The Independent

Senate Republican Leader Dennis Hollingsworth (R-Murrieta) and Senator Bob Dutton (R-Rancho Cucamonga) issued the following statements concerning state budget deliberations. Sen. Dennis Hollingsworth - Senate Republican Leader: "The budget proposals Democrats have put forward so far are financially irresponsible or illegal. Only Governor Schwarzenegger has proposed a legal budget proposal that closes the $19 billion deficit without raising taxes. We share the same goals: fix the budget by reducing spending and without raising taxes, reform some of the biggest looming problems, and get the economy moving again by bringing jobs back to California." Sen. Bob Dutton - Vice Chairman, Senate Budget Committee: "I've become increasingly frustrated during this budget process because it has become clear that the only solutions Democrats have offered to close the $19 billion deficit are a mix of accounting maneuvers and tax increases. In fact, the Assembly Democrats' pr...

By Adam B. Summers and Jon Coupal  California’s $19 billion budget deficit seems to worsen by the day, but an even larger financial crisis is brewing in the state’s pension system. Over the last two decades, state lawmakers have bestowed massive pension and benefit increases upon government workers. Unfortunately, taxpayers are now getting the bills for these handouts. Recent studies estimate California has $500 billion in unfunded pension liabilities, not to mention over $50 billion in unfunded retiree health care liabilities. It’s important for the state to recognize how it got into this fiscal disaster—and how to get out of it.   California’s public pension and retiree health and dental care expenditures have quintupled since fiscal year 1998-99, going from about $1 billion to $5 billion this year. And retirement spending is expected to triple again—to $15 billion—within the next decade.  Part of the problem is the growth of state governmen...

This Could be the US within Years Let’s see… Greece is having trouble with unfunded liabilities, runaway debt and constituents that demand they live off the public largess while much of the world recognizes that the current situation as unsustainable. I don’t see how the US is much different. While there are rosy projections that we’ll eventually be decreasing our deficit over the next few years if all goes well, what’s clear even in the most optimistic government models is that in 2030 and beyond we have a runaway situation. We’re seeing states and municipalities struggling to control debt and most of it stems from the overly generous pension and healthcare obligations they’ve made to generations of public-sector workers that is unsustainable. While the private sector has cut jobs, real wages and forced increased employee contributions to benefits for a decade, public workers have pretty much maintained the status quo as if they live in a vacuum. I can’t blame the worke...

We learned Monday that the Central Planners have proposed a $3.8 trillion budget, with $2.0 trillion of tax increases, $1.0 trillion coming by increasing income taxes on families who earn more than $250,000. For those of you earning $250,000 in your families, which is about $125,000 after taxes using current tax rates, I ask you the question, are you rich? You are paying $1,200 a month in health insurance, paying $40,000 a year in college tuition with no scholarship help because you make too much money, and had 40 percent of your stock investments and 20 percent of your real estate investments wiped out the past three years. You pay three times as much in real estate taxes on the same home you lived in ten years ago. Are you rich? You work for a firm that could downsize or go bankrupt at any moment. Are you rich? Government tax revenues decline due to economic recession, and government spending increases because that is what Central Planners do under the guise of stimulating the econom...

... The Senate defeated a measure that would have established a commission mandated to highlight duplicative or wasteful spending by federal government departments and agencies. On Tuesday, lawmakers voted down the creation of a commission to recommend the spending cuts and tax increases necessary to move the federal budget deficit back toward manageable levels. Mr. Obama pledged to create such a commission using his executive authority. Lawmakers of both parties have said this approach wouldn't be effective as the president can't oblige Congress to hold a vote on such a commission's recommendation. Taking the task of resolving the long-term fiscal imbalances from Congress' hands is an idea that has been around for years. As the nation's fiscal position has worsened, the concept has gained steam. Write to Corey Boles at corey.boles@dowjones.com

* The Wall Street Journal * JANUARY 28, 2010, 1:53 P.M. ET Senate Approves Amendment to Raise Debt Ceiling by $1.9 Trillion By COREY BOLES WASHINGTON—The Senate approved legislation Thursday increasing the federal government's borrowing limit by $1.9 trillion, enough to enable the Treasury to pay its bills through 2010. The 60-39 vote was strictly along party lines with no Republicans joining the Democratic majority to approve the legislation. Once the increase is signed into law, the federal government will be able to borrow up to $14.3 trillion, by far the highest amount of debt it has ever held on its books. The current limit of around $12.4 trillion would have been breached by the end of February. House lawmakers must still take up the legislation and are expected to do so next week, according to a senior House Democratic aide. The increase comes just over a month after Congress upped the borrowing cap by $290 billion from its previous limit of $12.1 trillion. A vote to...

