The Daily HatchOverall tax revenues have risen despite a recent decline due to the recession. Congress cut income taxes and the death tax in 2001 and capital gains taxes and dividends in 2003, yet revenues continued to surge even after the tax cuts were passed.
Chart 14 of 42
Max Brantley this morning on the Arkansas Times Blog, August 15, 2011, asserted:
Billionaire Warren Buffett laments, again, in a New York Times op-ed how the rich don’t share the sacrifices made by others in the U.S.. He notes his effectiie tax rate of 17 percent is lower than that of many of the working people in his office on account of preferences for investment income. Candidates such as U.S. Rep. Tim Griffin believe — with election results to support them — that Americans support such a tax system.
It appears according the chart below that the rich do sacrifice more than others which contradicts Max Brantley’s statment above. Welcome back Max. We missed you!!!
Top earners are the target for new tax increases, but the U.S. tax system is already highly progressive. The top 1 percent of income earners paid 38 percent of all federal income taxes in 2008, while the bottom 50 percent paid only 3 percent. Forty-nine percent of U.S. households paid no federal income tax at all.
Chart 13 of 42
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
Emily GoffResearch Assistant
Thomas A. Roe Institute for Economic Policy StudiesKathryn NixPolicy Analyst
Center for Health Policy StudiesJohn FlemingSenior Data Graphics Editor
Published on July 23, 2011 by Edwin Meese, III and Michael Needham
The centennial of Ronald Reagan’s birth earlier this year brought an unusual sight: a round of press reports noting President Obama’s admiration for his predecessor, including one he penned for this newspaper.
Despite their stark differences on policy, Obama praised Reagan for how he led the nation “through an extremely difficult period, with economic hardship at home and very real threats beyond our borders.” And, lo and behold, many pundits are now comparing what they call Reagan’s willingness to compromise on taxes to what they say is the intransigence of today’s GOP.
A cautionary tale
Leading the nation through hard times wasn’t easy. We’d like to suggest that President Obama take a closer look at how President Reagan dealt with that “economic hardship,” and how he steered the nation toward what would turn into its longest peacetime economic expansion. It’s a cautionary tale — one that involves the greatest domestic error of his administration.
In 1981, President Reagan’s plan for revitalizing the economy was a four-fold one:
1) Reduce tax rates across the board.
2) Decrease unnecessary regulations.
3) Work with the Federal Reserve to maintain stable monetary policy.
4) Slow the growth of federal spending.
President Reagan got his tax-rate cuts through Congress later that year. But because they were being phased in gradually, the economic pain they were designed to alleviate lingered well into 1982. High deficits persisted, and he faced enormous pressure to raise taxes.
The president had no interest in increasing taxes, but he agreed to consider some kind of compromise with Congress. His representatives began meeting with members of House Speaker Tip O’Neill’s team to find some way to hammer out a deficit-reduction pact. So began what, in our opinion, became the “Debacle of 1982.”
From the outset, the basic idea of the GOP participants was to trade some kind of concessions on the tax front for a Democratic agreement on spending cutbacks. The negotiators knew that Ronald Reagan would be hard to sell on any tax hikes. So they included a ploy they felt might overcome his resistance: a large reduction in federal spending in return for a modest rise in business (but not individual) taxes.
The ratio in the final deal — the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) — was $3 in spending cuts for every $1 in tax increases. It sounded persuasive at the time. Believing it to be the only way to get spending under control, most of the president’s colleagues signed on. He disliked the tax hikes, of course, but he agreed to it as well.
The cuts never came
You don’t have to be a Washington veteran to predict what happened next. The tax increases were promptly enacted — Congress had no problem accepting that part of the deal — but the promised budget cuts never materialized. After the tax bill passed, some legislators of both parties even claimed that there had been no real commitment to the 3-to-1 ratio.
In fact, spending for fiscal year 1983 was some $48 billion higher than the budget targets, and no progress was made in lowering the deficit. Even tax receipts for that year went down — a lingering effect of the recession, which the additional business taxes did nothing to redress.
Fortunately, the individual income tax-rate reductions that had been passed the year before remained intact. And as they took effect, the economy began its remarkable turnaround. The recovery of 1983-84 was strong enough that it paved the way for President Reagan’s landslide election to a second term.
More than two years into President Obama’s presidency, however, the prospects of Reagan-style recovery seem remote, to say the least. Rather than learning pro-growth lessons from President Reagan, he is creating another 1982 moment, seeking to lure Republicans into accepting another tax increase for illusory spending cuts.
Taxing our way to prosperity isn’t the answer. It never has been. If our children and grandchildren are to live in a free and prosperous America, congressional Republicans must not negotiate and accept a deal that raises taxes. That’s why The Heritage Foundation last year created Heritage Action for America — to ensure that members of Congress fight for the advance of freedom and are held to account.
President Reagan “had faith in the American promise,” President Obama notes. Reagan demonstrated that faith by trusting the American people to do the right thing, not by confiscating their wealth and subjecting them to myriad rules and regulations that stifle their creativity and sap their innovation.
