When Budget Cuts Are Actually Budget Increases

Yesterday Investor’s Business Daily posted an editorial about President Trump‘s budget proposal.

The article included the following graph:

As you can see, the federal budget does increase. However, it increases at a lower rate than it would if baseline budgeting were used. Baseline budgeting is a tactic used by people who want to grow the government to convince the rest of us that the sky is falling. It is very simple–if you got a 3% budget increase last year and you get a 2% increase this year, your budget has been cut (even though it grew by 2%).

The article further reports:

Trump’s proposed spending cuts for entitlement programs have been described as “massive,” “sweeping,” and on the surface, the $1.7 trillion spending cuts Trump proposes look massive.

But these reports always leave out one key fact. Spending on entitlement programs isn’t being cut. At least not in the traditional sense of spending less next year than you spend this year. Trump’s budget doesn’t touch Social Security or Medicare, and only slows the growth of the remaining “safety net” programs.

In fact, the projected 10-year spending for all entitlement programs under Trump’s budget would be trimmed by less than 8%. (See the accompanying chart.)

Some analysts say Trump’s budget would end up cutting $1.4 trillion from Medicaid over 10 years, because his proposed $610 billion in savings from reforming the program would come on top of the $800 billion proposed cuts contained in the House ObamaCare repeal-and-replace bill. (The budget doesn’t spell this out, but does contain a mysterious “allowance for ObamaCare repeal and replace” line item, with annual savings that match up to spending reductions in the House repeal bill.)

If true, that looks like a huge chunk, even from a program slated to spend $5.3 trillion. But keep in mind that states also contribute almost an equal share to Medicaid. In fact, when you combine federal and state spending, Medicaid is forecast to shell out more than $8 trillion over the next decade.

The article concludes:

Is Trump’s budget perfect? Hardly. We’d prefer that he tackle Social Security and Medicare reform in addition to Medicaid. The ObamaCare repeal savings are likely exaggerated. His $200 billion in infrastructure spending will only whet the appetite of lawmakers.

But on balance, this budget is far more realistic, and more responsible, than anything that ever came out of the Obama White House.

And as a statement of Trump’s governing principles — which is really all the presidents’ budgets ever amount to — Trump’s focus on spending restraint, entitlement reform, work incentives and on removing government impediments to growth is spot on.

In the world of Washington politics, power is measured by how much money you control. Bureaucrats love to spend our money. They will not give up that power easily. There will be a lot of people running around in the coming days yelling “the sky is falling.” They are misinformed. I wish this budget could pass Congress in its present form, but that is highly unlikely. However, I hope that the principles behind the budget will somehow survive and we will see a recognition of the fact that we are currently spending ourselves into destruction. The Washington establishment will not go down easily, but they seriously need to go down.

Bringing The Federal Budget Under Control

The Washington Examiner reported yesterday that one of the steps President Trump will be taking to help balance the budget next year will be reining in tax payments to illegal immigrants.

The article reports:

Trump’s fiscal 2018 budget, set to be released Tuesday, will set higher eligibility standards for the earned income tax credit and the child tax credit, Office of Management and Budget Director Mick Mulvaney said Monday. According to the administration, the measures will save $40 billion over 10 years.

In May 2014, The Washington Examiner reported:

The Treasury Department has released its latest report on the fight against widespread fraud in the Earned Income Tax Credit program. The problem is, fraud is still winning. And there’s not even much of a fight.

“The Internal Revenue Service continues to make little progress in reducing improper payments of Earned Income Tax Credits,” a press release from Treasury’s inspector general for Tax Administration says. “The IRS estimates that 22 to 26 percent of EITC payments were issued improperly in Fiscal Year 2013. The dollar value of these improper payments was estimated to be between $13.3 billion and $15.6 billion.”

There is no reason to continue funding tax fraud.

The article concludes:

Some anti-illegal immigration groups have said that allowing workers to claim credits without providing a Social Security number amounts to paying illegal immigrants to stay in the country. Conservative lawmakers also have favored tightening the restrictions as a matter of fiscal conservatism.

