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Government Spending

Spotlight On Sequestration
Posted By: Michael Tasselmyer - 12/04/13

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ground between House and Senate budget proposals is already facing pushback from lawmakers who want the sequester repealed or replaced.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:

  • H.R. 505: Rep. Keith Ellison's (D-MI) Balancing Act would repeal the sequester cuts in their entirety and replace them with tax increases for corporations and individuals. It would also increase investment in infrastructure projects and job training, and restrict certain types of military spending.
  • H.R. 699: Rep. Chris Van Hollen (D-MD) introduced the Stop the Sequester Job Loss Now Act in February. In addition to repealing the 2013 cuts and modifying several provisions in the tax code, Rep. Van Hollen's bill sought to reduce 2014 budget cuts by $27.5 billion.
  • H.R. 849: Under Adam Smith's (D-WA) Sequestration Relief Act of 2013, sequester cuts would be repealed and partially offset by a reduction in discretionary spending caps.
  • H.R. 857: The Protect Troops at War Act, introduced by Rep. Paul Cook (R-CA), would eliminate 2013 and 2014 sequester cuts to the Department of Defense.
  • H.R. 900: Rep. John Conyers (D-MI) introduced the Cancel the Sequester Act of 2013, which, as the name implies, would outright repeal all scheduled sequester cuts.
  • H.R. 2060: Rep. Van Hollen also introduced this bill, which would repeal (rather than reduce) the 2014 sequester and lower discretionary defense spending limits.
  • S. 388: Senator Barbara Mikulski's (D-MD) American Family Economic Protection Act of 2013 would reduce 2014 sequestration cuts, adjust tax rates for wealthy individuals, and eliminate certain direct payments to agricultural producers.

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.

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Taxpayer Money for Anti-Taxpayer Propaganda
Posted By: Brandon Arnold - 12/03/13

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.

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Should You Know When Taxpayer Cash Backs an Ad? & TPA’s David Williams on Ex-Im Loans - Speaking of Taxpayers, Nov. 22
Posted By: Douglas Kellogg - 11/25/13

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!

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Twenty States Down, Fourteen More to Go!
Posted By: Lee Schalk - 11/22/13

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.

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Who Paid for Washington’s Boom?
Posted By: Douglas Kellogg - 11/19/13

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.  

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2013 Review: Lingering Deficits Despite Record Revenue
Posted By: Michael Tasselmyer - 11/13/13

As the budget committee debates how it will reach a long-term deal by the December 13 deadline, the Congressional Budget Office (CBO) has been compiling the numbers behind the 2013 Fiscal Year, which ended just over a month ago. CBO's recent report ("Summary For Fiscal Year 2013") shows that for the first time since 2008, the U.S. Government ran a deficit of less than $1 trillion, as it spent $680 billion more than it collected.

The small "victory" that is a smaller deficit was accomplished largely thanks to increased tax revenues. Although federal outlays in 2013 were $84 billion less than the totals in 2012, the government collected $325 billion more in taxes than it did in 2012, which means that the growth in tax revenue was over four times as much as any reduction in federal spending.

fy13totals

The report also confirmed that spending on entitlement programs like Social Security, Medicaid, and Medicare all continued to grow at a rapid pace, even as spending on other programs related to defense and unemployment benefits declined. Those three entitlement programs each grew by over five percent, with spending on Social Security benefits breaching the $800 billion mark. The spending on these programs in Fiscal Year 2013 represented over 9 percent of GDP.

cbofy13spending

The numbers suggest that, as NTUF has pointed out before, entitlement reform will have to be revisited as a debt- and deficit-reduction measure as spending on these programs continues to offset not only the highest tax revenues Washington has had to work with in years, but significant cuts to defense spending in the wake of sequestration caps. As the latest BillTally report shows, however, Congress has seemingly lost some of its focus on finding ways to reduce spending: through the first six months of 2013, Congress proposed $3.83 in additional spending for every dollar they proposed to cut, and healthcare-related legislation was the costliest in both Chambers.

