Political News Updates by James Catledge

Summary of the Reid/Obama Debt Ceiling Increase

Since no legislative text or CBO estimate is currently available, the following summary is based on information distributed by Senator Reid’s office and is subject to change.

Debt Limit Increase:  According to Senator Reid’s office, his plan would increase the debt limit by approximately $2.7 trillion, from $14.3 trillion to $17 trillion.

$1 Trillion in Phantom Cuts from Funds that Have Not Been Requested and WILL NEVER be Spent:   The Obama/Reid plan contains more than $1 trillion in imaginary “savings” from war spending that is not written into law, has never been requested, and no one plans to ever spend.

The reason this budget deception is possible is because CBO’s current-law baseline is forced to assume that war spending over the next ten years will be the same each year as it was last year—a level based on a temporary troop surge.  However, surge level spending on the wars in Iraq and Afghanistan has already begun to wind down and will be drastically less than CBO is forced to estimate over the coming years.   According to CBO, the estimate for war spending in its baseline “incorporates the assumption that funding for war-related activities will continue at $159 billion a year (the amount provided so far for 2011, annualized) with adjustments for inflation, whereas the President’s budget includes a request for appropriations of $127 billion for such activities for 2012 and a placeholder of $50 billion a year thereafter.”  It is widely known that the cost of the ongoing wars in Iraq and Afghanistan will be significantly reduced, but CBO’s mandate forces it to assume spending of more than $1 trillion that will never leave the coffers.

The Obama/Reid plan would count expected reductions in war spending as “savings,” even though the money has not been spent and never will be spent.  As George Will once wrote, “Why, one wonders, not ‘save’ $5 trillion by proposing to spend that amount to cover the moon with yogurt and then cancelling the proposal?”  This budgeting trick would do nothing to reduce our job-destroying debt or put our country on a sustainable fiscal path.  Instead of counting savings from money that has not—and will not—be spent, the House Republican plan would make immediate and real spending cuts and establish a process to make additional cuts in the near future.  Democrats want to use a budget gimmick to make it look like they are “cutting” non-existent spending so they can avoid politically tough decision until after an election.  House Republicans have offered a plan to make real cuts in spending, place caps on spending to provide clear limits on government growth, and force Congress to bring forth a Balanced Budget Amendment.

Sen. Reid’s office has stated that “Paul Ryan’s budget also included this savings in its deficit reduction calculation.”  However, according to the House Budget Committee, “The House-passed budget cuts $6.2 trillion in spending relative to President Obama’s FY2012 budget request.  This $6.2 trillion figure assumes ZERO savings from the global war on terror relative to the President’s budget.”  In addition, Sen. Reid assumes that this would reduce interest spending by $180 billion, bringing the total amount of the made-up savings $1.18 trillion.  For more information on this $1 trillion gimmick, see the House Budget Committee website.

$1.2 Trillion in Discretionary Reductions:  According to Senator Reid’s office, the plan includes $1.2 trillion in unspecified discretionary cuts which purportedly had already been agreed to by negotiators from each Party.

$100 Billion in Mandatory Reductions:  According to Senator Reid’s office, the proposal saves:

• $40 billion by reducing fraud and abuse in mandatory programs.  This includes: Continuing Disability Reviews and SSI redeterminations, Internal Revenue Service tax enforcement, health care fraud and abuse control, and Unemployment Insurance improper payment reviews.
• $30 Billion in unidentified Fannie Mae and Freddie Mac Reforms.
• $15 Billion in unidentified Spectrum Sales.
• $10-$15 Billion in unidentified Agricultural Reforms.

Interest Savings:  According to Senator Reid’s office, the package includes $400 billion in interest savings, from $220 billion from the discretionary spending cuts and $180 billion from non-existent savings from the wars in Iraq and Afghanistan.

Joint Congressional Committee to Find Future Savings: According to Senator Reid’s office, the package will establish a joint, bipartisan committee, made up of 12 members, to present options for future deficit reduction. The committee’s recommendations will be guaranteed an up-or-down Senate vote, without amendments, by the end of 2011.

To read more click here.

The President’s regulatory machine continues to operate in overdrive despite the stated intentions of his executive orders to slow the job-crushing pace of rulemaking.  Former chief economist at the Department of Labor, Diana Furchtgott-Roth, highlighted the recent release of the Unified Agenda, a bi-annual report on federal regulatory activities from the Office of Information and Regulatory Affairs (OIRA), a division of Office of Management and Budget (OMB):

“[T]he president’s spring regulatory agenda contains 4,257 proposed rules, up from 4,225 proposed rules in the fall, and 3,943 this time last year. On the one hand, Obama asks for simplification. On the other hand, his agencies spew paperwork requirements.

