Congressman John Campbell's Blog - Green Eyeshade Blog

Tuesday, April 24, 2007

New Figures on the Looming Entitlement Crisis

Posted by: John Campbell at 2:56 PM

Yesterday, the Social Security and Medicare Trustees issued their annual report on the health of entitlement programs. The figures are now projecting that Social Security will begin paying out more money than it takes in by 2017, and in 2041, the Social Security Trust Fund will be entirely exhausted. The situation facing Medicare is even more dire. It's Hospital Insurance Program is already paying out more than it collects in payroll taxes, and Medicare's entire trust fund reserves will be exhausted in just 12 years -- 2019.

But what does this mean to you? Well, if Congress doesn't reform the financing of these programs soon, we will then have to either cut benefits originally promised or raise your taxes. But simply raising taxes will not solve the underlying problem, it will only fuel it. By 2041, Social Security, Medicare and Medicaid alone will cost Americans as much as the entire federal government does today. Our children will be forced to pay at least twice today’s level of taxes to only maintain these programs as they are currently structured.

These stark figures follow in the wake of the Dem's recently passed budget, which does absolutely nothing to address this looming entitlement crisis. What’s worse, Rep. Pete Stark (D-CA), chairman of the Ways and Means Subcommittee on Health, is even trying to do away with reporting procedures that alert members of Congress and the American people when entitlement spending has reached untenable levels.

Since my election to Congress in 2005, I have continually been amazed at how much the Democrat's talk on Capitol Hill about protecting the children, but then stand eerily quiet when it concerns to the large debt, massive tax increases, and reduced prosperity we are going to saddle them with if the unsustainable financing arrangement of entitlements are not reformed.

I'll leave you with the sensible words from the Social Security and Medicare Trustees, who aptly appraise what must be done:

"The financial difficulties facing Social Security and Medicare pose enormous, but not insurmountable, challenges. The sooner these challenges are addressed, the more varied and less disruptive their solutions can be. We urge the public to engage in informed discussion and policymakers to think creatively about the changing needs and preferences of working and retired Americans. Such a national conversation and timely political action are essential to ensure that Social Security and Medicare continue to play a critical role in the lives of all Americans."

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Monday, April 23, 2007

Democrat's Retreat on Ethics Reform

Posted by: John Campbell at 2:44 PM

I came across a good editorial today that ran in the Philadelphia Inquirer. It discusses the Democrat's increasing unwillingness to live up to their campaign promises to clean up earmark and ethics rules. Check it out here.

The House Democrats have short memories. Exit polls showed that a key factor that thrust them into power last November was the public's anger at the GOP majority's failure to police itself, as in the page scandal involving former Rep. Mark Foley of Florida.

If disgusted voters conclude that the new boss on Capitol Hill is the same as the old boss, it won't go well for Democrats next time at the polls.
Speaker Nancy Pelosi should spend less time jetting to Syria and more doing what voters put her in her position to do: Clean up Capitol Hill.

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Monday, April 23, 2007

$2.2 Trillion Spent by Government Agencies with "Below Satisfactory" Reports

Posted by: John Campbell at 11:54 AM

Last Thursday, I wrote a post that provided a telling example of how unwilling the Democrats are to even entertain the idea of spending accountability. During their time in the majority, they have shown an innate ability to question and investigate just about everything going on in Washington, except the prudent use taxpayer dollars.

On the heals of this, a report has been released by the Mercatus Center of George Mason University that shows 87 percent of federal appropriations, $2.18 trillion, are going to government agencies that score "below satisfactory." Not surprisingly, the worst scoring agency in the federal government - the Department of Housing and Urban Development - will probably see one of the greatest, if not the greatest, increase in spending this year under the new Democratic majority. To view the report, click here.

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Thursday, April 19, 2007

Democrats Would Rather Steal from the Taxpayer than Offset Spending

Posted by: John Campbell at 5:01 PM

Today, the House is going to vote on a bill making Washington, D.C.'s "delegate" into a full fledged voting member of the House. In order to continue the balance between Republicans and Democrats, this bill gives another seat to the State of Utah. Therefore, it would increase the size of the House by two to 437 members. Because the bill requires new funding for the two new members and corresponding staff, under the Pay-Go rules passed by the Democrat's last January, they have to find a way to pay for this increase.

Now, all the Democrats needed to do was find a relatively modest $2.5 million in wasteful spending in the budget and direct it towards these new expenses. But, what did they decide to do instead? Add accounting gimmicks and complexity to the tax code.

