budget

Deficits to grow by $7.6 trillion over next 10 years

The Congressional Budget Office expects budget deficits to grow by $7.62 trillion between 2015 and 2024 despite a rise in tax revenue. That, according to updated budget projections released yesterday.

The nonpartisan fiscal research office expects budget deficits to hit $492 billion in 2014, or 2.8% of gross domestic product (GDP), and $469 billion in 2015 before beginning to rise again. By 2020, the budget deficit will hit $804 billion, or 3.5% of the economy.

The main drivers of federal spending are entitlements, known budget language as “mandatory spending” or “autopilot spending,” and debt service. These budgetary items will consume nearly 74% of the federal budget over the 10-year budget window.

Though tax revenues will eclipse $4.9 trillion, or 18.3% of GDP, by 2024, spending will continue to rise at an unsustainable pace. The federal government will spend nearly $6 trillion in that same year. The federal government will spend nearly $48.2 trillion over the course of this timeframe.

Added together, taxpayers will be hit with $7.62 trillion in budget deficits over the 10 year budget window. The share of the national debt held by the public will eclipse $20 trillion by 2024. This, despite higher than average tax revenues collected by the federal government.

The Congressional Budget Office warns of potentially dire consequences if federal lawmakers don’t act soon to deal with the threats to the United States’ long-term prosperity.

Only two House Democrats support Obama’s budget

Rep. Mick Mulvaney (R-SC) did something yesterday that no House Democrat would dare do. The South Carolina conservative presented President Barack Obama’s tax and spend FY 2015 budget for a floor vote.

The budget unveiled by President Obama last month relies upon $3.5 trillion in higher than expected revenues to the federal government over the next 10 years. The increased revenues rely on rosy economic growth scenarios as well as $1 trillion in new taxes to finance a budget that never comes into balance.

The White House’s budget, however, failed to gain any real support when it was presented on the House floor. It was defeated by a 2 to 413 vote. The two votes came from Reps. Mary Kaptur (D-OH) and Jim Moran (D-VA).

President Obama’s budget was just one of several offered as amendments on the floor yesterday before the final vote on House Budget Committee Chairman Paul Ryan’s (R-WI) “Path to Prosperity.”

Rep. Raul Grijalva (D-NM) offered the Congressional Progressive Caucus’ alternative budget, which, believe it or not, is worse than the White House’s proposal. That measure did remarkably better — which should tell you exactly how far left the much of Democratic Party has drifted — but still failed, 89 to 327.

Today in Liberty: House to vote on Ryan budget, Second Amendment hero passes away

“Don’t hurt people, and don’t take their stuff. That’s it, in a nutshell. Everyone should be free to live their lives as they think best, free from meddling by politicians and government bureaucrats, as long as they don’t hurt other people, or take other people’s stuff.”Matt Kibbe

— White House suggests amendment to limit free speech: While Shaun McCutcheon was touting last week’s big win for the First Amendment, White House Adviser Dan Pfeiffer preached doom and gloom, suggesting that a constitutional amendment to limit free speech “may be the only option” to undo recent court rulings.

Ryan’s budget increases spending by $1.2 trillion

There are certainly some things to like about the budget proposal rolled out yesterday by House Budget Committee Chairman Paul Ryan (R-WI). The “Path to Prosperity” attempts to return Medicare to solvency, for example, and repeal Obamacare.

Ryan claims that the budget “cuts $5.1 trillion in government spending,” a line that has been repeated in media reports on the proposal. But this is a budgetary trick. The House Budget Committee may slash projected federal outlays, but Nicole Kaeding of the Cato Institute explains that the proposal would actually increase spending by $1.2 trillion:

How can spending both be “slashed” and increased by $1.5 trillion? It’s because of the bizarre way that Washington discusses spending, which is known as baseline budgeting.
[…]
In Washington, all spending proposals are compared to the CBO’s baseline projections. The CBO releases these projections a couple times a year, which are based on their estimates of current federal law. Every proposal is then compared to this baseline. Inside-Washington discussions of spending cuts or increases are relative to CBO’s figures.

But this is a very different way of thinking about budgeting than used by families, who don’t assume that their income will go up automatically every year. Families prioritize, and they cut back when they need to make the books balance. Sadly, few proposals in Congress make tough trade-offs and cut actual levels of spending.

Paul Ryan plans to balance budget in 10 years, reform Medicare

Tom Price and Paul Ryan
Image credit: Ellen Carmichael

House Budget Committee Chairman Paul Ryan (R-WI) rolled out House Republicans’ FY 2015 budget proposal yesterday. The latest iteration of the “Path to Prosperity” seeks to balance the federal budget in a decade, reform Medicare, and repeal Obamacare.

“This is a plan to balance the budget and create jobs, and it builds off a simple fact: We can’t keep spending money we don’t have,” Ryan said in a statement from the House Budget Committee. “This budget provides relief for families. Too many Americans struggle to make ends meet, while Washington continues to live beyond its means. It’s irresponsible to take more from hardworking families to spend more in Washington.

“Today’s proposal—The Path to Prosperity—shows that it’s not too late to tackle our country’s most pressing challenges,” he continued. “By cutting wasteful spending, strengthening key priorities, and laying the foundation for a stronger economy, we have shown the American people there’s a better way forward.”

