Mac's Blog
|
Posted by
on
December 07, 2012
Federal Spending As discussions about the “fiscal cliff” continue, it might be helpful to step back and take a broader view of federal spending – where your money goes. The “fiscal cliff” refers to tax increases that would take effect at the end of the year when many provisions of the tax code expire. It also includes automatic, across-the-board spending cuts set to begin under current law in January 2013. This newsletter will summarize federal spending; the next issue will summarize taxes. For more detail on what changes at the end of the year, see my previous newsletter. Direction of Spending Most Americans know that federal spending has been increasing in recent years. But I suspect that few understand how historic the spending increases have been. The chart below shows federal spending over time as a percentage of the economy. In 2012, federal spending was nearly $3.8 trillion, which is 27 percent more than when President Obama took office.
What is your money spent on? Federal spending is generally divided into three categories: mandatory, discretionary, and net interest. Mandatory Spending – Nearly two-thirds of annual federal spending is used for mandatory spending programs, also known as entitlements. Mandatory spending means that once the program is established, everyone who qualifies receives the benefit. It does not require the government to allocate a certain amount of money; the payments are made automatically without any further votes by Congress. It includes programs like Social Security, Medicare, Medicaid, and food stamps. Interest payments on our debts are also considered mandatory since they must be paid. The chart below shows total federal spending and highlights the portion that is in mandatory programs. As you can see more than 60 percent of federal spending is devoted to mandatory programs and interest payments.
Discretionary Spending - Discretionary spending is provided through annual appropriations bills and must be approved by the Congress each year. It is often further divided into defense and non-defense categories. According to the Congressional Research Service, 47 percent of the total budget was discretionary spending in 1962, and it remained the largest portion of federal spending into the 1970's. Since then, mandatory spending has increased at a much faster rate than discretionary spending. Today, discretionary spending makes up less than 40 percent of the entire budget.
Net Interest - Net interest is the only part of future spending that cannot be reduced by legislative action because it is money that must be paid to service the U.S. debt. Net interest payments today make up over six percent of the federal budget, but that percentage could increase if interests rates rise. Unfortunately, many economists predict that those rates could rise dramatically over the next decade.
Future Projections With no changes, spending on Medicare, Medicaid, and Social Security will continue to rise and consume more of the federal budget. The future cost of these programs is being driven by a combination of several factors:
Medicare Some people may believe that they are just receiving the Medicare benefits they have paid for with their taxes. However, according to a 2011 study by the Urban Institute, a couple with two earners making an average wage receives benefits worth three times what they paid into Medicare over their working life. If there is only one earner in the family, the couple receives a benefit that is nearly six times what was paid through taxes.
In fact, Medicare costs have jumped over 65 percent over the last ten years, more than any other major program.
Social Security It is often said that Social Security does not contribute to the federal deficit, but this is not true. Since 2010, Social Security has had to pay more money out in benefits than it receives in tax revenue. To make up for this shortfall, Social Security redeems IOUs from the federal government that are being paid back with additional interest. In 2011, Social Security IOUs earned $114 billion in interest. The only way to redeem these IOUs is through taxes and borrowing from general revenue.
Defense Spending Defense is the first job of the federal government, and I think the first money the federal government spends should be for national security. Of the $1.2 trillion in automatic spending cuts set to begin in January, half will come from domestic programs and the other half from defense. This means that while it makes up only 19 percent of the federal budget, nearly 50 percent of the deficit reductions will come from defense. These $500 billion in cuts would come on top of $486 billion in defense cuts already set to begin in January.
Even if the government eliminated all spending on defense, foreign aid, federal salaries, and all other discretionary spending, we would still have a deficit this year of several billion dollars. In other words, all of the money that goes into the federal government in taxes is not enough to pay for the entitlement programs.
A more detailed look at how the federal government spends your money can be found below.
