Democrats and their Budget Hypocrisy Leading to #DemocratShutdown

Monday, October 7th, 2013 and is filed under Blog, News

Throughout the past week, Democrats leaders have justified their refusal to negotiate with Republicans as a natural response to hostage taking.  They claim that the fight over Obamacare is extraneous to the budget, and as such, they should not have to talk to Republicans until they agree to pass a “clean” CR.  There are two points they are obfuscating in the context of the budget battle.

1)      Obamacare was passed through budget reconciliation.  So when they felt it was convenient for them to inject Obamacare into the budget process; namely, for the purpose of avoiding the 60-vote threshold, they were more than happy to do so.  Well, what’s good for the goose is good for the gander.  Now that we have approached the implementation date, which coincides with the budget deadline, it’s time to use that same process to uproot a law that is unworkable and unpopular.

2)      Democrats say they are refusing to pass individual funding bills for vital services because Republicans are manipulating the process to cherry pick what they want to fund.  Instead they are demanding that Republicans just pass a catch-all CR.  In reality, they are the ones who have the process backwards.  Regular order means passing individual appropriations bills one at a time.  This business of funding the government with endless continuing resolutions is nonsense.  Granted that we are past the deadline, but whose fault is that?  Senate Democrats have refused to go through regular order and send the 12 individual bills to conference.

Now that Democrats have refused to follow regular order, it’s time we focus on each funding bill one at a time.  Republicans have already passed bills to fund the DC government, NIH, national parks, military, and veterans.  Today they will pass many more funding bills, including some aspects that conservatives would like to reform or eliminate:

  • H.R. 3223 – Federal Employee Retroactive Pay Fairness Act (Rep. Moran, D-VA)
  • H.J. Res. 75 – Nutrition Assistance for Low-Income Women and Children Act (Rep. Aderholt, R-AL)
  • H.J. Res. 76 – Nuclear Weapon Security & Non-Proliferation Act (Rep. Frelinghuysen, R-NJ)
  • H.J. Res. 77 – Food and Drug Safety Act (Rep. Aderholt, R-AL)
  • H.J. Res. 78 – Preserving Our Intelligence Capabilities Act (Rep. Young, R-FL)
  • H.J. Res. 79 – Border Safety & Security Act (Rep. Carter, R-TX)
  • H.J. Res. 80 – American Indian and Alaska Native, Health, Education, and Safety (Rep. Simpson, R-ID)
  • H.J. Res. 82 – National Weather Monitoring Act (Rep. Rogers, R-KY)
  • H.J. Res. 83 – Impact Aid for Local Schools Act (Rep. Rogers, R-KY)
  • H.J. Res. 84 – Head Start for Low-Income Children Act (Rep. Rogers, R-KY)
  • H.J. Res. 85 – National Emergency and Disaster Recovery Act (Rep. Carter, R-TX)

Why are the Democrats so scared to fund these vital services, national security interests, and some of their own pet projects – all for the purpose of protecting Obamacare?  Let’s pass each bill one by one and restore the full function of government until we reach the funding for HHS, Office of Personnel Management (OPM) and the IRS.  If Democrats are so confident that Obamacare is working and resonating with the public, why not have a focused debate directly on funding for Obamacare without holding the rest of government hostage?

Why do they suddenly fear the budget process they so eagerly embraced in 2010?

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Austerity Cuts vs. Real Entitlement Reform

Tuesday, April 9th, 2013 and is filed under Blog, Obamacare, Taxes

In his latest attempt to cajole Republicans into raising taxes, Obama has called for a budget plan that makes some cuts to Medicare providers and subjects Social Security payments to the chained CPI.  John Boehner was correct to reject this ploy of holding entitlement savings hostage for tax increases.  However, he has come close to negotiating such a deal in the past, and there are some GOP officials who are saying they would still agree to such a trade.  Lindsey Graham has already expressed encouragement over the proposal.

We must remember that even to the extent we would be willing to trade tax increases for something transformational, Obama’s proposal is not entitlement reform, and it certainly doesn’t represent something transformational.  It is a proposal of austerity cuts to the status quo.

