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In his State Of The Union address, Obama called for massive new government revenues from eliminating tax loopholes and a carbon tax. He likewise called for massive new spending as the path to prosperity, or at least his far left version of it.
As to his proposals:
- Medicare: Obama says he will agree to reform Medicare, he just won't give specifics. We have heard like proposals in prior SOTU speeches, none of which amounted to Obama offering any compromise on entitlements.
- Revenue & Tax Structure: Obama wants “hundreds of billions of dollars” in more revenue by closing tax loopholes for the evil rich. He made no mention of the fact that he rejected just such an offer in December, preferring to raise tax rates above what they were during the Clinton years.
- Capital Gains Class Warfare: Obama is still playing class warfare for all its worth. He still wants to tax investment income the same as ordinary income, regardless of how economicly insane that idea actually is. There is a reason that Sweden, the most socialized and highest tax nation in Europe, recently dropped their capital gains tax to . . . zero. As Obama put it, he wants to insure that “billionaires with high-powered accountants can't pay a lower rate than their hard-working secretaries.”
- Debt Ceiling: A warning to evil Republicans – stop using the debt ceiling to challenge spending (Art. I, Sec. 8 be damned)
- More Public Sector Stimulus: Pass Obama's American Jobs Act (because public sector unions need more money and the government needs to get more involved in private sector finance)
- Research: Obama defended spending on “research,” most brazen being his assertion that he is spending to “[devise] new material to make batteries ten times more powerful.” Great. But didn't we just blow a quarter of a trillion dollars in taxpayer money sent to A123, the producer of advanced lithium batteries that was just purchased in bankruptcy by a Chinese company?
- Global Warming Set-Up: Obama stated “the 12 hottest years on record have all come in the last 15. Heat waves, droughts, wildfires, and floods – all are now more frequent and intense.” Where did that come from? One, using the term on “on record” refers to a little more than the past century. The earth has been, at many times, far warmer than it is today. Two, there has been no warming globally over the past 16 years. Three, even the IPCC draft wholly contradicts the claim that “heat waves, droughts, wildfires, and floods” are in any way connected to climate change. What horseshit.
- Carbon Tax: Obama called, in so many words, for the implementation of a carbon tax or a cap and trade system. The fact that the EU's experiment in cap and trade involved massive fraud and that their cap and trade market has completely fallen apart didn't make it into the speech. And if you can tax carbon, then you can tax every aspect of human existence. It is a nanny state nightmare.
- Constitutional Shuffle: If Congress won't give him what he wants, he stated his explicit willingness to bypass Congress and get what he wants through the regulatory bureaucracy. That he can do this really is the most significant systemic problem our nation faces. It flies in the face of the Constitution.
- Green Investments: Continue throwing money at wind and solar, ancient technologies that stopped being cost effective centuries ago.
- Energy Security Trust: Use our “oil and gas revenues to fund an Energy Security Trust that will drive new research and technology to shift our cars and trucks off oil for good.” So this hits three buttons. It creates a brand new bureaucracy for government to fund. It proposes punishing gas and oil production to fund it. And, the purpose of the trust is to channel funds to more left wing donors.
- Fix-It-First Program: A massive new public works program to fix our infrastructure. No price tag given.
- Partnership to Rebuild America: Obama plans to invite private businesses to fund his public works projects. This one actually sounds quite ominous, though no particulars were given. My understanding of business is that they invest with the expectation of profit, not mere good will from government. This has the distinct smell of a mafia strong arm operation.
- Housing: Obama plans yet another Fannie / Freddie style foray into our financial system, with the government taking over refinancing of existing mortgages to today's rates.
- Massive Expansion of Head Start style program: We know that Head Start
http://www.heritage.org/research/reports/2010/01/head-start-earns-an-f-no-lasting-impact-for-children-by-first-grade has no lasting impact on children, yet the centerpiece of Obama's new push on education is to create “ a high-quality preschool program” for all of our children, claiming that this will be the most helpful. This is nothing more than another giant program for public sector unions. What children need is access to good schools – just like those that Obama's children attend.
- Tie Federal Aid In Student Loans to Costs & Success Rates: This actually is a good idea.
- Immigration Reform: check.
- Violence Against Women Act: check.
- Paycheck Fairness Act: This act has nothing to do with paycheck fairness. It would have much more to do with the bottom line of lawyers than women. As it stands, this act is just the left's weapon to beat Republicans over the head with when the left needs to claim a war on women.
- Minimum Wage: Obama wants to raise it to $9 an hour. The negative effects of the “minimum wage” laws are so well established that its hard to understand how Obama could possibly push for this, particularly at a time of record long term unemployment and in an economy where the majority of new jobs being created are low wage jobs. Just insanity.
- Underwrite Democrat Failures At The Local Level: Virtually all of the most economically depressed cities in America share a single thread – years of one party Democrat rule. Obama wants to put our federal tax dollars to work helping out the 20 worst offenders. You will recall that after the election, one of Detroit's politicos asked when Obama was going to start sending Obamabucks their way, since they had gotten out the vote for him. They apparently now have their answer. No price tag given.
- Afghanistan: We're out of there. Obama is unilaterally ending the war.
- Al Qaeda: Its dead, but its reforming in many places. Obama will do nothing in the war of ideas. He is just going to support Muslim governments.
- Cybersecurity: This is a legitimate issue. Obama wants much more
Trade: Obama is calling for some type of trade pacts with Asian nations and the EU. No details were given.
- World Poverty & AIDS: Obama wants to spend tax dollars so that he can cure world poverty and eradicate AIDS. He has a plan, I think.
- Gun Control: According to Obama, gun control is good, it's needed, every thinking and moral person wants it. Interestingly enough, he called on Congress to give each of his gun control measures a vote. I found that fascinating, given that there are a host of Democrat Congresscritters in purple and red states who would rather have their teeth pulled than have to vote on gun control.
