Who Is Right: About What Is The Biggest Driver Of Our Deficit: Obama or The CBO?

During President Obama's twitter townhall meeting yesterday, he made an astounding claim: 

"I will say that today, welfare payments are not the big driver of our deficit or our debt. There are work obligations attached to welfare," President Obama said at his Twitter Town Hall.

Yet, the Congressional Budget Office, known as the CBO, explicitly states in its findings that entitlement programs are the biggest drivers of our national debt: 

The retirement of the baby-boom generation is a key factor in the nation’s long-term fiscal outlook. It portends a significant and sustained increase in the share of the population receiving benefits from Social Security, Medicare, and Medicaid. Moreover, under current law, per capita spending for health care is likely to continue rising faster than spending per person on other goods and services.

As a result, if current laws remained in place, the federal government’s spending on Social Security and the major mandatory health care programs (Medicare, Medicaid, the Children’s Health Insurance Program, and the health insurance subsidies that will be provided through insurance exchanges) is projected to grow from roughly 10 percent of GDP today to about 15 percent of GDP 25 years from now. (By comparison, spending on all of the federal government’s programs and activities, excluding interest payments on debt, has averaged about 18.5 percent of GDP over the past 40 years.) That combined increase of roughly 5 percentage points of GDP is equivalent to about $750 billion today.

Despite the overwhelming evidence that entitlement programs are, indeed, the single largest driver of the U.S. Debts, politicians like Obama are wrong in continuing to ignore the truth by proposing cuts in areas that could use budget cuts but really won't make real dent in reducing the deficit. 

For example, there are rumors that defense and national security spending could face a $700 Billion cut. While we can debate on whether or not making drastic cuts is a good, necessary or wise idea, there is no dispute that these cuts will not have any significant or substantial impact on shrinking the national debt. Those who are seeking reductions in defense spending as a compromise to the debt ceiling debate are foolish and reckless. Making these cuts while in the middle of fighting terrorism around the globe will not make our country safer nor will it fix our deficit problem. 

Another foolish compromise that some politicians are willing to make is to raise taxes in exchange for tough austerity measures to reduce the debt. It boggles my mind that they are willing to raise taxes at a time of high unemployment when most people don't have jobs which makes it possible for government to collect revenue. Moreover, only half of America pays taxes which means that taxes will go up for 50% of Americans that do pay, especially the wealthy. Yet, it won't change the amount that the government collects in revenue. Tax reciepts have traditionally remained around 19% to 20% of  our GDP. 

Finally, Senator Marco Rubio makes a great speech about how raising taxes will not create jobs: 

Here's the bottom line: These tax increases they're talking about. These so-called revenue enhancers, they don't solve the problem. So what do we do then? Because clearly we have to do two things.

"One, we have to hold the line on spending, if you keep digging yourself in the hole, the hole is going to bury you, the other thing is how do you start generating revenue for government so you can start paying down this debt? That’s what the debate should be about.

“We already know these taxes don't work. Here is what I suggest works in a balanced approach, using the President's terminology. Let's stop talking about new taxes and start talking about creating new taxpayers, which basically means jobs.

“Here in Washington, this debt is the number-one issue on everyone's mind, and rightfully so. It is a major issue. But everywhere else in the real world, the number one issue on everyone's minds is jobs. …

“We don't need new taxes. We need new taxpayers, people that are gainfully employed, making money and paying into the tax system. Then we need a government that has the discipline to take that additional revenue and use it to pay down the debt and never grow it again. That's what we should be focused on, and that's what we're not focused on.

“You look at all these taxes being proposed, and here's what I say. I say we should analyze every single one of them through the lens of job creation, issue number one in America. I want to know which one of these taxes they're proposing will create jobs. I want to know how many jobs are going to be created by the plane tax. How many jobs are going to be created by the oil company tax I heard so much about. How many jobs are created by going after the millionaires and billionaires the president talks about? I want to know: How many jobs do they create?

So while our political leaders in Washington D.C. plan to "go big" on budget cuts, they're going to do it with bad and failed solutions that will have no impact on reducing the national debt. Cutting the military and intelligence budget isn't going to shrink the debt. Raising taxes isn't going work either. Both will have a minimal impact on reducing the debt.

The only thing that will eliminate the national debt is reforming and/or cutting entitlement programs. Although Obama doesn't believe that entitlements are the single largest driver of the U.S. Debt, he is on the right track in proposing substantial reforms to our welfare programs.

In fact, entitlement reforms should be the only topic our politicians should be talking about in their discussions over raising the debt ceiling. Once they agree to these reforms and actually follow through on their agreements, then we can talk about making changes/reductions to the budgets of other government agencies and tinkering with the tax code.

