U.S. Senate Budget Republican Recap 9/16/11
“Keynesian elites in Washington continue to insist what common sense denies. They tell us that even more spending and borrowing is the answer. But when you’ve reached 100 percent of GDP, to try this failed experiment yet again is to put the whole country at risk. We’ve seen where this road leads and it leads the way of Greece. Why should we continue to trust the ‘masters of the universe’ who tell us that we can spend and borrow our way to prosperity? They’ve been wrong from the beginning.” - Sen Jeff Sessions’ opening statement at this week’s Budget Committee hearing (the first scheduled by Senate Democrats in six months)
Compiled by Stephen Miller, Communications Director, US Senate Budget Committee:
‘Wrong From The Beginning’: Sessions Questions Economic Predictions Over Stimulus
The Hill: “Jack Lew, director of the Office of Management and Budget (OMB), said Obama’s entire bill, which the administration is sending to Congress Monday evening, can be paid for by raising taxes on the wealthy and business… The White House dug in on its refusal to say how many jobs the package would create, pointing instead to an estimate from Moody’s that said the bill would create about 1.9 million jobs.”
Ranking Member Sessions drew attention to the fact that Moody’s and the White House predicted dramatically higher economic growth rates than anemic GDP growth experienced:“We may have raised our legal debt limit but we have breached our economic debt limit. America’s $14.5 trillion gross debt is now 100 percent of GDP. A prominent study from economists Rogoff and Reinhart—praised by Treasury Secretary Geithner as ‘excellent’—shows that when a nation’s gross debt reaches 90 percent of GDP it loses, on average, a percentage point or more in GDP growth each year. Our debt is depressing growth to unexpected levels and costing us millions of jobs.
In 2009, the Administration claimed its stimulus would prevent unemployment from rising above 8 percent. After the bill became law, however, unemployment rose to 10 percent and remains at 9.1 percent today.
One of our witnesses today, Dr. Zandi, in testimony before this committee about one year ago, stated, ‘The next six to twelve months will be uncomfortable as the economy struggles to gain traction, but a full-fledged expansion should take hold by this time next year.’
In January of this year, CBO projected economic growth for 2011 would be 3.1 percent. In February, OMB projected 2011 growth would be 2.3 percent. Yet the economy experienced just .4 percent growth in the first quarter of this year, followed by 1 percent growth in the second quarter.
Indeed, Dr. Zandi, who has been one of the most prominent advocates of spending and borrowing as the way to boost the economy, and who has been a close advisor to the Democratic Senate majority, has seen his projections prove to be dramatically inaccurate. His Moody’s Analytics in January of this year predicted we would have an astonishing 3.9 percent growth for this year, but have this month drastically lowered their growth estimates to 1.6 percent. Forgive me if those grim numbers do not give me confidence that the newly proposed stimulus plan will produce the results promised.” Labor Dept Reveals Billions In Improper Unemployment Payments Wall Street Journal:“Nearly $19 billion in state unemployment benefits were paid in error during the three years that ended in June, new Labor Department data show.
The amount represents more than 10% of the $180 billion in jobless benefits paid nationwide during the period. (See a sortable chart of each states’ overpayments) The tally covers state programs, which offer benefits for up to 26 weeks, from July 2008 to June 2011. Layers of federal programs that help provide benefits for up to 99 weeks weren’t included.
The figures were released Wednesday as the Obama administration promotes its bid to reduce waste at federal agencies. The federal government foots the bill for administering the programs, and states are supposed to pay for the benefits. Many states exhausted their unemployment insurance trust funds during the long recession and slow recovery, prompting them to borrow from the federal government to replenish their funds.
Improper payments most often occur when recipients claim benefits even though they have returned to work; employers or their administrators don’t submit timely or accurate information about worker separations; or recipients don’t correctly register with a state’s employment-service organization.