Other Responses:
- Rand Paul's Rebuttal On Behalf Of The Tea Party
- Marco Rubio's Republican Response
- AP Fact Check
- Nice Deb: Sen. Cruz Statement On SOTU
- WSJ: Obama offers an agenda aimed at electing a Pelosi House
- Daily Caller: Obama puts government at center of Americans' lives
- Krauthammer: ‘This speech is about spending your way to prosperity
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- George Will: SOTU makes clear no entitlement reform, spending cuts are coming
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Showing posts with label budget deficit. Show all posts
Showing posts with label budget deficit. Show all posts
Wednesday, February 13, 2013
Obama's 2013 SOTU Address: More Taxes, More Spending, No Cutting
Saturday, January 7, 2012
Saturday, May 7, 2011
Wednesday, April 13, 2011
Obama, The Economy & An Absence Of Leadership
Obama is finally figuring out that the November 2010 elections meant something. Americans can see the direction of our country - and its running fast and furious towards an economic cliff. Obama tried ignoring it with his 2011 Budget and insane SOTU speech. In stark contrast, Rep. Paul Ryan recently released a budget proposal to deal honestly with our problems. Obama tried to respond today - with a speech of course, not a serious budget proposal. Here is the summary of that speech:
The debt and deficit is Bush's fault. Republican's budget plan is "E"-vil. It will destroy our nation's infrastructure, toss grandmothers into the street, take away their health care, and take candy from babies. WE (the royal "we") will bring fiscal sanity to America by gutting our military and raising taxes on the rich and corporations. WE will also increase spending and leave untouched all benefits for social security and medicare. All of this will magically reduce the deficit by trillions.
Add a ton of intellectually dishonest demagoguery and announce a new panel with Joe the Clown in charge and that is it a nutshell. Obama is more dangerously incompetent than Homer Simpson working at a nuke plant.
Update: Krauthammer offers his take on the scurrilous performance by Obama:
Jake Tapper at Political Punch notes this contrast in intellectual honesty from one of Obama's prior speeches to today's:
President Obama at the GOP House retreat, January 2010:
“We're not going to be able to do anything about any of these entitlements if what we do is characterize whatever proposals are put out there as, ‘Well, you know, that's -- the other party's being irresponsible. The other party is trying to hurt our senior citizens. That the other party is doing X, Y, Z.”
President Obama today:
“One vision has been championed by Republicans in the House of Representatives and embraced by several of their party’s presidential candidates…This is a vision that says up to 50 million Americans have to lose their health insurance in order for us to reduce the deficit. And who are those 50 million Americans? Many are someone’s grandparents who wouldn’t be able afford nursing home care without Medicaid. Many are poor children. Some are middle-class families who have children with autism or Down’s syndrome. Some are kids with disabilities so severe that they require 24-hour care. These are the Americans we’d be telling to fend for themselves.”
One word that will never be appended to Obama when history is written is "leadership." My only question is whether we will still be able to fix our country post 2012, or whether Obama and the left have set us on a permanent progressive course to ruin.
Update from Rep. Paul Ryan, via the Weekly Standard:
“When the President reached out to ask us to attend his speech, we were expecting an olive branch. Instead, his speech was excessively partisan, dramatically inaccurate, and hopelessly inadequate to address our fiscal crisis. What we heard today was not fiscal leadership from our commander-in-chief; we heard a political broadside from our campaigner-in-chief.
“Last year, in the absence of a serious budget, the President created a Fiscal Commission. He then ignored its recommendations and omitted any of its major proposals from his budget, and now he wants to delegate leadership to yet another commission to solve a problem he refuses to confront.
“We need leadership, not a doubling down on the politics of the past. By failing to seriously confront the most predictable economic crisis in our history, this President’s policies are committing our children to a diminished future. We are looking for bipartisan solutions, not partisan rhetoric. When the President is ready to get serious about confronting this challenge, we'll be here.”Update: Ryan's office highlights "key facts" from Obama's speech:
· Counts unspecified savings over 12 years, not the 10-year window by which serious budget proposals are evaluated.
· Postpones all savings until 2013 – after his reelection campaign.
· Runs away from the Fiscal Commission’s recommendations on Social Security – puts forward no specific ideas or even a process to force action.
Update: The full comments from Paul Ryan on video -
(H/T Hot Air)
Monday, February 14, 2011
Obama's WTF Budget
Obama today sent to Congress his leviathan $3.73 trillion dollar budget request for 2011. In hyping the release, he noted that his proposed freeze to the discretionary spending that has exploded under his watch, plus draconian cuts to defense spending not mentioned above, would save $1.1 trillion over ten years. He further stated that, under his budget, discretionary spending as a percentage of the entire budget would be at its lowest in decades. As to his promise to cut our budget deficit in half by the end of his first term, . . .
Let's put the spin in perspective. Our budget shortfall last year was $1.3 trillion. In 2009, it was $1.4 trillion and, in 2011, it is forecast to hit $1.5 trillion. So when Obama hypes saving $1.1 trillion OVER TEN YEARS, he isn't even matching the shortfall of one of those years. It's like putting a band-aid over a severed carotid artery. More responsible savings like that and we will be bankrupt in the foreseeable future.
As to the percentage that discretionary spending is to the entire budget, it is hard to think of a more cynical expression of spin. The only reason discretionary spending will be lowered in the future as a percentage of total spending is because entitlement spending is set to rise exponentially with the retirement of baby boomers. It has us on a course to fiscal Armageddon. And Obama is not proposing a damn thing to reign in entitlements in his 2011 budget. Instead, he is using it as a positive in his spin of the 2011 budget. What an utterly worthless s.o.b.
As to his claim to be on track to cut our budget deficit in half by the end of his first term, good lord, that is so patently false I can't believe he raised it in a speech days ago. I heard him say it. I can't believe he said it. Nor can I wait to see what numbers he is going to use to try and show that he is making good on his promise. I don't think its even possible to torture the CBO numbers to the point where they will support his statement.
