Legislative Lowdown: Obama driving US off fiscal cliff

Brian Darling Liberty Government Affairs
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Are we better off under Obamanomics? Hardly, a new report from the Congressional Budget Office (CBO) reveals. According to the CBO, the federal government will spend $1 trillion more than it takes in this year — the fourth consecutive year that has happened. Furthermore, CBO projects negative growth and dismal unemployment numbers.

Remember President Obama’s promise that his stimulus plan would create jobs and set the economy on the right track? The CBO projects that if the Bush tax cuts are allowed to expire and scheduled defense cuts take effect, the unemployment rate will rise to 9.1% and the economy will contract by 0.5% by the end of next year.

The president’s record on the size and scope of the federal government is also terrible, according to this report. Obama inherited $10.6 trillion in debt and has seen it balloon to $16 trillion in his short tenure. His big-spending policies have saddled future generations with trillions in new debt.

This report contains further proof that the president’s proposed tax hikes are terrible for the economy. The CBO reports that “sharp increases in federal taxes and reductions in federal spending that are scheduled under current law to begin in calendar year 2013 are likely to interrupt the recent economic progress.” These policies will lead to “a recession” and “an unemployment rate that remains above 8 percent through 2014.”

The federal government is in dire need of specific cuts, but this report is further evidence that across-the-board cuts to defense spending may hit the wrong priorities at the Department of Defense. A better approach is to adopt some of the good ideas to cut government contained in Rep. Paul Ryan’s budget that passed the House of Representatives earlier this year.

These findings are echoed in the book “The Fiscal Cliff.” Brian Baker, president of Ending Spending, writes in the forward that “while the vast majority of Americans do pay taxes, including payroll, state, and sales taxes (to name a few), a recent report from the Joint Committee on Taxation shows that 51% of households in America paid no federal income tax in 2009, even though they used programs funded by federal income tax revenues.”

Baker is correct in his call for “lowering rates, broadening the tax base, and adopting pro-growth policies” in a way that will be revenue neutral in the first year, but will lead to increased revenues in future years as a result of a growing economy.

Obama’s policies are leading the U.S. economy to negative growth rates and high unemployment. Obamanomics is an abysmal failure. Washington needs to change direction.

Federal pay freeze

The Washington Post reported earlier this week that “President Obama told congressional leaders Tuesday that he is extending a two-year pay freeze for federal employees until at least next spring because Congress has not agreed on a budget for the next fiscal year.” The freeze is expected to last until early next year, when an expected continuing resolution to fund the government expires.

As expected, public-sector union leaders were quick to pounce. J. David Cox, the president of the American Federation of Government Employees, called the freeze “unconscionable” and argued that “federal employees cannot afford another four months or even another day of frozen wages.” In fact, federal employees are compensated at a much higher rate than their private sector counterparts.

A recent paper by The Heritage Foundation noted that “a January 2012 report by the Congressional Budget Office (CBO) shows that federal government employees receive substantially higher compensation than similarly skilled workers in the private sector.” The CBO concluded that “the average federal worker receives wages that are 2 percent higher than a similarly skilled private-sector worker, and benefits that are 48 percent higher. The average federal worker receives total compensation (wages plus benefits) 16 percent higher than market levels.

A pay freeze would bring federal employees’ pay more in line with the pay of their private sector counterparts.

Istook Live!

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I am lucky enough to be a guest host on the show and will be hosting next Friday. Tune in online at www.istook.com.

Brian Darling is Senior Fellow for Government Studies at The Heritage Foundation (heritage.org).