Congress

The U.S. Budget, By the Numbers

AP Photo/Ed Andrieski
AP Photo/Ron Edmonds I n the argument over the "sequester," the across-the-board cuts to both domestic and military programs that are about to take effect, everyone in official Washington seems to agree that the government's budget is bloated. Despite the economists telling us that this is still a terrible time for austerity (just look how well it has worked out for Europe), the argument between Republicans and Democrats seems to be whether we need to just slash the budget mercilessly, or slash the budget somewhat less and raise some taxes. But is the federal budget really so big? Let's take a look at some graphs. If you look just at raw dollars, it's true that the size of government has increased steadily in recent decades (there are a lot of reasons why that's the case). It's also true that spending went up at the beginning of the Obama administration, but it's important to understand why and how. The answer to why is simple: the Great Recession. When a recession hits, government...

The Five Most Terrifying Things about the Sequester

AP Photo/J. Scott Applewhite
The latest fiscal showdown concerns the “sequester”—across the board cuts to (almost entirely) discretionary spending that will total just over $1 trillion in the next decade, and which are set to take effect on March 1. What should those who have better things to do with their life than follow fiscal policy debates know about the sequester? 1. The sequester will hurt job-growth As we pointed out during the debates raging in the run-up to the “fiscal cliff," the sequester was the second-most damaging component of the austerity bundle set to take effect on January 1, 2013. The worst component was the non-renewal of the payroll tax cut, which is already dragging substantially on the economy . All told, if the sequester kicks in the economy will likely end the year with roughly 500-600,000 fewer jobs than if it were repealed. These are jobs the economy desperately needs . To be clear, the sequester alone won’t drive the U.S. economy back into outright recession, but it surely will make...

Lockheed, Stock, and Barrel

Do we truly need brand new aircraft carriers? Nope, but try telling the Pentagon and their many contractor friends.

AP Photo/Northwest Florida Daily News, Devon Ravine
AP Photo/Eric Talmadge This is the third in a three-part Prospect series on what an ideal military budget might look like. Read Part One on the military's current responsibilities here . Read Part Two on the real threats that our military should be protecting our country from here . W hat stops the United States from crafting a military budget that makes sense? As this series has shown, to defend Americans and to protect American economic interests—even if broadly defined—the military would need vastly less resources than it currently enjoys. Sure, people in our defense establishment will complain about "bloat" and "waste" and "inefficiency," but when it comes to actual cuts, they just aren't done. "Now's not the time," they say, and considering the harm that sequestration cuts will likely do to many people's jobs and possibly to our economic recovery, there might be something to it—but they always say that. So, why do conversations about possible—and advisable—cuts always end up a...

Victory for the Friends of Hamas!

Chairman of the Joint Chiefs of Staff / Flickr
Chairman of the Joint Chiefs of Staff / Flickr By a vote of 71 to 27, the Senate closed debate on Chuck Hagel's nomination to lead the Department of Defense, thus beating a Republican filibuster on his confirmation. He is now poised for a final confirmation vote later Tuesday or early Wednesday, even as Republicans continue to object to his views on foreign policy and Middle East security. The " Friends of Hamas " will be pleased.

The Sequestering of Barack Obama

AP Photo/Susan Walsh
AP Photo/Susan Walsh President Barack Obama urges Congress to come up with a plan to avert the automatic spending cuts set to kick in on March 1, 2013 last week. P resident Obama has miscalculated both the tactical politics of the sequester and the depressive economic impact of budget cuts on the rest of his presidency. The sequester will cut economic growth in half this year. But it’s now clear, one way or another, that we will get cuts in the $85 billion range that the sequester mandates this fiscal year. All that remains are the details. Obama’s miscalculation began in his fist term, with his embrace of the premise that substantial deficit cutting was both politically expected and economically necessary, and his appointment of the 2010 Bowles-Simpson Commission as the expression of that mistaken philosophy. Although the Commission’s plan was never carried out, its prestige and Obama’s parentage of it locked the president into a deflationary deficit reduction path. This past week,...

