national debt

Obama’s misleading debt ceiling claims

Polls show that Americans don’t want Congress to increase the debt ceiling, even if it means defaulting on the national debt. While the merits of those polls may be a subject for debate, polls show that the public is concerned about rising deficits and have given President Barack Obama less than stellar marks on the subject.

But the White House has begun a full-court press to pressure Congress to raise the debt ceiling, the statutory limit for the national debt, and President Obama is making some deceiving claims about the issue.

“Now, this debt ceiling — I just want to remind people in case you haven’t been keeping up — raising the debt ceiling, which has been done over a hundred times, does not increase our debt; it does not somehow promote profligacy,” said President Obama in a meeting with business executives. “All it does is it says you got to pay the bills that you’ve already racked up, Congress. It’s a basic function of making sure that the full faith and credit of the United States is preserved.”

“And I’ve heard people say, well, in the past, there have been negotiations around raising the debt ceiling,” he said. “It’s always a tough vote because the average person thinks raising the debt ceiling must mean that we’re running up our debt, so people don’t like to vote on it, and, typically, there’s some gamesmanship in terms of making the President’s party shoulder the burden of raising the — taking the vote.”

House Republicans want to fund government above sequester levels

House Republicans may be moving ahead with a Continuing Resolution (CR) that defunds ObamaCare, but the measure they’re pushing will fund the government above levels set by the Budget Control Act of 2011.

The Budget Control Act (BCA) set in place $1.2 trillion in spending cuts over the next 10 years, which became known as the sequester. Those cuts, which are ultimately cuts to the rate of spending growth, went into effect in March after a temporary delay at the beginning of the year. Half of the cuts were applied to domestic programs, the other half to defense.

Tad DeHaven, a budget analyst at the Cato Institute, noted last week that the original CR backed by House Republican leadership would have spent $988 billion in FY 2014, rough $20 billion above the levels set by the BCA.

“The Congressional Budget Office’s score of the House Republican CR shows that defense is funded at $20 billion above the sequestration-included cap for fiscal 2014,” wrote DeHaven. “However, non-defense funding is actually $1 billion below it. Thus, it seems clear that the CR was intentionally written to force the sequestration-defense issue, which would kick-in in January.”

The BCA set the level for spending level for FY 2014 at $967 billion. The latest CR proposed by House Republicans, which defunds ObamaCare, would spend $986 billion, funding the government until December 15.

Americans oppose raising the debt ceiling

debt ceiling

Though most members of Congress are focused on funding the federal government for another year, there is another battle on the horizon — raising the federal debt ceiling, which will be reached mid-next month.

House Republicans want some sort of a trade off from the White House to raise the debt ceiling, currently at $16.7 trillion, either further spending cuts or concessions on ObamaCare, and are tossing around the idea of holding a clean vote on the measure to show that there isn’t support for it inside the chamber. The White House, however, isn’t interested in having a debate on raising the debt ceiling.

Disagreement on how to approach the issue could lead to a stalemate similar to what the country saw in 2011 when Congress passed the Budget Control Act, a compromise between the Congress and the White House that led to the sequester.

But two new polls show that Americans are opposed to raising the debt ceiling.

NBC News and the Wall Street Journal released a poll at the end of last week showing that a plurality of Americans oppose raising the debt limit, at 44/22.

Though opposition is strong, NBC News notes that President Obama will be able to frame the debate over the issue, giving him an advantage over House Republicans who have frequently been unable to frame a coherent message.

CBO can’t determine costs of Syria intervention

Tomahawk missile

Among the reasons that have been cited against military intervention against Syria is the potential cost, not just in terms of what the Obama Administration says will be “limited strikes,” but also the possibility of a broader engagement should the situation worsen.

But the Congressional Budget Office (CBO), which frequently issues cost scores on legislation, issued a report on Monday afternoon noting that they could not accurately predict the cost of Syria intervention. Why? Because Obama Administration has “has not detailed how it would use the authority that would be provided” by the Authorization for Use of Military Force (AUMF).

S. J. Res. 21 would authorise the President to use military force against the government of Syria, for up to 90 days, in response to its use of chemical weapons,” noted the CBO in its summary of the resolution.

The CBO explained the AUMF requires that President Barack Obama to submit a plan to Congress showing that it has exhausted potential diplomatic solutions and how strikes against the Syrian government are in the national security interest of the United States. It also requires the Obama Administration to present a strategy for completing stated objectives of the strike.

“The Administration has not detailed how it would use the authority that would be provided by this resolution; CBO has no basis for estimating the costs of implementing S. J. Res. 21,” they added.

FreedomWorks urges “no” vote on Syria war resolution

FreedomWorks -- Syria

The push from the Tea Party against the authorization for use of military force (AUMF) in Syria just got a little stronger.

FreedomWorks, a grassroots group with more than six million members, announced this morning that they are urging members of Congress to vote against the Syria resolution. They will also score the vote on their scorecard.

“Congress should be focusing on the red ink at home, not arbitrarily established red lines abroad. As a membership organization, FreedomWorks has been overwhelmed with requests to help activists express their voice in this debate,” said Matt Kibbe, president and CEO of FreedomWorks. “A broad coalition of Americans, including the millions of grassroots activists represented in the FreedomWorks community, has already roundly rejected the Obama Administration’s rationale for bombing Syria. Congress ignores the will of the voters on this issue at their own peril.”

Kibbe said the vote represents the “‘insiders versus the rest of us’ dynamic” that is so prevalent in Washington, comparing the Syria resolution to the TARP bailout. He went onto note that the limited military strikes the Obama Administration is proposing may well turn into a costly, prolonged engagement.

