Mattie Duppler

Debt Limit D-Day? Not Until Democrats Get Serious About Spending

Posted by Mattie Duppler on Thursday, July 7th, 2011, 11:09 AM PERMALINK

Many view the White House meeting today as a sign that the debt ceiling debate is reaching critical mass - especially as Treasury continues to demogogue the August 2 deadline it has set for the exhaustion of U.S. borrowing authority. However, it is important to note that default does not even pose a remote threat at this point; the United States takes in ten times in revenue what it needs to service its debt, and can stil afford to pay out major entitelment obligations as well. What's more, Treasury's posturing on deafult belies the fact that it gets to make the call on whether or not the government pays its debts. If it refuses to do so, the consequential default is no one's fault but Treasury's own.

It's unclear what, if anything, will emerge of substance today from the White House meeting. It is unlikely the President would be willing to dive into the negotations without there already being at least some resolution on a deal. It is rumored the Biden-led talks found about a trillion dollars in spending cuts that were agreeable to both sides of the aisle.

One thing, however, is evident: no deal can be reached until Democrats admit their fixation on taxes distracts from the real issue: government spending. Republicans have made clear a deal that includes a tax hike cannot pass the House, and until Democrats come to terms with their spending addiction, a final compromise is not possible. What's more, revenue discussions focus on revenues resulting in tens, maybe hundreds, of billions of dollars. This is a negligent debate to be having when the government's spending problem rests in a matter of trillions - a signal that the Democrat posturing on tax hikes is a way to delay the debate, not solve it.

As the government exhausts its almost $15 trillion in borrowing authority, all eyes will be on whether Democrats are finally willing to have an "adult conversation" about fixing the problem of government spending. As the lead Democrat in the negotations, it is President Obama's responsibility to get his congressional allies to grow up and get serious about the country's explosive debt. Your move, Mr. President.

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Debt Limit Negotiations: What Winning Looks Like

Posted by Mattie Duppler on Thursday, June 30th, 2011, 12:48 PM PERMALINK

Reports are surfacing today that suggest Democrats are conceding their demand for tax hikes is a non sequitor in the debt limit negotations. After the President's laughable attempt yesterday to blame the government's spending problem on tax treatment of corporate jets (policy he has previously supported) it is clear any discussion involving taxes represents a non-serious approach to the debt limit debate.

The Hill reports today that in an effort to save face on the negotiations, Democrats are hoping to net Republican support for defense spending cuts. As we pointed out in the fall, conservatives should have no problem supporting military prudence - especially if it comes as a lesson to Democrats that tax hikes can't solve a spending problem.

That Democrats see defense spending as a "concession" from Republicans in the debt limit debate means that ultimately taxpayers will be the winners in these negotiations. This represents recognition, finally, that taxes cannot play a role in solving what is, and remains to be, a government spending problem.

ATR has re-sent its coalition letter, signed by over 30 prominent conservatives leaders, as a reminder to lawmakers that defense cuts should be a part of any serious discussion on spending. This proves once again that only once taxes are taken off the table, serious spending reform can be accomplished.

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GOP in Debt Limit Talks: Cut Spending

Posted by Mattie Duppler on Thursday, June 23rd, 2011, 12:31 PM PERMALINK

With the non-partisan Congressional Budget Office releasing its updated Budget Outlook on Wednesday, the debt limit discussions led by Vice President Joe Biden were forced to a halt, as Democrats’ arguments that taxes could close the budget deficit were unequivocally muted. House Majority Leader Eric Cantor and Senate Minority Whip John Kyl were forced to pull out of the debt limit discussions when Democrats refused to get serious about the government’s spending crisis. Democrats proved unwilling to focus on the trillions in savings needed to pull the government back from collapse; instead Democrats are willing to let the country default rather than admit their spending addiction needs to be cured.

