionaires tax.

I recently wrote an open letter to Congressman Rick Crawford and I put it on his facebook page. I personally do not have a facebook page so I used my son Wilson’s facebook page and here is what Congressman Crawford said:

Wilson- I agree with you that we have a spending problem and not a revenue problem in this country. As you might know I have been a strong advocate for permanent spending controls, like a Balanced Budget Amendment, that will ensure we do not continue spending money that we do not have. Thank you for your thoughts and know that I am fighting everyday to rein in federal spending and to pay down our crushing national debt.

I am very impressed that Congressman Crawford got back to me so soon. I am hopeful that he will join the 66 brave Tea Party Republicans who voted against the debt ceiling increase back in August of 2011,  Tea Party heroes like Rep. Todd Rokita,  Ben Quayle (R-AZ), Jeff Landry (R, LA-03),  Raúl R. Labrador , Tim Huelskamp,  Rep. Justin Amash (R-MI),  , Brooks, Mo (AL – 5), Buerkle, Ann Marie (NY – 25),Chabot, Steven (OH – 1),Duncan, Jeff (SC – 3), Fleischmann, Chuck (TN – 3) ,Gowdy, Trey (SC – 4) ,Griffith, H. Morgan (VA – 9) , Harris, Andy (MD – 1) ,Huizenga, Bill (MI – 2) , Mulvaney, Mick (SC – 5) , Pompeo, Mike (KS – 4) , Ribble, Reid (WI – 8), Rigell, E. Scott (VA – 2) , Ross, Dennis (FL – 12) ,Schweikert, David (AZ – 5), Scott, Austin (GA – 8) , Scott, Tim (SC – 1) , Southerland, Steve (FL – 2) , Stutzman, Marlin (IN – 3) , Walberg, Timothy (MI – 7) , Walsh, Joe (IL – 8),and Woodall, Rob (GA – 7) .

I have written about these Tea Party heroes over and over and over. They are the only hope that we have to stopping this federal government spending problem that we have. I like John Boehner a lot but if he keeps trying to give in to the Democratic demands to raise taxes and raise the debt limit then we need to do something about getting more conservative representation in the speaker chair. Newt didn’t put up with this kind of thing in the 1990’s when he worked with Clinton. As a result we had 4 balanced budgets in a row. DO YOU THINK THAT CLINTON WOULD HAVE DONE THAT WITHOUT NEWT STANDING UP TO HIM?

I was sad to read that the Speaker John Boehner has been involved in punishing tea  party republicans. Actually I have written letters to several of these same tea party heroes telling them that I have emailed Boehner encouraging him to listen to them. Rep. David Schweikert (R-AZ),Justin Amash (R-MI), and Tim Huelskamp (R-KS). have been contacted by me before and I have posted things about them too.

With Purge, House GOP Leadership Reaches New Low

Posted by Tad DeHaven

In December 2010, I wrote that “An indicator of the incoming House Republican majority’s seriousness about cutting spending will be which members the party selects to head the various committees.” The final roster ended up leaving a lot to be desired from a limited government perspective. For example, the House Republican leadership and its allies went with Rep. Hal Rogers (R-KY), aka “The Prince of Pork,” to head up the Appropriations Committee.

Two years later, the committee situation is about to get even worse now that the House Republican leadership has decided to send a message that casting a vote according to one’s beliefs instead of one’s instructions is a punishable offense. On Monday, four congressmen were booted from “plum” committee assignments for failing to sufficiently toe the leadership line. I suspect that the purge was motivated, at least in part, by Team Boehner’s desire to have the rest of the rank and file think twice before casting a “no” vote on whatever lousy deal is struck with the White House to avoid the “fiscal cliff.”

Three of the purged Republicans are returning members of the 2010 freshmen “Tea Party Class”: Rep. David Schweikert (R-AZ), Justin Amash (R-MI), and Tim Huelskamp (R-KS). Over the past year, I have been keeping a loose record of how the freshmen voted on opportunities to eliminate programs and prevent spending increases. On seven particularly telling votes*, Schweikert and Amash voted in favor of limited government every time. Out of 87 freshmen, only Schweikert, Amash, and five others had a perfect record. Huelskamp was six for seven. He also was one of only four Republicans on the House Agriculture Committee to vote against the bloated farm bill that passed out of the committee in July. The fourth outcast, Rep. Walter Jones (R-NC), had become an irritant to the Republican establishment after turning against the Iraq War and associating himself with more libertarian Republicans like Rep. Ron Paul (R-TX).

The best that can be said for Team Boehner thus far is that it isn’t Team Pelosi. A common excuse is that House Republicans have been constrained by Democratic control of the Senate and White House. While there is an element of truth to that claim, we’re talking about a House Republican majority that wouldn’t even vote to get rid of the loan guarantee program that led to the Solyndra debacle. The reality is that most Republicans were only ever interested in using Solyndra to score political points against the White House. Ditto pretty much every other White House spending endeavor that House Republicans claim to oppose.

*Votes were to terminate the Economic Development Administration, Advanced Manufacturing Technology Consortia, Essential Air Service program, Title 17 Energy Loan Guarantees, Community Block Development Grant program, against reauthorizing the Export-Import Bank, and against the Continuing Appropriations Act in September.

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By Everette Hatcher III | Also posted in President Obama, spending out of control | Comments (0)

Open letter to Congressman Crawford concerning debt ceiling increase: Rising Deficits Drive U.S. Debt Limit Higher, Faster

December 18, 2012 – 8:28 am

December 18, 2012

Congresssman Rick Crawford

2400 Highland Drive, Suite 300
Jonesboro, AR 72401

Dear Congressman Crawford,

This is the second time I have written you about this. I have enjoyed getting your weekly emails this last year and I can’t thank you enough because of your strong pro-life voting record. There is another pressing issue that I wanted to write you about today and it is the fact that President Obama will be soon wanting to raise the debt ceiling again. You have 66 friends in Congress who I have posted about that have stood against Obama on this. My efforts to get Senator Pryor to see the light have failed though.

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.

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. However, his policies have not changed. He is committed to cutting nothing from the budget that I can tell.

Evidently the Republicans have proposed raising tax rates as a possible compromise to avoid going over the fiscal cliff. Let me make a few comments about that.

First, if raising the debt ceiling is part of this agreement then we are losing our leverage over President Obama. We have enough votes to block a debt ceiling increase. We want a balanced budget but if President Obama does not get a debt ceiling increase then he will have to balance the budget immediately.

Second, spending is our problem and it is not tax revenue. The problem in Washington is not lack of revenue but our lack of spending restraint. We almost had a balanced budget in 2007 and if we had frozen spending at 2007 levels then we would be close to a balanced budget now. Instead of controlling spending our spending has gone from 2.7 trillion to 3.8 trillion in just 5 short years!!!

Third, my blog has exploded the last few days with clicks on past posts I have done like the one below. Take a look at this post below and see why it is one of my most popular.

Fourth, I have included some wise words from a fellow Tea Party favorite like you below. Mo Brooks’ words are true now like they were in August of 2011 when he voted against the debt ceiling increase then.

Fifth, let me share these two videos with you that make very good points concerning this issue:

This video belows shows how silly the federal government is when they pass “spending cuts.”

The problem in Washington is not lack of revenue but our lack of spending restraint. This video below makes that point.

Please take the time to read Mo Brooks’ words and respond to me and tell me if you will vote against the debt ceiling increase. It is the only leverage we have on President Obama. Others have responded to me in the past and for that I am very grateful.

Thank you for your time.

Sincerely,

Everette Hatcher, 13900 Cottontail Lane, Alexander, AR 72002, cell ph 501-920-5733, lowcostsqueegees@yahoo.com, www.thedailyhatch.org

Rising Deficits Drive U.S. Debt Limit Higher, Faster

Everyone wants to know more about the budget and here is some key information with a chart from the Heritage Foundation and a video from the Cato Institute.

Congress first placed a statutory limit on total federal debt in 1917, in the Second Liberty Bond Act. Since 1962, Congress has altered the debt limit through 74 separate measures, raising it 10 times since 2001. Since 1990, the debt limit has been raised a total of $10.1 trillion, but nearly half of that increase has occurred since September 2007.

