Wednesday, February 27, 2013

The Truth About Sequestration

Spending today is 13% higher than it was in just 2008. But the tax revenue is down 9.3% despite all recent tax increases. Why – because millions of people are out of work.

The key to getting the revenue back up – is to get millions of jobs back into our economy.

President Obama’s comments about the sequester are plainly untrue.

Bogus Line # 1
President Obama claims that unless Congress raises taxes to undo the imminent automatic budget cuts known as sequestration, the Transportation Security Administration (TSA) would be forced to reduce security measures, leaving travelers and the airways vulnerable and increasing wait times at airports.

Bogus Line #2
The Obama administration would have you believe it’s coming from “vital” social programs. That grandma and grandpa will not receive their Social Security checks or be able to get an appointment with their Medicare Participating doctor.

Here is the truth…
Sequestration leaves the largest component of federal spending—entitlements—nearly untouched. Instead, it falls most heavily on national defense, with 50 percent of sequestration cuts impacting national security. Thirty-five percent would impact non-defense discretionary spending. Less than 15 percent would fall on mandatory spending, which consumes 62 percent of the federal budget.

Democrats took over spending in January 2007 – Federal Spending by Year

2007 - $2.96 Trillion
2008 - $3.168 Trillion
2009 - $3.696 Trillion
2010 - $3.590 Trillion
2011 - $3.666 Trillion
2012 - $3.563 Trillion


Source: Office of Management and Budget, Budget of the U.S. Government, FY 2013: Historical Tables, Tables 8.1 and 1.1, February 2012,
(accessed August 8, 2012), and
Congressional Budget Office, An Update to the Budget and Economic Outlook:
Fiscal Years 2012 to 2022, August - 2012, Table 1–1,
(accessed August 23, 2012).

The sequester won’t lay off teachers

President Obama has also claimed that our nation’s children will be at risk of a poor education if the cuts go through:

“our ability to teach our kids the skills they’ll need for the jobs of the future would be put at risk…70,000 young children would be kicked off Head Start, 10,000 teacher jobs would be put at risk, and funding for up to 7,200 special education teachers, aides, and staff could be cut.”

No federal education program operated by the Department of Education directly funds teacher salaries—this is a state and local responsibility. Further, there are a multitude of ineffective and duplicative programs that could—and should—be cut, saving billions of dollars annually and restoring state and local education decision-making authority… (Education:No Room for Sequestration Cuts? – by T. Elliot Gaiser and Jason Lloyd)

The Truth
Here is a graph that is a clear visual of how absolutely minimal the sequestration cuts are. The graph also proves the case that we are not cutting spending from earlier levels. All the sequestration does is ‘slow the growth’ of spending. But in no way does cut spending the way we must in order to stop our nation from economic catastrophe.

I say – let the cuts happen! It high-time the Federal Government do what every other state or for that matter family must do – LIVE WITHIN ITS MEANS.

Resources & Links

The Unaffordable Care Act

The latest report from the GAO confirms not only what Republicans claimed would happen as a result of Obamacare; but a vast majority of the Healthcare Finance professionals I work with had said the very same thing.

Perhaps it would have been better if the President brought the experts to the table when drafting the plan – but he did not.

Once again – let me state – I am not clairvoyant; I merely have common sense and understand basic math.

The GAO (United States Government Accountability Office) released a report this week titled:

The Government Accountability Office (GAO) released a report Tuesday showing that if cost-control measures are not maintained the Affordable Care Act could increase the deficit by $6.2 trillion, or .7 percent of GDP, over the next 75 years. The report shows President Barack Obama’s comments that Obamacare would “not add a dime to the long term debt" - are false.

The result of this brand new report confirmed what Republicans were saying about the bill.

The report is the first to look at the long-term effects of the Affordable Care Act beyond a ten-year period.

The Congressional Budget Office (CBO) previously had projected the cost of Obamacare over a ten-year period and found it would save more than $100 billion if certain policies remained the same—policies that CBO director Doug Elmendorf said would be hard to maintain.

