Gavin Newsom’s California Has a $68 Billion Budget Deficit

California’s budget deficit has nearly tripled since last year, culminating in the largest revenue discrepancy the state has ever seen, according to a report from the state’s Legislative Analyst’s Office (LAO).

The state’s budget deficit ballooned to $68 billion this year after recording a deficit of $24 billion last year, owing to an unprecedented tax-revenue shortfall, according to the LAO report. The deficit is the highest in dollar terms that the state has ever seen, but not as a percentage of overall spending, according to Politico.

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Commentary: Oh Great, Another ‘Debt Commission’

Recognizing the precarious plight of the nation’s fiscal situation, newly installed House Speaker Mike Johnson has called for a bi-partisan commission to study the nation’s debt. Everyone involved in federal fiscal policy for a length of time surely responded with some variation on, “Good grief, Charlie Brown.” Congress has formed and ignored innumerable such groups over many decades.

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U.S. Senator Bill Hagerty Blasts Continuing Resolution for Failure to Include ‘Serious Border-Security Measures’

Sen. Bill Hagerty (R-TN) blasted the passage of the 45 day Continuing Resolution that included no spending cuts and failed to properly increase funding for U.S. border security.

The bill passed the House on Saturday in a 335 to 91 vote, then passed the Senate in an 88 to 9 vote, and was signed into law by President Biden just hours before the midnight deadline on Saturday, when funding for the 2022-2023 federal fiscal year. The bill continues funding the government at 2022-2023 levels until November 15.

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Commentary: House Freedom Caucus Wants To Do Something About Out of Control Spending

On Monday, the House Freedom Caucus (HFC) struck a blow in the fight for fiscal displume. In a 431-word statement, the conservative House Republicans put Official Washington on notice that when Congress returned in September and took up the seemingly annual short-term spending bill known as a “Continuing Resolution,” the HFC would not vote to fund business as usual. Instead, HFC members would only support a short-term spending bill to keep the government open if it also included several of their key policy priorities – policy priorities that would represent significant shifts in key areas of government policy.

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Commentary: Any Debt ‘Default’ Will Be Biden’s Choice

There’s enough revenue to pay interest on the debt even if the $31.4 trillion debt ceiling is reached.

Meaning, if the U.S. defaults on the debt on June 1, it will be because President Joe Biden chose not to make principal and interest payments on U.S. Treasuries out of existing revenue, for which there is more than ample revenues to service and refinance up to the current debt ceiling limit, $31.4 trillion.

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Proposal Uses Pennsylvania Rainy Day Fund To Pay Down Unfunded Pension Liability

A Pennsylvania lawmaker wants to use the state’s Rainy Day Fund to pay down the state’s unfunded pension liabilities that total more than $60 billion.

State Representative Joe Ciresi (D-Royersford) is asking colleagues to cosponsor a bill to move $670 million from the fund to the Public School Employees’ Retirement System (PSERS) and $330 million to the State Employees’ Retirement System (SERS). A memorandum describing his legislation avers it could save local real-estate taxpayers $2.1 billion over the next 20 years. 

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Commentary: The Interest Alone on the National Debt Will Hit $1 Trillion in 2024 as Reserve Currency Status Is Questioned

Gross interest owed on the $31.4 trillion national debt — that is, interest owed on both the $24.9 trillion publicly traded debt and the $6.7 trillion debt in the Social Security, Medicare and other trust funds — will reach a gargantuan $1 trillion in 2024 for the first time in American history, according to the latest data gathered by the White House Office of Management and budget.

To put that into perspective, that is more than is spent on national defense related spending, currently $814 billion.

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Pennsylvania Gov. Shapiro Would Deplete Rainy Day Fund While State Expert Suggests It Should Be Larger

Pennsylvania’s official fiscal watchdog this week told state senators that the commonwealth’s Rainy Day Fund contains less money than many experts recommend — and that’s before Democratic Governor Josh Shapiro’s long-term fiscal plan burns through it. 

The state Treasury currently keeps $5.7 billion in the Rainy Day Fund to help public institutions endure revenue losses resulting from economic downturns. According the the department’s own calculations, current reserves in this account could sustain General Fund expenditures for just under 43 days. 

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House Speaker Fight Foreshadows Larger Debt Ceiling Battle on the Horizon for Republicans

The gridlock that paralyzed House Republicans over the past week in their quest to elect a new Speaker could be a foretaste of more to come, with party moderates and conservatives set to tangle in the months to come over raising the debt ceiling and reining in reckless government spending.

Although newly elected Speaker of the House Kevin McCarthy ultimately prevailed in his bid for the office over a small but determined band of House Freedom Caucus members, his slim GOP majority in the House will be vulnerable if and when conservatives rebel again down the road, as some are predicting, in an effort to reassert debt reduction as a top priority for the party.