U.S. DEBT LIMIT

 
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Rising Deficits Drive U.S. Debt Limit Higher, Faster

Source: Congressional Research Service and White House Office of Management and Budget (Table 7.3, Historical Tables).

Chart 26 of 42

In Depth

  • Policy Papers for Researchers

  • Technical Notes

    The charts in this book are based primarily on data available as of March 2011 from the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO). The charts using OMB data display the historical growth of the federal government to 2010 while the charts using CBO data display both historical and projected growth from as early as 1940 to 2084. Projections based on OMB data are taken from the White House Fiscal Year 2012 budget. The charts provide data on an annual basis except… Read More

  • Authors

    Emily GoffResearch Assistant
    Thomas A. Roe Institute for Economic Policy StudiesKathryn NixPolicy Analyst
    Center for Health Policy StudiesJohn FlemingSenior Data Graphics Editor

  • ______________
  • __________Here is another Tea Party hero you need to listen to:
    Rep. Brooks on Fox Business: BBA and the Debt Ceiling Vote

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    Rep. Mo Brooks To Vote No On Obama-Reid-Boehner Debt Ceiling Bill

    08/01/11

    Washington, D.C. – Today Congressman Mo Brooks (R-AL) made the following statement concerning his vote on the Budget Control Act of 2011:

    Summary

    The Obama-Reid-Boehner Debt Ceiling Bill is bad for America, bad political process, bad for national defense, does not prevent unsustainable budget deficits, kicks the debt ceiling crises down the road to 2013 (when America will have more debt and less financial strength with which to fix the problem), and fails to satisfactorily decrease the risk of an American credit rating downgrade.

    Overview

    America must, and will, raise the debt ceiling.  The question is not whether Congress will raise the debt ceiling; the question is when and how.  Regardless of when the debt ceiling is raised, every bill and obligation of America to its citizens and creditors will be paid in full (albeit, with the exception of creditors, some payments may be delayed).

    I have voted to raise the debt ceiling provided the debt ceiling bill makes America’s financial condition better, not worse.

    I voted to raise the debt ceiling on July 22, 2011, when I voted for the Cut, Cap and Balance Plan (cutting FY 2012 expenditures by a modest $111 billion in the context of a $1.5 trillion deficit; capping federal government expenditures within historically justifiable 18-20% ranges; and passing a Balanced Budget Constitutional Amendment that protect future generations of Americans from revisiting the financial mess we face).

    I voted to raise the debt ceiling on July 29, 2011, when I voted for the Boehner Plan (which included a Balanced Budget Constitutional Amendment requirement).

    I will not vote for the Obama-Reid-Boehner Debt Bill (herein the “Debt Bill”) because it is not up to the financial challenges America faces. 

    Background:  The Problem

    Years of spending binges by the federal government have come home to roost.  America’s debt exceeds $14 trillion.  America has suffered three consecutive years of trillion dollar deficits (and faces trillion dollar deficits into the foreseeable future).

    Annual deficits and accumulated debt force America to confront two major financial threats, both with one common cause: unsustainable budget deficits.

    In the short term, America faces a debt ceiling crisis.  Over the longer term, America faces a debt crisis. 

    If trillion dollar deficits continue indefinitely, America’s insolvency and bankruptcy is certain, thereby risking America’s national defense, Social Security, Medicare, Medicaid, NASA, and everything else the federal government does.

    Debt Bill Deficiencies That Compel a “No” Vote

    The accumulative deficiencies in the Debt Bill compel me to vote “No.”  The deficiencies are:

    1. Minimal Time for Consideration and Deliberation.

    The Debt Bill is 74 pages of interwoven, complicated legal and budgetary terms.  I have read and studied the Debt Bill in the limited time available.  The Debt Bill forces onto our children and grandchildren another $2.4 trillion in debt burden, yet we are expected to vote on it with less than 24 hours notice.

    This is insufficient time to thoroughly understand the Debt Bill’s nuances, for budget experts to digest the Debt Bill and offer their insights, for the public to analyze the legislation and share their insight, and for Congress to make a wise and deliberative decision.

    While some argue the Debt Bill must pass by the White House’s August 2 deadline; I believe it is better to act wisely than in haste.  The economy will be much worse if Congress, in haste, makes a $2.4 trillion error. 

    2. Significant Defense Cuts in FY 2012 & 2013.

    In FY 2012, the Debt Bill cuts national defense by $2 to $17 billion (the variance is due to different Debt Bill interpretations by the House Armed Services Committee).

    The Debt Bill creates a 12-member Joint Select Committee (six Senators and six Congressmen; six Republicans and six Democrats).  By November 23, the Committee must recommend $1.2 trillion in deficit reduction measures (spending cuts and/or tax increases).  If the Committee makes a recommendation, Congress must vote on the recommendation on or before January 15. 

    If the Committee splits 6-6 and makes no recommendation, or if either House of Congress rejects the Committee’s recommendation, then the Debt Bill mandates that the Defense budget be cut $60 Billion in FY 2013 (i.e. – in the fiscal year beginning 14 months from now, on October 1, 2013).

    National defense is the top priority of the federal government.  If the Debt Bill passes, there is an unnecessary and substantial risk that it will trigger risky defense cuts in just 14 months that undermine the defense capabilities of America.

    3. The Bill Does Not Fix the Underlying Problem.

    The Bill makes America’s financial challenges worse by inadequately addressing unsustainable deficits that threaten America with insolvency and bankruptcy and force debt ceiling increases.

    The Debt Bill’s “cuts” bind no future Congresses.  Hence, the only “cuts” that count are those for Fiscal Years 2012 and 2013.

    In FY 2012, the Debt Bill cuts discretionary federal government spending by only $7 billion (versus FY 2011 levels), while overall federal government spending actually increases (“discretionary spending” is less than 30% of total federal government spending). 

    In FY 2013, the Debt Bill increases discretionary federal government spending by $4 billion (over FY 2012 levels).  Overall federal government spending again increases significantly.

    Hence, in both FY 2012 and 2013, the federal government deficit is estimated to exceed $1 trillion/year if the Debt Bill passes and, under the best of scenarios, the Debt Bill’s “solution” increases America’s debt by $2.4 trillion in less than two years, which makes America’s debt problem much worse, not better.

    4. Balanced Budget Constitutional Amendment. 

    The Debt Bill requires a vote of Congress on a Balanced Budget Constitutional Amendment but does not require that Congress pass a Balanced Budget Amendment. 

    The July 29 Boehner Bill required passage of a Balanced Budget Amendment before the Phase II debt ceiling increase would occur.  The Debt Bill eliminates the requirement for a Balanced Budget Amendment, thereby eliminating the only long-term fix to America’s unsustainable deficits. 

    5. Punting the Debt Ceiling Crisis to 2013. 

    Because of 2012 election considerations, the Debt Bill “kicks the can down the road” to 2013, when a financially weaker America will be less capable of facing yet another debt ceiling crisis. 

    America will be weaker because debt service burdens will be $2.4 trillion more and the total debt of $16.7 trillion will likely be subject to higher interest rates and more onerous payment obligations.

    America must face its unsustainable deficit issue while it is stronger, not weaker.  The longer America waits, the worse the economic outcome will be.

    6. Credit Rating Cuts.

    In my judgment, the Debt Bill substantially increases the long-term risk of a cut in America’s credit rating. 

    Standard & Poor stated on July 14, 2011, that America’s credit rating is at risk if Washington has “not achieved a credible solution to the rising U.S. government debt burden and [is] not likely to achieve one in the foreseeable future.”  Standard & Poor president Deven Sharma reiterated this concern on July 27, 2011 when he testified before the House Financial Services Committee that, “The more important issue is really the long-term growth rate of the debt… that is the more important issue at hand.”

    Similarly, Moody’s stated on July 13, 2011 that, if the debt ceiling is raised, America’s credit rating outlook “would very likely be changed to negative… unless [there is a] substantial and credible agreement [on] long-term deficit reduction.”