I don't know about you, but I really am pining for the good ole' days of fiscal responsibility under the Carter administration.
Wednesday, January 26, 2011
On The Road To Economic Armageddon - New Record Deficit Spending
According to new CBO estimates, Obama has us on a path, in 2011, to spend $1.5 trillion of borrowed money. This from the Washinton Post:
This year's deficit would be the highest on record and would equal about 9.8 percent of the economy, the CBO said, slightly smaller than the 2009 budget gap, which at $1.4 trillion amounted to nearly 10 percent of the gross domestic product. However, at a time when policymakers had hoped to begin closing the gap between spending and revenue, the CBO forecast that it is widening again and is on track to remain well above $1 trillion in 2012, the fourth year in a row.
Obama will destroy us if he and his far left cohorts are not voted out in 2012.
SOTU 2011 Post-Game Analysis - Spend Spend Spend
To summarize Obama's SOTU, stay the course on spending and don't change the substance of the agenda. As Rand Paul noted, Obama still sees government as the solution to all of our problems (both real and imagined, I would add). If anyone heard in Obama's SOTU speech a move to the center, they were listening to the mellifluous tone of Obama's voice and not paying any attention to the lyrics of his siren song. “Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again.” It was a disingenuous start to a disingenuous speech. : Reforming the corporate tax – As a general principal, this is a positive step. Obama said he wants Congress to reduce our corporate tax from the current rate of 35%, the highest in the developed world. He did not propose a new rate, but said that any such reform should be “revenue neutral." That is bad news, as it means it will not promote growth. That said, if it means getting rid of ALL the subsidies that special interests have worked into our tax code, then great. But Obama made crystal clear that he wants to heavily subsidize his favored industries, particularly the green ones. So it would seem that Obama's call for tax reform may in reality be a backdoor way to soak businesses in America to fund Obama's version of crony capitalism. We have to see the details on this one. Okay, now on to the ridiculous assertions and other low points of the speech: "This is our generation's Sputnik moment." The irony here is amazing. Our efforts at manned space flight did pay a lot of dividends for America – velcro, teflon, robotics, scanning technology, and scratch resistant lenses to name just a few. Yet Obama, who now calls for a “Sputnik moment,” is the man who killed off our manned space program so that he could spend more money on Obamacare – no doubt to increase innovations in socialism. Our free enterprise system is what drives innovation. But because it's not always profitable for companies to invest in basic research, throughout history our government has provided cutting-edge scientists and inventors with the support that they need . . . Apparently our corporations are incapable of conducting research and coming up with ideas without government intervention and massive infusions of our tax dollars. One, Obama wants to pick winners and losers in our economy – he fully embraces crony capitalism. Two, the proposition that our scientists and businesses cannot innovate without government subsidies and direction is simply too ludicrous to seriously entertain. Perhaps Obama should do some research on the issue over his I-pad, or make a call to the patent office on his cell phone. In a few weeks, I will be sending a budget to Congress that helps us meet that goal. We'll invest in biomedical research, information technology, and especially clean energy technology . . . The left destroyed our housing industry – and with it, many of the businesses involved in that industry. Yet Obama has the audacity to hold out two failed roofing manufacturers as shining icons of our new economy. These would be green entrepeneurs had the sense to take some of the massive government subsidies Obama is passing out like candy to open up a solar panel manufacturing plant. Solar power, which provides less than 1% of our energy needs and is not price competitive, is a massive boondoggle. Heavily subsidized solar power has nearly bankrupted Spain and is having negative impacts throughout every other economy in Europe. And the day the subsidies for solar power end in the U.S. is the day Robert and Gary Allen declare bankruptcy and close up shop. With more research and incentives, we can break our dependence on oil with biofuels, and become the first country to have 1 million electric vehicles on the road by 2015. One, electric cars are not going to lessen our dependence on fossil fuels. The electricity to run them has to be generated by . . . hint, its not unicorn excreta. Two, a major concern with electric cars is the destabilizing impact large numbers of these vehicles would have on our energy grid. [J]oin me in setting a new goal: by 2035, 80% of America's electricity will come from clean energy sources. Some folks want wind and solar. Others want nuclear, clean coal, and natural gas. . . . Is this guy nuts? We should be embracing nuclear power for the future of our electrical needs, but we haven't broken ground on a new nuclear plant in decades – and Obama insured that we wouldn't be doing it at any point in the future when he closed off our only nuclear waste repository. Clean coal is both untested and looks to be far too expensive. Wind and solar are absolute pipe dreams. The bottom line is that, if we are getting 80% of our electricity from “clean energy sources” by 2035, our nation will be broke and half of our nation will be blacked out. We need to get behind this innovation. And to help pay for it, I'm asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. I don't know if you've noticed, but they're doing just fine on their own. So instead of subsidizing yesterday's energy, let's invest in tomorrow's. Regardless of Obama's radical green dreams, we aren't getting off oil at any point in the near future. Obama's policies will only make oil and gas prohibitively expensive in America and make us ever more dependent on foreign oil. In the not too distant future, that will prove catastrophic for our economy. over the next ten years . . . we want to prepare 100,000 new teachers in the fields of science, technology, engineering, and math. We desperately need better teachers in each of these areas. But the answer is not to hire more teachers – as I pointed our here, we know empirically that neither more teachers nor more per pupil spending have improved the quality of our science and math education. We need people competent in their fields and who perform well as teachers. To get there, we need to end the stranglehold of teachers unions on our public school system. Obama studiously ignored that point. Over the last two years, we have begun rebuilding for the 21st century, a project that has meant thousands of good jobs for the hard-hit construction industry. Tonight, I'm proposing that we redouble these efforts. Yeah, let's do that again since it worked so well in 2009 to help our economy. This is just Obama wanting to do more Keynesian spending without mentioning the word "stimulus." “let's make sure that we're not doing it on the backs of our most vulnerable citizens.” Let there be no doubt of the new Democratic meme – any and all cuts proposed by the right will hurt the poor and/or the children. We should also find a bipartisan solution to strengthen Social Security for future generations. And we must do it without putting at risk current retirees, the most vulnerable, or people with disabilities; without slashing benefits for future generations; and without subjecting Americans' guaranteed retirement income to the whims of the stock market. Someone explain to me how, under those conditions, any reform to Social Security is possible. Obama said . . . in the speech . . .: The bipartisan Fiscal Commission I created last year made this crystal clear. I don’t agree with all their proposals, but they made important progress. And their conclusion is that the only way to tackle our deficit is to cut excessive spending wherever we find it – in domestic spending, defense spending, health care spending, and spending through tax breaks and loopholes. (emphasis added). Also see the AP, that surprisingly has a passable fact check of SOTU: "The ledger did not appear to be adding up Tuesday night when President Barack Obama urged more spending on one hand and a spending freeze on the other."
