Mark Pryor and the liberal gang of six plan

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 one of about 46 senators who were briefed by the so-called “Gang of Six” on the proposal that has been negotiated on and off for nearly 10 months. Sen. John Boozman, R-Ark., also attended.

“Really, the Gang of Six is over and I am hoping that this will become a Gang of 60,” said Pryor, referring to the number of senators likely needed for the proposal to become law.

The plan would require Congress to make tough choices on spending priorities that would call on everyone to sacrifice, he said. About three-quarters of the reductions would come from spending, and the rest would be made up by closing “loopholes” and “giveaways” in the tax code, Pryor said.

Sara Lasure, a spokeswoman for Boozman, said the senator is still reviewing the plan. For now, he considers it a “good step” that could put Congress on the path to fiscal responsibility.

Pryor plans to sign a letter to congressional leaders urging them to adopt the “Gang of Six” proposal, he said.

I am not too happy about the gang of six getting so much power. It appears they will be determined to tax us to death. It is all smoke and mirrors. The taxes go up now and the budget cuts ARE ALL FICTION!!!! BIG SPENDERS LIKE MARK PRYOR NEVER LEARN!!!

Concerning the “cut, cap and balance plan” Senator Pryor noted, “We need to come together and work on this together and stop pushing things that sound good on bumper stickers but are basically never going to go anywhere.”  SINCE THE REPUBLICANS WHO NOW ARE IN THE MAJORITY IN THE ARKANSAS DELEGATION VOTED FOR IT, THAT DOES NOT BODE WELL FOR PRYOR’S RE-ELECTION PROSPECTS!!!

Below is an article that exposes what this plan from the gang of six is really all about.

The Gang of Six Is Back from the Dead: Contemplating the Good, the Bad, and the Ugly in Their Budget Plan Posted by Daniel J. Mitchell

The on-again, off-again “Gang of Six” has come back on the scene and is offering a “Bipartisan Plan to Reduce Our Nation’s Deficits.”

The proposal is quite similar to the one put forth by the President’s Simpson-Bowles Commission, which isn’t too surprising since some of the same people are involved.

At this stage, all I’ve seen is this summary (A BIPARTISAN PLAN TO REDUCE OUR NATIONS DEFICITS v7), so I reserve the right to modify my analysis as more details emerge (and since I fully expect the plan to look worse when additional information is available, the following is an optimistic assessment.

The Good

  • Unlike President Obama, the Gang of Six is not consumed by class-warfare resentment. The plan envisions that the top personal income tax rate will fall to no higher than 29 percent.
  • The corporate income tax rate will fall to no higher than 29 percent as well, something that is long overdue since the average corporate tax rate in Europe is now down to 23 percent.
  • The alternative minimum tax (which should be called the mandatory maximum tax) will be repealed.
  • The plan would repeal the CLASS Act, a provision of Obamacare for long-term-care insurance that will significantly expand the burden of federal spending once implemented.
  • The plan targets some inefficient and distorting tax preference such as the health care exclusion.

The Bad

  • The much-heralded spending caps do not apply to entitlement programs. This is like going to the doctor because you have cancer and getting treated for a sprained wrist.
  • A net tax increase of more than $1 trillion (I expect that number to be much higher when further details are divulged).
  • The plan targets some provisions of the tax code – such as IRAs and 401(k)s) – that are not preferences, but instead exist to mitigate against the double taxation of saving and investment.
  • There is no Medicare reform, just tinkering and adjustments to the current system.
  • There in no Medicaid reform, just tinkering and adjustments to the current system.

The Ugly

  • The entire package is based on dishonest Washington budget math. Spending increases under the plan, but the politicians claim to be cutting spending because the budget didn’t grow even faster.
  • Speaking of spending, why is there no information, anywhere in the summary document, showing how big government will be five years from now? Ten years from now? The perhaps-all-too-convenient absence of this critical information should set off alarm bells.
  • There’s a back-door scheme to change the consumer price index in such a way as to reduce expenditures (i.e., smaller cost-of-living-adjustments) and increase tax revenue (i.e., smaller adjustments in tax brackets and personal exemptions). The current CPI may be flawed, but it would be far better to give the Bureau of Labor Statistics further authority, if necessary, to make changes. A politically imposed change seems like nothing more than a ruse to impose a hidden tax hike.
  • A requirement that the internal revenue code maintain the existing bias against investors, entrepreneurs, small business owners, and other upper-income taxpayers. This “progressivity” mandate implies very bad things for the double taxation of dividends and capital gains.

