Even Paul Ryan’s Budget Uses Wrong Map in ‘Path to Prosperity’

March 24, 2013- 

Sadly, all the fiscal focus — to address the nation’s budget crisis — is between the proposals from Sen. Patty Murray (D-Wash.) and Rep. Paul D. Ryan (R-Wis.).

Not to be facetious, but Ms. Murray’s proposal is based on the same old, tired ideas that caused the problems in the first place. It’s not worth a second look because it’s not a serious attempt.

Respectfully, considering his budget-hawk credentials, Rep. Paul is really off track in his federal budget proposal, which he calls “The Path to Prosperity.” His budget ideas are unrealistic.

Fiscally, the government is a nightmare. The deficit is approaching $17 trillion. There are multiplier ramifications. For example, a Harvard study shows government spending causes companies to cut back.

This means politicians must prioritize objectives with the money at-hand. But that appears to be too much to ask.

The House of Representative has done its job on the budget, thanks largely to Rep. Ryan. However, the government hasn’t had a budget since Mr. Obama has been in office, thanks primarily to Senate Majority Leader Harry Reid. He’s refused to allow a vote on the budget.

So, honestly, how can the U.S. return to prosperity if the government continues to spend more money than it receives from taxpayers? Unfortunately, that’s what Mr. Ryan’s plan would allow.

“Spending would grow by an average of 3.4 percent annually, only slightly less than the rate under President Barack Obama’s plan – 5 percent a year,” wrote Rep. Paul Broun, M.D. (R-Ga.) in a commentary published by the Palm Beach Post in March 2013.

“After 10 years, Rep. Ryan’s target for eliminating the deficit, ‘The Path to Prosperity’ will have spent $41 trillion, whereas the president’s plan would allow spending of $46 trillion,” explained Rep. Broun.

All Mr. Ryan’s plan would accomplish would only be to slow the growth rate of the government’s heavy spending.

Proposed savings

To President Obama and many Democrats, Rep. Broun floats an idea they’d surely oppose. He’d eliminate some federal agencies and departments.

Rep. Broun’s ideas appear to be solutions for a badly needed balanced budget.

“The departments of education and energy, for example, are two bloated bureaucracies that we don’t need,” he explains. “Their core functions would be absorbed by the states through block grants, saving taxpayers at least $500 billion over the next decade.”

Rep. Broun argues that the government should stop interfering with the 50 states and keep its mitts off of K-12 education.

“A Heritage Foundation study showed that in 2010 the average salary of an Education Department employee reached $103,000, nearly double the average public-school teacher’s salary,” he pointed out.

“Let’s phase out a large portion of the department’s roughly $70 billion budget,” suggested the Congressman. “We can transfer the remaining dollars directly to the states, where they will be used more wisely.”

Next, he targeted Energy Department.

Obama’s green-spending failures

“Without unending government backing, the Energy Department would have ceased to exist long ago because of its ineffectiveness, corruption and poor investment strategy,” he wrote. “Taxpayers are now on the hook for hundreds of millions of dollars squandered because of federal loans given to failed green companies such as Fisker Automotive and Solyndra.”

Cronyism is an issue here.

The list of failed companies – from batteries to solar energy – all backed by the Obama Administration – is long. Previously, I’ve pointed out that those companies that received the Energy Department loans were headed by executives who’ve also been donors to Mr. Obama’s campaigns.

But what would Rep. Broun do about the regulation of atomic weaponry?

“The only constitutionally necessary service provided by the Energy Department is regulation of the nation’s stockpile of atomic weapons, a function that can return to the Department of Defense,” suggested Rep. Broun. “Eliminating this bureaucracy would be a large, permanent spending cut, and would restore energy-related venture capitalism to its natural home, the private sector.”

Gas taxes

The federal government shouldn’t be allowed to manage the federal highway-financing system, wrote Rep. Broun, who argues in favor of the states administering the gas-tax receipts.

“States would then be free to determine their own transportation needs and to explore creative funding ideas for roads, such as public-private partnerships,” he added.

Healthcare

Rep. Broun, as a 30-year family doctor, has the credentials to address the pitfalls of the government’s role in healthcare.

“I recently co-sponsored legislation that would convert Medicaid and the Children’s Health Insurance Program into state-managed programs through a single federal block grant,” he wrote.

