In deficit reduction talks, Senate Democrats derail and insist on increasing spending & taxes.


In today’s deficit cutting talks with Vice President Joe Biden; Democrat representatives stated that they felt the way to fix the problem was to increase spending and subsequently increase taxes.

Does anybody else see the conundrum that the Republicans are having to deal with?

We are $14.3 trillion+ in debt that needs to be agreed upon by August 2 (less than a month away) or at we risk defaulting on our debts.

If we do not make some serious cutting, start creating jobs and selling more exports; we are going to have a serious problem balancing the budget.

It is at this point that we need to be CUTTING; not INCREASING spending.

Is Vice President Biden and his debt group really that oblivious to the will of the American people?

Are the Democrats really surprised that the Republicans walked out of deficit cutting talks?

How can you argue a concept of cutting spending when the other side wants to spend more money?

Its a waste of time and unbelievable that the Democrats would adopt this line of thought.

Even though, it is not technically “his job” Obama, as President, should get involved considering the severity of our situation.

According to my sources on Capitol Hill; the only involvement Obama is doing is “looking for a meeting room”.  Literally.

The game plan was to have deficit reduction talks completed by the end of June. That’s only 7 days from now.

Senator John Cornyn of Texas, a Republican leader, also agrees that President Obama needs to get directly involved.

“It’s clear that these were non-serious negotiations and the only time it’s going to get serious is when the president of the United States becomes thoroughly engaged,” Cornyn said. “There’s not going to be a deal without his direct involvement.”

Flashback to the 2011 Compromised Budget talk delays. The only time serious progress was made was when Obama was involved so he could push the Democrats to be reasonable.  It is obvious that Obama is needed in this case.

Deja vu seem to fall upon my ears as I heard Kentucky Republican Mitch McConnell ask of Obama once again, “Where is he?” What does he propose? What is he willing to do to reduce the debt and to avoid this crisis that’s building on his watch? He’s the one in charge. I think most Americans think it’s about time he started acting like it.”

Raising the Debt Ceiling and increasing spending; Contradictory?

It is imperative that we cut trillions of dollars from our $14.3+ trillion debt and NOT increase spending.

You cannot spend your way out of a recession.

The Democrats fail to understand the generic cutting mindset as the “Democrats continue to insist that any deal must include tax increases,” said Eric Cantor, a Virginia Republican, in a statement announcing his decision. “There is not support in the House for a tax increase.”

The tax issue must be resolved before discussions can continue,” Cantor said. “Given this impasse, I will not be participating in today’s meeting and I believe it is time for the president to speak clearly and resolve the tax issue. Once the tax issue is resolved, we have a blueprint to move forward to trillions of spending cuts and binding mechanisms to change the way things are done around here.”

Note to the Democrats: Your constituents want you to cut spending.  You have to come to the deficit reduction talks in the mindset of “what are we cutting, today?” because if you are looking at things from an increased spending point of view; the discussion is going to be pointless and a waste of everyone’s time.

It is imperative that you understand that we cannot spend, and most certainly cannot freeze, our way out of a recession. We have less than one week until Congress is needed to make a decision on whether or not we are going to raise the debt ceiling and to determine if the US will start defaulting on our debtors. Our SP index rating already dropped to negative; let’s not fall even further into the economic hole.

Note to the Republicans:  Eliminating the subsidies and tax breaks for big oil is NOT increasing taxes. If we eliminated a lot of the money we give big oil (they are doing just fine on their own); we could give that money back to the people and small businesses through price relief at the gas pump and help jumpstart our economy.

Also, please not give in to a  payroll tax deduction as that directly drains the Social Security funds and we are already short on Social Security funds as it is.

Copyright (c) June 23, 2011. All rights reserved.

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2012 Presidential Contender hopeful, Newt Gringrich, wants to extend Bush tax cuts.



House Republicans should pass a permanent extension of the George W. Bush-era tax cuts this year, former Speaker Newt Gingrich said this week, keeping the issue of taxes at the forefront of the 2012 presidential campaign.

In a thinly veiled pitch toward potential Republican presidential primary voters, Gingrich pushed GOP lawmakers to act to extend the cuts beyond 2012.