Obama stepped up to the teleprompter at a time when our economy is in deep trouble. Growth is tepid and far below where it should be coming out of a recession. A record forty one million people in the U.S. are on food stamps. Housing prices have sunk faster and lower than Katy Couric's Nielsen ratings. The cost of basic commodities - oil, gas and food - are going through the roof. Real unemployment, UH-6, is at 16.7% - and that is actually up from a year ago. So how does Obama address these problems in the opening of his SOTU speech? He puts a happy face on it:
Two days ago, I forecast what Obama would say in his State of the Union speech with fair accuracy. The majority of Obama's speech was given over to justifying more spending for his radical green agenda, to hire more teachers, and to pay for another stimulus under the guise of infrastructure spending. And when it came to deficit reduction, Obama tried to portray Obamacare as the heart of deficit reduction. To my surprise, he mentioned entitlements, but he did so only in passing. Obama also offered a freeze of entitlement spending in an act of symbolism over substance. Lastly, when it came to “reforming government,” Obama hyped reducing the regulatory burden, yet said nothing about the tsunami of regulations waiting in the wings.
To give the devil his due, Obama did make some very good proposals in his speech:
: Medical Malpractice reform – this is incredibly important if we are ever to bend down the cost curve of medical expenses. I am glad that he mentioned it, but it is likely a red herring. The left, owned in part by the trial lawyers lobby, would sooner chew off their right arm than pass national med mal reform. To date, neither Obama nor Congressional Dems have shown the slightest interest in anything beyond lip service to med mal reform.
: Race to the Top – this relatively inexpensive program program, $4 billion, is in fact a good program aimed at encouraging reform in state educational systems. It deserves full support from both sides of the aisle.
: Earmarks – Obama announced that he won't sign any bills with earmarks in them – weeks after the House promised not to send him any bills with earmarks. This was like watching the movie Dragonslayer, where at the end of the flick, the King walks up to the recently slain dragon, puts his sword through it, and has himself proclaimed "King Casiodorus, Dragonslayer." What a tool.
: A Reorganization and streamlining of our regulatory agencies – On the surface, this sounds like a very good idea. But I suspect there will be an infinite number of devils in the details.
I. Innovation -
Obama called for “innovation,” using the symbolism of a “Sputnik moment,” the point when America turned its attention to manned space flight and a lunar landing. He then stated that government spending was a necessity for innovation and made clear that his main concern was funding his radical green agenda:
Already, we are seeing the promise of renewable energy. Robert and Gary Allen are brothers who run a small Michigan roofing company. After September 11th, they volunteered their best roofers to help repair the Pentagon. But half of their factory went unused, and the recession hit them hard.
Today, with the help of a government loan, that empty space is being used to manufacture solar shingles that are being sold all across the country. In Robert's words, "We reinvented ourselves."
Biofuels are another major boondoggle (well, but see here). None have proven cost-effective at scale and, in the case of ethanol, Obama has us pitting fuel against food. Over a fourth of are farmland is now given over to producing fuel that is inefficient, expensive, ecologically worse for the environment than fossil fuels, and driving food prices to world records. It is insanity. And that is what Obama wants more of?
And as predicted, Obama is continuing his brutal war on our domestic oil production:
II. Education:
I said Obama would make a pitch for sending even more money into the black hole of public education, and lo and behold . . .
Obama's call for more teachers is nothing more than a push to further strengthen teachers unions and, thus, the Democratic Party. Expect this issue to be demagogued to the fullest over the coming months.
III. Illegal Aliens – Obama made a one paragraph pitch for amnesty. It was a shout out to the Hispanic Caucus.
IV. Infrastructure:
V. Deficit Reduction:
Obama is a magician at deficit reduction - all misdirection and illusion. His points and proposals were one joke after another. Obama did as predicted, pointing to his regulatory review and Obamacare's fairy tale CBO numbers as "proof" that he is focused on deficit reduction.
Beyond that, Obama added a promise to freeze current discretionary spending – 7% of our spending – at current levels for five years in order to save $400 billion. Given that he increased discretionary spending by an incredible 20% over the past two years, that is like an alcoholic saying he won't pay for another drink after he just stocked a 5 year supply of rum.
Our deficit is over $14 trillion and is on a trajectory to hit a crisis number of $20 trillion in less than a decade. What we need is deficit reduction. What Obama offers instead is a slightly slower march to Armageddon. Not exactly a profile in leadership.
Obama did manage to work in a criticism of the right's proposal to save $2.5 trillion by actually reducing discretionary spending:
That is just so insane. What poor people need are decent jobs, low fuel prices, low food prices and reasonable housing costs. EVERYTHING this administration is doing is falling heaviest on the poor. We are hemorrhaging good jobs, fuel and food are going through the roof, and housing is a mess. Obama and the left are the enemies of the poor. They give a little with the left hand and take away twice as much with the right.
VI. Entitlements:
Medicare, Medicaid and Obamacare
In the only prediction I got wrong, Obama did mention entitlement spending and the need to reform entitlements. He mentioned the need to make savings in Medicare and Medicaid, then segued into a claim that Obamacare would reduce the deficit. What he didn't say was that every bit of savings he just made in Medicare and Medicaid is being pumped into Obamacare. It was a shell game, just like the Obamacare CBO numbers.
