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CBO still showing record debt as a percentage of GDP approaching

July 16, 2014 2 comments

Last fall did a post looking at the CBO’s 2013 Long_Term Budget Outlook report; specifically at the deficit and debt as a percentage of GDP. At that time I noted the following:

The most noteworthy finding from this report is that “Federal debt held by the public is now about 73 percent of the economy’s annual output, or gross domestic product (GDP).” Only once has the United States had debt at such high levels, and that was during World War II when all resources were being redirected to the military-industrial complex. It is also worth noting the current level is more than double the debt level of 2007. These levels simply cannot be sustained for the country to stay fiscally sound. If these projects hold it will make the previous records set during WWI look like a little ‘blip’.

Things aren’t looking any better than they were a year ago. The CBO has released the 2014 Long-Term Budget Outlook. As expected, very little has changed over the last year. Two charts I showed last year showing federal deficit and federal debt as a percentage of GDP have been combined into one nifty depressing chart by the CBO:

Chart Source: CBO

Chart Source: CBO

Between now and 2039 the deficit (difference between spending and revenues) will continue to increase and the debt held by the public will become larger than the GDP itself. By 2039 it is expected federal spending will be 26% of GDP.

The two big areas for growth on spending are in Major Health Care Programs and Net Interest. This is reflected in the chart below:

Chart Source: CBO

Chart Source: CBO

By 2039 the federal government will be paying almost as much for the Net Interest on the national debt as it spends on Social Security now. I find it mind-boggling that so many politicians on the left and right seem to be OK with creating so much debt for future generations.

It is also wort looking at the federal spending on the Major Health Care Programs. Proponents of Obamacare often make the case that the program will ‘save money’ over the long term. I’m not really seeing that reflected in the CBO’s projection.

Luckily this projection is based upon current laws. Congress can make changes to reverse this course. I don’t think it is likely to happen this election cycle; especially since we have a President that has double-downed on Bush’s spending binges. But in a few more election cycles maybe the country can get a couple more fiscal conservatives in DC. Then there might be a chance (albeit a small one) that Congress and the President will actually work to get rid of the deficit and reduce the debt. If that doesn’t happen… well. I would recommend everyone invest in some alternative currencies such as Bitcoin, at least then you’ll have some purchasing power.

Noem has a victory in getting land back from the federal government

July 10, 2014 2 comments
Cemetery - Photo by Josée Holland Eclipse

Cemetery – Photo by Josée Holland Eclipse

On Monday the US Senate passed the Black Hills Cemetery Act (HR 291) by unanimous consent via voice vote. The bill had already passed the House by a vote of 390-2 back in May of 2013 (does this mean Reid is finally going to let some legislation go through the Senate?). South Dakota’s lone representative Kristi Noem was the Prime Sponsor of this bill. I think it is great to see Noem pushing for a conservative stance and returning some of the land grabbed by the federal government.

The bill changes ownership of nine historic cemeteries to local groups. And according to the text of the bill  “up to an additional two acres  adjoining each cemetery in order to ensure the conveyances include unmarked gravesites and allow for expansion of the cemeteries.”

Here are the nine cemeteries listed in the bill and who will receive the property:

  1. The Silver City Cemetery to the Silver City Volunteer Fire Department.
  2. The Hayward Cemetery to the Hayward Volunteer Fire Department.
  3. The encumbered land adjacent to the Englewood Cemetery  (encompassing the cemetery entrance portal, access road,  fences, 2,500 gallon reservoir and building housing such reservoir, and piping to provide sprinkling system to the cemetery) to the City of Lead.
  4. The land adjacent to the Mountain Meadow Cemetery to the Mountain Meadow Cemetery Association.
  5. The Roubaix Cemetery to the Roubaix Cemetery Association.
  6. The Nemo Cemetery to the Nemo Cemetery Association.
  7. The Galena Cemetery to the Galena Historical Society.
  8. The Rockerville Cemetery to the Rockerville Community Club.
  9. The Cold Springs Cemetery (including adjacent school yard and log building) to the Cold Springs Historical Society.

It should be noted all the recipients of these transferred lands already take care of these sites. The sites will continue to be historic cemeteries and treated as such. The only thing that has really changed is the federal bureaucracy is no longer involved with them. Hopefully this bill can begin a trend of returning federal lands to the states. It makes no sense to have bureaucrats that don’t even live in a state having controlling interest over that land.

