The first realistic budget - hallelujah! (updated 6apr2011)

George Rebane

The House Budget Committee submitted the first federal budget in years to deal with our fiscal crisis.  Under the leadership of Rep Paul Ryan (R-WI) the submitted budget will now have to weather the storms of Democratic opposition, for these are the people who think that liabilities in the tens of trillions will be handled by grudging spending cuts in the tens of billions.  Nothing new here, math and economics have never been their strong suit.

Our congressman Tom McClintock has thrown his support in for the GOP budget, and we’ll see how he and the other tea party supported Republicans will do when they run into heavy weather.  I have posted on this theme and its attendant continuing resolutions – one’s coming up this Friday – for some time now.  Ryan is the first national politician who has stepped out front with cuts totaling over $6 trillion in the next decade, and a path from here to a balanced budget in which we spend what we take in.  Well, not right away because initially we’ll still have to borrow to service the debt.  But the budget is the first to recognize that nothing happens without reducing the Big Three entitlements.

The Democrats will have a field day convincing the ignorant and the stupid, nevertheless their constituencies must be served, even if all you can serve them is pabulum.

For the full story on the FY2012 GOP budget proposal ‘The Path to Prosperity’ go to the source before you get underwhelmed by the lamestream – check the charts and graphs linked in the hard-to-see lime green band.  (H/T to Congressman McClintock’s office for the early email on this.)  This saga will be with us for some days yet; stay tuned.

[6apr2011 update]  The battle to rescue the country is joined.  Over the years our European friends have told us that they see very little difference between our two major political parties.  That problem has faded over the last four years, and I sincerely hope that it will completely disappear as the battle lines on the FY2012 budget and its more important portents are drawn.

Today the WSJ’s lead editorial essentially echoed the sentiments of this post and highlighted the significance of the first realistic budget as a stake in the ground marking responsible government and the distance we may/will stray from it in future negotiations with the country’s progressives.

The nearby photo was filched from another article on Rep Ryan’s budget that appeared in the 6apr11 WSJ showing the House Budget Committee stalwarts who have worked hard to bring this budget into the national debate on our fiscal future.  Prominently shown to Rep Ryan’s right is an extremely serious looking Tom McClintock, our own congressman from California’s 4th District.  The work in the coming months for all these gentlemen is cut out, and they deserve the support of all Americans who don’t belong to the can kicking cadres.

 

This morning via email from Rep McClintock’s office I received the transcript of his work session remarks to the Budget Committee.  It is presented below in its entirety.

Opening Statement
House Budget Committee
Markup of the 2012 Budget

Mr. Chairman:

 History walks with us today as we begin this work.  History offers us not a single example of a nation that has ever spent, borrowed and taxed its way to prosperity, but it offers us many, many examples of nations that have spent, borrowed and taxed their way to economic ruin and bankruptcy.  And history is screaming this warning at us: nations that bankrupt themselves aren’t around very long, because before we can provide for the common defense and promote the general welfare, we have to be able to pay for it – and the ability of our nation to do so is now in grave danger.

 Throughout these hearings, economists from every part of the spectrum have warned us that if we have just a few precious years left to avoid a sovereign debt crisis and potentially the financial collapse of the United States Government.

 Fortunately, history also offers us lessons of what to do and what not to do.

 We know what not to do.  Herbert Hoover responded to the recession of 1929 by increasing federal spending by a staggering 60 percent in just four years.  He began by imposing the Smoot-Hawley Tariff Act – a steep tax on some 20,000 imported products – and ended by boosting the Federal Income Tax from 23 to 65 percent.  Franklin Roosevelt amplified and expanded these policies and in 1939, the unemployment rate was just as high as when he started.  We had lost an entire decade.

 In 1945, Harry Truman abolished the excess profits tax.  He slashed federal income taxes. In 1946, Truman cut the federal budget from $85 billion down to $30 billion in a single year.  He fired ten million federal employees.  (It was called war demobilization).  The Keynesians at the time predicted 25 percent unemployment and a renewed depression.  Instead, his policies produced the post-war economic boom.