Entitlements: Social Security
Charles Krauthammer, in his post-speech analysis, noted that Obama paid only lip service to entitlement reform, thus indicating that Obama would not initiate any effort at entitlement reform over the next two years and that any attempt by the right to do so would be demagogued. Bottom line, Obama has no intention of doing anything to reduce our deficit and is daring the right to even make an attempt.
VII: Foreign Policy:
Obama's comments on foreign policy seemed like they were appendix to his speech. We face real foreign policy challenges, but you wouldn't get any of that from the SOTU speech. Are we in the Afghan war to win it? Obama gave no answer. He did not address the problem of nuclear proliferation. The Middle East is on fire. Lebanon just became a satellite state of Iran. Iraq may yet become a satellite state of Iran. China is arming at an alarming rate to challenge us militarily. And what about Wikileaks and the greatest assault on our state secrets in the history of our nation? If you expected Obama to substantively address any of that, you were sorely mistaken. Obama considers foreign policy a mere annoyance. He sees himself as Clement Attlee, not Winston Churchill.
Conclusion: Two years ago, the general consensus was that Obama, if elected, would serve out Jimmy Carter's second term. That was overly optimistic. Obama makes the disastrous Carter seem a paragon of Presidential prudence and competence in comparison. 2012 can't get here fast enough.
Update: Patterico makes a great point:
You got that? When you are allowed to keep your money, that is considered “spending” by the Federal Government. Because in reality all of the fruits of your labor belong to us, the government.
Is it wrong to say it almost the attitude of a master toward his slaves? . . .
Friday, January 21, 2011
The First Salvo - Republicans Introduce A Bill To Save $2.5 Trillion
The left has been asking what would the right cut when they had to make decisions. That question is now answered:
Rep. Jim Jordan (R-Ohio)'s Republican Study Committee is introducing the Spending Reduction Act of 2011, to cut back "non-security discretionary spending" to 2008 levels and to slice that spending back to 2006 levels from 2012 onward. That, they point out, would keep it "the same level as in effect during the last year of GOP control of the Congress."
The proposal does what Republicans have been talking about for two years -- "repeal" of remaining stimulus funds (now $45 billion), privatizing Fannie and Freddie ($30 billion), repealing Medicaid' FMAP increase ($16.1 billion), and what they estimate at $330 billion in discretionary spending cuts. Highlights of these projected annual savings:
- Cutting the federal workforce by 15 percent through attrition, and do this by allowing only one new federal worker for every two who quit.
- Killing the "fund for Obamacare administrative costs" for $900 million
- Ending Amtrak subsidies for $1.565 billion
- Ending intercity and high speed rail grants for $2.5 billion
- Repealing Davis-Bacon for $1 billion
- Cutting annual general assistance to the District of Columbia by $210 million, and cutting the subsidy for DC's transit authority by $150 million.
Reforms that go after their own perks:
- Cutting the Federal Travel Budget in half, for $7.5 billion
- Cutting the Federal Vehicle Budget by 1/5, for $600 million
- Halve funding for congressional printing - $47 million annual savings
- Ending the death gratuity for members of Congress
And cuts that get revenge for Juan Williams: $445 million from the Corporation for Public Broadcasting, $167.5 million from the NEA, and $167.5 million from the NEH. . . .
The bill would save $2.5 trillion over ten years. The beauty of this bill is that, by universally cutting all discretionary spending, it avoids the interminable trench warfare that would result from individual cuts. Moreover, its simplicity makes it an easy sell to the country. Let the left start objecting while our national debt climbs ever higher. The right could always use some good fodder for 2012 attack ads.
Thursday, January 20, 2011
Stopping The Tsunami Of Obamacare
On his first day as Speaker of the House, John Boehner received a letter from the CBO stating that "repealing health care reform will add $230 billion to the deficit over the next decade, leave 32 million fewer people with insurance and lead to higher costs for those who are covered." That was both a smart tactical ploy by the left and an utterly contemptible falsehood. Suppose someone - say, the president of United States - proposed the following: We are drowning in debt. More than $14 trillion right now. I've got a great idea for deficit reduction. It will yield a savings of $230 billion over the next 10 years: We increase spending by $540 billion while we increase taxes by $770 billion. (H/T Prarie Pundit)
Responding to the left's disingenuous arguments, Charles Krauthammer weighs in today, explaining in a few short paragraphs the massive fraud of Obamacare:
He'd be laughed out of town. And yet, this is precisely what the Democrats are claiming as a virtue of Obamacare. During the debate over Republican attempts to repeal it, one of the Democrats' major talking points has been that Obamacare reduces the deficit - and therefore repeal raises it - by $230 billion. Why, the Congressional Budget Office says exactly that.
Very true. And very convincing. Until you realize where that number comes from. Explains CBO Director Douglas Elmendorf in his "preliminary analysis of H.R. 2" (the Republican health-care repeal): "CBO anticipates that enacting H.R. 2 would probably yield, for the 2012-2021 period, a reduction in revenues in the neighborhood of $770 billion and a reduction in outlays in the vicinity of $540 billion."
As National Affairs editor Yuval Levin pointed out when mining this remarkable nugget, this is a hell of a way to do deficit reduction: a radical increase in spending, topped by an even more radical increase in taxes.
Of course, the very numbers that yield this $230 billion "deficit reduction" are phony to begin with. The CBO is required to accept every assumption, promise (of future spending cuts, for example) and chronological gimmick that Congress gives it. All the CBO then does is perform the calculation and spit out the result.
In fact, the whole Obamacare bill was gamed to produce a favorable CBO number. Most glaringly, the entitlement it creates - government-subsidized health insurance for 32 million Americans - doesn't kick in until 2014. That was deliberately designed so any projection for this decade would cover only six years of expenditures - while that same 10-year projection would capture 10 years of revenue. With 10 years of money inflow vs. six years of outflow, the result is a positive - i.e., deficit-reducing - number. Surprise.
