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Freedom Works
Friday April 20, 2018 @ 01:36:57 PM mt

Clock Ticks for Democrats Bad Move on Net Neutrality



Senate Democrats could seek to reverse the Federal Communications Commissions (FCC) Restoring Internet Freedom Order by Monday. While their attempt has no chance of passing the Republican-controlled House or avoiding a President Trump veto, the move panders to severely misinformed activists.

Democrats have invoked the Congressional Review Act, which grants Congress the authority to repeal federal rules with simple majorities, to reinstate Title II net neutrality regulations. FCC Chairman Ajit Pai repealed these regulations last year, citing net neutralitys detrimental effects on broadband investment and innovation. Senate Dems have forty-nine cosponsors on review legislation, exceeding the threshold of thirty for a vote by April 23rd.

Liberal activists often cite fears of censorship, monopolization, and slowed Internet speeds as justifications for Title II regulations, but none are accurate. Title II instead acts like a subsidy for bandwidth-intensive websites like Netflix and Youtube. Internet service providers (ISPs), which compete by offering fast speeds, simply want network management capabilities. That way, they can provide the fastest service possible to customers.

Network management is necessary because all bits traveling across the Internet arent equal. Video-streaming services require heavy, uninterrupted connections. Any disruption or latency, and your video buffers. Other services dont have these problems. ISPs want to maximize speed for everybody, which is the fundamental idea behind beleaguered paid-prioritization agreements hated by left-wing activists.

In a free market, an ISP would be able to ask a company like Netflix, which occupies 35 percent of bandwidth alone on any day in the United States, to pay more for guaranteed fast speeds. This is due to the increased burden companies like Netflix place on ISP infrastructure. The ISP can then reinvest profits in high-capacity networks like 5G technology that benefit everybody.

Activists slander paid-prioritization as gaming the system against small startup websites, another false claim. Paid-prioritization benefits smaller websites by allowing ISPs to expand bandwidth capacity. Otherwise, every site would pay the same prices to ISPs. Less intensive bandwidth websites would be priced out of the market, and the result would be a congested, slow Internet. Big burdens from high traffic video-streams would smash connectivity for remaining small sites, and theyd be forced to subsidize this awful system.

Chairman Pais Restoring Internet Freedom Order brought back the pre-2014 Internet regulatory framework that allowed for the web to become what it is today. Innovation will continue to thrive now that these rules have been restored. By legalizing paid-prioritization, ISPs can use pricing systems that make sense. None of this deals with the ISP-consumer relationship. Repealing net neutrality has nothing to do with the prices you pay for internet service. Its all about the relationship between ISPs and content companies online. To understand why Democrat net neutrality infatuation hurts the Internet, think of a delivery truck. It makes no sense to charge the same shipping price for a 500lbs package as a 5lbs package. The heavier package likely uses more space, labor, and fuel. Meanwhile the 5lbs package is easy to handle and store. Charging two prices a big price for big packages and a cheap price for small packages is an efficient, fair outcome. Attacking paid prioritization would make no sense in any other industry.

The internet should be the same way. Bandwidth intensive video streamers should pay more money to ISPs if ISPs find such a deal to be advantageous. Low-bandwidth functions that dont involve streaming, like email, blogs, or messaging should pay less. That way, ISPs can guarantee fast service for functions that need it while decongesting the web for everyone else.

Title II regulations harmed our internet. Lets hope Senate Democrats are unsuccessful at bringing them back.

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Freedom Works
Friday April 20, 2018 @ 01:43:48 AM mt

The Weekly Fix: Why Save Lives When You Can Scam Them



The fix is in. New York State Assemblywoman Pamela Harris (D) was indicted for defrauding approximately $60,000 in state and federal funds between 2012 and 2016. This includes scamming the Federal Emergency Management Agency (FEMA) out of almost $25,000 in Hurricane Sandy relief money.

Her indictment includes charges of wire fraud, bankruptcy fraud, submitting false claims, witness tampering, and obstruction of justice.

In addition to FEMA, Harris stands accused of defrauding other government agencies including the New York city council, the U.S. Department of Housing and Urban Development, and the citys Build It Back program for Sandy victims.

Heres what happened. Assemblywoman Harris claimed her house was badly damaged by Hurricane Sandy, forcing her to vacate the home. She applied for payouts from relief agencies to assist her through this relocation effort. To provide evidence for the claims, Harris manufactured fake lease agreements and rent payments for a second residence.

