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This morning the Senate voted on cloture to move forward the sequester-busting budget deal the House passed last week. The deal is proof-positive that Congress can’t keep spending in line with modest budget caps, even when those caps are The. Law.
Before Senators vote on final passage tomorrow, they should consider Senator Coburn’s (R-OK) “Wastebook 2013,” released just a few hours ago. This year’s Wastebook highlights nearly $30 billion in “questionable and lower-priority spending.” Sen. Coburn goes on to note that this is just “a small fraction of the more than $200 billion we throw away every year through fraud, waste, duplication and mismanagement.”
Some of the outrageous highlights of this year’s Wastebook include:
Go here to read the whole list.
Only a few months ago, House Minority Leader Nancy Pelosi (D-CA) proclaimed, “The cupboard is bare. There’s no more cuts to make.” However, as Senator Coburn’s annual Wastebook so ably demonstrates, the cupboard is far from bare.
Congress shouldn’t be resorting to accounting gimmicks and promised cuts in the future to pay for more spending now. We often say that Congress needs to make tough decisions on spending, and they do, but as the Wastebook and NTU’s own report with our friends at U.S. PIRG prove – there are still a lot of easy decisions Congress is leaving on the table.
Senator Coburn goes on to point out, “There is more than enough stupidity and incompetence in government to allow us to live well below the budget caps. What’s lacking is the common sense and courage in Washington to make those choices – and passage of fiscally-responsible spending bills – possible.”
Click here to call your Senator now and urge them to keep the caps and oppose the budget deal.0 Comments | Post a Comment | Sign up for NTU Action Alerts
(AUDIO) Taxpayers Get Raw Deal - Speaking of Taxpayers
NTU Foundation's Demian Brady and NTU's Brandon Arnold both offer insight on why the numbers don't add up and what to do as the bill heads to the Senate. Plus the Outrage of the Week!0 Comments | Post a Comment | Sign up for NTU Action Alerts
This Backloaded Budget Deal Is Bad News for Taxpayers
After spending some additional time reviewing the budget deal, it keeps looking worse and worse for taxpayers. The deal’s architects are trumpeting the notion that it will reduce the deficit by $23 billion over ten years. This is technically true. But the bill is so incredibly backloaded that it will actually increase the deficit by approximately $26 billion over an eight-year window.
It’s not until the last two years of the deal that things begin to improve. That’s because the largest piece of deficit reduction, $28 billion, comes from merely extending into 2022 and 2023 the mandatory spending caps established by the Budget Control Act of 2011 – the same bill that created the “sequester” many lawmakers have been eager to ditch. If you pull out that provision, you’re left with a bill that would increase the deficit by about $5 billion.
Taxpayers should be very concerned about the ability of Congress to keep long-term spending reductions on the books. But we can all be certain that in the near term, the $63 billion in spending hikes scheduled for 2014 and 2015 will take place.
And there’s the rub when it comes to this bill. Taxpayers are being asked to trade today’s spending hikes for tomorrow’s spending cuts. The deal’s proponents promise us that the cuts will occur because they will be part of the law. But the sequester they are trying to undo is part of the law, too. If Congress can’t be trusted to stick to current law and abide by the sequester’s spending caps, how can it be trusted to pare back spending nine or ten years from now?0 Comments | Post a Comment | Sign up for NTU Action Alerts
Ryan-Murray Budget Compromise Set to Increase Spending
The Congressional Budget Office (CBO) released its cost estimate for the provisions of the Ryan-Murray budget compromise, known as the Bipartisan Budget Act of 2013. As was widely reported, the House's and Senate's budget leaders crafted their compromise around reducing the discretionary spending limits set in place under the bipartisan Budget Control Act of 2011. These cuts, automatically enforced across-the-board through a process known as sequestration, were effective and helped rein in the budget: not since the 1950s had federal spending dropped in two consecutive years. The numbers reported by the CBO show that this budget compromise would weaken the fiscal discipline that Congress and the President agreed to just a few years ago.
The Ryan-Murray compromise would lift the budget caps by nearly $45 billion in FY 2014 and $19 billion in FY 2015. The new spending resulting from gutting the caps would be spread over the next six years, but the bulk would occur in the first two years: $26.3 billion (42 percent) in the first year and $21.6 billion (35 percent) in the second year. At an annualized rate, spending would increase by an average of $12.4 billion through the first five years.
A part of this new spending would be offset through various changes in direct spending. Unfortunately, on an annualized rate, the spending cuts will not keep pace with the increases. While nearly 75 percent of the new spending occurs up front, nearly 75 percent of these savings occur after the first five-year budget window. The proposals would reduce spending by $19.5 billion through the first five years and by an additional $58.8 billion over the next five years. At an annualized rate, the changes to direct spending programs would save $3.9 billion a year through the first five years.
