Budgetology: Upset Alert
Yesterday, President Obama went up to Capitol Hill to make his position on entitlements crystal clear by calling on fellow Democrats to embrace reforms. As the Senate unveils their budget, all eyes will be watching to see if they follow the president’s lead and “embrace” change, or if they will continue to put off addressing the biggest drivers of our long-term debt. It’s time for Washington to face reality; Medicare, Medicaid and Social Security will only survive with significant changes. Any meaningful reform must address entitlements.
OBAMA TO DEMS ON ENTITLEMENT REFORM: EMBRACE IT
For Any Serious Reform To Be Achieved, Entitlements Must Be Addressed:
President Obama Tells Democrats To Embrace Changes To Entitlement Programs:“[President Obama] warned that Democrats need to embrace at least some changes to unsustainable entitlement programs in order to achieve their long-term priorities. The president made the case, senators attending the luncheon said, to protect entitlements for future generations — a key Democratic priority in negotiations with Republicans over a deficit reduction deal known as a grand bargain.” (Ginger Gibson, “President Obama to Democrats: Entitlements May Have To Change,” POLITICO, 3/12/13)
“Obama Acknowledged That Social Security And Medicare — Big Drivers Of Federal Spending — Wouldn’t Survive Without Some Changes To Save Money.” (Ginger Gibson, “President Obama to Democrats: Entitlements May Have To Change,” POLITICO, 3/12/13)
But Not All Democrats Are Ready To Go Along With The President:
More Than Half Letter To The President Warning Against Entitlement Reform: “One hundred and seven of the 200 House Democrats signed a letter to Obama threatening to vote ‘against any and every cut to Medicare, Medicaid or Social Security benefits — including raising the retirement age or cutting the cost of living adjustments that our constituents earned and need.’” (Kate Nocera, “Democrats not sold on grand bargain,” POLITICO, 3/10/13)
Senate Democrats Object To President Obama’s Changes To Entitlement Programs: “President Obama began three days of meetings on Capitol Hill on Tuesday by fielding about a dozen questions from Senate Democrats about ongoing budget negotiations, an immigration overhaul and his administration’s unmanned aerial drone program. During the 90-minute exchange, Obama also heard objections from more liberal senators regarding potential cuts to entitlement programs as part of a bipartisan compromise on taxes and spending, according to senators in attendance.” (Ed O’Keefe and Paul Kane, “Obama Meets with Senate Democrats,” The Washington Post, 3/12/13)
The White House Has Long-Maintained That Any “Balanced Approach” Must Include Entitlement Reform:
White House Claims That Any “Balanced Approach” Includes Entitlement Reforms. “White House officials rejected Republican suggestions that Mr. Obama has not been serious enough about tackling the growth of entitlement spending. ‘He [Obama] is committed, every time he talks about this, to a balanced approach that includes both, you know, revenues, spending cuts and savings through entitlement reforms,’ said Jay Carney, the White House press secretary.” (Peter Baker, “Obama Tilts Tax Debate Away From Spending Cuts,” New York Times, 11/29/12)
President Obama: “I Believe That We Have To Continue To Take A Serious Look At How We Reform Our Entitlements, Because Health Care Costs Continue To Be The Biggest Driver Of Our Deficits.” (President Barack Obama, Remarks By The President At A News Conference, The White House, 11/14/12)
Entitlement Reform “Central” To Containing Spending. “As president-elect, Obama said entitlement reform would be ‘a central part’ of his administration’s attempts to contain federal spending.” (Carrie Budoff Brown, “Obama Dodges ‘Hard Choices’ On Entitlements,”POLITICO, 1/22/13)
Widely Reported That Obama Was Willing To Address Entitlements. “During the debt ceiling fight and the fiscal cliff fight, Obama was (widely reportedly) willing to make cuts to entitlements in exchange for higher taxes from Republicans.” (Joseph Wiesenthal, “Obama’s Inauguration Speech Dealt A Devastating Blow To Deficit Hawks,” Business Insider, 1/22/13)
And President Obama Has Been Calling For Entitlement Reform For Years:
