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The fix is in, my friends. Speculation on Capitol Hill runs rampant that House Leadership is actively undermining the prospects for passage of a Balanced Budget Amendment to our Constitution, effectively eliminating the most powerful tool we have to enforce budgeting discipline into the future. While all 47 Senate Republicans co-sponsored a strong BBA that included a spending limit and a supermajority threshold for tax increases, House Leadership has been either ambivalent or subtly hostile towards real structural budget reform. In interviews, House Speaker John Boehner (R-OH) has said he isn't interested in "gimmicks," which many regarded as a backhanded comment about a BBA or a statutory spending cap.
This bad-mouthing seems to be working. The National Journal surveyed Members of Congress about what they expected from a debt ceiling agreement and only 39% of Republicans thought a BBA would be a part of the deal. For some perspective a recent poll found that 81% of Republican voters support a BBA, so I think it's safe to say that elected Rs appear to not be reflecting the will of their constituents very well.
And now word is leaking that Republican House leaders seem to be rushing through a BBA not in order to actually pass it, but to give it a speedy euthanasia and get it out of their hair. Just this morning, I received an email from a House staffer who said "Leadership is planning on bringing H.J. Res. 1 to the floor for a vote sometime over the next two weeks to delegitimize the BBA and separate it from the debt ceiling vote."
H.J. Res. 1 is the version of a BBA that was sped through a House Judiciary Committee markup last Friday with little notice. NTU has been advocating for a BBA for 40 years and I was one of just three people invited to personally testify in its favor at a House Judiciary Subcommittee on the Constitution hearing last month, yet I heard NOTHING about the proposed markup until the morning it was occurring. That's not how a leadership team that's trying to build support for something operates, it's how you try to sneak something through quickly without a lot of scrutiny.
What's so peculiar about this turn of events is that a BBA is not some controversial too-conservative provision toxic to moderate Members' reelection prospects. This isn't, for example, Medicare reform, where dozens of Republican members had to swallow hard and cast the right vote in support knowing that Democrats would demagogue the issue mercilessly. Simply stated, NOBODY will have to "walk the plank" to vote for a BBA knowing that attack ads await them on the other side. It's a rare combination of good politics AND good policy, yet some Republicans are trying to kill it.
The next few weeks will tell you all you need to know about whether or not Republican leaders actually heard the message that was sent last November. Rushing a Balanced Budget Amendment through without allowing grassroots BBA supporters across the country to weigh in and build support would be a pretty clear indication of their true colors. If leaders in the House of Representatives schedule a vote on the Balanced Budget Amendment in the month of June, I'd consider it the equivalent of a big middle finger to the millions of fiscal conservatives who helped create the majority they now enjoy.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Some Democrats Joining Adult Conversation Over Debt Limit
"Adult conversation” and “serious debate” have become the top political buzzwords over the past couple of months.
President Obama said in February that his “hope is that what’s different this time is we have an adult conversation where everybody says, “Here’s what’s important and here’s how we’re going to pay for it.” Representative Paul Ryan echoed the call, “The fiscal commission gave us hope that we were going to finally have that adult conversation in Washington about how we preempt our debt and deficit crisis.”
Apparently serious adults are rare in Washington. If that’s the case, they must be bordering on extinction among the liberal pundits, journalists and bloggers who have been covering the deficit battle.
This has become no more clear than in the coverage over the debt ceiling debate. The debt ceiling is a cap set by Congress on the amount of debt the federal government can legally borrow. The ceiling currently stands at an eye-popping $14.294 trillion. The utter ridiculousness of that number and the sad fact that we’re constantly exceeding it has engendered some serious concern by conservatives.
They argue that the debt limit vote provides the necessary kick-in-the-pants that Washington needs to pass some real cuts and reforms so that we’re not right back here in six months talking about the debt limit again. A pretty sensible argument. Even President Obama thinks so. In an interview with the Associated Press, Obama said “I think it’s absolutely right that [the debt limit vote is] not going to happen without some spending cuts.”
Ah, sounds like the beginning of an adult conversation. We agree on the end goal, now let’s set about working out the details. And then the pundits got involved.
Take for example what Progressive Paul Waldman wrote in the American Prospect earlier this week:
The reason we're now seeing an unprecedented amount of attention paid to a vote that ordinarily passes with little notice is that the Republican Party's agenda is being set by a group of ideological radicals who seem quite willing to cripple the American economy if that's what it takes to strike a blow against the government they hate so much.
And now we’re back to the kiddies’ table, bickering over who gets the next turn on the Xbox.
Sadly, Waldman is not alone. With an understanding that succeeding in Washington is often about who can yell the loudest, rather than who can speak the most truthfully, liberals have pulled out their bullhorns. Their strategy is transparent enough: Use Armageddon-ish language to describe what happens if the debt limit isn’t raised, then blame any Republican attempt to reduce spending as a ploy to kill the economy.