The problem with entitlements is not limited to the budgetary cost to the federal government, although that is certainly a major concern.  The problem with our entitlements – in the case of Medicare and Medicaid – is the lack of choices, free market forces, and the inflationary cost of healthcare to the individual.  The problem with Social Security is the lack of private property rights, dreadful rate of return, lack of individual liberty, and hopeless dependency on government.  Limiting benefits to the chained CPI might be fine for the government option, but it should not replace policies that offer more choices.  Means-testing benefits might save money, but we must not forget that Social Security is already means-tested, as its benefit formula is tendentious towards low-income earners relative to what they contribute to the program.

Consequently, any real entitlement reform must follow the principles of free markets, limited government, and individual liberty.  The budgetary problem will self-correct through any conservative reform.  We are all rightfully outraged that Obamacare will force us to purchase health insurance, but where is the outrage over the lack of choice and control over our own retirement and healthcare as seniors?  We don’t need European austerity measures if they will not accompany a pro-growth plan that encourages private ownership and choice in retirement security.

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Welcome to Budget Irony Week

Monday, March 18th, 2013 and is filed under Blog, Debt

It’s ironic to see Republicans speak so passionately about this year’s Ryan budget, even as they simultaneously vote to vitiate last year’s Ryan budget with the CR.

Every Republican in Washington will give lip service to the importance of balanced budgets and cutting spending as they vote to pass the House budget for FY 2014 this week.  The RSC has introduced an even more aggressive budget.  The budget would balance in just 4 years and trim spending to 18.5% of GDP.  It would cut discretionary spending below FY 2008 levels, gradually raise the eligibility age for Medicare and Social Security, and phase-in Medicare premium support more quickly than the Ryan budget.  Moreover, it would not rely on the Obamacare and fiscal cliff tax hikes in order to achieve balance.

Many members will support this budget and hide behind a document that has no force of law in order to burnish their conservative credentials and stave off any attempted primary challenge next year.  But we all understand that both budgets are meaningless if those who support them refuse to stand behind any of the principles laid out in the budget when it counts.

Ultimately, leaders in both parties will wind up funding government for the next fiscal year (beginning October 1.) with a CR or an omnibus bill that looks nothing like the Ryan budget.  So while many Republicans will act like heroes voting for the Ryan budget, and possibly even the RSC budget, very few of them will commit to voting against the final CR or omnibus late this summer.  That final budget bill will ultimately fund Obamacare and eschew every major reform set forth in the Ryan budget resolution.

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Ryan Budget: Balancing with More Taxes

Tuesday, March 12th, 2013 and is filed under Blog, Debt, Taxes

Paul Ryan released his budget proposal for FY 2014 today, and as expected, it will balance within 10 years.  Let me first say that this budget would be superior to the status quo a million times over.  Medicaid and Food Stamps would be block granted to the states and Medicare would be subject to at least some free market reforms.  Most importantly, it defunds the Obamacare programs.  If Republicans would only fight for this budget during the debt ceiling fisticuffs, many conservatives would be more than satisfied.

However, as we’ve been showing over the past few weeks, there is a difference between balancing a budget and limiting government.  Balancing a budget is all about accounting.  You can coalesce enough small cuts across many programs and come up with a big number, without ever eliminating many of the 2189 federal government assistance programs.  I’m not sure how many of them would be abolished under this budget.

Moreover, an exclusive focus on balancing budgets instead of limiting government leads one to begin using every desperate accounting measure to achieve that balance.  Most prominently, we start factoring in optimistic revenue projections from economic growth and new tax hikes.

Last year, the Ryan budget proposed for FY 2013 didn’t balance until 2040.  This one balances in 10 years.  What changed?  You might think that this budget contains many new reforms and downsizing of government.  However, it is essentially the same budget.  Let’s compare the 10-year revenue and outlay figures of the two budgets:

FY 2013

Outlays: $40.135 trillion

Revenues: $37.008 trillion

FY 2014

Outlays: $41.466 trillion

Revenues: $40.241 trillion

Here is a comparison of the outlays by major category for the two budgets:

As you can see, this year’s budget actually spends more money, while all of the balance is achieved through $3.233 trillion in new revenues.   Spending increases an average 3.4% per year in this budget; last year’s budget increased spending by 3.1% per year.  Now, granted that the new budget goes from 2014-2023 while the last budget covered 2013-2022, meaning that this one contains an additional out year when there will be more baby boomer retirees.  That is why there is more spending.  But the balance is achieved by including the $618 billion in Obama/McConnell fiscal cliff tax hikes, $1 trillion in obamacare tax hikes, and a more optimistic revenue projection into the baseline.

