Tag Archives: spending

The Fiscal Cliff “Deal”

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It’s a bad deal, and the Republicans in the House should vote it down.  Indeed, they should refuse even to take up the bill until the Senate has actually voted on the budget bill which the House passed in spring of last year, which would obviate all of this, or on the House-passed fiscal cliff solution from last September (which CBSNews claims doesn’t address the fiscal cliff, even though it significantly reduces Federal spending).

If the House Republicans accede to this deal, there’ll be no meaningful spending cuts, no chance for deficit elimination, no chance for debt pay down, the coming debt ceiling “negotiations” notwithstanding.  No, the Republicans will only be confirming their failure in summer of 2011, and their Senate failure last night, and solidifying their habit of folding under pressure.  And so it will be easy for them to fold, yet again, in two months’ time.

But quite aside from that political failure, they will be creating an economic and social failure: there is no need for the Federal government to receive yet more revenue.  Yet allowing the government to expand its raids on the private pocketbook, they will be condemning Americans to existence as government wards.  After all, President Barack Obama is on record in his victory speech yesterday as saying he intends to use this tax increase to fund additional “welfare,” rather than to pay down the debt, and as saying he wants yet more tax increases in the next round of talks—with which to expand “welfare.”

Even the chump change spending cuts in this deal represent abject surrender for the emasculated party.  The deal agrees to slip the sequester by two months, but that only achieves a spending cut of $24 billion.  That’s one surrender, but it could have been choked down in favor of dealing seriously with spending in the coming debt ceiling debate.  However,

Republicans had insisted the cuts of $24 billion be offset with savings in other areas.  The White House wanted some of the offset to be in the form of tax increases, not just other spending cuts.

Republicans folded (there’s that habit, again).

The deal pays for delaying the sequester with a mix of new taxes and spending cuts[.]  …$12 billion would come from a shift in the rules affecting workplace-based 401(k) plans.

A tax increase from which President Barack Obama’s union allies are carefully shielded, no matter their incomes.

This is a bad deal.

Kill it.

Some Outcomes of the Obama Fiscal Cliff

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Sudeep Reddy described, in a recent Wall Street Journal op-ed, a few that will occur in the coming year.

  • Jan 1: New provisions take effect including higher payroll taxes, income taxes and investment taxes.

In truth, the payroll tax “holiday” was an act of monumental stupidity by both parties—but then I repeat myself.  With Social Security already nearing bankruptcy (the timing works out to just a Presidential election cycle or two from today), reduce the funding for it by nearly a sixth.  Yeah.

The payroll tax cut also points up the dishonesty of the Progressives in Congress and in the White House.  President Barack Obama, for instance, is on record as saying that such a cut in Americans’ taxes is good for all Americans.  Indeed, he’s gone so far as to propose boosting it to 3% and including businesses by proposing a 3% cut in their side of the payroll taxes.  Yet he, and his fellow Progressives, refuse to consider making those 3% an income tax cut and making the reduction permanent.

  • Jan 2: $110 billion in spending cuts scheduled to begin, hitting domestic and military spending.

This is as inevitable as Obama can make it.  Enormous defense cuts have been a Progressive dream for 50 years.

  • Late February, early March: the US is expected to reach its congressionally mandated borrowing limit.
  • March 27: A deal to fund the federal government expires.
  • Mid-2013: If Congress crafts a two-step deal to avert the fiscal cliff, this could be the deadline for tackling part two, including any unresolved tax and entitlement issues.

The tax and entitlement “issues” are already settled.  Senator Chuck Schumer (D, NY), et al., has already said that there are no entitlement issues; entitlements are not to be cut; they’re not even to be discussed.  Period.  Moreover, Obama has already said he’ll veto any bill that doesn’t include tax rate increases (his latest “flexibility” on that item is just eye-wash for the chattering classes.  That’s clear from his “stopgap” proposal: let taxes rise for those above his originally demand demanded threshold—$200k/$250k.)  The tax question already has been resolved in another way, too: Obama gets his tax rate increases in the absence of a deal.

Progressive Cooperation and the Fiscal Cliff

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In last weekend’s interview with NBC‘s “Meet the Press,” President Barack Obama said this with a straight face, according to The Wall Street Journal:

Singling out the two GOP legislative leaders, House Speaker John Boehner of Ohio and Mr [Mitch] McConnell of Kentucky, the president added that “Congress has not been able to get this stuff done.” The reason, he said, is “not because Democrats in Congress don’t want to go ahead and cooperate, but because I think it’s been very hard for Speaker Boehner and Republican leader McConnell to accept the fact that taxes on the wealthiest Americans should go up a little bit, as part of an overall deficit reduction package.”

Really?  Based on what theory must “taxes on the wealthiest Americans…go up a little bit?”  The revenues collected won’t amount to walking around money compared to your budget deficits.

