Non-partisan Federal Budget Blog Carnival

December 18th, 2009 Billy Hallowell

Facing Up to the Nations Finances is back with a new Budget Blog Carnival! If you are unfamiliar, a blog carnival is an online magazine (blogo-zine) of sorts that focuses on a specific theme. This issue is all about the U.S. federal budget and the national debt.

As always, the carnival is comprised of a non-partisan collective of blog entries. While specific pieces may have ideological roots, the overall carnival is a testament to the diverse voices present in the ongoing debate that surrounds the budget, deficit and accumulated national debt.

Today, we are releasing an exciting array of entries from The Heritage Foundation, The Committee for a Responsible Budget, Econbrowser blog, ECONLOG blog and the Economists View blog, to name a few of the participants! Here is your guide to Facing Ups Dec. 2009 Budget Blog Carnival:

First and foremost, Scott Bittle, executive vice president of Public Agenda and co-author ofWhere Does the Money Go?, leads the pack with a piece entitled, The Three Questions for the Public on the Federal Budget. In the piece, Bittle highlights three key questions for the public (and American leaders) to consider: Can we afford it? Can we keep the status quo? and Am I willing to give up something I want because the government can’t afford it?According to Bittle,

Most of the people who’ve looked at this issue, whether they’re liberal or conservative, in or out of government, use the same word to describe the federal budget: “unsustainable.”

Next, economist Dr. Arnold Kling of the EconLog blog ponders various scenarios for resolving U.S. debt. From technological advances to hyperinflation, Kling provides valuable insight.

Conn Carroll of The Heritage Foundation penned a piece entitled, The Definition of Economic Insanity. In the entry, Carroll stands firmly against deficit spending as a means to stimulate the U.S. economy. In opposition to recent jobs summit proposals Carroll states,

These “new” ideas will fail for the same reason the past two government stimulus plans failed: governments do not create jobs.

In a separate piece, Carroll presents a series of government actions from the 1930s through modern times that he considers examples of the failure of government to spend its way to prosperity and makes his case for the government to step out of the way.

And Dan Perry penned an intriguing article about the urgency of the debt. Perry charges both parties with fiscal irresponsibility, as he finds fault in both President Obamas deficit spending and record-increases in spending during George W. Bushs presidency. While he sees the Tea Party movement as impressive, he writes the following:

After eight years of a Republican administration, the nation saw record spending and deficit levels without so much as a peep about the financial difficulties it might someday cause. Meanwhile, their solution to these economic woes are a series of tax cuts accompanied by no tangible reductions in spending.

Next, James Hamilton of the Econbrowser blog responds to Paul Krugman, one of the leading economists to argue that U.S. budget deficits are not that troubling in the current fiscal environment. Hamilton expresses his worries about current and future deficits. Please also read Krugmans writings on this subject here and here.

Also, heres another piece from Hamilton an assessment of federal budget commitments and the danger present in continuing on our current budgetary path.

Another exciting partner in the current Facing Up carnival is the bi-partisan Committee for a Responsible Federal Budget. The Committee submitted two pieces one about theessentials associated with tax reform and another that explores the true costs of health care reform. Both of these entries provide insight into the current debate over the national debt.

And, Mark Thoma from the Economists View blog highlights the three ways in which debt can make future generations worse off, while covering some of the bogus arguments that are given in the budget debate. Thoma concludes by calling some of the Republican opposition weve seen as unduly alarmist.

In a more-lighthearted commentary, Bob McCarty writes about the similarities he sees between the movie Friday the Thirteenth and the economic stimulus package.

Finally, in Musings on America’s Budgetary Challenge, David D. Kent provides a fun-filled look at federal expenditures and ponders the what ifs of potential spending scenarios.

Thats it for this edition of the blog carnival. Stay tuned for more!

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Michigan Bottled Water Tax to Fund Education: Unjustified, Unwise, Unconstitutional

December 16th, 2009 Tax Foundation - Tax Foundation's "Tax Policy Blog"

From the Detroit Free Press:

Lt. Governor John Cherry this afternoon proposed using Michigan’s water supply to fund its education system.[...]

By charging water bottlers 10 cents on each bottle of water they pull from Michigan waterways, the state could raise $118 million a year, Cherry said. That would cover the $100 million needed for the Promise Scholarship and leave another $18 million for wetlands protection, he said.

Unjustified. What logic is there to hitting bottled water with a special tax to fund education? It sounds like just a revenue grab with a random product being chosen to take the hit. The rhetoric about taxing companies shouldnt divert peoples attention from the fact that consumers will be the ones paying this tax in the end.