The Labor Department launched a plan to crack down on the improper payments, targeting Virginia, Indiana, Colorado, Washington, Louisiana and Arizona in particular for their high error rates. Those states will undergo additional monitoring and technical assistance until their error rates dip below 10% and remain there for at least six months, according to the Labor Department.” Key Fiscal Details Missing From Stimulus II ABC News writes:“As Obama touts the American Jobs Act as a ‘fully paid for’ panacea for high unemployment and sluggish economic growth, his critics insist he’s glossing over the fine print when it comes to adding to the deficit…‘Given the depth of the economic crisis we now face … the lack of fiscal detail that has been provided to Congress is both disappointing and irresponsible,’ wrote Sen. Jeff Sessions, the top Republican on the Budget Committee, in a letter to Office of Management and Budget director Jack Lew earlier this week…
The legislative package sent to Capitol Hill Monday does not detail any of the administration’s cost estimates, nor does it include projections for revenue to be raised from spending offsets included in the bill. Officials have only outlined their estimates in broad strokes during public statements and briefings with the press… Administration officials acknowledge the president’s plan would mean increased deficits in the first few years after it was enacted but insist the trend would be reversed more than a decade later...
White House says even [interest] costs would be offset and paid for… The details of those projections, however, have not been released for public scrutiny.” SEN. CORNYN OPPOSES SECOND STIMULUS
SEN. GRAHAM DISCUSSES PRESIDENT’S JOBS BILL
SEN. JOHNSON RECOMMENDS $1.4 TRILLION IN SPENDING CUTS
Broken Promises After analyzing the legislative text of the plan and discovering that key fiscal details were missing—details that were promised as part of the plan’s submission—Ranking Member Sessions sent a letter to OMB Director Lew requesting that additional information be provided at once. Sen. Sessions wrote:“Following the president’s address, White House Press Secretary Jay Carney declared that ‘the president will submit a bill early next week, the American Jobs Act, which will specify how he proposes paying for the American Jobs Act.’ Meanwhile, the president urged on Monday: ‘No delays. I’m sending this bill to Congress today, and they ought to pass it immediately.’
When we received a copy of the legislation yesterday, we were expecting the Office of Management and Budget—which enjoys a five hundred person staff—to provide a precise and detailed estimate of the fiscal impact of the president’s proposal. But no such information was provided.
Perhaps even more troubling, however, is that despite the emphatic promise that we would learn yesterday how the bill would be offset, this information is missing too…
OMB must provide to the Congress and the American people, at a minimum, the basic information that demonstrates in detail, as promised, how this bill will be funded. This information should be provided without delay. Specifically:-- A table showing the expected budgetary impact, by specific policy, of the legislation on an annual basis for fiscal years 2011 through 2021 (the period covered by the president’s most recent budget submission).
-- A schedule showing the added interest that the federal government would have to pay on an annual basis and the resulting change in the federal debt (because it is unlikely that the specific offsets contained in the legislation would equal the effect on the budget of the specific proposals intended to encourage economic growth).
-- A table illustrating projected changes to the deficit for each of the next ten fiscal years as a result of this legislation. (The bill would presumably create a sudden increase in near-term borrowing, but the offsets are stretched out over a decade. The debt limit agreement saves $7 billion in budget authority for next year’s annual appropriations; this bill, regardless of the offsets, would wipe those savings out.)” Experts Agree: Pursue Policies During Thursday's hearing in the Senate Budget Committee (its first in 182 days), Ranking Member Sessions emphasized the economic danger of continuing to increase the deficit, and asked all three economists testifying—two selected by Democrats, one by Republicans—whether they agreed that it would be wise to pursue policies that create jobs and do not add to the debt. Sessions cited three policies in particular: producing more American energy, reducing costly bureaucratic regulations, and instituting growth-oriented tax reform. All three witnesses endorsed the wisdom of such an approach. The full exchange may be viewed here.