 We have more recent examples.  During his administration, Bill Clinton reduced federal spending by a miraculous four percent of GDP.  He dared to touch the third rail of entitlement spending and produced the most important and fundamental reform of the welfare state in our century.  He signed what amounted to the biggest capital gains tax cut in history on home appreciation.  He produced the only four budget surpluses in the last 40 years and a period of pronounced economic prosperity.

 True, George W. Bush reduced taxes but at the same time he recklessly increased federal spending – boosting it by 2 percent of GDP.  He re-introduced the discredited folly of stimulus spending.  He approved the biggest expansion of entitlement spending since the Great Society.  He produced massive budget deficits. If entitlement and stimulus programs, crushing deficits and massive spending increases were the road to prosperity, the Bush Administration should have produced a new Golden Age for the economy. 

 Let’s put partisanship aside today and concentrate on policy.  In the mid-1990’s, a Republican Congress and a Democratic President, following precisely the policies outlined in the measure before us today – balanced the budget, reformed entitlement spending, placed us on a path to pay off the entire national debt and produced a period of economic expansion and prosperity.   

 This budget turns us away from policies that we KNOW do not work toward policies that we KNOW do work.  It brings federal spending back under control, it puts Medicare and Medicaid on a sound financial foundation, it produces a million new private sector jobs next year through economic expansion and places our nation on a path so that when my children retire, the retirement systems they’ll have paid into all their lives will be safe and secure and their nation will be debt free and prosperous.

Comments

[Bob Hobert]

Rep. Ryan is doing some excellent work on the House Budget Committee. Even better, he is building the experience and credentials that we need to rescue liberty. I expect big things from him.

[Mikey McD]

Rep Paul Ryan for PRESIDENT 2012!

[Russ Steele]

Rep Paul Ryan has our local left with their undies all twisted and pinching in the usual places. One wrote, "Ryan’s proposal is a radical, ideological program designed to change the very fabric of our society, disguised as a budgetary plan."

He is right in this respect, it is a radical departure from business as usual. And, it is ideological driven, in that Ryan and his committee believe in the Constitution. And, yes it will change the fabric of our society, we will stop spending money we do not have, and we will honor our grand children by not burying them in a crushing debt. Look no one said this was going to be easy, but it has to be done! Let's get on with it!

[Larry Wirth]

Hardly "radical" when you stop and realize that the Fed budget needs to be cut by 40% to bring in into balance with revenues. That is, 40% of current expenditures are financed by borrowing. Expect to see much of the Federal Government disappear (good riddance) in the near future. Maybe well meaning people can engineer a soft landing, maybe not.

[Larry Wirth]

And, yeah, I'd like to select the 40% that disappears. Begin with the EPA, follow with the Dept of so-called education, homeland "security" and most of the do-nothings that were rolled into it; then just defund the rest of these useless...by 35% and viola, we're there.

[Jay]

No cuts to social security or medicare that are not accompanied by equal cuts to the massive military budget!

We spend way more that the rest of the world.
Ron Paul says never mistake military spending for defense spending !

We need to close the massive empire of over seas bases and their accompanying federally sponsored golf courses and bring our troops home to defend our south boarder.

Most military spending is corporate welfare, not really for the defense of our homeland.

[Barry Pruett]

Jay:

You are unlikely to get an argument from this crew in connection with cutting military spending. Nothing should be off the table.

[Russ Steele]

Reason Magazine weights in on the Ryan Budget Plan
 
The Good, the Bad and the Ugly of Rep. Ryan's Budget Plan
Reason.com's Nick Gillespie and Veronique de Rugy break down the best and worst  of Rep. Paul Ryan's new budget plan: "[President] Obama's plan for 2012 is so awful that it should make us feel lucky that he and the Democrats failed to pass a budget for the current fiscal year (the only time such a thing has happened since 1974). Obama's dream budget would mean a 2021 budget that spends $2 trillion more than we do today, increase debt held by the public from 62 percent to 77 percent of Gross Domestic Product (GDP) and maintain massive annual deficits. And that's if things go according to his plan, which they won't (built into his budget are unrealistic assumptions about the rate of economic growth, revenue collection, health care savings, and more). So compared to such an exercise in recklessness, Ryan's plan is refreshingly engaged with reality. Unfortunately for taxpayers and citizens, Ryan's plan looks better when standing in the shadow of Obama's. Neither budget provides a good way forward for a country still battling the effects of recession and the non-stop, self-inflicted spending binge that began with George W. Bush and has proceeded unabated since then. Ryan's budget is indeed a positive break from past efforts by Republicans and Democrats alike, but it doesn't provide the solutions the American people deserve."
Full Analysis

