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The following video is of Rep. Paul Ryan (R.-WI) delivering the Republican's weekly message, this one on government spending.
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We are nearing the precipice of a financial apocalypse in this country but you would never know it just by listening to the demagoguery of the Democrats. They can’t spend other people’s money fast enough (translated: the taxpayers). No pork project or expenditure to them is frivolous.
Despite massive increases in spending under Obama and Congress when both chambers were controlled by the Democrats, they refuse to agree to even a miniscule 1.7% reduction - $61 billion out of $3.6 trillion. Apparently, this figure has been reduced to about one half in order to avert a government shutdown. That would translate to around a 1.8% reduction in the spending deficit for just this one year!
This is essentially a rounding error – an unacceptable compromise which illustrates their total lack of responsibility and concern for America, our way of life and standard of living. It also confirms that their first interest is getting re-elected.
We should work to make sure that it doesn’t happen at their next election.
Shutdown? Why are we still discussing the 2011 budget?
Greg Richards April 01, 2011
The 2011 budget should have been passed by last year's Congress. The 1974 budget law requires that the budget for this fiscal year be passed by October 1 of last year.
The Democrats were in power last year. The entire government was under the control of the Democrat Party. In the Senate, the Democrats had a supermajority. In the House, the Democrats had a controlling majority. Their guy was in the White House.
Passing a budget could arguably be said to be Congress' primary duty apart from declaring war. But last year, we saw the contempt in which the Democrat Party holds the public. The Democrats ran away from their duty, a duty they accepted - indeed sought - by running for office.
But the Democrats did not want to run in the elections of November 2010 on their record, on their stewardship of the affairs of State. Instead they chose to be derelict in their duty to the country.
Now, under the goad of the Tea Party, the Republicans, having retaken control of the House, are insisting that the government institute a budget for fiscal 2011, which has already half gone. In the face of a $1.6 trillion deficit which is occurring, be it noted, in the absence of a national emergency even if in the context of poor economic performance, the Republicans are seeking to cut $61 billion in spending, a paltry 1.7% of the total budget and 3.8% of the deficit. And what do we find? We find the Democratic Majority Leader of the Senate Harry Reid attempting to marginalize the Tea Party, whose presence is the only reason that he is being forced to do his duty!
1. The Democrats, by abandoning their duty on the budget last year, have already shown that they have no respect for their responsibility to the country.
2. The Democrats certainly have no respect for Republicans and will not act in the interests of collegiality.
3. Therefore, the only thing that motivates Democrats in Congress is access to power. The only force that is going to move them is the fear of losing that power. What we know and they don't is that the citizenry is now aroused. It is fearful for the future of the country under the unmodulated profligacy of the Democrat Party in Washington.
So, let's treat the Harry Reids with the contempt they deserve. Reasonableness is not going to move the needle anyway. Let's do what is necessary to save the country and put the Dems to the test of public obloquy if they choose to continue their irresponsibility from last year and stand in the way of prudence and necessity.
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Congressional Republicans are continuing a welcomed pattern of pursuing fiscal responsibility by the federal government – just what the voters charged them to do. Their political counterparts and their ideological antithesis, the Democrats, instead are plotting to sabotage talks on federal spending and speciously blame and attack the Republicans. Their philosophy is that there can really never be too much spending.
Prudently, the Republicans are resurrecting the idea of a balanced budget amendment in order to force restraint in spending and taxation. They are conflating ideas from the past with new ones to create a Constitutional Amendment that will facilitate this.
In the end, they will irrefutably show that they are the party of fiscal responsibility and restraint so that the taxpayers can keep more of what they earn and all of us can enjoy a higher standard of living.
Budget Balance By Law
Investor’s Business Daily 03/28/2011
Fiscal Policy: The balanced budget amendment idea has lain dormant for years. But Republicans are bringing it back. In a day when runaway spending is running away faster than ever, we need a mechanism to rein it in.
GOP leaders expect in the next two weeks to introduce to the public a balanced budget amendment that they believe will fix the profound debt and deficit problems that lawmakers have created for the taxpayers. Done correctly, a balanced budget amendment might do just that.
Congressional Republicans had planned to announce their intention to amend the Constitution in the middle of the month, but decided to wait for a few weeks until they could come up with a bill they could all support.
Once lawmakers have agreed to a piece of legislation, the GOP will go public with it — and the promise is the process will be highly transparent.
In other words, Congress won't have to pass the amendment before everyone finds out what's in it.
"We will have a genuine rollout," Sen. John Cornyn, R-Texas, guaranteed Human Events, "so the American people can know what we're doing and they can call, and email, and fax, and demand their senators and congressmen support it and create a true grass-roots effort."
