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:

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.

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?

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

Senator Coburn: The Agony of a Pragmatic Conservative Amidst Inflexible Liberals

Senator Tom Coburn released a report, Subsidies of the Rich and Famous, detailing a list of subsidies, transfers, and “tax breaks,” that are paid to individuals with Adjusted Gross Income (AGI) of over $1 million.  The report found that millionaires have received at least $9.5 billion in “government payments” since 2003 and $113.7 billion in “tax breaks” since 2006.  Accordingly, Coburn concludes that many of these tax deductions should be eliminated, while benefits for the rich should be means-tested or reduced.

As our debt approaches $15 trillion, Coburn’s heart is undoubtedly in the right place; however, many of his proposals are misguided.  While some of the deductions enumerated in this report should be eliminated immediately, most of the savings will come from revoking universal tax deductions from those who already have the highest tax burden.  Additionally, while some of the subsidies, such as the farm and green handouts, should be abolished, most of Coburn’s savings on government benefits would come from reducing Social Security payments to the rich.  Social Security payments, unlike welfare and other subsidy programs, represent real money that was paid into the system through payroll taxes.  Any effort to deny those payments from the rich would engender further redistribution of a program that was not conceived for redistribution.  Also, it would ostensibly be a 12.4% tax increase on those high-income earners, as they would pay the tax without receiving the retirement checks.

Let’s drill through the numbers of the report.  Here is a list of government payments that Senator Coburn has identified as subsidies for the rich:

Bipartisan Big Spenders Appointed to Conference Committee for Spending Bills

After dithering for almost three years without a budget, Democrats are in a hellfire rush to finish all of the 12 annual appropriations bills.  Unfortunately, Republicans leaders are in such a hurry to bury the hatchet on spending fights, they are willing to void all of the House-passed bills, in return for bipartisan conference reports.  These conference committee versions – chock full of Senate Democrat amendments – will be forced down the throats of House conservatives without a chance to amend them, even though they never voted on two-thirds of  the underlying bill.  Worse, virtually all of the conferees are leftists, appropriators, and squishes.

Senator Sessions and other Senate conservatives tried to warn Republicans that Harry Reid was manipulating the process to insert $11.1 billion in extra spending to the Agriculture minibus bill.  While overall discretionary spending caps have already been set at $1.043 trillion, Democrats still have leverage (thanks to weak Republican leadership) to spend tens of billion more on transfer programs, while compensating for the extra expenditures with massive cuts to –you guessed it – the Defense appropriations bill.  They also have the ability to raise spending levels on mandatory programs, which are not subject to the spending caps imposed by the debt deal.  Moreover, the Senate stripped out many of the House-passed policy riders, such as a provision to defund most of the FDA food takeover bill (FDA Food Safety Modernization Act ).

The Senate version of the bill, and the inevitable conference report, contains millions more in spending for virtually every domestic and international food program, including WIC.  However, the most jarring difference between the two versions is the spending level for Food Stamps.  Despite the fact that Food Stamp spending has doubled in just three years, the Senate bill – which passed with 16 Republican votes – appropriates $80.4 billion for this dependency program.  That is $12.2 billion above the spending level set in the House version.  Take a look at the unprecedented growth of this program, when total appropriations and actual outlays are taken into account.

Republicans Must Oppose Reid's Minibus Bill

Last week, we noted that Harry Reid, with the help of Republican leadership, is attempting to come late to the 2012 budget game and commandeer the entire process through a series of 'minibus' bills.  They are using House-passed appropriations bills as vehicles to tack on at least two additional disparate spending bills.  Such a maneuver will allow the Senate to force a conference committee vote on spending measures and policies that the House never amended.  Although the topline discretionary spending figure is already set, Reid is wagering that his fast track minibus strategy will allow him to override House-passed policies, while inserting his own policies into the bills.  Thus far, he has been successful.

The first minibus is comprised of the House-passed Agriculture appropriations bill (HR 2112), along with the Senate's version of the Commerce-Justice-Science (S 1572) and Transportation-HUD (S 1596) measures.  Democrats assert that this package, which authorizes $128 billion in discretionary spending, is actually $1 billion below last year's levels.  To that end, it is slated to pass today with overwhelming bipartisan support.

