House Speaker John Boehner has promised to tie substantial spending cuts to upcoming debt-limit legislation. He said spending cuts will have to be at least as large as the dollar value of the allowed debt increase. Thus, if the legislation increased the legal debt limit by $2 trillion, then Congress would have to cut spending over time by at least $2 trillion.
When Republicans took control of the House in November, it set the stage for a brawl with Democrats over the sorry state of the federal budget. Round one — over funding the federal government for the remainder of the fiscal year — left both sides gasping as they staggered to their corners. Round two — over raising the debt limit — will be even tougher, but Republicans should come out swinging for fiscal responsibility.
Local officials, like their federal and state counterparts, spend other people’s money. Policymakers are naturally unlikely to spend other people’s money as carefully as they would their own. This situation is exacerbated when local officials spend money obtained from federal taxpayers. At least when local taxpayers foot the bill, they have an incentive to keep an eye on how their money is spent. That incentive is largely nonexistent when the money comes from Washington.
The British royal wedding was splendid, and the bride and groom were a great match. As a fiscal wonk, my idea of a royal match-up would be marrying corporate tax cuts and business subsidy cuts. The Obama administration is talking about corporate tax cuts and Republicans are talking about cuts to farm subsidies. Might they get together over a cup of tea and work out nuptials?
Advocates of the U.S. sugar program like to claim they are protecting our “food security.” It turns out that trade barriers deliver higher prices for consumers while making our food supplies LESS secure.
Republicans ride a wave of voter discontent over a Democratic president's big-government agenda to victory in the November elections. The new Republican majority in the House puts together a package of spending cuts. The defiant president tells upstart Republicans that he has “strongly and consistently opposed the House version of the bill because it would have unnecessarily cut valuable, proven programs that educate our children, invest in our future, and protect the health and safety of the American people.”
Back in January I noted that some analysts believe that the statutory debt ceiling should be eliminated. They view the potential for political brinksmanship as creating an unnecessary risk that financial markets will get rattled if there’s a chance the government won’t make good on its debt obligations in a timely manner. I argued that “forcing policymakers to spar publicly over fiscal policy is healthy, especially at a time when analysts generally agree that the country is headed toward an economic catastrophe if Washington’s mounting debt isn’t brought under control.”
President Obama’s dream of connecting 80 percent of Americans to a high-speed rail line appears to be dead. Congress appropriated $8 billion for high-speed rail in the 2009 stimulus bill and $2 billion more in the 2010 appropriations bill. But, after newly elected governors of Florida, Ohio, and Wisconsin rejected high-speed rail projects in those states, Congress declined to include any more funds in 2011 and it is unlikely to spend any more on this boondoggle as long as Republicans have a hold on the House.