Category Archives: Spending

The Republican No New Taxes Pledge and the Vilification of Grover Norquist

As the Congressional so called “Super Committee” is on the verge of its most predictable failure, Obama administration representatives and congressional democrats are abuzz with their claims that its failure to achieve results is because Republicans will not agree to new taxes. Additionally they have begun to personally vilify the creator of the modern Taxpayer Protection Pledge and leader of American’s for Tax Reform Grover Norquist. All of this has been adopted as a basis the narrative of the day by the Democrat’s tools in the media and blasted across the airwaves. Yet lost in the liberal diatribe is the base question, are the American people truly under taxed or has government expanded beyond the levels the American people desire. Additionally all Americans should be outraged when the state adopts a coordinated attempt to impugn the character and reputation of a single private citizen in the way the Obama administration and their supporters in congress have.

Leading Democrat on the Deficit Super Committee, Senator John Kerry

While many throw around the “No New Taxes Pledge” in interviews and writings, few seem to have read the actual Taxpayer Protection Pledge. In the 112th Congress, 238 Representatives (including 2 Democrats) and 41 Senators (including 1 Democrat) signed the pledge BEFORE the 2010 election. The pledge itself is relatively simple and straightforward stating:

“I, (candidate’s name) pledge to the taxpayers of the (insert district) district of the state of (insert state) and to the American People that I will:

ONE, oppose any and all efforts to increase the marginal income tax rates for individuals and/or businesses; and

TWO, oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates.”

The pledge is signed before the election and far from being hidden or part of any back room deal; virtually all who take it proudly feature it as a key part of their election campaigns. This is not a pledge to some special interest group; it is a pledge to the American people and specifically those voters who send the member in question to Washington. What is really shocking is the way in which the Democrat establishment and their media friends seem shocked when elected representatives actually keep their promises to their electors. One can only assume that keeping ones word to voters is a concept which President Obama and the majority of congressional democrats are not in any way familiar.

Levels of Federal Government Spending and Taxation since 1960 projected to 2021 (source: The Heritage Foundation)

The real question, the ones the Democrats seem unwilling to really address, is the unprecedented increase in federal government spending under the administration of President Obama. While they stand in front of the television cameras claiming to support expenditure cuts, President Obama runs around the country demanding support for his “Stimulus 2 Jobs Bill” which would be funded with additional tax hikes. America is in the midst of the longest and most severe economic downturn since the Great Depression and the Democrat solution is tax increases, which flies in the face of almost ever accepted economic theory. Additionally, if the is second stimulus works as well as the first, the American people may want dig a hole in the back yard and hide because the economic consequences may be catastrophic.

The Leftist Class Warfare Myth that "Taxing the Rich" solves Deficits (source: The Heritage Foundation)

The democrats hold to the myth that they can tax only the “rich” to solve the deficit problem. But the reality is there simply are not enough rich tax payers to tax away the problem and the middle class will have to be taxed to balance the books if Democrats are given their way. We will leave aside that increased taxation on the upper income levels has often produced lower revenues due to capital flight and reduced investment (a story for another day). What the Obama Democrats are doing is attempting to make permanent the record level of peace time spending they have established by putting in place new taxes to sustain it. The only way to get America out of the current economic mess is to fire up the private sector which has always been the true engine of economic growth in this country. One need only look to the current economic turmoil in Europe to see that higher taxation is not a solution to government overspending; it simply feeds the beast of government excess.

This brings us to the unprecedented attacks by the Obama White House and his congressional Democrats on Grover Norquist, president of Americans for Tax Reform. It seems whenever the left wants something they need to create a villain of the day, and to give them cover for the failure of the “Super Committee” they have found Norquist. To be clear, I do not know Grover Norquist, have only met him in person in passing at CPAC meetings and have never contributed to Americans for Tax Reform (something I may have to reconsider). It is outrageous that the full power of the federal government, as controlled by its chief executive, the President would target the destruction of the character and reputation of a private citizen. One is drawn back to the late 90’s when operatives of then President Clinton tried to discredit a certain former intern as “a little bit nutty and a little bit slutty” until a blue dress emerged with Clinton’s DNA making that a dead line of attack. Now Norquist is the target because the leftist Democrats know attacking the Republicans directly for keeping their word to their electors by honoring the Taxpayer Protection Pledge has never worked in the end.