If you think that's audacious, consider this: Obamacare does not create just one new entitlement (health insurance for everyone); it actually creates a second - long-term care insurance. With an aging population, and with long-term care becoming extraordinarily expensive, this promises to be the biggest budget buster in the history of the welfare state.
And yet, in the CBO calculation, this new entitlement to long-term care reduces the deficit over the next 10 years. By $70 billion, no less. How is this possible? By collecting premiums now, and paying out no benefits for the first 10 years. Presto: a (temporary) surplus. As former CBO director Douglas Holtz-Eakin and scholars Joseph Antos and James Capretta note, "Only in Washington could the creation of a reckless entitlement program be used as 'offset' to grease the way for another entitlement." I would note additionally that only in Washington could such a neat little swindle be titled the "CLASS Act" (for the Community Living Assistance Services and Supports Act).
That a health-care reform law of such enormous size and consequence, revolutionizing one-sixth of the U.S. economy, could be sold on such flimflammery is astonishing, even by Washington standards. . . .
And here was Paul Ryan making the same points on the House floor the other day, prior to the vote to repeal Obamacare:
(H/T Nice Deb)
At the WSJ several days ago, a former CBO Director and two former CBO Assistant Directors explained in some detail how and why the CBO came op with the numbers it did. The short version, false numbers in, false numbers out.
The left is now in an all-out push to protect Obamacare, willing to use the most ridiculous and scurrilous of lies to shape public opinion.
Rep. Steve Cohen equates Republicans with Nazis for their "lies" in support of repealing Obamacare. He gives no specifics, but then again, no specifics are required for left wing argument, just demonization.
Rep. Sheila Jackson Lee tells us that repealing Obamacare will "kill" people, and in particular, directs her arguments towards seniors, all of whom are actually covered by Medicare, the program raped to provide funding for Obamacare.
(/sarcasm on) Noted Constitutional scholars (/sarcasm off) Rep. Sheila Jackson Lee and Rep. John Lewis, between only a few working brain cells, tell us that to repeal Obamacare would be unconstitutional.
The left, in passing the nightmare for our country that is Obamacare, made the wildly ridiculous argument that Obamacare would create jobs. Well, the massive regulations will create more government jobs, but the regulations themselves would inevitably cost exponentially far more jobs in the private sector as the costs of compliance take hold. Apparently some on the left don't quite understand economics or much about the private sector, so when Eugene Robinson, appearing on MSNBC, called on Obama to now defend Obamacare by explaining to America how it would be a boon to employment, Rachel Maddow quickly switched him off that line of argument.
At any rate, expect to be inundated with emotion-heavy, fact-lite arguments from the left on Obamacare for the next two years. The single most important thing that Republicans can do is call the CBO Director in for hearings, have him explain both how the books are cooked on Obamacare and how the numbers change when the smoke and mirrors are removed. Then at the end of the hearing, the Republicans need to package it into a neat little sound bite summary, appropriate for use in one or two minute ads ripping the left for being dishonest and wildly reckless with Obamacare and our economy.
Saturday, January 15, 2011
2011: The State Of The Union Economy
In the near future, Obama will be giving his State of the Union address. Here are some deeply troubling facts about our economy that you will not be hearing in that speech.
1. Food Prices At Record Highs & Heading Upwards; Ethanol Mandates & Subsidies Put Fuel In Competition With Food
Food prices are skyrocketing upward, running last month at an annualized rate of 8.7% inflation.
In December, the wholesale price of vegetables rose by 22.8 percent, and fruit was up 15.4 percent. . . . The price of beef rose 2.7 percent in December and was 15 percent higher than a year ago, the Department of Labor said in the PPI report. Pork is up 22.3 percent from a year ago, and fish is up almost as much. Turkey is up 18 percent.
This is a world wide issue. Food prices are at their highest ever. Just today, the chief executive of one of the world's largest food producers warned that the global crisis in food production is reaching "dangerous territory" with demand outstripping supply.
The causes are multiple, but a large portion of it is the insane push to create "bio-fuels" out of food crops and the concomitant misuse of agricultural land:
In the United States, which harvested 416 million tons of grain in 2009, 119 million tons went to ethanol distilleries to produce fuel for cars. That’s enough to feed 350 million people for a year. The massive U.S. investment in ethanol distilleries sets the stage for direct competition between cars and people for the world grain harvest. In Europe, where much of the auto fleet runs on diesel fuel, there is growing demand for plant-based diesel oil, principally from rapeseed and palm oil. This demand for oil-bearing crops is not only reducing the land available to produce food crops in Europe, it is also driving the clearing of rainforests in Indonesia and Malaysia for palm oil plantations.
Bio-fuels are the world's greatest boondoggle. The fuel is inefficient, expensive and actually contributes to the growth of CO2 in our atmosphere. Not only does it make no sense to mandate or subsidize ethanol, it is a major contributing factor to poverty and hunger world-wide. Yet it is now a vested interest and thus, seemingly impossible to dislodge.
This particular problem in America has bi-partisan origins. It began under the Bush administration and now being furthered by the Obama administration. Within the past months, Obama's EPA actually increased by 50% the amount of ethanol allowable in gasoline, from 10% to 15% ethanol. Between that and the recent renewal of the ethanol subsidy, this problem of food prices will only get worse.
2. Housing Market
Our housing market has crossed the threshold into uncharted territory - it is now worse than it was during the Great Depression. Home values have declined 26% since their 2006 peak and there is no end in site to the slide. Foreclosures this year are expected to top 2010's record of one million, and over five million people are over two months behind in their mortgage payments.
3. Obama's War On Domestic Oil & Gas
It is impossible to underestimate the cost to our economy of Obama's war on domestic production of oil. An incredible 62% of our entire trade deficit now comes from importing foreign oil.
