Story #3: Shazam! Chris Christie's Budget Freeze Works!
RUSH: Marcia Kramer reporting for WCBS 2 Eyeball News in New York on Governor Chris Christie in New Jersey. "We're not raising taxes," he says. "New Jersey Governor Says He Has Residents Covered Through Fiscal Year 2011 Despite $800 Million Hole -- How Did He Do This? Remember The Budget Freeze? Looks Like It Worked. On the surface the news looked pretty grim for Garden State residents on Tuesday -- thanks to an unanticipated drop in tax revenues of $402 million this year and $365 million next year." One of the reasons for that is $70 billion worth of wealth has moved out of the state because their high taxes. So that's one reason tax revenues are down in New Jersey. Another reason is that they've raised taxes on everybody, which always results in reduced revenues. It just does.
"But a new budget hole of nearly $800 million..." the combination of 402 and 365 "...is not going to give Gov. Christie a single new white hair. At least this time, the governor's message is 'gotcha covered.' 'We're very confident we've been able to close the additional budget gap in (fiscal year) 2010 and in (fiscal year) 2011 we're going to be able to solve that problem without any new taxes at all and without any real significant cuts,' Christie said. Skipping the 'fiscalese,' what happened was the budget freeze imposed by Gov. Christie when he took office generated more savings than expected, enough to cover much of the lost tax money. 'I think we're going to be fine,' Christie said. ... How do residents feel? 'I'd rather see a tax on millionaires also. It's about time we stopped paying for everyone else,' said Lionel Nazco of Carlstadt. 'Taxing the millionaires sounds great. The only concern I have is the millionaires have the ability to take their money and leave,' added Anton Tsamas of Hackensack."
I remember back in the mid-nineties, maybe early nineties, '91 or '92, I remember that the Democrats were just up in arms over a $300 billion budget deficit, compared to our $1.4 trillion budget deficit this year. I mean it was a monster, and I remember talking to several economists who said, "You know, all you'd have to do is just freeze federal spending for five years, just freeze it, and allow for inflation, you know, increase government spending at inflation levels which amounts to a freeze, and in five years, you'll wipe this out because it's all a spending side problem. It's not that there's not enough tax revenue being collected. It's a spending side problem." And I remember I was on Charlie Rose one night and I was on with Tony Coelho, and I think Roger Altman. I was the only conservative, and I said, "Let me ask you guys a question, and you guys are much smarter than I am," I said, "I've heard from a lot of economists if we just freeze the budget for five years at inflation levels that all this would be taken care of." "Oh, no, no, ha-ha-ha-ha, typical, that's a nice try, ha-ha-ha," they started laughing at me.
They said it would never work, because these people's job was to spend money. It's how they stayed in office. The single greatest example of their power was to spend money, but here's Chris Christie now some 20 years plus later with a budget freeze in New Jersey. Guess what? That budget freeze is going to result in closing our budget loopholes each of the next two years, and we're not cutting anything. Now, when you propose a budget freeze, of course the Democrats say, "You are cutting, why, we're going to spend 8% more on whatever next year. If you're not going to spend 8% that's an 8% cut." No, no, no, no. You can't say that not spending an increase is a cut. A cut would be if we actually spent less. But there's never been a budget item -- or let me put it this way. There has never been an entire budget, state or federal, where one year was smaller in total than the previous year, and it's not going to be the case with Christie. They're just going to freeze it. And here it's working. No tax increase is needed, and no significant spending cuts needed. So the theory that was explained to me many, many moons ago seems to have credibility. If we don't do this, where are we going to end up? |