This quick analysis leaves many questions unanswered. I particularly look forward to getting information on the following:

  1. How fast will discretionary spending rise or fall under the caps? Will this be like the caps following the 1990 tax-hike deal, which were akin to 60-mph speed limits in a school zone? Or will the caps actually reduce spending, erasing the massive increase in discretionary spending of the Bush-Obama years?
  2. What does it mean to promise Social Security reform “if and only if the comprehensive deficit reduction bill has already received 60 votes.” Who defines reform? And why does the reform have to focus on “75-year” solvency, apparently to the exclusion of giving younger workers access to a better and more stable system?
  3. Will federal spending under the plan shrink back down to the historical average of 20 percent of GDP? And why aren’t those numbers in the summary? The document contains information of deficits and debt, but those figures are just the symptoms of excessive spending. Why aren’t we being shown the data that really matters?

Over the next few days, we’ll find out what’s really in this package, but my advice is to keep a tight hold on your wallet.

_______________________

The gang of six is engaged is providing real budget cuts? NO WAY!!! HOWEVER, PRYOR AND MANY OTHERS ARE OUT TRYING TO PULL THE WOOL OVER PEOPLE’S EYES CONCERNING THESE PHONEY CUTS.

Take a look at the conclusion of John Brummett:

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.

Take a look at this video clip below and see if Brummett has it right or not.

July 20, 2011 – 9:50 am Categories: Cato Institute, President Obama | Post a comment

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Review of Woody Allen’s latest movie “Midnight in Paris”

“I’m 12 years old. I run into a Synagogue. I ask the Rabbi the meaning of life. He tells me the meaning of life… But, he tells it to me in Hebrew. I don’t understand Hebrew. Then he wants to charge me six hundred dollars for Hebrew lessons.”

Midnight in Paris is Bill & Ted for Liberal Arts Majors

WHY DIDN’T ANYONE TELL ME DRUNK HEMINGWAY WAS IN THIS MOVIE?!

A Night at the Jewseum: Woody Allen Molests His History Book

I walked out of Midnight in Paris with a smile on my face, and frankly, I’m shocked.  The last time I walked out of a Woody Allen film, it was on an airplane.  Not really, but that’s exactly the kind of joke you expect to hear in a Woody Allen movie, a hacky, Borscht belt knee-slapper interspersed amongst the polysyllabic bloviating and romanticized notions of intellectual cocktail chatter. The “turgid discussions about categorical imperativeses,” and whatnot.  More so than just about everything, comedy has a way of passing you by if you don’t evolve. A style tends to die as soon as people recognize its structure, and I thought the Woody Allen rom-com was dead. D-E-A-D, dead like the Farrelly Brothers.  I figured the critics writing glowing reviews were just nostalgia junkies. At best, I expected inoffensive chuckle fare, conversation fodder for my mom and men with ponytails, something to help them relive the glory days while boogeying to moderately-volumed Steely Dan. Instead, I actually laughed. Hell, I thoroughly  enjoyed myself.

It’s not that it’s not Woody, it’s very Woody. At it’s most basic, Midnight in Paris is about a man searching for a woman who can appreciate the beauty of rainfall in Paris. If that was all it was about, I would’ve never stopped vomiting.  Thankfully, there’s a middle section. Owen Wilson plays Gil, one of the Woodiest of Woody Allen surrogates, a chatty screenwriter who wears earth-tone suits and shirts with no tie, and talks philosophically while gesturing with his hands. Visiting Paris with his bitchy fiancee played by Rachel McAdams  Gil has dreams of one day ditching screenwriting and moving to Paris to write novels like his golden age idols. The story begins the way you’d expect a Woody Allen movie to begin.  With stagey, contrived dialog about psychology (“you’re living in the past!”) and politics (“Palin is a lunatic!”) that you could never imagine two people having in the real world unless they were pretending to be in a Woody Allen movie.  But quickly it leaps from Woody Allen-land into the realm of fantasy, becoming, like… this whole other thing.  This magnificent tall tale, this light-hearted Charlie Kaufman.

Through the magic of some thankfully-unexplained wormhole, Gil quickly goes from pining for the Paris of Hemingway’s time to actually being in the Paris of Hemingway’s time, every night, hanging out with Hemingway himself, and assorted flappers, bullfighters, and hellraisers.  Corey Stoll plays the Papa as a young man, before his famous buckshot taste test, in a role any actor would kill for, furiously spraying quotable line after quotable line, gems like, “Do you fear death? Only a coward fears death. The artist’s job is not to fear death, but create an antidote to it. You can never escape death, only momentarily forget it by loving a truly great woman.”  Something like that.  He also talks about killing lions and rhinos a lot, and it’s funny every time, because manly men used to do that.