The problem is that this bill will actually increase spending.  As Senator Sessions observed, this bill increases spending by $2.2 billion because it contains extra emergency spending – without any offsets.  Moreover, this bill increases mandatory spending by $8 billion on Food Stamps.  The Food Stamp program (SNAP) is, by far, the fastest growing government program, as it is emblematic of Obama’s socialist transformation of our country.  In just three years, SNAP enrollment has jumped from 27 million to 45 million, while its budget has doubled to over $77 million for FY 2011.  Yet, many Republicans are ready to sign their life away to Harry Reid.

Two weeks ago, Senator Sessions attempted to cut spending on Food Stamps by eliminating “categorical eligibility.”  This is a practice in which states automatically grant Food Stamps to people who had received a Temporary Assistance for Needy Families brochure or contacted a pregnancy hotline funded by that program.  Categorical eligibility allows many people to enroll in SNAP who would otherwise be disqualified because of their income level.  Last year, members of the Government Accountability Office flagged this wasteful practice, and called for congressional action.  Unfortunately, Sessions’s amendment to the minibus bill was defeated with the help of six Republicans.

Today, the Senate will be voting on final passage of the minibus bill, following votes on six Republican amendments.  While these are very constructive amendments, Democrats will invariably vote them down.  As such, Republicans must vote against final passage of this bill.  If the bill passes the Senate, House conservatives must oppose efforts of their leadership to steer the minibus away from the House floor directly into the hands of the appropriators in conference committee.  Conservatives must get a chance to vote down pernicious policies and extraneous spending in bills that never saw daylight in the House.

The CBO Has Been Occupied by OWS's Intellectual Inequality

We already are the most progressive redistributive country in the world – and that is the problem

One fundamental liberal desideratum is the achievement of equal results at the expense of equal opportunity.  Conservatives believe in implementing policies that protect our God-given rights, which provide every human being with an equal opportunity to succeed.  Liberals reject policies that foster unfettered equal opportunity because they invariably produce unequal results, being that human beings have different talents, capabilities, work ethic, and luck.  On Tuesday, the CBO decided to throw in with the left-wing affinity for highlighting income inequality and advocacy for equal outcomes – outcomes that would be dictated by our venerable federal government.

While the focus on income inequality in itself is a dubious endeavor for the CBO, their conclusions are downright scandalous.  Their most outlandish conclusion was that income inequality has increased between 1979 and 2007 due to a decrease in “government transfers” and tax cuts for the rich.  Here was their punch line:

Government Transfers and Federal Taxes Became Less Redistributive

Government transfers and federal taxes both help to even out the income distribution. Transfers boost income the most for lower-income households, while taxes claim a larger share of income as people’s income rises.
In 2007, federal taxes and transfers reduced the dispersion of income by 20 percent, but that equalizing effect was larger in 1979.

• The share of transfer payments to the lowest-income households declined.
• The overall average federal tax rate fell.

You might be scratching your head wondering how CBO can posit such a falsehood at a time when welfare spending is at an all-time high, the top 1% pay 36.7% of income taxes, even though they only earn 16.9% of AGI, and 47% pay zero income taxes.

A Conservative Look at Perry's Economic Plan

When Herman Cain proposed his 9-9-9 plan, many conservatives became energized, despite their misgivings with the fine print of the plan.  It wasn’t so much the details of the proposal that excited the base, as most conservatives intuitively recoiled from a consumption tax; it was the boldness of the plan that resonated with them.  Cain’s 9-9-9 brought some excitement to a race that was defined by a frontrunner who offered 160 pages of banal fluff.  Nevertheless, his plan was too flawed to be utilized as a viable rallying cry in the general election.  Perry appears to have proposed both a viable and bold economic plan, albeit with some inevitable flaws.

Here is a synopsis of all of the major components.

