The views expressed in any article published in this blog are the author's own and do not necessarily reflect the views of Joseph Foster or Bob Lupoli.

Thursday, April 14, 2011

The American Budget: Slasher Novel?

Joe:  partisanship wins the budget deal. Each side calls the other a horrible monster and lo and behold they make a deal that is historic. Doesn’t feel historic it feels as if these politicians truly want us to be lieve a 1 or 2% cut in these times is actually worthwhile. I suppose it is worthwhile for  a politician who wants to save face, who wants to look good. Here are comments from the left Kinsley, right Wall Street Journal, and the so called extreme Ran Paul (so extreme a 10% cut whoopee! Interesting to note how Obama’s plan to raise taxes on the “rich” wouldn’t pay this year’s deficit. -Bob

By MICHAEL KINSLEY | 4/12/11 4:42 AM EDT
The fiscal savior of this country will be the person who persuades us to bite the bullet: Accept some pain now to remain prosperous later. That person will not be Rep. Paul Ryan.

The reviewers agree: The Path to Prosperity, aka the Republican budget proposal for 2012 that was released a week ago by the House Budget Committee — which Ryan chairs — is one helluva read. To liberals, it’s the nightmare of a madman with an ax chasing you down a long hallway. To conservatives, it’s a sweet dream of wonderland, where angels dine on Heritage Foundation press releases. Right or wrong, it is said, Ryan has at last set the stage for an honest debate about government spending and the federal deficit.

1. Say you’ve done it. They’ll probably believe you. If you boiled all the self-congratulations out of Ryan’s 60-page document, you’d save a lot of paper, which is important to him. He calls on the government to “eliminate excessive printing” of congressional bills and resolutions. OK, I’m for that. But that is one of a remarkably few specifics.

2. Waste, fraud and abuse. These are old friends — introduced to us by Reagan himself — which have survived years of ridicule and are still in Ryan’s “Path.” There is no budget line called “waste, fraud and abuse.” No doubt, there is plenty of all three in the federal government — just as in the private sector. But Ryan offers us no reason to think that there are easy pickings that five presidents since Reagan, most of them Republican, have overlooked.

3. “Caps” and “across-the-board cuts.” Ryan says there should be a “binding cap on total spending as a percentage of the economy” with “caps on the total size of government … enforced by sequester.” He also favors a seemingly redundant cap on “discretionary spending” — basically everything except Medicare, Medicaid and Social Security, which is not much — “enforced by automatic across-the-board cuts if spending exceeds these caps.” An order to cut without guidance on what to cut or why is more like an aspiration than a decision. You might as well pass a law saying that “there shall be a balanced budget,” and if there isn’t, “the president and Congress shall get together and produce one” — then claim that they’ve solved the puzzle. A cap is a restatement of the problem; it’s not a solution.

4. Block grants. The cost of Medicaid is shared between the federal government and the states. Ryan wants to turn the federal money into “block grants” for the states. Ryan does not say how he thinks the states might run the program more efficiently. He merely asserts that they would. Does he read the newspapers? Every day’s news offers evidence that state governments are not likely to improve on the federal record for efficiency and thrift. Block grants are like spinach sliced into fifty-one tiny bits and scattered about a plate by a child who wants to make it look as if he’s eaten some.

8. Punt. I was eager to see how Ryan would handle farm price supports, an expensive program and an obvious target for those who purport to believe in the free market. And Ryan deserves a strong B+ on this one. He starts out strong by correctly classifying farm programs as “corporate welfare” and noting the “reality of record-high farm income.” But instead of calling for an end to farm subsidies, he says cautiously that it’s “time to adjust” them.

Obama's toxic speech and even worse plan for deficits and debt.
The immediate political goal was to inoculate the White House from criticism that it is not serious about the fiscal crisis, after ignoring its own deficit commission last year and tossing off a $3.73 trillion budget in February that increased spending amid a record deficit of $1.65 trillion. Mr. Obama was chased to George Washington University yesterday because Mr. Ryan and the Republicans outflanked him on fiscal discipline and are now setting the national political agenda.

Mr. Obama rallied the left with a summons for major tax increases on "the rich." Every U.S. fiscal trouble, he claimed, flows from the Bush tax cuts "for the wealthiest 2%," conveniently passing over what he euphemistically called his own "series of emergency steps that saved millions of jobs." Apparently he means the $814 billion stimulus that failed and a new multitrillion-dollar entitlement in ObamaCare that harmed job creation.

Under the Obama tax plan, the Bush rates would be repealed for the top brackets. Yet the "cost" of extending all the Bush rates in 2011 over 10 years was about $3.7 trillion. Some $3 trillion of that was for everything but the top brackets—and Mr. Obama says he wants to extend those rates forever. According to Internal Revenue Service data, the entire taxable income of everyone earning over $100,000 in 2008 was about $1.582 trillion. Even if all these Americans—most of whom are far from wealthy—were taxed at 100%, it wouldn't cover Mr. Obama's deficit for this year.

By Catalina Camia, USA TODAY
Sen. Rand Paul, a freshman Republican and Tea Party favorite, says he'll vote this week against the fiscal 2011 budget deal that helped stave off a government shutdown.

The Kentucky senator is circulating a letter today to his fellow members of Congress, blasting the deal that would cut $38.5 billion for the next six months as too timid and not going far enough to reduce federal spending.

"I didn't come to Washington to settle for $6 billion less in spending than if I had not been here," Paul said in his letter. "That's barely half a day's spending at our current pace. This discussion is simply not credible or serious."

Earlier today, House Speaker John Boehner predicted that some Tea Party allies in the U.S. House will not vote for the final budget deal. Rep. Mike Pence, R-Ind., has also said he will not vote for the final budget deal when it comes up on the House floor this week.

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