Paul Ryan presents “The Path to Prosperity”

The big news yesterday was the budget, which you can read here, presented by House Budget Committee Chairman Paul Ryan (R-WI), which would cut anywhere between $5.8 to $6.2 trillion (depending on the news story you’re reading) over the next 10 years:

House Republicans on Tuesday unveiled a far-reaching budget proposal that cuts $5.8 trillion from anticipated spending levels over the next decade and is likely to provide the framework for both the fiscal and political fights of the next two years.

The ambitious plan, drafted principally by Representative Paul D. Ryan, the Wisconsin Republican who chairs the Budget Committee, proposes not only to limit federal spending and reconfigure major federal health programs, but also to rewrite the tax code, cutting the top tax rate for both individuals and corporations to 25 percent from 35 percent, reducing the number of income tax brackets and eliminating what it calls a “burdensome tangle of loopholes.”

Ryan took to the Wall Street Journal to explain this budget:

Our budget, which we call The Path to Prosperity, is very different. For starters, it cuts $6.2 trillion in spending from the president’s budget over the next 10 years, reduces the debt as a percentage of the economy, and puts the nation on a path to actually pay off our national debt. Our proposal brings federal spending to below 20% of gross domestic product (GDP), consistent with the postwar average, and reduces deficits by $4.4 trillion.

Cato Institute slams lack of leadership in Congress

In an ad in major papers on Thursday, the Cato Institute criticized both Democrats and Republicans in Congress for their lack of leadership in cutting the massive budget deficits that threaten the prosperity of the United States. While the $33 billion in proposed cuts are being touted as the largest spending cut in history (and that’s not true), they represent less than one percent of spending this year.

The ad suggests billions in proposed spending cuts that Congress could enact, including eliminating farm subsidies, repealing Obama and reforming Social Security.

House GOP freshman slam Harry Reid

House Republican freshman are making their voices heard when it comes to the Senate Democratic leadership stalling on passing a budget by sending Senate Majority Leader Harry Reid (D-NV) a letter criticizing his party’s record on spending:

A group of 30 House Republican freshmen on Wednesday joined their party leadership’s attack on Senate Majority Leader Harry Reid (D-Nev.), calling his record on spending “one of failure.”

“Mr. Reid, your record on spending in the Senate is one of failure. You have failed to pass a budget, failed to restrain spending and failed to put our country on sound fiscal footing,” the first-term members, led by Rep. Rick Crawford (R-Ark.), said in the letter delivered Wednesday to Reid. “We do not accept your failure as our own.”

The lawmakers called on the Senate to pass a long-term spending bill funding the government for the rest of the fiscal year. “Make no mistake: Any government shutdown is the result of your lack of leadership,” the lawmakers wrote.
In a press conference, the freshmen denounced Reid as the leader of a “do-nothing Senate.”

“We in the House are doing the job that the American people sent us to do,” Rep. Martha Roby (R-Ala.) said. “Democrats want to shift the blame and dodge responsibility.”

“We will not settle for a split-the-baby strategy,” she added

Why spending needs to be nipped in the bud

In London, there’s been protesting against government cuts.  Money is tight, and the government seeks to restore a little fiscal sanity.  Not much, this is England after all, but some.  The people, on the other hand, are bound and determined to get what they think they deserve.  This, more than anything else, is why it’s imperative to stop the fiscal insanity early.

Once an entitlement or program starts, people become attached to it quickly.  Nothing stirs the blood in politics more than the idea of a favorite program being cut, despite the necessity of it.  As more and more spending programs get trotted out, more and more money is needed to pay for it.  That means you need to actually get more money from folks, and when tough times like a down economy hits, it becomes even more important that you reign in the spending.

However, since you spend like crazy during the good times, people have gotten used to it.  They want their programs to stay, and they’re not going to just quietly let you take it away from them.  After all, they’re entitled to it!

Spending needs to be cut, and there will clearly be people who aren’t happy with it.  The cuts need to be drastic and nothing should be sacred and off the table.  However, that should be followed up in better times with more fiscal sanity.  Just because we might be in a boom time in the future doesn’t mean we should go back to spending like a drunken sailor on a three day pass.  Instead, we should hold onto any extra revenue as a cushion for further lean times.  This will help prevent need to take on more and more debt.

Of course, those people protesting usually don’t care about that.  So long as they get theirs.

Dallas Fed Chairman: US is at a fiscal “tipping point”

In case you didn’t already know, the United States is facing tremendous problems in terms of budget deficits and the national debt. Those problems were reconfirmed yesterday by Richard Fisher, president of the Federal Reserve Bank of Dallas:

The United States is on a fiscal path towards insolvency and policymakers are at a “tipping point,” a Federal Reserve official said on Tuesday.

“If we continue down on the path on which the fiscal authorities put us, we will become insolvent, the question is when,” Dallas Federal Reserve Bank President Richard Fisher said in a question and answer session after delivering a speech at the University of Frankfurt. “The short-term negotiations are very important, I look at this as a tipping point.”

But he added he was confident in the Americans’ ability to take the right decisions and said the country would avoid insolvency.

“I think we are at the beginning of the process and it’s going to be very painful,” he added.

Fisher earlier said the US economic recovery is gathering momentum, adding that he personally was extremely vigilant on inflation pressures.

Fisher’s brief comments on inflation are odd since inflation is on the rise. And his optimism about the public making tough choices is tough to share. Polls generally show that Americans want limited government, but they aren’t willing to make cuts necessary to put the country on a sustainable course.

