It was one year ago that I that I became a charter member of the George W. Bush Presidential Center.
Charter members play an important role in the immensely successful launch of this unique physical and unique virtual presence that convenes and connects neighbors and visitors from across the country and around the world.
I would ask that you consider becoming a charter member to help sustain the mission of the George W. Bush Presidential Center in the years ahead. There is an exciting progress on every front.
Joan Stoykovich Nelson, Charter Member and Advocate for Freedom
George W. Bush Presidential Center, Institute, and Library
PRESIDENT GEORGE W. BUSH IN MARINE ONE
ONE NATION UNDER GOD...THAT IS RIGHT! GOOD AND GOD ALWAYS PREVAIL IN THE END. WE WILL GET OUR COUNTRY BACK. LOSING AND WAVING A WHITE FLAG IS NOT AN OPTION. OUR BLOOD IS RED, WHITE, AND BLUE...
It’s one thing to talk a good game about cutting spending, but it’s quite another thing to actually do something about it. This week, the House of Representatives has an opportunity to finally set some limits on Washington’s spending spree while also ensuring that the U.S. military has the resources it needs to defend America. Here’s the lay of the land this week in the nation’s capital.
On Thursday, the House is set to take up a spending reduction plan known inside the beltway as “reconciliation.” Under the measure, Congress would tackle two looming problems hanging over Washington’s head: the soaring cost of entitlement spending and the arbitrary defense cuts mandated by the so-called Budget Control Act (BCA) that was enacted last year.
Those issues are nothing to gloss over, even though some in Washington would like to pretend they’re not a problem. Since 1965, spending on Medicare, Medicaid and Social Security has more than tripled as a share of the economy, is continuing to grow at a rapid rate, hitting 9.7 percent of GDP this year, and will nearly double by 2050. Meanwhile, spending on defense has dropped over time, even when you add in the costs of the wars in Iraq and Afghanistan. As you can see in Heritage’s Federal Budget in Pictures, that means that spending on entitlement programs is crowding out spending on defense — a core constitutional function of government.
The U.S. military is about to get slashed and burned even further under automatic spending cuts known as “sequestration,” which is mandated under last year’s Budget Control Act. Under sequestration, future defense spending will be cut across the board by nearly $500 billion beginning next year. Add in the $487 billion in cuts already put forward by the President in February (as projected by Secretary of Defense Leon Panetta), America’s military will see its budget drop on average by $100 billion annually over the next decade.
Panetta warned that those cuts will be “devastating,” leaving America with “[t]he smallest ground forces since 1940,” “a fleet of fewer than 230 ships, the smallest level since 1915,” and “[t]he smallest tactical fighter force in the history of the Air Force.” General Martin Dempsey, Chairman of the Joint Chiefs of Staff, bluntly told Congress that the mandated reductions create “very high risk” to national security.
Some in Congress would like to rely on defense cuts in order to balance the budget while keeping spending on entitlement programs intact. But that just won’t work. Even if defense spending were completely eliminated, entitlements would continue to drive deficits to unmanageable levels. That’s why Congress must take action to get that spending under control.
Heritage’s Patrick Louis Knudsen writes that though the budget reconciliation falls short in some areas — namely, it suspends only one year of the sequestration, meaning Congress would have to address the issue again in 2013 — he says it is a key part of implementing the budget passed by the House in March. The benefit, Knudsen explains, is that it is “the only fully developed plan for addressing the near-term problem of sequestration and the longer-term issue of runaway entitlement spending.”
Under the reconciliation plan, national security capabilities would be protected and the sequestration’s deep defense cuts would be reversed. As for entitlement spending, the plan introduces important reforms to the food stamp program, which has grown dramatically under President Obama, with spending shooting from $39 billion in 2008 to $80 billion in 2012. Knudsen explains that the reconciliation plan eliminates categorical eligibility — the policy of granting cash welfare assistance regardless of one’s income or assets. In addition, the plan finds savings by reforming the National Flood Insurance Program and ending the Obama Administration’s ineffective housing bailout, the Housing Affordable Modification Program, among other measures.
Knudsen writes that “The longer Congress delays, the more likely are steep, sudden benefit cuts, sharply higher taxes, deeper deficits and debt — or all of the above.” Washington can’t keep putting off its fundamental duty to enact a budget and get spending under control, and it shouldn’t try to solve the nation’s fiscal crisis by gutting America’s national security.
GOP Representavive Urges Obama to Step 'Off the Campaign Trail' to Resolve Fiscal Crisis
A top-ranking House Republican urged President Obama to step "off the campaign trail" if he wants to resolve the fiscal crisis, ahead of yet another rally where the president is expected to campaign for higher taxes on top earners.
The president on Monday is flying to Michigan, where he will speak at the Detroit Diesel Factory.
Rep. Kevin McCarthy, R-Calif., the No. 3 Republican in the House, suggested Sunday that the president's itinerary has left Republicans to negotiate with themselves.
"He's been to Pennsylvania. Tomorrow he is going to Detroit. It's now time to govern. The election is over," he said on NBC's "Meet the Press."
Democratic Illinois Sen. Dick Durbin countered that Obama "is a phone call away and you know it."
The president, though, did meet with House Speaker John Boehner on Sunday at the White House. Both sides were tight-lipped about the details, with White House spokesman Josh Earnest saying only that "the lines of communication remain open."
Despite sporadic phone calls last week between Boehner's office and the White House, Boehner on Friday accused Obama of having "wasted another week."
The speaker faulted the president for not coming back with a new proposal after House Republicans put an offer on the table last week.
Democrats, though, have described that offer as unacceptable because it did not include an increase in the top tax rates. Without a deal, taxes will rise for everyone on Jan. 1.
HOUSE SPEAKER BOEHNER ON THE ECONOMY AND THE FISCAL CLIFF
House Speaker John Boehner spoke to reporters about resolving the “fiscal cliff,” the impending tax increases and budget cuts at the end of 2012 if Congress cannot reach a new budget agreement. He said a Congressional Budget Office report proved that ending the George W. Bush-era tax cuts would hurt the economy. He said he hoped that 2013 would be the year for tax code and Social Security and Medicare reforms. Of immigration, he stated “the president has to lead” and that it is “time to get the job done.”
The 'Fiscal Cliff' and Public Opinion
The White House and congressional leaders face a critical December 31 deadline for coming to an agreement on how to avoid the so-called "fiscal cliff." It's the same kind of pressure they were under in the summer of 2011 when confronted with the choice of raising the debt ceiling or letting the federal government default on its debt obligations. The looming "fiscal cliff" is the outcome of a deal reached during the battle over the debt ceiling. That deal calls for deep, automatic cuts in federal spending to take effect Jan. 1, 2013 if a deficit-reduction deal is not reached.
Tom Cole: John Boehner will make ‘tough’ fiscal cliff deal
Republican Rep. Tom Cole, the Oklahoma congressman who has called for a quick extension of middle class tax cuts, offered praise on Thursday for House Speaker John Boehner.
Cole said earlier this week that Republicans should get on board now for an extension of tax cuts for the middle class, and debates over tax cut extensions for higher income earners could be hashed out later. Boehner (R-Ohio) pushed back on that suggestion Wednesday.
“I told Tom earlier in our conference meeting that I disagreed with him,” Boehner told reporters, according to news accounts Wednesday. “He’s a wonderful friend of mine, and great supporter of mine.”
Cole also said Thursday that he would “never say anything disparaging about…the speaker, who, by the way, I agree with.”
Meanwhile, outgoing Rep. Mary Bono Mack (R-Calif.) offered support for Cole’s stance.
“Tom presented a very thoughtful, articulate position,” she said on “Starting Point,” adding, “I would agree with what Tom has to say.”
Her husband, Rep. Connie Mack (R-Fla.), who lost his bid for a Senate seat, also appeared on the show — where he broke with both his wife and with Cole.
“Now I don’t happen to agree with my wife and Congressman Cole,” he said. “I think we need to continue to look at ways to cut spending.”
Governor Mary Fallin, Governors To Talk About Impact Of 'Fiscal Cliff'
OKLAHOMA CITY– Gov. Mary Fallin and the National Governors Association executive committee on Tuesday will be at the White House to discuss the impact that the "fiscal cliff" will have on states. "We just don't know what Washington is going to do," said Fallin, a former member of Congress. "I mean, they are bickering and fighting right now." Fallin, vice chairwoman of the NGA, said time is running out for a resolution. The fiscal cliff is the expiration of several tax cuts coupled with a reduction in federal spending.
If Congress does not come to an agreement in the next three weeks, "they will leave the states hanging," Fallin said.
She said she has told her cabinet secretaries to take a look at federal funds for state programs and to analyze where cuts would be made should a resolution not be forthcoming.
Proposed cuts in defense spending could have a huge impact on the state's aerospace industry and its five military installations, Fallin said.
"One of the things I hear constantly from the business community is they are not making any major spending decisions," the governor said. "They are not buying equipment, vehicles. Some of them are not expanding because there is so much uncertainty in Washington.
"It not only hurts some Oklahoma companies, but it hurts all companies and businesses in the nation, which affects the governors and our budgets."
Fallin said she believes the uncertainty at the nation's capitol is holding back the U.S. economy.
"We have not seen some of the improvements we need in the high unemployment rate as a nation," she said.
Fallin said governors, through the NGA, have been telling Congress and the White House that they need to listen to state concerns.
"The uncertainty is not good for the states, our economy and certainly not good for the national economy," Fallin said. "It is important that Congress give the nation some certainty."
Oklahoma's treasurer says the fiscal cliff's combination of tax hikes and reduced government spending could harm the state's economy.
Congressional negotiators are working with President Barack Obama to avoid steep tax hikes and spending cuts set to go into effect at the beginning of 2013. And Treasurer Ken Miller said Tuesday failure to avoid the fiscal cliff would mean a tax increase for Oklahomans and likely spending cuts at military bases and other government facilities in the state.
Miller says leaders in Washington need to start working together to avoid damage to the state's fragile economy.
Meanwhile, Miller says state revenue collections dipped slightly in November primarily because of reduced gross production payments on oil and natural gas. But he says consumer confidence remains high and sales tax receipts rose.
Speaker Boehner Responds to 'Fiscal Cliff' Talks
Friday, November 30, 2012
House Speaker John Boehner spoke with Capitol Hill reporters about the ongoing talks for the so-called “fiscal cliff” with the White House. His remarks were in response to President Obama, who delivered a statement on the economy and “fiscal cliff” negotiations at an event Friday in Pennsylvania.
On Thursday, Republican congressional staffers told journalists that the White House had proposed a package including $1.6 trillion in tax increases and $400 billion in spending cuts.
