Tag Archives: joint session of congress

President Obama’s job speech reacted to by Heritage Foundation scholars (Part 6)

September 17, 2011 – 9:05 am

President Obama’s job speech reacted to by Heritage Foundation scholars (Part 6)

I love going to the Heritage Foundation website because of articles like this:

Heritage’s experts watched President Barack Obama’s jobs speech delivered to a joint session of Congress. Here are some of their immediate reactions:

Obama Calls for Reviving Failed Hiring Tax Credit

What to make of President Obama’s plan in his speech tonight to revive a tax credit for businesses hiring new workers? In March 2010, the President signed into law an almost identical credit.

It was a credit he pushed for Congress to pass. The credit lasted from March through the end of December. It had no beneficial impact on job creation and added billions to the national debt. There is absolutely no good reason for trying it again.

As we argued before the first hiring credit became law, such a policy won’t spur permanent hiring because it only temporarily reduces the costs of employing new workers. Businesses only hire new workers when they anticipate those new workers will increase their profitability over the long haul.

A credit of a few thousand dollars, a mere fraction of the cost of hiring a worker, does nothing to change that calculation. The only positive effect on hiring the credit could have would be on temporary positions if it makes adding a few new temps profitable in the short term. But once the credit expires businesses will let those workers go.

To get the true picture of the credit’s effectiveness, however, you can’t just look at the few temporary jobs it might create. You also need to subtract the jobs foregone because the government took the money for the credit out of the hands of the private sector by taxing or borrowing to give it to the businesses that qualify. In the end it is more likely the hiring credit will actually destroy jobs on net.

– Curtis Dubay

Extending Unemployment Benefits

Today, Senate Minority Leader Mitch McConnell (R-KY) quoted Albert Einstein who he said once defined insanity as doing the same thing over and over again and expecting different results. By that measure President Obama’s plan to boost the economy by spending more on unemployment benefits is insane. Unfortunately, the President isn’t joking.

Congress has expanded unemployment insurance (UI) dramatically since the recession began. Laid off workers can now collect up to 99 weeks of benefits in some states. It isn’t hard to see why Congress did so. Normally workers can collect benefits for to up to six months. But the average unemployed worker has now been out of a job for nine months.

For welfare reasons Congress wants to help workers who cannot find jobs. This is understandable. That doesn’t mean it will help the economy, no matter how much the President wants it to.

The stimulus bill extended UI benefits. Congress has kept them in place several times since then. All told the government has spent over $300 billion on unemployment benefits since Obama took office. All that spending has done nothing to boost the economy. Unemployment is higher than the Administration projected if Congress did nothing. This failure was predictable.

The studies that show that UI spending stimulates the economy are based on macroeconomic models programmed to show large “multiplier effects” from government spending. These models assume that each dollar of government spending creates more than a dollar of economic growth. They essentially assume their conclusion. Actual empirical research shows that UI payments do not boost GDP. This is exactly what economic theory predicts.

One of the most thoroughly established findings of labor economics is the fact that extended unemployment benefits cause workers to remain unemployed longer. Even Alan Krueger, President Obama’s nominee to chair the Council of Economic Advisors, agrees. Studies show that raising benefits to 99 weeks during the recession has increased the unemployment rate by 0.5 to 1.5 percentage points. Extended benefits come at an economic cost.

There are understandable reasons for wanting to extend UI benefits despite this cost. But as much as it would be wonderful if doing so also boosted the economy, it does not. It would be similarly wonderful if an all you can eat bacon and ice-cream diet helped shed pounds. Wishing does not make it so.

If Congress thinks that keeping extended benefits is good policy then Congress should pay for it by reducing spending on less important programs. But spending tens of billions more on unemployment insurance will not stimulate the economy any more than the last extensions did.

