RedState Morning Briefing February 7, 2012 Go to www.RedStateMB.com to get the Morning Briefing every morning at no charge. 1. The Sweet Meteor of Death 2012 2. ‘Act of Valor’: Exploitative, Opportunistic, or Just Good Clean Fun? 3. The Highway Bill: A Road to Cave City ———————————————————————- 1. The Sweet Meteor of Death 2012 As I said back in December, I have no plans to endorse a candidate for President of the United States. I wrote, at the time, “I would prefer instead to tell you exactly what I think about each of the candidates, good or bad, and let the chips fall where they may.” Since then, I have routinely been asked who I would endorse. Today, after a lot of reflection on this race, I can honestly say my position has not changed and I would honestly prefer Ace of Spades’ sweet meteor of death than any of the candidates left in the race. . . . The Republican Party is putting itself in the hands of the economy. With Mitt Romney as the nominee, we will be forced to hope for a deteriorating economy because, while I will vote for him and think he is vastly better than Barack Obama, the fact is he has made no case for himself against Barack Obama except that he can do a better job on the economy. Please click here for the rest of the post. 2. ‘Act of Valor’: Exploitative, Opportunistic, or Just Good Clean Fun? I’ve been engaged in a twitter discussion with some good friends and acquaintances (and, being that it’s twitter, with some folks I don’t know from Adam) about the upcoming film Act of Valor. The film, for those who were comatose during the Super Bowl ad blitz, is a Navy recruiting video on major steroids that features several active duty SEALs and Special Warfare Combatant Crewmen in uncredited roles. Please click here for the rest of the post. 3. The Highway Bill: A Road to Cave City Last week, several House committees favorably reported the $260 billion 5-year House GOP highway bill to the full body. This 846-page behemoth is now headed to a floor vote sometime next week. Simply put, conservatives oppose the House leadership’s highway bill (H.R. 7) because it continues the failed top-down federal approach to transportation spending, while precluding devolution to the states for at least another five years. Moreover, it eschews the pay-as-you-go funding mechanism of the Highway Trust Fund (eerily similar to the Social Security Trust Fund!) by permanently authorizing a higher level of spending than the fund’s corresponding revenue source; the federal gas tax. Please click here for the rest of the post.
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Morning Briefing for February 7, 2012
RedState Morning Briefing February 7, 2012 Go to www.RedStateMB.com to get the Morning Briefing every morning at no charge. 1. The Sweet Meteor of Death 2012 2. ‘Act of Valor’: Exploitative, Opportunistic, or Just Good Clean Fun? 3. The Highway Bill: A Road to Cave City ———————————————————————- 1. The Sweet Meteor of Death 2012 As I said back in December, I have no plans to endorse a candidate for President of the United States. I wrote, at the time, “I would prefer instead to tell you exactly what I think about each of the candidates, good or bad, and let the chips fall where they may.” Since then, I have routinely been asked who I would endorse. Today, after a lot of reflection on this race, I can honestly say my position has not changed and I would honestly prefer Ace of Spades’ sweet meteor of death than any of the candidates left in the race. . . . The Republican Party is putting itself in the hands of the economy. With Mitt Romney as the nominee, we will be forced to hope for a deteriorating economy because, while I will vote for him and think he is vastly better than Barack Obama, the fact is he has made no case for himself against Barack Obama except that he can do a better job on the economy. Please click here for the rest of the post. 2. ‘Act of Valor’: Exploitative, Opportunistic, or Just Good Clean Fun? I’ve been engaged in a twitter discussion with some good friends and acquaintances (and, being that it’s twitter, with some folks I don’t know from Adam) about the upcoming film Act of Valor. The film, for those who were comatose during the Super Bowl ad blitz, is a Navy recruiting video on major steroids that features several active duty SEALs and Special Warfare Combatant Crewmen in uncredited roles. Please click here for the rest of the post. 3. The Highway Bill: A Road to Cave City Last week, several House committees favorably reported the $260 billion 5-year House GOP highway bill to the full body. This 846-page behemoth is now headed to a floor vote sometime next week. Simply put, conservatives oppose the House leadership’s highway bill (H.R. 7) because it continues the failed top-down federal approach to transportation spending, while precluding devolution to the states for at least another five years. Moreover, it eschews the pay-as-you-go funding mechanism of the Highway Trust Fund (eerily similar to the Social Security Trust Fund!) by permanently authorizing a higher level of spending than the fund’s corresponding revenue source; the federal gas tax. Please click here for the rest of the post.