Once Gil is immersed in the Parisien nightlife of the 1920s, partying with Dali (Adrian Brody) and Cole Porter, Scott and Zelda Fitzgerald, Allen’s staginess suddenly seems charming again.  Gil gets notes on his writing from Gertrude Stein and falls in love with a mistress of Picasso (Marion Cotillard), he gives Buñuel ideas for films and talks paint with Matisse.  It’s cutesy as hell, yet it works, like Bill & Ted’s Excellent Adventure for liberal arts majors, A Night at the Jewseum, if you will. (NOTE: A film which might not play as well to a 5 Fast 5 Furious crowd).  And the best part is, there’s no explanation of the fantastic. No gypsy curse or magic telephone booth, you’re just there, in the realm of fantasy, because you want to be.   Talk about art as a cure for death.

Midnight in Paris is a lot like the best of Charlie Kaufman (Eternal Sunshine, Being John Malkovich) in that it subverts your expectations by constantly exploding into ever-more ridiculous flights of fancy.  There’s even an Inception-like, fantasy-within-a-fantasy sequence that had me leaning over to my girlfriend to whisper “braaaaahmmm…” in her ear.  Only, instead of meticulously resolving every wacky plot device like a Kaufman or Christopher Nolan, Woody Allen ties them up in a much Woody Allenier way, with nothing but a glib joke or a wry smile. Why does Gil go back in time?  Why does the chicken cross the road? Why does the fiyahman weah suspendahs? Ha ch-cha cha cha.

Actually, it’s probably unfair to compare Midnight in Paris to Charlie Kaufman, because it most reminds me of another, pre-Kaufman Woody Allen film, “Oedipus Wrecks,” a vignette from New York Stories. Woody Allen’s character constantly wishes his mother would just disappear, and one night, he takes her to a magic show where she actually disappears, to his great relief.  Only he soon finds out that she hasn’t disappeared at all, and instead has reappeared in the sky over the city, where she can harass him constantly and share his most embarrassing personal details with strangers.    Midnight in Paris is the kind of overtly fantastical high concept that’s actually a clever method of treating universal problems, and not just a hackneyed excuse to put Sandler in a funny costume.  Best of all, it’s really fun.  I miss movies like this.

_________________________________

Woody Allen deals with big issues in lots of his films like death, the meaning of life and why is there suffering.

Related posts:

 
 

(Part 32, Jean-Paul Sartre)July 10, 2011 – 5:53 am

 

 (Part 29, Pablo Picasso) July 7, 2011 – 4:33 am

(Part 28,Van Gogh) July 6, 2011 – 4:03 am

(Part 27, Man Ray) July 5, 2011 – 4:49 am

(Part 26,James Joyce) July 4, 2011 – 5:55 am

(Part 25, T.S.Elliot) July 3, 2011 – 4:46 am

(Part 24, Djuna Barnes) July 2, 2011 – 7:28 am

(Part 23,Adriana, fictional mistress of Picasso) July 1, 2011 – 12:28 am

(Part 22, Silvia Beach and the Shakespeare and Company Bookstore) June 30, 2011 – 12:58 am

(Part 21,Versailles and the French Revolution) June 29, 2011 – 5:34 am

(Part 16, Josephine Baker) June 24, 2011 – 5:18 am

(Part 15, Luis Bunuel) June 23, 2011 – 5:37 am

July 20, 2011 – 5:53 am Categories: Current Events | Post a comment

Ronald Wilson Reagan Part 99

https://i0.wp.com/www.reagan.utexas.edu/archives/photographs/large/c31901-3.jpg

President and Nancy Reagan with Prince Charles and Princess Diana in the Yellow Oval room. 11/9/85.

