Category Archives: Fiscal Freedom

CONCORD, N.H.

Its virtually impossible to predict the actions of the New Hampshire House on close call votes, but several key lawmakers said Tuesday it appears momentum is moving in the direction of passage of a fiscal 2018-2019 budget later this week.

The House and Senate will vote up-or-down Thursday on a conference committee compromise $11.7 billion spending plan for the next two fiscal years. Senate approval is virtually assured on a 14-9 party line vote, while the House is far less certain.

House Speaker Shawn Jasper, R-Hudson, told WMUR last Thursday there would be an all-out push to touch every member and try to convince opponents and undecided members to vote in favor.

Jasper said Tuesday the effort has moved into high gear. House Republicans held the first of three closed-door caucuses following a public budget briefing led by legislative budget staffers and the chairs of the House and Senate finance committees. House GOP caucuses are scheduled for both Wednesday and Thursday morning ahead of the vote.

Gov. Chris Sununu, investing some of his own political capital, has been speaking extensively to lawmakers, while state Republican Party Chairman Jeanie Forrester, a former state senator, has also been deeply involved.

Its going very well, Jasper told WMUR. Were still working hard. I dont want to be over-confident, but the movement is in our direction and its moving pretty rapidly.

The fate of the budget will depend on the votes of conservative House members who identify with the House Republican Alliance or the New Hampshire House Freedom Caucus. Some attend meetings of both groups.

After an HRA meeting Tuesday morning, Rep. Glenn Cordelli, R-Tuftonboro, a group co-chair, said that he expects to be a yes vote. He said that within the HRA opinion is split.

There are some parts of the budget that I greatly appreciate the work of the conferees in including, he said, citing business tax cuts and an increase in the rainy day fund.

Do I wish it was lower? Probably so, Cordelli said. Im still looking at it, but Im leaning toward voting for it, he said.

Reps. Jim McConnell, R-Swanzey, and JR Hoell, R-Dunbarton, key members of the Freedom Caucus, continue to oppose the plan because they said it simply includes too much state general fund spending. Hoell said the increase is 9.6 percent over general fund spending in the current fiscal 2016-2017 spending plan.

But McConnell acknowledged that momentum is moving in the direction of passage.

Over the past week, the leadership has done a great deal of work and managed to create the idea that knocking the budget down will generate something that will be absolutely horrendous, he said.

My sense of things, quite candidly, has changed because recently a number of people who had said there was no way they would ever support the budget have now decided that maybe it isnt so bad and will vote for it, McConnell said.

We are looking at a very close vote, he said. I remain opposed to it and will do what I can to defeat it.

According to a document distributed by the House and Senate leadership at Tuesdays briefing, the plan calls for state general fund and education trust funding spending of $4.9 billion, while total spending, including federal and other funds, totals $11.72 billion.

The budget contains business tax cuts and repeals the electricity consumption tax. It increases the states rainy day fund from $93 million to $100 million while boosting funding for substance abuse prevention and treatment by nearly 60 percent.

Vote breakdown

There are currently 393 members in the House 221 Republicans, 170 Democrats and two Libertarians -- with six vacancies and one recently elected member who has yet to be sworn in. If all members attend the Thursday session, which is unlikely, 197 votes will be required for passage.

House Democratic Leader Steve Shurtleff of Penacook on Tuesday reiterated his belief that his caucus will unanimously oppose the budget. If that occurs, only 27 additional votes - the two Libertarians and 25 Republicans, for example will be enough to kill it, which would lead to further conference committee negotiations.

House and Senate Democrats will hold a press conference Wednesday morning to discuss their opposition to the plan.

Shurtleff has cited the budgets provision to end the states Medicaid expansion plan if the federal government does not grant a waiver allowing the state to impose a work or job training requirement on new entrants into the system.

He cited the insertion of Hyde Amendment language prohibiting the state from funding health care facilities that provide abortions.

I think its going to be a very close vote, but I think it will fail, Shurtleff said. Theres something in there for everybody to dislike, and if it fails, it can be ironed out in a renewed committee of conference.

If a budget agreement is not reached by the June 30 end of the fiscal year, it is possible a continuing resolution, to keep spending at current levels, will be passed while further negotiations take place. But Jasper said Sununu has made it clear to legislative leaders he does not want to turn to a continuing resolution.

Key legislative leaders met with the Freedom Caucus Monday night in Manchester, while Forrester and Senate Finance Committee Chairman Gary Daniels attended the HRA meeting Tuesday morning.

The HRA takes its positions based on the (state) constitution and the Republican Party platform, Cordelli said. But other representatives might have other considerations as well, such as what theyve heard from constituents.

And, believe it or not, there might be a political factor.

State Rep. Al Baldasaro, R-Londonderry, an HRA member, said that like most lawmakers, he is not in agreement with all aspects of the budget, but he supports the business tax cuts. He also said there are no tax or fee increases that would affect his constituents.

