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Is Congress finally getting serious about spending and the debt?

The Congressional Fiscal 2014 Budget Conference Committee met for the first time last week. It is a bipartisan, bicameral committee that includes all members of the Senate Budget Committee, and the Chairman and Ranking Members on the House side, is about even politically, with 15 Democrats and 14 Republicans, but is heavily weighted towards the Senate, with 22 senators and seven representatives.

The budget reform panel was mandated in the bill that raised the debt ceiling and ended the government shutdown, and has until December 13 to find a budget compromise or face the likelihood of another government shutdown in mid-January when funding for the government runs out.

The group is reportedly focused on finding ways to replace across the board spending cuts, known as sequestration, with more sensible reductions in federal largess.

Representative Paul Ryan (R-Wisc.) is chair of the joint committee, and in opening remarks said that the debt held by the public has doubled in just the last 5 years and is only getting worse. It’s a drag on the economy, he said. With 10,000 Baby Boomers retiring every day, Medicare and Social Security are going broke.

The debt, he said, hurts economic growth and job creation, and noted the message from the Congressional Budget Office, which warned that if something isn’t done soon, there will be a debt crisis. “We’ve got to get a handle on our debt, and we have got to get a handle on it now,” he stated, and the way he believes we must work our way out of this is through tax reform, including getting rid of carve-outs and kickbacks, and through a growing economy, and not by raising taxes.

The federal budget is a huge mess. In FY2013 the federal government took in revenue of $2.8 trillion, but spent $3.5 trillion, and owes $17 trillion to debt holders.

This compares to a family of four that earns $36,000 annually, but spends $45,000 each year and has accumulated debt totaling $219,000. This family clearly needs to cut down on its spending.

But the federal government cannot do that. At least not if we believe House Minority Leader Nancy Pelosi (D-Cal.), who said in an interview in September on CNN’s “State of the Union” that “The cupboard is bare. There’s (sic) no more cuts to make. It’s really important that people understand that.”

Ms. Pelosi is apparently unaware that the federal government spent your tax dollars on such important things as exotic dancers, robotic squirrels, studying pig poop, and a reality TV show in India. And she also doesn’t know about the Government Accountability Office estimate of roughly $17 billion of improper Medicare payments each year, or the billions of dollars of mismanagement, corruption, and wasteful spending in federal housing subsidies, and the fraud and abuse in the food stamp program, school lunch, and child care programs, and in Veteran’s Affairs.

Maybe she’s forgotten that we pay people with our tax dollars at the NSA to record terabytes of information about us, and IRS employees to harass Republican/conservative organizations applying for non-profit status, and federal SWAT teams to kick down the doors of people whose student loans are in arrears and besiege a mine operation in Alaska to check for compliance with the Clean Water Act.

And then there are the 31 areas of spending on duplicative federal programs, spelled out in a report by the Government Accountability Office that waste billions annually, such as at least 23 different federal agencies running hundreds of programs to support renewable energy, and the 29 Department of Homeland Security contracts that partly or completely overlapped with research being done by another part of the same department.

Despite these examples of waste, fraud and abuse, and also despite the record $2.8 trillion in revenue the federal treasury collected in FY2013 – which provided President Barack Obama the opportunity to claim credit for a sizeable reduction in the annual budget deficit – Nancy Pelosi thinks that in negotiations about debt reduction “revenue needs to be on the table.”

But, no, Ms. Pelosi. You and your big spending comrades don’t get another dime.

Before the middle class or even the wealthiest Americans are further burdened with additional taxes, the federal government needs to get its act together and start operating efficiently. It must eliminate the billions of dollars in waste, fraud and abuse, and eliminate duplication.

Taxes should be evenly applied and high enough to support only essential government services. And, the most important word in that concept is “essential.”

Congress must get rid of carve-outs and kickbacks, eliminate pork barrel projects, stop the unconstitutional passing of Congressional responsibility to Executive Branch agencies, and restrict legislative activity to necessary and useful laws.

And the federal government must begin to operate with an attitude that demonstrates the obligation every federal worker – from the President of the United States, to Cabinet Secretaries, to Members of Congress, to the lowest paid employee – owes to the people they work for, the taxpayers. Perhaps then each of them will earn through job performance the high status some of them assume they are due “just because” they hold a high elective or appointed position.

