Issues
Demand action on PERS reform
By Rep. Kevin Cameron (R-Salem)
There have been nearly 50 bills introduced that address, in some way, the PERS issue. So far, there has been no substantial legislation that has received a hearing. I am co-sponsoring the below four bills that were introduced by Rep. Bruce Hanna (R-Roseburg).
HB 3056 would limit the computation of “final average salary” to salary, rather than including unused sick time and vacation accruals.
HB 3057 would limit the COLA for PERS benefits to the first $36,000 of retirement income.
HB 3058 phases out the ability of employers to “pick-up” the employee’s 6% contribution into retirement accounts by 2020.
HB 3059 ends the practice of providing a supplemental benefit payment to offset income taxes for those who are not subject to Oregon income taxes.
It is my understanding that estimates of savings after instituting these reforms would be over $700 million per biennium. These alterations to the current process are important steps in the right direction to put PERS on sustainable footing for the future.
This is not a conversation about the worthiness of our public employees. It is a conversation about the absolute proven unsustainability of this retirement system. These bills deserve the opportunity to be heard, at the very least, in order to begin meaningful dialogue about how we are going to address this important issue in our state. The impact that it is having to our school districts and local government budgets is devastating and hurting our kids, our seniors, our social service agencies, and public safety. We must do better.
Reprinted with permission from Oregon Catalyst
Gun Control – a Surprisingly Complex Issue
By Suzanne Penegor
Gun control is a debate that is bipartisan in the sense that there are Democrats and Republicans who care about the Second Amendment and our right to bear arms. The National Rifle Association includes women and men of all ages and all political persuasions. It is a constitutional right we don’t take lightly.
So when recent mass shootings bring the subject up again, once more we are asked to give up our right to bear arms to protect ourselves from criminals or maybe from a tyrannical government.
The gun control debate has caused a boom in gun sales as Americans are concerned about Federal legislation that the Obama Administration is considering to restrict gun ownership. While the discussion of whether to again ban the sale of assault weapons will or will not make our country safer rages, we should also take a less simplistic look at why there are so many mass shootings.
Taking a broader look might include these questions: could there be economic factors related to the poor economy behind the shootings? Should we be looking at restoring funding for public mental health facilities? In our area we are still waiting for the Junction City mental health facility to open and, besides providing treatment, create local jobs in a tough economy. The addition of this facility would address both the mental health and economic issues noted above.
Thanks to cuts in public safety spending and early release of jailed criminals, county sheriffs are telling rural residents they may not be able to respond in a timely manner if they are victims of crimes. In response to this women are seeking concealed weapons permits.
Criminals will always get illegal guns. The young man who went on the rampage last year at the Clackamas Mall in Portland stole his gun from a friend. He did not go out and obtain it legally and he was not subjected to a legal background check.
Gun control, as it is often proposed, is a knee jerk reaction to a more complex problem. We should be looking at this bigger picture.
We should be entitled to defend ourselves as our forefathers intended when they created the Second Amendment – not only to protect ourselves against criminals in tough economic times, but also to protect our freedoms from a tyrannical government. We should have a Federal task force study the complex reasons that there have been more school shootings and mass shootings in the last 20 years. Blaming honest, law abiding gun owners won’t fix this important social problem.
Suzanne Penegor is an Oregon native, graduate of the U of O and a former local business owner
Springfield: Land of Opportunity
By Sean VanGordon
Springfield is a very practical city. We pride ourselves on our open for business and can-do attitudes. Former Mayor Sid Leiken called it “The Springfield Way”. However, Springfield still faces challenges and economic hardship. But, even as we confront a budget shortfall, the discussion around city hall is, fortunately, focused on what we can do as opposed to what we can’t. Because of our attitude and this focus, Springfield has significant opportunities in both economic development and innovation.
Springfield’s economic development program is centered around downtown, Glenwood, and Gateway districts. In 2012 Springfield supported economic development by renewing a public safety levy, which makes downtown as well as the wider city itself safer.
