Perpetuating Unemployment and Phony Spending Offsets

Thursday, March 27th, 2014 and is filed under Blog, Economy

What happens when instead of fighting the premise of creating a permanent unemployment entitlement, many Republicans focus on offsetting the cost of the extension?  We get the extension without any offsets!

Tomorrow, Senator Harry Reid plans to bring a bill to the floor that will extend unprecedented 73 weeks of UI benefits for five months retroactive to January 1.  The bipartisan deal, which has the support of GOP Senators Dean Heller of Nevada, Lisa Murkowski of Alaska, Susan Collins of Maine, Rob Portman of Ohio and Mark Kirk of Illinois, will cost $10 billion just for the 5-month extension.  We all know that they will continue to extend it when the deadline comes due in just five weeks.

The $10 billion cost would be “offset” by extending custom fees for another year in 2024 – 10 years from now.  Additionally, the bill would “save money” by extending a “pension smoothing” provision for taxpayer-backed pension insurance for another few years.

Are you ready for the accounting gimmick of the month?

Most corporate pensions are insured by the taxpayer-funded Pension Benefit Guaranty Corporation (PBGC), which guarantees (up to a limit) the pension obligations promised to workers in the event that a company cannot meet them when they come due.  As a condition for insuring the pensions, the PBGC requires companies to contribute specified minimum payments into the pension funds to ensure that they don’t fall behind on fulfilling their obligation and putting taxpayers at risk for bailing them out.

In plain English, “pension smoothing” allows companies to contribute less to pension funds in the short-term.  Normally, their required minimum contribution depends on interest rates.  When interest rates are lower, they are required to contribute more; otherwise the principle would compound too slowly for them to meet their overall obligation.  With interest rates at historical lows, underfunding pensions would place taxpayers at risk to bail them out when they can’t compensate for the shortfall down the road.  But like most Washington gimmicks, pension smoothing is designed to kick the can down the road.

So what does pension smoothing have to do with saving money for the federal budget and offsetting new expenditures?

Companies are able to claim tax deductions for every dollar they contribute to workers’ pension funds.  By lowering the amount they are requirement to contribute, companies will deduct less from their corporate tax liability.  Hence, this represents a notional tortured labyrinth to raise revenue down the road in order to pay for a definitive and immediate 5-month expenditure.

Perforce, not only is this a consummate Washington gimmick to obfuscate increased spending, it represents bad policy.  When it becomes clear that pensions are underfunded 7-12 years from now, one of two things will happen.  Most likely, companies will not have the money to fund the pensions, and taxpayers will have to bail them out.  Alternatively, if they do come up with the money, companies will have to dump extra funds into the pensions, thereby securing a commensurate degree of excess tax deductions.  Ultimately, the government will lose the same revenue they seek to gain in the short-term.  Call it the rubber-band effect of pension smoothing.

This is what happens when Republicans give into the false premise of extending a bad policy.

It’s time for all Republicans to unite against any new extension.  They should call out the Democrats for their ridiculous scheme of short-term extensions and challenge them to make it permanent law, which is what they are doing anyway.  Instead, Republicans should support a true job plan that increases energy production, reduces corporate taxes, and expands energy production.

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RELEASE: Madison Project Responds to Mike Simpson’s Dishonest Ad

Thursday, March 13th, 2014 and is filed under Blog, Elections, Press

Fort Worth, TX – The Madison Project PAC released the following statement in response to Congressman Mike Simpson’s (R-ID) appallingly dishonest TV ad:

“Simpson acts as if tossing around the vacuous stereotype of ‘personal injury lawyer’ against his opponent affords him the license to obfuscate his voting record and misleads the voters in Idaho,” said Daniel Horowitz of the Madison Project.  “There aren’t enough shyster consultants in Washington who can produce honest ads to rehabilitate his liberal record.  He dishonestly uses ceremonial votes that he knew would never be signed into law to obscure the consequential liberal votes he cast that were actually signed into law.”

Here are the facts:

Wall Street Bailout:  Simpson has the unbridled temerity to suggest that he voted to repeal the Wall Street Bailout, while refusing to mention the fact that he voted for it in the first place [RC #681, Oct 3, 2008].  Although Simpson declines to cite the roll call vote to ‘repeal’ TARP, there was never a full repeal bill and it was never signed into law.