The next newsletter in this series will include an overview of where the federal government gets the money it spends. As always, I am interested in your feedback and your suggestions on this topic or any other that matters to you. I hope you will contact me with your opinion via phone, email, letter, website, or Facebook. Sincerely,
Join Mac's Facebook page: http://www.facebook.com/repmacthornberry?sk=wall
*Please note, this email was sent from an unattended mailbox.*
Posted by
on
December 04, 2012
What is the Fiscal Cliff? The so-called “fiscal cliff" refers to a combination of tax increases and automatic, across-the-board spending cuts set to begin under current law in January 2013. Below is a more detailed look at exactly what changes at the beginning of the year. Taxes According to the Tax Policy Center, if the current tax provisions are allowed to expire, about 90 percent of all Americans will see their taxes raised. This increase would be the largest tax hike in American history. Expiring Taxes and Policies by the Numbers The following provisions are just the highlights. In fact, dozens of tax provisions affecting individuals and businesses expire at the end of the year. You can read the Congressional Research Service report An Overview of Tax Provisions Expiring in 2012 by clicking here. You can find more detailed information on each tax provision by clicking the hyperlink at the beginning the bullet point. Bush-era tax cuts:
Other tax increases:
New Taxes:
Other policies expiring:
Automatic Spending Cuts The automatic spending cuts or sequestration are mandated in the Budget Control Act to reduce the deficit by $1.2 trillion over 10 years. The cuts come from both domestic and defense spending, but many programs are exempt. Although defense spending makes up only 19 percent of the federal budget, it will account for 50 percent of the deficit reductions in the sequestration. There is widespread and bipartisan agreement that these cuts would have a severe impact on America’s national security and further harm the economy. These across-the-board cuts to defense would come on top of the nearly half-trillion dollars ($487 billion) in cuts already being implemented. Spending cuts by the numbers
Reports on the Fiscal Cliff Reports on Automatic Spending Cuts
Posted by
on
November 30, 2012
Dear Friend, There has been a lot of talk about a “fiscal cliff” that could occur in the next month or so. The so-called “cliff” is a combination of expiring tax cuts and deep, across-the-board spending cuts that will take place in January 2013. Solving our nation’s fiscal problems is going to require some real political courage and some tough decisions. It means that members of the House and Senate and the White House must move beyond the campaign rhetoric and get to work addressing the fiscal mess we are now facing. The reality of the political situation in Washington is that there will continue to be a divided government in Washington over the next two years. Yet, continued gridlock and stalemate will have serious consequences lasting for many years. The threat that the fiscal cliff poses to our economy is too great to ignore. The economic future of our country, and that of our children and our grandchildren, is ultimately at stake. Understanding this cliff and how it could impact our lives and businesses is critical to this discussion. So, over the course of the next two weeks, I will be sending you several emails containing important facts about the fiscal cliff, government spending, and federal taxes. My hope is that these emails will give you a better understanding of what is going on and what is really at stake. I will also keep you updated as the situation unfolds and developments occur. As always, I am interested in your feedback and your suggestions on this topic or any other that matters to you. I hope you will contact me with your opinion via phone, email, letter, website, or Facebook. Sincerely, Mac
Posted by
on
November 14, 2012
Last week, I was able to participate in three events that helped remind me that our nation is far greater and far stronger than any President, any Congress, or any election.
On Thursday, I attended the annual Veterans Day Luncheon at Amarillo College. Many veterans’ events focus on older veterans, and there were a number in attendance at lunch. But Amarillo College has a very active student veterans' club for those who have served and then come home to go back to school. While attending AC, these veterans are also giving back to the community with a host of projects and activities. It reminded me that we have always counted on our veterans, not only to defend the country while they serve, but also to help build the country when they come home.
Finally, on Friday I attended the 14th annual Veterans Day Celebration by Travis Elementary School in Pampa. More than 400 young voices sang to honor our veterans and our nation in front of several visiting wounded warriors and a large crowd from the community. It was incredibly moving, and I confess I had to wipe away a tear a couple of times. Mrs. Kay Pittman directs the show and her passion is to see that every student at Travis has a proper appreciation for how fortunate we are as Americans. I told the students that I wish I could have every member of Congress attend their program.