While there are competing versions of the balanced budget amendment among Republican lawmakers, Human Events reported last week that the likely final version of the amendment will:
• Cap spending at 18% of GDP. Under President Obama, spending has soared to 23.8% (fiscal 2010) and 24.7% (current fiscal year) of GDP.
• Allow federal spending to exceed federal revenue only when two-thirds of both chambers approve a specific dollar amount beyond government income.
• Prohibit tax hikes to balance the budget unless two-thirds in both chambers vote to override the limitation. The significance of this can't be overstated. Any amendment that enforces a balanced budget without such a restraint would only make matters worse. A large number of Democrats and a few soft Republicans would be giddy at the prospect of endlessly raising taxes.
• Require increases in the debt limit to be approved by three-fifths of both chambers.
• Force the president to submit a balanced budget each year to Congress.
In return for allowing the debt ceiling to exceed its current $14.2 trillion threshold, the GOP is demanding that Congress vote on a balanced budget amendment.
Should Republicans get their vote, and two-thirds of each chamber approve the amendment, it will go to the state legislatures. It must then be ratified in three-fourths of the states to be added to the Constitution.
To get it through the House, Republicans will need help from Democrats. Their 49-seat majority does not reach the two-thirds level required to approve an amendment. But a balanced budget amendment bill introduced this year by Rep. Bob Goodlatte, R-Va., has 215 co-sponsors, with 13 Democrats among them.
The GOP will also need help from Democrats, who have 51 of the 100 seats, to move it through the Senate. With votes from all 47 Republicans, the amendment will have to attract support from 20 Democrats.
While the numbers would indicate that passage in the Senate is unlikely, the prospect isn't entirely hopeless. Human Events notes that there are four Democrats who voted for the balanced budget amendment in 1997 who still serve in the Senate.
Democratic Sens. Mark Udall — who has offered his own balanced budget amendment — and Claire McCaskill — who has pushed for a 20.6% of GDP cap on spending — are two others who might vote for another balanced budget amendment.
But even if it gets hung up in one or both chambers, Cornyn still believes that the balanced budget amendment will at least be a useful guide to politics.
"I think the voters would know," he told Human Events, "with very stark clarity, who is for a balanced budget and who is not."
Typically all anyone needs to know about where a politician stands on a balanced budget is party affiliation. But maybe the shocking behavior of the Obama spending machine will clear up some Democrats' thinking. For those who refuse to learn, there are the elections of 2012.
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Rep. Paul Ryan (R.-WI) is taking his responsibilities as House Budget chief very seriously – just what the electorate wants but will clearly pay a high price for his diligence. He will soon unveil a concrete, effective plan for entitlement reform that unfortunately will be resoundingly attacked by the Democrats and receive little support from many Republicans.
Politics. Plain and simple.
The Democrats see this as an opportunity to sway voters who are addicted to entitlements and don’t want them reduced. Republicans are afraid that being fiscally prudent and responsible will cost them votes – and re-election.
This explains, in essence, why the issues of massive government spending with increasing deficits and debt have not been definitively addressed in the past.
Investor’s Business Daily 03/25/2011
Fiscal Responsibility: House Budget chief Paul Ryan will soon propose detailed entitlement reform. That he is sure to be savaged — even by fellow Republicans — shows how little Washington appreciates courage.
Ryan, a conservative Wisconsinite, will in early April unveil a budget that promises to be among "the boldest fiscal documents in history."
The Democratic Congressional Campaign Committee — the House Democrats' fundraising arm — already has a website, stopbenefitcuts.com, condemning the plan as "an extreme Republican scheme that will dismantle Social Security and Medicare as we know it."
At the Manhattan Institute's Reagan Centennial conference on supply-side economics last Tuesday, former Reagan and Bush administration economist Lawrence Lindsey said House Democratic leader Nancy Pelosi believes the GOP won the House because senior citizens abandoned the Democrats, and she wants them back.
"She is going to make the issue be, 'We are not going to cut your entitlements,'" Lindsey told the audience.
Ryan is also sure to be attacked by anti-spending purists like Sen. Rand Paul, R-Ky. But House leaders and key GOP senators, such as Senate Budget Committee ranking Republican Jeff Sessions of Alabama and freshman Marco Rubio of Florida, can be expected to give Ryan support.
The inevitable "dime-store Democrat" Republicans who will score political points by criticizing Ryan for his boldness are the most deplorable ones.
Based on past remarks, Ryan would change Medicaid to give governors freedom to tailor their states' plans to meet the needs of their particular low-income populations, in the spirit of the 1990s welfare reform.
Medicare would be reformed to give future beneficiaries a payment they could use to choose from a list of Medicare-approved plans. Social Security reform is not likely to take center stage in Ryan's plan.
Quibbles may be justified, but even hard-core Tea Party supporters should applaud Ryan when he makes history early next month by doing what no politician — not even Ronald Reagan — has ever done: get dead serious about cutting the spending of the most difficult-to-control programs of the federal government.
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The federal government’s continued reckless and profligate spending has resulted in an astounding and soon to be unsustainable debt level that is adversely impacting our economy and threatens even our standard of living and way of life. Irresponsible politicians in Washington including largely but not exclusively Congressional Democrats and Obama, continue to be dismissive of this impending financial apocalypse.
Making matters even that much worse now is the calamity in Japan, a country that is the second largest purchaser of U.S. debt after China. If Japan decides to substantially cut back on their buying of our bonds or even starts selling some of this debt in order to make available the massive capital needed for their country’s reconstruction, this could be financially problematic and costly for us.
This should serve as another important wake-up call to our politicians (and Americans in general) that we must expeditiously and substantially reduce government spending in effective and meaningful ways and get our financial house back in order.
Fears rise that Japan could sell off U.S. debt
Some analysts say that risk to U.S. economy unlikely
Seth McLaughlin The Washington Times March 24, 2011
U.S. Treasury Secretary Timothy F. Geithner said he doesn’t think Japan’s troubles will affect U.S. borrowing costs and interest rates. (Bloomberg)
Some lawmakers and market analysts are expressing rising concerns that a demand for capital by earthquake-ravaged Japan could lead it to sell off some of its huge holdings of U.S.-issued debt, leaving the federal government in an even tighter financial pinch.
Others say a major debt sell-off by Tokyo is unlikely, but noted that the mere fact that questions are being raised speaks volumes about the risks involved in relying so heavily on foreign investors to fund U.S. debt.
“This natural disaster in Japan concerns me that it could speed up what’s coming, because they are the second leading buyer of our debt,”Sen. Rand Paul, Kentucky Republican, told The Washington Times. “Small degrees of differences in how much they buy of our debt, I think, can make a big difference in interest rates that we have to pay people to buy our debt.”
With the federal government having piled up $14.2 trillion in debt, budget experts are warning that the country is on an unsustainable fiscal path.Congress, they say, must find cuts in all areas of the budget, while reforming the entitlement programs — Social Security, Medicare and Medicaid — that are the biggest drivers of national spending.
Congress has passed short-term spending bills this year that nibble on the edges of government spending, and President Obama has offered a 2012 spending plan that also saw spending rise.
Concerns about the financial plight facing Japan, which trails only Chinaamong foreign holders of U.S. Treasury debt, aren’t helping the picture.
“They have a lot of bonds,” former Sen. Pete V. Domenici told The Times this month after testifying before Congress about the country’s mounting debt woes. “Are they in such bad trouble that they are not going to buy anymore? If they don’t, who do we look to?”
Asked point-blank last week if he thought Japan’s troubles could affect the U.S. borrowing costs and interest rates, Treasury Secretary Timothy F. Geithner told a congressional hearing, “I do not.”
Japan, which held some $886 billion in U.S. debt in January, is “a very rich country, with a very high savings rate,” Mr. Geithner said.
But some two weeks after the earthquake, uncertainty still reigns over whether Japan will reduce its purchases of Treasury debt and other foreign assets — a decision that could force the U.S. to pay higher rates on its securities to attract buyers and possibly drive up U.S. interest rates.
But judging from Japan’s response to the 1995 Kobe earthquake, Ward McCarthy, chief financial economist at Jefferies & Co., said that it is unlikely.
“It’s not unreasonable to think their appetite will probably diminish somewhat simply because Japan is going to have to fund its reconstruction by issuing more debt,” he said. “So we are going to have more competition from Japan itself going forward.”
Still, lawmakers remain concerned that the amount of foreign-held debt represents a bigger financial gamble than people realize.
“Many people I’ve been talking to in Washington are worrying about Japan because they have nearly 200 percent of their GDP in debt,” Mr. Paul said. “We’re at 100 percent and some people worry that this might not necessarily be a problem for Japan, but more of a problem for us if Japan in this crisis cannot buy our debt any longer.”
Karl Denninger, founder of market-ticker.org, said that could become a real concern in the coming months, as the heavy reconstruction costs inJapan threaten to slow down or even reverse the current flow of goods and services out of the country, and dollars coming into the country.
“The impact of this is widely unappreciated and I think it is a mistake to ignore it,” he said.
Mr. McCarthy said perhaps more importantly, “in the bigger picture, we’ve painted ourselves into a corner.”
“Should an emergency or disaster like the one that happened in Japan, happen in the U.S., we simply have put ourselves in a situation where it will be very difficult for us to come up with the funding to respond in an appropriate way. There are countless reasons why Congress should do the right thing, make some difficult choices and reduce the budget deficit,” he said. “Unfortunately, they apparently don’t see it that way.”