Balanced Budget: Simpson touts his vote for a Balanced Budget Amendment.  That is lovely, but it is meaningless for him to support something that never had a chance to become law while supporting endless debt ceiling increases, which ensured that our budget would never balance.  The examples of votes he’s taken to bust the budget are too numerous to list.  A partial list can be viewed at

Cut Spending: Simpson claims to have cut trillions in spending, but as a chief appropriator he has never met a spending bill he didn’t like.  He even voted against the $100 billion in spending cuts promised by the GOP Pledge to America in 2011 [RC #103, Feb 18, 2011].  Mike Simpson was one of just three Republicans to vote against cutting off taxpayer funding for the radical liberal and corrupt ACORN [RC #397, June 2, 2011].

Obamacare: Simpson has the nerve to suggest that he voted to defund Obamacare, but he has always opposed the only consequential means of actually defunding the law, which is by objecting to any budget that contains funding.  [RC# 550, Oct. 16, 2013]

The Madison Project endorsed Bryan Smith (R-ID) against Rep. Mike Simpson. To view our endorsement click here.

The Madison Project supports and raises money for conservative candidates that have demonstrated a commitment to full-spectrum conservatism. The Madison Project website can be found at


For Immediate Release: Madison Project Opposes Omnibus Bill

Tuesday, January 14th, 2014 and is filed under Blog, Press, Taxes

No Way to Craft a Budget

The Madison Project PAC released the following statement today regarding the $1.1 trillion, 1586-page omnibus bill introduced in the U.S. House of Representatives:

“Once again, Republican leadership has shown us that they are not willing to change the culture of backroom spending deals in Washington,” said Daniel Horowitz of the Madison Project.  “In 2010, they vowed in the GOP Pledge to America, not to pass massive omnibus bills without enough time to read them.  This nearly-1600-page monstrosity covers every aspect of the federal bureaucracy, yet members will not even have the minimum 72-hours to read the bill, as stated in the Pledge.  Sadly, it has become commonplace for Republican leaders to violate their word precisely when it comes time to pass the most important and contentious pieces of legislation.

“Even after agreeing to increase the topline spending levels under the ill-conceived Ryan-Murray agreement, Republicans still should have pushed for regular order by passing each of the 12 appropriations bills, one-at-a-time.  And at the very least they should have secured a commitment from Democrats to pass next year’s budget through regular order.  This would have made it easier to fight funding for Obamacare in one bill without holding up funding for the entire government.  Instead, taxpayers are left with one massive bill that funds Obamacare, Dodd-Frank, and many other liberal priorities without any ability to scrutinize each department separately.”

“These past two years, more than any, it has become increasingly clear that if we ever hope to downsize the federal government and inject more transparency into the legislative process, that we will need to elect a new cadre of committed conservatives to replace the failed leadership in both parties,” said Drew Ryun of the Madison Project. “That is why the Madison Project will continue to support and encourage conservative candidates that will hold true to their campaign promises and not fall victim to the special interests of Washington like so many today.”

The Madison Project supports and raises money for conservative candidates that have demonstrated a commitment to full-spectrum conservatism. The Madison Project website can be found at



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Washington at its Best

Monday, January 13th, 2014 and is filed under Blog

Washington is a place filled to the brim with irony and hypocrisy. This week Congress will consider a $1.1 trillion omnibus bill and an extension of dependency-inducing long-term unemployment benefits for the seventh year in a row.  Watch how the irony unfolds.

After agreeing to undo part of the sequester for the first two years of the budget frame, as part of the Ryan-Murray agreement, the House plans to pass a full omnibus bill this week to reflect the topline budget numbers of that deal.  Pursuant to the December agreement, one of the only real spending cuts used to offset the sequester cancellation was a cut in military pensions to those currently serving in the Armed Forces. Even though we all warned about the dyslexic priorities of that agreement, both parties proceeded to vote for the bill, opting to complain about those cuts the minute the bill was signed into law.

Fast-forward to this week and there are rumors that the omnibus bill will repeal those pension cuts.  Remember, this omnibus bill is the execution vehicle of the Ryan-Murray deal, which was proposed for the very purpose of vitiating the sequester and replacing it with military pension cuts.  What a bunch of fools.

The other main item on this week’s legislative agenda is Harry Reid’s bill in the Senate to extend unemployment benefits for yet another year.  Towards the end of 2013, some sense of sanity finally settled upon Congress when they agreed not to extend this counterintuitive program – or at least 73-weeks’ worth of it.  Just a few weeks later, after an aggressive push by Democrats to change the subject from Obamacare, Republicans are once again agreeing to the premise of extending UI.  Even Senator Marco Rubio said there is a “general consensus” to extend the program, albeit with offsets.