The Tea Party, the most serious challenge to the American way of life

“The modern Tea Party doesn’t understand history, so it can’t be expected to appreciate irony. It is a mongrel movement, its leaders self-proclaimed, its agenda by turns unfathomable and incoherent, its philosophy grounded in vehemence. So how can it possibly be dangerous? Here, in no particular order, are my four Rs of the Tea Party,” writes someone named Mike Appleton, a guest blogger on a site hosted by law professor and legal analyst Jonathon Turley. First, it is racist, he states, and it is a religionist movement that is revisionist and repressive.

He is not alone in his disdain for the Tea Party. Florida 9th District Democrat Representative Alan Grayson compared the Tea Party’s popularity to that of the Ku Klux Klan, and used a burning cross to replace the T in “Tea” in an email he sent out last week.

New York Democrat Representative Charlie Rangel told the Daily Beast: “It is the same group we faced in the South with those white crackers and the dogs and the police."

West Virginia Democrat Senator Jay Rockefeller said a while back that they are "People who will do absolutely extraordinarily bad things that are extraordinarily bad for the country and not care about it." He added he believes some members of the Tea Party are "extremists" who have "hijacked" the Republican Party.

Many Republicans also sharply criticized the Tea Party faction’s behavior, including the party leadership in both the House and the Senate.

The Tea Party has been blamed for the government shut down earlier this month, and during and after Congressional wrangling over raising the debt limit to prevent the shut down, the Republicans and Tea Party were called “arsonists,” “terrorists,” “extremists” and “anarchists,” accused of “waging a War on Women,” compared to Thelma and Louise, and have been blamed for healthcare.gov’s failed rollout, as well as for Standard & Poor's downgrading the U.S. credit rating from AAA to AA+ for the first time, and the non-existent recovery from the 2008 recession.

Such power. No wonder most Democrats and establishment Republicans fear the Tea Party.

However, after months of digging into documents in the National Archives and elsewhere a research firm has discovered that the Tea Party was also responsible for the 9-11 terrorist attacks, Fast and Furious, the Benghazi terrorist attack, as well as Eve’s temptation of Adam, the Edsel, the Black Sox scandal, New Coke, and choosing the name of the Washington Redskins, although there is a strong argument that most of these things were really Bush’s fault.

It won’t come as a shock to all those blaming the Tea Party for destroying the country that there is no such thing as “the Tea Party,” per se.

Several organizations use the words “Tea Party” in their name, but “Tea Party” signifies a movement, not a formal organization. It is a loose affiliation of national and local groups that independently set their own agendas, based upon a broad set of principles.

The original form of the name was TEA Party, for “Taxed Enough Already” Party, obviously opposing existing high taxation and proposed new taxes and higher rates on existing ones.

The broad goals of the movement are to advance the principles of limited federal government, individual freedoms, personal responsibility, free markets, and returning political power to the states and the people.

Radical stuff, that.

These are essentially the same principles sought by the Framers of the U.S. Constitution 220-odd years ago. It says more about the Tea Party critics than about the Tea Party movement itself that the critics attack the founding principles as extreme.

The Republicans/Tea Partiers who opposed Obamacare and tried to repeal or defund or delay it earned themselves the enmity of Democrats because it interfered with their strong desire to control the healthcare of every American, and also of establishment Republicans because the political price of what they did was thought to be very high for Republicans.

There may be a high political price to be paid, but that remains to be seen. However, the Tea Partiers weren’t playing politics – and in Washington, DC not playing politics may be the worst sin of all. They were standing for a principle: that Obamacare, which cedes control of 18 percent of the economy to government, is bad for the country from its dishonorable smoky backroom origins, to its passage with only Democrat support, to the idiotic “that depends on what the meaning of ‘is’ is” acrobatics of Chief Justice John Roberts to find it constitutional.

With only control of the House of Representatives, the Tea Partiers had no chance at repealing Obamacare and their efforts earned them great anger, though now delay seems the smart thing to do. But the decision to try to repeal, or defund, or delay was a decision based on a principle, whereas the decision not to try is a political decision.

If elected officials make a mistake, wouldn’t we rather they did so supporting a founding principle than considering political repercussions?