The bill still has to be signed by Obama. There is no real reason to think he won’t do so. This is one of those occasions when I can actually give a kudos to Representative Noem! Now lets look at returning other lands to the state…

US House votes to keep Guantanamo Bay open for another year

June 21, 2014 5 comments

johnny_automatic_State_penitentiary_I’ve been looking through the amendments added to the Department of Defense Appropriations Act of 2015 (HR 4870). Earlier today I noted that South Dakota’s Representative Kristi Noem voted on the side of civil liberties by defunding illegal NSA activities. I applaud her for that vote. Now it is time to look at another amendment to the defense appropriations act she voted for that I feel is bad.

Rep Cotton (R-AR) submitted an amendment (905) that basically prevents President Obama from transferring prisoners from Guantanamo Bay for one year. This amendment was offered by Rep Cotton as a response to Obama unilaterally choosing to swap Sgt Bergdahl for Guantanamo Bay prisoners. That act from Obama was technically illegal because the NDAA requires the President to give a thirty-day notice to Congress before such transfers can happen.

I call bullshit on Rep Cotton’s reason for submitting this amendment.

Back when campaigning for this first term the closure of Guantanamo Bay was one of Obama’s biggest campaign promises. A promise he has failed to accomplish. There appears to be two very large reasons Obama has failed to keep this promise:

  1. Congressional war hawks in both parties do not want Guantanamo Bay closed. Rep Cotton is among those who will do anything possible to keep Obama from closing Guantanamo Bay.
  2. Obama has never really tried to close Guantanamo Bay. It is true that Obama has raised Guantanamo Bay as a talking point many times over the years. Yet he has failed to ever try using his political power to accomplish this goal. Now this late into his second term Obama simply doesn’t have the political power to make such a change actually happen.

Rep Cotton is using the current Obama Bergdahl scandal as political cover in a means to keeping Guantanamo Bay open. The Obama administration in turn is playing political games by saying this amendment would actually be unconstitutional because it would diminish the President’s power as Commander-in-Chief. Both Congressional war hawks and the White House are content with this battle because it keeps focus away from the debate that should actually be happening: should Guantanamo Bay be closed.

Personally I think Guantanamo Bay is the antithesis of what American is meant to stand for. The indefinite detaining of people without any true means of due process goes against the principles this country was founded upon. Ironically some of the very same politicians I hear talk about “natural-born rights” are also the same the politicians that support the existence of Guantanamo Bay. If someone believes in natural-born rights it has to be for EVERYONE; and not just for people who are born in the United States. Allowing the government to arbitrarily choose who gets natural-born rights and who doesn’t has the endgame effect of reducing the potential liberties for all people; including US citizens. Government officials have often claimed Guantanamo Bay is important because our Constitution and laws do not apply there. The very fact that claim is made in support of Guantanamo Bay should actually be the reason to show why it should not exist. Our morals should not disappear when we leave our national border!

Are the people in Guantanamo Bay bad? Most likely they are. But it is time to stop pretending we as a country have the right to detain people indefinitely in an ambiguous and unwinnable “War on Terror”. I don’t know what should be done with the prisoners that currently ‘reside’ in Guantanamo Bay; but I most certainly believe the current solution is NOT Constitutional or morally acceptable. It is time for Congress and the White House to actually try looking for an answer to removing this morally bankrupt detainment center from our country.

Back to Cotton’s amendment. The amendment passed 230-184 along highly partisan lines. Yet it is important to remember the vote was only among party lines because the Democrats voting knew it would pass not matter what they voted. If there were too many Republicans parting from leadership in this vote there is no doubt more war hawks from the Democrat side would have stepped up and ensured the amendments passage.

I don’t really think the amendment will make it through the Senate. But it doesn’t have to. Debate will take place about the amendment. Reid will accuse Republicans of playing political games. McConnel will accuse Reid of being a dictator. In the end the amendment will be dropped. That will be a case of Reid and McConnel showing modern-day bi-partisanship: both parties arguing over political games to keep attention away from the real issue.

Unfortunately in South Dakota our lone Representative Kristi Noem decided to be part of this political straw-man battle; instead of actually standing up for what is right and arguing about whether Guantanamo Bay should remain open. Maybe I was expecting too much to think that DC Republicans care about little things like natural-born rights……

Here is the actual text of Cotton’s amendment for those interested. Basically if passed it would prevent the President from transferring prisoners until the next defense appropriations bill is passed in 2016.

At the end of the bill (before the short title) insert the following:
Sec. __. None of the funds appropriated or otherwise made available by this Act may be used to transfer or release any individual detained at United States Naval Station, Guantanamo Bay, Cuba to the individual’s country of origin or to any other foreign country.