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Morning Briefing for February 7, 2012
Mitt Romney’s plastic and philosophically vapid campaign secured an easy victory in Florida on Tuesday night. Sunshine state GOP voters swallowed his “electability” argument whole, according to the exit polls. It appears that country club Republicans have succeeded again in duping the GOP electorate into crowning a “centrist” Republican. Never mind that “centrist” Republicans
“The rosy predictions for revenues and reduced healthcare spending can come to fruition, but not with the current socialist policies as the baseline.” The budget season has officially commenced today with CBO’s release of its annual budget and economic outlook. Here are some of the major takeaways from the report: FY 2012 Budget The topline figure that the media will focus on is the projected $1.070 trillion budget deficit for FY 2012, down from $1.3 trillion last year. However, as CBO notes several times throughout the report, the reduction in this year’s deficit is predicated on several assumptions. 1) Revenues : The entirety of this year’s deficit reduction comes from higher projected revenues, roughly $220 billion. CBO is forced to score current law, which assumes that the payroll tax cut will expire at the end of February. Another 10-month extension, which is almost a forgone conclusion, would cost over $100 billion. Also, the CBO baseline does not include a likely AMT patch, and extension of many annual “tax extenders,” such as the credit for research and development. It’s very likely that the extensions will wipe out the entire revenue gain from this year over 2011, thereby eliminating the reduction in the deficit. 2) Outlays : CBO is projecting $3.601 trillion in spending, up just $3 billion from last year. Obviously, this projection does not account for a full-year extension of unemployment benefits and doc fix, which could add as much as $70 billion to this year’s spending total. 3) Defense : Outlays for defense will be reduced by another $20 billion. When these factors are accounted for, it is clear that non-defense discretionary spending will not decrease significantly, while mandatory spending will continue to rise. If you assume the alternative scenario, in which most of the temporary tax and spending measures are extended, the deficit should be about the same as last year; around $1.3 trillion. In other words, there will be slightly more revenue this year, but increased spending as well. 10-Year Budget Frame: 2013-2022: Over the next 10 years, CBO is projecting $41.179 trillion in spending and $44.251 trillion in revenue, for a deficit of $3.072 trillion. The $3 trillion figure is a real lowball estimate of our projected debt for several reasons. Under that scenario, our annual deficits would dip to $450 billion in just two years, and stay below $400 billion indefinitely. They are assuming rosy pictures of revenue increases, along with the expiration of the Bush tax cuts. Furthermore, CBO notes, that Medicare and Medicaid spending have always increased above expectations, and with Obamacare taking effect, the real cost of healthcare spending will blow out the budget deficits – way beyond $3 trillion. Another important long-term factor is interest on the debt. At present, interest rates are at historic lows, but they will eventually revert back to their historic norms. That could add several trillion more to the 10-year deficit. The rosy predictions for revenues and reduced healthcare spending can come to fruition, but not with the current socialist policies as the baseline. Economic Outlook CBO is projecting more stagnation for the next few years. For 2012, they are seeing 2% GDP growth and 8.9% unemployment. For 2013, they are projecting a pullback to just 1.1% growth and a spike in unemployment to 9.2%. With these bleak economic figures, it’s hard to envision a scenario in which revenues increase substantially and spending on welfare programs decline (as projected by the report). How can revenues go from 16% of GDP to 20% in just two years, even without the extension of tax cut provisions? Then again, it’s all a moot point. Budget deficits tend to be much higher than the figures projected in CBO reports, in part, due to some of the aforementioned factors. Social Security Social Security is, by far, the largest expenditure for the foreseeable future. This year, SS outlays will top $770 billion, accounting for 21.3% of the entire federal budget for FY 2012. From 2013-2022, SS spending will top $10.5 trillion, almost 24% of the budget. On the revenue side, Social Security taxes will only rise $627 billion