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Californians are the losers in Gov. Brown’s gimmick-filled budget proposal

Can Californian’s say, please tax me? This is the not-so-new plan for the state’s $15-20 billion budget deficit woes. The Golden State’s Governor, Jerry Brown, is crossing his fingers that voters will agree to a sales and income tax hike to solve budget deficit problems.

What the governor doesn’t highlight is the hidden $7 billion increase in its yearly spending expenditures.

One might ask how the Gov. Brown intends to cover his tracks, increase taxes of course.

One liberal-leaning group is riding behind the Kim Kardashian’s success story and asking the reality television star if she can pay more in taxes. A video ad produced by the Courage Campaign targets the “Keeping Up with the Kardashians” star by comparing the millionaire’s (Kim earned a reported $12 million last year) tax rate to someone earning $47,000 a year. The ad failed to acknowledge that the reality star paid at least 10 percent of her earnings to Uncle Sam in Sacramento, her bill landed somewhere near the $1.2 million mark while the “unnamed” worker paid $3,000. Voters should be questioning which of the two paid their “fair share?”

In the meantime, California residents will be asked to increase their own taxes in order to cover the “out of control” pension funds promised to public-sector union employees, duplicative state agencies, the largest prison population, Medicaid/Medicare and other “free” services for the illegal population that reside in California.

Currently, California is facing monumental billion dollar budget shortfalls and Governor Brown is banking on residents to increase taxes to narrow the budget gap. In June of this year, state legislators voted on a supposed-balance budget, but underestimating expenditures has left a $12.8 billion hole for the state.

The biggest cut Governor Brown proposes is the state’s welfare and child care programs. These entitlement programs will see $1.4 billion less money next year if state legislators agree to the governor’s cuts and reduce spending to the poor.

“I do not see us taking cut action between now and the May (budget revision),” said Democrat Senate President Pro Tem Darrell Steinberg. “We’ve done enough damage on the cuts side. And the cash situation is pretty good. And it isn’t like February of 2009 when we were close to heading over the cliff. I just don’t see the need to make cuts.”

In an effort to stave off budget cuts, Democrats are hoping residents will elect to increase the state sales tax by half-a-cent for the next four years. The tax measure would also levy a 1 percent income tax on income earners who make $250,000, 1.5 percent on income over $300,000 and a 2 percent income tax on those earning more than $500,000. Effectively the state income tax would increase from 10.3 percent to 12.3 percent making California the most expensive state to live. Governor Brown anticipates the increase will raise $7 billion, still shy of the $13 billion budget deficit.

California tax crusader, Richard Rider of San Diego Tax Fighters points out the hard reality for Golden State residents. “If passed, California will advance from the third highest income tax state to numero uno. Any sane rich person HAS to be thinking of moving out of the state.”

Minor cuts await

Californians will also find the Governor has decided to save money by eliminating 3,000 jobs from the Department of Corrections and Rehabilitation Departments. The democratic-run state will shift some of the prison population to the counties and reduce prison sentences.

“The state of California is a very generous, compassionate political jurisdiction,” Brown explained. “When we have to cut spending, that spendingis going to come from programs that aredoing a lot of good.It’snot nice. Wedon’t likeit. But the economy and tax statutes of California make just so much money available.”

Brown has also proposed that 39 state agencies are axed. Some of the agencies on the chopping block include the California Volunteer Agency, California Emergency Management Agency, Managed Risk Medical Insurance Board, Rehabilitation Appeals Board and Department of Boating and Wateways.

Pension woes

A scathing report released by Stanford University provided scary details for the Golden State’s promised pension programs. Californians have promised approximately $500 billion, something the “millionaire’s tax” would not cover. (The new tax would raise around $6.9 billion, but that would help block cuts to K-12 education).

However, even if the state successfully abolishes agencies, raises taxes and cuts education departments, California will still operate in the red due to the pension fund promises.

Something else Governor Brown doesn’t address is California’s overly-burdensome regulations (AB32 is California’s own cap & trade law) and it’s these taxes that are driving businesses to other business-friendly states.

Without new revenue streams from businesses, the Golden State is at risk of further austerity measures which could cripple any prospects of a bright future.

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© Copyright 2011 Kimberly Dvorak All Rights Reserved.

Fiscal responsibility strikes the heart of America’s problems

Like a speeding train headed for a cliff, the conductor knows impending catastrophe is rapidly approaching and the time to act is running out. Just like that conductor, America is now facing a similar scenario as the deficits the country is racking up are reaching unsustainable levels.

The current White House administration has enacted record breaking spending packages like, TARP part two, stimulus one and two as well as a new trillion-dollar health care entitlement program.

While the country continues to face a stubborn recession and families tightened their budgets in order to wait out the economic storm, President Obama continues to put forth larger than life yearly budgets with massive spending programs and no budgetary control in sight.

However, team Obama has put together a debt commission. The co-chairs, Erskine Bowles a Democrat and Alan Simpson a Republican are searching for a solutions regarding America’s impending financial doomsday.

The commission says that at all options are on the table during their first once month meetings. They expect to present the President with their findings right after the November mid-term elections.

