Tag Archives: balanced budget amendment

Projected Federal spending caused U.S. credit downgrade

October 7, 2011 – 1:01 am

Everyone wants to blame the Tea Party for the downgrade, but a Tea party approach is needed to get on the right tract.

 

The Debt Ceiling and the Balanced Budget Amendment

Posted by David Boaz

The Washington Post editorializes:

A balanced-budget amendment would deprive policymakers of the flexibility they need to address national security and economic emergencies.

A fair point. Statesmen should have the ability to “address national security and economic emergencies.” But the same day’s paper included this graphic on the growth of the national debt:

National Debt

Does this look like the record of policymakers making sensible decisions, running surpluses in good year and deficits when they have to “address national security and economic emergencies”? Of course not. Once Keynesianism gave policymakers permission to run deficits, they spent with abandon year after year. And that’s why it makes sense to impose rules on them, even rules that leave less flexibility than would be ideal if you had ideal statesmen. Indeed, the debt ceiling itself should be that kind of rule, one that limits the amount of debt policymakers can run up. But it has obviously failed.

We’ve become so used to these stunning, incomprehensible, unfathomable levels of deficits and debt — and to the once-rare concept of trillions of dollars — that we forget how new all this debt is. In 1980, after 190 years of federal spending, the national debt was “only” $1 trillion. Now, just 30 years later, it’s sailing past $14 trillion.

Historian John Steele Gordon points out how unnecessary our situation is:

There have always been two reasons for adding to the national debt. One is to fight wars. The second is to counteract recessions. But while the national debt in 1982 was 35% of GDP, after a quarter century of nearly uninterrupted economic growth and the end of the Cold War the debt-to-GDP ratio has more than doubled.

It is hard to escape the idea that this happened only because Democrats and Republicans alike never said no to any significant interest group. Despite a genuine economic emergency, the stimulus bill is more about dispensing goodies to Democratic interest groups than stimulating the economy. Even Sen. Charles Schumer (D., N.Y.) — no deficit hawk when his party is in the majority — called it “porky.”

Annual federal spending rose by a trillion dollars when Republicans controlled the government from 2001 to 2007. It has risen another trillion during the Bush-Obama response to the financial crisis. So spending every year is now twice what it was when Bill Clinton left office. Republicans and Democrats alike should be able to find wasteful, extravagant, and unnecessary programs to cut back or eliminate. They could find some of them here in this report by Chris Edwards.

In the Kentucky Resolutions, Thomas Jefferson wrote, “In questions of power, then, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution.” Just so. When it becomes clear that Congress as a body cannot be trusted with the management of the public fisc, then bind them down with the chains of the Constitution, even — or especially — chains that deny them the flexibility they have heretofore abused.

President Obama’s Statement on Credit Downgrade

Uploaded by on Aug 8, 2011

The President assures Americans that, “we will always be a triple-A country.” August 8, 2011.

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By Everette Hatcher III | Posted in Cato Institute, spending out of control | Also tagged , , , | Comments (0)

Tea Party representatives claim debt deal responsible for downgrade because it did not cut enough (Part 5)

October 6, 2011 – 5:57 am

Tea Party representatives claim debt deal responsible for downgrade because it did not cut enough (Part 5)

The Tea Party members in the Republican Party voted against the debt deal and have even claimed that the debt deal did not cut enough out of the budget and that is why the USA got a downgrade in the  credit rating.

Rehberg Statement on U.S. Debt Downgrade

08/05/11

WASHINGTON, D.C. – Montana’s Congressman, Denny Rehberg, released the following statement in response to the unprecedented downgrade of the U.S. government’s “AAA” sovereign credit rating by Standard & Poor.

“Every hard working Montana taxpayer knows that your credit score doesn’t go down because you can’t get your next credit card fast enough. A credit score goes down when you blow through your credit limits. For years, I’ve stood with hard working Montana taxpayers warning that the consequences of reckless federal overspending were closer than we thought.  Well, with $47,000 in debt for every American man, woman, and child, those consequences have arrived.  This is a wake-up call to the big spenders with their heads in the sand.   Bold action is required.  It’s time for a balanced budget requirement in the Constitution.  In fact, we likely would have prevented this if we’d tied a balanced budget amendment to the debt limit increase like many of us tried to do.”

