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Politics

House GOP Repeatedly Promised $100 Billion In Spending Cuts That It Now Calls ‘Hypothetical’

House Republicans made a lot of noise in their pre-election “Pledge to America” regarding exactly how much government spending they were going to cut. At the document’s unveling, incoming Speaker of the House John Boehner (R-OH) confidently asserted “we can save $100 billion dollars a year. That’s $1 trillion over the next ten years.”

And Boehner was far from the only one laying out $100 billion in non-defense discretionary spending cuts as the benchmark. Incoming House Budget Committee Chairman Paul Ryan (R-WI) said that the GOP’s goal was to cut “a good $100 billion.” Rep. Kevin McCarthy (of “Young Gun” fame) reiterated the promise, saying, “We’re saying you go through, go back to pre-stimulus bailout numbers. We can live with that.” “We’ve got to roll back there. That will save $100 billion in the first year,” agreed Rep. Mike Pence (R-IN).

Just yesterday, in fact, incoming Majority Leader Eric Cantor (R-VA) repeated that the GOP is aiming for $100 billion in cuts. However, according to the New York Times, this promise was not a promise in the literal sense:

Now aides say that the $100 billion figure was hypothetical, and that the objective is to get annual spending for programs other than those for the military, veterans and domestic security back to the levels of 2008, before Democrats approved stimulus spending to end the recession.

“I think they woke up to the reality that this will have a direct negative impact on people’s lives,” said Rep. Chris Van Hollen (D-MD), who will be the ranking member on the House Budget Committee. “You know, it’s easy to talk about these things in the abstract. It’s another thing when you start taking away people’s college loans and Pell Grants or cutting early education programs.”

Indeed, since the contractionary effects of $100 billion in spending cuts, and the layoffs that would follow, would do real damage to the economy, the fact that the GOP is backing away from its commitment is a good thing. But it’s just the latest in a flurry of budget promises that the GOP has broken, before it even officially comes into power. The Wonk Room has a round up of all the broken pledges. This morning, Ryan said on NBC’s Today Show that, while spending will be reduced, he doesn’t know by how much. “I can’t tell you by what amount…but it will all be coming down,” he said.

Update

When repeatedly pressed about the $100 billion flip flop on Fox News today, Rep. Mike Pence (R-IN) refused to promise that House Republicans would end up cutting that amount within the next year, and saying that anyone who focuses on the $100 billion figure is just “number crunching.” Watch it:

Politics

Deficit Fraud Romney: Jobless Benefits Are Too Expensive, But The Bush Tax Cuts Increase Revenue

Yesterday, the Senate approved the tax deal that President Obama negotiated with Congressional Republicans by an 83-15 vote. The legislation now moves to the House, where Democrats are saying that they might tinker with the estate tax cut that Republicans are insisting upon.

But it isn’t only on the left that opposition to the deal exists. A few House Republicans have disparaged the deal for including too few tax cuts and too much help for the jobless. In a USA Today op-ed today, former Gov. Mitt Romney (R-MA) — who is consistently mentioned amongst GOP 2012 hopefuls — came to the same conclusion, saying that a two-year extension of all of the Bush tax cuts is too short, while a one-year extension of unemployment benefits is too expensive:

One thing is certain: While we cannot rebuild our flawed system [unemployment insurance system] overnight, we are surely not required to borrow the funds to pay for it. In spending $56.5 billion to extend benefits, the deal is sacrificing the bedrock Republican principle that new expenditures be paid for with offsetting budget cuts.

Romney also criticizes the deal’s payroll tax reduction for adding to the deficit. But then, in order to get around the fact that he favors permanent extension of the entire Bush tax cut package (at a cost of $4 trillion over the next decade), Romney asserts that such an extension will actually increase revenues:

In many cases, lowering taxes can actually increase government revenues. If new businesses, new investments and new hiring are spurred by the prospects of better after-tax returns, the taxes paid by these new or growing businesses and employees can more than make up for the lower rates of taxation.