Representative Noem votes to cut funding for backdoor NSA spying

June 21, 2014 2 comments
Edward Snowden Quote on NSA Spying

Edward Snowden Quote on NSA Spying

Last summer South Dakota’s lone representative in the US House of Representatives, Kristi Noem, voted no to the Amash amendment. That amendment to the Department of Defense Appropriations Act would have basically prevented the NSA from collecting data on American citizens that were not part of an actual investigation. To me that vote was the final sign that Noem doesn’t care about civil liberties and she has to go. Sadly Noem has no real competition in her bid for re-election this year. The good news however is that she appears to have learned from her mistake last year.

On Thursday night the House voted on amendments to the Department of Defense Appropriations Act of 2015 (HR 4870). Included in those amendments was one offered by Representative Massie (R-KY) that is aimed at preventing the NSA from continuing its backdoor spying. I’ve included the text from this amendment (935) at the end of this post for any who wishes to read it. But here is what the amendment basically does:

  • Prevents the NSA from using its funding to conduct warrantless searches.
  • Prevents the NSA from using its funding to have private companies and organization create backdoors in security products that use encryption.

These measures are not as good as the Amash amendment from last year, but it is definite step forward in restoring civil liberties. Unfortunately threats of budgetary defunding appears to be the only tool Congress has to reign in federal agencies such as the NSA.

The amendment passed the House floor roll call vote 293-123 in an bi-partisan fashion. Yet it is worth noting that the majority of the Aye votes actually came from Democrats, in a Republican controlled chamber. Outgoing Majority Leader Eric Cantor and incoming Majority Leader Kevin McCarthy both voted no for this amendment. South Dakota’s Representative Kristi Noem actually broke from leadership and voted Aye this amendment. She should be congratulated for actually standing up for civil liberties against the wishes of leadership within her party. Perhaps the Aye vote from incoming Majority Whip Steve Scalise gave her the courage to do so. Or maybe Noem finally understands that civil liberties are important to her constituents. Either way it is great to see her vote this way.

At this point it is still going to be a tough road ahead for this amendment to actually becoming law. The Obama administration is likely to pressure the Senate into removing this amendment from the appropriations bills (he threatened to veto the bill with Amash’s amendment last year). Right now the only hope is that the coalition between Senators Wyden, Udall, and Paul is able to pressure Reid into keeping this amendment as a part of the defense appropriations bill. It is too soon to tell if the three Senators have enough support in the Senate to actually protect civil liberties.

It really does feel good to do a post where I don’t have to attack Noem for voting against civil liberties. Hopefully she will make this a trend!

Here is the text of HR 4870 Amendment 935:

At the end of the bill (before the short title), insert the following new section:

Sec. __. (a) Except as provided in subsection (b), none of the funds made available by this Act may be used by an officer or employee of the United States to query a collection of foreign intelligence information acquired under section 702 of the Foreign Intelligence Surveillance Act of 1978 (50 U.S.C. 1881a) using a United States person identifier.

(b) Subsection (a) shall not apply to queries for foreign intelligence information authorized under section 105, 304, 703, 704, or 705 of the Foreign Intelligence Surveillance Act of 1978 (50 U.S.C. 1805; 1842; 1881b; 1881c; 1881d), or title 18, United States Code, regardless of under what Foreign Intelligence Surveillance Act authority it was collected.

(c) Except as provided for in subsection (d), none of the funds made available by this Act may be used by the National Security Agency or the Central Intelligence Agency to mandate or request that a person (as defined in section 1801(m) of title 50, United States Code) alter its product or service to permit the electronic surveillance (as defined in section 1801(f) of title 50, United States Code) of any user of said product or service for said agencies.

(d) Subsection (c) shall not apply with respect to mandates or requests authorized under the Communications Assistance for Law Enforcement Act (47 U.S.C. 1001 et seq.).

US House passes a bill to stop automatic growth of discretionary spending

April 9, 2014 1 comment

burnmoneykingThis week the US House of Representatives is focused on the federal budget. Among the bills going through the House is HR 1871: the Baseline Reform Act 0f 2013. The bill technically isn’t new, it was introduced last year (hence the reason it is a 2013 act) and in 2012 as HR 3578. Even though the idea isn’t new I think it is a bill that needs to be passed. The Baseline Reform Act actually has the potential to at least slightly slow down the growth of the federal government.

