Thursday, December 29, 2011

Brain Dead Dem Congressman Thinks Spending is Too Low

In case you were wondering why we are doing nothing to slow our inexorable march towards Greek-style insolvency, look no further than those who are vested with the power of the purse string.  Yesterday, Congressman Rush Holt (D-NJ) suggested that we are not spending enough “to invest in research and development, education and infrastructure that would allow America to compete in this increasingly global economy.”  He proved his assertion by comparing our deficits to….the WWII era!
According to the Office of Management and Budget, America’s deficits were more than twice as large in the 1940s as they are today. In 1943, the deficit was 30 percent of our economy’s size; in 1944, it was 23 percent. Today, it is less than 9 percent. As for publicly held debt, it was significantly larger as a share of our economy in 1944 than it is today.
Hmmm, what do you think was going on during 1943-1944?  Oh yes, that WWII thing.

Obviously, we had a massive military buildup – the most unprecedented in world history – which was very costly at the height of the war.  But those were temporary annual deficits.  Immediately after the war, our deficits returned to historical lows.  Consequently, our total gross debt dipped well below 60% of GDP during the next decade, and eventually, under 35% of GDP.  Just three years after the war ended, total federal outlays were just 11.6% of GDP; today’s outlays are 24.5% of our economy.  Even in 1944, at the height of the biggest war on world history, our total debt was 97.6% of GDP, lower than our current 100.5% debt-to-GDP ratio.

Now if Rep. Holt wants to compare our spending levels to the WWII era, let’s take defense and war spending out of the equation for a moment.  In 1944, defense spending accounted for an astounding 86.6% ($79.1 billion) of total federal outlays ($91.3 billion), while non-defense spending accounted for just 13.4% ($12.2 billion) of the budget.  In other words, non-defense spending in 1944 was pegged at 5.5% of GDP ($219.7 billion).

In 2012, total defense and war spending will check in at $662.4 billion, or roughly 18% of our estimated $3.7 billion budget.  That means that our non-defense spending will come in at 20% of our GDP (roughly $15.092 trillion), compared to 5.5% in 1944.  This year, our defense spending will account for 4.4% of GDP compared to 36% in 1944.  So if we want to engage in absurdity and use WWII spending as an accurate yardstick, why not reduce our non-defense spending to WWII levels, and cut spending by over $2 trillion?
The irony is that the military is the only expenditure that Democrats want to cut, yet they are using WWII – when defense consumed almost our entire budget – as a paradigm for auspicious government “investments.”

It’s a shame we can’t ship these loons off to Greece.

Cross-posted to

Wednesday, December 28, 2011

Romney Fundamentally Lacks Conservative Principles on Healthcare…Or Anything Else

“His only contribution to the party has been his five-year interminable presidential campaign, despite his insistence that he never intended to run for office again after 2008.”
When Mitt Romney was seeking the Republican nomination in 2008, he deflected criticism of Romneycare by blaming its disastrous effects on the liberal legislature in Massachusetts.  That was four years ago, when Romney was attempting to win the hearts of the conservative base as the alternative to John McCain.

This time around, as he seeks to eschew any ideological principles, Romney is pronouncing his signature healthcare reform as a meritorious and quite ideal plan, at least for his state.  In fact, in recent days, he has gone so far as to proclaim MassCare as a fundamentally conservative principle.

Here is what he had to say today on Fox and Friends [video]:
“I’m happy to stand by the things that I believe. I’m not going to change my positions by virtue of being in a presidential campaign,” Romney said. “What we did was right for the people of Massachusetts, the plan is still favored there by three to one, and it is fundamentally a conservative principle to insist that people take personal responsibility as opposed to turning to government for giving out free care.” [emphasis added]
Romney owes Republican primary voters answers to two questions; one ideological and one political.

1) If Romneycare is built on such inviolable conservative principles; if Romneycare has been such an auspicious healthcare reform plan, then what is so terribly offensive about Obamacare?  Yes, we’ve heard that dubious distinction between state governments having the ability to promulgate tyranny, whereas the federal government is constrained by the constitution.  But why not amend the constitution so we can implement Romneycare (Obamacare) on a federal level?  Why not share your paramount success with the rest of the nation?

Tuesday, December 27, 2011

The Chickens of Debt Ceiling Deal Have Come Home to Roost

Today, the Treasury Department announced that Obama will ask for another $1.2 trillion increase in the debt ceiling, carrying our national debt to $16.394 trillion by next year.  This will bring Obama’s total share of the debt to $5.77 trillion by the end of his tenure, far more than any other president.  Unfortunately, there is not a darn thing we can do about it.  Yet, it didn’t have to be this way.

Looking back at this year of legislative battles, there is no doubt that the debt ceiling deal wins the award for the most insane capitulation of the year.  In July, Obama, who had already accrued $3.6 trillion in debt, was faced with the embarrassing prospect of asking for yet another increase in the debt limit.  That was our opportunity to extract transformational concessions from Obama in return for the ability to issue more debt.  That was our time to push for Cut, Cap, Balance, or at the very least, a plain balanced budget amendment.

Not only did GOP leaders strike out and squander the entire opportunity, they ground into a double play.  They gave Obama the ability to raise the debt ceiling another $2.1 trillion, just enough to spare him from another embarrassing debt increase right before the 2012 election.  What did we get in return?  Our reward for giving him the increase was, in fact, a twofer gift to Obama.  We were “rewarded” with the creation of the 18th debt commission and the Budget Control Act, which completely abrogated the Republicans budget, thereby obviating any leverage we would have during the remaining budget battles of the year.  After all, how could we go back on our word?

At a time when many “prominent” conservative publications were blithely cheering on this disaster, we detailed nine reasons to oppose the deal.  Among other things, we noted that the deal would encourage notional spending cuts, preserve Obamacare, destroy the Ryan budget, engender deep cuts in defense, and grant Obama a lifeline, all the while, failing to prevent a credit downgrade.

Sadly, my premonition has come to fruition.  After enjoying a free ride on the first $900 billion of debt, Obama now has the authority to issue another $1.2 trillion of debt.  He has blown through the first ‘tranche’ of the debt ceiling increase at a rate of almost $6 billion per day.  Now, pursuant to the debt deal, only a resolution of disapproval from two-thirds of both houses of Congress can preempt such an increase.

Those who promoted this debt ceiling scheme last July with oleaginous columns and speeches, while denouncing its critics as “intransigent,”  should hang their heads in shame.

Sunday, December 25, 2011

Charting a Path Forward

If the traditional description of the political parties wasn’t evident enough before the payroll tax/UI kerfuffle, it certainly is now: Democrats are evil and Republicans are stupid.  Democrats are evil for insidiously driving up the deficit, perpetuating unemployment, lying about Social Security and passing short-term unworkable Social Security tax holidays for political gain.  Republicans are stupid for a) having Mitch McConnell as Senate Leader and b) coming back to fight the evilness… but then failing to fight it.  They should have outflanked the Democrats on the tax cut and waged a separate battle over Unemployment Insurance (UI).  Instead they begged Democrats to come to conference with them, a losing proposition from day one.

Undoubtedly, there is a lot of blame to go around, with the lion’s share going to Mitch McConnell.  However, the important thing is to forge a strategy going forward into next year.
While everyone is focused on the payroll tax part of the deal, Democrats are quietly getting what they wanted vis-à-vis the UI program.

We were all aghast with indignation last year when we found out that an unprecedented 99 weeks of UI was inserted into the deal that extended the Bush taxes.  We kicked ourselves for allowing that travesty to pass and promised never to let it happen again.  Unfortunately, GOP leaders waited until it was too late to formulate a coherent principled stance against the entire premise of extending UI welfare.  They made a compromise to extend the long-term benefits, but gradually reduce eligibility by 40 weeks.  And, by George, it would be paid for.

Well, now that we foolishly agreed to tie UI benefits to the payroll tax issue, the fate of the UI extension is inexorably tied to the fate of the payroll tax cut.  Consequently, we will get the full 99 weeks in perpetuity…and it won’t be paid for.  If we were like Democrats, who put political gain ahead of country, we might be cheering the ancillary fact that this deal will help perpetuate unemployment and hamper Obama’s reelection efforts.  Another ancillary benefit of this payroll tax brouhaha is that Democrats will have no leg to stand on when they try to let the Bush tax cuts expire.

