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August 31, 2011

Winners and Losers in Interstate Migration

The taxpayer friends at the Tax Foundation posted a most interesting map of the United States on Monday to their Tax Policy Blog that shows the "annual income lost/gained due to interstate migration.” In posting the below map, Nick Kasprak says it is:

“. . . a map of interstate movement of income over the past decade. Florida is the big winner - migrants bought a net $70 billion dollars in annual income into the state between 1999 and 2009. New York, on the other hand, lost the most income: $45 billion.”

If you wish to support the Tax Foundation, visit this webpage.

By the way, the states gaining the most annual income are Florida (#1), Arizona (#2), and Texas (#3) while the states losing the most annual income are Illinois (#48), California (#49), and New York (#50).

For an enlargement of the map, click-on the map at the Tax Policy Blog where you can also view all the "Monday maps."

August 30, 2011

Regulating Goat Herders

We’ve growled before about government regulation, e.g., on June 15, 2011, where we cited an op-ed by Pete Sepp of the National Taxpayers Union who pointed out that regulation can be just as ruinous as taxation.

Now comes Audrey Hudson who writes in an op-ed in the August 24, 2011 edition of Human Events:

“The Obama administration is setting new workplace regulations to assist foreign workers who fill goat herding positions in the U.S. , including employee-paid cell phones and comfy beds.

“These new special procedures issued by the Labor Department must be followed by employers who want to hire temporary agricultural foreign workers to perform sheep herding or goat herding activities.  It describes strict rules for sleeping quarters, lighting, food storage, bathing, laundry, cooking and new rules for the counters where food is prepared.

“A separate sleeping unit shall be provided for each person, except in a family arrangement,” says the rules signed by Jane Oates, assistant secretary for employment and training administration at the Labor Department.

“Such a unit shall include a comfortable bed, cot or bunk, with a clean mattress,” the rules state.”

Hudson closed the article by including a quote from the expert she relied on who said, “It makes you wonder . . . how they ever did this before the government got involved.”

August 29, 2011

Measuring Economic Recoveries

This past weekend’s edition of Investor’s Business Daily (IBD) included an editorial that discussed “the endless economic recovery,” which said, “If you needed another metric by which to measure the failure of Obamanomics, new numbers released Friday show that two years after the recession ended the economy still hasn't fully recovered.”

According to IBD, “two years after the recession ended, the economy still hasn't made up the ground it lost, giving Obama the dubious distinction of presiding over the most prolonged economic recovery since the Great Depression.” The editorial explains:

“An IBD review of all the post-World War II recessions shows that, on average, it took just over two fiscal quarters for the economy to recover from a downturn and start expanding again.

“In contrast, we're eight quarters into the Obama recovery, and the expansion is somewhere off in the distance, with real GDP still $65.5 billion below the pre-recession peak. And if you take into account all the population growth that's occurred over the past two years, we're even further behind.”

Here’s the graphic that provides all the details you need to know:

The IBD editorial concludes saying:

“If a patient were taking an unusually long time to recover from an illness, a responsible doctor would try a new treatment regimen, rather than simply administer larger doses of the same drugs. He might even consult other doctors to see if they've had better luck with different prescriptions.

“But Dr. Obama gives no sign of doing anything other than pump more Keynesian medicine into the IV. It's possible he'll try a different approach in September, when he gives his much-anticipated jobs speech. If he doesn't, it will be nothing short of malpractice.”

August 28, 2011

Another Global Warming ‘Inconvenient Fact’

The August 27, 2011 issue of The Week That Was, published by the Science and Environmental Policy Project reported:

“The big climate science event was the first publication of findings from the CLOUD (Cosmics Leaving OUtdoor Droplets) experiment by CERN, the European Organization for Nuclear Research. As expressed in the press release:

“The CLOUD experiment has been designed to study the effect of cosmic rays on the formation of atmospheric aerosols - tiny liquid or solid particles suspended in the atmosphere - under controlled laboratory conditions. Atmospheric aerosols are thought to be responsible for a large fraction of the seeds that form cloud droplets. Understanding the process of aerosol formation is therefore important for understanding  he climate.

“The CLOUD results show that trace vapours assumed until now to account for aerosol formation in the lower atmosphere can explain only a tiny fraction of the observed atmospheric aerosol production. The results also show that ionisation from cosmic rays significantly enhances aerosol formation. Precise measurements such as these are important in achieving a quantitative understanding of cloud formation, and will contribute to a better assessment of the effects of clouds in climate models.

“These new results from CLOUD are important because we’ve made a number of first observations of some very important atmospheric processes,” said the experiment’s spokesperson, Jasper Kirkby. “We’ve found that cosmic rays significantly enhance the formation of aerosol particles in the mid troposphere and above. These aerosols can eventually grow into the seeds for clouds. However, we’ve found that the vapours previously thought to account for all aerosol formation in the lower atmosphere can only account for a small fraction of the observations - even with the enhancement of cosmic rays."

TWTW then concludes saying:

“What is clear is that models being used to make dire predictions of future climate are inadequate. In Table 2.11 of an appendix of AR4, the inadequacy was recognized. The level of scientific understanding (LOSU) for cosmic rays was considered very low. The the LOSU of various aerosols was considered low or low to medium.”

From the United Kingdom, The Register reported on August 25, 2011, “Climate models will have to be revised, confirms CERN in supporting literature (pdf)” because:

“[I]t is clear that the treatment of aerosol formation in climate models will need to be substantially revised, since all models assume that nucleation is caused by these vapours [sulphuric acid and ammonia] and water alone.”

In commenting on the work of the CERN scientists at American Thinker on Friday, Rick Moran comments:

“In other words, the inconvenient fact of the sun contributing to global warming was simply ignored in the past by climate modelers. Now it must be part of their calculations.

"This thesis must be vetted by peers. And some conclusions will almost certainly be challenged. But for those scientists with an inquiring mind and honest heart, it calls into question how much of human activity is responsible for warming and if less than previously thought, are the solutions being offered the correct ones.”

And at Questions and Observations on Friday, Bruce McQuain comments:

“Here is another unknown finally known. Yet the scientists on the warmist side tried to claim they had all the information they needed to build their models and make their wild claims. However, as more and more real science comes it, it becomes clearer and clearer that their science falls at best in the “junk science” category and their claims are unsubstantiated assertions. As we’re finding out, they’re certainly not backed by science.

“So, what should be taken from this? A) the climate models are junk. Most observers have known this for quite some time. They are incomplete, their forcing data are all out of whack, and they not only can’t forecast the future, they can’t reproduce the past. B) We’re really just now beginning to understand the climate and its dynamics. And, unsurprisingly for most, despite the warmists attempts to ignore it, the sun plays a major role in determining temperature on earth.