It’s time the media who so often lament politicians who come to Washington and forget the promises they made to voters, point out that those rejecting new taxes today are simply keeping their word. Elections matter, a fact conservatives and Republicans had to accept after the 2006 and 2008 elections. Unfortunately the Democrats failed to show the American people their way worked and in 2010 the people revoked their mandate. Republicans were elected overwhelmingly with open support of the Taxpayer Protection Pledge. For Republicans to accept higher levels of taxation for Americans now would not only be bad policy, it would be a breach of their commitments to their voters. If the Democrats want higher overall taxation in America to support their expansion of the Federal Government, they should run on that platform in 2012. Maybe Walter Mondale’s campaign manager is available to help them.

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Filed under 2010 Election, 2012 Election, Budget, Congress, Conservative, Grover Norquist, Media, National Debt, Obama Administration, Politics, Republican Party, Spending, Taxes, United States House of Representatives, US Senate

Democrats Engineering Economic Disaster as Foundation of 2012 Election Strategy

As much of the financial world waits with anticipation the outcome of the so called Budget Super Committee whose report is due in just seven days, the back room strategists for the Democratic Party and Team Obama 2012 are giddy with anticipation of the economic train wreck to follow. The plan is elegant in its simplicity; allow a budget disaster which will have dire economic consequences and then cast the “obstructionist” republicans in congress for the resultant economic consequences. They have not had to be overly covert in their strategy as their pet tools in the media have been gladly echoing the White House talking points. Indeed this is the only strategy left for the leftists in Washington as the American public has rejected every element of their tax, spend and government control agenda. What is unfortunate is this destroy America strategy may well work.

Senate Democrats Ploting Stratewgy With President Obama and Vice President Biden in the Oval Office (White House Photo)

The scheme is largely the work of New York Senator Chuck Schumer who is Senate Majority Leader Harry Reid’s political war monger in chief. Throughout more than a decade in the senate and 18 years before that in the house, Schumer has gained a reputation as a narcissistic publicity hound. With an anemic legislative record comprise almost entirely of attaching his name to bills constructed by others, Schumer has developed the finely honed skills of a political ambulance chaser. If the media is there, so if Chuck with political incendiary bombs to toss at his opponents. Credit needs to be given as he has built a successful political career by blaming opponents for everything while personally accomplishing very little.

The first stage of the “Blame the Republicans” was to create the ruse of Republican control of Congress. Forgotten is that the democrats remain in full control of the senate where Senator Harry Reid has been the Majority Leader since January 2007. Not only have the Democrats controlled the senate for the past 5 years, for almost 2 years that had the lofty position of 60 seats constituting a filibuster proof majority allowing them to proceed without Republican cooperation. Reid’s period as Majority leader is most notable for the senate never producing a single years worth of budget authorizing bills but rather relying on an uninterrupted stream of continuing resolutions. Harry Reid and Chuck Schumer have succeeded in one of the most audacious Orwellian “Big Lie” strategies, and the media has embraced their message and are now full partners in the narrative.

Team Obama has been quick to join in on this destroy the American economy and blame republicans game. President Obama won the White House by promising a new political climate in Washington. Credit must be given to him he has kept his promise, as while it was almost inconceivable that the political acrimony of the final Bush term could be exceeded, Obama has done just that. I must admit as with the Democrats in the senate, Team Obama 2012 has had no choice in this strategy, everything else they have proposed has been soundly rejected by the American people. His signature achievement, Health Care Reform is opposed by more than 60 percent of Americans and is largely responsible for Democrats suffering the second biggest loss in the 2010 elections for the House of Representatives. If he were to again propose Health Care, he would be lucky to get 35 votes in the senate his own party controls. One component of that package, the SMART long term care insurance was withdrawn by his own administration when they admitted it was irreparably insolvent. In his first year in office he said in an interview 8 percent unemployment was intolerable and if he did not improve the situation his administration would be “a one term affair”. With unemployment stuck in the 9 percent range, his administration’s economic record is the most dismal since the Carter administration.