There is nothing particularly wrong with the last point; it’s just that we should not be fooled into thinking that this year’s budget is somehow radically different from last year’s budget.  If you didn’t like last year’s budget, this one is pretty much the same; it just uses tax hikes and new revenue projections to balance.

Consequently, conservatives who agreed to vote to suspend the debt ceiling in January and pass a CR that funded Obamacare – all in return for a 10-year balanced budget – should be asking themselves the following question.  Why was last year’s Ryan budget underwhelming in their estimation, yet this year’s budget is so magnanimous that it was worth signing the “Williamsburg Accord” with leadership and sell out on the debt ceiling and CR?  I can respect someone who liked last year’s budget.  It definitely is a lot better than the status quo. But this budget is essentially identical, albeit with $3.3 trillion in more tax revenue.

So House conservatives essentially voted to suspend the debt ceiling on condition that leadership introduce the same budget with tax hikes.  Now, the Ryan budget does call for pro-growth tax cuts that are not included in the static scoring of the bill.  However, were we to bake those tax cuts into the baseline, the budget would not balance.

Again, tax cuts are a good thing, and should not be avoided just to show a statically balanced budget.  I would rather the same budget without the tax hikes (or with the Ryan tax cuts), even if it wouldn’t balance statically.  This just goes to show that there is no way to truly balance a budget in a pro-growth way without actually eliminating programs and agencies that are unconstitutional, devolving things like transportation and education to the states, and charting many other functions on a course to privatization.  You can’t have it both ways.
Balancing the budget is not an end in itself; it is a means of downsizing government.

What’s the Point of the Ryan Budget?

Monday, March 11th, 2013 and is filed under Blog, Debt, Obamacare

This week the House and Senate will focus on spending measures for two different years, but they are both intertwined.  The Senate will vote on the House-passed CR to fund the government for the rest of the current fiscal year, while the House will introduce the “Ryan” budget resolution for FY 2014.

With much anticipation and gusto, Paul Ryan will release his budget this week – one that is expected to balance in 10 years.  In order to do so, it will presumably zero out funding for Obamacare.  Conservatives on an off the hill will offer profuse accolades for Ryan and his budget.  And rightfully so.  This budget, while imperfect (it uses Obama’s tax hikes to balance), will represent a paradigm shift from the current fiscal trajectory into Greece on steroids.  Conservatives will pour over the budget and express glee over each item as if it were some Christmas wish list.

Unfortunately, there is one disturbing point that will be overlooked through the hullabaloo over the budget resolution – we’ve been here before.  And if the past is a good indication of the future, conservatives will be disappointed.

In 2011, Paul Ryan introduced a pretty good budget for FY 2012.  We were told at the time to hold back on the FY 2011 CR because “wait until the Ryan budget, and we’ll defund Obamacare and cut trillions.”  Well, we waited for the Ryan budget, and Republicans never had any intention of standing behind it.  They eventually passed Harry Reid’s omnibus bill, which increased spending and obviously left Obamacare intact.

It’s really very simple, folks.  You can unilaterally craft a budget that balances in 10 years, 5 years, or one year.  It is irrelevant unless you plan to use the debt ceiling or budget deadline as leverage to force through a major element of that budget.

Oh, but we can’t “govern” from the House, can we?  Tell that to the Gingrich-era House, which fought a moderate Senate and a Democrat president to enact welfare reform and spending cuts.  Clinton knew that Republicans meant business and were willing to engage in brinkmanship.  And no, Republicans did not lose the ’96 elections because of the government shutdown.  I think a man named Bob Dole had something to do with that (they also picked up two seats in the Senate).