“CBO’s cost estimate noted that the legislation maintains and puts into effect a number of policies that might be difficult to sustain over a long period of time,” Elmendorf said at the time.

The new GAO study ran two projections: one in which those cost reduction policies were maintained and another projection in which Congress phased out the reduction policies put into Obamacare.

“The long-term fiscal outlook depends largely on whether elements in PPACA designed to control cost growth are sustained,” the report said. Under either scenario “the federal budget remains on an unsustainable path.”

Nancy Pelosi called Obamacare a money saver in 2011 and warned that repealing Obamacare would cause “very serious violence to the national debt and deficit.”

The Senate Committee on Finance features a webpage saying Obamacare “reduces the deficit by more than a trillion dollars in the coming decades.”

“I will not sign it if it adds one dime to the deficit, now or in the future, period,” Obama said in 2009 when he signed the ACA.

The claims President Obama made were false then and they are still false now.

Resources & Links

The Affordable Care Act: More than $800 Billion in Tax Cuts

Sunday, February 24, 2013

The President Is Raging Against a Budget Crisis He Created!!!

As I finished the video and reviewing the transcript yesterday, I literally had to go take a walk and cool off. The Presidents statement is so packed with a mix of misrepresentations and outright lies – its mind bending to me that the American people elected such a manipulative liar as their leader.

Not only does he attack Republicans and blame them for the sequester that HE DEMANDED for and CREATED VIA an EXECTUVE ORDER in earlier months – but the Republicans came to him over and over with plans to avoid this and he NEVER worked with them at all. In his weekly address he carries on and on about police officers, fireman, teachers, etc.  – not getting paid and not being able to do their jobs if the cuts happen. Police, firefighters and teachers have their salaries paid by local city, county and state tax revenues – so this claim on the part of the President and flatly false. He is using rhetoric and speech that can only serve one purpose – to strike fear in the hearts of our citizens and fool them into believing it was the evil Republicans that did this. So this is no longer simply – misdirection’s or misinformation – this outright lies on the part of our President. That is shameful.

How did the country find itself in this budget mess and economic crisis to begin with?

Here are the historical facts – documented, web-linked an indisputable. Every claim I have am making here and have made in previous posts is documented and backed up with facts. Each claim in this post is either linked to web-based research and/or provided in the Resources & Links area on the bottom of this post.

First – we did not reach the economic crisis quickly – it started in the 1990’s. No one was making bad home loans to unqualified people until Democrats came along and threatened to drag banks into court and have them fined. Some Democrats even branded the bankers as racists if they didn't go along with the left's Affirmative Action lending policies...all while federally insuring their losses. Even the New York Times warned in the late 1990s that Democrats continuing to force banks into lowering their standards would lead to this exact economic catastrophe.

Obama himself is even on the record personally helping sue one lender (Citibank) into lowering its lending standards to include people from extremely poor and unstable areas, which even one of the left's favorite "fact-checkers," Snopes, admits (while pretending to 'set the record straight').

But non-Fox media have spent years deliberately and relentlessly inoculating people against the facts, training them to mindlessly blame Bush for being in charge when it was Democrats in charge of policy and spending - and their policies destroyed the economy. So here we sit, to this day, still watching Obama under his own presidency; excuse and shrug off endless economic failures, illegal government takeovers, and a rush to national bankruptcy with zero accountability.

President Bush went to Congress repeatedly for years warning them that Fannie Mae and Freddie Mac were going to destroy the economy (17 times in 2008 alone). Democrats continuously called him names, ignored him, and shut down his proposals along party lines and continued raiding the institutions for campaign contributions on their way down. (Please remember that laws, regulations, budgets and spending are controlled by The Legislative Branch – not the President. Through much of the late 90’s and from 2007 to 2010 the balance of power was with the Democrats).

John McCain also co-sponsored urgently critical reforms that would have prevented the housing market collapse, but Democrats shut that down as well, along party lines, and even openly ridiculed anyone who suggested reforms were protect their taxpayer-funded campaign contributions as the economy raced uncontrollably toward the financial cliff.