The commission is made up of 10 Democrats and eight Republicans and for a recommendation to move forward they must have 14 of the 18 members in agreement. This will not be easy considering the Senate cannot come up with 60 of 100 votes to move legislation ahead.

Adding insult to injury, Washington Post writer Dana Milbank said, “Holding a ‘fiscal responsibility summit’ at the White House in the middle of a government spending spree is a bit like having an Alcoholics Anonymous meeting at a frat house on homecoming weekend.”

Seeing the writing on the wall Congress has not put forth its normally straightforward budget resolution by the April 15 deadline. If House Speaker Nancy Pelosi (D-CA) doesn’t act it would be the first time since 1974 that Congress failed to pass a yearly budget.

In the midst of record level deficits it looks like Congress may be coming to their senses regarding the federal government’s budget as they are having trouble passing a bill with overwhelming numbers skewing in the Democrats favor.

If Congress isn’t operating with a budget, Congressional appropriators could ignore standard caps on discretionary spending for fiscal year 2011. On top of that the debt commission holds no real power in Washington D.C. Any recommendations made by the panel must be adopted by Congress and the panel lacks any public input.

Until Congress realizes debt is the symptom and spending is the disease gridlock in Washington will remain intact.

According to a Fox News report the prized-jewel health care reform bill could be a sitting duck for the newly formed debt commission. In the discussions this week President Obama said everything was on the table – including the new health care bill, Social Security, Value Added Tax (VAT) and steep tax increases for those making less than $250 thousand per year.

On word of Greece’s reduced credit rating the stock markets tumbled in Europe and America.

“We live in a global economy,” Commissioner Bowles said. “We’ve got a deficit this year of $1.6 trillion. Half of what we’re borrowing every year we borrow from foreign countries. Forget if China starts to sell our (Treasury) bonds. Think if they just quit buying and what that will do to our interest rates, what that will do to the dollar, and what that will do to the economy in America. We’ve got to fix this debt problem or there’s not going to be a great future for this country.”

Republican co-chair, Simpson of the commission concurred. “These things are known to guys in Dubuque, Iowa, and Cody, Wyoming. You just don’t realize how alert the American people are to what’s happening. And they’ll come up to you on the street and say I’m willing to pay more taxes or I’m ready to cut back on this. Unsustainable is not a good word. It’s called going broke.”

The Heritage Foundation acknowledges the problem is far larger than Washington is alluding to. “The only reason to consider the VAT is because the current tax system cannot support the massive spending surge the President has already pushed through let alone the additional spending he envisions or the entitlements wave to follow. Either he finds a way to finagle the VAT or he will be forced to pare spending back to previous levels. Either Washington puts a much bigger squeeze on the taxpayers, or Washington must go on a crash diet. It’s time to send the federal government to a fat farm.”

The debt commission’s goal is to reduce the federal budget to three percent of the country’s gross domestic product by 2015. The 10 percent number the U.S. is currently saddled with means there are some tough choices on the horizon.

Big-ticket entitlement programs the debt commission is looking at include, Medicare, Medicaid and Social Security.

Earlier in the week Obama said he would ask the panel to scour the current U.S. tax code and he said he would not rule out any tax increases for the middle class if the debt commission believes it is necessary to begin chipping away at the deficit.

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CBO Chief calls the Democrat economic path unsustainable

As the nation marks tax freedom day– the day in which most Americans have earned enough money to pay for federal, state, and local taxes – most are left feeling worried instead of relieved thanks to the Democrats out-of-control spending agenda in Washington.

Adding to the misery is the price tag of the new health care reform package that will dig deeper into American’s pocket book by creating $570 billion in new taxes.

As a result senior Obama officials are now hinting that that a European-style ”value added tax” (VAT) will be needed to meet the increased spending, however many say the new hidden tax will slam consumers and kill jobs.

The already bloated deficit is expected to increase by an eye-popping $2.2 trillion. President Obama’s new massive $3.83 trillion budget proposal for 2011 recklessly borrows 42 cents of every $1 spent by the federal government, according to his financial team.

The non-partisan Congressional Budget Office (CBO) Chief Doug Elmendorf called the Obama Administration’s fiscal path “unsustainable” and stressed that the crisis cannot be solved through “minor tinkering.”

While the financial markets may have rebounded from the big crash during the Bush Administration the country’s unemployment figure is hovering around the 10 percent mark. Obama’s financial wizards have already indicated the elevated unemployment numbers may become the new norm, in the new America.

As Sen. Barbara Boxer (D-CA) readies herself for a tough reelection battle, she is crisscrossing California during the Senate recess touting what she sees as concrete accomplishments of the past year -jobs created by the economic stimulus package, benefits from the healthcare bill for seniors and tax breaks for businesses that are hiring the unemployed. Most in California see the new legislative packages as a drag on the economy, not a positive.

