Conservatives Beware: The Boehner Plan Leads to Tax Increases By David S. Addington

From the Heritage Foundation: (Emphasis added by the Bear)

Conservatives have a clear objective: Debt limit legislation should drive down federal spending on the way to a balanced budget, while preserving the ability to protect America, and without raising taxes. The plan suggested by Speaker of the House John Boehner fails to meet that objective — indeed, it sets America up for tax hikes.

The Boehner plan has two steps. The first step cuts spending by $1.2 trillion — but over ten years, and, as usual with these plans, the deep cuts come in the later years, which makes it less likely that they will ever occur. Moreover, the cuts do not get under control the ever-growing spending in the entitlement programs that continuously drive up America’s debt. In the first step, the American people get only a little bit of spending cuts now, but President Obama gets authority to borrow $1 trillion. He gets $325 billion immediately and $675 billion upon making a later request, a request that automatically takes effect as long as the President keeps the support of the one-third of a House of Congress necessary to sustain a veto of a disapproval resolution, support he would have. So, the first step of the plan has iffy cuts in spending, but guarantees big increases in borrowing.

The second step in the plan is a set of recommendations from a new dozen-member joint select committee of Congress. The committee’s recommendations to Congress would not be subject to amendments and would get a straight up-or-down vote. The plan directs the committee to propose reductions in the deficit by at least $1.8 trillion over 10 years. The government runs a deficit when it spends more than it takes in from Americans as taxes, and the government has run deficits in most years for decades. As always, there are two ways to reduce a bloated government’s deficit — the right way of cutting spending and the wrong way of hiking taxes. While the second step of the Boehner plan may produce some useful spending cuts, the second step also allows the Committee to propose raising taxes as part of its unamendable, fast-track legislative package. Thus, the second step greases the way for tax hikes.

Tax hikes in a weak economy slow economic growth and kill jobs. As students of American history (or the movie “Ferris Bueller’s Day Off”) know, enactment of the tax hike known as the Smoot-Hawley Tariff Act during the Great Depression hurt the already weak economy and made unemployment worse. Job-killing tax hikes in the current weak economy, as millions of Americans go without jobs and the unemployment hovers above 9 percent, will have a similar effect. However good the intentions of the drafters of the Boehner plan may have been, the plan sets up America for higher taxes and fewer jobs. Conservatives should continue to fight plans that either hike taxes now or set America up for tax hikes in the future.

For decades, Congress has promised on vote after vote we will really get spending under control “next time,” and, as all those “next times” went by with that same empty congressional promise, the public debt mounted. The message of the 2010 election was clear — cut the size and spending of government now — and the voters who sent that message deserve better treatment from their government.

The House of Representatives took a step in the right direction last week when it passed the Cut, Cap and Balance Act by a vote of 234 to 190. But the Boehner plan to retreat from the Cut, Cap, and Balance Act is a long step in the wrong direction. The House Leadership should step back and recover its focus on the objective. The time to put America on the path to getting control of federal spending and borrowing on the way to a balanced budget, while preserving our ability to protect America, and without raising taxes, is now.

More from The Heritage Foundation
Boehner and Reid have both offered proposals to raise the debt limit in order to avoid default, but their plans leave too much undone. Of the Boehner plan, Heritage’s Alison Fraser writes that though the proposal would cut $1.2 trillion in discretionary spending, there’s no guarantee that those cuts will occur, its results would offer only modest reductions in publicly held debt under the best scenarios, and the plan would do nothing to reform entitlements—the real driver of our deficits in the future. Meanwhile, the Reid plan falls short of Boehner’s by $800 billion. In short, neither plan does enough to reduce America’s debt, and neither would address the concerns raised by the credit rating agencies. Fraser explains:

    Neither of this week’s dueling debt ceiling proposals would pass the test from Moody’s or Standard and Poor’s for a credible, firm and actionable plan that would turn the tide of our deficits to put our debt on a manageable track. And if that holds true, then a downgrade by the rating agencies could occur smack in the very election year the President is trying to scoot through.

    Because spending is set to grow so significantly over the decade, the kind of onesie-twosie approach to cutting spending and increasing the debt limit is simply not adequate. Net interest payments are projected to more than triple over the next decade. The longer Congress waits to seriously control spending, the more it will have to cut just to offset bourgeoning interest costs. And if interest rates suddenly rise? Well, we have an even bigger problem on our hands.

SideBear: I have not been particularly enamored with any of the plans being put forth to increase the debt ceiling and that includes the Boehner’s plan.

While I do believe Boehner when he says that “Jell-O Man” keeps moving the goal post every other day, I have come to the conclusion that Obama doesn’t really want a solution to the debt ceiling raise unless he gets 100% of his way which means he gets a couple of trillion dollars to spend as he chooses.

What the Republicans seem to be missing in this scenario is Obama is looking at crisis as opportunity to blame the Republicans for any potential ramifications of default and lower bond ratings. With him it is always the politics of reelection that comes first and the hell with the country.

All of the so called plans put forth call for a couple of trillion dollars raise in the debt ceiling NOW and meaningless spending cuts far in the future. Whatever happened to the idea of for every dollar raised in the debt ceiling three dollars of cuts come NOW?

The time has come to stand firm on this issue and draw the line in the sand. Besides Boehner’s plan or any other plan doesn’t have the votes in the House to pass and Harry Reid said it won’t pass the Senate. This all a game of chicken to see who blinks first.

