As the day debt ceiling of reckoning fast approaches, dueling proposals are flurrying around Washington fast and furious. The latest two are from House Speaker John Boehner (R-OH) and Senate Majority Leader Harry Reid (D-NV). Americans, and global financial markets, are watching Washington nervously for a real plan—one that will put the nation squarely on a path to solving our twin crises of spending and debt. Without strong structural changes in spending, our debt will balloon out of control. At stake are two issues. The short-term is obvious – will there be …
Desperate for a “balanced” approach to resolving the debt ceiling impasse, President Obama glommed on to the Gang of Six’s plan before the ink was dry. The plan has lots of tough-talking language intended to make both sides of the aisle tingle. But that’s where the balance ends. In reality, it’s a mostly empty bipartisan shell—heavy on tax hikes and promises of spending cuts, but devoid of details on how to make the sweeping transformative changes needed to solve our debt and spending crises. A core problem, of course, is …
Everyone’s heard that Moody’s has threatened to downgrade our bond rating unless the debt ceiling is raised. We get that—crisis pending, yada, yada, yada. But if you read the announcement closely, there are important new points they added to the mix. First, Moody’s really doesn’t believe–that the President really will let Geithner default on our Treasury bonds—despite all of President Obama’s foot-stamping, scaremongering, and high stakes “This may bring my Presidency down” retro-drama. Moody’s says that “there is a small but rising risk of a short-lived default” (emphasis added), that …
Today’s release of the 2011 Long-Term Budget Outlook by the Congressional Budget Office (CBO) yet again confirms what we already know: America’s budget is continuing down an unsustainable path, and the longer we wait to address this problem, the more painful the policy fixes will have to be. The CBO presents its results under two sets of assumptions, and while the assumptions differ, the bottom line result is the same: Spending continues to spiral out of control and the increase in the nation’s debt would be catastrophic. Under the more …
America needs to change course. Our current direction is fiscally and economically unsustainable and politically and culturally bankrupting. It is threatening the well-being and future of our country. House Budget Committee Chairman Paul Ryan’s (R–WI) budget proposal, for the first time in recent memory, sets our nation on a different and better path. It tackles the massive spending excesses of the recent past and the entitlement crisis that is beginning to command our fiscal future. It rejects the politics of government dependence, massively higher taxes and the inevitability of national …
Maybe it’s the holiday season, but if the reports are true President Obama and congressional Republicans have reached a compromise on extending the Bush tax cuts that gives taxpayers and the economy a wondrous gift. While details are sketchy and ever-so-important, President Obama announced he has agreed to extend all the Bush tax cuts for two years, through 2012. The necessity of economic growth trumped the ideology of redistributionism, though the President did take plenty of jabs at the wealthiest Americans. The compromise also includes the unfortunate resurrection of the …
The report of the President’s Fiscal Commission is due today. As a stalemate appears increasingly likely, what appears to be an updated “chairman’s mark” to guide the commission’s discussions over the next several days was released. Like its predecessor, the report, puzzlingly titled “The Moment of Truth” (as if this will somehow garner enough votes), has some strong elements, both positive and negative. Overall, this proposal does much the same as the previous report, though it would cut spending deeper and faster, bringing discretionary spending to 2008 levels (adjusted for …
Remember how public anger over the federal debt reaching new sky-high levels last year drove lawmakers into a flurry of discussions about budget controls? Responding to public and international pressure to do something about permanently spiraling deficits, President Obama established a flawed commission to tackle the spending problem. Congress, doing its part, voted for a massive $1.9 trillion increase in the debt limit to $14.3 trillion. That increase was so large it would allow them to spend freely during this election year without upping the limit on the federal credit …
Federal spending is out of control. Even President Obama knows it. To really stop the madness, Reps. Jeb Hensarling (R-TX), Mike Pence (R-IN), and John Campbell (R-CA) have proposed a simple solution – a constitutional amendment capping federal spending at 20 percent of the economy. Their proposal puts the debate squarely where it should be: exploding federal spending and the size of government. The authors of the amendment write that “Fiscal reform must begin and end with significant spending restraint. If not – if spending continues unchecked – this generation …
The President has the right idea with his proposal to freeze spending. Unfortunately, after driving spending to a record $3.7 trillion—nearly 26% of GDP—last year with the accompanying $1.4 trillion deficit, the proposal is at best a bit….underwhelming. According to the administration, only $447 billion in spending would be subject to the freeze with a total of $15 billion to be saved. So this freeze would reduce the deficit by 1.1 percent or less than half a percent off of last year’s spending. Details have yet to be announced, but those that have …
