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Hoosiers Show How It’s Done: Indiana Posts a Surplus And Dems Are Unhappy

From The Blaze:

Indiana State Auditor Tim Berry announced the news on Thursday: the state posted a $1.2 billion surplus in the state budget. Considering that that the nation is in the middle of a nationwide recession, this may come as a surprise to many

Indiana’s fiscal year ended June 30 with the state having $400 million, or 40 percent more money in its coffers than it had at the same time last year.

“We’re showing . . . that you can manage a budget by reducing expenditures and not raising taxes,” said Berry.

According to the report, “Barry credited state agencies who slimmed their spending and Governor Mitch Daniels’ fiscal accountability.”

“More money in Hoosiers’ incomes and a terrific job of cost control by state employees working together combined to produce an even stronger result than we expected at budget time,” Daniels said in a statement Thursday.

“With the national economy still limping badly, and downside risks still abounding, it is reassuring to have a safety margin that other states would love to have.”

Last year, Daniels and Indiana lawmakers were concerned the state was going to bankrupt by the end of the fiscal year. Now, the state has an amount in reserves that was not predicted to be reached until 2013. A happy situation for any state.

“Indiana arrived at its surplus despite receiving 5.5 percent less revenue, or $1.34 billion, that was anticipated in the 2010-2011 fiscal year from the budget passed in 2009. At the same time, the state found ways to spend 5.5 percent less, or $1.52 billion than expected,” the report continued.

However, as per their usual, Democrats decided that this was no cause for celebration.

“From even the most cursory examination, it is apparent that this budget surplus has not been built on a strong economy keyed on job creation,” said House Minority Leader Pat Bauer (D-South Bend) in response. “That’s because this administration has no such program.”

Pat Bauer, as some may remember, made headlines recently when he coaxed his fellow democrats into fleeing the state in an attempt to halt a vote on anti-union legislation.

Bauer continued: “Instead, it is obvious that this surplus owes a great deal to budget reversions and other accounting tricks that this administration frowned upon when it took office. Without the past use of federal stimulus dollars, the continual demand for trimming agency budgets, and the occasional raid on dedicated funds, our financial picture would not be as rosy as the governor and the auditor would like. At that point, it is prudent to wonder at the cost extracted by these gimmicks. What services are suffering as a result of the obsessive need to maintain a $1 billion surplus?”

Despite his overtures, Gov. Mitch Daniels plans to keep the money in savings rather than restore state programs that were cut.

At this moment, the $1.18 billion surplus does not meet the 10 percent budget surplus amount required for an automatic taxpayer refund which state lawmakers passed earlier this year. However, Indiana lawmakers are optimistic that the saving will come close to that at the end of the current two-year budget cycle.

With a fiscal hawk like Mitch Daniels at the helm, Indiana could teach Washington, D.C. a thing or too. With effective cuts and real fiscal austerity, budgets can be controlled.

Cantor: ‘We Can Accomplish Well Over a Trillion Dollars in Cuts’

From National Review:

House Majority Leader Eric Cantor (R., Va.) hopes to axe a trillion dollars from the federal budget.

“We can accomplish well over a trillion dollars in cuts,” said Cantor, a leading Republican in debt-reduction talks, on Face the Nation. “The striking thing is, you get different people in the room of different philosophies and persuasions and what we’ve actually seen is that it’s easier to find places to cut and to gain efficiencies than the Democrats may have thought otherwise.”

“Everything is on the table,” he said. “As Republicans, we’re not going to go for tax increases. I think the administration gets that. But we’ve also put everything on the table as far as cuts.”

Tax Hikes Are Not Government Savings

From The Heritage Foundation:

Most people think of savings as that portion of a family’s income that they put away for emergencies, a big purchase, or their kids’ college education. It seems that some in the media want to change that definition.

The Hill ran an article equating tax increases with “savings” in terms of the budget deficit:

Senate Democrats claim they are close to agreement on a spending plan that would reduce borrowing by more than $4 trillion over the next decade, with about half the savings coming from higher taxes.