[Paul Emery]

Just reminder that historically it has been mostly Republican administrations that got us into this mess. Roosevelt, Truman, Eisenhower, Kennedy, Johnson and Nixons first term saw reductions in the debt created mostly as a result of WWII. Nixon's second term saw an increase in debt. Jimmy Cartes term led to a reduction but there was a huge jump under Reagan and Bush I. Clintons administration saw significant reductions erased by Bush 2's huge increases and now Obama's levitation's.

http://www.cbo.gov/ftpdocs/117xx/doc11766/2010_08_05_FederalDebt.pdf

[D. King]

O.T. kinda.

Wow! Liberals can now donate their own money directly to the government.

http://www.cssrc.us/web/4/news.aspx?id=10556&AspxAutoDetectCookieSupport=1

This is such good news, I’m beside myself. Those who want big government, now have a facility to pay for it. Boy, I bet the democrats are rubbing their hands together in anticipation of the generosity of their constituency.

http://www.youtube.com/watch?v=1aXpty_1xo4&feature=related

[Dixon Cruickshank]

Paul I might point out the term Debt has a direct corralation to Revenue

[Greg Goodknight]

Paul E, for most of my life there's been a Democrat as Speaker of the House. In fact, from my last filled diaper until Gingrich, there wasn't a single Republican in charge of taxes and the budget.

In fact, from 1933 until 1995, Democrats were in possession of the Speakership for all but four years and they also had a majority in the Senate most of that time. Your "Just reminder that historically it has been mostly Republican administrations that got us into this mess" comes from being blind to the realities of the US Government. Presidents are not Kings.

[George Rebane]

Paul, interesting chart from which you draw so much. Roosevelt was pres before and during WW2; Truman was pres before and during the Korean War; Kennedy was pres before and Johnson during the Viet Nam war. Every one of these presidents, including Clinton before 9/11, set American policy which was evaluated by those we then wound up fighting. And all these occasions, according to your lights, served to reduce debt.

And now Obama's watch brings us half the Islamic world aflame, which no doubt is completely Bush's fault. How did all those progressives achieve so much with so little?

[Paul Emery]

That's a loaded question that I don't want to attempt to answer. I drew no conclusions from the chart, which was published by the Congressional Budget Office and is one of many that draws the same conclusion that invariably, with the notable exception of the Obama Administration, national debt increases during Republican tenures especially illustrated during the Reagan, Bushes seatings and decreases during Democratic terms. Yes, there's the Newt effect during Clintons time and that needs to be part of the scenario.

George I don't really follow your thoughts here but according to your scaling, shouldn't Bush II's wars in Iraq and Afghanistan be part of your scenario of American war policy and it's effects on the deficit, which is the topic of this post?

[George Rebane]

Even though 9/11 was set up on Clinton's foreign policy watch, I (and the Repubs) will take the necessary heat for the way Bush2 responded to the Islamists (Hell, we should even take the heat for the way Bush1 responded to Iraq.) However, from what has happened since Obama took office, endorsed Bush's prosecution of the wars, and now has added those of his own, it is hard for me to acknowledge the sweeping and partisan conclusion you drew on the cause of the debt. And we haven't even started on its domestic sources.

Somehow, I don't think that many minds will be changed here. The Dems will want to solve spending by cutting billions, adding trillions, and taxing the country even more trillions. How this will get us out of the hole remains an abiding mystery, even to Obama and his minions. And no one expects more from the left - half of the people believe there is no fiscal problem ("SS is fully funded."), and the other half have long abandoned waiting for reason to emerge from Congress. Nevertheless, the budget fight has to be fought in the full light of day.

[Paul Emery]

Yes it will be fought out indeed. I agree that it's Obama's wars now and it's on his (our)dime. I never got into the cause of debt I was only pointing out the Presidential tenures that managed to reduce it and how they are predominately Democratic for what that's worth. I personally prefer the % wack of all programs as a solution. From what I see in this Repub budget it allows sacred cows to graze on as does the Democratic budget. We'll see.