July 2006: Sen. Barack Obama Said, “We’re Going To Have To Talk About Entitlements … Difficult To Have That Conversation…” Obama: “The — I think all of us are aware that at some point, in order to get our deficit under control, there are going to be revenue issues that we’ve got to bring up and there are going to be spending issues that we’re going to bring — and we’re going to have to talk about entitlements and we’re going to have to control costs and it is very difficult to have that conversation, particularly at a time when Americans are feeling squeezed and more vulnerable, if they think that the money is being wasted.” (Sen. Barack Obama, U.S. Senator Tom Coburn (R-Ok) Holds A Hearing On S. 2590, The Federal Funding Accountability And Transparency Act Of 2006, 7/19/06)
In 2009, Obama Pledged To Reform Social Security And Medicare. “President-elect Barack Obama pledged yesterday to shape a new Social Security and Medicare ‘bargain’ with the American people, saying that the nation’s long-term economic recovery cannot be attained unless the government finally gets control over its most costly entitlement programs.” (Michael D. Shear, “Obama Pledges Reform Of Social Security, Medicare Programs,” The Washington Post, 1/16/09)
“Obama Pledges Reform of Social Security, Medicare Programs” (in 2009): ”What we have done is kicked this can down the road. We are now at the end of the road and are not in a position to kick it any further,” [President Obama] said. “We have to signal seriousness in this by making sure some of the hard decisions are made under my watch, not someone else’s.” (Michael D. Shear, “Obama Pledges Reform of Social Security, Medicare Programs,” The Washington Post, 1/16/09)
Budgetology: Debt Clock Violation
SHOT: President Obama: “We don’t have an immediate crisis in terms of debt. In fact, for the next ten years, it’s gonna be in a sustainable place.” (President Barack Obama, Interview with George Stephanopoulos, ABC News – Good Morning America, 3/13/13)
CHASER: “In its annual Budget and Economic Outlook, the CBO said debt held by the public will be bigger by 2023 than in any year since 1951 and will be at 77 percent of gross domestic product (GDP) by 2023, far above the 40-year average of 39 percent of GDP.” (Tom Curry, “CBO Forecasts Growing Debt Even As Economy Recovers,” NBC News, 2/5/13)
More From The CBO …
CBO: “…[Fe]deral debt held by the public is projected to remain historically high relative to the size of the economy for the next decade.” (Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2013-2023, 2/5/13)
“Serious Negative Consequences” Of High Debt: Lower Wages, Greater Risk Of Fiscal Crisis. “Such high and rising debt would have serious negative consequences: When interest rates rose to more normal levels, federal spending on interest payments would increase substantially. Moreover, because federal borrowing reduces national saving, the capital stock would be smaller and total wages would be lower than they would be if the debt was reduced. In addition, lawmakers would have less flexibility than they might ordinarily to use tax and spending policies to respond to unexpected challenges. Finally, such a large debt would increase the risk of a fiscal crisis, during which investors would lose so much confidence in the government’s ability to manage its budget that the government would be unable to borrow at affordable rates.” (Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2013-2023, 2/5/13)
As President Obama prepares to speak at today’s donor summit for his new nonprofit “Organizing for Access Action,” American Crossroads took the opportunity to promote the event with a new video!
We call the new video “Appropriate” – after Jay Carney’s incisive description of the group and the way it raises money.
On Monday morning, Fox News contributor Karl Rove reacted to comments made by Nancy Pelosi on CNN’s ‘State of the Union’ in which the Democratic leader claimed of President Obama that the commander in chief “has always been very respectful of the views of the Republicans in Congress, their leadership and their membership; he has always tried to accommodate them. The idea that but for that, we would have gotten all these things done is really just not reality.”
Rove’s initial response? “What universe is she living in? He has not respected Republicans from day one,” he said.
“[This is a guy who uses] rhetoric that not only attacks [Republicans'] policies but continually questions their motivations,” he said, adding that Pelosi lives “in a different place” to make such claims.
“It’s fine for a president to disagree with their policies. But the thing this man does, though, is he questions their motivations. He constructs straw arguments about what he claims they’re for, and then demolishes them.”