“This would save approximately $2 trillion over 10 years by capping federal funding at 2012 levels for the next 10 years and giving states an incentive to seek out and eliminate waste, fraud and abuse,” he explained.

ObamaCare

Of course, Rep. Broun is aware of the dangers of ObamaCare.

“We must repeal ObamaCare – including the associated taxes, which the Ryan budget leaves intact by assuming the enactment of tax reform later on,” he asserted.

“We’ll replace it with a market-based health-care system devoid of government involvement and managed by patients and their doctors,” recommended the physician. “If we put Medicare in patients’ hands, by increasing contribution limits to health-savings accounts, it will transform Medicare into a more flexible premium-assistance program.”

It’s worth noting that Medicare is abusive to doctors and hospitals. The plight of doctors adversely impacts you. In addition, healthcare has become complex for the elderly.

So candidly, I don’t agree with him on Medicare, but I do agree regarding ObamaCare. I’ve written several articles about the ObamaCare issues. Nearly every businessperson I know is deeply troubled by ObamaCare.

Now, comes opposition from the International Franchise Association. Its members employ 9.1 million full-time workers; more than 33 percent of whom – 3.2 million people – will have their hours slashed or their jobs eliminated.

Ask anyone. It’s widely accepted that a 40-hour workweek is considered fulltime, but not to proponents of ObamaCare.

The law mandates that anyone who works just 30 hours a week must be considered fulltime to be covered under ObamaCare. Franchisees can’t afford it. That’s why the 3.2 million workers face unnecessary hardships.

See the association’s state-by-state breakdown regarding the harmful effects of ObamaCare on franchisee employees.

Balanced budget

Rep. Broun insists that Congress become fiscally responsible.

“To cap all this off, I have proposed a balanced-budget amendment that would force Congress to stick to the principle of not spending more than we take in,” he wrote.

“Passing a constitutional amendment is no easy task,” he admitted. “While it’s a large undertaking, I’ll continue to fight for its passage.”

But there’s been positive baby step after political coercion.

“Only a few weeks ago, the House put enough pressure on the Senate to force it to produce a budget, something Majority Leader Harry Reid, (D-Nev.), hadn’t attempted in more than four years,” he wrote.

Rep. Broun’s proposals are likely to be opposed by President Obama, Senators Murray and Reid as well as other Democrats. But to save America, the solutions must be implemented. Otherwise, businesspeople and consumers will continue to suffer losses in economic and political freedoms.

From the Coach’s Corner, see related articles in the public-policy category and economic analysis in the Op Ed section.

“A politician is just like a pickpocket; it’s almost impossible to get one to reform.”

-Will Rogers

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

A Favorable Supreme Court Ruling Will Start a Government Diet

Updated – March 7, 2015

Will wasteful government spending ever go on a diet? Perhaps — finally. A major court decision on ObamaCare in June will be a determining factor.

We were promised that ObamaCare would cut healthcare costs and premiums. The president and his supporters promised we could keep our doctors. etc. … and the unfulfilled promises go on and on … just the opposite is true.

Even back in 2012, this portal reported ObamaCare had cost the economy $27.6 billion and eliminated 30,000 jobs. ObamaCare has exacerbated the nation’s debt — now more than $18 trillion. (See the national debt clock in real time here.)

But now there’s a glimmer of hope for a government diet.

ID-100287607 (1) Stuart MilesThe ObamaCare debacle is going to be decided by the U.S. Supreme Court again. It could mean the end of the disastrous law.

Moreover, an anticipated collapse of ObamaCare and the 2011 downgrade of the U.S. credit rating would combine to be reproaches to massive, wasteful federal-government spending.

The high court, in effect, will decide the meaning of phrase in the law, “established by the state,” which pertains to Americans who get subsidies for their health insurance in those state-run exchanges.

ObamaCare supporters disingenuously now claim the phrase is irrelevant. They claim subsidies should be allowed in all 50 states.

If the court rules the phrase in the law should be taken literally, funding for the law will dissipate and ObamaCare will disappear.

U.S. credit rating

Many lawmakers in Washington have a short memory. Don’t forget about the Standard and Poor’s historic downgrade of the U.S. credit rating to AA+ in August 2011. President Obama bitterly complained about the downgrade instead of heeding it.

In reality, the downgrade and ongoing opposition to ObamaCare are positive developments. The two represent reproaches to the federal government’s behavior and performance.

