American Elephants

Straightforward Question. Acting Budget Director Unprepared. by The Elephant's Child

You don’t want to tackle Senator Jeff Sessions (R-AL), ranking member of the Budget Committee, if you don’t have your numbers on the tip of your tongue. It was a fairly major number that Senator Sessions asked for from Acting Budget Director Jeff Ziets. How much does this budget raise the deficit? When you get used to putting numbers in their most pleasing and engaging form, in order to confuse the people about what you are doing, you can be unprepared for plain old straight talk. Mr. Ziets was unprepared, and embarrassingly condescending.

The National Debt is rapidly approaching $17 Trillion. Could we please manage to take it seriously, Mr. Ziets?

Obama’s Budget Plan: Unserious. Irresponsible. by The Elephant's Child

The federal government has a budget process. It begins with the President’s budget which is a request to Congress for the funds to run the government and provide for the common defense. Then the Senate and the House of Representatives come up with budgets in response to the requests from the executive.

The President has finally released his budget two months late. The Senate finally produced a laughable budget after refusing to write a budget for four years, and the House has had time to write several versions, and pass one that gradually begins to reduce our towering debt.

The president’s budget isn’t a balanced plan to get the debt crisis under control. It is a  genuflection to complete fiscal irresponsibility. Investors’ review of the budget finds it:

  • Boosts spending and deficits over the next two years. Obama’s own budget numbers show that he wants to hike spending over the next two years by $247 billion above the “baseline”, which would mean $157 billion even after his new taxes. He claims he will get tough on spending and deficits — later. Every budget expert knows boosting spending today makes it harder to cut later.
  • Vastly exaggerates spending cuts. Smoke and mirrors department. He inflates the claimed savings by first canceling the automatic sequester spending cuts he previously signed into law, then reclaims them as new savings, and by adding in cuts in interest payments on the debt.  The press has reported that his budget would cut spending by a total of $1.2 trillion over the next decade, but his own numbers show he actually cuts it by a mere $186 billion.
  • Relies almost entirely on tax hikes. Obama’s budget plan would increase revenues by $1.14 trillion over the next decade. His budget proposes $6 in new taxes for every $1 in spending cuts. He is obsessed with spending.
  • Cuts the deficit less than claimed. “My budget will reduce our deficits by nearly another $2 trillion.” Obama said Wednesday. But the budget shows total deficit reduction of just $1.4 trillion, and they start rising again after 2018.
  • Creates a new entitlement with no way to pay for it. Obama claims that he can finance a new $76 billion preschool program for the nation’s four-year-olds by hiking tobacco taxes again. The last time he hiked tobacco taxes to pay for an expansion of Medicaid, revenues came in $2.2 billion less than expected.
  • It boosts taxes on the middle class, something he has promised not to do. He plans to change the government’s “consumer price index” in a way that would lower the official inflation rate. He is selling this as a way to cut the Social Security annual ‘cost of living” adjustments which are based on the CPI. But the CPI also applies to annual tax bracket adjustments, a sneaky way of hiking taxes by $124 billion, mainly on the middle class over the next decade due to bracket creep.

In his remarks upon releasing his overdue budget, President Obama claimed blithely “The numbers work. There’s not a lot of smoke and mirrors in here.”  If you took the smoke and mirrors out — there would be nothing left, nothing at all.



Is Anybody In The Federal Government Accountable? by The Elephant's Child

Accountability. Good word. You have to be responsible for your own actions. Hard to believe, but we have a Government Accountability Office (GAO) that is trying to make our government accountable. In theory each person and each department will stand up and say, yes I’m in charge of that and I screwed up. Uh huh. Not so’s you would notice. But that’s why we have the GAO, to keep track of duplication and waste. The Inspectors General are part of this office.

So we had, as you know, The Sequester. You surely know that President Obama has gone to great efforts to make sure you know that there is a sequester and the Republicans are entirely responsible. (Did I just explain accountability? The Sequester originated in the Oval Office, and was entirely Obama’s idea and attempt to trap the Republicans into giving him more money to spend). The President is not accountable, nothing is ever his fault, and his efforts to make the public feel the pain of every last cent of the $85 billion in sequester cuts aren’t working. People are supposed to freak out and demand that Congress give the president the money he wants so he can spend it.

The Government Accountability Office (GAO)  reports they have found 162 areas where services are duplicated or money is being wasted in the federal government. The annual cost of these programs is estimated at roughly $250 billion— that’s three times the amount involved in the sequester, which is only a reduction in the increases for next year, not the present budget. One would think that eliminating government waste would be more popular than ending White House tours and locking National Park bathrooms. Here’s some of what The GAO found:

— Renewable Energy Initiatives Federal support for wind and solar energy, biofuels, and other renewable energy sources has been estimated at several billion dollars a year — is fragmented because 23 agencies implemented hundreds of renewable energy initiatives in fiscal year 2010 — the latest year for which GAO developed these data.

The GAO has identified 82 federal wind-related projects being implemented by nine different agencies in fiscal year 2011. The 7 dozen initiatives are split up across agencies, and have overlapping characteristics, and duplicative financial support. Big wasteful Bureaucracy.

Sixty-eight of the 82 programs overlapped with at least one other because of shared characteristics. They were administered by Energy, Interior, Agriculture, Commerce and Treasury. Why are all these departments involved in wind projects? These five departments collectively implemented 73 of the 82 proposals. Does the left hand know what the right hand is doing, and are they doing the same things?

The federal government should get out of the business of betting taxpayer dollars on energy projects. They should let the American people vote with their pocketbooks on which forms of energy and which projects should succeed.

Flushing good money after bad, the government has increased the production tax credit because of inflation, and wind, geothermal and biomass projects will now get 2.3 cents per kilowatt-hour of electricity produced, up from 2.2 cents. The IRS keeps updating the tax credit. The tax break costs taxpayers about $1 billion a year, and the new increase adds another $545 million in support for the wind industry. Just as the wind industry cannot exist without subsidy, it cannot exist without support from fossil fueled power plants.  The wind is intermittent and requires full-time support from a dependable power source.

— The 2008 Farm Bill assigned the USDA’s Food Safety and Inspection Service responsibility for examining and inspecting catfish and for creating a catfish inspection program. Repealing this provision would save millions of dollars annually without affecting the safety of catfish intended for human consumption.

— The Department of Defense’s approach to combat uniforms is fragmented. Developing and acquiring uniforms could be more efficient, and better protect service members resulting in $82 million in savings in development and acquisition costs through collaboration among the military services.


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