ERIC CANTOR LEADER OF THE HOUSE
Friday, November 30, 2012
Each weekday morning this week, the Washington Journal highlights specific taxes, deductions and budgetary programs that will be impacted if the country goes off the so-called “fiscal cliff.” On Friday, we look at Expiring Tax Credits.
Politico Senior Tax Reporter Steven Sloan joins us to discuss four key credits for families that will revert back to previous levels unless Congress acts before the end of the year, as well as tax credits for businesses that are slated to expire in 2012.
Thursday, November 29, 2012
House Speaker John Boehner (R-OH) told Capitol Hill reporters that there has been no progress between the White House and congressional leadership in two weeks on the so-called “fiscal cliff.” He also said that House Republicans have agreed to put increased tax revenue on the negotiating table, but they have not yet heard what kind of spending cuts the White House would accept in return.
Speaker Boehner Remarks on the 'Fiscal Cliff' Talks
Washington, Apr 26 - Today, Congressman John Sullivan introduced H.R. 4825, the Congressional Accountability in Budgeting and Spending Act, legislation designed to reform Washington’s broken budget process. A compliment to the House passed Ryan budget, the Sullivan bill serves as a checklist for the Federal Government to get its fiscal house in order before it can even consider raising the federal debt limit again. “The worst kept secret in Washington is that the federal budget process is broken – without serious reform, our nation’s spending and debt crisis will only get worse. Passing a budget is one of Congress’ most basic responsibilities, yet the U.S. Senate hasn’t bothered to fulfill their obligation in nearly three years – the American people have a hard time understanding how this kind of fiscal irresponsibility is allowed to go on.” “If my bill becomes law, it will significantly change how Washington budgets and spends taxpayer money – Congress will be legally prohibited from considering debt limit increases until spending has been cut and capped at levels included in the House passed Ryan budget and a balanced budget amendment to the Constitution has been sent to the states for ratification. With our nation nearly $16 trillion in debt and our national unemployment rate hovering around 8 percent, the stakes don’t get any higher and the American people can’t wait any longer.” Click here to read the text of H.R. 4825 Click here to read Heritage Action’s blog post in support of H.R. 4825
Washington, Apr 26 - Today, Congressman John Sullivan introduced H.R. 4825, the Congressional Accountability in Budgeting and Spending Act, legislation designed to reform Washington’s broken budget process. A compliment to the House passed Ryan budget, the Sullivan bill serves as a checklist for the Federal Government to get its fiscal house in order before it can even consider raising the federal debt limit again.
“The worst kept secret in Washington is that the federal budget process is broken – without serious reform, our nation’s spending and debt crisis will only get worse. Passing a budget is one of Congress’ most basic responsibilities, yet the U.S. Senate hasn’t bothered to fulfill their obligation in nearly three years – the American people have a hard time understanding how this kind of fiscal irresponsibility is allowed to go on.”
“If my bill becomes law, it will significantly change how Washington budgets and spends taxpayer money – Congress will be legally prohibited from considering debt limit increases until spending has been cut and capped at levels included in the House passed Ryan budget and a balanced budget amendment to the Constitution has been sent to the states for ratification. With our nation nearly $16 trillion in debt and our national unemployment rate hovering around 8 percent, the stakes don’t get any higher and the American people can’t wait any longer.”
Click here to read the text of H.R. 4825
Click here to read Heritage Action’s blog post in support of H.R. 4825
Congressman John Sullivan
434 Cannon House Office Building
Dear Ms. Stoykovich Nelson,
As your Representative for the First District of Oklahoma, I would like to update you on what I am doing in Congress to reform our federal government's broken budget process.
On April 26, 2012, I introduced H.R. 4825, the Congressional Accountability in Budgeting and Spending Act. My legislation would serve as a checklist for the federal government to get its fiscal house in order before it can even consider raising the federal debt limit again. Specifically, H.R. 4825 would amend the 1974 Congressional Budget Act to legally prohibit Congress from considering debt limit increases until spending has been cut and capped at levels included in the House passed Ryan budget and a balanced budget amendment to the Constitution has been sent to the states for ratification. Given that our nation's federal debt level is approaching $16 trillion and the U.S. Senate hasn't passed a budget in nearly three years, it is imperative for Congress to pass my legislation in order to reform Washington's broken budget process. If you would like more information on H.R. 4825, please click here.
As your Representative, please know that I will continue to support fiscally responsible legislation that will balance the budget and combat our nearly $16 trillion national debt. It is an honor to serve you in Washington and Oklahoma. If you would like information on issues, or would like to share your thoughts with me via e-mail, you may visit my website at http://sullivan.house.gov/. Please do not hesitate to contact me should you have concerns on federal legislation or programs.
Member of Congress
Obama, Boehner face-to-face on ‘fiscal cliff’
“What we have done is spend ourselves into a hole, and we’re not going to raise taxes and borrow money to get out of it.” Sen. Tom Coburn says. (Associated Press)
Congressman John Sullivan
434 Cannon House Office Building
February 17, 2012
Ms. Joan Stoykovich Nelson
7085 E 52nd Pl
Tulsa, OK 74145-7724
Dear Ms. Stoykovich Nelson,
As your Representative of the First District of Oklahoma, I would like to share with you latest news regarding the Fiscal Year 2013 (FY13) federal budget.
As you may know, on February 13, 2012, President Obama announced a $3.8 trillion budget proposal for FY2013 which would have a devastating impact on Oklahoma's economy and our nation's opportunity for job growth. I am disappointed that the President has gone back on his promise to the American people to cut the nation's budget deficit in half. Instead, the President has presented us with the fourth budget proposal in a row with trillion-dollar deficits, while simultaneously proposing to increase taxes by $1.9 trillion dollars. These massive tax increases on American families and businesses will simply pay for more of the tax, borrow and spend agenda that the Obama Administration has demonstrated thus far. In addition, this budget proposal makes it impossible to achieve increased production of domestic oil and gas by targeting domestic oil and gas producers with punitive tax increases. For these reasons, I cannot support the President's budget proposal.
With our nation's national debt now exceeding a staggering $15 trillion, it is imperative that the government practice fiscal responsibility to keep our nation on a track toward a sound financial footing. We have a moral obligation to our children and grandchildren to stop the outrageous spending, and to balance our federal budget. Please know that as your Representative, I will continue to oppose any budget proposal that raises taxes on the American people and increases the federal deficit. I look forward to working with my Republican colleagues in the coming weeks on an alternative proposal that will balance our budget and create more jobs, without raising taxes on the American people.
It is an honor to serve you in Washington and Oklahoma. If you would like more information on issues, or would like to share your thoughts with me via e-mail, you may visit my website at http://sullivan.house.gov/. Please do not hesitate to contact me again should you have further concerns on federal legislation or programs.
Member of Congress
Sign up for Rep. Sullivan's E-Newsletter!
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House Members Hold Meetings on 'Fiscal Cliff'
Wednesday, November 28, 2012
As the negotiations to avoid the so-called "fiscal cliff" continue, House members met in their party caucuses and heard from groups of business leaders to discuss options for the budget.
House Republican leadership briefed reporters today following their meeting. House Speaker John Boehner (R-OH) said he will continue to work with the President to avert a political impasse. He also stressed that a balanced approach is required during negotiations.
The House Democratic caucus met with White House economic adviser Gene Sperling
In January 2013, the Bush-era tax-cuts will expire and a series of spending cuts mandated by the Budget Control Act of 2011 will begin, creating what analysts and economists are calling a "fiscal cliff."
The non-partisan Congressional Budget Office has estimated that the combination of tax increases and budget cuts could send the country into a recession.
Last week, congressional leaders met with the President to begin negotiations on a bill to continue at least some of the tax cuts and prevent the across-the-board spending cuts in favor of more targeted cuts. Following the meeting, House Speaker John Boehner (R-OH) told reporters that he would be open to considering revenue increases as part of a deal. He has later clarified that he hopes the revenue increases can come from reforming and simplifying the tax code, rather than allowing the tax cuts to expire for the highest earners, as the President proposes.
House Speaker John Boehner spoke to reporters about resolving the “fiscal cliff,” the impending tax increases and budget cuts at the end of 2012 if Congress cannot reach a new budget agreement. He said a Congressional Budget Office report proved that ending the George W. Bush-era tax cuts would hurt the economy. He said he hoped that 2013 would be the year for tax code and Social Security and Medicare reforms. Of immigration, he stated “the president has to lead” and that it is “time to get the job done.”
Gov. Mary Fallin was one of six governors who met with President Barack Obama at the White House on Tuesday morning to discuss concerns with the "fiscal cliff" facing the federal budget.
Thursday, December 6, 2012
Moody’s Analytics Mark Zandi and American Enterprise Institute economic policy director Kevin Hassett agreed the so-called "fiscal cliff" will have to be resolved immediately to avoid pushing the country into recession, but they disagreed on how to raise revenue to achieve fiscal sustainability.
They spoke Thursday at a hearing held by the Joint Economic Committee, chaired by Senator Bob Casey (D-PA). In remarks, Mr. Zandi said to avert a deep impact on the economy the budget proposal has to scale back the cliff, raise or eliminate the debt ceiling, and address long-term fiscal issues, including both tax reform and a tax increase.
Mr. Hassett does not believe new taxes would address tough choices on entitlements and would hurt business investment and job growth. In addition, Mr. Zandi said President Obama’s spending cut proposal falls short and should be doubled.
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For Today’s Debt Crisis
We get it, the last thing President Obama wants is to be blamed for is the nation’s growing debt—or anything else, actually. But the statute of limitations on blaming President George W. Bush for everything—anything—must have run out by now. On the debt in particular, it’s sort of a hard thing to avoid considering President Obama is the first president in history to preside over four years of deficits in excess of $1 trillion.
But in the time honored tradition of the Obama Administration, Treasury Secretary Tim Geithner took to the Sunday talk shows to wrongly lay the blame for the country’s massive debt squarely at the feet of President Bush. Geithner, however, overlooks the truth and ignores just how much deeper in debt President Obama’s failed leadership will leave America in the future.
Speaking on Meet the Press, Geithner claimed that “The vast bulk of the increase in debt is a result of the policy choices made by [Obama's] predecessor to finance very expensive tax cuts by borrowing, to finance two wars by borrowing, finance a big expansion of Medicare by borrowing, not cutting other spending or raising taxes. That’s the bulk of the contribution.” And of course, Geithner says that Obama is blameless, arguing that his policies “caused only about 12%, a very small fraction of the increase in debt you’ve seen over this period of time.”
First thing’s first: Are President Bush’s policies to blame for today’s debt? Quite simply, no.
Tax cuts of 2001 and 2003:
The left has blamed the Bush tax cuts for wiping out a $5.6 trillion surplus, leaving America with “deficits as far as the eye can see.” That surplus, though, never existed.