– James Sherk

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

Surprising facts about America’s poor

September 16, 2011 – 9:54 am

Surprising facts about America’s poor

Here are some interesting facts:

Mike Brownfield

September 13, 2011 at 11:00 am

In his address to the joint session of Congress last week, President Barack Obama called for $477 billion in new federal spending, which he said would give hundreds of thousands of disadvantaged young people hope and dignity while giving their low-income parents “ladders out of poverty.” And today, the U.S. Census released its annual poverty report, which declared that 46.2 million persons, or roughly one in seven Americans, were poor in 2010. What President Obama didn’t tell America as he was pleading for more spending–and what the Census Bureau didn’t report–is what it really means to be poor in America.

In a new report, Heritage’s Robert Rector and Rachel Sheffield lay out what the U.S. government’s own facts and figures really say about poverty in the United States. The results might surprise you, especially if your view of poverty is the conventional one, perpetuated by the media–namely, destitute conditions of homelessness and hunger. In reality, though, the living conditions of those defined as poor by the government are much different than that popular image. The following are facts about persons defined as “poor” by the Census Bureau:

  • 80 percent of poor households have air conditioning
  • Nearly three-fourths have a car or truck, and 31 percent have two or more cars or trucks
  • Nearly two-thirds have cable or satellite television
  • Two-thirds have at least one DVD player and 70 percent have a VCR
  • Half have a personal computer, and one in seven have two or more computers
  • More than half of poor families with children have a video game system, such as an Xbox or PlayStation
  • 43 percent have Internet access
  • One-third have a wide-screen plasma or LCD television
  • One-fourth have a digital video recorder system, such as a TiVo

As for hunger and homelessness, Rector and Sheffield point to 2009 statistics from the U.S. Department of Agriculture showing that 96 percent of poor parents stated that their children were never hungry at any time during the year because they could not afford food, 83 percent of poor families reported having enough food to eat, and over the course of a year, only 4 percent of poor persons become temporarily homeless, with 42 percent of poor households actually owning their own homes. Want an international comparison? The average poor American has more living space than the average Swede or German. You can read even more of those facts in their report, “Understanding Poverty in the United States.”

None of this is to say that the poor have it easy. Sadly, one in 25 will become temporarily homeless during the year, and one in five poor adults will experience temporary food shortages and hunger at some point in a year. But exaggerating the conditions of poverty does not do America any good, as Rector and Sheffield explain:

The poor man who has lost his home or suffers intermittent hunger will find no consolation in the fact that his condition occurs infrequently in American society. His hardships are real and should be an important concern to policymakers. Nonetheless, anti-poverty policy needs to be based on accurate information. Gross exaggeration of the extent and severity of hardships in America will not benefit society, the taxpayers, or the poor.

Those exaggerations about the symptoms of poverty don’t solve the root causes of the problem, either. As Rector and Sheffield write, “Among families with children, the collapse of marriage and the erosion of work ethic are the principal long-term causes of poverty.” In order to truly benefit the poor, they say, welfare policy must require able-bodied recipients to work or prepare for work as a condition of receiving aid. And it should strengthen marriage in low-income communities, rather than ignore and penalize it.

Poverty is a serious problem that requires serious solutions. But policymakers and the public need accurate information about what poverty in the United States really means. Only then can they implement the right policies to help those Americans who are truly in need.

By Everette Hatcher III | Posted in Current Events | Also tagged , , , | Comments (0)

President Obama’s job speech reacted to by Heritage Foundation scholars (Part 5)

September 16, 2011 – 9:52 am

President Obama’s job speech reacted to by Heritage Foundation scholars (Part 5)

I love going to the Heritage Foundation website because of articles like this:

Heritage’s experts watched President Barack Obama’s jobs speech delivered to a joint session of Congress. Here are some of their immediate reactions:

Obama Calls for Tax Hikes on Job Creators – In Jobs Speech

It was expected that President Obama would rehash and recycle a litany of policies that have no hope of stimulating job creation in his big speech tonight. What comes as a surprise is that he called for offsetting the costs of his sure-to-be-ineffective policies with tax hikes. On job creators.