Trading The Blame Game for The Bully Pulpit

Flickr/Neon Tommy
The White House apparently believes the best way to strengthen its hand in the upcoming “sequester” showdown with Republicans is to tell Americans how awful the spending cuts will be and blame Republicans for them. It won’t work. These tactical messages are getting in the way of the larger truth, which the president must hammer home: The Republicans’ austerity and trickle-down economics are dangerous, bald-faced lies. Yes, the pending spending cuts will hurt. But even if some Americans begin to feel the pain when the cuts go into effect Friday, most won’t feel it for weeks or months, if ever. Half are cuts in the military, which will have a huge impact on jobs (the military is America’s only major jobs program), but the cuts will be felt mainly in states with large numbers of military contractors, and then only as those contractors shed employees. The other half are cuts in domestic discretionary spending, which will largely affect lower-income Americans. There will be sharp...

Threat versus "Threat"

The second entry in our series on how to fix the Pentagon budget

flickr/zennie62
AP Photo This is the second in a three-part Prospect series on what an ideal military budget might look like. Read Part One here . Read Part Three on what's keeping us from a more perfect military budget here. A bout a year ago, Army General Martin Dempsey went to Capitol Hill trying to defend $55 billion in annual budget cuts by sequestration. With a straight face, the Joint Chiefs of Staff chairman testified to a panel of the House Appropriations Committee: “In my personal military judgment, formed over 38 years, we are living in the most dangerous time in my lifetime right now ." It's the kind of thing that makes a person alternately question the judgment and the honesty of our military leaders. It's obvious nonsense , just another ludicrous statement in the campaign mounted by the military, industry, and Congress in their effort to fight sequestration. That said, Dempsey raises a good question: Do we live in a dangerous world? Are there threats out there that might be the sort of...

Protecting the Homeland? So Last Century

What exactly does our military do these days?

Robert F. Bukaty
AP Photo This is the first in a three-part series on how to fix the military's budget. Read Part Two on the real threats that our military should be protecting our country from here . Read Part Three on what's keeping us from a more perfect military budget here. A s March 1 inches closer and the rhetoric about sequestration gets hotter, now seems like the time to ask what an ideal Pentagon budget would look like. The ever-so-scary talking points about how defense sequestration will be "devastating" and will "hollow out" our forces are patently ridiculous on their own terms, but in their hyperbole they highlight how little effort is made to justify spending hikes or maintaining the enormous status quo—and the efforts that do get made aren't very credible. Sequestration would cut $55 billion per year from the Pentagon's annual trough, which is more than any country but five (China, Russia, the UK, France, and Japan) spend on their militaries, yet it's only about 7 percent of our...

Ted Cruz Is the Next Jim DeMint, Not the Next Barack Obama

Flickr/Gage Skidmore
As the old saying goes, you never get a second chance to make a first impression. That isn't to say that first impressions are necessarily immutable destiny in politics, since there are those who have bombed in their national debut and turned things around, and others who looked terrific at first but turned out to be something less. Bill Clinton gave a famously terrible speech at the 1988 Democratic convention, and Sarah Palin was dynamite in her speech at the GOP's 2008 gathering. Nevertheless, there are some things you just can't overcome, particularly if what caused them wasn't a bad night's sleep but the very core of your being. A year or two ago, if you asked Republicans to list their next generation of stars Ted Cruz's name would inevitably have come up. Young (he's only 42), Latino (his father emigrated from Cuba), smart (Princeton, Harvard Law) and articulate (he was a champion debater), he looked like someone with an unlimited future. But then he got to Washington and started...

Shorter White House on the Sequester: "It Will Destroy Everything"

Wikipedia
At this point, odds are low for a deal to avert the sequester. Republicans want an agreement to replace the planned across-the-board spending cuts—which include cuts to defense spending—with ones that target social spending and entitlements. President Obama is willing to compromise on spending cuts, but insists on new revenues. "Balanced" deficit reduction—a key part of his reelection platform—is still a priority for the administration, and it commands wide support from the public. It's unclear what happens next, but the administration is attempting to build support for its position with a new lobbying campaign, aimed at the states. Just last night, the White House released detailed descriptions of how the sequester would affect each state. If it hits, says the administration , 70,000 children would lose access to Head Start, 2,100 fewer food inspections could occur, up to 373,000 mentally ill adults and children would go untreated, and small businesses may see $900 million in reduced...