“Tthis year the House Republican majority should pass a permanent extension of the Bush tax cuts,” Gingrich wrote in an op ed in The Wall Street Journal. 

Congress acted last December on a compromise proposal by President Obama that resulted in a 2 yr extension, across all income brackets, of the expiring 2001 tax cuts passed by President Bush.

The tax-cut deal installed by lawmakers in December would expire at the end of 2012, putting the debate over the Bush tax cuts squarely before voters as they decide between Obama and his eventual Republican competitor.

Democrats, led by Obama, argue that extending the tax cuts permanently would blow a huge hole in the deficit — to the tune of over $700 billion in the next decade for extending the tax cuts for top earners alone.

Republicans argue that during this recessive time, it would be detrimental to our economy to let the tax cuts expire which would then subsequently add a tax onto the average American who is struggling to make ends meet.

Yet the compromise of extending the Bush tax cuts for 2  years as long as a $56 billion extension in unemployment benefits (which was not offset by other cuts) is splitting many of the possible Republican presidential candidates, some of whom urged Republicans in Congress to vote down the plan precisely because it only extended tax cuts for two years and because it was attached to a $56 billion extension in unemployment benefits, spending for which was not offset by other cuts.

Gingrich at the time said he supported the deal, and was joined in his support by former Arkansas Gov. Mike Huckabee. They, like congressional GOP leaders, defended the deal as the best attainable option.

I predict that the Bush tax cuts extension will be at the forefront of the 2012 Presidential election and I know I will be watching  it closely as I would rather work on finding and eliminating abusive and wasteful procedures than take away  the tax cuts which have been proven to provide short term relief to many struggling families in a desperate time of need.

Copyright (c) March 16, 2011. All rights reserved.

Throwing the BS flag on Obama’s Superbowl Interview.


In an interview on Super Bowl Sunday, Fox News host Bill O’Reilly asked President Barack Obama to react to a Wall Street Journal editorial that accused Obama of being “a determined man of the left whose goal is to redistribute much larger levels of income across society.”

“Do you deny that you are a man who wants to redistribute wealth?” O’Reilly asked.

Obama first noted the conservatism of the Wall Street Journal‘s editorial page, then denied the charge “absolutely.”

“I didn’t raise taxes once. I lowered taxes over the last two years,” Obama said.

Whoa; Pump the breaks. Obama straight out lied.

Obama signed legislation raising taxes on cigarettes and other tobacco products in 2009 as well as 14 other taxes that were incorporated into his pet child, the health care law.

To find out more about the taxes incorporated into the the new health care law, please visit: https://theheartofamerica.wordpress.com/2011/01/20/read-my-lips-no-new-taxes/

It is true that Obama did not raise income taxes. However, if he would have had his way- he would have eliminated Bush’s tax cuts when they were set to expire last year.

If the tax breaks would have expired, then we would have been required to pay on those additional taxes which would essentially be a  tax increase.

Not to mention that with Obama’s proposed 2011 budget- he proposes broader unemployment taxes from businesses.

Obama’s proposal would attempt to replenish strained state unemployment-insurance trust funds by raising the amount of wages on which companies must pay unemployment taxes to $15,000, more than double the $7,000 in place since 1983.

The plan, which would take effect in 2014, could increase payroll taxes by as much as $100 billion over a decade, according to a person involved in its construction.

The plan is expected to be included in Mr. Obama’s budget proposal for fiscal 2012, to be released Monday.

While I understand and appreciate Obama’s attempt to help raise States provide jobless benefits, the fact still remains that this is yet another tax that Obama is pushing forth.

So, how can Obama state that he “never raised taxes?” Plain and simple, he cant. Anything mentioned to that sort is a flat out lie.

Unfortunately for President Obama, citizens are engaged in politics now a days and cross reference notes on recent undertakings of the Obama Administration and are not afraid to call him out for lying directly to the American People.

Dont worry, Mr. President-  We will remember all of your shenanigans and your pathetic attempt at insulting our intelligence come November 2012 and respond accordingly.

Copyright (c) February 9, 2011. All rights reserved.

Case in point: Eliminate big oil’s subsidies and royalties and reap the rewards.


With unleaded gas prices rising into the $4/gallon range; it is no wonder that Exxon and other oil companies are unleashing record 1st Quarter profits.