Unfortunately the GOP in congress handed the Democrats a political life jacket this past August by agreeing to $1.5 trillion in mandated cuts, divided equally between defense and entitlements, in exchange for raising the national debt ceiling. I’m not even going to get into the constitutionality of a 12 member joint senate house committee with automatic sending authority, which is questionable at best. But politically it set up an artificial Thanksgiving deadline which stood almost no chance of being achieved. Team Obama and Senators Reid and Schumer saw the opening almost immediately. President Obama initiated immediate class warfare and demanded tax increases on the “rich”. Schumer and Reid pronounced the republicans obstructionist while not allowing votes on more than 2 dozen bills passed by the house. In the single biggest act of political hypocrisy in memory, Reid prevented the Presidents own “Jobs Bill” to come to a vote in the senate less Obama be embarrassed by the repudiation it would have received by his inability to get even senate democrats to support it. As the same time President Obama was flying around the country on Air Force One blaming the do nothing republicans, while raising millions in campaign contributions from his “1 percent” supporters.

Team Obama 2012 Capital Hill Leads: Senator Chuck Schumer, Democrat Majority Leader Harry Reid and Senator Dick Durbin

So here we stand with a week until a train wreck which will further damage the American economy, potentially even resulting in further downgrades in the credit rating of US government securities. Give the democrats credit, they may have out foxed republicans and have kept President Obama in the race for a second term. But what cost are the Democrats prepared to make the American people pay for their political games? They could not win the battle of ideas in the 2010 election where their tax and spend policies were rejected. Today they are prepared to drive the economy over the cliff in order to manufacture an issue that could preserve their own jobs in 2012. Senator Chuck Schumer, Senator Harry Reid and President Barack Obama; three who are prepared to further devastate the American economy to preserve their own political viability. They may well win, but will not be able to escape the shame that will forever tarnish their reputations.

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Filed under 2010 Election, 2012 Election, Barak Obama, Budget, Congress, Constitution, Health Care, Leadership, Liberals, Media, National Debt, Obama Administration, Politics, Republican Party, Spending, Taxes, The Grand Old Party, The White House, United States House of Representatives, US Senate

The Ridiculous Act of the National Debt Limit: A Call for Change

As we approach the August 3 deadline set by the Obama Administration, the ridiculous nature of the entire debt limit would be a source of considerable amusement if not so serious. On or about the deadline, Congress will pass some sort of extension and the President will sign it into law at a level neither of them have any intention to honor. That will result in another performance of the debt Limit Two Step in 18 to 24 months. In truth, the national debt limit is utterly meaningless given congress has the ability to simply raise it to facilitate the annual budget shortfall whatever that may be. It would be as if you had the ability to raise the spending limit on your credit card whenever you bumped into that limit. It is simply ridiculous.

The 112th Congress

To be of any effect, the national debt limit must have real meaning which would force the congress to manage its annual budget within a fixed limit of unfunded expenditures. Some have suggested a maximum level of debt to GDP as a way of limiting the total level of debt. While this has some merits, it provides an administration incredible incentive to modify or tamper with the calculation of GDP, or to fuel inflation to increase the nominal amount of debt available to fuel their spending. The reality is there needs to be an ability to increase the debt limit; it must however be much more inflexible than the budget process the debt limit should be driving.

While in general I do not support legislating by way of the constitution, the primary purpose of that document is to define how the government should function and thus it is only right that the process by which the debt limit is raised should be defined by way of an amendment to the constitution. My proposed amendment would provide two ways by which the debt limit could be increased, both reinforcing the federal nature of our government and imposing upon the Congress and the President a limit they simply could not change at their own whim.

Part 1 would require the Congress to pass a change in the debt limit my way of a two thirds majority vote of both the Senate and the House of Representatives. Upon passing any debt limit modification, the resolution would then be forwarded to the states and would require the approval of the legislatures of 50 percent plus one of the states representing at least 50 percent of the population of the United States as at the most recent census. At neither the national of state levels would executive (President or Governor) approval be required.

Part 2 would allow any state’s legislative branch to propose a change in the national debt limit, and if adopted by two thirds of the states representing at least 50 percent of the population, that modification of the limit of the national debt would come into force. As with part 1, no approval would be required by any national or state executive. In this case the federal government would have to function within the debt limitations imposed upon it by the states, the people’s democratically elected representatives at a much closer level.