Unwise. Michigan isnt exactly swimming in tax-paying business activity nowadays, so the idea of taxing a product only if it is made in Michigan is short-sighted. Does Lt. Gov. Cherry not realize that by making Michigan products more expensive with a rather hefty tax, theyll be pushed out of the market by non-Michigan products? Nestle Waters put out a press release noting that they employ a few hundred people at its water bottling plant in Michigan, with a $2 million tax bill.

Unconstitutional. Article IX of the Michigan Constitution prohibits imposing sales taxes on food products. Perhaps there is an argument about whether bottled water is a food product (the FDA says it is) and whether a tax on someone who makes food is a tax on food, but Michigan could expect extended litigation on this.

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Debt Crisis Portends Liberalisms End

December 16th, 2009 Carter Clews

From the Washington Examiner:

With its most vigorous advocate in memory presiding in the White House and commanding Democratic majorities in Congress, its difficult to believe that the end of liberalism may be within sight. We base this suggestion not on a hunch or on wishful thinking, but on mathematics. The Petersen-Pew Commission on Budget Reform has produced a new report warning that [o]ver the past year alone, the public debt of the United States rose sharply from 41 to 53 percent of gross domestic product (GDP). Under reasonable assumptions, the debt is projected to grow steadily, reaching 85 percent of GDP by 2018, 100 percent by 2022, and 200 percent in 2038.

Long before the debt reaches such stratospheric levels, the commission warns, Fears of inflation and a prospective decline in the value of the dollar would cause investors to demand higher interest rates and shift out of U.S. Treasury securities. The excessive debt would also affect citizens in their everyday lives by harming the American standard of living through slower economic growth and dampening wages, and shrinking the governments ability to reduce taxes, invest, or provide a safety net.

In other words, within the lifetimes of the vast majority of living Americans, government as we have known it since the New Deal will become paralyzed, unable to deliver even basic services, let alone the myriad of entitlements that politicians had promised would last forever. Liberalism will owe its undoing to its blind faith that government could forever be the inexhaustible provider of ever more spending, more benefits and more prosperity, with nary a day of reckoning.

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Sen. Inhofe Discusses Climategate, “The Greatest Scandal in Modern Science”

December 8th, 2009 Todd Thurman

Sen. Jim Inhofe (R-OK), ranking Member on the Senate Environment and Public Works Committee (EPW), spoke to bloggers at The Heritage Foundation’s weekly Bloggers Briefing today and focused his remarks on the controversial “Climategate” scandal — the series of leaked e-mails that have blown holes through the theory of man-made global warming.

As Sen. Inhofe sat down to speak, he opined that he was just in the Senate trying to convince Senator Barbara Boxer (D-CA) to investigate the subject of the e-mails, instead of the people who uncovered the e-mails. Sen. Inhofe was the leader of the global warming opposition ten years ago when he chaired the EPW Committee; when a blogger asked him what he thought about the emergent news that the science was flawed, the Senator quipped, “Redemption.”

Senator Inhofe is not alone in his views on “Climategate.” The UK Telegraph called it the “greatest scandal in modern science,” and the UK MET is reevaluating over 160 years of climate data because “public opinion of man-made global warming has been shattered by leaked e-mails.” Sen. Inhofe seemed confident that neither climate bills would pass the Senate, but feared the Obama Administration would circumvent the legislative process and use the Environmental Protection Agency (EPA) to force regulation through the Clean Air Act. Sen. Inhofe fired back by releasing a YouTube video saying that the EPA finding that CO2 is a pollutant was based on faulty science.

Now, the United Nations is in the middle of the Copenhagen Climate Change Conference, where “the science is settled.” However, as we have stated, the science is far from settled. Now, the world has learned that the basis of the science that climate change was founded on could be proven faulty. This has not stopped the UN’s International Panel on Climate Change from creating a treaty that will be costly to the US economy and not have any real impact on the environment. And it’s a treaty that would infringe on our national sovereignty.

You can listen to Sen. Inhofe’s remarks here.

You can watch the video of his remarks here.

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The Senate Cloakroom: Nov. 30 – Dec. 4

November 29th, 2009 Dan Holler

Analysis –

Health care will dominate the Senate this week, and probably the entire month of December. Everyone will be watching Senators Joseph Lieberman (I-CT), Blanche Lincoln (D-AR) and Ben Nelson (D-NE), all three of whom have threatened to prevent the bill from moving to final passage (i.e. they would filibuster) if their concerns are not addressed. Senators are also likely to weigh in on the President’s Afghanistan announcement, which is scheduled for Tuesday evening.

