Why Both Parties Aren't Serious About Deficit Reduction

I shockingly agree with Dan Drezner and Megan McArdle. Neither the Republicans or Democrats are serious about reducing the deficit. Democrats want to extend the Bush tax cuts for the middle class and poor. Republicans want to extend tax cuts with people making over $250,000-a-year.

Drezner: They basically say, 'We want to seriously cut the deficit. We don't want to touch entitlements and we're not going to touch defense spending. And we're not gonna raise taxes." Go!

The Senate voted against the deficit reduction committee. These same Democrat and Republican Senators whom claim to be concerned about the deficit panic when it comes time to take action. The House of Representatives reinstituted PAYGO in 2007. The House abandoned PAYGO less than a year later. The current PAYGO rule is the party in power (Democrats) can't declare an emergency exemption to get around making cuts in other parts of the budget to balance out the passage of a certain bill. Congress does not have the moral courage to balance the budget.

Quote of the Day

"Let's agree that we're going to have PAYGO enforcement. That we're not going to cry 'emergency' every time we have a Katrina, every time we have a Tsunami, every time we have a need for extra spending, that we don't go call for a special appropriation that allows us to circumvent the PAYGO rules."

Marsha Blackburn, on the House floor.

Aren't we suppose to call an emergency during a hurricane or Tsunami? Those acts of nature, that actually kill people, are rather dangerous.

Anwar Richardson School of Economics Award: John Boehner

Anwar Richardson School of Economics Award is named after the Tampa Tribune sports writer. Richardson boldly predicted Brett Farve coming to the Tampa Bay Buccaneers "It's actually gonna pump some money into this economy. Especially, in the Tampa Bay economy." Farve never came and several economic stuidies have shown sport franchises have zero economic impact on the community. Tampa area residents are still paying for the construction of Rayomond James Stadium.

Minority Leader John Boehner calls for a spending freeze. Policy-wise this would accomplish nothing. Politically, Boehner can attack Barack Obama's stimulus package as pork. Boehner was in the Republican House leadership during the Bush years. Where was his concern about spending then? In 2006, Boehner backed President Bush's wildly off-the-mark projection there would be a surplus in 2012.

"Raising taxes . . . won't help balance the budget -- it will slow the economic growth that is creating the new jobs of tomorrow and increasing revenue to the federal government," House Minority Leader John A. Boehner (R-Ohio) wrote in an essay distributed yesterday by his office. "Keeping our economy strong and promoting fiscal responsibility will get the job done. Raising taxes won't."

Boehner attacked Obama's stimulus package as raising taxes. The Citizens For Tax Justice found Obama's Making Work Pay tax cuts will be be savings for most Americans.

Lowest 20% - 12.2 percent

Second Lowest 20% - 16.1 percent

Middle 20% - 20.2 percent

Fourth 20% - 26.4 percent

Next 15% - 22.5 percent

Next 4% - 2.5 percent

Top 1 0.0 percent

Boehner and other Republicans are false about Obama increasing taxes. If Boehner's political strategy hinges on fighting to restore Britney Spears' tax cuts then good luck in the midtern elections. The CTJ study found:

Tax cuts are generally less effective in stimulating demand than direct government outlays. But tax cuts targeted to the people who are most likely to immediately spend any money they receive, namely low- and middle-income people, are more effective than upper-income tax reductions. Tax cuts for business are far less likely to be an effective stimulus.

The middle and lower class are a larger part of the population than the top one percent income earners. Their spending is the best chance the economy has to itself out of recession.

Tax cuts do not pay off the deficit. The Congressional Budget Office found without the Bush tax cuts there would have been a surplus in 2005. The Bush/Republican tax cuts cost three times more than domestic spending.

I'm not even sure where Boehner is going with a spending freeze. Obama has brought back paygo in the stimulus bill. Conservative columnist David Brooks calls the spending freeze idea "insane."

BROOKS: The problem with them and the problem with Limbaugh in terms of intellectual philosophy is they are stuck with Reagan. They are stuck with the idea that government is always the problem. A lot of Republicans up in Capitol Hill right now are calling for a spending freeze in a middle of a recession/depression. That is insane. But they are thinking the way they thought in 1982, if we can only think that way again, that is just insane.

John Boehner, you are the first winner of the Anwar Richardson School of Economics Award.

American Recovery and Reinvestment Act Oversight

The House version of the American Recvery and Reinvestment Act fall under the restrictions of PAYGO. Congressional Republicans ended the PAYGO practice Democrats brought it back. John Kerry brought up PAYGO in the 2004 presidential debates.

KERRY: I'll tell you exactly how I can do it: by reinstating what President Bush took away, which is called pay as you go.

