Spending

House passes Farm Bill without reform, makes subsidies permanent

After a embarrassing defeat last month and despite a veto threat from the White House, House Republican leaders were able to save some face yesterday by passing the Federal Agriculture Reform and Risk Management Act (FARRM Act), otherwise known as the “Farm Bill.”

The vote was close, 216 to 208, with every Democrat voting against the measure because food stamp funding was separated from the bill for the first time in several decades. Twelve Republicans voted against the measure because they say it spends too much and didn’t offer any real reform.

While separating food stamps from the Farm Bill — which accounted for nearly 79% of the $940 billion measure that the House voted down last month — does substantially bring down, the $202 billion proposal passed yesterday by the Republican-controlled House, according to The Hillcuts less in subsidies than the bill passed by the Senate.

Do House Republicans really want Farm Bill reform?

As much as I never like to question anyone’s intentions, I finally find myself asking this week, do House Republicans really want to reform Washington?

Perhaps it was naïve, but after the defeat of the Farm Bill, I thought hope was in the air for agriculture policy reform. Numerous Republicans had offered strong amendments, many of which were rejected at the onset by the Rules Committee. And a fair number of the remaining amendments were defeated on the floor at the urging of leadership. This egregious flouting of their party’s desire to curb spending pushed members over the edge. Sixty-two fiscally conservative Republicans revolted against the bill, proving to leadership once and for all that, indeed, they are here to actually make changes.

This failure appeared to make leadership desperate, forcing them to take the drastic step they’d previously vowed to avoid – splitting the bill into two portions, one for food assistance and one for agriculture programs. Reform advocates long have tossed around splitting the bill. Their logic is simple: neither portion of the bill is strong enough to stand alone. Nutrition program supporters and farm program enthusiasts need each other to get the bill across the finish line. So for those who find the programs to be bloated, forcing each portion through on its own merit seemed more likely to yield change than the current back-scratching arrangement.

America, Land of the Free (but get permission first)

“It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood; if they be repealed or revised before they are promulgated, or undergo such incessant changes that no man, who knows what the law is to-day, can guess what it will be tomorrow.” — James Madison, Federalist No. 62 (1788)

Having celebrated the 237th anniversary of the signing of the Declaration of Independence this past Thursday, I was once again reminded of what a great country we live in; the “Land of the Free” where man is free to pursue happiness as he determines that to be, where you be anything you want to be and do what you want to do…anything at all!

Unless…

You want to choose your own health care plan, one that meets your needs and doesn’t force you to pay for coverage that you don’t need, that doesn’t make you pay for alcoholism coverage even if you don’t drink, coverage for smoking-related illnesses even if you’ve never smoked, pre-natal and maternity coverage even if you are a single man or a great-grandmother whose child-bearing years ended sometime around the Carter administration (sorry, you can’t do that).

Arizona Governor Signs ObamaCare Medicaid Expansion

Jan Brewer

On Monday, Arizona Governor Jan Brewer signed into law the state’s budget opting in to the ObamaCare Medicaid expansion program.  It was the capstone of a long, hard fought battle by Gov. Brewer to impose the expansion on the state of Arizona and its startled citizenry.

How did we come to the point where a Republican governor in a conservative state would stake her political career on choosing to implement ObamaCare’s massive expansion of the welfare state?

ObamaCare Medicaid Expansion is Optional

PPACA Section 2001 expanded Medicaid up to 133% of the federal poverty line.  It also provided federal funding for the increase as follows:

(A) 100 percent for calendar quarters in 2014, 2015, and 2016;
(B) 95 percent for calendar quarters in 2017;
(C) 94 percent for calendar quarters in 2018;
(D) 93 percent for calendar quarters in 2019; and
(E) 90 percent for calendar quarters in 2020 and each year thereafter.

Then came the Supreme Court’s ruling on the individual mandate in NFIB v. Sebelius.  Chief Justice Roberts inexplicably upheld the mandate as a tax, a holding that will forever define his legacy as having abandoned originalism.  But there was one minor victory for the states:

Expect the Farm Bill to cost a lot more than advertised

With pressure in the Senate to pass the Farm Bill this week (they approved cloture this morning) and showmanship killing any consideration of further amendments, things aren’t looking good for reformers. This leaves taxpayers on the hook for an expanded crop insurance program with incredibly few taxpayer protections built in.

The Senate lauds this as progress, claiming $24 billion in savings over ten years. But a simple breakdown makes it clear that these supposed savings will never be realized. Luckily, the American Enterprise Institute has a great infographic presenting the numbers as they are likely to look over the next ten years. Instead of finding $24.4 billion in savings, the AEI graphic shows $31.2 billion of increased spending, which they rightly term a “bait-and-switch” for the taxpayer.

So where do these costs come from? The answer is the Agriculture Risk Coverage provision, a proposed “shallow loss” program that would make up the difference for revenue not covered by crop insurance. The program works with crop insurance to guarantee revenues, basically ensuring farmers 89 percent of their average revenue over the last five years. So if prices fall or your yield decreases, ARC will smooth over the difference.

Despite Outcry, Our Infrastructure is Not Crumbling

Skagit Bridge

In the aftermath of last week’s bridge collapse in Washington state, there have been a number of news reports and editorials on the need to address “America’s crumbling infrastructure” and they’ve declared that Congress needs to take action.