According to Heritage research, the Congressional Budget Office (CBO) projected that surplus in January 2001 based on the assumption that the economy would keep growing at the late 1990s rate, that the stock market bubble would continue and generate record revenues, and that there would be no recessions, terrorist attacks or natural disasters, and that all discretionary spending would fall to 1930s levels.
Those assumptions, as we now know, were miles off target, and the anticipated surplus never materialized. From the years 2002 to 2011, the United States ran a deficit of about $6.1 trillion — an $11.7 trillion swing from what CBO projected. At a cost of $1.7 trillion, the Bush tax cuts only account for 14% of that amount. Blaming those tax cuts for today’s debt just doesn’t add up.
The Wars in Iraq and Afghanistan and the Medicare Prescription Drug Program:
How about the war spending and the prescription drug costs that Geithner also cites as the root cause of the debt? Again, he’s wrong. And here’s why.
Those policies were implemented in the early 2000s, and through 2008, annual deficits ranged from $160 billion to $458 billion annually. But in 2009, after President Obama took office, that number shot up to $1.4 trillion. How could existing policies with stable costs suddenly triple the annual deficit? They couldn’t — the cause was collapsing revenues from the recession along with Obama’s stimulus spending.
While Geithner and the president are turning their heads to stare down the past, they’re refusing to do anything about the future. And they’re making matters worse. Under the president’s budget, mandatory spending increases by $1.16 trillion through 2022 while producing cumulative deficits of $6.4 trillion. Meanwhile, the president does nothing to reform the tax code or to tackle the entitlement spending crisis, leaving the future even worse than the present.
Outraged Over Obama's Federal Budget Plan
The Obama administration has released the federal budget for the coming fiscal year, and it has Republicans upset.
Oklahoma Senator Jim Inhofe says he's outraged saying President Obama's plan decimates the military.
U.S. House Minority Leader Nancy Pelosi has called it balanced, fair and fiscally responsible, while Republicans are saying it's full of tricks, gimmicks and deception.
The White House is projecting that the national deficit will be reduced by $4 trillion over the next decade. To do that, the budget calls for tax increases on the wealthy and eliminates corporate tax breaks.
About a dozen tax breaks for gas and oil companies are also being eliminated.
Oklahoma Senator Jim Inhofe is angry about cuts to the defense budget, which total almost $500 billion.
"Well, I have to say my initial reaction was the same as it has been for the last three budgets, and that's outrage. This president has had over a trillion dollars in deficit in each one of his budgets, and the only ones taking the hits are military," said Senator Jim Inhofe.
The budget is not expected make it through Congress, and House Republicans say they'll release their own budget in the coming weeks.
The Fight for the Balanced Budget Amendment
At its core, the BBA would mandate that Congress not spend more than its income–a notion that would truly be a radical departure from today’s course of business in the nation’s capital, where the national debt could eventually reach a staggering 344 percent of GDP by mid-century.
You might think that putting constitutional limits on Congress’s ability to borrow and spend beyond its means is an idea whose time has come. If so, you’d be in good company. In 1798, Thomas Jefferson, the great author of America, wrote that he longed for such a constraint:
I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government; I mean an additional article taking from the Federal Government the power of borrowing.
It’s an idea that has surfaced time and time again over our nation’s history, as former Congressman Ernest Istook writes in a new paper. The BBA was first proposed in 1936; it re-emerged in 1982 and again in the Republican revolution of the 1990s, when it was a central piece of the Contract with America. But, as Istook notes, the BBA drew sharp attacks from liberals who took issue with the limits it would impose on government:
The BBA is a powerful proposal that attracts great vitriol from the American Left, which recognizes it as an enormous threat to its big-government ways—perhaps the greatest threat. For that reason, the history of Congress’s work on a BBA is full of frustrations, high-profile defections, reversals, and betrayals.
The BBA has resurfaced again with this Congress, and Republicans in the House and Senate have announced that they will force votes on balanced budget constitutional amendments. If the Senate and House were to pass identical versions of a BBA, the constitutional amendment would then be sent to the states for ratification.
However, as they stand right now, though the Senate and House versions of the current BBA are similar, there are some important differences, as Heritage’s Brian Darling explains in a new report.
The provisions that vary between the House and Senate versions of the BBA may have dramatic policy implications for federal spending. One consistency in the two versions that is a departure from the Contract with America version of the BBA is a cap on federal spending. Both the Senate and House versions have a similar mechanism for capping spending at 18 percent of the economic output of the United States. This new idea would constrict the size of government.
The two versions of the BBA diverge significantly on such threshold questions as how each amendment’s provisions apply during times of “military conflict” and the number of votes required to waive the constitutional mandate that the budget be balanced during a fiscal year. Basically, the House version, that may be changed, allows for unlimited spending during “military conflicts” with a majority of House and Senate votes. The Senate version specifies the exact amount for the “military conflict” and requires both chambers to pass an unbalanced budget with a two-thirds vote.
The Senate version makes it more difficult to raise taxes, yet the language is crafted in a manner that may hamper efforts for revenue neutral tax reform.
It is indeed good news that Congress is debating measures to cap fed spending, make it harder to raise taxes, and force the federal government to balance the budget. States do it, families do it, and Congress should do it. But Congress shouldn’t let the perfect be the enemy of the good. By all accounts, this new and improved BBA is strong and would forward the goals of limiting the size of government.
I see a bully pulpit holding our lives hostage until his majesty gets his own way. Obama and the Democrat majority need to stop threatening to remove our basic survival needs. Remember we are a Nation at War. I bow to GOD on high to hold us in the Palm of HIS Hands to ease our torment.
Republicans gave no ground Sunday to President Obama's demand for near-unilateral power to increase the debt ceiling, with one influential senator predicting the party will once again use the debt-ceiling vote to extract trillions in spending cuts.
The senator, Tennessee's Bob Corker, broke with some in his party Sunday by urging Republicans to drop their opposition to tax hikes on the wealthiest 2 percent. Corker, though, explained that he only thinks Republicans should cave to Obama on tax hikes because then they can focus on winning entitlement cuts as part of the debt-ceiling negotiations.
"Republicans know that they have the debt ceiling that's coming up right around the corner, and the leverage is going to shift, as soon as we get beyond this issue," Corker said on "Fox News Sunday."
"The leverage is going to shift to our side, where hopefully we'll do the same thing we did last time."
Corker said that if the president wants to raise the debt limit by $2 trillion, Republicans should press for $2 trillion in spending cuts.
That prospect is sure to infuriate the White House. After the bruising debt-ceiling fight from 2011, Obama recently warned that he will not "play that game" again. "We've got to break that habit before it starts," the president said.
The president argues that fights over the debt ceiling merely shake global confidence in the country's ability to pay its bills, and as part of talks over the looming fiscal crisis has called for a de facto permanent increase in the debt limit. It amounted to his second major demand as part of the fiscal talks, with the first being to raise tax rates on those making more than $250,000. It remains unclear whether both sides can strike a deal before rates are set to rise on everyone Jan. 1, roughly three weeks from now.
Corker, while indicating Sunday that he's leaning toward tax hikes, said the debt ceiling will not be "given up" unless Obama agrees to "real" entitlement cuts.
"Without that, there's no way in my opinion the debt ceiling is going to be given up. So then you go into January and February, with the negotiation about spending reductions which is where we want to go," Corker said.
Significantly, he said any debt-ceiling deal should have "no process" attached to it. That means he would want any entitlement cuts to be locked in as part of that deal -- and not delegated to another committee, as was done as part of the last debt-ceiling deal. The failure of that committee to then produce an agreement contributed to the current fiscal crisis, where sweeping and indiscriminate spending cuts are set to take effect on Jan. 2.
Other Republicans were similarly resistant to Obama's debt-ceiling demand.
Rep. Jeb Hensarling, R-Texas, said it was tantamount to the president saying "we no longer need even a speed bump."
"I mean, let's look at Greece. Greece has been very adept at increasing their debt ceiling. And now they have 25 percent unemployment," he said on ABC's "This Week."
While Hensarling continued to express opposition to raising tax rates, on the same show Republican Sen. Tom Coburn appeared to side with Corker.
Coburn said he'd be open to a tax increase, in exchange for "significant entitlement reform."
"We've got to quit playing the game," he said. "You can't continue to lie to the American people.
"Medicare and Social Security and Medicaid, if those aren't fixed, if we're not honest about how to fix them, and the fact that, yes, everybody in this country will have to participate in some discomfort if we're going to get out of this hole. And as long as we continue to lie to the ... American people that you can solve this problem without adjusting and working on those programs, it is dishonest and beneath anybody in Washington."
Republicans, though, are in for a fight if they try to use the debt-ceiling vote to extract entitlement reform.
Some Democrats continue to suggest that entitlement spending is not the driver of the nation's debt crisis. On "This Week," Michigan Democratic Sen. Debbie Stabenow tried to claim $700 billion in cuts to Medicare as an example of already-enacted entitlement reform -- though Coburn pointed out that money went to cover the costs of the federal health care overhaul.
Other Democrats are simply opposed to the debt ceiling being used as a negotiating tool, considering the chaos that ensued last summer.
On "Fox News Sunday," Sen. Charles Schumer, D-N.Y., said he thinks the debt ceiling will be part of a fiscal agreement this year.
"I believe, frankly, our Republican colleagues have learned that to say the government is not going to pay its debts and hold it up for something else is bad substance and bad politics. I don't think they'll prevail on that," he said. "If they want to say 'we won't raise the debt ceiling unless you cut Medicare,' make our day."
Congressman John Sullivan
434 Cannon House Office Building
October 25, 2011
Ms. Joan Stoykovich Nelson 7085 E 52nd Pl
Tulsa, OK 74145-7724
Dear Ms. Stoykovich Nelson,
As your Representative of the First District of Oklahoma, I would like to inform you of my most recent action in Congress to repeal costly and unsustainable programs under Obamacare.
You may be pleased to know that I am a proud cosponsor of H.R. 1173, the Fiscal Responsibility and Retirement Security Act of 2011. This bill would repeal the Community Living Assistance Services and Supports (CLASS) program, a massive, fundamentally flawed entitlement program enacted under Obamacare. The CLASS program lacks sufficient funding, poses a threat to our overall system of care and is yet another example of the many unsustainable aspects of Obamacare.
As a result, the Secretary of Health and Human Services indicated that the administration did not see a way to make the program sustainable and recommended repeal of the program. H.R. 1173, which provides for full repeal, has been referred to the House Committees on Energy and Commerce and Ways and Means and awaits further legislative action. Should this legislation come before me for a vote, it will have my full support.