A Natural Resources staff review of recent earnings announcements by the five largest oil companies operating in the United States shows that this industry has generated outsized profits that undermine the necessity for continued tax subsidies and royalty-free drilling access.

Hugely profitable multi-national oil and gas companies are set to enjoy $53 billion in royalty-free drilling over the next 25 years and $36.5 billion in taxpayer subsidies over the next decade.

In his State of the Union speech, President Obama called for an end to these tax subsidies:

“I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. I don’t know if you’ve noticed, but they’re doing just fine on their own. So instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.”

Tax Breaks and Royalty Relief Ridiculousness

The President’s remarks have focused renewed attention on the impact that outdated legacies of the tax code and failed royalty-relief policies have on our current energy system.

Most oil and gas subsidies have been on the books in the United States for many decades. They represent an era when oil and gas exploration was in its infancy, and when resources were plentiful but remained largely unexplored.

Intangible costs of exploration generally include wages, costs of using machinery for drilling, and the costs of materials like drilling muds, chemicals, and fuel that get used up during the process of building wells.

Since 1968, this program has cost the U.S. Treasury $78 billion. Ending this tax subsidy would raise nearly $8 billion over the next decade.

Tax breaks that allow oil and gas companies to use the “percentage depletion allowance” were first put in place in 1926. Rather than writing off the actual costs of the property over its useful life, like most businesses must do, some oil companies get to simply deduct a flat percentage of gross revenues.

Under this method of accounting, total deductions regularly exceed the actual capital invested to acquire and develop the reserve.

When this program was started, stimulating massive exploration around the geologically unknown United States was so important that oil and gas companies were allowed—through this preferable tax treatment—to recover amounts in excess of their investment.

Since 1968, this program has cost the U.S. Treasury $111 billion. Ending this tax subsidy would raise more than $10 billion over the next decade.

Subsidies to Oil Companies Do Not Benefit the Public

The oil and gas industry argues that the tax breaks they enjoy encourage them to develop more oil and gas deposits, which lead to increased oil and gas supplies and lower energy prices.

The Natural Resources Committee Staff’s analysis suggests otherwise for two primary reasons:

1. Depending on the reservoir and the physical characteristics of the hydrocarbon, the cost of producing oil can range from as little as $2 per barrel in the Middle East to more than $15 per barrel in some fields in the United States, according to the Energy Information Administration.

The profit incentive to explore and produce new supplies for this lucrative market dwarfs any marginal benefit that existing federal tax breaks for oil exploration or production could provide.

As President George W. Bush said in 2005, “With oil at more than $50 a barrel, by the way, energy companies do not need taxpayers’-funded incentives to explore for oil and gas.”  Now that oil prices have risen to $100 barrel, the same logic still applies.

2. In recent years, higher oil company profits have increasingly been redirected into dividends and stock purchases, not exploration. Among the Big 5 oil companies, less than 10 percent of profits are reinvested into exploration of new oil deposits.

Net profits directed towards dividends and stock repurchases for the Big 5 oil companies were 58 percent in 2005, 73 percent in 2006, and 72 percent in 2007, 71 percent in 2008, and 89 percent in 2009.

Dumping profits into stock buybacks drives up share prices for remaining shareholders by concentrating ownership, and, in the process, acts to increase the values of stock options for executives.

It also reduces the amount of capital available for new exploration and improvements in drilling safety. The current tax treatment does not incentivize oil and gas companies to diversify into clean energy alternatives.

While some oil companies tout their commitment to research into alternative energy resources, a review of actual corporate investments in research and development (R&D) reveal a business model which appears wildly averse to innovation.

While companies in high-tech sectors like pharmaceuticals and semiconductors regularly invest 15-18 percent of their revenues in R&D, U.S. energy companies invest less than one quarter of one percent of revenues in R&D.

Repealing the oil industry’s tax subsidies will not impact gas prices for American consumers. Oil, the main input and primary cost driver of gasoline, is traded in a global market and oil companies get paid the going market price for the oil they produce.

On the oil market, there is no difference between an unsubsidized barrel of oil that costs $10 to produce and a subsidized barrel that costs $9.50 to produce. Each barrel will sell for the same price, almost $100 on the oil market. Oil companies that receive tax subsidies pass on that benefit to their shareholders, not to consumers.