“Seems like common sense to me. So why has it taken so long to finally surface?

“As with all such things, follow the money.”

Finally, the following graphic is from The Register article, and shows how nucleation operates:

As Frank Emerson wrote in an e-mail, "I think of this as a strong reminder that climate is subject to change due to multiple factors and that climate change is subject to testing and revision of views about the causes -- so that starting costly programs in the hopes of affecting climate seems, at best, untimely.

August 26, 2011

Green Scissors 2011 Has Ways to Cut Spending

According to Taxpayers for Common Sense (TCS), “For more than 16 years, Green Scissors has exposed subsidies and programs that both harm the environment and waste taxpayer dollars. This year's report, Green Scissors 2011 (requires Adobe), offers a starting place for spending reductions, including cuts to discretionary, mandatory, and tax spending that also increase environmental protection.” TCS adds:

“Ending a third of a trillion dollars in environmentally harmful subsidies could go a long way toward solving our nation’s budget challenges, an unusual right-left coalition said today in a groundbreaking report.

“The report — “Green Scissors 2011” — provides a roadmap to saving up to $380 billion over five years by curbing wasteful spending that harms the environment. That amounts to a full quarter of the savings the new congressional Super Committee has been charged with obtaining, in half the time. For full details on the report, go to http://www.greenscissors.com.

“Green Scissors 2011 is being released by four organizations: progressive environmental group Friends of the Earth, deficit hawk Taxpayers for Common Sense, consumer watchdog Public Citizen and free-market think tank The Heartland Institute. (For reactions from current and former U.S. House members from both political parties, please see below list of statements.)

“While all four groups have different missions, histories, goals and ideas about the role of government,” the groups write in the report, “we all agree that we can begin to overcome our nation’s budgetary and environmental woes by tackling spending that is not only wasteful but environmentally harmful.”

“The groups propose cutting many fossil fuel, nuclear and alternative energy subsidies. Other targets include massive giveaways of publicly owned timber, poorly conceived road projects and a bevy of questionable Army Corps of Engineers water projects.”

The recommendations are divided into energy, agriculture, transportation, and land and water. For example, Green Scissors 2011 reports the following about the energy sector:

“Subsidies for the coal and oil and gas industries have existed since the beginning of the 20th century. Today, generous tax credits, royalty relief, taxpayer-backed insurance, and preferential financing through loan guarantees and bonds all provide energy companies with lucrative subsidies at the taxpayer’s and environment’s expense.”

The TCS press release concludes by saying:

"The 2011 Green Scissors Report is a reminder that it's time for Congress to have a serious, rational discussion about cutting the budget,” said Rep. Earl Blumenauer (D-Ore.). “With painful budget cuts already under discussion that will require American families to make sacrifices, it is only fair, for example, that we also stop the handouts to our richest oil companies."

"Conservatives believe in the accountability of the marketplace,” said former Rep. Robert Inglis (R-S.C.). “Subsidies cost us money, and they shield some participants from innovation. It's that innovation that can grow our economy and clean up the air, water and land."

"The Green Scissors report is full of recommendations that will help us be good stewards of the environment while also being good stewards of taxpayer dollars,” said Rep. Tom Petri (R-Wis.). “While we won't all agree on every proposed cut, the report's recommendations are a good place to start as we look for ways to put our nation on a more sustainable fiscal path."

“The Green Scissors Campaign strives to make environmental and fiscal responsibility a priority in Washington. For more than 16 years, Green Scissors has exposed subsidies and programs that both harm the environment and waste taxpayer dollars.”

Last October 28, 2010, we growled when two “unlikely allies” -- the U.S. Public Interest Research Group (U.S. PIRG) and the National Taxpayers Union (NTU) -- joined in identifying more than $600 billion of spending cuts with appeal across the political spectrum. Add in the $380 billion identified by Green Scissors, and much of the work required of the Congressional “Super Committee” has already been done.

August 25, 2011

Federal Spending Growing Faster Than Income

Thanks to the 2011 Budget Chart Book from the Heritage Foundation, we learn that "federal spending grew more than ten times faster than median income."

The below chart is of one of several depicting federal spending. The following text is how Heritage describes the chart:

"When federal spending grows faster than Americans' paychecks, the burden on taxpayers becomes greater. Over the past few decades, middle-income Americans' earnings have risen only 27 percent, while spending has increased 299 percent." (emphasis added)

 

August 24, 2011

Hey Congress: Cut the Spending; Don’t Raise Taxes

On Monday, we growled about a survey of business economists that showed a majority “believe the federal deficit should be reduced only or primarily through spending cuts.” In support of that view, the Tax Foundation observed last month (Fiscal Fact No. 278, July 29, 2011) about the “evidence of what the most effective methods have historically been.” According to the Tax Foundation:

“These methods have been analyzed in studies by Goldman Sachs (GS) and the European Central Bank (ECB), comparing the experiences of countries which have attempted to regain control of similar deficit and debt problems.  Though the two papers take slightly different methodological approaches to their analyses, the results and conclusions are remarkably similar:

  1. Spending cuts are more effective than tax hikes.
  2. Deficit and debt reduction can occur while taxes are being cut."

In the study's conclusion, David Logan, Tax Foundation economist David Logan, who authored the study, writes:

“The international experience suggests that deficit reduction plans driven by tax increases over spending cuts are far less likely to succeed.  Moreover, the most successful efforts put all spending programs on the table, not a select few programs. But contrary to the conventional wisdom in the United States, the international experience indicates that pairing spending cuts with tax cuts can produce meaningful deficit reduction and improved economic performance. That should be the goal for both the While House and the Congress during these intense negotiations.”

The study includes a great deal of information that you will want to read about. For example, Logan say that “lower taxes can accompany spending cuts. So take a few minutes to read the entire paper. And consider membership in the Tax Foundation.

August 23, 2011

Quote of the Day

"It is all too tempting to attack classical liberals for their outdated attachment to natural law, supposed extreme individualism, and rigid constitutional conceptions. But today’s progressive legacy—the creaking structures of government at both the federal and state level—makes you want to go out and attend the nearest Tea Party rally."

~ Richard A. Epstein

HT Hoover Digest

August 22, 2011

Hey Congress, Don't Raise Taxes; Cut the Spending!