Downtown Development
The Sprout Food Hub, Planktown Brewery, and the Washburne Cafe are some of the businesses that have created a food culture in the city. Downtown has also seen the opening of a new charter school and numerous second-hand stores. Downtown’s success is a result of hard work that volunteers, businesses, non-profits, and the city have performed.
We are creating a downtown where you can enjoy eating and shopping. We now have an inviting downtown where it is safe to take your family to dinner or open a new business.
City-Wide Development
In addition, there has been significant progress in Glenwood. And the Gateway District continues to be the largest employment area in the city.
In sum, we continue to make city-wide progress in economic development.
Innovation – The Springfield Way
Springfield has a long history of innovation and creativity in city services.
As a mid-size city, we offer creative, innovative services that save taxpayers money and support healthy, growing businesses. For instance, the merger of the Springfield and Eugene Fire Departments was a good example of improving city services while saving money through innovation.
As a result of our creative thinking and dedication to improving services while zealously guarding taxpayers’ money, Springfield is now a finalist for the Bloomberg Mayor’s Challenge. Plus, it’s the smallest city in the final 20. The competition is for a five million dollar award to provide innovative services. Springfield’s entry was a proposal for a mobile health care program. By utilizing sophisticated technology, this program can lower the cost of emergency medical responses even as it relieves pressures on Lane County Ambulance Services, thus saving both tax dollars and taxpayers’ money.
Economic development and innovation are and will continue to be key areas of focus for Springfield.
Springfield continues to create both attractive business opportunities and an ever increasing quality of life for its citizens because we think creatively and work hard to convert our dreams to reality. Our vibrant community is focused on accomplishments and dedicated to improving every aspect of city life.
Sean VanGordon is a Springfield City Councilor representing Ward 1
Lane County Board of Commissioners Chair Sid Leiken comments on Governor Kitzhaber’s letter to the Federal Delegation regarding future management of the O and C lands of Western Oregon
I would like to express my thanks to Governor John Kitzhaber for convening a group of Oregon stakeholders to take on the exceedingly tough public policy issue of how to best manage the O and C lands of Western Oregon. He has clearly prioritized this issue. His willingness to put into writing his expectations for our Congressional leaders should be appreciated by all of Lane County’s citizens, especially given the huge amount of federal land that surrounds our communities.
His letter to the Oregon delegation of the United States Congress summarizing the work of his panel could not have come at a better time. Literally today, Lane County received its last check from the federal government with dollars that came as a result of the Secure Rural Schools Act, first passed into law in 2000 under the leadership of Senator Ron Wyden. Notably, that check held back $500,000 of O and C revenue due to an un-expected and un–appreciated maneuver by the Department of the Interior. These are the very dollars that Lane County would be able to use for critical public safety services and their elimination is precisely why the Board of County Commissioners has been discussing putting a modest property tax proposal in front of the voters of Lane County.
The Governor clearly understands the tough road ahead for our federal delegation. These lands are unique to western Oregon, and their fate lies in the hands of the entirety of the US Congress. With Senator Wyden’s historic advocacy for the communities of Western Oregon and the more recent and courageous bi-partisan plan created by House members DeFazio, Walden, and Schrader, Governor Kitzhaber’s recommendations provide a foundation that should quickly lead to collaboration amongst the entirety of the federal delegation. Speaking with one voice united between the House and the Senate is crucially important given the rancourous nature of the current political environment in Washington DC.
It remains my belief that a way forward can only be charted if there is a sense of shared responses from local, state, and federal partners. Governor Kitzhaber states “Oregon state and local governments should share in the responsibility to fill any gap which may remain between timber revenues and the funding level required to keep counties fiscally viable.” I know that both the Governor and our delegation are aware that Lane County is contemplating a local money measure that would fund jail beds and youth services. Our residents also know that this new revenue will not cover the entirety of our public safety structure. I am willing to take the first step to place the shared response the Governor speaks to squarely on our shoulders. In doing so, I am confident that if we are successful there will be even more reason for the state and the federal government to act. Allowing some responsible degree of harvest to return to these forests is an absolute must.