CONGRESSMAN PEARCE STATEMENT ON DOWNGRADING NATIONAL CREDIT RATING

Government Needs to Focus on Long-Term Solutions
 

Las Cruces, NM (August 6, 2011) Today, Congressman Steve Pearce issued the following statement on Standard & Poor’s lowering of the nation’s long-term credit rating from AAA to AA+:

“Americans understand the downgrade is serious and are concerned of the impact this will have on their lives,” said Pearce. “The consequences are clear. As the federal government is spending $3.5 trillion for every 2.2 trillion taken in and printing money to cover this out-of-control spending, inflation is driven higher, jobs are placed in danger, and the economy is weakened. This approach is placing us on a dangerous course.”

“With unemployment above 8 percent for the 30th straight month, the Administration’s attempts to stimulate the economy by spending money we don’t have are clearly not working, as further evidenced by the downgrade,” Pearce continued. “Americans have said they want a new approach; last week, they wanted us not to make a deal but find a solution.  It is time to listen to the people and get to work on the real, common sense solutions, providing the accountability they deserve.  Once Washington provides a plan that will work, reestablishing the credit rating of the country will require hard work on the part of the American people, but I am confident that each one of us will do our part to restore economic security to our nation and to our families.”

By Everette Hatcher III | Posted in spending out of control | Also tagged , , | Comments (0)

Dear Senator Pryor, why not pass the Balanced Budget Amendment? (Part 10 Thirsty Thursday, Open letter to Senator Pryor)

October 6, 2011 – 12:11 am

Dear Senator Pryor, why not pass the Balanced Budget Amendment? (Part 10 Thirsty Thursday, Open letter to Senator Pryor)

Dear Senator Pryor,

Why not pass the Balanced  Budget Amendment? As you know that federal deficit is at all time high (1.6 trillion deficit with revenues of 2.2 trillion and spending at 3.8 trillion).

On my blog www.HaltingArkansasLiberalswithTruth.com I took you at your word and sent you over 100 emails with specific spending cut ideas. However, I did not see any of them in the recent debt deal that Congress adopted. Now I am trying another approach. Every week from now on I will send you an email explaining different reasons why we need the Balanced Budget Amendment. It will appear on my blog on “Thirsty Thursday” because the government is always thirsty for more money to spend.

There’s nothing nutty about a balanced-budget amendment
In fact, it makes a lot of sense
Thursday, July 21, 2011
By Dick Thornburgh

A late entry in the budget deficit-debt ceiling talkathon in Washington is increasing support for a constitutional requirement that the federal budget be balanced each and every year.

Doctrinaire liberals will no doubt characterize this proposal as a nutty one, but careful scrutiny of such an amendment to our Constitution demonstrates its potential to prevent future train wrecks in the budgeting process.

Coupled with a presidential line-item veto and separate capital budgeting (which differentiates investments from current outlays), a constitutional budget-balancing requirement makes sense. These tools already are available to most governors and state legislatures. And they work.

The current debate in the Congress will likely include the following arguments usually raised against a balanced-budget amendment.

First, it will be argued that the amendment would “clutter up” our basic document in a way contrary to the intention of the founding fathers.

This is clearly wrong. The framers of the Constitution contemplated that amendments would be necessary to keep it abreast of the times. It already has been amended on 27 occasions.

Moreover, at the time of the Constitutional Convention, one of the major preoccupations was how to liquidate the Revolutionary War debts of the states. Certainly, it would have been unthinkable to the framers that the federal government itself would systematically run at a deficit, decade after decade. Indeed, the Treasury did not begin to follow such a practice until the mid-1930s.

Second, critics will argue that the adoption of a balanced-budget amendment would not solve the deficit problem overnight.

This is correct, but begs the issue. Serious supporters of the amendment recognize that a phasing-in period of five or 10 years would be required to reach a zero deficit. During this interim period, however, budget makers would be disciplined to meet declining deficit targets in order to reach a balanced budget by the established deadline.

As pointed out by former Commerce Secretary Peter G. Peterson, such “steady progress toward eliminating the deficit will maintain investor confidence, keep long-term interest rates headed down and keep our economy growing.”

Third, it will be argued that such an amendment would require vast cuts in social services and entitlements or defense expenditures.