Well, we all know how the game of offsets works.  Typically, they cobble together a patchwork of notional and intangible savings from a dozen programs spread out over 10 years to cover the one-year cost.  Now Harry Reid is taking this stratagem to a new low by offering offsets 11 years from now.  In order to pay for the UI extension, he is offering to extend the mandatory spending cuts of the sequester into 2024, outside the 10-year budget frame.

Let’s take a quick step back for a moment.  After terminating part of the first two years of the sequester, we are to believe that the sequester will survive long enough that it will still be around in 2024 to offset this year’s UI extension!  The irony is that, at this pace, we will still be extending current law for unemployment benefits in 2024.  I guess we will have a sliding sequester for the next 10 years.  As we continue to terminate the current year’s sequester and extend UI for an additional year, we will add another year to the sequester outside the 10-year budget frame.  So in 2024, we will add 2034 to the sequester.


You’re not missing anything.  This is what happens when Republicans opt for pale-pastels and agree to the fundamental premise of a Democrat policy.  The rest of the story is merely a convoluted scheme for both parties to save face with the public.

Rinse and repeat, and you have yourself the cycle of government in Washington.

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New Year Opens With Big Spending Bang

Thursday, January 2nd, 2014 and is filed under Blog, Debt, Taxes

Congress plans to kick off the new legislative session the same way it ended the last one.  They will continue to spend more money.

When Congress voted on the Ryan-Murray budget deal before adjourning for Christmas, members were only signing off on the topline discretionary spending figures, not the individual accounts for all the departments and agencies.  They agreed to repeal part of the sequester for the next two years.  Consequently, discretionary spending will increase from $967 billion to an annualized level of $1.012 trillion for the remainder of FY 2014.  Congress will now work on passing an omnibus bill with 12 appropriations bills rolled up in one massive piece of legislation, which will reflect the topline figure in the Ryan-Murray deal.

Now, as The Hill reports, the appropriator cardinals are working frenetically to divvy up the new spending among their favorite portions of the government pie.

“Congress is set to unveil a giant spending bill next week that staff for appropriators have been preparing on a near daily basis throughout the holiday break.

Aides say progress on the $1 trillion, 12-part omnibus legislation has been better than expected at the subcommittee level, and that their goal remains to pass the bill through both chambers by Jan. 16 to prevent a government shutdown.

The secretive process has members anticipating rushed votes when they return next week, as congressional leaders race the clock.”

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Mitch McConnell’s Silence on Bad Budget Deal is Deafening

Friday, December 13th, 2013 and is filed under Blog, Debt, Issues

Despite the fact that the Ryan-Murray budget deal passed with overwhelming support from House Republicans, surprisingly, it hangs in the balance in the Senate.  Much of the robust showing in the House was a result of Congressman Paul Ryan’s (R-WI) strong influence on budgetary issues.

However, in the Senate, many of its members are facing tough primary challenges, and they are looking beyond the personalities.  Even some of the most moderate Republican members like Senators Lindsey Graham (R-SC) and Bob Corker (R-TN) have announced their opposition to this deal.  After all, the House-passed bill will repeal hard-fought spending cuts and replace them with tax increases and notional spending offsets.

Consequently, this bill is not a done deal in the Senate.  Even if every Democrat votes for the bill, which is not a safe assumption, no Republican aside for Senator John McCain (R-AZ) has committed to supporting it.  It’s not clear how Senator Harry Reid (D-NV) will find at least five Republicans to support the bill.

So where is the Republican leader?  Where is Senator Mitch McConnell?  As the highest ranking Republican in the Senate, this is the quintessential moment for him to assert his power and influence and speak with conviction against this rotten deal.  With the outcome of the bill hanging in the balance, and so many members on the fence, now is the time when McConnell can affect the outcome.

His silence is especially jarring given his emphatic statements during the battle over defunding Obamacare on the need to keep the sequester cuts.  He was unwilling to fight Obamacare, but claimed to fully support keeping the sequester cuts.  Well, now that the sequester cuts are about to be partially repealed, but it can still be blocked in the Senate, McConnell needs to step up to the plate.

The contours of this bill were known to the public weeks ago.  It was quite evident that they planned to replace the sequester.  The only point of contention was finding phony offsets to attach to the deal.  McConnell, as the most powerful Republican in the Senate, was certainly aware of the fact that his promise to keep the sequester was being challenged from day one.  Why the silence?