The President has said himself that tax hikes slow economic growth and deter job creation. That was the justification he gave in December for extending the Bush tax cuts through 2012. It seems he has forgotten what he himself said less than a year ago.

The President called for raising taxes on investors, businesses, and entrepreneurs in his speech. These are the job creators he so desperately needs to help revive the economy. Raising their taxes will reduce the already limited incentives they have to invest and add new workers right now.

This is akin to bailing water into an already-sinking ship.

If Congress foolishly passed the President’s ill-advised plan the tax hikes would be permanent and the jobs policies permanent. The American people would get a permanently enlarged federal government for temporary jobs policies that won’t create any jobs.

Uncertainty is the major factor causing businesses to hold back on new investment and refrain from adding workers. One of the biggest sources of that uncertainty is the President’s never-ending crusade to raise taxes. As long as their taxes might go up, job creators will be hesitant to add new workers.

If the President stopped incessantly demanding higher levies it would relieve some of the uncertainty. That alone won’t cure all that ails the economy, but it would be a big help.

C’mon Mr. President, surprise us in your next major speech by not calling for tax hikes.

– Curtis Dubay

Unsurprisingly, Obama Ignores Energy Exploration as a Solution

Increasing energy supply should have been a no-brainer for President Obama.  It’s a policy that can lower energy prices, create jobs and generate hundreds of billions in revenue from more royalties, leases, and rent.   And it’s a massive revenue raiser that occurs without raising taxes. Instead, the president used the opportunity to take a jab at oil companies and the “tax loopholes” they receive.

To be clear, what the President and anti-oil crusaders label a tax loophole is not tax treatment specific to the oil and gas industry. These are broad tax policies that apply to many industries.

The reality is the economy is weak and steep energy prices will hurt the economic recovery.  Despite the fact that oil settled at $89 per barrel, gas prices remain high and the economic pain as a result of higher gas prices spreads far beyond the pump. Higher energy prices also drive up production costs, which must be reflected in product prices, especially for goods reliant on transportation. Since higher prices reduce quantities sold, producers produce less. In turn, this drives wages down and incomes decline.

At least the people of Louisiana have the Saints to watch, because they don’t have jobs. Despite the fact that the administration lifted the official moratorium on deepwater drilling, the molasses-like permitting process is impeding the Gulf’s economic recovery; 20 rigs are in jeopardy of leaving the Gulf.

But it’s not just the Gulf that would benefit from allowing access for energy exploration and creating an efficient regulatory process that allows energy projects to move forward in a timely manner.  Colorado, Montana, New Mexico, North Dakota, Utah, and Wyoming have all suffered from a slower permitting process would see tremendous economic benefits if companies could explore and drill in a more timely manner.  Alaska has 19 billion barrels of oil of its coasts and another 10.4 billion in the Arctic National Wildlife Refuge (ANWR).  Increased proven natural gas reserves increased states like Pennsylvania, New York, Texas, Oklahoma, Arkansas and Louisiana has increased regional interest.

Increasing access to oil and natural gas reserves in the United States both onshore and offshore, would help offset rising demand, increase jobs and revenue, and provide the real economic boost our country needs rather than more the same tried-and-failed government spending programs.

– Nicolas Loris

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

Obama wants to raise taxes on job creators

September 16, 2011 – 7:42 am

Uploaded by on Aug 6, 2010

Cenk Uygur (host of The Young Turks) filling in for Chris Jansing on MSNBC talks to Dan Mitchell of the Cato institute to compare Reaganomics to Obamanomics.

__________________________

What should we do when we are caught in a slow economy? What did Reagan do in 1981? He lowered taxes to stimulate the economy. However, President Obama wants to raise taxes.

Obama’s Jobs Plan: Permanent Tax Hikes on Job Creators

By Curtis Dubay
September 15, 2011

When President Obama unveiled his much-hyped American Jobs Act to a joint session of Congress last week, he promised that the increased spending and temporary tax cuts the plan entails would be fully “paid for.” He did not specify in that speech the details of how he would offset the costs of his plan other than he would charge the “super committee” with this responsibility.