In his opening statement (which can be viewed in its entirety here), Sessions remarked:
“The fact that our nation continues to operate without a budget plan lies at the heart of our current economic crisis. America desperately needs the confidence and predictably that only a concrete fiscal plan can provide. The budget process isn’t broken—Washington has simply abandoned it…
Now, in the grips of crisis, we are told the president has a new plan to revive the economy. We received a proposal on Monday, with no fiscal details, that just offers more of the same. It calls for a sudden increase in the deficit with a promise to pay for it at a later date. In other words: more spending, taxing, and borrowing.
President Obama still doesn’t get it: the debt is destroying jobs today. Increasing it only digs us into a deeper hole.
Keynesian elites in Washington continue to insist what common sense denies. They tell us that even more spending and borrowing is the answer. But when you’ve reached 100 percent of GDP, to try this failed experiment yet again is to put the whole country at risk. We’ve seen where this road leads and it leads the way of Greece.
Why should we continue to trust the ‘masters of the universe’ who tell us that we can spend and borrow our way to prosperity? They’ve been wrong from the beginning…
More taxing, spending, and borrowing is not the way forward. We need policies that improve conditions for job creation and that stop adding to the debt…
In a time of crisis, confusion, and fear, we should return to basic, core principles—the tried and true. Pay your debts. Spend within your means. Live according to a budget. Remove the barriers of ineffective bureaucracy. Allow the private sector to flourish. If we take these steps—if we rely on the good sense and wisdom of the American people—we will see a resurgence of growth, jobs, and opportunity. There is no quick fix or gimmick that will get us there. The road ahead is not easy. But through diligence and common sense, we can put the country on a sound, prosperous path and build a better future for Americans today and for our children tomorrow.” SEN.ENZI: ADMINISTRATION MUST STOP GETTING IN WAY OF JOB CREATION
SEN. THUNE IS WILLING TO “MEND, IMPROVE, MODIFY” PRESIDENT’S JOBS PLAN
Sessions Explains Why FEMA Bill Requires Scrutiny
On Thursday, Senator Sessions spoke on the Senate floor regarding Majority Leader Reid’s attempt to speed through the Senate, without proper examination, the FEMA bill that would borrow nearly $2 billion more than the president’s own disaster relief request. Sessions remarked in part:“There is no doubt this country has sustained a series of disasters that will require federal support and funding. We have seen them in Alabama, my home State, where we had the worst series of tornadoes in history… We have had floods. We have had fires and droughts around the country… So it is incumbent upon us in Congress to wrestle with that and to try to figure out what should be done…
You know they say: ‘That is not much money, just $2 billion. We spend a lot more money than that around here on all kinds of things, and we shouldn't worry about it, Sessions. You are just slowing down the emergency bill. It has to go through right now…’
I suggest that this kind of rapid spending – emotional, political movement of the money through this body – is why this country has gotten into financial trouble. We just increase the price tag for a bill [by] $2 billion and rush it through and attack anyone who has the gumption to stand up like Senator Tom Coburn and raise some real questions about it. How much of this can we pay for? Can we pay for it all? We probably could. We probably should. Or pay for part of it so it’s not borrowed? …
I say responsible, senatorial management requires us to examine the legislation. And when we have a bill that [spends] about 40 percent more than the president asked for, maybe that ought to throw up a red flag around here.” Add’l Committee Activity
SEN. GRASSLEY ANWERS QUESTIONS ABOUT SOCIAL SECURITY
SEN. CRAPO QUESTIONS PANEL OF EXPERTS AT TAX REFORM HEARING
SEN. PORTMAN’S OPENING STATEMENT AT DEFICIT REDUCTION HEARING
SEN. TOOMEY INTRODUCES BILL TO HELP BUSINESSES RAISE CAPITAL
SEN. AYOTTE JOINS BIPARTISAN GROUP TO ENCOURAGE SUPERCOMMITTEE TO “GO BIG”
Tags: US Senate, Budget Committee, Jeff Sessions, To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service. Thanks!