Major Floor Action –

On Monday, the Senate will vote on the nomination of Jacqueline Nguyen to be U.S. District Judge for the Central District of California.
Senators will spend the remainder of the week debating health care reform.

Major Committee Action –

The Banking Committee will hold a hearing on financial regulatory reform and the reappointment of Federal Reserve Chairman Ben Bernanke.

The Agriculture Committee will hold a hearing on derivatives and systemic risk.

The Energy Committee will hold a hearing on reducing greenhouse gas emissions.

The Armed Services Committee may hold hearings on the President’s plan for Afghanistan.

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Comparing Senate Democrats Health Care Reform Bill to HCR Bill Passed by House

November 20th, 2009 Tax Foundation - Tax Foundation's "Tax Policy Blog"

Late Wednesday night, the Congressional Budget Office released its report on the proposed piece of legislation: the gross price tag for the coverage provisions is $848 billion. It would cut the deficit by $130 billion if fully enacted, according to CBO estimates. The main financing mechanisms would be cuts to Medicare, a new excise tax on high-valued Cadillac health insurance plans, a 1/2 percentage point increase in the Medicare tax rate for high-income earners, and various tax hikes imposed on the health care sector including fees on manufacturers and insurance companies.

Meanwhile, the CBO has released an update to its estimate of the House health care bill that passed two weeks ago. That House health care reform bills financing differs from the version outlined by Senate leadership. In addition to the House bill having a larger gross price tag (over $1 trillion), the House bill is financed largely via a surtax on high-income taxpayers, which the Senate bill does not include. Furthermore, the House bill has more cuts to Medicare than the Senate bill, although the Senate bill does cut more non-Medicare spending than the House bill.

For a pie chart comparison of how the two bills are financed, click here for the Senate bill and click here for the House bill. The table below also presents the data that is in the pie chart.

Note that all figures are from the most recent CBO scores of the two bills. Totals may not add up due to rounding.

Financing Mechanism Senate Bill
(as proposed by Reid)
House Bill
(as passed by the House)
Medicare Cuts to Providers (Net) $331 billion $440 billion
Other Health Care Spending Cuts (Net) $150 billion $14 billion
Surtax on high-income taxpayers $0 $460 billion
Excise Tax on Cadillac Plans $149 billion $0
Fees/Taxes on Medical Devices, Manufacturers & Insurers $102 billion $22 billion
Penalties on Individuals/Businesses for no insurance $36 billion $168 billion
Other Taxes and Revenues $156 billion $88 billion
Increase in Medicare Tax Rate for high-wage earners $54 billion $0
Gross Price Tag $848 billion $1,052 billion
Deficit Reduction $130 billion $138 billion

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Mr. Attorney General, Where Would You Put Osama bin Laden?

November 19th, 2009 Mike Brownfield

In today’s Morning Bell, we wrote about the historically bad decision Attorney General Eric Holder made in announcing that Khalid Sheikh Mohammed and five other terrorists would be tried in a civilian court in New York City rather than before a military tribunal.

Edwin Meese III, the Ronald Reagan Distinguished Fellow in Public Policy and Chairman of the Center for Legal and Judicial Studies at The Heritage Foundation as well as the United States Attorney General between 1985 and 1988, called Holder’s decisions a “a tragic mistake.”

In the video below, Senator Lindsey Graham (R-SC) questions Holder on his decision during yesterday’s Senate Judiciary Committee Oversight hearing of the U.S. Department of Justice. His questions illustrate why trying terrorists in civilian court is such a tragic mistake.

Click here to view the embedded video.

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Senate Republicans Lack of Unity Paves Way for Judicial Radicals, Fuels GOP Dissatisfaction

November 19th, 2009 Carter Clews

On Tuesday, the Senate voted 70-29 to invoke cloture on Judge David Hamilton, clearing the way for a confirmation vote for the controversial Obama nomination to the 7th Circuit Court of Appeals. Senator Jeff Sessions had a hold on the nomination for weeks and demanded the cloture vote, citing the judges radical judicial record.

In a recent speech to the Federalist Society, Senator Sessions quoted Hamilton as saying a judges job is to write footnotes to the Constitution. And Sessions also criticized Hamilton for arguing that judges need to empathize with the parties of cases rather than dispassionately and equitably applying the rule of law.

Ten Republicans broke ranks with their party on this vote: Senators Lamar Alexander of Tennessee, Saxby Chambliss of Georgia, Susan Collins and Olympia Snowe of Maine, John Cornyn of Texas, Judd Gregg of New Hampshire, Orrin Hatch of Utah, Richard Lugar of Indiana, Lisa Murkowski of Alaska, and John Thune of South Dakota.

