United Liberty

Whenever people call for cutting the military budget, the usual response goes something like  ”How can you keep the Army from getting the equipment it needs to fight wars?” Well, the problem with that response is highlighted today by this story from ABC:

Lawmakers from both parties have devoted nearly half a billion dollars in taxpayer money over the past two years to build improved versions of the 70-ton Abrams.

But senior Army officials have said repeatedly, “No thanks.”

It’s the inverse of the federal budget world these days, in which automatic spending cuts are leaving sought-after pet programs struggling or unpaid altogether. Republicans and Democrats for years have fought so bitterly that lawmaking in Washington ground to a near-halt.

Yet in the case of the Abrams tank, there’s a bipartisan push to spend an extra $436 million on a weapon the experts explicitly say is not needed.

“If we had our choice, we would use that money in a different way,” Gen. Ray Odierno, the Army’s chief of staff, told The Associated Press this past week.

Why are the tank dollars still flowing? Politics.

Keeping the Abrams production line rolling protects businesses and good paying jobs in congressional districts where the tank’s many suppliers are located.

If there’s a home of the Abrams, it’s politically important Ohio. The nation’s only tank plant is in Lima. So it’s no coincidence that the champions for more tanks are Rep. Jim Jordan and Sen. Rob Portman, two of Capitol’s Hill most prominent deficit hawks, as well as Democratic Sen. Sherrod Brown. They said their support is rooted in protecting national security, not in pork-barrel politics.

I have reached the conclusion that Americans have enjoyed so much freedom and prosperity for so many years that they have come to take it for granted, and not only fail to see such circumstances as unique in the history of mankind, but as commonplace. And because they assume such has always been the norm, they fail to realize that such prosperity and freedom must be nurtured, cultivated, and defended.

How else can you explain the re-election of Barack Obama, who added more debt in his first three years than the first forty-one presidents combined, and more debt in four years than George W. Bush (not exactly a fiscal conservative) accumulated in eight years? How else to explain the seeming indifference to stratospheric debt levels that keep rising by more than $4 billion per day? We seem to think that America, because it has been the richest and most powerful nation in our lifetimes, will always be such.

Likewise, while the world around us seems in constant turmoil, until the attacks of 9/11 (2001, not the Benghazi attacks that we still have no answers for), Americans felt safe and secure on our homeland, buffered from the violence in Europe, Asia, and the rest of the world that fills our nightly news. But on that day we had our nose bloodied, and we felt vulnerable. Yet for the next eight years under Bush, we had no more attacks on American soil, and we once again slipped back in complacency.

Now, violent attacks are the steady diet of our news media. The Boston Marathon bombing. The ricin letters. Sandy Hook. Aurora. Virginia Tech. Columbine. The Underwear Bomber. The Shoe Bomber. The Times Square Bomber. The Giffords shooting. Suddenly we seem vulnerable again, and in that vulnerability we seek safety and security.

“Though the earth, and all inferior creatures, be common to all men, yet every man has a property in his own person: this no body has any right to but himself. The labour of his body, and the work of his hands, we may say, are properly his. Whatsoever then he removes out of the state that nature hath provided, and left it in, he hath mixed his labour with, and joined to it something that is his own, and thereby makes it his property.” — John Locke, Second Treatise of Government (1690)

What is “spending through the tax code?”  This is an important question in light of the Obama FY 2014 budget proposal finally unveiled last week.  We already know it raises taxes by more than $1 trillion.  Much of this is done by eliminating so-called “tax expenditures.”

Here is how the Joint Committee on Taxation defines a tax expenditure:

Tax expenditures are defined under the Congressional Budget and Impoundment Control Act of 1974 (the “Budget Act”) as “rev­enue losses attributable to provisions of the Federal tax laws which allow a special exclusion, exemption, or deduction from gross in­come or which provide a special credit, a preferential rate of tax, or a deferral of tax liability.”