And the situation is poised to become much worse. Many expect the price of gasoline seems to spiral upwards, beyond the $4 a gallon threshold that caused nationwide discontent two years ago. Gas could well hit $5 a gallon this year. Opening up oil and gas drilling throughout America would add significantly to jobs, fill our declining coffers and significantly increase the supply of oil and gas, thus reducing the cost of gasoline. Yet the Obama administration is taking the opposite tack, warring on our oil and gas infrastructure.
The administration, has shut down all new offshore drilling and is making it ever more difficult to drill for oil on federal lands. Further, the Obama administration is in the midst of massive land and ocean grabs specifically aimed at cutting off ever more of our natural resources from exploitation. Lastly, the administration is expected to introduce even more regulations and increase taxes on our domestic oil industry in response to the report of the deeply partisan Oil Spill Commission, which, while tasked with investigating BP, instead condemned the entire oil industry.
4. Obama Is Killing Coal Mining & The Use Of Coal For Electricity With Deep Ramifications In The Future For The Cost & Availability Of Energy In America
The war on oil and gas pales in comparison to the Obama administration's war on coal - the basis for over 50% of the electrical power generation in our country. The Obama administration is doing all that it can to completely kill our coal industry:
"Coal is a dead man walkin'," says Kevin Parker, global head of asset management and a member of the executive committee at Deutsche Bank. "Banks won't finance them. Insurance companies won't insure them. The EPA is coming after them. . . . And the economics to make it clean don't work." . . .
Not a single new coal power generation plant was built in 2010. And lest there be any question whether investors should put their money into coal mines, the EPA recently took the unprecedented step of withdrawing a Clean Water permit for a mine it had approved three years ago. This from the WSJ, via Bizzy Blog:
The Environmental Protection Agency, in an unusual move, revoked a key permit for one of the largest proposed mountaintop-removal coal-mining projects in Appalachia, drawing cheers from environmentalists and protests from business groups worried their projects could be next.
The decision to revoke the permit for Arch Coal Inc.’s Spruce Mine No. 1 in West Virginia’s rural Logan County marks the first time the EPA has withdrawn a water permit for a mining project that had previously been issued. . . .
A spokeswoman for Arch said the company was “shocked and dismayed” by the agency’s decision, which it said would block an additional $250 million investment that would create 250 jobs. The company said it would appeal to the courts.
… As the EPA stressed that the permit decision had no implications beyond the Spruce mine, business groups outside the coal industry said the government’s action raised questions about whether permits previously issued for other businesses could also be revoked, potentially stranding investments and costing jobs even as the economy continues to heal.
The EPA has just added a significant amount of risk for any investor considering investment in a coal mine. This is killing jobs in the oil and coal industries. This war on coal and oil will soon have major ramifications for the domestic cost and availability of energy.
Update: Obama conducts this war even though his push for "green energy" is falling utterly flat. American Thinker covers the moras Obama has created with solar energy - a black hole for tax dollars and Democratic corruption that will not be replacing coal in our lifetime, if ever.
5. The EPA Poised To Harm Our Economy
Regulation as a whole has been creating an anti-business momentum for decades. But under Obama, and in particular with the EPA, the regulatory bureaucracy has taken wing. While Congress has refused to legislate restrictions on CO2, the EPA, with an assist from the climate scientists sitting on the Supreme Court, has assumed the right to do so under the Clean Air Act, a law ill suited for the task. The first leg of EPA's new regulatory scheme for CO2 went into effect this month. It is initially aimed at the "largest emitters" - i.e., coal fired power plants, cement plants, etc.
It is expected that this power grab will EPA will cost our country a million jobs and drive up significantly the price of energy.
6. Environmental Groups & The Courts Driving Energy Policy
Unfortunately, it is not just the regulatory bureaucracy that is implicated in this ever greater assault on our economy. Each of the regulatory laws passed by Congress decades ago contain a provision giving the keys to the courthouse to environmentalists. Because of that, a major driver of our nation's environmental policy is being dictated by the Courts - with drastic consequences. For example, a Federal Court decision to protect the Delta Smelt has turned one of our nation's prime agricultural areas into "Zimbawbwe." For another example, enterprising lawyers are now filing nuisance suits to sue U.S. manufacturers and power plants for their contribution to global warming. Our Supreme Court recently opted to allow such cases to proceed. It is time for Congress to end standing for all private suits under our environmental laws as well as clarifying that the regulation of green house gasses are policy questions for our elected representatives and thus cannot be heard by state or federal Courts.
7. More Regulatory Overreach & The Looming Explosion In Regulations
Before leaving the question of the regulatory bureaucracy, it is of course not just the EPA that has engaged in power grabs of very dubious constitutionality. The FCC's recent decision to assume control over regulation of the internet is yet another shining example of regulatory agencies gone wild. And we see similar overreach by HHS as Kathleen Sebilius is in the process of taking control over health insurance pricing in the U.S. Meanwhile, hundreds of new bureaucracies remain to be staffed and reams of new regulations remain to be written for Obamacare and the Financial Regulatory bill.
The regulatory bureaucracy is clearly out of control, bastardizing our form of government. We are beginning to resemble the EU - a government run by unelected bureaucrats. That is far from the vision of our Founders. As George Will notes in a column today, reasserting Congressional authority and oversight over the regulatory bureaucracy should be at the top of the agenda for the 112th Congress. Indeed, I believe that Congress should immediately pass a law holding that no regulation will become binding and enforcable unless and until approved by Congress.
