The Facts vs The Talking Points

Remember when the Democrats said that the Trump tax cuts would blow a huge hole in the deficit because of the money that would not be collected. Those who believed the Democrats need to study the Laffer Curve. Although liberals keep saying it doesn’t work, the history of tax cuts proves it does.

Yesterday Investor’s Business Daily posted an editorial about the impact of President Trump’s Tax Cuts.

The editorial states:

The latest monthly budget report from the nonpartisan Congressional Budget Office finds that revenues from federal income taxes were $76 billion higher in the first half of this year, compared with the first half of 2017. That’s a 9% jump, even though the lower income tax withholding schedules went into effect in February.

The CBO says the gain “largely reflects increases in wages and salaries.”

For the fiscal year as a whole — which started last October — all federal revenues are up by $31 billion. That’s a 1.2% in increase over last year, the CBO says.

The Treasury Department, which issues a separate monthly report, says it expects federal revenues will continue to exceed last year’s for the rest of the 2018 fiscal year.

The editorial concludes:

As we have said many times in this space, the problem the country faces isn’t that taxes are too low, but that spending is too high. The CBO projects that even with the Trump tax cuts in place, taxes as a share of GDP will steadily rise over the next decade, and will be higher than the post-World War II average.

But bringing in more tax revenues doesn’t help if spending goes up even faster. And that has, unfortunately, been the case, as the GOP-controlled Congress has gone on a spending spree.

Look at it this way. Tax revenues are up by $31 billion so far this fiscal year compared with last year. But spending is up $115 billion.

In other words, the entire increase in the deficit so far this year has been due to spending hikes, not tax cuts.

There are too many Republicans in Congress who don’t understand why the American voters sent them there. The Democrats have always loved to spend other people’s money, but the Republicans were supposed to be the alternative to that. Unfortunately, many Republicans have failed the voters. The only way to fix Washington is to unelect every Congressman who votes for spending increases. Otherwise the spending will only get worse.

Why The Republican Party Is Losing Voters

The 2016 Republican Platform includes the following on Page 8:

Reducing the Federal Debt

Our national debt is a burden on our economy and families. The huge increase in the national debt demanded by and incurred during the current Administration has placed a significant burden on future generations. We must impose firm caps on future debt, accelerate the repayment of the trillions we now owe in order to reaffirm our principles of responsible and limited government, and remove the burdens we are placing on future generations. A strong economy is one key to debt reduction, but spending restraint is a necessary component that must be vigorously pursued.

On May 10, 2018, CNS News reported:

The federal government collected a record $2,007,451,000,000 in total taxes through the first seven months of fiscal 2018 (October through April), but still ran a deficit for that period of $385,444,000,000, according to the Monthly Treasury Statement.

It’s the spending–not the revenue–that is the problem. So what are Republicans doing about it?

On May 8, 2018, The Washington Times posted the following:

House GOP leaders vowed Tuesday to speed President Trump’s new $15.4 billion spending cuts proposal through their chamber, brushing aside complaints from Democrats and some Republicans over the trims the White House wants to see.

House Majority Leader Kevin McCarthy on Tuesday predicted the House will pass the package, which includes 38 cuts to programs and generally involves money that’s sitting unused.

So what happened when the bill reached the Senate?

The Daily Haymaker posted the story today:

Senators voted Wednesday to block President Trump’s $15.4 billion spending cuts package, with lawmakers saying it trimmed the budget too much.

Brushing aside administration promises that the cuts were chiefly to money that was never going to be spent, the Senate voted 50-48 to keep the bill bottled up. Two Republicans — Susan Collins of Maine and Richard Burr of North Carolina — joined Democrats to defeat the package.[…]

So if the Republicans won’t even cut spending on money that wasn’t even spent, why in the world should I vote for them? Didn’t they read their own platform? How long could you run up your credit card before creditors would start clamoring for their money? Is the government any different?