Based upon a survey of 250 economists who are members of the National Association of Business Economists, the Associated Press reported in today’s USA Today, “The majority of economists surveyed by the National Association for Business Economics believe the federal deficit should be reduced only or primarily through spending cuts.” (emphasis added) The AP went on to write:

“The survey out Monday found that 56% of NABE members feel that way, while 37% said they favor equal parts spending cuts and tax increases. The remaining 7% believe it should be done only or mostly through tax increases.

“As for how to reduce the deficit, nearly 40% said the best way would be to contain Medicare and Medicaid costs.”

Maybe the White House should listen to NABE once in a while rather than to its own Council of Economic Advisers?

HT Joe Henchman at the Tax Foundation's Tax Policy Blog.

August 21, 2011

Thought of the Day

"Taxes are necessary. But the system of discriminatory taxation universally accepted under the misleading name of progressive taxation of income and inheritance is not a mode of taxation. It is rather a mode of disguised expropriation of the successful capitalists and entrepreneurs."

~ Ludwig von Mises

HT Page 141, "As Certain As Death: Quotations About Taxation," TaxAnalysts,Inc.

August 20, 2011

Finally Working For Yourselves

We missed the Cost of Government Day (COGD) last Saturday, August 12, which, according to Americans for Tax Reform (ATR), “is the day on which the average American has earned enough gross income to pay off his or her share of the spending and regulatory burdens imposed by government at the federal, state, and local levels.” A summary of what COGD means is that in 2011:

“On average, workers must toil 224 days out of the year just to meet all costs imposed by government. In other words, the cost of government consumes 61.42 percent of national income.”

Other trends reported by ATR in their 2011 report include the following:

“Cost of Government falls two days earlier than last year’s revised date of August 14. In 2011, the average American will have to work an additional 41 days to pay off his or her share of the cost of government compared to ten years ago in 2001, when COGD was July 2.

“In fact, between 1977 and 2008, COGD had never fallen later than July 20. 2011 marks the third consecutive year COGD has fallen in August. The difference between 2008 and 2009—from July 16 to August 14—was a full 29 days. The increase was spurred by government intervention in the form of the Emergency Economic Stabilization Act (EESA) that created the Troubled Asset Relief Program (TARP) and the American Recovery and Reinvestment Act of 2009 (ARRA).

“The two day decrease of the 2011 COGD is only a temporary fall before projections of increased future spending. In March 2010, President Obama signed the Patient Protection and Affordable Care Act (PPACA) into law which will add $2.3 trillion to COGD over its first decade.  Even without counting Obamacare’s contributions to future COGDs, the three years of the Obama Administration have been three record-setting years of federal government regulation and spending—a 21.78 percent increase relative to the average size of the federal government between 1977 and 2008.

“Additionally, 2011 COGD estimates are premised upon CBO’s ambitious 2011 calendar year estimate of 3.7 percent GDP growth. CBO numbers may overestimate annual growth because first quarter growth was limited to just 1.8 percent while real wages, durable-goods orders, manufacturing production, home sales, and real per-capita disposable incomes have been in decline since April.  Therefore, the estimate in this report may significantly underestimate the real cost of government for 2011.”

The following chart from the ATR report shows the long-term trend of Cost of Government Days from 1977 to 2011:

 

Now that you’re working for yourself, take some time to study the entire report since it highlights the effects of stimulus spending and the bailouts as well as the cost of government day in the 50 states.

Incidentally, COGD is also August 12 for Virginia's workers. However, it ranges as late as September 10 for workers toiling in Connecticut. Workers in Maryland have the distinction of knowing that Maryland maintains its fourth place spot for the second year in a row at August 20.

August 19, 2011

Your Federal Tax Dollars At Work? Or Wasted?

According to Tierney Smith in a story reported today by CNS News, the U.S. Department of Agriculture has paid farmers and ranchers in 11 Western states $112 million to protect birds "too numerous to be threatened." She adds the money would be used to "restore the habitat of the Sage Grouse, a bird that has not been listed as either threatened or endangered under the federal Endangered Species law because the government says there are too many of them." Continuing, she writes:

“Working with the Department of Interior, we are working together with our producers in the Western part of the United States to avoid having the Sage Grouse be placed on the endangered species list,” Vilsack said during a conference call briefing last Thursday.

“We’re doing this by working with landowners and identifying over 40 practices that will benefit the Sage Grouse, and encouraging landowners with the utilization of our conservation program to basically utilize a sweep of practices within those 40 identified practices,” he said. “In the past two years, we’ve committed $112 million to this Sage Grouse Initiative in 11 states, using five separate programs.”

The money is being paid to landowners through the Environmental Quality Incentives Program, the Wildlife Habitat Incentive Program, Wetlands Reserve Program, Farm and Ranch Lands Protection Program and the Grassland Reserve Program."

In discussing the property rights issues involved, Smith writes:

" . . . most states do not treat the bird as if it were endangered. In fact, according to a 2010 notice [3] in the Federal Register, state-regulated hunting of sage grouse is permitted in all but one state, Washington.

"The agriculture secretary specifically distanced the current programs from past proposals, which had threatened to impose environmental sanctions on land-use if the grouse was placed on the Endangered Species Act--measures that land-use groups labeled as "draconian."

"These programs really are designed to focus on particular conservation practices and conservation techniques and technologies. They aren’t necessarily, like other programs, designed to limit, if you will, utilization of property,” Vilsack said.

"Chuck Cushman, executive director of the American Land Rights Association, told CNSNews.com that land owners would welcome the USDA money, but not  if it comes with strings attached or doesn't shield property owners from having to implement draconian conservation practices and technologies without government assistance in the future, if the sage-grouse is ever placed on the Endangered Species List.

“The problem is that the government always has difficulty delivering these kinds of services without hooks and trying to get control over the farmers in some way,” Cushman said. “But if they can work with the farmers in a genuine way and really help them and not impose a top down command-and-control will from Washington on them, then it’s a good thing.”

And if you are inclined to think the entire effort is merely a make-work effort, don't be shocked when Smith closes the article writing, "The Interior Department and the Commerce Department are actually responsible for placing species on the Endangered Species List, but the USDA manages much of the federally protected land in the United States."

August 18, 2011

Spending Habits of the Special Joint Congressional Commiittee

We growled on August 11, 2011 after learning about the grades the 12 members who were appointed to the so-called “Super Committee” charged to find $1.5 trillion in debt reductions received from the National Taxpayers Union Foundation. NTUF has now taken a more indepth look at the 12 lawmakers’ spending reduction ideas.