“When they convene, Congress will consider short-term actions. They should also reflect upon long-term costs associated with those actions,” he said. “There is no guarantee that ‘limited’ military operations in Syria will lead to a ‘limited’ result. The costs of brinksmanship in an ongoing civil war are steep, and a collapse of state would fall in our laps. In other words, if we break it, we buy it.”

Nancy Pelosi doesn’t want to be Speaker again

During an interview last week with the National Journal, House Minority Leader Nancy Pelosi (D-CA) said that she doesn’t want to be Speaker again should Democrats win back the House of Representatives.

Pelosi had been commenting on the state of the House Republican Conference and Speaker John Boehner (R-OH), who won the job in 2011 following a historic mid-term election in which the GOP picked up 63 seats and control of the chamber, when she was pointedly asked if he wanted her old post back.

“No, that’s not my thing. I did that,” said Pelosi.

Pelosi’s office is, of course, disputing the report, telling media outlets that she “fully intends to be a Member of a Democratic Majority in the 114th Congress” and that whether she once again takes the gavel is up to the members of the House Democratic Conference. The National Journal stands by the original transcript of the interview.

The prospect of Pelosi serving as Speaker has been a rallying cry for Democrats. In May, President Obama told donors via email that he “could not be more anxious or eager” to have Democrats in control of the House and Pelosi holding the gavel.

True cost of national debt could be $222 trillion

National debt and funded liabilities

The Treasury Department announced on Monday that the $16.7 trillion debt limit will be reached in mid-October, meaning that Congress will once again have wade into the tumultuous politics that come with the issue.

House Republicans may hold a “clean vote” on the debt ceiling to show that there isn’t support for raising the borrowing limit without some sort of trade off, either further spending cuts or a showdown on ObamaCare. It could lead to a stalemate similar to what we saw in 2011 when Congress passed the Budget Control Act, a compromise between the Congress and the White House that led to the sequester.

Record budgets deficits that President Obama has overseen and a growing national debt are something about which Americans should be concerned. But the focus on the debt ceiling misses the larger point — specifically entitlement spending.

Veronique de Rugy, a senior research fellow at the Mercatus Center, recently took a look at various estimates of the true cost of the national debt, including unfunded liabilities, and what she found is nothing short of speechless:

Fiscal policy discussions generally focus on the current year’s budget numbers: $1.0 trillion budget deficit and $16.0 trillion national debt.

As alarming as these numbers are, they fail to account for the far greater fiscal challenges of unfunded liabilities.  Here is some key evidence from various studies:

Chatting with Jonathan Bydlak, President of the Coalition to Reduce Spending

Jonathan Bydlak

“The sequester is quite possibly the greatest thing to have happened to the fiscal conservative cause, at least in quite some time as far as I can remember.” — Jonathan Bydlak

It’s that time of year when spending battles come to the forefront of political discussion in Washington. Various congressional committees are currently debating appropriations measures that will divvy up taxpayer dollars to fund the federal government and a litany of government programs.

Most free market groups place heavy emphasis on taxes and regulatory concerns. But the Coalition to Reduce Spending, as their name suggests, seeks to focus its efforts on spending and budget deficits.

United Liberty recently talked with Jonathan Bydlak, president of the Coalition to Reduce Spending, about his organization’s very specific focus on the river of red ink that has been flowing from Washington.

“When you think about which groups in DC tend to be the most effective, it usually, in my experience, are those that have a very focused mission and execute on that mission very effectively,” Bydlak told United Liberty. “So there’s a reason why people pay attention to the NRA or the ACLU — because their mission is very focused and they build an interest group and they are very successful at accomplishing that mission. Nobody’s really done that for the issue of spending.”

Mike Lee: Young voters should focus on the national debt

As we head into the mid-term election, Republicans are still trying to figure out how to bring them back into the fold. During a recent tele-townhall, Sen Mike Lee (R-UT) was asked how he plans to reach out to young voters and others who don’t typically vote for Republican candidates.

There was once a time when Republicans did well with young voters. Just after the 2012 presidential election, in which President Barack Obama won 60% of voters under the age of  29, Jason Riley noted at the Wall Street Journal that both Ronald Reagan and George H.W. Bush actually won the youth vote. Riley also pointed out that “George W. Bush lost young voters to John Kerry by only 9 points and lost them to Al Gore in 2000 by less than that.”

“It’s important to remember that young voters will bear a disproportionate share, a disproportionate part of the burden associated with our $17 trillion debt,” Lee replied. “It’s a tragic thing…that these days most of the debt that we have in our federal government has been accumulated before a lot of today’s young voters were old enough to vote and, to a significant degree, a lot of that debt was acquired before they were even born.”

“That isn’t fair. It ends up creating a really pernicious form of taxation without representation,” he continued. “You’re gonna have to pay something to the government that you didn’t ever vote for, and that’s a big problem.”

It’s time to reform Social Security

Social Security

In a new video from Reason TV, Nick Gillespie explains that it’s time for Congress to get serious about Social Security reform.

Gillespie cites three strong reasons to tackle this problem now. First, Social Security is financially broke and will the surpluses it has amassed will be gone by 2033. That point was recently driven home by a report from the program’s trustees showing $23.1 trillion in unfunded liabilities.

Secondly, Gillespie explains that Social Security is a bad investment because Americans will receive less in benefits than they pay in taxes. And lastly, Americans don’t have any control over their contributions, which is especially unfair to younger workers. This means that they can’t invest their money in retirement account that better suits their needs, nor can they leave what they’ve put in the system to their loved ones.

Check out the two-minute video below:

 


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