    The Debt Bill does not cut America’s short or long-term deficits enough to minimize the risk of downgrade in America’s credit rating… a downgrade that will, in turn, drive up America’s debt service cost and reduce funding for all other federal government programs.  To make matters worse, if America’s interest rates go up; state, local and private interest rates are likely to also go up… thereby hurting all Americans at every level.

    The Solution

    The best solution that protects America from the short term debt ceiling and long term insolvency threats is a debt ceiling increase coupled with a Balanced Budget Constitutional Amendment that is phased in over a 5 year period.

    Inasmuch as constitutional amendments often take years to pass, time that America may not have, the debt ceiling should be raised in a two-step process.  The first step partially raises the debt ceiling when Congress passes a substantive and effective Balanced Budget Amendment.  If the Senate and House concur, this can be done in as little as a week.

    The second step raises the rest of the debt ceiling requirement when the states ratify the proposed Balanced Budget Amendment.  This process gives the states an incentive to ratify the Balanced Budget Amendment in less than one year (or trigger the effects of not raising the debt ceiling).

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

Spending is out of control but some insist on just asking for more revenue

December 18, 2012 – 1:05 am

Will Higher Tax Rates Balance the Budget?

Published on Apr 11, 2012

As the U.S. debt and deficit grows, some politicians and economist have called for higher tax rates in order to balance the budget. The question becomes: when the government raises taxes, does it actually collect a larger portion of the US economy?

Professor Antony Davies examines 50 years of economic data and finds that regardless of tax rates, the percentage of GDP that the government collects has remained relatively constant. In other words, no matter how high government sets tax rates, the government gets about the same portion. According to Davies, if we’re concerned about balancing the budget, we should worry less about raising tax revenue and more about growing the economy. The recipe for growth? Lower tax rates and a simplified tax code.

___________

Spending is out of control but some insist on just asking for more revenue.

Tax Increases Won’t Solve Washington’s Spending Problem

Emily Goff

December 11, 2012 at 5:45 pm

“We make some tough spending cuts on things that we don’t need; and then we ask the wealthiest Americans to pay a slightly higher tax rate. And that’s a principle I won’t compromise on.”

At yesterday’s fiscal cliff campaign stop in Redford, Michigan, President Obama delivered these remarks and hammered away at his “balanced” plan to avert the fiscal cliff. Balance, as defined in the President’s plan, consists of $4 in tax increases up front for every $1 in loosely defined spending cuts promised down the road. The balance scale at the White House, it seems, needs to be recalibrated.

Obama’s plan misses a crucial point: Washington does not have a problem of too little revenue. Its problem is too much spending. Though revenue has decreased during the recession, the nonpartisan Congressional Budget Office projects that revenues will return to their normal historical level once the economy fully recovers. Spending, however, is out of control. Instead of debating any variety of tax increases—hiking rates or limiting deductions—Congress and the President should be reducing spending. They can start with entitlement program reforms.

Raising taxes on more affluent Americans and businesses, as Obama’s plan would do, would not generate enough revenue to close our massive deficits. Doing so would require mathematically impossible tax rates. Any such attempt would also seriously hurt the economy and jeopardize job creation.

What if you stretched Obama’s version of balance a bit further, though, and let all current tax policy expire? Such massive tax increases—ignoring the certain economic damage that would occur—would STILL not balance the budget. Entitlement program spending would continue to rise dramatically, soaking up all available revenue and driving deficits deeper. (continues below chart)

Not even Obama is proposing this idea outright, but by virtue of Obama’s insistence on tax increases and unblushing silence on entitlement program reforms, he is leading the nation down this path.

A responsible solution exists to avoid the fiscal cliff without harming the economy. Bipartisan entitlement program reforms also exist that can begin to solve the country’s real fiscal crisis. President Obama insists on taxing his way to prosperity, dealing a blow to capital, investments, and small businesses. The only trouble is that he’s forgetting—or ignoring—that spending is the problem.

By Everette Hatcher III | Also posted in President Obama, spending out of control | Comments (0)

Open letter to Congressman Griffin: “Milton Friedman: “If taxes are raised in order to keep down the deficit, the result is likely to be a higher norm for government spending” (Charlie Rose interview pt 4)”

December 17, 2012 – 10:33 pm

 

December 17, 2012

Congressman Tim Griffin, c/o Little Rock Office, 1501 N. University, Suite 150, Little Rock, AR 72207

Dear Congressman Griffin,

This is the second time  I have written you on this subject. I have met you several times and I have always enjoyed visiting with you. I got to hear you speak at a town meeting at Shannon Hills about a year ago and I must say that you did a great job showing how our country is heading to Greece if we do not tackle entitlement reform in a serious way or we will not control our spending. The issue of runaway spending is one of the issues that I wanted to talk to you about today. 

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.

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. However, his policies have not changed. He is committed to cutting nothing from the budget that I can tell.

Evidently the Republicans have proposed raising tax rates as a possible compromise to avoid going over the fiscal cliff. Let me make a few comments about that.

First, if raising the debt ceiling is part of this agreement then we are losing our leverage over President Obama. We have enough votes to block a debt ceiling increase. We want a balanced budget but if President Obama does not get a debt ceiling increase then he will have to balance the budget immediately.

Second, spending is our problem and it is not tax revenue. The problem in Washington is not lack of revenue but our lack of spending restraint. We almost had a balanced budget in 2007 and if we had frozen spending at 2007 levels then we would be close to a balanced budget now. Instead of controlling spending our spending has gone from 2.7 trillion to 3.8 trillion in just 5 short years!!!

Third, my blog has exploded the last few days with clicks on past posts I have done like the one below. Take a look at this post below and see why it is one of my most popular.

Fourth, I have included some wise words from a fellow Tea Party favorite like you below. Mo Brooks’ words are true now like they were in August of 2011 when he voted against the debt ceiling increase then.

Fifth, let me share these two videos with you that make very good points concerning this issue:

This video belows shows how silly the federal government is when they pass “spending cuts.”

The problem in Washington is not lack of revenue but our lack of spending restraint. This video below makes that point.

Please take the time to read Mo Brooks’ words and respond to me and tell me if you will vote against the debt ceiling increase. It is the only leverage we have on President Obama. Others have responded to me in the past and for that I am very grateful.

Thank you for your time.

Sincerely,

Everette Hatcher, 13900 Cottontail Lane, Alexander, AR 72002, cell ph 501-920-5733, lowcostsqueegees@yahoo.com, www.thedailyhatch.org

 

MILTON FRIEDMAN: THE MIND BEHIND THE REPUBLICAN TAX REVOLT

| Jul 22, 2011 | 0 comments

The on-going debate over raising the debt ceiling has focused on many areas of disagreement between Democrats and Republicans but none bigger than the Republican determination not to raise taxes.  Many pundits credit this to the political power of Grover Norquist and his Americans for Tax Reform who have spent years collecting “No Tax Increase” pledges from Republican candidates.  Others attribute Republican intransigence on taxes to a near religious belief in supply side economics, a school of thought founded by economist Arthur Laffer and journalist Jude Wanniski in the late 1970s.

The true seeds of this attitude toward tax increases, in my view, actually go back farther and can be traced to an even nobler pedigree.  The real inspiration for this conviction comes from the late Nobel prize-winning economist, Milton Friedman.  It is only by understanding Friedman’s reasoning and his values that one can fully understand why Republican refuse to see spending cuts and tax increases as simply two sides of the same budget-balancing coin.

This was not always the Republican, or even the conservative, position.  During the 1950s, it was Democrats who advocated tax cuts to stimulate the economy and President Eisenhower who insisted “we can never justify going further into debt to give ourselves a tax cut at the expense of our children.”

In 1964, the eventual Republican nominee for president, Senator Barry Goldwater, voted against the so-called Kennedy tax cuts (actually passed after Kennedy’s assassination the previous year) because he was convinced the resulting deficits would be inflationary.  Even after losing the presidential election to President Lyndon Johnson in a landslide later that year, Goldwater predicted a Republican comeback, telling U.S. News & World Report that a no-win war in Vietnam and high inflation would prompt a backlash against the Democrats two years later (he was right on both counts).