As The Wonk Room explained, when it comes to the Bush tax cuts, revenue surely did not increase. Romney is simply twisting himself in circles to justify his opposition to the tax deal on fiscal responsibility grounds, while simultaneously advocating for a full extension of the Bush tax cuts, no matter their effect on the deficit.

Economy

Deficit Fraud Romney: Jobless Benefits Are Too Expensive, But The Bush Tax Cuts Increase Revenue

Yesterday, the Senate approved the tax deal that President Obama negotiated with Congressional Republicans by an 83-15 vote. The legislation now moves to the House, where Democrats are saying that they might tinker with the estate tax cut that Republicans are insisting upon.

But it isn’t only on the left that opposition to the deal exists. A few House Republicans have disparaged the deal for including too few tax cuts and too much help for the jobless. In a USA Today op-ed today, former Gov. Mitt Romney (R-MA) — who is consistently mentioned amongst GOP 2012 hopefuls — came to the same conclusion, saying that a two-year extension of all of the Bush tax cuts is too short, while a one-year extension of unemployment benefits is too expensive:

One thing is certain: While we cannot rebuild our flawed system [unemployment insurance system] overnight, we are surely not required to borrow the funds to pay for it. In spending $56.5 billion to extend benefits, the deal is sacrificing the bedrock Republican principle that new expenditures be paid for with offsetting budget cuts.

Romney also criticizes the deal’s payroll tax reduction for adding to the deficit. But then, in order to get around the fact that he favors permanent extension of the entire Bush tax cut package (at a cost of $4 trillion over the next decade), Romney asserts that such an extension will actually increase revenues:

In many cases, lowering taxes can actually increase government revenues. If new businesses, new investments and new hiring are spurred by the prospects of better after-tax returns, the taxes paid by these new or growing businesses and employees can more than make up for the lower rates of taxation.

When it comes to the Bush tax cuts, revenue surely did not increase. In total dollars, the government collected about $1 trillion in income tax receipts in 2001, according to the Office of Management and Budget. This fell below one trillion for the next five years following the Bush tax cuts, not climbing above that level again until 2006. In 2000, the government collected 10 percent of GDP in personal income taxes, a percentage that has never again been reached.

Romney is twisting himself in circles to justify his opposition to the tax deal on fiscal responsibility grounds, while simultaneously advocating for a full extension of the Bush tax cuts, no matter their effect on the deficit. This should once again call into question why Romney has a reputation as the GOP’s go-to-guy on the economy.

Politics

Reagan Budget Director: GOP Has Abandoned Fiscal Responsibility By Adopting ‘Theology’ Of Tax Cuts

As Congress prepares to take up extension of the Bush tax cuts during its lame duck session, Republican lawmakers have been unanimous in demanding that the cuts for the richest two percent of Americans be extended, claiming they are necessary for economic growth and that tax cuts (miraculously) pay for themselves.

While independent economists have shown these arguments to be false, today on CNN’s Fareed Zakaria GPS, President Reagan’s former budget director took on his own party for pushing this faulty logic. David Stockman, who led the all-important Office of Management and Budget under Reagan and was a chief architect of his fiscal policy, criticized today’s GOP for misreading Reagan’s legacy by adopting a “theology” of tax cuts. Stockman has spoken out before, but took perhaps his strongest stance yet against his own party today, saying “I’ll never forgive the Bush administration” for “destroying the last vestige of fiscal responsibility that we had in the Republican Party.” He also broke with Republican orthodoxy on a number of key issues:

– We need “a higher tax burden on the upper income.”

– “After 1985, the Republican Party adopted the idea that tax cuts can solve the whole problem, and that therefore in the future, deficits didn’t matter and tax cuts would be the solution of first, second, and third resort.”

– The 2001 Bush tax cut “was totally not needed.”

– On claims that Reagan proved tax cuts lead to higher government revenues: “Reagan proved nothing of the kind and yet that became the mantra and it just led the Republican Party away from its traditional sound money, fiscal restraint.”

– Former Vice President Cheney “should have known better” than claim the Bush tax cuts would pay for themselves.

– “I’ll never forgive the Bush administration and Paulson for basically destroying the last vestige of fiscal responsibility that we had in the Republican Party. After that, I don’t know how we ever make the tough choices.”