So, Im going bite my tongue, hold my nose and vote for the budget, Baldasaro said.

I think other conservatives are going to come on board, he said. If we dont pass this budget, we could lose some things, like the tax cuts, and we dont want that.

I think its going to pass, Baldasaro said. If I was a betting man, Id say today we have the numbers. Were close.

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Momentum seen moving toward NH House passage of budget plan - WMUR Manchester

Charlotte Observer

Mecklenburg commissioners approve full CMS bond request. Will voters agree? Charlotte Observer County Commissioner Jim Puckett said Tuesday that the county's $1.6 billion budget plan was an example of conservative fiscal management. What we will ... The first CRC is under construction at the Valerie C. Woodard Center on Freedom Drive. It will ... and more »

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Mecklenburg commissioners approve full CMS bond request. Will voters agree? - Charlotte Observer

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George Cahlink and Kellie Lunney, E&E News reporters

Energy Secretary Rick Perry (left) and Interior Secretary Ryan Zinke are among the administration officials on Capitol Hill this week defending the president's budget. C-SPAN

Energy Secretary Rick Perry and Interior Secretary Ryan Zinke are due on Capitol Hill this week to defend their fiscal 2018 budget request as House Republicans scramble to set in motion a plan to pass a spending package before summer recess.

GOP leaders have been eyeing packaging all 12 annual spending bills in a single omnibus before the five-week break. That would allow the House to focus on tax reform in the fall and strengthen its hand in final spending talks with the Senate.

But lawmakers first will need to adopt a budget or a substitute deal to set domestic and defense discretionary spending levels. Without an accord, it would be much harder to move the omnibus.

"You can't have the cart get before the horse, you have to have the [budget] number," Rep. Jim Jordan (R-Ohio) said.

Negotiations have gone on for weeks in the House, but the Budget Committee has yet to schedule a markup something usually done in April or May. The administration's delay in delivering its spending plan affected the panel's planning.

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Rep. Ken Calvert (R-Calif.), chairman of the House Interior and Environment Appropriations Subcommittee, said last week the GOP is grappling with how to deal with strict budget caps set by the 2015 budget deal.

Calvert suggested there is broad support within the party for increasing defense spending, but he says doing so by cutting domestic accounts as some conservatives want would be "untenable."

If Congress does not raise the budget caps, overall discretionary spending would be cut by about $5 billion next year, according to the 2015 deal.

The House Appropriations Committee already signaled its interest in going beyond those caps by approving a fiscal 2018 military construction and veterans affairs spending bill that includes $6 billion more than last year's figure. That bipartisan bill is the first and so far only spending measure to surface this year.

House conservatives, particularly members of the hard-right Freedom Caucus, are among those pressing for deep cuts in mandatory spending programs, like welfare, in exchange for any domestic boost in 2018.

Those conservatives likely have the votes to block any fiscal 2018 spending bills if they do not win funding reductions.

Rep. Tom Cole (R-Okla.), a member of the Interior and Environment Appropriations Subcommittee, said the House would need a budget or spending framework this month to make its plans work.

But Democrats in both the House and Senate are already worried about the impact of delays in adopting a budget.

"Until you have a budget resolution, until you know what the allocation of the overall discretionary dollars are, you have no idea frankly what the ramifications of $6 billion extra" for military construction and veterans affairs are, said House Minority Whip Steny Hoyer (D-Md.) last week.

Hoyer warned that appropriators could slash programs in upcoming spending bills to make up the difference. "You give more to one, you've got to take more from another," he noted.

Democrats in the Senate have the same concerns.

"You bet I'm worried," Sen. Patty Murray told E&E News last week. The Washington Democrat sits on both the Budget and Appropriations committees.

"We are way late in this process, we are running fast into a September deadline, [and] putting ourselves in jeopardy with Trump already saying he wants to shut down government."

In early May, just after the government averted a shutdown, President Trump tweeted that the country could use a "good shutdown" in September, when the current fiscal year ends.

While there's talk of the House putting an omnibus spending bill on the floor before the August recess, Sen. Tom Udall (D-N.M.), ranking member of the Interior and Environment Appropriations Subcommittee, said he hasn't yet heard of a similar plan for the Senate.

"I think our plan right now is to either have individual appropriations bills or small minibuses at this point," he said.

Zinke, who will be defending his agency's $11.7 billion fiscal 2018 budget request, will likely receive a friendly reception from lawmakers, despite expected pushback from Democrats and Republicans on proposed cuts to popular programs, including the Land and Water Conservation Fund and payments in lieu of taxes (E&E Daily, May 26).

Questions about the administration's preference for more energy development over new federal land acquisition are a safe bet.

Democrats, including Cantwell and Rep. Ral Grijalva of Arizona ranking members of the Natural Resources panels in the Senate and House will likely seize on Zinke's recent secretarial order directing a review of sage grouse policies, as well as his review of 27 national monuments.

Zinke, a former Montana congressman, released his interim report on Bears Ears last week, recommending a to-be-determined reduction of the Utah monument's 1.35-million-acre footprint (E&E News PM, June 12).

Another flashpoint: the Bureau of Land Management's announcement last week that oil and gas companies don't have to comply with the Obama-era rule on methane venting, flaring and leaking on public and tribal lands, pending judicial review (Greenwire, June 14).

Senate Energy and Natural Resources Chairwoman Lisa Murkowski (R-Alaska) will no doubt ask Zinke about the department's proposal to open up a portion of the Arctic National Wildlife Refuge in Alaska to drilling, a route she has long championed.

On the other side of the Capitol, House Natural Resources Chairman Rob Bishop (R-Utah) will likely seek answers on how Congress can work with the executive branch to reform the 1906 Antiquities Act and shrink Bears Ears.

The Alaska Wilderness League will hold a media conference today, ahead of the budget hearings, to oppose drilling in ANWR (E&E Daily, May 24).

Energy Secretary Perry, who will be defending his agency's $28 billion budget request, is facing questions over proposed cuts, like scrapping the Advanced Research Projects Agency-Energy and slashing the Office of Energy Efficiency and Renewable Energy by 70 percent, from $2.1 billion to $636 million.

Supporters of the president's plan say the Department of Energy has shifted too far away from its core mission and needs rebalance. In budget documents, the administration said, "The private sector is better positioned to finance disruptive energy research."

But critics say independent analyses, such as one this month from the National Academies of Sciences, Engineering and Medicine on ARPA-E, show DOE funding plays a unique and needed role.

Lawmakers also are likely to press Perry on how the administration's stated goals such as support for the national laboratories and coal technology mesh with the budget proposal.

Under the request, research and development at the Office of Fossil Energy which oversees carbon capture and storage research would see its budget cut by more than half, from $668 million to $280 million. Funding at the Office of Science, which oversees the majority of the labs, would fall by about 17 percent, to $4.5 billion.

Also likely to come up is the administration's plan to eliminate the mixed oxide fuel fabrication facility in South Carolina, a program with GOP backing (E&E Daily, May 24).

One of the project's most vocal supporters, Sen. Lindsey Graham (R-S.C.), sits on the Senate Energy and Water Development Appropriations Subcommittee, which is hosting Perry this week.

The Energy chief might also face questions about nuclear waste, mainly the agency's proposed $120 million to work on resuming the licensing process for the controversial Yucca Mountain repository in Nevada.

Reporters Manuel Quiones, Christa Marshall and Sam Mintz contributed.

Schedule: The House Energy and Water Development Appropriations Subcommittee hearing on the Energy budget is Tuesday, June 20, at 1 p.m. in 2359 Rayburn.

Witness: Energy Secretary Rick Perry.

Schedule: The Senate Energy and Natural Resources Committee hearing on the Interior budget is Tuesday, June 20, at 10 a.m. in 366 Dirksen.

Witness: Interior Secretary Ryan Zinke.

Schedule: The House Financial Services and General Government Appropriations Subcommittee hearing on Office of Management and Budget spending is Wednesday, June 21, at 2 p.m. in 2359 Rayburn.

Witness: Office of Management and Budget Director Mick Mulvaney.

Schedule: The Senate Interior and Environment Appropriations Subcommittee hearing on the Interior budget is Wednesday, June 21, at 9:30 a.m. in 124 Dirksen.

Witnesses: Zinke; Olivia Barton Ferriter, deputy assistant Interior secretary for budget, finance, performance and acquisition; Denise Flanagan, director of Interior's Office of Budget.

Schedule: The Senate Defense Appropriations Subcommittee hearing on the Air Force budget is Wednesday, June 21, at 10:30 a.m. in 192 Dirksen.

Witnesses: Air Force Secretary Heather Wilson, Air Force Chief of Staff Gen. David Goldfein.

Schedule: The Senate Energy and Water Development Appropriations Subcommittee hearing on the Energy budget is Wednesday, June 21, at 2:30 p.m. in 138 Dirksen.

Witness: Perry.

Schedule: The House Natural Resources Committee hearing on the Interior budget is Thursday, June 22, at 9:30 a.m. in 1324 Longworth.

Witnesses: Zinke, Ferriter and Flanagan.

Schedule: The Senate Energy and Natural Resources Committee hearing on the Energy budget is Thursday, June 22, at 10 a.m. in 366 Dirksen.

Witness: Perry.

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BUDGET: Zinke, Perry on Hill this week as spending talks advance ... - E&E News

Our religious liberties are slowly being eaten away by liberal non-believers. Its time to stand up to defend those sacred rights.

Aaron and Melissa Klein were penalized $135,000 for declining to create a custom cake to celebrate a same-sex wedding. They were defended in court by the Liberty Institute.

Today, we can help the Liberty Institute multiply a $100,000 Challenge Grant to reach their Fiscal Year-End $1.4 million goal.

High school football coach Joe Kennedy was fired for silent prayer. They are defending him in federal court this month!

Your gift will help win legal battles such as these.

Educator Toni Richardson was ordered to never tell coworkers Ill pray for you -- even if they attend her church!

Your gift will help their attorneys defeat dangerous attacks on religious liberty that could transform America into a nation stripped of our religious freedom.

Former nurse Mary Anne Sause was ordered to stop praying in her own home. And Chabad, of Irvine, was sued to stop traditional Orthodox Jewish religious ceremonies.

A Christian high school football team was banned from praying over a public address system even though their opponent was another Christian school who also wanted to pray.

Insight for Living Ministries (Pastor Chuck Swindoll) was ordered by the government to participate in health insurance that facilitates abortion -- or pay fines that would cripple their outreach.

Similar cases across America will determine the future of religious freedom for a generation. Read more at: libertyinstitute.org/2017_FYE_E?erid=76528411&trid=57a90555-53af-44af-8de1-6817c314b454

Mike Steffen,

Moline

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Letter: Stop non-believers from eroding religious freedom - Quad-Cities Online

I am throwing water on this concept that the President of the United States, well intended as he may be, will not realize something called the defense rebuild, said Roger Zakheim, former deputy assistant secretary at the U.S. Department of Defense.

If you are nostalgic about what President (Ronald) Reagan was able to accomplish back when he was rebuilding the military after the Carter years, dont hold your breath, Zakheim said. And we can get into the why and who is to blame, but it is not going to happen.

Speaking to members of the New Hampshire Aerospace and Defense Export Consortium on Thursday at the Manchester Country Club, Zakheim addressed President Donald Trumps military rebuild and its impact on the defense industrial complex.

Former President Barack Obamas defense budget was $585 billion, and Trumps proposal for defense spending is $603 billion, according to Zakheim, explaining former Secretary of Defense Robert Gates budget in 2012 was significantly higher at $661 billion, and the proposed $640 billion defense spending recommended now by Senate Armed Services Chairman John McCain (R-Ariz.) and House Armed Services Committee Chairman Mac Thornberry (R-Texas) is also significantly more.

With the Budget Control Act providing a $549 billion defense budget, Zakheim said Trumps proposal is basically keeping in pace with inflation. The debate right now in Congress is will we come at the Trump level, will we go up to the McCain/Thornberry level or will we have to just fund government at the Budget Control Act level, he said, adding it is quite possible that the freedom caucus and the fiscal hawks will demand spending at the BCA level or south of Trumps budget request.

Zakheim acknowledged that he was not a big fan of Trump as a candidate, but did favor his defense platform. During his candidacy, Trump said he would rebuild, modernize and increase the military, Zakheim said.

You will see in a few months now discussion of a shutdown or a continuing resolution because they cant come to agreement on spending levels, predicted Zakheim, a visiting fellow of the American Enterprise Institute and former deputy staff director of the U.S. House Armed Services Committee.

While defense spending has bottomed out, Zakheim said the debate now is how much it will grow. According to him, the military has been neglected for the past two decades so much that it cant fight todays challenges.

Zakheim said it does not have brigade combat teams ready to fight in a Russia scenario in Eastern Europe, nor does it have adequate munitions.

Where I look at these issues is from a national security standpoint, and the answer is, we are not OK, he told the group featuring trade representatives from Canada, the United Kingdom, Saudi Arabia, India, Poland and Mexico.

This is the first time since World War II, according to Zakheim, that the nation is facing three distinct threats to its national security and national defense China challenging the United States in Asia for trade, low-end terrorism threats in the Middle East and hybrid warfare posed by adversaries like Russia.

In this environment, no one knows what safe is, he said, adding the only certainty in politics is that everything is uncertain. Zakheim described the political environment in Washington as toxic, adding no one really understands the Trump factor.

The United States is the beneficiary of its own investment, he said, saying what the country spends on defense allows the nation to be a global security leader and the most prosperous in the world with the largest economy.

Zenagui Brahim, chairman of the New Hampshire Aerospace and Defense Export Consortium, said there are more than 350 manufacturing and defense companies in New Hampshire, all of which need to fully understand the state of the defense funding that could impact their businesses.

We keep hearing there will be more money for defense, but you never know, Brahim said. This is critical.

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Expert: 'Defense rebuild' not going to happen - The Union Leader

Hands over allotment letters of 10-marla plots to journalists

NOWSHERA: Chief Minister Pervez Khattak said on Saturday that the Pakistan Tehreek-e-Insaf (PTI)-led Khyber Pakhtunkhwa government believed in the freedom of the press.

Chief Minister Pervez Khattak was speaking at a ceremony at the Nowshera Press Club, where he distributed among the journalists the allotment letters of 10-marla plots at the Media Colony in Nowshera.

Pervez Khattak said that media was the fourth pillar of the state and it played an important role in bridging the gap between the government and people.

The PTI government attaches great value to media for continuity of democracy and rule of law, he added.

He said his government supported the press clubs across the province.

The chief minister said it was the top priorities of the government to provide relief to the common man. We have taken several steps to make the province financially self-reliant, he maintained.

Pervez Khattak said that his government believed in carrying out uplift projects across the province.

He said the government was spending Rs15 billion on the construction of embankments in Peshawar, Charsadda and Nowshera districts.

He said that work on flood prevention projects in Malakand, Hazara and Abbottabad would be launched shortly.

We have launched various projects to protect the flood-prone areas from floods, he added.

He said the provincial government had recommended to the federal government to include in its Annual Development Programme (ADP) the construction of Peshawar-Attock-Khairabad bridge and reconstruction of Nowshera-Mardan Grand Trunk Road.

He said that PTI didnt compromise on the rights of the province and increased the net hydel profit from Rs6 billion to Rs18 billion. He said Rs18 billion loans had been paid back to the federal government borrowed by the previous governments.

He said the provincial government had earmarked Rs126 billion for its Annual Development Programme.

He said his government had presented a balanced budget of Rs603 billion for the fiscal 2017-18, adding it increased the education budget by 18 percent compared to the previous budget allocations for this sector and earmarked Rs27.91 billion for education.

He said that Rs49.27 billion were allocated for health, Rs4.35 billion for agriculture and Rs720 million were earmarked for sports, culture and tourism.

Chief Minister Pervez Khattak said that reasonable allocations had been made for environment, forest, information and communications, public housing schemes and allowances for employees of government departments.

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PTI govt believes in press freedom: CM - The News International

Riverside County supervisors Monday, June 19, will go over the countys budget for the new fiscal year, which starts July 1.

Rather than read 847 pages full of numbers and accounting terms, you can get answers about the budget here.

Q: How big is it?

A: The fiscal 2017/18 budget calls for $5.5 billion in spending, down 2.2 percent from the current budget.

Its a lot, but keep in mind that Riverside County is geographically about the size of New Jersey. And it has more than 2 million people, making it one of the 10 most populated counties in America.

County government is one of the areas largest employers with about 20,000 workers. Its also counted on to provide police, firefighters and social services, run a hospital, prosecute crimes, run five jails, provide lawyers for indigent criminal defendants and a host of other duties, from code enforcement to managing airports and maintaining parks.

The five elected supervisors have direct control over only about $756 million, or roughly 14 percent, of the total budget. The rest is money primarily from Sacramento and Washington, D.C., designated for specific programs.

Q: Hows the county doing financially?

A: Its under pressure. Revenues are growing, but its not enough to keep up with a series of new, ongoing and inflexible costs.

Q: Like what?

A: In 2012, supervisors gave pay raises to unionized workers, who agreed to pay more toward their pensions and accept a lower tier of retirement benefits for new hires. That caused a ripple effect that boosted the pay of non-union employees.

Also, a lawsuit settlement requires the county to spend millions of dollars a year more on health

care for jail inmates. Staffing costs for the John J. Benoit Detention Center in Indio, which opens next year, could be $50 million annually.

The county dodged a bullet when Gov. Jerry Brown last month put more state dollars into In-Home Supportive Services, a program that pays for in-home care for indigent adults in need.

In January, state officials asked counties to shoulder a greater share of the programs costs. That led Riverside County to impose a 6.5 percent across-the-board budget cut and prompted talk of layoffs.

Q: About layoffs are there any in the new budget?

A: More than 30 county employees, mostly in code enforcement, received layoff notices in late May. No other layoffs are planned, said county spokesman Ray Smith.

The departments are using other cost-saving measures to achieve their budget targets, he said. In addition, it helps that the states IHSS decision had less of an effect than originally presented.

Q: If not layoffs, whats the county doing to save money?

A: The 6.5 percent cut stays in place, and officials want to keep a tight lid on future costs. Thats led to friction between the county and unions in ongoing collective bargaining talks.

Also, a private consulting firm, KPMG, is getting more than $20 million to transform county government. Besides finding ways to be more efficient, KPMG is tasked with changing the mindset of county leaders to embrace a performance-driven model that uses data to make decisions.

Q: Hows that going?

A: Among other findings, KPMG said $40 million can be saved by changing how the county buys goods and services, and replacing an old human resources computer system can save $30 million.

So far at least publicly the Board of Supervisors and District Attorney Mike Hestrin are on board with KPMGs plan. But Sheriff Stan Sniff is more skeptical.

Q: Why does the sheriffs opinion matter?

A: Unlike other department heads, Sniff and Hestrin are elected by voters. That means they cant be fired, and they can run their departments as they see fit, and they have the freedom to openly disagree with the Board of Supervisors, which holds the purse strings.

If Sniff and Hestrin say the budget hurts public safety, it puts the supervisors in a tough spot. They promised in their campaigns to protect the public, but theyve been warned that unchecked county spending is unsustainable and theres nothing left to cut from non-public safety areas.

Q: Whats Sniff saying about the budget?