[Greg Goodknight]

"Hell, we should even take the heat for the way Bush1 responded to Iraq."

Had conservatives and most left-liberals listened to libertarians, we'd not be in the mess we are in. Over two decades of the USA flailing away in Middle Eastern sand and the world is in worse shape than ever.

I remember Bush I's James Baker telling the country we were going in 'because of jobs'. How's that worked out?

[Mikey McD]

This is not left versus right, it is about The State versus us. I think we (Paul, George, Greg, Larry, etc) all seem to agree that government spending is unsustainable, reckless, and unethical(to leave our kids with the bill). Furthermore, I see no one who is indicating that republicans are frugal. All of our politicians have failed us with regards to managing spending. Now, after accepting that the national debt/spending crisis exists the next step is how to fix it? The beauty of the entitlement programs is that they can be reformed for future generations without throwing current (paid in full) participants under the proverbial bus. To leave the entitlements (and defense) budgets as-is is folly.

[Paul Emery]

Libertarian Foreign Policy is too tough a medicine to most Conservatives but oddly somewhat interesting to some Progressives such as Dennis Kucinich who occasionally flirts with Ron Paul.
http://www.ronpaul.com/2010-09-13/ron-paul-and-dennis-kucinich-allies-against-war/

[Paul Emery]

Mikey

Whatever the solution it needs to be tied to income-outcome. Where we will likely differ is in deciding what are essential government services and responsibilities. That's why I prefer a straight percent cut to all spending without prejudice rather than a program by program evaluation and decisions that will end up being political and divisive. There's plenty of room for that in day to day politics but lets keep it out of this process till things are balanced. And yes, let's have a balanced budget amendment that will include military actions and interventions. That will slow things down.

You want to go to war Mr President? How are we going to pay for it?

[Mikey McD]

agreed

[Russ Steele]

Paul,

The mission of the Department of Energy was to get us off of the imported oil teat, and we are importing more foreign oil than ever before. I can only conclude the organization has failed in it's mission, therefore should be eliminated. What good would it do to reduce the budget of a failed organization by 10%? The whole organization should be eliminated. Why do we need the Department of Education? What have they contributed to our local students performance? Any students performance? The whole organization should be eliminated. Do you have a defense for the Department of Energy and Department of Education? Please share it with us.

[Paul Emery]

Russ
I have no doubt that there are useless and duplicated government agencies that can be eliminated but you and I will likely have different opinions as to what they are. This is where politics comes into the picture. As long as we have warring factions nothing will get done because the country and government are so divided and will not likely agree on anything substantial . The simplicity of my idea is that it eliminates that process and gets the job done. Let me propose we take it one step further and require all fund receiving agencies to function on a flexible funding system depending on how much money there is to pass around, You get $100 this year to run your shower curtain inspection agency but next year you might get $90 or if there is prosperity and the will of the people for increased revenue you get $105.

Looking at what programs to cut, increase decrease or add is also important but if we keep it separate from this process we can balance the budget then fight it out in the halls of Washington.

I know what I propose is stupid simple by why not?
I

[RL Crabb]

The early election returns in Wisconsin appear to bear out my theory that the major parties' biggest flaw is "mandatitis"...or believing that winning an election gives them the right to stomp all over the loser.

I've been saying this for years. The Dems made the same mistake after '08, resulting in big loses in 2010. While these moves make the base all giddy and wet, that big group of independent voters is sick and tired of the games. Paul's idea of de-politicizing the process would serve the parties, and the nation, much better.

[George Rebane]

Since a balanced budget amendment - long favored in these pages - is fought tooth and nail by spenders of all stripes, it can only be passed during a time of crisis in order to avoid a yet more terrible end. Today are we there yet? Is Sen Marco Rubio's position now a proper one that we can all get behind?

If not today, when?

[Paul Emery]

I agree Bob

It's called overreaching. Clinton did it with Hillary Care, Bush did it with Iraq and those silly tax cuts that created no jobs, Obama did it by taking on health care reform during s near depression and the Repubs are now at it trying to please the wingers and ignoring the centrists in the party who have been very quiet up to now. Remember, Washington is always run by the middle that shifts a little from right to left but is always the middle. Right now it looks like Obama turf but it will take a little while to manifest. Either he's a passive no agressive or he's using the old rope a dope waiting for the public to tire of of the latest dance to the right craze.