While many of the direct spending changes would enact some real reforms, such as increasing the amounts that new federal employees and members of the military will contribute towards their pensions (a savings of $1 billion over five years and $6 billion over 10 years), or reducing fraudulent payments to inmates ($33 million over five years and $80 million over 10 years), a large portion of the savings would result from increases in user fees and premiums.
The Ryan-Murray plan would increase aviation security fees, extend customs user fees by two years (currently set to expire in 2021), establish a new user fee for beneficiaries of conservation planning technical assistance, and would increase premiums to the Pension Benefit Guaranty Corporation. Combined, these four proposals account for $8.8 billion in savings through five years -- 45 percent of the total savings reported by the CBO.
On net, the Ryan-Murray plan would increase spending by $42.3 billion over the next five years, and, on paper, would eventually lead to spending cuts of $16 billion through 10 years. But if Congress can't even abide by the modest discipline it imposed on itself just a few years ago, it would be foolish to believe in the durability of these long-term, promised cuts.0 Comments | Post a Comment | Sign up for NTU Action Alerts
NTU and USPIRG have released a new "Toward Common Ground" report with over $500 billion in savings proposals people from both sides of the aisle can support. Plus, a special chat with our fall interns, Tara Riggs and Curtis Kalin, and the Outrage of the Week!0 Comments | Post a Comment | Sign up for NTU Action Alerts
In addition to three new and notable bills we've recently scored, NTUF is dedicating a portion of this week's edition of The Taxpayer's Tab to an issue that could play a pivotal role in the ongoing budget discussions: sequestration.
The automatic, across-the-board cuts went into effect earlier this year, and have impacted a wide range of government agencies and programs. The budget committee that's been tasked with finding common ground between House and Senate budget proposals is already facing pushback from lawmakers who want the sequester repealed or replaced.
There have been several attempts in the 113th Congress to repeal the cuts that are scheduled to go into effect in 2014. For reference, a brief outline of those bills:
Most of the legislation discussed above varies significantly in scope and specificity, which makes a blanket cost estimate for any attempt at 2014 sequester repeal difficult to formulate. However, NTUF arrived at a score using the $109.3 billion total 2014 sequester level and the Congressional Budget Office's estimate of how outlays would be affected in the case of a 2013 repeal. By analyzing CBO's projected yearly outlay effects as a percentage of that year's total authorizations, we estimated that if the 2014 sequester were repealed entirely, federal spending would increase by $105.6 billion over four years, or $26.4 billion annually. Note that our estimate is preliminary and subject to revision should new information become available.
Whether sequester cuts are maintained, repealed, reduced, or replaced by some combination of tax hikes and other spending reductions, the implications for taxpayers could be significant.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Should the federal government waste your tax dollars on biased research? You know the answer. And, recent work by a pair of free-market organizations shows Washington’s doing just that … again.
See for instance this article by Michelle Minton of the Competitive Enterprise Institute. She notes that National Institutes of Health have issued a five-year grant totaling over $3 million to an organization to examine the effect of the recent privatization of alcohol sales in Washington State. While at first blush, this might seem like a legitimate examination of an important subject, Michelle uncovers the truth:
The organization that received the grant and its scientists have a long history of producing anti-alcohol-biased research. Dr. William Kerr, the lead on the project, has written and spoken many times in the past about his firm stance against the privatization of alcohol sales which he believes directly results in increased drinking and costs to the state. He received funding from the National Alcohol Beverage Control Association, an organization with the sole purpose of defending control state systems, to produce a study warning states of the dangers of privatization. In all likelihood, the conclusion of this forthcoming study will communicate a similar attitude.
This is particularly troubling given that several other states, most notably Pennsylvania, are examining changes to their alcohol laws. Such efforts to expand consumer choice and create jobs could very well be blocked by flawed, taxpayer-funded “research.” That would mean taxpayers would be shortchanged both by the inappropriate expenditure of funds to pay for the grant, but even more significantly by stymieing pro-consumer changes to outdated laws.
Perhaps just as troubling is a study funded by the Small Business Administration (SBA) to tout an Internet sales tax bill, which has garnered much attention on Capitol Hill this year. Big retailers have spent millions of dollars on lobbying and PR efforts in support of the so-called “Marketplace Fairness Act;” however, as Andrew Moylan of the R Street Institute points out:
In service of the PR campaign for President Obama’s and Senator Dick Durbin’s favorite Internet sales tax law, the SBA decided to fork over $80,000 of taxpayer money to…(drumroll please)…the very people who have been writing studies in favor of the Marketplace Fairness Act (MFA)!
