Economy & Budget

Playing politics with food stamps

Two weeks ago, the House Republican Majority passed a budget – embraced by their likely presidential nominee, Mitt Romney – that, among other things, slashes deeply into the social safety net and ends the Food Stamp program as we know it. Their budget cuts food stamp funding by at least $133.5 billion, or 17 percent, over ten years, meaning over 8 million men, women, and children could be cut from the program. It also attempts to convert our most important and successful federal anti-hunger program into a woefully inadequate block grant that would be incapable of responding to downturns in the economy or the needs of American families.
This is not the direction we should be moving in. In the words of President Harry Truman, "nothing is more important in our national life than the welfare of our children, and proper nourishment comes first in attaining this welfare." And in this economy, child poverty, child hunger, and food insecurity have all been on the rise, and middle-class and working families are working harder than ever to make ends meet. In 2010, nearly 15 percent of American households were food insecure. This means nearly 50 million Americans, including over 16 million children, face the real risk everyday of going hungry.  


Achieving affordability: A smarter approach to the Pentagon budget

Pentagon budget cuts create difficulties for everyone along the U.S. Department of Defense value chain, from customers, contractors and suppliers to congressional appropriators and Wall Street investors. These pressures are forcing the government and its suppliers to dramatically challenge the status quo. On Capitol Hill, members of Congress are seeking ways to make smarter national security investments.

Unfortunately, those on the defense acquisition as well as development, production and sustainment sides are ill equipped either to meet today’s new budget-pressure realities or address the many other changes that demand greater transformation of the value chain.


Cliff-hanger end to 2012 awaits

At the end of 2012 and the beginning of 2013, many major fiscal events are set to occur all at once. They include the expiration of the 2001/03/10 tax cuts, the winding down of certain jobs provisions, the activation of the $1.2 trillion across-the-board “sequester,” an immediate and steep reduction in Medicare physician payments, the end of current AMT patches, and the need to once again raise the country’s debt ceiling.


Don't raise shipping costs for Minnesota businesses

Like any business, Minnesota farmers and utilities have a wide range of costs they have to manage in order to be successful. From seed and fertilizer to labor and equipment, getting a fair price can mean the difference between profit and loss. But a decision currently being considered in Washington could result in an unfair hike in the costs our farmers and other businesses face for shipping their goods to market, and each of us would get stuck with the bill.

Let me explain. In 2010, the hugely successful investment fund Berkshire Hathaway purchased Burlington Northern Santa Fe railroad (BNSF). As part of that multi-billion dollar deal, Berkshire Hathaway agreed to pay a so-called “acquisition premium” of $8.1 billion above the railroad’s fair market value.


The Sound Dollar Act: A worthwhile debate in Congress

On March 8, 2012 Republican Congressman Kevin Brady of Texas proposed the Sound Dollar Act of 2012. The central focus of the legislation is to change Fed from a dual mandate system charged with promoting both maximum employment and price stability, to an institution solely focused on promoting price stability. However, Mr. Brady includes a variety of other interesting and substantive provisions in the legislation. With no illusions about this legislation passing through both chambers of Congress and receiving the Presidential signature of approval, Mr. Brady clearly designed many of these provisions, “to start a thoughtful debate.” So, that debate begins here.

The central tenet of the legislation, to end the dual mandate in favor of a single price stability objective, would bring the Fed in line with most other central banks in the world. However, taking away the explicit mandate to deal with employment, while unemployment remains over 8%, is extremely unlikely to be popular with constituents. Moreover, the legislative language implies that the Fed should adopt a hard inflation target, as opposed the current soft target, which could have disastrous consequences. While a soft inflation target provides little additional information to the markets, a hard target sets up the central bank to fail. If the Fed misses a hard target, it loses credibility in the markets and the target becomes functionally worthless.


Time to retire the Export-Import Bank

As with many federal programs, the Export-Import (Ex-Im) Bank of the United States began as an economic recovery program in the midst of the Great Depression, created to increase American trade. The premise was simple: foster domestic job growth through extending and guaranteeing loans to and assuming risk to aid international buyers of our exports.
Seventy-eight years later, the credit agency has ballooned into a bloated $100-billion bureaucracy that drains and puts taxpayer coffers at risk, creates inequalities in the marketplace and actually harms American companies by helping their foreign competitors through government-funded subsidies. The Ex-Im Bank deserves to be retired now. Unfortunately, Congress is poised to reauthorize the agency and inexplicably raise its lending cap by a stunning 40 percent before its charter expires at the end of May.


GSA spending scandal proves need for budget reform

For once, let’s be glad that what happened in Vegas didn’t stay in Vegas.

The news that the General Services Administration (GSA) blew through $822,000 for an elaborate training conference at a Las Vegas luxury hotel shocked Washington this week, leading to the resignation of GSA Administrator Martha Johnson. Beltway budget watchers were justifiably outraged. 


The government bureaucrat driving my family toward homelessness

Every day I wait for the knock on the door from the sheriff telling me, my wife and our four children to leave our home in Riverside, California.

In 2009, my family hit hard times. Freddie Mac and JPMorgan Chase, which held my mortgage, suggested that I should intentionally fall behind on my payments so that I would be able to modify my loan. Of course I followed their instructions. But then I found out I had been lied to. Instead of modifying my loan, the bank foreclosed on my family. I have the income to make my monthly payments to pay Freddie Mac and JPMorgan Chase, but because I followed their advice and fell behind they now refuse to accept my money.


Reauthorizing the Ex-Im Bank

Good ideas–ideas that work–should transcend ideological and partisan differences.

For almost 80 years, the Export-Import Bank of the United States has been one such good idea, enjoying broad bipartisan support while effectively promoting job-creating American exports. But the Ex-Im Bank’s work will grind to a halt within weeks without a new authorization. And, without a long-term reauthorization, the Bank’s mission would be seriously undermined, creating great uncertainty for U.S. exporters and their workers.

Rep. Rick Larsen, (D-Wash.), (one of the authors) and Rep. Don Manzullo, (R-Ill.), have introduced the Export-Import Bank Reauthorization Act of 2012 which would extend the Bank’s authority through 2015 and raise the borrowing authority to $140 billion.

Why should we care? First, the Ex-Im Bank is a self-supporting entity that actually turns an $800 million annual profit for the government. Second, and more important, the Bank supports U.S. exports, and exports have played an increasingly important role in driving stronger American economic growth and much-needed jobs.


Will state pension crisis be the tipping point?

The Supercommittee has come and gone without reaching an agreement on reducing our nation’s debt. Most of the post-mortems focused on who was to blame for the breakdown. If we had been able to slash the projected deficit by trillions of dollars, according to conventional analysis, Washington might have been able to get our debt under control and the United States would be on the path back to a firm fiscal footing.

But the dirty little secret is that it may not have been sufficient to avoid a coming fiscal catastrophe. The thing that pushes the United States over the tipping point just might be the exploding state pension crisis.

This crisis that has been a long time coming and we are just beginning to grasp the magnitude of the state pension debt tsunami that’s going to hit us within the next decade. Because virtually all states have some type of balanced budget requirement, it has been relatively easy to ignore the fact that unfunded pension obligations have been purposefully left off state balance sheets. In truth, those obligations in most states far exceed the total of outstanding state debt, spending, and tax revenues combined.