“As our country marks Tax Freedom Day, Californians are feeling anything but relieved thanks to Barbara Boxer and the Washington Democrats who have racked up reckless debts that will be paid for by future generations. Boxer and the Democrats in Congress have taxed, spent and borrowed America into a fiscal crisis, and we’re confident that voters will hold her accountable for this dangerous economic agenda in November,” said National Republican Senatorial Committee (NRSC) spokeswoman Amber Marchand.
When the President took office last year the national debt stood at roughly $10.6 trillion, according to the U.S. Department of the Treasury, Bureau of the Public Debt. However, by early April 2010, the national debt had increased by more than $2 trillion to $12.8 trillion and counting.

The bloated deficit is now threatening the country’s credit rating that in turn could cause interest rates to rise, further hindering an economic rebound and sending the economy into a double-dip recession.

The AAA credit rating is threatened by “mushrooming debt” according to Moody’s and they could downgrade America’s credit standing which would harm the federal government’s ability to borrow money cheaply.
The gold standard agency said the United States and other Western nations have moved ‘substantially’ closer to losing their top ratings, as the credit number reflects their ability to pay back loans.

America has enjoyed high credit standards for more than 50 years and Moody’s said it’s not just U.S. prestige at stake. A downgrade would harm the federal government’s ability to borrow money cheaply,” according to an editorial, “A Ticking Debt Bomb,” in The Philadelphia Inquirer.

“The federal deficit is expected to rise this year to 10.6 percent of gross domestic product, its highest level since 1946.” The fiscal future for America looks even dimmer according to the editorial.
Lower credit ratings translate into reduced services while spending remains the same. The result would leave schools short changed, roads unfixed, borders less secure and higher taxes.

The Columbus Dispatch explained it this way; “The United States isn’t going to default next week or next year, but the previously unthinkable grows nearer with every day the nation fails to change this disastrous course.”

The head of the CBO, Elmendorf, said the costs of the new health care laws could result in dire consequences if political leaders don’t scale back spending or increase taxes.

Elmendorf noted in a recent CBO report that an increase in the public debt from $7.5 trillion at the end of 2009 to $20.3 trillion at the end of 2020 if the President’s fiscal 2011 budget were to be implemented as written. As a percentage of gross domestic product, the debt would rise from 53 percent to 90 percent, the CBO forecasted. “The only other time the percentage was that high was right after World War II,” Jonathan Allen reported in Politico.

As America inches closer to a form of Socialism, concerned citizens say for the first time in their lives America’s children will not benefit from a brighter future. The tax revenue needed to sustain the federal government and entitlement programs in place will stagnate the economy indefinitely bringing America in line with European countries.

Curtailing spending is a must if America wishes to return to the days of yore, former President Ronald Reagan said it best; “Socialism only works in two places: Heaven where they don’t need it and hell where they already have it.”

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Tax and spend liberal Boxer stays true to form

When most American families have cut up their credit cards and tightened their spending habits, Senator Barbara Boxer (D-CA) voted to raise the nations’ debt ceiling to $14.3 trillion.

At last night’s State of the Union speech, President Obama called for a spending freeze (albeit it will take place next year after the dicey elections in November) the administration is seeking repentance after they increased spending in budgets this year by double digits.

Another component the President called for was bipartisanship. During the Senate session today Jeff Sessions (R-AL) and Claire McCaskill (D-MO) put a bipartisan bill forth. The bill would have imposed binding limits on total defense and non-defense discretionary spending for the next four years. Boxer nixed the idea of curtailing Washington’s spending problem.

Less than an hour later, Boxer voted to increase the country’s debt ceiling further sealing her tax and spend ways. According to the Associated Press, “Senate Democrats are counting on their soon-to-expire 60-vote majority to raise the federal debt ceiling by $1.9 trillion so they don’t have to take more politically painful votes on government borrowing until after the fall midterm elections.”

Californians are expected to make Boxer earn their upcoming votes. There are three candidates in the race on the GOP side, Chuck DeVore, Carly Fiorina and Tom Campbell- all are within single digits of Senator Boxer.

“Instead of doing what President Obama called for and ‘tightening their belts,’ Barbara Boxer and Senate Democrats rejected a bipartisan proposal to enact a federal spending freeze and instead raised the government’s debt limit,” said National Republican Senatorial Committee (NRSC) spokeswoman Amber Wilkerson Marchand. “Californians are tired of Barbara Boxer treating their wallets like personal ATM machines, and they will hold her accountable for her out-of-control spending spree when they cast their ballots this November.”

In a press release from Senator McCaskill, Senators Jeff Sessions (R-AL) and Jon Kyl (R-AZ) offered an amendment proposing spending caps. The group of bipartisan Senators are calling it “A rare opportunity to impose budget discipline on Congress.

“As public scrutiny intensifies on Washington’s penchant for spending and borrowing, senators will face a clear choice this week when they consider a measure to legally limit the growth of discretionary spending over the next four years. The proposed spending caps will be considered as an amendment to broader Senate legislation needed to permit the U.S. Treasury to borrow more money,” according to the McCaskill press release.

California’s budget crisis coupled with Washington’s spending habits will certainly be on the voter’s minds in November –the question remains will Boxer be the next Senator sent home due to angry constituents?

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