Democrats’ fixation on taxes reveals a serial misunderstanding of the country’s current fiscal health. CBO confirmed yesterday the country cannot tax its way out of its financial mess. The structural deficiencies of overblown discretionary spending, coupled with looming entitlement insolvency, set the United States on the road to disaster within the next ten years. According to the report:

  • The United States debt will total 100 percent of Gross Domestic Product (GDP) by 2021
  • Major entitlement spending on health care and social security, along with interest payments,  will overtake revenues by 2024
  • Interest payments on the debt will increase by 536 percent over the next twenty five years, from 1.4 percent of GDP in 2011 to 8.9 percent of GDP by 2035

“Finally, Democrats are getting honest about their plan for the country’s financial future, which is to hide behind tax hikes rather than fix the spending problem they created,” said Americans for Tax Reform President Grover Norquist. “Lawmakers who want to hike taxes, rather than save the country from bankruptcy, have been excused from the table. It’s time for grown-ups to sit down and start addressing the country’s spending problem head on.”


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ATR Urges Opposition to Permanent Government "Stimulus" Office

Posted by Mattie Duppler on Monday, June 13th, 2011, 9:25 AM PERMALINK

Today, Americans for Tax Reform and its Center for Fiscal Accountability sent the following letter to Senators, urging them to oppose the Economic Development Reauthorization Act of 2011. The bill would reauthorize the the Economic Development Agency, a government "stimulus" office created fifty years ago to dole out federal earmarks. From our letter:

The failure of President Obama's "stimulus" program to net economic growth could have been foretold by the consistent shortcomings of the EDA. The agency's own accounting of "jobs created" has been grossly exaggerated, while its internal audits have shown no long-term benefits to the programs it underwrites. A GAO study found that most of the money the EDA receives is devoted to sustaining its bloated bureaucracy rather than job initiatives.

The scope of the program has been significantly expanded since its implementation in 1965 - the number of areas that qualified for aid doubled in the program's first decade alone. As such, this perpetual earmark broker loses most of its funds in waste and fraud. Its Inspector General reported that between 2004 and 2008 alone “violations of EDA grant requirements, such as financial accounting irregularities, conflicts of interest, and improper procurement procedures,” had wasted $13 million.

Even the President's own Fiscal Commission has recommended the termination of the EDA: in their November recommendations, the commission admitted the EDA has become nothing more than a federal slush fund for parochial projects whose objectives are duplicated by many other programs run by the federal government.

Click here to read the letter in its entirety.

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The President's Spending Agenda vs. Reality: Why White House Economists Keep Resigning

Posted by Mattie Duppler on Tuesday, June 7th, 2011, 12:37 PM PERMALINK

This week, Austan Goolsbee, chief economist for the President, announced he would be leaving the post this summer, becoming the fourth economic counselor to depart the White House. While it’s hardly surprising head economists have been unwilling to stick around to defend failed policies, taxpayers are getting sick of being saddled with poor policy decisions that outlive their proponents. Goolsbee’s departure marks a trend in economic advisors jumping ship after the policies they’ve been forced to preach have been proven indefensible:

  • Peter Orszag, Director of Office of Budget and Management:
    • February 2009: On the President’s budget: “We're reducing those [inherited] deficits significantly.  The spending under this budget is lower than if we did nothing at all.”
    • When President Obama came into office, the deficit was $459 billion. “stimulus” spending, bailouts and excessive regulation have caused government overspending to skyrocket, to $1.5 trillion this year.
    • Orszag departs July 30, 2010
  • Larry Summers, Director, National Economic Council:
    • February 2009: With regards to the “stimulus,” Summers claims “You’ll see the effects begin almost immediately.”
    • August 2009: “the stimulus bill is a bill that's largely going to play out in the next couple of years.”
    • Summers leaves the White House December 15, 2010
  • Christina Romer, Chairwoman, Council of Economic Advisors
    • January 2009: Authors the famous chart that shows unemployment peaking at 7.9 percent of GDP with the enactment of the “stimulus” plan
    • October 2009: With unemployment hovering just under 10 percent, Romer claims “[the] stimulus has already had its biggest impact on economic growth and will likely not contribute to significant expansion next year.”
    • Romer resigns September 2, 2010
  • Austan Goolsbee, Chairman, Council of Economic Advisors
    • May 2011: Unemployment ticks back up to 9.1 percent, with almost 14 million people looking for work. For the two and half years since the passage of the Obama Administration’s hallmark economic “stimulus” plan, unemployment has averaged 9.5 percent.  Part of the President’s economic policy team for four years, Goolsbee can no longer reconcile the policies he has helped promote with the stalled economic recovery.


