Democrats in Sacramento praised the approval of a “balanced” and “on-time” budget. A prepared release from Assembly Speaker Toni Atkins, D-San Diego, says Assembly Bill 93, the budget bill, will “pay down debt, build reserves and restore funding to schools.”

“I want to thank our Budget Chair, Dr. Shirley Weber, our subcommittee chairs, the members of the Budget Committee and our conferees for performing an incredible amount of work, which is shown in the budget we voted on today,” said Speaker Atkins. “The stability from the years of hard choices gives us an opportunity that has been rare in recent years – the chance to focus on a budget that builds a stronger and brighter future for the people of California.”

Assemblyman Mike Gipson, D-Carson, released the following statement on the passage of AB93:

“I’m proud to support a balanced budget that prioritizes education, health care, and poverty reduction in California. By strengthening social programs to assist the disadvantaged, such as early education and the Earned Income Tax Program, more Californians will have the freedom to follow their own path to success and happiness. This budget will also help create healthier communities by restoring funding cuts to critical Medi-Cal programs. … Overall, these policies outline the virtues of a society concerned with creating the broadest opportunities for all of our citizens.”

Senator Connie Leyva, D-Chino, also commended the budget approval, calling it a “forward-looking budget that continues to strengthen California’s diverse communities … throughout the state.”

Democratic legislators highlighted the importance of investment in the Earned Income Tax Program, health care and Medi-Cal, state education at all levels of learning, public safety, child care and other programs. Senator Tony Mendoza, D-Artesia, said the budget “reflects the Legislature’s priorities of investing in the people of our great state … while paying down the state’s long term debt and setting aside more resources for our rainy day fund.”

But Republican legislators fear the budget does not do enough to meet the needs of California’s unfunded pension and retiree health care liabilities.

Senator John Moorlach, R-Costa Mesa, said on the Senate floor that the budget “departs from Governor Brown’s call for fiscal restraint” and does not “make a dent in our $72 billion in unfunded retiree medical costs, or the over $100 billion [plus] in unfunded pension liabilities.”

Senator Patricia Bates, R-Laguna Niguel, said the budget “gives a false sense of security to Californians.” Despite providing more resources for education, “it creates new and additional spending in other areas, which is simply unsustainable” and “may lead to higher taxes.” Her release continued:

“The undeniable fact is that this budget would spend a record $269 billion, which is $15 billion higher than last year’s budget. It also promises money that may never materialize as it assumes that the state will receive $3 billion more than what Governor Brown believes we will receive. That’s why he has not agreed to this budget. He recognizes that it repeats the foolishness of relying on rosy economic projections.

“Governor Brown has governed during times of both boom and bust, and I hope he will resist the urge to live beyond our means. By paying down more debt and smartly investing in top priorities such as education, we can avoid major problems down the road and secure a healthier future for all Californians.”

The Republican vice chairs of the Assembly and Senate budget committees, Assemblywoman Melissa Melendez, R-Lake Elsinore, and Senator Jim Nielsen, R-Gerber, also sent a formal letter to the governor, calling the proposed budget a “political exercise” and saying adoption of the budget would be “fiscal malpractice”:

“The needs of the state are great and the urge to spend is strong. As you have noted, however, a moderate economic downturn could cut state revenue by $40 billion over three short years. In assessing the health of the state’s economy, economists have suggested that California is not even prepared for a moderate recession. While our work to build a Rainy Day Fund is commendable, the Fund is only projected to have a $3.5 billion balance as of next summer. We should not delude ourselves into believing that $3.5 billion would be sufficient to smooth the effects of a significant economic tremor.”

According to charts from the Department of Finance, actual expenditures for fiscal year 2011-12 were $86.4 billion. As state revenues increased, that number has ballooned to $96.6 billion in FY 2012-13 and $99.8 billion in FY 2013-14. The proposed budget for FY 2015-16 is $117.5 billion – that’s about $17.7 billion dollars more than just two years ago.

The estimated revenue for the general fund in FY 2015-16 according to the Gov. Brown’s May Revise is $113.3 billion, which is less than the Legislature’s proposal to spend $117 billion and save $5 billion.

Gov. Brown and the Legislature will continue to negotiate and work out any discrepancies until the beginning of the fiscal year on July 1. The proposal now goes to the governor to sign and approve.

By Calwatchdog.com Editors

Dr. Ben Carson, joined by author Eric Metaxas, spoke at the Conservative Political Action Convention (CPAC) on the importance of developing and maintaining an educated populace — one with common sense. Being proactive and strategizing, he said, rather than being purely reactive, is how to protect the conservative vision for the future. He also added that it was essential for Americans to take care of their own, not depend on the federal government and think wisely about how to spend our money. Watch the full speech below:

March 16, 2013

By Josephine Djuhana

NATIONAL HARBOR, Md.—Some conservatives believe a federal balanced budget amendment is an essential reform for fiscal management in Congress. That was the topic of discussion during a panel at the Conservative Political Action Conference (CPAC) at the National Harbor in Maryland.

Grover Norquist, the founder and president of Americans for Tax Reform, moderated the discussion and began with a simple two-part plan for Washington to balance the budget—by “never raising taxes” and “not spending so much of other people’s money.” He also highlighted Paul Ryan’s recently unveiled budget, which rolls back entitlements and federal power, and balances the budget without raising taxes. The budget, according to Norquist, was not only a way to reduce the size of the federal government by reforming, but also a “step in the right direction to enact tax reform.”

Rep. Andy Harris, R-Md., said in reference to the Senate, “They don’t believe that the spending is the problem, and they don’t believe the debt or the deficit is a problem.” Anyone who has read Paul Krugman would know that to be the case. And even President Obama recently charged that he was not interested in a “balanced budget just for the sake of balance.” With much concern mounting over the nation’s ever-growing $16 trillion deficit, it’s no wonder that conservatives are now looking for ways to force Congress to create a balanced budget. But Democrats in Washington don’t seem to seem to agree on the need to halt spending, as the budget proposal from Senate Democrats, according to Norquist, “raises taxes and never balances the budget.” The budget plan includes $1 trillion in tax increases and a new $100 billion stimulus plan. It also increases spending by 60 percent over the next ten years, leaving an additional deficit of $500 billion ten years from now.

“That’s why you need a balanced budget amendment, because in the end, [Washington] can’t restrain itself,” Rep. Harris said. “And we certainly can’t guarantee that future Congresses will restrain themselves.”

The panelist consensus was that outside intervention is needed in order to limit spending by Congress. “Unlimited debt is the fairy dust that makes unlimited government function,” said Nick Dranias, a director at the Goldwater Institute.

There are two methods to ratify a constitutional amendment, but the path through Congress does not seem promising, as it requires a two-thirds majority approval in both houses of Congress. The state method is the alternative.

“In the state method, there is a critical check and balance on federal government,” said Derrick Khanna; he’s a former professional staff member for the Republican Study Committee. “It is unfortunate that this method has never been used as our Founders intended.”

All that is needed is a three-fourths majority of states to ratify a constitutional amendment. “States across the country are pushing for a federal balanced budget. First it was Florida, in 2010, and then it was New Hampshire, last year,” said Khanna.

Effects of a balanced budget amendment

There are certain fears that with a balanced budget amendment, members of Congress could force a tax increase in order to ensure that revenues keep up with expenditures.

But Arizona, which has a balanced budget requirement, has used this obligation to its benefit by rejecting Obamacare. When Governor Jan Brewer attempted to raise taxes in order to fund Obamacare in the state, the state legislature shot the proposal down, as state tax increases require a two-thirds majority in order to be ratified.

The balanced budget requirement also seems to be working for the state of Texas.

Texas Governor Rick Perry was also present at CPAC, and delivered short remarks on his state in comparison with the federal government.

“Texas has a balanced budget and a surplus, and is creating more jobs than any other state in the Union, and we’re doing this with a part-time legislature that meets for only 140 days every other year,” said Gov. Perry. “Our legislature—they come in and they pass laws, and then they go home and live under those laws.”

He then emphasized that states should be “the laboratories of reform.”

But instead, we have a federal government that mandates and dictates regulations to states, what with Obamacare and the expansion of Medicaid, the proposed increase in the minimum wage and more. Many conservative allies have fallen to money from the federal government and special interest groups, and we have reached a point where it seems that nothing can stop Washington from continuing on its taxing and spending binge.

“Washington doesn’t worry about how to pay its bills; they just charge it to our grandchildren’s accounts,” said Gov. Perry. “But in Texas, our constitution requires a balanced budget.”

Gov. Perry emphasized that Texas’ “number one ranking when it comes to job creation” is directly correlated to having “balanced budgets and one of the lowest tax and spending rates in the nation.”

Framework for a balanced budget amendment

During the panel, Nick Dranias highlighted the Compact for America, which is a formal amendment to balance the budget and has additional inclusions that work to prevent outright taxation by Congress in order to balance the budget.

But the path to Congressional discipline on the fiscal matters will be an uphill battle, yet many activists would like to see Congress reexamine itself and its practices when it comes to balancing the budget. As government expands, liberties decrease, and the best way to curb government intervention is to take away its ability to spend recklessly.

By Katy Grimes

Rick Santelli, my favorite vociferous and opinionated financial news guru, today said that with the federal government’s release of the latest report finally showing that the economy actually shrunk in the fourth quarter last year, “We are now Europe.”

“When you act like Europe, you get growth rates like Europe. We have become Europe!”