[Steve Enos]

I agree with Bob and Paul and I posted before about the "overreaching" issue. The reaction and results of Wisconsin and some other places overreaching was very predictable.

The overreaching was a big mistake that serves no one. Overreaching by either side or party is a big mistake that both have made.

Another prime example... we currently have a big overreaching push on women's right of choice by the hard right, ultra Christian's. They are working to connect the woman's choice issue to anything and everything, even the national budget and spending debate.

Then there was/is the overreaching on immigration, AZ is a prime example. I oppose illegal immigration and this issue needs to be addressed. But the right failed to consider a few keys issues, including demographics and they have over reached. Now there is push back and pull back in AZ. The right is not considering the demographics of CA and across the US and that’s a real big political mistake.

Overreach and you divide, create more useless conflict and you consolidate the other side to push back. The Wisconsin judge race is a prime example of this. Over reach, regardless of being on the right or left pushes the pendulum back the other direction… and it hurts everyone.

[Todd Juvinall]

There was no overreaching all one needs to do is review the democrat actions before they were booted. They stacked the deck and all this turmoil is caused by them trying to protect what they did. Now we see there is 5-10 thousand more ballots cast in Milwaukee than there are voters. This is a redo of Al Franken stealing the election in Minnesota. The democrats own the election offices in both states.

[Paul Emery]

Todd
Democratic fixing of elections?
Is that why there was such a Republican surge in the last election that led to a Republican majority? They must not have done a very good job. Also, win or lose you must admit was a huge surge for Kloppenburg against an expected shoe in. By the way, where did you get the information about the over votes? Gosh Todd I can't find out anything about this. Thanks in advance for the help.

[Todd Juvinall]

You need to do a better job so we can believe your impartiality. If I can find it, then anyone can find it.

[George Rebane]

http://www.foxnews.com/politics/2011/04/06/acorn-pleads-guilty-voter-registration-fraud-nevada/?cmpid=cmty_email_Gigya_ACORN_Pleads_Guilty_to_Voter_Registration_Fraud_in_Nevada

For balance, it would be good for someone to post equivalent news of organizations on the right.

[Paul Emery]

George

The news articles you referred to were from Nevada. The election we're looking at happened in Wisconsin.

Todd, just a couple of google search words for yesterdays Wisconsin vote would help or a link to a news article. I did google Wisconsin election voter fraud and got this
http://nation.foxnews.com/politics/2011/04/06/republican-has-narrow-lead-crucial-wisconsin-supreme-court-election
This was not a news article.

This was only a reference to past elections that some thought were questionable. You can call it what you want I don't care. In every close election local or national there are cries of voter fraud. The point is she came from far behind and will likely win the election because of an aroused electorate.

[Todd Juvinall]

Here are some links and this is always how it gets started. Read them and weep. And, many blogs are already on it, you know, citizen journalists. Anyway, this isn't the first time. There will be many more stories, sort of like Watergate don't you think?

http://tpmdc.talkingpointsmemo.com/2011/04/conservative-pundit-sees-vote-fraud-in-wisconsin-supreme-court-race-video.php

http://nation.foxnews.com/politics/2011/04/06/republican-has-narrow-lead-crucial-wisconsin-supreme-court-election

http://blogsforvictory.com/2011/04/07/voter-fraud-in-wisconsin/

[George Rebane]

Paul, you misunderstood my query. We're not talking about "cries of voter fraud". We are talking about pleading guilty to voter fraud in a court of law. The venue location is immaterial because the history of such indictments and trials is long and left-leaning.

[Todd Juvinall]

Just in, there apparently was a town not counted, a whole town! 7500 additional votes for......Prosser!

[RL Crabb]

If that's true, Toddy, what happened to the voter fraud?

[Paul Emery]

Okay some bloggers are chirping. They always do.
LBJ was the real pro at digging up the votes. An entire graveyard voted for him in '60. It's easy to get distracted in this. When the Wisc. AG get's involved I'll give it some ink. Otherwise the story is someone poked the bear and they voted. There's an old saying that there's nothing better for religion than a good healthy devil and Gov Walker may be just that. We'll see. The recalls will be the test.