Unfortunately, this is what McConnell does on the most critical pieces of legislation.  It is precisely times like this when we need bold conservative leadership in the Senate, yet this is when McConnell usually engages in his disappearing act.  He was nowhere to be seen in during the debate over Syria and immigration until the very last moment when the outcome was no longer in doubt.  As Politico noted today, “Senate Minority Leader Mitch McConnell (R-Ky.) is widely expected to oppose the budget measure, a position that could sway fence-sitting GOP senators. But it appears unlikely that GOP leaders would strong-arm their colleagues and urge them to vote against the measure.”

McConnell loves to tout his clout and influence and the importance of Kentucky being represented by the Senate Leader.  But what good is a leader who waits until the liberals have 60 votes before opposing bad legislation?

Conservatives are starving for new leadership.  We are sick of those who play an insiders’ game of ‘hope yes, and vote no’ with bad legislation.  If Senator McConnell really opposes this bill he should speak out forcefully now and whip against it all weekend.  That is the job of a Republican opposition leader.  If he really supports it he should be man enough to vote for it.

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The Half-Century Failed Progressive War to Perpetuate Poverty

Wednesday, November 6th, 2013 and is filed under Blog, Economy

Year after year, leftists run for office promising to solve the very problems they helped create with central planning and distorting the private economy.  They self-righteously ingratiate themselves to an array of constituencies promising policies that will redistribute wealth and create a utopia for all.  Well, 50 years into the so-called war on poverty, and after flushing roughly $20 trillion in inflation-adjusted spending on mean-tested programs, they have nothing to show for it but dependency and perpetuation of their own power.

Throughout the 1950s and early ‘60s, the federal poverty rate declined sharply thanks to the post-WWII economic boom.  In 1964, as the poverty rate was tumbling, President Lyndon B. Johnson launched the Great Society campaign, ironically declaring an end to “the days of the dole in our country.”  Well, as President Reagan noted in 1988, “the federal government declared war on poverty, and poverty won.”

Sadly, things have only gotten worse since Reagan’s era.

The AP reports that according to a revised census measure released today, the poverty rate has topped 16%, enveloping 49.7 million people.  In 1966, the poverty rate was 14.7%.  So after spending at least $20 trillion on welfare programs, we have failed to move the needle one inch against poverty.  Instead we have perpetuated and exacerbated the problem.

We could have flushed $20 trillion down the toilet and enjoyed the same result sans the dependency and extra Democrat votes.  Or as Cato’s Michael Tanner pointed out last year, with the amount we spend on combined federal and state welfare each year, we could write a $61,830 check to every poor family of three.

Unfortunately, when you ponder the real motivation behind the welfare state, it is clear that the war on poverty was a smashing success.

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Fighting Obamacare: The Difference Between Cutting Spending and Limiting Harmful Government

Monday, October 14th, 2013 and is filed under Blog, Debt, News, Obamacare

As Mitch McConnell puts the finishing touches on his terms of surrender, here are some thoughts to ponder.

Republicans and conservatives have spent the past few years messaging their platform to the American people built upon budget-speak.  It’s all about the debt and cutting spending.

In reality, we don’t have a spending problem per se, we have a big and harmful government problem.  The two are not always the same.

All of us who follow policy issues very closely understand that debt in itself is not just a problem for the federal balance sheet, it will have to be paid back by our children and grandchildren.  However, most people don’t see it that way, at least not in a meaningful way.  What people care about is loss of employment, lower/stagnant wages, the rising cost of living, and personal liberty.  It is our job to prioritize an agenda both in substance and messaging that directly addresses the harmful effects of government on jobs, standard of living, and personal liberty.  The federal budget is secondary, and will take care of itself once we restore government to its proper role.

For example, we spend roughly $8 billion in discretionary spending funding the EPA each year.  Now, is that $8 billion in wasted spending contributing to our debt?  You betcha.  But the more serious problem with the EPA is not the $8 billion in discretionary spending, but the hundreds of billions that are removed from the private economy in the form of lost jobs and higher cost of living (not to mention personal liberty), as a result of the regulatory regime.

Hence, when we cut the operating budget of the EPA from $8.4 billion to $8 billion via the sequester, are we really limiting government?  Not really.  We are cutting spending, which slows the debt crisis ever so slightly, but we are not really providing relief to the American people in a way most people understand or feel in any tangible way.

