Mattie Duppler

Seven Actions the Obama Administration Could Take Instead of Raising the Debt Ceiling


Posted by Mattie Duppler on Monday, May 16th, 2011, 12:46 PM PERMALINK


Today is the day the United States government will officially exceed its statutory debt cap, set at $14.3 trillion. The President and some of his allies in Congress, loath to address their spending addiction, claim this amounts to a “default” and threatens the fiscal credibility of the United States. In reality, the unsustainable growth in spending over the past few years is what undermines the country’s economic posterity.

Federal government revenues currently total ten times more than what is necessary to pay debt obligations.  Below are seven actions the Obama administration could take instead of raising the debt limit:

  1. Swap out debt. Currently, the government sits on massive investments in various funds, and can exchange liabilities from debt that counts against the limit to debt that doesn’t. All told, federal funds in various accounts, coupled with federal financing gimmicks, amount to almost a trillion in assets and borrowing flexibility.
  2. Get out of the bailout business. Simply by selling the remainder of its General Motors shares, the government could net $18 billion in savings. The government should also demand GM pay back the $30 billion in outstanding assistance from TARP.
  3. Redeem TARP assets in full. As of last fall, the government is owed $179.2 billion in outstanding TARP loans plus $142.5 billion in equity investments that could be liquidated.
  4. Lease government lands for energy production. The federal government currently owns over 85 million acres of untapped oil and gas reserves. Immediate income from auctioning federally-owned leases could total $61 billion.
  5. Sell public lands. The federal government currently owns over 650 million acres of land – almost 30 percent of all land in the United States. Based on land values estimated on past exchanges, selling federal lands (exempting National Parks) could be worth as much as $230 billion. This doesn’t include the over $25 billion spent on maintenance or $347 million spent on acquisition annually.
  6. Reform federal property management. The federal government is estimated to hold 900,000 buildings and structures. GAO has warned that real property owned by the government is consistently underutilized or abused, including the government’s maintenance of its real property as a part of its High-Risk Series since 2003. Selling nonperforming real estate assets and reforming federal real estate management would save at least $4 billion.
  7. End the spending spree. If spending continues on its current trajectory, debt is expected to consume the entire economy in the next two decades. Congress must use the debt limit debate to refocus on the government’s overspending problem, and make meaningful institutional reforms to establish fiscal restraint in federal budgeting. These reforms should look at constitutional spending limits, reforming budget rules and federal bookkeeping and statutory spending caps.

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Earmark Haunts Taxpayers on Friday the 13th


Posted by Mattie Duppler on Friday, May 13th, 2011, 9:13 PM PERMALINK


The F136 earmark has risen to haunt taxpayers too many times before. It is fitting, then, that on the week of Friday the 13th it has risen from the dead once again. Will taxpayers ever be rid of this goulish pork project? Click here for the full movie poster.

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Earmark Horrors Mark Friday the 13th


Posted by Mattie Duppler on Friday, May 13th, 2011, 11:56 AM PERMALINK


The Defense Authorization Bill that was voted out of committee on Wednesday brought back to life an expensive earmark that has plagued taxpayers for years – the F136 alternate engine for the Joint Strike Fighter. The second engine line has been opposed by both President Bush and President Obama, is unwanted and unneeded by the Pentagon and has been rejected by both chambers of Congress. Already having cost $3 billion in taxpayer funds, the earmark was thought to have finally been laid to rest last month – its reinsertion in to the 2012 Defense bill signals this may not be the last time we see the earmark rise from the dead.

  • July 2009: Members of the Senate reject funding for the F136 engine in the National Defense Authorization Act. However, the House of Representatives restores funds for the account, despite repeated protests from the Pentagon that it is unnecessary and wasteful.
     
  • September 2010: The House of Representatives fails to pass appropriations bills and passes a Continuing Resolution (CR) to fund the government for the 2011 Fiscal Year, starting October 1. The White House issues guidance on CR protocol, prohibiting money for accounts that had not received funding in bills passed by either chamber. Both the House and Senate had passed bills that year that excluded funding for the F136.
     
  • December 2010: Despite the OMB guidance, the White House backtracks, assuring Members of Congress the duplicative engine line will receive funding.
     
  • April 2011: The House of Representatives strips funding for the alternate engine in its final year funding deal. The Senate passes the bill and the President signs it into law.
     
  • March 2011: The Pentagon officially cancels the account, terminating the duplicative earmark.
     
  • May 2011: The National Defense Authorization Act passes out of the House Armed Services Committee with language allowing for continued testing of the alternate engine and a requirement that the system may be “restarted after a period of idleness,” ensuring taxpayers will continue to be on the hook for the earmark that refuses to be laid to rest.