This latest effort to repeal costly provisions under Obamacare is not the end of the debate over reforming our healthcare system; it is the first step in implementing a healthcare system that works for all Americans without costly, unconstitutional government mandates that destroy jobs. I look forward to working with my Republican colleagues in the 112th Congress to address our nation's health care needs. As a member of the House Energy and Commerce Committee, which has jurisdiction over health care issues, I will work to repeal this deeply-flawed law and replace it with common-sense reforms to lower health care costs.
It is an honor to serve you in Washington and in Oklahoma. If you would like information on specific issues, or would like to share your thoughts with me via e-mail, please visit my website at http://sullivan.house.gov.
American capitalists today are richer than virtually any other group in any country at any point in history. At the same time, the United States is experiencing record deficits, which threaten to bring the economy to its knees. If raising taxes on the rich would solve the deficit without hurting the economy, the American public would support the president’s tax policy. However, raising taxes on the rich is based on two false premises. The first is that tax increases on the rich are a solution to current budget deficits. Secondly, there is no evidence that tax increases on the rich hurt the economy. However, there is empirical evidence that taxes do impede economic activity. The rich in America have lots of money, but there are simply not enough of them to fund the president’s preferred level of spending.POSTED BY JOAN STOYKOVICH NELSONIf the rich are not excessively taxed they would invest their money into employing people. Jobs are prosperity; money to spend on families.FOR A GREAT RECOVERY VOTE REPUBLICAN 2012
House Speaker John Boehner spoke at a GOP news conference to address the points of contention in the ongoing debt talks. Boehner said Republicans have led on the biggest issues facing the nation, including the House-passed budget written by Rep. Paul Ryan, which he said “set the standard for serious debate.”
Boehner said the GOP’s goals in the debt limit debate are simple, but economic growth will not be possible without addressing our deficit and our debt, a stance echoed by Treasury Secretary Tim Geithner. He spoke of his opposition to tax hikes and support for spending cuts and reforms to restrain the growth of spending in future years.
Finally, Boehner said Republicans have offered serious proposals to cut spending and address these issues, and “I think it’s time for the Democrats to get serious as well” under the leadership of a plan, not a speech, from President Obama.
A Special Enterprise Update
The Burden Of Regulation On Americans
The burden of regulation on Americans increased at an alarming rate in fiscal year 2010. Over the next few weeks, Enterprise Update will present 20 regulations that should be eliminated. These unnecessary regulations hamper free enterprise, hinder job creation and erode freedom in America.
Based on data from the Government Accountability Office, The Heritage Foundation identified an unprecedented 43 major new regulations that were imposed by Washington in FY 2010. And based on estimates by government regulators, the annual cost of these new rules tops $26.5 billion, adding far more to total regulatory costs than any other year on record.
These costs will affect Americans in many ways, from raising the price of products and services to destroying an untold number of jobs. With the government takeover of health care, Washington’s micromanagement of the finance sector, and ceaseless rule making by the Environmental Protection Agency, the regulatory burden on Americans is set to swell even more in the year to come.
Many legislators in the new Congress are considering how to lessen the regulatory burden on Americans. President Obama, too, now says that he wants to root out unnecessary government rules. With regulatory costs at unprecedented levels, relief is sorely needed. But it is not enough to talk about fewer regulations. Policymakers must critically review specific rules and identify those that should be abolished.
Emory Bryan, News On 6
OKLAHOMA CITY -- Oklahoma's members of Congress didn't like much of what they heard from the President Thursday night.
Even the state's lone democrat in congress wanted to hear more about tax reform than the new spending the president outlined tonight.
Before the speech he predicted it would focus on new spending, instead of cutting waste in government.
"Pass this jobs bill and we can begin to restore America," the President told Congress.
Senator Coburn has criticized the President's call to end tax breaks for oil companies while creating tax credits for renewable energy.
Coburn said it's the kind fundamental tax reform that would stimulate economic growth.
"We need to take aggressive action to create jobs and stabilize the economy. Tax reforms like repatriation, a capital gains tax holiday, and passing the Natural Gas Act are just a few ideas that should be considered," Boren said in a statement.
The state's republicans were not cheering the President's plan for what they thought sounded too much like another stimulus package.
"I think the president gives a great speech. He's one of the best teleprompter speakers I've ever seen. But he came up with proposals for spending again. He's a great politician, but not a good mathematician," said Republican Representative John Sullivan.
"And everything in this bill will be paid for, everything," the President said.
That promise didn't ring true for Oklahoma Republican Senator Jim Inhofe.
"It sounded real good. Everybody is nodding and wondering how much of that money they're going to get and there's no source of revenue. He's very skilled at saying the same thing over and over again, It's paid for, it's paid for. It's not paid for," Inhofe said.
President Obama's stark warning that Social Security payments may not go out next month is a choice the administration has to make, but entitlement benefits could be withheld if the cash flow dries up over an impasse in Washington on raising the debt ceiling.
Obama issued the warning on Tuesday when he said Social Security payments and veterans' checks, among other payments, could be at risk if negotiators don't reach a deal to raise the debt limit above $14.3 trillion by Aug. 2. That's when the Treasury Department says the government will stop being able to borrow money.
"I cannot guarantee that those checks go out on August 3rd if we haven't resolved this issue, because there may simply not be the money in the coffers to do it," Obama said in an interview with CBS News.
The warning rippled through Washington, though some continued to question whether the administration was over-hyping the consequences of creeping too close to the cut-off date for borrowing.
Rep. Tim Huelskamp, R-Kansas, said Wednesday that if the administration were to withhold Social Security payments, it would be a "political decision" because there are "sufficient receipts" to cover the checks.
Social Security Administration actuary Stephen Goss told Huelskamp at a hearing that it would be up to the Treasury Department to send out payments.
Meanwhile, seniors are left wondering whether they'll get their promised retirement benefits.
Washington is obligated to pay Social Security benefits, but a Congressional Research Service report last month confirmed that the Treasury Department can delay them if necessary.
"Social Security benefit payments may be delayed or jeopardized if the Treasury does not have enough cash on hand to pay benefits," reads the report, which notes that the Treasury occasionally needs to issue debt to pay benefits, and a failure to raise the ceiling could make that impossible.
A Government Accountability Office report several decades ago also said it is "generally recognized" that, in the event of a national default, the government would be precluded from honoring some obligations -- including Social Security benefits, employee wages and other payments.
So far, the government is not at that point, and leaders in both parties are not showing the stomach for testing the fallout from failing to raise the debt ceiling. But the sides are conflicted about how much to increase the borrowing limit -- with Republicans insisting the government stop spending an equal amount as it borrows, and Democrats calling for tax hikes to pay for the additional loans.
On Tuesday, Senate Republican Leader Mitch McConnell offered a Plan B, which could allow for an increase by Aug. 2 even if there's no deal to cut spending.
Some lawmakers claim the administration could limp along at least for a short period by prioritizing payments, and in turn avoid default.
"I don't know what to believe," Boehner told Fox News in an interview after the latest White House meeting with congressional leaders Tuesday.
"The Treasury secretary is going to have options in terms of who should be paid and who shouldn't," he said. "Yes, there are some debts that have to be rolled over. But there's going to be money available on August 3, and I think it's way too early to be making some types of veiled threats like that."
Washington has found ways to protect Social Security payments in the past. The Treasury Department in 1996 announced it did not have enough money to pay Social Security benefits for the month of March because it could not issue new debt. However, Congress passed a law allowing the department to temporarily issue securities in an amount equal to those payments, in such a way that would not count against the debt ceiling in the short-term.
The benefits were paid and Congress subsequently raised the debt ceiling from $4.9 trillion to $5.5 trillion. At the same time, Congress also locked off Social Security and Medicare funds from the purposes of "debt management," according to the CRS report -- though the move still doesn't protect the payments if Treasury does not have the money to pay them.
Republican presidential candidate Newt Gingrich told Fox News that Republicans "should call President Obama's bluff."
"House Republicans ought to go in tomorrow or the next day, pass a $100 billion cut in spending and a $100 dollar increase in the debt ceiling so it is exactly balanced. That takes us all the way through to September. They should call that 'the Social Security payment guarantee bill.'
"Then they should say to the president. Here we've taken care of August. All you have to do is get Harry Reid and the Senate Democrats to pass it. You sign it. We can guarantee every senior citizen their Social Security check," Gingrich said.
Sen. Coburn talks About 'Debt Bomb' Book
On 'The Daily Show'
Coburn was on the show Wednesday to talk about his new book "The Debt Bomb: A Bold Plan to Stop Washington from Bankrupting America."
What America’s Credit Downgrade Means
by Amanda Reinecker
Over the weekend, the United States lost its “best in class” AAA credit rating. Reacting to the inadequate debt reduction measures in last week’s debt deal, ratings agency Standard & Poor’ s downgraded America’s debt to AA+.
Late on Friday, August 5, Standard & Poor’ s (S&P) downgraded the United States credit rating from AAA, and really best in class, to AA+. In one fell swoop, S&P sent two separate and powerful messages. First, as The Heritage Foundation and many others warned, the spending reductions in the deal negotiated by President Obama to raise the debt ceiling were entirely and woefully inadequate. Second, the global economy, the national economy, and state finances have all in their own ways been delivered a mighty and frightening body blow.
A Lost Standard of Excellence
For decades past memory, United States government debt was deemed the gold standard of credit quality. Textbooks referred to U.S. Treasuries as the “risk less asset” against which all others were compared. Those days have passed, at least for now, because the U.S. government has rapidly piled debt upon debt and, on its current trajectory, evidences no inclination to stop. Under the circumstances, without a fundamental policy course correction, a repeatedly threatened credit rating downgrade became inevitable, with only the timing at issue.
President Obama and his allies in and out of Congress do not deserve all the blame for the downgrade. Unaffordable entitlement programs were built up Congress after Congress, President after President, and their imposing fiscal dangers for the future were ignored thereafter. To his credit, President George W. Bush tried to reform the lesser problem of Social Security, spending virtually all the political capital acquired in his strong re-election in doing so, yet even many of his allies in Congress wanted no part of it. And so the basic facts regarding the tens of trillions in unfunded obligations in Social Security, Medicare, and Medicaid remain and are not in dispute.
While not solely to blame, President Obama and his allies are most certainly preeminently to blame. Facing a rapidly growing budget deficit in 2009, President Obama pushed through a massive fiscal stimulus program followed by a succession of lesser efforts. As the anemic state of the economy attests quite clearly, those programs failed miserably—except in raising federal spending and national debt.