Jim DeMint Thinks Mormonism Will Not Be An Issue In 2012

Like Rick Santorum, Jim DeMint thinks that Mormonsim will not be a big issue in the 2012 Presidential campaign: 

Former Massachusetts Gov. Mitt Romney's (R) Mormon faith won't be an issue for him in the Republican presidential primary, Sen. Jim DeMint (R-S.C.) argued Wednesday.

DeMint, the conservative icon who endorsed Romney in 2008 but hasn't decided whether to do so again in 2012, said that Romney's religion might not be the hindrance it has been traditionally considered to be.

"The religion is not an issue," DeMint said on MSNBC. "But I think what Americans are looking for right now is a person with principle, but courage."

Just to be clear, this isn't an endorsement of Mitt Romney but just an expression of his opinion that Jon Huntsman and Mitt Romney's religion will be an issue for him in the election and that he thinks that their religion will not be an issue for the American voters either. 

However, Jim DeMint will endorse a candidate but not yet: 

As for DeMint's support, he's still keeping his powder dry when it comes to Romney or any other candidate. The South Carolina conservative said Romney "could" still win his endorsement, but that he's keeping a close eye on how the presidential candidates handle the upcoming fight over raising the debt limit.

"I'm keeping an open mind," he said. "I'm not endorsing anyone right now because I want to see what they want to do on the debt limit."

The fact that he's waiting to see how candidates, including Mitt Romney, will address the debt ceiling is interesting in light of his comments about RomneyCare.

I'd also like to point out that Rick Santorum and Jim DeMint's comments about Mormonism is in stark contrast with social conservatives who are frantically trying to find a non-Mormon candidate who can win the election that they are happy with, everybody else doesn’t give a damn what religion the candidate belongs to. They just want a candidate who has the work experience and qualifications needed to lead American and get it back on the path of financial stability.

The Only Solution To Reducing The Deficit Is Entitlement Reform

With the political showdown over raising the ceiling, President Obama, Ron Paul and Gary Johnson and others would have you believe that best way to get out of the red and into the black is to reduce defense spending rather than reductions in entitlement spending. 

For example President Barak Obama and Ron Paul are in agreement that America ought to withdraw from Afghanistan because of the cost incurred in fighting that war. However, the cost of fighting in Afghanistan is a small drop in the bucket compared to the amount of money we spend on entitlements:

Next year the Pentagon plans to spend $107 billion in Afghanistan—this, in comparison to the $3.7 trillion that the Obama team plans to spend overall. Put another way, Afghanistan amounts to all of 0.75 percent of the nation’s $14.1 trillion GDP. So, no—war bonds, scrap drives, and rationing won’t be necessary. Quite the reverse: while the government spends $100 billion on America’s fighting men and women in Afghanistan, it will funnel 20 times that—more than $2 trillion—to its citizen-spectators through Medicare, Social Security, Medicaid, and other varieties of domestic spending.

The amount we spend in fighting terrorists, not just in Afghanistan, Iraq, or Libya but around the globe is tiny in comparison to the amount we spend on entitlements: 

Despite these facts, the anti-war left and right stubbornly contend that defense spending is the main driver of our national debt. They point to the fact that since 9/11, America has increased the amount of money it spends on defense spending. Here's a chart that gives a visual demonstration of their argument: 

While it is true that we have increased our military spending since 9/11, they neglect to give you a fuller picture of how much money we spend on defense in comparison to how much we spend on entitlements:

The problem with entitlement spending is that that it consumes more than half of what we spend currently and we can't even afford it now since these programs are already set to run annual deficits starting this year until it is completely drained in 2037. Furthermore, the amount we will spend on entitlements will continue to grow until we won't be able to afford it in the future. 

The graph above projects that entitlement spending will consume all revenues by 2052. However, there are other projections that predict that we won't be able to afford entitlements much earlier:

Regardless of the timing of when welfare spending will consume all revenues, the fact remains that while our defense budget has increased since 9/11, it is only a small fraction of the amount we currently spend on and it will continue to be a small fraction of the government's expenses in the future. In fact, we would have to engage in a multitude of wars before defense spending starts to eclipse all the revenue we receive. Conversely, we could eliminate all defense and national security spending, it still wouldn't make a dent in our national debt. 

Even more daring, we could eliminate all spending except entitlement spending and it still won't solve our debt problem.

