Bankrupting America’s Spending Daily

| April 16 2013

Spending Daily | April 16, 2013

Pray For Boston

Our thoughts and prayers go out to the victims, families and friends of all those who were impacted by the bombings at the Boston Marathon.  The American spirit is evident in the acts of courage and heroism by first responders, emergency personnel, police and fire department officials and the thousands of selfless individuals who helped rescue the injured and bring them to safety. Public Notice will be using its social media networks today to direct all those who would like to help to the American Red Cross.

 

Federal Tax Collections In 2013 Will Be Biggest Ever

The Hill reports, “The federal government is projected to collect more revenue in 2013 than ever before, a statistic Republicans are touting to make the case that the government has a spending problem, not a taxing one. Top GOP lawmakers, from Speaker John Boehner (R-Ohio) on down, have made that pitch while noting that the Congressional Budget Office (CBO) projects the revenue flowing to the government will double between 2012 and 2023.  The statistics are getting heavy play from Republicans, who argue that an overhaul of the tax code should not include more revenues. ‘We’re going to get more revenue in the federal government than we’ve ever seen — by twice,’ House Ways and Means Committee Chairman Dave Camp (R-Mich.) told reporters last week. ‘So I don’t think revenue’s the issue.’ Democratic leaders and economists say that GOP line isn’t the whole story, because the raw number of dollars the government collects doesn’t account for inflation and population growth. … The more telling statistic, analysts say, is revenues as a share of the economy. On that basis, federal revenues are running in the neighborhood of the 40-year average. … Revenues as a percentage of the economy have averaged around 18 percent over the past four decades, reaching a high of almost 21 percent late in former President Clinton’s administration. Revenues hovered at around 15 percent of GDP in 2009, 2010 and 2011, according to CBO.”

 

“There’s no shortage of tax revenue”

Public Notice Executive Director Gretchen Hamel editorializes in The Corpus Christi Caller, “In politics, timing is everything. So when President Obama issued his latest budget proposal on April 10, which included a pitch for some $580 billion in higher taxes, I had to question the timing. This proposal, of course, came just a few days after a dismal March jobs report that most economists and media outlets concluded was the result of the fiscal cliff tax hikes — not the sequester spending cuts, which is what the White House asserted. … Americans are working longer each year to pay their tax bills. But are leaders in Washington working to ensure those dollars are spent responsibly? No — our $16.7 trillion national debt and towering annual deficits are evidence of how little regard Washington has for taxpayers. Congress must reject the president’s demand for more taxes until the federal government gets spending under control. Lawmakers need to set priorities and make choices based on what they can afford — they don’t need more money, they need more guts.”

 

WSJ: “No Tax Increase is Ever Enough” for Obama Presidency

The Wall Street Journal editorializes, “An abiding lesson of the Obama Presidency is that no tax increase is ever enough. So it’s not surprising that the President’s new budget includes an increase in the death tax only three months after the last increase. In January Mr. Obama and Republicans agreed to tax estates at 40% with an exemption of $5 million ($10 million for couples). That was an increase from 35% and a $5 million exemption. Now only weeks later he’s again looking for more, as his budget proposes to raise the rate to 45% and reduce the exemption to $3.5 million. Mr. Obama’s budget justifies this bait and switch by claiming that in the fiscal-cliff talks ‘Republicans insisted’ on the 40% estate tax rate, which it also claims is a giveaway ‘averaging $1 million per estate to the very wealthiest Americans.’ That’s the familiar soak-the-rich disguise for a tax increase, and note well that the White House proposal doesn’t index its $3.5 million exemption for inflation. This means that over time much smaller estates would be hit with a rate that would confiscate nearly half of a lifetime of savings or business success. That’s exactly how a death tax that was originally sold in 1916 as hitting only billionaires like the Rockefellers gradually began to apply to middle-class families who own, say, a successful auto-repair shop or invested wisely during the stock market booms of the 1980s and 1990s.”

 

Congressional Budget Shortfall: $91 Billion

POLITICO reports, “The most regular thing about ‘regular order’ in Congress these days may be the regularity of its disarray. Nearly a month after the great budget debates of March, there’s no prospect soon of even appointing a formal House-Senate conference to try to resolve the differences. And rather than be the fall guy again, Appropriations Committee leaders are making plans to move ahead with what could be wildly different assumptions come May and June. ‘It is a huge problem,’ House Appropriations Committee Chairman Hal Rogers (R-Ky.) told POLITICO of the numbers dealt to him by the Republican-backed resolution. Indeed, each year, the gap between the House and Senate only seems to widen. That’s a $91 billion gap — more than three times the difference from a year ago. And when adjusted for inflation, the House’s $414.4 billion target takes Washington back to what domestic appropriations were in 2001, before the great surge in veterans and homeland security spending of the past decade.”

 

Tax Refunds Shrink After Fiscal Cliff Deal

The Wall Street Journal reports, “The January budget deal to avoid the ‘fiscal cliff’ has delayed refunds and boosted tax collections, helping to narrow the budget deficit and possibly giving lawmakers more time to craft an agreement to increase the federal government’s debt ceiling. As of April 5, the number of refunds issued fell more than 2 million, or about 3.2%, compared with the number filed by around the same date last year, the Internal Revenue Service said Monday, as many Americans were rushing to file their forms by the midnight deadline. The amount of money refunded by April 5 declined 4.5% to $214.5 billion, from the same date last year. A big reason for the drop in refunds was that the fiscal-cliff deal, signed into law on Jan. 2, forced the Internal Revenue Service to postpone the start of the tax-filing season to Jan. 30, about two weeks later than usual, so it could adjust its computer systems and forms.”