Liberal groups, though, argue that illegal immigrants pay taxes, such as payroll taxes for Social Security, for which they won’t get benefits. More generally, the low-income tax credits generally benefit needy families, even if they technically did not qualify for the benefits they received.

Why are we running huge budget deficits to pay benefits to people who are not eligible to receive them? This doesn’t make sense to me. It would be nice to see that change.

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.

Ignoring The Financial Report Deadlines

Today the Washington Examiner reported on the progress of the Budget Process under President Obama.

The Congressional Budget Act of 1974 (Titles I-IX of P.L. 93-344, 2 U.S.C. 601-
688) established the congressional budget process, which coordinates the legislative activities on the budget resolution, appropriations bills, reconciliation legislation, revenue measures, and other budgetary legislation. Under this budget process, the President is required to submit a budget to Congress on the first Monday in February.

The article in the Washington Examiner reports:

“The Office of Management and Budget recently announced that President Obama’s FY 2015 budget would be delivered to Congress on March 4, just over one month past the statutory deadline (which requires the President’s budget to be submitted by the first Monday in February),” explains a news release from Sen. Jeff Sessions, R-Ala., the top Republican on the Senate Budget Committee. “This will be the 18th occasion that the Administration has missed an in-law budget deadline.”

…Obama has never submitted a plan to control Medicare spending following a Medicare funding warning, though the law states that “if there is a Medicare funding warning … made in a year, the president shall submit to Congress, within the 15-day period beginning on the date of the budget submission to Congress under subsection (a) for the succeeding year, proposed legislation to respond to such warning.”

Such warnings have were issued and ignored in 2010, 2011, and 2012. Obama’s team has not submitted a final sequestration transparency report, which was due Jan. 21 of this year. They were late submitting the earlier installation of the report.

Obama’s team was also late filing mid-session reviews in 2010, 2011, and 2011. The financial reports on the United States were filed late in 2009, 2011, and 2012.

The obvious question is, “What good is the law if the President refuses to honor it?”

The President has stated that if Congress does not cooperate with his agenda, that he has a pen and a phone and he will go around them. It seems as if he has already  insulted them by ignoring the laws they have passed. Maybe the President needs to look in his own back yard before complaining about the trash in his neighbor’s yard.

Enhanced by Zemanta

This About Sums Up Where We Are

On Wednesday, Investor’s Business Daily posted an article giving their impression of how President Obama is dealing with the government shutdown. It’s not a pretty picture.

The article reports:

So the administration decided instead to put barricades around various other popular open-air Mall monuments to score political points in the budget shutdown standoff. That required, in turn, posting freshly printed signs explaining why they’re off limits, and a police presence to guard the barricades.

“The Obama administration is going out of its way to erect barricades and have people manning them in order to keep people out,” said Rep. Doc Hastings, R-Wash. In other words, Obama is expending more resources to close these monuments than they require to stay open.

Incredibly, this includes the Mall’s World War II memorial, which prompted a group of WWII veterans to force their way past the barricades — risking arrest — to pay homage to the fallen heroes of that war.

In case there’s any doubt as to who’s to blame for this outrage, a spokesman for National Park Service said the White House Office of Management and Budget ordered up the blockades.

Do you suppose they will try to stop people from driving on the streets of Washington, D.C.?

These are the actions of a petulant bully. He will be in office for the next three years, but as Americans we can make him less effective by electing people to Congress who refuse to be bullied. Let’s do it!

Enhanced by Zemanta

An Interesting Perspective On Immigration Reform

Yesterday John Hinderaker at Power Line posted an article about the economic impact the current proposals regarding immigration reform will have on the incomes of Americans.

This week in his weekly address, President Obama stated the following:

The Senate’s plan would also provide a big boost to our recovery. And on Wednesday, we released a report detailing exactly how big a boost that would be.

