House GOP Targets Job-Crushing Regulations
Today, the House is poised to take up the Regulations from the Executive in Need of Scrutiny (REINS) Act sponsored by Rep. Geoff Davis (R-KY), a bill that looks to combat the growing regulatory regime. The bill would requires Congress to affirm and major rule implemented by aggressive agencies. A major rule constitutes a rule that could have an economic impact greater than $100 million. Though the true economic loss caused by excessive regulation goes far beyond this calculated metric, this is an important first step in ending oppressive regulation by executive fiat. Americans for Tax Reform has long supported this important reform.
Unsurprisingly, the White House has issued a veto threat against the bill. This is because the Obama Administration has repeatedly turned to executive measures to push its agenda after Congress has been unwilling to participate in the President's radical expansion of the size of government. This is illustrated by the increasingly aggressive EPA in the wake of the 111th Congress—controlled by Democrats—abjectly rejecting the Cap-and-Trade scheme.
In 2010 the federal government implemented 3,271 new rules and regulations which cost small businesses approximately $10,000 per employee in compliance. Americans for Tax Reform Foundation calculated that the average American had to work 77 days in 2011 just to pay off the costs of regulation. The dead-weight loss to the economy, coupled with the growing burden to support the regulatory regime, represents a ballooning government that crowds out and limits private enterprise. Contact your representative to tell them to vote YES on the REINS Act today.
Feds Should Stay Out of Competitive Pharmaceutical Marketplace
This morning, Americans for Tax Reform sent a letter to senators on the Judiciary Committee, warning lawmakers to keep their hands off of the productive players in the health care system. A merger between two pharmacy benefit managers - which work to ensure the best prescription drugs are available for the best price - is currently pending in front of the Federal Trade Commission, but Congress has decided to needlessly interject itself into the debate. From our letter:
PBMs work to understand and address problems that cost the health care industry billions, such as patient compliance and harmful medication interactions. These losses are mitigated and could ultimately be prevented by the efforts made by PBMs to promote greater patient understanding.
The competitive nature of PBMs has allowed companies to develop diverse methods for controlling costs and providing safe medications. Thus, the proposed merger between pharmacy benefit managers (PBMs) Express Scripts and Medco Health Solutions would empower patients with greater prescription choice and broader pharmaceutical information. These companies have recovered preventable costs in the health care system without government mandate or management—to intervene as companies start to build on their successes would reverse significant pro-patient reform.
Discouraging the collaboration of two companies that have been tremendously successful in lowering costs and increasing safety would indicate lawmakers are not serious about addressing long-term sustainability in the American health care system. I encourage you to consider these points as the discussion on PBM mergers continues and urge you to refrain from any action that would allow this effective health care reform to move forward.
Click here to read the entire letter.
Sequester: A Big Word for "Not Making Things Worse"
The Super Committee’s announcement yesterday that it would not produce a deficit reduction plan has been viewed by many as a “failure” in Washington. In fact, the debt limit deal passed in August secured victory for taxpayers in any scenario - without a committee plan, a budget sequestration will go into effect, axing $1.2 trillion from federal spending. Taxpayers in favor of smaller government win either way.
Unlike a detailed committee proposal, the sequestration is an across-the-board cut for next year’s spending levels. The August debt deal requires half of the sequestration to fall on the defense side (the largest discretionary allocation by a long shot; defense spending makes up more than half of the funds appropriated each year) and half to come from domestic discretionary spending. OMB will be responsible for reporting to Congress what the spending levels will be and lawmakers will be able to flesh out where cuts will fall from there.
Most of the mandatory spending is exempt from sequestration, as is supplemental spending that has been used to side step budgetary restraints (supplementals are the common vehicle for war funding as well). The sequester can touch Medicare spending, but only cut about one-half of one percent of its expected costs over the next ten years.
This means supporters of bigger government and domestic spending are going to be feeling a very tight squeeze. CBO estimates that defense spending will amount to $8 trillion over the next decade. Non-defense discretionary spending will amount to $5.9 in that same period. That $600 billion in cuts from either of these categories would be deemed “draconian” is laughable, but it is obvious that the cuts will weigh much more heavily on the non-defense side of the ledger.
What’s more, the CBO projection does not include the security spending that happens outside of Pentagon budgets which will add over $200 billion in spending over the next ten years. It is a truly unserious lawmaker who can claim efficiencies cannot be made anywhere in these ballooning accounts.