The truth is that we have been reducing spending on defense while increasing the amount on entitlements since the 1960s:

Ladies and gentlemen, the reality is that defense spending is not something that on course to exceed government revenue. Nor will it ever. Furthermore, defense spending is not on autopilot like entitlement spending is right now. We can control what we spend on wars, weapons, troops, intelligence gathering, research and development and administrative agencies but we can't control what we spend on welfare programs because those expenses are locked in and mandatory. They're automatic. No questions asked.

It amazes me that there are politicians on the left and the right that want cuts in the defense budget despite the mountain of evidence that entitlement spending is the real driver of our deficit and will be in the future. Even the CBO acknowledges this fact.

That means we have a spending problem. Entitlements have taken on a life of its own unless we do something about it. Any denial that entitlement spending is the main driver of our deficit reveals the astounding inability to assess the seriousness of our financial problems and fundamentally skewed set of priorities on what to put on the chopping block. 

We've been cutting defense for a long time now.  We have never made any cuts since the we've started the war on Poverty.  Instead, we've been increasing spending on this war and somehow we're supposed to make more reductions on defense in the real wars we're fighting overseas.  That doesn't make any sense.

Thus, any politician, both on the left or the right, who is too cowardly to take on entitlement reform is not worth remaining on office. Politicians are more concerned alienating the check takers rather than the taxpayers. As a result, they're putting the entire nation at risk, both financially and militarily,  if we do not fix entitlements, just to keep these programs afloat.

The only solution to reducing the deficit is entitlement reform. No other austerity measure will have an impact on shrinking the deficit. The sooner we get on our way to making these reforms, the better our future will be.

Good Day For Mitt Romney: Raises $20 Million In 2nd Quarter, His SuperPAC raises $12 Million

As I reported earlier, Mitt Romney is far ahead of his Republican rivals in raising campaign fund for 2012.. The results are finally in for the 2nd quarter with Mitt Romney reporting that his campaign has raised $20 million: 

Mitt Romney, the Republican presidential front-runner and former Massachusetts governor, claims to have raised nearly $20 million for his campaign in the second quarter.

Romney's $20 million haul includes an impressive $10 million raised in a single day at a Las Vegas fundraiser in May.

Another good piece of news is that a super PAC established by prominent Mitt Romney backers called Restore Our Future, PAC is reporting that they raised $12 Million: 

Restore Our Future, the outside spending group founded by supporters of Romney's presidential campaign, said it had raised $12 million by the end of June, and has $12 million in cash on hand. While the group has existed formally since last fall, it launched its efforts in essence just late last month.

"There is tremendous support across the country for Mitt Romney," said the group's treasurer, Charlie Spies, who served as Romney's general counsel in 2008. "President Obama has taken our nation down the wrong road with out-of-control government spending that has produced no real results. Voters are fed up. Americans are coming out in support of Gov. Romney because they are confident he has the experience to turn our economy around."

The purpose of the Restore Our Future PAC is to combat Obama's own super PAC: 

The group aims to go head-to-head with Priorities USA Action, a similar super PAC led by former White House aides in support of President Obama. But Restore Our Future PAC could be used to go after other Republicans if necessary in the party’s primary season, those familiar with the operation said. 

Yet, this isn't the only super PAC for Obama. He has not one, but two super PACs, for the 2012 election. The fact that he is willing to use these PACs is hypocritical in light of his false criticism of the Supreme Court's decision in Citizen United v. FEC. 

Obama's two super PACs, Priorities USA and Priorities USA Action will be formidable groups who will rely on undisclosed donors as well as corporations and unions as sources of funding to help reelect Obama. This isn't the first time that Obama has used PACs since he used them during the 2008 Presidential elections as well.

Its clear that Mitt Romney fully intends to wage a campaign fundraising war against Obama's hypocritical fundrasing machine since he plans to raise at least $60 million for the 2012 election but might end up spending at least a billion to get himself reelected. 

While Mitt Romney has an ambitious goal to defeat Barak Obama both in campaign funds and at the ballot box, other candidates have less ambitious goals of surviving the Republican primaries or have set their sights even lower by seeing if they can stay surviving at all:

For all the candidates not named Romney, the question is: “Do they raise enough to remain viable in the eyes of the press and in terms of mounting an on-the-ground campaign in caucus states and a media campaign in primary states?” says Stephen Wayne, a political scientist at Georgetown University in Washington.

Already, he says, some could have trouble meeting that threshold. At the top of that list is former House Speaker Newt Gingrich, who lost most of his campaign staff, including his fundraisers, earlier this month over his unconventional approach (e.g., not a lot of travel to early states). The campaign-finance reports, which require disclosures on expenses, could show Mr. Gingrich’s campaign in the red.