Here’s the background on this study, which was conducted by NTUF’s Demian Brady:

“No one said it would be easy for the 12 lawmakers on the latest deficit reduction “Super Committee” to agree with each other, but a new analysis of the bills they’ve sponsored or cosponsored from the National Taxpayers Union Foundation’s (NTUF’s) BillTally system shows just how different their views are on spending programs. The 12 panel members have legislative agendas whose individual impact on the budget would vary widely, from an annual cut in federal expenditures of just over $85 billion to a yearly increase of more than $1.15 trillion.

“Based on the legislative turf that each of them has staked out so far, lawmakers on the Supercommittee will not be approaching the task of cutting spending on a vast plot of common ground,” said NTUF Senior Policy Analyst and BillTally Project Director Demian Brady. “However, BillTally data also demonstrates that if they are willing to explore ground that has already been plowed by other Members of Congress, it is possible to cultivate a package that would fulfill the ten-year, $1.5 trillion deficit reduction mandate of the Super Committee without raising taxes.”

Here’s the “bottom line” finding from the the study, according to to Brady (or the chart below if you prefer):

"All told, Super Committee appointees sponsored or cosponsored 18 non-overlapping bills whose gross savings (not accounting for any spending-increase bills they supported) added up to $89.6 billion a year. None of these 18 pieces of legislation have bipartisan support among the Super Committee Members, but three of those proposals have been introduced in both chambers and have the backing of GOP Senators and Representatives on the panel. The savings of these three “common bills” are estimated at $41.3 billion total.

August 17, 2011

Fiscal Innumeracy

Warren Buffett, one of America’s richest citizens, wrote an op-ed in the New York Times on Monday saying “legislators in Washington” should “stop coddling the super-rich” because his tax bill wasn’t high enough.

Buffett’s op-ed brought comments from all over the political spectrum. William Gale, co-director of the liberal Tax Policy Center, wrote in a column for CNN.com:

“There are, of course, better and worse ways to raise taxes. A general goal would be to broaden the tax base – reduce the use of specialized credits, deductions, loopholes and so on – and minimize the extent to which tax rates need to rise.

“One good place to start? High-income households: Limit the rate at which itemized deductions can occur to 28%. This would affect only households in the highest income ranges, it would not raise their official marginal tax rate, and it would raise $293 billion over the next decade, relative to how much money would be raised according to current law, according to the Congressional Budget Office. This would be a small move in the right direction.”

Politico staff make similar comments about Buffett’s op-ed:

“Buffett suggests raising taxes for anyone with a taxable income of more than $1 million, and an even higher rate for anyone making $10 million or more.

“My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice,” Buffett wrote.

“His comments come as the 12-member congressional supercommittee will soon begin work to tackle the nation’s deficit and some in Congress, and President Barack Obama, are pushing for the panel to back higher taxes on the wealthy.”

In an Associated Press story posted at Breitbart.com, AP observes, “Buffett, who is chairman and CEO of Omaha-based Berkshire Harthaway, has been calling for higher taxes on the super wealthy for several years, claiming “the tax system has contributed to the growing gap between rich and poor.”

At Big Government, however, Dan Mitchell writes:

“My first instinct is to send Buffett the website where people can voluntarily pay extra money to the federal government. I’ve made this suggestion to guilt-ridden rich people in the past.

“But I no longer give that advice. I’m worried he might actually do it. And even though Buffett is wildly misguided about fiscal policy, I know he will invest his money much more wisely than Barack Obama will spend it.”

Mitchell goes on to explain that Buffett’s “numbers are flawed in two important ways.” First, he writes that Buffett’s numbers do not show “the 35 percent corporate tax rate.” In addition, Mitchell writes that “Buffett completely ignores the impact of the death tax.”

And David Logan writes at the Tax Foundation policy blog:

“Contrary to Mr. Buffett's and President Obama's perceptions, America's wealthiest taxpayers are paying a disproportionate share of the income tax burden. Before we ask the rich to pay more, perhaps we should ask those who are paying nothing to contribute at least something to the basic cost of government.

“Of course, like any American, Mr. Buffett can voluntarily write a check or make an electronic payment to the Treasury to help reduce the deficit by simply clicking here.  To be consistent with his message, however, he should resist taking the corresponding charitable donation deduction.  This would at least ensure that he still pay those low income taxes of which he so passionately speaks.”

At Hot Air, Allahpundit writes, “Taxing the rich won’t solve everything; it’ll barely help solve anything. It’s part of the Democrats’ list demands chiefly for political reasons, so that they have some sort of class-warfare victory to tout to their base when they bargain with the GOP, not because it’ll contribute anything significant towards closing the gaping deficit. In fact, in the clip below, Buffett actually suggests lowering rates on middle-class taxpayers to offset the hikes on the very rich. But why do that if the goal is to maximize revenue? And if the answer is “because it’ll stimulate growth and that will maximize revenue,” then why not apply that logic to the very rich too?”

Allahpundit also points to the following Twitter comments by Tim Carney at the Washington Examiner:

As most of the media goes gaga over Billionaire Obama fundraiser Warren Buffett calling for tax hikes, (like he did in 2001, and 2004, and plenty of times in between), let’s remember a few things.

Buffett Profits from Taxes He Supports

“Buffett regularly lobbies for higher estate taxes. He also has repeatedly bought up family businesses forced to sell because the heirs’ death-tax bill exceeded the business’s liquid assets. He owns life insurance companies that rely on the death tax in order to sell their estate-planning businesses.

Buffett Profits from Government Spending

“Buffett made about a billion dollars off of the Wall Street bailout by investing in Goldman Sachs on the assumption Uncle Sam would bail it out. He also is planning investments in ethanol giant ADM and government-contracting leviathan General Dynamics.

“If your businesses’ revenue comes from the U.S. Treasury, of course you want more wealth.

And at the Heritage Foundation’s blog, The Foundry, Mike Brownfield writes in concluding his post, “But apart for misstating his tax burden, Buffett fails to call for significant reforms in Social Security and Medicare that could reduce federal spending, and he downplays the role of taxation plays in investment decisions . . . Then there’s the fact that a shortage of tax revenue isn’t even the root of Washington’s problems -- too much spending is.”

The Wall Street Journal concluded an editorial today by writing:

"Mr. Buffett is one of the great stock-pickers of his time, and we don't begrudge him a single dollar of his wealth. We only wish that, having already made himself rich, he weren't so intent on making it harder for others to become rich too. If he's worried about being undertaxed, we'd suggest he simply write a big check to Uncle Sam and go back to his day job of picking investments."

Finally, Investor’s Business Daily editorialzed that “Warren Buffet may have hoped his call for a tax increase on the rich would make him look selfless. Instead, it just made him look like an uninformed hypocrite.”