Unfortunately, ancillary benefits are all we have from this deal.

Thursday, December 22, 2011

What Does $40,000 Mean to You?

Obama's pathetic $40 Social security tax cut is nothing compared to his $40,000 debt increase

Obama has been running around all day making a fool of himself as he promotes his $40 Social Security tax cut.  Yes, the tax plan that will create a new class warfare Social Security Taxable Wage limit in order to accommodate his totally unworkable two-month extension.  Obama has even set up a new web page asking people “what $40 per paycheck would mean to you.”

Republicans should respond by setting up a web page asking every taxpayer to explain how a $40,000 increase in their share of debt will affect their finances and those of their grandchildren.

You see, while the media has been focusing on Obama’s two-month Social Security tax cut, they have ignored another big story.  Our national debt has surpassed 100% of GDP.  With Q3 GDP revised downward, our economy now stands at $15.081 trillion.  Our total federal debt is over $15.14 trillion.

How much of that debt is Obama responsible for?

When Obama took office, the total federal debt stood at $10.6 trillion.  Obama’s share of the debt increase is roughly $4.5 trillion.  There are approximately $112.7 million taxpayers.  That means that the individual share of the Obama debt is about $40,000.

So while Obama is bragging about his $40 tax cut, he is obfuscating the fact that he is increasing more entitlement spending along with the package.  This will only increase the $40,000 share of debt for every taxpayer.

We know that $40,000 is not much for the commander-in-chief of all class warfare, but what does it mean for you?

Wednesday, December 21, 2011

Pass A Payroll Tax Cut Extension...and Only a Payroll Tax Cut Extension

“We need to stop forcing Republicans to face the grim choice between blocking a tax cut and fighting against more entitlement and deficit spending.”
There are two inexorable political realities at this point: the payroll tax cut must be extended and those who block it will incur a needless political reprisal.  To that end, Republicans must outflank the Democrats on the payroll tax cut, while dealing with the entitlement extensions in another bill.

As conservatives, we all agree that a short-term payroll tax holiday – without Social Security reform – is inane policy, both in the realm of economic growth and entitlement reform.  We should have either categorically opposed a Keynesian stimulus holiday by calling out the Democrats for their hypocrisy on Social Security, or we should have outflanked the Democrats and called for a permanent diversion of the payroll tax to private retirement accounts.  Unfortunately, the ship already sailed on that a long time ago.  As the Wall Street Journal noted,” if Republicans didn't want to extend the payroll tax cut on the merits, then they should have put together a strategy and the arguments for defeating it and explained why.”

Republican leaders already agreed to another "holiday," albeit with the condition that it be paid for.  With less than two weeks to go before its expiration and with a universal expectation that it will be extended, Republicans must pass a clean extension of the payroll tax cut.  Anything less would enable the Democrats to get to the right of Republicans on tax cutting.

Last week, Republicans secured superior leverage by becoming the first body to actually pass an extension, while the Senate was unable to pass its own bill.  However, Mitch McConnell launched a broadside on his party by agreeing to a lousy two month extension – one that is totally unworkable in the real world.  Nevertheless, its 89-10 margin of support gave Democrats all the leverage they needed.  Now House Republicans are begging Democrats to join them in a conference agreement to iron out the discrepancies between the two bodies.  But this is only playing into the narrative that Republicans are the ones who are obstructing the “only” plan to extend the tax cut.  House leaders are justified in their outrage towards the Senate, but we need to focus on current strategy.  [We can talk about canning McConnell another time.]  Their current strategy of asking for a conference will get them nowhere and will only hurt them.

This is why, for the last time, I call on House Republicans to pass a clean 12-month extension without any strings attached; no riders, reforms, offsets, and extraneous extensions attached.  That will totally put the ball back in the Democrats’ court, forcing them to support or reject the only workable extension plan.  What about the offsets and Keystone pipeline provision?

Here’s the kicker:

Coburn Details $7 Billion in Waste from 100 Dumb Projects

At some point we will need to go beyond merely cutting waste, fraud, and abuse.  We will eventually have to wind down the welfare state and close government departments and agencies.  However, there is no reason we shouldn’t demand an immediate bipartisan effort to eliminate programs that are just plain dumb, even according to Democrat socialist ideology.

Nobody has been more assiduous and instrumental in identifying silly government projects than Senator Tom Coburn.  Yesterday, Senator Coburn released his annual “Wastebook” profiling 100 “unnecessary, duplicative, or just plain stupid projects spread throughout the federal government.” The total cost of these programs is $6.9 billion.  Cutting these programs would only account for roughly 40 hours of our debt, but why spend a penny on this stuff?

Here are some of the greatest hits:
  • $120 million in retirement and disability benefits to federal employees who have died
  • $30 million to help Pakistani Mango farmers
  • $550,000 for a documentary about how rock music contributed to the collapse of the Soviet Union
  • $10 million for a remake of “Sesame Street” for Pakistan
  • $764,825 to examine how college students use mobile devices for social networking.
  • $113,227 for a video game preservation center in New York
  • $765,828 to subsidize a “pancakes for yuppies” program in Washington, D.C.
  • $100,000 for a celebrity chef show in Indonesia
  • $175,587 for a study on the link between cocaine and the mating habits of quail
  • $606,000 for a study about online dating
  • $17.80 Million in Foreign Aid to… China – (Department of State & U.S. Agency for International Development)
  • The Super-Bridge to Nowhere – (Alaska) $15.3 Million
Yes, this is mere pocket change; we will not balance the budget by eliminating these preposterous projects.  Nevertheless, they reveal just how apathetic our lawmakers are in handling public funds.  They are also emblematic of the ridiculous budget process that has been in place in recent years.  If we are going to pass 1200-page bills that fund the entire government with such short notice, we will invariably continue to fund these projects.

Coburn’s report gives us another 100 reasons why we should never pass omnibus bills.

Tuesday, December 20, 2011

New Gang of Five Coalesce Around McConnell’s Excrement Sandwich

If I had voted for a bill that not only screwed my party, but also screwed the country, I would keep a low profile.  If I had passed a bill that was unworkable for businesses and helped preserve the entities that precipitated the housing crisis, I wouldn’t show my face in public for a while.  Evidently, there are five GOP senators, some of which have flirted with “No Labels,” who are unfazed by their vote for McConnell’s pathetic extenders package.  Worse, they are demanding that the House join them in helping their own reelection prospects at the expense of the rest of the country.

This, from CQ:
Republicans Scott Brown of Massachusetts, Dean Heller of Nevada, Richard G. Lugar of Indiana and Olympia J. Snowe and Susan Collins of Maine called on the House to change course, which Senate Democrats are gleefully noting. [...]
“I’m hopeful, maybe without basis, the House of Representatives will pass the bill the Senate passed and it will do so tonight,” Lugar said on MSNBC on Monday. “I’m hopeful that our majority, Republicans and Democrats today, will proceed, because it seems to me this is best for the country as well as for all the individuals who are affected.”
Snowe told Maine’s Portland Press Herald that it was “paramount at this point” that the payroll tax cut not lapse. Collins added, “At this point, we must act, as the Senate has done, to prevent a tax increase that will otherwise occur on Jan. 1.”
Heller said in a statement that [“There is no question we need to extend the payroll tax cut and unemployment insurance for the entire year..."]“there is no reason to hold up the short-term extension while a more comprehensive deal is being worked out.” Heller is set to face Rep. Shelly Berkley, D-Nev., in a close race next year.
“The House Republicans’ plan to scuttle the deal to help middle-class families is irresponsible and wrong,” Brown said in a statement. “The refusal to compromise now threatens to increase taxes on hard-working Americans and stop unemployment benefits for those out of work.”
Blocking a two-month extension that is untenable for payroll processors is “irresponsible,” Senator Brown?  Really?  You can’t think of any reason to hold up a short-term extension, Senator Heller?  We need another 99-wees of unemployment together with a tax cut, really?  This is really the best thing for the country, Mr. Lugar?  Or is this the best thing for your reelection?