Not necessarily. True, these programs would have to be paid for on a current basis rather than heaped on the backs of upcoming generations. Certainly, difficult choices would have to be made about priorities and levels of program funding. But the very purpose of the amendment is to discipline the executive and legislative branches actually to debate these choices and not to propose or perpetuate vast spending programs without providing the revenues to fund them.

The amendment would, in effect, make the president and Congress fully accountable for their spending and taxing decisions, as they should be.

Fourth, critics will say that a balanced-budget amendment would prevent or hinder our capacity to respond to national defense or economic emergencies.

This concern is easy to counter. Any sensible amendment proposal would feature a “safety valve” to exempt deficits incurred in response to such emergencies, requiring, for example, a three-fifths “super majority” in both houses of Congress. Such action should, of course, be based on a finding that such an emergency actually exists.

Fifth, it will be said that a balanced-budget amendment would be “more loophole than law” and might be easily circumvented.

The experience of the states suggests otherwise. Balanced-budget requirements are now in effect in all but one of the 50 states and have served them well.

Moreover, the line-item veto, available to 43 governors, would assure that any specific congressional overruns (or loophole end-runs) could be dealt with by the president. The public’s outcry, the elective process and the courts would also provide backup restraint on any tendency to simply ignore a constitutional directive.

In the final analysis, most of the excuses raised for not enacting a constitutional mandate to balance the budget rest on a stated or implied preference for solving our deficit dilemma through the “political process” — that is to say, through responsible action by the president and Congress.

But that has been tried and found wanting, again and again.

Surely, this country is ready for a simple, clear and supreme directive that its elected officials fulfill their fiscal responsibilities. A constitutional amendment is the only instrument that will meet this need effectively. Years of experience at the state level argue persuasively in favor of such a step. Years of debate have produced no persuasive arguments against it.

Perhaps Thomas Jefferson put it best:

“To preserve our independence, we must not let our rulers load us down with perpetual debt.”

That is the aim of a balanced-budget amendment. Reform-minded members of Congress should choose to support such an amendment to our Constitution as a means of resolving future legislative crises and ending “credit card” government once and for all.

A nutty idea? Not by a long shot.

Dick Thornburgh, of counsel to the Pittsburgh law firm K&L Gates, is a former U.S. attorney general and governor of Pennsylvania.
First published on July 21, 2011 at 12:00 am
By Everette Hatcher III | Posted in spending out of control | Also tagged , , | Comments (0)

The current federal budget brought down to a level a family could understand

September 28, 2011 – 9:12 am

I got this off the internet.

U.S. Tax revenue: $2,170,000,000,000
Fed budget: $3,820,000,000,000
New debt: $1,650,000,000,000
National debt: $14,271,000,000,000
Recent budget cut: $38,500,000,000

Now, remove 8 zeros and pretend it’s a household budget

Annual family income: $21,700
Money the family spent: $38,200
New debt on the credit card: $16,500
Outstanding balance on credit card: $142,710
Total budget cuts: $385

Sort of brings the true issue “home” doesn’t it?

Related posts:

Tea Party Conservative Senator Mike Lee interview

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Dear Senator Pryor, why not pass the Balanced Budget Amendment? (Part 8 Thirsty Thursday, Open letter to Senator Pryor)

Dear Senator Pryor, Why not pass the Balanced  Budget Amendment? As you know that federal deficit is at all time high (1.6 trillion deficit with revenues of 2.2 trillion and spending at 3.8 trillion). On my blog http://www.HaltingArkansasLiberalswithTruth.com I took you at your word and sent you over 100 emails with specific spending cut ideas. However, […]

Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 48)

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Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 46)

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Sixty Six who resisted “Sugar-coated Satan Sandwich” Debt Deal (Part 44)

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Dear Senator Pryor, why not pass the Balanced Budget Amendment? (Part 7 Thirsty Thursday, Open letter to Senator Pryor)

Dear Senator Pryor,  Why not pass the Balanced Budget Amendment? As you know that federal deficit is at all time high (1.6 trillion deficit with revenues of 2.2 trillion and spending at 3.8 trillion). On my blog http://www.HaltingArkansasLiberalswithTruth.com I took you at your word and sent you over 100 emails with specific spending cut ideas. However, […]

 

By Everette Hatcher III | Posted in spending out of control | Also tagged , , , | Comments (0)

Tea Party Conservative Senator Mike Lee interview

September 25, 2011 – 2:40 pm

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 government. It’s an uphill battle for the youngest member of the U.S. Senate, but one he’s prepared to fight.