To review: Savings come from spending less, not taxing more. Higher taxes cannot be savings for the government, because the income wasn’t the government’s to begin with. The extra revenue that would come from those tax hikes belongs to the American families and businesses that earned it. The government cannot “save” it by taxing it away from those who earned it.

Politicians, the media, and other commentators exhibit this troubling way of thinking far too often when discussing the federal budget. For example, it comes up often when they refer to the “cost” of tax cuts. Just like tax hikes can’t be savings for the government, tax cuts can’t cost the government anything because the money was never the government’s to begin with. Or, more accurately, it is only the government’s money once it has been extracted from the taxpayer.

President Obama, his allies in Congress, and other backers of an ever-expanding federal government welcome this dangerous redefining of simple words like budgetary “savings,” “tax costs,” and “mandatory spending.” Such misrepresentations make it easier for them to raise taxes to fund their big government programs.

After all, if our income belongs to the government in the first place, it is hard to object to government keeping more.

It is important that taxpayers remember that tax hikes are not necessary to lower the deficit to sustainable levels. Tax receipts will rebound once the economy picks up in the next few years and surpass their historical norm of around 18.5 percent of our economy by 2017. If Congress restrains spending to its customary level of 20 percent of our economy or less, then deficits will fall to sustainable levels without raising taxes a dime. We show in great detail how to do this in The Heritage Foundation’s new, comprehensive Saving the American Dream plan.

Getting spending under control, strengthening the economy, and holding the line on taxes will truly be savings to already beleaguered American taxpayers.

A Line-in-the-Sand Moment

From National Review:

Yesterday’s Senate vote on the Ryan budget was a line-in-the-sand moment for Republicans.

Forty Republican senators, including Marco Rubio and Mike Lee, stepped forward to lead the way on saving Medicare and providing the first real alternative to out-of-control Washington spending that our nation has seen in decades.

Every single Democrat, including Florida senator Bill Nelson, voted in lock step with the Obama administration to oppose Ryan’s plan.

There are three Republicans vying to replace Bill Nelson in Florida. Two of them, former U.S. senator George LeMieux and current Florida state senator Mike Haridopolos, refused to say how they would have voted on the Ryan plan. That makes them no better than Bill Nelson.

Only one candidate, Adam Hasner, had the courage to step forward and unequivocally announce his support for the Ryan budget.

“I would vote for the plan without hesitation,” Hasner said, “because I know that the alternatives are rationed care and declining healthcare options, watching Social Security and Medicare slowly go bankrupt, or America faltering under the weight of unsustainable entitlement programs.”

The 2012 election is the most important in our lifetime. If President Obama is reelected, and Democrats retain control of the Senate, the transformation of America into a European welfare state will be a foregone conclusion.

Simply electing more Republicans to Washington is not enough. We need to elect conservatives who will have the courage to take the tough votes, and stand with the conservatives already serving in the Senate.

A good place to start will be to support only those Republicans who had the courage to support the Ryan budget.

Senate Likely to Vote on Ryan Budget

From National Review:

The Senate could vote on the House Republican budget before the end of the month, reports The Hill:

Senate Democratic leadership is likely to bring the GOP’s 2012 budget plan to the floor later this month, a senior leadership aide told The Hill on Friday.

The aide said the Senate was likely to consider the bill the week of May 23, the last week it is in session before a recess for the Memorial Day holiday.

Senate Majority Leader Harry Reid (D., Nev.) has been threatening this for weeks, his goal being to force GOP Senators to go on-the-record in support of a budget that “ends Medicare as we know it.” Of course, a handful of Republicans are likely likely vote against it (Scott Brown, the Maine ladies, etc.) as well.

Reid’s effort could backfire, however, as Minority Leader Mitch McConnell (R., Ky.) has promised to force Democrats to vote on President Obama’s budget “plan.” If the Ryan plan gets more Senate votes that Obama’s (which is a real possibility, as both conservative and liberal Democrats have expressed reservations about the president’s proposals), that would be a tremendous embarrassment indeed.