What they have done is offered into statute a policy that permits the IRS to take more taxes from taxpayers than they are supposed to, and then give it back at the end of the year. This way they are technically not enacting a tax increase; but, they are depriving those taxpayers of the bank interest or freedom they would have had to use that money. The essentially are "stealing" that money for twelve months and then saying "Thanks, I used it for what I wanted...you can have it back now." With this extra or "stolen" revenue the federal government is then able to collect enough interest to pay for this new expense.

Wow. This is a textbook example of the great lengths the Dem's are willing go to not even entertain the notion of spending accountability. In fact, the $2.5 million needed under the bill represents just .00014 percent of the budget. Come on...even the most ardent liberal would recognize that we could find that money in our $2.2 trillion budget. I guess the Democrat's would just rather steal from the taxpayer.

If they prefer tax gimmickry above a budget offset of .00014 percent, I don't even want to imagine what they will do with the explosion of entitlement programs, which are on course to consume 100 percent of the federal budget by 2040.

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Wednesday, April 18, 2007

Small Business & Tax Complexity

Posted by: John Campbell at 5:08 PM

According to a NFIB Research Foundation Small Business Poll released today on Tax Complexity and the IRS, "88 percent of small-employer taxpayers used a tax professional to prepare their most recent federal tax return. For those employers who employ 20 or more people, the percentage that used a tax professional increased to 95 percent...61 percent of small-employer taxpayers typically consult a tax professional prior to making a major financial decision for the business."

Small business employer's stated that they have to use these tax professionals to ensure they comply with our incredibly complex tax system.

On a related note, John Stossell reported today that in Estonia citizens need only about 10 or 15 minutes to file their income taxes. Why, you may ask? In 1992, Estonia became the first country to tax everyone at the same flat rate. Right now, their flat tax rate is at 22%, and in 2009, it will drop to 20%. To learn more and for a good read, click here.

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Wednesday, April 18, 2007

Earmark Battle Waging in the Senate

Posted by: John Campbell at 4:26 PM

On Tuesday, Robert Byrd, chairman of the Senate Appropriations Committee, rolled out a long delayed earmark reform package. He did so as conservatives were becoming increasingly restless and poised to obstruct the upcoming spending bills. It was a shrewd political move by Byrd, who has long been known for his fondness of earmarks (Since 1991, he has directed over $4.88 billion in earmarks to his state of West Virginia. Approximately, 5 highways, 2 scholarship programs, and 29 buildings are named after him). But, a review of the meat of Byrd's proposal shows he is not really serious about cleaning up the process. In fact, the new rules have so many loopholes and ways to get around them, it may not do much of anything.

For example, as part of the new rules, all earmarks that originate in committee must reveal the sponsor and recipient of the request. This sounds well and good -- after all it improves transparency and sunlight for committee proceedings. But, these rules do not apply to bills when they get to the floor of the Senate. As such, there is no recourse for senators if the Appropriations Committee doesn't live up to their word. If an earmark is added on the floor, Senators could not raise a point of order against any appropriations bill that does not meet the disclosure requirements.

What Chairman Byrd proposed will sound good on a 30 second sound bite on the nightly news, but it has little substance to it. Let's get serious.

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Tuesday, April 17, 2007

Tax Day: My Top 10 List

Posted by: John Campbell at 2:25 PM

In honor of "Tax Day," that dreadful time of year when your 1040 federal tax returns are due to the IRS, I have made a top ten list detailing the craziness of our tax code and why we need to sunset it and start fresh with a common-sense, fair system. The current tax code is seven times longer than the Bible. It's length and complexity makes it ripe for abuse and often oppressive IRS enforcement.

A key component of the American Taxpayer Bill of Rights, an ambitious fiscal reform agenda offered by the RSC last March, would take care of this. It would sunset the current code and force Congress to debate and develop a new and simplified method of taxation -- whether it be a flat, flatter, or fair tax system. Whatever comes from the debate is ancillary to the fact that it would force Congress to fix this monster of a system.

# 10 - Americans spend an estimated 3.18 billion hours figuring out and filing their tax returns. That's 24.2 hours per taxpayer, according to National Taxpayers Union.

# 9 - For taxpayers with incomes above $100,000 the odds of being audited in 2006 were 1 in 59; above $1 million, the odds increased to 1 in 16. People in lower income brackets — those reporting incomes below $25,000 — faced a 1 in 94 chance of being audited as reported by the IRS.

# 8 - A new poll has found that 60 percent of taxpayers say their taxes are too high. Only two percent think they are too low.

# 7 - General Electric Co., set a record last year by filing a return that, had it been printed on paper, would have totaled more than 24,000 pages

# 6 - A new 2007 poll by the Tax Foundation has found that a majority of U.S. adults believe the federal tax code is too complex, that the federal income taxes they pay are too high, and the federal tax system needs major changes or a complete overhaul.