As Dan Mitchell of Cato points out, the full sequester hardly augers austerity; with the $1.2 trillion cut federal spending will still grow by $2 trillion in the next ten years. This is slightly more than the spending growth of the past decade, which included two new wars, unprecedented unemployment compensation, bank bailouts, and “stimulus” spending binges. The sequester, then, only prolongs the reckless spending habits of the past decade. While $1.2 trillion in automatic cuts is a good start, it is a small first step on a much larger journey towards solvency.
Super Committee Focus on Tax Hikes Robs Taxpayers of Spending Reform
The affirmation from the Super Committee today that they will not be producing a debt proposal comes as no surprise after repeated reports that Democrats refused to agree to a deal that did not include massive tax hikes. In September, ATR offered the below suggestions to find $1.5 trillion in savings—simple solutions that would have gone beyond the $1.2 trillion debated by the committee. Democrats instead torpedoed the opportunity to enact such commonsense reforms, arguing tax hikes can fix what it is a fundamental spending problem.
First, the Committee should enact a hard, nominal discretionary spending freeze at the FY2012 levels. Savings: $971 billion.
Secondly, the following reforms offer multiple ways for the committee to find its way to $1.5 trillion in savings (calculated over ten years, unless otherwise noted):
- Revive federalism – Give states control over their Medicaid programs, remaining federal welfare programs and transportation spending.
Devolving transportation to the states:
Savings: $540 billion
Savings: $750 billion
- Decrease the regulatory burden – Regulatory budgets have grown by 72.5 percent over the past decade, which is much faster than the reported costs of regulations in the same time period. Simply freezing spending on regulatory agencies’ at its ten-year average would create real savings while stemming aggressive regulatory overreach.
Savings: $298 billion
- Eliminate costly federal labor mandates – federal labor laws inflate the cost of construction projects with arbitrary wage mandates and uncompetitive union requirements.
Repealing the Davis-Bacon Act:
Savings: $108 billion
Repealing Project Labor Agreements:
Savings: $24 billion
- Spending Reform
Stop appropriating for unauthorized programs
Power-hungry appropriators annually fund programs and agencies whose authorizations have expired.
First year savings: $290 billion (2010 CBO estimate, does not include “indefinite” appropriations)
Prohibit authorizing and appropriating in the same bill
Obamacare is a prime with examples: PPACA both authorized and appropriated the Prevention and Public Health Fund, setting up an automatic funding track in perpetuity.
Savings from deauthorizing advance appropriations: 17.75 billion. (One of 38 “indefinite” appropriations in Obamacare)
End abuse of emergency spending loopholes
What few budget constraints that exist are flouted by the use of “emergency” designations, paving the way for explosive war spending, unemployment compensation extensions and President Obama’s “stimulus” plan.
Requiring offsets for non-defense emergency spending (includes only emergency spending in supplementals): $360 billion. Offsetting the “emergency” war funding: $493 billion. Total “emergency” savings would be $853 billion
Total savings from spending reform: at least $1.2 trillion
House Vote Weakens Chances for Strong BBA
As a part of the deficit reduction deal passed in August, Congress is required to vote on a Balanced Budget Amendment to the Constitution by the end of the year. After staying resolute in their pledge to not raise taxes and negotiating $1 trillion in cuts off the bat, House Republicans blinked on the BBA, bringing the weakest version available to the floor for a vote.
We have always warned that a weak amendment that does not require a super-majority to increase taxes will result in more harm than good – indeed, it is a pure fiction that in an era of $1.5 trillion deficits (and $15 trillion of debt) that Congress would be willing or able to cut spending rather than raise taxes to close this budget hole. Throw in the silence in the weak BBA regarding enforcement, and you have a court-mandated tax hike that allows members of Congress to continue unbridled spending without having to get their hands dirty with tax increases.
Interestingly, most Republicans argued that only a weak BBA would secure the necessary Democrat votes to pass the House. The figment of near-passage in 1995 bolstered the illusion that Democrats had somehow revised their tax-and-spend creed by 2011. Regardless that the BBA was clearly DOA in the Democrat-controlled Senate, conservatives linked arms to push the weak BBA to the floor, believing House Democrats would join their phalanx.
This fantasy failed to play out again; only 25 Democrats crossed the party line to support the BBA, while four Republicans (notably, taxpayer champion and Budget Committee Chairman Paul Ryan amongst them) voted against the BBA. Republicans needed double the amount of Democrats to vote for the amendment and all Republican votes to fall in line to secure passage. Even more painfully, of the TK Democrats who were both serving in 1995 and today, 7 Democrats who voted for the BBA in 1995 opposed the amendment on the floor last week.