Lee’s recent book, “The Freedom Agenda: Why a Balanced Budget Amendment is Necessary to Restore Constitutional Government,” outlined his goals for changing Washington. (Listen to our recent podcast.) Yesterday at Heritage, he delivered the annual Helms Lecture, detailing his opposition of the Law of the Sea Treaty — a measure supported by the Obama administration that awaits Senate ratification.

Lee spoke to us afterward about President Obama’s jobs plan, the mounting federal debt and his solution to saving Social Security.

In the days following Obama’s speech to Congress, Lee sharply criticized the president’s ideas for raising taxes and hiking spending to spur economic growth. As he explained to us, “We need to not be doing more of the same things that made the problem worse. We need to refocus on getting the federal government out of the way rather than making the federal government part of the problem.”

The interview runs a little more than 4 minutes. Hosted by Rob Bluey and produced by Brandon Stewart, with help from Hannah Sternberg.

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

Does Wal-mart charge us $100 to enter and they choose what we get? Same unsatisfying result when Congress raises debt ceiling!!

August 17, 2011 – 8:12 am

“If Wal-Mart charged you $100 to enter its stores and then told you what you were going to get for the money, it would not be a satisfying experience, yet, this is precisely how the U.S. government operates.”

Sadly that has been the way our government has been operating for years and now we all have over 46,000 dollars of debt for each member of our household and we still don’t feel satisfied with what we are getting.

Time for a Constitutional Fix

by Richard W. Rahn

This article appeared in The Washington Times on August 16, 2011.

Can an amendment to the U.S. Constitution fix the deficit problem? Polls show most Americans think we need a balanced-budget amendment. Yet serious scholars of the issue understand that the deficit is merely a symptom of the problem; people want more benefits from government than they wish to pay for.

Various forms of balanced-budget and tax-and-spending-limitation amendments have been proposed. Almost everyone realizes that an amendment must be flexible enough to deal with national emergencies, such as a major war. But if the amendment is too flexible, politicians will quickly find ways around whatever limitations on spending, taxing and deficits are imposed. The more tightly drawn any proposed amendment is, the more difficult it will be to pass it because an effective amendment will limit the powers of the very people who are required to vote for it. As the country considers what type of structural fix is doable, the observations of some leading scholars are worth pondering.

Political economist Lawrence Hunter, who has held senior policy positions both in and out of government, has been working on the issue for a couple of decades. Mr. Hunter just wrote inForbes, “The Father of the U.S. Constitution, James Madison, understood that any constitutional provision without self-enforcing mechanisms attached to it constitutes a mere ‘parchment barrier’ and simply would be ignored and discarded by [the political class]. … Madison laid out a framework in Federalist No. 51 for competition among political and legal actors with the national government as a means of checking and balancing the exercise of power by the various branches: ‘Ambition must be made to counteract ambition.'” Mr. Hunter thinks it is an open question when, if ever, the political class will get to the point where it will pass an effective, self-enforcing limitation on taxing, spending and debt.

Without a clear amendment, overspending will continue…

John McClaughry, who was a senior policy adviser in the Reagan White House, has come up with an interesting idea, which was published in the AmericanThinkerin May, that he calls Proposition 20. Mr. McClaughry would limit the total amount of federal debt to $20 trillion. Setting an absolute amount makes the calculation unambiguous, unlike most other proposals that refer to some percentage of gross domestic product or other less precise numbers. The United States has a gross debt of about $15 trillion, so the proposal would give Congress several years to get its house in order and give adequate time for the states to ratify it. Mr. McClaughry would allow the issuance of additional debt if, and only if, Congress formally declared war, and only while the armed forces were engaged in combat.

Maurice P. McTigue, a former New Zealand Cabinet minister who is a distinguished visiting scholar at the Mercatus Center at George Mason University, has been working on improving government accountability around the world ever since he was a key player in New Zealand’s economic reforms of two decades ago. He has spent considerable time identifying which reforms have worked in various countries and how their successes might be transferred elsewhere. Mr. McTigue notes that a major part of the problem of lack of government fiscal responsibility is the fact that virtually no one knows how much the various government services actually cost. Thus, a key to improving government accountability is to work on ways of ensuring that the public knows what it is getting for each dollar spent on various programs.