Currently federal budget baselines for discretionary spending are set to the prior years budget levels plus inflation. Ending this practice of automatic discretionary spending increases each year could go a long way in slowing down the monstrous growth of government programs. This is a good first step in trying to actually reduce the nations debt problem. Realistically it won’t do much to reduce the deficit or debt, but at least its a step in the right direction.

A second reason the bill is good is the very reason many Democrats were speaking against it: because it can be used as a way to cut off extra funding from certain federal programs. Exactly! It is just shy of impossible to end a federal program once it has started. Under the current appropriations process even the worse of federal programs will get an automatic budgetary increase each year. That is just crazy. Federal programs should have to operate like departments do for large companies in the private sector. Generally each department for a company in the private sector has to request increases and provide reasons for any budgetary increases. That is just sound fiscal policy.

It must also be noted that budget creators can still increase all of the budgets each year. All this change would do is stop the CBO from starting the baseline each year with an automatic budgetary increase. There is also a potential this new method could backfire and allow budget appropriators to give increases above inflation without anyone really realizing it. In this case though I think it is worth the risk to try this approach.

The bad news is the bill is unlikely to be brought up in the Senate. Senator Reid has proven to more obstructionist as the Senate Majority Leader  than Representative Boehner has been as the Speaker of the House (both are horrible, but Reid is slightly more of a dictator). Reid will not allow any bills to be brought up that would put his Democrat allies in a rough position politically. So realistically this bill will die again this year. Next year there is hope for the bill passing. The 2014 election has the potential to tip the balance of power in the Senate. At that time it will be interesting to see if DC Republicans retain their current top priority of reducing federal debt and actually passing bills such as this through both houses (I have my doubts, the Bush years are still fresh in my mind).

Thune offered an interesting Amendment to UI Extension bill

January 10, 2014 4 comments
Thune-012710-18480-_0030-R_rh_PhotoGallery

Senator John Thune (R-SD)

Yesterday morning Senator Thune introduced an Amendment to the Emergency Unemployment Compensation Extension Act (S 1845). I found this to be an interesting Amendment because as I listen to CSPAN today I keep hearing “The Republicans haven’t provided any solutions”. The bill text is available in the Congressional record (starting on page S151).

Here is my understanding of the four things this bill is trying to accomplished based upon listening to Thune speak on the Senate floor yesterday and reading the amendment from the Congressional record:

  1. TITLE I–EXEMPTION FROM AFFORDABLE CARE ACT MANDATE FOR LONG-TERM UNEMPLOYED
    This section of the amendment is pretty straightforward. It says the term “full-time employee” shall not include anyone hired falls in the category of long-term unemployed. Basically if a company hires someone who has been unemployed for an extended time they don’t have to include that employee in their official employee count for the ACA employer mandate. This is an interesting approach. I would prefer true delay of the overall employer mandate, but this does at least offer minor relief from the healthcare law. I have a feeling the Democrats will fight this provision because it exempts that employee as long as they work for that employer.
  2. TITLE II–EMPLOYER PAYROLL TAX HOLIDAY FOR LONG-TERM UNEMPLOYED
    The second section provides a temporary payroll tax holiday for employers that hire someone who has been unemployed for 27 weeks or longer. Thune mentioned during his floor time that this would be a six month holiday. But reading the bill it appears as if this provision applies to all long-term unemployed employees hired for the two-year period following enactment, or when long-term unemployment falls under 2,000,000, whichever comes first. Either way this provision could save a company a lot of money when hiring a an employee that has been unemployed for a long period.
  3. TITLE III–EMPLOYMENT RELOCATION LOANS
    This is an interesting provision. It allows a $10,000 loan to long-term unemployed individuals so they can move to another state or metropolitan area. The individual must have a letter of acceptance to hire in the target State/metro; or they can move to a State/metro that is not the individuals initial residence and has an employment rate that is at least 2% lower than where the individual currently lives. The ‘initial residence’ means where the individual lives before the loan is issued, this makes sure people are not moving and then asking for the loan. The loan would have to be paid back over a 10 year period.
  4. TITLE IV–SUPPORTING KNOWLEDGE AND INVESTING IN LIFELONG SKILLS
    Section 4 is basically the Skills Act (HR 803) that was passed in the House early last year. This part of the amendment would consolidate and modernize many separate government programs aimed at training the workforce. Doing so should save a lot of taxpayer dollars and allow the programs to function more efficiently.

Overall this is an interesting bill. On the floor Thune said the ACA mandate relief and payroll tax holiday would give business owners another $5,000 to hire new employees. I like what these first two sections are trying to do. But honestly I think there would be a more significant impact if the employer mandate was delayed for all employers and a payroll tax holiday was enacted for all employees. Businesses could then use that money to expand and hire more employees. Plus, it would be a nightmare for payroll administrators to track these one-off employees. The unintended burden from the first two sections almost outweigh the intended good Thune is trying to provide.

