Storified by Brian Empric· Wed, Mar 27 2013 19:14:47
“Since 1974, Capitol Hill's ‘baseline’ has automatically increased spending every year according to Congressional Budget Office projections, which means before anyone has submitted a budget or cast a single vote. Tax and spending changes are then measured off that inflated baseline, not in absolute terms.”
“The baseline scam also exists in many states, and no less a Democrat than New York Governor Andrew Cuomo denounced it in 2011 as a ‘sham’ and ‘deceptive.’ He wrote in the New York Post that state spending was ‘dictated by hundreds of rates and formulas that are marbleized throughout New York State laws that govern different programs—formulas that have been built into the law over decades, without regard to fiscal realities, performance or accountability.’ Then he proceeded to continue baseline budgeting.”
“In Washington, Democrats designed this system to make it easier to defend annual spending increases and to portray any reduction in the baseline as a spending ‘cut’… Republicans used to object to this game, but in recent years they seem to have given up…”
“If Republicans really want to slow the growth in spending, they need to stop playing by Beltway rules and start explaining to America why Mr. Obama keeps saying he's cutting spending even as spending and deficits keep going up and up and up.”
“Clearly, the budget process is broken. In four of the past five years, the president has missed his budget deadline. Senate Democrats haven't passed a budget in over 1,400 days. By refusing to tackle the drivers of the nation's debt—or simply to write a budget—Washington lurches from crisis to crisis.
“House Republicans have a plan to change course… We stop spending money the government doesn't have. Historically, Americans have paid a little less than one-fifth of their income in taxes to the federal government each year. But the government has spent more.”
“Under our proposal, the government spends no more than it collects in revenue—or 19.1% of gross domestic product each year… On the current path, we'll spend $46 trillion over the next 10 years. Under our proposal, we'll spend $41 trillion. On the current path, spending will increase by 5% each year. Under our proposal, it will increase by 3.4%...”
“Yet the most important question isn't how we balance the budget. It's why. A budget is a means to an end, and the end isn't a neat and tidy spreadsheet. It's the well-being of all Americans. By giving families stability and protecting them from tax hikes, our budget will promote a healthier economy and help create jobs. Most important, our budget will reignite the American Dream, the idea that anyone can make it in this country.”
“The other side will warn of a relapse into recession—just as they predicted economic disaster when the budget sequester hit. But a balanced budget will help the economy. Smaller deficits will keep interest rates low, which will help small businesses to expand and hire…”
“Anyone who attacks our Medicare proposal without offering a credible alternative is complicit in the program's demise.”
“All we need is leadership. Washington owes the American people a balanced budget. It isn't fair to take more from families so government can spend more… We House Republicans have done our part. We're offering a credible plan for all the country to see. We're outlining how to solve the greatest problems facing America today.”
“A new Rasmussen Reports national telephone survey finds that 35% of Likely U.S. Voters favor the Republican plan proposed by Congressman Paul Ryan. Half (49%) of all voters oppose the Republican plan, but another 16% are not sure…”
“However, only 19% favor the Democrats' option proposed by Senator Patty Murray. Sixty percent (60%) of voters oppose the Democratic plan. Twenty-one percent (21%) are not sure…”
“Sixty-three percent (63%) of Republicans agree with the plan that balances the budget in 10 years without raising taxes. Seventy percent (70%) of Democrats and a plurality (49%) of voters not affiliated with either party are opposed.
“However, only 26% of Democrats support their party’s plan while 40% are opposed. Eighty percent (80%) of Republicans and 64% of unaffiliated voters oppose the plan.”
“Seventy-two percent (72%) of Tea Party voters favor the GOP plan, and 89% oppose the Democratic plan.”
“What in the world is going through the minds of European officials with their crazy, destructive demands with Cyprus? Seizing a portion of peoples’ bank deposits is the kind of thing one would expect from Argentina or other kleptocratic third-world governments. It sets an awful precedent shredding the rule of law, which is the bedrock of a free and vibrant society…”
“What the Europeans are doing here guarantees that there will be disastrous runs on banks and money market funds when we have another financial crisis – which we will, since authorities today really don’t know what they are doing on the economic front…”
“The Cyprus move is portrayed as a way to recapitalize that island’s shaky banks. But stealing deposits guarantees banks’ failures as soon as their doors re-open – if they ever do. After all, the Cypriot government may reject their agreement with the European Commission, European Central Bank and the IMF out of fear of both apoplectic voters and angry Russian depositors. Make no mistake, this deal is about as voluntary as those famous gangster words, ‘We have an offer you can’t refuse.’”
“The poor judgment of the political and economical leadership of the West today rivals that of their predecessors of the 1930s and 1970s. Under their misguided policies the wealth-creating private sector is continually squeezed with growth-killing taxes and regulations and the power of Big Government expands. Most countries have made, at best, small reforms when big ones – especially on the tax cutting front – are needed.”
“[I]f Republicans plan to place entitlements in their cross hairs, they will be risking a high-profile and explosive fight with President Barack Obama, who has said there is no way he’ll consider changes to entitlement programs without corresponding tax increases. House Republicans have said they compromised on raising tax hikes in the fiscal cliff deal on Jan. 1.”
“House GOP leadership is also eyeing several bills to hike the debt cap with different budgetary reforms — those bills might hit the floor as soon as May. One option under discussion includes trying to tie tax reform to the debt ceiling. Republicans are also mulling another path, which would tether entitlement reforms Obama has previously supported to the debt ceiling. Those reforms include increasing the Medicare eligibility age, means testing Medicare and changing the formula for calculating government benefits.”
“Of course, the House is not alone in deciding how the debt ceiling issue is resolved… Obama has said he’s not interested in negotiating over the debt ceiling, and Senate Majority Leader Harry Reid (D-Nev.) still has control over his chamber. Reid’s strategy often lines up with Obama’s.”