Take one small set of Labor Department rules from the Office of Federal Contract Compliance governing rules on federal contractors. This small office has jurisdiction over 26 million workers, about 22 percent of the civilian workforce.

One proposed rule, titled “Affirmative Action and Nondiscrimination Obligations of Contractors and Subcontractors Regarding Protected Veterans,” takes up 67 pages in the Federal Register. Not single- or double-spaced pages, but pages with three columns of dense type.

Discrimination against veterans is already illegal, and the unemployment rate for all veterans is lower than the unemployment rate of nonveterans. But the proposed rule would require new procedures for federal contractors that would be time-consuming and costly.”

In economic terms, when business owners and managers spend time and money complying with federal paperwork burdens, the opportunity cost, or what is foregone, is market development and business expansion that create jobs.

The House passed H.Res. 72 on February 11, 2011, a resolution that would direct ten standing committees to inventory and review existing, pending, and proposed government regulations by agencies within their jurisdiction.

At a July 7, 2011 hearing of the Energy and Commerce Subcommittee on Oversight and Investigations, Rep. Marsha Blackburn (R-TN) asked Federal Communications Commission (FCC) Commissioner Robert McDowell if the FCC had to satisfy a more robust justification of its net neutrality orders using market power analysis or a cost-benefit analysis whether the Commission would have reached the same conclusion.  He responded: “Yes, because the process was outcome driven.”  Blackburn later highlighted the inherent challenge in limiting the job-destroying influence of these independent regulatory agencies, noting, “His response was an indictment of the FCC, proving that we need to move these agencies away from being driven by activists pursuing social outcomes to being grounded in regulatory humility and statutory obedience.”

http://www.gop.gov/policy-news/11/07/19/regulation-nation

After more than two and a half years of the Obama Administration’s destructive policies—including the constant threat of higher taxes, excessive regulations, and record spending—unemployment remains staggeringly high and is actually getting higher.  Today’s labor report reiterates a sad fact that Americans already know:  the economic recovery has stalled and President Obama’s economic policies have failed.

• 9.2%:  The unemployment rate for the month of June, the highest level in 2011 and the third straight month the rate has increased.  From March 2009 (the month after the stimulus passed) through June 2011, unemployment has averaged 9.5 percent.  Prior to President Obama taking office, unemployment had not been above 9 percent in 28 years.

• 29:  The number of consecutive months the unemployment rate has been at or above 8 percent—the level the President said unemployment would never reach if the stimulus passed.  Unemployment has not been above 8 percent for 29 consecutive months since the Great Depression.

• 14,087,000:  The number of unemployed Americans looking for work in the month of June, the highest number of unemployed workers of any month in 2011.  The number of unemployed eclipsed 13 million for the first time in history two months after President Obama took office and has remained above 13 million for 28 straight months.

• 44,647,861:  The number of Americans receiving food stamps, the highest number of recipients in history.  Today, 14 percent of Americans receive food stamps, an increase of 40 percent since President Obama took office.

• 39.9:  The average number of weeks it takes for job seekers to find a job—the longest average time that Americans have been unemployed since the statistic was first recorded in 1948.

• 8,552,000:  The number of Americans who are working only part-time because they cannot find full time employment.  The number of people working part time for economic reason reached 8 million for the first time in history under President Obama and has remained above 8 million for 29 consecutive months.

• 6,289,000:  The number of Americans unemployed and searching for work for more than 27 weeks.  Since President Obama took office, the number of people unemployed for more than 27 weeks has increased by 134 percent.

• 1,222,000: The number of job seekers that are new to the workforce and have yet to find a job.  The number of new workers who cannot find a job has been above 1 million for 23 straight months.

• 24.5%: The unemployment rate among job seekers between the ages of 16 and 19.  Youth unemployment has been above 24 percent for 25 months, the longest streak since the Great Depression.

• 16.2%: The unemployment rate among African Americans, an increase of 27 percent since President Obama took office.

• 11.6%: The unemployment rate among Hispanics and Latinos, an increase of 17 percent since President Obama took office.

• 14.3%:  The unemployment rate among Americans without high school diplomas, an increase of 16 percent since President Obama took office.