August 16, 2011

Quote of the Day

"Because the largest share of federal income taxes is paid by the highest earners, lower-earning households bear a much smaller share of the overall income tax burden, thereby creating progressivity in the federal income tax system. However, it also means that federal revenues devoted to general government operations are particularly sensitive to changes in the income of the top earners."

~ Joint Economic Committee, U.S. Congress

HT Page 141, "As Certain As Death: Quotations About Taxes," TaxAnalysts, Inc.

August 15, 2011

Latest Taxpayer’s Tab

The National Taxpayers Union Foundation (NTUF) has been publishing The Taxpayer’s Tab for more than a year, now, and has now partnered with WashingtonWatch.com, which is “an independent, interactive web site that tracks the potential fiscal impact of federal legislation.”

Last week’s issue of The Taxpayer's Tab summarized it’s tracking of bills sponsored or co-sponsored by members of Congress. Here is NTUF’s “snapshot” of the July “numbers” on those bills:

“During the month of July, NTUF analysts analyzed 551 bills to determine their impact on federal spending. Of those, 358 were House bills with 133 bills introduced in the past month. In the Senate, NTUF scored 193 bills of which 40 bills were introduced in July.

“Net federal spending would increase by approximately $47 billion annually if all 358 House bills were enacted (see below). Totals exclude offsetting provisions. The largest spending increase bills include legislation to directly fund jobs programs, expand benefits for veterans able to receive concurrent compensation, and adjust Social Security benefits for so-called Notch Babies. Large spending cut proposals include bills to repeal reporting requirement authorized in the Patient Protection and Affordable Care Act, rescind Medicaid maintenance of effort requirements for states, and defund foreign aid spending for Pakistan.

“The 193 Senate bills scored within the month of July would decrease federal spending by approximately $82.5 billion annually, if all of the bills were enacted (see below). Totals exclude offsetting provisions. The largest spending increase bills would establish a roadway safety program for elderly drivers, award education grants to high-need schools, and implement a Cost-of-Living Adjustment for veterans of the Armed Forces. These were more than offset by a proposal to reform the Tax Code and eliminate refundable credits.”

If you prefer a chart of the above information, however, it’s available at the above link for last week's The Taxpayer's Tab. In addition, NTUF provides such other information as the members of Congress submitting the most bills. the most spending bills, and the most bills that cut spending. You can receive your own copies of The Taxpayer’s Tabs by providing NTUF the information requested on the homepage.

August 14, 2011

Quote of the Day

'The powers of the legislature are defined and limited; and that those limits may not be mistaken, or forgotten, the Constitution is written."

~ Chief Justice John Marshall, writing in Marbury v. Madison (1803)

HT Wall Street Journal editorial, August 13, 2011

August 13, 2011

Profits Are A Good Thing

At Townhall.com today, John C. Goodman, president and founder of the National Center for Policy Analysis, does a good job in explaining “Why Profit Is Our Best Friend.” He begins the column writing:

“Many liberals think of profit as evil. They see it as the product of “corporate greed,” something that needs to be harshly taxed. Yet the desire to earn a profit is what impels innovators to solve some of our most important social problems.

“I don’t think that getting rich is the main motivation of entrepreneurs — the possibility of changing the world may be an even stronger desire. However, you can almost guarantee there will be no entrepreneurship if you do two things: (a) eliminate all possibility of getting rich, and (b) make it impossible to change anything without the approval of an intractable bureaucracy.

“That in a nutshell is my explanation for why our two most visibly dysfunctional social systems — health care and public education — remain so dysfunctional.”

Goodman then goes on to explain that the way ObamaCare was structured, i.e., mandating that “large health insurance companies have to pay out as much as 85% of their premium income in the form of benefits. The remaining 15% has to cover all sales and administrative costs plus brokers fees and if anything is left that’s what the insurer gets to keep.” The result:

“ . . . no insurer will be able to profit from major cost-reducing discoveries. Nor will any insurer even try. Instead, insurance companies will function like utilities, taking no real risks and making no radical changes in their current business model.

“ObamaCare has ensured that our health care problems will not be solved by stifling innovation in the one sector of the market that most needs vigorous entrepreneurial activity.”

Anyone who thinks their local utilities are fountains of entrepreneurialship are asleep at the wheel. In the view of this scribe, Goodman provides yet another reason to repeal ObamaCare.

August 12, 2011

Arlington Public Schools’ Efficiency Review Set to Start

In the online Arlington Sun Gazette today, Scott McCaffrey writes:

“School Board members hope an upcoming efficiency review could find savings that can be plowed into classroom instruction.

“State education officials are expected to award the contract for the review by the end of the month, said Mary Beth Chambers, the school system’s assistant superintendent of finance.

[ . . . ]

“The state government has long offered school districts the opportunity to have their budgets scrutinized by outside experts. Despite prodding by the Arlington County Taxpayers Association over the years, previous School Boards and administrators were lukewarm at best to the idea. (emphasis added)

“But a new generation of school leadership opted to ask for state help in finding ways to trim budget fat. School Board Chairman Abby Raphael said the review is comprehensive, and the reports issued to local school systems are detailed.”

ACTA wishes to thank “new generation” current School Board members Abby Raphael and Sally Baird and former School Board member Ed Fendley for their support of the efficiency review. However, since APS’ cost-per-pupil is among Virginia’s highest, we question whether it should be “plowed into classroom instruction.”

The news article notes that since 2004, about 1/3 of Virginia’s school districts have undergone efficiency reviews. You can read them at the Virginia Department of Education’s website.

August 11, 2011

Some on “Super-Congress” Not So Taxpayer-Friendly

We’ve growled before that Arlington County taxpayers are poorly represented in Congress. e.g., see this March 6, 2010 Growls. We arrived at that decision by referring to the scores developed by the National Taxpayers Union in their annual ratings of Congress.

Now, it seems that America’s taxpayers may be equally poorly represented by some members on the Joint Select Committee on Deficit Reduction. With all 12 members now known, Terence Jeffrey of CNS News looked at the voting records of 10 of the 12 members (two were not in Congress last year). HT to Jeff Dircksen at Government Bytes, NTU's blog.