 

GOP Embrace President’s Proposal to Trim Entitlements

The Washington Post reports, “President Obama’s offer to trim Social Security benefits has perplexed and angered Democrats, but GOP leaders are embracing the proposal and rushing to jump-start a debate that will delve even more deeply into the touchy topic of federal spending on the elderly. This week, two House subcommittees plan to hold hearings on ‘reforms to protect and preserve’ programs for retirees, starting with Obama’s proposal to apply a less generous measure of inflation to annual increases in Social Security benefits. Also on the table are higher Medicare premiums and reduced benefits for better-off seniors, and a higher Medicare eligibility age. … The developments signal an important shift in the budget battle as party leaders nervously prepare again to raise the federal debt limit. After more than two years of talking about taxes and ‘wasteful’ government spending, policymakers appear ready to move into the more serious and sensitive realm of entitlement programs. Republican leaders have made reducing the cost of entitlements their top priority, and for good reason, budget analysts say. Medicare, Medicaid and Social Security account for nearly 40 percent of federal spending and are growing rapidly, as they must provide benefits to all who qualify, regardless of cost.”

 

“Democrats Risk Alienating Young Voters by Opposing Cuts in Entitlement Spending”

Charlie Cook editorializes for The National Journal, “My National Journal colleague Ron Brownstein wrote a column for last week’s magazine that I thought was the most important piece of the week. In it, he argues that ‘large portions of the Democratic base still don’t understand the political and economic dynamics of the party’s changing electoral coalition.’ Brownstein is absolutely right. For liberals, Democrats, and others to argue that Social Security and Medicare should not be touched in any way sends the message that we are just going to run up the tab and send the bill to the millennial and subsequent generations. … History has shown that any society that spends more on the present rather than investing in the future is doomed to a dismal future. That is precisely what my generation, the baby boomers, has done. Our parents’ and grandparents’ generations sacrificed the present for the future, for example by investing in an interstate highway system and national infrastructure that was exceedingly forward-thinking but is now decaying. In more-recent years, infrastructure spending has declined, parallel to the quality of our elementary and secondary education. For the first time in American history, parents can no longer confidently say that the future for their children is brighter than it was for them at that age.”

 

Foreign Holdings of U.S. Debt Increased $12B Since January

The Hill reports, “The Treasury Department reported Monday that foreign governments have increased their holdings of U.S. debt to $5.66 trillion as of February. That is a $12 billion increase from $5.54 trillion in January. In total, U.S. debt stands at more than $16 trillion. China remains the top foreign holder of U.S. debt with $1.222 trillion in holdings. It increased its holdings by $8 billion in February. Japan remains number two, with $1.097 trillion. That is a decrease of $6 billion in February. While conservatives warn that the U.S. budget deficit is unsustainable in the long-run, there is yet to be any sign that Treasury is having difficulty in selling U.S. bonds.”

 

Confidence in U.S. Economy Slips

Gallup reports, “Americans’ confidence in the U.S. economy slipped slightly last week as record-high stock prices showed signs of pulling back on Friday, news coverage about the government’s negative jobs report continued, and both political parties took issue with President Barack Obama’s 2014 budget proposal. Gallup’s U.S. Economic Confidence Index was -17 last week, compared with -13 the prior week. The current reading of -17 is the lowest since the week ending March 10, when confidence was crawling back up after the budget sequestration spending cuts took effect earlier in the month.”

 

Bill to Fire Federal Workers with “Seriously Delinquent Tax Debts” Defeated in House

The Hill reports, “The House on Monday rejected a GOP bill that would have set up a process for firing federal workers who have ‘seriously delinquent tax debts’ and prevented people in that situation from being hired by the government. Members voted 250-159 in favor of the Federal Employee Tax Accountability Act, which was sponsored by Rep. Jason Chaffetz (R-Utah). While that’s a clear majority in favor of the bill, it was called up under a suspension of House rules, which required a two-thirds majority vote. … Democrats said the bill would be counterproductive by potentially firing federal workers and making it harder to ever collect money from them. They also said it’s not needed given that the delinquency rate for federal employees is about 3.6 percent, less than half of the national rate of 8.2 percent. Still others argued that federal workers are already taking it on the chin in light of the sequester, the ongoing federal pay freeze, and other factors.”

 

“Europe Split Over Austerity as a Path to Growth”

The New York Times reports, “In the last year, the International Monetary Fund has performed a major reassessment of how it thinks austerity harms a weak, financially troubled economy. But while warning of the perils of slow growth, it still often insists on austerity for just such economies. The tension between those realities will be on full display in Washington this week, as top economic officials from around the world gather for the spring meetings of the monetary fund and its sister institution, the World Bank. Once again, sluggish growth in advanced economies, and in particular the unfurling economic and fiscal afflictions in the euro zone, will be the central topic of discussion.”

 

To schedule an interview, please contact Public Notice Press Office at (571) 970-6490 or e-mail Press@ThePublicNotice.org.

###

BankruptingAmerica.org is an educational project of Public Notice, an independent, nonpartisan, non-profit, 501(c)(4) organization dedicated to providing facts and insight on the effects public policy has on Americans’ financial well-being.

0 comments