Spending Daily | March 11, 2013
Some Convinced Entitlement Reform Now Obama’s #1 Priority
The Washington Examiner reports, “President Obama, hoping to make debt reduction part of his legacy, appears focused on striking a grand bargain with Republicans to reform Medicare this year. Medicare’s growing share of the budget and its increasing toll on the expanding debt were the main topic of conversation at an unprecedented dinner meeting last week between Obama andSenate Republicans, who came away convinced that entitlement reform is now the president’s No. 1 priority. And he wants the job done by this summer. … Medicare is the biggest driver of the nation’s debt, Obama told the group, and it’s costing far more than American workers are pumping into the system through paycheck deductions. ‘They all think that Medicare is their money, and to a certain extent it is,’ Obama said, according to Sen. Ron Johnson, R-Wis., who attended the event. ‘But for every dollar they put in, they get three back. The American people don’t understand that.’
Dems to Obama: Don’t Touch Entitlements
POLITICO reports, “President Barack Obama may be thinking about a ‘grand bargain’ to address spending and the federal deficit, but there’s a key constituency he has to persuade to come along. Democrats. The talk of any deal with congressional Republicans — and for now, it’s just that: talk — has liberals worried the White House will give in to changes to safety net programs including Medicare, Medicaid and Social Security. … One hundred and seven of the 200 House Democrats signed a letter to Obama threatening to vote ‘against any and every cut to Medicare, Medicaid or Social Security benefits — including raising the retirement age or cutting the cost of living adjustments that our constituents earned and need.’”
Senate Dems Struggle to Pass Budget by Easter
The Hill reports, “Senate Democrats say they will soon pass their first budget in four years, but it is proving a test. Disputes over tax cuts, spending reductions and entitlement reform all present challenges to Budget Committee Chairwoman Patty Murray (D-Wash.) and Majority Leader Harry Reid (D-Nev.). The Democrats’ narrow 12-10 majority on the panel means one defection would mean failure, if Republicans stick together as expected. There is more leeway on the Senate floor because budget resolutions cannot be filibustered and Democrats control 55 seats. Still, the party can afford to lose only five votes before Vice President Biden’s deciding ballot would likely become necessary. … They have signaled that their budget will do more to raise revenue than to cut spending and that it will not end deficits. In a memo, Murray adumbrated the justification for this by noting that Congress has already approved $1.8 trillion in spending cuts since 2010 but only $600 billion in new taxes.”
“Pump Up the Fraud”
The Washington Free Beacon reports, “A politically connected engineering company that received massive stimulus contracts has admitted that workers committed widespread fraud under the encouragement of its executives while working on a major taxpayer-funded nuclear cleanup effort. Employees of CH2M Hill routinely inflated hours worked on the cleanup effort at the Hanford nuclear waste site in Washington state between 1999 and 2008. Company executives sanctioned those violations in order to obtain bonuses that required certain performance benchmarks, according to an agreement between the company and the Justice Department filed in federal court on Friday.”
“Too Much Talk of Taxing”
Judd Gregg editorializes in The Hill, “Many who march in the army of the president say that all they want is to return to the good old days when Bill Clinton rode the range and richpeople paid their fair share of taxes. … In 2000, the top tax rate was 39.6 percent and there was a 2.9 percent Medicare tax on top of that. Therefore, the stated tax burden on high income Americans and small businesses was 42.5 percent. After the ’fiscal cliff’ tax increase, the top rate is now 39.6 percent and on top of that there is a new 3.8 percent Medicare tax rate forpeople with incomes over $200,000. This means that the top stated rate for taxes is now 43.4 percent — a rate that is higher than that paid in Clintonian times. … The capital gains rate on small businesses and high-income people is also now higher than in the Clinton years. It is 23.6 percent today as compared with 20 percent in Clinton’s last years. Even if you look at the effective rate, high-income people are paying more today than in the last decade of the last century. The effective rate is 27.6 percent today as compared with 26.4 percent back then. There should be happiness in Obama-land. But, alas, there is not. The president and his minions in Congress continue to call for the rich, also known as small business-owners, to pay more. What is the goal here? Obviously, it is not to return to the tax policies of the Clinton years regarding wealthy Americans and small businesses, since we have already done so.”
Are Senate Leaders Road Blocking Deficit Talks?