The best thing for the country is to remove some of these political hacks, who hypocritically place their political ambitions ahead of the good of the country.

We can start by helping out Lugar’s primary opponent.

Monday, December 19, 2011

More Problems With Senate Extenders Package

The Senate-passed payroll tax cut extenders package was already on the ropes with House Republicans over the weekend.  The bill (HR 3630) offers a pathetic two-month extension of the payroll tax cut.  In addition, it extends long-term unemployment benefits for the ninth time, along with the annual Medicare doc fix.  The bill gutted all House-passed reforms to medicare and unemployment insurance, while offsetting the cost through phantom revenue increases generated through Freddie and Fannie.  Reliance on these fees for spending offsets will actually make it more difficult to close down these harmful entities.

Today, we are discovering two more problems with the Senate package:

1) Earlier today, Senators Brown, Heller, and Lugar blasted House Republicans for holding up the short-term deal.  “There is no reason to hold up the short-term extension while a more comprehensive deal is being worked out,”cried Heller.  Well, here is a good reason.

Aside for the obvious vices of a two-month payroll tax extension, this tenuous law will make life difficult for providers of payroll processing services.  Section 101 of the legislation establishes a new Social Security Taxable Wage limit of $18,350.  All wages in excess of $18,350 for January and February will be taxed at the old rate of 6.2%.  This provision was inserted in order to preclude those with high incomes from meeting their full payroll tax obligation during the first two months.  Such an eventuality would create a disparity in which middle-income earners, who would still incur a payroll tax liability after February, would pay a higher rate (6.2%) on the rest of their income than high-income earners would have to pay.  Many high-income earners receive large bonuses at the beginning of the year, and Democrats were not about to let them take advantage of this short-term payroll tax cut.

Now, the National Payroll Reporting Consortium (NPRC), a trade association representing payroll processing companies, is charging that this provision is untenable.  Such a drastic change would force payroll processors to implement significant changes to their program software.  In a letter sent to the chairmen of the tax-writing committees obtained by Jake Tapper, NPRC's president warns that there is not enough time to implement these changes before January.

A full 12-month extension would obviate the need for this wage limit, thereby sparing payroll processors the two-month headache.  Unfortunately, Senator Brown excoriated House Republicans for fighting the Senate bill, calling their "plan to scuttle the deal to help middle-class families" "irresponsible and wrong."  The only thing irresponsible and wrong was his vote for an inane two-month extension.

Sunday, December 18, 2011

House Must Decouple Payroll Tax Cut From Broader ‘Extenders’ Package

“The Senate action was akin to grounding into a triple play for Team GOP, yet the underlying bill passed with unanimous consent.”
Over the weekend, Mitch McConnell and Senate Republicans obviated the superior leverage of House Republicans by passing a two-month extension of the payroll tax cut, along with a clean extension (no reforms and offsets) of doc fix and unemployment benefits.

In a premature capitulation, they agreed (89-10) to amend the House extenders bill by eliminating most of the spending offsets, all of the UI reforms and the policy riders, with the exception of the Keystone pipeline provision.  They will fill in the $33 billion two-month gaping budget hole with nebulous revenue increases from higher Freddie/Fannie mortgages over ten years.  To the extent that those revenues will be actualized, this deal will indeed make it harder to shut down these officious venture-socialist enterprises.  The Senate action was akin to grounding into a triple play for Team GOP, yet the underlying bill passed with unanimous consent.

Yes – we can already see the ecstatic pronouncements emanating from the McConnell Republican echo chamber.  “We got the pipeline,” they will exclaim.  But here is the problem: the ship already sailed on that.  This issue was such a political liability for Obama that, despite his rhetoric, it was a foregone conclusion he would be forced to cave on it.  He was not going to allow this to become an albatross around his neck during the election.  Accordingly, the White House is lending enthusiastic support to McConnell's Senate-passed extension.  Besides, due to loopholes in the Keystone provision, the administration is already balking at compliance with the language of the bill.

This is all about understanding your leverage; something that has been lost on GOP leaders throughout the year.  And speaking of leverage, this capitulation has totally undermined the superior leverage of House Republicans.

Until Saturday, the House was the only body that had proposed a workable solution to preempt a tax increase on every American worker.  The Democrats had been on the run for the entire week.  Sadly, in his last act of the year, McConnell, in what appears to be a unilateral move, has launched a drive-by preemptive assault on the House-passed proposal.  Was he in such a rush to get home?

Now House Republicans are incensed, and for good reason.

The Great Spending Betrayal

Over Friday and Saturday, 61% of House Republicans and 34% of Senate Republicans voted for the omnibus megabus bill.  In doing so, not only did they violate their pledge pertaining to bundled (1200-page) bills and the 72-hour layover rule and agree to fund Obamacare, Dodd-Frank, Planned Parenthood, the EPA, the PLO and the UN; they actually agreed to spend almost $9 billion more than last year.  Overall, budget authority will be $33 billion higher than the House budget, while appropriations for non-defense spending will be $45 billion more.  One of the members who voted in the affirmative even agreed that he had voted for a “crap sandwich."

Throughout the process, GOP leaders and appropriators swore incessantly that the spending measure would not breach the $1.043 trillion cap and would cut $6.7 billion from last year’s budget authority.  Well, they have lied.

In a cynical subterfuge that has become all too common in Washington, House leaders placed the offsets for the additional $8.6 billion of emergency spending in a separate bill.  This allowed members who voted for the omnibus to go on record as saying that they voted to offset the extraneous spending, thereby keeping their pledge to spend less than the previous year.  It also enabled Senate Democrats to pass the underlying omnibus bill, along with the emergency spending, but easily vote down the offsets in the third bill.  And that is exactly what they did today.

Thanks for being pawns in this insidious inside-the-beltway game.  What a way to end of a year that began with so much potential.

Below the fold is a list of Republicans who supported the omnibus.  With the presidential election largely narroewed down to a few unideal choices, we need to ramp up Tea Party 2.0 for the 2012 congressional elections.

Oh, and by the way, Senator Ron Johnson voted no; Senator Roy Blunt voted yes.

Friday, December 16, 2011

So This is It?

This is what we get from a new House Republican majority?

Call me naive, but from the onset of this legislative session I really expected we would witness some transformational change in the way Washington does business.  That was obviously a foolish expectation.

GOP leaders agreed last night to pass the omnibus bill with largely the same provisions as the one they introduced yesterday.  After all of the bravado and grandstanding throughout the year; after cutting a mere $352 million in non-baseline spending in FY 2011, they are prepared to cut nothing off the 2012 budget.  In fact, with the $8.6 billion in extra disaster spending, the total discretionary budget authority will surpass last year’s levels by roughly $3 billion.  Yes, we know that there are spending offsets, but they were cleverly packaged in a separate bill from the rest of the omnibus, allowing Democrats to vote them down.

What about the riders?  Democrats are bragging about the fact that they jettisoned all the major policy riders except for the block on light bulb bans.  We now have a 1200-page bill that encompasses funding for most of the federal government, yet it cannot be amended.  That leaves one option for conservatives: vote no on the entire package.

Hey, I guess we can take solace in the fact that we slowed baseline spending from what it would have been had Democrats retained control of Congress.  Then again, all these numbers only account for discretionary spending, or about one-third of the federal budget.  The other two-thirds, mandatory and entitlement spending, continues to grow out of control.

And speaking of mandatory spending, what are we getting in return for agreeing to defacto permanent super-long-term unemployment benefits?

Thursday, December 15, 2011

Conservatives Must Throw Omnibus Under the Bus

“Conservatives should not let GOP leaders and Harry Reid pocket their good will on the omnibus under false pretenses that Boehner will remain strong on the extenders package.”
The bill violates GOP pledge, funds Obamacare, and paves the way for a breaching of spending caps and capitulation on extenders package

There is an important rule - one that runs counter to DC conventional wisdom – that conservatives should heed when considering support for a piece of legislation.  No legislation is better than bad legislation.  To put that in today's relevant terms, passing no spending bill or a CR is better than passing a $1.050 trillion, 1217-page Omnibus just 36 hours after its inception.