The report is based on the findings of independent, nonpartisan economists and experts who concluded that, if the Senate’s plan becomes law, our economy will be 5% larger in two decades compared to the status quo. That’s $1.4 trillion added to our economy just by fixing our immigration system.

Here in America, we’ve always been a nation of immigrants. That’s what’s kept our workforce dynamic, our businesses on the cutting edge, and our economy the strongest in the world. But under the current system, too many smart, hardworking immigrants are prevented from contributing to that success.

John Hinderaker points out:

And who might those supposedly “independent, nonpartisan economists and experts” be? When you check out the actual report, here is who they are:

President’s National Economic Council, Domestic Policy Council, Office of Management and Budget, and the Council of Economic Advisers.

In other words, extensions of the office of the president. His appointees–high level flacks.

That’s the first problem with that statement. The second problem is explained by a Power Line reader with amazing math skills who sent a note to Power Line which definitely disputed that claim.

The reader reports:

The claim is that aggregate GDP will be 5% higher in 20 years than otherwise, equal to $1.4 trillion in constant dollars. By simple algebra that means they are assuming a status quo future GDP of $28 trillion and therefore an immigration-enhanced GDP of $29.4 trillion. But wait! What about GDP per capita, the only meaningful measure of economic growth for the populace? Well…population will increase from today’s 315 million to about 378 million under the current immigration and population levels, and to about 410 million with the new immigration regime, conservatively estimated. [Ed.: That is a VERY conservative estimate.] Simple arithmetic demonstrates that future GDP per capita without the new immigration levels is $74,000, whereas with increased immigration it is $71,700.

…Their plan is simply to import scores of millions of unskilled 3rd world immigrants, covered by a fig leaf of a few hundred thousand high skilled STEM workers, 90% of whom we can easily do without, in order to create “economic growth” — in the aggregate — by a massive population expansion from the outside–but not growth that will benefit existing native born Americans at all. And that is not counting the inevitable economic drawbacks of this grotesque giantism — overcrowding, land use issues, infrastructure deterioration, and environmental degradation, to name a few.

The ability of some of our elected leaders to lie in order to further whatever agenda they have is amazing to me. I would love to see our immigration policies reformed–they are awful. However, the current changes proposed by the Senate are not the answer. The incremental proposals coming from the House of Representatives might better solve our current problems.

Enhanced by Zemanta

If You Tell A Lie Often Enough People Begin To Believe It

CNS News posted a story yesterday about a comment President Obama made on NBCs “Meet the Press” on Sunday. President Obama stated, “Well, I have to tell you, David, if you look at my track record over the last two years, I cut spending by over a trillion dollars in 2011. I campaigned on the promise of being willing to reduce the deficit in a serious way, in a balanced approach of spending cuts and tax increases on the wealthy while keeping middle class taxes low.”

That statement sounds really good, but what are the facts?

The article states:

According to the White House Office of Management and Budget, federal spending was not cut by $1 trillion in 2011. In fact, in fiscal 2010, federal spending was $3,456,213,000,000. In fiscal 2011, federal spending was $3,603,213,000,000. That was an increase of $147 billion.

While President Obama did not cut federal spending by $1 trillion in 2011, he did increase the debt by more than $1 trillion in that fiscal year. In fiscal 2011, according to the White House Office of Management and Budget, the federal deficit was $1,299,595,000,000. That was up from a deficit of $1,293,489,000,000 in fiscal 2010.

The White House website also repeats the claims of the President, but when you begin to read, you discover that the cuts are over a period of ten years. There are also claims that Obamacare will reduce spending. The only reason Obamacare has not already collapsed under its own weight is that the taxes it increases are collected for years before the benefits take effect.

The thing to keep in mind here is that what is called a spending cut in Washington would be called a spending increase anywhere else. Because of the concept of baseline budgeting, any time a government department does not receive additional money, that department’s budget is considered cut. Until Americans begin to understand that, we are doomed to ever-increasing federal budgets and ever-increasing federal debt.

Enhanced by Zemanta

Overruling The Law When Convenient

Sequestration is scheduled to occur on January 2, 2013. As usual, note that this is after the November election. Sequestration is essentially drastic cuts to government spending triggered by the fact that Congress was unable to reach a budget compromise. Sequestration will have an incredibly negative aspect on the American economy overall if is actually happens, and as of now, it will happen.

Scott Johnson at Power Line posted an article today about some of the political maneuvering revolving around sequestration. The article explains that under the Worker Adjustment and Retraining Notification (WARN) Act, defense contractors are required to issue notices of layoffs to employees 60 days before the layoffs occur. Since under sequestration defense contractors can expect major layoffs (January 2, 2013), those notices would go out in early November. Obviously, the Obama Administration does not want that to happen.

The Office of Management and Budget (OMB) has issued a memorandum stating that they do not believe these notices should be issued. Please follow this link to read the entire memorandum.

Some highlights from the memorandum:

DOL (Department of Labor) concluded that it is neither necessary nor appropriate for Federal contractors to provide WARN Act notice to employees 60 days in advance of the potential sequestration because of uncertainty about whether sequestration will occur and, if it did, what effect it would have on particular contracts, among other factors:

Specifically, if (1) sequestration occurs and an agency terminates or modifies a contract that necessitates that the contractor order a plant closing or mass layoff ofa type subject to WARN Act requirements, and (2) that contractor has followed a course of action consistent with DOL guidance; then any resulting employee· compensation costs for WARN Act liability as detennined by a court, as well as attoroeys’ fees and other litigation costs (irrespective of li tigation outcome), would qualify as allowable costs and be covered by the contracting agency, if otherwise reasonable and allocable.

Translated into English, this says don’t send out the notices and the government will pay any legal penalties.

The Hill reports:

“The Obama Administration is cynically trying to skirt the WARN Act to keep the American people in the dark about this looming national security and fiscal crisis,” Sens. John McCain (R-Ariz.), Lindsey Graham (R-S.C.) and Kelly Ayotte (R-N.H.) said in a statement. “The president should insist that companies act in accordance with the clearly stated law and move forward with the layoff notices.”

No one actually knows if sequestration will happen, but right now it is scheduled to happen. The law needs to be followed, regardless of the politics involved. The government is not supposed to be used as a campaign committee. This is totally over the top.

Enhanced by Zemanta

Coming Soon To Your Pocketbook If President Obama Wins In November

 

Tax

Tax (Photo credit: 401K)

Heritage.org posted an article yesterday about the hidden tax increases in President Obama’s proposed budget. Hang on to your wallet.

The article reports:

EXCLUSIVE: It could be said that President Obama has never seen a tax hike he doesn’t like — whether it’s letting the 2001 and 2003 tax cuts expire, insisting on higher taxes for job creators, and yesterday calling on Congress to raise taxes on the oil industry. But as much as the President wants to raise taxes, Heritage has discovered that there are even more tax hikes hidden in his budget, adding up to a total of $2 trillion in higher taxes.

In a new report, Heritage’s Curtis Dubay uncovers Obama’s hidden tax hikes and finds that the President’s proposed $1.561 trillion tax increase over 10 years is much bigger than advertised. In fact, the President wants to raise taxes by $1.689 trillion – that’s $128 billion more than was reported by the White House Office of Management and Budget (OMB) in the President’s FY 2013 budget proposal.

What’s to account for the discrepancy? Dubay explains that OMB reports the tax hikes in areas other than the tax section, misleading readers into believing that the President’s tax hikes are smaller than they are in reality. Among them are the “Financial Crisis Responsibility Fee,” better known as the bank tax, which adds another $61 billion to the President’s tax hike total; a $44 billion tax hike from allowing the IRS to adjust a program integrity cap; a $48 billion increase of the unemployment tax; and a $1 billion hike of user fees for commercial navigation of inland waterways.

