deficit spending

7 Reasons Why Kevin McCarthy Shouldn’t Replace Eric Cantor

John Boehner, Kevin McCarthy, and Eric Cantor

Republicans were jockeying for position to move up on the ladder before Eric Cantor (R-VA), who lost his primary bid in a shocking upset on Tuesday night, announced that he would step down from his post as House Majority Leader at the end of July.

But with the leadership election scheduled for Thursday, June 19, several names are being kicked around to replace Cantor, among them is current Majority Whip Kevin McCarthy (R-CA).

Yeah, no. That’s a terrible idea.

McCarthy has been in lock-step with Cantor, who endorsed him yesterday, and Speaker John Boehner (R-OH). He’s essentially the status quo. Nothing will change in the House if McCarthy becomes the next Majority Leader. It would be a politically tone deaf move for House Republicans to choose a carbon copy of Cantor to lead their conference.

And here are some reasons why.

Health Care Compact: Let states take the reins of health care away from the federal government

In April, Kansas Governor Sam Brownback, a Republican, signed into law the national Health Care Compact, making the Sunflower State the ninth to embrace the bold new idea.

And what, you ask, is the Health Care Compact? It’s a proposal to allow participating states to take the reins of health care away from the federal government while reducing overall federal health spending.

A shorter description for this idea is “devolution,” and it’s exactly what we’ll need, if we’re ever going to get control of federal spending and debt.

This is the most creative and exciting policy proposal in a generation. It has to be approved by Congress, and is far from perfect, but in my humble opinion every American should get behind it.

As I mentioned, nine states have signed on, so far: Alabama, Georgia, Indiana, Kansas, Missouri, Oklahoma, South Carolina, Texas, and Utah.

Meanwhile, James Lankford, a Republican representing Oklahoma’s Fifth Congressional District, introduced a bill in February to approve the HCC. It currently has 12 sponsors, all of them Republicans and all of them representing states that have approved the compact.

How It Would Work

The brainchild of Houston conservative activist Leo Linbeck III, the HCC cleverly combines two existing ideas, interstate compacts and federal block grants, in a way that can fairly be described as revolutionary.

White House Budget Director Refuses to Answer Whether Obama’s Proposal Ignores the Law

 Sylvia Burwell

President Barack Obama appears to have ignored the Democrats’ decision to pass on pushing through a budget and decided to make a move on his own.

Obama’s recently unveiled $3.9 trillion budget would raise more than $1 trillion over the next 10 years and increase spending $56 billion above statutory caps in the next year alone, which means that the President did not consider the spending caps both the White House and Congress agreed to last year before he decided to unveil his plan.

During a Budget Committee hearing yesterday, Sylvia Burwell, Obama’s White House Budget Director, seemed to struggle to answer Sen. Jeff Sessions’ (R-AL) question regarding the president’s budget proposal. While Obama’s plan would increase spending, Burnwell refused to answer Sessions when asked whether the budget would allow more spending than what had been already agreed to previously when the President signed the Ryan-Murray budget.

According to the Budget Director, “there are some questions that are not simply Yes or No questions.” Her justification and defense of the new budget proposal ignores the budget already signed by the president. When asked if she wanted Congress to change the Ryan-Murray budget so that the increased spending proposed by Obama would then become a possibility, Burnwell also struggled to respond.

“Fiscally conservative” Blue Dog Democrats fail to protect taxpayers

Blue Dog Democrats

Much ink has been spilled in the last few years over the decline of the Blue Dog Coalition in the House of Representatives. Just this week, the Washington Post ran a story noting that this group of purportedly centrist Democrats will has seen its numbers fall from 50 members four years ago.

“[T]he Blue Dog Coalition is a shell of its former self, shrunken to just 15 members because of political defeat, retirements after redrawn districts left them in enemy territory and just plain exhaustion from the constant battle to stay in office,” wrote Paul Kane at the Washington Post. “Several are not running for reelection in November, and a few others are top targets of Republicans.”

There actually 19 members of the Blue Dog Coalition, though three members aren’t running for reelection in 2014. Reps. Jim Matheson (D-UT) and Mike McIntyre (D-NC), whose districts were targeted by Republicans, decided to retire. Rep. Mike Michaud (D-ME) is running for governor in Maine. Other members of the Blue Dog Coalition face tough bids for reelection, which could further dwindle its numbers at the beginning of the next Congress.

Blue Dog Democrats claim to “represent the center of the House of Representatives” and purport to be “dedicated to the financial stability and national security of the United States.” In news stories, reporters will frequently refer to Blue Dogs as “fiscally conservative” or “deficit hawks.”

A Single-Payer Health Care System Would Put Us in More Debt

spending

When Sen. Bernie Sanders (D-VT) suggested that a single-payer system is the “cure for America’s ailing health care,” he suggested that ObamaCare was a small step in comparison to the reform he envisions. And what would this reform be, you ask.

The subsidized program that places the health care monopoly in the hands of the government.

Thomas Sowell pointed out that the reason why the single-payer system still sounds appealing to some is that people are being fooled into thinking that they are getting something for nothing. Health care at no cost for every single American, subsidized by taxpayer dollars is their goal, and the ObamaCare failure might be just the type of blessing that Congress is looking for.

But before we continue, have you ever asked yourself whether single-payer system supporters understand or even realize that subsidized health care is not free?

According to a report released by the National Taxpayers Union Foundation, during 113th Congress’ first six months, some lawmakers have been much more interested in pushing for the singe-payer health care system than introducing budget cuts. All legislation introduced during the first six months in both the House and the Senate would increase spending by $1.74 trillion. Cuts introduced by Congress would only amount to $453 billion.