8. Obamacare's Looming Taxes & Costs
As to Obamacare, its first effects are just now being felt. What we as a nation have to look forward to in the offing - higher health insurance premiums as well as hundreds of billions in new taxes, all on top of the costs of compliance:
- Excise Tax on Charitable Hospitals (2010)
- Tax on Innovator Drug Companies (2010)
- Tax on Indoor Tanning Services (2010)
- Medicine Cabinet Tax (Jan 2011)
- HSA Withdrawal Tax Hike (Jan 2011)
- Corporate 1099-MISC Information Reporting (Jan 2012):
- Surtax on Investment Income (Jan. 2013)
- Flexible Spending Account Cap aka “Special Needs Kids Tax” (Jan 2013)
- Hike in Medicare Payroll Tax (Jan 2013)
- Tax on Medical Device Manufacturers (Jan 2013)
- Raise "Haircut" for Medical Itemized Deduction from 7.5% to 10% of AGI (Jan. 2013)
- Elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D (Jan 2013)
- $500,000 Annual Executive Compensation Limit for Health Insurance Executives (Jan 2013)
- Individual Mandate Excise Tax (Jan 2014)
- Employer Mandate Tax (Jan 2014)
- Tax on Health Insurers (Jan 2014)
- Excise Tax on Comprehensive Health Insurance Plans (Jan 2018)
9. The National Debt & The Road To Becoming A Banana Republic
Our national debt is expected to balloon over the next decade, particularly in light of massive entitlement obligations. Obama and the left have us on track to have debt rise to $20 trillion, 90% of GDP, by 2020, the consequences of which will be calamitous. It means we will soon be facing massive increase in taxes, inflation, and the need for draconian cuts in spending - or default on our sovereign debt, with unimaginable consequences not just for us, but also for the world economy.
10. Unemployment
Since Obama assumed the Presidency, we have hemorrhaged millions of jobs and remain mired above 9% unemployment. For two years, Obama has concentrated on everything but the economy and jobs for Americans, apparently assuming that the economy would bounce back of its own accord while he focused on paying off labor unions and forcing through Obamacare. We are world's away from the Bush years, during which unemployment averaged 5.2%.
The December unemployment report showed that the jobless number dropped to 9.4%. That seemingly small piece of good news is illusory. This from Morning Bell via Bizzyblog:
You are going to hear a lot of noise from the White House about how this drop from a 9.8% unemployment rate to 9.4% means the economy is in a strong recovery. This is false. The reality is that the only reason the unemployment rate dropped is because the U.S. labor force decreased by 434,000. More importantly 260,000 Americans dropped out of the labor force entirely. This means that the Obama economy is now driving Americans out of the labor force faster than it is bringing them in.
Unemployment will remain an intractable problem under this deeply incompetent administration. Indeed, it will take a major change to all of the conditions dicussed above if we are to turn our country around, lower unemployment and grow our way out of this fiscal crisis.
11. Conclusion
Obama inherited a bad economy that he has made worse. Instead of changing tack, he is on the cusp of making our economy infinitely worse. True, he has finally appointed a token capitalist with business experience to his administration - William Daley. But unless this means Obama is willing to do an economic u-turn on gas, oil, Obamacare, the EPA, the FCC, ethanol and deficit spending, nothing is going to pull us out of our downward trajectory between now and 2012. The best we can hope for is for the House to slow the slide. But don't expect to hear any of that at the State of the Union.
Friday, January 7, 2011
Losing The MESSAGING WAR Yet Again - This Time On Obamacare
When will our Congresscritters on the right figure out that their messaging is absolutely broken. They may be on the side of the angels, but as long as the left dominates the MSM, they have to work three times harder to get their message out.
Specifically what I am referring to was the left's gambit of having the CBO send a letter on day one of the 112th Congress asserting that repeal of the monstrosity of Obamacare would add $270 billion to the deficit.
Here is reality:
Ryan said this afternoon at the National Press Club that the only reason a Congressional Budget Office letter claims the national health care law will reduce the deficit--i.e. bring in more revenue through tax hikes and Medicare cuts than it spends on Obamacare--is because "the books have been severely cooked"--not by the CBO but by the Democrats who wrote the bill.
"CBO has to score what you put in front of them," Ryan explained. "And if you put a bill in front of them that ignores the discretionary cost of the $115 billion you need to spend to run this new Obamacare program, that double counts the Medicare savings, that double counts the CLASS Act revenue, that double counts the Social Security revenue, that does not count the "Doc Fix"--you add all that stuff up, net it out, we're talking about a $701 billion hole--deficit."
"So if you actually do real accounting, get away the smoke-and-mirrors, get away the budget gimmicks, this thing is a huge deficit-increaser. . . .
That's great. But if the general public doesn't hear it, it is useless. Every Republican in Congress should be jumping up and down on camera calling the left lying sob's for having CBO write this piece of fantasy and trying to sell it to the American people. Otherwise, what will happen is what I just watched a few minutes ago - on Studio B no less - where the story was Republicans pusshing ahead with an attempt to repeal Obamacare even though the CBO will add $270 billion to the deficit. End of story. Absolutely f*** incompetent idiots.
Wednesday, August 4, 2010
After Six Months In Office - There is Hope & Change
Chris Christie is doing the impossible in bluest of blue states, N.J. In a state with the legislature firmly in control of Democrats, he is defeating the unions, holding the line on taxes, and decreasing spending. It is far more steamroller than bipartisan. At NRO, they document how Christie has done it and the daunting hurdles that still remain.
Monday, May 3, 2010
The Left's Plan To Sell Us On "Pro-Growth" Taxation
We contend that for a nation to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.
- Sir Wintson Churchill
The Democrats appointed by Obama to his Budget Deficit Commission apparently haven't read Sir Winson. Having met just once, the commission is already floating as a fix to our deficit "pro-growth" tax hikes. As Hot Air points out, there has been no talk as of yet of cutting any of the 1 trillion in spending increases authorized by Democrats since 2007.
It has been no secret that this "Commission" is nothing but cover for Obama to raise taxes on all Americans. I have been pointing it out for months. And indeed, if the polls are accurate, most Americans realize as much.
When it comes to the economy, business, and our own personal incomes, there is no such thing as "pro-growth" taxation. The only thing that grows is the pot of money avaialable for our legislators to spend. If Obama thinks he and the left are going to spin the fairy tale of "pro-growth" taxation on America this time around, he will likely find few willing to believe.
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