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A basic tenet of the Republicans is that reducing government spending and the debt stimulate private businesses and result in a growing economy. This is just the opposite of the failed approaches of Obama and the Democrats (and the news media and liberal intelligentsia) who believe that a bigger and more massively spending government is the correct and only solution.
The last two years of abject failure of these Democratic policies have clearly shown that this approach does not work. Conversely, extensive research involving similar situations including in other countries has revealed that a significant reduction in government spending and in the level of debt will lead to real and substantial growth both short and long term.
This is exactly what several key Republicans are championing and what we need to support.
Spend Less And Owe Less To Make Economy Grow
Rep. Kevin Brady 03/23/2011
For the past two years, Americans have been told that the only way to economic recovery is more federal spending that drives up federal debt. The White House and Washington Democrats continue to cling to this failed economic model, refusing to listen to the voices of respected economists in America.
The job gap between Democratic promises and the results is significant. After nearly $5 trillion in fiscal and monetary stimulus, there are 2.3 million fewer jobs today than when the stimulus began. The White House fell more than 7 million jobs short of its year-end 2010 forecast, and our unemployment rate is far above the promised 6.9%.
The "government spending is the answer" crowd had their chance to jump-start the economy. They failed. It's time for a proven approach.
Congressional Republicans are determined to remove barriers to new jobs by reducing America's dangerous budget deficits and removing the uncertainty that deters businesses from hiring new workers.
Private business investment, not the government, is the engine of job creation in America. Comparing federal spending and private-sector job growth over the past 40 years shows little correlation between the two. Just the opposite: As federal spending grew, jobs on Main Street shrank.
Since 1971, when private business investment grew — that is, companies both large and small bought buildings, equipment, and software — jobs in the private sector grew. For job creation, there is no substitute for private business investment — not federal spending, not rebates, not "shovel ready" projects.
With nearly $2 trillion in capital on the sidelines, it's time to reject Washington-centric policies and instead encourage business investment to again flow naturally into America's economy.
A new report, "Spend Less, Owe Less, Grow the Economy," unveiled this week by the Joint Economic Committee Republicans, surveys economic studies examining countries with developed economies like ours that struggled with rising government debt. It proves that countries which reduce their government deficits through spending cuts can boost economic growth and job creation even in the short term.
Respected economists found 21 instances between 1970 and 2007 where 10 developed countries successfully reduced their debt-to-GDP ratio by 4.5 percentage points or more based predominantly or entirely on spending cuts. Countries that increased taxes were much less successful.
When government debt shrank through spending cuts, jobs grew. For example, neighboring Canada reduced total government spending by 12.8 percentage points of GDP between 1994 and 2006 and boosted its economic growth from under 1% to a robust 3.4% average. Sweden's economy was shrinking in the early 1990s. After reducing Swedish government spending by 11.4 percentage points of GDP from 1994 to 2000, Sweden's economy revived with growth averaging 3.4%. New Zealand experienced the same.
They are not alone. U.S. economists found 26 episodes in nine developed counties where reducing debt through spending cuts provided a large boost to economic growth in the first three years after their fiscal consolidation began.
That's the critical point: While most economists agree that reducing federal spending increases economic growth in the long term, this analysis of economic studies found that reducing federal spending through spending cuts boosts economic growth and job creation in the short term as well.
Two factors drove these pro-growth turnarounds. First, businesses no longer expected the government to levy large tax increases in the future to pay for excessive spending — so businesses stepped up their investment in buildings, equipment and software. Business investment, as we've shown, equals jobs. Second, families no longer facing higher taxes had higher expectations for permanent disposable income and became more confident to make major purchases for homes and autos.
According to the study, to maximize growth and job creation the spending reductions must be "large, credible and difficult to reverse once made." The cuts that produced the greatest economic growth include: right-sizing the government workforce, eliminating duplicative agencies and programs, eliminating transfer payments (subsidies) to businesses, and reforming and reducing transfer payments (entitlements) to individuals.
Moreover, the study found evidence of strong economic growth effects from reforming government pensions and health care to make them "sustainable and solvent," even when the reforms are phased in slowly and exempt current beneficiaries from change.
To preserve the bloated size of our federal government, President Obama and congressional Democrats loudly decry the risk of reducing America's deficits now. But they ignore the risk of delay.
As this study shows, ample real-life data prove that there are significant economic growth and job creation benefits from reducing spending and reforming entitlement programs to restore their sustainability for future generations.
It's time to stop listening to the economists and politicians who were wrong about the stimulus and instead take a different, proven path forward. To grow America's economy, it's time for Washington to spend less and owe less.
• Brady, R-Texas, is the top Republican on the Joint Economic Committee.
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