this year and $8.9 trillion over 10 years. Once again, this projection does not factor in any future payroll tax cuts. Another noteworthy point is that the Social Security Disability Insurance trust fund will be exhausted in 2016. Remember that the Social Security Trust Fund is a notional accounting gimmick and is nonexistent. Consequently, every penny of SS benefits that is not covered from the payroll tax will augment our deficit. The real question is why one quarter of the budget is consumed by a program that should be controlled by the individual. Why are we bankrupting our future for a program that offers a worse rate of return than private accounts, which would not cost the government and future generations of Americans a penny? Medicare Gross Medicare spending, the second largest domestic spending program, will reach $560 billion this year and $7.8 trillion over 10 years. Net Medicare spending (subtracting $1.2 trillion in offsetting revenues from premium payments from seniors) will be about $6.55 trillion. This year’s outlays would have been higher if not for a shift in certain payments from fiscal year 2012 into fiscal year 2011 because the first scheduled date for payments to health plans in 2012 fell on a weekend. Revenues from the Medicare payroll tax will only bring in roughly $2.8 trillion – and that is including the payroll tax increases under Obamacare. As such, the Medicare hospital insurance trust fund, which is funded by payroll taxes, will be exhausted in 2022. Now that it is incontrovertibly clear that government has failed at controlling healthcare and retirement costs, is it too much to ask that we allow personal ownership and the free-market to get a bite at the apple? Liberals always complain that seniors will be left to their own devices under our policies. Judging by the future debt figures, I think we would all rather be on our own, as opposed to shouldering the burden of crushing debt payments. Cross-posted to The Madison Project
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CBO’s Budget Report: Perennial Debt for Generations
Our national debt stands at $15.2 trillion, and is growing by roughly $6 billion per day. We have tens of trillions in unfunded liabilities for Social Security, Medicare, and Medicaid. Unfortunately, we have learned that Republicans lack the gumption to fight for transformational spending cuts and reforms of major entitlements. However, at the very least, one would expect them to oppose silly pork projects like Buffalo Soldiers! Yesterday, the Republican-controlled House passed HR 1022, a bill that would require the Secretary of the Interior to conduct a study of the history of Buffalo Soldiers in the establishment of national parks. The study will cost $400,000 . The purpose of the study is to ascertain the feasibility of a plan to create a 200-mile trail between San Francisco and Yosemite National Park in commemoration of the Buffalo Soldiers. The federal government already owns roughly 1/3 of all American land. Do we need to afford them the opportunity to take over more land? The bill was sponsored by Democrat Congresswoman Jackie Speier, yet Republican leaders agreed to bring it up under a suspension vote with limited debate. Even though a two-thirds super majority is required for passage, the bill passed easily with 338 votes. Only 70 Republicans opposed this inane endeavor. While this is small potatoes in the scheme our more existential problems, it is very instructive. If they can’t find the courage to oppose some silly bill that nobody cares about, how are they going to roll back major dependency programs that enjoy popular constituencies? Moreover, if you take a look at page 34 of the GOP Pledge to America , they made the following observation regarding suspension votes during the Pelosi Congress: The number of House legislative days devoted to action on noncontroversial and often insignificant “suspension” bills is up significantly in this Congress by comparison with the past several Congresses, wasting time and taxpayer resources. Of the bills considered under the suspension procedure – requiring 2/3 vote for passage – so far during this Congress, more than half were bills naming federal buildings, recognizing individuals or groups (like sports teams) for achievements, or supporting the designation of particular days, months, or weeks. The Buffalo Soldiers undoubtedly served with courage in the United States Army, and deserve some sort of commemoration. But doesn’t this study qualify as “wasting time and taxpayer resources?”
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They Spent Our Taxes on This?
