Weeks before their historic victories in the November 2010 elections, congressional Republicans released the “Pledge to America,” a set of principles for governing should the American people give them control of the House. Prominent in the agenda was a promise to “roll back spending to pre-stimulus, pre-bailout levels” and review “every current government program to eliminate wasteful and duplicative programs.” Judging by their recent votes, however, one can’t help but wonder if House leadership has abandoned their pledge for fiscal restraint.
Adam Berkland | All Articles
If you think mega-banks like JP Morgan and Bank of America are “too big to fail,” you may be surprised to hear that the U.S. government is actually by far the most dominant player in our nation’s consumer credit markets. The American Enterprise Institute’s Ed Pinto explains that Uncle Sam currently backs 86% of all consumer lending in this country — your taxpayer money on the line for trillions of dollars lent to individuals and families.
Many conservatives are outraged that the U.S. Senate hasn’t passed a budget resolution since early 2009. Yet in a way, even this eye-popping fact understates how badly federal budgeting efforts have broken down in recent years.
Last week, the members of the so-called super committee announced they could not reach a deal to trim $1.2 trillion from federal deficits over 10 years. The back-up plan is $1.2 trillion in automatic “sequestration” cuts that take effect starting in January 2013, with about half of this coming from the defense budget. When you add in the cuts already agreed to in this summer’s debt-ceiling deal, the defense budget will see a not-so-insignificant cut of 14 percent over the next 10 years.
Early last week, Americans discovered that nearly $13 million in bonuses were paid to 10 executives at the government-owned mortgage giants Fannie Mae and Freddie Mac. Just days before, the two entities had once again reported substantial quarterly losses and asked for another $13.8 billion in federal aid. Given that taxpayers have already provided nearly $170 billion to prop up these government-sponsored enterprises (GSEs), it’s no surprise that there has been public outrage over the hefty bonuses.
Deficit reduction is on nearly everybody’s mind in Washington. With a soaring national debt and a third-straight year of trillion-dollar deficits, policymakers in Washington are keeping their eyes and ears open for spending cuts any way they can get them. One proposal came in mid-March from Senator Orrin Hatch (R-Utah): rescind $10 billion of currently unused funds from the Small Business Lending Fund (SBLF). The $30 billion fund is still sitting idle despite being signed into law last fall, so why not return some of those taxpayer dollars to the Treasury to reduce the debt? At a time of severe budgetary stress, that would be a smart and quick way to shrink the deficit. But with the SBLF’s continued implementation delays and, more importantly, the program’s significant design flaws, perhaps the full $30 billion ought to be on the chopping block.