As you can imagine, there has been a lot of discussion about Rep. Paul Ryan’s budget proposal for the upcoming fiscal year. And while the budget would, if passed, repeal ObamaCare, it doesn’t replace it. This, along with other aspects of the proposal, has been a sticking point for many conservatives.
On Tuesday, Rep. Ryan said that he didn’t include a replacement for ObamaCare, for which costs have doubled, in his budget because there is no consensus amongst House Republicans as to what their model for health care reform should be.
Given all of the problems with ObamaCare, many of which were laid out in an op-ed at the Wall Street Journal by Sen. Ron Johnson (R-WI), proposing such a comprehensive budget proposal without at least some foundation of replacement proposals is odd. It’s even more odd when the budget was unveiled during the second anniversary of the health care reform law and the week before it’s due to come before the Supreme Court.
However, Rep. Paul Broun, MD (R-GA) has introduced the OPTION Act (H.R. 4224), a patient-centered health care reform replacement. According to Broun’s office, the OPTION Act would repeal and replace ObamaCare with a reform package that would protect the interests of patients:
This past week in Arizona, the remaining contenders for the Republican presidential nomination gathered for the last debate before the Super Tuesday primaries. Not unexpectedly, considering the moderators of these debates tend to be members of the left-leaning national media, the questions directed at the Republican candidates were often premised on a liberal worldview. Maybe nowhere was that more obvious than in the media feeding frenzy surrounding the beliefs of former Sen. Rick Santorum regarding birth control.
As a member of the Catholic Church, Santorum adheres to the belief that abortion and even the use of birth control are immoral. The media has seized upon this as proof that, were Santorum to win the presidency, he would impose a theocracy upon America, the implication being that he would use government to block abortion and birth control to those that desire it. Mitt Romney, in a previous debate, was perplexed by the question of whether states have the right to ban birth control, correctly noting that no state was even considering such a move, so why bring it up?
While several of the candidates touched on it, this was a golden opportunity to discuss a subject of immense importance and one that too few Americans could define, much less elaborate upon…the doctrine of federalism.
As expected, President Barack Obama rolled out his budget proposal for FY 2013, which, as we noted yesterday, comes with a $1.33 trillion budget deficit. As you can imagine, there is a lot to parse through it the proposal, which has been all but declared dead-on-arrival in Congress.
Some of the budget proposals are familiar. President Obama is once again pushing tax hikes on individuals earning more than $250,000 — more than the millionaires and billionaires he so frequently targets. James Pethokoukis has a run down of the tax hikes in the budget:
Obama’s new budget isn’t about economic growth or cutting debt or creating a “built to last” economy. The Obama campaign is built around the idea of reducing inequality. So in his budget, Obama takes the populist whip to the wealthy and to business:
1. The top income rate would be raised to 39.6 percent vs. 35 percent today.
2. Under the “Buffett rule,” no household making over $1 million annually would pay less than 30 percent of their income in taxes.
3. Between now the end of a second Obama term, Obama proposes $707 billion in “net deficit reduction proposals.” Of that amount, only 16 percent is spending cuts.
4. The majority of small business profits would be taxed at 39.6 percent vs. 35 percent today.
5. The capital gains rate would rise to 25.0 percent (including the Obamacare surtax and deduction phase out) from 15 percent today.
6. The double-tax on corporate profits (including dividends) would increase to 64 percent based on the statutory corporate tax rate (58 percent using the effective tax rate), easily the highest among advanced economies.
The practice of earmarks has come under scrutiny in recent years and some members in both chambers have pushed for bans on the practice because of the propensity of their colleagues to use them for less than noble purposes. The House of Representatives did enact a moratorium, though it doesn’t seem to be all that effective.
