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 RedState.com

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.

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.

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.

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?

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?

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.

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:

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:

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):

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

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.

Oops.

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.

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:

The Supercommittee of Super Insanity

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?

Thanks 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.

Now 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.

CBO Director Admits Stimulus Will Shrink Economy

Another Keynesian beast has been slain

We could have done a lot of good things with the $830 billion that was flushed down the toilet through the 2009 stimulus.  That money could have been used to permanently transform our entitlement programs to free-market personal ownership accounts.  It could have been used for massive pro-growth tax cuts.  Instead, it was used to grow perennial dependency and for special interest handouts.  But all of the supercilious smart economists say that it helps stimulate the economy, right?  After all, it is called stimulus.

Well, earlier today, CBO Director Doug Elmendorf admitted to Senator Sessions that in the long run the stimulus will shrink the economy.  He testified at a  Senate Budget Committee hearing that the stimulus will indeed “be a drag on GDP” over the next ten years.  Any diligent student of history already knew that, but now we have the “gold standard” of budget and economic scoring to affirm that self-evident truth.  Nevertheless, fear not, the stimulus will have a stimulating effect in the short-term.  That’s why we are enjoying a robust annual average GDP growth of…..1.4%.

The IRS as Tax Preparers?

When conservatives and liberals advocate tax reform they are referring to radically divergent concepts.  Conservatives desire a low, flat, and universal tax code, while liberals desire reform that would result in increased revenues.  The obvious way to achieve that goal is to impose radical redistributive tax increases, such as the ones Obama has recently proposed.  However, there is a more subtle way that is beginning to percolate into the liberal mainstream.  Liberals envision a future in which the IRS would automatically pre-file your tax returns for free, sending you the bill.

Earlier this year, Tennessee Democrat Rep. Jim Cooper introduced "The Simple Return Act," a bill that, according to Cooper's assessment, would "get the IRS to do your taxes for you" using "the financial information it already receives from each taxpayer’s employer and financial institution: W-2 and 1099."  Cooper asserts that roughly 40 million Americans file tax returns that are simple enough for the IRS to pre-file.  This idea was originally floated by Obama’s former Chairman of the Council of Economic Advisers Austan Goolsbee.  In a 2006 op-ed for the New York Times, Goolsbee cited Denmark and Sweden as success stories for government-run tax preparation.

Although this bill has failed to garner any co-sponsors, there is some concern that Max Baucus, a member of the super committee, will try to push the simple tax return as part of a 'benign' means of raising revenue.  In the past, he has been a vocal advocate for finding innovative ways to close what he refers to as "the $345 billion annual tax gap," the amount of taxes owed that go unpaid each year.

Moreover, Obama has already expressed support for the concept of the IRS serving as tax filer and tax collector.  In 2007, in a speech at the Tax Policy Institute, Obama promised to establish a simple return system during his presidency.  He opined that "the government already collects wage and bank account information, so there's no reason the IRS can't send Americans free file tax forms to verify."

Well, I can think of a couple of reasons.

Now is Not the Time to Shirk From Obamacare Fight

By now, we are all intimately acquainted with the bromide that "Republican's only control one-half of one-third of government."  Nonetheless, we must remember that, in the realm of appropriations, they control the most consequential body of government; the House of Representatives.  Unfortunately, almost a year into their stewardship of that body, they have shown only a tepid inclination to defund Obamacare.

Despite months of diligent work on appropriations bills, House (and Senate) Republicans are abdicating their budget powers to Harry Reid's "minibus" scheme – a scheme in which the House is jettisoned from two-thirds of the process, while conference committees adopt the spending bills favored by Senate Democrats [more here and here].  Next week, the Senate will vote on the second minibus bill.  Reid is using the House-passed Energy-Water bill (HR 2354) as a vehicle to carry the Financial Services (S.1573) and State-Foreign Operations (S.1601) bills (even though they were never voted on by the full House).  So we will have one appropriations bill that covers such disparate expenditures as the IRS and the State Department.  But don't worry, it's a minibus bill; not an Omnibus bill.  Hence, Republicans will get the green light to vote for it.  All but 14 of them already voted for cloture to proceed with the 'don't call it an omnibus bill.'

Here are the issues with Reid minibus number two:

Current Status of Spending Bills

The Heritage Foundation has a useful chart out today detailing the current status of apprpriations bills:

Despite thefact that the topline spending figure is already locked in at $1.043 trillion, there is still wiggle room for Democrats to add more spending to their priorities.  How will they accomplish this?  By cutting defense spending, of course.  They plan to cut military spending by $17 billion, while adding more spending to health, labor, and food programs.  Republicans must fight for the House-passed bill during conference committee next week.

Obama's Government Behemoth

This chart detailing the trend-line of growth in government workers speaks for itself.

(Courtesy of Veronique de Rugby of the Mercatus Center)

The Handouts in the Tax Code that Nobody Wants to Discuss

The forgotten "30% club" that makes money off the tax system

For years, Democrats (and Republicans) have surreptitiously created dependency by manipulating the tax code.  Liberals often refer to handouts as tax cuts, and tax cuts as handouts to the rich.  To that end, they have perpetuated a travesty in which millions of people are able to obtain welfare payouts without ever applying for them.  Most people don’t even realize that they are receiving handouts because they view them as “tax credits.”  Accordingly, all efforts to eliminate these handouts are viewed as insidious tax increases.
These handouts are better known as refundable tax credits.

While most (conservative) commentators focus on the fact that 51% of tax filers paid no income taxes in 2009, the more egregious fact is that 30% of filers had a negative income tax liability.  Over 95% of these handouts came from the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC).  As part of the Stimulus, Obama created a third refundable credit; the Making Work Pay Tax Credit.

Here are the relevant statistics for those refundable tax credits in 2009 (CRS report):