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Commentary: Don’t Give an Inch on the Debt Ceiling

The dust has barely settled from the contentious midterms, and the battle lines are already being drawn for the next legislative fight in Washington: the debt ceiling. With the nation at unprecedented levels of indebtedness, the choice in this fight is a stark one: a path toward stability or fiscal Armageddon.

If that sounds hyperbolic, consider the following facts about America’s finances.

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City of Dearborn Facing $22 Million Deficit

The city of Dearborn plans to restructure health care benefits and cut spending as it faces a $22 million deficit equivalent to firing 349 full-time employees.

The Metro Detroit city cited rising costs for the deficit, including $3.2 million in wage and benefit increases, $2.7 million for deferred fleet maintenance, and $1.2 million for increased fuel and other supplies.

However, budget details note the city has consistently spent more than it collected in revenue.

Dearborn Mayor Abdullah Hammoud told residents at a public meeting last week: “You are not going to lose benefits,” Fox2 reported. “At no point in time will the rug ever be pulled away from them, we never want to do that.”

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Arizona Rep. Schweikert’s House Speech on Fraud, Spending, and Running Out of Money Goes Viral

Rep. David Schweikert (R-06-AZ), known as the wonky numbers member of Congress, gave a speech on the House floor a few days ago about runaway spending in Congress that has gone viral with over 1.2 million views. It’s on Social Security and Medicare running out of money and how the U.S. is headed for a dystopian future if it’s not fixed. He addressed several myths and offered solutions.

He began saying he’s about to say some things most people don’t want to hear, “We call it math.” The biggest threat over the next couple decades facing the country is demographics. “Getting older isn’t Democrat or Republican, it’s going to happen to everyone.” But he says he’s been booed for telling people the truth. “You don’t raise money telling people the truth about what’s going on.” Referring to Congress, he said, “We live in a financial fantasy world in this place … there’s a fraud around here.” 

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Commentary: The Biden Inflation Tax, Made Clear in One Chart

Joe Biden walking with "American Jobs Plan" sign

What is all this “Biden inflation tax” talk really about? What is the actual effect of inflation on the lives of real people? 

Well, below is a chart that compares yearly wage and inflation rates for each month from 2017 through July of this year using Bureau of Labor Statistics data. Wage rates are in blue and inflation (as measured by the consumer price index) is in red. When blue is on top, as it was during the entire Trump administration, workers’ wages are beating inflation and their standards of living are improving. When red is on top, they’re not.

While President Biden claims that it is “indisputable” that his jobs plan “is working,” this chart unequivocally shows that it is not, at least not for American workers. Rather, inflation is surging, more than wiping out any wage gains those workers might have experienced.

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As Infrastructure Bill Heads Toward Passage, Tennessee’s Blackburn and Hagerty Sound Alarm on Debt

Bill Hagerty and Marsha Blackburn

As U.S. Senate leaders expect to pass a $1.2 trillion infrastructure bill Tuesday morning, both of Tennessee’s senators, Marsha Blackburn (R) and Bill Hagerty (R) are vehemently opposing the legislation, alarmed by its potential to worsen the national debt.

Senate Democrats have expressed their intention to use a process called reconciliation to avoid any possible filibuster, thus allowing themselves expand the measure to encompass $3.5 trillion in federal spending.

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Tennessee Sen. Hagerty Prevents Hastened Passage of Infrastructure Bill

Tennessee Senator Bill Hagerty (R) on Thursday night halted a move by Senate Majority Leader Chuck Schumer to expedite advancement of a $1.2 trillion infrastructure bill. 

The spending package is not dead yet, but it will not have the accelerated path to passage it would have enjoyed had all 100 senators consented to quickly moving through over a dozen amendment votes Thursday evening and sending the bill to the House of Representatives. 

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The Congressional Budget Office Says the Bipartisan Infrastructure Bill Will Increase Deficits by $256 Billion over 10 Years

The Congressional Budget Office estimated Thursday that the bipartisan Senate infrastructure bill will add $256 billion to the deficit over the next decade, undercutting its backers’ claims the spending had been offset.

In FY2020, the deficit hit a record $3.1 trillion. So far in FY2021, the deficit is $2.2 trillion. The national debt is climbing to $29 trillion for the first time in U.S. history.

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Biden’s ‘American Jobs’ Plan Could Cost Taxpayers about $666,000 per Job Created

President Joe Biden and VP Kamala Harris

President Joe Biden’s proposed $2 trillion American Jobs Plan could end up costing taxpayers more than $666,666 per job created.

