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E-News 7/29/11

The Week Just Past: No Blank Check for the President

The ABC’s of the Budget Control Act

By the Numbers: Increase in the National Debt Held by the Public

Biggest Impediment to Job Growth?  “The U.S. Government!”

Obamacare Discourages Business Health Coverage

The Week Just Past: No ‘Blank Check” for the President

“Last week, House Republicans put forward and passed a common-sense ‘Cut-Cap-and-Balance’ plan that would end Washington’s out-of-control spending binge.  Democrats in the Senate refused to even consider the plan.

“This week, despite the President having failed to put even a single plan on the table, the House is poised once again to act responsibly by passing a second bill that cuts out-of-control federal spending and seeks to avoid a default on our debt obligations. 

“As I have said consistently, America is a nation that pays its bills and a default on our obligations would harm our economy and further damage job creation efforts.

“But it is time for the President and his Congressional allies to get serious about cutting federal government spending.  We don’t need a ‘balanced approach’ to raising the debt ceiling. We need a balanced budget and here’s why:

“As Arthur Brooks of the American Enterprise Institute told us in an Op Ed piece in the Wall Street Journal this week

·        Total government spending at all levels has risen to 37% of gross domestic product today from 27% in 1960—and is set to reach 50% by 2038.

·        Between 1986 and 2008, the share of federal income taxes paid by the top 5% of earners has risen to 59% from 43%.

·        Between 1986 and 2009, the percentage of Americans who pay zero or negative federal income taxes has increased to 51% from 18.5%.

·        Our national debt has now increased to 100% of the size of our economy today, up from just 42% in 1980.

“These are trends that, left unchecked, will saddle future generations with the weight of massive debt and a lack of jobs and economic security.  In this regard, our efforts this week to raise the debt ceiling while firmly addressing the debt crisis is as much a moral as an economic decision. 

Over the past several months, we have told the President that we will not support his request to increase the debt limit without serious spending cuts, binding budget reforms and we will not support higher taxes on families and small businesses we are counting on to create jobs.

“A week after passing the “Cut, Cap and Balance (the Budget) Act,” legislation designed to cut federal spending to 2008 levels, before all the “bailouts” and the failed ‘stimulus’ bills, the House is on the verge of approving the Budget Control Act.

“While far from perfect, this realistic approach finally begins to turn back the tide of federal red ink in several important ways: 1) it cuts spending by $917 billion and does not raise taxes that would fuel additional spending; 2) it creates a process that keeps our underlying fiscal policy problems front-and-center for the foreseeable future rather than ignoring them until 2013.

“Granted, some well-meaning Americans have opposed the Budget Control Act because they think it does not cut enough. While $900 billion+ of spending cuts is a genuine deficit reduction, I completely agree that it is far from sufficient to solve our underlying budget problems. In that respect, it is a step in the right direction, nothing more. 

“I, too, want deeper spending cuts and greater deficit and debt reduction.  However, given the stubborn insistence of the President and his Congressional allies on a debt limit increase coupled with new taxes and still more spending, I cannot see how we achieve greater savings at this time.

“I, for one, will not give the President a blank check.  Enough is enough.”

Rodney Frelinghuysen

By the Numbers: Increase in the National Debt Held by the Public

The American people are still asking: “where are the jobs?” And they know Washington’s spending binge is part of the problem.

 

 

We need to stop spending money we don’t have and start creating a better environment for long-term job growth. Cutting spending and preventing a national default will prevent more American jobs from being destroyed.

Recommended Reading:Arthur Brooks, writing in the Monday Wall Street Journal,The Debt Ceiling and the Pursuit of Happiness:

The ABC’s of the Budget Control Act

1. Guarantees Passage of the Balanced Budget Amendment for Additional Debt Limit Increase:Fifteen years ago, the BBA passed the House with bipartisan support, only to lose by one vote in the Senate.  Since then, the debt has grown by $9.2 trillion.  The BBA is the ultimate solution to our nation’s fiscal crisis.  

·        The Budget Control Act requires the House and Senate to pass balanced budget amendment before another debt limit increase occurs.

2. Avoids a Default on Current Obligations: Most Americans believe that people – and Congress – should pay their bills.  If the debt ceiling is not raised, at some point, obligations of the federal government will go unpaid.  Further uncertainty could lead to an increase in interest rates, which would hurt small businesses and families by increasing the rates on small business loans, credit cards, mortgage rates, car loans, and student loans.

