Wednesday, January 2, 2013

Wednesday, January 2, 2013

End Of Year Update

Our staff here at American Values is busy going through the checks we received in the mail from the holiday weekend to see if we met our year-end fundraising goal. Most of our supporters give $10, $20 or $30, so it takes time to add it all up. I want to thank everyone who responded for your tremendous generosity. I hope American Values reached its goal. We will provide an update later in the week. Thank you, my friends!

Higher Taxes; More Debt?

There are conflicting headlines from the fiscal cliff deal that are causing considerable confusion and consternation. Many conservatives are outraged that Senate Republicans approved a plan that raises taxes at all. But it is important to remember that taxes would have gone up automatically across-the-board as of yesterday even without a deal. Other conservatives are seizing on a report from the Congressional Budget Office (CBO) that the deal increases the national debt by nearly $4 trillion over the next 10 years.

That figure is hokum. The Congressional Budget Office report assumed that all of the Bush tax cuts would expire, and that the government would reap a windfall in higher revenues as a result of these massive tax increases. By renewing 98% of the Bush tax cuts, the deal denied the government trillions of additional revenue. That is how the numbers crunchers come up with the $4 trillion increase in the debt.

Keep in mind that this is the same outfit that just six weeks ago predicted another recession and skyrocketing unemployment if Congress did nothing and allowed the Bush tax cuts to expire.

That's because higher taxes hurt economic growth, and that's why conservatives generally oppose tax increases. Taking money out of the pockets of small business owners and American families and sending it to Washington bureaucrats does nothing for the economy.

There are all kinds of reasons to oppose this compromise. But do not fall for the left-wing logic that considers tax cuts a form of government spending. That assumption begins with the belief that all money belongs to the government. The history of pro-growth tax reform measures is clear: Lower tax rates result in more economic growth, which in turn produces more revenue.

What's Next

The stock market celebrated the news of a fiscal cliff deal that preserved the overwhelming majority of the Bush tax cuts. The Dow has been up more than 200 points for most of the day. But the fiscal cliff fight is far from over.

It is worth pointing out that this deal raises only about $60 billion a year in additional revenue. That's less than half of what President Obama originally demanded. Not surprisingly, he's demanding even more of your hard-earned money.

Congressional Republicans don't want the Pentagon to get hit by another wave of cuts from the sequestration deal. But according to a Los Angeles Times report, "As the price for lifting those defense cuts, White House officials have said, the president will demand another round of revenue (tax) increases."

Having conceded to higher taxes on the successful, most Republicans are saying "No more." Senator Pat Toomey (R-PA) is one of the strongest fiscal conservatives in Congress. He grudgingly supported the compromise deal, as did other conservatives like Senators Tom Coburn (R-OK), Jeff Sessions (R-AL) and Ron Johnson (R-WI).

Senators Marco Rubio (R-FL), Rand Paul (R-KY), Charles Grassley (R-IA), Richard Shelby (R-AL) and Mike Lee (R-UT) voted against the deal, along with three Senate liberals. In the House, nearly two-thirds of Republicans opposed the deal, while 90% of Democrats supported it.

Explaining his vote this morning, Senator Toomey said, "We spared as many Americans as we possibly could from a tax increase." But he also said this:

"We're totally done. You can't solve this problem -- I don't care how much you raise taxes. … We will only solve this problem when we finally get the spending under control. And the debt ceiling, and after that, the continuing resolution expiration, those are the vehicles that give us the opportunity to insist on making progress on the real problem."

Spending is the issue, as this chart shows. Savings of $60 billion a year in additional revenue is virtually meaningless when the administration is running deficits in excess of $1,000 billion a year.

But even as President Obama celebrated this compromise deal and higher taxes on the "rich," he warned members of Congress that he would not negotiate on the debt ceiling, saying, "[W]hile I will negotiate over many things, I will not have another debate with this Congress over whether or not they should pay the bills that they’ve already racked up through the laws that they passed."

That's an odd statement to make when it seems obvious he's going to have to negotiate with Congress over the obvious problem -- debt and spending. Unless he's prepared to issue an executive order unilaterally raising the debt limit and creating a constitutional crisis in the process.

The Fight Over Gun Control

During a Sunday interview with Meet The Press host David Gregory, President Obama made it clear that he was getting ready for a big fight over legislation that would restrict your right to own a fire arm. I have no idea what his proposal will look like, but just consider the lunacy that is prevailing in the Washington, D.C., suburbs.

A six year-old boy was suspended recently from Roscoe R. Nix Elementary School in Silver Spring, Maryland. Did he bring a gun to school in his lunch box? No. He was suspended merely for pointing his finger at another student and saying, "Pow."

Boys have been playing "Cowboys and Indians" or "Star Wars" playground games forever. But now a six year-old saying "Bang!" is a security threat?

A local newspaper in New York decided it was an urgent public service to publish the names and addresses of gun permit holders. Think about this for a moment. These folks have done nothing wrong. By definition they are law-abiding citizens.

Why should they be singled out for public scrutiny? By printing the names the paper told every thug and criminal in the area which homes are armed and which ones are not. Guess which ones are more likely to be robbed?

But there's more. In response to the considerable backlash the paper received, it has just posted ARMED GUARDS at its offices! So the paper's editors want the benefit of armed protection, but they just don't think anyone else deserves the right to protect themselves without having their names published.