Where Did The Money Go?

On Wednesday, The Washington Examiner posted an article about how Washington is spending our money.

The article reports:

The Congressional Budget Office now projects that the federal deficit for fiscal 2024 will total $1.9 trillion, a $408 billion increase from its projection in February that the deficit would amount to $1.5 trillion. The culprit of this 27% increase in the projected deficit? President Joe Biden‘s bailouts of student loan debt and failed banks.

More than a third of the projected increase, or $145 billion, results from “revisions that the Administration made to the estimated subsidy costs of previously issued loans and from the Administration’s proposed rule to reduce many borrowers’ balances on student loans,” according to the CBO. The Federal Deposit Insurance Corp., which was directed by the White House to foot the bill for a series of bank failures even though not all the compromised accounts were insured by the independent agency, has failed to quickly recoup those losses, increasing projected outlays by another $70 billion. Together, Biden’s bailouts of the banks and of student loan debt contribute to a majority of the $408 billion increase.

More pernicious than all the student loan debt Biden is explicitly trying to cancel, often in violation of repeated pushback from the federal judiciary, is the debt taxpayers are clandestinely being forced to take on through the president’s income-driven repayment scheme for student loans borrowers are nominally expected to repay again after a multiyear pause.

This is an election year. President Biden is attempting to buy votes. However, younger voters are not necessarily buying what he is selling. Younger voters fresh out of college, trade school, or high school are discovering the high cost of housing, gasoline, and groceries. Some of the smarter ones are also looking at the lawfare against President Trump and not liking what they see.

If the November election is honest, it is going to be very interesting–many stereotypical voting blocs are changing rapidly.

Honoring The People Who Pay You–Not The People Who Protect You

On Tuesday, The Daily Caller reported:

The Biden administration “strongly opposes” a proposal to raise the pay of junior enlisted service members in the military — even after nearly spending seven times the proposed amount on Ukraine and the broader region’s security.

The House Armed Services Committee’s (HASC) draft of the 2025 National Defense Authorization Act (NDAA) would give all junior troops a pay raise, representing a rough total of $24.4 billion over five years, according to the Congressional Budget Office. The Biden administration said in a statement on Tuesday that it does not support the proposed “significant, permanent” pay hike until it has had a chance to conduct a compensation review.

“The Administration is strongly committed to taking care of our Servicemembers and their families, and appreciates the Committee’s concern for the needs of the most junior enlisted members, but strongly opposes making a significant, permanent change to the basic pay schedule before the completion of the Fourteenth Quadrennial Review of Military Compensation,” the White House budget office said.

The article concludes:

“Joe Biden must hate our military,” Republican Florida Rep. Matt Gaetz, also on the committee, told the DCNF. “While families of our junior enlisted struggle on food stamps, this administration opposes their pay raises and wants to force-feed them pronoun training and drag queen story hour. If Biden had any PRIDE at all in our troops, he’d support the long overdue pay raise House Republicans have passed.”

The White House did not immediately respond to a request for comment.

Ukraine is a fantastic money-laundering tool for Democrat (and some Republican) campaigns. It is an almost unlimited source of funds for American politicians. It also provides the President of Ukraine with a lifestyle that is unimaginable to his countrymen. It may be time to unelect every Congressman who has voted continuously for Ukrainian aid.

Inflation Isn’t Over, And The Damage Will Continue

No one who has bought groceries recently or filled up their gas tank believes inflation is over. Yet recently economist Paul Krugman declared, “Inflation is over. We won.” I guess he doesn’t do the grocery shopping in his family. Yes, inflation has slowed. However, we are still dealing with the price increases that occurred in the past three years. If the baseline is where we were when President Biden took office, the inflation rate is somewhere over 15 percent. If we are talking about the past few months, the number is much lower. However, that number is in addition to the 15 percent that we have already been dealing with.

On Saturday, Real Clear Politics posted a commentary about the damage the Biden administration has done to the economy.

The commentary notes:

The truth is that the wild inflation, high interest rates, bank failures, and other economic harms of the last three years were all entirely avoidable and all entirely caused by President Biden and the Democrats’ arrogant and unwise policies.

This is not “Monday morning quarterbacking.” Some of us were saying this well before the fact. My May 7, 2021 column (“Joe Biden, Economy Killer”) accurately forecast the inflation, rising interest rates, and rising government debt service long before the Biden administration even acknowledged the risks were real.

The U.S. economy did not need another giant stimulus plan when Biden and the Democrats took control in 2021. The U.S. gross domestic product, knocked down by the COVID shutdown in the first half of 2020, had jumped up by a record 33% in the third quarter of 2020 and by another 4% in the fourth quarter, all before Biden took office. The S&P stock market had risen 16.3% in 2020. Employers were waiting for workers to come back to work, and another stimulus package had been passed with bipartisan support in the last quarter of 2020. Happily, the inflation rate was only 1.4% as 2020 ended, with a one-year Treasury rate of just 0.10% and a 10-year Treasury rate of just 0.95%

The commentary concludes:

The Congressional Budget Office last week revised its government deficit estimates upward, expecting $48.3 trillion of government debt by 2034. Interest expense on the federal debt this year has already jumped up to $870 billion, which is larger than the defense budget. Additionally, Biden’s higher interest rates will continue to increase debt service costs as old government debt rolls off and is replaced at higher costs. The risk is stark: a 3% higher interest rate on even the existing $33 trillion level of federal debt equates to $1 trillion of extra federal interest expense each and every year, on top of the already giant existing debt service number.

There is no painless way to pay down this deficit or cover this extra annual government interest cost. The need for billions and billions of extra tax money or budget cuts will fuel fierce political fights, populist divisions, and national anger for years to come. All this public unrest will also be the legacy of the bad Democratic economic policies since 2021. Professor Krugman, when it comes to Bidenomics, “We lost.”

I believe we can turn this around, but it will take an administration that includes people who have worked in the private sector and run businesses. Whatever administration is elected in November needs to include people hired for their qualifications and experience–not for any other reason.

The Festivus Report

On Friday, Fox News posted an article about Rand Paul’s annual Festivus Report.