Such an amendment would make the limit on total debt financing available to the federal government a real constraint on spending. Part 1 would allow the congress to initiate changes they viewed as essential and an opportunity to convince a majority of the people’s state represent ivies of the validity of the change. Part 2 would allow the peoples elected representatives at the state level the ability to restrain the federal government’s ability to mortgage the nation’s future. In no way would this control federal spending so long as such programs are funded. It would however made the national debt a truly limited funding option controlled by elected officials representing the people other than those spending the money.

Is this radical? Absolutely. Would it allow the federal government to function? Absolutely, so long as they spend within their ability to pay for the expenditures with current revenue or to convince the states of the rational to increase the nation’s total indebtedness. The current system of unlimited deficit spending threatens the very existence of the republic; radical change is required to preserve our nation’s future.

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Filed under 2012 Election, American Leadership, Barak Obama, Budget, Congress, Conservative, Constitution, National Debt, Politics, Spending, Taxes

The Reality of National Debt

After years of uncomfortable silence, the nation’s political discourse is now full of, if not dominated by, discussions of the crisis created by the national debt. This is long overdue as the seeds were planted for this over decades. Headlining the news today is the social unrest created in Greece as they have finally reached the edge of the financial cliff and faced with the prospect of going over that rim, are trying to find a solution which apportions the pain across the population. It is easy for American commentators to dismiss the situation in Greece as a flawed comparison which could never happen in the United States. Indeed Greece is a small country with a population of just 11.3 million, as part of the euro zone it had limited monetary control and is not considered a strong economy. The United States is still the largest economy in the world, both in nominal terms, but also more importantly on a per capita basis among the major economies and among the most diverse economies in the world. The US Dollar is the international reserve currency and considered the safest in the world; the one international investors seek in times of financial and political risk. Most importantly the Greek debt has passed 125 percent of GDP while the US is at a much more manageable 75 percent. While all this is true, it overlooks some of the challenges we face in the US in resolving the debt crisis, the liabilities within the social Security System which are not counted in the national debt calculation and the potentially devastating effect of an international exodus from the US dollar if investors lost faith in our ability to manage our finances.

Greek People Take to the Streets to Protest Government Cuts

What the Greek situation today does illustrate is the significant social strains which will be places on American society in the event we do not find a long term solution to our fiscal situation. Somewhere around 2026, just 15 years from now, the majority of Americans who as of now depend on Social Security for a majority of their retirement will get a shock when their benefits are cut by 30 to 40 percent when the Social Security runs out of money. The social implications of this should be alarming to policy makers as it will place at risk the basic structure of American society. On one hand we will potentially have a massive displacement of older Americans, many of whom will be facing homelessness or massive restrictions of basic needs of life which we as a people have found to be unacceptable. On the other hand there will only be between 2.0 and 2.5 workers in the workplace to support each of those then receiving benefits and any tax increase to support those receiving benefits could easily double their total effective tax bill, a situation which would be socially, let alone politically unacceptable. The massive cuts in all spending and unavoidable tax increases would likely send Americans to the street.

Back in 1985 Ronald Reagan’s commission on Social Security proposed relatively modest adjustments to the cost of living increases in Social Security, many of which simply better reflected the actual cost of living for seniors, as well as a gradual increase in the retirement age. This represents the inevitable truth of Social Security, when created you received benefits at 65 when life expectancy was just 62. Then Senate Majority leader Bob Dole courageously endorsed the commission’s recommendations and as a result saw the Republican majority reduced to a minority in the 1986 midterm elections as the Democratic demagogues portrayed it as forcing seniors to eat cat food. Thus the myth of Social Security being the “third rail” of American politics was born, a myth reconfirmed in 2005 when President Bush half heartedly attempted to allow private investment and management of social security. Policy makers today can only wish they had options as painless as those Bob Dole chose to champion.