Ask candidates: ‘Do you support skydiving?’
By Jacob Daniels
As an attorney, I’ve made some general observations: First, attorneys are expensive, and second, prolonged litigation benefits nobody but the attorneys involved.
The City of Creswell is currently fighting a legal battle with Eugene Skydivers on two fronts. First, we are defending a Part 16 Complaint filed with the Federal Aviation Administration. At this point, the City has spent over $100,000.00 of your money to defend this action. Further, at the September City Council meeting we were notified that the Eugene Skydivers have filed a separate lawsuit against the City of Creswell alleging Breach of Contract and demanding $735,000.00 in damages.
You probably already know what this fight is about, but I will break it down for the rest of you.
Basically, Eugene Skydivers want to drop (land) at the airport. On the other hand, the City believes that skydiving at Creswell Airport isn’t safe. Because of the City’s belief that skydiving isn’t safe, the Eugene Skydivers aren’t allowed to drop at the Creswell Airport.
I admit that the thought of skydiving terrifies me and that’s why I’m not a participant.
Nonetheless, skydiving has been carried out in a safe manner at the Creswell Municipal Airport for many years. The skydiving activity is something fun to watch and was a selling point for many who have chosen to move to Creswell.
Further, amidst these tough economic times, I believe that the City of Creswell should be sending a pro-business message rather than an anti-business message. In this case, the City is creating significant roadblocks for a once-profitable small business. After Eugene Skydivers, who is next?
It is my goal for the City to enter discussions with Eugene Skydivers to find common ground and settle this case. I believe that the settlement should contain a provision allowing skydiving activity to resume at the Creswell Airport. But first, we need to elect City leaders willing to support skydiving.
Those who disagree with me will quickly cite the City’s potential liability if somebody were to get hurt skydiving.
Like any other person, I would hate to see an injury and we certainly don’t need another lawsuit. Nonetheless, skydivers sign a waiver before diving and I believe it would be difficult to find the City financially liable if an injury were to occur. Even if the City were found liable the Eugene Skydivers’ Lease Agreement requires them to indemnify the City for any lawsuit.
In my mind we have two options: (1) continue spending tax dollars on lawyers to fight something that most people in Creswell enjoy; or (2) enter a settlement that includes certain safety provisions. So here is my advice to you… the next time a candidate comes to your doorstep ask him/her: “Do you support skydiving at the airport?”
Jacob Daniels is a member of the Creswell City Council. The opinions expressed here are his own and do not represent the views of any other City Councilor, City Employee, or the City of Creswell.
Reprinted with permission from the Creswell Chronicle
Union Pacific Coal Trains in the Pacific Northwest
Thirty Plus Years Later, Local Governments Suffering From Environmental Decisions
By Larry Huss
Last Saturday’s Oregonian carried a story about another “blue ribbon panel” to be appointed by Gov. John Kitzhaber:
“Gov. John Kitzhaber said he’ll convene a panel of timber industry executives, conservation groups and hard-hit county representatives to figure out how to allow more logging on 2.6 million acres of federal land while protecting key environmental features.”
Mr. Kitzhaber has a long history of appointing blue ribbon panels and then ignoring their advice. It is one of those political gimmicks that makes it look like you are all action when, in fact, you are just all talk.
But that’s not the real story here. The real story is about real economic consequences of a federal government that over reaches “in the name of the greater good.”
“If ultimately approved by Congress, a deal on the O&C [Oregon and California Railroad timber] lands could be the first step in resolving a problem that has bedeviled rural Oregon for decades. The federal government owns 60 percent of the forestland in Oregon but accounts for only 12 percent of the state’s timber harvest each year – a harvest that generations of Oregonians depended on for jobs and funding for schools and county services. [Bracketed words supplied]
The various pieces of environmental legislation adopted by Congress are best described as “target legislation” that define goals and then turns the details over to an army of bureaucrats. And therein lies the problem. The broad authority granted to the bureaucrats allows virtually unlimited actions in furtherance of the goals without regard to consequences in other areas. And the federal courts validated this myopic view of bureaucratic action.