With tens of thousands of dollars that could have been spent on the actual victims of Hurricane Sandy, Harris went on a shopping spree at Victorias Secret and Kohls, spent $10,000 on cruise tickets and vacations, and paid off the mortgage on her original home.

Almost 50 deaths can be directly attributed to Hurricane Sandy in New York. That didnt seem to deter Assemblywoman Harris from profiteering off the pain of her own constituents. It doesnt get much more despicable than this.

To make matters worse, Harris then tried to sabotage the FBI investigation after the fact by pressuring witnesses to lie on her behalf. If convicted, Harris could get up to 30 years in prison for the FEMA scamming, and 20 years each on two separate wire fraud charges.

Its time to take a stand. The American people arent being heard by their representatives because the game is rigged. Government isnt broken. Its fixed.

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Freedom Works
Friday April 20, 2018 @ 01:43:46 AM mt

Support the Earmark Elimination Act H.R. 5369



On behalf of our activist community, I urge you to contact your senators and ask them to support the Earmark Elimination Act, H.R. 5369, introduced by Reps. Jim Cooper (D-Tenn.) Ted Budd (R-N.C.), Ralph Norman (R-S.C.), and Kathleen Rice (D-N.Y.). The bill would make permanent the temporary moratorium on congressional earmarks put into effect in 2010 by creating a point of order against any provision within a bill that matches the definition of an earmark, and when raised would be stricken absent a two-thirds majority to override.

This legislation has an identical companion bill in the Senate, introduced in January by Sen. Jeff Flake (R-Ariz.), and has 13 cosponsors, including Sens. Rand Paul (R-Ky.) and Ted Cruz (R-Texas). Earmarks, called by then-Rep. Flake in 2006 as the currency of corruption, are specific line items in a spending bill, such as an appropriations or transportation bill, for a project or program. Not only corruptive in nature, they are also, as then-Sen. Tom Coburn (R-Okla.) astutely put it, the gateway drug to spending addiction. After Republicans faced widespread backlash to their rampant use of earmarks through 2010, the House Republican Conference signed off on a ban of all earmarks. At their peak in the mid 2000s, total earmarks reached nearly 14,000 in a single year (2005), costing upwards of $30 billion (2006).

Proponents of earmarks argue that these extra spending provisions funding often-useless projects grease the wheels for legislation by persuading individual members to come on board for the sake of earmarked spending for their districts, and come at a small monetary price to taxpayers. They refuse to acknowledge the corruption and spending addiction that comes with earmarks, not to mention the public opposition to the pernicious practice.

The House Rules Committee held hearings in January on the potential of bringing earmarks back into the congressional process by ending the 2010 moratorium. FreedomWorks submitted written testimony in opposition to ending the moratorium to the hearing, and has signed onto coalition letters in opposition as well. This bill, with a bipartisan group supporting it and an identical bill in the Senate with bipartisan support as well, represents the correct path forward on earmarks banning them outright certainly not bringing them back.

As Rep. Budd said of the bill, It represents a permanent solution to the earmark problem, and gives the current ban the force of law...Im grateful to my bipartisan colleagues, Reps. Cooper, Norman and Rice, for their support on this important legislation.

Earmarks are the antithesis of transparency and accountability, and must not be brought back into the congressional process. For these reasons, I urge you to contact your senators and ask them to support the Earmark Elimination Act, H.R. 5369.

Sincerely, Adam Brandon President, FreedomWorks

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Freedom Works
Friday April 20, 2018 @ 01:43:45 AM mt

In the Case of Fair Sentencing Act Retroactivity USSC Report Lends Resounding Endorsement



Retroactive application of the Fair Sentencing Act (FSA) which became law in 2010 and reduced the sentencing disparity for crack and powder cocaine from 100-to-1 to 18-to-1 has been a hotly contested issue in the criminal justice space. The primary concern from those opposed to retroactivity, including Attorney General Jeff Sessions, is that allowing offenders to petition the court for a review and reduction in their sentence could result in violent criminals being released to the streets, putting public safety at risk.

Proponents of FSA retroactivity cite the process required to reduce a sentence as a sufficient guard against such criminals being released. Retroactivity does not mean automatic sentence reductions and jail doors opening, but simply allows the a defendant to petition for full court review of his or her case to determine if their case is fit for a reduced sentence under the law.