[Todd Juvinall]

Crabby, are you saying voter fraud only happens with democrats?

[Russ Steele]

BREAKING: Computer Error Could Give Prosser 7,381 More Votes, Victory

After Tuesday night’s Wisconsin Supreme Court election, a computer error in heavily Republican Waukesha County failed to send election results for the entire City of Brookfield to the Associated Press. The error, revealed today, would give incumbent Supreme Court Justice David Prosser a net 7,381 votes against his challenger, attorney Joanne Kloppenburg. On Wednesday, Kloppenburg declared victory after the AP reported she finished the election with a 204-vote lead, out of nearly 1.5 million votes cast.

I think the fat lady just sang here song.

[Todd Juvinall]

Must not be a union town.

[Paul Emery]

This is going to be real fun. The latest numbers show the incumbent with a 40 vote lead but check this out from the National Review

"Prior to the election, Waukesha County Clerk Kathy Nickolaus was heavily criticized for her decision to keep the county results on an antiquated personal computer, rather than upgrade to a new data system being utilized statewide. Nickolaus cited security concerns for keeping the data herself - yet when she reported the data, it did not include the City of Brookfield, whose residents cast nearly 14,000 votes."
http://nation.foxnews.com/wis-supreme-court-election/2011/04/07/latest-vote-count-gives-gop-judge-narrow-lead-wisconsin

[Mikey McD]

Just finished my "patriotic duty" and filed/paid an obscene amount to the IRS and State of CA. What are the odds that I get some back if they shutdown?

[George Rebane]

Not a problem Mikey (also dropped our checks in the mailbox today), just compute the pro rata of the shutdown duration and file for a refund. I'm sure they'll honor it.

[Todd Juvinall]

Here is a DailyKos review today. Paul, these are your buds aren't they?

http://www.dailykos.com/story/2011/04/07/964478/-Wisconsin-Supreme-Court-vote-tally%C2%A0in%C2%A0doubt

[Todd Juvinall]

Here is another one for RL and Paul.

http://www.twincities.com/ci_17796228?nclick_check=1

[RL Crabb]

Ironic that the new GOP hero is guilty of the same kind of incompetence the locals accuse Greg Diaz of.

I'll still stand by my prediction of Republicans overreaching. Just give them time.

[Todd Juvinall]

Who?

[Paul Emery]

Yes Imagine the fuss if Diaz would have forgotten to include Grass Valley in a Statewide election. I've never heard of a town being misplaced. The recalls are the real story so we'll see.

[Dixon Cruickshank]

To all: WI voter registration is a joke - honest, I have to show photo ID to vote and it sounds logical. In WI you can walk up with an electric bill - register - then vote all in one fell swope with out a photo ID of any kind, very bizarre. This and many inconsistency's were pointed out in the 2008 election and reforms were shot down by the Democratic Leg. for what reasons I know not.

What I do know is they had a very close mayors race and a very close County Adminstrators race in one big city/county - big turn out on both sides - yet 10,000 ballots were marked that ONLY listed the Supreme Court race as voted for and no other race - now that is odd I don't care who you are. Why would a local person in a local election in April go to the trouble of going to the voting place and vote in only 1 race that didn't effect their residence ??????? maybe they did maybe they didn't - just fricken odd - just say'in

[George Rebane]

Dixon - I imagine Florida is the same as all over. Have you discovered the reason that the Democrats always support voting processes that invite and make voter fraud easy, and Republicans always support processes that require the voter to present his legal bona fides at registration and voting, thereby making voter fraud more difficult? And I recall a politically incorrect analysis that showed voter fraud has historically been overwhelmingly perpetrated by liberals. Have you seen any evidence of this conclusion?

[Todd Juvinall]

The rascally democrats steal elections all the time. I once escorted a woman to the swearing in of her becoming a American in Sacramento. She was married to a friend and she was from Russia. When we got out of the building the democrats were there and registering them. That is fine with me since the Republicans were not there that was their fault. Since then, the democrats are registering these people BEFORE they become citizens.

[George Rebane]

It's registering them as an alternative to becoming citizens that worries me.