(Washington D.C.) – Today, the Co-Chairs of the Joint Select Committee on Deficit Reduction, Representative Jeb Hensarling and Senator Patty Murray, released the following statement.

“After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee’s deadline.

“Despite our inability to bridge the committee’s significant differences, we end this process united in our belief that the nation’s fiscal crisis must be addressed and that we cannot leave it for the next generation to solve. We remain hopeful that Congress can build on this committee’s work and can find a way to tackle this issue in a way that works for the American people and our economy.

“We are deeply disappointed that we have been unable to come to a bipartisan deficit reduction agreement, but as we approach the uniquely American holiday of Thanksgiving, we want to express our appreciation to every member of this committee, each of whom came into the process committed to achieving a solution that has eluded many groups before us. Most importantly, we want to thank the American people for sharing thoughts and ideas and for providing support and good will as we worked to accomplish this difficult task.

(more…)

There’s a lot of chatter out there that the debt reduction “super committee” isn’t getting the results it should be, especially with the clock running out on their time to cut the requisite $1.5 trillion from the budget. However, I think we need to give credit where it’s due. The super committee has one truly Herculean accomplishment under its belt; it has managed to identify an issue that Americans of all political stripes – Republicans, Democrats, and Independents – all agree on.

The issue? It’s a proposal to ditch the dollar bill in favor of a new dollar coin being advanced by a pair of Congressmen from copper-producing states. The bill purports to save the taxpayers an estimated $5.5 billion…over 30 years. Even those miniscule cost savings were thoroughly debunked in a recent USA Today op-ed, which states that “[t]he GAO report itself admits that factors outside the scope of financial benefit to the government were not considered, including the impact on private businesses and banks, and the costs of transferring, distributing, storing, authenticating and managing dollar coins.”

Just when it seemed like this proposed legislation couldn’t make any less sense, recent polling shows that voters are nearly united against the idea of replacing a bill with a coin. A survey performed by Lincoln Park Strategies for Americans for George found that:

•76 percent of Americans oppose doing away with the dollar bill, with that number representing a fairly equal share of Republicans, Democrats and Independents and voters from all regions of the country.

•45 percent of Americans believe that phasing out the dollar bill will have a net negative effect on the economy, versus just 10 percent who believe it will have a positive effect.

•75 percent of Americans view the dollar coin as both unwanted and unnecessary. (more…)

Just when the world financial markets had seemed to stabilize after five weeks of the violent convulsions caused by the first credit downgrade in the history of the U.S.; Standard & Poors announced the United States remains on negative credit watch and there is now a one-in-three chance of another U.S. credit downgrade. S&P understands that the President has been politically successful when he refused to cut spending and let the world suffer massive financial losses when S&P downgraded. It appears to be in President Obama’s political interest for America to suffer another credit downgrade crisis.

The new S&P warning follows President Obama’s efforts to sabotage bipartisan cooperation on the “Supercommittee” deficit reduction panel by making confrontational demands for half of a trillion dollars more in stimulus spending and trillions of dollars of new class warfare tax increases on investment and charity.

Most investors prior to August 5, 2011 assumed that the President would be so afraid of voter wrath if the U.S. credit rating was downgraded; that he would wait until the last moment possible before agreeing to just enough Republican spending cuts to save the AAA rating. Those assumptions turned out to be very expensively wrong.

President Obama refused to make any last minute cuts; then calmly left the Capitol for a family vacation on Martha’s Vineyard. On the next trading day, markets around the world suffered $2.5 trillion in losses. The New York Stock Exchange is off 11% from its recent highs; but China’s Shanghai Exchange is down 28% and Germany’s DAX exchange is down 26% from their highs:

Investors mistakenly was assumed President Obama’s opinion polls would suffer from a downgrade. According to the Gallup Poll; President Obama maintains the same 43% voter approval level he held from before the crisis, as he does today. But Congress hit a new all-time low approval rating of 13% during the crisis.

