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President Obama released his long awaited budget today (access all budget documents here).  Two months overdue and dead on arrival to a dysfunctional and divided Congress, the fiscal year (FY) 2014 budget is nothing more than a wish list of things that will never happen.  It is important to look through the budget and see where the President’s priorities are.  The budget proposes to spend $3.78 trillion in FY 2014.  That is $10.3 billion per day, $431 million per hour and $7.2 million per minute.  There are two fundamental problems with the budget, there is too much revenue asked for and not enough spending cuts.  Even though the budget calls for $24 billion in specific spending cuts, Defense spending alone will be $52 billion above the budget cap for next year saving some programs that should be eliminated such as the F-35 Joint Strike Fighter.  The President’s budget also wants to raise more revenue via tax increases on the wealthy and a new program to offer preschool to all 4-year-olds from low- and moderate-income families through higher tobacco taxes.

On February 14, 2013, the Taxpayers Protection Alliance joined with nine other taxpayer and free market groups to urge Congress to take common sense steps to reform federal supports for agriculture and save taxpayers at least $100 billion over the next decade.  The 113^th Congress has a prime opportunity to reduce the federal government’s meddling in the agricultural sector while helping to pay down our $16 trillion national debt. A number of common sense steps can be taken to create a more accountable, responsive, and cost-effective agricultural policy.  Despite the 2012 drought being one of the most severe in history, the agriculture industry “suffered” with near-record profits. Given today’s extraordinarily high commodity prices and farm profits and our monumental fiscal crisis, agriculture subsidies should be reduced by at least $100 billion over the next decade.  Federal supports for agriculture must be evaluated on their own merits. Though explosive growth in nutrition programs, particularly the Supplemental Nutrition Assistance Program (SNAP), must be addressed, that discussion must not be used to sidetrack necessary reforms to federal subsidies to agricultural businesses.  Congress must consider changing the law under which America operates in the absence of a new farm bill. The current fallback, the horribly outdated Agricultural Act of 1949, forces taxpayers to decide between Farm Bills with inadequate reforms or reverting to even more detrimental World War II-era law.

Tonight was President Obama’s fourth State of The Union (SOTU) address (2009 was technically just a speech before a joint session of Congress, not a State of The Union).  Just as in previous SOTU’s by President Obama, and former President’s, there is quite a lot to digest.  As you can imagine, the Taxpayers Protection Alliance (TPA) listened intently as the President talked more about his spending and taxation plans for the year.  An article in The Hill earlier today gave us a sneak preview of what to expect, “President Obama will use his State of the Union speech Tuesday to turn public opinion against automatic spending cuts and argue that some of the money to replace the cuts should instead come from higher taxes.  He will use the prime-time TV address to argue the economy would be damaged if $85 billion in automatic spending cuts were to go ahead on schedule on March 1, and will seek to set up Republicans to take the blame if they do.”  Well, President Obama kept true to his word.  He railed against the sequester (automatic spending cuts), asked for more revenue, and called for additional spending.  The trifecta of what not to do considering that the nation is $16.5 trillion in debt and the deficit this year will eclipse the $800 billion mark.

Today, the Taxpayers Protection Alliance joined with 7 other groups to urge Congress to pursue a minimum of $50 to $100 billion in annual Pentagon budget savings over the next decade—savings taxpayers were promised in the Budget Control Act of 2011.  The wars in Afghanistan and Iraq are ending, and our defense leaders admit the spending boom that more than doubled the Pentagon budget since the wars’ launch a decade ago must end.  Consensus exists among civilian and military experts that DOD can absorb at least sequestration levels of spending cuts while retaining a robust force to meet the nation’s security needs. The bottom line is that sequestration will not weaken our military and should only be the first step in realigning the Pentagon’s priorities.  Reforms such as eliminating outdated, Cold War-era weapons; cutting programs the military doesn’t even want; reforming military health care programs; and closing unneeded bases will not only save taxpayers billions, they will also make our nation stronger by helping safeguard our financial security.