The article reports:

Sen. Rand Paul, R-Ky., released his annual Christmas “Festivus” report Friday for the ninth year in a row, outlining $900 billion in government waste. 

Among notable instances, the National Institutes of Health allocated funds to study Russian cats on treadmills, photos of Barbies were utilized as identification to obtain COVID relief funds, the Department of Defense lost $169 million of outdoor-stored military gear, $6 million went towards tourism in Egypt by the United States Agency for International Development, and the Small Business Administration provided over $200 million to “struggling” music artists such as Post Malone, Chris Brown, and Lil Wayne.

Up from $30 trillion in debt in 2022, this year’s debt amounts to $34 trillion, the report also highlights. 

“Who’s to blame for our crushing level of debt? Everybody,” Paul wrote in the report. “This year, members of both parties in Congress voted to raise the debt ceiling, which empowered the government to borrow an unlimited amount of money until 2024. As Congress spends to reward its favored industries and pet projects, the American taxpayers are forced to pay the price through recordhigh inflation and crippling interest rates.”

He added: “The same big spenders teamed up, yet again, to continue sending Americans’ hard-earned money to foreign countries and funding endless wars, all while ignoring our porous southern border.”

The article concludes:

The Congressional Budget Office forecasts a staggering increase in national debt, estimating an average addition of $2 trillion annually for the coming decade. This translates to over $5 billion in debt daily over the next 10 years. 

“As always, taking the path to fiscal responsibility is often a lonely journey, but, as I’ve done in years past, I will continue my fight against government waste this holiday season,” Paul wrote. 

Last year, Paul’s report broke down $482 billion in wasteful spending, from the billions spent giving COVID relief funds to ineligible people to a $118,000 study on whether Marvel movie villain Thanos would really be able to snap his fingers while wearing the Infinity Gauntlet.

Until the uni-party is unelected in Washington and in many of our states, we can expect more of the same.

 

There Is A Real Plan

On Tuesday, Breitbart posted an article about the Republican plan to deal with the debt ceiling.

The article reports:

The Congressional Budget Office (CBO) said in a report released on Tuesday that the Limit, Save, Grow Act would reduce the deficit by $4.8 trillion over the next ten years.

That is a really good idea.

The article explains:

The CBO report found that the debt limit plan would drastically cut the growth of spending between 2023 and 2033. The nonpartisan analysis agency found:

  •  The bill’s cap on discretionary funding would result in savings of $3.194.5 trillion over ten years
  • Scrapping energy tax credits would save $569.5 billion
  • Reducing funding for the IRS would save $119.7 billion
  • Implementing work requirements [for] Medicaid, Temporary Assistance for Needy Families (TANF), and the Supplemental Nutrition Assistance Program (SNAP) would save $120 billion
  • Rescinding funding for unspent coronavirus aid would save $29.5 billion
  • Requiring the Department of the Interior (DOI) to conduct oil and gas leases would save $3.4 billion

House Republican leadership hopes to pass the debt limit bill this week to pressure President Joe Biden and Senate Democrats to negotiate a debt ceiling compromise.

As the debt ceiling deadline, likely in June, looms ever closer, battleground Democrats continue to fret over the president’s refusal to continue negotiating with McCarthy over a long-term deal.

I honestly don’t know if Democrats have any incentive to work with Republicans on this. Most Americans won’t even notice the debt ceiling unless the government shuts down. At that point the media will make it look like the shutdown was the Republicans fault. We need to stop raising the debt ceiling, but no one is willing to take the political hit that would be the result of doing that. Until Americans are properly schooled on the impact of our ever-increasing debt, I think this is a losing battle for Republicans. They should probably fight a debt ceiling increase for moral reasons alone, but unless the public can be educated, the Republicans will not succeed here.

Actions Have Consequences

Yesterday The Washington Examiner posted an article warning of the consequences of passing the Biden administration’s infrastructure bill.

The article reports:

We are often told to “follow the science.” This is true of wearing masks, how we teach children to read, and addressing the perils of climate change. So we should probably better do the same with the economy, no?

Consider the new Congressional Budget Office report on that very thing, the budget, the economy, and how we tax it. Let’s assume that we want the Federal government to spend lots more money on infrastructure. I don’t, because I’m certain that the money will be sprayed up the wall like the last few trillions were.

Still, the CBO report is useful in laying down the basic science of taxation. Whatever we tax, we’ll get less of. Tax corporations and there will be less corporate activity. Tax the income from capital investment and there will be less investment. Tax labor incomes and fewer will work so hard to make that money. Put simply, if people get less from doing something, they’ll do less of it. Toddlers grasp this: they will do more for two pieces of candy and less for one. In the jargon these are known as “deadweights.” That is to say, things that do not happen, economic activity that is wiped out by taxation.

Yes, it’s true that we can buy lovely things with the money that has been taxed, or at least we might. But it is still true that the act of taxing itself reduces economic activity. Worthwhile tax and spend is defined as that which is even more lovely in its results than what we’ve lost by financing it.

The Democrats seem to be unaware of the Laffer Curve. That is the principle that says that after people who produce wealth are taxed to a certain point, they will stop producing wealth. We will reach a point where the only way to pay for our bloated government is to devalue our currency. That is happening to some extent right now. The result of that will be hyper-inflation and a total collapse of our economy. That is the end result of unbridled tax and spend programs.

Changing The Rules

The Federalist posted an article today about some of the rules that are being put in place in the House of Representatives. These rules will damage America. They will also result in major Democrat losses in the House of Representatives in 2022. The question is how much damage can the Democrats do in two years.

The article reports:

House Democrats blocked a Republican measure Monday to cut a provision in the Democrats’ rules package for the 117th Congress exempting favored legislation from PAYGO requirements such as the socialist Green New Deal.

PAYGO requirements stipulate that any legislation spending money must include a “payfor” component that could come in the form of additional legislation analyzed by the Congressional Budget Office (CBO) offering members insight into the true cost of any new spending bill. Under the proposed Democratic rules, however, proposals such as the Green New Deal are exempt from the requirement, protecting its supporters from having to answer how to cover its initial estimated $93 trillion price tag.

Are there any fiscally responsible Democrats that could have stopped this?