The Washington Post gave Biden “two Pinocchios” for saying the American Jobs Plan, his infrastructure and jobs proposal, will create 19 million jobs. Both Biden and his Transportation Secretary Pete Buttigieg have made the 19 million jobs claim. The source of the statement is a Moody’s analysis, which CNN pointed out had estimated the U.S. economy would add about “16.3 million jobs over the same period if the infrastructure proposal does not get passed.”

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CBO Says Budget Deficit Will Hit $2.3 Trillion in 2021

The U.S. budget deficit will be larger than expected because of the $900 billion stimulus bill passed in December, a whopping  $448 billion larger than was projected in September, the Congressional Budget Office said Thursday.

According to Breitbart, the CBO forecasts that the federal government will borrow $2.26 trillion this year making it the second-largest deficit since World War II. Last year’s $3.1 trillion was the biggest in absolute numbers and also the largest as a share of gross domestic product.

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Budget Deficit Spiked in January, CBO Report Finds

The federal budget deficit grew a whopping 400% in one year as the pandemic caused spending to skyrocket, the Congressional Budget Office said in a report Tuesday.

The estimated January federal budget deficit was $165 billion, $132 billion more than the deficit in January 2020, according to a Congressional Budget Office (CBO) report released Tuesday. The federal budget in the first four months of fiscal year 2021, which started in October, was $738 billion, an 89% jump compared to the same period last year.

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U.S. Deficit 60.7 Percent Higher Than This Time Last Year

The federal deficit in the first three months of the budget year is 60.7 percent higher than over the same time period as last year, a record-breaking $572.9 billion.

The deficit surged as a result of Congressional spending of $3.5 trillion in 2020 in response to the coronavirus, although critics note that spending on pork barrel programs that had nothing to do with the virus increased and also drove the deficit. At the same time, revenue declined because of ongoing state lockdowns.

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Awash in Red Ink: U.S. Posts Record $3.1T 2020 Budget Deficit

The federal budget deficit hit an all-time high of $3.1 trillion in the 2020 budget year, more than double the previous record, as the coronavirus pandemic shrank revenues and sent spending soaring.

The Trump administration reported Friday that the deficit for the budget year that ended on Sept. 30 was three times the size of last year’s deficit of $984 billion. It was also $2 trillion higher than the administration had estimated in February, before the pandemic hit.

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Commentary: Deficits Are Secondary to What You’re Paying For

US Capitol

“I am not worried about the deficit,” Ronald Reagan famously said. “It is big enough to take care of itself.”

If you pay attention to the libertarian purists, President Reagan earns mixed reviews on his economic policies. After all, in 1983, the federal budget deficit exceeded 6 percent of GDP. But Reagan was untroubled by federal budget deficits for at least two reasons, and in both cases he has been vindicated by history.

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Blackburn Votes No as Budget-Busting Deal Pass in the Senate

  U.S. Sen. Marsha Blackburn (R-TN) released a statement after her vote against the massive Bipartisan Budget Agreement that the Senate approved. “Governance requires tough choices, and if everything is a priority then nothing is a priority. Our priority should be ensuring our men and women in uniform have the resources they need to defend U.S. interests, our allies, and freedom. Holding those resources hostage to bloated, inefficient and wasteful federal spending is shameful and inappropriate. “In 2010, then-Chairman of the Joint Chiefs of Staff, Admiral Mike Mullen, said, ‘the most significant threat to our national security is our debt.’ It is time Congress takes this threat seriously. “We have a responsibility to our children and grandchildren to clean up this fiscal mess. I cannot in good conscience support legislation that funds the government at the expense of adding to our national debt,” Blackburn concluded. The Senate approved a massive two-year budget that raises spending $320 billion over current levels and lifts the debt ceiling for two years, Politico said, putting an end to a possible government shutdown. The budget was worked out in a compromise with Democratic House Speaker Nancy Pelosi. The vote was 67-28, with a majority of…

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In FY2018, the Deficit Increased – But Not Because of Tax Cuts

Trump-captial-spending-money

by Robert Romano   The numbers for the end of Fiscal Year 2018 are in and they aren’t pretty for fiscal hawks, as the budget deficit increased by an eye-popping $113 billion to $779 billion. But it had nothing to do with tax cuts. Tax receipts rose by $14 billion. All of it was because spending increased, and more than half of it was because gross interest owed on the national debt spiked by $65 billion to $521.5 billion. That bit is unsurprising, as 10-year treasuries interest rates have jumped from 2.2 percent in Sept. 2017 to 3.1 percent today. No wonder President Donald Trump thinks the Federal Reserve is crazy for hiking interest rates. With $21 trillion in debt, for every percentage point interest rates increase, that’s another $210 billion U.S. taxpayers will owe on the debt long-term. The other half of the deficit increase was a jump in spending that was already baked into the cake, largely in areas like Social Security, Medicare and defense spending. What’s amazing is that Social Security and Medicare spending have not been growing faster, considering how rapidly the population 65 years old and older has been expanding, but inflation was much lower…