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Appropriations Committee Affirms Pledge to America


Posted by Mattie Duppler on Thursday, May 12th, 2011, 1:29 PM PERMALINK


Building on the compact to cut spending made by the House in passing the GOP Budget last month, the House Appropriations Committee released Wednesday the framework for discretionary spending in the coming fiscal year. These plans effectively fulfill the GOP Pledge to America, which states:

With common-sense exceptions for seniors, veterans, and our troops, we will roll back government spending to pre-stimulus, pre-bailout levels, saving us at least $100 billion in the first year alone and putting us on a path to begin paying down the debt, balancing the budget, and ending the spending spree in Washington that threatens our children’s future.

After authoring a significant down payment on the GOP’s Pledge in the final funding deal for FY 2011, the suballocations illustrate a significant departure from the spending status quo. Just as the first Continuing Resolution crafted this year was unprecedented in proposing spending cuts rather than increases, that the Appropriations Committee is providing a template for spending discipline demonstrates a new era of fiscal restraint is emerging with Republicans in control of the House of Representatives.

The committee’s plan includes a $30.4 billion cut from current spending levels, bringing non-defense, discretionary spending back to below 2008 levels. The suballocations effectively dial back the “stimulus” bloat built into baselines over the past few years and amount to over a trillion in savings over the next ten years.  

After Congressional Democrats refused to pass a budget and failed to take up almost all of the appropriations bills last year, Committee Chairman Hal Rogers (R-Ky.) also released a strict mark up schedule for the twelve appropriations bills, pledging to keep the process on time this year. Also in tune with the promises of transparency made in the Pledge to America, this signals that the days of pork-filled omnibus spending measures, shuttled through Congress at the end of the year, are a thing of the past. The suballocations from the Committee show House Republicans are serious about an open and honest appropriations process and are committed to fulfilling the promises made to American taxpayers.

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JOBS Act Frees States to Reform Unemployment Benefits


Posted by Mattie Duppler on Wednesday, May 11th, 2011, 4:37 PM PERMALINK


Today, Americans for Tax Reform and its Center for Fiscal Accountability sent the following letter, urging Members of Congress to support the Jobs, Opportunity, Benefits and Services (JOBS) Act of 2011. The bill would allow states to request the full amount of their federal unemployment funds up front, and then decide how best to manage the money in their own jobless systems. This is an innovative and critical step in reforming federal spending, and comes on the heels of Rep. Paul Ryan's budget passing in the House of Representatives, which would allow states to control other mean-tested programs such as Medicaid and food stamps. From our letter:

Currently, states are hamstrung by broad federal rules on unemployment insurance. This precludes targeted spending to address diverse populations – resulting in the same programs and spending for states with divergently different unemployment rates. This means states with low unemployment are required to treat federal funds the same way as states with high jobless rates, instead of being able to use the money to promote helpful employment initiatives or pay back federal loans.

The JOBS Act, then, allows states to be provided their full share of federal funds for the remainder of the year to administer as they see fit. This unties the hands of states that are currently beholden to capricious federal policy to innovate and experiment with strategies to get their populations back to work.

Click here to view the entire letter.

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RSC Chairman Urges Members to Reject Backdoor Tax Hikes


Posted by Mattie Duppler on Tuesday, May 10th, 2011, 4:14 PM PERMALINK


Americans for Tax Reform and its Center for Fiscal Accountability recently sent the following letter to Congressman Jim Jordan, Chairman of the House Republican Study Committee. Our statement endorses a letter currently being circulated by the Chairman, calling on his colleagues in the House to reject the notion of deficit "triggers." In part, our letter states:

Both Congressional Democrats and the White House have expressed support for some kind of “deficit target” as a means towards addressing the country’s growing debt. In fact, focusing on the deficit serves as a fig leaf for real spending restraint; it ignores that the proper metric for addressing the country’s fiscal climate is not the deficit – it is the government’s spending.

Historically, federal tax revenues have averaged about 18 percent of GDP while spending has consistently taken up about 21 percent of the economy – providing for a 3 percent structural deficit. The non-partisan Congressional Budget Office estimates that while tax revenue will return to this historical average, spending is expected to explode, averaging 23 percent for the next decade. Clearly, any solution to the country’s fiscal instability must address the government’s overspending.

The focus on the deficit provides a convenient excuse for lawmakers pushing for higher taxes, claiming the hole dug by overspending necessitates increased revenue. Thus, “trigger” mechanisms, such as those proposed by the President’s fiscal commission, translate to an automatic tax hike on all Americans that would not even have to  be approved by Congress.

Click here to read the entire letter.

