Radio America Online News Bureau

debt

Debt-Ridden Dem Wins Primary, Libs Do Want Your Guns, Epic Failure to Launch

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Jim Geraghty of National Review and Greg Corombos of Radio America are pleased to see pathetic levels of voter enthusiasm among Democrats in Texas and Georgia and they dissect the substantial personal debt afflicting the party’s nominee for governor in Georgia.  They also fire back as California Rep. Eric Swalwell argues for a ban on military-style semiautomatic rifles, a buyback program aimed at those who own such weapons, and criminal prosecution for anyone subsequently caught with one.  And they shake their heads over the 30-year-old man who took his parents to court for insisting he move out of their house.

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Runaway Spending Will Engulf U.S. Soon

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Earlier this year, a $1.3 trillion dollar omnibus spending bill left many fiscal conservatives wretching over the rise in domestic spending, but Hillsdale College Prof. Gary Wolfram says mandatory spending is real emergency and we’ve got less than a decade to do something before it gobbles up all of our revenue.

Wolfram teaches economics and public policy at Hillsdale.  He also served as chief of staff to former Rep. Nick Smith, R-Mich, in the mid-1990’s and on the Michigan State Board of Education.

The omnibus controversy arose when President Trump and Republican congressional leaders agreed to huge increases in domestic spending in exchange for lifting the spending caps on national defense spending.

In a recent column, Wolfram explains that mandatory spending – Social Security, Medicare, Medicaid – is the much greater threat.  What makes it mandatory is specific congressional acts dictating how much is spent on those programs.

In our interview, he discussed how much federal revenue goes towards mandatory spending now and what it will look like in a few years if the problem is not addressed.

“If you look at mandatory spending plus interest on the debt, in 2019 it’s going to be 70 percent of the budget outlays and 89 percent of the revenue.  So if Congress didn;t enact anything, 89 percent of the revenue’s going out the door already with mandatory spending.

“If you get to 2028, according to the Congressional Budget Office, 98.5 percent of all the revenue that comes into the federal government is going to be spent already, either through Social Security, Medicare, Medicaid, and some other items that are already mandated, plus net interest,” said Wolfram.

“So if you do not do something about Social Security and Medicare, which between them are almost two trillion dollars in 2019 and are going to be $3.3 trillion in 2028, you’re not going to do anything about the deficit,” said Wolfram.

While Wolfram believes each mandatory program must be reformed, his first recommendation is to change the appropriations process.  In Wolfram’s home state of Michigan, the legislature determined how much is spent on each program every year, regardless of what is mandated in statute.  He says the same principle should be applied in Washington.

“Let’s say Social Security is supposed to spend $1.043 trillion in 2019.  If this were the way the Constitution worked in the federal government, Congress appropriates a trillion dollars.  Everybody gets their proportionate share of the trillion dollars.  I think that’s the type of thing we’ve got to be looking at,” said Wolfram.

Wolfram says Congress won’t get serious about reforming programs until members are faced with passing a massive hike on Medicare and Social Security taxes.

He ought to know.  When serving for Rep. Smith, Wolfram pushed legislation that would allow taxpayers to set aside a portion of the their Social Security tax payments into a private account in exchange for receiving smaller checks when they retire.  Only one other members showed up at the press conference announcing the bill.

But he says there are still measures that could do some good.

He says keeping the system in place for Americans 55 years and older is doable if younger people are told they won’t get Social Security benefits until they are 70 or 75.  However, he believes Medicare needs a far more drastic overhaul.

“With Medicare, you’ve got to change the way the system works.  You’ve got to make it like health savings accounts are in the private sector, where it’s a high deductible policy where you get so much and then you ask the question, ‘How much does it cost when you go to get your blood test?'” said Wolfram.

He says there are simple ways to drastically reduce Medicaid costs as well.

“Think of what the incentives are in Medicare or Medicaid.  It’s to produce something that the government will pay for, even if it’s inordinately expensive, because the person buying it  is not the person receiving it,” he said.

Wolfram says the health savings account approach works well on Medicaid as well.

“If you apply that to Medicare and Medicaid, it’ll change the whole incentives of the system.  I’ll be Walmart or Walgreens and I’ll have a nurse practitioner there, charge you ten bucks to tell you your kid’s got pink eye and then provide you with a prescription,” said Wolfram.

Congress refuses to deal with the problem, but Wolfram still holds out hope that lawmakers will do the right thing when they have no other choice.

“I believe at some point things are going to get bad enough that they’re going to have to deal with it,” said Wolfram.