Back in 1995, we only had $4.5 trillion in debt, the dependency state was a fraction of its current size, and Obamacare did not exist.  Anyone who is serious about saving this country must be willing to fight at least as hard as the Republicans did in the ‘90s.  Perforce, if Republicans continue to telegraph the message to Democrats that they are terrified of engaging in brinkmanship, the Ryan budget is not worth the paper it is printed on.

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Just Say No to Funding Obamacare

Wednesday, March 6th, 2013 and is filed under Blog, Debt, Obamacare

On Wednesday morning, the House will vote on the Continuing Resolution  (H.R. 933) to fund the government for the rest of this fiscal year.  This is the last opportunity to defund Obamacare before the health exchanges are implemented on October 1.  Conservative lawmakers, Jim Bridenstine (OK) and Tim Huelskamp (KS), submitted an amendment to the Rules Committee today to defund Obamacare.  The amendment was rejected.  As such, the CR will continue to fund Obamacare.

Bridenstine and Huelskamp circulated a letter asking colleagues to join them in the defund effort and to resurrect our most important policy issue, and frankly, our most potent political weapon in the field.  The fight over Obamacare has been dormant ever since we won the 2010 elections.  This letter was an effort to restart that discussion and call upon conservatives to stand firm one last time to block the worst piece of legislation in American history.

In the end, 30 members signed the letter:

Amash (MI)

Barr (KY)

Black (TN)

Blackburn (TN)

Bridenstine (OK)

Broun (GA)

DeSantis (FL)

Duncan (SC)

Fleming (LA)

Franks (AZ)

Gingrey (GA)

Gohmert (TX)

Hanna (NY)

Hudson (NC)

Huelskamp (KS)

Jones (NC)

LaMalfa (CA)

Lamborn (CO)

Massie (KY)

McClintock (CA)

Meadows (NC)

Pearce (NM)

Rothfus (PA)

Salmon (AZ)

Schweikert (AZ)

Stewart (UT)

Stockman (TX)

Wilson (SC)

Yoder (KS)

Yoho (FL)

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Monday, March 4th, 2013 and is filed under Blog, Obamacare

If you live in the real world, you will notice that the federal government has destroyed our free markets, limited our freedoms, and denigrated our right to religious liberty – all before Obamacare has fully taken effect.  The federal agencies continue to promulgate rules and regulations that drive up the cost of the most vital goods and services to the point that most of us will require government subsidies just to afford our most basic necessities, most notably, health insurance.

Yet, for many Capitol Hill conservatives who live in an exclusive world of budget-speak, we are on the cusp of restoring our Constitutional Republic.  You see, the upcoming CR (H.R. 933) will fund discretionary spending for the remaining 6 months of Fiscal Year 2013 at the level of $974 billion [well, it’s actually $982 billion, but it’s close enough to the original RSC number for members to become all sentimental over it].  Isn’t that awesome?  Forget about focusing our message on things that actually penetrate the tin ear of the average voter, such as losing their healthcare under Obamacare.  We’re talking about our victory over “974.”

Did you ever think that Republicans would rally around a cry of “974?”  What does the number 974 mean to you?  Not much.  No wonder why Republicans have a terrible approval rating with the American public.

For quite some time, I’ve been trying to convey the message that limiting the harmful effects of big government and cutting spending in the abstract are not necessarily the same thing.  There’s no doubt we should cut spending wherever we have the opportunity to do so, and in the case of the sequester, we should obviously pocket the change.  In fact, that is the entire point.  We already won on the issue; it’s time to move on and fight Obamacare in the sequester – something that really matters to the average person – instead of continuing to fight a battle we’ve already won.

Let’s remember that the sequester will not eliminate a single major program nor will it shut down a single federal agency.  Will it cut non-baseline spending for one or two years (before reverting to baseline cuts in the out years)?  Yes – primarily with regards to defense spending.  But will we actually eliminate any of the harmful programs or agencies that directly cost people their jobs and raise the cost of living?  Absolutely not.

An EPA with an operating budget of $8.1 billion instead of $8.4 billion will still have the ability to promulgate every last regulation that kills jobs, destroys hundreds of billions in private wealth, and raises the cost of major goods and services.

Whether the National Labor Relations Board (NLRB) spends $290 million or $280 million will not affect its ability to destroy private sector jobs.