The article continues:

“On only day two of the 117th Congress, House Democrats are already attempting to strip Americans of the transparency they deserve in order to push through an expensive progressive wish-list,” House Budget Committee Republican Ranking Member Jason Smith of Missouri admonished lawmakers. “This exemption is irresponsible since arguably it could apply to any radical, progressive, out-of-touch legislation dreamed up next by House Democrats.”

Democrats blocked the Republicans’ Motion to Commit, striking the exemption by a margin of 217 to the GOP’s 203 voting in favor. The radical proposals Smith prophesied are certainly in the pipeline.

The article concludes:

With few votes to spare on major legislation, Pelosi will need to keep her caucus’s farthest-left members on board. The final check on two years of Democrats passing every item on their wish list with an incoming Democratic president then falls to the Senate, control of which will be decided in the Georgia Senate runoffs Tuesday.

Hang on to your wallets. This is going to get very ugly and very expensive.

What Happens If The Trump Tax Cuts Are Repealed?

Yesterday The Washington Examiner posted an opinion piece with the following title, “Democrats want to repeal most important part of Trump’s tax cuts.”

I would like to note at this point that according to CNS News:

The federal government set records for both the amount of taxes it collected and the amount of money it spent in the first four months of fiscal 2020 (October through January), according to data released today in the Monthly Treasury Statement.

So revenue has increased under the tax cuts–not decreased.

The piece at The Washington Examiner continues:

Democrats are vowing to repeal the GOP’s 2017 tax reform bill, starting with raising the corporate income tax. The Democrat-controlled House Ways and Means Committee recently held a hearing laying the groundwork for this tax increase, falsely claiming that the corporate rate was lowered at the expense of middle-class families.

Reality belies this rhetoric. The corporate tax reduction from 35% to 21% has benefited families and workers alike by growing the economy, raising wages, and creating new jobs.

It’s no coincidence that, in the two years since the tax cut, unemployment has dropped to a 50-year low. It has hit all-time lows for key demographics including women, African Americans, and Hispanics. Thanks to these pro-growth policies, nearly seven million jobs have been created since Trump took office, and there are now fewer unemployed people than job openings.

Wages have also grown.

Annual hourly earnings have grown by 3% or more in the past 12 months. In fact, real median household income has increased by over $5,000 during Trump’s tenure, according to data released by Sentier Research. In addition to this wage growth, the tax cuts have allowed businesses to expand, hire new workers, and increase pay and benefits.

Savings are also on the rise.

When Trump was elected president, the Dow Jones sat at 18,332. It is now at roughly 29,000, an increase of about 60%. This stock market growth benefits the 100 million 401(k)s, the 46.4 million households that have an individual retirement account, and the nearly $4 trillion in public pension funds, half of which is invested in stocks.

And the Congressional Budget Office has revised revenue up by over $1.2 trillion, 80% of the cost of the tax cuts, due to improving economic conditions since the tax cuts were passed.

You have to wonder why the Democrats would want to undermine an economy that is obviously working for everyone. If federal revenue is at record levels, why would you change things?

The piece concludes:

Utility savings for households are another benefit of the corporate rate reduction. As a direct result of the corporate rate cut, utility companies in all 50 states reduced their prices. That means lower monthly electric, gas, and water bills for households and businesses. If Democrats raise the corporate rate, they will be saddling households with higher utility bills.

The Left won’t stop there, either.

Democrats have proposed trillion-dollar annual tax increases that include payroll tax increases, small-business tax increases, income tax increases, and even an increase in the “death tax.” The fact is, corporate tax cuts have grown the economy, lifted wages, and created more jobs. Democrats would undo these gains and harm middle-class families.

Are the Democrats economically ignorant, or do they simply not care about the impact of their policies on everyday Americans?

We Need To Get Healthcare Right

Yesterday Issues and Insights posted an article about ObamaCare 10 years out.

The article reports:

Based on polling data, Obamacare has been a miserable failure, and Obama will be far from the last president to grapple with this issue.

The most recent Wall Street Journal/NBC News poll finds that health care is at the top of the nation’s priority list, with 24 percent of respondents listing it as their top priority for the federal government. Next on the list is immigration, at 18 percent, and after that, economic growth at 14 percent. 

The poll also found that 42 percent list health care as either their first or second choice on the priority list.

Back in June 2008, when Obama was running for president, only 8 percent rated health care as a top priority, just 20 percent as their first or second priority. Of course, the economy was in a recession and the country at war with Iraq, both of which weighed heavily on the public’s mind at the time.

But even in earlier years when the economy was doing well, health care ranked far lower on the list of priorities than it does today. In June 2006, only 14 percent ranked it as No. 1 on their list. A year later, 15 percent said it was their top priority.

The public has not been impressed with ObamaCare:

An ongoing Gallup survey finds that the public was actually more satisfied with their own coverage and quality of health care in 2007 than they were in 2018. Other surveys find cost remains a major complaint.

The article lists a few problems with ObamaCare:

It has done nothing to slow, much less reverse, the rising cost of health care. In fact, Obamacare itself caused premiums in the individual market to more than double in its first four years.

…National health spending, which was 16.3 percent of GDP in 2008, is now 17.9 percent and is slated to hit 19.4 percent by 2027. Per-capita spending on healthcare jumped from $7,898 to $10,739 over those years.

Far from driving the deficit down, Obamacare is pushing federal red ink up. The Congressional Budget Office has calculated that repealing Obamacare would cut the deficit by some $473 billion in the first 10 years

Rather than admit failure, the Democrats simply want to throw more money at it.

The article concludes:

Naturally, because of these failures, the Democrats’ answer is to dump even more taxpayer money into government-run health care programs, with most now favoring a $32 trillion plan developed by socialist Bernie Sanders to have the government nationalize the entire health insurance industry.

Only in government, and only among fans of big government, are massive failures like Obamacare rewarded with still more government. 

Revising The Numbers

Economists seems to have a problem lately correctly predicting economic growth. They always seem a bit surprised when the numbers come in higher than what they predicted. Well, it has happened again.