During the 1990s, we had pay-as-you-go rules. If you were going to pass something in the Congress, you had to show where you are going to pay for it and how.

President Bush has taken -- he's the only president in history to do this.

The catch is the stimulus package is labeled emergency spending. PAYGO will not apply. After years of George W. Bush, I was shocked to see PAYGO mentioned in a bill.

The House bill will appoint special Inspector Generals to oversee how stimulus money is spent. The Congressional Budget Office and cabinet Inspector Generals have been given revenue to oversee stimulus program funding.

No money will be used for "any casino or other gambling establishment, aquarium, zoo, golf course, or swimming pool." Only U.S. steel and iron will be used for infrastructure projects. These projects are "airports, bridges, canals, dams, dikes, pipelines, railroads, multiline mass transit systems, roads, tunnels, harbors, and piers."

The House bill's language is clear on how oversight will work.

SEC. 1201. TRANSPARENCY REQUIREMENTS.

(a) REQUIREMENTS FOR FEDERAL AGENCIES.—
Each Federal agency shall publish on the website Recovery.gov (as established under section 1226 of this subtitle)—

(1) a plan for using funds made available in this Act to the agency; and
(2) all announcements for grant competitions, allocations of formula grants, and awards of competitive grants using those funds.

(b) REQUIREMENTS FOR FEDERAL, STATE, AND LOCAL GOVERNMENT AGENCIES.—

(1) INFRASTRUCTURE INVESTMENT FUNDING.— With respect to funds made available undermthis Act for infrastructure investments to Federal, State, or local government agencies, the following requirements apply:

(A) Each such agency shall notify the public of funds obligated to particular infrastructure investments by posting the notification on the website Recovery.gov.

(B) The notification required by subparagraph
(A) shall include the following:
(i) A description of the infrastructure,investment funded.
(ii) The purpose of the infrastructure investment.
(iii) The total cost of the infrastructure investment.
(iv) The rationale of the agency for funding the infrastructure investment with funds made available under this Act.
(v) The name of the person to contact at the agency if there are concerns with the infrastructure investment and, with respect to Federal agencies, an email address for the Federal official in the agency whom the public can contact.
(vi) In the case of State or local agencies, a certification from the Governor, mayor, or other chief executive, as appropriate, that the infrastructure investment has received the full review and vetting required by law and that the chief executive accepts responsibility that the infrastructure investment is an appropriate use of taxpayer dollars. A State or local agency may not receive infrastructure investment funding from funds made available in this Act unless this certification is made.

(2) OPERATIONAL FUNDING.—With respect to funds made available under this Act in the form of grants for operational purposes to State or local government agencies or other organizations, the agency or organization shall publish on the website Recovery.gov a description of the intended use of the funds, including the number of jobs sustained or created.

(c) AVAILABILITY ON INTERNET OF CONTRACTS AND GRANTS.—Each contract awarded or grant issued using funds made available in this Act shall be posted on the Internet and linked to the website Recovery.gov. Proprietary data that is required to be kept confidential under applicable Federal or State law or regulation shall be re25
dacted before posting.

SEC. 1202. INSPECTOR GENERAL REVIEWS.

(a) REVIEWS.—Any inspector general of a Federal department or executive agency shall review, as appropriate, any concerns raised by the public about specific investments using funds made available in this Act. Any findings of an inspector general resulting from such a review shall be relayed immediately to the head of each department and agency. In addition, the findings of such reviews, along with any audits conducted by any inspector general of funds made available in this Act, shall be posted on the Internet and linked to the website Recovery.gov.

(b) EXAMINATION OF RECORDS.—The Inspector General of the agency concerned may examine any records related to obligations of funds made available in this Act.

I have never seen a bill with this level of oversight. Democrats have written many safeguards into the bill's language. The Treasury Department, Council of Economic Advisers, and Office of Budget and Management will submit quarterly reports to Congress. I could challenge Republicans for a GOP sponsored bill with this level of oversight. I know the bill doesn't exist.

There will be a transparency board. They will submit quarterly reports to President Obama and Congress.

SEC. 1222. COMPOSITION OF BOARD.

(a) MEMBERSHIP.—The Board shall be composed of seven members as follows:
(1) The Chief Performance Officer of the President, who shall chair the Board.
(2) Six members designated by the President from the inspectors general and deputy secretaries of the Departments of Education, Energy, Health and Human Services, Transportation, and other Federal departments and agencies to which funds are made available in this Act.

(b) TERMS.—Each member of the Board shall serve for a term to be determined by the President.

Congress will receive reports from the transparency board, Treasury Department, Council of Economic Advisers, and Office of Budget and Management. This is the way government should run.