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Senate Budget-rama

Posted by Mattie Duppler on Wednesday, May 25th, 2011, 5:17 PM PERMALINK

Today, Senator Reid announced he will hold votes on motions to proceed to the House Budget and the Obama Budget, as well as alternative plans offered by Senators Toomey and Paul. According to Senate Rules, if the chamber has not passed a budget by April 15 (this should sound familiar – it’s been over 750 days since Senate Democrats produced a budget plan), any budget that is on the calendar can be called up as a privileged resolution. Rather than craft their own budget, Senate Democrats are trying to show a lack of support for the House Budget by calling a vote to proceed to debate on it. As an alternative, Senate Democrats can only offer the President’s budget, which Obama himself rejected a mere two months after he introduced it.

If the only alternative to actually budgeting is a plan the author himself has rejected, you might think Senate Democrats would be a little more invested in crafting their own spending blueprint. Instead, they have spent the better part of the afternoon assailing the House’s budget plan, failing to grasp the hypocrisy that this marks the second year they have failed to produce their own. Despite this demagoguery, the House Budget is the only plan that ends the government’s spending binge, saves the entitlement programs and puts the country on the road to fiscal solvency without punishing taxpayers.

Senate Democrats think they’re making a political point by putting this budget up for a vote, when their alternative is a plan even the President no longer supports. They probably should have thought a little harder about what exactly that point might be.

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Two Futures: Democrats Want to Bankrupt Medicare

Posted by Mattie Duppler on Wednesday, May 25th, 2011, 10:00 AM PERMALINK

In his latest video, Chairman of the Budget Committee Paul Ryan explains the two futures for the federal budget. In the House's budget, Medicare is rescued from insolvency and focuses on patient care, rather than political payoffs. The other choice is the status quo; the President's plan of doing nothing to reform Medicare bankrupts the program in under ten years. So, if you're worried about "cuts" to Medicare, watch the video below to learn how the Democrats' plan to do nothing does a lot more than cut - it dissolves the program entirely.

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DOD Authorization Kicks Off Pentagon Spending Debate

Posted by Mattie Duppler on Tuesday, May 24th, 2011, 4:39 PM PERMALINK

Today, Americans for Tax Reform and its Center for Fiscal Accountability were joined by taxpayer groups representing millions of concerned citizens in urging the House of Representatives to eliminate wasteful spending from the National Defense Authorization Act (NDAA). The bill, which will be debated this week, authorizes $690 billion in defense spending and has been used in the past to shuttle wasteful pork projects through Congress under the guise of national security. With the House-imposed ban on earmarks, Members of Congress have gotten more creative, authorizing accounts with deliberate language that leaves the door open for future spending. What's more, the DOD authorization bill will require an appropriations bill to be fully fleshed out, allowing members to create placeholders in the NDAA bill they hope appropriators will fill. In the letter sent to the hill today, the coalition called attention to a specific example of this kind of spending, asking leadership to resist efforts to continue to fund one of the Pentagon's wasteful missile systems. From the letter:

On behalf of the millions of concerned taxpayers represented by our organizations we write to urge you to bring the National Defense Authorization Act of 2012 to the floor with an eye for waste and inefficiencies. One of the first tests of this Congress’s fiscal discipline for 2012, the Defense Authorization bill should not be used to shuttle wasteful spending in the name of national security.