The result has been decades of increasingly intrusive rules, endless studies and consumptive litigation. In each instance, environmental activists recognize that each step involves a delay – and not just a short delay but rather delays that stretch into years – and that such delays result in victory even when the merits would result in defeat. A visible reminder of the effects of delay is the 2002 Biscuit fire in Southern Oregon.
Let’s make sure that we understand the size of the problem. The Biscuit Fire consumed 400,000 acres in the Siskiyou National Forest – an area dominated by conifers and hardwoods. Forty-two percent of the trees were killed by the fire and another eight percent were so damaged as to put them at immediate risk of destruction by insect infestation. The trees killed and damaged represented five billion board feed of timber. That is an amount that is roughly 10 times the total amount of timber harvested on public lands in Oregon in the same year, 2002.
In the immediate aftermath of the fire, it was estimated that half of the timber was salvageable. Of that 2.5 billion board feet of salvageable lumber, less than one per cent was actually be harvested. The remainder will stand like blackened sentinels testifying to the ability of environmental extremists to use the courts to thwart common sense and modern technology. The environmental extremists know that there is a limited time within which you can harvest marketable burned timber and their lawsuits and appeals can run out the clock before the timber can be harvested and the fire-damaged forests replanted. Even in an instance when nature has been ultimately destructive and the intrusion of man will be more beneficial than harmful.
The Biscuit fire is representative a whole series of actions that basically devastated the timber industry in Oregon beginning in the 1980’s. Thousand of good family wage jobs were lost and long time family businesses were forced to close as the ability to harvest timber dried up. Three decades have passed without any significant relief from the effects of these environmental laws and regulations. Twenty-six years of Democrat administrations in Oregon have passed without so much as a peep regarding the economic damage caused by these acts.
But now there is concern. Why at this late date? Because now the economic reality of the collapse of the timber industry is being visited upon government. While the timber industry was devastated from the outset, government was immunized through a series of federal acts that provided “replacement funds” for tax revenues lost from the now quiescent timber industry. As the Oregonian – ever late to the party – noted:
“The decline of logging due to policy changes, endangered species protection, lawsuits, recessions and other forces has greatly reduced timber revenues to a number of Oregon counties.
“Congress supplied replacement funding with the Secure Rural Schools and Community Self-Determination Act, beginning in 2000. The county timber payments were extended twice, and a last round of emergency checks was delivered this year. In several counties, the payments provided 60 percent or more of total operating budgets.”
Fast forward to the economic collapse in 2008 and four years of record deficits. A federal government, strapped for cash, has ended the federal payments and local governments now feel the same deprivation as the industry upon which they once relied. As the Oregonian noted:
“Some Counties have already reduced sheriff’s patrols, let prisoners out of short-staffed jails and closed departments.”
But then here is Mr. Kitzhaber attempting to redefine the problem for the Oregonian:
“’We can’t ignore what’s going on our there in our rural communities’, the governor said. ‘They want the dignity of being able to bring home a paycheck and take care of their families. That’s the part I’m really concerned about’”
Please governor, give us a break. If you really gave a damn about the dignity of people being able to bring home a paycheck you would have done something about it during your first two terms. But back then the federal dollars were flowing, the fly-fishing was magnificent and all was good in your little world. It is solely and only because government now faces a funding crisis that you are moved to even speak about the issue let alone do anything.