Also in potentially questionable territory, financially, are former Minnesota Gov. Tim Pawlenty and former Pennsylvania Sen. Rick Santorum. Mr. Pawlenty entered the race with high expectations as a two-term governor who was on John McCain’s shortlist for a running mate during the 2008 campaign. But he has yet to catch on in polls, and without buzz, it can be difficult to attract donors. 

Other candidates are also struggling to stay alive for th e2012 election which really hasn't even begun yet. Michelle Bachmann and Ron Paul haven't released their second quarter numbers yet but they both will mostly likely have raised approximately $5 million. Herman Cain has raised a paltry $2.46 million and seems to be following the same trajectory as Newt Gingrich by losing staff members: 

Herman Cain’s Iowa Director, Tina Goff, told TheIowaRepublican.com that she has submitted her resignation and is no longer working for the campaign.  In addition to Goff’s resignation, TheIowaRepublican.com can confirm that Kevin Hall has also left the campaign.  Hall served as Cain’s Straw Poll coordinator.

Goff and Hall both worked on Fred Thompson’s presidential campaign in 2008 and Iowa Governor Terry Branstad’s campaign in 2010.  Goff stated that she resigned because the Cain campaign refused to make a serious effort in Iowa, the home of the First-in-the-Nation caucuses.

With just 43 days to the Iowa Straw Poll, Cain’s campaign here in Iowa and nationally seems to be unraveling.  Cain lost his New Hampshire director, Matt Murphy, who was his only staffer in that state, earlier this week.  Jim Zeiler, a Cain regional director who had been to Iowa and was helping with the campaign’s Straw Poll plans, has also left the campaign.

When you look at all the money raised for the second quarter of 2011, it is actually smaller than the total amount in the second quarter of 2007 prior to the 2008 election: 

The total amount raised by all the candidates looks to be much smaller than in 2007, when the top three candidates alone (Romney, Sen. John McCain, and former New York Mayor Rudy Guiliani) raised a combined $53 million in the second quarter. In conversations with the Washington Post's Chris Cillizza, Republican operatives said the weak numbers were due to a weak economy. Also, the race has gotten off to a slow start, and with so much uncertainty about who might enter the race, potential donors may be reluctant to commit to a candidate.

While Mitt Romney had a great day as far as campaign finance goal and has set the yardstick to measure the performance of the other Republican candidates, it is important to remember that the total amount that each of them has raised for the 2nd quarter will not match the amount that Obama will have raised: 

Obama doesn’t have a primary challenge, so he’s cashing up for the general election. His campaign has put out an expectation that between the Obama campaign and the Democratic National Committee, they will take in a combined $60 million. Four years ago, in the second quarter of 2007, the Obama campaign raised $31 million.

As the election continues to heat up, the question for the primaries be which candidate has the financial and political ability to defeat Barak Obama in 2012? The answer to that question is Mitt Romney.

If you would like to help Mitt Romney defeat Barak Obama, I have set up a donation page in which you can contribute to his campaign.

England's Tribute To Ronald Reagan

As a mentioned in an earlier post, England has erected a statue of Ronald Reagan and placed a plaque recognizing the 40th president's role in ending the Cold War near the U.S. Embassy in Grosvenor Square. 

I thought some of you might enjoy watching a brief clip of  former US Secretary of State Condoleezza Rice and Foreign Secretary William Hague's tribute to the Ronald Reagan:  

England Will Celebrate The 4th Of July By Honoring President Reagan

England will be honoring Ronald Reagan today by erecting a statue of the Gipper in near the U.S. Embassy in Grosvenor Square:

An $800,000 statue honoring former President Ronald Reagan is set to be unveiled on Independence Day, joining monuments to Franklin Roosevelt and Dwight Eisenhower in the heart of the British capital.

At a time when the much-celebrated "special relationship" between the U.S. and Britain is widely seen to have frayed, about 2,000 people are expected at the ceremony. Organizers say that is about ten times the typical crowd for such an event. 

Former U.K. Prime Minister Margaret Thatcher, who declined an invitation to Prince William's recent wedding due to her poor health, is said to be "determined" to attend. Now aged 85, the "Iron Lady" rarely appears in public. 

Nancy Reagan will be represented at the ceremony by former Secretary of State Condoleezza Rice, who will give the keynote address. U.S. Ambassador Louis B. Susman and a congressional delegation led by House Majority Whip Kevin McCarthy are also due to attend on Monday.

Reagan Foundation executive director John Heubusch told msnbc.com that roughly $800,000 had been raised from private donors for the sculpture, with around 40 percent of the funds coming from people in the U.K.