The Gateway Pundit is reporting the following today:

The fourth quarter GDP number was released on Thursday and beat expectations at 2.6%Economists expected a 2.2% GDP rate.

CNBC says the GDP report was only preliminary, it would mean average growth for the year was 3.1 percent.

...Ronald Reagan brought forth an annual real GDP growth of 3.5% . Barack Obama, with his abysmal policies, was lucky to average a GDP growth rate of slightly greater than 1%.

Obama ranked as the fourth worst presidency on record in GDP growth at 1.457% . Only Herbert Hoover (-5.65% ), Andrew Johnson (-0.70% ) and Theodore Roosevelt (1.41% ) had lower average annual GDP growth than Barack Obama.

The Commerce Department announced in the first quarter of 2016 that the US economy expanded at the slowest pace in two years with a GDP growth rate of an anemic 0.5% . The second quarter GDP growth rate was not much better at 1.2% . (The 3rd quarter GDP rate was not yet announced by the time we drafted our post before the 2016 election.)

…Barack Obama was the first President ever to never surpass an annual rate of 3% GDP growth!  This resulted in Obama being rated the worst economic President ever!

Obama’s Congressional Budget Office (CBO) forecast in 2016 that America would never see 3.0% economic growth again. They had given up and Hillary was their candidate.

President Trump did win the election in 2016 and his Director of the White House National Economic Council Larry Kudlow said in early December that the U.S. economy is growing at a rate greater than 3% –

This is good news for people in the job market and people entering the job market. Jobs are becoming more plentiful and salaries are rising.

The Real Numbers

On Friday The Daily Signal posted an article about the consequences of winding down ObamaCare. It seems that the press and the Congressional Budget Office lied to Americans about the consequences of repealing ObamaCare.

The article reports:

According to a report by the Centers for Medicare and Medicaid Services released Wednesday, the Congressional Budget Office wildly overestimated the number of people who would lose their health insurance with the repeal of the individual mandate penalty.

Initial estimates from the Congressional Budget Office said 14 million would drop off their health insurance coverage due to the elimination of the individual mandate. Then, during the height of the 2017 debate over repeal, progressives touted a leaked number from the Congressional Budget Office claiming that 22 million people would “lose” their insurance if Congress repealed the law.

However, as health care analyst Avik Roy pointed out, what made this number so high was the inflated number of people expected to lose their insurance due to repeal of the mandate—about 73 percent to be exact. So, it wouldn’t be 22 million Americans losing their insurance. Most of those in the projection would simply be choosing to opt out of insurance.

And it turns out even that wasn’t true. A far smaller number of Americans appear to be opting out of insurance since the individual mandate’s repeal. Only 2.5 million more people are expected to go without insurance in 2019 due to its repeal, according to the latest report, and that number is expected to decline in the years ahead.

Putting the government in charge of healthcare is always a bad idea. Economist Milton Friedman once stated, “If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand.” The government is not responsible for providing healthcare to anyone. Charitable hospitals and charitable organizations are welcome to take on that responsibility, but government healthcare is nowhere to be found in the U.S. Constitution.

The article further states:

Doug Badger, a visiting fellow in domestic policy studies at The Heritage Foundation, told The Daily Signal that Congressional Budget Office analysis has been a chronic problem.

“When it comes to the individual mandate, CBO has never let the facts affect their wildly inaccurate estimates. CBO continued to forecast that millions of insured Americans would suddenly become uninsured if the mandate were repealed,” Badger wrote in an email to The Daily Signal. “CBO’s faulty estimates misled the public into believing that repealing Obamacare would lead to a vast increase in the number of uninsured. Bad estimates produced bad policy.”

Many conservatives are fed up with the deference shown to the agency, given it’s poor track record and track of transparency. Reps. Mark Walker, R-N.C., and Jim Jordan, R-Ohio, suggested in 2017 that it’s time to stop “blindly” following the agency’s predictions.

“The value of having outside experts review legislation cannot be understated,” they wrote for the Washington Examiner. “But continuing to hinge congressional actions on the projections of an agency that has proven to be so consistently wrong does a disservice to not only members trying to represent their constituents, it primarily does a disservice to the public.”

I wrote in 2017 that perhaps we should be more skeptical toward the findings of independent agencies like the Congressional Budget Office. It seems those doubts were valid.

People based their votes on the information they were given. It is a shame that a government agency provided inaccurate information.

Something To Consider

Decisions that impact national security should be made on the basis of what is best for America. Unfortunately that has not been the case as of late.

On January 10th, The Washington Times reported:

President Trump has proposed spending $18 billion over the next decade to construct a new and improved border wall between the U.S. and Mexico. While some lawmakers have criticized the both the cost and the plan, a new analysis reveals the expenditure is relatively small compared to other federal spending.

“That $18 billion would equal just 0.0338 percent of the $53.128 trillion the Congressional Budget Office currently estimates the federal government will spend over that same 10-year period,” wrote Terence P. Jeffrey, editor-in-chief of CNSNews.com.

It also equals only 2.7 percent of the money the federal government will spend on the food stamp program, Mr. Jeffrey wrote. The Supplemental Nutrition Assistance Program will eat up $679 billion in the 10 fiscal years from 2018 through 2027, according to budget office’s estimate.

He figured that this is 37.7 times as much as the $18 billion which would go to Mr.Trump’s proposed border wall.

The cost of the wall is also 0.34 percent of the $5.232 trillion which the federal government will spend on Medicaid over the next 10 years, and 0.26 percent of the $6.838 trillion allotted to national defense in the next decade.

So this battle is obviously not about money. We also have to realize that if either the Democrats or the Republicans were serious about border security, the wall would have been built by now. So why don’t we have a wall?

Carroll Quigley one wrote:

“The argument that the two parties should represent opposed ideals and policies, one, perhaps, of the Right and the other of the Left, is a foolish idea acceptable only to doctrinaire and academic thinkers. Instead, the two parties should be almost identical, so that the American people can throw the rascals out at any election without leading to any profound or extensive shifts in policy. Then it should be possible to replace it, every four years if necessary, by the other party, which will be none of these things but will still pursue, with new vigor, approximately the same basic policies.” ~ Carroll Quigley

The Democrats and the establishment Republicans have a shared policy on open borders–they support them. The Democrats want voters and the Republicans want cheap labor. Until someone wants the safety of the American public, we have a problem.