“The House-side maneuvering on the debt ceiling also plainly displays that the talk of a grand bargain, for now, is just that: talk. The ability to come to some sort of massive fiscal deal is still a pipe dream, of sorts, for those who deal with the reality of legislating on Capitol Hill.”
“This legislation would not only result in the termination of current tax delinquent federal employees, but would prohibit the future hiring of federal employees with tax liens.”
“The legislation also requires federal agencies to conduct reviews of public records to determine if tax liens have been filed against current employees or applicants.”
“Nearly 312,000 federal workers and retirees owed more than $3.5 billion in back taxes as of Sept. 30, 2011, the (Internal Revenue Service) agency reported earlier this month…”
“The IRS says most residents who owe back income taxes file returns but cannot pay the full amount at tax time. Others have their tax bills increased through audits and cannot pay the higher bill.”
“Most Americans want to end government subsidies for these ‘too big to fail’ institutions, and half want to see those megabanks broken up.”
“The government currently provides nearly $100 billion in subsidies to the largest banks because they are deemed ‘too big to fail’. Just seven percent (7%) of Americans support continuing these subsidies, while 76% are opposed. Sixteen percent (16%) are undecided.”
“Fifty-three percent (53%) still prefer a financial system with more competition and less regulation. Twenty-six percent (26%) would rather have more regulation and less competition in the financial system. Another 21% are not sure…”
“Fifty-eight percent (58%) of Democrats and 51% of adults not affiliated with either major political party support breaking up the megabanks, a plan that just 40% of Republicans favor.”
Storified by Brian Empric· Mon, Mar 25 2013 19:23:37
“The turnabout (of the stock market) is testament to healthy corporate profits and the resilience of America's free enterprise system. And it's a huge relief to workers whose 401(k) plans are tied to equities. But the risky little secret of the rebound is that it is powered in significant part by the easy-money policies of the Federal Reserve, which must one day end.”
“[T]he time is approaching to scale back the bond-buying spree and get ready to unwind some of the Fed's massive portfolio, which now tops $3 trillion. The longer the policy lasts, the more likely it will end unhappily.”
“Savers, particularly older ones trying to live on income from their investments, are starved for safe options. They've been forced into stocks, which is one reason the market has been acting as if it's on steroids. Further, with borrowing costs low, Congress and the White House have less incentive to rein in the national debt.”
“The market is ‘hooked on the drug’ of easy money, Dallas Fed President Richard Fisher told Reuters… Fisher's comparison of Fed policies to a drug is apt. Markets might not like the idea of the drug being withdrawn now, when the Fed holds a portfolio of $3 trillion. But the withdrawal symptoms will be a lot worse once the portfolio grows to $4 trillion, or more.”
“The longer the Fed's easy-money policies go on, the greater the risk they will distort markets, create new bubbles and set the economy up for another fall.”
“With the White House closing its doors to public tour groups in order to save money for the sequester, it's worth remembering some of the other costs the White House incurs annually.
“Like the ‘Chief Calligrapher,’ Patricia A. Blair, who has an annual salary of $96,725, and her two deputies, Debra S. Brown, who gets paid $85,953 per year, and Richard T. Muffler, who gets paid $94,372 every year.”
Other #CutWaste opportunities here
“Let’s be honest about one thing: The budget introduced yesterday has about as much chance of becoming law as Nancy Pelosi does of being elected pope.”
“But at least it is a budget. It has now been more than four years since the Senate produced such a document. While Senate Democrats have pledged to do so this year, recent reports suggest that they are struggling to come up with a plan that can garner support from a majority of their members…”
“[T]he Ryan budget provides a view of Republican priorities and their vision for how to increase economic growth, reform entitlements, and balance the budget. While timid and imperfect, Ryan’s plan shows that Republicans are at least looking in the right direction.”
“On the spending side, Ryan would mostly retain the sequester, and would further reduce spending by $5.7 trillion from the current ten-year baseline, bringing the budget into balance by 2023.
“However, while we can undoubtedly look forward to news stories about how Ryan would slash spending, his budget doesn’t actually cut spending at all; it merely slows the rate of growth. Indeed, under Ryan’s proposal, federal spending would still grow by an average of 3.4 percent every year…”
“Ryan’s budget would leave us with roughly $20.85 trillion in debt in 2023, which is $5.29 trillion lower than under the current baseline but still a $4.15 trillion increase over what we currently owe…”
“The budget would also block-grant Medicaid and food stamps (the latter would be reformed more gradually, as the unemployment rate decreases), and reform civil-service pensions by requiring increased contributions from federal workers.”
“As Ryan says, ‘balancing the budget is a means to an end,’ that end being a growing economy and freer, more prosperous society.”
“Based on the premise that national economies grow by about 1 percent less when debt exceeds 90 percent of GDP, the president of the AAF (American Action Forum)—and former Congressional Budget Office director—Douglas Holtz-Eakin predicts that the Republican budget would allow for 5 percent more in economic growth than under current law, translating to that estimated 5 million new jobs in 10 years.”
“But despite the benefits of lowering the debt-to-GDP ratio, there is not widespread bipartisan agreement on whether balancing the budget should be a top priority. Ryan's plan would balance the budget through spending cuts alone. The Democratic plan calls for a combination of discretionary spending reductions, tax increases and boosting infrastructure spending, but it does not balance the budget in the foreseeable future.
“In an interview with ABC News this week, President Barack Obama said he was not interested in balancing the budget ‘just for the sake of balance. My goal is how do we grow the economy, put people back to work, and if we do that we are going to be bringing in more revenue.’”