“He recognized that each of us has the power — as individuals and as a nation — to shape our own destiny,” President Obama wrote this past January. That destiny, however, can be realized only in an atmosphere of freedom. Will the current president learn from the lessons of 1982?
Former U.S. attorney general Edwin Meese III holds the Ronald Reagan Chair in Public Policy at The Heritage Foundation. Michael Needham is chief executive officer of Heritage Action for America.
Senator Mark Pryor wants our ideas on how to cut federal spending. Take a look at this video clip below:
Senator Pryor has asked us to send our ideas to him at cutspending@pryor.senate.gov and I have done so in the past and will continue to do so in the future.
On May 11, 2011, I emailed to this above address and I got this email back from Senator Pryor’s office:
Please note, this is not a monitored email account. Due to the sheer volume of correspondence I receive, I ask that constituents please contact me via my website with any responses or additional concerns. If you would like a specific reply to your message, please visit http://pryor.senate.gov/contact. This system ensures that I will continue to keep Arkansas First by allowing me to better organize the thousands of emails I get from Arkansans each week and ensuring that I have all the information I need to respond to your particular communication in timely manner. I appreciate you writing. I always welcome your input and suggestions. Please do not hesitate to contact me on any issue of concern to you in the future.
I just did. I went to the Senator’s website and sent this below:
You are friends with the gang of six members and Senator Tom Coburn of Oklahoma is one of the those members. I noticed a study that Senator Coburn did on how to cut money out of our bloated federal budget and I have included below some of his suggestions concerning the Dept of Health and Human Services below:
DEPARTMENT OF HEALTH
AND
HUMAN SERVICES
The Department of Health and Human Services (HHS) is charged with protecting the health of all Americans. This includes supporting medical research, promoting wellness, preventing and controlling disease, ensuring the safety of drugs and medical devices, and providing health care and related services.
The budget of HHS ―represents almost a quarter of all federal outlays, and it administers more grant dollars than all other federal agencies combined. HHS Medicare program is the nations largest health insurer, handling more than 1 billion claims per year. Medicare and Medicaid together provide health care insurance for one in four Americans.‖1 HHS is also involved in other activities such as assisting with the management of wastewater treatment facilities 2 as well as doing house work and shopping for older Americans. 3
1 ―About HHS,‖HHS website, accessed June 30, 2011;
2
―TERMINATION: RURAL COMMUNITY FACILITIES,‖Fiscal Year 2012 Terminations, Reductions, and Savings; Budget of the U.S. Government, Office of Management and Budget, page 61; http://www.whitehouse.gov/sites/default/files/omb/budget/fy2012/assets/trs.pdf .
3 Administration on Aging Annual Report 2008, Page 7;
http://www.aoa.gov/AoARoot/Program_Results/docs/2008/AOA_2008AnnualReport.pdf .
HHS is made up of many diverse agencies, including the Administration on Aging, Administration for Children and Families, Agency for Healthcare Research and Quality, Agency for Toxic Substances and Disease Registry, Centers for Disease Control and Prevention, Centers for Medicare and Medicaid Services, Food and Drug Administration, Health Resources and Services Administration, Indian Health Service, National Institutes of Health, the Substance Abuse and Mental Health Services Administration, Office of Global Health Affairs, and the Office of the Surgeon General, which includes the 6,500-member Commissioned Corps of the U.S. Public Health Service.
Improving Management of Funds and Resources
The entire annual HHS budget exceeds $889 billion. This mammoth budget has proven difficult to properly manage. From paying health care claims submitted for dead patients and prisoners to bonuses to nursing homes for substandard care to excess travel costs, mismanagement at HHS is costing taxpayers more than one billion dollars every week.
In 2010, the Office of Management and Budget (OMB) designated five HHS programs as ―high-error‖based on the agencies annual performance and financial reports. In just two of these programs, Medicare Fee-for-Service and Medicaid, HHS made $56.8 billion of improper payments.
4 These ―improper payments‖include millions of dollars of Medicare claims submitted under the names of dead doctors5 and ordered for medical services for dead patients.6
―Medicare fraudestimated now to total about $60 billion a yearhas become one of, if not the most profitable, crimes in America,‖CBS News recently reported, which raises ―troubling questions about our governments ability to manage a medical bureaucracy.‖7
Statement by Dr. David Acheson, Associate Commissioner on Foods at the Food and Drug Administration of the U.S. Department of Health and Human Services on Improper Payments in Government Agencies and Departments before the U.S. House of Representatives Committee on Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies, May 11, 2011; http://www.hhs.gov/asl/testify/2011/03/t20110317e.html .