# 5 - The needlessly complex nature of the code promotes tax cheating, strong enforcement measures by IRS revenue officers, and encourages lawyers and lobbyists to seek tax favors from members of Congress.

# 4 - 60 percent of tax filing Americans are now using paid preparers or accountants, with the average compliance costs being around $207, as compiled by NTU.

# 3 - The non-partisan Congressional Budget Office reports that those who made more than $87,300, the top 10% of our nation, paid 70.8% of all income taxes, an increase from their share of 48.1% in 1979.

# 2 -The top 40 percent of Americans (those who make more than $43,200) pay 99.1 percent of all income taxes - while the bottom 40 percent (more than 44 million adults) pay no income taxes at all. Democrats have long argued the system is unfair. The question is: for whom?

# 1 - The Democrat's Want More Taxes and Paperwork: They just passed the largest tax increase in American history in the budget - $3,035 more in taxes a year for the average American. Click here to read the specifics.

Happy Tax Day!

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Monday, April 16, 2007

1 in 2 Americans Dependent on Federal Government

Posted by: John Campbell at 5:21 PM

As reported today in the Christian Science Monitor, a study prepared by economist Gary Shilling has found that 1 in 2 Americans now receive income from federal government programs, an increase from from 1 in 4 in 1950. It is apparant that entitlements like Social Security and government healthcare programs are largely the source of this increased dependency on the government. The budgetary reality of these increases must be confronted.

You can read the article here.

"Healthcare and Social Security are the big programs poised for growth, thanks to the arc of the baby-boom generation, longer lifespans, and rising medical costs. Insurance-style programs also include farm subsidies and efforts to relieve poverty."

"You do have the yearning for cradle-to-grave paternalism, but as Americans you also have the carry-over of the frontier spirit" of individual opportunity, says Shilling. "That's the trade-off that will define the scope of government," he says.

"European nations have shown that advanced economies can maintain generous social-welfare programs, but...these nations pay a price of more tepid growth. Sweden...has in recent years dropped off the global Top 10 list for per-capita output. Ireland, by contrast, has kept the government burden low and enjoyed rapid economic growth."

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Monday, April 16, 2007

On the Eve of Tax Day: Where will your money be going?

Posted by: John Campbell at 1:54 PM

As the deadline for federal income tax filing looms, writers across the nation are penning some quality articles on our government's chaotic tax code and troubling spending forecasts. One article of note was written by Brian Reidl of the Heritage Foundation. In it, he clearly laid out the break down of federal spending per American household. The federal government is slated to spend $24,106 per household this year, the highest total since World War II. Of that number, roughly 30 percent will go towards entitlement programs, which is only going to increase as time goes on.

We need to get our fiscal house in order. This spending growth is simply unacceptable. To read Reidl's entire article, click here.

Top Five Areas of Federal Spending per Household:

1. Social Security/Medicare: $8,301.

2. Defense: $4,951.

3. Anti-Poverty Programs: $3,550.

4. Interest on the Federal Debt: $2,071.

5. Federal Employee Retirement Benefits: $907.

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Thursday, April 12, 2007

RSC Chairman Raises Awareness of American Taxpayer Bill of Rights

Posted by: John Campbell at 5:09 PM

In the last 50 years, the federal government has grown five times faster than the median family income. Congresses controlled by both parties and presidents of both parties and every combination thereof we have run up deficits to pay for this unsustainable growth. If we don't enact systemic changes to this broken process, our children and grandchildren will be the ones that pay the price.

This is part of the message RSC Chairman Jeb Hensarling has been taking to the people the past couple weeks. He is using the Democrat imposed spring break to spread awareness and drum up support for the American Taxpayer Bill of Rights.

Here are some solid articles detailing his message and this important reform agenda:

http://www.athensreview.com/local/local_story_101214555.html

http://www.jacksonvilleprogress.com/local/local_story_101160650.html

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Wednesday, April 11, 2007

You're Right, We Spent Too Much...

Posted by: John Campbell at 2:58 PM

Many of you have posted comments pointing out that Republicans committed many of the same fiscal sins when we were in control that are now being committed by the Democrats.

You are absolutely correct. And Republicans lost the majority in no small part because we said we were fiscal conservatives, but we didn't act like it.

When the Democrat's swept into power, they said they would be committed to reforming earmarks and being fiscally responsible. They are doing neither. They have clearly not changed from the tax and spend days of old. My previous posts on this blog speak to the lengths they have gone the past couple months.

Now, that does not excuse Republican fiscal transgressions. I would love to tell you my colleagues have learned these lessons. But that is not true. However, many of us never lost that fiscal compass. It is we in the Republican Study Committee that have kept the fiscally responsible flame burning on Capitol Hill, however, dimly.