“Over the next decade, spending under Murray's budget would increase by 62 percent... As the chart shows, the budget would increase a bit each year, under the Democratic plan.”
“Murray’s budget spends $2.2 trillion more in 2023 (the last year of the budget window) than the 2013 levels – a 62% increase (significantly outpacing inflation),” says a staff member on the Republican side of the Senate Budget Committee.
“Ryan’s plan is revenue neutral… meaning that it is not an overall tax hike. Senate Democrats say in the Chairman’s Mark that their budget includes ‘only’ $923 billion in higher taxes over the next 10 years, but it turns out to be much higher. Buried elsewhere in their budget is $580 billion in additional tax hikes, bringing the total to $1.5 trillion.”
“Both budgets call for comprehensive tax reform, but they disagree on what that should look like. Chairman Ryan proposes simplifying and streamlining the tax code, highlighting the ‘maze’ of deductions, credits, limitations, and phase-outs that clutter the tax code. He also calls for rate reduction, on both the personal and corporate side… Representing a different vision, Senate Democrats want to ‘restore fairness to the tax code’ by making it even more progressive…”
“Although both plans call for eliminating loopholes, both are woefully short on specifics. Neither dives into the details of which deductions should be cut…”
“Chairman Ryan proposes to simplify our broken tax code by turning our seven individual income tax brackets into two, and then bringing down the marginal tax rates to 10% and 25%... Murray’s budget doesn’t lower personal income tax rates…”
“Chairman Ryan would cut the top corporate tax rate to 25 percent, but Murray’s budget would leave it untouched. AFP supports cutting the corporate tax rate—which is currently the highest in the industrialized world, at 35 percent—since low rates is a principle of optimal taxation and it would produce myriad positive results for the economy. According to a brand-new study from Tax Foundation, cutting the federal corporate tax rate to 25 percent would incite economic growth, more wages and job creation, and higher tax revenue.”
“So it looks like we've all been sentenced to spending at least two more years in budget hell with Barack Obama. Under the rules of budget hell set the past four years by the prince of Pennsylvania Avenue, you're not allowed to do anything real about federal spending. You can only fight over federal spending. Forever.”
“Amid the sequester smackdown with the White House, Republicans did something off-script: They called the Obama bluff. They let the sequester's spending cuts occur, and the apocalypse didn't descend. The only thing that cracked was the president's approval rating.”
“Ever since Ronald Reagan legitimized the efficacy of tax cuts, Democrats have sought to discredit his idea and restore the New Deal theory of a Keynesian multiplier, which dates to 1931. It holds that more public spending will revive a struggling economy… No president has believed more in the miracle of the multiplier than Barack Obama…”
“(Economist Alberto Alesina, a professor at Harvard University) has identified the alternative. His, and others', work the past decade with how struggling economies revive suggests that the Obama spend-more solution is the opposite of what the U.S. should be doing.”
“The path back to stronger growth, argues Mr. Alesina, is a combination of significant, permanent cuts in public spending and relatively small tax increases, if any.”
“Adjustments based upon spending cuts,” the economists concluded, “are much less costly in terms of output losses than tax-based ones. Spending-based adjustments”—that is, cuts—“have been associated with mild and short-lived recessions, in many cases with no recession at all. Tax-based adjustments”—tax increases—“have been associated with prolonged and deep recessions.”
“Fiscal plans based on large, permanent spending cuts are associated with renewed growth more than any alternative policy mix that has been tried. Indeed, spending cuts without big tax increases look to be the only thing that really works…”
“No worries, America. Debt is a preoccupation of the fringe, a mere distraction for anyone interested in progress. And anyway, as President Barack Obama explained this week, ‘we don’t have an immediate crisis in terms of debt. In fact, for the next 10 years, it’s going to be in a sustainable place.’
“That’s a pretty convenient position, wouldn’t you say, for a man who’s helped pile on trillions of dollars of new debt and created an entitlement that promises to escalate this non-crisis crisis of ours?”
“Right now, we’re spending more money to pay interest on debt than we’ll spend on education, homeland security, transportation and veterans’ benefits combined this year. Surely, there’s something better to spend that money on. And those interest payments are a significant tax on Americans — a debt tax that Washington doesn’t want to talk about. And just wait until interest rates rise, because at some point they will.
“Hey, I didn’t even come up with the previous paragraph. I cribbed it from a speech given on the Senate floor in 2006 by an up-and-comer named Barack Obama. He’s so articulate I couldn’t resist. But those were the stormy days when debt mattered because Republicans were … well, Republicans.”
“Of course, debt isn’t always a bad idea. We build things for the next generation, and they should chip in, no doubt. But right now, public debt is more than 75 percent of gross domestic product. So when do we get to worry? At 100 percent?”
“Last month, the Congressional Budget Office released its revised baseline for spending, taxation, and deficits for the next decade. It is not pretty. The gross federal debt is expected to increase by nearly $10 trillion over 10 years, from $16 trillion today to roughly $26 trillion in 2023.
“Beyond the 10-year horizon, the fiscal picture only gets worse. Without major reforms, the government’s vast array of health entitlements—starting with Medicare, Medicaid, CHIP, and Obamacare—are set to grow from about 5 percent of gross domestic product today to 9 percent in 2033, 12 percent in 2053, and 15 percent in 2073. There is no way the nation can afford that bill, absent a shocking increase in taxation. What’s more, taxes would have to be raised again and again and again, as health entitlements are expected to grow faster than the economy.”
“Much has been written about the nation’s awful budgetary outlook, but one aspect that is often overlooked is the effect the country’s debt and deficit will have on the American political landscape.”
