Dr. Boozman's Check-up

The Cost of Failure

Nov 30 2011

The supercommittee’s failure to reach an agreement on how to cut the nation’s debt by at least $1.2 trillion is forcing credit rating agencies to rethink our government’s AAA rating.

Earlier this week, Fitch Ratings placed our AAA credit rating on a “negative outlook,” and warned that if the government doesn’t develop a plan that tackles our budget deficit, our rating will be downgraded within the next two years.

"The negative outlook reflects Fitch's declining confidence that timely fiscal measures necessary to place U.S. public finances on a sustainable path and secure the U.S. AAA sovereign rating will be forthcoming,” the agency said in a statement.

This comes on the heels of a Standard & Poor’s downgrade this summer and a week after Moody’s Investors Service affirmed its negative outlook on our nation’s credit.

The bottom line is that we can’t continue kicking the can down the road to deal with our financial problems in future years. The supercommittee was given the task to rein in spending and balance our budget and unfortunately they came up empty handed. We are in a dire situation where we must work to cut our costs or face the consequences that will cost us all even more.

Answering Arkansans

'From the Mailbag'

Nov 21 2011

Senator Boozman answers questions about what Congress is doing to help with private sector job creation, the President's proposal for job creation and Social Security and Medicare in this edition of 'From the Mailbag.'

Our nation’s unsustainable spending spree forces our national debt higher by the second, so it shouldn’t come as a surprise that it hit $15 trillion this week.  Still, seeing that number in print is alarming to say the least.

It is a very stark reminder that Washington has spending problem, not a revenue problem.  If you don’t believe me, take a look at the figures.  Since President Obama took office in January of 2009, our national debt has increased by close to four and half trillion dollars in less than three years.

We borrow around 37 cents of every dollar we spend.  This year alone, the federal government will spend $3.7 trillion while only collecting $2.2 trillion. 

This is further evidence that the Super Committee needs to be bold with their plan to rein to federal spending.  And that is exactly what it is going to take.  We cannot tax our way out of this mess.  There simply are not enough “revenue” sources to scrounge up $15 trillion from the couch cushions.  We absolutely have to cut spending if we hope to make a dent in the enormous dent our national debt.

This is what makes the task before the Super Committee of such vital importance.  If we fail to address this crisis, our country risks going the direction of Greece, Ireland and Portugal—who each face economic crises that have pushed them to brink of default.

As we quickly approach the November 23rd deadline, the word most associated with the Super Committee has been “standstill.”  However, I remain confident that they will put forth a meaningful proposal to address this crisis.  As days become hours and we get into crunch time, necessity creates an environment that fosters an agreement.  I can assure you the members of the Super Committee will work, in good faith, up to the very last minute to reach an agreement.  The stakes are too high not to.

In August I cosigned a letter to Senate leadership asking that the new joint congressional committee created by the Budget Control Act, more commonly referred to as the super committee, be open to the public and available for television broadcast. We also introduced the Budget Control Joint Committee Transparency Act (S.1501), that would mandate proceedings of the Joint Committee on Deficit Reduction be transparent and open to the public

The first steps of members of the super committee seemed to outline a plan that allowed for disclosure to the American people, but since then, much of these discussions have been held behind closed doors with little to no transparency.

With less than 10 days until the super committee has to introduce its deal, I am concerned with the secrecy and there are calls for the members to let the public in to understand where negotiations stand.

This editorial published by the Washington Examiner urges the super committee to open its doors, as they should have been from the start, and provide transparency to this process that will have a big impact on the lives of all Americans.

236 years ago, the rich tradition of sacrifice, service, and fidelity to nation of the United States Marine Corps was born. It was on this date in 1775 that the Continental Congress passed a resolution calling for two battalions of Marines able to fight for independence at sea and on shore. Dubbed the Continental Marines, the battalions were quickly thrust into action successfully executing their first amphibious landing on a hostile shore. 

Today’s Marine Corps is ready to respond on the ground, in the air and by sea. Their integrated approach means the Marines are often the first on the scene, earning them the reputation as “America’s 911 Force” — our nation’s first line of defense. 

To a Marine, "always faithful" is more than a motto, it is a way of life.  Marines remain faithful to the mission at hand, to each other, to the Corps and to country, no matter what.  Because of their commitment, we are a stronger and safer nation. 

Happy birthday and Semper Fi, Marines.  We thank you and all our veterans from every branch of our armed forces for your service and sacrifice.

Talking with KASU

Nov 10 2011

During my monthly interview on KASU I talked with Mark Smith about the supercommittee and debt reduction, infrastructure, Veterans Day and many more of today's top issues. If you missed it, you can listen to the interview here.

A majority of small business owners believe the U.S. is in a recession or will be within a year, according to the Sage Small Business Economy Study. 64% of small business owners who participated in “The Sage SMB Perspective on Economic Recovery hold this view of the economy, despite President Obama’s claims that the economy is better off after the passage of his “Stimulus” plan.

Perhaps more alarming, 77% of those polled, do not plan to hire any additional employees in the near future and 8% are planning to downsize.

Why all this pessimism? The common thread in the answers of these respondents is the climate of uncertainty that hangs over our economy.  Most of that uncertainty can be attributed to the overregulation of the private sector the Obama administration continues to engage in. 

