Category Archive 'Federal Budget'
06 Aug 2011

So, Whom Do You Believe?

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Reuters delivered the bad news.

The United States lost its top-tier AAA credit rating from Standard & Poor’s on Friday in an unprecedented blow to the world’s largest economy in the wake of a political battle that took the country to the brink of default.

S&P cut the long-term U.S. credit rating by one notch to AA-plus on concerns about the government’s budget deficit and rising debt burden. The action is likely to eventually raise borrowing costs for the American government, companies and consumers.

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Cornell Law Professor William A. Jacobson says:

Democrats own the downgrade. They fought Republicans and Tea Party supporters every step of they way, and forced a deal which was insufficient. They played class warfare and race politics against arguments that we needed to drastically change our spending habits.

This is Barack Obama and Harry Reid’s crowning achievement.

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Paul Krugman blames Tea Party Republicans.

[Y]es, it is the madness of the right: if not for the extremism of anti-tax Republicans, we would have no trouble reaching an agreement that would ensure long-run solvency.

Krugman then proceeds to argue that the S&P ratings agency has neither the right nor the authority to make ratings(!).

04 Aug 2011

“You’re Gonna Pay”

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Another of the videos from Power-line’s contest. This one has rapidly attracted over 35,000 views.

03 Aug 2011

“The Spending Is Nuts”

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Winner of a Power-Line contest.

02 Aug 2011

“Are All of You Completely Crazy?”

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A small businessman tells the DC political class where to get off.

From Bird Dog.

01 Aug 2011

“Unfit to Govern”

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Fighting hobbits

“Tea party Republicans may be a noisy and effective protest movement, but they’re unfit to govern,” Rep. Chris Van Hollen (D-Md.) said at a news conference on Friday.

Speaker John Boehner’s task in working out a deal with Barack Obama and the democrat leadership of the Senate to avert a default crisis was made more difficult by 22 fiscally-irredentist Tea Party Republicans who refused to support his compromise solution.

John McCain made headlines by labeling the conservative extremists as “hobbits.”

I think “the hobbits” were wrong tactically and philosophically on insisting on trying to pass a balanced budget amendment. The democrats could never accept a balanced budget amendment. Their base and constituencies would never tolerate it. But, even more importantly, a balanced budget amendment is an unworkable idea which is constitutionally highly problematic.

Publius Huldah is quite right: a balanced budget amendment would strike directly at the concept of enumerated powers and it would effectively transfer decision-making authority from Congress to the courts.

The hobbits were wrong about the balanced budget amendment, but I think their hearts were in the right place and I still think they served a highly useful purpose in holding the GOP leaderships’ feet to the fire and restricting their ability to compromise too far elsewhere.

Mr. Boehner was enabled by their existence to go to Barack Obama and Harry Reid and say, “You know, guys, I’d like to compromise further and let you throw in some class-warfare taxes on the rich, but those crazy hobbits are fierce and fanatical. They’d never put up with any tax increases at all. I’d like to settle for more modest spending reductions, but Bandobras “Bullroarer” Took (R-VA) is insisting on blood.” It’s useful in negotiations to have a “Mr. Jones” you have to answer to, who is completely unreasonable and who is making maximalist demands.

Marc A. Thiessen contends that, in the end, in fact, the Tea Party hobbits did win.

The reported debt-limit deal appears to be a victory for the Tea Party. It includes around $1 trillion in spending cuts and creates a special committee of Congress to recommend cuts of $1.2 trillion more. If Congress does not approve those additional cuts by year’s end, automatic spending cuts go into effect. The package sets an important new precedent that debt-limit increases must be “paid for” with commensurate cuts in spending. According to Sen. Rob Portman, a former White House budget director, if we cut a dollar of spending for every dollar we raise the debt limit, we will balance the budget in 10 years — something that even the Paul Ryan budget would not achieve. And all this is accomplished with no tax increases. …

The Tea Party is also winning the battle of ideas. Last week, Obama campaign strategist David Axelrod crowed that the debt-limit battle was shaping up as a “definitional fight” in which voters would see Obama as defending the reasonable center against Republicans who are “pandering to the extremes.” Well, if Axelrod is so confident that Obama is winning this “definitional fight,” why was the White House so adamant about ducking a second round next year? The president said that “the only bottom line that I have is that we extend this debt ceiling through the next election.” If he were winning the argument, he would have been eager to have this fight again just before the next election.