At its core, the federal budget deficit is a reflection of the fight for America’s self identity in the coming decades. President Obama is in fact a social-democrat, progressive, socialist or whatever you want to label those who seek a dramatically expanded a European style role for government. If you choose to support this view it is impossible not to dramatically increase taxes to pay for those services. This will also result in a change in the nature of American society to one where government replaces the entrepreneurial private sector as the leader of society. Those of us who believe that government’s role should be limited to national and domestic security and providing only a social safety net enough to ensure our citizens are not neglected must recognize the time has arrived to stop the inertia of government spending. This means revitalizing the private sector and true capitalism. We must restore the concept of moral hazard to the private sector: if your business is not successful and well managed then it should fail to be replaced by those who can. We must stimulate the private sector not with shovel ready dreams but with tax cuts to spur investment (a dramatic acceleration of capital depreciation on new investments as an example), reductions in government regulations and eliminating regulatory activists such as the NLRB (if Boeing wants to build a factory in South Carolina, it is no concern of the federal government, period). And raising the debt ceiling should be done to a reasonable ceiling, then prevented from increasing the next time we fail to live within our means.

The riots in the streets of Greece should be seen as a somewhat blurred and distorted by the filter of time look into our future if we stay on our current track. Over the past few years I have resisted supporting some of the more emotional movements calling for reductions in government. I believe we as Republicans must present a free market alternative to Obamacare rather than simply call for repeal. The responsibility of governing calls for the adoption of real solutions not just opposing the socialist programs of the left. We must show true fiscal stewardship of all elements of government spending such as defense (the elimination of programs even the Generals don’t want like the F136 “alternative” engine for the F 35). Every American must embrace less government spending even in their home town, not just the rest of the country. This will not be a one program Silver bullet but rather a line item by line item review of spending. While I truly fear the empty rhetoric we hear from all sides in Washington today, I have tremendous faith in the American people. When challenged the people have always faced sacrifice and restraint with strength and resolve. What is needed is the courage of leadership to make the case to the people those real solutions exist and a path to stability is defined. What we need is detailed reforms, not empty rhetoric; what we need are real leaders, not blow hards and demagogues. It truly is time to man up.

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Filed under 2012 Election, American Leadership, Barak Obama, Budget, Congress, Conservative, Free Markets, Health Care, Liberals, Obama Administration, Politics, Social Security, Spending, Taxes

What Lessons Should GOP Take from NY 26 Loss?

While it is easy to portray the loss in NY 26 as simply as a missed opportunity in a three way brawl with two well funded Democrats, there are some deeper lessons for 2012. Clearly the Democrats have a strategy that worked and they will try to repeat in any district they can of planting fake Tea Party candidates in races. The mainstream media totally ignored the fact that the “Tea Party” candidate had run three times previously as a Democrat and as late as the 2010 election cycle had made contributions to the Democrats. Only a grass roots uproar and efforts to expose the frauds by conservative groups prevented this from being totally successful. That said, there is a lesson for the Tea Party that any third candidate efforts are likely to elect Democrats in almost any race.

The Democrats also test ran their Mediscare campaign with great success where they characterized Paul Ryan’s budget proposal, and specifically its proposals to reform Medicare as an effort that would leave old folks sick on the streets. This is classic Democratic scare tactics where they make no proposals of their own how to solve the nation’s problems but run against the GOP by a well orchestrated scare campaign. They have been using it effectively since they won back the senate in 1996 on republican plans to reform social security. Twenty five years later those reforms seem modest compared to those needed now to restore solvency to the retirement plan, but nobody since has seriously faced the reality which was seen a quarter of a century ago that social security was going bankrupt. Today, the senate democrats, the majority party, are making no budget proposal of their own but rather want to force a vote on the House GOP budget which will be defeated by their majority but they hope to force senate GOP to vote for those cuts. Even faced with a financial crisis the Democrats would rather a vote they can use for politics over one that solves the nation’s problems.

Now is a time of serious problems which require serious efforts to avoid an even deeper crisis. It seems we never g take the fight back to the Democrats. Hade the 1995 GOP plan to reform social security been adopted there would be no need for the significant cuts we face today. These changes are nothing compared to what we will face in a decade if nothing is done. The spending reductions in the Ryan budget are nothing compared to the impact on the economy if we experience a full debt crisis in a decade if the Democratic budget deficit grows unchecked. While the Bush deficits were indefensible, the Obama solution has been to double them. The lesson of NY 26 is we need to take the fight to the democrats first and paint a very real picture of how scary the future will be if we do not restore fiscal responsibility. There are no easy solutions, but it is solutions which America needs.

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Filed under 2012 Election, Barak Obama, Budget, Congress, Conservative, Liberals, National Debt, Obama Administration, Spending, Taxes, The Grand Old Party