Archive for the “Accountability” Category

More temporary and targeted tax cuts and spending increases

From the Wall Street Journal

If President Obama’s economic policies have had a signature flaw, it is the conceit that by pulling this or that policy lever, by spending more on this program or cutting that tax for a year, Washington can manipulate the $15 trillion U.S. economy to grow. With his speech last night to Congress, the President is giving that strategy one more government try.

This is not to say that Mr. Obama hasn’t made any intellectual progress across his 32 months in office. He now admits the damage that overregulation can do, though he can’t do much to stop it without repealing his own legislative achievements. He now acts as if he believes that taxes matter to investment and hiring, at least for the next year. And he now sees the wisdom of fiscal discipline, albeit starting only in 2013.

Yet the underlying theory and practice of the familiar ideas that the President proposed last night are those of the government conjurer. More targeted, temporary tax cuts; more spending now with promises of restraint later; the fifth (or is it sixth?) plan to reduce housing foreclosures; and more public works spending, though this time we’re told the projects really will be shovel-ready.

We’d like to support a plan to spur the economy, which is certainly struggling. Had Mr. Obama proposed a permanent cut in tax rates, or a major tax reform, or a moratorium on all new regulations for three years, he’d have our support. But you have to really, really believe in hope and change to think that another $300-$400 billion in new deficit spending and temporary tax cuts will do any better than the $4 trillion in debt that the Obama years have already piled up.

We’ve had the biggest Keynesian stimulus in decades. The new argument that the 2009 stimulus wasn’t big enough isn’t what we heard then. Americans were told it would create 3.5 million new jobs and unemployment would stay below 8% and be falling by 2011. It is now 9.1%. But this stimulus we are told will make all the difference.

Read the rest at the Wall Street Journal.

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The United States has lost its sterling credit rating.

Credit rating agency Standard & Poor’s on Friday lowered the nation’s AAA rating for the first time since granting it in 1917. The move came less than a week after a gridlocked Congress finally agreed to spending cuts that would reduce the debt by more than $2 trillion — a tumultuous process that contributed to convulsions in financial markets. The promised cuts were not enough to satisfy S&P.

Read the rest at Fox News.

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Ever since they fudged the numbers to pass ObamaCare, Democrats have abandoned credible spending plans.

By Paul Ryan

During the negotiations over raising the debt ceiling, President Obama reportedly warned Republican leaders not to call his bluff by sending him a bill without tax increases. Republicans in Congress ignored this threat and passed a bill that cuts more than a dollar in spending for every dollar it increases the debt limit, without raising taxes.

Yesterday, Mr. Obama signed this bill into law. He was, as he said, bluffing.

Since then he has offered a lot of rhetoric but no real plan to avoid a spending-driven debt crisis. His speeches and press conferences are no substitutes for actual budgets with specific numbers and independently verified projections of future deficits and debt. Meanwhile, it has been over two years since the Democrat-controlled Senate passed any budget at all. This is a historic failure to fulfill one of the most basic responsibilities of governing.

This leadership deficit has thrown the federal budget process into chaos at the worst possible time. Even though Congress has cut spending by a significant amount, it still hasn’t dealt with the drivers of our debt—primarily federal spending on health care.

The math is scary, yet simple: In the years ahead, spending on programs such as Medicare, Medicaid and the Democrats’ new health-care entitlements is projected to skyrocket relative to the size of the economy, even as federal spending on everything else is projected to decline.

Read the rest at Wall Street Journal.

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Senator Rubio (R-FL) discusses the debt and engages in a debate with Sen. John Kerry.

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Senate Democratic Leader Harry Reid has signed off on a tentative debt-ceiling compromise, saying he hopes lawmakers can finalize a deal and move to a vote as early as Sunday.

At the same time, concerns were spreading on the conservative side that the emerging plan could cut too deeply into defense spending, raising questions about whether the framework can attract enough bipartisan support.

One congressional source said the deal is not yet sealed. But Reid, becoming the first congressional leader to publicly endorse the plan, said late Sunday afternoon through a spokesman that he had signed off on it “pending caucus approval.”

But as time dragged on and House Speaker John Boehner, scheduled a conference telephone call with his rank and file, the likelihood of any vote Sunday night appeared less likely.

With pressure intensifying to produce a bill that can somehow sail through both chambers in the next two days, leaders on both sides are now scrambling to not only finalize the package but loop in their rank-and-file members.

Already, liberal groups and lawmakers were raising alarm about the possibility of entitlement cuts in the package. House Democratic Leader Nancy Pelosi, without taking a position, said she’d have to review the details, looking ahead to a meeting with Democrats on Monday.

“We all may not be able to support it. And maybe none of us will be able to support it,” she said.

But as Reid tried to build support on the Democratic side, GOP leaders were dealing with mounting concerns from party conservatives about possible defense cuts.

Read the rest at Fox News.

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From Fox Business

By Elizabeth MacDonald — We’ve got an auto czar, a weatherization czar, even an Asian carp czar.

But where is the deficit czar?

Isn’t the deficit a clear and present danger, the most threatening of all, one that could really sock it to our wallets?

It is remarkably foolish for anyone to play down the bond market’s reaction to the ballooning deficit and out of control government spending. Historically that reaction has been sudden, violent and severe.

The naysayers either forget or are ignorant of history, including how the bond markets’ negative reaction accelerated economic crises that gripped various countries since the ‘80s, as in the Latin American and Asian debt crises.

President Barack Obama is expected to detail his plans for revamping the nation’s finances in his State of the Union address this January, after the Democrats added  an estimated $3.8 trillion to the deficit in just two years. 

That $3.8 trillion figure doesn’t count the budget-busting cost of health reform, a bill that passed on tenuous grounds and shaky math after Congress railroaded it through to enactment via a parliamentary maneuver called budget reconciliation. Health reform was justified as cutting the deficit via maneuvers that counted 10 years of revenue but only six years of spending.

It is borderline silly for White House officials to claim catastrophic consequences if the Congress does not raise the government’s debt ceiling beyond the present $14.3 trillion, and to warn that a failure to do so means the nation tips into technical credit default.

And that’s not just because the Congress has raised the debt ceiling 11 times since 1996 and will likely do so again—and, no surprise, for 14 consecutive years the Government Accountability Office says it could not sign off on the government’s books because they are in such disarray due to shoddy accounting moves like those used in health reform. 

Ignored here is what top analysts at credit ratings agencies Standard & Poor’s and Moody’s Investors Service are saying about what exactly could push the U.S. into losing its Triple-A rating–rocketing interest costs on U.S. debt that are now eating up more and more of federal revenue.

The ratings agencies do not want any sovereign government getting on the hamster wheel of either printing money or borrowing money to pay interest on fiscal debt.

And sources at these companies are stunned by the speed of government borrowing, so much so they say that consideration of a downgrade to the U.S.’s Triple-A rating is no longer an event for the decade beginning in 2020, but may come as soon as 2015.

Read the rest of the story.

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