Watch it:

Media

CNBC Aids Rep. Ryan In Pushing Falsehoods About The Bush Tax Cuts And Small Business

One of the key justifications that Republicans use to support extending the Bush tax cuts for the richest two percent of Americans (at a ten-year cost of $830 billion) is that allowing those particular tax breaks to expire will disproportionately harm small business and job creation. “This is about stopping a job-killing tax hike on small businesses during tough economic times,” argued Sen. Orrin Hatch (R-UT).

This is a phony argument, as just three percent of people with income from a business large or small would be affected if the Bush tax cuts for the rich expire. Republicans eventually conceded this point, only to begin disingenuously arguing that half of small business income would be affected by the tax increase. Today, CNBC host Joe Kernen helped Rep. Paul Ryan (R-WI) spread this falsehood, and threw in the incorrect Republican assumption that extending the Bush tax cuts for the rich would spur job creation:

KERNEN: They say it every time, because only two percent of small businesses fall into that. So they say that and they know through their teeth, that they know they’re dissembling…Half the income of small businesses is hit by it!

RYAN: Drive to any town in Wisconsin, go to the outskirts and you’ll see an industrial park. And in that industrial park, nine times out of ten it’s going to be a sub-S corporations that has 50 to 250 employees, who are all in this category of making $250,000 or higher. They’re pass-through entities, they’re partnerships, sub-S’s, they’re the people who are creating the jobs. That’s where the economic engine rests, and that’s who’s getting the tax increases. [...]

KERNEN: But what I don’t understand is if they want jobs, if they want to help the country, with its 10 percent unemployment, why do they dissemble?

Watch it:

First, Kernen is flat-out wrong that half of small business income would be affected by the expiration of the Bush tax cuts for the rich. The Congressional Joint Economic Committee has estimated that half of net business income would be affected, and that its figures “do not imply that all of the income is from entities that might be considered ‘small.’”

As The Wonk Room explained, a lot of these “small businesses” are simply large businesses that are organized as “pass-through” entities, which means they don’t pay the corporate income tax, but “pass-through” their profits to the owners, who then claim the profits on their personal income tax returns. These include the Bechtel Corporation, which is the fifth-largest privately owned company in the United States, posting gross revenue in 2008 of $31.4 billion; the Wall Street buyout firm Kohlberg, Kravis and Roberts, which has more than $54 billion in assets and 14 offices around the globe; as well as every partner in a law firm, every passive investor in an oil or gas venture, and anyone with a trust fund.

The GOP wants you to picture the local dry cleaners and hardware store as facing a crushing tax increase, but the fact remains that exceedingly few small businesses will be affected if the Bush tax cuts for the rich expire. And, contrary to Kernen’s assertion, such an extension is the least effective tax or spending step the government could take to boost the economy.

Politics

Hensarling Ludicrously Claims Rep. Ryan’s Roadmap Will Not Cut Social Security Or Medicare By ‘One Penny’

On Wednesday night, Rep. Jeb Hensarling (R-TX) successfully claimed the chairmanship of the House Republican Conference after his challenger, tea party favorite Rep. Michele Bachmann (R-MN), dropped out of the running. But just hours after his big win, Hensarling, ran into this familiar buzz saw for Republican deficit frauds when on CNN’s Parker/Spitzer he was completely unable to name any significant spending cuts he wants to enact.

Host Elliott Spitzer astutely laid out the hollowness of Hensarling’s proposal to cut $900 billion dollars of annual government spending through a Constitutional amendment by noting that Hensarling’s plans leaves massive portions of the federal budget untouched, making it almost impossible to find nearly a trillion dollars in savings. Hensarling tried to fight back, but offered only feeble talking points and assertions that he didn’t understand Spitzer’s math, prompting Spitzer to remind Hensarling, “Sir, you have a degree in economics.”

