It looks like Senate Democrats, who have not passed a budget since April 29, 2009, are once again falling down on the job. Over at the Washington Examiner, Conn Carroll notes that they’re blaming the sequester for their failure to perform one of the most basic functions of government:
Well that was fast. Less than a month after Senate Democrats passed a debt limit hike that included a provision delaying their pay if they failed to pass a budget this year, Senate Democrats are already signaling that no budget should be expected.
“Senator Murray is working on a budget right now and we hope we can get that done,” Sen. Jack Reed, D-R.I., told CNN yesterday. “But we need time. So the sequestration will prevent — preempt us from getting a budget done and other factors.”
So don’t blame the Democrats if they can’t pass a budget. It’s the sequester’s fault. Never mind that Democrats never had any intention of passing a budget anyway. Pressed to commit to a budget in November, Senate Budget Committee Chairman Patty Murray, D-Wash., told The Hill she “had no idea” whether Democrats could come to an agreement.
In what was probably the most unsurprising story from last week, Reuters noted on Wednesday that retail sales had slowed in January. Why? Because of President Barack Obama’s tax hikes and rising gas prices:
Retail sales barely rose in January as tax increases and higher gasoline prices restrained spending, setting up the economy for only modest growth in the first quarter.
The Commerce Department said on Wednesday retail sales edged up 0.1 percent after a 0.5 percent rise in December.
The small increase suggested the expiration of a 2 percent payroll tax cut on January 1 and higher tax rates for wealthier Americans were hurting the economy.
While some economists were encouraged that consumers had maintained purchases despite a reduction in their disposable incomes, they cautioned sales could remain weak over the next months.
“By no means are we completely out of the woods when it comes to the impact of higher taxes,” said Michael Feroli, an economist at JPMorgan in New York. “Evidence from past episodes suggests it could take up to two quarters for spending to fully adjust to new tax realities.”
President Obama’s plan to fix the deficit and national debt? Call for more tax revenue:
President Obama insisted Sunday that additional tax revenue will need to be part of future deficit deals, but said hikes in tax rates may not be necessary.
In a pre-Super Bowl interview with CBS, the president outlined his vision for further deficit reduction, which he said was essential, but in a way that preserves the government’s ability to continue spending on key programs.
He also emphasized that the seemingly continuous stream of Washington standoffs was wreaking havoc on confidence in the U.S. economy.
Republicans have insisted that the revenue side of the deficit equation was dealt with during “fiscal cliff” talks, which resulted in a compromise that saw rates climb on the nation’s top earners. But Obama flatly rejected the notion that future talks would explicitly focus on spending.
“There is no doubt we need additional revenue, coupled with smart spending reductions, in order to bring down our deficit,” he said.
Uh, no, Mr. President. What we need is not additional revenue; what we need is to reduce spending across the board. We need to cut defense spending, which is the highest in the world. We need to cut and reform entitlements. We need to drastically scale back federal education spending, which has done absolutely nothing to educate our children. We need to acknowledge that the federal War on Poverty has been useless and reform our welfare system. We need to end foreign aid. We need to cut back on environmental spending, since that has done nothing useful. What we do not need is “additional revenue.”
Don’t look now, but the economic recovery that we’ve been constantly told is upon us may unsurprisingly be fading away. The Commerce Department released less-than-stellar numbers this earlier today showing that gross domestic product (GDP) contracted in the last quarter of 2012:
The U.S. economy posted a stunning drop of 0.1 percent in the fourth quarter, defying expectations for slow growth and possibly providing incentive for more Federal Reserve stimulus.
The economy shrank from October through December for the first time since the recession ended, hurt by the biggest cut in defense spending in 40 years, fewer exports and sluggish growth in company stockpiles.
The Commerce Department said Wednesday that the economy contracted at an annual rate of 0.1 percent in the fourth quarter. That’s a sharp slowdown from the 3.1 percent growth rate in the July-September quarter.
Oh, and by the way, you’re taxes have gone up. That’s right, Americans will have less money to spend as the affects of the tax increases that hit at the beginning of the year are felt. When money is removed from the economy, it will translate into slower economic growth or even, given that the economy contracted, a recession.
Rick Santelli, the CNBC contributor whose rant on the floor inspired the Tea Party movement in 2009, summed up the news best:
“Hey Joe,” Santelli said, “when you act like Europe, you get growth rates like Europe, and our discussions with economists sounds like we’re in Europe. They have the same discussions constantly.”
Since beginning his run for president in 2007, Barack Obama has endlessly complained that higher-income earners aren’t paying their “fair share” of taxes, despite IRS statistics showing that the top 20% of income earners pay nearly 70% of all income taxes.
All signs are than President Obama will push for even more tax revenue increases in his second term. Much like a bank robber, President Obama and his acolytes in Congress feel that they can keep going back to the wealthy because, after all, that’s where the money is.
But what if those being targeted by these tax hikes decide to give up and walk away? Based on comments he made this weekend, that thought seems to have crossed the mind of golfer Phil Mickelson:
On the day President Obama was sworn in for his second term, Mickelson sent shock waves through the Humana Challenge when he said the political landscape in the United States was causing him to seriously contemplate his future in golf. Mickelson, who will turn 43 in June, has 40 PGA Tour victories, including four majors, and was inducted last year into the World Golf Hall of Fame.