Jane Zhang, ―Medicare Ignored Its Claims Policy, Audit Says,‖The Wall Street Journal, August 26, 2008; http://online.wsj.com/article/SB121971017492971293.html . 6
―Doctor Pleads Guilty to Billing Medicare and Medicaid for Counseling Sessions with Dead Patients; Dr. Williams Claimed $2 Million in Phony Health Treatments, Saying It Was Group Therapy,‖U.S. Attorneys Office, Northern District of Georgia, FBI website, June 6, 2011; http://www.fbi.gov/atlanta/press-releases/2011/doctor-pleads-guilty-to-billing-medicare-and-medicaid-for-counseling-sessions-with-dead-patients 7
―Medicare Fraud: A $60 Billion Crime,‖CBS News, September 5, 2010; http://www.cbsnews.com/stories/2009/10/23/60minutes/main5414390.shtml . 8
Clark Kauffman, ―Nursing homes across the U.S. receive bonuses despite violations,‖Des Moines Register (Iowa), November 9, 2008; http://www.desmoinesregister.com/article/20081109/NEWS10/811090341/-1/SPORTS09 .
9 Staff estimate based on OMB numbers.
10 David Freddoso, ―Government conference spending gone wild!,‖Washington Examiner, August 29, 2009;
―INDIAN HEALTH SERVICE: IHS Mismanagement Led to Millions of Dollars in Lost or Stolen Property (GAO-08-72),‖Government Accountability Office, June 2008; http://www.gao.gov/new.items/d08727.pdf .
Fraud is not the only cause of wasted federal health care dollars. For instance, the Centers for Medicare and Medicaid Services awarded more than $312 million a year in bonuses to nursing homes with past violations of basic health-and-safety standards that provided below-average care.8
There are plenty of other areas where HHS spending is simply excessive. HHS spent $215 million on travel, including the cost of rental cars, hotels and airline tickets, in 2008.
9 The Department spent at least $349 million on conferences and meetings over the last decade.
10
Millions of dollars of HHS equipment disappears every year. Over 5,000 items worth $15.8 million, including laptop computers, all-terrain vehicles, tractors, pickup trucks, and medical devices, were lost or stolen by employees of HHS Indian Health Service between 2004 and 2007.
11 Investigators blamed management failures and weak leadership for the problems, yet the official in charge of IHS property group still received a $13,000 bonus award in December 2008.
The Department ends every year with billions of dollars in excess funds. HHS is expected to end 2011 with more than $210 billion in unspent funds. Over $40 billion of that amount is unobligated. The Department is expected to end 2012 with an even greater amount of unobligated money.13
One way the Department could clean up their act and save taxpayer dollars is simply through complying with existing federal law. The nonpartisan analysis of an audit conducted by Ernst & Young on the balance sheets of the Department of Health and Human Services for FY2010, was included in HHSs FY 2010 Agency Financial Report, dated November 15, 2010. The audit revealed concerning conclusions; among the many findings were the following:
14
HHS is not in compliance with federal financial management law. According to the HHS Inspector Generals review of Ernst & Youngs financial audit of HHS, ―HHS’s financial management systems are not compliant with the Federal Financial Management Improvement Act of 1996.‖
Nearly $2 billion taxpayer dollars are stuck in limbo. ―As of September 30, 2010, the audit identified approximately 102,500 transactions totaling an approximate $1.8 billion that were more than 2 years old without activity.‖
Nearly $800 million dollars ―could not be explained‖differing between HHS records and treasury department records. ―Based on our review and discussions with management, we noted differences of $794 million that could not be explained.‖
Some processes and procedural manuals have not been updated since the 1980s. ―HHSs formalized policies and procedures are out of date and may be inconsistent with actual processes taking place….For example, we noted that certain policies and procedures, including certain accrual processes, had not been updated since the mid-1980s.‖
Current HHS personnel need training to ―complete their day-to-day responsibilities.‖―Further, we noted additional training on the financial systems was needed to enable HHS personnel in their ability to access needed information from the system to complete their day-to-day responsibilities – including the preparation of reconciliations, research of differences noted, and the ability to identify and clear older ―stale‖transactions dating back several years.‖
Senator Mark Pryor wants our ideas on how to cut federal spending. Take a look at this video clip below:
Senator Pryor has asked us to send our ideas to him at cutspending@pryor.senate.gov and I have done so in the past and will continue to do so in the future.
On May 11, 2011, I emailed to this above address and I got this email back from Senator Pryor’s office:
Please note, this is not a monitored email account. Due to the sheer volume of correspondence I receive, I ask that constituents please contact me via my website with any responses or additional concerns. If you would like a specific reply to your message, please visit http://pryor.senate.gov/contact. This system ensures that I will continue to keep Arkansas First by allowing me to better organize the thousands of emails I get from Arkansans each week and ensuring that I have all the information I need to respond to your particular communication in timely manner. I appreciate you writing. I always welcome your input and suggestions. Please do not hesitate to contact me on any issue of concern to you in the future.
I just did. I went to the Senator’s website and sent this below:
“Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity,” Heritage Foundation, May 10, 2011 by Stuart Butler, Ph.D. , Alison Acosta Fraser and William Beachis one of the finest papers I have ever read. Over the next few days I will post portions of this paper, but I will start off with the section on federal spending reform.