Posted by
on
August 13, 2012
Dear Friend, Sincerely, Mac
Posted by
on
July 10, 2012
I wanted to share a letter I wrote to U.S. Border Patrol Chief Michael Fisher asking for answers on the border patrol station closures. I think they made this announcement without first ensuring that local law enforcement agencies will have the necessary resources to deal with the serious illegal immigration problems in our area.
Posted by
on
June 11, 2012
I always appreciate when you take the time to contact me and look forward to answering your questions on the video mailbox. In this edition, I discuss concerns about the Farm Bill, the possibility of cuts to agriculture programs, and where Congress stands on renewing these policies. With the Supreme Court set to rule on the Obama health care law any day, I also talk about the House's recent vote to repeal additional pieces of the law. The latest vote would repeal the law’s tax on medical devices and end restrictions on health savings and flexible spending accounts. The measure passed with bipartisan support on a vote of 270 to 146. I hope you'll tune in to this edition and keep the questions coming.
Posted by
on
May 01, 2012
It makes me rather sick to see how those who do so much to protect our country have become political footballs. 
The people who deserve credit, not only for bin Laden but also for stopping many terrorist plots to kill Americans, are those whose names you will never know. It is the intelligence and military professionals who do their job, day-after-day and night-after-night with quiet competence. Most of them will never write a book or talk about what they have done. They know that they will never receive the accolades and praise that some top generals and political appointees get. Yet, they also know that what they do has kept Americans at home generally safe from terrorist attack for more than a decade. These quiet heroes have been remarkably restrained about complaining when the White House releases details of their operations and capabilities in an attempt to bolster President Obama’s national security credentials. The more information that is released about what they do and how they do it, the better informed the enemy is and that makes the next operation even more difficult. As Chairman of the Armed Services subcommittee that oversees the Special Operations Command, I have some idea of how capable and dedicated these professionals are and what they do every day to keep us safe. Others in the government should look for ways to help and support them, rather than make their job harder.
Posted by
Mac
on
April 24, 2012
Yesterday, we all received even more evidence that we need to take serious steps to shore up Social Security sooner rather than later. The Social Security Trustee issued their annual report and said that the Trust Fund will be depleted three years earlier—by 2033—than they projected last year. This announcement is just the latest data that shows how Social Security’s financial situation is worsening. In 2010, Social Security for the first time in many years paid out more money in benefits than it received in payroll tax revenues. That trend will continue. And even if all of the money borrowed out of Social Security in the past is repaid, the Trust Fund will be exhausted by 2033. Meanwhile, every day more Americans who count on Social Security are planning for or entering retirement. As you may know, mandatory spending programs—like Social Security, Medicare, and Medicaid —make up the largest part of our nation’s budget. And it is increasingly clear that leaving these programs on autopilot will continue to threaten the financial security of all Americans, not just those who currently receive benefits. I do not believe we should change the rules in the middle of the game. Proposals I have supported in the past would not affect those who are 55 years of age or older. But for younger workers, some reforms are necessary or Social Security cannot survive. You can read the Trustee report yourself at www.socialsecurity.gov/OACT/TR/2012/. Press Releases | Opinion Pieces | In the News | Committee Statements | eNewsletters | Photos
Email | eNewsletter | Facebook | Twitter | Google + | Tumblr | Mac’s Blog | YouTube | Video Mailbox | Flickr
Posted by
Mac
on
April 10, 2012