Reduce the Foreign Dependency

American consumers are price takers when it comes to buying oil. When oil markets react negatively to unfavorable political events or when OPEC decides to cut production, American consumers must simply pay more at the pump.

The world has little spare production capacity that can be tapped during supply crunches, and what does exist lies almost entirely in Saudi Arabia and other OPEC countries.

Expanded domestic drilling will not significantly change that dynamic, as the United States lacks sufficient oil reserves and production capacity to offset OPEC production decisions.

Put the Oil Profits Back into the Pockets of the Taxpayer

ExxonMobil, BP, Chevron, Shell, Conoco Phillips and many other companies are now drilling for free on public land offshore and will continue to do so for the life of these leases no matter how high oil prices climb.

The Government Accountability Office (GAO) has estimated that the federal government and American taxpayers stand to lose up to $53 billion in foregone royalties over the next 25 years.

Ranking Member Ed Markey has authored legislation that would recover these royalties rightfully owed to the American people.

The House has repeatedly passed Rep. Markey’s legislation, including as part of H.R. 3534 that passed the House on July 30, 2010, but the Senate has never taken action.

Oil Profits lay with the Shareholders, not Big Oil operations.

The oil companies and their representatives frequently suggest that their high publicly reported profit numbers are misunderstood because only 7 cents of every dollar in sales is profit, which is similar to other American industries.

However, intensely competitive industries like retail and food service are lucky to earn 1 or 2 cents of profit per sales dollar. The real measure of the oil industry’s financial health is how much profit they generate with the money shareholders have invested. Over the last two years, the Big 5’s average annual return on equity was 21 percent. The U.S. Treasury bond, in contrast, yielded about 3 percent during this same period.

The oil and gas industry’s very high profitability has provided a financial a bonanza for shareholders over the last decade. A $10,000 investment in the Big 5 in 1990 is worth $100,000 today. In contrast, the same investment in an S&P 500 index fund is now worth $60,000. Big difference.

The oil and gas industry is a mature and highly profitable sector that is no longer in need of generous tax breaks or royalty-free drilling access. The $36.5 billion in subsidies that the industry is set to receive over the next decade will not help consumers with rising energy prices.

These subsidies will not strengthen America’s energy independence or help to develop alternatives to oil. Allowing hundreds of billions of dollars to go to an industry who is clearly not in need of the subsidies is a fiscal misstep that must be corrected.

Redirecting a portion of the money saved from the subsidies and royalties into alternative energy while using the rest to pay down our monstrous national debt, would be the best way to start addressing the the US’s financial and environmental concerns.

Copyright (c) February 5, 2011. All rights reserved.

PREDICTION: Value Added Tax coming to a city near you.


Talk about tax reform: A Senate Budget Committee hearing on Wednesday featured a fair amount of discussion about the merits of a value added tax.

Lawrence Lindsey, a former chief economic adviser to President George W. Bush, said the current income tax system is too complicated and noted that China’s value added tax accounted for a third of its revenues.

“So having an income-based system, while most other countries in the world, including in Europe and Canada, are moving away from an income-based system and toward value added taxation or indirect taxation puts us at a competitive disadvantage,” Lindsey said.

“All roads are going to lead to a VAT,” Lindsey said later in the hearing.

A value added tax, generally speaking, is charged on goods at every stage of production. The VAT has been discussed in recent years as a potential weapon against the deficit, including in a 2009 Washington Post article where Sen. Kent Conrad, the Budget Committee chairman, said it was something that needed to be on the table.

Tax reform is an area that has been discussed as a possible area of bipartisan cooperation in the particular Congress. The witnesses at Wednesday’s hearing – who also included Eugene Steuerle of the Urban Institue; Donald Marron of the Urban-Brookings Tax Policy Center; and Rosanne Altshuler of Rutgers University – all said the American tax system was in dire need of fixing.

Many people are not talking about the VAT but I feel that it is a real possibility. The government is going to need our money to fund health care and this is the only viable way for them to do it.

Whether they are argue that it is better than the current system, is irrelevant.  I predict the VAT tax WILL be pushed on us and even if it is coated with sugar- it will still be a bitter pill to swallow.

Copyright (c) February 3, 2011. All rights reserved.