The Cost Of Compromise

A budget compromise was needed by both sides–establishment Republicans and Democrats for different reasons. The Republicans did not want to be blamed for another shutdown when the Continuing Resolution (CR) expired or when the debt ceiling needed to be raised (that day is rapidly approaching and there are no guarantees that either side will  handle it well). The Democrats needs to pass a budget (for the first time in five years) to change the subject from ObamaCare. Each side had their reasons. However, it bothers me that both side were willing to throw the veterans who served our country and went to war at the request of Congress under the bus.

Yesterday the Washington Free Beacon reported that the budget compromise which has passed the House of Representatives could cost military service retirees as much as $124,000 in retirement pay.

The article reports:

The Washington Free Beacon reported that under the budget agreement crafted by House Budget Committee Chairman Paul Ryan (R., Wisc.) and Senate Budget Committee Chairman Patty Murray (D., Wash.), military retirees younger than 62 will receive 1 percentage point less in their annual cost-of-living adjustment (COLA).

While new federal employees who are hired after Jan. 1, 2014 will be required to pay 1.3 percent more of their pay into their pension plans, federal retirees will continue to receive their generous pension benefits and current employees will not be required to pay more.

Please excuse my cynicism, but note that the federal employees have unions–the military does not. Unions make very large political contributions–the military does not. This is a horrible perversion of priorities. We ask our soldiers to risk their lives, and then we cut their pensions rather than cutting the pensions of civil servants who work in safety. That is simply awful.

The article reports:

A loss of one percentage point in their COLA translates into thousands of dollars in lost retirement income.

For instance, a 42-year-old who retires as an enlisted E-7 could lose a minimum of $72,000. E-7 refers to the ranks of Sergeant First Class, Chief Petty Officer (CPO), Master Sergeant, and Gunnery Sergeant.

A 42-year old Lieutenant Colonel could lose a minimum of $109,000 over a 20-year period.

If an E-7 retires at 40, they would lose $83,000. Commissioned officers could lose much more. Lieutenant colonels and commanders (an O-5 rank) who retire at 40 would lose $124,000.

Sen. Kelly Ayotte (R., N.H.) has also come out against the deal late Thursday.

“I cannot support a budget agreement that fails to deal with the biggest drivers of our debt, but instead pays for more federal spending on the backs of our active duty and military retirees – those who have put their lives on the line to defend us,” Ayotte said in a statement.

“My hope is that both parties can work together to replace these unfair cuts that impact our men and women in uniform with more responsible savings, such as the billions that the Government Accountability Office has identified in waste, duplication and fraud across the federal government.”

It will be interesting to see if this part of the bill gets changed. If not, everyone who voted for the compromise should be voted out of office.

 

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A Short Primer On The Debt Crisis

Last night Hugh Hewitt spent three hours with Representative John Campbell talking about the debt crisis.It was an amazingly educational show.

Representative Campbell’s House of Representatives web page lists some of his committee assignments:

As a member of the House Committee on Financial Services, he has taken an active part in addressing the country’s top economic issues, including mortgage lending, corporate governance, banking reform, and insurance regulation. Through the recent economic crisis, he was influential in the responses to the crisis that averted a collapse in our markets and economy. Currently, he serves on the Capital Markets and International Monetary Policy subcommittees.

John also serves on the House Committee on the Budget, where he has had a hand in crafting portions of The Roadmap for America’s Future.  This plan championed by Congressman Paul Ryan contains a comprehensive proposal to ensure health and retirement security for all Americans, to lift the debt burdens that are mounting due to reckless spending, to reform and simplify the tax code, and to promote jobs and competitiveness in the 21st century global economy.  John is also a leading author of the Taxpayer Choice Act, which would make America’s tax system simpler and fairer by providing the opportunity to take advantage of an optional flat tax, in addition to repealing the Alternative Minimum Tax (AMT).

As a Certified Public Accountant and a former small business owner, Representative Campbell provided a lot of insight into where we are in terms of our current financial crisis.

America crossed over its debt ceiling of $16.4 trillion on December 31st. What that means is that the government cannot issue any new debt. The government is required, at least temporarily, to live within their means.

There were three main points to the discussion:

1. The debt crisis is coming and it could occur at any moment.

2. The debt crisis is caused by a spending problem–not a tax problem.

3. There are immediate spending reforms that would address the problem.

One of the things that I learned from the program is how Washington spends money. There is discretionary spending and mandatory spending. Discretionary spending includes defense, government agencies, etc. Mandatory spending includes all entitlement programs. The three main entitlement programs are Social Security, Medicare, and Medicaid. Other entitlement programs include food stamps, student loans, etc. These two types of spending are funded in different ways–discretionary spending has to be approved by Congress every year and signed into law by the President. Mandatory spending is already law, and unless Congress acts to change it, the spending automatically occurs.  Therefore, when President Obama says that raising the debt ceiling is only paying the bills that Congress has voted for, he is not being entirely accurate.

