Congress pontificates about reducing its massive national debt of $30 trillion, but each year it gets bigger. Diet books don’t help one lose weight. Only by reducing food intake can weight be lost. The same is true for budgets. Bloviating about the national debt on cable TV will not reduce the debt. Only by cutting programs and reducing laws can Congress reduce the national debt.

In 2021, our federal government spent $6.82 trillion in a $22.4 trillion economy. Simply, 30% of all economic activity in the U.S. is federal spending.  Another $3.3 trillion was spent by state and local governments. Forty-five percent of our entire economy is government spending. The Government Accountability Office (“GAO”) informed Congress that the growth of the national debt is unsustainable and a risk to our future. It’s now time to stop spending and start reducing the nation’s debt to ensure a sustainable nation for our children.

A diet that takes trillions off the federal spending scale without disrupting a lifestyle.

The nation’s goal should be to reduce the national debt with as little disruption as possible. Starvation diets don’t work. The nation just needs to cut out the junk food but keep a good helping of vegetables on our plate. This is doable by recognizing we don’t need to eat every time we see food. Likewise, Congress does not need to spend money every time it sees a perceived “problem.”

Once in this mindset, Congress needs to identify what the American people do not need. Five categories of spending literally jump off the plate.

1. Do not fund laws that have not been authorized. The easiest set of budget cuts would be to refrain from funding laws that Congress has not authorized. “In FY 2021 appropriations, the Congressional Budget Office identified 1,068 authorizations of appropriations, stemming from 274 laws, tolling $432 billion, that expired before the beginning of the fiscal year 2022.” Since House Rules prohibit appropriations to fund laws not authorized by Congress, just letting those unauthorized laws expire is an easy savings of almost one-half trillion dollars. If Congress is so unwilling to perform oversight on expired laws or the public has so little interest in a law being reauthorized, Congress should follow House rules and not fund the expired laws.
2. Review and vote on every expenditure in the Judgment Fund. The Judgment Fund is the mother of all slush funds. It is a permanent, indefinite, and unlimited congressional appropriation continuously available to pay money judgments entered against the United States and settlements of cases in or likely to be in litigation with the United States. It is so secret that Congress no longer even debates what the amounts are for as an indefinite appropriation. The amounts are appropriated, no matter what the amount. The Department of the Treasury just pays the claims upon the receipt of completed forms.This is the fund that President Obama used to deliver $1.7 billion in cash to Iran as a bribe to sign the Iran nuclear deal. Why should our government officials have billions in a secret fund to cover up illegal activity or to held terrorists? Having Congress approve each judgment and settlement as it did before 1956, the U.S. could save taxpayers tens of billions of dollars by rejecting settlements the executive branch makes with its friends that bring suit against the government knowing of a friendly settlement or with terrorists.
3. Enact a fair, simple, tax code that focuses on raising money not legislating behavior. Another easy way to reduce the deficit is to get rid of the 8-million-word tax code and replace it with the 1913- four-page Form 1040. Few deductions and low rates, but everyone pays something, including the wealthiest. The benefit of this simple approach is it captures a greater amount of tax owed by closing the “tax gap.”  The IRS defines the tax gap as the difference between true taxes owed for a given tax year and the amount that is paid. The gap is caused by the under-reporting of income, non-filing, and tax evasion. While the exact amount is unknown, the IRS estimates it to range from $574 to $700 billion, annually. A complex tax code invites under-reporting and manipulation, whereas failing to pay taxes in a simple system, could easily place one in a position of defending a fraud or tax evasion charge.
4. Follow and implement GAO’s Generally Accepted Accounting Principles (“GAAP”). Congress mandates GAO to perform a GAAP analysis of federal spending and assets and provide recommendations to ensure the financial reporting by the agency is transparent and consistent. Every member of Congress should read these reports on how our money is managed and should implement its findings when mismanagement is identified. One specific GAO recommendation is for the federal government to address the government-wide improper payments, estimated to be $175 billion.
5. Congress should make a kitchen-table list of what programs are most important to our Republic. The amount of information available to Congress for making smart debt reduction decisions is overwhelming. It is time Congress puts these materials to use. A simple way to approach this task would be for each congressional committee to rank sequentially, each program within its jurisdiction, with the most important programs having the lowest number. The budget committee would still allocate a budget for appropriations and the highest-priority programs will be funded first. The appropriation committees would work down the list until the revenues raised by taxes are expended.At that point, Congress would have to cease spending money on programs for which there is no longer any money, e.g., studies of shrimp on a treadmill, or admit to the taxpayers, it wants to borrow money to fund programs of little value. This kitchen-table process of spending only up to revenues received could save another $1plus-trillion annually, even if Congress expended a few hundred billion on some lower value programs.