And Glenn Reynolds notes complacently: Well, you know the hobbits won in the original story too.

The fact that the Conservative Movement is large and diverse enough to have its own more extreme fringe is really a positive sign. Political coalitions large enough to win are never tidy, compact, perfectly ideologically pure, all neat and discreet. A successful political movement inevitably even attracts people you would just as soon not have on your own side along with all the opportunists who can tell which way the wind is blowing.

20 Jul 2011

How Do You Get From $6.31 Trillion to $9.65 Trillion in Debt in 27 Months?

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All you need to do is elect Barack Obama.

From Paul Ryan’s House Budget Committee, A Brief History of President Obama’s Fiscal Record:

January 20, 2009
President Obama sworn into office

President tells the American people in his Inaugural Address: “Those of us who manage the public’s dollars will be held to account, to spend wisely, reform bad habits, and do our business in the light of day, because only then can we restore the vital trust between a people and their government.”

Debt Held By Public = $6.31 trillion

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February 17, 2009
President Signs into Law the Spending Stimulus

The stimulus adds $821 billion in new spending according to the Congressional Budget Office (CBO).

The White House promises this infusion of spending and borrowing would keep unemployment rate below 8%. As millions of Americans are painfully aware, that promise was broken.

Debt Held by Public = $6.48 trillion

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February 26, 2009
President Issues FY2010 Budget

The President’s budget adds $2.7 trillion in new debt in FY2010 and imposes $1.4 trillion in new taxes.

Debt Held by Public = $6.58 trillion

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March 11, 2009
President Signs FY2009 Omnibus Appropriations Act

The massive spending bill includes 8,696 earmarks at a cost of $11 billion.

The spending bill adds $19 billion in new spending above the baseline – an 8.6% spending increase.

Debt Held by Public = $6.66 trillion

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April 29, 2009
Congressional Democrats Pass FY2010 Budget

The Congressional Democrats’ budget calls for a $2 trillion debt increase in 2010, and another 8.9% increase in non-defense discretionary spending.

The reconciliation process is abused to later pave the way for health care overhaul to be jammed into law.

Of note: this is the last time Congressional Democrats will bother budgeting.

Debt Held by Public = $6.85 trillion

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February 2, 2010
President Issues FY2011 Budget

The President’s budget more than doubles the debt; pushes the FY2011 deficit to a new record of $1.6 trillion; drives spending to a new record of $3.8 trillion in fiscal year 2011; and raises taxes by more than $2 trillion through 2020, under the administration’s own estimates.

Debt Held by Public = $7.85 trillion

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March 23, 2010
President Signs Health-Care Overhaul Into Law

The massive new law adds $1.4 trillion in new spending over the next decade, and over $2.5 trillion once the law is fully implemented.

Despite sluggish economic growth and high unemployment, the law imposes over $500 billion in new tax hikes. CBO Director Elmendorf would later testify that the law would reduce employment by roughly half a percent – a reduction of approximately 800,000 jobs.

Debt Held by Public = $8.18 trillion

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April 15, 2010
Congressional Democrats Decide Not to Do a Budget for FY2011

The 1974 Budget Act requires Congress to pass a budget each year by April 15.

In an unprecedented budget failure, House Democrats not only failed to pass a budget – they opted to not even propose a budget.

Debt Held by Public = $8.39 trillion

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July 21, 2010
President Signs Financial Regulatory Overhaul Into Law

In addition to heightened regulatory uncertainty, the massive new law adds $10.2 billion in new spending.