If you care about lower taxes, curtailed spending, and less government in your lives, the Democrats will never deliver for you. First, we must expose their hypocrisy in that regard. Then we must return a Republican majority to Congress with the renewed fiscal discipline of 1994. That is my mission. I hope you will join me.

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Tuesday, April 10, 2007

Democrat's Failing to Reform Earmark Process

Posted by: John Campbell at 4:27 PM

The Dem's record on earmark reform their first three months in power is dismal at best. Thus far, they have used over $20 billion in pork and special handouts to win votes for the war supplemental, enacted ambiguous ethics rules, extended the deadline for earmark submissions by two weeks, reneged on their pledge to limit requests, fought against full earmark disclosure in committee, and there are reports of appropriators preventing government researchers from publishing data on earmark submissions. The Senate has yet to even pass any kind of rules that disclose what member requested these millions and sometimes billions of dollars.

Given all of this, I do not have much optimism when Speaker Pelosi and the Dem's continue to talk about the earmark reform. Matching their rhetoric with their actions shows you the true tenor of their stance on the issue.

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Monday, April 09, 2007

National Tax Foundation: Average Federal Tax Burden $17,000 per household

Posted by: John Campbell at 3:20 PM

The National Tax Foundation released a study today revealing the average tax burden for households in each congressional district. The numbers are striking. In the city of Stamford, Connecticut the average household pays $82,745 to Uncle Sam each year, while in Mission, Texas they pay on average $7,238 per household.

One part of the report that I am not particularly proud of is that the district I represent in Congress has the ninth highest level of taxation in the country at $40,013 per household. Just imagine what a small portion of that money could do if these families had the liberty to decide how they wanted to spend it. They could use it to help make their mortgage payment, buy braces for the kids, start a business, give to a charity, save for college -- the options are endless. Instead, much of it is going to the black hole of federal bureaucracy and government waste.

To view the full report, click here.

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Tuesday, April 03, 2007

Sign Petition Supporting the American Taxpayer Bill of Rights

Posted by: John Campbell at 1:45 PM

FreedomWorks, a grass roots advocacy group led by former majority leader Dick Armey, has begun a signature gathering campaign to raise awareness and encourage presidential candidates to publicly endorse the American Taxpayer Bill of Rights. This proposal as developed by the RSC calls for four systemic changes to the federal spending and budgeting process.

Taxpayers have a right to have a federal government that does not grow beyond their ability to pay for it.
Taxpayers have a right to receive back each dollar they entrust to the government for their retirement.
Taxpayers have a right to expect the government to balance the budget without having their taxes raised.
Taxpayers have a right to a simple, fair tax code that they can understand.

It's no secret that the budgeting and spending process in Washington is broken and needs to be fixed. Despite record growth in revenue, Congress continues to run up deficits. If we don't change this failed system, we will continue to pass on huge deficits to our children and grandchildren. Be sure and sign the petition here and send a message to Washington that the status quo is not acceptable.

For more news on the proposal and its crucial need, take a look at this editorial in The Daily Oklahoman. Also, RSC Communications Chair Marsha Blackburn wrote a good blog post on the subject. And for those who think this policy is only applicable to the federal government, check out this blog post on how it can be applied at the local level.

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Monday, April 02, 2007

The Back Scratching Congress

Posted by: John Campbell at 3:56 PM

The Democrat's are not living up to their campaign promises to reform the earmark process and reign in abuse. Just today, it was reported in Roll Call that Democratic Senator Max Baucus, who chairs the subcommittee on transportation and infrastructure, used his position to force a $140 million earmark into an upcoming water project authorization bill. The funding, which will go towards a distribution system in northern Montana has elicited outcry from several Republicans. Baucus and full committee chair Barbara Boxer have now offered to "offset" this massive request with another $140 million for Republican members.

Simply amazing. I have never heard of an "offset" that actually meant doubling spending. Normally, an offset means you reduce funding in one area, so that you can raise funding in another. Not for the Democrats. It's easier to just increase spending and buy off the opposition.

What's more, the Democratic leadership in the Senate has yet to pass disclosure rules for earmarks. Right now, there is little to no daylight during this entire back or "baucus" scratching process. We need more transparency and discipline, otherwise taxpayers will continue to see their paychecks thrown around like monopoly money here in Washington.

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About John Campbell

John Campbell is a member of the House Financial Services Committee, and has taken a leadership role in addressing the country's top economic issues. Campbell serves as a member of the Joint Economic Committee, and House Committee on the Budget. He has a Bachelor's Degree in Economics from UCLA and a Master's Degree in Taxation from USC.