Budget deal wins final Senate approval, heads to Obama's desk

WASHINGTON -- A bipartisan budget plan won final approval in Congress on Wednesday, with the Senate passing the hard-fought compromise.

President Obama was expected to swiftly sign the measure, which cleared the Senate 64 to 36. Nine Republicans joined all Democrats in approving the measure. Three Republicans who voted to advance the bill earlier in the week voted against it Wednesday. The House overwhelmingly passed it last week.

The $85-billion package is modest in scope but represents a rare bipartisan achievement for a divided Congress that has spent the past two years engaged in high-stakes standoffs over government budgets.

Under the accord reached by Rep. Paul D. Ryan (R-Wis.), the former vice presidential nominee, and Senate Budget Committee Chair Patty Murray (D-Wash.), spending for 2014 and 2015 will rise by $63 billion, reversing some across-the-board cuts to defense accounts and social programs that only the most conservative lawmakers wanted to keep.

PHOTOS: 2013's memorable political moments

The increased spending was opposed vehemently by conservative groups, who split the GOP as they tried to stop the deal. It will be paid for with new fees on airline travel to pay for transportation security, as well as reductions in the pensions of new federal employees and younger, uninjured military personnel. There will be no new taxes.

Via: LA Times
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RYAN BUDGET DEAL MAY HIKE TSA FEES

Congressional Budget Committee chairs Rep. Paul Ryan and Sen. Patty Murray are working to finalize a deal on the federal budget. Reportedly, the two are just "a few billion" away from an agreement to fund government and replace the automatic sequester cuts. The deal may also increase government revenue through higher "fees" for airline security and other government services. This idea should never get off the ground. 

“That sort of thing is a user fee, it’s not a tax,” said Rep. Tom Cole (R-Okla.), a party to the negotiations. “It’s not something that I would have an objection to as a tax increase. But we’ll see where [Ryan and Murray] end up.”

Calling higher government revenue a "fee" rather than a "tax" is mostly a distinction without a difference. Money to pay a fee still comes from a consumer's wallet, not some magical "fee" account. 

Reportedly, Ways and Means Chairman Rep. David Camp, has briefed several Republican colleagues about the possibility of including "revenue raisers" in any budget deal. As if the federal government had a revenue problem.

According to the Congressional Budget Office, government revenue currently equals about 15% of GDP. Next year, the amount the government takes out of the economy will spike to 17.5%. Over the next two decades, the government's take will gradually increase to equal 19.5% of the economy, higher than its historical average. Over the past 4 decades, government revenue has averaged 17.5% of the overall economy. 

If anything, the government should be trimming its revenues. 

Via: Breitbart

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Tax Increases Really Hurt Growth and Jobs

Some lawmakers, led by Senate Budget Committee chair Patty Murray (D–WA), are seeking to raise taxes in the budget conference to replace the modest spending reductions referred to as sequestration. They say that spending cuts hurt growth and jobs.

If they are truly concerned about the economy and Americans’ opportunities, their approach is misguided for a number of reasons.

Based on new research by Heritage economist Salim Furth, PhD, here are just three reasons why replacing sequestration spending cuts with tax increases is a really bad idea:

1. Tax increases hurt economic growth and jobs. At a recent Heritage symposium on European austerity, three economists from Harvard University, the International Monetary Fund, and the American Enterprise Institute all acknowledged that tax increases can cause deep and immediate economic losses. Had the $85 billion in sequestration spending reductions in 2013 been replaced with tax increases, the estimated costs for the economy range from $57 billion in output and 320,000 jobs to $240 billion in output and 1.3 million jobs. That would have been a sizable loss for a still struggling economy.
2. Replacing tax increases with spending cuts is better for economic growth and jobs. The payroll, Obamacare, and fiscal cliff tax increases add up to more than $3 trillion over the next decade. In contrast, the sequestration spending cuts would reduce spending over that same period by a little over $1 trillion. According to Furth’s analysis for 2013, had Congress implemented more spending cuts instead of raising taxes, “the economy would have generated from $130 billion to $520 billion more in [gross domestic product] by the end of 2014 and added between 700,000 and 2.9 million jobs.” The long-run benefits from cutting bloated government spending are even greater, as the resources no longer squandered by bureaucrats are put to work much more efficiently by private individuals and businesses.

Via: The Foundry

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House GOP to Push Budget With Defunded Obamacare

Speaker John Boehner has decided to virtually bet the House on thrashing Obamacare in a looming fiscal showdown.

In a bow to conservatives, House Republican leaders facing a Sept. 30 deadline to avoid a government shutdown will hold a vote Friday on a three-month funding bill that would permanently drain funds from the Affordable Care Act. The move -- a gamble that the establishment wing of the GOP decried not so long ago -- nonetheless has unified the conference, according to Republican Whip Kevin McCarthy.

House Majority Leader Eric Cantor also introduced a plan to the conference Wednesday that would lift the debt ceiling (which expires in mid-October) for one year and impose a year-long delay in implementing Obamacare. It also calls for tax reform and federal approval of the Keystone XL crude oil pipeline. “That fight will continue as we negotiate the debt limit with the president and the Senate,” he said. A vote on this part of the GOP strategy is expected as early as next week.

Boehner noted Wednesday that congresses and presidents have long used the debt limit “for legislation to cut spending, and even President Obama worked with us two years ago in the debt limit negotiations to put controls on spending. This year is not going to be any different.”

With time running out and their original plan -- which would have allowed the defunding provision to be tossed out by the Senate -- exhausted, the Republican leaders had to come up with something to address the shutdown threat.

But the House could find itself back at the same place next week. The Democratic-controlled Senate won’t muster the 60 requisite votes for the move to derail President Obama’s signature piece of legislation and authorize $986 billion (extending current sequester levels) in spending. “I want to be very clear: Democrats are not going to agree to defund or delay health care reform. It’s just not going to happen,” said Senate Budget Chair Patty Murray.

Via: Real Clear Politics

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