Debt Held by Public = $8.69 trillion

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February 14, 2011
President Issues FY2012 Budget

The President’s budget yet again calls for the doubling of the debt in five years, and tripling the debt in ten years.

The President’s budget spends $47 trillion over the next decade, imposes over $1 trillion in new tax hikes, and fails to address the drivers of the debt.

Debt Held by Public = $9.45 trillion

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April 13, 2011
President Delivers Speech on Deficit Reduction

The President appears to abandon his own budget by offering a ‘framework’ that calls for additional tax increases, defense spending cuts, and Medicare price controls – yet lacks sufficient detail to back-up claims of deficit reduction.

Debt Held by Public = $9.65 trillion

16 Jul 2011

National Debts Compared

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Hat tip to Theo.

14 Jul 2011

Obama Blows His Cool

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Politico quotes Rep. Eric Cantor (R- VA) on the presidential temper tantrum that concluded the latest round of budget negotiations between the White House and Republicans.

Cantor said the two sides were too far apart to get a deal that could pass the House by the Treasury Department’s Aug. 2 deadline — and that he would consider moving a short-term debt-limit increase alongside smaller spending cuts — Obama began to lecture him.

“Eric, don’t call my bluff,” the president said, warning Cantor that he would take his case “to the American people.” He told Cantor that no other president — not Ronald Reagan, the president said — would sit through such negotiations.

Democratic sources dispute Cantor’s version of Obama’s walk out, but all sides agree that the two had a blow up. The sources described Obama as “impassioned” but said he didn’t exactly storm out of the room.

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Reuters adds a hilarious quotation from Mr. Obama.

U.S. President Barack Obama told Republicans at the conclusion of a stormy budget meeting on Wednesday that he would not yield further even if it puts his presidency at risk, a Republican aide said.

“I have reached the point where I say enough,” Obama said, according to the aide. “Would Ronald Reagan be sitting here? I’ve reached my limit. This may bring my presidency down, but I will not yield on this.”

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Bringing to mind a skit broadcast a few months back by Jay Leno:

14 Jul 2011

The Left’s Progress

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William Hogarth, The Rake’s Progress: 6. The Rake at the Gaming House, 1734, Sir John Soane’s Museum, London

Republicans, these days, are finding themselves feeling exactly like the parental character in some old-fashioned moralizing English novel. Americans worked hard and lived responsibly and produced as cherished offspring and heir, the liberal elite. Our child, the liberal elite which we shall refer to henceforward as “Algernon,” it turns out, has grown up not into the sturdy young hero we desired, but rather into a vain, irreligious, and totally irresponsible habitué of the most extreme fashionable demimonde, a rake, and a spendthrift.

Inevitably, we learn that Algernon has exceeded his very generous allowance and run up massive debts. There is no possibility that Algernon can ever meet his obligations. Disgrace, dishonor, and debtors’ prison loom as gloomy prospects.

Young Algy has consequently returned to the family home he previously despised to beg his disappointed and estranged parent to intervene to save him. The scene is easily pictured. There is the sad, but still loving, grey-haired pater familias. There is the slightly crest-fallen, but still arrogant, young Corinthian. The father is theoretically willing to retrench and mortgage the estate and sacrifice for long years to come to save his son’s honor and keep him from prison, but he naturally considers himself obliged to make such assistance conditional upon genuine repentance and a complete break with the young man’s bad associations and pernicious habits.

It turns out, of course, that his life of iniquity in the fleshpots of the metropolis has coarsened young Algernon and fed his arrogance. Algy feels completely entitled to the life he has led, and has plans underway for even more ambitious forms of debauchery. Algy regards his father’s estate as already his own, and simply demands that his father assume responsibility for all his current debts and increase his allowance.

Sadly, the unhappy father explains that meeting even the current obligations Algernon has assumed is impossible with the income of the entire estate. To pay Algernon’s debts, land must be sold, the manor-house rented to strangers, tenants evicted and the commons converted to new enterprises to increase income. The entire family will have to curtail its expenses and live on a much more restricted scale for years.

