Thursday, July 28, 2011

Audition to be Michele Bachmann's Treasury Secretary!

In a speech before the National Press Club today, Michele Bachmann reiterated that she would not vote to raise the debt ceiling.


Your mission, should you choose to accept it, is to show Michele Bachmann (and perhaps Secretary Geithner) how the federal government should prioritize its payments using this nifty little tool from the Washington Post!

 

Sunday, July 24, 2011

Obama to Congressional Leaders: "Explain to Me How It is We're Going to Avoid Default"

On Friday afternoon, after the stock market closed, House Speaker John Boehner (R-OH) and President Barack Obama issued dueling press conferences to explain that Boehner had decided to discontinue debt ceiling negotiations with the president and instead pursue a solution in Congress.



Boehner claimed that Obama had asked for $400b in revenue over ten years by increasing taxes, in addition to $800b that would be achieved through tax reform. Obama claimed that the deal had been structured to avoid raising taxes because so many Republicans had signed an anti-tax pledge (see I Pledge Allegiance to Grover Norquist). It was unclear from Obama’s press conference whether or not the deal breaking $400b would, indeed, require something other than closing loopholes but it was something that his fellow Democrats had demanded after seeing the ratio of cuts to revenues Obama and Boehner had negotiated.

Coincidentally, earlier Friday morning, Senate Majority Leader Harry Reid (D-NV) held a vote to kill the “Cut, Cap and Balance” bill, passed by the House, without allowing debate.

Harry Reid said, “I think this piece of legislation is about as weak and senseless as anything that has ever come on this senate floor… perhaps some of the worst legislation in the history of this country.”

The vote was killed (51-46) along party lines with two Democrats, John Kerry and Kirsten Gillibrand, and one Republican, John McCain, not voting.

By its refusal to consider this legislation, the senate Democrats joined Republican presidential candidates Michele Bachmann and Ron Paul in voting against raising the debt ceiling. Boehner did not cite the way the House’s legislation was handled as a reason for his leaving the debt ceiling talks but mentioned "partisan sniping" in answering a question.

In terms of deficit reduction, the House Republican’s line in the sand has been “no tax increases.” The Democratic line in the sand has been “no entitlement cuts without shared sacrifice.”

Later in the press conference, Obama expressed some thoughts on additional future uses of revenue. “If you’re a progressive, you should want to get our fiscal house in order because once we do it, it allows us to then have a serious conversation about the investments we need to make: like infrastructure, like rebuilding our roads and bridges, airports, like investing more in college, education, like making sure we’re focused on the kinds of research and technology that’s going to help us win the future.”

With these two press conferences, Boehner and company are faced with a new deadline. They have to come up with something to sooth the stock market by Monday morning.

Thursday, July 21, 2011

Ron Paul and Michele Bachmann Reject Raising Debt Ceiling and "Cut, Cap and Balance"

Republican presidential candidates Ron Paul and Michele Bachmann have voted not to raise the federal debt ceiling and not to support "Cut, Cap, and Balance" (the bill that passed the House on Tuesday that would raise the debt limit by $2.4 trillion accompanied by mandatory spending cuts and a balanced budget amendment).

Michele Bachmann has said elsewhere that Secretary Geithner should pay the interest on the debt and the brave men and women in uniform.



Ron Paul says we won't stop sending out the checks but we will default.




Based on their votes, the federal government would still be able to pay 59% of its bills.



Sunday, July 17, 2011

I Pledge Allegiance to Grover Norquist

Grover Norquist wants less government, less regulation and lower taxes.

Norquist takes a libertarian viewpoint and wants those running for public office to sign a simple pledge.



One of the signatories to Norquist’s pledge (here is a complete list) is House Majority Leader (R-VA) Eric Cantor, who has lived up to the pledge but not to Norquist’s vision of less government.

Cantor voted for deficit spending to fight wars in Afghanistan and Iraq, to start up a new unfunded entitlement program, Medicare Part D, and to support George W. Bush’s TARP legislation to bailout the banking system. Cantor has remained true to his pledge by refusing $1 of revenue increase for every $3 dollars of spending cuts in recent deficit reduction negotiations.

If you're thinking to yourself, "I've never heard of this Grover Norquist fellow," Terry Gross conducted an engaging interview with him in 2003 that started like this:

“Last month, I interviewed Paul Krugman, a columnist for the New York Times and an economic professor at Princeton University. Krugman opposes President Bush’s tax cuts and believes his economic policies could send us into a spiral of fiscal collapse. Krugman said that behind Bush’s economic policies is a plan to deprive the government of revenue so that it’s forced to dismantle most of the federal system that’s been built up since the 1930s. Krugman cited Grover Norquist as being one of the leading architects of the current administration’s policies.”

Norquist's view differed slightly from today's official Republican line. He didn’t argue against taxing wealthy people because they are the “job creators” but because taxing a small group of people based on their income is “the morality of the holocaust.”

When Gross asked a question about what the government would do when the Bush tax cuts left it billions and billions less money to work with, Norquist corrected her by saying “Trillions.”

Thursday, July 14, 2011

Balanced Budget Amendment

At today's press conference, House Speaker John Boehner (R-OH), Majority Leader Eric Cantor (R-VA) and fellow House Republicans proposed the passage of a balanced budget amendment to the Constitution.

Both Boehner and Cantor have pointed out time and again that "Washington doesn't have a revenue problem. It has a spending problem."

To achieve a future balanced budget, it might be useful to see what the revenue and spending looked like the last time the budget was balanced.


The table above comes from a press release Senate Appropriations Chairman Daniel K. Inouye: "Domestic Discretionary Spending Flat Since 2001; Not Responsible for Growing Debt (PDF)"

If the Republicans chose to balance the budget by cutting all expenses back to 2001 levels, current revenues would still produce a $407 billion deficit.