Early this morning, minutes after midnight, the House Appropriations Committee released their omnibus as a package of three bills.  They will need to violate even their interpretation of the three-day posting rule if they intend to pass it as a vehicle to avert a government shutdown Friday night.   The first bill is the main omnibus appropriations package that bundles nine approps bills at a cost of $915 billion.  This, coupled with the three approps bills already passed (via that ridiculous minibus bill) comes out to exactly $1.043 trillion in discretionary spending – the spending cap set under the Budget Control Act.  Additionally, the omnibus appropriates another $115 billion for the annual OCO (Overseas Contingency Operations) war spending and $11 billion in war funding for the State Department.  The second bill funds emergency disaster spending to a tune of $8.6 billion, while the third bill offsets that spending with further recessions from the discretionary spending totals in the main bill.

Overall, this bill totally vitiates the House budget passed by the entire conference, by appropriating an extra $24 billion in discretionary spending.  Also, the fact that they are proposing three bills gives House Democrats the ability to vote for the first two bills, but quash the third bill with the offsets, thereby consummating spending levels higher than those of 2011 ($1.052 trillion).

This entire package, which includes funding for 10 executive departments, will be voted on within the next 36 hours, in violation of two provisions of the Pledge to America; passing Omnibus bills and the 72-hour posting rule.  Jeff Flake expressed his exasperation like this:
“We’ve barely seen the bill; it’s an awful big bill to get a vote on that fast.”
“Some riders got in, some got knocked out, and I don’t even know – and I’m on the appropriations committee,” he adds. “Whenever we come to an impasse, our leadership says, we can’t shut the government down. We haven’t had the leverage in any negotiation we’ve gone into. That’s what’s frustrating to me.”
Why are Republicans unilaterally violating their own pledge?

Wednesday, December 14, 2011

We Need More Fighters in Congress

You can't win a war without warriors

“We all know which ones have been fighting hard to keep their campaign promises and which ones have remained stealth senators following the rudderless lead of Senator McConnell.”
The defeat of Ron Johnson for a leadership post in the Senate should serve as a wakeup call to conservatives.  Despite our hard work during the 2010 elections, we have not done enough to elect conservative warriors to Congress.

Too many people assume that we have successfully flushed the Senate of liberal Republicans, with the exception of a few senators from the northeast.  The truth is just the opposite.  With the exception of a few fighters such as DeMint, Paul, Lee, Toomey, Johnson, Rubio, and a handful of others, we have no one who is willing to fight day and night to reverse the inexorable tide of statism.

While there are only a handful of true RINOs, members who consistently vote with Democrats, the lion’s share of the conference is satisfied to merely support Mitch McConnell’s uninspiring incrementalism to nowhere.  Even though some of our most intrepid conservatives were elected as part the 2010 freshman class, we also elected a new crop of McConnell benchwarmers such as Boozman, Hoeven, and Portman.  While we were focused on the high-profile intra-party fights in blue and purple states, we ceded precious ground in solid red states.

To be clear, the mainstream of the Republican conference, the McConnell loyalists, are not RINOs.  We may even assume that they intuitively understand that free-market conservatism is what is best for the country.  However, they are not fighters.  They don’t wake up every morning and promise to dedicate themselves to the advancement of constitutional conservative principles.  They wake up in the morning and determine the best way to play it safe and continue being….just another Republican senator.  Either they simply lack the mettle to fight for their convictions or they believe that their convictions are political liabilities.

Tuesday, December 13, 2011

Annual Deficit Will Absolutely Top $1 Trillion in 2012

“It's going to take a lot more than a few accounting gimmicks and unrealistic assumptions to cure our budget ailment”
Yesterday, the media was agog with glee over reports that CBO is projecting an annual deficit "below $1 trillion for the first time in four years."

How did they arrive at that conclusion?

This projection was extrapolated from the Treasury Department's report of the first two months of the fiscal year budget, which, as explained by the CBO's monthly budget review, pegs the current deficit at $236 billion — $55 billion less than at this time last year.  The media is conflating this monthly report with an outdated long-term CBO budget outlook, which projects only a $973 billion deficit for FY 2012.

You might be wondering how we can achieve such a reduction when there are little or no spending cuts.  After all, even the infinitesimal $6.6 billion in discretionary cuts will be cancelled out by additional emergency spending.  Additionally, mandatory spending programs will only continue to grow this year.  Yes – revenues are expected to climb; they have increased 7.1% from last year, but that would only reduce the deficit by $163 billion, when extrapolated on an annual basis.

Well, like most optimistic economic and budget projections, this one is garbage in, garbage out.  It also involves shoddy work on the part of the media.

Monday, December 12, 2011

Mitt Romney: Leader of the Pale Pastel Wing of Party

During Saturday night’s GOP debate, Mitt Romney demonstrated once again why he is failing to gain traction with the conservative base.  He continues to muddle the distinction between Obama’s policies and true free-market doctrine.  Romney consistently invokes progressive policy doctrines, while tempering them with banal flavors of conservatism.

We must remember that every time a candidate failed to draw a sharp intellectual distinction between himself and the Democrats, that candidate was relegated to the ash heap of history.  So far, Republican voters appear to have internalized that lesson.

Here are some examples of Romney’s insipid expression of ‘conservative’ policy.

Taxes/Class System
“His [Gingrich's] plan in capital gains, to remove capital gains for people– at the very highest level of income is different than mine. I’d– I’d– eliminate capital gains, interest, and dividends for people in middle income. So– we have differences of viewpoint on– on some issues. But– but the real difference, I believe, is our backgrounds. I spent my life in the private sector.
I– I understand how the economy works. And I believe that for Americans to– to say goodbye to President Obama and elect a Republican, they need to have confidence that the person they’re electing knows how to make this economy work again and create jobs for the American middle class.” [...]
“And– and in my view, the place that we could spend our precious tax dollars for a tax cut is on the middle class, that’s been most hurt by the Obama economy. That’s where I wanna eliminate taxes on interest dividends and capital gains.” [emphasis added]
Romney goes on to criticize Gingrich for not joining him in recognizing a class system and spending “our precious tax dollars” only on middle class taxpayers.  This is exactly what we mean when we say Romney is Obama-light.  He doesn’t believe in raising taxes on the rich, but he believes in the pale pastel alternative of tax cuts only to certain “classes”.  Worse, he views tax cuts as a means of “spending” as opposed to a means of returning wealth to its original owners.  Accordingly, he believes that those “expenditures” should be granted to the right people.

GOP Must Block Maria del Carmen Aponte from Becoming Ambassador to El Salvador

What is worse than an Obama radical czar?  An ambassador to a sensitive South American country that had an affair with a Cuban spy.

Last August, stymied by Jim DeMint’s Senate hold, Obama used a recess appointment to name Maria del Carmen Aponte ambassador to El Salvador.  She was originally selected as ambassador to the Domincan Republic during the Clinton administration, but she withdrew her name after refusing to take a polygraph test concerning her relationship with Cuban spy, Roberto Tamayo.  Nonetheless, radical rejects of the Clinton administration are the very people whom Obama loves to recycle.  Aponte’s recess appointment expires at the end of the year, and the Senate may vote on her permanent appointment as early as Monday afternoon.

While everyone is focused on the Middle East, few people are focusing on one of the most serious threats that hearkens all the way back to the Monroe Doctrine.  There is a disturbing trend, known as the “Pink Tide”, of radical socialist tin-pot dictators obtaining power throughout Latin America and aligning themselves with Chavez and Castro.  Many of these countries, such as Bolivia, Nicaragua, and Ecuador, have already joined Venezuela in an unholy alliance against Iran.  They are also strengthening ties with Iran.

There are many smaller developing nations in the region that have fallen to the Pink Tide, and El Salvador is one of them.  We need to engage these countries from a position of strength and lure them away from their alliance with Chavez and his Bolivarian Alliance for the Americas and the newly formed Community of Latin American and Caribbean States (CELAC).  It goes without saying that those who are vested with such diplomatic power should not side with our enemies.  Then again, the commander-in-chief sides with the Pink Tide anyway.

Call your senators and urge them to vote no on Maria del Carmen Aponte.