During the summer of 2011, as Washington worked toward a plan to reduce the deficit to allow for an increase in the federal debt limit, President Obama and John Boehner very nearly came to a historic agreement. Unfortunately the deal fell apart at the last minute when the President demanded an extra $400 billion in new tax revenue—50% more than we had shaken hands on just days before.

So he (the President) sabotaged the budget plan. Who went back on his word? President Obama did! As a matter of fact; if you follow the events in chronological order – you see a pattern emerge. The pattern is simply this – President Obama for the sake of political posturing and in order to ‘appear’ to be tough on Republicans – never intended to work this thing out at all. There is no other conclusion to be drawn now that we can look back at what has transpired and more specifically the President’s behavior.

Here are the events that lead to the so-called ‘Sequester’ & the ‘Fiscal Cliff’ - In time order:

The National Commission on Fiscal Responsibility and Reform – YouTube; (often called Bowles-Simpson Commission) - from the names of co-chairs Alan Simpson and Erskine Bowles; or NCFRR. This is a Presidential Commission created in 2010 by President Barack Obama to identify …policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run. The commission first met on April 27, 2010. A report was released on December 1, 2010, and although the Commission was supported by over 60% of the members (11 out of 18), and an equal number of Democrats and Republicans – President Obama turned down every one of their suggestions and dismissed their entire plan. (Note in the YouTube video link above – the senate had been under continual control by Democrats. In his Jan 2010 SOTU – Obama said he would enact the Fiscal Commission by Executive Order because the Senate blocked his bill/proposal. The President cannot tell us now that the Debt Commission was not his idea – he ordered it by Executive Order).

I will remind you that Bowles is a long time Democrat - Bowles served as Clinton's White House Deputy Chief of Staff, in the first term of the Clinton Administration. He was the guy that helped President Clinton to work with Republicans in the 1990’s – to track back to the middle on tax and fiscal policies – which stopped a short term recession by bringing us back in line with Reagan's policies of the 1980’s.

Next - President Obama and John Boehner come to an agreement. The very next day, the President breaks the agreement and derails the entire process.

Immediately, John Boehner reaches out to Harry Reid and the Senate to forge a new plan; which they do. Again, President Obama refuses to work with them. Why – again political posturing – he did not want to face a national debate on the debt-limit increase just before his re-election. (Is that leadership or politics? Rhetorical question – it’s not leadership! He was just looking out for himself; not the nation).

NOTE – here is a link to a video of Erskine Bowles addressing an audience of students and professionals about President Obama’s Debt Commission and his refusal to follow their suggestions and plans. His address was in November 2011 at Columbia Business School.

See minutes 6:11 – 10:55 of this video link

It was a disappointing decision by the president, but with just days until a breach of the debt limit, a solution was still required—and fast. John Boehner immediately got together with Senate leaders Harry Reid and Mitch McConnell to forge a bipartisan congressional plan. It would be called the Budget Control Act.

The plan called for immediate caps on discretionary spending (to save $917 billion) and the creation of a special House-Senate "super committee" to find an additional $1.2 trillion in savings. The deal also included a simple but powerful mechanism to ensure that the committee met its deficit-reduction target: If it didn't, the debt limit would not be increased again in a few months.

But President Obama was determined not to face another debt-limit increase before his re-election campaign (it would appear nearly every considerations by our President is driven by posturing and politics – to hell with what we really need – which is a leader). Having just blown up one deal, the president scuttled this bipartisan, bicameral agreement. His solution? A sequester.

With the debt limit set to be hit in a matter of hours, Republicans and Democrats in Congress reluctantly accepted the President's demand for the sequester, and a revised version of the Budget Control Act was passed on a bipartisan basis.

Ultimately, the super committee failed to find an agreement, despite Republicans offering a balanced mix of spending cuts and new revenue through tax reform. As a result, the president's sequester is now imminent.

Every crisis we have faced under President Obama was either allowed to happen (could have been prevented); or manufactured so he could use it for political gamesmanship. He is not a leader- he is a partisan hack; more concerned with power and ideology than doing anything to help the American People. God help us!

Resources & Links