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Bolton Replaces McMaster, GOP’s Ugly Omnibus, Millennials Love Doing Taxes

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Teddy Kupfer of National Review and Greg Corombos of Radio America cheer President Trump’s selection of John Bolton as National Security Adviser and look forward to his tough stance on North Korean nukes and the Iran nuclear deal while liberals fear that Bolton will start bombing everyone.  They also unload on the bloated $1.3 trillion omnibus that the majority of Republican representatives and senators approved, much to the delight of Democrats and the fury of fiscal conservatives.  Teddy and Greg understand the desire of Republicans to rebuild the military but find the reckless spending in other areas unacceptable.  They scratch their heads trying to figure out why more than half of millennials actually enjoy doing their taxes.  And they offer a champagne toast to the late Democratic Georgia Gov. and Sen. Zell Miller and reflect upon his memorable keynote address at the Republican convention in 2004.

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Tax Cuts Working, Spending Must Be Reined In

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The Republican tax cuts are already boosting local economies and more help may be on the way, but GOP House member says lawmakers must get serious about cutting spending and taming the debt.

Rep. Keith Rothfus, R-Pennsylvania, is a member of the House Financial Services Committee.  He says the benefits of the tax legislation, passed solely on Republican votes in December, are already clear in his district east of Pittsburgh.

“We’re seeing a lot of positive feedback.  We’re seeing a lot of folks who are getting more money in their weekly or bi-weekly paychecks.  We’re hearing from people who have gotten bonuses.

“We’ve talked to small businesses that are going to be able to make new investments in their businesses to grow their businesses, hire workers, buy equipment, which means the person who supplies the equipment is going to have a job.  We have gotten a lot of great feedback and this is just the thing that this economy needed,” said Rothfus.

Rothfus says the tax cuts, along with the GOP rollback of regulations, is triggering the kind of economic recovery we should have seen years ago.

“The Obama administration had a different model of recovery, one of more regulation, more control from Washington, higher taxes, more spending.  We saw the slowest growth rate in a recovery since the Great Depression,” said Rothfus.

So what do Rothfus and other Republicans have in mind for stoke economic growth some more?

“It’s all about getting capital flowing again.  We are losing a community bank or a credit union a day in this country because of all the over-regulation in the financial sector.  We need to find right regulation.  I talk about this all the time.  We want regulation that is smart, prudent, responsible.  That’s the focus we’re going to have on the Financial Services Committee,” said Rothfus.

But while Republicans made good on their promises to cut taxes for most Americans, Congress has not managed to restrain spending.  In addition to maintaining Obama-era spending levels for over a year, lawmakers forged a budget agreement in February that will crank up both military and domestic spending and create trillion-dollar deficits for years to come.

Rothfus voted against that deal.  He says it is unacceptable for lawmakers to look the other way on debt and deficits.

“That means we are borrowing two million dollars every minute, every day of the year.  That’s what a trillion dollars is,” said Rothfus.

“We have to get serious about this spending problem that we have.  We are collecting more tax revenue than ever.  We have to get back to healthy economic growth, because that’s actually going to help generate revenues to pay for programs that people expect,” said Rothfus.

He says a double-digit growth in domestic spending is irresponsible given other pressing priorities.

“When you’re growing the defense budget the way we did, when you’re going to offer $89 billion to help people effected by disasters in Texas, Florida, and Puerto Rico, this was not the year to raise domestic, non-defense spending by 12 percent.

“A family that is going through issues in their budget at the kitchen table, if they had a fire there they know they’re going to have to put more money there and not buy other things,” said Rothfus.

When asked how to control spending, Rothfus pointed to two ideas, one of which Congress recently scrapped.

“The smart way is to have left in place the caps that we had under the prior budget agreement, except to make sure that we’re taking care of defense and our veterans,” said Rothfus.

He also wants to see much closer scrutiny of existing government programs, as Congress is now doing with funding for opioid addiction treatment.

“That means you have to take a hard look at other programs across the government and see what’s effective and what’s not.  We passed a bill a couple years ago called the Comprehensive Addiction Recovery Act, a necessary piece of legislation to address the opioid epidemic.  One of the provisions for that is for the first time we are going to measure the effectiveness of some of the treatment plans.

“Imagine that.  We should be measuring the effectiveness of every government program.  These are the hard-working taxpayers’ dollars that we want to be good stewards of,” said Rothfus.

Addressing the opioid crisis is a major priority for Rothfus, who believes government needs to play a key role in helping people end their addictions.

“The response has to come from everywhere.  This is an all hands on deck situation.  We have to have local partnership,” he said.