Most businesspeople oppose the law (How Healthcare Law Would Affect Small Business, and Healthcare Reform Increases Costs to Workers, Study).

Despite disingenuous claims by the Obama Administration, S&P’s downgrade was justified. In pandering to political cronies, nearly all in Congress from both parties have spent an obscene amount of money on unwarranted hometown pork and earmarks. Did I mention the huge red flag — the $18 trillion+ national debt.

Not only do most Americans disapprove of ObamaCare according to most polls, you might recall public officials in most states originally filed legal action against it.

The opponents’ case was pursued by attorneys general and governors from more than half of the states – 26. Other plaintiffs have included the National Federation of Independent Business and two individuals.

Obamacare requires guaranteed funding via the consistency in the mega pool of policyholders. Now, insurance companies have hiked premiums — just as predicted here at The Biz Coach.

Possible Ramifications

Possibly, there’ll be a different political landscape. Perhaps the Supreme Court might rule against the Obama Administration — especially if the Republican-dominated Congress finally comes up with an alternative to ObamaCare.

As state governments have carried out the law’s reforms, there has been a lot of angst about the costs in implementing the law. Many of the states’ politicians complain their rights have been trampled.

In Oregon, state officials finally pulled the plug on the state’s exchange after $248 million was wasted on it. (See this LA Times article: Oregon abolishes its hopelessly bungled health insurance exchange.)

So a positive ruling in June will torch the remaining portions of ObamaCare. Why? The mandate to buy insurance is a source of the law’s funding, which might now be disrupted.

Only one source remains as a funding source – an aggregate decrease of $799 billion in Medicare benefits payable to doctors for their care of patients. As a result when people turn 65, many can’t get care as doctors refuse to accept new Medicare patients.

Sadly, ObamaCare supporters have been disingenuous. They conveniently omit the resulting devastation to recipients of Medicare.

Let’s hope the entire baggage in Obamacare is at-risk. It was clearly unconscionable for the Obama Administration to require Americans to buy private products in the first place.

The Great Recession may have technically ended but not for many businesspeople and consumers. That’s why the S&P downgrade and court ruling are beneficial. The reproaches might help to end the expansion of the over-extended Federal government.

The reproaches also hold the promise of enhancing the economy by alleviating economic uncertainty for 14 millions of unemployed and under-employed Americans, and struggling employers, alike. Companies have been reluctant to hire, in part, because of the expense of Obamacare.

Here’s a better strategic plan: Balance the budget without increasing taxes on everyone. Make it feasible for startups and other businesses to hire and expand.

Economic and political freedom are two of America’s sacred liberties. Government spending must go on a diet.

From the Coach’s Corner, here are related public-policy articles:

Only Fiscal Sobriety Will Prevent Further Fiscal Chaos — We’re way past the deadline to demonstrate financial leadership. It’s time for economic fundamentals and teamwork focused on economic patriotism.

Do We Really Honor the Declaration of Independence? — Progressively more every year, many Americans, especially public officials, demonstrate they need to review the reasons for Independence Day and why we celebrate the fourth of July. It is, of course, a national U.S. holiday that commemorates the adoption of our unique Declaration of Independence on July 4, 1776. Thomas Jefferson was inspired to write the historic document between June 11 and 28, 1776. He eloquently stated the convictions of Americans. They weren’t new ideals expressing the desire for liberty. John Locke and others beat him to it.

Manufacturing Jobs Might Return to U.S. as China’s Labor Costs Rise — As some U.S. states develop reputations as low-cost manufacturing centers and China’s wages increase, offshoring of jobs is expected to decline in five years, according to an international consulting firm. That’s the essence of a 2011 study by The Boston Consulting Group (BCG).

Economic Climate for Business – Has Obama Misread the 3 Ms? — President Obama has misread his small-business 3Ms – he won’t be confused with Abraham Lincoln for policies and Franklin Roosevelt for messaging.

Government Spending Causes Companies to Cut Back, Harvard Study — A Harvard study reveals that massive U.S. borrowing and spending has wasted trillions of dollars in flawed efforts to stimulate the economy.

“Giving money and power to government is like giving whiskey and car keys to teenage boys.”

-P.J. O’Rourke

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Seattle business consultant Terry Corbell provides high-performance management services and strategies.