This Administration, like no other in recent years, has abused the regulatory process. Last year, the Obama Administration finalized 3,573 new rules—the costs of these new regulations amounted to $1.75 trillion—nearly 12% of GDP.

Even many rules that have merely been proposed, not even enacted, are hurting our economy. Businesses, both big and small, need to plan ahead to succeed. With so many proposed rules, it is nearly impossible for a business owner to plan with any degree of confidence. This uncertainty is as large of an obstacle to our recovery as the regulations implemented. If business owners don’t know what their tax rates and energy, healthcare and compliance costs are going to be, then the last thing they are going to do is hire a bunch of people.

Quite simply, fear of the effects the next wave of regulations serve to further push small business owners to the edge of uncertainty.

To encourage investment in small business, the heart of our nation’s economy, we need to provide business owners and investors with the predictability they need to make sound investment decisions.  In order to accomplish this we need to rein in spending, reform our tax code, reduce regulatory burdens imposed by government agencies, increase exports with the trade partners and create a new energy policy that allows us to use American resources and make us less dependent on foreign oil.

We have a plan that accomplishes all of this— The Jobs Through Growth Act

The Jobs Through Growth Act is the right approach to long-term economic recovery.  Job creation cannot happen in a vacuum.  The environment of uncertainty created by President Obama’s policies of excessive spending and overregulation is preventing a recovery from even beginning.  This bill combines a broad range of market-based solutions that will help turn the economy around by encouraging private sector job creation and economic growth.  Let’s pass this bill and get unemployed and underemployed Americans working again. 

Senator Boozman answers questions about the Joint Congressional Committee or what is more commonly referred to as the Supercommittee, the No Child Left Behind Reauthorization and Social Security in this edition of 'From the Mailbag.'

As you may have heard, there will be a test of the nationwide Emergency Alert System tomorrow at 1:00 P.M. CST.

The Emergency Alert System is an alert and warning system that can be activated by the president to address and provide information to the American public during emergencies and to issue more localized emergency alerts.

I want to stress this is just a test.

The Federal Emergency Management Agency, the Federal Communications Commission and the National Oceanic and Atmospheric Administration will administer the test as part of their ongoing efforts to keep the nation safe during emergencies and strengthen resilience against all hazards.

The test will be similar to those you see or hear on local television or radio stations, but on a larger scale. Emergency broadcast system alerts are typically done on one station at a time whereas this test will be on every single TV and radio station all at once and should include both audio messages and a video scrolling message that a test is in progress.

According to information from Arkansas Department of Emergency Management (ADEM), the test will last 30 seconds. During this period, regularly scheduled television, radio, cable and satellite shows will be interrupted as the system is tested.

This upcoming test serves as a good reminder to establish an emergency preparedness kit and emergency plan for yourself, your family, and your community.  ADEM’s website and “Ready Arkansas” have a wealth of information about how to prepare for, and stay informed about, what to do in the event of an actual emergency.

As Congress debates competing plans to get Americans working again, I started a series of blog posts aimed at shining a spotlight on the individual bills that make up “The Jobs Through Growth Act” and how each one will help put our economy on a road to recovery. Today, we look at how a bill to repeal and replace the President's health care law that is included in "The Jobs Through Growth Act" will help the economy.

A “structural break in job growth” is a fancy phrase economists throw around to describe the correlation between a single event and its resulting job-loss.   It may be easier concept to define by describing the most significant example of it in recent times: The passage of President Obama’s health care plan into law.

While the economy was far from booming at the start of 2010, private-sector job creation was recovering from the recession at a normal rate.  Within two months of the passage of the President’s health care law, the job market stopped improving and has yet to regain its footing.

Now this is not to say that the current lack of jobs in America rests solely on the passage of the health care law, but just about any small business owner in the country will tell you the law significantly raises their operating costs and uncertainty about the future.

The consequences of this law impact the job market in the following ways: 

  • Businesses with fewer than 50 workers have a strong incentive to maintain this size.  By doing so, they avoid the mandate to provide government-approved health coverage or face a penalty;

  • Businesses with more than 50 workers will see their costs for health coverage rise.  Many business owners who fall in this category  have already said it is more economically feasible to pay the government fine and drop coverage all together —which will push their employees into the government pool; and

  • It greatly adds to the enormous amount of uncertainty in our economy.  Employers have no idea what the health care market or their health care costs will look like in in the coming years, which makes planning for the future difficult. 

As a former small business owner and a healthcare provider, I understand how to approach the challenge of lowering the crippling costs of quality health care and creating access for all Americans without stifling economic development.  The President’s law is not the answer and we are seeing clearly just how much of a burden it is on our economy.

Early this year in the Senate, we tried to repeal this law, but Majority Leader Harry Reid’s caucus voted to protect the President.  The Jobs Through Growth Act gives us another opportunity to right this wrong by repealing and replacing the President’s health care law.  The comprehensive jobs package I support includes Senator Jim Demint’s bill to repeal the President’s law, which gives us an opportunity to replace it with market-based reforms that actually will contain the rising costs of health care and return some confidence in the economy for our job creators.