Compiled by Stephen Miller, Communications Director, US Senate Budget Committee:
‘Wrong From The Beginning’: Sessions Questions Economic Predictions Over Stimulus
The Hill: “Jack Lew, director of the Office of Management and Budget (OMB), said Obama’s entire bill, which the administration is sending to Congress Monday evening, can be paid for by raising taxes on the wealthy and business… The White House dug in on its refusal to say how many jobs the package would create, pointing instead to an estimate from Moody’s that said the bill would create about 1.9 million jobs.”
Ranking Member Sessions drew attention to the fact that Moody’s and the White House predicted dramatically higher economic growth rates than anemic GDP growth experienced:
In 2009, the Administration claimed its stimulus would prevent unemployment from rising above 8 percent. After the bill became law, however, unemployment rose to 10 percent and remains at 9.1 percent today.
One of our witnesses today, Dr. Zandi, in testimony before this committee about one year ago, stated, ‘The next six to twelve months will be uncomfortable as the economy struggles to gain traction, but a full-fledged expansion should take hold by this time next year.’
In January of this year, CBO projected economic growth for 2011 would be 3.1 percent. In February, OMB projected 2011 growth would be 2.3 percent. Yet the economy experienced just .4 percent growth in the first quarter of this year, followed by 1 percent growth in the second quarter.
Indeed, Dr. Zandi, who has been one of the most prominent advocates of spending and borrowing as the way to boost the economy, and who has been a close advisor to the Democratic Senate majority, has seen his projections prove to be dramatically inaccurate. His Moody’s Analytics in January of this year predicted we would have an astonishing 3.9 percent growth for this year, but have this month drastically lowered their growth estimates to 1.6 percent. Forgive me if those grim numbers do not give me confidence that the newly proposed stimulus plan will produce the results promised.”
The amount represents more than 10% of the $180 billion in jobless benefits paid nationwide during the period. (See a sortable chart of each states’ overpayments) The tally covers state programs, which offer benefits for up to 26 weeks, from July 2008 to June 2011. Layers of federal programs that help provide benefits for up to 99 weeks weren’t included.
The figures were released Wednesday as the Obama administration promotes its bid to reduce waste at federal agencies. The federal government foots the bill for administering the programs, and states are supposed to pay for the benefits. Many states exhausted their unemployment insurance trust funds during the long recession and slow recovery, prompting them to borrow from the federal government to replenish their funds.
Improper payments most often occur when recipients claim benefits even though they have returned to work; employers or their administrators don’t submit timely or accurate information about worker separations; or recipients don’t correctly register with a state’s employment-service organization.
The Labor Department launched a plan to crack down on the improper payments, targeting Virginia, Indiana, Colorado, Washington, Louisiana and Arizona in particular for their high error rates. Those states will undergo additional monitoring and technical assistance until their error rates dip below 10% and remain there for at least six months, according to the Labor Department.”
The legislative package sent to Capitol Hill Monday does not detail any of the administration’s cost estimates, nor does it include projections for revenue to be raised from spending offsets included in the bill. Officials have only outlined their estimates in broad strokes during public statements and briefings with the press… Administration officials acknowledge the president’s plan would mean increased deficits in the first few years after it was enacted but insist the trend would be reversed more than a decade later...
White House says even [interest] costs would be offset and paid for… The details of those projections, however, have not been released for public scrutiny.”
SEN. GRAHAM DISCUSSES PRESIDENT’S JOBS BILL
SEN. JOHNSON RECOMMENDS $1.4 TRILLION IN SPENDING CUTS
Broken Promises After analyzing the legislative text of the plan and discovering that key fiscal details were missing—details that were promised as part of the plan’s submission—Ranking Member Sessions sent a letter to OMB Director Lew requesting that additional information be provided at once. Sen. Sessions wrote:
When we received a copy of the legislation yesterday, we were expecting the Office of Management and Budget—which enjoys a five hundred person staff—to provide a precise and detailed estimate of the fiscal impact of the president’s proposal. But no such information was provided.
