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  • House and Senate Cloakroom: January 24-28, 2011

    Analysis provided by Heritage Action for America

    House Cloakroom Report: January 24-28

    Analysis:

    After a week in the House that saw Obamacare repealed, the House will move in to a week heavily focused on spending, further organization of committees, and a slew of hearings on healthcare, the economy, stalled trade agreements, and the oil spill commission report. On Monday afternoon, the House will reconvene with votes scheduled for the evening. On Tuesday, hearings will dominate most of the day with votes on H.Res 38 which would be a resolution reducing non-security spending to fiscal year 2008 levels or less followed by the President’s State of the Union Address that evening at 8:35 pm Eastern. On Wednesday, the House will consider a bill to reduce federal spending and the deficit by terminating taxpayer financing of presidential election campaigns and party conventions, thus reducing mandatory spending $520 million according to CBO estimates from last year. Spending cuts, economic recovery, and healthcare will drive the conversation for the week.

    Major Floor Action:

    • H.Res. 38 – To reduce spending through a transition to non-security spending at fiscal year 2008 levels.

    Major Committee Action:

    • The House Ways & Means Committee will hold a full committee hearing on “US Trade Agreements with South Korea, Colombia, and Panama” as well as a hearing on the “Economic Effects of Health Care Overhaul”.
    • The House Budget Committee will hold an organizational meeting on Wednesday followed by a full committee hearing on the “Fiscal Impact of Health Care Overhaul”.
    • The House Education and the Workforce Committee will hold a full committee hearing on Wednesday on the “State of the US Workforce”.
    • The House Financial Services Committee will hold a full committee hearing on “Economic Recovery and Job Creation Strategies”.
    • The House Natural Resources Committee will hold a full committee hearing on the “Oil Spill Commission Report”. See Heritage’s take on putting together a cohesive oil spill response bill here.
    • The House Oversight and Government Reform Committee will hold a full committee hearing on Tuesday regarding “Bailouts and Foreclosure Crisis Oversight”.
    • The House Foreign Affairs Committee will hold a full committee hearing on Tuesday regarding “Problems at the U.N.”

    Senate Cloakroom: January 24-28, 2011

    Analysis:

    The Senate returns to Washington on Tuesday after being in recess for the majority of January. There is still much transition happening on Capitol Hill; many new Senators have yet to be assigned permanent office space and the new official committee assignments have yet to be resolved, so much of the Senate schedule for the week is still unclear. It does look increasingly more likely that the fight over the filibuster that has been brewing for weeks will come to the Floor for debate and a vote at some point in the week. Also, President Obama will deliver the State of the Union Address on Tuesday, January 25.

    Major Floor Action:

    S Res 10 — Filibuster Rules

    Major Committee Action:

    The Senate Judiciary Committee will meet to mark up a bill to change the patent system and judicial nominations on Thursday.

    The Energy and Natural Resources Committee will hold a hearing relating to the oil spill commission’s report on Wednesday.

    The Senate Health, Education, Labor and Pensions Committee will hold a hearing on how Obamacare will impact consumers on Thursday.

    1/24/11 – Update: Several Senate committees announced their schedule over the weekend. This section of the Senate report has been updated.

    Posted in Ongoing Priorities [slideshow_deploy]

    2 Responses to House and Senate Cloakroom: January 24-28, 2011

    1. George Colgrove, VA says:

      The Federal Government has to be cut by 40% to first and foremost stop deficit spending. Second, to be able to pay the interest on that debt and finally start the process of actually reducing that debt. 40% will allow for the first two important tasks, but also allow for a minimal start on the last.

      After the 40% cut, federal spending needs to be gradually reduced even more as we eliminate more overlapping tasks, waste, redundancy and as we enhance efficiency and transparency. In five years, there should be no noticeable difference between federal and private sector wages and benefits.

      The pill we will need to swallow is that we need to accept there will be a massive number of federal workers out of a job – upwards of a million or more. This will be in addition to the more than 9 million people who lost jobs in the private sector due to those federal workers and federal policy.