There is some more bad news for ObamaCare. According to a recently released report from the Government Accounting Office (GAO), the Patient Protect and Affordable Care Act (PPACA) — President Obama’s signature domestic policy achievement — could cost taxpayers dearly in the long-term if cost-savings measures don’t work as intended.

The report, which was requested by Sen. Jeff Sessions (R-AL), who is the ranking Republican on the Senate Budget Committee, explains that the “effect of PPACA on the long-term fiscal outlook depends largely on whether elements designed to control cost growth are sustained.”

“Overall, there was notable improvement in the longer-term outlook after the enactment of PPACA under our Fall 2010 Baseline Extended simulation, which, consistent with federal law at the time the simulation was run, assumed the full implementation and effectiveness of the costcontainment provisions over the entire 75-year simulation period,” noted the GAO. “In contrast, the long-term outlook in the Fall 2010 Alternative simulation worsened slightly compared to our January 2010 simulation. This is largely due to the fact that cost-containment mechanisms specified in PPACA are assumed to phase out over time while the additional costs associated with expanding federal health care coverage remain.”

The baseline scenario is used by the government budget officials to determine the the cost effects of current law. However, the alternative scenario gauges budget implications based on past behavior of Congress, such as its proclivity for bypassing scheduled Medicare payments to doctors (also known as the “doc fix”).

President Barack Obama’s State of the Union address was filled with promises and various other costly legislative items at a time when budget deficits are still running high. According to the National Taxpayers Union, President Obama’s agenda would cost taxpayers $83.4 billion per year:

In President Obama’s most expensive and widest ranging State of the Union Address yet, his proposals weighed in at $83.4 billion worth of quantifiable agenda items, according to National Taxpayers Union Foundation’s (NTUF’s) annual line-by-line analysis of the speech. This figure could grow much higher depending on what the President aims to do to avoid the sequester. In either case, if the President intends to follow through on his promise that his speech would not “add a dime to the deficit,” individuals and businesses may be facing another round of tax increases.

“The speech gave the President the opportunity to preview his forthcoming budget,” said NTUF Director of Research Demian Brady. “And although he said his agenda items would not increase the deficit, he spent far more time detailing new spending initiatives than how they would be ‘paid for.’”

If the sequester plan that the White House has put forward were passed, it would raise the cost of the spending proposals to $100.4 billion. The most costly program that President Obama wants enacted is his cap-and-trade plan, which would cost $56.5 billion each year. NTU also notes that more than half of the proposals mentioned by President Obama in the State of the Union address “could not be quantified.”

You can see the costs of each proposal here.

Last night during a joint session of Congress, President Barack Obama gave his fifth the State of the Union address where he laid out his agenda for the next year. As was anticipated, the speech carried over the Leftist themes of last month’s inaugural address and was more aggressive in tone.

Despite recent GDP numbers showing that the economy contracted in the last quarter of 2012, President Obama started off the hour long speech by repeat a familiar line, explaining that “[t]ogether, we have cleared away the rubble of crisis, and can say with renewed confidence that the state of our union is stronger.”

After a couple of shots at Congress, President Obama spent a few minutes discussing the sequester, claiming that “both parties have worked together to reduce the deficit by more than $2.5 trillion – mostly through spending cuts, but also by raising tax rates on the wealthiest 1 percent of Americans.” Obama claimed, “we are more than halfway towards the goal of $4 trillion in deficit reduction that economists say we need to stabilize our finances.”

If only that were true. In Cato Institute’s response to the State of the Union address, Michael Tanner explained, “Let’s be absolutely clear — there have been no spending cuts under this President.”

In 2010, the first year that this President was responsible for the budget, the federal government spent $3.4 trillion,” noted Tanner. “Last year, the federal government spent $3.5 trillion, and for the first four of last year, we’re spending at a fast pace than the first four months of last year.”

Written by David Boaz, executive vice president at the Cato Institute. It is cross-posted with permission from Cato @ Liberty.

News reports quote President Obama, in discussing the debt ceiling and the ongoing argument over tax and spending policy in his press conference yesterday, saying:

It turns out the American people agree with me.