CBO estimates $9.5 trillion in deficits over 10 years

The Obama Administration received some bad news on Friday when the Congressional Budget Office released numbers showing deficits over the next 10 years to be $9.5 trillion, more than $2 trillion higher than the White House’s estimate:

The Congressional Budget Office on Friday released its analysis of President Obama’s 2012 budget proposal and found it does less to rein in deficits and the debt than the administration had estimated.

CBO estimates Obama’s plan would produce 10 years of deficits totaling $9.5 trillion. By 2021, it would increase the debt held by the public to 87 percent of gross domestic product.

The administration, using different methods, estimated budget deficits would total $7.2 trillion over the next 10 years under the 2012 budget. It forecast that total debt in 2021 would be 77 percent of GDP.

The White House also said total deficits over the next decade would be $1.1 trillion more without the recommendations included in Obama’s budget.

Marc Goldwein, policy director for the Committee for a Responsible Federal Budget, said that CBO has found the effects to be almost nil.

He explained that the difference between the CBO’s $9.5 trillion estimate and OMB’s $7.2 trillion estimate comes from two sources: rosy economic growth assumptions by OMB and offsets for the Medicare doc fix as well as transportation spending OMB did not specify in the budget and which CBO will not factor in.

The most important aspect of CBO’s analysis is that, while OMB claimed the president’s budget “stabilized” the debt at 77 percent of GDP over the 10-year window, CBO estimates the debt will grow throughout the period and end up at 87 percent, he said.

Rubio: Not in the Senate to be part of “absurd political theatre”

With the battle heating up over the Continuing Resolution to fund the federal government for the rest of the year, Sen. Marco Rubio (R-FL) made his position clear in a post over at RedState:

Despite the seriousness of this debt crisis, an absurd pattern has clearly developed in Washington. Last year, when they still controlled the House, Senate and White House, the Democrats failed to pass a budget at all. In the first two months of this year, Senate Democrat leaders have spent invaluable time not on tackling the debt but on re-authorizing the F.A.A. and reforming the patent system. Their only attempt at addressing our debt was a plan to cut $4.7 billion in spending, which only equals what our government borrows approximately every 30 hours alone.

Democrats’ unwillingness to engage on this issue is leading us closer to a catastrophic debt spiral that will irreversibly damage our government, our economy and ultimately our country.

The absurdity of what we have witnessed on the Senate floor is only eclipsed by the lack of leadership demonstrated by the White House, and a President who has been absent from this debate and even sent his lead negotiator on a five-day foreign trip.

All this has led to a very predictable outcome: Washington politicians of both parties scrambling to put together two and three week plans to keep funding the government, while not fundamentally changing the behavior that has gotten us into this mess to begin with.

White House wants “adult conversation”, just not with you

President Obama wants to have an “adult conversation” about budget cuts.  He’s also said he wanted the most transparent government in history.  So Jagadeesh Gokhale and David Schoenbrod of the Cato Institute decided to take the President at his word.  They wanted data so they could take part in the so-called “adult conversation”.

Unfortunately, here’s what happened:

To acquire the information necessary for an “adult conversation” on the budget, we formally requested that OMB Director Jack Lew release the projections. The response was a letter stating that the information was “not available to the general public.”

One excuse was that OMB’s long-term projections were not fully “vetted.” Another was that the information “could lead to unintended misrepresentations of the administration’s proposals.”

Well, isn’t that transparent?

I understand concerns about information being used to misrepresent intentions.  Unfortunately, you’re not going to stop that by simply not letting the information get out.  Instead, you create an environment where suspicion begins to take hold, where people make up their own data points – either through educated methods or just systematic wild assed guessing – and use them to misrepresent the proposals.

Open government, something that President Obama promised and that I sincerely prayed he would deliver, can not function without debate over the issues.  That is one reason why freedom of speech is so important to a free society.  However, we must also have accountability with regard to what the government is doing and thinking.  Free speech isn’t particularly effective when it doesn’t know what it’s talking about.

Sen. Rand Paul on balancing the budget

See Video

NPR executive slams tea party movement

James O’Keefe has done it again. His group released yesterday video of an NPR senior executive on film slamming the tea party movement:

In a new video released Tuesday morning by conservative filmmaker James O’Keefe, [National Public Radio senior executive Ron] Schiller and Betsy Liley, NPR’s director of institutional giving, are seen meeting with two men who, unbeknownst to the NPR executives, are posing as members of a Muslim Brotherhood front group. The men, who identified themselves as Ibrahim Kasaam and Amir Malik from the fictitious Muslim Education Action Center (MEAC) Trust, met with Schiller and Liley at Café Milano, a well-known Georgetown restaurant, and explained their desire to give up to $5 million to NPR because, “the Zionist coverage is quite substantial elsewhere.”

On the tapes, Schiller wastes little time before attacking conservatives. The Republican Party, Schiller says, has been “hijacked by this group.” The man posing as Malik finishes the sentence by adding, “the radical, racist, Islamaphobic, Tea Party people.” Schiller agrees and intensifies the criticism, saying that the Tea Party people aren’t “just Islamaphobic, but really xenophobic, I mean basically they are, they believe in sort of white, middle-America gun-toting. I mean, it’s scary. They’re seriously racist, racist people.”

Schiller goes on to describe liberals as more intelligent and informed than conservatives. “In my personal opinion, liberals today might be more educated, fair and balanced than conservatives,” he said.

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