The bottom line is that all six Democrats who have been named to the committee received an “F” from the National Taxpayers Union. By comparison, four of the Republicans who served in Congress in 2010 received either an “A,” “B+” or a “B;” two were not rated in 2010. Here are the grades and percentage scores of the 12 committee members who will serve on the “Super-Congress,” according to the CNS News report:

Senate:                                                       Grade        Percentage

Sen. Patty Murray (D.-Wash.)                     F              6 percent
Sen. John Kerry (D.-Mass.)                           F            6 percent
Sen. Max Baucus (D.-Mont.)                         F            9 percent

Sen. Jon Kyl (R.-Ariz.)                                    A            97 percent
Sen. Pat Toomey (R-Pa.)                                 Not rated in 2010
Sen. Rob Portman (R.-Ohio)                          Not rated in 2010

House:

Rep. Chis Van Hollen (D.-Md.)                        F          4 percent
Rep. Jim Clyburn (D.-S.C.)                               F          2 percent
Rep. Xavier Becerra (D.-Calif.)                         F          4 percent

Rep. Dave Camp (R.-Mich.)                               B+     88 percent
Rep. Fred Upton (R.-Mich.)                             B          86 percent
Rep. Jeb Hensarling (R.-Texas)                        A          94 percent

Jeffrey's article fully explains the NTU methodology for computing the grades and percentage scores. So if you have any questions about the grades, refer to Jeffrey's article.

August 10, 2011

Quote of the Day

"Government does not produce revenue. It consumes it."

~ Ronald Reagan

August 09, 2011

S&P Downgrade or Tea Party Downgrade?

At the National Journal, Theresa Poulson writes, “Democrats over the weekend were quick to pin the U.S. credit downgrade by Standard & Poor on the tea party, labeling it the "tea party downgrade." But the administration on Monday toed a softer line -- avoiding waging war against the caucus of conservative Republicans, but also not absolving them for their part in the contentious debt-ceiling debate.”

Poulson also wrote, “On Face the Nation on Sunday, Obama adviser David Axelrod called S&P's move "essentially a tea party downgrade." Sen. John Kerry, D-Mass., and Democratic former Vermont Gov. Howard Dean both echoed the sentiment.” (videos available at the National Journal link; Sen. John Kerry appeared in a Real Clear Politics video.)

In a separate video appearing at Real Clear Politics, CNBC’s Rick Santelli, whose February 2009 rant literally gave birth to the Tea Party Movement, says, “If it wasn't for the Tea Party, they would have passed the debt ceiling thumbs up, we would have been rated BBB." Here is a large portion of what RCP wrote-up of what Santelli said:

"You know what leadership means? It means that it doesn't really matter what S&P says. We all know deep inside that no country is the same as it was 5 years ago. And the market seems to be okay with it. And as for stocks going down we were already Ralph Cramden (of Honeymooners) on thin ice. Now an infant jumped on our shoulders. It’s just even more weight.

“In the end, in the end we need to address problems we know exist. A Treasury Secretary or a President should be out here not fighting S&P, not grabbing the other coach and slapping him around, taking the umpire behind the barn. He should be getting the team psyched to overcome.

“See I remember I had a professor in college. I wrote a great paper. Could never please this guy. But it made me better. Okay? We’re better than this. Don’t get caught up in the minutia. All this BS. We’re better than this. We need to prove it. We’re off the track. Whether we're better than some other country or not, the real issue is we're on the wrong path.

“Blame the Tea Party? Geez, no wonder Kerry did so well in an election. If it wasn't for the Tea Party, they would have passed the debt ceiling thumbs up, we would have been rated BBB."

Another great video, Mr. Santelli. Listen to the video. You decide.

August 08, 2011

More On S&P’s Credit Rating Downgrade

Economist William McBride of the Tax Foundation writes at their Tax Policy Blog that “(w)hile the administration and others have criticized S&P for downgrading U.S. debt, there are at least three reasons it makes sense.” He then goes on to discuss each of the following three reasons:

  • Reason 1: The debt ceiling deal fails to address long term debt, which is mainly coming from healthcare entitlement spending.”
  • Reason 2: Many OECD countries spend more than we do on welfare programs, but they also have the VAT.”
  • Reason 3: In a world where healthcare spending is not addressed, and we do not have the VAT, interest payments will become a dangerously large share of tax revenues.”

Rather than comment on each reason, readers can read the entire post. It’s not very long, and includes a very helpful chart of the growth in healthcare entitlements.

One of the editorials in today’s Wall Street Journal discusses S&P’s credit rating downgrade. Of special interest, the Journal points out, “A spend and tax policy mix always leads to economic decline.”

Remember when you learned that a picture is worth a thousand words? Well, one chart in the Journal’s editorial is that good of a picture. Titled “Entitlement Nation,” it shows that “federal payments to individuals continue to grow as a share of all spending, as the nearby chart shows.”

 

The Wall Street Journal editorial makes the following important point:

“Despite S&P's opinion, there is no chance that America will default on its debts. The real importance of the downgrade will depend on the political reaction it inspires.”

For more on S&P's downgrade of America's AAA credit rating, see the August 6 and August 7, 2011 Growls.

August 07, 2011

The Tea Party Had It Right

At the Hot Air blog today, Ed Morrissey asks, “What caused the United States to lose its AAA rating for the first time in 94 years, a rating that withstood two world wars, the Great Depression and (most of) the Great Recession, and a costly military buildup that bankrupted and demolished our Cold War foe, the Soviet Union, without a direct shot fired?” (For more on S&P's downgrade of America's AAA credit rating, see yesterday's Growls.)

Morrissey goes on to cite a report by Reuters that discusses the appearance of David Beers, head of S&P’s sovereign ratings on Fox News Sunday. According to Reuters:

“Beers called the U.S. Treasury Department's criticism of the credit rating agency's analysis a "complete misrepresentation." Even with the debt limit agreement passed by Congress, he said, "the underlying debt burden of the U.S. is rising and will continue to rise over the next decade."

Morrissey then makes the following extremely astute observation:

Actually, the Tea Party caucus in Congress had it right. The bond raters needed to see the US take a significant step towards ending deficit spending and getting future liabilities under control. The problem with the lack of consensus came from the resistance of Democrats to the fiscal realities of the situation we face. Instead of addressing the real problems, Democrats blocked any attempt to deal with the entitlement crises and would only agree to address discretionary spending.” (emphasis added)

Before including the budget chart (see below) from the Heritage Foundation’s 2011 Budget Chart Book, Morrissey asks, “Want to see why it’s the debt and not the taxes, Tea Party, or Congressional tiddlywinks?

Heritage’s Description of Chart:

“If the average historical level of tax revenue is extended, spending on Medicare, Medicaid and the Obamacare subsidy program, and Social Security will consume all revenues by 2049. Because entitlement spending is funded on autopilot, no revenue will be left to pay for other government spending, including constitutional functions such as defense.”