Then the President pushed through his disastrous and highly unpopular health care reform. On paper, these reforms give the appearance of improving the fiscal picture modestly. But as the Medicare trustees’ report has reminded us every year after Obamacare’ s passage, this happy picture is an illusion. Aside from the damage it has done and will do to health care costs and services, from a fiscal perspective Obamacare ultimately is just yet another unaffordable entitlement piled on top of those already on the books.
A Lost Opportunity
In the recent debt ceiling fight, the President’s initial view was that Congress should pass a “clean” debt ceiling, allow yet more borrowing, and attend to whatever deficit reduction might be possible later. The reaction by S&P demonstrates undeniably how wrong the President was. And the nation knew it. Rarely have the American people been more engaged in and more concerned about a matter of federal fiscal policy. Yet after ignoring his own high-profile if fatally flawed fiscal commission, and after offering a budget in January that was utterly silent on these critical issues, the President told the Congress: Don’t worry, be happy.
In the course of negotiations on the debt ceiling, congressional Republicans tried tirelessly to get the President and Senate Democrats to get serious about cutting spending. All Obama and Senate Majority Leader Harry Reid (D–NV) could do was carp about symbolic tax hikes on the rich, oil companies, and their latest silly affection—corporate jets. To be clear, despite the perilous state of the nation’s finances, the President’s sole objective was ideological and symbolic: Even if Republicans had caved on tax hikes, which they wisely refused to do, the revenue gains would have been inconsequential compared to the spending cuts that are necessary. The President played politics while the nation’s credit rating was set to burn, and now it has.
Whether the congressional Republican leadership should have forced deeper spending cuts before agreeing to raise the debt ceiling is now a settled question. S&P settled it. Whether they could have forced deeper spending cuts in the face of a politics-playing President and Senate dominated by spenders will never be known. But the nation will soon see the consequences.
Failure Has Consequences
Taken in isolation, a credit rating downgrade will eventually mean higher interest rates on U.S. government debt. This may be hard to imagine given the recent drop in Treasury bond rates in response to events overseas. But higher future rates are certain, and that means that even more federal tax dollars must be dedicated to paying the interest on past government excesses. Higher interest rates and interest cost means greater deficit pressures, which can mean more debt, which can lead to higher interest rates. This is why it is termed a debt spiral.
How will the credit rating downgrade of U.S. government debt affect the states and municipal governments’ interest costs? Nobody knows for sure, but it cannot be good. As a practical matter, U.S. government debt is the foundation of the U.S. financial system, as a point of reference if for no other reason. Interest rates paid by state and local government can only go up as a result of the downgrade, unwelcome news indeed to states wrestling with their own massive deficits due in part to the failure of the economy and state revenues to recover.
In today’s global economy, however, the U.S. credit rating downgrade may prove catastrophic. Prior to the credit rating downgrade, Europe was already teetering on the brink. Last week European stock exchanges plunged 10 percent, their worst weekly losses since November 2008. The long-building government debt crisis in Europe, which had been so unsuccessfully papered over just a few weeks ago by its leaders, is reaching the boiling point, threatening to wash over not just the worst offenders like Greece and Portugal but also some of the pillars of the European Union like Spain and Italy.
This is a European government debt problem on top of a European currency problem on top of a European economic growth problem. But the 2007–2009 financial crisis taught an important lesson about the intense interconnectedness of global financial markets—and that a great many of these connections are little known and poorly understood. What happens in Europe will not stay in Europe. What weaknesses in global finance and financial supervision will this crisis reveal? No one knows, but what a terrible time for the dominant financial actor in the global financial system, the United States government, to suffer an entirely preventable credit rating downgrade. The dangers to the global economy, and specifically to the U.S. economy, have increased markedly as the U.S. credit rating has been marked down.
Perhaps the Last Opportunity That Must Not Be Lost
President Obama and Congress have the time and opportunity to change the course of fiscal policy. The United States can recover its AAA credit rating and begin to heal the damage, but it must not delay. The debt ceiling deal included the provision for the creation of a joint select committee of Congress to cut at least $1.2 trillion over the next 10 years. Clearly, that figure is much too low. The committee was to report by November 23. Clearly, that is too late. In the eyes of many, the committee was designed to fail. That must not happen.
President Obama must now do things he has been loath to do heretofore. First, he must lead. No more grand speeches, no more politicking, no more finger-pointing while criticizing those who oppose him. Above all, leading now means corralling his forces to reach across the aisle to Republicans and work together.
Second, he should give up the ideological fight for higher taxes on anyone. For one thing, even suggesting higher taxes when unemployment is so high and economic growth is so low suggests a man more committed to politics than jobs. As The Heritage Foundation suggested at the start of his term, President Obama should suspend his desire for higher taxes at least until the economy has moved far toward full employment. The wisdom (or lack thereof) of higher taxes can be debated when Americans are back to work.
Finally, the President should forego his inclination to use entitlement reforms for political purposes. Scaring seniors about Social Security checks and related “Mediscare” tactics, which are basic elements of the Democratic Party playbook, must stop. The problem is too much entitlement spending now and even more so in the near future. Republicans know it. Democrats know it. Conservatives know it. Liberals know it. The nation now knows it.
A number of sound incremental reforms can garner strong bipartisan support and can substantially improve these programs’ sustainability and the nation’s finances. The President must lead his party to join hands with Republicans in the joint select committee to embrace these reforms and be ready to enact them, saving far more than $1.2 trillion and far sooner than November 23.
It Can Be Done
The objective for the nation, the President, and the joint select committee is clear: drive down spending—including and especially on entitlement programs—toward a balanced budget while protecting America and without raising taxes. Properly done, this would lead to economic growth, more jobs, less government, and a restoration of the nation’s credit rating. It can be done. The Heritage Foundation has described in detail how to do it in “Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity.”
J. D. Foster, Ph.D., is Norman B. Ture Senior Fellow in the Economics of Fiscal Policy in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.
This week, I voted against President Obama’s request to raise the federal debt limit by $2.4 trillion while failing to include any spending cuts or long term plans for deficit reduction.
I voted no because there is only one way to regain fiscal sanity in Washington, and that is to stop spending money we don’t have. Our nation is already facing a record setting $14 trillion debt and this legislation would have added another $2.4 trillion to it while doing absolutely nothing to end the taxpayer funded spending spree that has plagued the Federal Government for far too long.
There is an old saying that when you are in a hole, you need to stop digging – well the Obama Administration would rather keep digging than to actually listen to the American people and cut spending.
CONGRESSMAN JOHN SULLIVAN
ON THE Washington's Spending Binge
Today marks the anniversary of one of the most unfortunate pieces of legislation to be signed by President Obama. Three years ago, the American Recovery and Reinvestment Act of 2009, later known as Obama’s Stimulus package, became the law of the land. Thank you for being one of the nearly 300,000 activists to sign AFP's No Stimulus petition! The American people were told this package would save and create jobs, but the simple fact is that it was the start of a long pattern of wasteful spending from a President who has little regard for fiscal discipline, and feels entitled to pick winners and losers in the marketplace.
CONGRESSIONAL BUDGET OFFICE
The Congressional Budget Office on Tuesday downgraded its estimate of the benefits of President Obama’s 2009 stimulus package, saying it may have sustained as few as 700,000 jobs at its peak last year and that over the long run it will actually be a net drag on the economy.
CBO said that while the Recovery Act boosted the economy in the short run, the extra debt that the stimulus piled up “crowds out” private investment and “will reduce output slightly in the long run — by between 0 and 0.2 percent after 2016.”
The analysis confirms what CBO predicted before the stimulus passed in February 2009, though the top-end decline of two-tenths of a percent is actually deeper than the agency predicted back then.
All told, the stimulus did boost jobs and the economy in the short run, according to CBO’s models. At the peak of spending from July through September 2010, it sustained anywhere from 700,000 to 3.6 million, which lowered the unemployment rate by between four-tenths of a percent to 2 percent.
The Obama administration had promised 3.5 million jobs would be produced at the peak of spending.
For this current quarter CBO said the stimulus is sustaining between 600,000 and 1.8 million jobs, which has improved the unemployment rate by as much as 1 percent versus what it otherwise would have been.
The White House did not return a message seeking comment Tuesday afternoon, but officials there previously have said the Recovery Act stopped the economy from falling into another Great Depression.
“The point is, what is uncontestable is that those infrastructure projects that were funded by the Recovery Act were very well managed, came in on budget or under budget and led to the creation of many, many jobs by an outside, independent analyst” White House press secretary Jay Carney said in September, as Mr. Obama was proposing another round of stimulus spending.
That new proposal called for $447 billion in expanded tax breaks, additional aid to states to hire teachers and emergency workers, and more infrastructure spending.
That broad effort has stalled, though on Monday Mr. Obama signed a slim portion of the package that offers tax breaks to businesses that hire veterans, and that repeals a 3 percent contract withholding requirement for government contractors.
On Tuesday, top House Democratic leaders sent a letter to House Speaker John A. Boehner urging support for the extension of unemployment benefits, last year’s payroll tax cut and higher payments to doctors who treat Medicare patients before they all expire at the end of this year.
“Independent economists from across the political spectrum estimate that failure to pass these essential pieces of legislation could reduce economic growth by much as 2 percentage points next year,” the leaders, including top House Democrat Rep. Nancy Pelosi and her two chief lieutenants, said.
CBO has re-evaluated the stimulus every three months, and its estimates for the total cost have varied. Initially the package was pegged at $787 billion, rose as high as $862 billion at one point, and is now projected to be $825 billion once all the money is paid out.
The nonpartisan agency also has changed its model for the spending’s impact on the economy, and the new calculations show the Recovery Act did less than originally projected.
CBO said it has concluded there is less of an indirect multiplier effect of federal spending.
Those changes caused it to drop its estimates for total employment sustained by the spending in 2011 from between 1.2 million and 3.7 million down to between 600,000 and 3.6 million.
As for the long-term situation, CBO said its basic assumption is that each dollar of additional federal debt crowds out about a third of a dollar’s worth of private domestic capital.
CBO said there is no crowding out in the short term, which is why the Recovery Act boosts the economy in the near term.
Obama’s Tantrum in a High Chair
Every mom who has ever been at her wit’s end recognizes Barack Obama. The president who earlier nagged Congress that it was time for Americans to “eat our peas” finally threw his own peas to the floor and banged his spoon on his supper dish. Such a tantrum in a high chair is a familiar sight in a lot of kitchens.
“Enough is enough,” the president cried, frustrated by the tense budget talks at the White House. “Don’t call my bluff,” he told his Republican tormentors. “I’m going to the American people.”
If a pout and a sulk is familiar to Mom, every 2-year-old in town can understand the president’s angry frustration. Throwing your peas on the floor, particularly if they’re of the English variety, tasting of copy paper and sliding down a tiny throat like un-lubricated ball bearings, is the instant gratification every tantrum-thrower yearns for. But it’s a presidential strategy we haven’t seen before.