Do they? It’s true that a majority of respondents told pollsters that they wanted to raise taxes on someone else. And Congress did that in the “fiscal cliff” legislation.

But what about the president’s insistence on a larger government and essentially no cuts in federal spending? The election day exit polls shed some light on those questions.

51 percent of voters polled said the government is doing too many things better left to businesses and individuals—8 points higher than in the 2008 election. Only 43 percent of voters said they believe government should be doing more.

49 percent said the 2010 health care law should be repealed, with only 44 percent of voters supporting it.

And 51 percent said they prefer smaller government with fewer services, while 43 percent prefer larger government. As usual.

Now that the “fiscal cliff” deal is law, we move on to the next acts in this kabuki theater we call Congress. The fiscal cliff deal locked in most of the Bush-era tax rates permanently, raised taxes on the highest earners, allowed the payroll tax to increase on all earners (a shock to many Democrats, who thought the re-coronation of the Obamessiah exempted them from more taxes). It once again kicked the can of spending excess, specifically entitlement spending, down the road. It supposedly reduces the huge annual deficits, yet will bring in only $620 billion over ten years (enough revenue in a decade to pay HALF of THIS year’s deficit). Since entitlement spending drives our growth in debt, the fiscal cliff deal did not avert a fiscal crisis; it simply delayed it and insured that it will be much worse when it hits.

The irony is that Obama’s fiscal cliff deal theoretically demands higher taxes for “fairness,” to get the rich to carry more of the burden. However, a recent Huffington Post article quotes Professor Emmanuel Saez of UC-Berkeley, who reveals that income inequality is actually higher under Obama than it was under Bush. Or, as the writer explains, “That means the rising tide has lifted fewer boats during the Obama years — and the ones it’s lifted have been mostly yachts.” In other words, his uber-rich friends hit the jackpot even as the poor and middle class he supposedly protects suffer more.

Despite hand-wringing and breathless proclamations of impending doom, Congress and Obama showed they were completely unserious about fixing the problem, voting on the “fiscal cliff” bill without having a clue what was in it. According to Congressman Ron Paul, the bill was voted on in the House just 22-hours after the text was made available, and the Senate voted on the 154-page bill just three minutes after it was presented.

At the end of last week, President Barack Obama nominated Jack Lew, who currently serves as White House Chief of State, to replace Timothy Geithner as the next Treasury Secretary. While he may eventually win confirmation, the White House and Lew may have a fight on their hands in the Senate:

Republicans say Jack Lew will have to answer for what they view as the president’s bare-knuckle tactics when Lew undergoes the Senate confirmation process for Treasury secretary. 
[…]
Republicans are frustrated that Obama has not put forth what they would consider a credible plan to reform entitlement programs. And they were angered when after the election he traveled to Pennsylvania and Virginia for campaign-style events to pressure Republicans to extend the middle-class tax cuts.

Senate GOP aides say Lew will be called to account for the White House’s tactics when he comes before the Senate Finance Committee.

“He’s coming to the Senate from the chief of staff’s role in the White House and this White House just points the finger at everyone else. It refuses to take the blame for the bad things that are happening. This is a White House that is overly political and not really interested in alternate points of view,” said a senior Senate GOP aide.

“He’s going to be facing a lot of questions related to his involvement in the White House. He’s the top dog over there. He’s responsible for the direction,” the aide said. “It’s a shame the president would send along such a divisive figure.”

Senator Rand Paul has a new plan to prioritize government spending in order to stave off defaults and bring the country back towards solvency:

In a renewed attempt to force President Barack Obama’s hand on the debt limit, Kentucky Republican Sen. Rand Paul is pushing legislation that would ban federal spending on anything but interest payments on the national debt, Social Security checks, and military salaries.

Paul, who is traveling through Israel this week, told Business Insider here Thursday that he believes the GOP should take a more pro-active approach to the coming fight over raising the debt ceiling. Rather than march the country toward a government shutdown — and spook markets with possible default — Paul argued that Republicans should pass a bill that would force the government to prioritize payments to bondholders.