And yet, the bill that passed from the House Armed Service Committee is rife with waste that impinges, rather than enhances, our country’s security. Notably, the Medium Extended Air Defense System (MEADS), which stands to receive over $200 million in the NDAA markup, represents another duplicative and wasteful allocation of scarce taxpayer dollars.

Meant originally to replace the Patriot missile defense system, MEADS is a multinational agreement between the United States, Germany and Italy from the nineties, with American taxpayers footing the majority of the bill. Cost overruns and delays have made MEADS a second-rate and more expensive alternative to a modernized Patriot program.

Click here to view the letter in its entirety.

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Cheers! ATR Supports the BEER Act

Posted by Mattie Duppler on Friday, May 20th, 2011, 11:17 AM PERMALINK

This week marks American Craft Brew Week, a celebration of the nearly 1,8000 small brewers that provide innovation and character to the American malt beverage market. One of the most dynamic enterprises in the country, craft brewers face steep regulatory and tax burdens to keep their businesses afloat as current government policies largely favor traditional beer producers. In response, Senators Mike Crapo (R-Wyo.) and John Kerry (D-Mass.) have introduced the Brewer's Employment and Excise Relief Act of 2011, which would provide tens of millions each year for small brewers to continue to grow their businesses. Today, Americans for Tax Reform President Grover Norquist sent a letter to the Senators, urging support of their bill. In part, the letter states:

The BEER Act would reduce from $7 to $3.50 the tax paid per barrel on the first 60,000 barrels produced by small brewers.  This is estimated to generate $19.9 million in capital for small beer producers, an enormous resource to promote job growth in the craft brewing industry.
The current small brewer tax places archaic definitions on an industry that has grown by 12 percent in just the last year alone. When the law was written twenty five years ago, small brewers were defined as producers of up to 2 million barrels annually. Your bill updates this definition by raising the ceiling to 6 million barrels, accurately reflecting modern standards and industry growth.

The craft brewing industry provides for widespread diversity and originality in the malt beverage marketplace. Comprising less than five percent of the entire beer market, this innovation stands to be eliminated by the current heavy-handed regulatory and tax regimes that favor traditional producers. Thus, I encourage your colleagues to support the Brewer’s Employment and Excise Relief Act of 2011 and look forward to working with you to continue to ease the tax burden on American employers.

Click here to read the entire letter.


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Extrapolating on CBO's Extrapolation

Posted by Mattie Duppler on Tuesday, May 17th, 2011, 12:26 PM PERMALINK

Yesterday, CBO released an extrapolation of the Final FY 2011 Continuing Resolution, which has been interpreted to mean that the final CR actually increased spending. This is false; claiming the CR "increased" spending relies on the assumption that outlays are the proper understanding of government spending - however, funding bills are articulated in terms of Budget Authority, which govern account baselines. Cutting an outlay means preventing a dollar from being spent at some point; cutting Budget Authority decreases the ability to spend that dollar forever. This is an important distinction that we fully fleshed out here.

Cuts in Budget Authority now, then, result in hundreds of billions in savings for taxpayers over ten years. The recent estimate from CBO insinutates that the final deal cuts less over the long term than what was originally promoted by its proponents. However, the projection only takes into account the final deal - it does not incorporate the temporary spending cuts netted in the previous short-term CRs that had governed spending levels for the first half of the fiscal year. Since those had run out by the time the final deal was passed, the accounts that had been cut for the preceeding weeks could have been refunded in the final bill. They were not, and thus should be counted against baselines in the ten year window for an accurate picture of what the full-year funding bill did.

CBO's intent was to analyze the final funding bill, not the entire universe of spending. In doing so, it may have clouded the rearview on the FY11 funding debate, but did not rewrite the history. For a full review of the funding battle, check out our post here.

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