One issue that affects nearly everyone in our area and across the country is gas prices. There is no doubt that high energy prices have placed a real burden on many Americans. And, from small business owners to parents who drive carpool, chances are that the cost of gas is hitting your wallet hard. Some predict that we will see near or above $5 per gallon at the pump by peak driving time this summer. Many experts believe that the recent turmoil overseas is one of the reasons for rapidly increasing gas prices. And while things happening in the Middle East drive up the world price of oil, the President has only made things worse with the anti-fossil fuel agenda being implemented by this Administration. Of course, the federal government does not directly control the price you pay at the pump. We do know, however, that this Administration has prevented actions that could promote stable prices through production of more oil and gas here at home. Among other things you have heard by now, the President has limited drilling off our shores and on federal lands. He continues to threaten tax increases on the entire oil and gas industry; he has vetoed the full-length of the Keystone XL pipeline; and he has sent out EPA regulators to harass drillers. The Administration and its allies are also working hard to discredit fracking and other successful technologies like horizontal drilling. And I think, unfortunately, the cost of energy will continue to increase if the President continues along this course. Just look at what has happened over the last three years. In 2009, the Administration listed carbon dioxide as a hazardous pollutant, opening the door for the regulation of carbon dioxide emissions under the Clean Air Act. The decision, in effect, granted more regulatory control to the EPA and its bureaucrats in Washington to govern through regulation. In 2010, the President effectively reinstated the ban on offshore drilling, placing the entire Pacific Coast, the entire Atlantic Coast, the Eastern Gulf and parts of Alaska off limits to future production until 2017 at the earliest. In 2011, the President proposed a budget that included over $60 billion in direct tax and fee increases on American energy production. And, already in 2012, the President announced a plan to close over a million acres of public land in Colorado, Utah, and Wyoming to oil shale development. Many officials from the White House have argued that domestic oil and natural gas production is up. It has increased on private lands, but it has decreased on land controlled by the federal government. And the reality is that the increase has been in spite of this Administration, not because of them. Energy production on private lands is up because of improved recovery methods like fracking, not the Administration’s policies. The more stable the supply of energy, the more stable the price. It is that simple. And people are tired of excuses for tying our own hands and not producing all of the energy we can here at home. My proposal, the “No More Excuses Energy Act of 2011 (H.R. 1023),” is a common sense plan that encourages responsible domestic energy production of all kinds here in the United States. The bill seeks to remove some of the most burdensome regulatory roadblocks that limit our domestic supply of energy. Among other provisions, the bill requires the President to designate at least 10 sites for oil or natural gas refineries on federal lands; it opens up the Arctic National Wildlife Refuge (ANWR) for drilling; and it removes carbon dioxide from the list of pollutants amended to the Clean Air Act. Overall, this legislation seeks to increase the production of American energy with American workers. In fact, a study by the American Petroleum Institute (API) found that changes in federal energy policies could add nearly 1.1 million energy-related jobs over the next decade. The study notes that federal regulation changes, such as expanding drilling permits in the Gulf of Mexico and approving the Keystone XL pipeline, could create jobs from coast to coast, increase domestic oil production, and lead to projected federal revenues of $803 billion by 2030. As you may know, Texas leads the nation in production of crude oil and natural gas. Texas is also home to at least one-third of the jobs created nationwide since the recession. Data recently released by the Bureau of Economic Analysis highlighted the strength of the Texas economy in a report which found that Texas surpassed nearly $1 trillion in economic output and gained nearly a full percentage point in its share of the U.S. economy during the last decade. A report released in August 2011 highlights how other energy-producing states—North Dakota, Oklahoma, and West Virginia— have ranked among the top job markets for the previous 3½ years. And one of these states, North Dakota, has an unemployment figure of 3.1 percent, currently the lowest in the nation. We can—and should—create jobs and bring down the cost of energy by implementing commonsense domestic energy policies. It is time to stop making excuses and get the government out of the way when it comes to a whole variety of things, including our energy resources. It is the right thing to do for gas prices, for the American people, and for the economy. Press Releases | Opinion Pieces | In the News | Committee Statements | eNewsletters | Photos Email | eNewsletter | Facebook | Twitter | Google + | Tumblr | Mac’s Blog | YouTube | Video Mailbox | Flickr |
||||||||||||||||||||||||