These five modest proposals for reducing the national debt do not disturb any of the programs Congress views as a “must fund.” The reductions all come in areas where Congress has little interest, settlement of lawsuits that should not be settled, making sure everyone pays their fair share on income tax, requiring agencies to only pay authorized recipients, and not spending money on stupid programs.

Is anyone in Congress willing to put the national debt on a diet?

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By Luke Rosiak

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By Ron Paul, Rand Paul

As presidents and Congresses come and go, the addiction to busting the budget remains; its voraciousness fueled by the same enabler, the Federal Reserve.

While it took our nation more than 225 years to accumulate nearly $20 trillion in debt (and much, much more if you factor in unfunded liabilities), our central bank can put Americans on the hook for trillions without blinking by simply creating whatever funds it needs out of thin air. Its status as “the lender of last resort” signs a blank check for politicians to spend to their heart’s content without worrying about the immediate consequences.

When pressed to at least provide some measure of substantive transparency for its actions, the Fed tells the American people it’s none of their business.

We disagree.

Time and again, we have been asked to justify our desire to Audit the Fed. Time and again, we answer, how can we afford not to?

Though one of the Fed’s mandates is to keep prices stable, a trip to the grocery store is enough to prove its failure. The Minneapolis Federal Reserve Bank’s own website hosts a calculator that reveals that what would have cost you $1 in 1913 would now require $24.

We may chuckle when parents and grandparents tell children about the “good ol’ days” of lower prices, but the massive decline in the dollar’s value is no laughing matter for seniors whose supposed safety nests don’t stretch as far as they used to, or for frugal consumers who are punished for saving for rainy days. Politicians pile debt onto future generations’ backs, and the Federal Reserve makes sure they can’t ever hope to pay for it.

Meanwhile, Americans struggling to cover basic costs watch as favored parties receive bailout after bailout from friends in high places. If you care about income inequality, then you must start fostering change by holding the Fed accountable.

The big-spending status quo is powerfully entrenched, but a growing political coalition, driven by overwhelming support from the American people, is fighting to assert Congress’s right to know the facts about how the Fed is using its tremendous power.

Audit the Fed, which has now passed the U.S. House of Representatives multiple times and received majority support in the Senate, removes the shackles on how the nonpartisan, independent Government Accountability Office (GAO) can examine the Fed.

The bill would authorize the first-ever thorough audit of the entire Federal Reserve System in its 104-year history, including its agreements with foreign governments and central banks, discount window and open market operations, member bank reserves, and Federal Open Market Committee (FOMC) directives. Congress would require the GAO to conduct this audit within one year of the bill’s passage and to report back within 90 days of its completion.

The biggest opponent to auditing the Fed is, unsurprisingly, the Fed.

The Fed harnesses its moneymaking machine in an all-out lobbying effort against transparency on its activities. The conflict of interest, with the Fed lobbying against its own audit, should make us question whether such lobbying should be forbidden by law.

The Fed argues that: 1.) It is already audited enough; and 2.) Any further “interference” would threaten its independence and represent a takeover of monetary policy by Congress, with disastrous results.

While it is true that an outside auditor examines the Fed’s financial statements, and that an inspector general also keeps an eye on its activities, Paul-Martin Foss, President and Executive Director of the Carl Menger Center for the Study of Money and Banking, reminds us that both are appointed by and answer to either the Federal Reserve Board or the Fed Chair directly. This amounts to, as he states, the Fed saying, “[W]e can audit ourselves if we want to, so just trust us that we’ve investigated ourselves and found ourselves fully trustworthy.”

The GAO’s opinion is that, while the Fed is subject to limited audits, “no complete audit is done.” The GAO went on to say, “We do not see how we can satisfactorily audit the Federal Reserve System without authority to examine the largest single category of financial transactions and assets that it has.”

As Foss further observes, “The full audit called for by Audit the Fed would necessarily include not just a financial audit (if that were determined to be necessary), but performance and operational audits as GAO is accustomed to carrying out.”

Perhaps the Fed’s real fear is the American people finding out the extent to which the Emperor is parading around without his clothes.

“If the Fed examiners were set upon the Fed’s own documents—unlabeled documents—to pass judgment on the Fed’s capacity to survive the difficulties it faces in credit, it would shut this institution down,” Grant’s Interest Rate Observer founder and editor Jim Grant said on CNBC in 2009 – when the Fed held half the assets it does now.

In December, Alex J. Pollock, former CEO and president of the Federal Home Loan Bank of Chicago, estimated the Fed would fail if subjected to “a simple and standard interest rate stress test,” with it being “highly likely” the Fed would “be hugely insolvent on a mark-to-market basis.”

What about the Fed’s second argument? Would increased scrutiny threaten its independence or create a global economic catastrophe?