Sunday, December 11, 2011

Newt Gingrich Tells the Truth About the Palestinian Non-Entity

“The Palestinians are the global warming climate change of geopolitical conflict. They use deceptive parlance to advance their agenda.”
Newt Gingrich hit it out of the park with his succinct assessment of the “Palestinian” cause.

One of the most incorrigible fallacies pertaining to the Middle East is the notion that the Palestinians are entitled to a state of their own.  This fallacy stems from the misconception that there is a nation of ‘Palestinians’, and to the extent that such a nation exists, this name is an accurate representation of the Arabs who live in modern Israel.  This artful manipulation of the geopolitical lexicon was meant to bestow upon a group of random Arabs a false sense of geographical ties to the Holy Land.

In 1977, during an interview with the Dutch newspaper Trouw, PLO Executive Committee member Zuheir Mohsen described the stratagem as this:
“The Palestinian people does not exist. The creation of a Palestinian state is only a means for continuing our struggle against the state of Israel for our Arab unity. In reality today there is no difference between Jordanians, Palestinians, Syrians and Lebanese. Only for political and tactical reasons do we speak today about the existence of a Palestinian people, since Arab national interests demand that we posit the existence of a distinct Palestinian people to oppose Zionism.”
This delusion is no trivial matter.  For years, the left wing foreign policy establishment has rapturously promoted the ‘Palestinians’ as the cause célèbre of our national security interests.  Instead of focusing on the real threats to our national security (such as those who, incidentally, fund the so-called Palestinians), the foreign policy establishment has singularly focused on creating a state for the most virulently anti-American people on the face of the planet.  Their maniacal fixation on the Palestinians has left them devoid of solutions regarding the broader turmoil in the Middle East.

The first step in undoing this foreign policy mess is for the next president to deracinate the entire myth of a ‘Palestinian people’.  Kudos to Newt Gingrich for finally telling the truth about the geopolitical cause célèbre of all the world’s imbeciles.

Friday, December 09, 2011

The GOP Payroll Tax Cut/UI Extension Proposal

“will they finally hold the line on their own promises this time, or will they pass all the extensions without the reforms, riders, and spending offsets? This package must be the final offer.”
Earlier today, House Republican leaders unveiled their package deal to extend the payroll tax and unemployment benefits for another year and to continue Medicare ‘doc fix’ for another two years.

While bipartisan passage of the payroll tax cut and doc fix were a forgone conclusion, the real issues for conservatives were the UI extension and the spending cuts.  Unfortunately, they are acquiescing to another extension, albeit with some reforms.
The major reforms include mandatory drug testing and participation in reemployment services as a condition for receiving benefits.  Those receiving the 99 weeks of UI will gradually be reduced to 79, and then finally 59 weeks.  Also, states would be authorized to use some of the funds for job training programs.  The UI component of the bill falls short of transformational reform, but at least it precludes 99 weeks from becoming the standard duration of payments.

In order to ameliorate yet another welfare extension for conservative members, two more sweeteners were added: 1) A law to force Obama’s hand on the Keystone Pipeline 2) A provision that would keep illegal immigrants from receiving the refundable portion of the Child Tax Credit, by requiring that recipients provide a valid SSN.  This would save $10 billion over 10 years, according the GOP sources [more background on that issue here].  The bill also has a provision to reduce Clean Air Act regulations for industrial boilers.

The proposal, which includes the aforementioned three extensions, will cost about $200 billion.  Republicans say they will pay for it with the following reforms, many of which were adopted from the Senate Republican proposal:

Thursday, December 08, 2011

Defeat That Omnibus!

“Why are we bailing them out from their biggest debt with the voting public? Why are Republicans in a rush to move on from issues that embarrass Democrats?”
It is still inexplicable to me why Republicans should violate their pledge against passing an Omnibus, in order to meet an artificial deadline set by those who never passed a budget.

Democrats were too incompetent to pass a budget, even while they controlled all branches of government, thereby creating a need to pass the budget through a series of continuing resolutions.  Now that Republicans control the House, and have a real budget on the table, Democrats have conveniently become disdainful of CRs.  They have also undergone a cathartic conversion to meeting budget deadlines.

At this point, the big-government statists in both parties know that the only way for conservatives to fight for any semblance of the House budget – both in terms of spending levels and policy riders – is to drag out the process beyond December 16.  Conservatives would be able to force Senate Democrats to pass the remaining nine spending bills one at a time.  This would give House conservatives the leverage to amend each bill and force Democrats into defending embarrassing spending bills, which fund unpopular laws and agencies, on nine separate occasions.  In plain English, this is exactly how the budget process is supposed to work, pursuant to the 1974 Budget Act.

“Oh, but it is already so late in the year,” cries Democrats, and oddly, Republican leaders.  Well, dummies, whose fault is that?  We passed our budget on time.  Now you want to come in late and subvert the process under the guise of budget tardiness?

Instead, Democrats want to bundle the nine spending bills into an omnibus megabus (no, we’re not referring to the intercity bus service), and wash their hands of the FY 2012 budget process by December 16, when the current CR expires.  This will allow them to suffer just one unpopular vote.  Also, CRs would approriate less funding than an Omnibus for agencies like the EPA.  More importantly, it will enable them to circumvent the House conservatives, and vitiate all of their policy riders, most notably, the ones defunding Obamacare.  The conference committee is convening today (you can see the list of conferees here, and formulate your own opinion).

If you want to know why Democrats are taking this approach, here are the problems with the megabus bill:

Wednesday, December 07, 2011

Don't Conflate Super-Long Unemployment Extension With Payroll Tax Cut

The outcome of the impending payroll tax imbroglio seems to be clear.  With Republicans offering spending offsets and Democrats demanding tax increases, my safe premonition is that, for better or worse, the simple tax cut extension will pass, albeit without either "offset" plan.  Due to some divisions among conservatives, such an outcome seems to be intractable at this point.

At this point, we must focus on unemployment benefits with a unified message.  My concern is that all of the proposed GOP packages conflate the passage of the payroll tax cut with UI extension.  We all know that Democrats will abjure all Republican proposals to pay for the package, most notably, cuts to the federal workforce.  The only thing this package will do is telegraph a public message to Democrats and the voters that Republicans agree to the premise of extending unemployment benefits.

As the clock winds down toward Christmas break, and Democrats balk at spending offsets, Republicans will once again be forced to acquiesce to yet another aspect of Obama's Santa Claus stimulus package.  Worse, conservatives who want to support the tax cut will be forced to vote for a package of unprecedented UI benefits – without any offsets or structural reforms to the program.  By voting for the full package, conservatives will be going on record as supporting UI extension.  Then, the offsets will be jettisoned from the deal by Democrats, forcing conservatives into a no-win situation on the last day of the session.

At the very least, the GOP proposal for UI must be decoupled from the payroll tax bill.

Earlier this week, we laid out the case why Republicans should oppose the entire premise of a 99-week UI extension, irrespective of spending offsets.  They must make it clear to Democrats that they will not pass an extension unless consequential structural reforms are made to the program.  Any serious reform must restructure the program to resemble the insurance plan that originally characterized the program, instead of a new mandatory unfunded liability that resembles more of a European style welfare plan.  Reforms that focus on pocket change from the few millionaires or prisoners who collect UI are non-sequiturs.

Republicans should pass a standalone UI reform bill, and make it clear to Democrats that it is their bottom line.  Then they should go home.

As the program is currently constituted, it must not be extended.  Conservatives understand that we won't come away with everything from the end-of-year legislative fights.  Nonetheless, we should not walk into a trap of bundling tax cuts with the creation of a defacto permanent entitlement program.

Tuesday, December 06, 2011

GOP Should Launch Offensive in Payroll Tax Fight

“in typical Democrat asinine fashion, they are promulgating a defacto permanent tax cut by telegraphing to the public that it is only temporary, thereby minimizing the pro-growth effect of the tax cut.”
After decades of monstrous lies about Social Security, Democrats have finally blown the cover off their stratagem.  They have always proclaimed that our payroll taxes were held securely in a trust fund in order to purvey retirement checks for each pay roll tax contributor.  Moreover, they emphatically promised that as much as $2.6 trillion in unspent tax revenue had accrued in the trust fund.  Now, with their push for a defacto permanent payroll tax cut, they are shedding all effort to conceal their Social Security mendacity.