This week, he released his own proposals to pay for the plan. To no one’s surprise, the plan would offset the costs of its jobs policies solely with tax hikes and not one penny of spending reductions.

The tax increases the President proposes are the same old hodgepodge of tax hikes he has proposed often since taking office, and they have been rejected by Democratic and Republican Congresses alike each time he’s pushed for them. In the end, the tax hikes would be permanent while the jobs policies temporary; thus, the proposal is really a tax hike plan rather than a jobs plan.

Tax Hike on Job Creators

Almost all of the $447 billion in increased revenue called for by President Obama would come from raising taxes on job creators,[1] the same job creators whom President Obama wants to hire more workers to reduce the unemployment rate.

The plan would raise taxes on job creators by capping the deductions that families and businesses earning more than $250,000 a year could claim. It would reduce the deductions of these families and businesses to the amount they could claim had they only earned enough to qualify for the 28 percent tax bracket instead of the higher tax brackets (33 percent and 35 percent) they face now.

For example, under the current tax code, $100,000 of deductions for a family that pays the 35 percent rate reduces its tax bill by $35,000. Under the plan’s tax hike, this family’s deductions could only reduce its tax bill by $28,000, or what it would have been under the 28 percent rate. The tax hike would be bigger as the family’s deductions increase.

This tax hike would be on top of the 3.8 percent surtax on investment income (passed as part of Obamacare) that these same families and businesses will pay beginning in 2013 and the higher marginal income tax rates they will pay if President Obama gets his way and the Bush tax cuts expire at the end of 2012. If marginal income tax rates rise, the tax increase from limiting deductions would increase as well.

The families that would pay these higher taxes are the investors that the economy needs to provide capital to businesses and entrepreneurs so they can expand and start new operations that would employ new workers. A recent study from President Obama’s own Treasury Department shows that 90 percent of businesses that pay their taxes through the individual income tax code and employ workers would pay the higher taxes under the President’s plan.[2]

This tax hike would negate any benefits of the President’s jobs policies. Capping deductions as President Obama’s plan does would raise the marginal effective tax rate of these important job creators and therefore reduce their incentives to invest and take on new risk—permanently. Less investment and less risk-taking means fewer new jobs created.

Since it is likely President Obama’s job proposals would create few, if any permanent, positions, taken together with the tax hike on job creators, his plan would likely reduce employment in the long term.[3]

Industry Specific Tax Hikes

The rest of the tax hikes in President Obama’s plan specifically target the oil industry and jet manufacturers. He would mostly raise their taxes by limiting their ability to “expense” (or deduct at the time of acquisition) their purchases of capital equipment.

The President’s desire to strip these targeted industries of the ability to deduct their capital purchases faster than current depreciation schedules allow is at odds with his own position on expensing. The President insisted that the 2010 tax deal to extend the Bush tax cuts include 100 percent expensing for all capital purchases for all businesses for one year. This latest jobs bill—which oil and jet tax hikes are supposed to help pay for—includes an extension of that expensing policy.

More troubling is the President’s apparent lack of understanding of the actual impact that his policies would have. He frames the jet tax hike as a hike on the owners of corporate jets, but the burden of his policy would fall on the workers that manufacture the jets. The tax hike would raise the cost of jets, which would reduce the demand for them. Reduced demand would ultimately result in fewer jobs for the blue-collar workers who manufacture the planes.

This is not just theory. In 1990, a 10 percent tax on luxury yachts went into effect. Congress passed the measure assuming that the rich buyers of yachts would pay the burden. But when the price of yachts rose, orders dried up and the yacht-building industry dried up as well. As The New York Times chronicled then, it was the blue-collar workers who lost their jobs and ended up bearing the pain of the tax.[4] The situation was dire enough that Congress repealed the devastating tax in 1993.

