Members of Congress will vote Wednesday to freeze their salaries through 2013 and impose the same pay limitation on non-military federal workers. The vote in the U.S. House comes just two days after the Congressional Budget Office confirmed that federal workers are paid 16 percent more in total compensation — a conclusion similar to research conducted by The Heritage Foundation and American Enterprise Institute. “Study after study has shown that when compared to the private sector, the federal government on average pays more than required to recruit and retain a …
Medicare is in dire need of reform. This week’s chart illustrates why the entitlement program is the largest driver of long-term runaway deficits. With the country’s population aging and increasingly dependent on health care, Medicare’s cost to taxpayers is projected to rise from $522.8 billion in 2010 to $932 billion in 2020. The Heritage Foundation has long championed reforms for Medicare, most recently as part of Saving the American Dream. Heritage’s Bob Moffit recently outlined a two-stage approach to reform. The first step is saving the current program, then moving …
The accounting methodology used to measure the cost to taxpayers of federal loan guarantee programs such as the one that financed defunct solar company Solyndra may dramatically understate the programs’ financial risk to taxpayers. Simply put, the federal government ignores administrative costs and the risks of borrowers defaulting on their obligations. Under the Federal Credit Reform Act of 1990, the cost of federal financing is measured according to a discounted rate based on the cost of lending Treasury securities. That includes the cost of average losses from loan defaults, but …
Following the failure of the Joint Select Committee on Deficit Reduction, Sen. Pat Toomey (R-PA) criticized liberals for insisting that any deal include a massive tax hike. In a speech at Heritage last week, he said tax revenue isn’t the problem facing the United States in the future; it’s the massive increase in federal spending. “It’s actually arithmetically impossible to solve this problem on the tax side alone,” said Toomey, who noted that Democrats on the Super Committee wanted to hike taxes by $1 trillion without making any fundamental reforms …
Recently, the Congressional Budget Office (CBO) released its latest statistics on income inequality. Economists, bloggers and others have been furiously debating their implications. Over at the American Enterprise Institute, Jim Pethokoukis has been bludgeoned by various left-wing bloggers for pointing out that the story of growth of income inequality is much more complicated than the simple version spun by the CBO, and that there exists a considerable amount of evidence that income inequality hasn’t gotten worse since the ‘90s. His arguments can be read here, here and here. One point …
Rep. Tim Huelskamp (R-KS) came to Washington in January ready to have a vigorous public debate over America’s debt crisis. He’s less optimistic about the outcome today — a result of the super-secret Joint Select Committee on Deficit Reduction. “I thought it was a very, very bad idea to create a non-transparent, backdoor committee to put together something that is the responsibility of 535 members of Congress,” Huelskamp said yesterday at Heritage. “I expect nothing good to come out of it.” Huelskamp voted against the final debt-limit bill that created …
Lawmakers have recently paid lip service to cutting the corporate tax rate to help boost economic growth. Doing so would be good policy, but it’s important to know why. Information disseminated by both political parties, think tanks, government organizations, media outlets, and political pundits has confused the issue, leading many to believe that reducing the corporate tax rate would have little effect on the economy. This is because most discussion surrounding the utility of tax cuts is filtered primarily through the “demand-side” lens—that is, it views tax cuts as effective …
House Armed Services Chairman Buck McKeon (R-CA) is a man on a mission. He’s making the rounds on Capitol Hill to convince his colleagues, particularly those on the 12-member Joint Select Committee on Deficit Reduction, that they should avoid cutting defense spending. McKeon has a point — and it’s one that is backed up by Heritage calculations from Congressional Budget Office data. This chart reveals that even if defense spending was eliminated entirely, entitlements would continue to fuel the debt crisis. Making reforms to Social Security, Medicare and Medicaid is …
During the Republican debate Monday night in Tampa, Florida, Governor Rick Perry (R–TX) said that President Obama’s $800 billion stimulus created zero jobs. CNN “fact-checked” this statement and determined it was false. To review, in 2009 just before the stimulus was enacted, the unemployment rate stood at 7.5 percent. Today—two years after the unprecedented spending experiment—the unemployment rate is 9.1 percent. In fact, 1.7 million fewer Americans are working today than were employed when the stimulus was enacted. Nevertheless, CNN decided that because the Congressional Budget Office (CBO) and other private forecasters claim …
Now that President Obama has signed the Budget Control Act into law following weeks of grueling debate, lawmakers are packing their bags and heading home for August recess. Both houses of Congress return the first week of September, but neither passed a formal adjournment resolution, denying Obama the opportunity to make recess appointments. Lawmakers wrapped up their work without finalizing an agreement on the Federal Aviation Administration funding bill. Thousands of civilian employees and construction workers have been out of work since the partial FAA shutdown last month. Heritage welcomes Roger …