Reforming the Federal Budget Process. When Congress established its current budget process in 1974, the United States was in debt by about a half-trillion dollars; it is now in debt over $14 trillion. Regrettably, for any proposal to deal with the nation’s fiscal problems, the budget process does little to help and in many ways impedes good and bold policy. For one thing, its focus on just 10 years diverts lawmakers from dealing with the mounting long-term challenges, such as retirement programs. For another, the lack of firm budget controls and enforcement procedures makes fiscal discipline very difficult. Reforming the budget process is therefore an implicit part of reforming the budget itself.
In the Heritage plan, we change the budget process to impose enforceable caps to reduce total federal spending to 18.5 percent of GDP by 2021 (including entitlement programs) and then keep spending at that level. Within those overall caps we also cap non-defense discretionary spending at 2.0 percent of GDP. Anti-poverty spending is also capped, as described above. These statutory restrictions on future spending are to be no higher than the modern historical level of federal revenues.
We also propose amending existing federal laws that provide permanent or indefinite appropriations for federal agencies or programs (including and especially entitlement programs), or that allow agencies or programs to spend funds they receive from fees or other sources, rather than depositing them in the U.S. Treasury, so as to retrieve congressional control of spending for those agencies and programs. Within our specific reforms for Medicare and Medicaid we also include a fixed budget amount for each program.
To make the budget process more visible, understandable, and accountable to the American people, we require Congress to estimate and publish the projected cost over 75 years of any proposed policy or funding level for each significant federal program. Any major policy change should also be scored over this long-term horizon.
Finally, in addition to calculating the costs of proposed congressional actions without regard to the response of the economy to those actions (known as “static” scoring), we require a parallel calculation that takes account of that response (known as “dynamic” scoring) so as to make more practical and useful cost information available to Congress when it decides whether to pursue the actions.
The Bottom Line
Runaway federal spending threatens to drown the nation in taxes and debt for generations to come. Promoting economic prosperity requires streamlining government, cutting spending, and empowering families and entrepreneurs.
The Heritage plan achieves those objectives by focusing Washington on performing a limited number of appropriate duties well rather than a wider range of questionable duties poorly. It transfers more power to state and local governments, which are closer and more responsive to the people; transfers functions to the private sector that the market can perform better; targets federal spending more precisely to those in need; and eliminates wasteful, unnecessary, and duplicative spending.
These steps will unleash the power of the private sector to meet market demands, create jobs, and raise living standards. Taking these steps, combined with entitlement and tax reform, means that Americans can look forward to opportunity and prosperity rather than a future of debt and economic decline.
Senator Mark Pryor wants our ideas on how to cut federal spending. Take a look at this video clip below:
Senator Pryor has asked us to send our ideas to him at cutspending@pryor.senate.gov and I have done so in the past and will continue to do so in the future.
On May 11, 2011, I emailed to this above address and I got this email back from Senator Pryor’s office:
Please note, this is not a monitored email account. Due to the sheer volume of correspondence I receive, I ask that constituents please contact me via my website with any responses or additional concerns. If you would like a specific reply to your message, please visit http://pryor.senate.gov/contact. This system ensures that I will continue to keep Arkansas First by allowing me to better organize the thousands of emails I get from Arkansans each week and ensuring that I have all the information I need to respond to your particular communication in timely manner. I appreciate you writing. I always welcome your input and suggestions. Please do not hesitate to contact me on any issue of concern to you in the future.
I just did. I went to the Senator’s website and sent this below:
“Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity,” Heritage Foundation, May 10, 2011 by Stuart Butler, Ph.D. , Alison Acosta Fraser and William Beachis one of the finest papers I have ever read. Over the next few days I will post portions of this paper, but I will start off with the section on federal spending reform.
Replacing Farm Subsidies with Farmer Savings Accounts. Intended to remedy low crop prices and farmer poverty, the current farm subsidy system does neither. Farm subsidies encourage overplanting, which drives prices down further, necessitating even more subsidies. Moreover, rather than focusing on low-income farmers, most farm subsidies go to commercial farmers who report an average annual income of nearly $200,000. Claims that the agriculture industry could not survive without large subsidies are contradicted by the fact that nearly all subsidies go to growers of just five crops (wheat, cotton, corn,
soybeans, and rice), while fruit, vegetable, livestock, and poultry operations thrive with almost no government aid.
The real problem—yearly income fluctuations due to crop and weather
unpredictability—can be solved inexpensively with farmer savings accounts. Under the Heritage plan, growers of all crops, not just the “big five,” can save money during boom years in tax-deductible IRA-style accounts and withdraw those funds during bust years as taxable income, thus smoothing out their yearly income fluctuations. An improved no-net-cost crop insurance system will assist when major disasters deplete most farmers’ accounts. All farmers can participate in the new system regardless of income or crop grown and at a fraction of the current cost to taxpayers.
