Reason.tv (and Europe) aptly reminds us that a government shutdown won’t exactly halt the wheels of government. Enjoy!
I talked to Dan Mitchell this week on why the standard narratives about government shutdowns are largely myth.
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Reason.tv (and Europe) aptly reminds us that a government shutdown won’t exactly halt the wheels of government. Enjoy!
I talked to Dan Mitchell this week on why the standard narratives about government shutdowns are largely myth.
Today POLITICO Arena asks:
Will there be a budget deal? And has Obama shown himself to be a capable leader throughout this budget impasse?
My response:
Will there be a budget agreement? Who knows. Has Obama shown himself to be a capable leader in this budget battle? Please. One thing is clear, though: It’s beyond rich for Democrats to blame Republicans for this budget impasse.
Let’s remember that we’re talking about the budget for the fiscal year that began last October, which should have been passed well before then — when Democrats held the White House and both chambers of Congress by wide margins. In all that time, however, they couldn’t pass even one appropriations bill. Why? Because they were trying to game the November elections.
Well they lost those elections — big time. Yet even in the lame-duck session, when they still held all the cards, they couldn’t pass a budget. Now they blame the Republicans? For listening to the voters? What do they think those elections were about? Chopped liver?
It’s not an easy period for major media organizations, what with all this creative destruction revamping that sector of the economy. So the Washington Post Co. couldn’t help but be pleased when it received a $570,000 bailout from ObamaCare’s Early Retiree Reinsurance Program. That program allows the Obama administration to run up the national debt another $5 billion by doling out cash to corporations that provide retiree health benefits. The CBS Corporation received more than $720,000. General Electric, a part owner of NBC Universal, Inc., cleared nearly $37 million.
Since The Washington Post, CBS News, NBC News, and MSNBC have now received subsidies (the latter two indirectly) from this very controversial law, their reporters should disclose that fact to their audiences when reporting on ObamaCare. A disclaimer like this should suffice: “The Washington Post Corporation has received subsidies under the health care law.” That would be consistent with how NBC discloses its relationship with General Electric:
Oh, and kudos to the marketing whiz who decided to call all these ObamaCare spending programs “slush funds.”
Just days after the introduction of a very good plan by the Chairman of the House Budget Committee, leaders from the Republican Study Committee in the House of Representatives have introduced an even better plan.
In a previous post, I compared spending levels from the Obama budget and the Ryan budget and showed that the burden of federal spending would rise much faster if the White House plan was adopted.
If the goal is to restrain government, the RSC blueprint is the best of all worlds. As the chart illustrates, government only grows by an average of 1.7 percent annually with that plan, compared to an average of 2.8 percent growth under Ryan’s good budget and 4.7 percent average growth with Obama’s head-in-the-sand proposal.
According to the numbers released by the Republican Study Committee, the burden of federal spending would fall to about 18 percent of GDP after 10 years if the RSC plan is implemented.
While that’s a great improvement compared to today, the federal government would still consume as much of the economy as it did when Bill Clinton left office.
Last but not least, for those who are focused on fiscal balance rather than the size of government, this is the only plan that produces a balanced budget. Indeed, red ink disappears in just eight years.
President Obama’s incomprehensible “kinetic military action” in Libya has driven George Will to distraction, and to mordant wit:
At about this point in foreign policy misadventures, the usual question is: What is Plan B? Today’s question is: What was Plan A?
Not to mention literary allusion:
Perhaps the CIA operatives should have stayed home and talked to some senators who seem to know what’s what. Sen. John Kerry (D‑Mass.) refers to the Libyan rebels as part of a “pro-democracy movement.” Perhaps they are. Sen. Lindsey Graham (R‑S.C.) must think so. Serving, as usual, as Sancho Panza to Sen. John McCain’s Don Quixote, Graham said last Sunday (on “Face the Nation”), “We should be taking the fight to Tripoli.”
House Budget Committee Chairman Paul Ryan’s budget plan is ostensibly for FY 2012, but it contains reforms with far-reaching implications for the nation’s fiscal condition.
Most of the action in his plan is on the spending side and mainly on health care entitlements: Medicare and Medicaid. Many pundits on the left are claiming it is a political document rather than a serious budget proposal, especially because it lacks details on many of its proposed policy changes.