 

Pork In The North Carolina Budget

Washington isn’t the only place where lawmakers love to spend money that isn’t theirs. The North Carolina legislature is currently working on its state budget for FY 2018-19. On Monday, Civitas posted an article about the current budget proposal.

The article reports:

The state budget for FY 2018-19 contains nearly 170 line items totaling $30 million that are highly inappropriate or outright pork.

Appropriations directing funding to local pet projects include items such as walking trails, playgrounds, county fairs and highway signs. Moreover, dozens of nonprofit organizations receive direct appropriations in the budget. Make no mistake, these nonprofits perform admirable work. However, it is highly inappropriate – and unfair favoritism – to single out nonprofits for specific appropriations of state tax dollars, instead of having them go through the appropriate grant process.

There is little doubt that a large percentage, if not all, of these earmarks represent legislators trying to “bring home the bacon” to their districts in an election year. State taxpayers should not be forced to finance explicitly local projects.

Note that the items identified in this article include only adjustments made to the second year of the biennial budget passed last year. There no doubt are many more such earmarks that will be doled out this year that were previously included in last year’s budget.

Legislative leaders have rightly been criticized for the closed-door, non-transparent process used in crafting the budget. It is plausible to believe that these 166 line items were the result of political horse-trading behind closed doors, which left virtually no time for objections from legislators before the House and Senate voted.

Such a significant number of earmarks, while not adding up to a major percentage of the budget in dollar terms, raises legitimate concerns about political patronage in which representatives direct state funds to local projects in exchange for political support.

Please follow the link above to read the entire article. It includes a specific list of the earmarks in question.

Countering Fake News

The major media sources are all abuzz with the fact that President Trump is denying food to senior citizens by cutting Meals on Wheels. How awful. How awful that the media is reporting something that is not true. Meals on Wheels only gets a small percentage of its funds from the Community Development Block Grant (CDBG) programs. The cuts President Trump is making will have little or no impact on Meals on Wheels.

The Conservative Review posted an article today explaining the details:

President Donald Trump is catching hell from the media over accusations that his budget will cut off funding for Meals on Wheels as part of his proposal to eliminate funding for Community Development Block Grant (CDBG) programs.

Most of the media’s hysterics are exaggerating the effects of the Trump proposal, or being downright dishonest about CDBGs. Examine what Office of Management and Budget (OMB) Director Mulvaney actually said during Thursday’s press conference on the budget, in response to a question on Meals on Wheels.

“As you know, or I think you know, Meals on Wheels is not a federal program,” he began. “It’s part of that community that CDBGs — the block grants that we give to the states, and then many states make the decision to give that money to Meals on Wheels.” (emphasis added)

The article goes on to mention that the government has spent $150 billion on CDBG programs since 1970 and has no results to show for it.

The article explains the problem:

This program is ineffective because the administration of these funds is often absolutely corrupt. In 2013, the House Financial Services Oversight and Investigations Subcommittee identified “more than $770 million in questionable costs and included recommendations for putting $739.5 million in HUD funds to better use.” The subcommittee identified CDBGs as one of HUD’s largest programs that “lack proper oversight” and are “especially vulnerable to waste, fraud, and abuse.”
The article goes on to list some of the abuses in past use of CDBG money. Please follow the link above to read the entire article. President Trump is acting like a businessman–he is cutting funds to programs that do not work and moving funds to programs that show results. If we are ever to find a way out of our increasing debt, these are the steps that will be necessary. It is a shame that the mainstream media wants to continue to increase the debt that our children and grandchildren will have to pay off.

One Reason Government Spending Is Out Of Control

On Saturday the Washington Post posted an article about some of the end-of-the-year spending done by government agencies. The spending is a result of one of the side effects of baseline budgeting, which is something our government needs to get rid of. Baseline budgeting is the concept that a department’s budget is based on how much money they spent in the previous year. If they spend 90 thousand dollars and their budget was 100 thousand dollars, the department budget will be 90 thousand dollars in the following year. If they don’t spend all of the money in their budget, their budget is cut. This creates a mad rush to spend their entire budget by September 30, the end of the fiscal year. If they spend the full amount and ask for a 10 percent increase and get a 5 percent increase, that is considered a 5 percent budget cut. That is how Congress can claim they are cutting the budget while the spending continues to increase. These two concepts explain some of the rather interesting end-of-the-year spending done in the past few weeks by the government. As you read this, remember that this is under sequestration when Democrats are complaining that there is no money.