The Hill reports, “Sen. Tom Coburn (R-Okla.) accused Democratic and Republican Senate leaders of standing in the way of a bipartisan deficit-reduction deal. ‘The Senate’s not nearly as dysfunctional as it’s made out to be, because there’s great relationships in the Senate,’ said Coburn, who is at the center of deficit talks. ‘Our problem in the Senate is the leadership in the Senate, not the members in the Senate.’ He said President Obama, who has tried tocircumvent Republican leaders by reaching out to rank-and-file members in recent days, has a good chance at striking a grand bargain despite widespread skepticism. … Coburn said many lawmakers on both sides of the aisle are eager to forge a compromise and blamed the Democratic and Republican leadership in Congress for impeding their efforts. He said he came away from last week’s meeting hopeful that Obama would begin talking to the public about the need to reform entitlement programs, the biggest drivers of the federal deficit. Coburn said a deal would need to be struck before the start of the 2014 campaign season and indicated his willingness to reduce the deficit by raising new revenues through tax reform in exchange for entitlement reform, a concession Obama has demanded.”
Ryan Claims Budget Will Balance Books in 10 Years
Bloomberg reports, “House Budget Committee Chairman Paul Ryan is planning to unveil a 2014 budget plan this week that would balance the government’s books in 10 years by limiting the annual growth of spending to 3.4 percent. The budget proposal assumes that Congress would repeal President Barack Obama’s health-care law set to be implemented next year, Ryan said yesterday on ‘Fox News Sunday.’ That assumption depends on the unlikely possibility that the Democrat in the White House and those who control the Senate agree to repeal the president’s signature domestic policy achievement. Ryan, a Wisconsin Republican, said his budget would save $5 trillion over 10 years, the same amount his two previous budget plans had proposed saving by 2040. His party’s vice presidential nominee in 2012, Ryan said new tax revenue of more than $600 billion that Congress and the president agreed to in January will help achieve a balanced budget in 10 years. … ‘Instead of growing spending at 4.9 percent’ annually, ‘we grow spending 3.4 percent’ so ‘the result is a $5 trillion’ cut in the increase of spending over 10 years, he said.”
“Cuts Give Obama Path to Create Leaner Military”
The New York Times reports, “At a time when $46 billion in mandatory budget cuts are causing anxiety at the Pentagon, administration officials see one potential benefit: there may be an opening to argue for deep reductions in programs long in President Obama’s sights, and long resisted by Congress. On the list are not only base closings but also an additional reduction in deployed nuclear weapons and stockpiles and a restructuring of the military medical insurance program that costs more than America spends on all of its diplomacy and foreign aid around the world. Also being considered is yet another scaling back in next-generation warplanes, starting with the F-35, the most expensive weapons program in United States history. None of those programs would go away. But inside the Pentagon, even some senior officers are saying that the reductions, if done smartly, could easily exceed those mandated by sequestration, as the cuts are called, and leave room for the areas where the administration believes more money will be required. These include building drones, developing offensive and defensive cyberweapons and focusing on Special Operations forces.”
WASHINGTON – U.S. Sen. Carl Levin, who has been a force for progressivism in the Senate since 1979 and made his mark in recent years as chairman of the powerful Armed Services Committee, will not run for re-election next year, likely setting off a political avalanche of interest in the seat.
Levin, 78, released a statement Thursday afternoon saying he made the decisions believing “I can best serve my state and my nation by concentrating in the next two years on the challenging issues before us … in other words, by doing my job without the distraction of campaigning for re-election.”
Brad Dayspring, Communications Director for the NRSC issued the following Statement from the National Republican Senatorial Committee on today’s announcement by U.S. Senator Carl Levin and the 2014 Michigan Senate race:
“Over the last few months, the 2014 map has gone from sorta difficult to really tough for Senate Democrats. Politically, Senator Levin’s decision knocks a Democratic Senate already on defense far back on their heels and offers us a real pick up opportunity. Republicans can win in Michigan, as the Governor, Lt. Governor, Secretary of State, and Attorney General have proven. That is why we’ve been speaking to local officials and grassroots organizations in preparation for Senator Levin’s potential retirement, and now that groundwork will start to pay off.”