On the eve of the first meeting of Congressional Supercommittee, the Obama Administration leaked to the New York Times their demands for millionaires to lose the favorable tax treatment on capital gains, municipal bonds and charitable donations. This political poison pill to bipartisan cooperation is affectionately referred to as the “Buffett Rule”; in a honor of Warren E. Buffett, the billionaire investor who has complained repeatedly that the richest Americans generally pay a smaller share of their income in federal taxes than do middle-income workers, because investment gains are taxed at a lower rate than wages.

(more…)

With Sen. Harry Reid (D.-Nv.) leading the charge that killed the Cut, Cap and Balance Act (it apparently was the “worst piece of legislation” he’d ever seen),  and a new deal to break the impasse over raising the debt ceiling looming, it’s appropriate to ask why Democrats hate the idea of a balanced budget amendment.

Americans are forced each day to live with a balanced budget – families can only spend more than their income for a short time without ultimately going into default.  Firms in a private market must live with a balanced budget or they’ll quickly exit industry.

So, why do Democrats hate the idea of a balanced budget amendment?  Such an amendment would force Congress to spend within its means.  What’s the problem with forcing expenses and revenue to equal each other?  It seems to make sense in the absence of some mechanism (like profits and losses in the private market) to incentivize a prudent use of resources, that politicians should be bound to spend within their means.

It’s not that Democrats don’t believe in fiscal discretion or think there are no consequences to amassing a massive debt for future generations to pay.  President Obama has repeatedly stated that deficit reduction is a priority, and he favors a “big deal” to both raise the debt limit and reduce spending by billions.  Democrats in Congress have supported these goals of working hard to reduce the deficit over the next decade.  Listening to lawmakers speak about their desire to cut spending, one would expect wide-spread bipartisan support for a balanced budget amendment.

Not so fast.

(more…)

From The Hill:

Sen. Tom Coburn (R-Okla.) said Sunday the federal government can save $1 trillion though tax reform, a proposal that will put him at odds with some GOP colleagues.

Coburn plans to unveil a $9 trillion deficit-reduction package Monday that would give lawmakers a menu of policy options to reduce the deficit.

Coburn has suggested $1 trillion in savings could come from eliminating special tax breaks, such as the tax subsidy for ethanol, which he has fought to end.

(more…)

How serious can the Democrats be about deficit reduction?

From the Associated press:

Amtrak and rail projects in 15 states are being awarded the $2 billion that Florida lost after the governor canceled plans for high-speed train service.

(more…)

We thought tax reform meant lowering rates and broadening the base by eliminating or cutting back on various deductions, credits, and loopholes. That’s what the Bowles-Simpson commission proposed. That’s what Paul Ryan and David Camp are working on. And that’s the pro-growth model.

But President Obama unveiled a much different tax-reform vision in his much-anticipated debt speech on Wednesday. He would raise tax rates on upper-income earners and small businesses. He also would eliminate deductions and credits, or so called “tax expenditures.” The president referred to these tax-expenditure reductions as “spending cuts.” In his context, they most certainly are not. They are more tax hikes.

Basically, the president is giving successful earners and small-business filers a double tax hike. That’s what it really is.

Of course, the president’s formula of estimating higher revenues to lower the deficit is completely wrong. The reality is that higher tax rates will slow the economy, inhibit new start-up companies, penalize investors, and may very well lose revenues and increase the deficit.

In the latter part of his speech the president did mention some kind of middle-class and corporate tax reform. But he gave no specifics.

(more…)

Yesterday, Vice President Joe Biden visited CBS’ “Early Show” for a “wide-ranging interview” during which he said, “We understand why people are angry…We get it.”

Um, no you don’t. Because if you did, Mr. Vice President, we wouldn’t keep hearing stories about the executive branch seeking ways to act unilaterally on domestic issues it can’t seem to get passed in the lopsided, Democrat-controlled Congress.

And we wouldn’t keep reading about SEIU and other bankrollers of the Obama campaign demanding swifter action on agenda items that are in their interest.

Vice Captain Obvious also had this observation: “Washington right now is broken.”  Help me out,  Joe. Your party controls 59 seats in the Senate.  You have a huge majority in the House.  Yet Washington is “broken?” Under whom is it broken, Joe?

(more…)