Capping and Reforming Antipoverty Spending. Since 1990, federal
antipoverty spending, including Medicaid, has expanded 236 percent faster than inflation, from $190 billion to $639 billion (an increase of 2.2 percent of GDP). Antipoverty spending has grown as much as Social Security, Medicare, defense, and education spending combined. Overall, the federal government spends approximately $28,000 per family with children in the bottom third of the income table without encouraging independence. Many of the programs do not include enforced work requirements and continue to reward illegitimacy and other destructive behaviors that block the road to independence. Once the unemployment rate drops back to normal levels (projected in 2014), the Heritage plan returns total federal antipoverty spending to its 2007 level (adjusted for inflation) and then caps total spending growth at the inflation rate (using the medical inflation rate for the health care portion). Congress or states could shift spending among antipoverty programs to increase effectiveness
as long as total spending does not exceed the cap. This cap and flexibility will force lawmakers at all levels to reexamine the size and goals of the welfare state and tailor assistance more efficiently to help families escape poverty and dependence and achieve independence.
Other Spending Reforms. Multiple federal programs should be returned to the state or local levels. For instance, there is no compelling reason for Washington to finance local job training, justice, environmental, or community and economic development programs. Therefore, the plan eliminates these federal grant programs with the expectation that state and local governments will determine whether to address these local issues with local funds and be held accountable by local voters. Energy research and development spending that is commercial in nature is moved to the private sector. Lawmakers are also expected to pare $15 billion in costs associated with the estimated $125 billion in annual federal payment errors.
Asset Sales. The federal government currently owns and controls vast
assets, including huge swaths of commercial land, especially in the West; power generation facilities; valuable portions of the electromagnetic spectrum; underutilized buildings; and financial assets. Given the federal government’s huge debt, it makes sense to sell at least a portion of these assets, especially those that are currently generating revenue below market levels (in which case the sale value would be above the present value of the current income on the assets). Sales of assets would immediately reduce the government’s operating deficit and debt, reducing future interest costs.
The Heritage plan includes a program of asset sales totaling approximately
$260 billion over 15 years. This includes partial sales of federal properties,
real estate, mineral rights, the electromagnetic spectrum, and energy-generation facilities.
Senator Mark Pryor wants our ideas on how to cut federal spending. Take a look at this video clip below:
Senator Pryor has asked us to send our ideas to him at cutspending@pryor.senate.gov and I have done so in the past and will continue to do so in the future.
On May 11, 2011, I emailed to this above address and I got this email back from Senator Pryor’s office:
Please note, this is not a monitored email account. Due to the sheer volume of correspondence I receive, I ask that constituents please contact me via my website with any responses or additional concerns. If you would like a specific reply to your message, please visit http://pryor.senate.gov/contact. This system ensures that I will continue to keep Arkansas First by allowing me to better organize the thousands of emails I get from Arkansans each week and ensuring that I have all the information I need to respond to your particular communication in timely manner. I appreciate you writing. I always welcome your input and suggestions. Please do not hesitate to contact me on any issue of concern to you in the future.
I just did. I went to the Senator’s website and sent this below:
“Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity,” Heritage Foundation, May 10, 2011 by Stuart Butler, Ph.D.,Alison Acosta FraserandWilliam Beach is one of the finest papers I have ever read. Over the next few days I will post portions of this paper, but I will start off with the section on federal spending reform.
Repealing Obamacare.
If fully implemented, Obamacare will add trillions of dollars in long-term government spending to a health care system that is already unaffordable. It also increases federal controls and mandates and will impose heavy costs on states, businesses, and households. As noted earlier, the Heritage plan repeals Obamacare and replaces it with the improved, consumer-centered health care system. While this proposal for maintaining sufficient levels of defense spending assumes that future military personnel will be brought under the broader proposals for health care and retirement reform outlined in this report, it also provides for tailored transition options for current military personnel and retirees. Importantly, reforms in compensation and benefits must maintain effective recruitment and retention of, and honor reasonable commitments to, members of the armed forces.
The war on terrorism has increased defense spending to approximately 5
percent of GDP, yet it remains well below the 9 percent spent during in the
1960s and the 6 percent spent during the 1980s. While the Heritage plan
recognizes that predicting precise funding requirements for overseas contingency operations is impossible, it is reasonable to expect that the phasedown in those efforts will permit reducing defense spending to approximately 4 percent of GDP and maintaining it at that level. Ultimately, of course, defense spending will have to be whatever it takes to protect America and its interests around the globe.
Funding an Adequate Defense. The most important core function of the
federal government is ensuring America’s national security, but it needs to be accomplished as economically and efficiently as possible. The Defense Department will focus on identifying and addressing its significant levels of wasteful spending and initiating significant reforms and efficiencies in logistics and acquisition processes so that those funds can be reprioritized into the most important uses to protect America and our allies by maintaining a strong, modern, and effective military.