“Right off the bat, the looming debt crisis explains why House Republicans persist with a policy solution that has not been politically popular in the past. Today’s House GOP believes it has no choice; the duties of responsible governing require a solution to this problem, even if such a solution is unpopular… The fiscal situation also explains why Senate Democrats have failed to produce a budget in four years. Senate majority leader Harry Reid has a hyper-transactional approach to politics, always preferring to shield his members from tough votes, or sweeten the pot for them when he has no choice.”
“Together, the different approaches that House Republicans and Senate Democrats have taken in dealing with the nation’s fiscal mess illustrate the profound changes occurring in American politics. Reid has chosen the fiscally irresponsible but politically easy path; Ryan the opposite. It is either one or the other, because the two goals are now mutually exclusive. A responsible policy requires a departure from the status quo—meaning higher taxes, entitlement reforms, or both—that will be politically dangerous.”
“Politicians of generations past could pass a budget or agree to raise the debt ceiling without much trouble because they never really had to worry that the debt was out of control. Today, they have no such luxury. Hence the persistent fighting over what were once perfunctory tasks.
“Until the public makes up its mind about what to do next, all bets about American politics are off. The near-term political outlook is messy, fraught with finger-pointing, demagoguery, and vitriolic rhetoric as both sides try to position themselves…”
“One thing, though, is clear: The political center as we know it today will no longer exist. For generations, Americans have demanded more, more, more from their government, which has been able to supply it without burdening the citizenry with onerous taxes. No longer. The time for painful choices is at hand.”
Storified by Brian Empric· Mon, Mar 18 2013 18:27:23
“There's an increasing sense in America now that the facades are intact but the machinery inside is broken.”
“The jobless rate, officially 7.7%, is almost twice that if you include those who have stopped looking, work part time, or are only ‘marginally attached’ to the workforce… Meanwhile, the president is stuck in his games and his history. He should have seen unemployment entering a crisis stage four years ago, and he did not. At that time I was certain he'd go for public-works projects, which could give training to the young and jobs to the experienced underemployed, would create jobs in the private sector and, in the end, yield up something needed—a bridge, a strengthened power grid. He instead gave his first term to health care. And now ObamaCare is being cited as a reason employers are laying people off and not hiring, according to a report from the Federal Reserve.”
“Right now his attention has turned to dinner with Republican senators and meetings with members of both parties on Capitol Hill. He is trying to show, after a hit in the polls, that he can reach out. He's trying to convince America he's capable of making a deal.
“The new engagement may work if in the past few days the president has changed his political style, approach and assumptions. But people don't usually change overnight…”
“It is interesting that almost at the same time as the dinner the president's people had once again begun warning of doom. A blast email from Organizing for Action, signed by Stephanie Cutter, used these words: ‘Devastating,’ ‘obstructionism,’ ‘destructive,’ ‘this is real’… Their whole approach is still stoke and scare—stoke resentment and scare the vulnerable into pressuring Republicans.”
“Barack Obama really is a study in contrasts, such as aloof and omnipresent. He's never fully present and he won't leave. He speaks constantly, endlessly, but always seems to be withholding his true thoughts and plans. He was the candidate of hope and change, of ‘Yes, we can,’ but the mood of his governance has been dire, full of warnings, threats, cliffs and ceilings, full of words like suffering and punishment and sacrifice.”
“Mr. Obama is making the same mistake he made four years ago. We are in a jobs crisis and he does not see it. He thinks he's in a wrestling match about taxing and spending, he thinks he's in a game with those dread Republicans. But the real question is whether the American people will be able to have jobs… He's missing the boat on the central crisis of his second term.”
“Thus, he invited a gang of Republican senators to din-dins at the swank (and legendary) Jefferson Hotel, one of the city’s more discreet (and expensive) gathering places… Indeed, the president picked up the tab, a gesture of generosity or, one might speculate, a tiny deposit on a big investment, the returns of which are already rolling in: the media extrapolation that the president is extending an olive branch to his adversaries in search of a solution.”
“Not to be cynical, but does anyone really suppose that a Republican representative or senator is going to go against the party because Obama gave him a call?”
“It was nothing but a PR move,” says one seasoned insider. “Obama wants to run against obstructionist Republicans. The fact of the matter is, unless something really bad happens, there’s no reason for [Republicans] at this point to cave on taxes. Why would [House Speaker] John Boehner ever cave on taxes at this point?”
“Bottom line — for once a term aptly applied rather than a cliché — the only long-term deficit reduction involves serious entitlement reform, which everyone knows and Democrats don’t want to do... Republicans simply are not going to budge on taxes without real entitlement reform.”
“Democrats will run against those terrible Republicans who refused to raise taxes. Republicans will run on the Democrats’ record of no-growth and out-of-control spending, assuming, that is, they can figure out how to effectively communicate the message that no-growth is connected to Obama policies.”
“Why do presidents get in trouble in their second terms? They think they have a mandate when they don’t. They believe they’re stronger politically than they really are. They’re convinced they can get away with things other presidents couldn’t. They think too highly of themselves personally and act accordingly.”
“Sign number one is the sequester. It’s given Obama numerous opportunities to overreach, and he seems determined to seize all of them… Obama himself led the fear-mongering… But after the House and Senate rejected his vague plan for more tax increases than spending cuts, the president faces the temptation to further overreach and make his worst-case scenario come alive—to vindicate his dire predictions.”
“OFA (Organizing for Action) is unprecedented. No previous president had such an organization or even considered having one. It’s a kind of private political pressure group. Had President George W. Bush set one up, the media would have pounced and demanded he jettison it. But Obama has gotten minimal pushback from the press.”
“OFA is an invitation to crony capitalism and scandal… In reality, it’s a subsidiary of the White House, answers to Obama, is run by his campaign aides, and is empowered by the campaign’s vast database of supporters and Obama followers on Twitter, almost 28 million strong.”