Which brings me to the current showdown and Obamacare.  Mitch McConnell is getting ready to completely surrender on Obamacare so long as the sequester is preserved.

Let’s lay some facts out on the table:

1)      There is nothing that will destroy more jobs, lower wages, raise the cost of living, and disrupt personal liberty than Obamacare.  Not to mention the fact that it’s costly to the federal budget.

2)      Due to the new coverage of Obamacare over the past few years, the importance of healthcare, and the immediate deleterious effects of the law, this is something that is easily understood and vividly felt by the broad populace.

3)      If we are resigned to letting go of the Obamacare fight in the budget, there is no way it will ever be repealed, even partially repealed.  By 2017, the first possible opportunity for full GOP control of government, there will be over 30 million people either willingly or unwillingly dependent on Obamacare.  Even if it is barely workable, it would be the only care they have.  We cannot repeal it.

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Obama’s Debt Ceiling Mendacity

Wednesday, October 9th, 2013 and is filed under Blog, Debt

Earlier today, the ever melodramatic president suggested that it is unprecedented for an opposing party in Congress to deny a request for a clean debt ceiling increase.  He asserted that “nobody in the past has ever seriously threatened to breach the debt ceiling until the last two years. and this is the credit worthiness of the united states we’re talking about.”

Actually, as Sean Davis noted, there have been a number of epic budget battles over the debt ceiling dating back to President Eisenhower.  Many of them resulted in some serious concessions by the sitting president.  But what is more important is Obama’s amnesia from his own days in the Senate.

The President had few accomplishments in his brief time in the Senate, but one of his most public moments was when he spoke out against President Bush’s request to raise the debt ceiling from $8.184 trillion to $8.965 trillion.  He sounded like a tea partier.  Here are some of the highlights:

“It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our government’s reckless fiscal policies. Over the past five years, our federal debt has increased by $3.5 trillion to $8.6 trillion. That is  ‘‘trillion’’ with a ‘‘T.’’ That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers.” […]

“Our debt also matters internationally. My friend, the ranking member of the Senate Budget Committee, likes to remind us that it took 42 presidents 224 years to run up only $1 trillion of foreign-held debt. This administration did more than that in just five years.”[…]

“Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit.”

Ultimately, Obama not only “threatened to breach” the debt ceiling, he voted against the increase.

Let’s put this in perspective.  Obama opposed a debt limit increase from $8.2 to roughly $9 trillion because President Bush increased the debt by $3.5 trillion in 5 years.  Well, President Obama increased the debt from $10.6 trillion to $16.7 trillion in less than five years.  If increasing the debt from $8.2 trillion “weakens us domestically and internationally,” increasing it from $16.7 trillion would be cataclysmic.

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Press Release: McConnell Gets Support from Liberal Special Interest

Wednesday, August 14th, 2013 and is filed under Blog, Issues, Press

McConnell Gets Support from Liberal Special Interest

Washington, D.C. – The Madison Project PAC released the following statement regarding The American Chemistry Council’s $400,000 ad buy on behalf of Senator McConnell:

“It’s always interesting to see what special interest groups come out of the woodwork to support establishment Republicans in their time of trouble,” said Daniel Horowitz of the Madison Project. “The American Chemistry Council is led by liberal California Democrat Cal Dooley.  The only other ads they are running this year are in support of liberal Democrats and RINO Republicans who are vulnerable to conservative primary challenges, such as Rep. Mike Simpson and Rep. Fred Upton.”

“We find it extremely hypocritical that the ad praises McConnell as a supporter of small business and expanded energy production when he voted for the 2007 Energy bill – the Obamacare of Energy [RC#430, 12/13/2007].  That bill created the most onerous green energy mandates on fuel producers, cars, and light bulbs of any bill to come before Congress.  We are paying for these mandates and taxes to this day in the form of higher food and fuel prices and less jobs.”

“This is another example of the collusion between big government and big business,” said Drew Ryun of the Madison Project. “Of course a group like the American Chemistry Council would run ads on behalf of Senator McConnell-it is natural that big business would do anything to protect one of its own.  That is why we are proud to support Matt Bevin.  He is committed to working with conservatives like Sen. Ted Cruz and Sen. Mike Lee to restore our free markets and end all tendentious favors to big business at the expense of the American taxpayer.”

To view our endorsement of Matt Bevin, click here.

The Madison Project supports and raises money for conservative candidates that have demonstrated a commitment to full-spectrum conservatism. The Madison Project website can be found at


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