Some say that restricting earmarks is unconstitutional because it cuts in on congressional spending authority in Article I, Section 8. Others say that earmarks represent a fraction of the budget and eliminating them does nothing in the way of restoring fiscal responsibility. The former has some merit, but we know how James Madison, the Father of the Constitution, felt about spending for pork projects. It’s hard to see that he would find funding peanut research meets any constitutional litmus test.
The latter is true; however, earmarks are the epitome of what is wrong with Washington, DC. Yes, reforming entitlements and cutting spend elsewhere is incredibly important, but earmarks are a symbolic part of the battle. If we can’t cut this fraction of spending out of the budget or reform the earmark process, are we naive enough to believe that we can reform entitlements?
Back in 2006, at the height of the discussion about ethics in Congress, Rep. Jeff Flake (R-AZ) explained that earmarks are the “currency of corrpution.” Not only were members using them to steer business to donors and friends, they were being used by leadership of both parties to sway votes on legislation.
On the campaign trail and during the third presidential debate with Sen. John McCain (R-AZ) in 2008, then-candidate Barack Obama promised that Americans would see a “net-spending cut” during his presidency.
The claim was met with a boatload of skepticism given that Obama was proposing massive expansions in healthcare and non-defense discretionary spending; however, we all crossed our fingers that he would follow through, but we didn’t hold our breath.
The skepticism proved to be justified. Just a couple of months after coming into office, President Barack Obama told Americans that under his budget that there would be trillion dollar deficits as far as the eye can see.
He wasn’t kidding. The Congressional Budget Office released its budget report for this current fiscal year yesterday, predicting yet another trillion dollar budget deficit and unemployment hovering around 9%:
The Congressional Budget Office on Tuesday predicted the deficit will rise to $1.08 trillion in 2012.
The office also projected the jobless rate would rise to 8.9 percent by the end of 2012, and to 9.2 percent in 2013.
These are much dimmer forecasts than in CBO’s last report in August, when the office projected a $973 billion deficit. The report reflects weaker corporate tax revenue and the extension for two months of the payroll tax holiday.
If the CBO estimate is correct, it would mean that the United States recorded a deficit of more than $1 trillion for every year of Obama’s first term.
On Thursday, the Heritage Foundation and the Wall Street Journal released the 2012 Index of Economic Freedom, an annual report on economic freedom across the globe that measures interventionist government policies and ranks countries accordingly.
Ed Feulner, president of the Heritage Foundation, gives us an idea of what we’ll find in this year’s report, and it’s not pretty:
As Friedrich A. Hayek foresaw decades ago, “The guiding principle in any attempt to create a world of free men must be this: a policy of freedom for the individual is the only truly progressive policy.” Thus, the battle of ideas must also be a battle for the meaning of the very words with which we debate. Is it “progressive” to utilize the coercive power of the state to redistribute and level incomes within a society? Is it “liberal” to build a massive state apparatus to regulate conditions of employment, usage of energy, and access to capital? The answers to such questions will determine how we live as individuals in the 21st century.
The 2012 Index of Economic Freedom documents a global economy that is engaged in this evolving battle between the forces of government and free markets. Today’s troubles have been neither accidental nor inevitable. The problems we face are the outcomes of politically driven and economically self-defeating policy decisions that have turned an economic slowdown into an accelerating decline.
Unfortunately, the report shows that the United States has, once again, lost more economic freedoms as corruption, cronyism, government spending, and a poor monetary policy continue to drag us down. While we are still ranked as “mostly free,” we can no longer say our economy is the ambition of the world.
As we role merrily right along into November, I, along with the rest of the libertarian crowd, am watching the Republican Party blissfully make the same tired mistakes yet again. Watching what appears to be unsynchronized cat herding under penalty of broken knee caps can be entertaining, but at this point, I’m really close to pulling out a speech worthy of a spot in Pulp Fiction on Samuel Jackson’s cue cards.