House Republican Conference Chair Cathy McMorris Rodgers (R-WA) delivers this week’s address, calling on President Obama and Senate Democrats to negotiate a solution to the President’s devastating spending cuts, known as the sequester. The President’s sequester went into effect March 1st. The Democrat-led Senate has not passed any replacement plan, and the President has not put any solution forward. The House has acted–twice–to replace the sequester with responsible cuts and reforms. Washington Democrats must act.
According to President Obama, the world is going to end after sequestration.
What will the world look like on the day after?
Common Cents: The $85 Billion Question
With the sequester set to go into effect in just two days, Americans are trying to piece together how Washington failed to come up with anything better than their best, worst idea. Ultimately, the inability to prioritize and trim back just three percent of the federal government’s annual budget is why we’re still in this situation. Is cutting three cents on the dollar really as difficult as Washington says it is? It shouldn’t be. But with all the mixed messages coming out of Washington, it’s hard to keep track of who can do it … and who can’t.
CAN WASHINGTON FIND A SMART WAY TO CUT $85 BILLION?
CNBC’s Joe Kernan: “… If you were a surgeon, you could find $85 billion in the discretionary side that is duplicative or waste or whatever. I mean, you’re not saying that we couldn’t find a way to do that, are you?” (Joe Kernan, CNBC’s Squawk Box, 2/26/13)
Democratic Whip Steny Hoyer: “I think that’s correct, Joe …” (Steny Hoyer, CNBC’s Squawk Box, 2/26/13)
President Obama: “When you’re cutting $85 billion in seven months, which represents over a ten percent cut to the defense budget in seven months, there’s no smart way to do that. There’s no smart way to do that.” (President Obama, Remarks at Newport News Shipbuilding, Newport News, VA, 2/26/13)
FLASHBACK: EVEN INSIDE THE WHITE HOUSE, IT ISN’T CLEAR
The President today travels to Hampton Roads, Virginia – 180 miles from Washington, DC – to continue his “endless campaign” for higher taxes instead of making the 1.7 mile trip to Harry Reid’s office on Capitol Hill to find a replacement for his sequester. At a time when the President should be working with Senate Democrats to find smarter, more responsible spending cuts, he is singularly focused on holding more rallies to push for tax hikes.
(HINT: President Obama could have made more than 3,000 trips to sit down with Harry Reid and Senate Democrats.)
People are going to hate me for this… or love me. Just know that this seems to be the facts… Painful as it is, an article I was sent had this info….
The receipt (pictured) spells out what Obama and the feds want to keep secret – the middle class is being heavily taxed despite all the fatuous rhetoric of Democrats who invariably play the class warfare card to sell their confiscatory taxation policies.
“The 2.3% Medical Excise Tax that began on January 1st is supposed to be ‘hidden’ from the consumer, but it’s been brought to the public’s attention by hunting and fishing store Cabela’s who have refused to hide it and are showing it as a separate line item tax on their receipts,” the email states.
Now being skeptical of this I went to the IRS website and found this!
Q1. What is the medical device excise tax?
A1. Section 4191 of the Internal Revenue Code imposes an excise tax on the sale of certain medical devices by the manufacturer or importer of the device.
Q2. When does the tax go into effect?
A2. The tax applies to sales of taxable medical devices after Dec. 31, 2012.
Q3. How much is the tax?
A3. The tax is 2.3 percent of the sale price of the taxable medical device. See Chapter 5 of IRS Publication 510, Excise Taxes, and Notice 2012-77 for additional information on the determination of sale price.
So being more curious I clicked on “Chapter 5 of IRS Publication 510“ And WALLAH! What do I find under “MEDICAL DEVICES” under “MANUFACTURERS TAXES”? Manufacturers Taxes The following discussion of manufacturers taxes applies to the tax on:
- Sport fishing equipment;
- Fishing rods and fishing poles;
- Electric outboard motors;
- Fishing tackle boxes;
- Bows, quivers, broadheads, and points;
- Arrow shafts;
- Taxable tires;
- Gas guzzler automobiles; and
I think we have definitely been fooled, if we believe that the Affordable Care Act is all about healthcare. It truly does appear to be nothing more than a bill laden with a whole lot of taxes that we the people have yet to be aware of!
Aw great, more good news for your pocket book.