The Senate Judiciary Committee marked up the Sentencing Reform and Corrections Act, sponsored by Sen. Chuck Grassley (R-Iowa), in February of this year. Section 105 of the bill includes retroactive application of the Fair Sentencing Act. Retroactivity of the Fair Sentencing Act is also a provision in the Smarter Sentencing Act, S. 1933, introduced by Sen. Mike Lee (R-Utah). In the past, the Smarter Sentencing Act has been cosponsored by Sens. Ted Cruz (R-Texas) and David Perdue (R-Ga.).

Prior to the markup, Attorney General Sessions sent a letter from the Department of Justice to Sen. Grassley, the chairman of the committee, expressing his concerns with the bill -- specifically opposing the provision allowing retroactive application of the Fair Sentencing Act.

[T]his bill would allow judges to retroactively reduce sentences...In so doing, it risks putting the very worst criminals back into our communities and eviscerates the lawful results of either structured plea agreements or trials, Sessions wrote on behalf of the Department of Justice.

An amendment was offered in committee to directly address this concern by striking the retroactivity provision. The amendment failed by a vote of 6-15. As a result, Sen. Cruz withheld his vote from the underlying bill. Nevertheless, it was reported out favorably by a vote of 16-5.

These concerns underlying the chief opposition to retroactivity of the Fair Sentencing Act are widely regarded as baseless by supporters of retroactivity. This includes Chairman Grassley, who expressed this during markup following Sen. Cruzs remarks bringing up his amendment.

Eliminating the retroactivity eliminates a very vital part of this bill[i]ts important to note that if this bill becomes law, not a single person will automatically be released from prison, nor will a single sentence be automatically reduced, he said. Instead, a court has to review all the circumstances that include the public safety, criminal history, and the impact on the victims.

Together, as Chairman Grassley notes, the comprehensive review process would ensure public safety is not compromised as a result of allowing reduced sentences. Those who receive reduced sentences would be receiving them after careful consideration by the courts of the facts, and would not pose any more risk to society upon early release than they would had they been required to serve their whole sentence under previous law. This is the goal of retroactivity.

This week, the United States Sentencing Commission put out a report, Recidivism Among Federal Offenders Receiving Retroactive Sentence Reductions, that confirms the arguments of those in favor of retroactive application of the Fair Sentencing Act. The Commissions report analyzed recidivism rates of two groups of federal crack cocaine offenders -- one group which received reduced sentences through existing limited ability to apply FSA retroactively, and the other group which served their full sentence.

The Commission asked this simple research question: Did the reduced sentences for the FSA Retroactivity Group result in increased recidivism? A yes answer to this question would indicate that the concerns of opponents of sentencing reform are valid and that applying FSA retroactively would in fact increase crime and pose a public safety threat.

On the other hand, a no answer to this question would validate the arguments of proponents of FSA retroactivity, proving that the process in place to determine which offenders will receive reduced sentences is an ample guard against the retroactivity provisions applying to those who are potential public safety threats. A no answer is what the USSC found.

According to the report, The recidivism rates were virtually identical for both groups, and [o]ver a three-year period following their release...each [group] had a recidivism rate of 37.9 percent. Additionally, approximately one-third of offenders who recidivate in both groups...had court or supervision violation as their most serious recidivist event.

The answer USSC found to their question was not only a resounding no, but also was an indication that often, the recidivist charge of the offenders that did recidivate was for the lowest possible, nonviolent violation possible. Together, these simple facts confirm long-held beliefs of proponents of FSA retroactivity, and undermine the fear-driven narrative opponents of sentencing reform in their attacks on the impact of retroactivity.

Armed with this new knowledge, directly from the United States Sentencing Commission, the arguments in favor of retroactivity are strengthened and should provide a new avenue to persuade others that this provision -- either as a standalone bill or as part of a broader bill like the Sentencing Reform and Corrections Act -- is not cause for opposition to the bill entirely. In fact, it is cause for support.

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Freedom Works
Thursday April 19, 2018 @ 03:05:44 PM mt

FreedomWorks Launches Draft Jim Jordan Campaign for House Speaker



Thousands of FreedomWorks activists nationwide are calling on Rep. Jim Jordan (OH-04) to run for Speaker of the House to fill the void left by retiring Speaker Paul Ryan (WI-01).