So if Eisenhower and Goldwater represented Republican orthodoxy in the 1950s and ‘60s, what happened?  In large part, it was an intellectual revolution in conservative/libertarian thought prompted by economist Milton Friedman.  While Friedman rejected the simplistic Keynesian (and later supply-side) notion that tax cuts automatically stimulate the economy, he believed that higher taxes were bad because they led to more and bigger government, which he was convinced at best led to waste and at worse to greater government control over our economy, our lives and our freedoms.

In 1967, three year’s after the Kennedy tax cuts, the Johnson Administration was already running huge deficits thanks to the a combination of Great Society social programs and the Vietnam War.  Writing in his regular Newsweek column on August 7, 1967, Friedman expresseded his concern that this would soon lead to higher taxes, using an analysis that would become familiar to his readers over the years:

“.If we adopt such programs, does not fiscal responsibility at least call for imposing taxes to pay for them?  The answer is that postwar experience has demonstrated two things. First, that Congress will spend whatever the tax system will raise—plus a little (and recently, a lot) more.  Second, that, surprising as it seems, it has proved difficult to get taxes down once they are raised.  The special interests created by government spending have proved more potent than the general interest in tax reduction.

“If taxes are raised in order to keep down the deficit, the result is likely to be a higher norm for government spending. Deficits will again mount and the process will be repeated.”

Sure enough, a year later a 10% income tax surcharge was enacted by Congress to cut the deficit and fight inflation.  His prediction having been confirmed, Friedman returned to the subject in another Newsweek column dated July 15, 1968.  He now described a familiar pattern of how Democrats used the traditional view of fiscal conservatism to convince Republicans to help pay for the Democrats’ own profligate spending:

“The standard scenario has been that the Democrats—in the name of the New Deal, the Fair Deal, or the Great Society—push through large spending programs . . . generally against the opposition of the Republican leadership.  The spending programs not only absorb the increased tax yield generated by the ‘fiscal drag,’ they go farther and produce deficits.

“The Democrats then appeal to the Republicans’ sense of fiscal responsibility to refrain from cutting tax rates or, as in this case, to raise them.  The Republicans cooperate, thereby establishing a new higher revenue base for further spending.  The Democrats get the ‘credit’ for the spending; the Republicans, the ‘blame’ for the taxes; and you and I pay the bill.”

Fast forward seven years, when Republican President Gerald Ford was proposing a tax cut to stimulate the economy during a brief recession.  As an economist who believed monetary, not fiscal, policy was the best way to keep the economy on a stable path to growth, Friedman did not believe the proposed tax cut would have its intended stimulatory effect.  He explained why in another Newseek column on July 15, 1975 but went on to say:

“Yet I must confess that I favor tax cuts—not as a cure for recession but for a very different reason.  Our basic long-term need is to stop the explosive growth in government spending.  I am persuaded that the only effective way to do so is by cutting taxes—at any time for any excuse in any way.

“The reason is that government will spend whatever the tax system raises plus a good deal more—but not an indefinite amount more.  The most effective way to force each of us to economize is to reduce our income.  The restraint is less rigid on government, but it is there and seems to be the only one we have.

“So hail the tax cut—but let’s do it for the right reason.”

Another six years went by and now it was the newly-elected president, Ronald Reagan, who was proposing a large, multi-year tax cut to get the economy moving. At the time, he was also proposing off-setting spending cuts (which we all know didn’t happen).  Friedman wrote yet another Newsweek column dated July 27, 1981, refuting objections to the plan by liberal economists while also discounting many of the claims of supply-siders in the Reagan Administration.  Friedman still supported the tax cuts, of course, and explained why liberals were suddenly worried about deficits:

“The analysis so far treats government spending and taxes as if they were two independent entities.  They clearly are not.  We know full well that Congress will spend every penny—and more—that is yielded by taxes.  A cut in taxes will mean a cut in government spending.  And there is no other way to get a cut in spending.

“That is the real reason why the big spenders and the big inflationists of the past have suddenly been converted to fiscal conservatism and to preaching the virtues of fighting inflation.  They know that a multi-year tax cut will force multi-year spending reductions.  They hope that a one-year tax cut will quiet public agitation and allow them to revert next year to their high-spending ways.”

Taken as a whole, these excerpts from columns written for a popular magazine by a Nobel laureate economist between 1967 and 1981—44 to 30 years ago—spell out precisely the philosophy that today motivates many Republicans in and out of Congress to firmly oppose any tax increase as part of a deficit reduction or budget-balancing plan proposed by Democrats.

Like Milton Friedman, they are firmly convinced that any taxes they raise will ultimately result in increased government spending.  They believe government spending necessarily translates into more and bigger government.  They believe the federal government is already too big, threatening not just the health of the economy but their freedom and way of life as well.

One can argue with Friedman’s assumptions as well as the conclusions he draws from them.  But until those on the other side—including the President, Democratic congressional leaders and the media—understand the reasoning and motivations behind the anti-tax sentiments of Republicans from Capitol Hill to the Tea Party activists, it’s hard to imagine anything more than a temporary truce in the battle being waged over the budget.

____________

Here is another Tea Party hero you need to listen to:
Rep. Brooks on Fox Business: BBA and the Debt Ceiling Vote

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Rep. Mo Brooks To Vote No On Obama-Reid-Boehner Debt Ceiling Bill

08/01/11

Washington, D.C. – Today Congressman Mo Brooks (R-AL) made the following statement concerning his vote on the Budget Control Act of 2011:

Summary

The Obama-Reid-Boehner Debt Ceiling Bill is bad for America, bad political process, bad for national defense, does not prevent unsustainable budget deficits, kicks the debt ceiling crises down the road to 2013 (when America will have more debt and less financial strength with which to fix the problem), and fails to satisfactorily decrease the risk of an American credit rating downgrade.

Overview

America must, and will, raise the debt ceiling.  The question is not whether Congress will raise the debt ceiling; the question is when and how.  Regardless of when the debt ceiling is raised, every bill and obligation of America to its citizens and creditors will be paid in full (albeit, with the exception of creditors, some payments may be delayed).

I have voted to raise the debt ceiling provided the debt ceiling bill makes America’s financial condition better, not worse.

I voted to raise the debt ceiling on July 22, 2011, when I voted for the Cut, Cap and Balance Plan (cutting FY 2012 expenditures by a modest $111 billion in the context of a $1.5 trillion deficit; capping federal government expenditures within historically justifiable 18-20% ranges; and passing a Balanced Budget Constitutional Amendment that protect future generations of Americans from revisiting the financial mess we face).

I voted to raise the debt ceiling on July 29, 2011, when I voted for the Boehner Plan (which included a Balanced Budget Constitutional Amendment requirement).

I will not vote for the Obama-Reid-Boehner Debt Bill (herein the “Debt Bill”) because it is not up to the financial challenges America faces. 

Background:  The Problem

Years of spending binges by the federal government have come home to roost.  America’s debt exceeds $14 trillion.  America has suffered three consecutive years of trillion dollar deficits (and faces trillion dollar deficits into the foreseeable future).

Annual deficits and accumulated debt force America to confront two major financial threats, both with one common cause: unsustainable budget deficits.

In the short term, America faces a debt ceiling crisis.  Over the longer term, America faces a debt crisis. 

If trillion dollar deficits continue indefinitely, America’s insolvency and bankruptcy is certain, thereby risking America’s national defense, Social Security, Medicare, Medicaid, NASA, and everything else the federal government does.

Debt Bill Deficiencies That Compel a “No” Vote

The accumulative deficiencies in the Debt Bill compel me to vote “No.”  The deficiencies are:

1. Minimal Time for Consideration and Deliberation.

The Debt Bill is 74 pages of interwoven, complicated legal and budgetary terms.  I have read and studied the Debt Bill in the limited time available.  The Debt Bill forces onto our children and grandchildren another $2.4 trillion in debt burden, yet we are expected to vote on it with less than 24 hours notice.

This is insufficient time to thoroughly understand the Debt Bill’s nuances, for budget experts to digest the Debt Bill and offer their insights, for the public to analyze the legislation and share their insight, and for Congress to make a wise and deliberative decision.