This ignorance of political reality will cost Republicans more than a balanced budget – it will make it even more unlikely that a BBA can ever pass. By bringing a weak BBA to the floor, Democrats were able to reap the benefits of supporting prudential policy without ever having to exercise it. The 25 Democrats with fingerprints on a Balanced Budget Amendment can now return to their districts with just enough fiscal credo to hold on to their seats. Of the 25 Democrats who voted for the BBA, a majority were slated for tough elections next year; at least 18 who were in competitive districts will now be able breathe easier in their re-election bids.
The latest failed vote should signal that only in a fool’s paradise will any BBA garner significant Democrat support. The delusion that a weak BBA could pass relied on the assumption that Democrats would not only absolve themselves of years of deficit spending but also commit to fiscal restraint in the future. Republicans who wagered Democrats would have their come-to-Jesus moment when the dogma of the Democrat party hung in the balance have simply not been paying attention. Let's hope conservatives have learned their lesson - the next time a BBA comes up for a vote, it should be nothing less than the strongest version possible.
What do you think? Does the failure of a weak BBA again make it easier or harder for a robust BBA to pass Congress?
Alert: House to Take Up Weak Balanced Budget Amendment
H.J.Res. 2, currently before the House of Representatives, does not include a super-majority requirement to raise taxes. This will amount to an automatic tax hike every year in which the government is unwilling to cut spending. As taxpayers have witnessed over the past few years of unprecedented deficits, lawmakers will oppose austerity when tax hikes are on the table.
Washington must learn to live within its means. A Balanced Budget Amendment should keep the focus on Washington’s overspending problem. Passing a BBA that allows a tax hike by a simple majority, however, will allow lawmakers to balance their budgets on the backs of taxpayers, rather than forcing Congress to rein in spending.
Washington has an overspending problem, not an under-taxing problem. Historically, outlays have averaged about 21 percent of Gross Domestic Product (GDP) while revenues have amounted to about 18 percent of GDP. Due to the Obama Administration and Congressional Democrats’ spending binge, outlays now average almost 25 percent of GDP, and are projected to stay around 23 percent in perpetuity.
Unless tax hikes are taken off the table, reckless lawmakers will increase taxes to pay for these new bloated spending levels, instead of bringing spending in line with revenues.
Any lawmaker concerned about restoring American solvency cannot seriously vote for a BBA that does not include a super-majority requirement for tax increases. To pass a BBA that allows a tax hike by simple majority is to distract from the real problem of government spending, and leave taxpayers to bear the burden of foolhardy federal budgeting.
Taxpayers deserve better.
Americans for Tax Reform WILL RATE a vote against a Balanced Budget Amendment that includes a super-majority requirement for tax increases.
Conservatives to Congress: Vote NO on a Weak Balanced Budget Amendment
Today, millions of taxpayers represented by Americans for Tax Reform and thirty-one other groups urged Congress to oppose a so-called “clean” Balanced Budget Amendment (BBA). The debt limit deal passed in August requires Congress to vote on a Balanced Budget Amendment by the end of the year, and lawmakers are considering bringing a BBA to the floor that would increase taxes rather than requiring spending cuts to balance the budget. From the letter:
Unless tax hikes are taken off the table, reckless lawmakers will increase taxes to pay for these new bloated spending levels, rather than bring spending in line with revenues. A “clean” BBA provides the excuse big spenders seek to raise taxes and grow government.
Any lawmaker committed to restoring American solvency cannot seriously vote for a BBA that does not include a super-majority requirement for tax increases. Thus, on the behalf of millions of taxpayers represented by our organizations, we ask you to consider a strong Balanced Budget Amendment with these protections before the Budget Control Act deadline.
The letter is signed by a robust coalition of conservative voices, including 60 Plus, Americans Civil Rights Union, American Family Business Institute, Americans for Prosperity, Americans for Tax Reform, the Carleson Center for Public Policy, the Center for Freedom and Prosperity, the Citizens’ Alliance for Life and Liberty, Citizens for the Republic, Citizen Outreach, Club for Growth, CNP Action, Inc., Concerned Women for America, Council for Citizens Against Government Waste, the Cost of Government Center, the Faith and Freedom Coalition, the Florida Center-Right Coalition, the Georgia Center-Right Coalition, Less Government, Let Freedom Ring, the Maryland Taxpayers Association, the Michigan Center-Right Coalition, the New Mexico Center-Right Coalition, the North Dakota Taxpayers’ Association, the North East Ohio Center-Right Coalition, ReAL Action, Rightmarch.com, the Small Business & Entrepreneurship Council, The Taxpayer Association of Oregon, Taxpayers Protection Alliance, and Tradition, Family, Property, Inc.