This differs drastically with the Senate Democrat caucus. They voted in lockstep—all 60 members—for cloture, demonstrating a party loyalty and discipline that has been lacking for Republicans in the current Congressional session.

Though, in hindsight, it is clear that Republicans did not have the votes to sustain the filibuster, that does not excuse the GOP defectors. As ALG President Bill Wilson commented yesterday, “Every election cycle, Republican candidates for Senate state their commitment to bringing judges to the federal bench who will help restore the role of constitutionally limited government in American jurisprudence. Instead, Republican and conservative constituents have been betrayed by their own Senators.”

Hamilton was clearly no strict legal constructionist. A coalition letter from 24 conservative leaders late last week urged all members of the Senate to filibuster Hamilton because of his views on the law. According to the letter, Judge Hamilton has ruled “that prayers to Jesus Christ offered at the beginning of legislative sessions violate the Constitution, but that prayers to Allah do not”, chose to follow mandatory sentencing guidelines, overturned a sex offender registry law, and had “urged the President to grant clemency for a police officer who had pled guilty to producing child pornography”.

The Republicans’ lack of unity will have repercussions—it sends a message to the current White House that it can push through even the most outrageously radical appointments to the bench. And with two of the nine Supreme Court justices now in failing health, that bodes ill for future High Court nominees.

Unless Republicans muster the courage to stand strong – and focus on persuading conscientious Democrats to join with them they will not be able to block a single Obama judicial nominee, giving the White House carte blanche to easily stack the federal bench with radicals. And as that occurs, it will be the Senate Republicans, as well as the Democrats, who must shoulder the blame when decisions are handed down from federal judges like Hamilton restricting religious expression, protecting child predators, and turning a blind eye to the usurpations of a federal government out of control.

In a recent Rasmussen Poll, 74 percent of Republicans nationwide said GOP members of Congress are out of touch with their base that elects them. The Hamilton vote suggests the grassroots Republican dissatisfaction with their representatives will only continue to grow.

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Political Theater Cant Create New Jobs

November 14th, 2009 Carter Clews

From the Washington Examiner:

Its no coincidence that the White House announced a forum to talk about unemployment a day after Gallup reported that voters now favor Republicans over Democrats going into the next congressional election. The political maestros in the West Wing can read the data as well as anybody else, and they realize many Americans think President Obamas priorities are mixed up. While Obama spends time on Capitol Hill extolling his plan for massive growth of government spending and taxes by nationalizing health care, unemployment reaches 10.2 percent, its highest level since 1983. Hes already driven the deficit up to an unprecedented $1.4 trillion. His health care reform proposal will take trillions more out of the economy at the worst possible time.

Contrary to the presidents fairy tale that his $787 billion stimulus program has created or saved more than a million jobs and slowed the growth of unemployment, the reality is that the month-on-month increase in unemployment from September to October was four times as big as job losses from August to September. The losses in manufacturing and retail jobs accelerated in October, and most of the increase in new unemployment claims came among adult men. The economy is sick and getting sicker.

So the president calls a forum on jobs and economic growth. If this routine sounds familiar, its because the Obama team did something quite similar a week after the stimulus package was approved. And what will they do at the White House forum on unemployment? Well gather CEOs and small-business owners, economists and financial experts, as well as representatives from labor unions and nonprofit groups, to talk about how we can work together to create jobs and get this economy moving again. In other words, they will talk.

Obamas forum announcement came within days of something else an avalanche of media reports about the fraudulent data behind the claim that a million jobs were created or saved. As The Examiners Mark Hemingway reported in a Beltway Confidential post headlined The return of lies, damned lies and stimulus jobs, journalists across the country examined Obama stimulus job claims and found them full of what appeared to be purposeful misrepresentations in at least 13 states.

Instead of trying to sell a bogus stimulus program with dishonest data and convening a White House talkfest, Obama should follow the examples of John Kennedy and Ronald Reagan: Stop taking money out of the economy, cut taxes, get rid of bureaucratic interference, and free businesses small and large to do what they do best, which is expand the economy by making things and providing services people need and want. Its a proven formula, and the White House should stop pretending it wont work again.

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Government Cable

November 13th, 2009 Billy Hallowell

The Center for Medicine in the Public Interest has an excellent (and hilarious) video that focuses on American health care and where we may be headed.  Check it out:

You need to a flashplayer enabled browser to view this YouTube video

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