My, How Times Change

Remember when the Democrats told us that ObamaCare was not a step in the direction of government-controlled single-payer healthcare? Well, that statement is now inoperative.

The Washington Examiner reported the following yesterday:

House Budget Committee Chairman John Yarmuth, D-Ky., has asked the Congressional Budget Office to analyze the effects of shifting all healthcare costs onto the federal government, a first step toward the “Medicare for all” legislation sought by progressives.

…Yarmuth said in a statement that his request for the score is aimed to inform House hearings on “single payer,” proposals. Such hearings would be the first step in the process toward passing legislation enacting single payer systems, a top goal pursued by progressives like Sen. Bernie Sanders, I-Vt., and Rep. Alexandria Ocasio-Cortez, D-N.Y.

The article concludes:

The study concluded that overall spending, not just government spending, would be $2 trillion less compared to where spending is projected under the current healthcare system, but that would come mostly through cutting payments that hospitals and other providers were getting from private insurance by about 40 percent. Higher taxes may be under consideration to have Medicare payments align more closely with those of private insurers.

Sen. John Barrasso, R-Wyo., had asked CBO to score the Medicare for All Act introduced by Sanders. In taking up various requests, CBO analysts tend to focus on bills that are closer to passage.

If you read this blog on a regular basis, you have seen this quote before, but here it is again:

Milton Friedman, “If you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand.”

Britain has single-payer health care. In March 2017, The Daily Wire posted an article about the problems with the British health care system.

These are some of the highlights from the article:

“Pressure on all services is rising and care is increasingly being rationed. Waiting lists should not be rising, and yet they are,” said Mark Porter, council chair of the British Medical Association (BMA).

“Doctors always want to deliver the best possible care for our patients, but we can’t continuously plug gaps by penny pinching and poaching from elsewhere in an overstretched NHS.”

…A study conducted by the London School of Hygiene and Tropical Medicine concluded that around 750 patients a month – one in 28 – pass away due to subpar quality of care, which includes “inattentive monitoring of the patient’s condition, doctors making the wrong diagnosis, or patients being prescribed the wrong medicine.” In other words, patients needlessly die as a result of the incompetence of the NHS.

For example, in January an elderly woman died from cardiac arrest after waiting 35 hours on a trolley because there was a shortage in hospital beds. A 73-year-old man also died from an aneurysm in the same hospital as he languished in the waiting room.

Please follow the link above to read the entire article. Note that single-payer health care is government-controlled. Do you really want the government controlling your health care?

Six Major Challenges In 2019

On December 28th, Investor’s Business Daily posted an editorial listing what their editors considered would be the top six issues of 2019. The title of the editorial is, “Will 2019 Be Happy? It Depends On How Washington Handles These 6 Challenges.” I suspect that is true.

The editorial lists the six items:

1. The Federal Reserve

2. Trade

3. Immigration

4. The Coming Budget Battle

5. Slaying The Regulatory Dragon

6. Fixing Health Care ‘Reform’

Here are some of the observations from the editorial on each item:

The Fed has raised its benchmark funds rate eight times over two years in pursuit of a “neutral” rate. Its most recent rate hike, coming about a week before Christmas, was followed by a steep decline in stocks and growing concerns that the economy might fall into recession next year if the central bank follows through on its plan to raise rates at least twice more.

It’s of more than academic interest that all 11 of the U.S. recessions since World War II were preceded by a sharp run up in Fed rates. Every one of them. It’s not a record of which to be proud.

…Despite bitter criticisms, President Trump successfully concluded a “new Nafta” deal with both Canada and Mexico covering $1.3 trillion in trade. The deal closes a number of holes in the old Nafta, increasing U.S. access to Canadian dairy markets, for instance, while also making cars tariff-free if 75% of their parts are made in the U.S., Canada or Mexico. All three countries signed off on the deal. The only question is, will it ever go into effect?

With Democrats controlling Congress and just six months for the trade deal to go into effect, some worry that major changes will be requested. President Trump has asked that either the new U.S.-Mexico-Canada Agreement be approved outright, or revert to the pre-Nafta trading rules. Congressional Democrats may even challenge Trump’s right to make a deal, putting the so-called USMCA in limbo. Stay tuned.

…With Americans eager to control immigration, as polls repeatedly show, Democrats may decide that negotiation rather than confrontation is a better tactic. That could mean a deal for a pathway to citizenship for the millennial illegal immigrant “dreamers,” many of whom have lived in the U.S. for most of their lives despite not having citizenship. With an estimated 22 million illegals in the U.S., many states are eager to gain some stability in our immigration policy.

…This year’s budget battle over funding the wall will likely pale in comparison to next year’s. The continued growth in entitlements, compounded by the sharp rise in interest payments, thanks to the Fed’s rate hikes, will balloon the deficit. The Congressional Budget Office’s last official projection pegged the deficit for 2019 at $981 billion. It will likely end up topping $1 trillion.

…But as we’ve pointed out many times, the problem isn’t tax cuts, it’s the unwillingness of anyone in Washington — including Trump — to deal with entitlement programs that have swamped the federal budget. Trump and the GOP will have to stand firm on taxes next year, while grappling with a rising tide of debt that will soon surpass $21 trillion.

…ObamaCare limped along for another year, with premiums for 2019 falling, overall, after years of massive double-digit increases. Trump took several steps to improve ObamaCare. The most important fix was to breathe life back into the short-term insurance market that President Obama tried to snuff out to protect the ObamaCare exchanges. Unfortunately, since Republicans blew their chance at repeal, the best we can hope for is that Trump will continue to tweak the law where he can. But he shouldn’t shy away from fighting for more free-market reforms. Should Democrats resist, or start pushing for socialized “Medicare for all,” it will create an opportunity for Trump to paint Democrats as big-government extremists.

The article concludes:

The coming year will be eventful, with many of Trump’s main initiatives set for action by Congress — a Congress, as we noted, that won’t be as friendly to Trump as the last one. Whether Trump and the Democrats can, as the bumper sticker says, coexist, or whether the Trump agenda founders on a never-ending stream of congressional investigations and hearings on the White House, remains to be seen. We guarantee it won’t be boring.

