Podcast: Jim Bunning, 2nd Amendment, Health Care Reform, Reconciliation, Extremism, Puppycide,Guests: Doug Deal & Mike Hassinger
On Thursday, the US Senate voted to restore pay go rules on a party line vote. President Obama praised the restoration of the PAYGO rule. Obama supporter Andrew Sullivan used the vote as a club to attack Republicans. Republicans opposed the restoration of pay go calling it a backdoor attempt to raise taxes. However, the PAYGO rule is at best a dual edged sword. While PAYGO is an excellent for controlling and limiting deficit spending, it does very little to limit the size and growth of the Federal government.
The PAYGO or “pay as you go” rule simply calls for any increase of mandatory spending or reduction in revenue (ie. taxes) must be offset by decreases in discretionary spending or increases in revenue (taxes). Mandatory spending is things like Medicaid, Medicare, Social Security, pay for Federal employees, paying debt, and other welfare programs such as Food Stamps and Veterans benefits. Mandatory spending is nearly 60% of the Federal budget. Discretionary spending is everything that Congress has to pass legislation to authorize.
How PAYGO Is Fiscally Responsible:
In last week’s article titled “Problems of the Republican Party”, I discussed some key policy mistakes the modern day Republican Party has made over the last quarter of a century. The problems are deep and quite fundamental, as I mentioned before, but with some significant reform and a bit of policial realignment it is possible for the Republican Party to regain the prestige it once had. For the voices within the party that stand for reason and liberty, this battle will be very slow and may never be won, but finding and implementing solutions to fix the myriad of problems the party faces is a worthy cause.
The results of the mid-term election became a reality for Democrats yesterday as Republicans took control of the House of Representatives, and more than 90 new members were seated.
John Boehner (R-OH) defeated Nancy Pelosi (D-CA) in the election for Speaker. In fact, 19 members of her own caucus voted for someone else (11 voted for Heath Shuler), voted present or did not vote at all; the most members of a caucus to vote against their party’s nominee since 1923.
The power exchange wasn’t limited to the Congress, as the transition also took place on Twitter. The Daily Caller notes:
Late Tuesday evening, hours before the Wednesday kick-off of the 112th Congress, Rep. Pelosi dutifully ceded the use of @SpeakerPelosi in exchange for @NancyPelosi. Meanwhile, @JohnBoehner remains to be actively used by the entering Speaker (he also used @GOPLeader, but that account has been handed over to Majority Leader-elect Eric Cantor), while @SpeakerBoehner became the Ohio congressman’s active account Wednesday morning.
Yesterday, the Senate passed yet another extention of umployment benefits, breaking through a Republican filibuster. President Barack Obama could sign the extention into law as soon as today.
With this, the Wall Street Journal wonders if we’re encouraging this behavior by not prolonging these payouts:
In the immediate policy case, Democrats are going so far as to subsidize more unemployment. If you subsidize something, you get more of it. So if you pay people not to work, they often decide … not to work. Or at least to delay looking or decline a less than perfect job offer, holding out for something else that may or may not materialize.
The economic consensus—which includes Obama Administration economists in their previous lives—couldn’t be clearer on this. In a 1990 study for the National Bureau of Economic Research, labor economist Lawrence Katz found that “The results indicate that a one week increase in potential benefit duration increases the average duration of the unemployment spells of UI recipients by 0.16 to 0.20 weeks.”
A March 2010 economic report by Michael Feroli of J.P. Morgan Chase examined several studies and concluded that “lengthened availability of jobless benefits has raised the unemployment rate by 1.5% points.”
Common sense economics doesn’t make for popular policy, but ignoring your own PAYGO rules, pushing the deficit higher does.
As you may know, Sen. Jim Bunning (R-KY) has been holding up $10 billion in extended unemployment benefits. It’s a procedural tactic. Every time another Senator calls for unanimous consent, Bunning objects. Unfortunately, not many in his caucus are defending him.
Some in the media are calling it a filibuster. It’s not. And Bunning is not doing this because he philosophically opposes unemployment benefits. He plans on voting for them. Bunning is objecting because he wants the Democratic majority to abide by the PAY-GO rules. For those of you that don’t know, PAY-GO requires any new spending to be paid for by a tax increase or spending cuts. This different from paying for this extension through debt.
While I wish Bunning were doing this on philosophical and constitutional grounds, kudos to him for standing up for holding Democrats accountable.