As we noted last week, House Republicans have decided to throw in the towel on the debt ceiling. But despite giving in on this particular battle, they are pushing an angle that would prevent members of Congress from getting paid until they actually do their duty by passing a budget:
House Republican leaders said Friday that they will schedule a vote next week on a plan to extend the nation’s debt ceiling for three months, but that it would also require the Democratic-controlled Senate to pass by a budget by April 15 for the first time in four years or see senators’ pay withheld.
Under the GOP plan, House members would continue to be paid even if the Senate did not pass a budget because Republicans who control that chamber will certainly pass one, explained a senior House Republican aide. The base pay for both House members and senators is $174,000 a year.
The strategy was announced at the conclusion of the House GOP’s private three-day issues and strategy session here.
“We are going to pursue strategies that will obligate the Senate to finally join the House in confronting the government’s spending problem. The principle is simple: No budget, no pay,” House Speaker John Boehner said in remarks he made to the Republicans at the conclusion of their retreat on Friday, according to excerpts released by his office.
Based on a Review of Studies Looking at the Impact of Taxes on Growth, Academic Research Gives Obama a Record of 0-23-3
Written by Daniel J. Mitchell, a senior fellow at the Cato Institute. Posted with permission from Cato @ Liberty.
How do you define a terrible team? No, this isn’t going to be a joke about Notre Dame foolishly thinking it could match up against a team from the Southeastern Conference in college football’s national title game (though the Irish win the contest for prettiest make-believe girlfriends).
I’m asking the question because a winless record is usually a good indication of a team that doesn’t know what it’s doing and is in over its head.
With that in mind, and given the White House’s position that class warfare taxation is good fiscal policy, how should we interpret a recent publication from the Tax Foundation, which reviews the academic research on taxes and growth and doesn’t find a single study supporting the notion that higher tax rates are good for prosperity.
None. Zero. Nada. Zilch.
Twenty-three studies found a negative relationship between taxes and growth, by contrast, while three studies didn’t find any relationship.
For those keeping score at home, that’s a score of 0-23-3 for the view espoused by the Obama Administration.
Written by Daniel J. Mitchell, a senior fellow at the Cato Institute. Posted with permission from Cato @ Liberty.
Because of Obama’s class-warfare tax hike and additional tax increases by kleptocrats at the state level, many successful taxpayers will now lose more than 50 percent of any additional income they generate for the American economy.
I discuss the implications of this punitive tax policy in this CNBC interview.
Normally, this is the section where I highlight certain points I made, or bemoan the fact that I failed to mention an important fact or overlooked a key argument. Today, though, I want to address the do-taxes-impact-growth issue raised by Robert Frank.
Earlier today, President Barack Obama held the final White House press conference of his first term, using the opportunity to slam Republicans over the debt ceiling while making yet another call for more tax revenue — despite getting high tax rates on the wealthy in the “fiscal cliff” deal passed at the beginning over the year:
President Obama at a Monday press conference demanded that Congress raise the nation’s $16.4 trillion debt ceiling, saying the country is “not a deadbeat nation.”
Obama said Congress should pay the bills government has already rung up, arguing would be disastrous for the economy — which he said is showing signs of lifting off — to not raise the debt limit.
“It would be a self-inflicted wound on the economy,” he said. “To even entertain the idea of this happening … is irresponsible. It’s absurd.”
The president has insisted he will not negotiate with Republicans over raising the debt ceiling, and gave no sign of wavering on that position. Republicans are demanding steep spending cuts in exchange for raising the debt limit.
“They will not collect a ransom in exchange for not crashing the American economy,” Obama said Monday of Republicans.
“We can’t finish the job of deficit reduction through spending cuts alone,” he said. While open to “modest adjustments” to entitlement programs, Obama said, “we need more revenue through tax reform.”
In March of 2009, at a Georgia GOP county convention, Sen. Johnny Isakson gave a stump speech in which he pleaded for the help of the faithful grassroots in returning him and other Republicans to power because, as he told the assembled crowd, we had to defeat the Democrats and Barack Obama to stop the reckless, runaway spending in Washington, D.C. I turned to my wife in abject shock and asked if he’d really just said that.
Afterward, I went to him and respectfully but pointedly reminded the Senator that, when Georgia W. Bush was president and spending money like he had a golden goose, as our senator he’d voted for every one of those pork-filled, bloated budgets. Yes, Obama and the Democrats were on a drunken spending binge, but the Republicans had only been better by degree. I told him that the Republicans will never regain the trust of the American people unless they governed in a way that mirrored their conservative campaign rhetoric. I also told him the surest sign I’d seen that they had not yet learned their lesson was the fact that the Senate Republicans had re-elected the porkmeister, Mitch McConnell, as Senate Minority Leader. It is hard to take seriously a party which talks about fiscal responsibility and then elects as their leader of the upper house a man who campaigned on the amount of pork he’d brought back to Kentucky.
And now we have the re-election of John Boehner, the eternally weeping love child of George Hamilton and the Great Pumpkin, as Speaker of the House. The ONE branch of the federal government controlled by the Republicans and they re-elect the man who received the MVP Award from Team Obama; a man whose chief negotiating tactic is to fold faster than a card table in a hurricane.