These are not the cheers and hosannas the prince of Hyde Park imagined for himself when he agreed to step down from on high to assume the presidential purple. It’s going on three years, and the natives are restless. They keep asking impertinent questions. Rep. Eric Cantor, the leader of the Republican House majority, ignited the president’s ire when he suggested the president and the Democrats take a smaller budget deal than His Excellency wants. The president - “he got very agitated,” in the telling of Mr. Cantor, who was there - did not appreciate such lack of respect for royalty.
Harry Reid, the president’s liege man in the Senate, wanted to boot Mr. Cantor from the talks. “He shouldn’t even be at the table,” the majority leader said. No tea and cookies for him. Some Democrats disputed the details in the Republican account, but there was general agreement that Mr. Obama lost his celebrated cool. And why not? So far, the budget talks have been a classic standoff between the president, who is determined to raise taxes to make the welfare state grow, and the Republicans, who are determined to cut the bipartisan spending that threatens to spin the economy into an abyss of unknown depth.
The president’s tantrum can have a positive effect, however, if it captures the full attention of the public. Talk of the economy makes the average voter’s head hurt, his teeth itch and his Jockey shorts bunch up under his belt. The economy has always been like algebra, difficult to grasp, and voters have been willing to leave the algebra to the advocates for the tax-eaters. That may be changing as one and all begin to recognize that the good life is at risk - the car, the boat, college for the kids, tropical vacations in Maui. The exceptional nation may be at risk of becoming like the toy nations of Europe.
President Obama plays the empty threat to withhold Grandma’s Social Security check. Ben S. Bernanke, chairman of the Federal Reserve, warns of “a huge financial calamity” if Congress refuses to raise the debt limit. This echoes the lamentations of Treasury Secretary Timothy F. Geithner as well as the new chairman of the International Monetary Fund. Moody’ s, the financial service that measures such things, piles on, with the dire threat that U.S. bonds could be downgraded. Maybe. It all smells like a contrived campaign to put pressure on the Republicans to cave just as they have the attention of the president and his frightened Democrats.
The scheme of Sen. Mitch McConnell, leader of the Republicans in the Senate, to give the president the authority to raise the debt limit without serious cuts and bear the consequences, looks better to the Republicans than it did when he introduced it and was scorched for his trouble by some conservatives as the usual Republican sellout artist. Democrats squealed like stuck pigs. They naturally don’t want this responsibility because they understand the eventual consequences of continuing to live it up like pigs in the slop house. Mr. Obama wants Republicans to share the “credit” for his incompetent management of the economy.
The verdict of history, though on the way, is not quite at hand. The verdict of 2012 soon will be and looms over everything. It’s enough to make a president, swaddled with a bad situation he made much worse, bang his supper dish with his spoon and throw his peas on the floor.
• Wesley Pruden is editor emeritus of The Washington Times.
'Challenge' to Speakership
While House Speaker John A. Boehner's leadership post was never in doubt, that didn't stop one House Republican from trying Wednesday.
While House Speaker John A. Boehner's leadership post was never in doubt, that didn't stop one House Republican from trying Wednesday.
As House Republicans gathered behind closed doors at the Capitol to pick their leaders for the upcoming new Congress, outspoken Texas Rep. Louie Gohmert symbolically nominated former House Speaker Newt Gingrich for speaker, said a senior House GOP aide who was at the meeting. The nomination didn't receive a second, and Mr. Boehner's nomination eventually was approved by a voice vote.
The full House formally will vote for its speaker when the 113th Congress convenes in early January. But with Republicans controlling the chamber, Mr. Boehner's election is assured.
THE PRESIDENT: Thank you all for coming. I just met with my Cabinet, where we discussed a lot of issues. And one issue we discussed is the budget. I submitted the budget today to Congress -- it's on a laptop notebook, an e-budget. It saves paper, saves trees, saves money. I think it's the first budget submitted electronically.
And it's a good budget. It's a budget that achieves some important objectives. One, it understands our top priority is to defend our country, so we fund our military, as well as fund the homeland security.
Secondly, the budget keeps our economy growing. It's central that we make sure that we deal with the uncertainties -- the economic uncertainties we face. And that's why we're working hard with the House and the Senate to get a growth package out quickly that will put money in the hands of consumers and provide incentives to small businesses and large businesses to invest.
Thirdly, we recognize that in order for this economy to grow, it's important to make the tax relief permanent. And that's what this budget reflects. It's a budget that boosts money for education and health and housing. It helps deal with the issue of making the tax code more fair for individuals who want to buy health insurance in the individual market.
This budget is one that keeps spending under control; discretionary spending is held to less than 1 percent. It eliminates 151 wasteful or bloated programs, saving the taxpayers $18 billion. It also takes a hard look at entitlement growth over the next five years, and provides specific recommendations to save $208 billion over those five years. At the same time, the budget achieves balance by 2012.
This is a good, solid budget. It's not only an innovative budget, in that it's coming to Congress over the Internet, it's a budget that's balanced -- gets to balance in 2012 and saves taxpayers money.
You know, in my State of the Union I said to the Congress that there's a lot of talk about entitlement spending. Once again, we've proposed specific reforms and specific measures. And Congress needs to come up with its own ideas. And Congress needs to respond to these looming deficits as a result of unfunded liabilities inherent in Social Security and Medicare. Our budget does that. Our budget protects America and it encourages economic growth. Congress needs to pass it.
Click for Video
Thank you very much.
PRESIDENT GEORGE W. BUSH BUDGET
For Immediate Release
Office of the Press Secretary
February 4, 2008
Fact Sheet: The President's FY09 Budget
The President's FY09 Budget
Addresses Immediate Economic Challenges
Includes a bipartisan economic growth package that spurs investment and strengthens the Nation's economy.
Promotes and preserves the American dream of home ownership though education and assistance to combat foreclosures and maintain a stable, healthy housing market.
Ensures Sustained Prosperity
Makes tax relief permanent for long-term economic growth and sustainability.
Improves access for more Americans to affordable health care by fostering a marketplace, encouraging competition, and improving efficiency.
Builds on the success of No Child Left Behind through support of proposals to reauthorize and strengthen the law while also proposing policies to make college more affordable for families.
Keeps the U.S. the most innovative nation in the world by implementing the American Competitiveness Initiative (ACI).
Increases energy security by focusing on renewables, accelerating technological breakthroughs, and expanding traditional sources to reduce our reliance on foreign oil.
Keeps America Safe
Supports the national defense and funding for America's troops.
Enhances homeland security and terrorism prevention.
Promotes peace, democracy, and economic opportunity worldwide through diplomatic, development, and reconstruction activities.
Balances the Budget by 2012
Maintains proven pro-growth policies – keeping taxes low and restraining government spending – to ensure that near-term deficits are overcome and we achieve a surplus in 2012.
Continues to address the long-term challenge of unsustainable entitlement spending.
Improves results of government programs and instills greater transparency so that taxpayer dollars are spent wisely.
January 28, 2008
President Bush Delivers State of the Union Address
Chamber of the United States House of Representatives
United States Capitol 9:09 P.M. EST
THE PRESIDENT: Madam Speaker, Vice President Cheney, members of Congress, distinguished guests, and fellow citizens: Seven years have passed since I first stood before you at this rostrum. In that time, our country has been tested in ways none of us could have imagined. We faced hard decisions about peace and war, rising competition in the world economy, and the health and welfare of our citizens. These issues call for vigorous debate, and I think it's fair to say we've answered the call. Yet history will record that amid our differences, we acted with purpose. And together, we showed the world the power and resilience of American self-government.
All of us were sent to Washington to carry out the people's business. That is the purpose of this body. It is the meaning of our oath. It remains our charge to keep.
The actions of the 110th Congress will affect the security and prosperity of our nation long after this session has ended. In this election year, let us show our fellow Americans that we recognize our responsibilities and are determined to meet them. Let us show them that Republicans and Democrats can compete for votes and cooperate for results at the same time. (Applause.)
From expanding opportunity to protecting our country, we've made good progress. Yet we have unfinished business before us, and the American people expect us to get it done.
In the work ahead, we must be guided by the philosophy that made our nation great. As Americans, we believe in the power of individuals to determine their destiny and shape the course of history. We believe that the most reliable guide for our country is the collective wisdom of ordinary citizens. And so in all we do, we must trust in the ability of free peoples to make wise decisions, and empower them to improve their lives for their futures.
To build a prosperous future, we must trust people with their own money and empower them to grow our economy. As we meet tonight, our economy is undergoing a period of uncertainty. America has added jobs for a record 52 straight months, but jobs are now growing at a slower pace. Wages are up, but so are prices for food and gas. Exports are rising, but the housing market has declined. At kitchen tables across our country, there is a concern about our economic future.
In the long run, Americans can be confident about our economic growth. But in the short run, we can all see that that growth is slowing. So last week, my administration reached agreement with Speaker Pelosi and Republican Leader Boehner on a robust growth package that includes tax relief for individuals and families and incentives for business investment. The temptation will be to load up the bill. That would delay it or derail it, and neither option is acceptable. (Applause.) This is a good agreement that will keep our economy growing and our people working. And this Congress must pass it as soon as possible. (Applause.)
Mrs. Laura Bush, joined by her daughters, Barbara, left, and Jenna applaud from the First Lady's box at the U.S. Capitol, as President George W. Bush delivers his State of the Union Address Monday, Jan. 28, 2008. White House photo by Joyce N. Boghosian
We have other work to do on taxes. Unless Congress acts, most of the tax relief we've delivered over the past seven years will be taken away. Some in Washington argue that letting tax relief expire is not a tax increase. Try explaining that to 116 million American taxpayers who would see their taxes rise by an average of $1,800. Others have said they would personally be happy to pay higher taxes. I welcome their enthusiasm. I'm pleased to report that the IRS accepts both checks and money orders. (Laughter and applause.)
Most Americans think their taxes are high enough. With all the other pressures on their finances, American families should not have to worry about their federal government taking a bigger bite out of their paychecks. There's only one way to eliminate this uncertainty: Make the tax relief permanent. (Applause.) And members of Congress should know: If any bill raises taxes reaches my desk, I will veto it. (Applause.)
Just as we trust Americans with their own money, we need to earn their trust by spending their tax dollars wisely. Next week, I'll send you a budget that terminates or substantially reduces 151 wasteful or bloated programs, totaling more than $18 billion. The budget that I will submit will keep America on track for a surplus in 2012. American families have to balance their budgets; so should their government. (Applause.)