“Obama, from all appearances, isn’t worried about serious second-term difficulties. He’s more full of himself than usual. He’s made it clear he prefers hobnobbing with Hollywood celebrities to spending time with Washington’s political class. And he may be right in thinking his situation, postreelection, makes him immune to the woes of earlier presidents. But maybe not.
“It makes an enormous difference whether he stumbles badly over the next year. If the president is forced on the defensive, Democratic prospects for winning the House in 2014 will evaporate and Republican hopes of gaining the Senate will soar again. And Obama may realize he isn’t exempt from the normal workings of politics, as he once thought.”
“The big story of the moment is that President Obama has suddenly decided to talk with lesser political beings. The famously aloof President who began his second term as if the 2012 election campaign wasn't over is inviting Members of Congress, and even some of its evil Republicans, to lunch and dinner. The question is whether this is merely a tactical feint or if Mr. Obama really wants to accomplish something in the next two years and realizes he needs Republicans to do it.”
“Mr. Obama and his White House aides have made clear that their highest priority is to return Nancy Pelosi as House Speaker in 2015. He and 2012 campaign manager Jim Messina are already mobilizing donors toward that goal, and his inaugural address, State of the Union speech and budget proposals have framed the issues in a way that suggests his priority is a grand liberal finale in his last two years.
“The appearance of a new bipartisanship is perfectly consistent with such a partisan 2014 strategy. The more reasonable he appears today, the better positioned he might be to blame Republicans for failure next year. Independent voters love to see politicians working together, however haplessly, so Mr. Obama may figure he has nothing to lose by dropping his Democrats-only strategy for now. He can always sandbag the GOP again later. In particular, he'd love to carve out deals in the Senate that isolate House Republicans.”
“In my view, there’s little reason to believe that the president wants such a grand bargain—or at least that he wants it enough to jeopardize his second-term political strategy. That plan? To win back the House of Representatives for Democrats, with heavy Obama involvement, by portraying Republicans once again as extremists… Then, having secured control of Congress, the president can consolidate and build on his implementation of the progressive agenda he began in his first term and laid out in his second inaugural and most recent State of the Union Address.”
“By ‘reaching out’ to Republicans, he is attempting to position himself as the ‘reasonable’ party in Washington even if his big ask—additional revenues—is something Republicans already gave him as part of the fiscal cliff deal.”
“The president has shown little appetite for real entitlement reform over his first four years in office, aside from a tweak to the calculation of inflation on Social Security and whispers to John Boehner during the original debt ceiling talks…”
“If the White House is bragging about its unwillingness to concede on entitlement reform, the one thing that could conceivably allow Republicans to be part of a ‘grand bargain,’ how likely is it that the president is serious about getting a deal?”
“Thanks to the FOIA, the transparency issue will be widely discussed this week as journalists, non-profit advocates, academics and others celebrate Sunshine Week with speeches, news reports and features, forums, surveys and panel discussions across the country. The week is timed to coincide with the March 16 birthdate of First Amendment author James Madison, who was also the country's fourth president.”
“A recent study by the Transactional Records Access Clearinghouse at Syracuse University found a 28 percent increase in the number of FOIA suits filed during the last two years of Obama’s first term, compared to the last two years of President George W. Bush’s second term, from 562 to 720 cases.”
“[J]ournalists and activists will keep on fighting for more official transparency because, as the Project on Government Oversight’s Danielle Brian (@daniellebrian) told The Washington Examiner, ‘it is our job to push back and crack open those closed doors that hide corruption, mismanagement and other wrongdoing.’”
“She called transparency ‘the most powerful tool citizens have to ensure government is operating ethically and effectively. Although there are some things that should remain secret, the government tends to err on the side of over-classifying and hiding behind secrecy to keep nosy citizen activists and journalists out of its business …’”
“Those who make the rules should play by them. Especially a White House that lectures the rest of America about the importance of paying your ‘fair share’ of taxes.
“So we were struck by IRS reports that no fewer than 40 aides to President Obama still owe the federal government a combined $333,485 in back taxes… This year, some 312,000 of Uncle Sam’s own employees owe the IRS a whopping $3.52 billion.”
“For all its sermons on fairness, this administration has never seemed too bothered when its own people somehow forget to send the IRS the check they owe.”
Storified by Brian Empric· Fri, Mar 15 2013 17:14:07
“House Speaker John Boehner's confirmation that the vaunted title of H.R. 1 will go to comprehensive tax reform is notable because it wasn't assured. As the GOP has publicly waged a sequester fight, it has privately spent the past months in an intense internal debate over tax reform...”
“A simple code sounds pleasant, but getting there means tough votes on dangerous topics. Want to lose friends fast? Chop the charitable deduction, squeeze mortgages, take away that tax perk for the biggest job creator in your district. Business will howl. Voters might freak. Democrats will pounce. Indeed, the White House may turn those votes into a central plank of its campaign to take back the House.”
“To remain silent on tax reform was for the GOP to cede a signature issue, even as it gave Mr. Obama leverage in the budget fight. How long could the party hold out for the president's call for ‘reform’ without a plan of its own?”
“One: Any House bill will be ‘revenue-neutral,’ meaning money raised gets plowed back into lowering rates. Two: Any House bill will simultaneously reform both the individual and corporate codes…”
“There is a glum GOP awareness that the party's role of late has been that of responsible bearer of bad news. It has had to warn about deficits, advocate cuts, tackle entitlements. Somewhere along the way it lost its tax punch, and it has been outflanked by a president who has used class warfare to position himself as protector of the middle class.”
“There is no better way to recapture the party's core issues of taxes, the middle class and the economy” than tax reform, says one senior GOP aide. “It is the one silver bullet that hits all of those pieces.”