Ronald Reagan – The Presidential Years Part 1 of 4

Lee Edwards of the Heritage Foundation wrote an excellent article on Ronald Reagan and the events that transpired during the Reagan administration,  and I wanted to share it with you. Here is the 12th portion:

Reagan’s most dramatic defeat came in 1987 when he nominated Judge Robert Bork to the Supreme Court.[xli] Bork’s confirmation became an ugly battle against liberal organizations like the American Civil Liberties Union, the AFL-CIO, and People for the American Way. One analyst put the cost of the anti-Bork media campaign at $15 million.[xlii]

Although the American Bar Association rated Bork “well qualified,” the ACLU called him “unfit.” Senator Edward Kennedy, who led the Senate fight against the conservative jurist, charged that Bork’s nomination would lead to an America where women would be forced into back-alley abortions, blacks would sit at segregated lunch counters, rogue police would break down citizens’ doors in midnight raids, school children would not be taught about evolution, writers and authors could be censored at the whim of government and the doors of the federal courts would be shut on the fingers of millions of citizens.[xliii]

Not since 1964 and LBJ’s Anti-Campaign against Barry Goldwater had a conservative been subjected to so fierce and unfair an attack. The Boston Globe’s Supreme Court correspondent wrote that Kennedy “shamelessly twisted Bork’s world view.”[xliv]

Bork’s nomination dominated the political agenda in the late summer and early fall of 1987. His five days of testimony before the Senate Judiciary Committee were nationally televised. Former President Gerald Ford personally introduced the nominee to the committee. Former President Jimmy Carter then sent a letter stating his opposition. One hundred and ten witnesses appeared for and against Bork during two weeks of hearings. Finally, the Democrat-controlled Judiciary Committee refused by a vote of 9-5 to recommend Bork’s nomination. The Senate then voted 58-42 against confirmation: six moderate Republicans broke party ranks and voted with fifty-two Democrats against Bork while two Democrats voted for Bork. Liberals loudly celebrated their victory, but soon after, Reagan nominated and won confirmation of a lower-keyed conservative, Anthony M. Kennedy.

Several factors combined to deny Robert Bork a seat on the Supreme Court: a strongly partisan Democratic Senate, a president weakened by the Iran-contra affair, a White House that did not launch its nomination campaign early enough, a liberal opposition that was better organized and financed than the conservative support, and a nominee who was often contentious and contradictory in his testimony. But ultimately Bork was rejected because of his view that the Constitution was “the Founders’ Constitution” bound by original intent and not a “living document” susceptible to the interpretation of current justices.[xlv] Today, however, Bork’s traditional view of the Constitution is increasingly articulated by a majority of the Supreme Court.

Although Bork’s defeat was a major setback for the Reagan administration, it could not negate Reagan’s significant legal legacy of a conservative federal judiciary from top to bottom. “Reagan’s success lies not simply in quantity but quality,” concluded conservative author Terry Eastland, who worked in the administration’s Justice department. Indeed, Reagan’s judges, according to biographer Lou Cannon, “ranked above [those of] Carter, Ford, Nixon and Johnson.”[xlvi]

July 20, 2011 – 5:47 am Categories: Ronald Reagan | Post a comment

Senator Pryor asks for Spending Cut Suggestions! Here are a few!(Part 95)

 

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.

Here are a few more I just emailed to Senator Pryor myself:

Government auditors spent the past five years examining all federal programs and found that 22 percent of them—costing taxpayers a total of $123 billion annually—fail to show any positive impact on the populations they serve.

 

  • The State Department will spend $450,000on art shows in Venice, Italy.
  • During a recent three-day conference, NASA spent $62,611on “light refreshments” for its 317 attendees—$66 per day per person. NASA officials said such expensive snacks were needed to keep its officials from wandering away from the conference.
  • NASA spent $500 millionconstructing a 355-foot steel tower to launch a rocket that is now unlikely to ever be built.
  • The Congressional Research Service has confirmed that the new health care law may subsidize Viagraand other sexual performance drugs for convicted rapists and sex offenders.
  • Federal agencies are delinquent on nearly 20 percent of employee travel charge cards, costing taxpayers hundreds of millions of dollarsannually.
  • The Securities and Exchange Commission spent $3.9 millionrearranging desks and offices at its Washington, D.C., headquarters.
July 20, 2011 – 5:22 am Categories: Uncategorized | Post a comment

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

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

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

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

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

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

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

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

 

The House BBA

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

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

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

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

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

July 20, 2011 – 5:16 am Categories: President Obama, spending out of control | Post a comment

Downsizing government being proposed?

We are told that the problem in Washington is too much government spending. However, is anyone suggesting cutting spending? The answer is no. The only thing being talked about is cutting the amounts of projected increase in spending. Take a look at video above.

Uploaded by  on Jul 6, 2011

$2 trillion appears to be the “sweet spot” for spending cuts in order to negotiate a debt limit increase. Rather than cut wasteful and unconstitutional spending, Congress and the President are prepared to trim around the edges to strike a deal.

Video produced by Caleb O. Brown and Austin Bragg.