In addition to providing the money for programs proven to help addicts recover, Rothfus says the crisis makes real border security an even greater priority.

‘We have to be taking a hard look at our border.  Most of the heroin that we have in our country is coming from the cartels in Mexico.  If that’s not a reason to secure our border, I don’t know what is.

“So we’ve got to be doing a much better job and, where appropriate, have barriers along the border.  We have to increase capacity at ports of entry so that we can be inspecting the vehicles that are smuggling this poison in,” said Rothfus.

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Brat: Senate ‘Scared of Shadow’ on Spending

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Rep. Dave Brat, R-Virginia, is slamming Republican congressional leaders for caving to spending demands by Democrats in a two-year budget bill that he anticipates will spark trillion-dollar deficits as far as the eye can see while Republicans unilaterally surrender their greatest weapon for passing meaningful entitlement, welfare, or health care reforms.

On Wednesday, just one day before another government funding deadline, the Republican and Democratic leaders in the House and Senate announced an agreement to keep operations running for two years, but with a hefty price tag for the American taxpayers.

Republicans who favor the bill are celebrating the lifting of sequester spending caps on national defense.  They also included language to repeal the Independent Payment Advisory Board, often referred to as “death panels” in the Affordable Care Act.  And they contend there is money well spent on veterans programs, infrastructure, disaster relief, and opioid addition programs.

But Brat says everything is getting more money and the media’s estimate of $300 billion in new spending is actually low.

“It’s actually $400 billion now and wait til you see what policies get plowed into that $400 billion,” said Brat.

The congressman says the House of Representatives addressed appropriations last year, passing a budget that cut spending as well as 12 separate departmental spending bills.  He says things fell apart once those bills got sent to the U.S. Senate.

“They failed.  They failed on Obamacare.  They failed on keeping their word to the American people on being fiscally responsible,” said Brat.

Earlier this week, the House passed a continuing resolution that boosted defense spending but left other levels unchanged.

“The House Freedom Caucus plussed up defense spending.  The entire Republican Conference was in favor, plus up the military but nothing else.  We were going to stay as a team on that call.

“Then leadership got together and went to the Senate.  They need nine Democrats and it morphed into a Democrat bill in five minutes.  They plussed it up to $300 billion.  When you add in contingency funding, it’s $400 billion,” said Brat.

“When you’ve got (Senate Minority Leader Chuck) Schumer saying this is a great bipartisan bill, and Republicans are in charge of the House, the Senate, and the White House, you might have a problem on your hands,” said Brat, who points out the two-year deal allows the Senate to wash its hands of the issue until late next year.

“The Senate basically doesn’t even want to vote on a budget next year.  They’re scared of their shadow,” he said.

Brat is generally positive on Speaker Paul Ryan’s leadership but is not impressed with his actions on this bill.

“We got backed into a trap, but still [Ryan’s] got to take the boxing gloves and put them on and go over their to (Senate Majority Leader) Mitch McConnell and say no,” said Brat.

Brat says there’s only one reason why a bill like this gets passed in the GOP-run Congress.

“None of this has to d with rational policy.  No one’s in favor of a trillion dollar deficit and so it’s all politics.  It’s people protecting their hide and their slot up here .  Taking the ‘yes’ vote is the easy vote.  Sure, yes, yes, yes to everything.  Put it on the credit card and the kids will pay it off.  You know, were $21 trillion in debt right now,” said Brat.

And that’s about to get much worse.

“We’re going to have over trillion dollar deficits as far as they eye can see.  If you’re a Republican and you’re fine with that, then I don’t get it,” said Brat.

Not only that, the required payments on the interest for the national debt were tamped down in recent years since interest rates were next to nothing.  Brat says the markets are facing volatility now because of inflation fears brought on by rising wages.  He says the tab to preserve the government’s solvency will also be on the rise.

“That wage inflation set off a signal.  Markets are rational and they say, ‘Oh oh, interest rates are going to bump up once wages bump up,'” said Brat.

“We’re going to have inflation, interest rates going up, and then we’ve got to pay off $21 trillion in debt at normal interest rates like three, four, five percent,  That’s going to be hugely costly and the market has properly recognized that,” said Brat.

In addition to being awash in red ink, Brat is aghast that GOP leaders effectively handcuffed themselves from getting any major reforms done in the next two years.

“They deemed the budget and gave up our ability to do budget reconciliation again this year in the budget.  It’s a huge deal.  That’s how we tried to get rid of Obamacare and that’s how we passed the very successful tax cut.