Balanced Budget Amendment Is the Price for a Debt Limit Increase

From The Heritage Foundation:

A battle is raging within the conservative movement on Capitol Hill whether to shoot at the flag stick or lay up (in golf terms). The battle is between the Balanced Budget Amendment (BBA) versus a statutory spending cap bill. Both factions have good points.

The bold, shoot-at-the-flag-stick faction of the movement wants to push for a BBA strategy or bust. This strategy includes taking the debt limit increase hostage for the demand of a BBA passing both the House and the Senate.

Another other faction of the movement is pushing for a law that would set a statutory cap over the next 10 years, limiting the spending of the federal government to about 20.6 percent of the economic output of the United States’ economy. This strategy would settle for an amendment in the form of a spending cap to the debt limit increase as a price for passing an increased debt limit.

Today, I wrote at Human Events that Senator Mike Lee (R–UT) is rounding up support for the idea that the price of increasing the debt limit is passage of the BBA by both the House and the Senate.

Senate conservatives are working to pass a Balanced Budget Amendment (BBA) as part of the debate over a debt-limit increase. According to Politico, Sen. Mike Lee (R.-Utah) is circulating a letter to other senators asking them to join his pledge to “oppose any attempt to raise the debt ceiling” until a BBA is passed by both houses. Lee has been joined by Republican Senators Rand Paul (Ky.), Jim DeMint (S.C.), Jim Risch (Idaho), Marco Rubio (Fla.), Jim Inhofe (Okla.), and Richard Shelby (Ala.).

Robert Costa over at NRO interviewed Senator Lee on the strategy, and Lee said the following:

I would like to see a scenario in which Republicans in both houses draw a line in the sand. If Democrats do not give us the supermajorities we need in both houses to pass the balanced-budget amendment, we are not going to even come to the table. It is a condition precedent. We are always hearing the Left, from the political establishment, that it would be catastrophic if we do not raise the debt limit. I don’t mean to minimize the significance of that happening; it would create a lot of uncertainty and a lot of fear. But we have to remember that there are at least equal corresponding risks of raising it without putting anything else in place.

The Commitment to American Prosperity Act, or CAP Act (S. 245), was introduced by Senators Bob Corker (R–TN) and Claire McCaskill (D–MO) as a means to cap spending as a percentage of America’s gross domestic product. I write in Human Events that the CAP Act is being viewed as a safe landing place for those who want to cap spending but fear that a BBA is a bridge to far, because it would take a two-thirds vote of the House and Senate to pass a change to the Constitution in the form of the BBA.

Some conservatives worry that a bipartisan plan to cap spending … may undermine efforts to pass a BBA this year. The CAP Act would start in Fiscal Year 2013, capping spending at 25% of the gross domestic product, then ratchet down spending caps over the years 2014 through 2022. This isn’t enough for some conservative senators, who note that spending caps have proven ineffective. Furthermore, some complain that the CAP Act sets spending levels too high, and doesn’t even cap spending for the next fiscal year.

Senator Corker describes the CAP Act as follows:

The CAP Act reduces total federal spending—discretionary and mandatory spending combined—to a target of approximately 20.6 percent of gross domestic product (GDP), the historical average of federal spending. Beginning in 2013, the CAP Act will establish federal spending limits that will be gradually reduced over 10 years to 20.6 percent.

Some conservatives demand fundamental constitutional reform, because statutory spending limits are too easy to waive and change. This debate will play out over the next few weeks approaching Secretary of the Treasury Tim Geithner’s declared deadline of August 2 for passage of a debt limit increase. It will be interesting to see if the House and Senate decide to throw in all their chips for a bold strategy or an incremental strategy to cut the size and scope of the federal government.

Obama Has No Budget Plan

From National Review:

Even by the very low standards of Washington politics, President Obama’s budget speech last week was a model of disingenuousness. In fact, to treat the president’s speech as a budget proposal is probably unfair. It wasn’t really a budget plan; it was a campaign speech — long on vitriol, platitudes, and promises, but short on detail. Even so, it’s worth pointing out some of the bigger inaccuracies.