Tax Plan

The centerpiece of the plan is a flat individual income tax of 20%.  This would serve as a vehicle for massive economic growth, as it offers a huge tax cut for job-creators who currently pay as much as 35%.  However, unlike the traditional Steve Forbes flat tax, this proposal would keep the deductions for mortgage interest, charitable contributions, and state and local taxes for those earning less than $500,000 (over 99% of taxpayers).  It would also offer a standard deduction of $12,500 per household members.  Consequently, a family of four earning $50,000 would have a zero tax liability.  Update: Phillip Klein reports that the employer tax exclusion for healthcare would remain until Obamacare is repealed.

Moreover, the entire system would preserve the option to remain under the current tax code.  As such, the 47% who have zero tax liability and the 29% who have a positive tax liability (as a result of the EITC and Additional Child Tax Credit), would have no incentive to move to the flat tax.  Accordingly, there would be two shortcomings to this plan:

Barack the $15 Trillion Man

A truly historic presidency

Amidst the hype concerning the so-called era of austerity and budget cuts, the national debt is rapidly marching towards the $15 trillion milestone.  As of late last week, the national debt stood at $14.94 trillion.  For those of you keeping score, that number has grown by $646 billion since the debt ceiling was raised on August 2, as part of the great bipartisan Budget Control Act of 2011.  In other words, the debt has increased by over $8 billion per day during the past 11 weeks.

Let's put these numbers in historical perspective.

Barack Obama likes to blame all of our economic woes on his predecessor.  The burgeoning national debt is no different, as he blames its precipitous rise on the Bush tax cuts.  Well, President Bush and his merry band of big-government conservatives were anything but budget hawks; nonetheless, it took them 92 months – almost the entire 8-year tenure – to accrue $4.3 trillion in debt.  Obama has accumulated that much debt in just 33 months.  Put another way, it wasn't until 1997 that we amassed as much debt as Obama has in 2.5 years.

There is also another grim, but often overlooked statistic of Obama's empire of debt.

The national debt consists of two components; debt held by the public and intra-government debt.  The debt held by the public is the sum of the treasury securities held by those outside the federal government, with the lion's share owned by foreign countries.  The debt held by the public currently stands at $10.2 trillion.  The other component, the intra-governmental share, is owed to other federal agencies and accounts, most prominently, the non-existent Social Security Trust Fund, as well as accounts holding pensions for military veterans and government workers.  That share of the debt currently stands at $4.73 trillion.

OWS Flag Desecration

Amidst the fawning coverage from the media, the OWS crowd as already gotten away with rabid anti-semitism and other forms of extremism.  Now they are resorting to desecration of the American flag.  Don't expect this to be covered outside of the new media:

(HT: Weasel Zippers)

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):

The Bipartisan Social Security Demagoguery Must End Now

The source of the 76-year old monstrous lie 

The recent Social Security demagoguery that has been propagated by Mitt Romney and other big-government apologists is truly repugnant.  Accusing those who desire to preserve and expand personal retirement – of eliminating Social Security for seniors is akin to an arsonist blaming firefighters for fanning the flames.  It was the very big-government statists like Romney who obfuscated and corrupted the original intent of Social Security; it is the modern day constitutional conservatives who desire to solve the SS insolvency – with a solution that corrects those vices.

On October 29, 1936, in a campaign speech that was rife with virulent class warfare, FDR spoke at length of his one-year old Social Security Act.  He told the assembled crowd of blue collar workers in Wilkes-Barre, PA that their payroll taxes would be “held by the Government solely for the benefit of the worker in his old age.”  He referred to Social Security as an insurance program numerous times throughout the speech, concluding that “in effect, we have set up a savings account for the old age of the worker.” (emphasis added)

It’s a shame Congressman Joe Wilson wasn’t around during the speech.  He would have bellowed out an emphatic “YOU LIE.”  As Walter Williams noted, from the inception of Social Security, its advocates lied to the American people by categorizing the program as a secure savings account or insurance plan, with a defined distribution commensurate to the original contribution, which would be guaranteed as an irrevocable right.  The original government pamphlet on Social Security promised that “Beginning November 24, 1936, the United States government will set up a Social Security account for you. … The checks will come to you as a right.”