Making Public Health Service Spending More Efficient. Public health
service spending has grown 56 percent faster than inflation since 2000. While health research is vital, the Heritage plan eliminates waste and inefficiencies that have accumulated. For example, by consolidating redundant facilities and laboratories, the Heritage plan saves the National Institutes of Health $1 billion annually. States take over the financing and operation of health centers, health professions programs, and the substance abuse block grant. The Centers for Disease Control and Prevention sees savings over $2 billion annually by reducing travel, ending questionable public campaigns, and focusing its role on interstate coordination. Finally, converting Indian Health Service aid into a
premium-support system (where possible) and reforming the Food and Drug Administration save a combined $1 billion annually.
Thus, all Americans will have access to financial aid in attending college,
but it will not be a free ride at the taxpayers’ expense.
However, thanks to a key provision in the Heritage plan’s tax reform, higher education costs are partially defrayed through the simplified and generous tax deduction for higher education tuition. Families whose incomes are too low for them to benefit fully from this tax deduction are eligible for a Pell Grant with a value up to the tax deduction. The direct student loan program is retained with loan limits high enough to guarantee college access but with rates set to ensure that there are no budgetary costs, including the costs associated with deferred repayment until graduation as well as the costs of loan forgiveness programs.
Higher education reforms, including the new deduction for college tuition in the Heritage tax reform, ensure that students receive enough financial
assistance to attend college. Shifting from grants to student loans ensures that most college costs will be financed by the college graduates themselves, who benefit the most from their degrees, and not by other Americans.
Scaling Back K–12 Education Spending and Reforming Higher Education
Spending. Federal spending on K–12 education has grown 192 percent faster than inflation since 2000, yet this sharply increased federal spending and federal micromanagement of school districts has not improved student performance. Under the Heritage plan, total federal K–12 spending is reduced to 2000 levels (adjusted for inflation), in part by eliminating many of the numerous small education programs that Washington uses to micromanage school districts. This will allow states and school districts to manage and meet the needs of their students more effectively.
Dear Senator Pryor,
The President asked us to contact those representing us in Washington and that is exactly what I am doing today. Let make a few points.
First, in the past few months I have responded to your request to provide SPECIFIC SPENDING CUT SUGGESTIONS to your office. I have done so over 100 times and I have also posted them one at a time on my blog www.HaltingArkansasLiberalswithTruth.com .
Second, I have also written many posts concerning your political views and many of these articles have got lots of hits on my blog. In fact, when I started in December of 2010 I was only getting a handful of hits every week, but now I have got over 60,000 hits in the first 7 months on my website and I have you to thank for a lot of those hits.
Third, Arkansas is turning conservative and I wonder if you will change with Arkansas. Just recently you went across the state saying that the Republicans wanted to push granny off the cliff. Does that sound like you are open to making changes to make sure that Medicare survives?
Fourth, you wanted me to give you specific suggestions to cut federal spending. I have an easy one for you: Eliminate the Dept of Education!! That would save over 100 billion right there!!!
Fifth, if you want to raise taxes on the job creators during this time then you will be guilty of destroying the recovery. You have already been guilty of slowly down the recovery with the silly stimulus bill. Every prediction that President Obama made about the stimulus have proven to be incorrect!!! Everyone of them!!!
I have done my duty that my President asked me to do by contacting you. Below you will find a letter that says perfectly what I think about this current debt ceiling crisis. Recently I got to hear Ernest Istook the president of the Heritage Foundation speak in Little Rock. He did a great job.
Below is an excerpt from a letter that went out today from the Heritage Foundation:
Our nation is in the midst of a fiscal crisis, but it is one that has nothing to do with an August 2 “deadline” for a deal or President Obama and Secretary Geithner’s fear mongering over recent days and weeks. The crisis is one of over $62 trillion in unfunded obligations that are the loudest warning bell possible of the systemic problems plaguing our nation. Washington should not ignore or postpone dealing with this problem once again.
Twice already this year, the House of Representatives has voted for plans that would address our fiscal crisis and save our nation from a creditworthiness downgrade. In April, the House passed a bold budget, which would place our nation on a different, more sustainable and prosperous course. Last week, the House passed the Cut, Cap and Balance Act, which would force future Congresses to live within their means and rapidly bring down our nation’s debt-to-GDP ratio. Unfortunately, both of these responsible proposals were defeated by an ideological Senate, which has offered few ideas of its own.
Clearly, the most blame belongs to the President and the Senate – a President who comes up with no useful fiscal plan of his own and a Senate that refuses to pass meaningful legislation to save the American dream from a fiscal tsunami. We cannot, however, continue business as usual by raising the debt limit without substantively addressing our nation’s fiscal challenges. The entire purpose of the debt limit is to put an end to borrowing when it reaches a point that our nation finds unacceptable. There is no point in having a debt limit if the option of using it to address overspending and overborrowing is so intimidating that it is unilaterally taken off the table.