In the culmination of the fiscal cliff talks and despite what politicians said, taxes increased for all working Americans.  Now is the time for all taxpayers to join together and seize the opportunity to pursue the long overdue reform to our nation’s tax code.  Fortunately, some members of Congress agree and understand the need for change.  In a Politico op-ed from last week, Senator Rob Portman (R-Ohio) wrote, “Our tax code has become an obstacle to growth, and only a robust, growing economy can create the new jobs (and future tax revenues) that we need.”  Senator Portman also stated that, “Since 2001, taxes on everything from salaries and small business income to investment earnings and gifts have been temporary — a source of economic uncertainty and perennial fiscal fights. New permanent rates create a clear starting point for tax reform and end disputes over the baseline that have vexed past reform attempts.”  Another problem with the shenanigans of the past several years is the significant uncertainty Washington’s game playing imposes on businesses.  With so many unknowns, businesses are cautious about making large investments (and creating new jobs in the process) for future gains because they lack any assurance that Congress won’t change the tax rates with its next whim.

On Friday, January 18, the Taxpayers Protection Alliance (TPA) sent a letter to Minnesota Governor Mark Dayton urging him to not raise taxes in order to balance the budget in Minnesota (read the letter here).  Tax increases are the siren song of politicians across the country, as politicians look to fill budget holes.  The problem is that tax increases hurt taxpayers and consumers.  One popular tax increase has been tobacco and Governor Dayton is reportedly looking at raising that tax, a dramatic shift in policy considering that Governor Dayton once opposed a tobacco tax increase. According to the Minnesota State News, “During Wednesday’s budget negotiations with legislative leaders, Governor Mark Dayton offered two new budget proposals, both featuring substantial tax hikes. Dayton's options included a temporary 2% income tax increase on Minnesota millionaires or, alternatively, a $1-per-pack cigarette tax increase.”  The same article noted that “Since 2003 there have been 57 cigarette tax increases across the nation and 68% of them have failed to meet projected revenues. In 2006, New Jersey raised cigarette taxes with the hope of pulling in $30 million in extra revenue each year.  Not only did the tax hike fail to bring in extra revenue, but the state actually collected $20 million less in cigarette sales.”  TPA urged Governor Dayton to cut spending.  The Minnesota Budget Solutions Coalition has identified reforms that could save Minnesota taxpayers more than $6 billion, including eliminating all corporate welfare including corporate subsidies, incentives, and credits; abolishing ethanol grants; and reducing legislators’ and constitutional officers’ pay by 5%.

Many people are accustomed to waking up on January 1 with a headache.  This year taxpayers woke up to not only the usual headache from a night of excess, but also a headache from the excesses of Congress and the President.  In the early morning hours of today (January 1, 2013) the Senate passed a bill to soften the blow of going over the fiscal cliff.  In reality, the bill may do more harm than good.  The bill extends the 2001 and 2003 Bush tax cuts for individuals making less than $400,000 and families making less than $450,000. In addition, the payroll tax cute will expire meaning that payroll taxes will increase from 4.2 percent to 6.2 percent, a real tax increase on the Middle Class.  The real kick in the wallet is a two-month delay in the automatic spending cuts (sequestration).  As reported by Breitbart.com, “According to the Congressional Budget Office, the last-minute fiscal cliff deal reached by congressional leaders and President Barack Obama cuts only $15 billion in spending while increasing tax revenues by $620 billion—a 41:1 ratio of tax increases to spending cuts.”  UPDATE (3:00 pm):  The Congressional Budget Office has pegged the spending cuts at $25 billion. Click here here for a full list of provisions as reported by Politico.  With a $1 trillion deficit and a debt that has eclipsed $16 trillion, the lack of spending cuts is shameful.  Even if all the revenue is used for deficit reduction (which it likely won’t be), the total impact to the $1.1 trillion deficit will be $64.5 billion (if no more spending cuts are approved and the sequestration is avoided).

The Medium Extended Air Defense System (MEADS) is struggling to remain relevant and alive as Congress looks at real spending cuts to avoid the fiscal cliff.   The Taxpayers Protection Alliance explained in a recent blog post that, “MEADS has rightly earned the moniker the ‘"Missile to Nowhere.’" And, according to a December 4, 2012 Politico article, “Senate Armed Services Committee Chairman Sen. Carl Levin said today he feels strongly that the Medium Extended Air Defense System is a ‘waste of money,…’”  Because of the prohibitive cost ($2 billion over budget), schedule delays (10 years behind schedule) and the system's poor performance, the U.S. Army has said it doesn't want MEADS and that it would never use the missiles.”  Now, in nothing more than a dog and pony show, there was a test of MEADS.  And, a misleading title of a news story, “MEADS Successfully Completes First Intercept Flight Test,” shows that even more education about this unneeded program is necessary.