It is conservatives – those who criticize its current stewardship as a Ponzi scheme – who seek to preserve and restructure the program to reflect the way it was originally advertised.  Unfortunately, the original Social Security Act was written by malfeasants who deliberately misled the public about the true nature of the law.

Republicans Should Stop Reauthorizing Stuff they Denounced

There is an old adage that defines insanity as “doing the same thing over and over again but expecting different results.”  What’s worse than insanity is hypocritical insanity, which may be defined as doing the same thing that your opponent did over and over again, while expecting different results.  Unfortunately, that is an apt description of the House GOP leadership of late.

During the 2010 elections, Republicans railed against profligate spending, Obamacare, and growing dependency from things like the Stimulus.  Now, they are extending and reauthorizing many of those offensive policies.  Last April, they continued the entire Democrat 2010 budget with a CR for FY2011 that cut outlays by a miniscule $352 million.  This week, they plan to pass a continuing resolution for FY2012 that will authorize more discretionary spending than their own “Ryan budget” by $24 billion.  This will pave the road for passage of an omnibus mega-bill in November – the very sort of reckless budgeting that they lampooned throughout the Pelosi years.

Last week, Republicans passed the 22nd short-term extension of surface transportation funding and the 8th stop-gap FAA reauthorization bill.  Their tepidness to pick a fight over their own transportation bills has led them to reauthorize Pelosi-era spending levels, along with wasteful public transit and beautification projects that are forced upon the states.  Additionally, they are on the cusp of paying Obama ransom for holding three free trade agreements hostage, by reauthorizing the Trade Adjustment Assistance – a superfluous unemployment handout to Big Labor.  We must also be vigilant of attempts by leadership to pass parts of Obama’s Stimulus 2.0.

On Wednesday, Republicans will be confronted with another opportunity to reauthorize a welfare program at current levels.  Sadly, it appears that leadership will pass it under suspension – without firing a shot.

We the People: A Constitutional Republic, Not a Democracy

Today, we celebrate the 224th anniversary of the signing of the United States Constitution (September 17 falls out over the weekend this year).  On this day, it is imperative that we reflect on the importance of our constitution and celebrate the roots of our founding.  As our nation comes under attack from the forces of tyranny within, we must reaffirm our commitment to the ideals of our founders and founding documents.

Most people often mistakenly refer to our nation as the greatest democracy on earth.  They are mistaken because we are not an absolute democracy; we are a constitutional republic.  That is what makes our nation great, for if we were merely a democracy, we would be anything but great.  And to the extent that we no longer function as a constitutional republic, that greatness is rapidly ebbing away.

Why did we need a constitution?  Why are popular elections not a sufficient means of preserving liberty?

Romneycare: A Microcosm of Obamacare, According to Conservative Study

Does government have the right to take over the healthcare sector, thereby infringing on liberty, killing jobs, reducing income, destroying investment, and driving up costs to consumers?  Well, as long as it is promulgated by state government, Mitt Romney thinks there is nothing wrong.

The conservative Beacon Hill Institute at Suffolk University has done a comprehensive study surveying the devastation of Romneycare – and it’s not pretty.  The study, which was obtained by the Boston Herald, analyzed trends in healthcare costs and employment data before and after passage of this unconstitutional behemoth.  Here are some of the key findings of the Romneycare devastation:

• cost the Bay State 18,313 jobs;

• drove up total health insurance costs in Massachusetts by $4.311 billion;

• slowed the growth of disposable income per person by $376; and

• reduced investment in Massachusetts by $25.06 million.

Additionally, the study found that much of the higher costs were subsidized by the federal government (national taxpayers) through a Medicaid waiver program.  A previous Beacon Hill study found that Romneycare cost Medicaid $2.4 billion and Medicare $1.4 billion.  It is these very costly state programs that are causing federal Medicaid expenditures to rise from its current level of $280 billion to $574 billion in 2020.  It is these very state mandates that have spiked the cost of private health insurance for years.

GOP Must Use Political Victories to Oppose Obama's Stimulus in its Entirety

Pass the bill never!