      We need to begin a strategy to improve the economy with what we got. We need to get the private sector jobless and the newly jobless from the federal government back to work. Government strategies have failed us. I think it is time to let the private sector fix this problem. This strategy will not include any more Keynesian federal deficit spending. It will require sacrifice only at the government levels. The people have already sacrificed plenty. People and businesses have money, but in many ways, they are scared of what these governing bodies will do to them. They are very uncomfortable spending out of fear of the many layers of government who has their greedy eyes on it. Government has become the only body that can legitimately steal money from others who earned it. It is no coincident that is where all the thieves are going.

      The strategy shall include – these things need to be in place prior to the massive federal reductions (this all can be done by FY2012):

      1.Eliminate property tax and prohibit any governing body from charging any kind of perpetual property taxes from here on.

      2.Simplify the entire tax collection system to a single payer system.

      3.Deregulate small business at the federal and state levels.

      4.Eliminate the corporate taxes and transfer the regulatory function back to where it belongs – the stockholders.

      5.Provide a mechanism where employee benefits packages are created by the employee outside the employer’s domain so that businesses and government no longer need to spend scarce resources maintaining such programs.

      Job 1 put in an outright ban on Property Taxes. This will be the key to starting up the economy. There will be no more perpetual taxation on property. Be it land, homes, automobiles, boats, or whatever. This will spawn massive home and business construction. People will make their homes and businesses as nice as they wish without fear of higher taxes being levied upon them. Decks, bedrooms, kitchens and additions will be built. Fancy new cars will be bought. People may actually go out and buy that boat. Jobs will be created to a point that there may not be enough people to fill the need. Welfare rolls will go down as a result and therefore taxes would further decrease and more debt would be paid off. Communities will start to look nicer. We should also get rid of the inventory tax on businesses. This will allow businesses to have the right stock for their customers without having to pay a huge tax to do so.

      Simplify the tax collection. Create a trickle up – single payer system. Only allow two taxes. An income tax to be collected by the lowest tax collection agency in the states (town, city, or county) and a sales tax to be collected by the state.

      The Income tax will be a flat tax on income (with a minimum tax of $100 per taxpayer with earnings over $2,000) – everyone pays the same rate and follows the same rules. You only allow for up to four deductions – two for adults and two for children. The deduction is based on the poverty line of a family of four divided by four (current = $27,000 so a deduction would be $6,750). Meaning a family of four on poverty (or worse) will only pay $100. The taxpayer need only fill out a 3×5 card and submit an income statement on a 3×5 card from their employer to the local tax collection agency. All personal information is located only in the local tax collection agency – not the state or the feds. A town may also charge a minimum school fee for each child and/or a minimum town membership fee (these will stay with the town). The tax is collected locally with mandated 100% transparency of the operation. By switching over from property tax to income taxes, the local tax collection agencies will not need to change in size and scope. All audits that are required will be done by the private sector (former IRS agents??) and paid for by for the taxpayer who is doing wrong. This should not be a taxpayer burden.

      The state in addition to collecting a sales tax, will then set up formulas to determine what each town; city or county will need to pay the state based on local financial strength – this should not require hundreds of state employees. Just a couple dozen to administer the collection and determine the formulas. The idea is to reduce the state tax collection bureaucracy layer and save the taxpayers at the state level. The other idea is to keep the money at the lowest level. We do not need bureaucrats to take money from lower levels just to return that money back to the lower level. That uses up a lot of resources – that could have been used building a bridge or funding a classroom.

      At the fed level, they will need only set up formulas for 50 states and a few territories in the same manner as the states. The states will be providing the feds an electronic report, which will automatically enter into a single small desktop computer that will use SIMPLE software to calculate the state formulas for collection with no political interventions. This is all public information anyway so we do not need massive amounts of security. THIS IS JUST A SIMPLE TASK! This is not hard work and will not require even need a dozen people. We can get rid of the IRS and replace it with a very small program office in the Dept of the treasury. All existing taxpayer paper records and databases shall be destroyed and all computer hardware, warehouses and buildings the IRS consumed shall be sold off. Current IRS agents would be perfect to provide audit services to the local collection offices throughout the country as independent private contractors. The feds will only need to collect 50+ checks, which will actually be electronic cash transfers from the states and territories. The feds will no longer have the regulatory writing authority as it has proven to be political and is often bought out by special interest.

