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  • The Spending Must Stop

    Congress is at it again, spending more taxpayer money and significantly adding to the deficit in the process. This latest bout of irresponsible spending is $174 billion tacked on to an otherwise necessary bill to extend long-established, mostly sensible tax-reducing provisions known as the “tax extenders.”  The legislation, dubbed Stimulus IV by some, is officially called The American Jobs and Closing Tax Loopholes Act of 2010, which either evidences a peculiar form of dark humor or simple political cynicism.

    The new spending in the bill arises mostly from extending 4 programs: increased Medicare spending, also known as the doctor fix ($63 billion); continuing the extension of unemployment insurance at 99 weeks ($47 billion); yet another Medicaid bailout for the states ($24 billion); and an extension of COBRA health insurance coverage ($8 billion).

    The Heritage Foundation recently posted an analysis of all the provisions – including all the new spending, tax hikes and other bad policy choices – in the tax extenders bill which can be found here.

    In total, all the overspending will add $134 billion to the deficit. That sum is finally causing some in Congress to gag. Senator Kent Conrad (D-ND) has said that the cost of all the spending is “too high.” Conrad is chairman of the Senate Budget Committee, so he should know.

    Conrad’s reluctance to accept more reckless spending by Congress shows some in Washington are starting to wake up to the fact that the American people want an end to all the deficit spending.

    Conrad’s hesitation could put the entire bill in jeopardy. That would prevent the spending increases – for now, but it would also further delay the long-overdue passage of the tax extenders – 45 tax-reducing provisions that expire this year. Congress has still not passed them almost 5 full months into 2010, and for the most part they would only be extended through 2010, leaving their status for 2011 still in doubt.

    Businesses and individual taxpayers are pressuring Congress to act soon so they can have some assurance in their tax planning for the remainder of the year, and next. Who can blame them? It is long past time for Congress to approve these necessary extensions.

    Congress has been slow to pass the extenders in part because it wrongly insists on applying pay-as-you-go (PAYGO) budget rules to their extension.  The issue is pretty simple:  Allowing these provisions to expire imposes a tax hike.  Congress treats their extension as a tax cut.  So in Washington, to avoid a tax hike Congress finds it has to raise taxes.  That’s as crazy as it sounds.  Of course, Congress has no problem waiving PAYGO requirements for all manner of spending by designating the most wasteful spending an “emergency”, but when it comes to tax provisions that are long-held policies it draws the line and requires they be “paid for.”

    It gets worse.  After years of this PAYGO folly with respect to the tax extenders whereby taxes have to be raised to avoid a tax hike, Congress has run out of relatively painless taxes to raise, so it has turned to an economically menacing tax hike to offset the cost of the extenders.  It has chosen to reduce the effectiveness of the foreign tax credit that United States businesses that operate overseas use to limit double taxation. This will drive even more jobs overseas, despite the protestations to the contrary by its supporters.

    Congress should stop the madness and drop the spending hikes in the tax extenders bill. It should then go about its necessary businesses of permanently extending the sound policies in the extenders without the egregious tax hikes to offset them. Doing so would give businesses and individuals the stability they need and prevent yearly tax hikes.  Eliminating this uncertainty and the threat of tax hikes would be real stimulus.

    At the same time, removing the spending from the bill would show that Congress finally recognizes what everyone from Greece to California is now painfully aware of: The spending must stop.

    Posted in Economics [slideshow_deploy]

    7 Responses to The Spending Must Stop

    1. Lloyd Scallan - New says:

      Obama, and his Dems lackeys in Congress, are deliberately collapsing our entire economical system so that they can "come to the rescue" with another system, SOCIALISM! This has always been the Obama plan. Anything else they might claim is pure sophistry.

    2. Billie says:

      Totally agree Lloyd. "The spending must stop" is exactly what government knows and that is exactly why they aren't. Set-up for the downfall of America.

    3. Pingback: Daily Buzz 05.27.10 | Daily Buzz Factor

    4. Kevin Habib, Glen Bu says:

      The 2 trillion in deficits from Republican tax cuts from 2001 and 2003 must stop. Do you not notice how the deficit has balloned after the tax cuts? Republcians took a projectedc surplus and turned it into the largest projected deficit in US history…and now you bash a extenders bill that costs less 1.7 trillion less than the tax cuts that created this economic crisis?

    5. Billie says:

      tax cuts didn't create this crisis. out of control, undisciplined, indignant government spending did!

    6. Pingback: The Spending Must Stop - Whitley County Patriots

    7. Letitia Calhoun says:

      Your true agenda is very CLEAR!

      1-Are the politicians, corporate America, and those with health care willing to live without health care and simply pay for it themselves? The real problem with health care is GREED, not the people receiving it. The politicians and corporate America receive the top of the line health care coverage. The average employee will Never receive the same coverage these two groups of people receive so they will Never be able to speak or decide for anyone, what is best for anybody. Let's not forget the fact that the health care industry is paying these two group in order to maintain the industry profit that support their lifestyle, so out of greed they will never give it up.

      Working America, therefore, can not afford health care because of the other two groups greed. So we can not go without health care even though we hardly ever use it. The American people fund health care so the American people should say what how it can be used NOT Who should use it.

      2-Is Corporate America STILL making money. This group is NOT in a recession only making less profit. People can not get a job because corporate does not want to lose a substantial profit loss. So layoffs take place now that the banks, insurance agencies, and other UNREGULATED financial players has made off like a bandit, while the rest of America can no longer pay their mortgage, car note, credit cards and basic needs. Corporate America has the power to hire, Corporate America simply Will Not hire in the US because of their profit margin.

      3-The majority of America claims they are Christian or believe in Some God. Others don't believe in anything but claim they are Good people. So why is it that this same group of people Hate (steal land from, enslave, hang, call illegal, go to war against and prevent the advancement) people of the other races.

      There is no reason to say you don't want the SOCIALIST to have a part in living in the United States of America, the land of Freedom, if greed is not keeping this group from being FREE to do what the other groups do.

      1-Stimulus money Gave SOMEONE an opportunity to Eat, pay their mortgage, and buy gas somewhere in WORKING AMERICA, even if just for one month.

      This war, has started in on bankrupting the country, because of the Oil the that fuels our country.

      2-Free Trade is the reason corporate took our jobs overseas even though must of us can not understand what is being said when we call in to find out what is going on with the bills will Never stop receiving.

      3-Tax dollars only become important when it appears every class will break even.

      You don't have a problem with the Spending in this country. Every class uses the black oil and spends the green money. No matter how much spending was being done eight years ago, there was no disrespecting platform like this while we were getting screwed and did not realize just how badly it was. Greed initiates disrespect, selfishness and bigotry. So you CLEARLY do not really have a problem with Government Spending.

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