While some argue the Debt Bill must pass by the White House’s August 2 deadline; I believe it is better to act wisely than in haste.  The economy will be much worse if Congress, in haste, makes a $2.4 trillion error. 

2. Significant Defense Cuts in FY 2012 & 2013.

In FY 2012, the Debt Bill cuts national defense by $2 to $17 billion (the variance is due to different Debt Bill interpretations by the House Armed Services Committee).

The Debt Bill creates a 12-member Joint Select Committee (six Senators and six Congressmen; six Republicans and six Democrats).  By November 23, the Committee must recommend $1.2 trillion in deficit reduction measures (spending cuts and/or tax increases).  If the Committee makes a recommendation, Congress must vote on the recommendation on or before January 15. 

If the Committee splits 6-6 and makes no recommendation, or if either House of Congress rejects the Committee’s recommendation, then the Debt Bill mandates that the Defense budget be cut $60 Billion in FY 2013 (i.e. – in the fiscal year beginning 14 months from now, on October 1, 2013).

National defense is the top priority of the federal government.  If the Debt Bill passes, there is an unnecessary and substantial risk that it will trigger risky defense cuts in just 14 months that undermine the defense capabilities of America.

3. The Bill Does Not Fix the Underlying Problem.

The Bill makes America’s financial challenges worse by inadequately addressing unsustainable deficits that threaten America with insolvency and bankruptcy and force debt ceiling increases.

The Debt Bill’s “cuts” bind no future Congresses.  Hence, the only “cuts” that count are those for Fiscal Years 2012 and 2013.

In FY 2012, the Debt Bill cuts discretionary federal government spending by only $7 billion (versus FY 2011 levels), while overall federal government spending actually increases (“discretionary spending” is less than 30% of total federal government spending). 

In FY 2013, the Debt Bill increases discretionary federal government spending by $4 billion (over FY 2012 levels).  Overall federal government spending again increases significantly.

Hence, in both FY 2012 and 2013, the federal government deficit is estimated to exceed $1 trillion/year if the Debt Bill passes and, under the best of scenarios, the Debt Bill’s “solution” increases America’s debt by $2.4 trillion in less than two years, which makes America’s debt problem much worse, not better.

4. Balanced Budget Constitutional Amendment. 

The Debt Bill requires a vote of Congress on a Balanced Budget Constitutional Amendment but does not require that Congress pass a Balanced Budget Amendment. 

The July 29 Boehner Bill required passage of a Balanced Budget Amendment before the Phase II debt ceiling increase would occur.  The Debt Bill eliminates the requirement for a Balanced Budget Amendment, thereby eliminating the only long-term fix to America’s unsustainable deficits. 

5. Punting the Debt Ceiling Crisis to 2013. 

Because of 2012 election considerations, the Debt Bill “kicks the can down the road” to 2013, when a financially weaker America will be less capable of facing yet another debt ceiling crisis. 

America will be weaker because debt service burdens will be $2.4 trillion more and the total debt of $16.7 trillion will likely be subject to higher interest rates and more onerous payment obligations.

America must face its unsustainable deficit issue while it is stronger, not weaker.  The longer America waits, the worse the economic outcome will be.

6. Credit Rating Cuts.

In my judgment, the Debt Bill substantially increases the long-term risk of a cut in America’s credit rating. 

Standard & Poor stated on July 14, 2011, that America’s credit rating is at risk if Washington has “not achieved a credible solution to the rising U.S. government debt burden and [is] not likely to achieve one in the foreseeable future.”  Standard & Poor president Deven Sharma reiterated this concern on July 27, 2011 when he testified before the House Financial Services Committee that, “The more important issue is really the long-term growth rate of the debt… that is the more important issue at hand.”

Similarly, Moody’s stated on July 13, 2011 that, if the debt ceiling is raised, America’s credit rating outlook “would very likely be changed to negative… unless [there is a] substantial and credible agreement [on] long-term deficit reduction.”

The Debt Bill does not cut America’s short or long-term deficits enough to minimize the risk of downgrade in America’s credit rating… a downgrade that will, in turn, drive up America’s debt service cost and reduce funding for all other federal government programs.  To make matters worse, if America’s interest rates go up; state, local and private interest rates are likely to also go up… thereby hurting all Americans at every level.

The Solution

The best solution that protects America from the short term debt ceiling and long term insolvency threats is a debt ceiling increase coupled with a Balanced Budget Constitutional Amendment that is phased in over a 5 year period.

Inasmuch as constitutional amendments often take years to pass, time that America may not have, the debt ceiling should be raised in a two-step process.  The first step partially raises the debt ceiling when Congress passes a substantive and effective Balanced Budget Amendment.  If the Senate and House concur, this can be done in as little as a week.

The second step raises the rest of the debt ceiling requirement when the states ratify the proposed Balanced Budget Amendment.  This process gives the states an incentive to ratify the Balanced Budget Amendment in less than one year (or trigger the effects of not raising the debt ceiling).

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By Everette Hatcher III | Also posted in Milton Friedman, President Obama, spending out of control | Comments (0)

Open letter to Speaker of the House John Boehner (Part 55)

December 17, 2012 – 4:33 pm

Open letter to Speaker of the House John Boehner (Part 55)

John Boehner, Speaker of the House

H-232, The Capital, Washington, DC 20515

Dear Mr. Speaker,

I know that you will have to meet with newly re-elected President Obama soon and he will probably be anxious for you to raise taxes and  federal spending, but he will want you to leave runaway entitlement programs alone. When that happens then you have one thing you can hold over his head and that is the debt ceiling.

You must stand up to him and tell him that you can not raise it. In December of 2012 or January of 2013 at the latest we will be shutting down the government if we don’t increase the debt limit according to the LA Times. You got to listen to the Tea Party heroes like Rep. Todd Rokita, Ben Quayle (R-AZ), Jeff Landry (R, LA-03), Raúl R. Labrador , Tim Huelskamp,  Rep. Justin Amash (R-MI),  , Brooks, Mo (AL – 5), Buerkle, Ann Marie (NY – 25),Chabot, Steven (OH – 1),Duncan, Jeff (SC – 3), Fleischmann, Chuck (TN – 3) ,Gowdy, Trey (SC – 4) ,Griffith, H. Morgan (VA – 9) , Harris, Andy (MD – 1) ,Huizenga, Bill (MI – 2) , Mulvaney, Mick (SC – 5) , Pompeo, Mike (KS – 4) , Ribble, Reid (WI – 8), Rigell, E. Scott (VA – 2) , Ross, Dennis (FL – 12) ,Schweikert, David (AZ – 5), Scott, Austin (GA – 8) , Scott, Tim (SC – 1) , Southerland, Steve (FL – 2) , Stutzman, Marlin (IN – 3) , Walberg, Timothy (MI – 7) , Walsh, Joe (IL – 8),and Woodall, Rob (GA – 7) .

__________

Here is another Tea Party hero you need to listen to:
Rep. Brooks on Fox Business: BBA and the Debt Ceiling Vote

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Rep. Mo Brooks To Vote No On Obama-Reid-Boehner Debt Ceiling Bill

08/01/11

Washington, D.C. – Today Congressman Mo Brooks (R-AL) made the following statement concerning his vote on the Budget Control Act of 2011:

Summary

The Obama-Reid-Boehner Debt Ceiling Bill is bad for America, bad political process, bad for national defense, does not prevent unsustainable budget deficits, kicks the debt ceiling crises down the road to 2013 (when America will have more debt and less financial strength with which to fix the problem), and fails to satisfactorily decrease the risk of an American credit rating downgrade.

Overview

America must, and will, raise the debt ceiling.  The question is not whether Congress will raise the debt ceiling; the question is when and how.  Regardless of when the debt ceiling is raised, every bill and obligation of America to its citizens and creditors will be paid in full (albeit, with the exception of creditors, some payments may be delayed).

I have voted to raise the debt ceiling provided the debt ceiling bill makes America’s financial condition better, not worse.