Obama just wants to tax “millionaires and billionaires.” Whenever the president talks about his plan to raise taxes, he sounds as if the only two people likely to be affected are Bill Gates and Warren Buffet. This speech was no different, with the president calling for tax hikes “only on the wealthiest Americans.” After all, the president notes, “Warren Buffett doesn’t need another tax cut.” In reality, however, the president is calling for tax increases on households earning as little as $250,000 per year. While that’s certainly not poor, it’s not Warren Buffett territory, either, especially in places such as New York and New Jersey, which have high costs of living. Moreover, Obama’s tax increase would fall heavily on small businesses that file taxes under individual rates. In fact, nearly half of all small-business income would be hit by the proposed tax increase.

Obamacare saves money. The president says we don’t really need to worry about Medicare’s future liabilities, because his new health-care bill is already saving money in the program. If we need to save a little bit more, we can just double down on Obamacare’s price controls, and everything will be fine. This sort of slides by the fact that even if every penny of Obamacare’s potential savings was realized, Medicare would still face some $45 trillion in future deficits. It also ignores the fact that Obamacare actually uses those theoretical savings to fund other aspects of his health-care bill. But even more important in this context, almost no one in Washington actually believes that those savings will occur. Medicare’s own chief actuary warns that those savings “may be unrealistic.” And the Congressional Budget Office notes “it is unclear whether such a reduction in the growth rate of [Medicare] spending could be achieved.” In fact, this month CBO raised its estimate of Obamacare’s ten-year cost.

Obama would cut domestic spending. In his speech the president implied that he would cut spending by $750 billion over the next 12 years. While that’s a pretty low bar — less than $63 billion per year, roughly 1.5 percent of federal spending, or about what the federal government borrows every eight days — there’s more than a little smoke and mirrors in the president’s plan. For example, the president includes lower interest payments from deficit reduction as a spending cut. Even more cynically, the president includes something called “reduced spending through the tax code.” In other words, he counts tax hikes as spending cuts. The president claims that his plan includes $3 in spending cuts for $1 in tax hikes. Not quite. In fact, even Obama cheerleader Paul Krugman admits (happily) that the ratio is closer to one-to-one. As for the rest, the recent deal on the 2011 Continuing Resolution shows what the Washington establishment considers to be cuts. Of course, the president does promise that if Congress doesn’t make spending cuts, he will appoint a commission (now there’s an original idea!) with the power to propose more spending cuts or (surprise!) more tax increases.

Obama’s plan balances the budget. While the president talked about the need to “live within our means,” his budget plan doesn’t actually enable us to do so. The president’s plan does not actually balance the budget at any time over the next decade. In fact, it would add as much as $9 trillion to the national debt over that period. In fairness, it should be acknowledged that we are in such a deep hole that Paul Ryan’s plan doesn’t actually get us to a balanced budget either. But, whereas Ryan would reduce the deficit by $6.2 trillion over ten years, the president would cut it by only $4 trillion over 12 years. That’s a big difference. (And, by the way, when did we go from a ten-year budget window to a 12-year one?)

In the end, the president is right about one thing. This is a debate about values as much as budgets. The president wants more spending, a bigger government, and higher taxes. Paul Ryan proposes less spending, a smaller government, and lower taxes. That’s a debate worth having. If only the president had been honest about that.

— Michael Tanner is a senior fellow at the Cato Institute and author of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution.

Barack Obama Is Directly To Blame For the S&P Downgrade

From RedState:

If you have been away for the past twenty-four hours, you missed that for the first time since its founding in 1941, Standards and Poor downgraded our nation’s credit outlook. S&P believes there is a 33% change it will downgrade the nation’s AAA credit rating in the next two years.

For the past year, Democrats have spent freely arguing that their free spending ways did not matter. In fact, Barack Obama’s proposed budget for 2012 increases the national debt to 116% of gross domestic product, even while adding $2 trillion in tax increases.

It is not that budget proposal that became the straw to break the camel’s back.

It was not even his trillion dollar stimulus plan or his multi-trillion dollar stimulus plan than became the straw to break the camel’s back.

In fact, it was Barack Obama’s disastrous speech last week that broke the camel’s back.