Fix the Economy, Not the Deficit

AP Photo/Charles Dharapak
AP Photo/Charles Dharapak President Obama discuses the sequester last week surounded by emergency responders, whom the White House says could be affected if state and local governments lose federal money as a result of budget cuts. I t’s hard to be happy about the prospect of the sequester—the huge, automatics cuts to domestic spending set to take place if lawmakers can't reach a long-term budget deal—going into effect at the end of the week. Not only will it will mean substantial cuts to important programs; it will be a further drag on an already weak economy, shaving 0.6 percentage points off our growth rate. The end of the payroll tax cut, which expired on January 1, has already pushed it down to around 2.0, but the sequester cuts will depress it below the rate needed to keep pace with those entering the labor market. As a result, we are likely to see a modest increase in unemployment over the course of the year if the cuts are left in place. Of course, it could be worse. Half of...

Happy Birthday, Dear Income Tax

Five lessons for progressives from our first century of income taxes. 

flickr/jpconstantineau
flickr/jpconstantineau I n February 1913, exactly a century ago, the Sixteenth Amendment gave Congress a constitutional green light to levy a federal tax on income. Later that same year, lawmakers made good on that opportunity. An income tax has been part of the federal tax code ever since. So what can we learn, as progressives, from this first century of income taxation? Lesson One Steeply graduated income tax rates can help societies do big things. A half-century ago, America’s federal income tax rates rose steadily—and quite steeply—by income level, with 24 tax brackets in all. On income roughly between $32,000 and $64,000, in today’s dollars, couples in the 1950s faced a 22 percent tax rate. On income that today would equal between $500,000 and $600,000, affluent Americans faced a tax rate of 65 percent. The highest 1950s tax rate, 91 percent, fell on annual income that would today exceed $3.2 million. Today, o ur federal tax rates rise much less steeply. The current top rate? The...

Extremist Republicans Don't Want to be Attacked for Extremism

Google Images
Google Images President George W. Bush signing the reauthorization of the Violence Against Women Act. The National Review 's Andrew Stiles is still upset with Democratic messaging on reproductive rights: Welcome to the scorched-earth phase of the Democrats’ “war on women” campaign, and the beginning of a ruthless offensive to hold their Senate majority, and possibly to retake the House, in 2014. Democrats have nearly perfected the following exercise in cynical electioneering: 1) introduce legislation; 2) title it something that appeals to the vast majority of Americans who have no interest in learning what is actually in the bill, e.g., the “Violence Against Women Act”; 3) make sure it is sufficiently noxious to the GOP that few Republicans will support it; 4) vote, and await headlines such as “[GOP Lawmaker] Votes No On Violence Against Women Act”; 5) clip and use headline in 30-second campaign ad; and 6) repeat. I'm not sure if Stiles knows this, but the Violence Against Women Act...

The Sequester Blame Game

Google
A key part of the GOP's strategy on the sequester is to blame President Obama for the fact it exists at all. One good example is House Speaker John Boehner's op-ed in today's Wall Street Journal : With the debt limit set to be hit in a matter of hours, Republicans and Democrats in Congress reluctantly accepted the president's demand for the sequester, and a revised version of the Budget Control Act was passed on a bipartisan basis. Ultimately, the super committee failed to find an agreement, despite Republicans offering a balanced mix of spending cuts and new revenue through tax reform. As a result, the president's sequester is now imminent. The big problem with this narrative is that it directly contradicts Boehner's rhetoric at the time. After the deal was crafted, in July 2011, Boehner told GOP House members that "There was nothing in this framework that violates our principles." Later, in an interview with CBS News following the House vote on the bill, he described the deal as...

Americans Really Want the GOP to Knock It Off

fakelvis / Flickr
fakelvis / Flickr If the public is unhappy with anything, it's the crisis-driven governing of the last two years. Between the debt ceiling stand-off—when House Republicans threatened to sink the economy if they didn't get spending cuts—and the recent fiscal cliff battle—where, again, Republicans threatened economic disaster if they didn't get spending cuts—the United States has lurched from fight to fight, crisis to crisis, in an ongoing game of domestic brinksmanship. This strategy might appeal to the Republican base—which has no interest in the Obama agenda—but it's been a nonstarter with the broader public, which just wants government to function. Indeed, GOP intransigence is almost certainly the reason for its dismal ratings in the latest poll from USA Today and the Pew Research Center. Republican leaders, for example, receive a 25 percent approval rating from the public, with a sharp divide between Democrats and independents (who give them a 22 percent and 15 percent rating,...

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