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Lots of Ways to Learn About Congressional Spending
Posted By: Dan Barrett - 11/11/13

NTU Foundation is getting the word out about how Congress is planning to spend your tax dollars. For 20 years, the BillTally system has tracked every proposal introduced in the House and Senate to show taxpayers and legislators exactly what would happen if one, several, or all the active bills in Washington, D.C. were enacted. The first half of 2013 saw many bills to cut government spending but many more to increase expenditures on an annual basis. In our latest study, NTUF researchers found that Congress would grow public programs and efforts by $1.28 trillion per year. But, of course, that's not the whole story and is just one of the several findings that NTUF's research has brought to light.

Elected officials in each Chamber of Congress have laid out many different paths for the country's fiscal future. Besides consulting the line-by-line details in the full BillTally report by Director of Research Demian Brady, there are a variety of mediums for you to get the information you need to educate yourself on where Congress wants to take your tax dollars.

For the visually inclined, there are four infographics, each detailing a part of the BillTally report. If you want to see what the entire Congress or what each chamber has proposed (House and Senate), we've parsed out the data so you don't have to. An interesting fourth visualization takes a look at when savings bills have been introduced in both the previous Congress and in 2013. One of the questions we are constantly looking at is when and how cut proposals are taken up because spending reductions do not happen without legislative action.

The audio-lovers are not forgotten as Brady went on NTU’s weekly podcast, Speaking of Taxpayers, to give you the highlights and important findings of how the Tea Party has affected spending proposals and whether net agendas are following historical trends or breaking new ground. For the first time, NTUF staff exhibited our on-camera skills by hosting a Google Hangout:

Of course, there are overviews of the report in the form of press materials and in-house summaries but perhaps more importantly are some posts by Policy Analyst Michael Tasselmyer that delve between the lines. So far, he has posted on two of Congress' larger spending categories, healthcare and jobs programs, and on the timing of savings proposals. Additionally, Tasselmyer explored the differing defense budgets of the House and Senate (the findings may surprise you). Perhaps you want to know which bills would most dramatically affect the budget? We've got you covered.

Is this the first you're hearing of the many levels of BillTally analysis? If so, you can be on the cusp of Congressional research by subscribing to The Taxpayer’s Tab, NTU Foundation's weekly update. Tab subscribers are the first to see the costs and implications of bills making the headlines and generating buzz in the policy world. Not a fan of email or love NTUF so much that you want more? Follow us on Twitter and give us a shout out! And remember, there's a lot of ways that NTU Foundation helps out Americans and we're always looking for new members. Are you up for a challenge of getting government spending under control? We need you!

Was there a part of the recent BillTally report that surprised you? Post what your thoughts are on the $1.28 trillion in new spending that Congress could pass below.

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BillTally Report: Congress Still Proposing New Spending
Posted By: Michael Tasselmyer - 10/31/13

As we approach the final weeks of the first session in the 113th Congress, taxpayers have already been faced with a number of major legislative shakeups in Washington, D.C. From automatic sequestration cuts to the rollout of several major provisions of the Affordable Care Act – and a multi-week government shutdown, to boot – there’s been a lot for citizens to consider as they reflect on how their Representatives and Senators have used their tax dollars.

Fortunately, National Taxpayers Union Foundation (NTUF) has been keeping tabs on Congressional budget proposals through its BillTally project – the only comprehensive database that tracks every major spending and saving bill introduced on Capitol Hill. In a new Policy Paper, NTUF Director of Research Demian Brady has crunched the BillTally numbers from the first six months of the current session of Congress to offer taxpayers perspective and insight into how the proposals we’ve seen so far measure up to those in previous years.

Among the major findings:

  • In the House, NTUF was able to score 438 bills over the first six months that would affect the budget by $1 million or more. For every bill that would decrease federal outlays, there were 4.41 that would increase them. Over the entirety of the 112th Congress, that ratio was 3.87.
  • In the Senate, NTUF found 230 such bills over that same time, with a ratio of 5.97 spending increase bills to every one savings bill. In the 112th Congress, the Senate’s ratio was 4.6.
  • Excluding overlapping bills, the House proposed a net $1.2 trillion budget increase, already higher than the previous Congress’ $1.12 trillion over its first year. The Senate offered a net savings agenda of $46.8 billion, which is lower than the 112th’s $405 billion net increase in its first year, but does not include any high-cost universal health care proposals.
  • Across both Chambers, legislators introduced a net spending increase agenda of $1.28 trillion in their first six months, which is almost exactly the same total agenda proposed over the course of the entire 112th Congress.