But the wicked and ungrateful Algernon refuses to hear any of this. He bangs his fist on the table, abuses his father, and demands everything he asked for.

Sadly, the father explains that his son’s attitude, his hardened habits of iniquity, and his lack of responsibility make rescuing him impossible. As an alternative to prison, the father can only offer him a boat ticket to Australia and a small remittance for so long as he remains out of England.

12 Jul 2011

Fairness, Obama-Style

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11 Jul 2011

Barack Obama Says Now is the Time to “Eat Our Peas”

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From PackerBronco (one of Ann Althouse’s commenters):

These days, when the President says that we have to “eat our peas,” I no longer know whether he’s offering a metaphor or invoking the Commerce Clause.

“Eat our peas” occurs around 1:05

11 Jul 2011

“If You Ain’t Got No Money, Take Your Broke Ass Home”

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The American Progressives’ project of erecting a European-style welfare state is over, and it may be ending in default.

Chriss W. Street points out what the country’s real budget looks like (before Obamacare):

The Federal government’s spendable tax revenue of approximately $170 billion per month; is roughly just enough to cover legally required Social Security / Medicare payments ($90 billion) and debt service (ranging from $10-40 billon per month) – and the most politically sensitive payments for military and unemployment ($40 billion).

Read the whole thing. He has some good explanations of how we got here.

10 Jul 2011

“Republicans, Don’t Get Fooled Again”

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James C. Capretta, at National Review, has a sense of déjà vu all over again, as democrats artfully attempt to induce Congressional Republicans to blink, or to at least win the PR battle, in the confrontation over raising the federal debt ceiling. Republicans caved before, he points out, resulting in the election of William Jefferson Clinton to the presidency.

As the debt-ceiling showdown heads into its final stages, the political maneuvering has intensified, with both sides seeking to gain the upper hand in the public-relations war. Leaders from both parties know the stakes in this fight are very, very high; confrontations of this sort tend to become defining moments in political life, for good or ill. At this stage, anything could still happen, with many scenarios still in play. But for Republicans, there are reasons to worry that this showdown could be headed toward a political and fiscal debacle if they are not very careful.

It wouldn’t be the first time Democrats got the better of Republicans in a budget fight. In 1990, Richard Darman, who was director of the Office of Management and Budget, wanted to strike a budget deal to bring projected budget deficits down by $500 billion over five years. As a precondition for entering the talks, however, Democratic Senate majority leader George Mitchell demanded that Pres. George H. W. Bush renege, in writing, on his “no new taxes” pledge. The president did so at Darman’s urging, and from that moment on, the president’s standing and leverage plummeted. At crucial moments in the ensuing process, the tax increases kept getting larger and more onerous, and the spending cuts and entitlement reforms kept getting more ephemeral. In the end, it was just a question of how bad the political fallout would be for the president, which of course turned out to be very bad indeed.

In the current fight, it’s quite clear what President Obama and his allies are trying to accomplish. First, they want a package upon which the president can campaign in 2012. Something on the order of a “$3 trillion deficit-cutting program” (no matter how phony) — or even $2 trillion — would help the president downplay the big-spending, liberal image that most independent voters now have of him.

Second, the president wants to raise taxes without getting blamed for it. Hence the disingenuous cat-and-mouse games aimed at luring Republicans into accepting tax hikes behind closed doors so that the president never actually has to take ownership of them before they become law. Quite a trick if he can get away with it.

Third, and most important, Democrats want a deal that doesn’t give an inch on what really matters to their voting base — which is the entitlement status quo. The Democratic party has come to define itself as the party of entitlements. The New Deal. The Great Society. Obamacare. Nothing gets the Democratic heart beating quite like ensnaring the entire American middle class in entitlement dependence. For Democrats, victory means forcing Republicans to accept a budget framework that leaves today’s entitlement superstructure — and most especially centralized government management of American health care — exactly as it is today. ….