Entitlements Will Consume All Tax Revenues by 2049

UPDATE (8/7/11): At Townhall.com today, Helen Whalen Cohen suggests the next "meme" is very likely to be "Tea Party downgrade." Breitbart's Big Government has the video of Sen. John Kerry (D-Massachusetts) spewing it forth on Meet the Press.

August 06, 2011

America’s Long-Term Rating Lowered To ‘AA+’

Now that’s truly a historic first. Who would have thought it could happen in our lifetime? Here’s how the Wall Street Journal describes the lowering of America’s credit rating:

“S&P removed for the first time the triple-A rating the U.S. has held for 70 years, saying the budget deal recently brokered in Washington didn't do enough to address the gloomy outlook for America's finances. It downgraded long-term U.S. debt to AA+, a score that ranks below more than a dozen countries, including Liechtenstein, and on par with Belgium and New Zealand. S&P also put the new grade on "negative outlook," meaning the U.S. has little chance of regaining the top rating in the near term.”

If you prefer your news from the Washington Post, go here, or go here and here for the news by reporters for American Spectator. Meanwhile, The Hill reported last night that “Standard & Poor's decision to downgrade the nation's credit rating reinforces Democrats' call for increasing tax revenue, Senate Majority Leader Harry Reid (D-Nev.) said Friday.”

Here, in the words of Standard & Poor’s (requires Adobe) itself is portion of the 'overview' of S&P’s decision to downgrade America’s credit rating:

"The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics.

“More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.

“Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government's debt dynamics any time soon.

“The outlook on the long-term rating is negative. We could lower the long-term rating to 'AA' within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.”

If you prefer the potty-mouthed version, Helen Whalen Cohen has it at Townhall.com. It was provided by Christina Romer, President Obama’s first chair of the White House Council of Economic Advisors on the Bill Maher show.

In addition, here are two “takes” at Andrew Breitbart’s Big Government:

  • Author and business executive Robert Allen Bonelli writes: “The future of our nation’s prosperity and our nation’s liberty depends on real leadership.  The best way for government to lead in response to the S&P is to address the rapidly growing future costs of all entitlement spending; flatten the tax rate; lift restrictive regulation; repeal the faulty healthcare law and its enormous economic uncertainty; and get out of the way of the private sector.  The American people will do the rest.”
  • Dan Mitchell, a senior economist at the Cato Institute, writes: “the United States has fiscal cancer. Yet rather than try to cure the disease, politicians are – at best – kicking the can down the road . . . The only glimmer of hope, as I wrote yesterday, is that House Republicans have made serious efforts to restrain the burden of federal spending." He includes a video of an interview on Bloomberg TV in which he discusses DC’s fiscal incontinence.

Finally, at Fox News, economist John Lott concludes an op-ed by writing:

“It should be clear to everyone now that the threat the U.S. faced over the August 2 debt ceiling deadline was not over the false scare tactic claims of default, but over whether the U.S. was willing to actually control the huge deficits that we are facing.

“S&P's decision to downgrade the U.S. bond rating isn’t a real disaster yet, but it is a wake up call. And it's one that should force Washington’s politicians to re-examine the debt ceiling deal that they just made.”

Fox News describes their news 'fair and balanced.' At Growls, we think we provide news that is 'well-rounded.'

August 05, 2011

Getting What They Wished For

At the American Thinker today, Randall Hoven writes: “Class warriors got what they wished for in the first year of the Obama presidency. Now the 2009 tax return numbers are out . . . and yes, they do show that same pattern.” See also yesterday's Growls, which discussed who pays income taxes for tax year 2008.

In Hoven’s article today, he focuses on tax return data for 2007 and 2009, which was recently published by IRS’ Statistics of Income Division. Hoven notes that comparisons between those two years capture the depth of the Great Recession. He writes:

“The main reason federal revenues were down was that personal incomes were down. Total adjusted gross incomes (AGI) less deficits declined $1.1 trillion, or 12%. However, due to our progressive income tax, the percentage decline in taxes collected was even greater: 22%.

“You see, when you get rid of rich people, like class warriors want, you also get rid of the taxes they used to pay. Of the $250-billion drop in personal income taxes, $175B (70%) was due to declines in incomes over $200K. No rich people, no taxes from rich people.

“The chart below shows the total incomes of those making over $200K and over $1M per year from 200(7) through 2009. The total income on those making over $1M was cut almost in half from 2007 to 2009.

“In the Great Recession, the "rich" suffered the most. (For convenience, I use the term "rich" loosely here, simply meaning higher incomes in a given year, not wealth.). The tables below show how the number of "rich," their incomes, and taxes collected from them all declined. These tables also show that the higher the income group, the greater the decline in income and taxes on that income.”

I encourage you to take a minute and look at the three tables in Hoven’s article, i.e., total number of returns, total income (AGI less deficit), and total tax. Let’s take a brief look at some numbers, however:

  • Total number of returns. From 2007 to 2009, the number of returns with AGI over $1M dropped by just over 155,000, a drop of 40%. Returns with AGI over $200K dropped 14% while returns with AGI under $200K dropped 1.8%.
  • Total income. From 2007 to 2009, total income of those with AGI over $1M dropped by 48% while total income of those with AGI over $200K dropped 31% and 1.5% for returns with AGI under $200K.
  • Total tax. From 2007 to 2009, the total tax paid by those with AGI over $1M decreased by 43% while the total tax of returns with AGI over $200K dropped 29% and those with AGI under $200K dropped 15%.

Hoven ends the article saying:

“I can think of two ways to solve the dilemma, if you call lack of federal revenue a dilemma.  (1) Create more rich people.  (2) Raise tax rates on those making under $200K.  Wow, class warriors aren't going to like those choices.

“After all, raising taxes on those making over $200K, as President Obama constantly urges, does no good if no one is making over $200K, as all of Obama's other policies constantly promote.

“It's a conundrum.”

A very informative article, Mr. Hoven. We’ll write more about tax year 2009 tax returns so revisit Growls often.

August 04, 2011

Who Pays Income Taxes, and How Much?

I never cease to be amazed by the knowledge of some callers to talk radio about who pays income taxes and how much. And it’s not just “average citizens.” Even worse, it’s people who should know the answer, i.e., members of Congress. On his January 8, 2008 radio show, Neal Boortz interviewed Rep. Dennis Kucinich (D-Ohio), who represents Cleveland and southwestern Cuyahoga County, to see if the Congressman “knew what he was talking about.” Here’s how Boortz summarized the interview:

“He didn't.