Mature discourse? No. Would it have worked anyway? Possibly. Until today, when the second part of their plan got trounced worse than the San Antonio Spurs in this year’s playoffs. From today’s Washington Post:
A growing number of Democrats are threatening to defy the White House over the national debt, joining Republican calls for deficit cuts as a requirement for consenting to lift the country’s borrowing limit.
The push-back has come in recent days from Sens. Kent Conrad (D-N.D.), chairman of the Senate Budget Committee, and Joe Manchin (D-W.Va.), a freshman who is running for reelection next year. Sen. Mark Pryor (D-Ark.) told constituents during the Easter recess that he would not vote to lift the debt limit without a “real and meaningful commitment to debt reduction.”
Even stalwart White House allies like Sen. Amy Klobuchar (D-MN) said the debt-ceiling vote should be tied to deficit reduction. And Sen. Mark Udall (D-CO) went as far as to say, “As catastrophic as it would be to fail to raise our debt ceiling, it’s even more irresponsible to not take this opportunity to own up to our unsustainable spending path.”
More and more people are joining the adult conversation, understanding that our deficit problems are just too big to ignore. There’s always room at the table. Let’s hope some others are willing to set aside their partisan bombastry and help us solve our spending problems.2 Comments | Post a Comment | Sign up for NTU Action Alerts
Taxpayers Threatened By Growing State Pension Shortfall
Washington Post blogger Ezra Klein is fond of describing our government as an insurance conglomerate protected by a large, standing army. It’s a pithy way of making the point that our government is defined by what it spends its money on, and in the case of the federal government that is largely Medicare, Medicaid, and the military.
But what about state governments? How should we define them? If it were based on the average interaction a citizen has with their state and local governments we would typically think of it as a service provider – they educate our children, pave our roads, collect our trash, and protect our streets. But this quaint view of where our taxpayer dollars are going is quickly being tossed out the window due to the growing cost of underfunded public sector benefit programs. In Klein’s terms, our state government is quickly becoming a publicly funded retirement community for well-heeled government workers.
A new report by the Pew Center on the States found that the state funds devoted to paying pension and health care benefits to retired government workers is $1.26 trillion underfunded. Even that eye-popping number likely understates the problem. As Pew explains in their report, “The $1.26 trillion figure is based on states’ own actuarial assumptions. Most use an 8 percent discount rate – the investment target that states expect to earn, on average, in future years.” If the last decade is any guide, the 8 percent rate is wildly optimistic. From 2000 to 2009, the average annual return for the pension investments was 3.9 percent.
Using a more likely rate of return, the funding shortfall could be as much as $1.8 trillion, using investment assumptions required in the private sector by the Financial Accounting Standards Board, or even $2.4 trillion, using a conservative rate analogous to the 30-year Treasury bond which guaranteed a 4.38 percent return.
As the funding gap grows the annual bill for pension and health care benefits will continue to climb. “In many states, the bill for public-sector retirement benefits already threatens strained budgets and is competing for resources with other critical needs, including education, infrastructure and health care,” said Susan Urah, managing director of the Pew Center on the States.
This could lead states into the dire fiscal mess being experienced in California and Illinois where growing public sector retiree costs are eroding spending on other programs. In an op-ed last August California governor Arnold Schwarzenegger revealed the starling truth that the cost of retirement benefits was growing so fast that it would exceed what the state was spending on higher education this year. But it wouldn’t stop there, next year costs would rise another 15 percent – far outstripping any growth in revenue. By 2020, annual pension spending will have grown nearly five-fold, from $6 billion in 2011 to $28 billion.
This is a direct threat to taxpayers. As Mercatus researcher Veronique de Rugy explains, “Once pensions plans run out of money, payments will have to come out of general funds, meaning taxpayers’ pockets.” Even now, an exorbitant amount of taxpayer money is going to outsized public sector salaries, lavish benefits, and cushy retirement plans, taking money away from states’ ability to fund Medicaid, schools, and other programs.
Reforms will not be accomplished unless there is some public outrage at this gross mismanagement of taxpayer funds. I have a feeling most people wouldn’t be happy to know state governments are becoming little more than an exclusive retirement resort for their own workers.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Rep. Giffords Hopes to Give Congress a Pay Cut
It has been 78 years since Congress took a pay cut. In the midst of the Great Depression Congress voted to cut their pay from $9,000 to $8,500. Now, with the economy still struggling to get on its feet under the crushing weight of historic deficits, a bipartisan group of Representatives is once again pushing to cut Congress’ salaries.