In less than 24 hours, conservatives have taken more than 8,000 grassroots actions to contact their representatives and voice support for a Jordan speakership campaign on social media, using the hashtag #SpeakerJordan.

FreedomWorks president and CEO Adam Brandon commented:

Jim Jordan is the only name that received unanimous consent from the FreedomWorks Activist Advisory Council. The level of grassroots energy surrounding a Jordan speakership campaign is something we havent seen in years. It indicates to us that selecting a truly conservative speaker would change the entire momentum of the 2018 midterm election cycle.

Our activists believe this speakership campaign is the battle that will determine the future of the Republican Party. If Republicans in Congress really want to see the swamp drain, Rep. Jordan is the guy thats going to work with President Trump to get it done.

A House with Speaker Jordan at the gavel would actually pass laws, stand on principle, and cut spending. Speaker Jordan would make Congress work again.

The path to victory for a true conservative to be selected for House leadership is a challenge, but FreedomWorks is committing its full institutional support behind Rep. Jim Jordan.

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Freedom Works
Thursday April 19, 2018 @ 11:19:51 AM mt

Key Vote YES on the Confirmation Vote on Jim Bridenstine to be NASA Administrator



On behalf of our activist community, I urge you to contact your senators and ask them to vote YES on the confirmation vote on Rep. Jim Bridenstine (R-Okla.) to be the administrator of NASA. Between his time as an aviator in the United States Navy, his firsthand experience serving as the executive director of the Tulsa Air and Space Museum and Planetarium, and his work in Congress, Bridenstine is extraordinarily qualified for the role of NASA administrator.

In this role at NASA, Bridenstine will have the ability to bring much-needed reform to the agency, implementing the same principles of free markets and government efficiency that he tirelessly fought for in Congress. Serving on the House Committee on Science, Space, and Technology, Bridenstine became a champion of issues pertaining to air and space exploration.

He proposed legislation in Congress, the American Space Renaissance Act, which would have provided certainty to encourage commercial space innovation and promote stability, accountability, and mission clarity at NASA. He believes NASA has become a jack of all trades and hopes to help it focus on human exploration and pioneering space, as was its main objective in 1958. This is precisely the mentality needed in a NASA Administrator.

Additionally, his colleagues have been outwardly very supportive of his nomination to serve. Sen. Ted Cruz (R-Texas) took to the Senate floor yesterday prior to Bridenstines cloture vote to encourage his confirmation. Throughout my time in the Senate I have been blessed to meet with a number of astronauts, Sen. Cruz said. [Q]uite a number of those astronauts at NASA have backgrounds very similar to that of Rep. Bridenstines. He will be able to lead them as one who served a mission similar to the ones they had served in and are serving in now.

Fellow Oklahoman, Sen. Jim Inhofe (R-Okla.), has also expressed his deep support for Bridenstine, saying on Twitter after Bridenstines successful cloture vote yesterday, He has the experience to take our space program to new heights b/c of his background as an aviator, passion for space & work to modernize our nations space program. We should confirm him swiftly. Sen. James Lankford (R-Okla.) also issued a similar statement on Twitter following the vote.

For these reasons, I urge you to contact your senators and ask them to vote YES on the confirmation vote on Jim Bridenstine to be NASA Administrator. FreedomWorks will count the vote on our 2018 Congressional Scorecard. The scorecard is used to determine eligibility for the FreedomFighter Award, which recognizes Members of the House and Senate who consistently vote to support economic freedom and individual liberty.

Sincerely,

Adam Brandon President, FreedomWorks

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Freedom Works
Thursday April 19, 2018 @ 11:19:50 AM mt

Support the One Percent Spending Reduction Act H.R. 5572



On behalf of FreedomWorks activist community, I urge you to contact your representative and strongly encourage him or her to cosponsor the One Percent Spending Reduction Act, H.R. 5572, introduced by Rep. Mark Sanford (R-S.C.). The bill, also known as the penny plan, would balance the federal budget in five years by simply cutting one penny from every dollar the federal government spends.

When the One Percent Spending Reduction Act was first introduced in Congress, in May 2011, the United States a $14.322 trillion national debt. Today, the national debt exceeds $21 trillion, and the river of red ink flowing from Washington, D.C. is threating to drown the American people.