Perhaps even more troubling, however, is that despite the emphatic promise that we would learn yesterday how the bill would be offset, this information is missing too…
OMB must provide to the Congress and the American people, at a minimum, the basic information that demonstrates in detail, as promised, how this bill will be funded. This information should be provided without delay. Specifically:
-- A schedule showing the added interest that the federal government would have to pay on an annual basis and the resulting change in the federal debt (because it is unlikely that the specific offsets contained in the legislation would equal the effect on the budget of the specific proposals intended to encourage economic growth).
-- A table illustrating projected changes to the deficit for each of the next ten fiscal years as a result of this legislation. (The bill would presumably create a sudden increase in near-term borrowing, but the offsets are stretched out over a decade. The debt limit agreement saves $7 billion in budget authority for next year’s annual appropriations; this bill, regardless of the offsets, would wipe those savings out.)”
In his opening statement (which can be viewed in its entirety here), Sessions remarked:
Now, in the grips of crisis, we are told the president has a new plan to revive the economy. We received a proposal on Monday, with no fiscal details, that just offers more of the same. It calls for a sudden increase in the deficit with a promise to pay for it at a later date. In other words: more spending, taxing, and borrowing.
President Obama still doesn’t get it: the debt is destroying jobs today. Increasing it only digs us into a deeper hole.
Keynesian elites in Washington continue to insist what common sense denies. They tell us that even more spending and borrowing is the answer. But when you’ve reached 100 percent of GDP, to try this failed experiment yet again is to put the whole country at risk. We’ve seen where this road leads and it leads the way of Greece.
Why should we continue to trust the ‘masters of the universe’ who tell us that we can spend and borrow our way to prosperity? They’ve been wrong from the beginning…
More taxing, spending, and borrowing is not the way forward. We need policies that improve conditions for job creation and that stop adding to the debt…
In a time of crisis, confusion, and fear, we should return to basic, core principles—the tried and true. Pay your debts. Spend within your means. Live according to a budget. Remove the barriers of ineffective bureaucracy. Allow the private sector to flourish. If we take these steps—if we rely on the good sense and wisdom of the American people—we will see a resurgence of growth, jobs, and opportunity. There is no quick fix or gimmick that will get us there. The road ahead is not easy. But through diligence and common sense, we can put the country on a sound, prosperous path and build a better future for Americans today and for our children tomorrow.”
SEN. THUNE IS WILLING TO “MEND, IMPROVE, MODIFY” PRESIDENT’S JOBS PLAN
Sessions Explains Why FEMA Bill Requires Scrutiny
On Thursday, Senator Sessions spoke on the Senate floor regarding Majority Leader Reid’s attempt to speed through the Senate, without proper examination, the FEMA bill that would borrow nearly $2 billion more than the president’s own disaster relief request. Sessions remarked in part:
You know they say: ‘That is not much money, just $2 billion. We spend a lot more money than that around here on all kinds of things, and we shouldn't worry about it, Sessions. You are just slowing down the emergency bill. It has to go through right now…’
I suggest that this kind of rapid spending – emotional, political movement of the money through this body – is why this country has gotten into financial trouble. We just increase the price tag for a bill [by] $2 billion and rush it through and attack anyone who has the gumption to stand up like Senator Tom Coburn and raise some real questions about it. How much of this can we pay for? Can we pay for it all? We probably could. We probably should. Or pay for part of it so it’s not borrowed? …
I say responsible, senatorial management requires us to examine the legislation. And when we have a bill that [spends] about 40 percent more than the president asked for, maybe that ought to throw up a red flag around here.”
SEN. GRASSLEY ANWERS QUESTIONS ABOUT SOCIAL SECURITY
SEN. CRAPO QUESTIONS PANEL OF EXPERTS AT TAX REFORM HEARING
SEN. PORTMAN’S OPENING STATEMENT AT DEFICIT REDUCTION HEARING
SEN. TOOMEY INTRODUCES BILL TO HELP BUSINESSES RAISE CAPITAL
SEN. AYOTTE JOINS BIPARTISAN GROUP TO ENCOURAGE SUPERCOMMITTEE TO “GO BIG”
Tags: US Senate, Budget Committee, Jeff Sessions, To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service. Thanks!
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