Democrats want to cooperate?  What was the Senate vote on the fiscal cliff spending solution (albeit for only six months) which the House passed last September?

What were the vote outcomes on the Federal budgets the House passed each of the last two years?

What were the Senate votes on any of the 40, or so, jobs-related bills passed by the House and sent up to the Senate in this Congressional session?

What were the deficits contained in your own budget proposals which you sent to Congress in each of the last three years?  Oh, wait—most of the Democrats (yourself, only, excluded) did cooperate on these: you couldn’t even get a single vote, Democrat or Republican, on any of those “budgets.”

Where are your Democrats on entitlement reform or on spending cuts—real ones, now, not reductions in growth rates that you masquerade as cuts, to occur some time in a nebulous future?

What was it you threatened to do in your 2013 inaugural and State of the Union speeches if you don’t get your way on taxes?  Oh, yeah.  You said

[you] would use [your] inaugural address and [your] State of the Union speech to tell the country the Republicans were at fault.

You berate Republicans for acting against 98% of Americans by holding out for no tax increase on the remaining 2%.  Yet you’re ready—anxious—to blow up our economy and gravely harm honest, hard-working Americans because, having already gotten 98% of what you claim you want, You’re greedy and want more.  Where’s your cooperation?

Where is any Democrat’s cooperation, Mr Obama?  You’ve offered no evidence to support your assertion.

Good Faith Negotiations

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Here’s another example of good faith, Progressive style.  This occurred in the failed fiscal cliff “negotiations:”

At one point, according to notes taken by a participant, Mr Boehner told the president, “I put $800 billion [in tax revenue] on the table.  What do I get for that?”

“You get nothing,” the president said.  “I get that for free.”

It’s certainly true that a number of chuckleheads, as one Republican participant called them, let themselves be confused into thinking that voting to preserve the present tax rates for 99.8% of Americans was the same as voting for a tax increase—even though the Great Grover Norquist had given permission for such a vote.

But the fact is, that President Barack Obama has been discussing in bad faith all along: he wants the cliff.  With the cliff, he gets tax rate increases all across the board, he gets to gut Defense spending, and he gets to blame Republicans for the economic and security disaster that will result—all Progressive dreams.  And that blame is as important to Obama’s ego as are the tax increases and the Defense cuts.

It is unfortunate that the GOP has chosen to be complicit in this shameful affair, but there it is.  They’ve emasculated themselves with an idiotic civil war, and they’ve rendered themselves impotent for the next two years.  Look for the Progressives to retain control of the Senate and regain control of the House in 2014, and to retain the White House in 2016.

Had the Republicans been able to pass Plan B in the House, those chuckleheads would have achieved three things: they would have voted for the present tax rates for nearly all Americans, they would have put the onus on the Progressives—as Speaker of the House John Boehnor (R, OH) put it

[T]he president will have a decision to make.  He can call on the Senate Democrats to pass that bill, or he can be responsible for the largest tax increase in American history

—to come up with an honest counterproposal.  And put the failure of the negotiations squarely on the shoulders of the Progressives in the Senate and the White House.

Now, Republicans don’t have anything at all for the debt ceiling debate other than an understanding of how to fail.

Congratulations, guys.

Some Government Spending

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Progressives in Congress and the White House are loathe to reduce spending—especially actual reductions, not just the reduced rates of growth that they, along with too many Republicans, masquerade as spending reductions.  This reluctance is part of why they’ve been so indisposed toward passing a budget, which would make their spending excesses even more apparent.

Bret Baier, of Fox News, though, has dug out some numbers illustrating the present excesses.  Just last November, for instance, the Federal government collected $5 billion in total revenue, while spending $11 billion, each day of the month, for a spending excess of $6 billion per day.  The table includes Baier’s numbers and provides some of the biggest spending sources.  (The Totals sums won’t agree  between across and down due to rounding.)

Spender Daily Tab ($billion) Monthly Tab ($billion) Projected Annual Tab ($billion)
Department of Health and Human Services

3

90

1,080
Social Security

2.5

75

900
Department of Defense

1.8

54

648
interest on the national debt

0.85

25.6

307.4
Totals

8.2

244.6

2,935

Notice that the two biggest spenders are Obamacare—HHS—and Social Security: two of the entitlements which the Progressives have already said are not negotiable—no matter the damage to our economy.

Notice further that those $300+ billion in debt interest are utterly withdrawn from our economy; it’s just the vig on our debt.  Those dollars don’t circulate.  Moreover, that vig doesn’t pay down the debt a single fēn (分).  Then, too, when interest rates revert to our historical levels in the neighborhood of 5% from our current roughly 0.25%, those interest payments will explode to the region of $6,148 billion—over $6 trillion.  Per year.

No wonder the Progressives are so reluctant to discuss spending or actual deficit elimination and debt reduction.  That would be hard.