And what does it say about our country when taking a stand for one of America’s fundamental principles is considered radical or extreme?

Random thoughts on the passing scene

Some of those who think the American health care system needed to be trashed and reformed in the image of the Canadian system might be interested in the opinion of Bacchus Barua, a senior economist with Canada's Fraser Institute.

"Healthcare in Canada is anything but free," he states, noting that the average family of four pays more than $11,000 a year in taxes for hospital and physician care. However, he explains in an article for The American "surely such expenditure is justified if Canadians receive a stellar healthcare system in return for their tax dollars. Unfortunately, that simply isn't the case."

Specifically, he lists some problems with his country’s system:

** Canada has fewer physicians, hospital beds, and diagnostic imaging scanners, and performs fewer medical interventions than its American and European counterparts.

** Canada has one of the lowest physician-to-population ratios in the developed world.

** A recent survey found that Canadians must wait an average of about 4 1/2 months for medically necessary elective procedures after referral from a general practitioner.

** The wait for diagnostic imaging technologies like MRIs is over two months on average.

** Patients in Canada are likely to wait two months or more to see a specialist, six days or more to see a doctor when sick or needing care, and four hours or more in the emergency room.

** Due to the lengthy waits, about 40,000 Canadians leave the country for treatment elsewhere each year [like the U.S.].

** Public drug plans covered only about a quarter of the new drugs approved for sale in Canada between 2004 and 2010.

He concludes: "These realities serve to dismiss the mythical notion that a Canadian-style healthcare system" is highly desirable.

We are headed in that direction.

*****

During the mortgage banking crisis the federal government pressured large banks like JPMorgan Chase to take over the bad mortgage loans sold by failing banks Washington Mutual and Bear Stearns. Now the government is fining JPMorgan $13 billion for helping the feds deal with the crisis. Can you say “shakedown?”

*****

Planned Parenthood involves itself with topics other than planning parenthood on its Facebook page, discussing topics like why some types of sexual activity are painful, transgender issues, and promoting Obamacare. Not exactly family planning.

An article on the Internet site bighealthreport.com reports that on Planned Parenthood’s Facebook page for teens it answers the question: “Is promiscuity a bad thing?” and that the organization defended doing so with the statement, “there’s nothing bad or unhealthy about having a big number of sexual partners.”

Isn’t this the mentality that has led to 40 percent of our babies being born out of wedlock, and males with multiple children from multiple “baby mamas?”

This “advice,” such as it is, increases the likelihood of HPV and cervical cancer among females, in addition to STDs. “Even the Guttmacher Institute, the former research arm of Planned Parenthood, considered ‘a person to be at direct risk for STDs if he or she had had two or more partners during the 12 months preceding the interview’ during one of their research studies,” Big Health Report said.

The article notes “a person with low self-esteem has been shown to engage in sexual relations earlier, and engage in riskier, unprotected sex with multiple partners.” Does that sound like “nothing bad or unhealthy” to you?

Seriously? This is what we get for $542 million in federal subsidies?

*****

The “government shut down” really amounted to about 17 percent of the government being “shut down,” and that is somewhat like going to a mall that has 100 stores and finding only 83 that are open for business. So, while things were uncomfortable for some folks, it bore no resemblance whatsoever to the government actually shutting down.

Of course, if the mall management blocked off stores that otherwise would be open, things would be more uncomfortable. No sensible businessperson would do that, but a petty, politics-dominated administration would, and did.

*****

The emotional push to raise the minimum wage to $15 dollars an hour for those working the least skilled jobs in the fast food industry puts the spotlight on a fundamental misunderstanding of basic economics.

Advocates think the wage ought to be based upon concerns totally unrelated to the job and the business the job is a part of. “I flip burgers at Burger King, and can’t support my family on what I make, so raise the minimum wage,” is the mentality behind this ill-advised movement. In their mind, if a PhD. in English, mathematics, biochemistry, or any other field somehow ended up ringing up Happy Meals at MacDonald’s, the wage ought to be based upon his/her training, or some arbitrary “living wage” concept.

A job is worth whatever the employer says it is worth. Anyone who doesn’t like the wage is free to not take the job, or to look for a better one. If the employer can’t find people to work at the selected wage, he or she will have to raise it. Anyone who tries to find a better job, but can’t, needs to pipe down and do the job the employer allowed them to have until they can find a better one.