According to the Congressional Budget Office (CBO), budget deficits are projected to rise, reaching $1 trillion annually in 2020, quicker than expected because of the passage of the Bipartisan Budget Act, which blew through the spending caps by nearly $300 billion over two years. The growth of federal budget deficits is not for lack of revenue into the coffers of the Treasury.

Between 1967 and 2016, the federal government took in average revenues of 17.4 percent as a percentage of gross domestic product (GDP). Over the next ten years, 2018 through 2027, the federal government is projected to receive revenues of 18.2 percent.

Average outlays between 1967 and 2016 were 20.3 percent of GDP. Between 2018 and 2028, federal spending is expected to eclipse 22 percent of the economy. The further out into the future, the budgetary picture only gets worse, and each American born will inherit a larger share of the national debt than the generation who came before them, diminishing prosperity and destroying opportunity.

The One Percent Spending Reduction Act would reduce federal noninterest spending by 1 percent over the next five years. The bill would also cap federal spending at 18 percent of gross domestic product. The legislation would allow Congress to make specific, targeted cuts to meet the required 1 percent spending reduction.

Our country is on an unsustainable fiscal path. The penny plan would put us back on the right track. For these reasons, I urge you to contact your representative and strongly encourage him or her to cosponsor the One Percent Spending Reduction Act, H.R. 5572.

Sincerely,

Adam Brandon, President, FreedomWorks

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Freedom Works
Thursday April 19, 2018 @ 01:15:21 AM mt

Some Form of Line-Item Veto Is Necessary But It Isn't a Cure for Washington's Spending Addiction



In a press conference on Friday, President Donald Trump criticized the process that Congress used to pass the Consolidated Appropriations Act, H.R. 1625, although he signed the spending bill into law. Still, he threatened to veto a future spending bill that was packed with wasteful spending and unrelated legislative priorities.

Specifically, the president asked Congress for a new tool to target wasteful spending. To prevent the omnibus situation from ever happening again, he said, Im calling on Congress to give me a line-item veto for all government spending bills.

The line-item veto isnt a new concept. In fact, the governors of 44 states have the power to reduce or strike appropriations passed by legislatures. State lawmakers would have the ability to override the reduction or veto of a specific line item the same as they would an ordinary piece of legislation. The only states that do not grant this authority to governors are Indiana, Nevada, New Hampshire, North Carolina, Rhode Island, and Vermont.

The line-item veto can be a powerful tool to reduce spending or reduce waste, particularly in instances in which the branches of government are not controlled by the same party. But it is not a panacea. Although the process for the Consolidated Appropriations Act was terrible, it also spent $1.3 trillion, nearly $300 billion above the spending caps established in 2015.

Nevertheless, one may wonder why the president does not have the ability to reduce or strike appropriations in the same manner as 44 governors? The line-item veto was a core component of House Republicans Contract with America during the 1994 midterm election.

In 1996, Congress passed the Line Item Veto Act, S. 4, which was sponsored by Sen. Bob Dole (R-Kan.). President Bill Clinton signed it into law. The bill amended the Congressional Budget and Impoundment Control Act of 1974 to give the president the ability to rescind discretionary spending, any new mandatory spending, and limited tax benefits. Congress had the ability to cancel any line-item veto, within 30 days, through a resolution of disapproval, which could still be vetoed by the president and subject veto override.

Unfortunately, the Line Item Veto Act had a short life. The law was immediately challenged in the federal court system by six members of Congress in Raines v. Byrd. Although that lawsuit was initially successful in district court, the Supreme Court determined that the senators did not have standing to challenge the law.

In 1998, the Supreme Court invalidated the law in a 6 to 3 decision in Clinton v. City of New York, holding that the Line Item Veto Act violated the Presentment Clause found in Article I, Section 7 of the Constitution, which established the process by which a bill becomes a law.

In the opinion of the Court, Justice John Paul Stevens explained that the only way to remedy the ruling was to pass a constitutional amendment. If there is to be a new procedure in which the President will play a different role in determining the final text of what may become a law, he wrote, such change must come not by legislation but through the amendment procedures set forth in Article V of the Constitution.

Passing a constitutional amendment is not easy, and it was not meant to be. Since the Constitution went into effect in 1789, it has been ratified only 27 times. We know the first ten amendments to the Constitution as the Bill of Rights. These amendments were ratified in 1791. The subsequent 17 amendments were ratified between 1795 and 1992.