Speaker Boehner’s most recent proposal to raise the debt limit is regrettably insufficient to our times. Step one of the Speaker’s proposal would cut $1.2 trillion in discretionary spending. Assuming all of these cuts materialized, this would reduce our nation’s projected debt at the end of the decade from $24.9 trillion to $23.7 trillion. Step two would create a special committee, which has three major problems: (1) The “deficit reduction” of $1.8 trillion remains insufficient for our times; (2) “Deficit reduction” is a well-known codeword for “tax increases”; and (3) 17 blue-ribbon panels, commissions and the like since 1982 have gotten our nation into the mess we are in and there is no obvious reason as to why the 18th will get us out. Further, this proposal would outline a fast track proposal that unduly limits the rights of the congressional minority.
All in all, under a best case scenario where all of the cuts envisioned in the Boehner plan come to fruition, they would only reduce our nation’s projected debt-to-GDP ratio from 104% to 92% – a ratio far higher than its current 62 percent, which Moody’s has already said must come down to maintain our nation’s stable outlook.
Harry Reid’s proposal to raise the debt ceiling is equally unacceptable. It appears to be the latest in a line of proposals that began with the McConnell Proposal, morphed into the McConnell-Reid Proposal, further deteriorated into the Gang of Six Proposal, and has now resurfaced as the Reid Proposal. Each of these insufficiently bold ideas would lead to an increase in the debt limit in exchange for few, if any, actual cuts off existing spending levels. In normal times we might take these as one step toward a path of fiscal sanity. But we do not have the luxury of taking that kind of small first step at this juncture. The rating agencies are poised to downgrade us within months if we don’t pass something like the House of Representatives’ first two attempts . . . The last thing our country needs is a clean debt limit increase with some fancy window dressing to try to fool the American people.
All in all, Heritage Action remains where we were at the start of the summer: absolutely convinced our nation is in fiscal crisis and certain that bold political leadership is necessary to save the American dream. Congress should drive down federal spending on the way to a balanced budget, while protecting America, and without raising taxes. Unfortunately, that does not appear to be what we will get from Washington, which has irresponsibly turned its back on the only real plans out there: The House Budget and the Cut, Cap and Balance Act. As such, Washington should be forced to live under the current debt limit until it’s ready to make tough choices – choices that it should make, and has time to make, this week.
Sincerely,
Michael A. Needham
Chief Executive Officer
___________________________________
Thank you for your time. I know that you are very busy.
From Everette Hatcher
Alexander, AR 72002
Related posts:
John Brummett in his article, “By Pryor prediction, gang of 6 emerges,” Arkansas News Bureau, July 21, 2011 asserts: So what’s in this great new plan from the Gang of Six? Only about $4 trillion in real deficit reduction achieved by deep defense cuts, commission-delegated reductions in spending for Medicare, Medicaid and Social Security, […]
John Brummett in his article, “By Pryor prediction, gang of 6 emerges,” Arkansas News Bureau, July 21, 2011 asserts: So what’s in this great new plan from the Gang of Six? Only about $4 trillion in real deficit reduction achieved by deep defense cuts, commission-delegated reductions in spending for Medicare, Medicaid and Social Security, plugging […]
Today I read in the article, “Pryor backing bipartisan debt reduction plan,” Arkansas News Bureau, July 20,2011 the following words: Sen. Mark Pryor said today he supports a $3.7 trillion deficit-reduction plan unveiled Tuesday by six Republican and Democrats as a “carefully crafted balanced” way to avert a looming financial crisis. The Arkansas Democrat was […]
Senator Mark Pryor wants our ideas on how to cut federal spending. Take a look at this video clip below:
Senator Pryor has asked us to send our ideas to him at cutspending@pryor.senate.gov and I have done so in the past and will continue to do so in the future.
On May 11, 2011, I emailed to this above address and I got this email back from Senator Pryor’s office:
Please note, this is not a monitored email account. Due to the sheer volume of correspondence I receive, I ask that constituents please contact me via my website with any responses or additional concerns. If you would like a specific reply to your message, please visit http://pryor.senate.gov/contact. This system ensures that I will continue to keep Arkansas First by allowing me to better organize the thousands of emails I get from Arkansans each week and ensuring that I have all the information I need to respond to your particular communication in timely manner. I appreciate you writing. I always welcome your input and suggestions. Please do not hesitate to contact me on any issue of concern to you in the future.
I just did. I went to the Senator’s website and sent this below:
“Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity,” Heritage Foundation, May 10, 2011 by Stuart Butler, Ph.D. , Alison Acosta Fraser and William Beachis one of the finest papers I have ever read. Over the next few days I will post portions of this paper, but I will start off with the section on federal spending reform.
The Details
Returning Most Non-Defense Discretionary Spending to 2008 Levels.
Non-defense discretionary spending has expanded 21 percent faster than
inflation over the past three years. Returning to 2008 levels still leaves
typical programs nearly one-third larger than they were in 2000 (adjusted for inflation). Freezing this spending at 2008 levels through 2015 and then capping subsequent growth at the inflation rate would save more than $2 trillion in the first decade and even more thereafter.
Many of these savings are achieved by reducing the size of the federal
bureaucracy, overhauling the federal pay system, permanently eliminating many earmarked accounts, and consolidating duplicative functions. Yet not all programs are affected equally. For example, Coast Guard and other important security spending rises under the plan, while lower-priority spending, such as subsidies to public broadcasting, AmeriCorps, the National Endowment for the Arts, and the National Endowment for the Humanities, is left to the private sector.