One thing that stands out, as pointed out by David Leonhardt in the NYT, is that Ryan’s plan exempts people older than age 55 from bearing any share of the adjustment costs. They should, instead, be called upon to share some of the burden, Leonhardt argues — a point that I agree with. If seniors are receiving tens of thousands of dollars more than what they paid in for Medicare, then they should not be allowed to hide behind the tired old argument of being too old to bear any adjustment cost. Indeed, seniors hold most of the nation’s assets and a progressive-minded reform would ask them to fork over a small share to relieve the financial burden that must otherwise be imposed on young workers and future generations.
The numbers presented by Leonhardt are computed by analysts at the Urban Institute. However, those numbers aren’t quite as one-sided as Leonhardt and Urban scholars suggest, because they only compare Medicare payroll taxes by age group to Medicare benefits. A large part of Medicare benefits (Medicare’s outpatient care, physicians’ fees, and federal premium support for prescription drugs) are financed out of general tax revenues, not just Medicare taxes. General tax revenues, of course, include revenues from income taxes, indirect taxes, and other non-social-insurance taxes and fees. Seniors pay some of those taxes as well — especially by way of capital income and capital gains taxes — but the Urban calculations fail to account for this. That means that the net benefit to seniors from Medicare is smaller than Leonhardt claims in his column. I don’t know whether it would bring the per-person Medicare taxes and benefits as close to each other as they are for Social Security, however. (See Leonhardt’s column for more on this point.)
Leonhardt also notes that Chairman Ryan’s proposal leaves out revenue increases as a potential solution to the growing debt problem. Leonhardt argues that wealthy individuals (mostly large and small entrepreneurs) received high returns on assets during the last few years (pre-recession) and could afford to pay more in taxes.
But it would be poor policy to raise these entrepreneurs’ income taxes — that would distort incentives to work, invest, innovate, and hire in their businesses. Instead, policymakers should consider reducing high-earners’ Medicare and Social Security benefits (premium supports under the Ryan plan) in a progressive manner, including allowing them to opt out of Medicare and Social Security completely if they wish to.
During recent business trips to a few Midwestern towns, I met several investors and professionals in real estate, financial planning, and manufacturing concerns, most of whom expressed their willingness to forego social insurance benefits during retirement. So there seems to be some public support for such a reform of social insurance programs.
Washington is filled with groups that piously express their devotion to balanced budgets and fiscal responsibility, so it is rather revealing that some of these groups have less-than-friendly responses to Congressman Ryan’s budget plan.
The Committee for a Responsible Federal Budget, for instance, portrays itself as a bunch of deficit hawks. So you would think they would be doing cartwheels to celebrate a lawmaker who makes a real proposal that would control red ink. Yet Maya MacGuineas, president of the CRFB, basically rejects Ryan’s plan because it fails to increase the tax burden.
…while the proposal deserves praise for being bold, the national discussion has moved beyond just finding a plan with sufficient savings to finding one that can generate enough support to move forward. All parts of the budget, including defense and revenues, will have to be part of a budget deal… Now that both the White House and House Republicans have made their opening bids, this continues to reinforce our belief that a comprehensive plan to fix the budget like the one the Fiscal Commission recommended has the best hope of moving forward.
I’m mystified by Maya’s reference to an “opening bid” by the White House. What on earth is she talking about? Obama punted in his budget and didn’t even endorse the findings of his own Fiscal Commission. But I digress.
Another example of a group called Third Way, which purports to favor “moderate policy and political ideas” and “private-sector economic growth.” Sounds like they should be cheerleaders for Congressman Ryan’s plan, but they are even more overtly hostile to his proposal to reduce the burden of government.
House Budget Chairman Paul Ryan’s budget is a deep disappointment. There is a serious framework on the table for a bipartisan deal on our long term budget crisis. It’s the Bowles-Simpson blueprint, now being turned into legislation by the Gang of Six. It puts everything on the table – a specific plan to save Social Security, significant defense cuts, large reductions in tax expenditures and reforms to make Medicare and Medicaid more efficient, not eliminate them.
That sounds hard left, not third way. But it’s not unusual. Many of the self-proclaimed deficit hawks on Capitol Hill also have been either silent or critical of Ryan’s plan.
Which leaves me to conclude that what they really want are tax increases, and they simply use rhetoric about debt and deficits to push their real agenda.