And yes, whether the HHS budget is $78 billion or $75 billion, it will still be able to promulgate the healthcare takeover laws (they just released 700 pages of rules), implement the exchanges, and expand Medicaid….unless we specifically prohibit funding those programs in the CR.  Ditto for the IRS with regards to the enforcement of the individual mandate.

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Defund Obamacare or Bust

Thursday, February 28th, 2013 and is filed under Blog, News, Obamacare

It’s really simple, folks.  Everything boils down to Obamacare.

Do we really believe that Obamacare will make private health insurance unaffordable?

Do we really believe Obamacare will bankrupt the nation and relegate the next generation of Americans to a dimmer future of less freedom and opportunity?

Do we really believe Obamacare will create incorrigible dependency?

Dow we really believe that Obamacare will lead to a deterioration of healthcare services and rationed care?

Are we really serious about balancing the budget and reforming entitlements?

If the answer to the aforementioned questions is a resounding yes, which is presumably the case for all conservatives, then the following statements from House conservatives regarding funding Obamacare in the upcoming budget CR are incomprehensible: (via The Hill)

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The Sequester and Born-Again Keynesians

Monday, February 25th, 2013 and is filed under Blog, Debt

What would happen of the federal government were to open a new agency to study the mating habits of a rare species of spiders?  Let’s say for a moment that it would create 10 jobs.  Should we not cut this colossal waste, even though 10 people will be out of a job?  Moreover, if government can simply create jobs by spreading around existing taxpayer capital instead of creating new capital, why shouldn’t we just hire a million people to dig ditches and another million to fill those ditches?

Obviously, the Keynesian argument that government should spend money for the purpose of job creation is absurd.  Government should only spend money because there is a need for that service.  However, whether the service is vital or frivolous, it still requires an outside funding source, and is not an engine of job creation.  As such, we should not be advancing an argument against the sequester that is built upon this notion.

We believe in spending money on a military because we feel that there is a necessity for one and that it is within the purview of the federal government.  We don’t believe in military spending because it creates jobs.  Yet, Republicans have made that the centerpiece of their argument against the sequester.  This allowed Van Hollen to rightfully observe the following during a floor debate several months ago:

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Obama’s Cowardly Mendacity Over Sequestration

Wednesday, February 20th, 2013 and is filed under Blog, Debt

In August 2011, Obama hatched a deal to grant himself a free $2.1 trillion increase in debt, which would take him past the 2012 elections, thereby sparing him the embarrassment of another debt limit request during the campaign season.  He knew that such a request was so bold it needed to be ensconced in a deal that would give voters the impression he was committed to cutting spending.  To that end, the Budget Control Act called for the creation of a super committee to identify $1.2 trillion in baseline cuts and tax increases.  Given that the committee would be evenly split between Republicans and Democrats, Obama knew that this would trigger the sequestration.  And that is exactly what he wanted.

Nobody could accuse Republicans of designing the sequester.  Only a leftist like Obama would ensure that the one mechanism to actually cut spending would disproportionately cut defense.  For example, this year’s sequester will cut $42.7 billion from defense, $28.7 billion from non-defense discretionary spending, and $14 billion from mandatory spending, most notably, to healthcare providers.  Obama figured that Republicans would be so scared of the defense sequester that they would come to him begging for a reprieve.  That way Obama would be saved from cutting one penny of spending from any account, and could possibly leverage more tax increases in exchange for letting them off easy with defense spending cuts.

A free $2.1 debt limit increase in exchange for nothing but defense cuts and possible leverage to raise taxes…..sounds like a nice plan, doesn’t it?

In 2011, Republicans went along with this insane plan.  As a result, we burned through the $2.1 trillion in new debt in just 17 months.  We actually increased spending during that time period.  Now the time to pay the infinitesimal price of spending cuts has come due.  Conservatives decided to draw a line in the sand and not fall into Obama’s trap.  While we don’t like the fact that 50% of the cuts will come from the most important part of the budget, which only represents 20% of total outlays, we will not pass up an opportunity to cut non-defense discretionary spending; nor will we be suckered into more tax hikes.

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