Devolving or Privatizing Most Transportation Spending. Under the federal highway program, Washington collects the 18.3 cents-per-gallon gas tax from states, subtracts a large administrative fee, and returns the remaining funds to the states with numerous strings attached, including many requirements to spend the dollars on congressional earmarks and for specific uses that may not coincide with local needs. The Heritage plan reforms this inherently wasteful system by devolving the highway program and gas tax to the states, thereby eliminating the federal middleman and allowing states to retain the gas tax revenues and spend them on their own highway priorities, provided they maintain a minimum standard of interstate highway maintenance.
The Heritage plan ends federal funding for passenger rail, saving money on
projects that invariably have ridership that is far below projections and costs that far exceed initial budgets. Amtrak subsidies are phased out over three years, the President’s costly high-speed rail program is terminated, and subsidies to for-profit freight railroads are ended. This relieves states of the upkeep and maintenance burdens associated with rail programs that Washington is currently pressuring them to undertake. The private sector and state governments can either take over or terminate these rail programs as they see fit.
Finally, all non-safety functions of the Federal Aviation Administration
(FAA) are transferred to the private sector, and most FAA fees are eliminated.
The air traffic control system will be transferred to the private sector, where it belongs, and financed by flight ticket user fees. The airport improvement program is also terminated, with airlines, state government, and private investment taking the place of the federal taxpayer.
So what’s in this great new plan from the Gang of Six? Only about $4 trillion in real deficit reduction achieved by deep defense cuts, commission-delegated reductions in spending for Medicare, Medicaid and Social Security, plugging of assorted tax code loopholes and — get this — an elimination of the alternative minimum tax and an over-all actual reduction in personal income taxes attainable, presumably, by the credibility and depth of the spending cuts.
The problem with Brummett’s comments is that he is totally fooled by “procedural gimmicks that promise Congress will do in the future what it won’t do now to control spending.” Dav id Addington rightly has noted, “Congress should not raise the debt limit without getting spending under control. Debt limit legislation should put America on the path to driving down federal spending and borrowing, while preserving our ability to protect America, and without raising taxes. Conservatives should stop the Gang of Six Plan. To control federal overspending and overborrowing, America doesn’t need more empty promises of future action — America needs action now.”
David Addington wrote an excellent article, “Gang of Six: Promises, Promises,” Heritage Foundation, July 19, 2011 that breaks down the proposal of the gang of six. Here is the article:
A group of U.S. Senators called the Gang of Six has cobbled together the third Senate-originated half-baked idea this week that would lead to hiking the debt limit. All three Senate approaches — the McConnell Plan, the McConnell-Reid “Just Borrow More” Plan, and now the Gang of Six “Maybe Later in the Year” Plan — have one thing in common: procedural gimmicks that promise Congress will do in the future what it won’t do now to control spending. The time has passed for procedural gimmickry — Congress should cut spending and cut it now.
The Gang of Six circulated a plan that has Congress enact a law now whose principal elements (1) make unspecified spending cuts and unspecified tax increases to yield a $500 billion reduction in the federal deficit, and (2) impose spending caps on discretionary spending, but not on Social Security, Medicare, Medicaid and welfare programs that are the main cause of out-of-control spending.
Then the Gang of Six promises — an unenforceable promise — that some time in the next six months Congress will enact a second law with all kinds of Christmas presents for everybody. As an imaginary present for Republicans, for example, the Gang of Six promises to eliminate the Alternative Minimum Tax, drop the top individual tax rate to 29 percent, and drop the corporate tax rate to 29 percent. And, as an imaginary present for the Democrats, the second law would have what appears to be a $3.4 trillion tax hike over the next 10 years, so the size of government can just keep on growing. Of course, enactment of the second law is just a promise, or, in the case of the huge tax hike, a threat.
Although the “Gang of Six” claims that their plan is separate from the debt limit increase, everyone in Washington including President Obama thinks its precise purpose is to pave the way for a debt limit hike. Under the Gang of Six Plan, Congress will pass some easy stuff now, but punt the hard stuff to the future, promising that Congress will pass it some time within the next six months. There’s plenty in the Gang of Six Plan for President Obama — he gets his tax hikes and, in reality, he gets to borrow lots more money. But the American people don’t really get much of anything, except the usual empty promise of action in the future.
Congress should not raise the debt limit without getting spending under control. Debt limit legislation should put America on the path to driving down federal spending and borrowing, while preserving our ability to protect America, and without raising taxes. Conservatives should stop the Gang of Six Plan. To control federal overspending and overborrowing, America doesn’t need more empty promises of future action — America needs action now.
The Top 10 Percent of Earners Paid 70 Percent of Federal Income Taxes 
Taxes per Household Have Risen Dramatically
Federal Revenues Have More Than Tripled Since 1965
The Daily Hatch 