Getting Congress on the Right Track - Spending Cuts More Effective Than Tax Increases

Today in Washington, D.C. - Oct. 24, 2011
The US Senate is not in session this week' it is Senate constituent work week.

The U.S House Today is expected to address the following bills today:

• H.R. 295 - To amend the Hydrographic Services Improvement Act of 1998 to authorize funds to acquire hydrographic data and provide hydrographic services specific to the Arctic for safe navigation, delineating the United States extended continental shelf, and the monitoring and description of coastal changes, as amended.
• H.R. 441 - Kantishna Hills Renewable Energy Act of 2011
• H.R. 818 - To direct the Secretary of the Interior to allow for prepayment of repayment contracts between the United States and the Uintah Water Conservancy District
• H.R. 1160 - McKinney Lake National Fish Hatchery Conveyance Act
• H.R. 320 - Distinguished Flying Cross National Memorial Act
• H.R. 461 - South Utah Valley Electric Conveyance Act
• H.R. 2594 - European Union Emissions Trading Scheme Prohibition Act of 2011

According to The New York Times today, “President Obama on Monday will begin a series of executive-branch actions to confront housing, education and other economic problems over the coming months, heralded by a new mantra: ‘We can’t wait’ for lawmakers to act. According to an administration official, Mr. Obama will kick off his new offensive in Las Vegas, ground zero of the housing bust, by promoting new rules for federally guaranteed mortgages so that more homeowners, those with little or no equity in their homes, can refinance and avert foreclosure.”

This isn’t the first initiative to fix housing problems President Obama has launched; most of the previous ones have gone nowhere, as The Washington Post reports today. “It was a critical plan to jump-start the economy. President Obama pledged at the beginning of his term to boost the nation’s crippled housing market and help as many as 9 million homeowners avoid losing their homes to foreclosure. Nearly three years later, it hasn’t worked out. . . . Housing prices remain near a crisis low. Millions of people are deeply indebted, owing more than their properties are worth, and many have lost their homes to foreclosure or are likely to do so. Economists increasingly say that, as a result, Americans are too scared to spend money, depriving the economy of its traditional engine of growth.”

Why another bite at the apple, then? NBC News explains, “[E]conomically, it’s unlikely that this new policy will have a big impact. But, politically, it could more successful. For starters, today’s housing announcement is part of a larger effort by the White House to begin unveiling executive-branch actions that Congress -- so far -- has been unable to pass.”

Interviewed on MSNBC this morning, retiring Rep. Dennis Cardoza (D-CA) said, “With regards to the presidents housing proposal, I’m very concerned that it’s more of the same . . . .” Indeed, it appears to be another instance of politics coming first for this administration.

With the national debt approaching $15 trillion, the recent downgrade of the United States’ credit rating, and the economy growing at anemic levels, we have reached the moment of truth. It’s time for us to live within our means. To do that, we need real cuts to spending now.

With the U.S. debt is quickly approaching $15 trillion, the debt represents more than the entire size of the U.S. economy. We would have to sell everything in the U.S. – every good and service in the entire economy – to equal this enormous number. Public Notice identifies that "Both Republicans and Democrats in Washington are addicted to spending. Both are responsible for this mess and it will take both parties working together to get out of it."

However, the Republicans have acknowledged this problem and numerous conservative Republicans as promoting the "Cutting spending by ending wasteful programs" and seeking to make "government more efficient" and making tough choices needed today to save our children from even tougher choices tomorrow." As Senate Minority Leader Mitch McConnell (R-KY) has often said, "We have a spending problem, not a revenue problem."

Alberto Alesina, a professor at Harvard and former chair of the economics department recently published a paper that said: “Spending cuts are much more effective than tax increases in stabilizing the debt and avoiding economic downturns. In fact, in several episodes, spending cuts adopted to reduce deficits have been associated with economic expansions rather than recessions.”

The Past and proposed Obama administration stimulus spending just doesn’t work. It is reckless, puts us further in debt, and makes the situation even worse – not better. Before the stimulus became law, President Obama’s senior economic advisers projected that if the stimulus became law the unemployment rate would peak at just under 8 percent. That never happened. Unemployment now sits at 9.1% and has reached 10%. Public Notice offered the following . . .

ECONOMIC SNAPSHOT
Total FY2011 deficit: $1.3 trillion
Current debt: $14.9 trillion
Debt per household: $132,591
Debt per individual: $47,785
Unemployment rate: 9.1%
Consecutive Months of Budget Deficit: 36

Real Clear Politics summary of polling data reveals that Congress' average approval for late September to mid-October was 12.8%. Their Right Track/Wrong Track numbers which covered early to mid-October showed Congress with a right track number of was 17.7% and a wrong track average was 75.8%.

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