Madison Project

Remember all those promises from TARP supporters that the bailouts have ended?  Officials in the Obama administration have even suggested that we will begin to turn a profit on TARP.  Well, according to the CBO report released today, taxpayers are on the hook for another $61 billion in TARP expenditures this year.  This from the Wall Street Journal:

The federal government will spend roughly $61 billion more in fiscal 2012 than it did in fiscal 2011 on its continuing emergency rescue fund instituted at the height of the 2008 financial crisis, the nonpartisan Congressional Budget Office said.

The CBO said the government would record outgoings of $23 billion in fiscal 2012 on the Troubled Asset Relief Program, as compared to $37 billion in savings it booked in fiscal 2011.

And where will the biggest expenses come from?

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In today’s Politico, conservative stalwart Jim DeMint was quoted as saying, “It would be fun to have a real convention, wouldn’t it?”

I couldn’t agree more. Many point to 1976 and the Ford/Reagan convention as a cautionary tale as Ford went on to lose to the man who will go down in history as the worst American President ever, Jimmy Carter. What they want to gloss over is that, yes, Carter won. And four years later we got Ronald Reagan, a man who will go down as one of the greatest American President’s ever. Will a brokered convention be ugly? Yes. Will it be worth it? Yes.

I think too, the question in peoples’ minds is: Can we survive four more years of Barack Obama? If we hold the House, win the Senate and replace Mitch McConnell and his “leadership” team, then the answer is yes.

The legacy of dependency:  A baseline of indebtedness and stagnation

The budget season has officially commenced today with CBO’s release of its annual budget and economic outlook.  Here are some of the major takeaways from the report:

FY 2012 Budget

The topline figure that the media will focus on is the projected $1.070 trillion budget deficit for FY 2012, down from $1.3 trillion last year.  However, as CBO notes several times throughout the report, the reduction in this year’s deficit is predicated on several assumptions.

1)      Revenues:  The entirety of this year’s deficit reduction comes from higher projected revenues, roughly $220 billion.  CBO is forced to score current law, which assumes that the payroll tax cut will expire at the end of February.  Another 10-month extension, which is almost a forgone conclusion, would cost over $100 billion.  Also, the CBO baseline does not include a likely AMT patch, and extension of many annual “tax extenders,” such as the credit for research and development.  It’s very likely that the extensions will wipe out the entire revenue gain from this year over 2011, thereby eliminating the reduction in the deficit.

2)      Outlays:  CBO is projecting $3.601 trillion in spending, up just $3 billion from last year.  Obviously, this projection does not account for a full-year extension of unemployment benefits and doc fix, which could add as much as $70 billion to this year’s spending total.

3)      Defense:  Outlays for defense will be reduced by another $20 billion.

When these factors are accounted for, it is clear that non-defense discretionary spending will not decrease significantly, while mandatory spending will continue to rise.  If you assume the alternative scenario, in which most of the temporary tax and spending measures are extended, the deficit should be about the same as last year; around $1.3 trillion.  In other words, there will be slightly more revenue this year, but increased spending as well.

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According to the Standard & Poor’s Case-Shiller indexes, home prices fell sharply in November.  Government intervention has failed to boost the housing market, and has only prevented it from bottoming out.

Remember Obama’s two-year salary freeze he imposed on federal workers?  Well, as part of his FY 2013 budget, Obama plans to end the pay freeze and offer salary increases to federal workers.  It is in this context that CBO published a report showing that federal workers still earn more than their counterparts in the private sector.

While it is clear that many federal workers (but not all) work hard for their money, it is also clear that they should not be earning more than those who pay their salaries.  It is simply unsustainable for government workers to be earning more than their counterparts in the private sector.

Yesterday, CBO published a report showing that on average, government workers are paid more than those in the private sector with similar jobs and qualifications.  Here are the pertinent findings of the report:

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“We’re at a point in America where about half of the people are getting something from government and the other half are paying for it, and we’re on track to have 60 percent getting something from government and 40 percent paying for it,” DeMint said.

CBO just published a report comparing compensation for federal government workers to that of private workers with similar education and credentials.  Guess how much more federal workers are compensated?

Talk about Orwellian!  A former Democrat, who voted for Obama in 2008, has received the endorsement of the Pennsylvania GOP for Senate.

Much ink has been poured over the fact that 51% of tax filers paid no federal income taxes in 2009.  There is less attention directed towards the more outrageous statistic; 30% of tax filers had a negative tax liability that year.  In other words, they made money off the tax system.

Those who won the jackpot on tax day benefited primarily from refundable tax credits; the Earned Income Tax Credit (EITC), Additional Child Tax Credit (ACTC, the refundable portion of child tax credit), and the now-expired Making Work Pay Credit.  In 2011, refundable credits cost the treasury about $94.4 billion.   Keep in mind that this is just one small portion of the burgeoning welfare empire, approaching $1 trillion in total federal, state, and local expenditures.   While it would be nice to get rid of these redistributive “tax expenditures” for everyone, we could start with illegal aliens.

Last July, the Treasury Inspector General for Tax Collection released a shocking report detailing how illegal aliens are able to utilize a filing loophole to obtain billions in ACTC funds.  While EITC appropriations are protected from illegals (those who don’t engage in identity theft) because they are only awarded to those who provide a valid Social Security number, the same cannot be said for the ACTC.  Illegals can receive the ACTC by merely providing an Individual Taxpayer Identification Number (ITIN) on their 1040 form, which is blithely issued by the IRS.  In 2010, according to the report, illegals received $4.2 billion in ACTC payouts.  That accounts for roughly 15% of all outlays for that refundable credit.

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Several weeks ago, Barack Obama engaged in one of the most unprecedented assaults on the Constitution.  He appointed Richard Cordray as the first chief of the Consumer Financial Protection Bureau and named three new members to the National Labor Relations Board, even though the Senate did not approve them.

Obama claimed the he was using his authority to make appointments during the congressional recess.  The problem is that Congress never recessed.  In fact, during the Christmas/ New Years vacation, Congress passed a two-month extension of the payroll tax cut and received information about the Treasury bumping up against the debt ceiling.  In other words, being that Congress was officially in a pro forma session, Obama’s appointments were illegal and should be deemed void.

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