The fact that Democrats are attempting to permanently cut the employee’s share of the payroll tax by 50% is a clear repudiation of their first premise.  And let’s face it; the cut will be permanent, as any subsequent relapse would be deemed a tax increase.  Nonetheless, in typical Democrat asinine fashion, they are promulgating a defacto permanent tax cut by telegraphing to the public that it is only temporary, thereby minimizing the pro-growth effect of the tax cut.

Additionally, the fact that their bill calls for $185 billion in general fund transfers to Social Security helps depose the myth that there is anything left in the trust fund.  It is clear that not only is there no existing money in the trust fund, but even the revenue from the current year (which would already come up $50 billion short, even without the tax cut) is insufficient to cover Social Security costs.  In plain English, we would call that a Ponzi scheme, not a pay-as-you-go system.

Sadly, instead of using this as an opportunity to own up to their 70-year old lie, Democrats are doubling down on it.  They are insisting that, due to their tax increases and faux spending cuts, all is fine and dandy with Social Security.  “The legislation would not affect the Social Security Trust Fund by one penny, because it requires that the Social Security Trust Fund be made whole through transfers from the General Fund,” wrote Bob Casey.

Anti-Pipeline Dave Heineman Should Not Run for Senate in Nebraska

One of the biggest political and policy winners for Republicans is their strong support for expeditious approval of the Keystone Pipeline.  Their unified support for this propitious project has provided voters with a sharp contrast to Obama’s casual disregard for private-sector job creation and cheap energy for consumers.  Hence, it is a no-brainer that the pipeline issue should be used as a rallying cry for all Republicans running for elected office in 2012.

In that vein, Nebraska Governor Dave Heineman would be wise to remain in Lincoln, and discard any aspirations to run for Senate.

Toward the end of the summer, amidst pressure from members of his own administration, Obama was on the verge of signing off on the deal.  The State Department had published yet another favorable environmental impact study, and even Energy Secretary Steven Chu seemed to concede that opposition to the pipeline was indefensible.  But then came the vociferous protestations from Obama’s base; greenies, hippies, Hollywood bimbos, and….Nebraska Governor Dave Heineman.

Late in August, the Nebraska Republican penned a letter to the President and Secretary of State requesting that they deny the permit for the pipeline.  Heineman stated that he objected to the route of the pipeline for fear that an oil spill would affect that Ogallala Aquifer – an underground water table in western Nebraska.

Never mind that unlike oil tankers, pipelines are much safer, and in the rare event of a spill, the affected area is measured in tens of feet, not thousands.  Never mind that the EPA and the State Department saw no concern with the proposed route of the pipeline.  Disregard the fact that the only legitimate threat to the water supply comes from the ethanol production that is so blithely promoted by Nebraska’s Republicans, without any concern for the Ogallala Aquifer.  Dave Heineman felt that he must convene a special session of the legislature and block the pipeline, granting Obama the vital bipartisan cover he needed to scuttle the project.

Two months later, buoyed by Republican Heineman’s moral support, Obama suspended the pipeline until after the 2012 elections.  As they say, the rest is history.

Now, Senators Cornyn and McConnell are imploring the governor to seek the Republican nomination in the Senate race against Ben Nelson.

Let’s not muddle our unified message on energy policy by electing the Keystone Pipeline slayer to the Senate?

Monday, December 05, 2011

We Need Employment Benefits, Not Another Permanent Welfare Program

Force Democrats to pay unemployment reparations from their own coffers 

Here we go again.  After a full year of grandstanding against another extension of unemployment benefits, some Republicans are ready to cave.

“do we believe in free-market doctrine, which suggests that extended UI hurts the economy, or the Keynesian multiplier, which suggests that UI helps the economy?”
If you ever wondered why it is so hard to cut spending, and more importantly, to downsize government, look no further than the fight over extending unemployment benefits.

Despite a year full of political parlance concerning budget austerity, many have forgotten that we have only cut $6.67 billion from the FY 2011 $1.049 trillion discretionary budget authority.  Even this miniscule cut might be cancelled out by up to $11 billion in emergency disaster spending, which is not subject to the spending caps.  Moreover, after just one year of cuts, discretionary spending will steadily rise during each subsequent year, albeit at a slower rate than originally proposed by Obama.

But there is a more salient observation that must be publicized.  These miniscule cuts, including the faux baseline cuts, are only applied to 28% of the budget – the part that is funded through the congressional appropriations process.  The other parts of the budget are virtually unscathed, even from baseline cuts.  To that end, even as we cut a few billion from baseline discretionary spending, we will still add hundreds of billions more in mandatory spending for each subsequent year.

These mandatory programs have created such inveterate dependency constituencies that nobody wants to touch them with a ten-foot pole.  Even if we exclude Social Security, Medicare, and veteran’s benefits, there are still almost $800 billion in other mandatory programs, most of which is spent on welfare.  This has become the fastest growing part of the budget, yet it will remain completely fortified from any budget control mechanisms.

The Unemployment Insurance (UI) program has been one of the biggest drivers of increased ‘other mandatory spending’.  Over the past two years, due to unprecedented 99 weeks of unemployment benefits and bankrupt state unemployment programs, the UI program has cost between $130-160 billion per year, rapidly becoming the fourth largest expenditure (behind Medicaid) in the budget.

Are we prepared to eschew free-market principles, and permanently enshrine UI as part of the entitlement state?

Friday, December 02, 2011

How Good are the New Unemployment Numbers?

The much anticipated November jobs number have been posted.  Here is a rundown of some of the highlights:
  • Jobs created in November:  The net increase in new jobs this month was 120,000.  There were 140,000 jobs added to the private sector, while the public sector shed 20,000.  The U3 unemployment number dropped from 9.0% to 8.6%.  In more good news, September’s numbers were revised up to 210,000 from 158,000, while October’s jobs numbers were boasted by 20,000 to a total of 100,000.  Also, the U6 number, which counts discouraged workers, dropped to 15.6 percent from 16.2 percent, its lowest level since March 2009.
  • Types of Jobs:  The largest share of new jobs came from the retail industry, which saw a 50,000 spike.  On the other hand, manufacturing only gained 2,000, while construction shed another 12,000 jobs.  This might be an indication that a lot of these jobs are temporary increases for the Christmas shopping season.  Another related point is that the sharpest drop in unemployment was amongst those with little or no college education.
  • Size of civilian labor force:  So why is this, at best, a mediocre jobs report?  Well, if you shrink the size of the pool, the unemployment rate will actually go down.  While a net-120,000 jobs were added in November, the civilian labor force shrunk by 315,000.  In October, the civilian labor force stood at 154.198 million.  Now, there are only 153.883 in the labor force.  Moreover, the Civilian noninstitutional population grew by 172,000, yet there are now 487,000 more people not in the labor force than there were in October.  Consequently, the labor participation number dropped from 64.2% to 64.0%.  This, along with the upward revisions from the past two months, has caused the U3 rate to drop by .4%.
  • Duration of unemployment: The average (mean) duration of unemployment is 40.9 weeks, a record high. By comparison, the average duration was 19.9 weeks in January 2009.
  • Comparison to January 2009-Obama’s inauguration date:  In January 2009, the labor force stood at 154.185.  This means that a net 302,000 people have left the labor force since Obama was inaugurated.  Concurrently, the size of the working age population grew over 5.7 million from 234.739 million at the time Obama was sworn in.  Also, in January 2009, 142.201 million were employed, over 1.62 million more than today.   So we have a larger population, a smaller workforce (resulting from discouraged workers), and more unemployed.  As AEI’s James Pethokoukis points out, if the labor force was the same size as when Obama took office, the U3 rate would be 11%.

So, Whose House is it Anyway?

Last year, the American people voted overwhelmingly for a Republican House of Representatives.  Based upon their campaign pledges, the prevailing expectation of a “Republican House” was a body of revitalized Republicans who would not fund Obamacare and Dodd-Frank, downsize Freddie/Fannie, oppose appropriator-concocted omnibus bills, and fight for at least some of their priorities in the Ryan budget.