And these are not the only “social engineering” projects that are about to go under because a lack of funding. Wind and solar projects dependent largely on past and future government subsidies are about to crash given the likelihood that federal subsidies, including tax credits, will end. As much as the left loves the electric car, it too is about to end as subsidies are withdrawn. We have learned lately that it costs General Motors $89,000 to produce a Chevy Volt that sells for $47,000. (It was bad enough when we learned that the Chevy Volt was simply a modified Chevy Cruz that sells for $17,000 and will get only 30 miles on an overnight charge.) There is significant chatter in the auto industry that the reason General Motors is pressing for the federal government to sell its remaining 26 percent of the company and that the federal government is resisting is because General Motors wants to dump the Volt along with other government mandates. And finally, the light rail projects loved by Portland’s liberal establishment face future headwinds as transportation funds are scaled back.
And therein lies the point. Uneconomical decisions fail over the long run. Either because the market place moves beyond those decisions or, as in the case of the environmental curtailment of the forest industry the burdens imposed on private industry eventually adversely effect the finances of government.
But before the liberals who dominate Oregon politics go apoplectic over the prospect that an additional tree will be cut in Oregon, or that – God forbid – someone should make a profit from cutting a tree, please remember that Mr. Kitzhaber has a long record of appointing blue ribbon panels and then ignoring their advice. One should expect that the solution to a lack of government funding in Oregon’s timber counties and schools will not be found in producing something but rather in another form of government subsidy. For those of you forced to endure an education in Portland public schools, that means that the state legislature will be asked to subsidize these counties. And that means an additional burden spread across all of the taxpayers in Oregon – or at least that declining percentage of Oregonians who actually pay taxes.
Reprinted with permission from Oregon Catalyst
A Pragmatist Decides How to Vote
By Thomas Michael Stewart
“Pragmatist” has become a negative word in politics. These days, when people say that a politician is a pragmatist, they usually mean someone who has no strong principles and will say or do anything that seems expedient at the time.
The corruption of this word is unfortunate. As originally defined by American philosopher William James (1842-1910), pragmatism meant nothing more than that the worth of every new idea must be measured against the way that idea performs in practice.
I’m about to graduate from college, and I want to know that there’s a job waiting for me when I do. So, come November, I’m not going to vote Democrat or Republican. I’m going to vote for the presidential candidate whom I regard as the closest to being a true pragmatist.
Our most successful presidents have been pragmatists. In recent memory, we can point to Ronald Reagan and Bill Clinton. Both were pragmatists. Reagan was a committed tax-cutter who was willing to raise taxes when circumstances warranted it. Bill Clinton was a liberal who wanted to expand government, but was willing to turn 180 degrees and proclaim that “The era of big government is over” when the mood of the country changed.
What about Barack Obama and Mitt Romney? Mr. Obama came into office facing the worst economic crisis since the Great Depression – a crisis that, admittedly, was not his fault. To stop the free fall, Mr. Obama pumped $800 billion into the economy. Not all of that money was spent wisely, but I believe that catastrophe was averted. Nevertheless, economic growth remains sluggish.
The pragmatic thing to do, once the results of massive government intervention had proved disappointing, would have been to look for alternatives. Instead, Mr. Obama chose to believe that government could reinvent the American economy and return it to prosperity. So he gave us Obamacare, Solyndra and the Chevy Volt – along with near record-high gasoline prices.
Has Mr. Obama learned from experience? His campaign rhetoric to date suggests that he has not. He’s presided over the weakest economic recovery since World War II, but it’s clear that if he gets another term he intends to continue the same kind of policies that he has pursued so far.
But would Mitt Romney be any better? If Mr. Obama has a mystical faith that federal spending and government regulation will bring prosperity, Mr. Romney seems to be no less devout in his conviction that tax cuts and laissez-faire capitalism will do the same.
So which of the two candidates is closest to being a pragmatist? It’s a tough call, but I’d give Mr. Romney the edge. First, because Mr. Romney’s faith in tax cuts is tempered with reason. He wants to lower tax rates while at the same time eliminating many tax breaks. If he’s sincere in this, the result will be not only lower rates, but a tax code that is closer to being neutral. In other words, he is trying to create a tax code that doesn’t try to manipulate the economy through tax incentives. Why? So that taxpayers will base their investment decisions on their best judgment instead of how much they expect to save at tax time. More neutrality in the tax code has got to be good for the economy.