The Democrats have provided Republicans with a historic opportunity to go on offense against Keynesian stimulus, and apply jujitsu against the Democrat 2012 playbook – Mediscare tactics.  They shouldn't blow it.

Last night, Democrats got wiped out in two special elections; losing by 22% in Nevada CD-2 and by 8% in a New York district that hasn’t voted Republican since 1922.  These victories were buoyed by Obama’s record disapproval ratings across every demographic, most notably, whites and independents.

While there have been copious pages of commentary published in an attempt to analyze the source of the GOP’s success, it is clear which tactic was unsuccessful: Mediscare (are you watching, Mitt Romney?).  Both Democrat candidates attacked their opponents incessantly as proverbial killers of Medicare and Social Security.  Although this pathetic line of attack is 50 years old, it was slated to serve as the impetus for Democrats’ 2012 campaign strategy.  Well, their only plan to win in 2012 failed miserably, providing Republicans with a chance to launch a counterattack.

Obama's America

There are three headlines from today that serve as paramount examples of a nation on decline - a nation that has been transformed from one of ownership to one of entitlement, thanks to socialism:

- The U.S poverty rate swelled from 14.3% in 2009 to 15.1% in 2010
- Employment-based health insurance coverage dropped by 1.5 million
- People covered by government health programs rose by 1.8 million in 2010.  31% of the population is now on some government run health program.

How's that 45 year-old war on poverty working out for you?  As the chart below from the Cato Institute shows, it has done nothing but perpetuate and exacerbate poverty.

Illegal Aliens Receive $4.2 Billion in Additional Child Tax Credits

What happened to the balanced approach toward revenue?

 

Throughout the entire debt ceiling imbroglio, Democrats incessantly regurgitated the talking point about the need for “a balanced approach.”  They were so uniform and synchronized that they sounded like the sheep in Animal Farm.  Ironically, their idea of a balanced approach was singularly focused upon Oil Company and corporate tax deductions, which are negligible compared to the crushing debt.  The targeted oil tax deductions would have brought in $2 billion in annual revenue, while the cancellation of the corporate jet depreciation deduction would have saved only $3 billion over 10 years!

Well, it turns out that illegal aliens, most of which pay zero in net taxes, enjoyed $4.2 billion from the Additional Child Tax Credit (ACTC) last year.  That’s more than the annual revenue from the selected oil tax deductions and corporate jet deductions combined!

Yesterday, the Treasury Inspector General for Tax Collection released a shocking report detailing how illegal aliens are able to utilize a filing loophole to obtain billions in ACTC funds.  The Earned Income Tax Credit (EITC) and ACTC (unlike the base child tax credit) are totally refundable and can award the recipient with a negative tax balance.  Appropriations for the EITC in FY 2010 were $54.7 billion and $28.3 billion for the ACTC.  While EITC appropriations are protected from illegals (those who don’t engage in identity theft) because they are only awarded to those who provide a valid Social Security number, the same cannot be said for the ACTC.

Here is the punchline of the Inspector’s report:

The Entitlement Leviathan in Numbers

We need bold free-market, liberty-promoting solutions from our POTUS candidates.

Immediately prior to breaking for the August recess, Congress passed a bipartisan agreement to cut spending.  Well, sort of.

Leaders in both parties got together to do something evil and stupid; they agreed to the largest increase in the debt ceiling, without solving our debt problem.  They cut discretionary spending by $6.67 billion for FY 2012, from $1.0497 trillion to $1.043 trillion.  That's a bit more than half a percentage point.  Worse, discretionary spending (budget authority) only accounts for roughly 28% of our projected $3.7 trillion in outlays for FY 2011.  So we cut about 0.6% of 28% of our federal budget for next year!

But, fear not; the best is yet to come.  The mandatory entitlement spending reforms will be tackled by the super committee.  The only problem is that a committee with such luminaries as John Kerry, Patty Murray, and James Clyburn – will never cut a dime from mandatory spending.

Where does this leave us?

Here is a brief overview of our giant entitlement/dependency/welfare state, which if left unreformed, will lead to insolvency, engendering public riots to the degree that we have seen in Europe this year.