Let’s see if Obama wants to be the first President ever to preside over a default. I doubt it. Besides there will not be any default and Tim the tax cheat will come up with his fifth drop dead date.

Does Obama Want to Solve the Debt Problem?

Leading From Behind On Debt

Leadership: Last Friday, at the end of his press conference on the debt, President Obama said: “I think if you want to be a leader, then you got to lead.” Too bad Obama isn’t taking his own advice.

It’s possible that Obama thinks talking about an issue is the same as leading on it. After all, in July alone, the president has held three press conferences and a town hall, delivered three press briefings, a radio address and a prime-time speech — all devoted to the debt ceiling negotiations.

But in the real world, leadership means standing in front of the parade and directing its course. All Obama has done since the debt crisis emerged more than two years ago is posture, issue platitudes and try to score political points from the tail end of the march.

To get a sense of Obama’s complete lack of leadership on this issue, it’s worth going through a brief timeline.
All this is to say nothing about Obama’s phony debt-default deadlines — first it was the end of March, then the end of April, then sometime in June, and now Aug. 2 — or his scaremongering about Armageddon and seniors not getting Social Security checks if the debt limit isn’t raised, or his continued unpresidential broadsides against Republicans with whom he’s supposedly trying to hammer out a deal.

In the end, Obama’s “leadership” has produced nothing other than partisan sniping and gridlock. To paraphrase the president, this is no way to lead the greatest country on Earth.

Read more from IBD Editorials

The Global Fairness Madness By Victor Davis Hanson

The more we have, the more we begrudge others who have more.

Whether in the fights over the U.S. debt limit or the rioting in Athens, the common global theme is not poverty in absolute terms, but more often fairness — as in having about the same amount of things as others do.

Here in America, the months-long impasse over the national-debt ceiling continues. President Bush borrowed nearly $5 trillion in eight years. But President Obama easily trumped even that staggering figure with his plan to borrow over $6 trillion in his first four years in office. The architects of his economic policy — Austan Goolsbee, Peter Orszag, Christina Romer, and Larry Summers — have all resigned, and are now either back in tenured academia, making lots of money in the much-criticized revolving door, or writing op-eds about why the president’s plan isn’t working — or all three.

Now Obama is demanding higher taxes to prevent a government default — apparently on the logic that everything he did with his previously borrowed $5 trillion was vital to the republic and all elements of it must remain unquestioned. So his sudden fiscal sobriety assumes the propositions that (1) all his borrowing was necessary, and (2) new taxes must be levied to pay off the borrowing inherited almost entirely from George W. Bush.
If one were to add up current American and European aggregate debt, and factor in the trillions more owed in contracted pensions, Social Security, and promised health-care payments, the tab is unsustainable. The only mystery is whether the crash will come hard and quick, as creditors lose their investments — or whether austerity plans can force once-affluent publics to curb consumption while slowly paying back money to those who already have more money than do those who borrowed it.

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That warm and cozy feeling By T. Scott

Doesn’t reading of the nation’s financial woes give you that warm and cozy feeling that tells you all is right ?

It doesn’t ?

Well shame on you for it is you and millions like you that obviously haven’t understood the real message coming from Washington – the message that you and me, We The People, don’t matter at all.

Consider that your savings for retirement are worth less than they once were. If you invest, you are taking a shellacking as the Congress twiddles with the debt matter and your home is worth less than you thought. You read that your Medicare costs will rise again, that you’ll see no cost-of-living raise in your Social Security and while you try to figure out how you can cope with all that is happening, doesn’t it give you that warm and cozy feeling to know that those you sent to Washington to represent you are doing just wonderfully.Their salary levels are well into the 100K range and growing. Their real estate values are soaring, they get raises, their retirement is not suffering a bit and their health plans are the most generous in all the world.

When you read that they cannot even agree to cut the waste out of their spending and that they require more and more from us in order that they may continue to enjoy a life-style truly emulating the rich and famous, don’t you suddenly have that warm and cozy feeling ?

Well, most of you must think everything is just fine and dandy as you certainly aren’t bothering to contact your people in Washington with a message that you want them to do their darned job. You must think that adding debt is not a problem for your generation so you are content to mortgage the future of this, your country. When Obama starts reading his prepared script, it must give you a warm internal glow.

Oh, you are reaching a conclusion that this writer is far off base and that things are really not as bad in Washington because Harry Reid, Chuckie Schumer and Obama tell you so.

America, you need a violent wake-up call and you need it right now, With each breath we take, our freedoms are being taken from us. The America that won World War II is but a distant memory and all of us are being sold out – by those we sent to represent us.

My warm and cozy feeling has become a life-threatening chill. How about you ?

North Dakota, Spurred by Energy and Ag Boom, Has 3.2 Percent Unemployment

Bismarck, North Dakota — In recent weeks, North Dakota has been in the news because of the historic and damaging flooding of the Missouri and Souris Rivers. But as the waters subside, it’s worth focusing on the state’s economy. For at a time of stagnant wages and a high unemployment rate, this vast, lightly populated Peace Garden State is one of the few places in America where jobs are plentiful.

In May nonfarm payroll employment was up 4.3 percent from the year before, and the unassuming state sported a gaudy 3.2 percent unemployment rate. In several counties, the rate is below one percent.

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