The scare mongering continues on the debt ceiling and default

There is great wailing and gnashing of teeth over the potential for catastrophe if the debt ceiling is not raised, but whether the ceiling is raised or not, the underlying problem will remain to be reckoned with yet again.

We are warned against defaulting on the national debt, which President Barack Obama tells us will have the most dire consequences. However, default really isn’t an issue, as economist and former long-time Federal Reserve System Chairman Alan Greenspan explained: “The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.”

While Mr. Greenspan’s statement is technically true, printing even more money to pay the nation’s debts has its own set of economic problems, and heaven knows we have enough of those already.

Another reason paying our debt service isn’t a problem is that even if the debt ceiling isn’t raised so that the government can borrow more money, there is more than enough money coming into the treasury each month to pay the interest on the debt multiple times over, although that has its problems, too.

But the best reason is contained in Section Four of the Fourteenth Amendment to the U.S. Constitution, which directs, in no uncertain terms, that "the validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned." The Constitution commands the president to make good the debts of the United States, and that includes both what our nation owes to bondholders, and the sums promised in legislation to those receiving pensions set by law, according to legal scholar Garrett Epps.

What that means is that if the debt ceiling isn’t raised President Obama will be forced to make some tough decisions on what won’t receive funding so those mandated payments can be made, and since much of Mr. Obama’s popularity comes from spending money, there could be some uncomfortable and long days in the White House.

However, the scare mongering about the catastrophe facing the nation and the resulting public outrage will likely force an increase in the debt ceiling for the 80th time since 1940.

President Obama tells us this won’t increase spending, but since it does increase the limit on spending, does anyone really doubt that spending will soon increase, and before long the politicians will want yet another debt ceiling increase.

Sometimes there are compelling reasons for deficit spending, like WWII, the 9-11 attacks, and the banking crisis that threw the country’s economic system into crisis, but most times it is just a bail out from fiscal irresponsibility. Sometimes the ceiling has been raised by a small amount, other times by a large amount, and sometimes it’s been raised temporarily with provisions for a "snap-back" to a lower level.

“Weighing benefits against costs is the way most people make decisions – and the way most businesses make decisions if they want to stay in business,” says the eminent economist Dr. Thomas Sowell. “Only in government is any benefit, however small, considered to be worth any cost, however large.”

And that is the crux of the problem. People who are elected to represent the interests of the citizenry do not use common sense and basic economics when making decisions we pay them to make.

Trying to obtain benefits without considering either the cost or the likelihood of success not infrequently produces bad programs, and bad programs breed and multiply in Washington, DC, and live forever.

The federal government is simply too big, too powerful, too intrusive, too expensive, and too undisciplined, and as a result there are dozens of duplicate programs, and more than a few programs that do not, and never have, achieved success, but are still being funded. And there are billions going to fraud and abuse.

Attempts to reign in waste, fraud and abuse have mostly lacked serious action, and efforts to cut spending to match income likewise have accomplished little.

And atop that lackluster record we have the biggest deficit producer in history in the White House.

At the end of FY2000, four months before George W. Bush took office, the national debt totaled $5.67 trillion. At the end of the fiscal year that Barack Obama took office it had risen to $11.91 trillion. That number is skewed higher due to the $151 billion TARP program President Bush implemented, $147 billion of which was repaid after Mr. Obama took office.

At the end of FY2013 the debt stood just short of $17 trillion. Excluding FY2009, when both Mr. Bush and Mr. Obama held the White House, the president and the mostly-Democrat-controlled Congress added more than $5 trillion to the national debt, with average deficits of $1.163 trillion from FY2010 – FY2013.

It is way past time that government face up to reality and live within its means. The president and Congress must get rid of unproductive programs; eliminate, or at least significantly reduce, fraud, waste and abuse; shut down or downsize federal departments; and implement business-like fiscal standards. In short: do their job.

Obamacare has been successful only in its ability to create chaos

Many people who have influence with President Barack Obama have gotten relief from the terrors of the Affordable Care Act we now know as Obamacare, but the great majority of the American people are still expected to follow the dictates of the healthcare “reform” law next month.