      The tax rate will be set after the feds, the states and the towns, city or counties present a passed budget. The feds will divide their budget over every taxpayer in the US for an average taxpayer responsibility for that tax. The States will do the same for the state taxpayer, and finally the town, city or county will do the same for their jurisdiction. The total tax collected for the average taxpayer will be summed up from the three levels and multiplied over the number of taxpayers in that local jurisdiction. The local GDP for that area will be determined and from that a tax rate will be selected.

      Small businesses shall be completely deregulated at the federal level and dare I say the state level. A poorly run small business unto itself cannot impose any significant damage beyond a single community, let alone the state or the country. Since the feds mission is on the general welfare of the entire country, they have no jurisdiction on small business. Regulatory bodies for small business shall be at the local level only and with market principals, it will be the communities that invite the most businesses that will win. Meaning, using market principals, only the best and most reasonable regulations will be in place. Other than taxing incomes of the sole proprietor, there shall be no other reporting necessary for taxes. Every small business has an end-of-year profit and loss statement that shows a balance, this is all that is needed. The part of the business expense that went to the business owner(s) will be taxed as personal income tax. Accounting has been around for thousands of years, I think we got that handles without government intrusion. A small business need only submit their P&L statement (which they create for themselves anyways) and a list of employees with their incomes (if they have them). The local tax collection agency will then match these incomes up with a centralized clearing house database to make sure all was reported properly. SIMPLE!

      Abolish corporate taxation completely – at all levels. This will do far more to reduce the need for massive governing bodies at all levels. The only people concerned about the business of a corporation are the stockholders. The only thing stockholders need is transparency and full disclosure to make wise investments. The only thing the feds need to do is set up a transparency and disclosure process and let the stockholders or the private sector stock market administer it. The law and a courtroom is all that is need to make businesses right. The feds or the states need not get involved. The stockholders should decide on how that all that work is done for their company. The stock market that company participates with is the only body that needs to worry about what that company reports to it. Again, market principals will dictate how well a corporation will do. A corporation that is open and honest with its stockholders (and the public) will have more investors and do better. We do not need a SEC, commerce department, etc. Once corporations are fee of the federal reporting requirements for all government “needs”, trillions of dollars wasted on this reporting will be instantaneously injected into the economy by the creation of new jobs and the purchase of new hardware.

      Lastly, employees should be allowed to shop for their benefits via an independent private sector benefits broker. This would include the common health, life, dental and glasses insurances as well as 401K’s and other investment strategies. An employee will engineer their own package to their liking using the full open market to decide from. This will enhance competition and will give small upstarts a better chance at getting customers. The employee will get a summary of benefits, which they will take to their employer. The employer can then have a negotiation chip on how much of that package they will pay for. Government bodies will be forced to use private sector averages, as they cannot be trusted to handle this on their own. The fact we are dealing with scares tax payer dollars and with rampant nepotism, favoritism, and political and corporate connections that exist in government, they would simply pay 100% of a lucrative $50,000 package if for example they wanted their son or some contractor’s daughter to do well. The feds currently get an average $41,000 benefits package whereas the private sector package does not even reach $10,000!

      These simple steps will require little thought and will eliminate massive amounts of government at all levels. And will spawn nearly instant growth without fear. The GDP will begin to climb and as it does so will the extra tax revenue that comes from that growth. The surplus tax revenue should be split between reducing taxes and paying off the debt – no increased in federal spending even in the DoD! Until the debt is paid off, the federal government should continue to reduce its size, scope and thereby costs. Once the debt is paid off, the tax rate should be adjusted downward to compensate. We should not allow the federal government to con us into a rainy day fund, nor should we allow them to con us into letting them grow again. Once we chain down that beast with the constitution, we should throw away the key.

    2. Pingback: House and Senate Cloakroom: January 24-28, 2011 | Just Piper

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