Hensarling only ran into more trouble when he spoke of a different plan he has endorsed — Rep. Paul Ryan’s (R-WI) Roadmap for America’s Future. While proudly saying he has endorsed the Roadmap, Hensarling claims the plan would not “cut one penny” from Social Security or Medicare:

SPITZER: I want to go through category by category so the public can understand where we are. $2.3 trillion of this $3.8 trillion is in couple of areas, Social Security, Medicare, Medicaid, interest on the debt and defense spending, right? We can agree on that, I presume, right? That’s straight out of the federal budget. Now, are you willing to cut Social Security 25 percent this year?

HENSARLING: Oh, absolutely not. And again, Eliot, you know that you don’t have to cut one penny out of these programs. What you do have to do is ensure they don’t grow faster than the economy’s ability to pay for them. We can’t have Social Security, Medicare and Medicaid grow at 5, 6 and 7 percent and the economy grow at 1.5 percent. … You have to bend the growth curve so they don’t grow as fast. I have co-sponsored Paul Ryan’s “Roadmap for America’s Future.” Not one penny of these programs is cut.

Watch it:

Hensarling — who does indeed have an economics degree from Texas A & M University — is either gravely misinformed about the plan he is endorsing, or willingly misleading the American people. As the Wonk Room’s Pat Garofalo noted, “the Roadmap is an explicit attempt to balance the federal budget via severe cuts to Medicare and Social Security.” The Center on Budget and Policy Priorities explains, the “Ryan plan proposes large cuts in Social Security benefits — roughly 16 percent for the average new retiree in 2050 and 28 percent in 2080 from price indexing alone.” Meanwhile, “By 2080, Medicare would be cut 76 percent below its projected size under current policies.”

And after all that, Ryan’s Roadmap still won’t balance the budget. As the New York Times’ Paul Krugman noted, “the Ryan plan would reduce revenue by almost $4 trillion over the next decade. If you add these revenue losses to the numbers The Post cites, you get a much larger deficit in 2020, roughly $1.3 trillion.”

Politics

Gingrey Ignores Promise To Reduce Government Waste By Fighting For Defense Program The DoD Doesn’t Want

In the war on Democrats this year, Republicans united behind the pitch for a universal “spending freeze” and “across the boardbudget cuts in their promise to reign in the deficit. Falling in line, Republican Rep. Phil Gingrey (GA) assured Americans that he is “committed to finding ways to reduce” government programs that are “bloated” and “riddled with waste.” “With each new appropriations bill Congress considers, I have to ask myself, ‘Is this a good way to spend tax payer dollars,’” he says.

Given his rhetoric, it would be reasonable to assume that Gingrey also opposes unnecessary defense spending. The F-22 stealth fighter jet, for example, is a weapon designed to address threats last faced during the Cold War. It “has not performed a single mission” in Iraq or Afghanistan, and comes with a $120 million price tag per plane. Coupled with the $8 billion it would cost the Pentagon to upgrade the 100 F-22s already in use, the F-22 landed on Defense Secretary Gates’s chopping block last year. After consulting with other Defense officials, Gates concluded, “there is no military requirement” for creating more F-22s.

Yet despite that, and the overwhelming bipartisan agreement that the plane qualifies as taxpayer waste, and in spite of own his commitment to cutting spending, Gingrey now thinks he knows better than the Pentagon and is calling for resuming production of more F-22s. Not only is Gingrey willing to waste taxpayer dollars on an unnecessary and unwanted weapon, he’s willing to fight his own party to do it, because the planes are built in his state:

The takeover of the U.S. House by Republicans could prompt a revival of the fight for additional funding for the Marietta-built F-22 stealth fighter, U.S. Rep. Phil Gingrey said Friday. This isn’t just for the sake of home-cooking, but also for the sake of the country,” Gingrey said in a telephone interview.

But Gingrey conceded that concerns over spending and the federal deficit could make the funding battle a difficult one. The planes have a price tag of $120 million each. “We would have to look at it with a very, very sharp pencil,” he said. “It would take some negotiating.”[...]

Gringrey says he has not consulted yet with Chambliss on the issue of reviving the F-22. Right now, Gingrey said, he and the rest of the Georgia delegation were focusing their efforts on getting Republican Austin Scott of Tifton, who beat Democrat Jim Marshall of Macon, a seat on the House Armed Services Committee.