The effort began under the leadership of Representative Gabrielle Giffords (D-AZ) who introduced H.R. 204, the “Congressional Pay Cut Act”, in January. NTU endorsed the bill soon after as a common sense measure to reduce spending and to have Members of Congress endure what millions of American have in this economy: a pay cut. While she recovers from the horrifying shooting that left her hospitalized, Representatives David Schweikert (R-AZ) and Kurt Schrader (D-OR) have taken up the lead to bring the legislation to the floor.
In a joint op-ed, the two Representatives spoke of the importance of setting an example at a time when Americans are still feeling the effects of the lingering recession. “American families are adapting to these challenging economic times by tightening their belts and learning to do more with less,” write Reps. Schweikert and Schrader. “They have the right to expect their government to do the same.”
This echoes the sentiment of Representative Giffords who, upon introducing the bill, said that “Members of Congress can’t ask any American to cut back before we are willing to make some sacrifices of our own.
The “Congressional Pay Cut Act” would create this shared sense of sacrifice by imposing an across-the-board five percent pay cut on all Members of Congress salaries. This would match the House of Representative’s earlier budget cutting effort in which they returned all office budgets to 2008 levels – a five percent cut.
Our nation is facing unprecedented fiscal problems. “The American people are looking for bold action to reduce spending,” write Reps. Schrader and Schweikert. “They want to see members of both parties show a renewed commitment to cutting spending in every corner of the government, including our own.”
Representative Gifford’s bill is a step in the right direction. It is a small demonstration that Washington can move beyond the politics of pain for thee but not for me. It won’t solve the problem on its own, or anything close to it, but it’s a reasonable step that all Members should support. While Americans are struggling to find work and America’s spending problem will necessitate bold action, it is good to know that some Representatives are willing to share with us in the sacrifice.1 Comments | Post a Comment | Sign up for NTU Action Alerts
National Taxpayers Union Executive Vice President Pete Sepp appears on the Government Accountability Project's Whistle Where You Work program to discuss the 'Whistleblower Protection Act" among other issues. Click HERE to see the entire program.1 Comments | Post a Comment | Sign up for NTU Action Alerts
In the time it takes you to read this blog post, the federal government will have racked up an additional $10 million in debt that will be passed along in higher burdens on our children and grandchildren. Learn about what conservatives in Congress are doing it to stop it by joining us for a tele-townhall event with Representative Paul Ryan (R-WI), Chairman of the House Budget Committee and the innovative fiscal conservative behind the “Roadmap for America’s Future.” NTU President Duane Parde will be hosting the 30 minute call with Dick Armey, Chairman of FreedomWorks, and you’re invited to hear the latest breaking news and ask questions! Join us and thousands of other activists on the call at 6pm Eastern time Wednesday, March 9th by dialing 1-888-886-6603, extension 16307#.
Our national debt has reached a staggering $14 trillion, and our deficit alone from this year is as big as the entire budget of 1998. Congress has been working on a spending bill for the rest of 2011, but even modest spending reductions amounting to less than four cents out of every dollar of overspending have been rejected by Washington liberals. In the coming weeks we’ll begin debate on the budget for 2012, so it has never been more important for you to make your voice heard on Capitol Hill.
Our tele-townhall will be a great chance for you to hear from a Representative Paul Ryan, who as the head of the House Budget Committee is right on the front lines of the battle to reduce spending and create a sustainable budget. Join us and learn about not only the dangers our debt poses, but also what conservatives in Congress plan on doing to stop it. At 6pm Eastern time Wednesday, March 9th, dial 1-888-886-6603, extension 16307# to join this important call.
We hope you’ll join us as we get the latest information on the upcoming showdown over spending.6 Comments | Post a Comment | Sign up for NTU Action Alerts
GAO Report Highlights "Mother Lode" of Government Waste
In his State of the Union address President Obama said that we must create a “government that’s more competent and more efficient.” He highlighted the duplicative nature of Washington, joking that fresh water salmon and saltwater salmon are regulated by two different agencies, but “it gets even more complicated once they’re smoked.”
Something tells me President Obama is no longer laughing after the Government Accountability Office released a report today showing the depth of redundancy and waste Government Accountability Office (GAO). In the report, the government watchdog found that Congress’ penchant for creating programs, but never reviewing, or eliminating them, has created a labyrinth of duplicative programs that grows by the year.
If Obama thought two agencies to regulate salmon were bad, the GAO found that the U.S. government has more than 82 programs for monitoring teacher quality, 80 programs focusing on economic development, 47 for job training and 15 agencies that deal with food safety. Moreover, few of these programs are receiving the necessary oversight to ensure that taxpayer money isn’t being wasted. A consistent refrain found throughout the GAO report was that “little is known about the effectiveness” of a given program because it “has not been well studied.”
Comptroller General Gene Dodaro wrote that, “Reducing or eliminating duplication, overlap, or fragmentation could potentially save billions of tax dollars annually and help agencies provide more efficient and effective services.”