“It’s almost as if Washington has seen this movie before: a bridge collapses, groups decry the nation’s crumbling infrastructure and Congress does nothing,” lamented Abby Phillip at ABC News. John Nichols of the leftist publication The Nation carried the water of labor unions, and asked, “Is Washington ready to listen to the people who have been saying for years that we can’t afford to keep neglecting and shortchanging our nation’s infrastructure?”

Brian Levin of the Huffington Post was even more direct. He declared a state of emergency, writing that [w]e should treat our decaying infrastructure as the national security threat that it is and dispatch troops to the ground.”

“And by troops, I mean the million-man strong regiment of unemployed construction workers — 13.2 percent of people in the industry,” he added. “There is no logical reason why anyone from any party or persuasion would oppose the president’s plan, except to say that it should go even further.”

Hyperbole, much?

Spending Proposals Down in 112th Congress, Fiscal Irresponsibility Still a Washington Habit

It’s no secret that Washington is addicted to spending. Though, it’s true that the budget deficit is expected to decline this year, after four consecutive years of $1+ trillion deficits, the decline is spending isn’t because of any actual spending restraint, it’s a result of gridlock in government.

But declining budget deficits don’t reflect the desires of many members of Congress. According to a new report from the National Taxpayers Union Foundation (NTUF), the net-cost of legislation introduced in 112th Congress (proposed increases less proposed cuts) would have increased the federal budget by $1.3 trillion.

Despite the large increase in federal spending proposed last year, the “BillTally” report has some encouraging findings. Demian Brady, director of research at NTUF, noted that there was a increase in legislation to cut spending.

“The 112th Congress saw a sharp rise in the number of bills to reduce federal spending, with 221 introduced in the House and 127 in the Senate,” wrote Brady. “This is the highest number of spending-cut bills NTUF has recorded since the 105th Congress (1997-1998) when there were 265.” The report also found that legislation to increase federal spending is “being introduced at a much slower pace than in the previous Congress.”

No More Tanks: Army Tells Congress to Stop Spending

Abrams tank

Whenever people call for cutting the military budget, the usual response goes something like  ”How can you keep the Army from getting the equipment it needs to fight wars?” Well, the problem with that response is highlighted today by this story from ABC:

Lawmakers from both parties have devoted nearly half a billion dollars in taxpayer money over the past two years to build improved versions of the 70-ton Abrams.

But senior Army officials have said repeatedly, “No thanks.”

It’s the inverse of the federal budget world these days, in which automatic spending cuts are leaving sought-after pet programs struggling or unpaid altogether. Republicans and Democrats for years have fought so bitterly that lawmaking in Washington ground to a near-halt.

Yet in the case of the Abrams tank, there’s a bipartisan push to spend an extra $436 million on a weapon the experts explicitly say is not needed.

“If we had our choice, we would use that money in a different way,” Gen. Ray Odierno, the Army’s chief of staff, told The Associated Press this past week.

Why are the tank dollars still flowing? Politics.

Keeping the Abrams production line rolling protects businesses and good paying jobs in congressional districts where the tank’s many suppliers are located.

If there’s a home of the Abrams, it’s politically important Ohio. The nation’s only tank plant is in Lima. So it’s no coincidence that the champions for more tanks are Rep. Jim Jordan and Sen. Rob Portman, two of Capitol’s Hill most prominent deficit hawks, as well as Democratic Sen. Sherrod Brown. They said their support is rooted in protecting national security, not in pork-barrel politics.

Tax Breaks Are Not Tax Expenditures

budget

“Though the earth, and all inferior creatures, be common to all men, yet every man has a property in his own person: this no body has any right to but himself. The labour of his body, and the work of his hands, we may say, are properly his. Whatsoever then he removes out of the state that nature hath provided, and left it in, he hath mixed his labour with, and joined to it something that is his own, and thereby makes it his property.” — John Locke, Second Treatise of Government (1690)

What is “spending through the tax code?”  This is an important question in light of the Obama FY 2014 budget proposal finally unveiled last week.  We already know it raises taxes by more than $1 trillion.  Much of this is done by eliminating so-called “tax expenditures.”

Here is how the Joint Committee on Taxation defines a tax expenditure:

Tax expenditures are defined under the Congressional Budget and Impoundment Control Act of 1974 (the “Budget Act”) as “rev­enue losses attributable to provisions of the Federal tax laws which allow a special exclusion, exemption, or deduction from gross in­come or which provide a special credit, a preferential rate of tax, or a deferral of tax liability.”

Obamanomics: Not Smarter Than a Cave Man (or JFK)

Obamanomics

One thousand, four hundred and twenty four…that’s the number of days that have passed since the Democrat-controlled Senate performed their constitutional duty to pass a budget, more than a year before the ubiquitous iPad was invented. Judging by the contents of that budget, we can see why Democrats were scared to reveal their plans before Obama was safely re-elected and no longer accountable to the voters. It is unbridled recklessness that passes for the Democrat budgeting process.

Such sheer irresponsibility reminds me of P.J. O’Rourke, the civil libertarian who once said “Giving money and power to government is like giving whiskey and car keys to teenage boys.” Admittedly, it is not fair to compare elected Democrats to drunken teenage boys who, even with a fleet of cars and a swimming pool filled with whiskey could not hope to achieve as much damage as is being done by Democrats right now.

The Senate budget demands nearly one trillion dollars in new tax increases, on top of the nearly $700 billion already conceded by Republicans just a few months ago in the “Fiscal Cliff” deal. An almost equal amount would supposedly be cut from spending, but considering the bait-and-switch tactics that have become the modus operandi for Democrats, it is hard to believe that those cuts would ever come to fruition.


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