Now, to put it diplomatically, Congress barely functions. Article V of the Constitution requires two-thirds of the House and the Senate and ratification by three-fourths of the states. In such polarized political atmosphere, this is an insurmountable hill to climb.

The constitutionality of the line-item veto aside, there may be another option available. A 2004 report prepared by the Congressional Research Service explained, [A] number of statutory procedures used in the past, without raising constitutional questions, offer the President substantial discretion over the expenditure of funds. Congress may pass lump-sum appropriations that provide funds not exceeding amounts specified in the statute. Funds may be made available for expenditure unless the President determines that certain factors, identified in the statute, prevent the funds from having legal force or effect. In these cases the President would not be repealing or amending the statute; he would be following the law and exercising authority given him.

In Clinton v. City of New York, the Supreme Court appeared to acknowledge that the not exceeding language would withstand judicial scrutiny. Justice Stevens specifically pointed to such language in an appropriations bill signed by President George Washington in 1790. Separately, in his dissent, Justice Antonin Scalia argued, [T]here is not a dimes worth of difference between Congresss authorizing the President to cancel a spending item, and Congress's authorizing money to be spent on a particular item at the President's discretion.

Indeed, Justice Scalia was right to point out that giving a president the power to cancel spending or including the not exceeding language is a distinction without a difference. There has been legislation since Clinton v. City of New York to revive the line-item veto. Whether it would survive a constitutional challenge is not clear since it never became law.

In 2011, the House passed the Expedited Legislative Line-Item Veto and Rescissions Act, H.R. 3521, sponsored by then-House Committee Chairman Paul Ryan (R-Wis.). The bill would have given a president the ability to make recommendations for rescissions from an appropriations bill. Those recommendations would have received fast-track authority, requiring an immediate approval or disapproval from Congress. The savings from rescissions would have been required to be used for deficit reduction or a budget surplus. The Senate never considered the bill.

Whether Congress passes some form of a line-item veto or begins including the not exceeding language in appropriations bills, it will do little to rectify concerns about federal spending. Remember, the Consolidated Appropriations Act only appropriated $1.3 trillion, which represents less than 30 percent of all federal spending for FY 2018. It would not address mandatory spending, including entitlement programs, which are more than 60 percent of federal outlays.

Should Congress give President Trump what he asked for? Absolutely. Some form of line-item veto authority, either codified in statute or a constitutional amendment, or not exceeding language in appropriations bills may indeed be valuable. But it will not have a substantial impact on the deficit or address the United States long-term fiscal problems.

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Freedom Works
Wednesday April 18, 2018 @ 09:28:09 PM mt

Congress Doesn't Lack Tax Revenue -- Democrats and Republicans Have a Spending Problem



Opponents of the Tax Cuts and Jobs Act, which delivered much-needed tax relief to the middle class and business owners large and small, have complained that the law is contributing to the increase in expected budget deficits over the next ten years. Certainly, budget deficits are a serious concern, and Congress has shown no interest in addressing the problem.

Despite the literal apocalyptic rhetoric from some opponents of the tax bill, including House Minority Leader Nancy Pelosi (D-Calif.), the recent Congressional Budget Office (CBO) report shows that projected tax revenue collections are close to the average of the previous 50 years, from 1968 through 2017. During this 50-year period, tax receipts from sources provided by the CBO averaged 17.4 percent of gross domestic product (GDP). Under the Tax Cuts and Jobs Act, the projected tax receipts will be 17.1 percent of GDP over the next 11 years, 2018 through 2028.

As the chart above shows, individual income tax receipts are actually projected to be higher as a percentage of GDP than the previous five decades. Now, some may say the comparison isn't accurate because the individual tax cuts in the Tax Cuts and Jobs Act will expire at the end of 2025 unless Congress extends them. That's true. But if we cut the projected tax receipts off after 2025, individual tax receipts would be 8.4 percent of GDP, higher than any of the any of the previous five decades. (Click here to see a larger version of the chart below.)

The real problem is spending, folks. Even though projected tax revenues are only percentage points of GDP less than the average of the previous 50 years, spending will continue to grow. Between 1968 and 2017, federal spending averaged 20.3 of GDP. There were occasions in this 50-year period when spending eclipsed 21 percent of GDP, most recently between 2009 and 2012 when the neo-Keynesians in the Bush and Obama administrations believed they could spend the United States out of a recession. Federal spending in this four-year period averaged 23.3 percent of GDP.