The article posts some examples of spending in recent weeks:

On Monday, VA paid $27,000 for an order of photographs showing sunsets, mountain peaks and country roads. They would go into a new center serving homeless veterans in Los Angeles; a spokeswoman described the art as “motivational and calming, professionally designed to enhance clinical operations.”

On Tuesday, the USDA bought $127,000 worth of toner cartridges (“end of year,” the order explained). VA spent another $220,000 on artwork for its hospitals.

On Wednesday, the Coast Guard paid $178,000 for cubicle furniture, replacing high-walled cubes with low-walled ones to improve the air flow in a large office area.

“Other higher-priority projects were not able to be executed, so they moved [money] to this lower-priority project” before the year’s end, said Coast Guard spokesman Carlos Diaz. “The money was going to be spent anyway.”

On Thursday, VA was buying art again. It spent $216,000 on artwork for a facility in Florida. In all, preliminary data showed that the agency made at least 18 percent of all its art purchases for the year in this one week. One-sixth of the buying in one-52nd of the year.

This is not a reasonable system. There is a spreadsheet at adelphi.edu that shows the federal deficit over the years. When President Obama took office, the deficit was approximately 12 million dollars. The deficit is now approaching 17 million dollars. That’s a pretty hefty increase in five years. However, the really interesting part of the spreadsheet is the relationship between the deficit and which party controls the House of Representatives. Remember, the House controls the spending. Please follow the link to the spreadsheet and take a look at the history of the federal deficit.

At any rate–baseline budgeting needs to go.

 

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Let’s Put The Budget Together Right After The Company Christmas Party

Putting the budget together for a business right after the company Christmas party is ridiculous, right? Well, evidently the United Nations has done that consistently in the past.

ABC News posted a story today quoting Ambassador Joseph M. Torsella, who represents the U.S. on the U.N.’s budget committee.

The story reports:

Ambassador Joseph M. Torsella, who represents the U.S. on the U.N.’s budget committee, said Monday that the tense process of negotiating the world body’s annual budget is made more complicated by the number of diplomats who turn up drunk.

The U.N. budget is finalized in December, when holiday parties apparently lead to some revelry spilling over into budget negotiations.

The U.S. is making “the modest proposal that the negotiating rooms should in future be an inebriation-free zone,” Torsella said during a private meeting of the budget committee. The U.S. mission released a transcript of his remarks.

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Why The Senate Keeps Passing Continuing Resolutions Instead of Passing A Budget

As a teenager (back in the age of dinosaurs), one of the things I remember is being asked to read the newspaper as a part of high school history class. I was not a news junkie back then, and reading a newspaper (the New York Times was the school’s paper of choice) was a very frustrating experience. When reading the articles, I often felt like someone who walks into the theater in the middle of the movie. Even if I understood the story, I had no clue to the events that had preceded the story. Some of the budget debates in Congress have given me that same feeling.

The Senate has not passed a budget since 2009. Why? Well, it seems that the answer is actually rather simple. About.com has an information page about the 2009 Budget. The page explains that the 2009 Budget created the largest deficit in the history of America ($1.413 trillion). The 2009 Budget was unusually large because of the extra spending needed in the recession. There are some valid questions as to whether that level of spending is still needed since we are supposedly in the midst of an economic recovery. However, by passing Continuing Resolutions rather than a budget, the Senate can continue the levels of spending in the 2009 Budget. Because of the concept of ‘baseline’ budgeting, government spending will be based on the numbers in the inflated 2009 Budget–without any debate on the validity of those numbers. That is the reason for continuing trillion dollar deficits, and it also explains why the Senate has not been willing to discuss or pass a budget since 2009.