As James Pethokoukis noted, Obama’s muddled plan to solve the crisis was “fastened together by the chewing gum and sticky tape of rosy economic assumptions and fiscal opacity.” But more so, it was Barack Obama’s angry words and denunciation of Paul Ryan’s own plan that drove S&P to its conclusion.

S&P said

We view President Obama’s and Congressman Ryan’s proposals as the starting point of a process aimed at broader engagement, which could result in substantial and lasting U.S. government fiscal consolidation. That said, we see the path to agreement as challenging because the gap between the parties remains wide. We believe there is a significant risk that Congressional negotiations could result in no agreement on a medium-term fiscal strategy until after the fall 2012 Congressional and Presidential elections. If so, the first budget proposal that could include related measures would be Budget 2014 (for the fiscal year beginning Oct. 1, 2013), and we believe a delay beyond that time is possible.

Remember, up until the President’s attack, even Democrats on the Deficit Commission were praising Paul Ryan’s willingness to engage the issue “at an adult level.” Everyone expects congressional partisans to take pot shots, but for the President of the United States to have a temper tantrum over it akin to a three year old denied a lollipop? That’s unheard of.

The President’s open hostility to an adult plan while offering no substantive plan of his own was the straw that broke the camel’s back. And because Mr. Obama still cannot deal with the issue as an adult, we will keep heading down this treacherous road.


Governor Daniels on Obama Debt Speech

From HoosierAccess:

Governor Mitch Daniels appeared on the Wall Street Journal Report with Maria Bartiromo discussing President Obama’s debt speech. He argues that “We’d be better off if the speech had never been given.”


We Don’t Have A Divided Government: We Have A Broken Government And No Leadership

From Big Government:

The state of our national government is in shambles. We are so far removed from the traditional political divide. To explain what is going on in Washington would require use of a metaphor such as The Mariana Trench to explain it. The Democrats might as well be speaking Mandarin and the Republicans, Latin. The American people as a consequence are, of course, def, blind, and dumb. Our politics has really devolved into the ‘us-them’ model and the only real losers are the American people.

The Republicans, led by House Speaker Boehner, promised a principled stand against spending. Their target at first was $100 billion, than $60 billion before settling for roughly $36 billion. While that was disappointing to many, it did show life on the side of the Republicans. It turns out now that all of it was a lie. A numbers game with no real impact on the budget or the deficit: CBO Says Budget Deal Will Cut Spending by Only $352 Million. Remember this was touted as an “historic” budget deal.

Here’s how the great game was played.

All the cuts in the deal aren’t equal. The ones that matter most are the cuts in discretionary spending that reduce the budget baseline in future years. Even with more the details of the deal released early yesterday morning, the exact numbers are still shrouded in confusion, but it is clear the cuts are much less than meets the eye — the gimmickry is not merely around the edges.

The $38.5 billion includes real cuts, but also a dog’s breakfast of budgetary legerdemain. According to the Associated Press, the deal purports to save $2.5 billion “from the most recent renewal of highway programs that can’t be spent because of restrictions set by other legislation.” It gets another $4.9 billion by capping a reserve fund for the victims of crime that also wasn’t going to be spent this year — a long-standing trick of appropriators. The Washington Post reports that a notional $3.5 billion cut from the Children’s Health Insurance Program “would affect only rewards for states that make an extra effort to enroll children. But officials with knowledge of the budget deal said that most states were unlikely to qualify for the bonuses and that sufficient money would be available for those that did.” And so on. There’s realism and then there’s cynicism. This deal — oversold and dependent on classic Washington budget trickery — comes too close to the latter. John Boehner has repeatedly said he’s going to reject “business as usual,” but that’s what he’s offered his caucus. It’s one thing for Tea Party Republicans to vote for a cut that falls short of what they’d get if the controlled all of Washington; it’s another thing for them, after making so much of bringing transparency and honesty to the Beltway, to vote for a deal sold partly on false pretenses. (National Review)

Then you have the most partisan and socially dividing president in American history adding fuel to the fire.

Read the rest at Big Government.

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