I don’t really have much to say about the third section. I don’t feel it is the place of the federal government to act as a lender and don’t feel it has a place in this bill.

As to the Skills Act. The better answer would be to get Senator Reid to take up and pass the Skills Act that already made it through the House. This would be a great chance for Reid to show he cares about reducing the federal bureaucracy. Unfortunately Reid is unlikely to do so…

This amendment provided by Thune is unlikely to ever see a vote. Senator Reid has “filled the amendment tree” on the UI extension bill, basically preventing anyone from adding amendments to the bill. In the last year Reid has filled the amendment tree on almost every major piece of legislation, meaning Republicans get no say on legislation. Ironically while doing this Reid is calling the Republican’s “obstructionists”. I think it is time for Reid to look up the word obstructionist and let amendments such as this one be debated and voted upon. Even though I think this interesting amendment is bad, I do think Thune should be able to at least give it a chance.

How did South Dakota’s congressmen vote on the budget deal and defense bill

December 26, 2013 2 comments

scales-of-justiceToday President Obama signed into law the Ryan/Murray budget deal and the defense bill while on vacation in Hawaii. Both bills were bad and should not have been passed as written. Of course there was little actual resistance to either bill. I thought it would be worth looking at how the three congressmen from South Dakota voted on these two bills.

First there is the Ryan/Murray budget deal, oficially known as the Continuing Appropriations Resolution of 2014 (HJ RES 59). This ‘deal’ was bad from a fiscally conservative viewpoint. Previous I blogged about the ‘deal’ increasing an airline tax and removing the little fiscal gains made by sequester cuts. One of the few actual cuts in this bill was targeted at veterans. Representative Noem (R) voted yes to the bill. I still am not surprised by this vote, Noem simply isn’t the type of legislator to stand up for what is fiscally right. In the other house Senator Thune (R) voted no while Senator Johnson (D) voted yes. Again, there is no surprise here. Senator Johnson has never shown any concern about fiscal responsibility, so his vote was known ahead of time. Senator Thune made the correct vote as he joined many other Republican Senators wishing to add amendments that would fix problems such as the targeting of veterans. Reid however called that obstructionism and would not allow any amendments to voted on. The Senate either had to pass the flawed bill as-is or else…

The defense bill was also signed into law today, which is officially known as the National Defense Authorization Act (NDAA) for Fiscal Year 2014 (HR 3304). This bill was bad on many levels (too many to go into in this short post). The worst parts of this bill include:

  • Making indefinite detention of people (including US citizens) easier than previous version of NDAA. This doubled-down on this unconstitutional practice.
  • Creates a data-warehouse for all collected data, including potentially illegally gained data by agencies such as the NSA.
  • Added a great amount of pork to the military-industrial complex.

The House voted on this bill by a voice vote. So there is no record of how Representative Noem voted. In this case we can be pretty sure she voted Aye because her office praised its passage due to the inclusion of part of a military sexual assault bill Noem had sponsored. It is commendable what the sexual assault portion of NDAA tries to do, but it does no override how bad the rest of NDAA is. In the Senate both South Dakota Senators voted Aye. Thune’s office released a statement applauding NDAA’s passage because it included an amendment from the Senator funding a next-generation bomber. I guess pork outweighed constitutional rights for Thune on that vote. Either that or he didn’t want to look weak on defense spending. And true to form Senator Johnson had no problems spending more taxpayer dollars while taking away constitutional rights.

If I were to grade the South Dakota congressmen on these votes it would be as follows:

Representative Noem: F – FAIL – South Dakota’s lone representative in the House didn’t stand up for fiscal conservatism or civil liberties.

Senator Thune: C – Campaigning – Thune took the rights votes going into a 2016 Presidential run. On the budget he voted no, knowing full well it would pass without him. That allows him to get a good fiscal conservative vote on record without risk. And voting for NDAA he looks strong to war hawks. Too bad civil liberties isn’t more of a campaign issue…

Senator Johnson – R – Reid – Once again Senator Johnson voted how he was told by Senator Reid. I look forward to when South Dakota will replace this seat in the 2014 election.

Going into 2014, the first major actions to watch from these three are what they do about the farm bill and the pending debt ceiling battle. Maybe enough time will be spent on those two issues that Congress can get little else done. We can hope anyhow…

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