The administration’s announcement July 2 delaying the employer mandate was the first in a series of goodies provided to favored constituencies. And, about 20 percent of waivers went to gourmet restaurants, nightclubs, and fancy hotels in Rep. Nancy Pelosi’s (D-Cal.) district.

But as maddening as this discrimination is to us common folk, exempting Members of Congress and their staffs is far worse.

Under heavy pressure from Democrat leaders, Mr. Obama agreed to ignore the terms of the law that he pushed so hard for and now requires taxpayers to subsidize coverage for representatives, senators, and their employees to lessen the financial burden of Obamacare.

What a hardship these taxpayer-supported elected officials and employees suffer: The Office of Personnel Management reported that as of September 2012, the average salary for a full-time, permanent, non-seasonal government position was $78,467, and rank and file members of Congress make $174,000. The average American in the private sector makes less than $50,000.

It is possible for others to receive subsidies, too, and the key is income level. But, typical of this law’s rampant failures, there is no mandate to verify eligibility for a subsidy, virtually guaranteeing extensive fraud, and an additional expense burden on taxpayers.

Only about 36 percent of Americans have a positive opinion of the law, and now even Mr. Obama’s strong union supporters are calling for repeal or major repair of this debacle because it is decimating the 40-hour workweek that is the backbone of unionized labor.

Throughout the debate over Obamacare, a major claim was that it would cover the 30 million people that at the time did not have some sort of health insurance, ignoring the fact that a significant number chose not to have insurance. However, the Congressional Budget Office says that over the next decade there will never be a point where the number of Americans who remain uninsured will drop below 30 million. In other words, the main reason for ramming Obamacare down the throats of 270 million people who were happy with their health insurance is a falsehood.

Other of the President’s promises also have been broken:

Promise: “If you like your health care plan, you’ll be able to keep your health care plan, period.”
Truth: As many as 30 percent of employers will stop providing their existing health care coverage, while many are reducing employee hours below the 30-hour/week full-time level, or are trimming total employees to fewer than 50 to escape the crushing costs imposed by Obamacare.

Promise: “I will not sign a plan that adds one dime to our deficits — either now or in the future.”
Truth: We now know that health care “reform” will cost a trillion dollars.

Promise: “I will protect Medicare.”
Truth: Obamacare ends Medicare as we know it by imposing, among other things, severe reimbursement cuts that threaten access to care for seniors.

Promise: “I will sign a universal health care bill into law by the end of my first term as president that will cover every American and cut the cost of a typical family’s premium by up to $2,500 a year.”
Truth: There are at least 12 ways that Obamacare will increase premiums instead of reducing health care costs.

Promise: “Under my plan, no family making less than $250,000 a year will see any form of tax increase.”
Truth: Obamacare includes tons of new taxes and tax hikes. One that began this year is the 2.3 percent excise tax on manufacturers and importers of certain medical devices that will raise $20 billion by 2019.

It’s not that Barack Obama deliberately misleads; it’s just that so much of what he says isn’t true.

Few people now defend Obamacare besides the Congressional Democrats who participated in the dishonorable process of throwing it together, voting for a 2,700-page bill they had never read, and which had zero bi-partisan support.

Many believe that Barack Obama never really cared what was in the Affordable Care Act or if it ever makes it to implementation, and in fact wants it to fail miserably. And that’s because once it becomes law, replaces the prior system, and causes mass chaos, the stage would be set to move to a single payer, government healthcare system as the only way to fix the resulting mess.

In his worldview, socialistic/communistic systems are the solution to all the country’s problems, and that is how he wants to “fundamentally transform the United States of America.”

The best thing for the country is to repeal Obamacare and begin again to make the several relatively minor adjustments to the current system that should have been done several years ago. Short of that, delay implementation for everyone until the numerous problems can be addressed and repaired.

Neither is likely to happen, of course, because too many people can’t admit they made a mistake, or they truly want government controlled health care.

Mr. Slick and Dummy encourage us to ignore the negatives of ethanol

There’s a TV commercial featuring a ventriloquist named Mr. Slick and his dummy, named “Dummy,” promoting the wondrous benefits of ethanol, not by actually listing those specific benefits – as one ought to do if one has real benefits to tout – but by implying that the evil oil companies don’t want you to know about them. Dummy answers questions that make the oil companies look bad, and Mr. Slick, portraying an evil oil baron, is horrified at Dummy’s responses and eventually puts his hand over Dummy’s mouth to shut him up. The announcer then asks the question, “Why don’t the oil companies want you to know the truth about ethanol?”