Unfortunately, the CBO projects that federal spending will begin to grow above the historical average. Over the next 11 years, federal spending will exceed each of the previous five decades. By 2028, federal spending will consume 23.7 percent of the economy, a level eclipsed only once, in 2009, between 1968 and 2017. This is in large part to the growth in mandatory spending, which includes earned entitlements like Medicare and Social Security, as well as Medicaid and other welfare programs. (Click here to see a larger version of the chart below.)

The growth of mandatory spending is not a surprise. Yet, members of Congress from both parties continue to ignore it, preferring to kick the can down the road to let a successor address.. But mandatory spending will eventually leave Congress with tough choices. They will either have to reduce spending on defense and/or nondefense discretionary programs to mitigate the growth of mandatory spending. The recent budget deal, however, essentially guarantees that this scenario won't happen. A new baseline for spending has been created for FY 2018 and FY 2019, setting up spending increases in the out years that CBO doesn't measure because it's not current law.

Increasing taxes is another option, but it comes with a steep price: diminished economic growth. Some combination of spending reductions and tax increases is an option. Doing nothing is another option, but that presents another set of problems if borrows begin to worry about the United States' ability to pay debt. Such a concern will lead to higher interest rates, leading to an increase in payments for debt service, which is another aspect of federal spending that is on the rise because of large deficits.

Democrats, as well as some Republicans, who are complaining about the Tax Cuts and Jobs Act are ignoring the growth of federal spending. It has been said before, but it needs to be said again -- Congress doesn't have a revenue problem; it has a spending problem. Revenue collections are projected to be near historical averages. Spending, however, will continue to rise until the political will exists in Congress to address this fiscal challenge.

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Wednesday April 18, 2018 @ 05:08:45 PM mt

The Shadow of Yesterday's Triumph: Why Kicking the Can Down the Road on Welfare Reform Is Not a Solution



This summer, America will mark the 22nd anniversary of the enactment of the Personal Responsibility and Work Opportunity Act. Reforming welfare was a prominent part of then-Speaker Newt Gingrichs Contract With America as well as President Bill Clintons 1992 presidential campaign. After lengthy negotiations and a couple of vetoes by President Clinton, the measure was passed with bipartisan support. It promised to overhaul the way America handled welfare and government assistance for years to come.

Of the historic measure, President Clinton remarked:

[It] gives us a chance we haven't had before to break the cycle of dependency that has existed for millions and millions of our fellow citizens, exiling them from the world of work. It gives structure, meaning and dignity to most of our lives.

This bill was supposed to be a triumph for every American voter who trusted Congress and President Clinton to stop that cycle by putting Americans to work and getting serious about government spending. Welfare, as it existed before 1996, had failed millions of Americans and put too many in a life that robbed them of any chance at independence.

The measure emphasized work requirements, tighten the means tests for eligibility in the programs, and allowed states to design their own welfare systems by instituting block grants. The goal was very clear. Welfares success should be judged by how many people are able to leave the program, not by how many benefits are given out or by how many people are receiving government assistance.

At first glance, it seemed to work out very well. Employment and earnings went up. The number of welfare recipients went down. That seemed to be a clear cut statement that the mission of the legislation was being accomplished as planned. Both Gingrich and Clinton could go to the American people and say that they had saved the wasteful, floundering welfare state.

Despite this apparent victory, all these years later, politicians on both sides of the aisle still campaign on the need to overhaul our welfare system. Republicans and conservatives use largely the same talking points now that Gingrich used over 20 years ago. Too many people who are able to work remain on government assistance; the system disincentivizes upward mobility, and robs people of the dignity of work.

This begs the question: what happened? While, on the surface, the 1996 welfare reform package appeared to be one of the greatest legislative accomplishments of our time, the bill was not crafted for long-term success. While the negotiations between both parties to come to an agreement on such a hot-button issue should be praised, the final substance lacked any safeguards against future abuse, and included loopholes that eroded the possibility of meaningful results down the road. To pass meaningful welfare reform in todays world, lawmakers should look at the successes of the 1996 effort, but should, more importantly, scrutinize its shortcomings.

The Shadow of Yesterdays Triumph: Why Kicking the Can Down the Road on Welfare Reform Is Not a Solution

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