A year later, the prevailing sentiment amongst the GOP ruling class within the House is antithetical to those ideals.  First it was the minibus; then it was the omnibus; now there’s talk about a megabus (coupled with unemployment benefits and tax extenders).  Instead of demanding that Democrats pass a proper budget and allow both chambers to vote on one bill at a time, they are willing to genuflect before Harry Reid and Senate Democrats.  The fact that we are running late on appropriations is not the fault of Republicans, and the American people know that.  Why reward Democrats for their insouciance towards our budget process by granting them all the major policy riders and spending levels?

Yet, astoundingly, House appropriators are blaming conservatives for weakening their leverage.  They bemoan how they are forced to seek Democrat votes in order to pass…Senate Democrat bills.  The million dollar question is this: if they are demanding that we support Democrat bills in order to pass the House without Democrat support, what sort of leverage are they trying to achieve?  Here is the latest from Roll Call:

Thursday, December 01, 2011

What is the Endgame for the Payroll Tax Fight?

Well, it looks like the ship already sailed on extension of the payroll tax cut.  Republicans introduced their own legislation to continue the current payroll tax cut from 6.2% to 4.2% for another year.  This proposal, which would cost $119.6 billion in revenue for the remainder of FY 2012 and the first few months of FY 2013, does not include the Democrat provisions to cut the employer’s share of the payroll tax. 

Yesterday, I detailed some of my concerns from a public policy standpoint, but from a personal standpoint I’m not complaining.  Who knows if we will receive our Social Security money?  We as may as well keep the money now.  

So how will they pay for the deficits that will result from the $119 billion (additional) transfer from general revenues to Social Security?  Senator Dean Heller introduced the following plan:

  •  Extend the current two-year freeze on federal employees’ salaries from 2013 through 2015 and expand it to apply to employees of the legislative branch, including members of Congress.
  • Reduce the number of federal employees by 10% through attrition.  This would follow the framework of the Simpson-Bowles proposal to only allow the hiring of one new employee for every three who leave the federal workforce.
  • Insert a line on every tax return for the Republican version of the “Buffet Rule,” in which rich liberals can volunteer to pay more taxes.
  • Cut some benefits to those individuals with an adjusted gross income over $1 million.  They take some ideas from Senator Coburn’s report, such as cutting unemployment benefits for millionaires, and charging them higher premiums for Medicare part B and D (the parts that are not funded through payroll taxes).  They also propose closing an anomalous loophole that allows certain rich people to collect food stamps.  These latter proposals will save very little. 

Wednesday, November 30, 2011

The College of Hypocritical Big Government Cardinals

There is an old adage in Washington that describes the political system as consisting of three political parties; Democrats, Republicans, and Appropriators.  The Appropriations Subcommittee chairmen, often referred to as the “College of Cardinals,” usually agree to concoct legislation that fuses the worst elements of the evil and stupid parties, resulting in something worse than a pure Democrat proposal.

This is exactly what transpired with the so-called minibus bill.  The Republican-controlled House passed an agriculture appropriations bill that breached the spending caps of their own budget, but nonetheless remained within the confines of the spending levels established under the Budget Control Act.  The Senate, after failing to pass a budget for over 900 days, tacked on two other appropriations bills that funded four other departments, and sent them straight to conference committee without the House ever voting on two-thirds of the bill.  They added in more food stamps spending, $2.3 billion in non-offset disaster spending, and gutted all Republican policy riders.  Then the bipartisan College of Cardinals went to conference committee for a compromise.  This “compromise” contained even more spending on WIC and international food aid, and added  a provision, which was inserted into the conference report, to expand the role of Fannie Mae and Freddie Mac.

The conference report passed the House, but not after 101 Republicans opposed it, forcing leadership to coddle together a majority with 165 Democrats.  Now, the venerable Cardinals are really embarrassed and are asking Boehner to reaffirm his commitment to get the collective rumps of his caucus in line.  In an article titled, “Cardinals to Boehner: Crack whip,” The Hill reports on the tantrums from anonymous Republican appropriators.

Here are some of the greatest hits:

Don’t Fall Into Democrats’ Payroll Tax Trap

As the original 2% payroll tax cut for employees is set to expire next month, Democrats are proposing an even bigger cut.  Earlier this week, they introduced legislation (S.1917) to cut the payroll tax to 3.1 percent for employees, and for employers on the first $5 million of their payroll.  The bill would also eliminate the payroll tax paid by employers for the last quarter of 2011 and all of 2012 on the first $50 million of a company’s increased annual wage costs.  In order to pay for it, they are proposing a “surtax on millionaires,” which applies a 3.25 percent tax on modified adjusted gross income over $1 million, or $500,000 for a married individual filing separately.

Even though this cut will discard 38% of the annual revenue for Social Security, Democrats are accusing opponents of supporting a tax increase on “working families.”  For their part, most Republicans have only voiced opposition to the tax hikes, but shied away from assailing the very premise of a temporary payroll tax cut extension.  In fact, Senator McConnell told reporters yesterday, “In all likelihood, we will agree to continue the current payroll tax relief for another year, but we believe it should be paid for.”  He has yet to divulge how they would pay for it.  Kudos to Senator Jon Kyl for uprooting the entire premise behind Democrats’ rationale by noting that this cut has not been pro-growth and it has only further endangered the future of Social Security.

Republicans must show how it is the Democrats who are treating Social Security like a Ponzi scheme by indiscriminately marauding it, while paying out the shortfall with deficit spending, in addition to tax hikes.  Payroll taxes supposedly singlehandedly fund Social Security, yet Obama and the Democrats plan to cut 38% of its revenue source with this bill, even though SS already faces a $50 billion shortfall.

Republicans should force Democrats to answer the following questions:

Tuesday, November 29, 2011

The Tragic Results of No Free-Market in Healthcare

What has 40 years of no free-market in healthcare wrought on the American consumer?  John Goodman, a healthcare expert at National Center for Policy Analysis (NCPA), posted this shocking graph:

As long as health insurance is treated as a primary payment instead of traditional insurance, the premiums will reflect this reality.

End All Green Corporate Handouts in 'Tax Extenders' Bill

Here's our opportunity to end corporate cronyism, eco-socialism, and market distortions in the energy sector

It's that time of year again.  The clock is ticking toward December 31, and green energy special interests are discreetly lobbying for the extension of their choice handouts, credits, and grants.  We must remain vigilant against these powerful interests.

At the end of every calendar year, Congress passes a 'tax extenders' bill to temporarily reauthorize specific tax breaks that have not been permanently written into law.  These bills have traditionally dealt with issues like the AMT patch, the R&D business credits, and universal deductions for depreciation, as well as state and local taxes.

In recent years, tax extenders have been magnets for non-universal carve-outs for green energy.  The 2010 tax extenders bill also included extension of the Bush tax cuts, the annual Medicare 'doc fix,' a payroll tax cut, and an unprecedented extension of unemployment benefits.  Most of these provisions are set to expire next month, and will consume the lion's share of the debate and media coverage.  This will give the green industry the opportunity to surreptitiously slip in their handouts as part of a grand bargain revolving around the bigger issues and legitimate, universal tax deductions.  They must be stopped.

Monday, November 28, 2011

Fact Check: Ron Paul is Wrong About Defense Spending

Sequestration imposes real cuts on the military, not just baseline cuts 

During last week’s foreign policy debate, Ron Paul won accolades from the crowd when he professed that there are no real pending cuts to the military, just reductions in baseline spending.  Here is the full quote:
“Believe me. They’re cutting — they’re nibbling away at baseline budgeting, and its automatic increases. There’s nothing cut against the military. And the people on the Hill are nearly hysterical because they’re not going — the budget isn’t going up as rapidly as they want it to. It’s a road to disaster. We had better wake up.”

This statement is absolutely false.  Sequestration will indeed reduce military spending from ‘actual dollar amounts’ of FY 2011 spending levels over the next seven years.