July 20, 2011 – 1:00 am Categories: Cato Institute, Current Events | Post a comment

Social Security Privatization would grow economy (Social Security part 6)

HALT:HaltingArkansasLiberalswithTruth.com

There are two crises facing Social Security. First the program has a gigantic unfunded liability, largely thanks to demographics. Second, the program is a very bad deal for younger workers, making them pay record amounts of tax in exchange for comparatively meager benefits. This video explains how personal accounts can solve both problems, and also notes that nations as varied as Australia, Chile, Sweden, and Hong Kong have implemented this pro-growth reform.


Social Security Series Part 6

Personal accounts would cause the economy to grow.

Dan Mitchell of the Cato Institute has asserted that three things would happen if Social Security was privatized.

1. Lower tax rate on work, encouraging job creation.

2. Less government spending, leaving more resources in productive sector.

3. More private savings, fueling investment.

Dan Mitchell goes on to say that this “is exactly what you would expect if you replace a tax and transfer entitlement scheme with private savings and wealth accumulation.”

José Piñera discusses privatizing social security on FBN



July 19, 2011 – 9:00 pm Categories: Cato Institute, Social Security, Taxes | Post a comment

President Obama’s press conference June 29, 2011, a Conservative Response Part 4

President Obama Press Conference pt.5

Is President Obama using scare tatics concerning  the date of August 2nd and the debt ceiling? It appears that he is.

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

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

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

1. Failure to pass means defaulting on our debts. If there has been consistent message from the White House, it that the United States can’t afford to “default on our debts.” That is almost certainly true. However, refusing to raise the debt limit does not mean defaulting on our debts. The U.S. Treasury currently takes in more than enough revenue to pay both the interest and the principal on the debts we currently owe. And if the Obama administration is truly worried about whether it will do so, then it should urge Congress to pass the legislation proposed by Sen. Pat Toomey (R., Pa.) requiring the Treasury Department to pay those bills first. It is true that, once we had paid our debt-service bills, there wouldn’t be enough money left over to pay for everything else the Obama administration wants to spend money on. The government would have to prioritize its expenditures — sending out checks for the troops’ pay and Social Security first. Other spending would have to wait. Treasury Secretary Tim Geithner says that not spending money Congress has appropriated is “the same as default.” It is not. It is economizing, which is what you do when you are out of money.

There is nothing wrong with forcing government not to spend money that it had planned on spending.

2. Failure to pass the debt-ceiling increase on time would be unprecedented. Both the administration and the media sound as if we are at the edge of zero hour, the time at which economic Armageddon will erupt if we have not raised the debt ceiling. That’s not quite so. It is true that Congress has never refused to raise the debt ceiling. But it has, in fact, frequently taken its time doing so. In 1985, Congress waited nearly three months after the debt limit was reached before it authorized a permanent increase. In 1995, four and a half months passed between the time the government hit its statutory limit and the time Congress acted. And in 2002, Congress delayed raising the debt ceiling for three months. In none of those cases did the world end. It won’t this time, either.

3. It’s always a “clean bill.” The administration is also insisting that it would be shocking for Congress to add any conditions to the debt-ceiling increase. But such conditions are far from unprecedented. There have been numerous amendments and conditions attached to debt-ceiling bills throughout the years. Remember Gramm-Rudman-Hollings? The classic spending-control plan was added to the debt-ceiling vote in 1985.

4. This is not about future spending. The administration insists that raising the debt ceiling is just about paying for spending that’s already occurred. Not quite. Depending on how high it is raised, it may be about paying only for spending that is already authorized — or much more. Authorized and spent are not the same thing. There is nothing wrong with forcing government not to spend money that it had planned on spending. Moreover, Tim Geithner is reportedly calling for an increase in the debt ceiling big enough to last through the 2012 election, which would enable a lot of new spending.

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

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

President Obama Press Conference pt.6 

July 19, 2011 – 8:54 pm Categories: President Obama | Post a comment

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3 myths about debt ceiling

I got the info below from ReasonTV:

Uploaded by on Jul 18, 2011

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

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

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

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

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

July 19, 2011 – 3:37 pm Categories: President Obama, spending out of control | Post a comment

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

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

Kick the Can or Kick the Habit?

by Jagadeesh Gokhale

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

Added to cato.org on July 19, 2011

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

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

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

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

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

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

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

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

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

 

More by Jagadeesh Gokhale

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

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

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

July 19, 2011 – 2:57 pm Categories: President Obama, spending out of control | Post a comment

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