·        The Budget Control Act would cut and cap discretionary spending immediately, cutting $22 billion in spending next year, and saving $917 billion over ten years, and raise the debt ceiling by less – up to $900 billion – in order to avoid default.

3. Rejects Calls for Job-Killing Tax Increases:  Our debt crisis is a result of Washington spending too much, not taxing or borrowing too little.  Raising taxes on job creators will cause even more harm - controlling spending must be the solution.

·        The Budget Control Act includes no tax hikes, and ensures that if tax hikes are a part of any negotiations for a future debt limit increase, the House can easily vote it down.

4. Cuts More Than It Hikes:  No more blank checks for President Obama – any new debt increase will have to be met with even more cuts.

·        The Budget Control Act also creates a Joint Committee of Congress that is required to report legislation that would produce a proposal to reduce the deficit by at least $1.8 trillion over 10 years, in addition to a Balanced Budget Amendment being sent to the states.

5. Changes Washington’s Spending Culture:  In just seven months, the House has changed the trajectory of federal spending and is actually shrinking a federal government that has done nothing but expand for the past 40 years.

·        For the first time in the history of modern federal budgeting, House Republicans will cut discretionary federal spending for two straight years. 

Biggest Impediment to Job Growth?  “The U.S. Government!”

Thirty years ago, an entrepreneur who grew up in a tenement in Newark took his thriving three-year-old business public.  Today, that company is #30 on the Fortune 500 list with more than $68 billion in revenues, 2,200 stores, and more than 320,000 employees. 

The following is an excerpt from a recent Investor’s Business Daily interview with Bernie Marcus, the co-founder of Home Depot:

IBD: What's the single biggest impediment to job growth today?

Marcus: The U.S. government. Having built a small business into a big one, I can tell you that today the impediments that the government imposes are impossible to deal with.  Home Depot would never have succeeded if we'd tried to start it today. Every day you see rules and regulations from a group of Washington bureaucrats who know nothing about running a business.  And I mean every day.  It's become stifling.

If you're a small businessman, the only way to deal with it is to work harder, put in more hours, and let people go.  When you consider that something like 70% of the American people work for small businesses, you are talking about a big economic impact.

IBD: President Obama has promised to streamline and eliminate regulations.  What's your take?

Marcus: His speeches are wonderful.  His output is absolutely, incredibly bad.  As he speaks about cutting out regulations, they are now producing thousands of pages of new ones.  With just ObamaCare by itself, you have a 2,000 page bill that's probably going to end up being 150,000 pages of regulations.

Read the entire interview here.

These are the words of someone who knows of what he’s talking about. Unfortunately, the Obama administration’s regulatory mania is making it impossible for today’s entrepreneurs to achieve success on the scale of Home Depot, precluding the job creation and economic development that would follow.

“The small businessmen and women I talk to around New Jersey make it very clear: they want the government to get out of their way and allow them to do what they do best – invest, expand and hire,” Rodney said.

The House passed H.Res. 72 on February 11, 2011.  This resolution would direct the standing Congressional committees to inventory and review existing, pending, and proposed government regulations by agencies within their jurisdiction to determine which ones hamper economic growth and job creation. 

Obamacare Discourages Business Health Coverage

One in eight small businesses have either had their health insurance plans terminated since the passage of President Obama’s health care reform or expect to do so.  This statistic comes from the nation’s largest small business organization, the National Federation of Independent Business.  The NFIB surveyed small businesses one year after the passage of the Obamacare, formally known as the Patient Protection and Affordable Care Act (PPACA).

Among the most striking of NFIB’s findings was the number of employer health insurance plans that have been or will be eliminated since PPACA’s passage — 14 percent, or one in eight. Eliminating employer health care plans “is the first major consequence of PPACA that small-business owners likely feel,” the NFIB reported.

The NFIB study also found 20 percent of small employers expect to significantly change their benefit packages the next time they renew their health insurance plans. Almost all of them expected to see diminished benefits, increased employee costs, or both.

Recommended Reading:Marisa Cochrane Sullivan, writing in the Thursday Wall Street JournalObama’s Iraq Abdication: