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I helped balance the federal budget in the 1990s – here’s just how hard it will be for the GOP to achieve that same rare feat

House Speaker McCarthy wants to put the US on a path to a balanced budget as debt ceiling negotiations begin with President Biden. Here’s why it won’t…

Bill Clinton, at right, oversaw the first balanced budget since 1969, with some help from a bipartisan deal with Newt Gingrich. AP Photo/Doug Mills

Kevin McCarthy reportedly promised many things to Republican hardliners en route to clinching his job as speaker of the U.S. House of Representatives. One of them was a “balanced budget” in 10 years.

As part of that plan, Republicans are demanding substantial spending cuts and budget reforms in exchange for lifting the debt ceiling this year – putting the U.S. at risk of default.

But a look at the numbers – and the history – shows just how difficult balancing the budget will be.

Doing so requires the federal government to generate enough income to pay for all its spending. The U.S. has managed this feat only twice in the past 60 years – and both times involved raising taxes, something Republicans are loath to do. President Lyndon B. Johnson managed to do it in 1969, and President Bill Clinton created a surplus that ran from the fiscal years 1998 to 2001, when he left office.

As a member of the Clinton administration in the Commerce Department from 1997 to 2001, I participated in achieving that rare balanced budget and understand the obstacles to delivering a repeat performance. A quick look back at how we did it, along with how much has changed, shows that Republicans are unlikely to manage a similar performance.

How Clinton balanced the budget

When Clinton took office in 1993, the budget deficit in the previous year was just under 5% of gross domestic product, and the nonpartisan Congressional Budget Office predicted a bleak fiscal outlook.

Clinton’s balanced-budget recipe was a mixture of higher revenues and lower spending, with help from a booming economy. In his second term, he also negotiated a bipartisan budget deal with Republicans.

After campaigning on a pledge to cut the deficit, Clinton raised taxes on the wealthy during his first year in office. He introduced higher top personal income tax brackets, raised corporate taxes, increased taxes on Social Security benefits, added 4.3 cents per gallon onto gas taxes and eliminated a number of itemized tax deductions. On the spending side, Clinton took advantage of the “peace dividend” that followed the collapse of the Soviet Union to reduce defense spending from 4.3% of GDP in 1993 to 2.9% by 2000.

These measures helped slash the overall deficit to 1.3% of GDP by the end of Clinton’s first term. That’s the smallest it had been in 22 years.

The higher taxes invited pushback from Republicans, who gained majorities in the House and Senate in 1995. Clinton wrangled continually with then-Republican Speaker Newt Gingrich, who forced a government shutdown that same year.

As part of budget negotiations, Congress eventually passed the Balanced Budget Act of 1997, which retained Clinton’s original tax increases but cut capital gains taxes and reduced spending on Medicare and Medicaid. Meanwhile, the economy, fueled by a tech boom, expanded rapidly during Clinton’s second term.

Higher tax rates on the wealthiest Americans, strong economic growth and continued restraint in government spending produced a budget surplus of US$69 billion in 1998. The surplus peaked in 2000 at $236 billion before falling to $128 billion in 2001. The surplus – which hasn’t been seen since – allowed the U.S. to pay down the national debt by over $450 billion.

Lessons for today

The lesson for Republicans today is that if they are serious about balancing the budget, it will require some very unpalatable choices.

On the spending side, so-called entitlements – mandatory programs such as Social Security, Medicare and veterans benefits – now [account for almost two-thirds of the federal budget](,on%20debt%20(see%20chart), compared with less than half when Clinton took office. Funding for these programs is set by formula, making it difficult to change. And the population of Americans 65 or older has grown by 32% since 1993, increasing demand for entitlements.

A group of white man clap as president Clinton sits on at desk with the words a balanced budget witten in front
When Clinton signed the Balanced Budget Act of 1997, it was the first time since 1969 that the U.S. had made ends meet. Paul Richards/AFP via Getty Images

Defense spending takes up another 14% of taxpayer dollars, greatly exceeding every other item in the so-called discretionary budget, which includes everything else from transportation and energy to airline traffic control and national parks.

The U.S. spends 8% of the budget simply paying interest on the national debt. This percentage hasn’t changed much, but the debt itself has soared from $4.5 trillion in 1993 to $31 trillion today mainly because of massive tax cuts during the Bush and Trump administrations, costly wars in Iraq and Afghanistan and vast public spending to address the 2008 financial crisis and the COVID-19 pandemic.

Now that historically low interest rates have come to an end, the U.S. will be forced to devote a bigger slice of the pie to paying interest.

The policy nonprofit Committee for a Responsible Federal Budget recently estimated that if spending on defense, veterans, Social Security and Medicare were off the table, Congress would need to reduce all other spending by 85% to get to an overall balance. In other words, simple arithmetic means it is not feasible to achieve anything close to a balanced budget without addressing military spending and entitlement programs.

Reducing military spending is always controversial – and many Republicans (as well as some Democrats) would resist such cuts – but especially so at a time when the U.S. is ramping up military aid to Ukraine and the Pentagon perceives a threat from China. It’s the very opposite of the Clinton-era peace dividend.

Cutting mandatory spending would require significant reforms. The U.S. has one of the youngest minimum retirement thresholds in the world, at age 62, compared with 65 in Canada and 67 in Britain and Germany. Even France may soon have a higher minimum retirement age of 64 – though the current protests there over increasing it from 62 illustrate the political perils of such a change.

Can they do it again?

Certainly, opportunities do exist to close the gap between income and spending.

The Congressional Budget Office has released a report outlining 76 options for reducing the deficit. But many of the ideas require further hard choices, such as rolling back some or all of the last three tax cuts, increasing taxes on the wealthy, ending or curtailing tax deductions and adopting a consumption-based value-added tax or a carbon tax, as well as fundamental reforms to entitlement programs.

Unfortunately, Congress shows limited appetite to tackle such issues.

Back in 1997, after the smoke cleared, both the Clinton administration and the Republicans in Congress were able to claim some political credit for the resulting budget surpluses. But – crucially – both parties recognized that a deal was in the best interest of the country and were able to line up their respective members to get the votes in Congress needed to approve it. The contrast with the current political landscape is stark.

The Republican Study Committee, a bloc of more than 160 conservative lawmakers, released a budget blueprint in June 2022 that promises to balance the budget in seven years. The plan proposes trillions of dollars in spending cuts, many of which would fall hardest on low-income Americans. These include shrinking Medicaid, paring veterans benefits and raising the age for full Social Security retirement benefits from 67 to 70. It also calls for higher military spending and further tax cuts – which would require even more draconian cuts to core safety net programs.

It would also lock in the Trump tax cuts of 2017 – the opposite of what the Congressional Budget Office recommends or what Clinton did in the 1990s to secure a balanced budget.

Without a credible Republican deficit-cutting plan on the table, I believe that the odds favor a protracted stand-off over the debt ceiling, which could tip the precarious U.S. economy into recession.

While Congress seems highly unlikely to allow a debt default, this brawl would waste time and energy that could be better spent on figuring out how to strengthen programs like Social Security and close tax loopholes that drain revenue.

Balancing the budget is not an end in itself. Most economists agree that governments should reduce public debt during periods of prosperity and run deficits to assist people when the economy is weak.

The U.S. was fortunate in the late 1990s to enjoy a buoyant economy that enabled Congress and the president to achieve a fiscal surplus. What the country needs now, in my view, is not more quick fixes but a sustainable pathway to stabilizing the national debt. That requires growing revenues and reducing nonessential spending in a responsible way.

Linda J. Bilmes is the Daniel Patrick Moynihan Senior Lecturer in Public Policy and Public Finance at the Harvard Kennedy School, Harvard University. She is affiliated with the National Academy of Public Administration, where she serves on the Board of Directors, and the United Nations Committee of Experts on Public Administration, where she is the member for the United States. She served as the Senate-confirmed Assistant Secretary and CFO of the US Department of Commerce from 1999-2001, and as Deputy Assistant Secretary of Commerce for Administration and Budget from 1997-1998.

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As We Sell Off Our Strategic Oil Reserves, Ponder This

As We Sell Off Our Strategic Oil Reserves, Ponder This

Authored by Bruce Wilds via Advancing Time blog,

One of Biden’s answers to combating…



As We Sell Off Our Strategic Oil Reserves, Ponder This

Authored by Bruce Wilds via Advancing Time blog,

One of Biden's answers to combating higher gas prices has been to tap into America's oil reserves. While I was never a fan of the U.S. Strategic Petroleum Reserve (SPR) program, it does have a place in our toolbox of weapons. We can use the reserve to keep the country running if outside oil supplies are cut off. Still, considering how out of touch with reality Washington has become, we can only imagine the insane types of services it would deem essential next time an oil shortage occurs.

Sadly, some of these reserves found their way into the export market and ended up in China. We now have proof that the President's son Hunter had a Chinese Communist Party member as his assistant while dealing with the Chinese. Apparently, he played a role in the shipping of American natural gas to China in 2017. It seems the Biden family was promising business associates that they would be rewarded once Biden became president. Biden's actions could be viewed as those of a traitor or at least disqualify him from being President.

The following information was contained in a letter from House Oversight Committee ranking member James Comer, R-Ky. to Treasury Secretary Janet Yellen dated Sept. 20. 

"The President has not only misled the American public about his past foreign business transactions, but he also failed to disclose that he played a critical role in arranging a business deal to sell American natural resources to the Chinese while planning to run for President.”

Joe Biden, Comer said, was a business partner in the arrangement and had office space to work on the deal, and a firm he managed received millions from his Chinese partners ahead of the anticipated venture. While part of what Comer stated had previously been reported in the news, the letter, cited whistleblower testimonies, as well as emails, a corporate PowerPoint presentation, and a screenshot of encrypted messages. These as well as  bank documents that committee Republicans obtained suggest Biden’s knowledge and involvement in the plan dated back to at least 2017.

The big point here is;

  • The Strategic Petroleum Reserve, which was established in 1975 due to the 1973 oil embargo, is now at its lowest level since December 1983.

In December 1975, with memories of gas lines fresh on the minds of Americans following the 1973 OPEC oil embargo, Congress established the Strategic Petroleum Reserve (SPR). It was designed “to reduce the impact of severe energy supply interruptions.” What are the implications of depleting the SPR and is it still important?

The U.S. government began to fill the reserve and it hit its high point in 2010 at around 726.6 million barrels. Since December 1984, this is the first time the level has been lower than 450 million barrels. Draining the SPR has been a powerful tool for the administration in its effort to tame the price of gasoline. It also signaled a "new era" of intervention on the part of the White House. 

This brings front-and-center questions concerning the motivation of those behind this action. One of the implications of Biden's war on high oil prices is that it has short-circuited the fossil investment/supply development process.  Capital expenditures among the five largest oil and gas companies have fallen as the price of oil has come under fire. The current under-investment in this sector is one of the reasons oil prices are likely to take a big jump in a few years. Production from existing wells is expected to rapidly fall.

The Supply Of Oil Is Far More Constant And Inelastic Than Demand

It is important to remember when it comes to oil, the supply is far more constant and inelastic than the demand. This means that it takes time and investment to bring new wells online while demand can rapidly change. This happened during the pandemic when countries locked down and told their populations and told them to stay at home. This resulted in the price of oil temporarily going negative because there was nowhere to store it.

Draining oil from the strategic reserve is a short-sighted and dangerous choice that will impact America's energy security at times of global uncertainty. In an effort to halt inflationary forces, Biden released a huge amount of crude oil from the SPR to artificially suppress fuel prices ahead of the midterm elections. 

To date, Biden has dumped more SPR on the market than all previous presidents combined reducing the reserves to levels not seen since the early 1980s. In spite of how I feel about the inefficiencies of this program, it does serve a vital role. It is difficult to underestimate the importance of a country's ability to rapidly increase its domestic flow of oil. This defensive action protects its economy and adds to its resilience. 

Biden's actions have put the whole country at risk. Critics of his policy pointed out the Strategic Petroleum Reserve was designed for use in an emergency not as a tool to manipulate elections. Another one of Biden's goals may be to bring about higher oil prices to reduce its use and accelerate the use of high-cost green energy.

Either way, Biden's war on oil has not made America's energy policies more efficient or the country stronger.

Tyler Durden Sat, 03/25/2023 - 18:30

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The Disinformation-Industrial Complex Vs Domestic Terror

The Disinformation-Industrial Complex Vs Domestic Terror

Authored by Ben Weingarten via,

Combating disinformation…



The Disinformation-Industrial Complex Vs Domestic Terror

Authored by Ben Weingarten via,

Combating disinformation has been elevated to a national security imperative under the Biden administration, as codified in its first-of-its-kind National Strategy for Countering Domestic Terrorism, published in June 2021.  

That document calls for confronting long-term contributors to domestic terrorism.

In connection therewith, it cites as a key priority “addressing the extreme polarization, fueled by a crisis of disinformation and misinformation often channeled through social media platforms, which can tear Americans apart and lead some to violence.” 

Media literacy specifically is seen as integral to this effort. The strategy adds that: “the Department of Homeland Security and others are either currently funding and implementing or planning evidence–based digital programming, including enhancing media literacy and critical thinking skills, as a mechanism for strengthening user resilience to disinformation and misinformation online for domestic audiences.” 

Previously, the Senate Intelligence Committee suggested, in its report on “Russian Active Measures Campaigns and Interference in the 2016 Election” that a “public initiative—propelled by Federal funding but led in large part by state and local education institutions—focused on building media literacy from an early age would help build long-term resilience to foreign manipulation of our democracy.” 

In June 2022, Democrat Senator Amy Klobuchar introduced the Digital Citizenship and Media Literacy Act, which – citing the Senate Intelligence Committee’s report – would fund a media literacy grant program for state and local education agencies, among other entities. 

NAMLE and Media Literacy Now, both recipients of State Department largesse, endorsed the bill. 

Acknowledging explicitly the link between this federal counter-disinformation push, and the media literacy education push, Media Literacy Now wrote in its latest annual report that ... 

... the federal government is paying greater attention to the national security consequences of media illiteracy.

The Department of Homeland Security is offering grants to organizations to improve media literacy education in communities across the country. Meanwhile, the Department of Defense is incorporating media literacy into standard troop training, and the State Department is funding media literacy efforts abroad.

These trends are important for advocates to be aware of as potential sources of funding as well as for supporting arguments around integrating media literacy into K-12 classrooms. 

When presented with notable examples of narratives corporate media promoted around Trump-Russia collusion, and COVID-19, to justify this counter-disinformation campaign, Media Literacy Now president Erin McNeill said: “These examples are disappointing.”

The antidote, in her view is, “media literacy education because it helps people not only recognize the bias in their news sources and seek out other sources, but also to demand and support better-quality journalism.” (Emphasis McNeill’s)

Tyler Durden Sat, 03/25/2023 - 17:30

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Disney World Event Gives Florida Gov. DeSantis the Middle Finger

Walt Disney’s CEO Bob Iger has shown no willingness to back down in the face of the governor’s efforts to campaign against diversity training.



Walt Disney's CEO Bob Iger has shown no willingness to back down in the face of the governor's efforts to campaign against diversity training.

Florida Gov. Ron DeSantis has made Disney World, one of his state's largest employers, the target of his so-called war on woke. 

At the root of the dispute are former Walt Disney (DIS) - Get Free Report CEO Bob Chapek's remarks opposing the Republican governor's new law, which limits the ability of educators to discuss gender identity and sexual orientation with children.

Labeled the Don't Say Gay bill, the law met with huge pushback from Disney employees, who had criticized Chapek for initially not speaking out against the bill.

That led the then-Disney boss to take a direct stand against the governor's actions, which in turn led DeSantis to strip the company of its special tax status.  

DON'T MISS: Huge Crowds Force Disney World to Make Big Changes

DeSantis has decided to use Disney as the center of his political-theater culture war because it's an easy, and nonmoving, target. The company can't pack up Disney World and move it to New York, Massachusetts, or some other liberal bastion, so it mostly has to take whatever the governor dishes out.

But while DeSantis wants to use Disney as a target, he's mostly playing to the cameras; clearly, he's not actually looking to take down the largest single-site employer in the U.S. Disney World generates tens of thousands of jobs, pays the state a lot of money. and brings in billions of tourism dollars -- many of which are spent outside its gates in the broader Florida economy.

Image source: Shutterstock/TheStreet Illustration

Disney CEO Iger Uses Actions, Not Words

Disney CEO Bob Iger understands that actions speak louder than words and words can come back to haunt you.

The returned Mouse House boss has not called out DeSantis, nor did he fight the governor's takeover of its Reedy Creek Improvement District.

On paper, Disney World appears to have lost its right to self-govern. That's true, but it doesn't mean much because it's not as if the state -- even DeSantis's handpicked cronies who now oversee the former Reedy Creek Improvement District -- intend to actually get in Disney's way. The company prints money for the state.

So, that's why Iger -- who had publicly spoken against the Don't Say Gay bill when he was a private citizen and not Disney CEO, has not called out DeSantis. A speech decrying the governor's actions, pointing out that they “put vulnerable, young LGBTQ people in jeopardy,” as he said before taking the CEO job back, would not help Disney.

Instead, Iger has let his company's actions speak. 

Disney World plans to host a "major conference promoting lesbian, gay, bisexual and transgender rights in the workplace" at the Disney World Resort this September, the Tampa Bay Times reported.

Disney Boldly Challenges DeSantis

Disney World will host the annual Out & Equal Workplace Summit in September.

"The largest LGBTQ+ conference in the world, with more than 5,000 attendees every year. It brings together executives, ERG leaders and members, and HR and DEI professionals and experts -- all working for LGBTQ+ equality," the event's organizer, Out & Equal, said on its website. 

"Over more than 20 years, Summit has grown to become the preferred place to network and share strategies that create inclusive workplaces, where everyone belongs and where LGBTQ+ employees can be out and thrive." 

The Tampa Bay Times called simply hosting the event "a defiant display of the limits of DeSantis’s campaign against diversity training."

Disney World has hosted the event previously and the company has a relationship with Out & Equal going back many years.

Instead of giving a speech and becoming even more of a right-wing-media talking point, Iger showed his employees where Disney stands through his actions. It's a smart choice by a seasoned executive not to become an actor in DeSantis's political theater.

The Florida governor wants to be perceived as battling 'woke" Disney without actually hurting his state's relationship with the company. The newspaper described exactly how that works when it looked at the new government powers the state has taken from the theme park giant.

The subsequent legislation left most of Disney’s special powers in place despite the governor’s attempt to dissolve the district. The conservative members the governor appointed to the board hinted at the first meeting of the new board that they would exercise leverage over Disney, such as prohibiting COVID-19 restrictions at Disney World. But legal experts have said that the new board’s authority has no control over Disney content.

DeSantis wants a culture war, or at least one that'll play out in the media. Iger knows better and has played the situation perfectly.   


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