Scott, as the only Georgia Republican on the committee, would become the point man for any discussion of the F-22, Gingrey said.

Gingrey’s soft-spot for this boondoggle may have to do with the fact that he owns tens of thousands of dollars worth of stock in Boeing — Lockheed Martin’s partner in building the F-22. And if he hopes to slip funding for the fighter into this year’s defense authorization bill, he’s making a shrewd move in recruiting Scott for the House Armed Services Committee. Scott represents Georgia’s 8th District, which “has a strong military presence and includes the Warner Robins Air Logistics Center, a testing and repair site for the F-22 Raptor.”

But Gingrey is not alone in falling out of step with the GOP’s posturing on spending cuts. Along with the current battle over earmarks, there is an internal “civil war” between “hard-core deficit hawks” like Senators-elect Pat Toomey (R-PA), Rand Paul (R-KY), Mark Kirk (R-IL), and Sen. Tom Coburn (R-OK) who want to cut military spending, and members like Gingrey and Rep. Buck McKeon (R-CA) “who view military spending as sacrosanct.” Even GOP leadership seems to be sacrificing the principle for pet projects. Both presumptive-House Speaker John Boehner (R-OH) and former GOP House Conference Chairman Mike Pence (R-IN) are also ignoring Gates’s advice to cut the “costly and unnecessary” extra engine for the F-35 Joint Strike Fighter in the name of “parochial interests.”

Politics

House Republicans Name Program That Already Expired As First Spending Item They Would Cut

Rep. Tom Price (R-GA)

ThinkProgress has been documenting the struggles that House Republicans have been having as they attempt to claim the mantle of fiscal responsibility without laying out any real spending cuts to which anyone might object. Rep. Kevin McCarthy (R-CA) epitomized this dance, saying on PBS’ Newshour that he had a path to budget balance, and then outlined cuts that amounted to less than one half of one percent of the budget.

One program which House Republicans have consistently seized upon to bolster their budget-cutting bona fides is the Temporary Assistance for Needy Families Emergency Contingency Fund, a successful program that has created 250,000 jobs in 37 states via subsidized employment programs for low-income and unemployed workers. And according to National Journal, Republicans are once again railing against the program, selecting it as one of their first programs to cut:

House Republicans have targeted one of the first programs they would like to ax: the $25 billion emergency fund for people who lose their jobs, part of last year’s stimulus bill. Rep. Tom Price of Georgia, chairman of the Republican Study Committee, said the program encourages states to increase their welfare caseloads “without requiring able-bodied individuals to work, get job training, or make other efforts to move off of taxpayer assistance.”

As the Center on Budget and Policy Priorities pointed out, Price’s characterization of the fund is completely inaccurate. The program has also earned the staunch support of many Republican governors, including Gov. Haley Barbour (R-MS), who said it provided “much-needed aid during this recession by enabling businesses to hire new workers, thus enhancing the economic engines of our local communities.”

But the crux of the issue is that eliminating the TANF emergency fund will not save any money because the program has already expired. It was funded at $5 billion for two years, and ended on September 30, 2010. There is no money left for Price to save.

As The Wonk Room has explained, advocates, as well as the Obama administration, have asked that Congress fund the program for an additional year for $2.5 billion. Price multiplied that over ten years to come up with his ludicrous pronouncement that he would save $25 billion by cutting the program.

Politics

Pawlenty Inadvertently Explains How House Republicans Are ‘Lying To You’ About Spending Cuts

As ThinkProgress has repeatedly noted, despite their professed commitment to cut government spending, most Republicans in Congress refuse to propose specifics that would actually cut spending in any significant way. Recognizing the extreme unpopularity of cutting Social Security and Medicare, and the aversion of their base to military cuts, these self-styled fiscal conservatives often take entitlement and defense spending off the table, removing nearly 60 percent of the federal budget from scrutiny. Of the remaining spending, another sizable portion goes to debt payments — which are untouchable — and most Republicans also take homeland security and other security spending off the table, leaving only a small fraction of the total federal budget from which to find cuts.

