The Bruce Bartlett Archives
According to the latest Medicare trustees report (p. 146), the unfunded liability of Medicare Part D is $16.1 trillion.
Google has completely destroyed its RSS Reader. Suggestions for alternatives are appreciated. Non-Mac only.
Press reports say that Congress is about to enact a nominal spending cut of 10 percent in the U.S. Government Accountability Office budget. The mind-boggling stupidity of this action is frankly beyond comprehension. Anyone who knows anything about the budget knows that the GAO is the primary source for detailed analyses of government programs. If Congress really wants to cut the budget without just taking a meat-ax to every program regardless of the consequences it needs the GAO desperately. It is the strongest ally any budget cutter could possibly have. GAO analysts know the ins and outs of government programs better than anyone in Washington. Its database is filled with decades full of reports recommending savings that would have saved trillions of wasted dollars over the years if they had been followed. Instead of slashing GAO's budget, Congress ought to be increasing it.
I have previously posted a table showing that people support raising taxes as part of deficit reduction by a 2-to-1 margin over the Grover Norquist/Club for Growth/Tea Party position that the deficit must be reduced only by spending cuts without a penny of higher taxes. In light of President Obama's new budget plan, which includes higher taxes, I am posting an updated table, including a poll on Friday showing that three-fourths of people support higher taxes and only 21 percent support the doctrinaire right-wing position.
Michele Bachmann compared herself to Margaret Thatcher today. This gives me an excuse to reprint my Economix column from a few weeks ago on Thatcher's actual accomplishments in terms of tax and budget policy, which are quite different from the Republican legend about her.
New York Times
December 24, 2008
On August 15, 1971, Richard Nixon implemented the most radical economic program in American history. And it was all done over a single weekend in secrecy worthy of the atomic bomb project during World War II. While ultimately unsuccessful, the Nixon program showed what a forceful president can do to completely change the nation’s course if he is willing to push the limit of his power.
Thirty years ago today, Ronald Reagan signed into law the Economic Recovery Tax Act of 1981. It remains controversial, with Democrats blaming it for undermining the nation’s finances and contributing to the maldistribution of income, while Republicans assert that the Reagan tax cut was so stimulative it actually lost no revenue and that its reprise is just what the economy needs today.
On Thursday, the Financial Times reported that Michael Bradfield, former General Counsel to the Federal Reserve Board and the FDIC, had sent a memorandum to Congress supporting the constitutional option to the debt limit, in which the president would invoke section 4 of the 14th Amendment to override the debt limit and raise the cash necessary to avoid default and the violation of laws requiring spending for various purposes. I have managed to obtain a copy of this memo through a congressional source. Because of its importance to the debate taking place right this moment, I am pasting the memo below. I have not asked Mr. Bradfield's permission because I do not know where to reach him. I hope he doesn't mind.
Some time in the next week or so, President Obama will be forced to break the law. Either he must break the law by refusing to pay bondholders the interest or principal they are legally entitled to, or he must refuse to pay government contractors, government employees, Social Security recipients and millions upon millions of other people and businesses that are also legally entitled to payments from the Treasury. Republicans say he can just pay the bondholders and screw everyone else. But the president is just as legally obligated to make other payments required by appropriations and other laws as he is to make interest payments. Indeed, there is a law, the Congressional Budget and Impoundment Control Act of 1974, which says that it is illegal for the president to fail to spend money that Congress has appropriated. Furthermore, the Supreme Court ruled in the case of Clinton v. New York that the president may not impound funds even if Congress says he can.
I posted an earlier version of this table a week ago, but there have been several new polls confirming the conclusion, so I have brought it up to date.
