As the tumultuous year of 2011 winds down, Congress will be facing a number of crucial budget deadlines. Aside for the supercommittee deadline to find $1.2 trillion in deficit reduction (over ten years), they must contend with the December 31 expiration of three provisions of the 2010 tax extenders deal; payroll tax cuts, unemployment benefits, and ethanol subsidies. Now the Washington Post is reporting that the supercomittee might attempt to extend unemployment benefits and payroll tax cuts as part of the final deal. The rubber is meeting the road, and conservatives need to mobilize rapidly.
By my count,
the supercommittee's final report gives us five issues to deal with;
oppose the three extensions, fight tax hikes, and push for real spending cuts
(cuts that will make 2013 spending levels below 2012 levels). Over the
past year, the GOP has caved on virtually every budget battle. They
are now slated to pass every one of Harry Reid's appropriations bills –
bills that allocate more funds for programs than requested by Obama;
that jettison all Republican policy provisions; that expand the role of Freddie/Fannie. Is there a single issue where GOP leaders will hold the line and coalesce around a coherent conservative policy?
to the inane and insane debt ceiling deal, which many other
conservative outlets supported wholeheartedly, we are confronted with a
double-edged sword. We must either accept tax increases and nebulous
spending cuts as part of the supercommittee report, or we face
sequestration – a process that will kill the military and cut funding to
healthcare providers, as well as the border patrol. And guess which programs are exempt
from the automatic cuts? Yup – Social Security, Medicaid,
S-Chip, Temporary Assistance for Needy Families (TANF), public housing,
Food Stamps, SSI, Child Nutrition, refundable tax credits, Pell Grants,
and federal employees' retirement. Those programs easily amount to over
$1.4 trillion, and when coupled (as it should be) with the inviolable
veterans’ programs (roughly $140 billion), we have about 55% of the
non-defense budget (roughly $2.85 trillion) off limits.
Boehner is offering to compound the problem by passing an extension of
the payroll tax cut and 151 weeks of unpaid unemployment compensation.
How do they plan to pay for that? With $700 billion in phony war savings, of course.
Republicans are going to cave on tax increases and inconsequential
spending cuts, they should at least hold the line against extension of
Obama's two stimulus programs.
Insurance (UI) is a joint state and federal program created by the 1935
Social Security Act to offer payments to unemployed workers. It is
funded by employers' payroll taxes, with the tax rate set according to
that company's layoff history. Those revenues are usually sufficient
for states to properly fund their unique unemployment programs for 26
weeks’ worth of benefits. During tough economic times, the federal
government has historically reimbursed states for an additional 13
Since taking office, Obama, with the help of Republicans,
has extended UI benefits for an unprecedented 99 weeks. Over the past
three years, state and federal governments have shelled out over $450
billion in benefits, even though they only collected about $175 billion
in employer payroll taxes. Obama's proposed extension to 151 weeks will
cost another $62 billion in deficit spending. UI is rapidly becoming
the fourth largest non-defense expenditure of the federal government and
is on the precipice of being enshrined as a permanent entitlement
program. If extension of unemployment benefits actually stimulated the
economy, we must be missing something. Quite the contrary, unemployment
benefits are helping perpetuate unemployment. Extension of extraneous
UI benefits is simply indefensible, even if they are offset with real
spending cuts (not to mention fake war savings).
Payroll Tax Cut
part of Stimulus 2.0, Obama is proposing another extension of his
temporary 2% payroll tax cut for employees, as well as some additional
cuts for employers. While we all like tax cuts, payroll taxes are
different from all other forms of taxation. Payroll taxes 'supposedly'
single-handedly fund Social Security, yet Obama plans to cut 36% of its
revenue source with this stimulus bill, even though SS already faces a
$50 billion shortfall. Last year's tax extenders bill authorized $105
billion of general fund transfers in order to cover the shortfall of the
payroll tax cut. This year's bill will do the same. Yes, Social
Security is a Ponzi scheme, and as such, there is no money in the trust
fund. So any further cuts in revenues will necessitate more deficit
Instead of renewing Obama policies that obviously failed
to stimulate the economy, Republicans should use this as an opportunity
to expose his cavalier attitude to the SS Trust Fund, and call for real
free-market reforms. Proper articulation and communication to the
American people will work wonders.
Remember that the creation of
the supercommittee was supposed to be our 'reward' for giving up our
leverage on raising the debt ceiling. Everyone understands that
conservatives can't win every concession; however, amidst robust public
support for downsizing government, can we at least salvage something
from our 2010 victories? We certainly were never supposed to lose out
on the deal by incurring tax increases without real spending cuts – or
And if Republicans are incapable of holding the line
against tax hikes, trivial spending cuts, defense cuts, Social Security
Trust Fund raids, and unemployment welfare, can they please oppose
ethanol? Hey, even Bill Clinton and Al Gore agree on that one.