“This year, we were going to work on welfare reform and maybe some mandatory spending programs because they’re a $100 trillion unfunded (liability).  Now for some reason e just unilaterally disarmed and gave away our power,” said Brat.

The reconciliation tool allows legislation to pass with a simple majority rather than having to meet the 60-vote threshold to cut off debate.  Republicans will now have to keep their entire conference together and pick up nine Democrats to pass any legislation.

Brat, who calls this bill “a Christmas tree on steroids,” is getting some blowback from critics who want to know why he is so upset at a bill boosting federal spending by $400 billion when he just voted in favor of a tax bill that adds $1.5 trillion to the debt over 10 years.

Brat says the explanation is simple.

“I did my Ph.d on economic growth and you’ve got to compete with the mainstream media that doesn’t know anything about economics.  All you need is an additional 0.75 percent economic growth to pay for our tax cut,

So when you put together the regulatory relief we have and the tax cut bill itself.  The bill itself won’t pay for all of it, but the economy is more than compensating for it.  We’re only at one-and-a-half or two (percent growth), so if you get to 2.75 you’ve paid for it and the Fed of Atlanta has us growing at 5.4 next quarter,” said Brat.

He says this line of attack is proof positive that liberals are clueless on fiscal policy.

“The tax cut does pay or itself but government spending does not pay for itself.  That’s Econ 101 and unfortunately I don’t think the Democrats took the class,” said Brat.

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Space X Success, Big Spending Republicans, Pelosi on Race & Immigration

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David French of National Review and Greg Corombos of Radio America pause to cheer the Falcon Heavy rocket launch by Space X this week and David hopes it sparks more aspirational innovation that our nation so sorely needs.  They also grimace as Republican majorities are preparing to jack up spending significantly over the next couple of years, even though some positive elements are included in the budget bill.  And they sigh as Nancy Pelosi uses part of her marathon floor speech on immigration policy to say her young grandson blew out his birthday candles and wished he could look like his friend from Guatemala.

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Brat Hails Final Tax Bill

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Republicans are celebrating Wednesday after both the House of Representatives and Senate approved major tax reform legislation, laws which supporters claim will put badly need money in the pockets of American families and giving an already improving economy an even bigger boost.

The final bill is a compromise hammered out between differing House and Senate versions that were approved separately in recent weeks.  House Freedom Caucus member Rep. Dave Brat, R-Virginia, says the new law is far better than what he expected to emerge from the congressional negotiations.

“I was fairly shocked.  Up in D.C., usually at year-end when you go into conference I usually don’t like the outcome.  But in this case, we fixed a lot of the issues.  We had a college student loan issue, a graduate student piece.  There was a Medicare piece, a small business piece.  All of those got major improvements,” said Brat.

Brats admits he wishes the the final bill would have called for three tax brackets instead of seven, but he says there’s still good news there.

“By rearranging those brackets, they ensured that way more people get a tax cut.  A single woman with a child gets over a thousand dollars back.  That’s great.  A family of four with two kids, married and making $70,000 – that’s the typical income in my district – they’re getting $2,059 back,” said Brat.

“The corporate rate goes down from 35 percent to 21 and it takes place this year.  In the Senate plan, they were going to lag that a year.  In conference, we fixed it so it goes into place.  That’s probably the most important piece,” said Brat, who says the stock market has been soaring in anticipation of this bill getting passed.

Brat says another big group of winners are young people looking for work.  He says businesses will now be in better position to hire people for good jobs.

“I think the kids I taught for 20 years are going to go out.  They’re going to have multiple job offers and go out and live the American Dream.  That’s the goal of this thing.  The kids go out and get good jobs.  That’s a virtuous cycle, so I’m proud of it,” said Brat.

And while Democrats all voted against the bill, claiming Republicans were giving big tax cuts to businesses and rich people at the expense of the middle class, Brat says the facts prove otherwise.

“The Democrats on the floor today were just apoplectic on the thing.  I’ve never seen such emotion and misinformation.  We’ve (supposedly) raised taxes on the middle class for the rich.  They just can’t overcome the basic facts,” said Brat.

Some Democrats admit that middle class families will get some tax relief but suggest the $1,000 or $2,000 in extra income only amounts to a few dollars a day and makes no tangible difference.  Brat disagrees.

“They’re making fun of giving back money to lower income folks, which I thought they would applaud.  A thousand dollars or two thousand for a family of four, that’s some big bucks.  That pays for a lot of stuff that families don’t currently have,” said Brat.

He says the emotional denunciations from the Democrats are designed to distract from their dearth of ideas.

