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Topic: Federal Budget

Cut, Cap, and Balance! - Pence Says It's Time for the States to Decide

Posted on Jul. 08, 11 | 11:57 AM by Andrew Roth | Topic: Federal Budget

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New Video: 20 Democrats Support a Balanced Budget Amendment

Posted on Jul. 07, 11 | 03:54 PM by Barney Keller | Topic: Federal Budget
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Can Obama Ignore the Debt Limit?

Posted on Jul. 06, 11 | 01:55 PM by David Keating | Topic: Federal Budget
The latest hot argument circulating among liberals, first suggested by a former Reagan Treasury aide, that the 14th Amendment gives Obama the power to ignore the debt ceiling.

The Amendment says in Section 4 the following:

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

One law professor has written “The Speech Obama Could Give: 'The Constitution Forbids Default'” in the Atlantic where he outlines the case and an explanation of the action Obama could take.
Fourteen years ago a law journal article was written that examines this sentence.  This article was recently posted online so anyone could read it.

There has been a lot written on this already.  These posts at Freakonomics and The Volokh Conspiracy refer to yet more posts.  Michael Stern does a nice job of describing the history of the debt limit.

And the ever sensible Michael McConnell weighs in too. He seems to make the best case for what would happen under the Constitution if the limit is hit, writing "At most, it means that paying the public debts and pension obligations of the United States, as they become due, has priority over all other spending. Each month, the Treasury takes in about $175 billion in new revenues. These are more than sufficient to pay principal and interest when due, as well as pension obligations."

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Another Optimistic View, and one Really Pessimistic View

Posted on Jun. 29, 11 | 09:41 AM by David Keating | Topic: Federal Budget
Yesterday's Wall Street Journal had two interesting views on the budget talks and situation ahead.

Bad news first.  Lawrence B. Lindsey warned that the budget deficit today, as bad as it is, would and likely will be a lot worse when interest rates return to historical norms.  "At present, the average cost of Treasury borrowing is 2.5%," he wrote.  "The average over the last two decades was 5.7%. Should we ramp up to the higher number, annual interest expenses would be roughly $420 billion higher in 2014 and $700 billion higher in 2020."

HIs article generate a huge number of comments, so he  really hit a nerve with Journal readers.

Higher interest costs would wipe out more than twice over any of the budget deal cost savings now being discussed.  Talk about depressing. 

He also warned that current budget projections may be based on overly optimistic forecasts for growth and that ObamaCare will cost a lot more than projected.

What he leaves out is that lawmakers and the president should be doing more to spur growth.  Yes, we have to get spending under control, but these efforts would be a lot more successful in controlling debt if the economy, and thus tax receipts, grow at a healthy clip. 

Tim Pawlenty is right that we should pursue policies with a goal of 5% growth.

On the optimistic side, Gerald Seib writes an interesting article about how the politics of spending has changed, and he's right about that.  I just hope it has changed enough.

Seib notes that "First, Washington's long-term attitudes about spending and debt are slowly but surely changing. Second, as a result, a meaningful short-term deficit deal should be within reach."

He cites the fact that Obama has been forced to submit a second budget and sit down to talk about spending restraint, that the Senate voted to end ethanol subsidies and even the AARP is willing to discuss changes to Social Security. 

It shows the power  of elections.
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Rep. Jim Jordan Talks About Cut, Cap, and Balance

Posted on Jun. 24, 11 | 02:41 PM by Andrew Roth | Topic: Federal Budget

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Sign the Pledge. Cut, Cap, and Balance!

Posted on Jun. 24, 11 | 08:41 AM by Andrew Roth | Topic: Federal Budget

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Senate Rejects Both Parties' Budgets

Posted on Mar. 10, 11 | 10:53 AM by Andrew Roth | Topic: Federal Budget
The Senate rejected continuing resolutions offered by both parties yesterday.

They voted 44-56 on the House GOP's proposal that would cut $57 billion in FY11.  It was a party line vote except for three Republicans (Lee, Paul, DeMint) who voted NO because it didn't cut enough spending.