“A new Rasmussen Reports national telephone survey finds that 35% of Likely Voters believe the economy is at least somewhat fair to middle-class Americans, but that includes only six percent (6%) who think it’s Very Fair. Sixty-two percent (62%) think the economy is not fair to the middle class, with 20% who feel it’s Not At All Fair.”
“There's general partisan agreement when it comes to the fairness of the overall economy, but GOP voters (42%) are more likely to believe the economy is fair to middle-class Americans than Democrats (31%) and voters not affiliated with either major party (31%).”
“Sixty-nine percent (69%) of working Americans now describe themselves as middle class, the highest level in nearly four years.”
“Personal and social insurance taxes totaled just over $2.6 trillion at a seasonally adjusted annual rate, Commerce Department data out Friday (3/1/13) showed…”
“Higher taxes have acted as a steady head wind for disposable income… Real personal spending rose an ‘anemic’ 0.1%...”
“Personal income dived 3.6% in January, with disposable income down 4%.”
“The Congressional Budget Office has projected that federal tax receipts, including corporate taxes, will rise from 15.8% of GDP in fiscal 2012 to 16.9% this year… In 2014, CBO sees revenue returning to 18% of GDP, close to the historical average.”
“CFPB director and longtime Democratic politician Richard Cordray earlier this month told Bloomberg News that managing retirement savings is ‘one of the things we've been exploring ... in terms of whether and what authority we have.’”
“What business, exactly, does a U.S. government that has rung up over $16.6 trillion in red ink have giving consumers advice on how to save money?
“What can a consumer learn about frugality and responsibility from a corrupt, insatiable Washington leviathan that screams about the sky falling when just 2% in automatic spending cuts kick in?”
“What doesn't work is the government, which should be told to stuff its offer of help at managing people's money. Better to have Typhoid Mary run the Centers for Disease Control.”
“The Pew results actually show support for what official Washington would consider massive spending cuts… The problem is with the way the numbers were reported.”
“To most Americans, maintaining spending at current levels would mean spending the same amount in 2013 as we spent in 2012. However, to those experienced in the mysterious ways of Washington, maintaining spending at current levels means spending $3.5 trillion this year and $4.5 trillion in five years. To most Americans, that's a trillion dollars in spending growth.
“The Political Class, on the other hand, would consider holding spending unchanged at current levels to be a massive spending cut. Why? Because it wouldn't allow for the trillion dollar spending growth that is already built into the budget.”
“Consider the Pew numbers for roads and infrastructure projects: 38 percent want more spending, and only 17 percent favor a spending cut. But a plurality (43 percent) wants to hold infrastructure spending steady. Since the Political Class would consider holding spending steady to be a ‘cut’ in spending, 60 percent in the Pew poll favors what official Washington calls cuts.”
“Using this understanding, the Pew data shows that voters prefer what the politicians call budget cuts in 17 out of 19 programs.”
“So when politicians claim that sound polling data like the Pew study shows a lack of public support for spending cuts, they're either wrong or deliberately trying to deceive us. Voters shouldn't need a translator to understand what the Political Class is saying. But those in the Political Class bubble just don't speak plain English anymore.”
“Normally, the president’s request is the beginning of the annual budget process and Congress relies on its detailed spending information to come up with its own budget resolution.”
“House Budget Chairman Paul Ryan (R-Wis.) plans to put out his own budget — one that balances in 10 years… That budget is also slated to get a House vote before the House embarks on a two-week Easter recess March 22.
“The Senate will be putting together its own budget plan for the first time in four years this month. Under ‘no budget, no pay’ legislation enacted in January, it must pass a budget resolution by April 15 or senators' pay will be withheld.”
“[W]hile the President speaks of his deep concern for American workers and families, he fails to even submit to Congress his financial plan to help those workers and families,” Sen. Jeff Sessions (R-Ala. and ranking member of the Senate Budget Committee, @budgetgop) said in a statement.
“Under the law, the president must submit his budget request no later than the first Monday of February. Last month, the Obama Administration announced that for the fourth time in five years it would fail to meet this deadline…”
“In just one term, President Obama has missed the budget deadline more than any other president…”
“All presidents from Harding through Reagan’s first term met the statutory budget submission deadline in every year…”
“Since the statutory deadline was extended to the first Monday in February, with the exception of the first budget for a new president, this deadline has only been missed three times: Clinton FY 1998, Obama FY 2012, and Obama FY 2013.”
“Every family must balance its budget. Washington should too, and it’s time for President Obama and Senate Democrats to embrace this common-sense goal.”
Storified by Brian Empric· Wed, Mar 06 2013 19:58:04
“There’s debt denial and debt denial denial, but there is one wave of liberal truth-telling sweeping the land. We are increasingly hearing admissions that paying for the promises the federal government has made will require higher taxes on everyone, not just the rich.”
“[L]iberals who don’t need votes from the American people are still allowed to do math. To pay for the social programs they want, they will ultimately need more tax revenue from the middle class as well as high earners.”
“Since the 1980s, the two parties have had a tacit agreement. We get the Republicans’ tax rates in exchange for the Democrats’ spending programs. There were some upward adjustments of the top rates under George H.W. Bush and Bill Clinton in the early ’90s and in the fiscal cliff deal at the end of last year, but this has basically held. The price has been chronic deficits… Now those deficits are becoming unsustainable and the major entitlement programs will soon be in the red.”
“The plain fact is that big government has actually limited the political options available to the American people, leaving them with only unpleasant options. But at least we can be honest that the bill is about to come due.”