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Speaker Boehner Refuses to Make Taxpayers Responsible for Government's Mistakes


Posted by Mattie Duppler on Monday, May 9th, 2011, 7:21 PM PERMALINK


Tonight, Speaker of the House of Representatives John Boehner (R-Ohio) called for a decisive end to the stifling uncertainty and unsustainable spending spree that has handicapped the country. The Speaker stepped up to lead, doing what President Obama and Congressional Democrats have been unwilling to do: learn from the failures of the past. Speaker Boehner rightfully called for an end to the policies that have hampered economic growth, recognizing that the path forward to fiscal responsibility relies on rejecting the follies of the past.

  • The government has an overspending problem, not an undertaxing problem:
    Speaker Boehner: “And with the exception of tax hikes -- which will destroy jobs -- everything is on the table.”
  • Budget “deals” that consider revenue part of the problem always result in tax hikes while spending restraint is forgotten:
    Speaker Boehner: “Today some seem intent on recycling the 1990 budget deal, only this time with much larger tax increases. That's not going to happen, and I've told that to the president.  A tax hike would wreak havoc not only on our economy's ability to create private-sector jobs, but also on our ability to tackle the national debt.” 
  • Government “stimulus” by spending is a fallacy that has been proven false by every Democrat administration that has attempted it:
    Speaker Boehner: “The lesson of the stimulus era is that short-term government intervention is no substitute for long-term economic investment, private initiative, and freedom. I believe it's time to leave that era behind.”
  • A deficit “trigger” equates to an automatic and unconstitutional tax hike that ignores the real problem – overspending – and fails to increase budgetary restraint.
    Speaker Boehner: “[Spending cuts] should be actual cuts and program reforms, not broad deficit or debt targets that punt the tough questions to the future.”

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Beating Back Our National Debt


Posted by Mattie Duppler on Thursday, May 5th, 2011, 3:51 PM PERMALINK


This article originally appeared on Townhall.com

After compelling the President to axe almost $80 billion from his desired spending levels for the fiscal year, House Republicans are once again faced with the prospect of negotiating with a recalcitrant President on the next spending battle: the approaching debt ceiling. In keeping with his inflated rhetoric on the threat of a government shutdown, President Obama is feigning exigency once again, claiming a “clean” debt limit vote is necessary to prevent government default and certain economic catastrophe.

The request to increase the debt limit without confronting the actual causes of debt belies the wisdom of having a debt ceiling – limiting the government’s borrowing authority is supposed to inspire prudence, not offer opportunity to flout it. What’s more, a “clean” debt limit vote would be somewhat anachronistic; the limit has been raised ten times in as many years with significant reforms attached, such as passage of the Congressional Review Act in 1996 and the Gramm-Rudman-Hollings budget reforms in 1985.

With the headroom on the $14.3 trillion debt ceiling closing in, Republicans have offered several proposals that would address the government’s overspending problem that drives the mounting debt. A balanced budget amendment to the constitution is one suggestion, as are serious statutory spending caps. However, the enormity of the government’s overspending problem requires additional and serious reform, addressing the seemingly insoluble spiral of entitlement spending and rectifying the government’s bias to abuse, rather than save, taxpayer dollars. The current political environment does not lend itself to reform that fully rectifies these problems.

However, as witnessed in the funding debate, a Congress that is unwilling to cut $100 billion at one time is comfortable with cutting that amount in pieces every few weeks. This is a lesson learned from the political success of the Left: the President’s “stimulus” binge, health care takeover and financial overhaul were not simply a product of Democrat majorities – they are an artifact of years of gradual government creep, in which policymakers on both sides of the aisle were complicit in bloated spending and increasing government overreach. Addressing the statist assault will have to be done in the same way – gradually. A short term debt limit that serves as a real and constant reminder of the government’s overspending problem provides the opportunity to do this.

Rather than granting the president massive spending authority for the rest of his term in exchange for one piece of desired reform, Congress should authorize short term extensions of borrowing authority. Conservative members entered the 112th Congress with a number of good ideas that represent several smart bargaining chips in exchange for short extensions of borrowing authority. Using these proposals to chip away at the government burden while denying the President carte blanche on spending is a win-win for fiscal conservatives and taxpayers. This keeps the Big Spender in Chief on a short leash to garner prudence the White House is unwilling to commit to on its own.

It is important to note, however, that the debt limit fight is unique from the FY 11 debate in a significant way: The President cannot share the blame with Congressional Democrats. Despite the rhetoric employed by the administration, reaching the debt limit is not equivocal to default – not even close. The government currently takes in ten times the amount needed in revenue to service the debt, and it is wholly within Treasury’s authority to prioritize payments to investors to avoid economic uncertainty. Thus, the blood of a government default is fully on the hands of the President.