Stop Digging

In the Administration’s poorly crafted and contradictory jobs package, the American people get permanent tax hikes that would enlarge the federal government to offset the cost of temporary jobs policies that would not create any jobs. In the long run, the tax hikes in this plan are more likely to destroy more jobs than the jobs policies create.

Unfortunately, President Obama will not consider policies that would actually create jobs by reducing the high level of uncertainty that persists in the economy today. This would include doing things such as:

  • Fundamental revenue-neutral tax reform that repairs the tax base and lowers marginal tax rates to improve the incentives for income production;
  • Reducing the crushing amount of regulations coming from various federal government agencies;
  • Repealing Obamacare and its onerous regulations and taxes;
  • Repealing the Dodd–Frank financial reform legislation; and
  • Stopping incessant calls for higher taxes.

American workers do not need policies that will further inhibit job creation and dig deeper the already-deep jobs hole that the President’s policies have created.

Curtis S. Dubay is a Senior Analyst in Tax Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

By Everette Hatcher III | Posted in Cato Institute, President Obama, Ronald Reagan, Taxes | Also tagged , , , | Comments (0)

President Obama’s job speech reacted to by Heritage Foundation scholars (Part 4)

September 15, 2011 – 7:09 am

President Obama’s job speech reacted to by Heritage Foundation scholars (Part 4)

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

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

I love going to the Heritage Foundation website because of articles like this:

Heritage’s experts watched President Barack Obama’s jobs speech delivered to a joint session of Congress. Here are some of their immediate reactions:

President Calls for Ill-advised Federal School Construction

As expected, tonight President Obama called on taxpayers to send their hard-earned money to the federal government so that Washington can pour that money into public school construction. In an attempt to boost job growth, the president suggested spending billions on school infrastructure projects to “modernize 35,000 public schools.”

Since President Obama came into office, spending on public education has skyrocketed:

  • Education budget in 2008: $59.2 billion
  • Education budget in 2011: $69.9 billion
  • Department of Education “stimulus” award (Spring 2009): $98 billion
  • “Edujobs” public education bailout (Summer 2010): $10 billion

And state and local school construction spending has also seen significant increases.

By some estimates, inflation-adjusted school construction spending has increased 150 percent in the last two decades. And unfortunately, profligacy and waste are the norm. Remember the $500 million RFK high school in Los Angeles, built last year after a California bond referendum was enacted? There are certainly schools in ill-repair, but this maintenance should be a local concern. Washington should not be in the business of school window repair, updating facilities, or repainting buildings. Schools don’t need increased federal funding for school repairs; they need more flexibility with funding to be able to use dollars for needs they consider pressing.

The president’s proposal to funnel more taxpayer dollars into school construction has both constitutional and pragmatic problems. School construction has historically been – and should remain – the job of states and localities. Federal forays into school construction have been rare and indirect. Federally-funded school construction is also a terribly expensive way to build schools: Washington-funded jobs must pay prevailing wages, increasing costs on average by 22 percent.

In calling for federally-funded school construction, President Obama is once again supporting Washington overreach in education. But he’s also behind the game in terms of the direction school policy is trending. As states and localities begin embracing online learning  – and as education shifts to a world outside of the walls of physical school buildings – President Obama is pushing to subsidize the old model. The administration might think “school construction” polls better than other government “jobs” projects, but it’s just as destined to be a waste of taxpayer money, and a public policy failure.

– Lindsey Burke

Not A ‘Jobs Plan’ — Just Stimulus Redux

What President Obama calls a “jobs” plan is really just stimulus redux: a typical Keynesian-style set of infrastructure, school construction, teacher pay, unemployment benefits, and temporary tax breaks that have demonstrably failed in the two-and-a-half years since the $825-billion Recovery Act.

Obamanomics has left the economy with a growth rate just a fraction above 1 percent, nearly 2 million fewer Americans working, and an unemployment rate higher now than when he took office. Government cannot “grow the economy” (as if it were a field of strawberries), and it cannot create private sector jobs. It can only maintain conditions conducive to growth — limiting government spending and regulation, keeping tax rates low, and removing the uncertainties caused by feckless public policies.