Second, Mr. Romney was a successful business executive. He knows how the market works and what motivates other executives to make significant capital investments and thereby create jobs. As an intellectual, Mr. Obama lacks this real-world expertise. So he is forced to rely on government solutions because he really doesn’t know what else to do.
Third, Mr. Romney is offering himself to the American people as a practical problem-solver. For example, he’s produced an economic recovery plan that has been endorsed by 400 leading economists, including four Nobel Prize winners. So there’s good reason to believe that a Romney administration would pursue sound, market-tested solutions to the nation’s economic problems.
I doubt that William James would wholly approve of either of our two major candidates for President. But to me, at least, Mitt Romney seems the more pragmatic of the two. That’s why he will get my vote.
Thomas Michael Stewart, a resident of Eugene and former student at Marist and Sheldon High Schools, is currently a senior at Princeton University. He has contributed to Lane Solutions in the past.
Five Lessons I’ve learned About Government Spending
By Sean VanGordon
In the fall of 2012 Oregonians should ask tough questions of candidates about their policy views. Campaigns in the United States are marketing-driven, heavily scripted and rely on simplistic catchphrases. Good marketing wins elections. But it doesn’t solve problems – because when you govern, it’s the details that matter.
Government spending is a perfect example of this oversimplification of issues. Voters are presented with the false choice of either paying more taxes to support government or cutting government programs. Even at the city level, budgets are more complicated than that. I want to share with you five key lessons I’ve learned about government spending. In doing so I’ll show that you can prioritize spending and protect essential public services.
For the sake of argument, this is a discussion about the management of government finances, not the role of government. In our current economic situation a reduction in spending is a reality, and this is my opinion of how to reduce spending while mitigating cuts to essential services.
Lesson #1: Economic Growth Is King
All budgets are tied together by a single truth, which is that the economy is king. That’s because economic conditions control the flow of revenue to the government. As a household earns more, it pays more in taxes. A worker with a decent manufacturing job pays more taxes than one on unemployment. Jobs will close deficits at all levels of government. Weak economic growth will make deficits worse.
Lesson #2: Reorganization Saves Money While It Protects Services
Elected officials need to constantly question the size and organization of government. By shrinking the size of government you can reduce overlap and save administrative costs. By cutting administration you protect services that the public uses. Here are some local examples:
- The Eugene-Springfield Fire Department merger: This is an ongoing effort to merge two fire departments. In Springfield it has saved approximately $600,000 through reduction of overlaps between the two departments. These savings protected firefighters from layoffs and, more important, safeguarded response times for citizens caught in an emergency.
- The Springfield Public Works and Development Service Departments: For the last twenty years these have been separate departments. Last year Springfield merged them. During the merger the city, determined to improve customer service, carefully reviewed all functions of the two departments. The result? Savings totaling about $300,000.
- The State of Oregon reduced managers: In 2012 the Oregon Legislature required that the State increase the ratio of employees to managers. While the State has had some challenges with implementation, the Legislature’s message was clear: Improve efficiency.
Lesson #3: Don’t Forget to Save
We need to focus on providing consistent services to the voters. The budget situation is tight in every jurisdiction, and we don’t know when it’s going to get better. Saving when you can and protecting your reserves protects the financial health of government. In the 2011-2012 budget cycle the City of Springfield received $500,000 more in property tax revenue than it had budgeted. The Springfield City Council decided to save it for the 2012-2013 budget cycle in order to avoid additional cuts.
In the Oregon Legislature there are numerous proposals to grow a rainy day fund. My personal favorite is the plan to save 3% of all revenue in the General Fund.