Get out the popcorn.

If It’s Not About The Money, What Is It About?

In January of 2018, The Washington Times noted that the estimated $18 billion over the next decade spent on a border wall between the United States and Mexico would be roughly 0.0338 percent of the $53.128 trillion the Congressional Budget Office currently estimates the federal government will spend over that same 10-year period. So what is all the fuss about?

Yesterday WWF came to the Oval Office in the White House when Representative Nancy Pelosi and Senator Chuck Schumer discussed the border wall with President Trump. YouTube posted the video:

The battle is not about money–it’s about votes. The Democrats have lost some of the voting blocs they have counted on to win elections–they can no longer be sure of the working man’s vote or the union vote. So how are they going to win elections? They are counting on the minority vote. The Democrats are afraid that if the wall is built, they will lose the Hispanic vote.

According to the Pew Research Center, this is how Hispanics voted in 2018:

According to a USA Today article posted November 9, 2016, President Trump did surprisingly well among Hispanic voters:

Hispanics favored Democratic candidate Hillary Clinton 65% to 29%, a 36-point difference that helped her secure winning margins in states like Nevada and Colorado and kept her competitive late into the night in other key battleground states.

But that margin, based on exit polling conducted by Edison Research, was smaller than the 71%-27% split that President Obama won in 2012. And it was smaller than the 72%-21% her husband, former president Bill Clinton, won in 1996.

Because the Democrats are becoming more dependent on the votes of minority groups to win elections, it is easy to understand why they would oppose any legislation or spending that most cost them votes in the minority community.

The Real Numbers

Yesterday Investor’s Business Daily posted an editorial about the federal deficit and federal revenues. The numbers tell a very different story than the one the media would have you believe.

The editorial reports:

The latest monthly budget report from the Congressional Budget Office shows the deficit jumping $102 billion in just the first two months of the new fiscal year.

…A true apples-to-apples comparison, the CBO says, shows that the deficit climbed by just $13 billion.

So, no, the deficit is not soaring.

The editorial explains:

In fact, the CBO report shows that overall tax revenues climbed by $14 billion in the first two months of the year, compared with the same months last year. Which means they continue to hit new highs.

The CBO report shows that combined income and payroll taxes were the same in the first two months of the new fiscal year as they were last year. That’s even though far less money was withheld from paychecks thanks to the Trump tax cuts.

It also found that corporate income taxes went up by $5 billion. That’s despite the “massive corporate tax giveaway” that Democrats want to repeal.

Why are these revenues flat or up? Simple: The tax cuts help spur accelerated economic growth, which create jobs and spark income gains. More workers and higher wages mean more tax revenues. On the corporate side, a bigger economy means more profits, which even when taxed at lower rates can produce more revenue. This is exactly what advocates of Trump’s pro-growth tax cuts said would happen.

Meanwhile, revenue from “other sources” climbed by $8 billion. (To be clear, at least some of that $8 billion came from the re-imposition of ObamaCare’s nefarious tax on insurance premiums, which Congress had suspended the year before.)

But while revenues climbed by $14 billion, spending in the first two months of the new fiscal year climbed by $27 billion.

The obvious solution to the deficit problem is to limit spending. If we can’t agree on that, we could lower taxes again to increase revenue further, but I suspect that would really cause some Congressional heads to explode.

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.

The Economic Impact Of Tax Cuts

First of all, let’s take a short walk down memory lane to a Washington Post article from November 20, 2017.

The article explains how the Democrats plan to use the tax cut plan in the 2018 mid-term elections:

The goal of the ads will be to hit two messages. The first is that the GOP changes to the tax code themselves would be enormously regressive, showering most of their benefits on the wealthy while giving crumbs to working- and middle-class Americans or even raising their taxes. The second is that these tax cuts would necessitate big cuts to the safety net later — the ad references $25 billion in Medicare cuts that could be triggered by the GOP plan’s deficit busting — further compounding the GOP agenda’s regressiveness down the line.

Geoff Garin, a pollster for the Democratic super PAC Priorities USA, tells me that his polling shows that this combination alienates working-class whites, particularly Obama-Trump voters. “They are fundamentally populist in their economic views, and they find big breaks to corporations and the wealthy especially heinous when the flip side of that means cutting Medicare and Medicaid,” Garin said.

That was the original plan. Now lets look at an article posted yesterday in The New York Post about the results of the tax cut plan.

The New York Post reports:

We are already starting to see a fiscal dividend from Trump’s pro-business tax, energy and regulatory policies. The Congressional Budget Office reports that tax revenues in April — which is by far the biggest month of the year for tax collections because of the April 15 filing deadline — totaled $515 billion. That was good for a robust 13 percent rise in receipts over last year. ‎

…But there’s another lesson, and it’s about how wrong the bean counters were in Congress who said this tax bill would “cost” the Treasury $1.5 trillion to $2 trillion in most revenues over the next decade. If the higher growth rate Trump has already accomplished remains in place, then the impact will be well over $3 trillion of more revenue and thus lower debt levels over the decade.

Putting people back to work is the best way to balance the budget. Period.

The article concludes:

No one thought that Trump could ramp up the growth rate to 3 percent or that his policies would boost federal revenues. But he is doing just that — which is why all that the Democrats and the media want to talk about these days is Russia and Stormy Daniels.

I want to go back to the original Democrat statements about the damage the tax cuts would do to the economy. Did they really believe that or do they simply want more of our money under their control? Either way, it doesn’t say good things about them–either they don’t understand economics (see the Laffer Curve) or they lied. Obviously they have to continue lying if they want to use the tax cuts as part of their mid-term election campaign–they have already stated that they want to rescind many of the tax breaks that have resulted in the recent economic growth.

If you are inclined to vote on pocketbook issues, the only choice in November is to vote for Republican candidates for Congress.

The Impact Of The Tax Cuts

On Monday, The Washington Times posted an article about a Congressional Budget Office report on April tax revenue.