Ethanol has some useful qualities, like reducing the amount of petroleum-based fuels that are burned and the pollution they produce, but it has many disadvantages.

The all-knowing central planners at the Environmental Protection Agency (EPA) have decreed that gasoline must currently have 10 percent ethanol (E10) mixed in, and the EPA is raising that requirement by 50 percent (E15), thus increasing by a half the negatives of ethanol in gasoline.

Putting ethanol in fuel means currently that approximately 40 percent of the corn from which ethanol is made is used for ethanol instead of food and animal feed. The amount of corn we burn could feed an estimated 570 million people annually. Shifting that much food corn to ethanol production raises the cost of food corn for human and animal consumption, as well as other food crops, such as wheat and hops, because farmers stop growing those crops and start growing corn to get the federal subsidies, and that creates shortages and higher prices for those crops, too. A PricewaterhouseCoopers study prepared for the National Council of Chain Restaurants said the federal ethanol mandate cost each restaurant $18,000 a year in higher food prices. Guess who pays that additional cost?

Every gallon of ethanol produced requires 5 gallons of water, and that affects the dry western states where ethanol is produced by shifting more of the sometimes-scarce liquid to farmers and away from urban areas, and could easily lead to water shortages and/or higher urban water prices.

Worse, however, is the great potential for damage to gas storage tanks, pumping equipment, other equipment involved in the delivery chain and engines that are the end user of ethanol in fuels. This point is supported by a December 2010 study commissioned by the Department of Energy that found 40 percent of new dispensing equipment designed for use with E10 fuels had failed tests, and 70 percent of previously used E10 equipment failed tests.

Ethanol fuels are deadly to small gasoline engines, such as lawnmowers, string trimmers, chain saws, boat motors, motorcycles and ATVs to the extent that manufacturers may void warranties when these fuels are used in their products.

Gasoline stabilizers must be added to ethanol infused gasoline to protect these smaller engines, at a cost, of course. But, however, owners of these machines have an option that car and truck owners don’t have: they can buy pure gasoline that has no added ethanol for only $20 to $32 a gallon.

If you get decent miles per gallon from your car or truck, you’d be getting even better mileage without ethanol in your gas. E10 and E15 mixtures routinely get fewer miles per gallon because ethanol contains less energy than pure gasoline. Estimates of lost miles per gallon range from 3-to-5 percent, to as high as 20 percent.

The Renewable Fuel Standard mandates the use of corn-based ethanol and other biofuels for transportation fuel. It promised less dependence on foreign oil and lower fuel prices and greenhouse gas emissions; however, many view the mandate as an economic and environmental boondoggle.

The benefits of infusing gasoline with ethanol to improve emissions from gas burning vehicles and tools are unclear. There has been some reduction in the use of petroleum in fuels, but the price we have paid for it has been comparatively high when the costs of producing ethanol and blending it with gasoline are considered, along with the increased prices of food for humans and animal feed. The House Energy and Commerce Committee has launched a bipartisan review of the Renewable Fuel Standard to determine its level of success.

Government efforts to make our lives better nearly always fail, or at least unleash new problems on the American people. The feds thought incandescent light bulbs that have served us so well for so long used too much energy, so they have mandated that we use the new CFL bulbs, which do use less electricity, but cost more and contain mercury, and create a haz-mat emergency when one of them breaks. Efforts to clean up emissions from electricity production have produced job losses in the coal and power industries and forced the sale of more domestic coal to foreign countries that do not make any effort to clean up their emissions.

Government mandates cost us billions of dollars a year for compliance, plus the cost of the bureaucracy to create and monitor compliance with regulations. Given the poor record of success the government has amassed, we’d be much better off with less government interference.

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Is Congress finally getting serious about spending and the debt?

The Tea Party, the most serious challenge to the American way of life

Random thoughts on the passing scene

The scare mongering continues on the debt ceiling and default

Obamacare has been successful only in its ability to create chaos

Mr. Slick and Dummy encourage us to ignore the negatives of ethanol

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