A: In the past, hes asked for more than the county executive office the day-to-day administrator of county government wants to give him.

Sniff argues his costs go up because of raises the board gave to his deputies and staff. Sheriffs officials have said theyve lost a lot of people through attrition, causing a drop in deputies patrolling the countys unincorporated communities.

Reading the budget document, theres a $57 million gap between what the sheriff is asking for $712.3 million and what the executive office recommends $654.6 million.

Q: What happens this week?

A: On Monday, supervisors will hold a daylong series of hearings with department heads to get budget feedback. Sniff and Hestrin will be given the opportunity to speak.

The board is expected to approve the budget this week; theres a June 30 deadline. Later this year, supervisors will give final approval when theres a better idea of what moneys coming in.

The Riverside County Board of Supervisors have a special meeting to discuss the fiscal 2017-18 budget.

When: 8:30 a.m.,Monday, June 19.

Where: First-floor board hearing room, County Administrative Center, 4080 Lemon St. in Riverside.

The meeting is open to the public and there will be an opportunity for public comment, although it might not come until the afternoon.

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Will there be layoffs? We answer this and other questions about Riverside County's $5.5 billion budget - Press-Enterprise

Military rebuild is not in the cards says Roger Zakheim at aerospace and defense event

By Liisa Rajala

Published: June 16, 2017

Roger Zakheim

Despite rhetoric to the contrary, Roger Zakheim, former deputy assistant secretary at the U.S. Department of Defense, told attendees at the 3rd annual New Hampshire Aerospace and Defense Export Consortium that President Donald Trumps proposed increase in military spending is actually not much of an increase at all.

In fact, while the administration boasts that its budget request of $603 billion for defense spending is 10 percent above the $534 billionin the Budget Control Act of 2011 passed to cap federal spending in order to reduce the national debt Trumps request is only 3 percent above President Barack Obamas planned request if Democrats had stayed in power.

Which is not called a rebuild. Thats called keeping pace with inflation, said Zakheim on June 15 at the Manchester Country Club in Bedford.

Zakheim attributed the conservative number to the director of the Office of Management and Budget, Mick Mulvaney, who as a congressman was a member of the Freedom Caucus and often willing to cause a government shutdown to keep budget costs in check.

Mulvaney is symbolic of one piece of the puzzle holding Washington at a standstill, despite a Republican-led Congress and Republican administration. The other pieces are the noise on the left about the controversies, as Zakheim described the Russia investigations,the proposed wall, the travel ban, trade fights and the fact you really dont have anyone in government beyond cabinet secretaries.

In addition, the continuing problem of Congress being unable to reachan agreement over funding the government isputting pressure on realizing the Trump administrations goals, said Zakheim, who said Fiscal Year 2018 would be challenging due to the intense and toxic political environment.

Only now people in Washington are saying tax reform, well probably do that in 2018. Repeal and replace Obamacare, well well get it through the house, well see if the Senate can actually do that, said Zakheim.

And budget hawks are not willing to give in this time on budget talks in September, said Zakheim, which means the federal government could be operating on another continuing resolution for another three to six months.

But by then, the 2018 midterm primaries will be approaching.

What do midterms mean in Washington? Nobody sticks their neck out to make a deal when youre dealing with re-election, and 435 out of 535 people who sit in Congress will have primaries early in 2018, he explained, which means actions will have to be taken throughexecutive orders.

Sequestration

To explain how we arrived at this point, Zakheim showed slides looking back at the short-term history of defense allocations.

Before sequestration capping federal spending occurred in 2011, thenDefense Secretary Robert Gates had requested $661 billion per year to meet the Defense Departments needs.

When thenPresident Obama, thenHouse Speaker John Boehner and Senate Majority LeaderMitch McConnell agreed on the Budget Control Act of 2011, the intent was to cut defense and non-defense spending as well as reform entitlement programs.

As we know, the Social Security and Medicare piece didnt get touched and the defense piece, as a result, got doubly taxed, said Zakheim.

That resulted in a planned 10-year cut of over a $1 trillion in defense spending from 2011 to 2021.

As a candidate, Trump called for repealing budget control caps and rebuilding the military, through modernization and expanding its size.

That was pretty exciting. You basically have to go back to 1980 Ronald Reagan to find a candidate that committed toreinvesting in our national defense, said Zakheim. [But] if youre nostalgic about what President Regan was able to accomplish back when he was rebuilding the military after the Carter years, dont hold your breath. We can get into the whys and whos to blame, but its not going to happen, he said.

One reason is that within the Trump administrations planned budget is the extension of a defense budget capto 2027.

Through a congressional staffer, Zakheim was able to have his question about the line item posed to Defense Secretary James Mattis in a recent hearing. As Zakheim tells it, Mattis turned to his comptroller who frowned and said I think thats just a place holder.