They subsequently voted 42-58 on the Senate Democrat proposal that cut only $6 billion.  All Republican voted against it, plus these 11 Democrats:

Bennet, M. (CO)
Hagan (NC)
Kohl (WI)
Levin, C. (MI)
Manchin (WV)
McCaskill (MO)
Nelson, Ben (NE)
Nelson, Bill (FL)
Udall, Mark (CO)
Webb (VA)

So what happens now?  House and Senate leaders will try to negotiate a weak compromise, but the votes probably aren't there.  Another short-term CR could happen, but that would be a mistake.  Kicking the can down the road again plays into the big spenders' hands by not forcing a crucial debate on our country's fiscal recklessness.
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Obama's Budget: A Terrible Miscalculation

Posted on Feb. 16, 11 | 12:06 PM by Michael Connolly | Topic: Federal Budget
President Obama’s recently released 2012 budget increases the deficit for the coming year and, really, does almost nothing to shrink the deficit or address the looming debt crisis.

The White House – and Beltway conventional wisdom – thinks this is the “safe” play.  But, instead, I think it’s a terrible political mistake. 

The strategy is cynical, but simple: do nothing, wait for Republicans to lead on spending cuts, then pounce on them for their “reckless,” “draconian.” 

But the politics of spending have shifted – they’re less about demagoguery than they are about credibility now.  For the first time, everyone knows the status quo is unsustainable, so the public’s calculus has changed from “Who can protect my piece of the pie?” to “Who can get us out of this mess without putting me or my grandkids in the poor house?”  It’s an entirely different question, and, as usual with public opinion, the Obama White House is slow on the uptake.

The president’s budget landed Monday not with a thud, but riotous laughter.  It was so transparently political and unserious that the administration has, in 48 hours, lost a great deal of what was left of its post-stimulus/ObamaCare fiscal credibility.  When Republicans do propose cuts in coming days, the president’s inevitable attack will be seen as cynical and self-serving, not principled.

If the president’s budget had made significant, but comparatively small, cuts in spending, his attacks against the Republicans’ larger cuts would have put him in the position of the responsible grown-up tempering Tea Party excess.  But his budget wasn’t that.  It was a joke, and now, so will be his canned, insincere criticisms of the Republican budget. 

This is not simply a tactical mistake – it is a huge unforced error.  He is now weak going into this budget fight.  That means Republicans will probably get deeper cuts than they otherwise would have.  In other words, a few weeks after he has alienated the middle with his ridiculous budget, President Obama will be forced to turn around and alienate the Left with a budget deal negotiated on the Republicans’ terms.

If and when, a few years hence, a Republican president and Congress repeal ObamaCare and reform entitlements, Barack Obama’s 2012 budget proposal may prove to have been the straw that finally broke the back of the Washington status quo.
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The Obama Budget

Posted on Feb. 14, 11 | 08:29 AM by Andrew Roth | Topic: Federal Budget
President Obama is releasing his FY12 budget today.  The highlights include higher taxes, no entitlement reform, and a whopping 11% increase in education spending.  And he wants to take 10 years (what's the rush?) to cut the deficit by $1.1 trillion.  Here are the details.
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Rep. David Schweikert Talks About The Budget

Posted on Feb. 11, 11 | 09:06 AM by Andrew Roth | Topic: Federal Budget
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Club for Growth Supports Sen. Lee’s Balanced Budget Amendment

Posted on Feb. 07, 11 | 12:39 PM by Michael Connolly | Topic: Federal Budget
WASHINGTON – The Club for Growth today endorsed S.J. Res. 5, a proposed constitutional amendment to balance the federal budget and restrict federal spending and taxes, which was introduced by U.S. Sen. Mike Lee (R-Utah) and 13 co-sponsors.

“Mike Lee’s amendment will not only balance the budget, but rescue America’s founding principles from a federal government increasingly indifferent to them,” said Club President Chris Chocola.  “This amendment will force Congress to live within its means, and also limit those means to 18 percent of the nation’s income, more than enough for Washington to meet its constitutional responsibilities.”

“A balanced budget, limited government, and a constitutional commitment to economic liberty would jump start our economy, pay off our nation’s debt, and create millions of new jobs and businesses in coming years,” Chocola said.  “Mike Lee’s balanced budget amendment is one of the best policy ideas we’ve seen in a long time, and would be a suitable tradeoff for the Obama Administration’s requested increase in the federal debt limit.  The Club for Growth urges all members of the Senate to co-sponsor and support Lee’s proposal.”

Lee’s amendment would:

·    Require Congress to pass a balanced budget every year;
·    Limit federal expenditures to 18 percent of national economic output; and,
·    Require 2/3 majorities in the House and Senate to raise taxes, deficit spend, or raise the federal debt ceiling.

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