This presents effectively more motivation for the President to come to the table on negotiating the debt limit. The FY11 funding battle demonstrated that despite Candidate Obama’s platitudes on “reaching across the aisle,” President Obama’s congeniality is in short supply unless he is politically motivated to play nice with the other side. It is clear that absent a born-again coming to bipartisanism, the approaching debt ceiling represents a unique opportunity to keep the channels between the two parties open in a divided government that is only going to become more intractable ahead of the next presidential election.

Likely unsatisfied with his takeovers of the health care and financial industries in the first part of his term, the President no doubt has an ambitious agenda for the next year that will need to be tamed and difficult to stop if he has no reason to keep talking to Republicans in Congress. For all of their negotiating prowess in the CR debate, Republicans still only control one half of one third of the government – lacking weight, momentum is the best strategy to aid taxpayers in the year ahead. Making the debt limit debate exist in the short term restructures the debt ceiling as an actual deterrent rather than a theoretical one. The President’s inflated parlance on the looming threat of fiscal catastrophe can’t win in that debate – fiscal conservatives, and taxpayers, can.

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Treasury: Debt Limit Not a "Constraint" on Debt


Posted by Mattie Duppler on Tuesday, May 3rd, 2011, 4:18 PM PERMALINK


In a letter sent to Members of Congress yesterday Treasury Secretary Tim Geithner revealed once again that the administration’s threat of government default on the debt is proving more empty by the day. The letter, the third evaluation this year by Treasury of the country’s debt, Secretary Geithner said the country’s borrowing authority will not expire until August 2, almost a full month later than his previous prediction. All but erasing the President’s only leverage in the debate – the looming exigency of a default – the Secretary is evidently switching tactics, alleging instead that: 

I want to emphasize that, contrary to a common misperception, the debt limit has never served as a constraint on future spending, nor would refusing to increase the debt limit reduce the obligations the country has already incurred.

There are two ways to interpret this statement. The first is to believe the Secretary is claiming the debt limit has never been raised in exchange for cohesive reform, as both Republicans and Democrats in Congress are currently requesting. This is simply untrue. The Congressional Review Act, which the administration has been so keen on flouting, was a product of the 1996 debt limit debate; the same is true for the Gramm-Rudman-Hollings budget reforms in 1985 and their subsequent revision in the debt limit debate of 1987. It is anachronistic, not to mention irresponsible, to consider a vote on raising the debt ceiling without first addressing the government spending driving the debt.

The second interpretation of this statement is that the cabinet member charged with safeguarding the country’s finances doesn’t believe the debt limit serves as an actual limitation on the country’s debt. Small wonder, then, the President keeps projecting economic catastrophe ahead of the debt limit debate - a serious debate on the debt limit is sure to bring the façade that his spending spree has no consequences to an end.

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Coalition Urges Congress to Implement Hatch-Duncan Anti-Appropriations Committees


Posted by Mattie Duppler on Tuesday, April 26th, 2011, 11:33 AM PERMALINK


Today, Americans for Tax Reform and its Center for Fiscal Accountability were joined by forty other groups in urging lawmakers to establish Anti-Appropriations Committees in both chambers of Congress. The Anti-Appropriations Committee is modeled after the Byrd Committee which existed in the 1940s and served as a body that focused solely on cutting federal spending. Rep. Jeff Duncan (R-S.C.) in the House and Senator Orrin Hatch (R-Utah) in the Senate have introduced bills that would establish this committee in each of their respective chambers, and could be integral in cutting back on the government bloat of the past few years. In part, the coalition's letter states:

The Committee on Reduction of Nonessential Federal Programs is not a new idea – in fact, the committee existed first in the 77th Congress after it was proposed by Senator Harry F. Byrd Sr. (D-Va.). Named after its creator, the “Byrd Committee” was tasked solely with cutting unnecessary and redundant federal programs and was able to enact real reform to that end – the Committee netted over $38 billion in savings (in adjusted dollars) in just its first few years of existence.

Created in 1941, the Committee was integral in dialing back some of the exponential New Deal growth in government. After two years of bailouts and government “stimulus,” American taxpayers could benefit greatly from a similar effort aimed at decreasing the burden of government.

Your bill would create a Standing Committee that would focus solely on eliminating the redundancies and inefficiencies that add to the cost of government. While several committees exist today that encourage and promote new spending, this Committee would have the unique responsibility of decreasing outlays and finding savings. Tasked with this singular goal, the Committee could pave the way for significant spending reform.

Click here and here to read the letters in their entirety.

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