– Patrick Knudsen

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

President Obama’s job speech reacted to by Heritage Foundation scholars (Part 3)

September 15, 2011 – 6:53 am

I love going to the Heritage Foundation website because of articles like this:

Heritage’s experts watched President Barack Obama’s jobs speech delivered to a joint session of Congress. Here are some of their immediate reactions:

The Absurdity of Obama’s Spending Offsets

It is absurd that this President — who ignored the recommendations of his own fiscal commission, and then sought to raise the debt ceiling without a nickel of spending reductions — now demands the super-committee created in the debt-ceiling negotiations to come up with additional savings to pay for his jobs proposal.?? ?

– Patrick Knudsen

And When, the Rest of the Story, Mr. President?

In giving his big jobs speech this evening before a rare Joint Session of Congress, also gave us a classic “Paul Harvey” moment.

Paul Harvey was a famous radio commentator and personality with one of the longest running national radio programs in history.  His trademark was to tell the audience the big lead into a big story and then break for a commercial.  When he came back he would then announce, “And now, (pause) the rest of the story”.  We’re still waiting for Barack Obama to give us the rest of the story.

In his jobs speech, the President laid out a bunch of retread policy ideas that two years after they were first tried managed to create an arithmetic novelty – exactly zero job growth in August.  In total, the President is calling for more new spending on proven policies that are proven failures, and he says these will all be paid for with budget reductions elsewhere.

But he refused to give his proposals for offsetting the cost of his proposals.  Desserts only, no spinach?.  We’re still waiting for “the rest of the story”.  Was he unable to decide in time on what to propose?   Did he think perhaps no one would notice?  Why put out what is literally a half-baked plan?

– J.D. Foster

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

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

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

U.S. DEBT LIMIT

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

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

Chart 26 of 42

In Depth

  • Policy Papers for Researchers

  • Technical Notes

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

  • Authors

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

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

President Obama’s job speech reacted to by Heritage Foundation scholars (Part 2)

September 12, 2011 – 7:07 am

I love going to the Heritage Foundation website because of articles like this:

Heritage’s experts watched President Barack Obama’s jobs speech delivered to a joint session of Congress. Here are some of their immediate reactions:

Obama’s False Choice – and Missed Opportunity – on Regulations

The President tonight missed an opportunity to constructively address one of the major problems facing the economy: regulation.

After acknowledging that “there are some rules and regulations that put an unnecessary burden on businesses, and claiming credit for the small steps taken so far toward reform, he then slipped into a rhetorical — and rather cartoonish — description of the issue.

“What we can’t do,” he said, “is let this economic crisis be used as an excuse to wipe out the basic protections that Americans have counted on for decades.  I reject the idea that we need to ask people to choose between their jobs and their safety.”

But no one is suggesting that any basic protections be erased — instead the pressing need now is to stop the tidal wave of regulation — costing almost $40 billion dollars — that has swamped Americans and the economy since the president was elected.

From lightbulbs to the Internet, from guitars to health care, Washington has imposed new rules. It is time to stem this flow. This need not be a partisan issue – both sides agree the current rulebooks are too fat. But demagoguery and rhetoric will get us no closer to a solution.

– James Gattuso

The Futility of Infrastructure Banks

Building and repairing roads and bridges neither creates net job growth nor boosts the economy in the near term.

First, increasing government spending on these projects simply moves resources from one place to another — it may employ construction workers, but only by reducing jobs in other sectors. Further, the money never gets out the door soon enough to promote near-term job growth: “shovel-ready” projects are not nearly so shovel ready as they may seem, as the President himself recently acknowledged.

Further, the infrastructure bank the President proposes would require a whole new bureaucracy that would only increase the central government control over transportation — which would be consistent with the President’s government takeover of health care, student loans, financial markets, and other sectors.?