Here again, the use of taxpayer dollars is offensive in its own right, but even worse is the fact that public funds are being used to promote blatantly anti-taxpayer legislation. My colleagues, Pete Sepp and Doug Kellogg accurately dubbed the SBA study the “Outrage of the Week” in a recent podcast. The federal government should stop funding biased research. Doing so would represent a small step toward deficit reduction and a much bigger one toward fairer, more responsible governance.1 Comments | Post a Comment | Sign up for NTU Action Alerts
NTU Foundation's Michael Tasselmyer stops by to talk about the latest fiscal legislation in Congress, and Taxpayer Protection Alliance's David Williams talks about why the Ex-Im Bank should concern taxpayers. Plus, a big-time Outrage of the Week!0 Comments | Post a Comment | Sign up for NTU Action Alerts
Thanks to grassroots pressure and bipartisan support, the Ohio Legislature this week passed a Balanced Budget Amendment (BBA) Convention Application, growing the roster of states with BBA resolutions from 19 to 20. Thirty-four states must pass similar resolutions to reach the two-thirds threshold to call on Congress to set a time and place for a Constitutional Convention.
It’s no secret why taxpayers across the country are so eager for the passage of a BBA. Washington has run deficits during 45 of the last 50 years, proving that as an institution, Congress is no longer capable of restraining itself. Clearly, any solution to our spending crisis must come from outside Washington, D.C.
Thankfully, Article V of the Constitution allows state lawmakers to exercise certain powers to prevent a catastrophe due to federal excesses. As we wrote in “Why You Must Lead the Congress” over two decades ago:
The Founding Fathers had no way of predicting the current irresponsible spending policies of the federal government. Yet although they could not foretell the future, they were men of great wisdom. They did foresee the possibility that Congress might fail the people. It is for that reason that Article V of the U.S. Constitution enables the states to amend the Constitution.
The time has come for the states to exercise their constitutional authority over the federal government, and our hats are off to the Ohio Legislature for doing their part to seize this historic opportunity. Stay tuned to NTU.org as we continue the push for an Article V Constitutional Convention for the sole purpose of adopting a Balanced Budget Amendment.
NTU’s letter calling on Ohio leaders to pass an Article V resolution can be found HERE.1 Comments | Post a Comment | Sign up for NTU Action Alerts
In case you hadn’t noticed already with all the news over recent years about the D.C. area’s rising real estate prices, or new status as a millennial hotspot, or the city’s weathering of the recession, the Washington Post’s feature story on the beltway’s decade-long boom should bring the point home.
Certainly there are other regions that have done just fine during the “Great Recession”, an oil and gas boom in North Dakota has created thousands of jobs, while Texas has worked to maintain a friendly business environment, fostering new business, and snagging existing businesses from tax-heavy states like California.
Yet, these states earned that growth, Washington, D.C. has a better trick: let someone else earn it. Thus, as the Post points out, government spending and power fueled this growth in the District, and that means taxpayers.
The Post writes:
“Two forces triggered the boom.
“The share of money the government spent on weapons and other hardware shrank as service contracts nearly tripled in value. At the peak in 2010, companies based in Rep. James Moran's congressional district in Northern Virginia reaped $43 billion in federal contracts — roughly as much as the state of Texas.
“At the same time, big companies realized that a few million spent shaping legislation could produce windfall profits. They nearly doubled the cash they poured into the capital.”
Since 2000, and including 2013 projected revenue, the federal government has taken in $31 trillion in revenue – still managing to run a deficit all but two of those years… It won’t comfort taxpayers much that another $8.2 trillion was thrown on to the credit card after the last surplus in ‘01.
The long and short of it is that while D.C. has been living it up, taxpayers throughout the rest of the country have provided the backing for the good times being doled out through federal contracts, not to mention rising costs for government workers and programs like the stimulus.
The increase in lobbying expenditures may seem less connected to the direct flow of cash into Washington at first glance, but it is clearly no coincidence that a growing government would offer more opportunity – or require it from any business reluctant to take part – for lobbying.
We all pay the price for a system that is increasingly based on power and favor trading, rather than fostering a market system that truly responds to the needs of individuals.
The Post takes a somewhat optimistic track on how cottage industry built around this spending boom may lead to new private sector-only entrepreneurship. But will the taxpayers who provided a decade of seed money while dealing with a struggling economy see any return on that “investment”?
It’s an unwieldy example, however, it’s worth remembering that in the old Soviet Union the big cities starved the countryside to insulate themselves from the country’s economic failures (heck even in the currently-popular Hunger Games series we see a capital city’s excess maintained on the backs of an oppressed outer population).
That’s not to suggest that’s precisely what’s happening, those examples and more simply illustrate why this sort of trend is worth keeping a cautious eye on.0 Comments | Post a Comment | Sign up for NTU Action Alerts