The Sequester: I would wager that just a few months ago very few of you knew what the word “sequester” meant. Maybe you didn’t know how to pronounce it either (see-kwes-ter). I can tell you that I had never heard the word before I was elected to Congress. And, it took me a couple of terms on the budget committee to become familiar with it.

But, now we all know. It is a budgeting mechanism by which across-the-board spending reductions are enforced. And, it went into effect on March 1st.

Listening to the president, you would think that the Mayan calendar was off by a couple of months and that the end of the world was really coming as a result of the Sequester. From the dramatic rhetoric in his perpetual campaign swing, it sounds like life as we know it will cease because of a 2% reduction in the growth of planned government spending. What you are not hearing is that even with the Sequester cuts in effect, total federal spending this year will be higher than last year. So, why all the drama? Because it is clear that the president wants to increase spending and increase taxes and he wants you to think that the… Read More

Governor Jerry Brown struck a conservative tone in his State of the State Address today when he spoke of fiscal discipline, local control and regulatory reform.

But the challenge before California remains the same: growing private sector jobs. If we want to solve our long-term budget problems, we need more taxpayers, not less.

Despite some job gains, California’s unemployment rate remains among the highest in the nation—many California counties still have double-digit unemployment rates ranging as high as 25%.

Many entrepreneurs, small business owners and even athletes are considering leaving our state due to rising taxes.

And while certain government-favored industries are growing, most job creators are struggling to survive under a growing weight of new regulations, taxes and fees.

Clearly, it’s far too early to celebrate California’s recovery. Millions have yet to experience it.… Read More

This native Californian was all bundled up to keep warm on a chilly Washington morning on Monday to witness the 57th United States Presidential Inaugural and hear President Obama’s second inaugural address.

To be honest, I was inspired by the address….. ….but, not in the way the president might have wanted.

I’m a big football fan. There’s nothing to bring you to your feet quite like the big touchdown pass. And, that is usually what brings accolades in the annals of football lore. But, just as important, and many times more important, is that tenacious defense. When you don’t have the ball, you count on those 11 defensemen to keep you in the game. Oh sure, they can sometimes get a “pick-6” and score a touchdown. But usually, they just hold the line and keep bad things from happening. The undefeated 1972 Miami Dolphins were led by what was dubbed the “no name defense”. They held the line and they were a big part of the only undefeated season in NFL history. As Republicans, we don’t have the ball right now. We may control the House, but we are the minority party in Washington since everything… Read More

I speak often in these pages about things fiscal, financial and economic. Given that I am a CPA and sit on three committees in Congress that deal with money (Budget, Financial Services and Joint Economic), this is to be expected. But, I am not all about money. And, the nation’s problems are not all about money. As big a problem as our debts and deficits are, they are emblematic of deeper and actually more significant moral and cultural issues.

For some time now, we have heard of those who Tom Brokaw dubbed “the greatest generation”, those who sacrificed through a world war to vanquish fascism and imperialism and leave a stronger America for their children. We can go back further to speak of the generation that took the risks to establish this country in the late 18th century or of the generation that fought the Civil War. In each case, said generation sacrificed in order to leave a better and more prosperous country of opportunity for their children.

But, what are we doing now? What will be the legacy of my generation? Our debt and deficit crisis is largely caused by giving ourselves health care and retirement benefits without paying for them.… Read More

The president says that we should just extend the debt limit, or cede the authority to him to expand it as he wishes. I’m sure he probably doesn’t think we even need such a discipline at all. He says he will not negotiate on this issue. He says that Congress has already approved all the spending that led to these deficits.

Like on most things, the president is completely wrong.

If credit cards had no limit on them, a whole lot of people would spend without end. The debt limit is like that. It is a discipline that reminds us – “Oh yeah…we’ve just borrowed $16.4 TRILLION. That’s kind of a lot. Maybe we shouldn’t spend so much.” We’ve borrowed 35% ($5.805 trillion) of that since Obama took office. Maybe we ought to think about it before we try to borrow $7 trillion more, which is an approximation of how much more this president wants to borrow in his second term. And, as I understand him, the president won’t negotiate on this. In fact, he has yet to negotiate on anything. No change here. And, as far as Congress already approving the spending….that’s not correct either, Mr. President. Sixty percent of all… Read More

You may be wondering why you did not hear from me during the last few weeks of the “fiscal cliff” machinations in Washington. For one thing, I figured that many of you were enjoying the holidays with your families and friends and did not want me to interrupt that with depressing news. Additionally, however, things were moving so fast that anything I wrote you would have been obsolete by the time you read it. I had about a dozen “laptops” in my head each day, but, by the time I sat down to write them, the circumstances had already changed.

Well, unless you were abducted by aliens or have just gotten back from your Mayan end-of-the-world worship ceremony in South America, you know about the deal that was passed by the Senate and the House on New Year’s Day. To say I didn’t like the “deal” would be to understate the case. I hated it.

I don’t want to raise taxes. That feeling is not driven by a pledge, as many liberals would like to argue in order to portray we conservatives as the mindless lemmings that some of said liberals are. I think that having the federal government take roughly 20% of all the production of the… Read More

Given Thursday evening’s events in the House, it looks more and more like we may be going over the “fiscal cliff”. Therefore, I wanted to give you an update on what that could potentially mean for you. I also wanted to clarify the total impact of the income tax rate changes that we will face should we go over. These figures, which appeared in my previous “Laptop Report”, have been updated.

The total impact of all the income tax rate changes is estimated to raise revenue of roughly $4.5 trillion over 10 years. The total effect of all of this would be to reduce the deficit by approximately $7.7 trillion over the next ten years according to the Congressional Budget Office (CBO). That means CBO projects an “average” annual deficit of roughly $230 billion if we are over the “cliff” vs. a deficit of about $1 trillion a year if everything is extended.

Again, these projections are based on “static modeling”. That means they do not take into account the economic impacts and the behavioral changes that will occur as a result of what I’ve outlined above. When these tax hikes take place, people will most certainly take actions to… Read More

Just the Facts, Ma’am – Fiscal Cliff Edition: This was the famous, at least to those of us who were alive then, admonition offered by the fictional LA detective, Sergeant Joe Friday, to witnesses who would engage in too much speculation about a crime. Well, I generally give you a lot of my opinion. Every once in a while, though, I give you just the unvarnished facts so that you can draw your own conclusions.

You have probably heard the term “Fiscal Cliff” enough times to make you sick. But, do you really know everything it entails? Below, you will find a comprehensive list of every law that will expire at the end of this year, as well as the result of our returning to whatever the law was before. The accumulation of all of these things has been dubbed collectively by the media as the “Fiscal Cliff”:

• Unemployment compensation will revert from a 73 week maximum to a 26 week maximum. This takes it back to the duration that existed in 2008 and prior. This will reduce spending by approximately $30 billion over 10 years.

• For the past 2 years, there has been a “payroll tax holiday”. For this… Read More