“If you want to reject a hypothesis, you have to offer a better hypothesis and they don’t have that,” said Brat, noting the the Democrats’ budget called for $10 trillion in new taxes and $11 trillion in new spending over the next decade.

“If you raised taxes $10 trillion, you would go into a massive recession next year.  Period.  End of sentence,” said Brat.

He says eight years of Obama economic policy led to anemic economic growth.

“You saw the evidence over the last ten years.  You didn’t have growth.  Your growth was at one and a half or two (percent) tops.  Now we’re at three percent and the Federal Reserve has us at four percent next quarter,” said Brat.

While Brat admits the bill does not pay for itself and projects a $1.5 trillion deficit over ten years, he says the impact of the bill should easily lead to additional revenues to cover that amount.

“If you put the tax package together with capital incentives and lower rates and less regulation, all you have to do is come up with $150 billion a year in growth, and we’re going to blow by that with ease,” said Brat.

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Bloated Budget Limits Tax Reform Plans

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Republicans cleared a major hurdle on the march towards tax reform legislation last week when the House and Senate agreed on a budget bill, but one House member says GOP members have their heads in the sand and are limiting the scope of tax reform by scrapping their own conservative budget for a status quo approach from the Senate.

Rather than head to a House-Senate conference committee, the House agreed to vote on the Senate’s budget bill.  It passed 216-212, with 20 Republicans voting against it.  One of the them was Rep. Matt Gaetz, R-Florida.

Critics accused Gaetz and the other Republicans opposed to the budget of opposing tax cuts.  Gaetz says the explanation for his vote is simple.

“While I’m all about getting the economy moving with productive tax cuts, we’ve got to be honest with ourselves about the challenged we face with spending.  I’m going to use my position on the budget committee to try to advocate for spending cuts so that wee don’t drive up deficits while we’re working to get the economy moving again,” said Gaetz.

He says the original House budget bill was one he was proud to support.

“The House of Representatives passed a conservative budget that cuts spending by over $200 billion.  We actually laid out a plan to accomplish those spending cuts, by ensuring that able-bodied, childless adults, who can choose to work, would actually have to meet a work requirement before getting benefits from the government,” said Gaetz.

He says the Senate wanted no part of that.

“When we sent these conservative ideas over to the United States Senate, unfortunately the Senate did not agree to cut a single nickel in spending.  Instead, they merely sent a budget back that kept things the way they were and preserved the status quo,” said Gaetz.

He says that not only kicks the can down the road on fiscal responsibility but chokes off a more aggressive approach to tax reform.

“I was very disappointed that the swamp creatures over in the Senate didn’t have the guts to cut spending.  We’re going to keep fighting for spending cuts in the House.  I think that’s the way that we get the full value out of tax reform.  If businesses in our country have the capital to be able to hire more people, it will all be for naught if we don’t deal with the workforce challenges that incentivize people to stay home,” said Gaetz.

He’s also tired of the House playing second fiddle to a Senate that can’t make good on the GOP agenda.

“I didn’t run for the House of Representatives to come here and be a rubber stamp for the Senate.  I think too often in the House, we’re the Senate’s lapdog.  Look at health care. We would have passed whatever the Senate passed.  Look at the budget.  We take whatever the Senate gives us.

“My hope is when we get to tax cuts, we won’t whittle down the value of tax cuts, we won’t fail to deliver on the promises President Trump has made regarding massive tax cuts, just because the Senate cannot do both things,” said Gaetz.

Gaetz is also frustrated with the Senate catering to the whims of the most liberal Republicans who he says ran on the same agenda of cutting spending, repealing Obamacare and cutting taxes only to embrace the status quo once they came back to Washington.

He says tax reform is going to present more hurdles as senators get bombarded by special interests to keep their special provisions in the tax code.

“[Fiscal conservatives} are becoming a bit of an endangered species on Capitol Hill.  It’s indicative of the environment we live in, where every special interest wants the government to spend more money because then there’s more room in the trough for their respective snouts,” said Gaetz.

He says the bottom line is lawmakers must stop piling up debt for future generations, a problem he says ought to be blamed on both parties.

“They’re all fighting for more spending in different areas.  So we’ve got to have courageous conservatives ready to stand up and say, ‘No more.  We are not going to participate in this great wave of generational theft.  In the last 15 years, we’ve stolen more than $15 trillion from the next generation.  And they’re going to have to pay that back with interest,'” said Gaetz.

He says the mounting debt is also a burden on efforts to jump start the economy.

“The debt is a wet blanket over our economy and there is no amount of tax cuts that will ever allow us to grow to meet the obligations we’ve set forth in the absence of spending cuts,” said Gaetz.

 

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