We are in financial crisis. Unless the spending is slowed, we will continue to see high unemployment and slow economic growth. Until more Americans begin to pay attention and vote for economic growth, rather than against it, America will continue to decline.

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One Reason Things In Washington Don’t Seem To Be Changing

The Tea Party movement toward smaller government and lower taxes began sometime around 2009. The Tea Party has elected a number of its members to the House of Representatives in the past two elections. Why hasn’t anything changed?

One clue can be found in an article posted at RedState.com on December 3. The article points out that the conservative Republicans supported by the Tea Party are being excluded from leadership positions on the various House Committees.

The article reports:

Maybe it’s because he’s intent on repealing Dodd-Frank.  Maybe it’s because he wants to use his committee assignment to advocate winding down Fannie Mae and Freddie Mac.  Perhaps it’s because of his opposition to the $1 trillion farm bill.  Maybe it’s because he’s just too darn conservative to sit on an important committee.

Earlier today, we provided a list of those who made it onto the Super A committees.  Well, Rep. David Schweikert (R-AZ) is a conservative freshman member who was actually kicked off the Financial Services Committee.  Members are rarely kicked off committees unless there is a scandal.

David Schweikert is one of those 2010 freshmen who is actually a Tea Partier in deed as well as rhetoric.  While many freshmen folded under the pressure from leadership, Schweikert was actually removed from the Whip team because of his conservative dissent during the budget battles.

If we have the same President we have had for the past four years and the same Congressional leadership we have had for the past four years, why should we expect things to change?

Politico reported yesterday that conservative groups are protesting some of the decisions made by Boehner’s leadership team.

The article reports:

On Monday, in a closed meeting, House Republicans booted Amash, Schweikert, Huelskamp and Rep. Walter Jones (R-N.C.) from plum committee assignments. Retribution for members who voted against Boehner’s team was long discussed in leadership circles. It was low-risk for Boehner — he went after three freshman and Jones, who has long been a pariah in the House Republican establishment.

Huelskamp, who lost his seat on the Budget Committee, was particularly stung. The budget is his main issue, and he sent a blistering statement Monday evening, saying “the GOP leadership might think they have silenced conservatives, but removing me and others from key committees only confirms our conservative convictions.”

“This is clearly a vindictive move, and a sure sign that the GOP establishment cannot handle disagreement,” Huelskamp said.

If we want America to survive, Republicans have only one option–vote out the current Washington leadership and bring in the fiscal conservatives.

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Fact Checking Paul Ryan’s Plan For Medicare

Fox News posted a story today about the attacks by the Obama campaign against Paul Ryan‘s plan to reform Medicare. It seems as if the plan that the Obama campaign is criticizing is not the right plan!

The article reports:

The president’s accusations largely refer to Ryan’s 2011 plan, ignoring the fact that the House Budget Committee chairman rolled out a different version in 2012 — taking into account Democratic critiques. Though the 2012 plan is more moderate, Obama and his surrogates have all but ignored the newer version as they amp up their accusations against the Romney-Ryan ticket. 

Most glaringly, the campaign has omitted a key point. 

While Ryan’s 2011 plan proposes to give seniors a government payment to buy private insurance, his 2012 plan offers seniors a choice. 

Under the blueprint, seniors could use the payment to buy private insurance or stay in traditional Medicare. 

The bottom line here is simple–Medicare is going broke. Medicare needs to be reformed in order to survive. Taking over $700 billion out of Medicare to fund Obamacare does not help Medicare. We need a serious discussion of how to fix Medicare–not rob it blind to fund more government programs.

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Yesterday’s House Of Representatives Vote On President Obama’s Budget

Yesterday the Washington Times reported that President Obama’s proposed budget was voted on in the House of Representatives. The vote was 414 to 0. Even the Democrats in the House did not support the proposal.

The article reports:

The vote came as the House worked its way through its own fiscal year 2013 budget proposal, written by Budget Committee Chairman Paul D. Ryan. Republicans wrote an amendment that contained Mr. Obama’s budget and offered it on the floor, daring Democrats to back the plan, which calls for major tax increases and yet still adds trillions of dollars to the deficit over the next decade.

Why is it that no Democrat was willing to go on the record in support of the President’s budget proposal?

The Senate has already stated that they will not bring a budget proposal to the floor this year–despite the fact that they are required by law to pass a budget. It is truly sad that the Democrats in Congress do not have the backbone to stand up for their convictions. If they believe that higher taxes and increased spending will help the economy, why are they unwilling to vote as they believe? I happen to disagree with that idea, but if the Democrats in Congress believe it, why don’t they act on their belief?

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