In order to understand defense appropriations, we need to distinguish between the two categories of spending; base budget (ships, planes, weapons, troops) and Overseas Contingency Operations (OCO).  Using CBO’s numbers, roughly $703 billion (the DOD Comptroller’s office puts that number at $688 billion) was spent on total defense spending, with $552 billion allocated for base budget (true national defense) and the rest going toward the wars (OCO).  When preparing a 10-year budget for defense spending, OCO appropriations are hard to predict because our war spending vacillates with our foreign policy decisions.  Only the base budget figures are truly fixed into the budget, just like most domestic non-security expenditures.  Consequently, whenever we mention the estimated $1 trillion in defense cuts, remember that they are exclusively incurred by the base budget, aka the military, not the war budget.

So what will the ten-year budget projection of our base defense budget look like after sequestration?  Here are the results from the latest CBO report (CBO Testimony, October 26, pages 18-19):

Thursday, November 24, 2011

Happy Thanksgiving!

On this day of giving, you might want to ponder how much the government is taking from you.  Here is a synopsis from Americans for Tax Reform of extraneous Thanksgiving costs "thanks" to government:
According to the American Farm Bureau Federation, this year’s Thanksgiving meal for ten increased in cost by $5.73 to a total of $49.20—mostly due to rising food prices. Despite the most significant increase in food costs since 1990, government taxation still gobbles up $13.68 of your meal preparations.

Unfortunately this measure still does not account for beer and wine consumption. Between football games and meals, nearly 53 million cases of beer are consumed. Government collects $219 million in taxes—44.33 percent of the cost of each case. Thanksgiving attendees will also find it hard to be grateful for the 32.77 percent increase in the cost of each bottle of wine thanks to government.

Whether you fly or drive to be with your loved ones this Thanksgiving season, government heavily taxes your preferred mode of transportation. Of the 94 percent of travelers driving their cars, government will raise an estimated $1.1 billion in tax revenue—45.33 percent of the gasoline price tag. Similarly, government also increases the cost of the average $376 Thanksgiving flight, making up 43.57 of each ticket’s price.

Happy Thanksgiving to our entire conservative community.  May we continue to be thankful for this blessed Republic.

Tuesday, November 22, 2011

The Non-Existent Spending Cuts…Except for Defense

Yesterday, we observed the unique spectacle of a socialist president threatening to veto any bill that reinstates higher levels of spending.  Did Obama just experience an epiphany?

No.  We are merely talking about cuts in defense spending.  Those are the good kind of cuts.

Throughout the entire supercommittee imbroglio, whenever Democrats or members of the media referred to spending cuts – to the extent that they exist – they were referring to baseline cuts.  In other words, the cuts in discretionary spending will still enable the spending levels to rise each subsequent year, albeit at a slower pace.  Welfare and entitlement spending is exempt from all cuts, even baseline reductions.  Defense, on the other hand, will actually incur real reductions in 'actual dollar' spending in subsequent years.
House Armed Services Committee Republican Staff

Monday, November 21, 2011

The Anatomy of a Compromise From Hell

I just recovered from my weekend hangover celebrating our reward for raising the debt ceiling in August.  All good things are worth waiting for, and after three and a half months, we got our vote on a balanced budget amendment!  And you know what?  It was summarily defeated, even before it came to the Senate.  Oh, and 25 of the most vulnerable Democrats now have austerity-proof records to shield them next November.


We who opposed the debt ceiling deal and the budget bills this year have been censured as intransigent rubes incapable of compromise.  While the mantra about the need for compromise is in itself quite dubious, let’s discuss the virtues of a true compromise.

As the year comes to a close, it is important to reflect upon the results of the multiple “compromise” deals.  Even purists like us support the idea of a real compromise, just not a capitulation.  A real compromise is one in which our side would gain substantive results, albeit not everything that was desired.  Moreover, the degree to which a compromise is considered a success is largely determined by the magnitude of leverage that we have going into the debate.  In the realm of politics, that leverage is most profoundly affected by public opinion and electoral reprisal.  By that measure, we should have accrued a year of supreme success.

Sunday, November 20, 2011

The 4th Circuit Appeals Court Becomes Casualty of Obama Presidency

While everyone is focused on Obama promulgating socialism through the executive and legislative branches of government, we often overlook the third branch; the judiciary.  Since Reagan, we have been making substantial progress in rolling back the liberal stranglehold on the courts.  In recent years, the 4th circuit has been a bastion for conservative originalist jurisprudence.  But in case you haven't noticed, a panel of that circuit actually agreed to uphold Obamacare's individual mandate.  It's no coincidence; Obama has packed the court with like-minded radicals.

The Baltimore Sun has an interesting report on the shift in the ideological bent of the 4th circuit, which covers the Mid-Atlantic and southeastern states:

When Obama took office, the 4th Circuit, based in Richmond, Va., had 11 sitting judges — six Republican appointees and five Democratic picks — and four vacancies.

The spots were left open because the Democratic-controlled U.S. Senate of 2007 and 2008 refused to approve President George W. Bush's 4th Circuit appointments, including Rod J. Rosenstein, who had been named Maryland's U.S. attorney a few years earlier based on a Bush recommendation.

The inaction on judicial nominations paved the way for Obama to make an impact with his choices, which have focused on diversifying federal courts based on race, gender and sexual orientation. Since he took office, two more vacancies opened on the 4th Circuit, allowing him to nominate six people in total. Five have been approved: a woman, two black men, a Latino, and a white man.

That makes the split on the court nine Democratic appointments to five Republican. Another Obama pick, Stephanie Thacker, was nominated this year and is awaiting confirmation by the Senate.

The new makeup could have an effect on national policy, given the kinds of cases handled by this court, legal analysts said.

Once again, we are paying for the tepid leadership of the Republican Senate during the middle of the decade.

Friday, November 18, 2011

Mainstream Americans Oppose Citizenship for Children of Illegals

For years, conservatives have been impugned for opposing so-called Birthright Citizenship, the practice of granting automatic citizenship to children born to illegal alien parents.  Most of us with commonsense intuition just could not fathom how someone could run across the border, overstay their visa, or exploit "birth tourism" - and proceed to reap the benefits of citizenship for their children. 

We have always asserted that just a convoluted interpretation of the 14th amendment only serves to attenuate the value of American citizenship.  After all, the 14th amendment was meant to guarantee citizenship for blacks who lived in this country for centuries; not for those who break our laws as their first act on American soil.

Now, the latest Rasmussen poll confirms that this is indeed mainstream thought in America:

Voters oppose more strongly than ever granting automatic U.S. citizenship to a child born to an illegal immigrant in this country.
Now, nearly two-out-of-three Likely U.S. Voters (65%) say if a woman enters the United States as an illegal alien and gives birth to a child here, that child should not automatically become a U.S. citizen. 

Only those who live in the New York-Washington ivory tower could possibly view American citizenship any other way.  Unfortunately, they control the media, and as such, will ensure that the immigration polling data is not reported, even though these are the people who live and die by polls.

Republicans Throw Their ‘Pledge To America’ Under the OmniBus

This afternoon, the House passed Harry Reid’s first minibus appropriations bill (Agriculture, Commerce-Justice-Science, Transportation-HUD), which contains record levels of spending for Food Stamps, WIC, and international food aid.  It also contains $2.3 billion for disaster spending, which is excluded from the budget caps.  Appropriations Committee Chairman Harold Rogers promised today on the House floor that spending will not exceed the $1.043 trillion spending cap.  Well, the extra $2.3 billion in disaster spending allowed him to do just that.  Moreover, if they continue to adopt the higher spending levels of the Democrats, the only way to stay below the cap will be to cut defense appropriations.  Worse, this bill has a provision, which was inserted into the conference report, to expand the role of Fannie Mae and Freddie Mac.

Last year, as part of their ‘Pledge To America,‘ Republicans promised to downsize Freddie/Fannie.  They also promised to end the practice of minibus bills.  Today, they violated both pledges.  Yes, we know that mantra; it’s a minibus bill; not an omnibus.  But the reality is that House Republicans never had an opportunity to vote and amend two-thirds of the bill.

Fortunately, more and more members are hearing the voice of the grassroots.  Even though the ‘don’t call it an Omnibus’ bill passed 298-121, it was opposed by 101 Republicans, and only passed with the help of Democrats.  In the Senate, Jim DeMint and David Vitter have already blocked Harry Reid from passing a second minibus bill.  So what is the response of the political appropriations establishment?
This, from CQ: