Video: What’s Really in President Obama’s 2015 Budget

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In Heritage Impact

Heritage’s Romina Boccia previews the new taxes and spending in President Obama’s forthcoming 2015 budget plan on Fox Business:

“This president has presided over the largest peacetime deficits in U.S. history,” Boccia told Gerri Willis. And based on early reports, the new budget would pile on more spending and debt while imposing new taxes.

Do you think the budget should increase taxes and spending?

The Deficit News Isn’t All Good News

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In Heritage Work

The media has been trumpeting reports that Uncle Sam will only spend $500 billion more than it takes in this year.

While it’s good news that we’re adding less to the debt than in past years, Heritage’s Steve Moore writes, the long-term picture has actually grown worse:

But what hasn’t been advertised is the disgraceful longer-term outlook for our fiscal future, which took a turn for the worse. And Obamacare is the main culprit. In the long run, the budget deficit will be slightly more than $1.5 trillion WORSE than previously estimated.

Heritage has a detailed plan to cut spending and rein in the debt. Read the whole thing.

Do you think we can ever get spending under control?

Should the Feds Bail Out Detroit?

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In Heritage Work

Jeremiah Robinson/ZUMA Press/Newscom

Detroit’s decades-long decline has accelerated of late. Over the last four years, the city has lost over a fifth of its population, and its manufacturing base has continued to erode. What was the city’s response to this? It shifted city resources from the private sector to the public sector, raised taxes, and increased regulations.

And last week, Detroit became the biggest American city to file for Chapter 9 bankruptcy. The Heritage Foundation’s Alison Acosta Fraser and Rachel Greszler point out:

Detroit’s tragic downward cycle has reached its end. With all tax rates close to their statutory max and dismal public services that discourage individuals and businesses from remaining in or coming to Detroit, the city simply cannot continue to fund its operations and service its debt.

Detroit will undoubtedly seek help from the federal government. This must be resisted, Fraser and Greszler argue: Continue Reading »

You Won’t Believe How Much Debt the Government Added in Just Four Months

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In Heritage Work

Debt Grew by $300 Billion Since Debt Limit Was Suspended

“On May 19, the United States hit its debt ceiling after adding $300 billion in more debt since lawmakers suspended the ceiling in February,” Heritage’s Romina Boccia reports.

That’s $300 billion in new debt in less than four months.

Hitting the limit, she says, is part of an ongoing pattern: Continue Reading »

The Problem Isn’t China Buying U.S. Debt—The Problem Is the Debt Itself

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In Heritage Work

Photo: Newscom

There’s a lot of talk in the media about China “owning America” because they buy up so much of our government’s debt. This borrowing from China is often presented as an economic problem.

But Heritage expert Derek Scissors says these claims are overstated:

China has fallen behind Japan as the largest foreign holder of U.S. securities. The Department of the Treasury’s new numbers are good only through June 30, 2012, but it puts Japan at $1.84 trillion and China at $1.59 trillion.

There are lots of things to say about this, but one stands out: The loose talk about China “owning” America never made any sense and perhaps now can finally end.

In fact, he says, our problem isn’t China buying our debt but rather our own elected officials who create that debt in the first place: Continue Reading »

If Congress Doesn’t Cut the Debt, Get Used to Low Growth

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In Heritage Work

Photo credit: Newscom

Amidst our other economic woes, another looms: stagnant growth resulting from our government’s high debt. As more and more debt accumulates, private investment is crowded out, leading to weaker growth.

When debt reaches 90 percent of GDP, economies experience significant growth problems. Heritage Foundation economist Salim Furth explains: Continue Reading »

Video: Jim DeMint on Raising the Debt Ceiling

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In Heritage Impact


America will not default on its debt absent a “clean” debt limit increase, Heritage Foundation President-Elect Jim DeMint said Wednesday on Fox News.

Instead, we need to couple a debt limit increase with spending cuts and other reforms that put us on a path to a balanced budget, he said.

“The only way the federal government would default on its debt in the event the debt ceiling remains unchanged is for the Treasury to choose to default—an utterly implausible eventuality,” Heritage expert J.D. Foster explains. Continue Reading »

What’s Really Driving the Fiscal Crisis? It’s Not Taxes

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In Heritage Work

While lawmakers negotiate ways to avoid the Taxmageddon tax increases and the so-called fiscal cliff, they are ignoring the real issue at hand: runaway entitlement programs and interest payments that account for more than half of federal spending.

Combined with interest payments on the debt, Social Security, Medicare and Medicaid (including Obamacare) are driving the United States toward fiscal collapse.

The Heritage Foundation’s Romina Boccia explains: Continue Reading »

Heritage Experts Break Down Last Night’s Debate

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In Heritage Work

Heritage Foundation experts live-blogged their analyses of last night’s presidential candidates’ debate from Hofstra University.

Here are some highlights:

Emily Goff on Taxes and Spending

President Obama’s approach to spending and debt is hardly balanced.

President Obama’s recycled “balanced approach” mantra surfaced for the umpteenth time this evening—even though Americans know it is far from balanced, never mind mathematically impossible. Raising taxes on wealthier Americans who, in President Obama’s own words, “can afford to pay a little bit more,” would be a direct hit to the very businesses and investors we need to be encouraged, not discouraged from creating jobs. Failing to addressTaxmageddon and inject certainty into the economy is an abysmal failure of Congress and President Obama. It’s already threatening the economy, and causing economic stagnation.

Walter Lohman on China

“Getting tough on China,” something both candidates claimed to aspire to, is good—as long as what is meant by that is ensuring China abides by its international trade commitments. But this is not enough—it is not a trade policy. The U.S. needs to create opportunity with trade, not just manage bad behavior… President Obama said during the debate that he signed three trade deals. Not true…What Obama did was to delay passage of agreements with South Korea, Colombia, and Panama that were already completed. He did so to appease labor unions and others in his political base. During the three years of waiting for the President to submit the U.S.-Korea FTA, the U.S. lost $30 billion in exports.

James Carafano on Libya

What did the Obama administration do about security before the attack on the U.S. consulate in Benghazi, and how did it respond afterward? Continue Reading »

New Heritage Report Shows Just How Much the Federal Government Is Spending

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In Heritage Work

Base spending continues to grow

Heritage Foundation economist Alison Fraser offers a summary of the latest “Federal Spending by the Numbers,” a report detailing what Congress is doing with taxpayer money.

  • Over the past 20 years, federal spending grew 71 percent faster than inflation.
  • Entitlement spending more than doubled over the past 20 years, growing by 110 percent (after adjusting for inflation). Discretionary spending grew by 60 percent.
  • Deficits have pushed up the debt each year since 2002 as federal spending exceeded revenue. Fiscal year 2012  marked the fourth consecutive year of $1 trillion deficits.
  • Although debt held by the public surged from 33.6 percent of gross domestic product in 2002 to 73 percent in 2012, net interest costs have held below 2 percent of GDP because interest rates have fallen to all-time lows.
  • In 1962, defense spending was nearly half the total federal budget (49 percent); Social Security and other mandatory programs were less than one-third of the budget (31 percent). Two major entitlement programs, Medicaid and Medicare, were signed into law by President Johnson in 1965.
  •  In 2012 entitlements were nearly 62 percent of total spending, while defense dropped to less than one-fifth (18.7 percent) of the budget.

Read the full report to see a breakdown of where the money goes and how spending on entitlements and interest on the debt is crowding out other spending, including defense spending.

Do you think Congress will ever act to rein in the growth in spending?

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