When Congress required the Fed to reveal the details of more than 21,000 transactions it made during the 2008 financial crisis that involved trillions of dollars, the sun still rose and Fed officials went about their jobs without a congressman sitting in each of their offices.

Do you remember the chaos that erupted after Bloomberg won its lawsuit to force the Fed to disclose even more details about the specific recipients of its emergency lending?

Neither do we, despite the Fed promising doom.

Though the Fed will claim that further soliciting the GAO’s opinions on its policies and procedures would cause irreparable harm, recent history proves otherwise.

After Congress expanded the GAO’s authority to allow for a one-time audit of the Fed’s emergency activities between Dec. 1, 2007, and July 21, 2010, the GAO made seven recommendations to improve the Fed’s operations, noting, “The Federal Reserve Board agreed that GAO’s recommendations would benefit its response to future crises and agreed to strongly consider how best to respond to them.”

In a letter also included in the GAO’s report, Fed General Counsel Scott Alvarez wrote, “We appreciate the GAO’s substantial efforts to review these complex programs and the understanding of these programs that your report demonstrates.”

There is no reason not to keep expecting such professionalism and expertise from the GAO.

Throughout its existence, the Fed’s manipulation of interest rates and expansion of the money supply have led to malinvestment and helped generate a devastating boom-and-bust cycle that routinely levels our economy as the market corrects course.

We hear no shortage of tales about how the Fed rescued the nation during the financial crisis, but this is the equivalent of someone pushing you into an icy lake and expecting you to thank them for saving your life after they pull you out.

Time is of the essence. The Federal Reserve cannot be allowed to continue denying full accountability to the hundreds of millions of people whose financial futures hinge on its actions.

We cannot wait until we find ourselves slipping underwater to ask the tough questions about what keeps putting us there.

With President Trump indicating his support for Audit the Fed, the window of opportunity has never been more open.

If we hope to ever rein in spending, change a failed status quo and avoid paralyzing downturns, we must not let it slip away.

Ron Paul is a former U.S. congressman from Texas. Rand Paul is the junior U.S. senator from Kentucky.

EDITOR’S NOTE: This op/ed was originally written and published for Rare.us, and is being used with expressed permission from the authors.

EDITOR’s NOTE: The views expressed are those of the author, they are not representative of The Libertarian Republic or its sponsors.

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Obamacare marketplaces across the country approved fake applicants for health care insurance subsidies in an undercover federal investigation, according to a new Government Accountability Office (GAO) report.

California and the District of Columbia through their state-run marketplaces, and Florida and Virginia through the federal marketplace, approved nine of the 12 fictitious applicants GAO created for special enrollment and subsidies. That’s because there are no laws requiring marketplaces to verify whether someone is eligible for special enrollment outside the normal enrollment period for life events, like gaining a dependent through marriage or a making permanent move.

“While subsidies under the (Patient Protection and Affordable Care) Act are generally not paid directly to enrollees, participants nevertheless benefit financially through reduced monthly premiums or lower costs due at time of service, such as copayments,” the report said.

“Because subsidy costs are contingent on eligibility for coverage, enrollment controls that hep ensure only qualified applicants are approved for coverage with subsidies are a key factor in determining federal expenditures under the act,” the report added.

The approved nine fake applicants collected subsidies amounting to $18,960.

One of GAO’s fake applicants submitted a letter from a nonexistent doctor claiming the applicant couldn’t apply during open enrollment because of a medical condition. The marketplace approved the applicant’s case.

This isn’t the first time Obamacare marketplaces have failed GAO’s undercover investigations.

GAO in July, 2014, used 12 fictitious identities to apply for health care coverage under the federal marketplace, 11 of which were approved. GAO conducted a similar investigation in October, 2015, and was successful in 17 out of 18 attempts.

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A recent report from the Government Accountability Office uncovered that the ATF (Department of Alcohol, Tobacco, & Firearms) has not been abiding by the law when it comes to handling data related to gun ownership in the US. Prominent libertarian and Fox News legal analyst Judge Andrew Napolitano was on Fox and Friends this morning talking about this blatant violation of federal law by President Obama‘s administration. Fox Insider reports:

“Congress decided that since the states regulate guns – not the federal government – the federal government would never be able to keep a list of every gun owner and every gun owned by that person,” Judge Napolitano said. “But they are … This lawless administration has broken that law and retained that information.”

The Judge opined that this sort of flippant disregard for the law in the past has emboldened the present administration to use ever more personal discretion as to when to obey the law and when to do whatever they like; and that this sort of behavior will only encourage additional lawlessness by executive fiat in the future. Do you agree with the Judge? Watch the whole segment and then let us know your thoughts on Facebook or in the comments below.

https://www.youtube.com/watch?v=-JjZDE764Og

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