Expect the Farm Bill to cost a lot more than advertised

With pressure in the Senate to pass the Farm Bill this week (they approved cloture this morning) and showmanship killing any consideration of further amendments, things aren’t looking good for reformers. This leaves taxpayers on the hook for an expanded crop insurance program with incredibly few taxpayer protections built in.

The Senate lauds this as progress, claiming $24 billion in savings over ten years. But a simple breakdown makes it clear that these supposed savings will never be realized. Luckily, the American Enterprise Institute has a great infographic presenting the numbers as they are likely to look over the next ten years. Instead of finding $24.4 billion in savings, the AEI graphic shows $31.2 billion of increased spending, which they rightly term a “bait-and-switch” for the taxpayer.

So where do these costs come from? The answer is the Agriculture Risk Coverage provision, a proposed “shallow loss” program that would make up the difference for revenue not covered by crop insurance. The program works with crop insurance to guarantee revenues, basically ensuring farmers 89 percent of their average revenue over the last five years. So if prices fall or your yield decreases, ARC will smooth over the difference.

Spending Proposals Down in 112th Congress, Fiscal Irresponsibility Still a Washington Habit

It’s no secret that Washington is addicted to spending. Though, it’s true that the budget deficit is expected to decline this year, after four consecutive years of $1+ trillion deficits, the decline is spending isn’t because of any actual spending restraint, it’s a result of gridlock in government.

But declining budget deficits don’t reflect the desires of many members of Congress. According to a new report from the National Taxpayers Union Foundation (NTUF), the net-cost of legislation introduced in 112th Congress (proposed increases less proposed cuts) would have increased the federal budget by $1.3 trillion.

Despite the large increase in federal spending proposed last year, the “BillTally” report has some encouraging findings. Demian Brady, director of research at NTUF, noted that there was a increase in legislation to cut spending.

“The 112th Congress saw a sharp rise in the number of bills to reduce federal spending, with 221 introduced in the House and 127 in the Senate,” wrote Brady. “This is the highest number of spending-cut bills NTUF has recorded since the 105th Congress (1997-1998) when there were 265.” The report also found that legislation to increase federal spending is “being introduced at a much slower pace than in the previous Congress.”

The Case for a Romney Presidency

Romney

On Wednesday night, Americans were treated to the first of three presidential debates, focusing primarily on the economy. For many Americans, this was their first opportunity to see an unbiased, objective view of Governor Mitt Romney, one untainted by the press, which has discarded all pretense of journalistic integrity and instead rabid Obamamaniacs (some of this is subtle, like the stories the media choose to cover and how they cover them, and others are more blatant, as when MSNBC was busted recently editing video to make it appear Romney was pleading with a crowd to cheer for him, in order to make him look weak and pathetic). For Obama, having the media on your team is like being an NFL team where the referees make all the calls in your favor.

To date, Governor Romney has failed to take advantage of a plethora of evidence supporting the argument against the re-election of the president; high and sustained unemployment, slowing GDP growth, chaos in the Middle East as his foreign policy goes up in flames. Likewise, Romney has largely failed to make the case for his own election by touting his success in private enterprise, as a governor, and as a humanitarian. His failure to do so has been inexplicable. However, on Wednesday he went on the attack from the first moment, respectfully but firmly challenging the Obama narrative that the pliant media has dutifully parroted. The effect was noticeable, with Obama rarely looking at Romney, often smirking and sighing, and just looking irritated that anyone would challenge his greatness.

CBO long-term budget outlook shows nothing new

The Congressional Budget Office (CBO) released the 2011 Long-Term Budget Outlook yesterday. As you might expect, both sides are talking up the aspects of the report that play to their talking points. For example, if you listen to our progressive/liberal friends, they’re quick to point to charts in the report showing that budget deficits wouldn’t be as large if the 2001/2003 tax cuts hadn’t been extended. Of course, most, if any at all, don’t acknowledge that the CBO also says this in the report:

Changes in marginal tax rates (the rates that apply to an additional dollar of a taxpayer’s income) also affect output. For example, a lower marginal tax rate on capital income (income derived from wealth, such as stock dividends, realized capital gains, or the owner’s profits from a business) increases the after-tax rate of return on saving, strengthening the incentive to save; more saving implies more investment, a larger capital stock, and greater output. However, if that lower marginal tax rate increases people’s after-tax returns on savings, they do not need to save as much to have the same future standard of living, which reduces the supply of saving. CBO concludes, as do most analysts, that the former effect outweighs the latter, such that a lower marginal tax rate on capital income increases saving. A higher marginal tax rate on capital income has the opposite effect.

SOTU: Obama wants to cut deficit while “investing”

If you were looking for a substantive discussion of the problems facing the United States, last night’s State of the Union address was a let down.

President Barack Obama spent 62 minutes speaking in mostly generalities and explaining to us how great government spending is, but also warning the Congress that he will veto bills containing earmarks – special projects that are inserted into legislation that go bypass the normal budget process. President Obama also pledged to take measures to cut spending by enacting a five-year freeze on non-defense discretionary spending. While he may consider this to be some great feat, Obama’s proposal will only save $400 billion during that time. This is a drop in the bucket compared to the $6 trillion in budget deficits projected by the Congressional Budget Office.

Obama noted in his speech that non-defense discretionary spending represents a relatively small portion of the budget – around 12 percent, using his numbers, and added that “we have to stop pretending that cutting this kind of spending alone will be enough.”


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