The people's trust in their government is undermined by congressional earmarks -- special interest projects that are often snuck in at the last minute, without discussion or debate. Last year, I asked you to voluntarily cut the number and cost of earmarks in half. I also asked you to stop slipping earmarks into committee reports that never even come to a vote. Unfortunately, neither goal was met. So this time, if you send me an appropriations bill that does not cut the number and cost of earmarks in half, I'll send it back to you with my veto. (Applause.)
And tomorrow, I will issue an executive order that directs federal agencies to ignore any future earmark that is not voted on by Congress. If these items are truly worth funding, Congress should debate them in the open and hold a public vote. (Applause.)
Our shared responsibilities extend beyond matters of taxes and spending. On housing, we must trust Americans with the responsibility of home ownership and empower them to weather turbulent times in the housing market. My administration brought together the HOPE NOW alliance, which is helping many struggling homeowners avoid foreclosure. And Congress can help even more. Tonight I ask you to pass legislation to reform Fannie Mae and Freddie Mac, modernize the Federal Housing Administration, and allow state housing agencies to issue tax-free bonds to help homeowners refinance their mortgages. (Applause.) These are difficult times for many American families, and by taking these steps, we can help more of them keep their homes.
President George W. Bush shakes the hand of Secretary of Treasury Henry Paulson as he arrives on the House floor at the U.S. Capitol Monday, Jan. 28, 2008, to deliver his 2008 State of the Union address. Looking on are Secretary of State Condoleezza Rice and U.S. Supreme Court Chief Justice John Roberts. White House photo by Eric Draper
The Congress must also expand health savings accounts, create Association Health Plans for small businesses, promote health information technology, and confront the epidemic of junk medical lawsuits. (Applause.) With all these steps, we will help ensure that decisions about your medical care are made in the privacy of your doctor's office -- not in the halls of Congress. (Applause.)
On education, we must trust students to learn if given the chance, and empower parents to demand results from our schools. In neighborhoods across our country, there are boys and girls with dreams -- and a decent education is their only hope of achieving them.
Six years ago, we came together to pass the No Child Left Behind Act, and today no one can deny its results. Last year, fourth and eighth graders achieved the highest math scores on record. Reading scores are on the rise. African American and Hispanic students posted all-time highs. (Applause.) Now we must work together to increase accountability, add flexibility for states and districts, reduce the number of high school dropouts, provide extra help for struggling schools.
Members of Congress: The No Child Left Behind Act is a bipartisan achievement. It is succeeding. And we owe it to America's children, their parents, and their teachers to strengthen this good law. (Applause.)
President George W. Bush acknowledges the applause Monday, Jan. 28, 2008, as he arrives at the podium on the House floor at the U.S. Capitol to deliver his final State of the Union address. White House photo by Eric Draper
On trade, we must trust American workers to compete with anyone in the world and empower them by opening up new markets overseas. Today, our economic growth increasingly depends on our ability to sell American goods and crops and services all over the world. So we're working to break down barriers to trade and investment wherever we can. We're working for a successful Doha Round of trade talks, and we must complete a good agreement this year. At the same time, we're pursuing opportunities to open up new markets by passing free trade agreements.
I thank the Congress for approving a good agreement with Peru. And now I ask you to approve agreements with Colombia and Panama and South Korea. (Applause.) Many products from these nations now enter America duty-free, yet many of our products face steep tariffs in their markets. These agreements will level the playing field. They will give us better access to nearly 100 million customers. They will support good jobs for the finest workers in the world: those whose products say "Made in the USA." (Applause.)
These agreements also promote America's strategic interests. The first agreement that will come before you is with Colombia, a friend of America that is confronting violence and terror, and fighting drug traffickers. If we fail to pass this agreement, we will embolden the purveyors of false populism in our hemisphere. So we must come together, pass this agreement, and show our neighbors in the region that democracy leads to a better life. (Applause.)
Trade brings better jobs and better choices and better prices. Yet for some Americans, trade can mean losing a job, and the federal government has a responsibility to help. (Applause.) I ask Congress to reauthorize and reform trade adjustment assistance, so we can help these displaced workers learn new skills and find new jobs. (Applause.)
President George W. Bush receives a standing ovation during his 2008 State of the Union address Monday, Jan. 28, 2008, at the U.S. Capitol. White House photo by Joyce N. Boghosian
This agreement will be effective only if it includes commitments by every major economy and gives none a free ride. (Applause.) The United States is committed to strengthening our energy security and confronting global climate change. And the best way to meet these goals is for America to continue leading the way toward the development of cleaner and more energy-efficient technology. (Applause.)
To keep America competitive into the future, we must trust in the skill of our scientists and engineers and empower them to pursue the breakthroughs of tomorrow. Last year, Congress passed legislation supporting the American Competitiveness Initiative, but never followed through with the funding. This funding is essential to keeping our scientific edge. So I ask Congress to double federal support for critical basic research in the physical sciences and ensure America remains the most dynamic nation on Earth. (Applause.)
On matters of life and science, we must trust in the innovative spirit of medical researchers and empower them to discover new treatments while respecting moral boundaries. In November, we witnessed a landmark achievement when scientists discovered a way to reprogram adult skin cells to act like embryonic stem cells. This breakthrough has the potential to move us beyond the divisive debates of the past by extending the frontiers of medicine without the destruction of human life. (Applause.)
President George W. Bush receives applause at the State of the Union Address Monday, Jan. 28, 2008, at the U.S. Capitol. Vice President Dick Cheney and Speaker of the House Nancy Pelosi are seen back right. White House photo by Eric Draper
On matters of justice, we must trust in the wisdom of our founders and empower judges who understand that the Constitution means what it says. (Applause.) I've submitted judicial nominees who will rule by the letter of the law, not the whim of the gavel. Many of these nominees are being unfairly delayed. They are worthy of confirmation, and the Senate should give each of them a prompt up-or-down vote. (Applause.)
In communities across our land, we must trust in the good heart of the American people and empower them to serve their neighbors in need. Over the past seven years, more of our fellow citizens have discovered that the pursuit of happiness leads to the path of service. Americans have volunteered in record numbers. Charitable donations are higher than ever. Faith-based groups are bringing hope to pockets of despair, with new found support from the federal government. And to help guarantee equal treatment of faith-based organizations when they compete for federal funds, I ask you to permanently extend Charitable Choice. (Applause.)
Tonight the armies of compassion continue the march to a new day in the Gulf Coast. America honors the strength and resilience of the people of this region. We reaffirm our pledge to help them build stronger and better than before. And tonight I'm pleased to announce that in April we will host this year's North American Summit of Canada, Mexico, and the United States in the great city of New Orleans. (Applause.)
There are two other pressing challenges that I've raised repeatedly before this body, and that this body has failed to address: entitlement spending and immigration. Every member in this chamber knows that spending on entitlement programs like Social Security, Medicare, and Medicaid is growing faster than we can afford. We all know the painful choices ahead if America stays on this path: massive tax increases, sudden and drastic cuts in benefits, or crippling deficits. I've laid out proposals to reform these programs. Now I ask members of Congress to offer your proposals and come up with a bipartisan solution to save these vital programs for our children and our grandchildren. (Applause.)
Former Senator Bob Dole and former Cabinet Secretary Donna Shalala are recognized and applauded in the First Lady's box Monday evening, Jan. 28, 2008 at the U.S. Captiol, during the State of the Union Address by President George W. Bush. Dole and Shalala were selected by President Bush to co-chair the President's Commission on Care for America's Returning Wounded Warriors. White House photo by Eric Draper
This is the business of our nation here at home. Yet building a prosperous future for our citizens also depends on confronting enemies abroad and advancing liberty in troubled regions of the world.
Our foreign policy is based on a clear premise: We trust that people, when given the chance, will choose a future of freedom and peace. In the last seven years, we have witnessed stirring moments in the history of liberty. We've seen citizens in Georgia and Ukraine stand up for their right to free and fair elections. We've seen people in Lebanon take to the streets to demand their independence. We've seen Afghans emerge from the tyranny of the Taliban and choose a new president and a new parliament. We've seen jubilant Iraqis holding up ink-stained fingers and celebrating their freedom. These images of liberty have inspired us. (Applause.)
In the past seven years, we've also seen images that have sobered us. We've watched throngs of mourners in Lebanon and Pakistan carrying the caskets of beloved leaders taken by the assassin's hand. We've seen wedding guests in blood-soaked finery staggering from a hotel in Jordan, Afghans and Iraqis blown up in mosques and markets, and trains in London and Madrid ripped apart by bombs. On a clear September day, we saw thousands of our fellow citizens taken from us in an instant. These horrific images serve as a grim reminder: The advance of liberty is opposed by terrorists and extremists -- evil men who despise freedom, despise America, and aim to subject millions to their violent rule.
President George W. Bush is surrounded by members of Congress as he prepares to leave the House chamber Monday evening, Jan. 28, 2008 at the U.S. Capitol, following the President's State of the Union Address. White House photo by Eric Draper
We are engaged in the defining ideological struggle of the 21st century. The terrorists oppose every principle of humanity and decency that we hold dear. Yet in this war on terror, there is one thing we and our enemies agree on: In the long run, men and women who are free to determine their own destinies will reject terror and refuse to live in tyranny. And that is why the terrorists are fighting to deny this choice to the people in Lebanon, Iraq, Afghanistan, Pakistan, and the Palestinian Territories. And that is why, for the security of America and the peace of the world, we are spreading the hope of freedom. (Applause.)
In Afghanistan, America, our 25 NATO allies, and 15 partner nations are helping the Afghan people defend their freedom and rebuild their country. Thanks to the courage of these military and civilian personnel, a nation that was once a safe haven for al Qaeda is now a young democracy where boys and girls are going to school, new roads and hospitals are being built, and people are looking to the future with new hope. These successes must continue, so we're adding 3,200 Marines to our forces in Afghanistan, where they will fight the terrorists and train the Afghan Army and police. Defeating the Taliban and al Qaeda is critical to our security, and I thank the Congress for supporting America's vital mission in Afghanistan. (Applause.)
In Iraq, the terrorists and extremists are fighting to deny a proud people their liberty, and fighting to establish safe havens for attacks across the world. One year ago, our enemies were succeeding in their efforts to plunge Iraq into chaos. So we reviewed our strategy and changed course. We launched a surge of American forces into Iraq. We gave our troops a new mission: Work with the Iraqi forces to protect the Iraqi people, pursue the enemy in its strongholds, and deny the terrorists sanctuary anywhere in the country.
The Iraqi people quickly realized that something dramatic had happened. Those who had worried that America was preparing to abandon them instead saw tens of thousands of American forces flowing into their country. They saw our forces moving into neighborhoods, clearing out the terrorists, and staying behind to ensure the enemy did not return. And they saw our troops, along with Provincial Reconstruction Teams that include Foreign Service officers and other skilled public servants, coming in to ensure that improved security was followed by improvements in daily life. Our military and civilians in Iraq are performing with courage and distinction, and they have the gratitude of our whole nation. (Applause.)