Brady also analyzed lawmakers’ proposals by policy category, and found that health care and job creation/”stimulus” measures carried the highest costs to taxpayers. Among the least expensive proposals – those that would reduce federal spending the most – were across-the-board spending cuts, Affordable Care Act repeals, and tax code reforms that would reduce or eliminate many refundable credits.

Overall, although the 113th Congress has introduced its share of spending cuts, Brady’s analysis shows that at least over the first six months, it is doing so at a slower pace than the 112th. That finding comes at a time when many Americans are still concerned over mounting deficits and no sure sign that a long-term budget deal will be worked out in the coming months.

To read the full report online, complete with in-depth data, charts and analysis, click here. A press release with summary information can be found here.

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Senate, House to Vote on Resolutions to Stop Debt Ceiling Suspension
Posted By: Nan Swift - 10/29/13

Today the Senate, and tomorrow the House, are expected to vote on resolutions (S.J. Res. 26 and H.J. Res. 99 respectively) that disapprove of President Obama’s suspension of the debt ceiling until February 7th. One of the provisions of the Continuing Resolution/Debt Limit compromise (H.R. 2775) of only about two weeks ago was to give Congress the chance to end the suspension of the debt limit via an expedited resolution process. Technically, this does give Congress back some of the “power of the purse” it abdicated via yet another debt ceiling suspension, but the truth is that this will be little more than a show vote.

Nothing short of a miracle could give S.J. Res. 26 the votes it needs to pass in the Senate. Across the Hill, H.J. Res. 99 is expected to pass the House and promptly stall, as it  will neither be able to pass the Senate nor garner anywhere near enough votes to override a veto from the President (should the unthinkable happen in the Senate). This means a free-pass for many Members who want the chance to say they oppose overspending without any real-world implications.

The resolutions at hand are far from the serious reforms we urgently need. Rather than continue on this unsustainable trajectory, in which debt ceiling increases are routine, Congress must demonstrate a clear, credible plan to reduce expenditures.

Continually raising the debt limit without the serious reforms necessary to rein in our out-of-control spending only compounds the uncertainty and drag that weighs down our economy and potential for growth. It is likewise a moral imperative not to continue taking out lines of credit at the expense of future generations whose own prosperity is equally uncertain.

It is essential that Congress adheres to the principles NTU repeatedly outlined during consideration of H.R. 2775:            

1. Do not raise taxes

2. Resist the temptation to include extraneous measures

3. Preserve the sequester

4. Enact meaningful entitlement reform.

Our debt and spending problem is so massive, even the most aggressive, confiscatory tax plans can’t begin to fill the hole left by profligate legislators and administrations – not to mention the negative economic consequences of such tax schemes. Loading down “must-pass” legislation with other favored projects obscures the issue, and unnecessarily muddies the water in the search for votes.

Failing to address the real spending problem at the heart of repeated “debt ceiling crises” by dismantling the sequester or failing to enact meaningful entitlement reform only makes these issues increasingly hard to tackle and ensures that just a few short months from now we’ll be here again, looking up from the bottom of an even deeper hole.

Go here to tell Congress to “Keep the Caps” and stop the spending binge.

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The Late Edition: October 28, 2013
Posted By: Curtis Kalin - 10/28/13

Today’s Taxpayer News!

Costly questions: The National Endowment for the Humanities is spending hundreds of thousands of taxpayer dollars in an attempt to answer timeless philosophical questions such as “what is the meaning of life?” and “why are people bad?”. The NEH budget runs at about $150 million per year. The Washington Examiner has more.

Failure to navigate: As the new healthcare exchanges still face tech difficulties, the Department of Health and Human Services is adding $13 million to the “Navigator” program that is supposed to help uninsured Americans traverse the new health exchanges. However, even before the program earned a raise, over half of Americans don’t know what the exchanges are and HHS has still refused to release a number of actual enrollees. More details at the Gardner News.

Pricey political food: Members of Cleveland area city councils have spent into the thousands on pre-meeting meals and snacks and using taxpayer money to do so. One council president defended the meals saying, “It is an incidental expense that is well within our authority.” The Cleveland Plain-Dealer has more details.

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