Given the apparent redundancy and waste spread throughout the federal government the question becomes whether Democrats will continue to label $4 billion in proposed spending cuts “extreme,” and back off their claim that adopting spending cuts will “undermine and damage our capacity to create jobs and expand the economy.”
Eliminating bureaucratic waste while making government more efficient for taxpayers should be a no-brainer for Congress. But as Reagan said, “no government ever voluntarily reduces itself in size.” Fortunately, Rep. Jeff Duncan, has introduced a bill to resurrect the “Committee on Reduction of Nonessential Federal Programs” tasked with identifying and cutting redundant federal programs. The idea, a throwback to the “Byrd Committee,” which sought out government waste to ease the stress on the nation’s finances prior to World War II, is a welcome idea given Congress’ $1.65 trillion overspending problem. It’s also the perfect prescription given the GAO’s grim diagnosis.
President Obama was to correct to speak of the need for a more efficient government in his State of the Union, but it has become clear it is not a laughing matter. Hundreds of billions of dollars of taxpayer money is being needlessly wasted by Washington. If Congress is looking for ways to reduce its deficit, the GAO’s report and Rep. Duncan’s new “Byrd Committee” are good starting places.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Reflections on CPAC
Today is the third and final day of the 2011 Conservative Political Action Conference (CPAC), the largest annual gathering of conservatives and libertarians in the nation. After three days of staffing a well-visited booth, meeting with dedicated activists, and listening to dynamic speakers, I’m looking forward to some rest and relaxation, but also to what the future holds for the conservative movement.
This year’s CPAC had the highest number of attendees (11,000) in the history of the conference. CPAC speakers ranged from Rep. Paul Ryan of Wisconsin, the House Budget Committee Chair, to Governor Mitch Daniels of Indiana, a potential presidential candidate who gave, in my view, an outstanding keynote address, which you can read here. Also, CPAC 2011 featured a number of new participating organizations that focus on both activism and policy related to social, economic, and political issues at the federal, state, and local levels.
While attending CPAC, I had the opportunity to participate in a number of discussions about important tax and fiscal policy issues facing the United States. NTUF hosted a discussion about entitlement reform that featured experts such as Rep. Devin Nunes, Maya MacGuineas, Douglas Holtz-Eakin, Steven Moore, and Dan Mitchell. The bottom line of their presentation was that we need to start tackling the problem of runaway entitlement spending before it’s too late.
But budget reform should not be restricted to social programs. CPAC also featured a panel on how the nation can reduce defense spending to a more manageable level without jeopardizing readiness. As a former military aide to a fiscally conservative Member of Congress, I was pleased to hear all of the views presented and the many ideas for maintaining an affordable defense posture. The passion the attendees displayed at the panels, and in conversations with me at the NTU table, was striking. It bodes well for conservatives if these activists carry their views home and remain outspoken and active in the political process.
For the last several weeks, there has been a lot of talk in the media about differences in the conservative movement over certain policies and suggestions that these differences spell certain doom the conservative movement. After three days of observing conservatives of all stripes from across the country, I can unequivocally say that reports of destructive differences among conservatives are greatly exaggerated. In fact, I would argue that the conservative movement has never been stronger and ready to bring real solutions to the many serious problems facing the nation.4 Comments | Post a Comment | Sign up for NTU Action Alerts
Tune into NTU's State of the Union Coverage tonight
Tonight at 9 p.m. EST, the National Taxpayers Union's crack government affairs and policy analysis teams will provide special online coverage of the President’s State of the Union Address, and we want you to be there and be a part of the discussion. We will be breaking down the President's proposals and what they will mean for taxpayers. Details on how you can join the conversation are below.
We look forward to seeing you online tonight at 9 p.m. EST!
We look forward to seeing you online tonight at 9 p.m. EST!
On the GOP Response: Limited Government?
Paul Ryan, as the face of the Republican party, eloquently stated: "We believe, as our founders did, that 'the pursuit of happiness' depends upon individual liberty; and individual liberty requires limited government. Limited government also means effective government."
Man, these guys can really talk the talk. But I'm skeptical. For six years Republicans held the Presidency and both chambers of Congress. Six years of unified government! What ended up happening? Bush took office when government was consuming $1.86 trillion, 18.5 percent of GDP. When he left office the budget reached over $3.5 trillion, 24.9 percent of GDP! Mind you, all under Republican government -- the same folks who are promising to "limit" government and "cut" spending now. I would take their rhetoric with a grain of salt and hold their feet to the fiscal fire. Republicans won back the House and 20 state governments under the auspices of limited government.
Let's hope they put their money where their mouths are.2 Comments | Post a Comment | Sign up for NTU Action Alerts