As long as you don’t work, drive, go boating, have a bank account, or use energy to heat or cool your house, these new taxes won’t effect you.

Please follow the link to Heritage.org to read the entire article.

Enhanced by Zemanta

If You Are Going To Lie, At Least Do It Well

Today Bob Beauprez posted an article at Townhall.com about the LightSquared scandal. Before I go into the details, I would like to comment that cronyism was easier in Chicago–it wasn’t looked at as closely as it can be in Washington, and if it was discovered, everyone knew how to sweep it under the table without too much effort. Washington sometimes looks at such things a little more carefully.

The question about LightSquared is whether or not the Obama administration interfered with the testimony of witnesses appearing before Congressional committees. There were a number of witnesses from different agencies, but there were some striking coincidences. The article reports:

Further, entire portions of the supposedly independent opinion submitted to a Congressional Oversight Committee regarding LightSquared from four separate government agencies contained “identical language in their written testimony” – a truly remarkable coincidence. 

That’s just laziness on the part of the people involved in skewing the testimony. Couldn’t they at least have been original?

The article further reports:

On September 20, 2011 separate letters were sent to the White House Office of Science and Technology Policy (OSTP) and the Office of Management and Budget (OMB) requesting documents related to the Administration’s involvement with LightSquared.  The letters were signed by Science and Technology Committee Chairman Ralph Hall (TX), James Sensenbrenner (WI), Rep. Broun and four other committee members.  The letters document the apparent attempts to “Tamper with Testimony” and “Muzzling Officials” for possible political objectives.  “Sugarcoating testimony over critical matters that include the lives of Americans is irresponsible, and inevitably raises questions about the Administration’s priorities,” wrote the lawmakers. 

The letters express frustration that earlier requests by the Committee for LightSquared related documents from DHS, NOAA, NIST, and the Commerce Department have been ignored.  The lawmakers also cited the stonewalling by the FCC of Senator Charles Grassley’s request for LightSquared documents made last April, and the refusal of FCC Chairman Julius Genachowski to testify at a Senate hearing. 

The Chicago-way has come to Washington. Let’s evict it in 2012.

Enhanced by Zemanta

When Political Contributions Endanger Our Soldiers

Navstar-2F satellite of the Global Positioning...

Image via Wikipedia

On Thursday The Daily Beast posted a story about a Congressional investigation into a satellite broadband company named LightSquared. On Friday, Big Government carried the story. The question involved in the investigation is whether or not the White House pressured a Air Force General to change his testimony before Congress to help a corporation that happened to be a large democrat party donor.

The Daily Beast reports:

According to officials familiar with the situation, Shelton’s prepared testimony was leaked in advance to the company. And the White House asked the general to alter the testimony to add two points: that the general supported the White House policy to add more broadband for commercial use; and that the Pentagon would try to resolve the questions around LightSquared with testing in just 90 days. Shelton chafed at the intervention, which seemed to soften the Pentagon’s position and might be viewed as helping the company as it tries to get the project launched, officials said.

Big Government supplies some of the specifics:

Gen Shelton told members of Congress that the GPS satellite constellation operates in a “quiet neighborhood” in terms of bandwidth, and it’s this lack of interference that helps shield the GPS system from harmful interference in its critical operations. The LightSquared project would be the equivalent of a rock band moving into the neighborhood and blasting its music. All the testing the military did on LightSquared’s systems indicated major disruptions in the GPS system.

The Daily Beast further reports:

The White House confirmed Wednesday that its Office of Management and Budget suggested changes to the general’s testimony but insisted such reviews are routine and not influenced by politics. And it said Shelton was permitted to give the testimony he wants, without any pressure.

The fact that the General was asked to alter his testimony at all in a way that could put the American military at risk is a disgrace. Crony capitalism is becoming a serious problem in this White House. The voters are beginning to make it clear that Chicago politics is not appreciated in Washington.

Enhanced by Zemanta