January 8, 2010 By Jon Coupal For a decade, California state government has spent more than it receives in revenue. The result? Our state has the lowest credit rating of all 50 states, we rank in the top four in unemployment, near the top in tax burden per capita, and we rank last or close to last in a number of surveys that measure business climate. Not coincidentally, California small business bankruptcies are up 81% over last year. For lawmakers, spending is a compulsion. During the historic recall campaign of 2003, Arnold Schwarzenegger, who correctly labeled the spending problem as an addiction, promised he would be the antidote. His pledge to “blow up the boxes” and bring fiscal sanity to Sacramento led voters to support his candidacy by a huge margin. Sadly, and perhaps predictably, the spending terminator quickly succumbed to a more regional strain of the Beltway fog – some have even likened it to the Stockholm Syndrome where, after just a few months in office, elected o...

"The government is spending money like it is going out of style," groans one justifiably disgruntled reader. "Part of reason is huge pay to government employees and corruption by Congress. "Data from Cato Institute of Federal Pay Vs Private (i.e. taxpayers) shows federal pay and benefits in 2008 of $119,982 vs. $59,909 private industry. Twice as high! And, the gap is growing fast. A decade ago, the average federal civilian employee earned 66% more in wages and benefits than the average private taxpayer. Today, it is double. In 2009 Federal Government budget for wages is up 3%, while private employees are losing their jobs and pay is being reduced. And, state and local town employees are paid about 35% more than private taxpayers. "Is that fair for taxpayers to be supporting Federal pay double their own?" the reader goes on to ask. "The federal employees are now the elite, upper class - like in Russia. It is the reason why Washington and s...

by Money Morning Americans could be in for a rude awakening in coming months when they discover the true scope of the massive national debt racked up by the U.S. government. In fact, the $1.6 trillion deficit expected for 2010, which is above 10% of gross domestic product (GDP), is only the beginning. Since the current economic crisis began in late 2007, the U.S. Federal Reserve has tripled the size of its balance sheet, creating enormous amounts of new money by lending to hundreds of ailing banks and buying up more than $1 trillion of questionable asset-backed securities. But that’s only a small part of the story. Since the beginning of the crisis, the Fed has lent, spent, or guaranteed $11.6 trillion, including underwriting the entire system of mortgage finance in the United States, a system that currently shows a nearly $1 trillion loss. And none of these figures include any of U.S. President Barack Obama’s stimulus packages, which means the actual deficit next y...

Here is what we (us, our kids, grandkids, great-grandkids) owe... Only taxes can pay for these or a default by the US congress. When you're in a hole, stop digging. Congress has to go - they are the diggers! Throw all the incumbent bums out!   U.S. National Debt Clock : Real Time

On October 22nd 2009, Sen. Judd Gregg (R-N.H.), ranking Republican on the Senate Budget Committee , says that the U.S. economy faces a future as a “banana republic” if current federal fiscal policies continue. " Congress works for the next election, not for the next generation." In April 2009, Missouri Republican US Senator Kit Bond likened Barack Obama 's administration to a banana republic if they proceed to hold public trials on the issue of torture, giving the term banana republic a bimodal definition in the context of the ongoing US torture investigations. [23] In May 2009, Paul Krugman, columnist for the New York Times , referred to the state government of California as a banana republic. He was commenting on the state's tax system, in which taxes cannot be raised even in an emergency without a two-thirds majority. The state constitution requires that the budget be balanced, denying it the ability to borrow, while gerrymandering has turned many dist...