Click here for a copy of the letter. Click here to tell your Congressman to vote against any Balanced Budget Amendment that does not require a super-majority to raise taxes and significantly limit spending.
"We Can't Wait?" History Shows Otherwise, Mr. President.
The crumbling facade of "stimulus" success has caused Democrats to reject outright the new tax and spending proposals in the Obama jobs plan, causing a frantic White House to resort back to its usual scare tactics to promote its agenda.
Rather than introspect on the damage the past few years of Obama-Pelosi-Reid have wrought, the President is returning once again to the rhetoric of exigency to push policies that are too unpopular - even amongst his own party - to pass through Congress.
Alleging Republicans have been "unwilling" to act, the President announced today that he will direct the Federal Housing Finance Agency to unilaterally implement new refinancing measures to help homeowners who are underwater on their mortgages. The executive summary is silent on what impact this could have on mortgage bondholders and certainly doesn't comment on the increasing moral hazard of eliminating risk.
We've seen how policy enacted under the guise of emergency has played out before:
- The 2008 Emergency Economic Stabilization Act that created TARP extended $700 billion in taxpayer funds to banks and precipitated much higher costs by enshrining "too big to fail" in the public ethos. Concurrent passage of financial overhauls such as the Dodd-Frank are a direct result of the government overreach represented by TARP. Compliance costs of Dodd-Frank estimated to be $20 billion alone.
The 2009 American Recovery and Reinvestment Act is hailed as a one-time emergency measure to jumpstart the economy, the effects of which will be seen "almost immediately," according the National Economic Council Director Lawrence Summers.
Cost: $1.2 trillion
- The 2009 Omnibus is passed on the heels of the "stimulus," cost taxpayers $410 billion, a $32 billion plus-up for agencies and departments who had just received a massive infusion of "stimulus" cash.
- The 2010 Patient Protection and Affordable Care Act went through all sorts of parliamentary jujitsu to get swept through Congress last year. The urgency of rushing the bill through Congress was most famously edified by Speaker Pelosi herself, who argued Congress must first pass the bill so then taxpayers could see what was in it.
- The abuse of "emergency" spending loopholes spurred $1 trillion in spending in the 111th Congress. Ending the practice of using emergency supplementals could save $853 billion, and that's assuming no other stunts like those mentioned above are attempted in the next decade.
So, given the history of "emergency" spending programs, how well do you think the President's plans that "we can't wait" to pass will spur economic recovery?
Democrats Deliver Another Blow to Obama "Jobs" Plan
Last night, the Democrat-controlled Senate rejected a portion of the President’s so-called jobs plan, which would have been a mini-“stimulus” program designed to save local public employee jobs. The bill was overwhelming rejected; only gaining 50 votes.
The history on local “stimulus” spending is clear: the American Recovery and Reinvestment Act established the State Stabilization Fund, a $50 billion slush fund for state and local educators. Projects funded from the program ranged from providing for inflated health care costs to funding water park field trips to buying iPods and iPads for elementary school classes.
As a result, 1.6 million teaching jobs were lost between the passage of the “stimulus” bill and last summer, when then-Speaker Pelosi called Congress back from recess to pass an emergency state bailout with $10 billion in teachers’ funds. Still, 826,000 local teachers’ jobs have been lost since enactment of first stimulus, with more to come. That’s because funds extended are on top of current state spending – expanding state obligations and ensuring teacher cuts down the road when federal funds dry up.
So why does the President and his colleagues in Congress continue to push a policy that has proven to be an abject failure? Because those failures benefit a major Democrat constituency: labor unions. The federal education bailouts have been a windfall for state teachers’ unions. It is estimated that the $10 billion infusion of federal funds to “save” education jobs last August plowed as much as $100 million into the National Educators Association, who use dues to support friendly Democrats in elections.
The necessity of another education “stimulus” might be perceived by some as an admission of the failure of the first, but instead of rethinking failed policy, the President has doubled down on it, calling on Congress to pass his “job” plan. Luckily, even Democrats are starting to consider the idea too toxic to support.
Graphic: Obama's Plan to Nowhere
The Speaker's office has one clue as to why the administration has failed to create jobs...