Despite this stark reality, Republicans still try to claim the mantle of fiscal responsibility, and are forced to fumble, hem and haw when pressed on how they would actually cut spending. But at least one Republican leader is willing to be honest. Appearing on MSNBC’s Morning Joe today, Minnesota Gov. Tim Pawlenty (R) essentially called his party’s congressional leaders liars, saying anybody says they want to cut spending but won’t touch entitlements or defesne is “lying to you”:

HOST: What are you going to cut?

PAWLENTY: If you look at a pie chart of federal outlays, discretionary spending being the red, non-discretionary being the blue. The blue is already over the over the half way mark and it’s growing in double digits. Anybody who comes in here and tells you they’re not going to cut anything other than waste fraud and abuse, they’re not going to touch entitlements — they’re lying to you. If you want to deal with the spending issue, in terms of total federal outlays, you got to deal with interest on the national debt, Social Security, Medicare, Medicaid — if you have the time I can walk you through my ideas. But that’s the truth, you got to do entitlement reform, particularly if you’re going to hold defense harmless.

Watch it:

Pawlenty called out this “lying” because he openly favors cuts to entitlements like Social Security and Medicare. This is an unpopular position, so Republican congressional leaders often attempt to claim that no one in their ranks wants to cut these programs. However, this is patently false; ThinkProgress has identified 104 Republicans in Congress who support privatizing Social Security. Progressives have alternatively proposed defense spending cuts, eliminating corporate welfare elimination, and responsible revenue increases.

If these congressional Republicans are serious about cutting spending and want to make cuts to Social Securiy or Medicare, they should have the courage to say so honestly, as Pawlenty seems to be calling on them to do, instead of hiding behind phony claims that they can make meaningful cuts without causing significant pain.

Politics

Deficit Fraud Pence Calls For Defense Cuts, But Refuses To Cut Program Pentagon Doesn’t Want

While conservatives have adamantly demanded spending cuts over the past two and half years, critics have pointed out that most Republican leaders keep defense and entitlements like Social Security and Medicare off the table — which together account for over 60 percent of federal spending — making their calls for belt tightening somewhat disingenuous.

Appearing on CNN’s Parker/Spitzer last night, House Republican Conference Chairman Mike Pence (R-IN) seemed to endorse defense cuts:

SPITZER: You said everything will be on the table, which I admire you, I agree with you, it’s got to be on the table. … Are you willing to consider any cuts in defense? [...]

PENCE: But you bet, Eliot, come on, I mean, we know there are inefficiencies in defense spending in this country. We have real challenges. There are rising threats around the globe far beyond the reach of the war on terror. We need to be preparing for, for the future. I think we can do that if we look for greater efficiencies and if we set into motion processes that will encourage efficiency and a better use of taxpayer’s dollars in providing for the common defense which of course is the first article of the federal government.

Watch it:

Pence’s rhetoric on defense cuts sounds good, but like many GOP promises to cut spending, it rings hollow. Earlier this year, Pence was presented with a great opportunity to cut “inefficiencies in defense spending,” and he passed. Defense Secretary Robert Gates has called for major cuts to a number of big-ticket weapons programs and chief among them is a proposed extra engine for the F-35 Joint Strike Fighter. Gates called the second engine — which costs $560 million a year to develop — “costly and unnecessary,” and said, “Every dollar additional to the budget that we have to put into the F-35 is a dollar taken from something else that the troops may need.” Gates even urged President Obama to veto any funding for the engine.

After the House Armed Services Committee failed to strip the second engine from the Defense Authorization bill in May, Rep. Chellie Pingree (D-ME) offered an amendment to de-fund the superfluous project — Pence voted no and the amendment failed. In an interview with Bloomberg’s Al Hunt in July, Pence defended his vote. Seemingly knowing more about defense than Gates, Pence said, “I really do believe that it was in the interest of our national defense.” Not coincidentally, the company that would manufactures the extra engine has a large presence in Pence’s district.

If Pence refuses to cut funding for a program that the military adamantly does not want, what will he cut?

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