Lesson #4: Reduce Overtime
Overtime is expensive, but sometimes unavoidable. It wouldn’t make sense to send police back from a crime scene to punch out or call firefighters home from a fire because their shift was up. However, government needs to reduce non-essential overtime whenever possible. In 2011 the Springfield City Council held a meeting specifically to talk about the $900,000 in overtime we budgeted for the Fire Department. As a result, in 2012 the city reduced its budgeted overtime expenditure by 33% because management and labor worked together to find creative solutions.
Lesson #5: Innovate.
Innovation in government saves taxpayers money and protects services. It allows government to solve structural cost problems with creativity. Here are examples of innovative solutions that are either in use or under consideration:
- The statewide e-permitting system that allows developers to apply for permits on-line;
- The shared lending agreement between local libraries that makes it easier to share books while saving both staff time and spending on materials;
- Springfield is evaluating becoming self-insured for health insurance and workers comp;
- Both the Springfield City Council and Planning Commission now use iPads for public meetings, which saves thousands of dollars on printing costs.
There are plenty of additional examples on the state, county and local levels. As citizens, we need to promote this type of thinking.
Conclusion
The economic environment is tough right now. The country faces hard choices about the size and scope of government. In a campaign year candidates typically present two choices: 1) I will spend more money in government and may raise your taxes. 2) I will cut government spending and may cut your taxes.
Ask for specifics. Ask candidates which services they are going to protect and what the tradeoffs are. At the end of the day we need to elect leaders who can discuss their opinions in detail with you, and make solid decisions about problems we face as a community.
Sean VanGordon is a Springfield City Councilor
Increased Taxes on America’s Small Businesses?
Washington, D.C. – U.S. Senator Rob Portman (R-Ohio) recently released a statement responding to President Barack Obama’s call for increased taxes on America’s small businesses.
Senator Portman introduced his statement with these observations:
While President Obama calls for higher taxes on jobs (sic) creators, two new government reports undercut his class warfare argument and the basis for calls for higher taxes…. As the nation careens toward a fiscal cliff, real leadership not more rhetoric and finger pointing, is necessary to reform our tax code and address Washington’s out of control spending.
Analysis of the Congressional Budget Office’s (CBO) final report on what caused the January 2001 projection of a $5.6 trillion 10-year surplus to turn into an actual $6.1 trillion deficit over that 10-year period (ed. note: a $11.75 trillion dollar swing) shows that:
- Tax policies enacted a decade ago are responsible for just 16% of the swing from surplus to deficit, or $1.9 trillion;
- Given that only about one-fourth of the tax cuts went to upper-income earners (indicative of the reality that there are very few of these), just 4% of the decline from surpluses to deficits resulted from upper-income tax cuts, or $490 billion
- Since CBO ignores any of the positive impact of tax cuts on the economy (this is known as “static analysis,” as opposed to “dynamic analysis,” which estimates growth attributable to tax cuts), savings and economic growth, the percentage was actually even smaller than the 4% estimate (above).
Additional analysis of the factors behind this massive $11.75 trillion swing reveals that new spending, (much of which was due to debt incurred because of the new spending and interest) were responsible for almost half (48%) of the increase in spending.
To sum it up, the $11.75 trillion swing from surplus to deficit was comprised of a $6.1 trillion decrease in revenue (52% of the total swing) caused by tax policies, new spending and interest and a $5.6 trillion increase in spending (48% of the total swing).
Of the total spending and revenue lost over the 10 year period, an astounding 34% ($4 trillion) was due to Obama/Pelosi legislation over the last three years!
Senator Portman concluded:
In a second report, the CBO said that in both 2008 and 2009, the highest-earning 20% of taxpayers paid 94% of the total income tax burden – up from 86 %in 2007, and 81% before the 2001 tax cuts. In other words, higher-income Americans have been paying a bigger and bigger part of the total tax burden under the so-called “Bush tax cuts.”
Editors’ note: Due to rounding, the percentages above may not agree with the dollar amounts. For clarity’s sake the editors decided to round dollar amounts to two decimal points and percentages to just one.
The author is a concerned Lane County resident and business owner.