We are about to enter a debate on raising the debt ceiling of America. I strongly suggest that the Republicans in Congress (I don’t expect the Democrats to do this, although it would be wonderful if they did.) should demand that the Senate pass a budget before they agree to raise the debt ceiling. If we are going to increase the amount of money given to Washington, we need to know ahead of time how they are planning to spend it. Just one more note on the budget. As Congress continues spend more than it takes in, the Treasury continues to either borrow money or print money. As more money is printed, the value of the money already in circulation decreases. That is one of many reasons the cost of gasoline at the pump is higher than the current cost of crude oil at the pump warrants (It should be noted that the state and federal government make more money on the sale of a gallon of gas than the oil companies that sell the gas). That is one way runaway spending by the government impacts all of us. It is time to take the charge card away from Congress and force them to live within their means.

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This Really Doesn’t Sound Like A Plan

Hot Air posted a video today of some of the Congressional hearings on the President’s proposed budget. The clip they posted is of Paul Ryan asking United States Secretary of the Treasury Timothy Geithner what the President’s budget does to help end future deficit spending. I strongly suggest that you follow the link and watch the video.

There is a great quote in the video:

Geithner states, “We’re not coming before you today to say that we have a definitive solution to the long term problem, what we do know is we don’t like yours.”

In other words, why, no, our new budget does nothing to address America’s long-term fiscal crisis.

If our current administration is not willing to address America’s long-term fiscal crisis, let’s elect an administration that will be.

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Giving Money To The Rich At The Expense Of The Poor

No, I am not about to support the class warfare that President Obama is planning to use to win a second term in the White House. What I am referring to is the fact that under the budget suggested by President Obama government subsidies for people who purchase a Chevy Volt will be raised to $10,000 while the scholarship program in Washington, D.C. will be eliminated.

Hot Air posted a story yesterday on the budget.

Speaking of the D. C. Opportunity Scholarship Program (OSP), the article states:

Enrollment increased 60 percent last year, with parents “rushing” to sign their kids up, after the new GOP House renewed the program for five years. That’s the good news — since Congress is likely to become redder this fall, the GOP will be able to force a penny-ante budgetary matter like this on Obama even if he’s reelected. The bad news is that O is so deeply captive to public-school teachers’ unions that he’d rather risk the optics of canceling a school-choice program for poor kids knowing that it’ll end up in the budget anyway than embrace it and anger his PEU cronies. Loathsome.

Meanwhile, people who can afford a $50,000 car will get a tax break which will cost the government $100 million each year if it is approved by Congress, presuming only 10,000 new-technology autos are sold each year.

This is another example of the Obama Administration telling Americans what to buy. It is a political move designed to shore up environmental support for President Obama in an election year. Meanwhile, the students in Washington, D.C. are tossed aside.

I think this President has his priorities backwards.

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A Great Idea That Will Probably Die In The Senate

On Friday, the Daily Caller reported that Harry Reid told reporters that the Senate would not pass a budget this year. Senator Reid did not feel a budget was necessary because he felt that the debt-ceiling agreement already covered that. Never mind that the Senate is constitutionally required to pass a budget.

To add to the confusion, CNS News reported on Friday that the House of Representatives has now passed a bill to eliminate baseline budgeting. Baseline budgeting is the practice that allows Congress to claim it is cutting the budget while it continues to increase spending. This is done by assuming every government agency will have a certain percentage increase every year. If the amount of that increase is cut, it is a considered a spending cut, even though the agency got an actual increase in the amount it could spend. For example, let’s say the Department of Education spent $100 this year. Next year they would automatically get $110. If Congress cut the budget and they were only given $105, that would be considered a budget cut, even though their budget grew.

That is baseline budgeting. That is what the House of Representatives voted to end on Friday. Is anyone willing to make a bet on how far this bill will get in the Senate?

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