On saying “we have to remove Obama” out of fear and we can only support whoever the eventual GOP Nominee is: I’ve already written about this subject in The Strategy of Hating One. In the current cycle, it’s President Obama, but the previous installment was Bill Clinton and little blue dress. You can point to a general belief that the President is a Marxist or Socialist without too much opposition. You can make the point that the closest description of our country is Fascism. But I have to challenge you to point out the differences between the last Republican President or the alternative of McCain, and this Democrat President. We have stayed in Iraq until they are kicking us out, we have escalated Afghanistan, Libya, kept Gitmo open. Leaving the main differences that the increase in spending has been larger than say a McCain might have done, and Obamacare has been pushed through. And frankly, Obamacare could very well be named McCain-Care given the same congressional make-up.
Oh yeah baby, the new plan is here. Raise Taxes on those Rich Sunsabitches. Once again confirming the old adage “Democrats Tax and Spend, and Republicans just spend”.
In what would appear to be a last ditch effort to get out of the basement in Presidential rankings, President Obama is proposing an increase of taxes on the “super earners” of America that may in fact close the gap on the deficit enough to restore America’s credit rating.
The one question I have yet to see asked is: Who does a better job with money, the government, or top private earner? The question that has been asked (and answered) is how much would increasing taxes on top earners actually increase revenue? And I would like to expand on that:
Warren Buffett, who has spoken out about “not paying enough taxes” made about 43 Million last year according to one report I read – and he paid about 18%. That’s about $7,740,000. Want to know what that covers in terms of Federal Government Spending? $3.9 Trillion Divided by 365 days, divided by 24 hours, divided by 60 minutes = $7,420,091.So obviously, doubling Mr. Buffett’s taxes will get you…. One whopping minute of spending.
Or put another way…. It’s just shy of 1.5% of what the federal government just lost with Solyndra. Apparently though, $535 Million is a “drop in the bucket”. You need seventy Warren Buffetts just to pay for the Solyndra theft loss… that doesn’t seem like a drop in the bucket to me.
President Obama claimed last night that his jobs plan would be paid for. “Everything in this bill will be paid for. Everything,” he said. In politics, it never gets more clear than that. Of course, obviously I question it. I question everything any politicians says. What surprised me was that even the Associated Press is questioning it.
THE FACTS: Obama did not spell out exactly how he would pay for the measures contained in his nearly $450 billion American Jobs Act but said he would send his proposed specifics in a week to the new congressional supercommittee charged with finding budget savings. White House aides suggested that new deficit spending in the near term to try to promote job creation would be paid for in the future – the “out years,” in legislative jargon – but they did not specify what would be cut or what revenues they would use.
Essentially, the jobs plan is an IOU from a president and lawmakers who may not even be in office down the road when the bills come due. Today’s Congress cannot bind a later one for future spending. A future Congress could simply reverse it.
Thank you AP.
For the record, this is the same problem one runs into when talking about spending cuts. Most of those cuts are deferred to the out years to ease the pinch in the short term, and most never materialize because, as the AP points out, Congress can’t tell a future Congress what they have to spend.
Regardless of what you think of the President’s jobs plan, his claim it will be paid for is dubious at best. As the AP piece points out, Obama must send his proposal to the Super Committee – which he does not control – and hope they accept it, then get it through Congress and then hope that these proposals are adhered to in the future.
Just like in 2008, the Club for Growth is putting together a series of white papers on candidates running for the Republican Party’s presidential nomination. We’ve already covered their reports on the records of Newt Gingrich, Tim Pawlenty, Herman Cain, Mitt Romney, Jon Huntsman, Ron Paul and Gary Johnson. Next under the knife is Rick Perry, who has served as Governor of Texas since 2000.
Perry has certainly shaken up the race for the GOP nomination for president and dominated media coverage during his first week on the campaign trail. His campaign is being driven by conservatives and tea partyers wary of Mitt Romney, who they see as a flip-flopper and someone who laid the blueprint for ObamaCare. But does Perry have the fiscal record for conservatives and libertarians to get behind? You be the judge.