The article reports:

The federal government took in a record tax haul in April en route to its biggest-ever monthly budget surplus, the Congressional Budget Office said, as a surging economy left Americans with more money in their paychecks — and this more to pay to Uncle Sam.

All told the government collected $515 billion and spent $297 billion, for a total monthly surplus of $218 billion. That swamped the previous monthly record of $190 billion, set in 2001.

CBO analysts were surprised by the surplus, which was some $40 billion more than they’d guessed at less than a month ago.

It will be interesting to see if the CBO changes its predictions on future deficits as tax revenues increase.

The article further states:

April is always a strong month for government finances, with taxpayers filing their returns for the previous year and settling up what they owe, even as expenditures often dip for the month.

But this year was particularly strong, with receipts jumping 13 percent compared to a year ago.

The news couldn’t come at a better time for President Trump and congressional Republicans, who were facing major questions about the damage last year’s tax-cut package might do to future deficits. Just a month ago the CBO projected that the deficit would quickly soar back to $1 trillion a year.

The deficit is a problem and will be a problem in the future. Hopefully the rescissions package that President Trump sent to Congress will pass (article here), and Congress will begin to trim the out-of-control spending it is accustomed to. Our future depends on it–we are not undertaxed–Congress is overspending.

What Does The Tax Plan Look Like?

Investor’s Business Daily posted an article today detailing some of the impact of the new tax plan.

The article reports:

The Tax Policy Center (TPC), a liberal think tank, noted that more than 80% of Americans will get tax cuts under the plan just passed. And the benefits will go to every income group, not “billionaires.” This, by the way, is bolstered by other recent analyses by Congress’ Joint Committee on Taxation and by the widely respected nonpartisan Tax Foundation.

TPC estimates an average tax cut of about $2,140 per person. By the way, some 16% of the richest Americans — those in the top 0.1% of incomes — will face an average tax increase of $387,610.

Brian Riedl of the Manhattan Institute, further crunching the TPC numbers, found that while the top 1% of incomes now pay 27% of all federal taxes, they will get just 21% of the tax cuts. The bottom 80%, including the middle class, pays only 33% of all taxes, but will take home 35% of the tax cuts.

Of the 12% who will face tax hikes, they’re overwhelmingly among the rich — not the middle class.

So, no, it’s not “tax cuts for the rich.” That’s a totally bogus argument.

For that matter, so are the arguments that tax cuts tank the economy. History is replete with examples of why that isn’t true.

The article concludes:

…As history clearly shows, growth-oriented tax cuts such as these almost always have major benefits for the economy and for average workers. During the 20th century, big tax cuts in the 1920s (Harding, Coolidge), 1960s (Kennedy) and 1980s (Reagan) all yielded major growth dividends for the U.S. economy.

What’s more, those past major tax cuts were to varying degrees bipartisan. Sadly, not this time. Not one Democrat voted for them. Not one.

That’s why the Democrats and progressive left have become so utterly unhinged. They’ve failed to stop the one thing that might deny them a chance to retake both houses of Congress in the 2018 midterm elections: an economic boom.

When the economy really begins cooking, with the economy growing close to 3%, hundreds of thousands of new jobs being created and workers seeing more in their paychecks, how will they explain that to their constituents?

One of the things to remember here is the impact of cutting the corporate tax rate. Corporations don’t pay taxes–they pass them on to consumers and shareholders. When you lower the corporate tax rate, good things happen for consumers and shareholders. The other aspect of this is the relationship between the American corporate tax and corporate taxes in other countries. America had one of the highest corporate tax rates in the world. This high tax rate encouraged companies to locate their headquarters elsewhere. Lowering this tax rate makes America more competitive as a home base for businesses. The lower tax rate combined with the low cost of energy in America makes America a very attractive place to do business.

Time will tell what the impact of this tax plan will be. If all Americans do better under this tax plan, it will be difficult for Democrats to explain their opposition to it.

What Does The Senate Tax Bill Do?

Investor’s Business Daily posted an article yesterday detailing the tax cuts under the Senate Tax Bill currently being considered.

The article takes on some of the fiction about the bill currently being reported:

The Senate tax bill would reduce income taxes for people at every income level — even those who don’t pay taxes. That’s the official conclusion of the Joint Committee on Taxation. So why are Monday’s headlines screaming that the tax cuts would make the poor much worse off?

“Senate GOP tax bill hurts the poor more than originally thought, CBO finds.” That’s the headline in the Washington Post describing a Congressional Budget Office report released on Sunday.

The story claims that the “Republican tax plan gives substantial tax cuts and benefits to Americans earning more than $100,000 a year, while the nation’s poorest would be worse off.” Later, the Post story talks about the bill’s “harsh impact on the poor.”

The article explains why that story is false:

First of all, the CBO doesn’t describe the Senate bill as being “harsh” to the poor. That’s the spin put on by the reporter.

The report does, however, include a table that shows how the bill would affect federal revenues and spending by income group. And, indeed, it appears to indicate that those making less than $40,000 will take it on the chin, while those making more than $100,000 make out like bandits.

But note the word “spending” above. Since this is a tax-cut bill, why is “spending” part of the calculation at all?

That’s in there because the CBO includes the spending impact of the Senate bill’s repeal of ObamaCare’s individual mandate.

The CBO numbers assume that if the mandate is gone, people will drop their insurance. It does not consider the fact that many people pay the fine rather than the high cost of insurance. The tax bill returns the freedom to consumers to make their own choices about health coverage.

The article also includes a chart of tax savings (looking only at the tax cuts and savings in the tax bill):

If the tax cuts are passed, we can expect economic growth to return to our previous normal of about 3% (or more). We can expect people to leave welfare and join the work force because of a booming economy that results in higher wages. If the tax cuts fail, we can expect a Democratic Congress that will raise taxes, slow economic growth, and spend its time trying to impeach President Trump. It’s up to Congress to make the choice.

Fact Checking The Democratic Talking Points On Tax Reform

Guy Benson posted an article at Townhall today about the Democrat‘s claim that if the tax reform bill is passed, millions of people will lose their health insurance.