I voted to raise the debt ceiling on July 22, 2011, when I voted for the Cut, Cap and Balance Plan (cutting FY 2012 expenditures by a modest $111 billion in the context of a $1.5 trillion deficit; capping federal government expenditures within historically justifiable 18-20% ranges; and passing a Balanced Budget Constitutional Amendment that protect future generations of Americans from revisiting the financial mess we face).

I voted to raise the debt ceiling on July 29, 2011, when I voted for the Boehner Plan (which included a Balanced Budget Constitutional Amendment requirement).

I will not vote for the Obama-Reid-Boehner Debt Bill (herein the “Debt Bill”) because it is not up to the financial challenges America faces. 

Background:  The Problem

Years of spending binges by the federal government have come home to roost.  America’s debt exceeds $14 trillion.  America has suffered three consecutive years of trillion dollar deficits (and faces trillion dollar deficits into the foreseeable future).

Annual deficits and accumulated debt force America to confront two major financial threats, both with one common cause: unsustainable budget deficits.

In the short term, America faces a debt ceiling crisis.  Over the longer term, America faces a debt crisis. 

If trillion dollar deficits continue indefinitely, America’s insolvency and bankruptcy is certain, thereby risking America’s national defense, Social Security, Medicare, Medicaid, NASA, and everything else the federal government does.

Debt Bill Deficiencies That Compel a “No” Vote

The accumulative deficiencies in the Debt Bill compel me to vote “No.”  The deficiencies are:

1. Minimal Time for Consideration and Deliberation.

The Debt Bill is 74 pages of interwoven, complicated legal and budgetary terms.  I have read and studied the Debt Bill in the limited time available.  The Debt Bill forces onto our children and grandchildren another $2.4 trillion in debt burden, yet we are expected to vote on it with less than 24 hours notice.

This is insufficient time to thoroughly understand the Debt Bill’s nuances, for budget experts to digest the Debt Bill and offer their insights, for the public to analyze the legislation and share their insight, and for Congress to make a wise and deliberative decision.

While some argue the Debt Bill must pass by the White House’s August 2 deadline; I believe it is better to act wisely than in haste.  The economy will be much worse if Congress, in haste, makes a $2.4 trillion error. 

2. Significant Defense Cuts in FY 2012 & 2013.

In FY 2012, the Debt Bill cuts national defense by $2 to $17 billion (the variance is due to different Debt Bill interpretations by the House Armed Services Committee).

The Debt Bill creates a 12-member Joint Select Committee (six Senators and six Congressmen; six Republicans and six Democrats).  By November 23, the Committee must recommend $1.2 trillion in deficit reduction measures (spending cuts and/or tax increases).  If the Committee makes a recommendation, Congress must vote on the recommendation on or before January 15. 

If the Committee splits 6-6 and makes no recommendation, or if either House of Congress rejects the Committee’s recommendation, then the Debt Bill mandates that the Defense budget be cut $60 Billion in FY 2013 (i.e. – in the fiscal year beginning 14 months from now, on October 1, 2013).

National defense is the top priority of the federal government.  If the Debt Bill passes, there is an unnecessary and substantial risk that it will trigger risky defense cuts in just 14 months that undermine the defense capabilities of America.

3. The Bill Does Not Fix the Underlying Problem.

The Bill makes America’s financial challenges worse by inadequately addressing unsustainable deficits that threaten America with insolvency and bankruptcy and force debt ceiling increases.

The Debt Bill’s “cuts” bind no future Congresses.  Hence, the only “cuts” that count are those for Fiscal Years 2012 and 2013.

In FY 2012, the Debt Bill cuts discretionary federal government spending by only $7 billion (versus FY 2011 levels), while overall federal government spending actually increases (“discretionary spending” is less than 30% of total federal government spending). 

In FY 2013, the Debt Bill increases discretionary federal government spending by $4 billion (over FY 2012 levels).  Overall federal government spending again increases significantly.

Hence, in both FY 2012 and 2013, the federal government deficit is estimated to exceed $1 trillion/year if the Debt Bill passes and, under the best of scenarios, the Debt Bill’s “solution” increases America’s debt by $2.4 trillion in less than two years, which makes America’s debt problem much worse, not better.

4. Balanced Budget Constitutional Amendment. 

The Debt Bill requires a vote of Congress on a Balanced Budget Constitutional Amendment but does not require that Congress pass a Balanced Budget Amendment. 

The July 29 Boehner Bill required passage of a Balanced Budget Amendment before the Phase II debt ceiling increase would occur.  The Debt Bill eliminates the requirement for a Balanced Budget Amendment, thereby eliminating the only long-term fix to America’s unsustainable deficits. 

5. Punting the Debt Ceiling Crisis to 2013. 

Because of 2012 election considerations, the Debt Bill “kicks the can down the road” to 2013, when a financially weaker America will be less capable of facing yet another debt ceiling crisis. 

America will be weaker because debt service burdens will be $2.4 trillion more and the total debt of $16.7 trillion will likely be subject to higher interest rates and more onerous payment obligations.

America must face its unsustainable deficit issue while it is stronger, not weaker.  The longer America waits, the worse the economic outcome will be.

6. Credit Rating Cuts.

In my judgment, the Debt Bill substantially increases the long-term risk of a cut in America’s credit rating. 

Standard & Poor stated on July 14, 2011, that America’s credit rating is at risk if Washington has “not achieved a credible solution to the rising U.S. government debt burden and [is] not likely to achieve one in the foreseeable future.”  Standard & Poor president Deven Sharma reiterated this concern on July 27, 2011 when he testified before the House Financial Services Committee that, “The more important issue is really the long-term growth rate of the debt… that is the more important issue at hand.”

Similarly, Moody’s stated on July 13, 2011 that, if the debt ceiling is raised, America’s credit rating outlook “would very likely be changed to negative… unless [there is a] substantial and credible agreement [on] long-term deficit reduction.”

The Debt Bill does not cut America’s short or long-term deficits enough to minimize the risk of downgrade in America’s credit rating… a downgrade that will, in turn, drive up America’s debt service cost and reduce funding for all other federal government programs.  To make matters worse, if America’s interest rates go up; state, local and private interest rates are likely to also go up… thereby hurting all Americans at every level.

The Solution

The best solution that protects America from the short term debt ceiling and long term insolvency threats is a debt ceiling increase coupled with a Balanced Budget Constitutional Amendment that is phased in over a 5 year period.

Inasmuch as constitutional amendments often take years to pass, time that America may not have, the debt ceiling should be raised in a two-step process.  The first step partially raises the debt ceiling when Congress passes a substantive and effective Balanced Budget Amendment.  If the Senate and House concur, this can be done in as little as a week.

The second step raises the rest of the debt ceiling requirement when the states ratify the proposed Balanced Budget Amendment.  This process gives the states an incentive to ratify the Balanced Budget Amendment in less than one year (or trigger the effects of not raising the debt ceiling).

Sincerely,

Everette Hatcher, 13900 Cottontail Lane, Alexander, AR 72002, lowcostsqueegees@yahoo.com, www.thedailyhatch.org, ph 501-920-5733

___________

Related posts:

Government shutdown coming, will there be any tea party heroes available to stand up to Obama?

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Some Tea Party heroes (Part 1)

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Some Tea Party heroes (Part 8)

Rep Himes and Rep Schweikert Discuss the Debt and Budget Deal Michael Tanner of the Cato Institute in his article, “Hitting the Ceiling,” National Review Online, March 7, 2012 noted: After all, despite all the sturm und drang about spending cuts as part of last year’s debt-ceiling deal, federal spending not only increased from 2011 […]

Some Tea Party heroes (Part 7)

Michael Tanner of the Cato Institute in his article, “Hitting the Ceiling,” National Review Online, March 7, 2012 noted: After all, despite all the sturm und drang about spending cuts as part of last year’s debt-ceiling deal, federal spending not only increased from 2011 to 2012, it rose faster than inflation and population growth combined. […]

Who are the Tea Party Heroes from the 87 Freshmen Republicans?