Let's hope thats the case,saidZakheim.What I really think is happening is, where the president of the United States doesnt think there should be a Budget Control Act, the director of the Office of Management and Budget loves the Budget Control Act ...And that not only reflects the mindset, in my judgment, of Mick Mulvaney, but most of the congressional leadership sitting in Washington.

And its quite possible, saidZakheim, that the Freedom Caucus and the fiscal hawks will demand a spending levelsouth of the Trump budget request or atthe Budget Control Act level.

To put that into perspective, Trumps request of $603 billion for defenseis just 18 percent of total federal spending.

This year, well spend more money servicing our debt than we will on national defense, said Zakheim, who argued the only way to cut our debt is to reform Social Security and Medicare.

The upside is defense spending, in this administration, will not drop below the Budget Control Acts number of$534 billion.

The question is how much will we grow, said Zakheim.

And with five top threats facing the U.S. Russia, China, terrorism around the world, North Korea and the distinct challenges in Iran it also begs the question, how can the U.S. military combat 21st century threats when the Defense Department is already shuffling around its dollars to fill in the gaps?

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Former defense official paints grim picture of budget - New Hampshire Business Review

The thirty seven days from Memorial Day to Independence Day always draw a deep emotion for me. With a long family history of military service, I reflect and feel gratitude for those who have served this great nation and protected my freedoms. Freedoms I so many times take for granted. Their sacrifices allow us all to enjoy the freedoms and liberty in what I call the greatest country on earth. As we move towards Independence Day, I think of our founding fathers who provided the foundation which allows us to truly experience the freedom of religion, freedom of speech, the right to bear arms and so many more. To those who created Independence Day and to the men and women who have sacrificed their lives, along with those who currently serve in our armed forces, I give my heartfelt thank you!

As an elected official for the great state of North Dakota, it always gives me great pride to educate citizens on financial freedoms. Our forefathers said it best. "Work hard, play hard, save for a rainy day, and save for your maturing years." I often sit with our grown sons and talk about savings plans and options and what those plans should look like. We talk about cash on hand and what you need to sustain the day-to-day not to mention an ailing furnace. I always say, if you can, keep six months of cash on hand, money that you can easily get to without having to pay a penalty to access it. We discuss long-term savings the kind you don't touch or shouldn't touch like IRA's. And of course, we talk in great length about saving for a house and saving for retirement.

The state of North Dakota has experienced its own financial freedom. Our legislators and elected officials did a wonderful job creating ways to save money during prosperous times and made investments over the biennium that provided great returns. We were fortunate during the 2017 legislative session to have cash on hand and rainy day funds to lessen the financial burden with no tax increases.

However, today I have concerns about what the 2019-2021 biennium will look like. Our agriculture producers need rain and our oil and gas industry needs to sustain a price of $45-$50 per barrel. These are all factors that impact North Dakota's financial well-being. I will be watching these trends and continue to implement strategies that keep our state financially healthy. As always, I will keep you informed along the way. You will be hearing more about financial freedom in future articles.

As we look forward to Independence Day, my wish for you is a joyous celebration and a move towards financial freedom!

To learn more visit our website at http://www.nd.gov/treasurer to find financial literacy resources and detailed fiscal information regarding our State. Be sure and like us on Facebook or follow us on Twitter for current information relating to your dollars and our office.

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Kelly Schmidt: Respecting freedom - Pierce County Tribune

WASHINGTON House Republican leaders are negotiating a tax overhaul with their counterparts in the Senate and the White House, but another group of GOP lawmakers is signaling it too must be included in any deal.

House Freedom Caucus leaders are laying out their ideas for overhauling the tax code that, together with a related proposal for getting a budget deal, is likely to set them up for a fight with GOP leaders and tax writers.

Most of the four principles for a tax overhaul that Freedom Caucus Chairman Mark Meadows and three other caucus members unveiled at a Heritage Foundation event are not major deviations from the House GOP leaders framework though there are some notable differences.

But perhaps more striking were the ideas the Freedom Caucus members made clear they were not pushing a revenue neutral bill and the inclusion of the border adjustment tax, both linchpins of leaderships plan.

The caucus members also offered a wildcard idea of adding a welfare overhaul to the yet-unwritten reconciliation instructions for a tax rewrite, something they argue would perhaps convince them to accept a larger topline spending figure in the fiscal 2018 budget resolution.

Amid all of those ideas is an urgency to move quickly. We should have a real proposal that we start debating before we leave at the end of July, Meadows said. But if not, weve already taken a formal position: We believe that we need to stay in through August until we get it done.

Four principles

The North Carolina Republican suggested that lawmakers move the ball closer to that goal post by agreeing to four principles within the next four weeks.

The Freedom Caucuss four principles for a tax overhaul are:

Lower the tax rate for both corporations and small businesses to 20 percent

Accelerate the time frame under which businesses can write off certain expenses

Allow for a voluntary repatriation of offshore earnings over 20 months at a reduced tax rate of 8 percent

Double the standard deduction for individuals.