“Using GAAP-based accrual accounting, though, as typically used by private corporations, the government’s day-to-day operations were shown to have suffered a shortfall of $1.3 trillion, with an additional $5.3 trillion shortfall in the year-to-year increase of unfunded liabilities in social programs, such as in Medicare and Social Security…”
“Based on the same official GAAP numbers, the federal government’s total obligations as of September 30, 2012, stood at $85.4 trillion…”
“Suggestions that somehow the total GDP can cover the government’s deficit, debt and obligations problems are nonsense. With decades of practice and fine-tuning, the U.S. government has reached the practical limits of the net cash it can siphon out of the income-producing private sector. The system has reached that delicate balance, where the government’s raising taxes actually reduces the government’s cash receipts, where higher taxes reduce economic activity enough to reduce tax revenues.”
“Often, before a large company goes bankrupt, creditors can see the financial collapse coming and tighten up on credit, freeze credit, or move to collect a debt while there still may be time. The same thing happens at the level of sovereign states, and the global financial markets increasingly have indicated waning patience for the United States to address its longer-range solvency issues.”
“With limited tax-raising options, massive spending cuts have to be put in place and the social programs recast so as to be solvent, if there is to be any hope of restoring long-term solvency for the United States government… There is no political will apparent among those currently controlling the White House and Congress to do so.”
“In the nearly four years since Senate Democrats last passed a budget (on 4/29/2009), government spending has driven our national debt up past $16 trillion (and rising). That’s more than $52,000 for every man, woman, and child.”
“While our debt continues to grow, President Obama and Senate Democrats are demanding more tax hikes to fuel more ‘stimulus-style spending. That’s why Speaker John Boehner says we don’t need higher taxes – ‘It’s time to focus on the real problem here in Washington, and that is spending.’”
“The search for an elusive grand bargain — more taxes, fewer benefits — may be blinding us to the potential for incremental progress. The two parties fundamentally disagree over the future of our welfare state, but there may be space for common ground.”
“Both sides should agree at least to spend less money on the wealthy — via means testing. It may surprise some Americans to learn that the United States spends quite a lot on the affluent, especially through the entitlement programs at the heart of the budget fight: Social Security and Medicare… Means-testing — allocating benefits according to need — might offer both sides a way out.”
“First, give less to the wealthy rather than take more from them… Second, assess wealth based on lifetime earnings rather than on income or assets… Basing benefits on lifetime earnings… would encourage saving over time, would be far more difficult to game and, provided it was based on pre-retirement earnings, would not discourage older Americans who are able to work from continuing to do so.”
“Some on the left might complain that curtailing our entitlement programs’ universal character would undermine their social purpose and political support. But targeting benefits to those who most need them is surely better than reducing payments to providers (many of whom will drop out of Medicare), as President Obama’s 2010 law does. Some on the right might complain that such reforms would punish success. But surely rewarding achievement with government aid is no one’s idea of conservatism.”
“Liberalism has its advantages. It puts government in the driver’s seat and encourages the creation of more and more government programs that sound good and seem nice. Who could be against them?”
“If programs lifted from the liberal book of dreams are enacted, Obama and his allies will be thrilled. If conservatives—congressional Republicans in this case—block those programs, that’s fine too. Democrats can exploit GOP opposition to winsome new programs to recapture the House in 2014 and transform Washington into a liberal juggernaut for the president’s final two years.
“If you think this tactic cannot work, think again. We’ve just seen it work brilliantly in Obama’s reelection campaign. The election was less a referendum on Obama’s first term—the norm for reelections—and more a negative verdict on Mitt Romney, the challenger. The Obama team cast Romney as a heartless corporate buccaneer and made him the centerpiece of its campaign…”
“In effect, (Obama)’s accepted a slow growth, high unemployment, high tax, large debt economy, but he can’t acknowledge it for obvious reasons… Nor can he turn to the most effective tools for stirring economic growth and job creation—that is, cutting tax rates on individual income and capital gains and reducing government spending. He just raised rates on income and capital gains and wants to increase spending. Besides, Obama is loath to unleash the private sector to boost the economy. That way, government loses control.”
“For Republicans, the response may be easier than they think. It’s simple: Forget the politics and do what’s right. Obama thinks the public loves government programs and wants more, whatever the cost. If he’s right, Republicans are doomed regardless of what they do politically. If he’s wrong, a Republican comeback is slouching toward Washington.”
“Americans need to understand that Mr. Obama is threatening that if he doesn't get what he wants, he's ready to inflict maximum pain on everybody else. He won't force government agencies to shave spending on travel and conferences and excessive pay and staffing. He won't demand that agencies cut the lowest priority spending as any half-competent middle manager would… It's the old ploy to stir public support for all government spending by shutting down vital services first.”
“Mr. Obama just whacked the economy with a roughly $160 billion tax increase in 2013 that he says will do no harm, but he wants us to believe that $85 billion in spending cuts will trigger a recession… Mr. Obama has taken government spending from 21% to 24% of GDP, yet we've had the weakest economic recovery in three generations.”
“For 30 years bipartisan tax reform has meant lowering tax rates in return for closing loopholes. But having already raised rates, Mr. Obama now wants fewer loopholes for those he dislikes while keeping the higher rates. This is nothing but a grab for more revenue so he and Democrats can keep spending.”
“If Mr. Obama really wants to eliminate the sequester, Republicans are ready to negotiate. But if he won't drop his tax increase and negotiate in good faith, as he hasn't during his Presidency, then the sequester is the only way that any spending is going to be cut. The economy will be better for it.”
“The major objection most Republicans have to the coming sequestration budget cuts is that the cuts will fall disproportionately on the Department of Defense. That’s true; defense spending is about one-fifth of the federal budget but will take about half of the sequester cuts.