It would be far better to find a way to cut whatever spending can be cut sensibly with some Democratic support, raise the debt limit modestly, and leave the big questions on entitlement reforms and taxes to the collective judgment of the voting public in 2012.

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Glenn Reynolds adds:

So driving home from the gym just now, I heard Rush Limbaugh saying that if the GOP caves on the debt-ceiling fight we’ll see a Tea Party-backed third-party candidate for President, and the RNC will “implode” for lack of contributions. I think that’s right, but I don’t think that will happen. …

[T]he Democrats aren’t holding very many cards, and there’s no reason for the GOP to fold under the threat. Which isn’t to say that they won’t fold anyway, of course. As Teddy Roosevelt once said about Oliver Wendell Holmes, Jr., I could carve a better backbone out of a banana. . . .

09 Jul 2011

Pat Buchanan Counsels No Surrender

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Pat Buchanan left mainstream Conservatism for the Paleocon fever swamps some years ago, and has rarely ever made much sense since, but today the old Pat Buchanan is back and in fine form. In fact, Buchanan identifies precisely the tactics of bluffing and intimidation that the mouthpieces of the establishment are using to try to frighten the Republican leadership (which holds all the cards) into surrendering on tax increases to the impotent, discredited-by-reality, and sinking-daily-in-the-polls democrats. Pat Buchanan is right: the level of shrillness of the MSM commentariat is directly proportionate to their desperation. They know they’re losing.

By refusing to accept tax increases in a deal to raise the debt ceiling, Republicans are behaving like “fanatics,” writes David Brooks of The New York Times.

Anti-tax Republicans “have no sense of moral decency,” he adds.

They are “willing to stain their nation’s honor” to “worship their idol.” If this “deal of the century” goes down, as he calls the Barack Obama offer, “Republican fanaticism” will be the cause.

“The GOP has become a cult” that has replaced reason with “feverish” and “cockamamie beliefs,” writes Richard Cohen of The Washington Post. The Republican “presidential field (is) a virtual political Jonestown,” the Guyana site where more than 900 followers of the Peoples Temple drank the Kool-Aid that Rev. Jim Jones mixed for them.

Does anyone think this an appropriate description of such mild-mannered men as Mitt Romney, Tim Pawlenty and Jon Huntsman?

“The GOP’s Hezbollah Wing Is Now Fully in Control,” screams The New Republic over a recent lead editorial.

Other columnists charge the GOP with holding America “hostage” by refusing to accept tax hikes to avert a default on the debt.

What to make of this hysteria?

The Establishment is in a panic. It has been jolted awake to the realization that the GOP House, if it can summon the courage to use it, is holding a weapon that could enable it to bridle forever the federal monster that consumes 25 percent of gross domestic product.

To bully and blackmail the GOP into surrendering the weapon and betraying its principles and signing on to new taxes, that establishment has unleashed rhetoric more befitting a war on terror than a political dispute.

For how, exactly, are Republicans threatening the republic?

The House has not said it will not raise the debt ceiling. It must and will. It has not said it will not accept budget cuts. It has indicated a willingness to accept the budget cuts agreed to in the Biden negotiations.

Where the GOP has stood its ground is on tax increases. …

The Republican Party has not said it will refuse to raise the debt ceiling. It has an obligation to do so, and will.

The House has simply said it will not accept new taxes on a nation whose fiscal crisis comes from overspending.

If the GOP keeps its word, raises the debt ceiling and accepts budget cuts agreed to in the Biden negotiations, the only people who can prevent the debt ceiling’s being raised are Senate Democrats or Obama, in which case, they, not the GOP, will have thrown the nation into default.

It is the establishment that is resorting to extortion, saying, in effect, to the House GOP: Give us the new taxes we demand, or Obama will veto the debt ceiling and we will all blame you for the default.

They’re bluffing.

The GOP should stand its ground — and fix bayonets.

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