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MUST READ: White House to miss deadline for report on ‘fiscal cliff’ budget cuts

By Erik Wasson - 09/07/12 01:37 PM ET
The Hill

The White House on Friday said it will miss the legal deadline for delivering a report to Congress on the spending cuts from sequestration that are scheduled to take effect in 2013.

Spokesman Jay Carney told reporters on Air Force One that the report will be coming next week.

Under the terms of the Sequestration Transparency Act signed in August, President Obama was to tell Congress by Friday how the administration plans to implement the $109 billion in automatic cuts mandated by the Budget Control Act.
The Office of Management and Budget has repeatedly failed to make legal deadlines. It delivered its presidential budget proposals and mid-session updates late both this year and last year.

To read the entire article, please click here.

Legislative Lowdown: Obama driving US off fiscal cliff

By Brian Darling
Senior Fellow, The Heritage Foundation

Are we better off under Obamanomics? Hardly, a new report from the Congressional Budget Office (CBO) reveals. According to the CBO, the federal government will spend $1 trillion more than it takes in this year — the fourth consecutive year that has happened. Furthermore, CBO projects negative growth and dismal unemployment numbers.

Remember President Obama’s promise that his stimulus plan would create jobs and set the economy on the right track? The CBO projects that if the Bush tax cuts are allowed to expire and scheduled defense cuts take effect, the unemployment rate will rise to 9.1% and the economy will contract by 0.5% by the end of next year.

The president’s record on the size and scope of the federal government is also terrible, according to this report. Obama inherited $10.6 trillion in debt and has seen it balloon to $16 trillion in his short tenure. His big-spending policies have saddled future generations with trillions in new debt.

This report contains further proof that the president’s proposed tax hikes are terrible for the economy. The CBO reports that “sharp increases in federal taxes and reductions in federal spending that are scheduled under current law to begin in calendar year 2013 are likely to interrupt the recent economic progress.” These policies will lead to “a recession” and “an unemployment rate that remains above 8 percent through 2014.”

Read the entire op-ed here.

Politics Aside, Debt Fix Is Clear

By Vin Weber and Jane Harman
Politico

Between us, we served 15 terms in Congress. We belong to different parties and now support different presidential candidates. But this toxic election cycle is no reason to delay a sensible bipartisan solution to our serious budget crisis. We made this argument on these pages one year ago, and the situation has only gotten worse.

The huge missed opportunities to pull together for the country have hurt all American families. Solving the problem is just getting harder. Since last summer, more than $1 trillion has been added to the debt. Worse yet, the White House Office of Management and Budget revised downward its projections for long-term growth, and forecast higher debt loads for every year between now and 2020. The fiscal outlook, despite cuts imposed by the Budget Control Act, is deteriorating — with a projected 76 percent debt-to-gross-domestic-product ratio in 2020, up four points from a year ago.

In at least one respect, the “fiscal gap” between the current budgetary outlook and the trajectory required to stabilize a 75 percent debt to GDP ratio by 2050, a new OECD study estimates, the United States is in a worse position than all of Europe. Including debt-plagued Greece, Spain and Italy.

Despite this continuing fiscal decline, the debate about rebalancing U.S. finances has not advanced. This is particularly disappointing because we’ve now had the template for nearly two years: It’s Simpson-Bowles, along with pieces of some other worthy plans.

The formula is simple: spending cuts, entitlement reform and changes to the tax code that bring revenue in line with the historical average of about 18 percent of GDP.

Read the entire article here.

Must Read: Everything You Ever Wanted To Know About The Budget But Were Afraid to Ask

By David Wessel
The Wall Street Journal

After 25 years of covering the federal budget, I’m still amazed at the persistence of fiscal misconceptions. The distinction between fact and political opinion has been blurred to the point of invisibility. The choices—what spending to cut, whose taxes to raise—are fundamentally political; the facts are not. But the budget is now so sprawling—the U.S. government spent $400 million an hour last year—that grasping it in its entirety is impossible. The budget, I’ve concluded, is best understood in digestible morsels.

Nearly two-thirds of annual federal spending goes out the door without any vote by Congress.

About 63% of the budget is on autopilot. Congress passes legislation every year to keep the government operating, the phones answered and the National Parks open, but much of the money the government spends doesn’t require any affirmative vote. Social Security benefits get deposited. Health-care bills for Medicare for the elderly and Medicaid for the poor are paid. Food stamps are issued. Farm-subsidy checks are written. Interest payments are dutifully made to holders of Treasury bonds.

Congress can alter these programs, but if it does nothing, the money is spent. As Eugene Steuerle, an economist at the Urban Institute think tank in Washington, puts it: “In 2009, for the first time in the nation’s history, every dollar of revenues had been committed before Congress walked in the door.” The government’s total take was only enough to pay for promises that had been made in the past—interest, Social Security, Medicare, Medicaid and so on. For everything else, the government had to borrow.

The U.S. defense budget is greater than the combined defense budgets of the next 17 largest spenders.

About $1 of every $5 the federal government spent in 2011 went to defense, and about 20 cents of that $1 was spent on the wars in Iraq and Afghanistan. In all, the U.S. spends about $700 billion a year on its military. That’s more than the combined military budgets of China, the U.K., France, Russia, Japan, Saudi Arabia, Germany, India, Italy, Brazil, South Korea, Australia, Canada, Turkey, the United Arab Emirates, Spain and Israel. The Pentagon counters that the U.S. also asks its military to do more than all those other countries combined—to keep sea lanes open for international trade, for instance, and to be prepared to deploy almost anywhere.