When all government revenue (Social Security taxes, personal income taxes, corporate taxes and a never-ending list of excise taxes and fees) goes into the same pot — which is the case now — and then the money is allocated by Congress according to political considerations, any connection between what is being paid and the “service” on which it is spent becomes increasingly remote. If Wal-Mart charged you $100 to enter its stores and then told you what you were going to get for the money, it would not be a satisfying experience, yet, this is precisely how the U.S. government operates.

Richard W. Rahn is a senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth.

More by Richard W. Rahn

As we struggle to try to devise a constitutional fix to the structural problem of destructive debt, spending, regulation and taxation, it would be useful to consider the following:

1. All government insurance (incorrectly called “entitlements”) and trust programs must be privatized or fully funded from specifically identified and allocated taxes and fees that cannot be diverted to pay for other government programs and must be managed by independent officials who will be legally at risk for not fulfilling their fiduciary responsibilities.

2. Every government expenditure, no matter how small, must be funded from an identifiable stream of revenue — taxes, fees, asset sales or other — and the same dollars may not be spent on more than one item.

3. No new or expanded government program or activity may be enacted into law without a specific source of funding attached to it, and the program or activity may not spend more than funds provided by the identified tax or fee.

The U.S. Constitution was written in response — after vigorous and learned debate — to the problems arising out of the original Articles of Confederation. It appears that a constitutional fix is needed to deal with ongoing fiscal problems the country faces. A vigorous debate has begun, and that is all to the good.

By Everette Hatcher III | Posted in spending out of control | Also tagged | Comments (0)

Tea Party representatives claim debt deal responsible for downgrade because it did not cut enough (Part 1)

August 9, 2011 – 8:51 am
 
The Tea Party members in the Republican Party voted against the debt deal and have even claimed that the debt deal did not cut enough out of the budget and that is why the USA got a downgrade in the  credit rating.

 

 
 
Washington, D.C., Aug 5-Congressman Jack Kingston (R-GA) released the following statement after Standard and Poor’s announced they have lowered the United States credit rating to AA+:“For the first time in history, the credit rating of the United States has been downgraded.  This confirms my belief that the debt ceiling increase signed into law this week does not go far enough to change the nation’s fiscal trajectory.  Congress should immediately reconvene to take up the fundamental reforms necessary to right the ship and lay the groundwork for a more stable and secure future for our children and grandchildren.“I have put forth legislation which can be brought up today to cut spending immediately and bring the budget to balance in five years.  With it and with a balanced budget amendment to the United States Constitution, we can answer the call for leadership necessary to face our fiscal challenges.”NOTE: Earlier this year, Kingston introduced legislationto limit total federal spending as a percentage of the economy.  Americans for Prosperity, National Taxpayers Union, Club for Growth, Americans for Tax Reform, Citizens United, and Americans for Limited Government have all endorsed the plan.

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S&P Downgrade Stark Reminder We Must Get Our Fiscal House in Order

Aug 6, 2011 Issues: Spending Cuts and Debt 
 

Today Rep. Todd Rokita responded to news that Standard & Poor’s lowered the United States’ long-term credit rating from AAA to AA+:

“Last night’s announcement by Standard and Poor’s is the starkest reminder yet that we must get our fiscal house in order and put our nation back on a fiscally sustainable trajectory.  The debt ceiling increase passed by Congress and signed by President Obama failed to do that.”      

The choices may be hard, but the way forward is clear.  We cannot continue to spend money we don’t have.  The time has come for a balanced budget amendment to the Constitution.

Sending a balanced budget amendment to the states will give the American people a vote on their future and the opportunity to force politicians to stop borrowing from China and stealing from our children and grandchildren.”    

Rokita is the co-author of a balanced budget amendment to the Constitution. 

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By Everette Hatcher III | Posted in spending out of control | Also tagged , , , | Comments (0)

Breaking down Senator Mark Pryor’s speech on debt ceiling, Do the Republicans want to send granny over the cliff? (Part 2)

July 23, 2011 – 4:37 pm

For Senator Mark Pryor it is time to get back to his liberal democratic roots. Blame the evil Republicans for wanting to end Medicare as we know it and push granny off the cliff. For heavens sake we better not cut a dime out of the government now, but maybe promise to cut 6 trillion out of it about 7 or 8 years from now and call that a 10 year plan.