England will also will not only be honoring him but the impact he had on the world as a promoter of freedom and liberty:

Sculpted by Charlotte, N.C.-based artist Chas Fagan, the 10-foot bronze will stand near statues of Eisenhower and Roosevelt outside the U.S. Embassy in Grosvenor Square. A plaque will recognize the 40th president's role in ending the Cold War.

The ceremony will be part of a European tour celebrating Reagan's 100th birthday. It will be followed by a black-tie gala at London’s historic Guildhall – where Thatcher hosted Reagan upon his return from a visit with Mikhail Gorbachev in 1988.

Although July 4th is a day to celebrate America's independence from England, it is really a holiday devoted to freedom. Ronald Reagan had an unwavering belief that freedom is a right to be enjoyed by all of mankind because "freedom is one of the deepest and noblest aspirations of the human spirit."

Yet, while Reagan encouraged each of us to remember the important concept of freedom during the July 4th festivities, he also encouraged us to have fun in our celebration:

Have a safe and wonderful Fourth of July!!!

Mitt Romney In the Lead For Fundraising

July 15th is the end of the first quarter for raising campaign funds. Although not every campaign has submitted their financial reports, Mitt Romney is outperforming all of the other 2012 competitors when it comes to raising cash for the 2012 primary election.

Mitt Romney, the former Massachusetts governor who has assembled the field’s most robust fund-raising operation, will report raising less than $20 million for the Republican primary during the fund-raising period ending on Thursday, an aide said. That would put Mr. Romney just slightly ahead of his own total during the same period four years ago, when he was new to presidential politics and competing against a more crowded and competitive field.

Former Gov. Tim Pawlenty of Minnesota will report taking in less than $5 million, said a person close to his campaign, some of which may be earmarked for a future general election campaign and unavailable to Mr. Pawlenty in his battle with other Republican candidates. Even if it were all primary money, that would be far less than any of the first-tier Republican candidates raised during the early stages of the 2008 race, and underscored the difficulty Mr. Pawlenty faces in sustaining a strong challenge to Mr. Romney and the rest of the field.

Jon M. Huntsman Jr., the former American ambassador to China in the Obama administration, entered the race so recently that he is not required to report his second-quarter fund-raising until the fall, one of his campaign aides said. But the aide said Thursday that Mr. Huntsman had raised about $4.1 million for the quarter, though a substantial portion came from his own fortune.

Representative Ron Paul of Texas, in an e-mail solicitation to supporters on Thursday morning, said his campaign had raised about $4 million and hoped to raise more by the end of the day. 

Newt Gingrich, Herman Cain, Rick Santorum have not released their first quarter numbers but it is predicted that they will all raise less than $10 million. Once candidate is expected to do well and that is Michelle Bachmann: 

Rep. Michelle Bachmann has been quite successful in the past raising money. She was the House incumbent who raised the most funds in the 2010 election bringing in $13.2 million. She also brought in $1.7 million in the first quarter for her congressional account. Her campaign points out she however has only been in the presidential race for a few weeks. However, she can transfer the approximate $2.9 million in her House account to her presidential campaign. Her campaign won't say whether those funds were already moved. It is not expected she will report her total until right near the July 15th deadline.

When it comes to raising campaign funds, the only real challenger that Mitt Romney has is President Obama: 

Showcasing the importance of the early fundraising totals, both Obama and Romney were in Pennsylvania on Thursday to drum up cash, hoping to pad contributions in the final hours of the financial quarter -- the fundraising figures must be reported to the Federal Election Commission by July 15.

In a somewhat ironic position for a multimillionaire, Romney acknowledged his status as a financial underdog on the campaign trail.

"We're not going to raise anywhere near that kind of money," he said of Obama's fundraising prowess after touring a shuttered metalworks in Allentown.

And the Obama campaign, hoping to meet funding expectations, made a series of last-minute pushes Thursday for donations.

"Come next fall, people might not remember this date -- or make the connection between the strength of our campaign then and the steps we took in these early months. But anyone worth their salt in politics knows tonight is one of the most important tests we'll face as a campaign this year," said Obama Campaign Manager Jim Messina in an email to supporters Thursday.

To stay competitive with Obama, Mitt Romney has created an innovative way to raise money by letting you set up your own donation page on his website. A few days ago,  I signed up and I have created my own donation page in which I have a fundraising goal of raising $250 for Mitt Romney's campaign. Please pitch in $5, $10 or even $20 to help Mitt Romney build up the massive war chest needed to defeat Barak Obama.