Here is a study done on the votes of the 87 incoming freshman republicans frm the Club for Growth. Freshman Vote Study In the 2010 election, 87 freshmen House Republicans came to Washington pledging fealty to the Tea Party movement and the ideals of limited government and economic freedom. The mainstream media likes to say […]

Tea Party Conservative Senator Mike Lee interview

Tea Party Conservative Senator Mike Lee interview Here is an excellent interview above with Senator Lee with a fine article below from the Heritage Foundation. Sen. Mike Lee (R-UT) came to Washington as the a tea-party conservative with the goal of fixing the economy, addressing the debt crisis and curbing the growth of the federal […]

Some Tea Party heroes (Part 6)

I feel so strongly about the evil practice of running up our national debt. I was so proud of Rep. Todd Rokita who voted against the Budget Control Act of 2011 on August 11, 2011. He made this comment:   For decades now, we have spent too much money on ourselves and have intentionally allowed our […]

Some Tea Party heroes (Part 5)

Rep. Quayle on Fox News with Neil Cavuto __________________ We have to get people realize that the most important issue is the debt!!! Recently I read a comment by Congressman Ben Quayle (R-AZ) made  after voting against the amended Budget Control Act on August 1, 2011. He said it was important to compel “Congressional Democrats and […]

Some Tea Party heroes (Part 4)

What future does our country have if we never even attempt to balance our budget. I read some wise words by Congressman Jeff Landry (R, LA-03) regarding the  debt ceiling deal that was passed on August 1, 2011:”Throughout this debate, the American people have demanded a real cure to America’s spending addiction – a Balanced Budget […]

Some Tea Party heroes (Part 3)

I read some wise comments by Idaho First District Congressman Raúl R. Labrador concerning the passage of the Budget Control Act on August 1, 2011 and I wanted to point them out: “The legislation  lacks a rock solid commitment to passage of a balanced budget amendment, which I believe is necessary to saving our nation.” I just […]

Some Tea Party heroes (Part 2)

Congressmen Tim Huelskamp on the debt ceiling I just don’t understand why people think we can go on and act like everything is okay when we have a trillion dollar deficit. Sometimes you run across some very wise words like I did the other day. Kansas Congressman Tim Huelskamp made the following comment on the […]

By Everette Hatcher III | Also posted in President Obama, spending out of control | Comments (0)

Open letter to President Obama (Part 194)

December 17, 2012 – 6:39 am

 

President Obama c/o The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President,

I know that you receive 20,000 letters a day and that you actually read 10 of them every day. I really do respect you for trying to get a pulse on what is going on out here.

We got to lower taxes if we want to encourage job creation.

I am sometimes at a loss for words to describe the stupidity of the Republican Party.

Let’s use an analogy to explain what I mean. Imagine you were playing a game of chess and your opponent openly stated that he wanted you to move your rook to a certain point on the board.

If your IQ was above room temperature, you would probably be suspicious that he wasn’t trying to help you win the game.

Well, the same thing happens in fiscal policy. I quoted the Hill newspaper last year when some Democrats admitted that their top political goal was to seduce the GOP into a tax increase.

Now we have more evidence.

The Democrats’ counter-strategy is a bit more subtle, but has essentially been to find ways to make it very uncomfortable for Republicans to maintain such a rigid anti-tax orthodoxy — to ultimately force Republicans to break their anti-tax pledges and badly splinter their party. That’s what the Buffett Rule is about; that why Dems insist they won’t dismantle the so-called “sequester” — big cuts to defense and even to Medicare — unless Republicans agree to tackle deficits in a balanced way, i.e. by supporting significant new tax revenues. The results have been mixed. They’ve won a small number of GOP votes here and there, and vulnerable members are nowadays more likely to trash or dismiss Grover Norquist in the press than they were last year. But at a very high level within the Democratic Party, there’s a recognition that breaking the GOP on taxes is an absolutely crucial strategic imperative for defending safety net programs over the long term.

That’s a pretty clear statement. We have folks on the left who say they want higher taxes both to prop up big government and to cause internal damage to the GOP.

So we’re now left with a rather strange puzzle. Why would any Republicans (most recently Sen. Lindsey Graham and Jeb Bush) want to help the Democrats achieve those goals?!?

Unless, of course, they’re motivated by a belief in bigger government (high likely) or a suicidal desire to harm their own electoral prospects (highly unlikely since even I don’t think GOPers are that stupid).

____________

Thank you so much for your time. I know how valuable it is. I also appreciate the fine family that you have and your commitment as a father and a husband.

Sincerely,

Everette Hatcher III, 13900 Cottontail Lane, Alexander, AR 72002, ph 501-920-5733, lowcostsqueegees@yahoo.com

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

Open letter to Speaker of the House John Boehner (Part 54)

December 17, 2012 – 6:28 am

Open letter to Speaker of the House John Boehner (Part 54)

John Boehner, Speaker of the House

H-232, The Capital, Washington, DC 20515

Dear Mr. Speaker,

I know that you will have to meet with newly re-elected President Obama soon and he will probably be anxious for you to raise taxes and  federal spending, but he will want you to leave runaway entitlement programs alone. When that happens then you have one thing you can hold over his head and that is the debt ceiling.

You must stand up to him and tell him that you can not raise it. In December of 2012 or January of 2013 at the latest we will be shutting down the government if we don’t increase the debt limit according to the LA Times. You got to listen to the Tea Party heroes like Rep. Todd Rokita, Ben Quayle (R-AZ), Jeff Landry (R, LA-03), Raúl R. Labrador , Tim Huelskamp,  Rep. Justin Amash (R-MI),  , Brooks, Mo (AL – 5), Buerkle, Ann Marie (NY – 25),Chabot, Steven (OH – 1),Duncan, Jeff (SC – 3), Fleischmann, Chuck (TN – 3) ,Gowdy, Trey (SC – 4) ,Griffith, H. Morgan (VA – 9) , Harris, Andy (MD – 1) ,Huizenga, Bill (MI – 2) , Mulvaney, Mick (SC – 5) , Pompeo, Mike (KS – 4) , Ribble, Reid (WI – 8), Rigell, E. Scott (VA – 2) , Ross, Dennis (FL – 12) ,Schweikert, David (AZ – 5), Scott, Austin (GA – 8) , Scott, Tim (SC – 1) , Southerland, Steve (FL – 2) , Stutzman, Marlin (IN – 3) , Walberg, Timothy (MI – 7) , Walsh, Joe (IL – 8),and Woodall, Rob (GA – 7) .

__________

Here is another Tea Party hero you need to listen to:

Roby Comments on Debt Limit Vote

Aug 1, 2011 Issues: Spending Cuts and Debt
 
 
 

WASHINGTON—U.S. Rep. Martha Roby (AL-02), a member of the House Committee on Armed Services, made the following comments today regarding the House of Representative’s vote to increase the statutory limit on the national debt:

                “I applaud the efforts of Speaker Boehner, Majority Leader Cantor, Majority Whip McCarthy, and Budget Chairman Ryan over the last month. Every dollar saved under the plan approved tonight is a result of their steadfast advocacy on behalf of the American People. While the final legislation is far from perfect and while many of us would prefer the more fundamental reforms found in the ‘Cut, Cap, and Balance Act,’ this compromise cuts a dollar of spending for every new dollar of debt. That is a significant accomplishment given that Democrats—who wanted new taxes and no spending reductions—outnumbered Republicans two to one at the negotiating table.

                “During this debate, I voted for two separate proposals that would significantly cut future spending, put our nation on firmer financial footing, and avoid a potentially catastrophic default. Each was killed by Senate Democrats.

                “I am pleased that a default has been avoided as a result of the vote tonight. However, I was unable to support this legislation because, after a careful reading of the bill, I fear it could ultimately result in devastating and unjustified cuts to our national security. This bill, unlike previous proposals I supported, has a weak firewall against potentially destructive defense cuts. To be sure, there are savings to be found in the Pentagon’s budget, and I have already voted this year to trim wasteful and unnecessary defense spending. But this bill goes much too far. The legislation would use our defense budget as an insurance policy to guarantee savings in the event that the special joint committee, which this legislation creates, fails to achieve cuts in other areas of the government bureaucracy.