“But even for the Pentagon, the cuts are only to the rate of growth for the defense budget in coming years. They are not actual cuts that make spending decline…”
“[A]ssume that U.S. involvement in the war in Afghanistan does end in the next year or so, and that war spending goes down or even disappears altogether. Even in that scenario, defense spending is scheduled to increase in every year except one, even with sequestration cuts…”
Bob Woodward notes that during the campaign last fall Obama blamed Republicans in Congress for proposing and then insisting upon the sequester; however, Woodward’s reporting in his book “The Price of Politics” showed that the sequester was initiated by Jack Lew and Rob Nabors in the White House.
“What is the non-budget wonk to make of this? Who is responsible? What really happened?”
“Obama personally approved of the plan for Lew and Nabors to propose the sequester to Senate Majority Leader Harry Reid (D-Nev.). They did so at 2:30 p.m. July 27, 2011, according to interviews with two senior White House aides who were directly involved.”
“A majority of Republicans did vote for the Budget Control Act that summer, which included the sequester. Key Republican staffers said they didn’t even initially know what a sequester was — because the concept stemmed from the budget wars of the 1980s, when they were not in government.”
“Why does this matter? … First, months of White House dissembling further eroded any semblance of trust between Obama and congressional Republicans… Second, Lew testified during his confirmation hearing that the Republicans would not go along with new revenue in the portion of the deficit-reduction plan that became the sequester…”
“In fact, the final deal reached between Vice President Biden and Senate Minority Leader Mitch McConnell (R-Ky.) in 2011 included an agreement that there would be no tax increases in the sequester in exchange for what the president was insisting on: an agreement that the nation’s debt ceiling would be increased for 18 months, so Obama would not have to go through another such negotiation in 2012, when he was running for reelection.
“So when the president asks that a substitute for the sequester include not just spending cuts but also new revenue, he is moving the goal posts…”
“And when the Republicans opened the seventh seal of the sequester, there was a great earthquake; and the sun became black and the stars fell unto the Earth; and our nation's ability to forecast severe weather, such as drought events, hurricanes and tornados, was seriously undermined. Lo, and the children were not vaccinated, and all the beasts starved in the zoos, and the planes were grounded.”
“But if any of these cataclysms do come to pass, then they will be mostly Mr. Obama's own creation. The truth is that the sequester already gives the White House the legal flexibility to avoid doom, if a 5% cut to programs that have increased more than 17% on average over the Obama Presidency counts as doom.”
“This White House has never been fussy when a statutory text or even the Constitution interferes with its political ambitions. (See ObamaCare, immigration executive orders, recess appointments and much else.) Could it be that Mr. Obama is exaggerating the legal stringency of the sequester in a gambit to force Congress to shut it off?”
“If air traffic control and airport security really are the models of government efficiency that anyone who has ever traveled knows they are not, perhaps Homeland Security could begin by targeting some of the programs identified by Oklahoma Republican Tom Coburn this week. These include necessities such as grants for a security conference in San Diego that featured ‘zombie apocalypse training’ or funds for towns like Keene, New Hampshire (pop. 23,000) to purchase armored tank-like vehicles called Bearcats. Seriously.
“Before furloughing park rangers, maybe start with the 10% of the 75,000 Department of the Interior employees who are conserving the wilderness of Washington, D.C. Before slashing cancer research, stop funding the $130-million-a-year National Center for Complementary and Alternative Medicine that studies herbs and yoga. Cut after-school funding only after consolidating the 105 federal programs meant to encourage kids to take math and science classes.”
See also: AMERICA'S GROWTH CORRIDORS: The Key to National Revival
“Overall, these corridors account for 45% of the nation's land mass and 30% of its population. Between 2001 and 2011, job growth in the Great Plains, the Intermountain West and the Third Coast was between 7% and 8%—nearly 10 times the job growth rate for the rest of the country. Only the Southeastern industrial belt tracked close to the national average.”
“Energy, manufacturing and agriculture are playing a major role in the corridor states' revival. The resurgence of fossil fuel–based energy, notably shale oil and natural gas, is especially important…”
“Since 2000, the Intermountain West's population has grown by 20%, the Third Coast's by 14%, the long-depopulating Great Plains by over 14%, and the Southeast by 13%. Population in the rest of the U.S. has grown barely 7%...”
“The corridors' growing success is a testament to the resiliency and adaptability of the American economy. It also challenges the established coastal states and cities to reconsider their current high-tax, high-regulation climates if they would like to join the growth party.”
“A display case in the lobby of the Federal Reserve Bank (in Richmond, VA) might express humility. The case holds a 99.9 percent pure gold bar weighing 401.75 troy ounces. Minted in 1952, when the price of gold was $35 an ounce, the bar was worth about $14,000. In 1978, when this bank acquired the bar, the average price of gold was $193.40 an ounce and the bar was worth about $78,000. Today, with gold selling for around $1,600 an ounce, it is worth about $642,800. If the Federal Reserve’s primary mission is to preserve the currency as a store of value, displaying the gold bar is an almost droll declaration: ‘Mission unaccomplished.’”
“The Fed failed to cure the (Great Depression), and today’s unprecedentedly anemic recovery — approximately 3 million fewer people are working than were five years ago — has failed to cure the (Great Recession): If the workforce participation rate were as high as it was when Barack Obama was first inaugurated, the unemployment rate would be 10.8 percent.”
“Will Rogers said, ‘Be thankful we’re not getting all the government we’re paying for.’ Today we are not paying for all the government we are getting, and the political class benefiting from this practice should be thankful for the Fed’s low interest rate policy, which makes running deficits inexpensive. In addition to making big government cheap, this causes a flight of investors from interest-paying assets into equities — the rising stock market primarily benefits the wealthy — and commodities, rather than job-creating investments.
“Fed policy, which has failed so far, can also fail by succeeding. If strong economic growth begins, interest rates will rise substantially, and the cost of debt service will cause the deficit to explode.”
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