The Arkansas Times Blog reported on July 22, 2011:

Senator Mark Pryor on July 22  made the following statement on the Senate floor to encourage his colleagues to end the budget gimmicks and move forward with a comprehensive debt-reduction plan as part of a debt ceiling solution. A portion of his statement is below:

Mr. President, Abraham Lincoln once said, “I am a firm believer in the people. If given the truth, they can be depended upon to meet any national crisis. The great point is to bring them the real facts.”

We need to bring people the facts about our nation’s debt. People in my state see through the games being played in Washington. They want solutions, courage and leadership — the kind that puts us on a more secure fiscal path for the future.

… Chairman of the Joint Chiefs of Staff last summer said, “Our national debt is our biggest national security threat.”

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Mark Pryor is not going to lift a finger to cut down our national deficit. That is why he did not want to pass the “Cut, Cap and Balance” plan.

Pryor notes, “We need to bring people the facts about our nation’s debt.” However, he does not believe in a Balanced Budget Amendment. How does that make sense?

Then he complains, “People in my state see through the games being played in Washington.They want solutions, courage and leadership — the kind that puts us on a more secure fiscal path for the future.” Nevertheless, he will vote for a responsible plan like “Cut, Cap and Balance.”

Finally Pryor asserts, “… Chairman of the Joint Chiefs of Staff last summer said, “Our national debt is our biggest national security threat.” But Pryor’s inaction on cutting the deficit is speaking volumes. He just can’t break away from those old favorite tactics of the liberals. He travels across Arkansas screaming “The Republicans want to send granny over the cliff!!”

Abdication: Senate Votes to Do Nothing Unless It Can Hike Taxes for the President” by David S. Addington July 22, 2011 at 2:54 pm, seems to be perfectly describing Pryor’s own actions. Here is a portion of that article:

Earlier this week, the House of Representatives passed the Cut, Cap and Balance Act, to get federal spending under control and balance the budget.  That legislation passed with 234 votes in the House.  The House is a legislative body, and it has legislated.  The House has done its job.

In contrast, the Senate is a legislative body that has failed to do its job.  So far, the Senate has come up with lots of bad plans, but no votes.  The Senate plans that have cropped up in the last week — the McConnell-Reid “Just Borrow More” Plan, the Coburn Plan with its tax hikes, and the Gang-of-Six Plan with its tax hikes — have among them exactly zero votes, because the Senate has not voted on any of them.

Today, the Senate voted 51 to 46 to not even consider the House-passed Cut, Cap and Balance bill, even though two-thirds of Americans, according to the CNN Poll dated July 21, support such legislation.  The Obama Administration chimed in that, even if the Senate passed the bill, the President would veto it anyway.  Therefore, if, ten days from now, America fails temporarily to meet its obligations because the Treasury lacks sufficient money to pay them when due, the responsibility for that failure falls squarely upon President Obama and the Senate liberals, who let it happen because they wanted to raise taxes.  Conservatives have commendably pursued legislation to ensure that the government pays its most important obligations first when the Treasury has a shortage of money to pay all its bills, but even on that liberals have been no help.

President Obama and the Senate liberals may represent well that ever-shrinking tax-spend-and-borrow crowd of liberal special interests, but most of the American people want to cut government spending, cut the size and scope of government, and cut up and throw away the national credit card.

So far, only the House conservatives have acted responsibly.

A week is still plenty of time to pass legislation to get the spending-cut job done.  The time to put America on the path to driving down federal spending and borrowing, while preserving our ability to protect America, and without raising taxes, is now.

newscasters debt ceiling
By Everette Hatcher III | Posted in President Obama, spending out of control | Also tagged , , , | Comments (0)

Senator Jim DeMint critical of fellow Senator Mitch Mcconnell

July 20, 2011 – 3:27 pm

Uploaded by on Jul 19, 2011

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

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

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

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

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

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

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

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

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

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

By Everette Hatcher III | Posted in Current Events, spending out of control, Taxes | Also tagged , , , , | Comments (0)

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

July 19, 2011 – 7:28 am

Published on Jul 15, 2011 by

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Senate BBA

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

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

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

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

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

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

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

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

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

Related posts:

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

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