The article reports:

In spite of a torrent of liberal attacks, independent analyses have confirmed that the plan would boost economic growth, create nearly one million new full-time jobs, and reduce the tax burden on the vast majority of Americans; on average, taxpayers in every income group would receive a tax cut.  There will be a small percentage of Americans — many of them wealthier people who itemize deductions and exploit loopholes — who would be worse off under the proposal.  Republicans would be foolish to pretend that every single household and business would emerge as ‘winners’ if reform is implemented; that would echo one of the biggest lies Democrats peddled about Obamacare.  But the data has found that an overwhelming majority of Americans, including (or even especially) the middle and working class, would benefit from the House-approved bill.  

The article explains the impact of cutting the healthcare mandate:

Regardless of where the revised number lands, dumping the mandate liberates millions of Americans to not purchase healthcare plans that they do not want or cannot afford, without getting slapped with government fines.  People making that choice for themselves and their families is absolutely not equivalent to the government taking away coverage.  Healthcare policy expert Avik Roy puts a finer point on this important truth, which underpins liberals’ mendacious claim:

[Another] category of Democratic complaints revolves around the Congressional Budget Office’s estimate that 13 million fewer people would have health insurance in 2026 if Republicans repealed Obamacare’s individual mandate. “We’re kicking 13 million people off health insurance to give tax cuts to the wealthy,” exclaimed Senate Minority Leader Chuck Schumer (D., N.Y.) on Wednesday. There are two problems with Schumer’s assertion. As Glenn Kessler, fact-checker at the Washington Post, notes, nobody is being “kicked off” their insurance. People are no longer being fined for not purchasing it. (Kessler gives Schumer two Pinocchios.) The second problem is that the CBO’s projections of the mandate’s magical powers are inaccurate, by their own admission.

The bottom line here is that Democrats do not want to cut taxes. A tax cut will stimulate the economy and undo (and expose) the economic damage done by the Obama Administration. The Washington establishment cannot afford a successful Trump presidency–it would come too close to draining the swamp. It will be interesting to see if the tax bill passes (and in what form). If the Republicans do not pass the tax bill, they will probably lose Congress in 2018. If the Republicans do pass the tax bill, the economy will grow, at least part of the Washington swamp will be drained, and Trump will be a successful President. Get out the popcorn.

 

 

There Are Two Things In Play Here

Special interests are important in Washington; lobbyists and lobbyists’ money have a lot of power. However, educated voters also have a lot of power. We are about to see a clash between special interests (lobbyists, big business, the political establishment, etc.) and educated voters. The clash is going to take place before September 30 and will involve the repeal of ObamaCare.

ObamaCare is a nightmare for many Americans–their insurance premiums and their deductibles have risen drastically over the past six years, and some middle-class Americans are forced to choose between paying their mortgage or paying their health insurance bill. ObamaCare has failed, and the Republicans in Congress have thus far broken their promise to repeal it. Democrats are offering single-payer healthcare which will break the bank, but at least the are offering something. Voters have given Congress an approval rating of about 15 percent.  Next year is an election year for all of the House of Representatives and one-third of the Senate. Congressmen (and Congresswomen) have a choice–who do they represent? Some Republicans may be getting the message that voters are important.

The Washington Examiner posted an article today with the following headline:

Mitch McConnell asks CBO to score Obamacare overhaul

That is the sound of a Congressman who is beginning to feel the impact of the grassroots of the Republican party. Someone in Washington is beginning to understand that the Republican party will go the way of the dinosaur if they do not start listening to their base. Lobbyists may have money, but there are a lot of angry voters out there.

The article reports:

Senate Majority Leader Mitch McConnell has asked the Congressional Budget Office to quickly score an Obamacare overhaul bill introduced this week, his office confirmed Friday.

The bill would take revenues from Obamacare and distribute them as block grants to states so they could write their own healthcare plans. Sen. Bill Cassidy, R-La., introduced the bill along with Sens. Lindsey Graham of South Carolina, Dean Heller of Nevada, and Ron Johnson of Wisconsin.

This is not a perfect bill, but it may have conservative support because it moves money out of Washington and back to the states.

The article states:

Supporters hope the bill can be passed through the reconciliation, would need just 50 votes to advance and pass in the Senate, assuming a tie-breaking vote by Vice President Pence. Reconciliation is a budget measure that allows passage with a simple majority rather than the 60 votes needed to block a filibuster. The Senate faces a Sept. 30 deadline to use reconciliation, according to the Senate parliamentarian.

There are three choices–leave ObamaCare in place, single-payer healthcare or this bill. This bill is not perfect, but it is the best choice of the three. If the Republicans do nothing, they will lose badly in the mid-term elections.

It is ironic that many Republican Congressmen are spending more time opposing President Trump than they did opposing President Obama.

Losing Health Insurance Because You Want To

Yesterday National Review posted an article about the claims the Congressional Budget Office (CBO) is making regarding the number of people who would lose their health insurance if ObamaCare were repealed.

The article states:

Do you want to repeal every word of Obamacare and replace it with nothing? CBO says 22 million fewer people would have health insurance. Do you prefer replacing Obamacare with a system of flat tax credits, in which you get the same amount of assistance regardless of your financial need? CBO says 23 million fewer people would have health insurance. Do you prefer replacing Obamacare with means-tested tax credits, like the Senate bill does, in which the majority of the assistance is directed to those near or below the poverty line? CBO says 22 million fewer people would have health insurance.

22 million, 23 million, 22 million—these numbers are remarkably similar even though the three policies I describe above are significantly different. Why is that?

Thanks to information that was leaked to me by a congressional staffer, we now have the answer.

Nearly three-fourths of the difference in coverage between Obamacare and the various GOP plans derives from a single feature of the Republican bills: their repeal of Obamacare’s individual mandate. But the CBO has never published a year-by-year breakout of the impact of the individual mandate on its coverage estimates.

So actually, a large percentage of the people who would lose insurance coverage if ObamaCare is repealed would choose to lose coverage because they would no longer be penalized for not having insurance. Basically, the CBO report is spin! There is also the matter of ObamaCare requiring people to pay for coverage they don’t need. Generally speaking senior citizens do not need maternity coverage or pediatric dental coverage. They should not be asked to pay for it!

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.