– Patrick Knudsen

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

President Obama’s job speech reacted to by Heritage Foundation scholars (Part 1)

September 11, 2011 – 7:33 am

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

I love going to the Heritage Foundation website because of articles like this:

Heritage’s experts watched President Barack Obama’s jobs speech delivered to a joint session of Congress. Here are some of their immediate reactions:

Jobs for Teachers?

In his remarks tonight, President Obama argued that his jobs proposal would create more jobs for teachers. He went as far as to say laying off teachers…”has to stop”.

But since 1970, student enrollment in public elementary and secondary schools has increased just 7 percent, while public elementary and secondary staff hires have increased 83 percent. Moreover, in the 1950′s, there were approximately 2.36 teachers for every non-teacher in a school district. Today, in our nation’s school systems, that ratio is closer to 1 to 1. So every teacher in the classroom has an administrative counterpart in your local public school district. That is a tremendous strain on state budgets. But it is also a huge boon the education unions.

President Obama’s call to spend more precious taxpayer dollars to “prevent teacher layoffs” may do more to inflate schools’ non-teaching rosters than to retain teachers.

On a per-pupil basis, federal spending on education has nearly tripled since the 1970′s. And those who have benefited the most from this profligacy aren’t the children sitting in the nation’s classrooms. No, the increase in federal education spending (and commensurate increase in Washington’s involvement in local schools) hasn’t led to improvements in academic achievement, to increased graduation rates, or even to a narrowing of the achievement gap. It hasn’t served to improve outcomes for children, but it has propped-up the public education jobs program that too often aims to meet the needs of the adults in the system, not the children it was designed to educate.

– Lindsey Burke

A Puzzling Plan to Allow Refinancing of Mortgages

One of the more puzzling parts of the President’s plan promises to allow more Americans to refinance their mortgages, but provides no details about how.  The President promises that with refinancing, families could save about $2,000 a year, but like similar past promises few homeowners are likely to see those savings.

Briefing papers released by the White House say that the economic team will “work with” Fannie Mae, Freddie Mac, the regulator that runs them since both effectively failed three years ago, and “industry leaders” to make the 2009 Housing Affordable Refinance Program (HARP) more effective.

This means that the White House still has no idea how to do this. HARP, which was supposed to help between 4 and 5 million homeowners who owe more than their property is worth, and several other attempts to help under water homeowners have all been resounding failures.

In theory, refinancing at today’s record low mortgage rates is a good idea that would reduce monthly mortgage payments for those whose mortgages are refinanced. This would especially benefit homeowners who have paid their mortgage on time, but still owe more than the house is worth. These homeowners would be more likely to stay in the house.

However, even a well planned refinancing program would still be slow and complex. And sadly, there is no sign that the Administration has figured out how to successfully structure such a program.

Mortgages are both made and refinanced one at a time. The several past efforts to do mass refinancings have foundered in a mass of overwhelmed phone lines, complex paperwork requirements, and confusion. Some housing advocates talk about redoing hundreds of mortgages at a time, but have no idea how to legally implement such a goal.

Another question that must be answered if the mortgage refinancing proposal would cost money. Briefing papers are silent on this, but a refinanced mortgage will produce lower earnings for the lender. If the mortgage value is written down to the actual value of the house (which is unknown at the moment), there would be additional costs. And most importantly, how would this proposal create jobs?

Until there are details, the President’s proposed mortgage refinancing program, like its predecessors will be little more than another unkept promise.

– David John

In 2010, the U.S. spent more on interest on the national debt than it spent on many federal departments, including Education and Veterans Affairs.

BILLIONS OF DOLLARS (2010)

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In One Year, Spending on Interest on the National Debt Is Greater Than Funding for Most Programs

Source: White House Office of Management and Budget.