                “Of course we lack a crystal ball to know how it will play out, but my best judgment is that the chances the special joint committee will fail are too high to risk our national defense, which is one of few legitimate government functions enumerated in the Constitution. If required, the cuts would be so deep as to affect the readiness of our troops around the world—a risk I am not willing to take. As important as deficit reduction is, what good is it for a country that is unable to adequately defend the freedom and liberty it cherishes? Certainly there are other places in the massive federal bureaucracy that are more deserving of deep cuts.

                “I reject the idea that we need not worry about these cuts because Washington will never let them happen. To make that suggestion is to say that the legislation does not actually do what we have said it does.

                “In the end, I hope that the special joint committee will find the spending cuts that it is charged to identify, and I look forward to reviewing the product of its work. Our prayer is that the special joint committee members will do their jobs, thereby ensuring that the damaging military cuts that could occur never see the light of day.

                “On the broader question of restoring fiscal responsibility, our work has just begun. This has been a long and convoluted process, but the takeaway is simple: in a short period of time, House Republicans have successfully changed the conversation in Washington from ‘how do we spend more’ to ‘how do we spend less.’ Even so, much work remains, and only a sustained, dedicated effort will truly change the spending culture in Washington.”

# # #

NOTE: Congress debated how best to raise the debt limit for many months. Members considered numerous proposals, and the House of Representatives and the Senate each took several votes on the issue. On May 31, Rep. Martha Roby voted against President Obama’s original request for a clean debtincrease that would expand the government’s ability to borrow money without placing any restrictions on future spending. She saidthat any debt limit increase should be accompanied by “significant” spending cuts. On July 22, Roby voted in favor of the “Cut, Cap, and Balance Act,” referringto the “strong” measure as her “preference.” The Democratic Senaterejected the measure. With the debt deadline looming, Roby supported Speaker Boehner’sproposal on July 29, notingthat it was “far from perfect” but that it cut a dollar of spending for every dollar of additional debt and included no new taxes. Again, the Senaterejected that measure. On July 28, Roby opposed Sen. Reid’s proposal, which she pointed outincluded an unacceptable budget gimmick that would not result in real savings. (The Senatealso rejectedthe Reid proposal.) That vote was followed by the events described in the press release above.

Sincerely,

Everette Hatcher, 13900 Cottontail Lane, Alexander, AR 72002, lowcostsqueegees@yahoo.com, www.thedailyhatch.org, ph 501-920-5733

___________

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I feel so strongly about the evil practice of running up our national debt. I was so proud of Rep. Todd Rokita who voted against the Budget Control Act of 2011 on August 11, 2011. He made this comment:   For decades now, we have spent too much money on ourselves and have intentionally allowed our […]

Some Tea Party heroes (Part 5)

Rep. Quayle on Fox News with Neil Cavuto __________________ We have to get people realize that the most important issue is the debt!!! Recently I read a comment by Congressman Ben Quayle (R-AZ) made  after voting against the amended Budget Control Act on August 1, 2011. He said it was important to compel “Congressional Democrats and […]

Some Tea Party heroes (Part 4)

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Some Tea Party heroes (Part 3)

I read some wise comments by Idaho First District Congressman Raúl R. Labrador concerning the passage of the Budget Control Act on August 1, 2011 and I wanted to point them out: “The legislation  lacks a rock solid commitment to passage of a balanced budget amendment, which I believe is necessary to saving our nation.” I just […]

Some Tea Party heroes (Part 2)

Congressmen Tim Huelskamp on the debt ceiling I just don’t understand why people think we can go on and act like everything is okay when we have a trillion dollar deficit. Sometimes you run across some very wise words like I did the other day. Kansas Congressman Tim Huelskamp made the following comment on the […]

By Everette Hatcher III | Also posted in President Obama, spending out of control | Comments (0)

Republicans seem to give in most of the time on spending issues

December 14, 2012 – 6:40 am

Republicans seem to give in most of the time. I wish for the good of the country someone would step up and try to reverse the trend towards more spending and start cutting the budget for a change. We only had a budget deficit of about 161 billion in 2007 with income about where it is now. Then why do we have a budget deficit over one trillion today? It is because our problem is spending and not revenue!!!

It’s never a good idea to display weakness during negotiations. Your opponent will sense your fear and up his demands.

That’s certainly what we’re seeing in Washington. The cartoon at this link captures the GOP’s wobbly attitude on taxes, and this interview is about the ever-increasing demands of the Obama Administration.

It’s rather galling, by the way, to be lectured on taxes by a tax cheat like Tim Geithner.

But my key point is that the GOP’s preemptive surrender emboldened the White House, and helped move the debate even further to the left.

Let me elaborate on two points from the interview.

  1. We don’t need a tax increase. We can balance the budget simply by limiting spending so that it grows by “only” 2.5 percent annually. As I say to Cavuto, the White House is pushing higher taxes in order to enable a bigger burden of government spending.
  2. It’s important to define austerity correctly. To provide an analogy, we have to drink liquid to survive, but that doesn’t mean it would be a good idea to guzzle paint thinner. Likewise, we need austerity, but that shouldn’t mean higher taxes. We need to be like Estonia and tighten the belts of the public sector, not the private sector.

It’s not my job to give Republicans political advice, but I also want to expand upon the arguments I made a couple of days ago, when I wrote a post giving five policy reasons and five political reasons why the GOP shouldn’t surrender on tax increases.

A couple of readers correctly pointed out that I forgot to mention that tax increases are political poison because middle-class voters turn against the GOP once “revenue” is on the table. They are completely right, and my oversight is inexplicable since I’ve actually made that point in the past. Here’s some of what I wrote last year.

If Republicans put tax increases on the table, however, the politics get turned upside down. Instead of being united against all tax increases, voters realize somebody is going to get mugged and they have an incentive to make sure they’re not the ones who get victimized. That’s when soak-the-rich taxes become very appealing. Democrats, for all intents and purposes, can appeal to average voters by targeting the so-called rich. And even though voters will be skeptical about what Democrats really want, they don’t want to be the primary target of the political predators in Washington. Think of it this way. You’re a wildebeest running away from a pack of hyenas, but you know one member of your herd will get caught and killed. You despise hyenas, but at that critical moment, you’re main goal is wanting another member of the herd to bite the dust. This is why surrendering to tax increases put Republicans in a no-win situation. They oppose class-warfare taxes because they understand the disproportionately damaging impact of higher top income tax rates and increased double taxation of dividends and capital gains. So when GOPers get bullied into agreeing to raise taxes, they want to target less destructive sources of revenue. But that usually means…taxes that are more likely to hit the middle class. Needless to say, Democrats almost always win if there is a fight on whether to tax the middle class or to tax the rich.

I have to pat myself on the back for that passage, particularly the analogy that equates politicians with hyenas (though in the past I’ve apologized to hyenas for that unfair comparison).

Let’s close with a very good cartoon, which points out the foolishness of the media for wanting to send more money to Washington when even they understand that the town is filled with clowns and buffoons. That’s actually a very serious point, as I note about halfway through the interview included in my five-political-reasons-five-policy-reasons post.

Cartoon Beat the Press Tax Hikes

But it’s hard to laugh when you contemplate what’s happening. Obama is bullying the GOP, and the Republicans are in the process of surrendering to his class-warfare demands.

That will lead to bad policy, but it will also result in an emasculated, compliant, and house-broken GOP for at least the next two years, and perhaps even Obama’s entire second term. So even though the fiscal cliff tax hike is bigger than what Obama’s currently demanding, the long-run policy damage of surrender almost surely will be far greater.

Republicans don’t have many options in this fight. But they can show some cojones and tell Obama that the only way he’ll get a tax hike is if he wants to take the nation over the cliff.

P.S. If you like the Henry Payne cartoon in this post, you can enjoy some of his other work here, here, here, here, here, here, here, and here.

Cartoon GOP Reindeer

But what really makes the cartoon funny is the petulant stance of the elephants. Very effective artwork, mush as I praised Ramirez for the visual genius of his recent cartoon.

By Everette Hatcher III | Also posted in President Obama, spending out of control | Comments (0)