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Deceptive Tricks Congress Uses to Drive Spending Higher

US Capitol

by Justin Bogie   Congress is up to its old tricks again, trying to pass another massive spending bill that uses gimmicks and tricks to push deficit spending even higher. And it thinks it can hoodwink President Donald Trump into signing it. Next week, the House is expected to vote on a combined fiscal year 2018 continuing resolution and a fiscal year 2019 spending bill for the departments of Defense, Labor, and Health and Human Services. The “cromnibus” bill would provide over $855 billion in funding for 2019, making up two-thirds of the total discretionary budget. The Senate passed the measure on Tuesday. If the House passes the Senate version and the president signs it into law, the government will stay open past Sept. 30. But at what cost? Earlier this year, Congress busted the budget and with a whopping spending deal that ran up nearly $300 billion in new debt. This bill would continue those spending levels. Take the so-called savings from changes in mandatory programs. The bill claims nearly $8 billion in savings from such changes. This is the most commonly used gimmick to increase discretionary spending. These “savings” are included in appropriations bills as a rescission of funds, meaning that unspent money…

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Commentary: Trump, Reagan, and Big Government

Ronald Reagan, Donald Trump

by Jeffery Rendall   As I strolled through the excellent and memory-provoking exhibits at the Ronald Reagan Presidential Library (in Simi Valley, CA) the other day I was struck by how similar President Donald Trump’s approach to today’s politics is to the way Ronald Reagan handled the subject a half century ago. For starters, Reagan and Trump’s optimistic pro-American emphasis is nearly identical. They both appealed to the patriotic propensities of country-loving individuals to rise up and be the best they possibly can be, so that everyone might achieve their goals and dreams as long as they’re willing to work hard, sacrifice and put stock in the best nation on the planet. At their core both Reagan and Trump mastered a populist message and used it to ignite a movement (unfortunately in their cases, very personality-centered). Both acknowledged America as the lead source of good in the world and championed American exceptionalism as their signature value. Both were extremely media savvy and understood mass communications and messaging to perfection. It almost appears as though Trump’s emulated Reagan’s political career and added his own personal touches to match the legendary effectiveness of the great communicator. Reagan didn’t have Twitter, of course, and…

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China’s US Trade Surplus Hits Record in June

Donald Trump, Xi Jinping

Reuters   China’s trade surplus with the United States swelled to a record in June as its overall exports grew at a solid pace, a result that could further inflame a bitter trade dispute with Washington. But signs exporters were rushing shipments before tariffs went into effect in the first week of July suggest the spike in the surplus was a one-off, with analysts expecting a less favorable trade balance for China in coming months as duties on exports start to bite. The data came after the administration of U.S. President Donald Trump raised the stakes in its trade row with China on Tuesday, saying it would slap 10 percent tariffs on an extra $200 billion worth of Chinese imports, including numerous consumer items. US-China trade surplus China’s trade surplus with the United States, which is at the center of the tariff tussle, widened to a record monthly high of $28.97 billion, up from $24.58 billion in May, according to Reuters calculations based on official data going back to 2008. For January-June China’s trade surplus with the United States rose to $133.76 billion, compared with about $117.51 billion in the same period last year. China’s exports to the United States…

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Commentary: Can Republicans Resist Mass Political Suicide, or Can They Take ‘Yes’ For an Answer?

By CHQ Staff   In its blind failure to recognize its dire peril, Capitol Hill’s Republican establishment is beginning to look a lot like the unfortunate souls at Jonestown who “drank the Kool-Aid” and committed mass suicide as the authorities closed in on the cult at its remote compound in Guyana. However, in a rare moment of lucidity, Senator Lindsey Graham spelled out for CNN’s Dana Bash that failure to pass tax reform means political death for the GOP establishment: For every Republican senator, the fate of the party is in our hands, as well as that of the economy. The economy needs a tax cut, and the Republican Party needs to deliver. Yet, with this imperative two Republican Senators have already come out in opposition to the bill and between six and eight others have expressed reservations about the House-passed plan. Sen Steve Daines (R-MT) joins Sen. Ron Johnson (R-WI) in publicly rejecting the current version of the bill. According to reporting by The Hill’s Naomi Jagoda, the two senators are pushing for lawmakers to do more to help “pass-through” businesses whose income is taxed through the individual tax code. Pass-throughs can take the form of sole proprietorships and…

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