The Leader's Ledger

State Of Play: Deficit Reduction Must Come From Cutting Spending, Not Raising Taxes

Editorial: Deficit Reduction Must Come From Spending Cuts, Including Tax Increases Invites Failure. Rep. Eric Cantor, R-7th, made his point. When he announced his departure from the debt-limit talks, the House majority leader explained that the White House needed to insert itself into the process. ... Combining a debt hike with spending cuts would represent a credible compromise. Although Republican lemmings supported increased debt limits during the Bush years, the numbers suggest they will not do so now. (Obama voted against such increases while serving in the Senate during the Bush administration; his expressed regrets do little to boost his cause.) The price for GOP acquiescence regarding the ceiling is a real reduction in federal spending. Proposals regarding taxes introduce a complicating element. Pelosi-crats may be inviting failure. A good deal remains possible. Obama's presence might help. Richmond Times-Dispatch

• The Democrats’ Proposal Would Raise Taxes By Hundreds Of Billions Of Dollars. The crux of this argument is not about this loophole or that loophole, it is about raising taxes in a lagging economy. You can’t help the wage earner by taxing the wage payer offering a job, and the bottom line is that the proposal pushed by Democrats would increase taxes by hundreds of billions of dollars on individuals, small businesses and employees at a time when we need to focus on job growth, said Cantor Spokesman Brad Dayspring. The Plum Line

Lindsey: Tax Increases Don’t Solve The Problem, Spending Cuts and Binding Reforms Are The Only Credible Solutions For Long Term Deficit Reduction. There is no way to raise taxes enough to cover these problems. The tax-the-rich proposals of the Obama administration raise about $700 billion, less than a fifth of the budgetary consequences of the excess economic growth projected in their forecast. The whole $700 billion collected over 10 years would not even cover the difference in interest costs in any one year at the end of the decade between current rates and the average cost of Treasury borrowing over the last 20 years. Only serious long-term spending reduction in the entitlement area can begin to address the nation's deficit and debt problems. It should no longer be credible for our elected officials to hide the need for entitlement reforms behind rosy economic and budgetary assumptions. And while we should all hope for a deal that cuts spending and raises the debt ceiling to avoid a possible default, bondholders should be under no illusions. The Wall Street Journal

The Majority Of Americans Support The Republican Approach To Deficit Reduction and Economic Growth. In a recent Bloomberg poll of U.S. adults, 55 percent said that spending cuts, combined with tax cuts, would be the best way to grow the economy, while 61 percent said they would not be willing to pay higher taxes to reduce the deficit. Just 36 percent were willing to pay more. The public’s preferences find support in economic data. Alberto Alesina, a Harvard economist who has analyzed the ways in which various countries responded to large fiscal crises, concludes that spending cuts are “much more effective” than tax increases in stabilizing the debt without harming the economy. “In fact, in several episodes, spending cuts adopted to reduce deficits have been associated with economic expansions rather than recessions,” Alesina writes. These findings were echoed in a report from Goldman Sachs analysts Ben Broadbent and Kevin Day, which examined “every major fiscal correction in the OECD since 1975.” National Review Online

The Obama Economy: Americans Continue To Give President Obama Failing Grades On The Economy and Deficit Reduction

By A Nearly 2-1 Margin, Americans Disapprove Of How President Obama Is Handling The Deficit. Another ominous sign for Obama: By nearly 2-1, voters disapprove of how he's handling the federal budget deficit, expected to hit a record $1.5 trillion this fiscal year, which ends Sept. 30. McClatchy

• President Obama Has Failed To Lead, Lay Out A Clear Path Forward On Deficit Reduction. As president, Obama has proved to be a very good Senate majority leader — convening committees to do the work and intervening at the end. ... The Obama style has advantages, but it has served his party poorly in the current budget fight. He has not educated the country about the debt challenge. He has not laid out a plan, aside from one vague, hyperpoliticized speech. He has ceded the initiative to the Republicans, who have dominated the debate by establishing facts on the ground. The New York Times

ALL-TIME LOW: Only 37% Of Americans Approve Of President Obama’s Handling Of The Economy. President Barack Obama is in a fragile position as the 2012 campaign begins: Only 37 percent of registered voters approve of his handling of the economy, his lowest rating ever, according to a new McClatchy-Marist poll. McClatchy

• Fewer Americans See The Economy Improving Today Then Compared To This Time Last Year. In the most recent week, 31% of Americans said the U.S. economy is getting better -- on par with what Gallup has measured throughout June . but down from 37% weekly readings during most of May. The latest reading is also down from 36% during the same week in 2010. Gallup

• Nearly Half Of Americans Rate The Economy As Poor. Forty-five percent of Americans rated current economic conditions "poor" in the week ending June 26 -- three points worse than the 42% readings during the week ending May 29 and a year ago. June's "poor" ratings are at or near their highest levels of 2011. Gallup

More Trouble Ahead? First New York, Then Philadelphia, and Now ... Manufacturing, Business Activity Drops In Dallas. The Federal Reserve Bank of Dallas reported that its monthly survey of Texas factory activity fell sharply in June. The Manufacturing Outlook Survey found that general business activity slumped to -17.5, down 10.1 from May. Negative numbers indicate contracting business activity, while positive figures indicate growth in the sector. The production index that measured conditions at 84 factories around Texas dropped to 5.6 from 12.7 in May, which the Dallas Fed interpreted as slower growth in the sector. New orders picked up, but manufacturing activity was sluggish overall. The Street

Dem Divide: More Fissures Emerge Between House Democrats and The White House

Dem Lawmaker: Senior House Dems Frustration With The Administration Is Growing. Among Senior House Dems House Democrats’ frustration with Obama is boiling in the intense heat of negotiations to reach a budget deal and raise the nation’s $14.3 trillion debt ceiling. Capitol Hill Democrats have been steaming for months, since being sidelined during talks to extend the George W. Bush-era tax rates and fund the government this year. Many say the White House takes their support for granted but ignores them when it comes to making policy. “Before this year we were playing a strong role,” said Cuellar, but “now a lot of us feel like we’re almost being ignored.” ... The frustration “seems to be growing” with “senior members of the caucus … shaking their heads,” the lawmaker said. The Hill

Off The Beaten Path

WARNING: No More Cutting The Cheese At The NY Green Market ... New York Daily News

PSA: Just Another Reason Not To Do Cocaine – ABC News

Mudslide!