Today in Liberty: Join Amash’s Rebel Alliance, Celebrate Human Achievement

“Things in our country run in spite of government, not by aid of it.” — Will Rogers

— Why buy coverage when you don’t have to?: Serious question. Obamacare’s individual mandate is meaningless, at least for the first two years. So meaningless in fact that Americans can escape it by claiming virtually any hardship. “Filed for bankruptcy in the past six months? Had medical bills you couldn’t pay in the past two years? Been a victim of domestic violence? Received a shut-off notice from a utility company? If you don’t want to buy insurance under Obamacare, you don’t have to. No penalty,” Politico explains. “The individual mandate may be the most despised part of Obamacare, but the reality is that it’s much smaller than people think. It’s riddled with exemptions, hardships and other loopholes that allow millions of people off the hook for enrollment by March 31.”

— Keep Calm and Join the Rebellion: Rep. Justin Amash’s (R-MI) end of quarter money bomb began this morning. As of 7:15 am, he’s already raised $6,021.14. Amash is facing an establishment-backed primary challenger. “We’ll fight their army of starched collars and pinstripe suits with a different type of army — the grassroots,” the campaign says via Facebook. “The great news is that we far outnumber them. For every $1,000 check a lobbyist can cut to Brian Ellis, I’m confident there are 100 grassroots supporters who can send Justin $35 at www.justinamash.com.

Obama’s budget requests $5.5 billion for insurer bailout

Buried inside President Barack Obama’s hideous budget proposal is a request for $5.5 billion to pay for the bailout for health insurance companies in the increasingly likely event that they lose money on Obamacare:

Health insurers such as WellPoint Inc. and Humana Inc. stand to gain $5.5 billion next year to cover losses from Obamacare in a program the law’s opponents label a bailout.

The money, outlined in President Barack Obama’s proposed budget for the fiscal year that begins in October, is designated to help insurers who find the cost of the law higher than expected, based on the percentage of older, sicker people who sign up compared with younger enrollees.

Under the Patient Protection and Affordable Care Act, insurers who record a profit of 3 percent or more on their Obamacare business would put some of the gains into a government-controlled fund. Companies whose claims cost at least 3 percent more than their premium revenue can access the money.

There are a couple different reasons why insurers are likely to use the risk corridors provision, mainly because of unexpected regulatory changes that are likely to reduce projected enrollments and the number of young and health people signing up for coverage hasn’t met expectations.

Defense Cuts in the Time of Crimea

The situation in Ukraine has come at a very inconvenient time for the Obama administration given their desire, announced at the end of February, to “shrink [the] Army to pre-WWII level.” The optics, as they say, are bad.

According to the paper of record at the time of the announcement:

The cuts proposed by Mr. Hagel fit the Bipartisan Budget Act reached by Mr. Obama and Congress in December to impose a military spending cap of about $496 billion for fiscal year 2015. If steeper spending reductions kick in again in 2016 under the sequestration law, however, then even more significant cuts would be required in later years.

The budget is the first sweeping initiative that bears Mr. Hagel’s full imprint. Although Mr. Hagel has been in office one year, most of his efforts in that time have focused on initiatives and problems that he inherited. In many ways his budget provides an opportunity for him to begin anew.

So, okay, that’s good. This administration isn’t known for paying attention to things like budgets. Nice to see them decide to meet one of the parameters of a bipartisan effort to get things under control. And, truthfully, as Sen. Bernie Sanders (I-VT) pointed out last year in pushing back against the National Defense Authorization Act, defense spending could use some oversight and tightening up:

Obama produces another tax and spend budget

President Barack Obama unveiled his $3.9 trillion budget for FY 2015, just days after Senate Democrats announced that they have no intention of trying to push through a budget in a what’s expected to be a contentious election year.

The proposal doesn’t offer anything in terms of new ideas or policy changes, though it does respect the budget framework agreed upon by Sen. Patty Murray (D-WA) and Rep. Paul Ryan (R-WI), chairs of the respective congressional budget committees, for FY 2015 before blowing past it in later years.

President Obama’s budget is more a nod to the leftist Democratic base than an actual blueprint for governing the country. It’s not passable, and the White House knows it. The proposal is so toxic that no vulnerable Democrat could support it and win reelection.

The Wall Street Journal notes that the budget would impose $1 trillion in new taxes over the next 10 years. Including new taxes and fees and rather rosy economic projections, the White House anticipates $3.15 trillion in new revenue through 2024, according to Philip Klein at the Washington Examiner.

Obama and the Bong-Hit Budgeting Plan

It looks like Obama has reprised his role as the leader of the “Choom Gang,” the uber-cool, pot-smoking rebels of his college days. How else can one explain Obama’s latest budget proposal, in which he will, according to the Washington Post, call “for an end to the era of austerity that has dogged much of his presidency…”

Seriously? And end to austerity? That is like Rosie O’Donnell announcing an end to her era of starvation. That’s like Lindsay Lohan calling for an end to her strict sobriety, or Bill Clinton announcing an end to his marital fidelity.

The thought that the Obama presidency to date has been an era of austerity is so comical, so absolutely farcical, that when I first heard the comment I assumed it had to be from a Saturday Night Live skit. I mean, the utter disregard for spending restraint under Obama is legendary. Obama’s spending makes George W. Bush’s spending seem downright miserly by comparison, and that is quite a feat!

Obama had barely changed the drapes in the Oval Office before he signed off on the $830 “stimulus” bill, an orgy of handouts to Democrat special interests and labor unions under the guise of economic recovery. It was never intended to stimulate the economy, which is why unemployment increased to over 10% and stayed above 9% for his entire first term, and why Obama joked about “shovel ready jobs” not being as shovel ready as they imagined.


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