Economy & Budget

S&P states the obvious

Politicians did not get much time to pat themselves on the back for supposedly rescuing the economy with the debt limit deal last week. The ink was barely dry when Standard & Poor's downgraded the US debt ratings anyway, roiling world financial markets. Anyone who has taken an honest look at the government's fiscal situation, taken into account how Washington works and the direction it is going would have a very difficult time arguing with S&P's decision, although a strong case can be made that this was too incremental a downgrade and that it took far too long for S&P to admit the obvious.  

Nonetheless, the administration nitpicked over a $2 trillion "mistake." S&P rejoined with the fact that $2 trillion here or there hardly makes a difference in the time frame under discussion. That, if nothing else, should tell you the magnitude of the problem. $2 trillion has become a drop in the bucket.


Department of Labor fiduciary rule: Major unintended consequences

This year represents a watershed moment in terms of retirement planning as the first of 79 million baby boomers inaugurate a nearly 20-year long retirement boom throughout America. The number of retired Americans over age 65 is projected to swell to 72 million by 2030, nearly an 80% increase from today. As the primary governmental safety net gets smaller -- many groups now concede Social Security benefits must be trimmed in the future -- most Americans face a personal savings crisis that threatens their financial future. 

According to research from the Employee Benefits Research Institute (EBRI), half of all American workers do not have confidence that they will have enough savings to live comfortably in retirement. Equally alarming is that is that 45% of Americans age 36 to 62 are at "at risk" for having inadequate retirement savings. Accordingly, many groups, including the Insured Retirement Institute, are concerned that the U.S. Department of Labor’s (DOL) efforts to modify a 35-year-old rule governing Individual Retirement Accounts (IRAs) may produce unintended consequences that would make it harder, not easier, for individuals to set aside money for their golden years.


Government consumes Americans' earnings

Each year Americans for Tax Reform Foundation authors the Cost of Government Day (COGD) report which measures the number of days worked to pay off the annual burden of government spending and regulation. In 2011, Americans have to work 224 days (through August 12) to support the government Goliath. For the third year in a row, government consumes Americans’ earnings at unprecedented levels. This year, Americans are left with a meager four and half months to earn enough to pay their bills and save for their own future.

While “stimulus” spending peaked in 2010 and the banking bailout “only” has a few billion left in projected outlays, federal spending has predictably not returned to manageable levels. Even though the “stimulus” spending binge was sold as a temporary fix to the country’s economic malaise, the Congressional Budget Office’s projections don’t bear this out; the federal government’s share of the economy is estimated to be at its lowest in 2014 at 23 percent—over five percent higher than revenues’ historical average, and two percent higher than the spending average of the past forty years.


We must pass a balanced budget amendment

For the first time in our history, Standard & Poor’s lowered the United States long-term credit rating from AAA to AA+. This decision is the latest consequence of Washington’s out-of-control spending, which must end to restore confidence in our markets, to grow our economy and to get folks back to work.
America is facing both a debt and economic crisis, which has led to ever-increasing uncertainty for families, small businesses and the marketplace. For too long, Washington has spent way beyond its means. When faced with economic uncertainty, Washington spent more in an attempt to boost confidence and create jobs. As a result of these failed policies, we are left with an unemployment rate above 8 percent for 30 consecutive months and a national debt that is greater than America’s Gross Domestic Product (GDP).
Ultimately, the government has to live within its means, just like families do. Since coming to Congress, my philosophy has been the same as it was when I was mayor of Johnson City – spend less than you take in. I have upheld the philosophy that we need less government spending and less government intrusion in our lives. I have fought the administration’s aggressive efforts to expand the role of the federal government in so many different aspects of people’s lives – in health care, energy, student loans, the financial markets, and many other areas.


Debt crisis threatens our future

House Republican Conference Chairman Jeb Hensarling (R-Texas) issued the following statement today after Speaker John Boehner announced that he was appointed to represent House Republicans as the co-chair of the Joint Select Committee on Deficit Reduction, serving along with Energy and Commerce Chairman Fred Upton (R-MI) and Ways and Means Committee Chairman Dave Camp (R-MI).
Times are tough, and American families have had to make many sacrifices over the last few years. While they didn’t cause this debt crisis, they’ve learned how to make do by tightening their belts and living within their means.  It’s time Washington did the same, and I'm honored that Speaker Boehner has entrusted me to work with our colleagues to tackle these challenges and help solve our spending-driven debt crisis.


Sweets for some, bitter pill for most

What program has cost American consumers $1.7 billion in higher food prices, has cost the U.S. economy 76 cents for each of those dollars, has lost jobs in the food processing sector, and discriminated against the world’s poorest farmers? You would be correct if you had answered: current U.S. sugar policy.

Sugar is sweet and the federal sugar program is sweeter, at least for sugar beet and sugar cane producers. But U.S. sugar policy is a bitter pill to swallow for American consumers and food processing industry workers. Consumers pay for it through higher food prices; the food processing sector through lost jobs because of reduced competitiveness in the global market place. In addition, the program is genuinely painful for the world’s poorest farmers, who get substantially lower prices for their sugar and are pushed deeper into poverty.


'Americans are demanding leadership'

Senate Democratic Conference Secretary Patty Murray (D-Wash.), Senate Finance Committee Chairman Max Baucus (D-Mont.), and Senate Foreign Relations Committee Chairman John Kerry (D-Mass.) released the following joint statement today after being appointed to the Joint Select Committee on Deficit Reduction.

We are grateful and humbled that Leader Reid asked us to join this Committee to help tackle this critical issue for the American people. While some will argue there is peril in serving on this committee, we believe there is far greater peril in leaving these issues unaddressed. It is long overdue to step beyond the partisanship and politics that have overwhelmed these discussions for months. The true danger lies in inaction, so we look forward to working with our colleagues to find solutions for our economy and for our country. We very much want this joint committee to be a serious committee because these are among the most serious challenges we’ve ever faced in the Senate.


Stubborn facts: Nuisances to critics of the AT&T-T-Mobile merger

As John Adams once said, “facts are stubborn things.”  Adams’s words aptly describe the weaknesses plaguing the arguments made in opposition to AT&T’s proposed acquisition of T-Mobile.  

Stubborn Fact #1: Economic realities of the cellular service market preclude anticompetitive effects of the merger. 

Opponents of the deal contend that the merger will have a detrimental impact on competition in the nation’s cellular market, pointing blindly to increased market concentration and crying foul. This pro-forma analysis, however, ignores the economic realities of the cellular service market.


America past the point of no return

You’ve certainly heard the endless stream of negative economic news lately. America’s fiscal house is in trouble, job growth has stalled, and we may be driving right into a double-dip recession.  

While giving their pessimistic economic outlooks, there is one thing that the doom-sayers have gotten wrong - they aren’t nearly worried enough.

This isn’t going to be 2008 all over again, it will be something much worse. This time, we’re already starting from a vulnerable position. We’ve seen the first municipal bankruptcy of the many to come, in Central Falls, Rhode Island, and with others like Jefferson County, Alabama, preparing to vote on declaring Chapter 11.


This isn't the end of the fight

For the last decade, the ship of state has been on a collision course with financial crisis.

Government has spent more than it has taken in and not stopped to balance its checkbook – unlike the responsible budgeting we have to do every day in our own families.

The American people saw the path we were on and yelled "STOP!", ultimately sending a new majority into the House last fall to see if we were listening and could help turn the ship around.