President George W. Bush delivers his State of the Union Address Monday, Jan. 28, 2008, at the U.S. Capitol. White House photo by David Bohrer
While the enemy is still dangerous and more work remains, the American and Iraqi surges have achieved results few of us could have imagined just one year ago. (Applause.) When we met last year, many said that containing the violence was impossible. A year later, high profile terrorist attacks are down, civilian deaths are down, sectarian killings are down.
When we met last year, militia extremists -- some armed and trained by Iran -- were wreaking havoc in large areas of Iraq. A year later, coalition and Iraqi forces have killed or captured hundreds of militia fighters. And Iraqis of all backgrounds increasingly realize that defeating these militia fighters is critical to the future of their country.
When we met last year, al Qaeda had sanctuaries in many areas of Iraq, and their leaders had just offered American forces safe passage out of the country. Today, it is al Qaeda that is searching for safe passage. They have been driven from many of the strongholds they once held, and over the past year, we've captured or killed thousands of extremists in Iraq, including hundreds of key al Qaeda leaders and operatives.
Last month, Osama bin Laden released a tape in which he railed against Iraqi tribal leaders who have turned on al Qaeda and admitted that coalition forces are growing stronger in Iraq. Ladies and gentlemen, some may deny the surge is working, but among the terrorists there is no doubt. Al Qaeda is on the run in Iraq, and this enemy will be defeated. (Applause.)
President George W. Bush is applauded during his State of the Union Address at the U.S. Capitol Monday evening, Jan. 28, 2008. White House photo by Shealah Craighead
When we met last year, our troop levels in Iraq were on the rise. Today, because of the progress just described, we are implementing a policy of "return on success," and the surge forces we sent to Iraq are beginning to come home.
This progress is a credit to the valor of our troops and the brilliance of their commanders. This evening, I want to speak directly to our men and women on the front lines. Soldiers and sailors, airmen, Marines, and Coast Guardsmen: In the past year, you have done everything we've asked of you, and more. Our nation is grateful for your courage. We are proud of your accomplishments. And tonight in this hallowed chamber, with the American people as our witness, we make you a solemn pledge: In the fight ahead, you will have all you need to protect our nation. (Applause.) And I ask Congress to meet its responsibilities to these brave men and women by fully funding our troops. (Applause.)
Our enemies in Iraq have been hit hard. They are not yet defeated, and we can still expect tough fighting ahead. Our objective in the coming year is to sustain and build on the gains we made in 2007, while transitioning to the next phase of our strategy. American troops are shifting from leading operations, to partnering with Iraqi forces, and, eventually, to a protective over-watch mission. As part of this transition, one Army brigade combat team and one Marine Expeditionary Unit have already come home and will not be replaced. In the coming months, four additional brigades and two Marine battalions will follow suit. Taken together, this means more than 20,000 of our troops are coming home. (Applause.)
Any further draw down of U.S. troops will be based on conditions in Iraq and the recommendations of our commanders. General Petraeus has warned that too fast a draw down could result in the "disintegration of the Iraqi security forces, al Qaeda-Iraq regaining lost ground, [and] a marked increase in violence." Members of Congress: Having come so far and achieved so much, we must not allow this to happen. (Applause.)
In the coming year, we will work with Iraqi leaders as they build on the progress they're making toward political reconciliation. At the local level, Sunnis, Shia, and Kurds are beginning to come together to reclaim their communities and rebuild their lives. Progress in the provinces must be matched by progress in Baghdad. (Applause.) We're seeing some encouraging signs. The national government is sharing oil revenues with the provinces. The parliament recently passed both a pension law and de-Baathification reform. They're now debating a provincial powers law. The Iraqis still have a distance to travel. But after decades of dictatorship and the pain of sectarian violence, reconciliation is taking place -- and the Iraqi people are taking control of their future. (Applause.)
President George W. Bush smiles as he delivers his 2008 State of the Union address Monday, Jan. 28, 2008, at the U.S. Capitol. White House photo by Eric Draper
The mission in Iraq has been difficult and trying for our nation. But it is in the vital interest of the United States that we succeed. A free Iraq will deny al Qaeda a safe haven. A free Iraq will show millions across the Middle East that a future of liberty is possible. A free Iraq will be a friend of America, a partner in fighting terror, and a source of stability in a dangerous part of the world.
By contrast, a failed Iraq would embolden the extremists, strengthen Iran, and give terrorists a base from which to launch new attacks on our friends, our allies, and our homeland. The enemy has made its intentions clear. At a time when the momentum seemed to favor them, al Qaida's top commander in Iraq declared that they will not rest until they have attacked us here in Washington. My fellow Americans: We will not rest either. We will not rest until this enemy has been defeated. (Applause.) We must do the difficult work today, so that years from now people will look back and say that this generation rose to the moment, prevailed in a tough fight, and left behind a more hopeful region and a safer America. (Applause.)
We're also standing against the forces of extremism in the Holy Land, where we have new cause for hope. Palestinians have elected a president who recognizes that confronting terror is essential to achieving a state where his people can live in dignity and at peace with Israel. Israelis have leaders who recognize that a peaceful, democratic Palestinian state will be a source of lasting security. This month in Ramallah and Jerusalem, I assured leaders from both sides that America will do, and I will do, everything we can to help them achieve a peace agreement that defines a Palestinian state by the end of this year. The time has come for a Holy Land where a democratic Israel and a democratic Palestine live side-by-side in peace. (Applause.)We're also standing against the forces of extremism embodied by the regime in Tehran. Iran's rulers oppress a good and talented people. And wherever freedom advances in the Middle East, it seems the Iranian regime is there to oppose it. Iran is funding and training militia groups in Iraq, supporting Hezbollah terrorists in Lebanon, and backing Hamas' efforts to undermine peace in the Holy Land. Tehran is also developing ballistic missiles of increasing range, and continues to develop its capability to enrich uranium, which could be used to create a nuclear weapon.
President George W. Bush delivers copies of his speech to Speaker of the House Nancy Pelosi (D-California) and Vice President Dick Cheney before delivering his 2008 State of the Union address Monday, Jan. 28, 2008, at the U.S. Capitol. White House photo by Eric Draper
On the home front, we will continue to take every lawful and effective measure to protect our country. This is our most solemn duty. We are grateful that there has not been another attack on our soil since 9/11. This is not for the lack of desire or effort on the part of the enemy. In the past six years, we've stopped numerous attacks, including a plot to fly a plane into the tallest building in Los Angeles and another to blow up passenger jets bound for America over the Atlantic. Dedicated men and women in our government toil day and night to stop the terrorists from carrying out their plans. These good citizens are saving American lives, and everyone in this chamber owes them our thanks. (Applause.)
And we owe them something more: We owe them the tools they need to keep our people safe. And one of the most important tools we can give them is the ability to monitor terrorist communications. To protect America, we need to know who the terrorists are talking to, what they are saying, and what they're planning. Last year, Congress passed legislation to help us do that. Unfortunately, Congress set the legislation to expire on February the 1st. That means if you don't act by Friday, our ability to track terrorist threats would be weakened and our citizens will be in greater danger. Congress must ensure the flow of vital intelligence is not disrupted. Congress must pass liability protection for companies believed to have assisted in the efforts to defend America. We've had ample time for debate. The time to act is now. (Applause.)
Protecting our nation from the dangers of a new century requires more than good intelligence and a strong military. It also requires changing the conditions that breed resentment and allow extremists to prey on despair. So America is using its influence to build a freer, more hopeful, and more compassionate world. This is a reflection of our national interest; it is the calling of our conscience.
America opposes genocide in Sudan. (Applause.) We support freedom in countries from Cuba and Zimbabwe to Belarus and Burma. (Applause.)
America is leading the fight against global poverty, with strong education initiatives and humanitarian assistance. We've also changed the way we deliver aid by launching the Millennium Challenge Account. This program strengthens democracy, transparency, and the rule of law in developing nations, and I ask you to fully fund this important initiative. (Applause.)
America is leading the fight against global hunger. Today, more than half the world's food aid comes from the United States. And tonight, I ask Congress to support an innovative proposal to provide food assistance by purchasing crops directly from farmers in the developing world, so we can build up local agriculture and help break the cycle of famine. (Applause.)
America is leading the fight against disease. With your help, we're working to cut by half the number of malaria-related deaths in 15 African nations. And our Emergency Plan for AIDS Relief is treating 1.4 million people. We can bring healing and hope to many more. So I ask you to maintain the principles that have changed behavior and made this program a success. And I call on you to double our initial commitment to fighting HIV/AIDS by approving an additional $30 billion over the next five years. (Applause.)
America is a force for hope in the world because we are a compassionate people, and some of the most compassionate Americans are those who have stepped forward to protect us. We must keep faith with all who have risked life and limb so that we might live in freedom and peace. Over the past seven years, we've increased funding for veterans by more than 95 percent. And as we increase funding -- (applause.) And as increase funding we must also reform our veterans system to meet the needs of a new war and a new generation. (Applause.) I call on the Congress to enact the reforms recommended by Senator Bob Dole and Secretary Donna Shalala, so we can improve the system of care for our wounded warriors and help them build lives of hope and promise and dignity. (Applause.)
Our military families also sacrifice for America. They endure sleepless nights and the daily struggle of providing for children while a loved one is serving far from home. We have a responsibility to provide for them. So I ask you to join me in expanding their access to child care, creating new hiring preferences for military spouses across the federal government, and allowing our troops to transfer their unused education benefits to their spouses or children. (Applause.) Our military families serve our nation, they inspire our nation, and tonight our nation honors them. (Applause.)
The strength -- the secret of our strength, the miracle of America, is that our greatness lies not in our government, but in the spirit and determination of our people. (Applause.) When the Federal Convention met in Philadelphia in 1787, our nation was bound by the Articles of Confederation, which began with the words, "We the undersigned delegates." When Gouverneur Morris was asked to draft a preamble to our new Constitution, he offered an important revision and opened with words that changed the course of our nation and the history of the world: "We the people."
By trusting the people, our Founders wagered that a great and noble nation could be built on the liberty that resides in the hearts of all men and women. By trusting the people, succeeding generations transformed our fragile young democracy into the most powerful nation on Earth and a beacon of hope for millions. And so long as we continue to trust the people, our nation will prosper, our liberty will be secure, and the state of our Union will remain strong. (Applause.)
So tonight, with confidence in freedom's power, and trust in the people, let us set forth to do their business. God bless America. (Applause.)
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