House Republican leaders A Better Way plan does call for lowering the current 35 percent corporate tax rate to 20 percent but proposes a 25 percent rate for small business organized as passthrough companies, which are taxed at individual rates that currently top out at 39.6 percent.

Leaderships plan would also allow businesses to write off the full cost of certain investments in the tax year that theyre incurred something the Freedom Caucus is open to with modifications to account for businesses that borrow money for investing rather than use cash and nearly double the standard deduction for individuals.

The biggest gap between the two proposals is on repatriation of offshore earnings.

GOP leaders plan would institute a mandatory tax on existing offshore earnings of 8.75 percent for cash assets and 3.5 percent for nonliquid assets. Unlike the Freedom Caucus proposal, which seeks to incentivize companies to bring offshore earnings back to the U.S. in exchange for a lower tax rate, leaderships plan would require U.S.-based companies to pay the repatriation tax regardless of whether they bring their offshore money home.

While the differences between the Freedom Caucuss four principles and leaderships framework are not minor, they could be worked through. But the red line the caucus has drawn against the border adjustment tax is more problematic for House leadership.

There is not consensus for the border adjustment tax, Meadows said. The sooner we acknowledge that and get on with a plan that actually works and actually can build consensus, the better off well be.

The border adjustment tax, or BAT, is a proposal to tax imports instead of exports, reversing the way the United States taxes goods crossing its borders. House GOP leaders, namely Speaker Paul D. Ryan of Wisconsin and Ways and Means Chairman Kevin Brady of Texas, have pushed for the tax as a way to discourage U.S. companies from moving operations overseas and to raise roughly $1 trillion in revenue to partially offset an ambitious corporate tax rate cut. But the idea has faced steep opposition from within their own party Meadows and others have argued, that its politically unfeasible to pass.

I think its lost a lot of momentum, said Rep. Warren Davidson, a Freedom Caucus member. The Ohio Republican said he could actually live with the BAT as part of a larger tax overhaul but the problem is that leadership still has not offered a proposal on how to implement it.

Ryan and Brady have shown no interest in letting go of the BAT but say theyre open to better ideas for raising revenue and preventing tax base erosion, which could be triggered by a flood of U.S. taxpayers, primarily businesses, moving to lower tax jurisdictions.

Jim Jordans view

What is not in those principles is this concept of revenue neutrality, said Ohio Rep. Jim Jordan, a caucus member and former chairman of the group. Letting families keep more of their money is not a cost to government. It is a freedom.

Since Republicans are planning to use the budget reconciliation process to advance their tax bill, the measure must be deficit neutral for the tax overhaul to be considered permanent. GOP leaders say temporary tax cuts that would expire at the end of the 10-year budget window - like the George W. Bush tax cuts whose expiration led to the 2012-2013 fiscal cliff - is not an option, but the Freedom Caucus isnt ruling that out.

Some of the tax cuts could be temporary so you dont need to get full deficit neutral, but were hoping to get close to that, Jordan said.

An idea that Jordan proposed that could help achieve the needed savings is adding a welfare overhaul to the reconciliation instructions for the tax bill. The Freedom Caucus is looking at taking an official position, suggesting that as a possible trade-off to them supporting a budget deal with larger topline spending number for fiscal 2018, Jordan said.

Right now a budget cannot pass in the House of Representatives, he said.

Absent a budget deal along those lines, House Republicans will struggle - like they did last year - to pass a budget resolution, Jordan said. House Republicans need to pass and reconcile a budget resolution with the Senate to execute the GOPs procedural strategy for advancing a tax overhaul. An agreement on the topline spending number is also needed for appropriators to begin moving fiscal 2018 spending bills.

If someone can come up with a better idea than the one were putting forward . were all ears, Jordan said. But no one can. So we think thats the key in the short term to do all the things we promised the American people.

Meadows said Jordans welfare overhaul plan would result in roughly $400 billion in savings, and with that and the tax ideas the Freedom Caucus is discussing, a deficit neutral reconciliation bill is possible. It should get us there, he said, noting, though, that temporary tax cuts represent a fallback plan.

GOP problem

The divisions among House Republicans about how to approach a tax overhaul are complicated by the fact that GOP leaders are striving to come up with a single, unified plan that also has the support of the Senate and White House. The gaps among the Republican power structures are fairly wide.

Right now on tax reform theres disagreement in the House, theres disagreement in the Senate, theres disagreement between the House and the Senate and theres disagreement with the administration, Texas Sen. Ted Cruz said at a Faith and Freedom Coalition conference in Washington. Other than that, we are all on the same page.

Letting families keep more of their money is not a cost to government. It is a freedom. Jim Jordan AP Photo

http://limaohio.com/wp-content/uploads/2017/06/web1_Jordan-Jim-AtHearing-2.jpgLetting families keep more of their money is not a cost to government. It is a freedom. Jim Jordan AP Photo

Goup pushes 4 principles in tax overhaul

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Freedom Caucus sets up battle with leadership over taxes - Lima Ohio