To read the entire article, please click here.

MUST READ: BUDGET INSANITY

Politicians are addicted to spending. John Stossel writes in Real Clear Politics about this, how people are complicit, and the ongoing cycle of not making tough choices resulting in the fiscal mess America finds itself.

“One more infrastructure bill” or “this jobs plan” will jumpstart the economy, and then we’ll kick our spending addiction once and for all. But we don’t stop.

For most of American history, government was tiny. But since Lyndon Johnson’s Great Society and the promise that government would cure poverty, spending has gone up nonstop. This is not sustainable.

Progressives say: If you’re so worried about the deficit, raise taxes! But it’s a fantasy to imagine that taxing the rich will solve our deficit problem. If the IRS grabbed 100 percent of income over $1 million, the take would be just $616 billion. That’s only a third of this year’s deficit.

Even if you could balance the budget by taxing the rich, it wouldn’t be right. Progressives say it’s wrong for the rich to be “given” more money. But money earned belongs to those who earn it, not to government. Lower taxes are not a handout.

That’s the moral side of the matter. There’s a practical side, too. Taxes discourage wealth creation.

It’s the spending, stupid.

Even if you think — despite all evidence — that government spends money more usefully than people in the private sector, there is a limit to how much government can tax before people work less or flee.

READ MORE

Spending Cuts, Taxes & the Federal Deficit: And The Polls Say…

In a recent Rasmussen poll, 51% believe that the US Government will go bankrupt before the budget is balanced. Of course, it is hard to have a balanced budget when there hasn’t been a budget for over 3 years.

Depleted expectations of congress and an election in the offing doesn’t make it easy to address the critical issues facing us but an elevated acknowledgement by taxpayers of the fiscal dilemma America finds itself in could help encourage our elected officials to find the courage (or perhaps an election might provide the motivation). But how do Americans think we can solve the fiscal issues? Are the taxpayers willing to do their fair share to reduce the debt?

Recent polling gives us insights but is also confusing. A poll released by the Peter G. Peterson Foundation touted findings that:
• 67% of voters strongly agree that “I am willing to do my part to reduce the national debt, as long as other people also do their part.”

That sounds great. People get it…but not so fast.

A Rasmussen poll done during the same time, found only:
• 26% would be willing to “pay more in taxes to reduce the deficit”.

Which is it?

Without robust economic growth, and that is a not forecasted, increased taxes or decreased spending are the two options on the table to reduce the deficit. So what would voters choose if they were casting their votes in Washington DC? A September 2011 Rasmussen poll notes that 50% favor a mix of spending cuts and tax hikes. If there was a mix proposed to reduce the deficit, 59% of Americans think that mix should include more spending cuts. Just 24% feel the proposal should be heavier on tax hikes.

Bill Clinton Discusses Avoiding The Fiscal Cliff

Former President Bill Clinton told CNBC Tuesday that the US economy already is in a recession and urged Congress to extend all the tax cuts due to expire at the end of the year. He noted in his interview:

“What I think we need to do is find some way to avoid the fiscal cliff, to avoid doing anything that would contract the economy now, and then deal with what’s necessary in the long term debt-reduction plans as soon as they can, which presumably would be after the election,” Clinton said.

“They will probably have to put everything off until early next year,” he added. “That’s probably the best thing to do right now. But the Republicans don’t want to do that unless he agrees to extend the tax cuts permanently, including for upper income people, and I don’t think the president should do that.”

Must Read: Happy Anniversary (or perhaps, not so happy)

Read Douglas Holtz-Eakin’s post on National Review Online which explains what a budget resolution is and why it is so important. He quotes Erskine Bowles line regarding the fiscal situation American finds itself facing.

…the most predictable crisis in history.

Must Watch: National Journal Live - Budget Review: Leading Policy Priorities for Sustained Growth

The House passed the Fiscal Year 2013 budget resolution. Want to learn more about the various budget proposals that have been presented? Our friends at Public Notice recently sponsored a National Journal policy summit that we recommend you watch to learn more about the current critical budgetary issues.

Must Read: Why States Have to Push for Federal Funds

Everyone on the Ending Spending team is reading this important post from the National Review Online today:

The issue of earmarks is completely different from the issue raised when states push for the largest possible share of federal funds. Earmarks are when a member of Congress secures funding for some pet project or constituent in his state or district. That’s bad enough. But federal grants to state governments (such as federal highway funds) present states with a Hobson’s choice that ought to be flatly unconstitutional.

The federal government creates the problem by first taxing money away from residents of all the states and then rewarding some states and punishing others by distributing the money back to them unevenly and with conditions attached. First, the distribution of seats in Congress greatly weights the voting power of small states at the expense of large ones. This is why Texas finds itself eternally paying for highway projects in Alaska. Second, and infinitely worse, is that the federal government creates programs such as Medicaid, which require states to shape their own state policies according to federal preferences, or suffer the punitive transfer of billions of their residents’ tax dollars to other states.

The whole practice of federal conditional funding is inherently inequitable because every state is either a winner or a loser; it is also confiscatory, coercive, and profoundly corrosive to the federal structure of our Constitution. This is not like earmarks, which people oppose chiefly because of their potential for self-serving political corruption in Congress. The rent-seeking manipulation of federal grants to states by transient majorities in Congress threatens to blow away what few constitutional limits remaining on federal power.

Please head over to National Review Online to continue reading.

Taxpayers Connected:

Our national debt is  
$ 00 00 , 000 000 , 000 000 , 000 000 , 000 000
and each American Taxpayer owes $119,236 of it.