Chart 29 of 42

In Depth

  • Policy Papers for Researchers

  • Technical Notes

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

  • Authors

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

     

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

Video and Transcript of Bachmann rebuttal to Obama speech

September 9, 2011 – 7:49 am

Outstanding rebuttal by Michele Bachmann to President Obama’s speech of September 8, 2011:

Unfortunately, it seems, every time the President speaks, his policies have cost the American people jobs and future prosperity.

Tonight the President under the veil of one of the most sacred deliberative forums, a joint session of Congress, delivered another political speech where he doubled down on more of the same policies that are killing the economy.

Mr. President, what among your proposals was new? What here hasn’t already been tried and failed before?

While the President’s speech comes on the heels of a trillion dollars of failed stimulus, bailouts, and temporary gimmicks aimed at creating jobs, the President continued to cling to the idea that government is the solution to creating jobs.

My conservative colleagues and I have been fighting over the last two and half years for pro growth policies.

I stand here tonight to say to the President, not only should Congress not pass your plan, I say, “stop; your last plan hasn’t worked, it’s hurting the American economy.” Instead of temporary fixes, do what has proved to work in the past, permanent pro growth policies that are driven by the free market.”

Today, unemployment is 9.1 percent. Job creation has literally been zeroed out with the worst jobs report in 66 years this last month. Since the President’s failed trillion dollar stimulus we have lost over 2.5 million jobs while adding 416,000 government jobs. One in six Americans is now on food stamps, and the average time unemployed Americans are out of work is greater than 40 weeks. Housing values have fallen 19% from 2008 to the first quarter of this year. GDP growth was an anemic .4% in the first quarter and at 1% in the last and the dollar has lost 12 percent of its value.

These are not good times for the American people. Our patience for speeches, gimmicks and excuses has run out.

The only remedies the President knows are temporary, government directed fixes. And even if the President’s plan passes, we already know it will fail. In practice, we haven’t paid for his last trillion dollar jobs program and now his latest plan would have us embrace potentially over $400 billion in new government spending!

Spending taxpayer dollars on extending unemployment benefits has proved to add only 25 cents to GDP for every dollar we spend. Even the President’s new economic advisor agrees that extending unemployment benefits discourages future employment. Spending taxpayer dollars on extending the payroll tax holiday will reduce over 111 billion dollars to the Social Security trust fund this year and continuation of this policy will put social security checks to seniors at even greater risk. Spending taxpayer dollars on more infrastructure projects failed to create lasting jobs in the last stimulus.

And, looming on the horizon is the full scale implementation of Obamacare that, according the Congressional Budget Office, will kill 800,000 jobs and steal over 500 billion from Medicare.

Candidate Obama promised to wipe out deficits and the debt. Instead the President has increased the debt by over 6 trillion dollars, and what do we have to show for it? Permanent increases in the size of government, spending and debt, with a greater dependency on government.

Four years ago President Bush’s deficit was around 160 billion dollars; today, President Obama’s is nearly ten times that amount.

The President and Vice-President’s plan to spend us to prosperity has failed. And worse, they have stolen from a generation of Americans yet unborn, the consequences of which mean a near certainty of reduced choices and a dramatically downsized lifestyle for future generations from what we enjoy today.

Generational theft is a moral and ethical issue, and I care deeply about both the present generation and generations to come.

The President is politically paralyzed and philosophically incapable of doing what needs to be done.

I do agree, the President should take immediate action. But it is the nine following steps that will put us on a path to economic growth and put Americans back to work;

1) Repatriate American business dollars earned from overseas,

2) Massively cut spending and the size of government,

3) Repeal Obamacare, which is the government takeover of America’s healthcare system,

4) Cut taxes, including corporate taxes,

5) Repeal Dodd-Frank,

6) Repeal job killing regulations,

7) Increase exports by finalizing free trade agreements,

8) Spur new investment in America, inspire innovation,

9) Provide job creating energy solutions, including decreased regulations on developing new energy supplies from our abundant domestic energy resources.

The way forward needs to be based on permanent solutions grounded in the private sector. That is how we will once again restore economic prosperity to our country.

God Bless the United States of America.

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