• 6.7%: The level at which the Obama administration claimed unemployment would be today if the “stimulus” was signed into law.

• 1,820,000: The number of net jobs the economy has shed since the Democrats’ “stimulus” was signed into law in February 2009.

• $1,161,000,000,000:  The total cost of the Democrats’ “stimulus.”  CBO estimates the cost of the bill will reach $821 billion and interest on the debt for the bill will be at least $347 billion.

• Entrepreneurship is at a 17-Year Low:  Since 2007, there has been a 23% drop in new business creation – falling to the lowest levels seen since 1994,

http://www.gop.gov/policy-news/11/07/08/june-unemployment-by-the-numbers

Regulations do have costs; often, as a country, we have to make tough decisions about whether those costs are necessary.”

—President Obama, Wall Street Journal op-ed, January 18, 2011

GOP Conference Secretary, Rep. John Carter (TX), has been tracking the burden that expensive government regulations place on the economy.  Last week, Rep. Carter’s “Reg Watch Update” included this factoid:

• “Of the 4,225 rules now in the regulatory pipeline, 224 are ‘economically significant’ meaning they wield at least $100 million in economic impact—this is an increase of 22 percent over 2009’s 184 rules.”

In order to ease the regulatory burden on the economy and to promote job creation, we will approve legislation that requires a congressional review and approval of any proposed federal government regulation that will have a significant impact on the economy.

One example of such legislation is the Regulations from the Executive in Need of Scrutiny (REINS) Act, introduced by Rep. Geoff Davis (KY).  This legislation would restore Congressional accountability for the regulatory process requiring Congress to take an up-or-down, stand-alone vote, and for the President to sign-off on all new major rules—those that have an annual economic impact of $100 million or more—before they can be enforced on the American people, job-creating small businesses, or State and local governments.

Additionally, the House passed H.Res. 72 on February 11, 2011, a resolution that would direct ten standing committees to inventory and review existing, pending, and proposed government regulations by agencies within their jurisdiction.  Committee reports identifying each committee’s activities highlighting the regulatory effect on jobs and economic growth were submitted last week.  For example, at a March 30, 2011 hearing of the Financial Services Subcommittee on Oversight investigating the budgetary and economic effects of implementing the Dodd-Frank Act, former CBO Director Douglas Holtz-Eakin testified, “additional costs will be shifted to workers in the form of fewer jobs and reduced compensation—and financial services customers—in the form of fewer free services, higher fees, and increased borrowing costs.”

http://www.gop.gov/policy-news/11/07/06/regulation-nation

Top House Republicans bashed the White House decision to release 30 million barrels of oil from the nation’s strategic stockpiles, calling it an inappropriate, political move that ignores what they call undue barriers to domestic drilling.

“Frankly, it’s pathetic that Democrats not only block domestic energy production at every turn, President Obama is now drawing down on our nation’s ‘strategic’ oil reserve which is intended for national emergencies, not as a political tool when a President is feeling heat over high gas prices,” said House Majority Whip Kevin McCarthy (R-Calif.) in a statement.

The White House on Thursday announced that the Energy Department will release 30 million barrels of oil from the Strategic Petroleum Reserve. It’s part of a broader international plan to bring a total of 60 million more barrels from strategic reserves into the market over 30 days to offset supply disruptions from unrest in the Middle East.

But McCarthy and the top Republicans on two House committees — Natural Resources, and Energy and Commerce — took aim at White House policies that they say are locking up resources offshore and elsewhere.

“The Strategic Petroleum Reserve is intended for situations when there’s a dramatic supply shut down, not to achieve short-term political gain,” said Natural Resources Committee Chairman Doc Hastings (R-Wash.) in a statement.

“However, this is a clear admission from the Obama administration that increasing domestic oil supplies will help lower costs. Unfortunately for the past two and a half years, the Obama administration has consistently blocked efforts to expand American energy production and actively placed moratoriums on domestic development,” he said.

Energy and Commerce Committee Chairman Fred Upton (R-Mich.) similarly said the reserve is meant for emergencies, not “political convenience.”

“The bottom line is this — it’s hard to believe that the administration would rather tap into our emergency supply than support legislation to produce and develop North American supplies, which will create American jobs,” he said.

The House has passed a series of measures in recent weeks that would mandate faster action on offshore drilling permits and require the opening of vast new areas to drilling.

The White House has criticized the bills while touting its own steps to speed up U.S. production.

http://www.gop.gov/wtas/11/06/23/the-hill-senior-republicans-bash