“Kucinich has a long history in congress of trying to shift the tax burden away from low and middle income Americans onto the backs of the high-achievers. In 2003 he sponsored a law that would give a "refundable" tax credit to protect low and middle income people from having to pay Social Security or Payroll taxes. Kucinich, who is chairman of the "Progressive" (that means liberal) Caucus also proposed something he called a "tax dividend" for every man, woman and child. Well, almost every man, woman and child. He wanted to limit the dividends paid to the top 1% of income earners to only 1% of the total tax cut.

“Well, there's our clue. Kucinich doesn't have any idea in the world how much of the total taxes are paid by the top one percent of income earners ... so I asked him two questions:

What percentage of total income is earned by the top 1% of income earners?
What percentage of total federal income taxes are paid by the top 1% of income earners.

“The answers were astounding. Congressman Dennis Kucinich thinks that the top 1% of income earners earns about 60% of all income, and he thinks that they pay about 15% of all income taxes. The fact is that the top 1% of all income earners pull in about 18% of all income and pay 38.8% of all income taxes.

“This is an astounding level of ignorance on such an important statistic. You can excuse a mother of three loading up on Happy Meals for her porky little kids at a McDonalds for not knowing this .. .but a member of the Congress? Remember .. the Clinton tax increase passed the House of Representatives by only one vote ... and Kucinich was there ... there without a clue ... there voting for a tax increase on people he thought earned 60% of all the income but were only paying 15% of all income taxes. Inexcusable.”

So that ACTA members and Growls readers aren’t found as ignorant as one member of Congress, here are answers to the first question, as reported by the National Taxpayers Union for the individual income tax for tax year 2008:

Percentiles/AGI Threshold/Percentage of Federal Personal Income Tax Paid

  • Top 1% -- $380,354 -- 38.02%
  • Top 5% -- $159,619 -- 58.72%
  • Top 10% -- $113,799 -- 69.94%
  • Top 25% -- $67,280 -- 86.34%
  • Top 50% -- $33,048 --97.30%

Here's hoping Arlington taxpayers won't be as ignorant as members of Congress. And rather than use the phrase President Obama likes to use, i.e., “shared sacrifice,” it seems President Obama's "millionaires and billionaires" are bearing an unfair sacrifice.

UPDATE (8/4/11): An editorial that will appear in tomorrow's Investor's Business Dailey (IBD) will cover much of the above material under the headline "Class Warfare." IBD points out:

"So which group isn't paying its fair share? Which cohort is not sharing in the sacrifice? The facts show that the richest Americans are the ones who have been largely financing Washington's careless spending and the buildup of the soul-killing welfare state. Why should they have to pay even more?

"We would also like to know why the president gets to define "fair" for the purposes of tax collecting. Why does his definition and that of his party outweigh any other definitions of what is fair? That seems like the job of an emperor, not an elected president who swore that he would uphold the Constitution and its 14th Amendment requirement that everyone receive equal treatment under the law.

"We're not making this point to defend wealthy Americans and to malign the poor. We're simply trying to make an argument for true fairness — not a political or ideological "fairness."

"We also wish to point out that adding to the tax burden of the rich causes problems because it is the rich whose investments expand the economy and create jobs. Taxing the top earners isn't a solution. It's a backward move."

The IBD editorial includes a "cleaner" version of the above "chart" of NTU income and tax data.

August 03, 2011

Arlington County’s Jobless Rate Remains Under 4%

This morning’s online Arlington Sun Gazette reports the county’s “jobless rate hangs on at less than 4% for June.” The story by Scott McCaffrey goes on to say:

“Despite an uptick from May to June, Arlington’s unemployment rate remains the only one among Virginia’s 134 cities and counties standing - if just barely - at less than 4 percent.

“The county’s June jobless rate was 3.9 percent in June, according to figures reported Aug. 3 by the Virginia Employment Commission. That was up slightly from 3.7 percent in May, part of a general upward drift in unemployment across Northern Virginia and a larger jump across the commonwealth as a whole.”

The following graph from the Sun Gazette article includes unemployment rates for Northern Virginia jurisdiction as well as Virginia and the United States. In addition, McCaffrey’s story reports employment statistics such as rates for the leisure/hospitality and construction industries.


August 02, 2011

Quote of the Day

“What is history but the story of how politicians have squandered the blood and treasure of the human race.”

~ Thomas Sowell

HT OnPower.org

August 01, 2011

Tax Hikes Still Possible in ‘Debt Deal’

Although the “debt ceiling’s” final votes are still being taken in the House of Representatives and the Senate, here is how Stephen Dinan of the Washington Times reports the current situation in a story posted online this afternoon:

“The debt framework President Obama and congressional leaders reached Sunday night runs 74 pages long, and could authorize as much as $2.4 trillion in new debt — or $32.4 billion per page.

“That debt increase will get the country through the 2012 election, both sides said, but it does not bring to an end the sea of red ink that will continue to wash over the federal government for the foreseeable future.

“In the near term, the bill sets budget numbers for 2012 that would require a real cut of $7 billion in discretionary spending from 2011 levels, though that’s $25 billion less than projected spending would have been had it kept pace with inflation.

“Over the long term, the deal could lead to as much as $2.4 trillion in lower-than-projected spending over the next decade, which also works out to about $32.4 billion per page in lower spending — if all of the conditions are met. But during those 10 years, that still means the country could pile up another $10.4 trillion in new debt, which would leave the government well more than $20 trillion in debt by the end of the decade.”

Worse news, though, comes from a story posted today by Susan Jones at CNSNews.com, which indicates that President Obama and Senate Majority Leader Harry Reid (D-Nevada) “eye new commission as way to achieve tax hikes.” She goes on to say:

“President Obama clearly expects the panel to consider tax hikes as part of those “deficit reduction measures.” In remarks Sunday night, he called the 12-member commission an “important” part of the tentative debt deal.

“Over the next few months, Obama said, “I’ll continue to make a detailed case to these lawmakers about why I believe a balanced approach is necessary to finish the job.”

That is confirmed in the third talking point in a White House fact sheet that says the so-called deal:

“Establishes a bipartisan process to seek a balanced approach to larger deficit reduction through entitlement and tax reform.”

Americans for Prosperity (AFP) issued a brief statement during the day on the “debt limit deal.” AFP concluded their statement saying:

“While we appreciate that the debate has been focused on the right problem of spending and has considerably improved from earlier bipartisan proposals, we must remain firm to our commitment to the Cut, Cap, and Balance approach as the only way to genuinely solve the problem of out-of-control spending. Until strong balanced budget amendment has been adopted, we urge Congress to vote no on authorizing any additional debt.”

Stay tuned. The entire debt ceiling imbroglio goes to show, however, in just how much more work conservatives and the Tea Party movement has to do.