February '11 Issue Debrief

CRNC Research Compendium February 2011
Editor: Brandon Greife, Political Director
College Republican National Committee
600 Pennsylvania Ave SE, Ste. 215 Washington, DC 20003 Washington, DC 20003 T 202-608-1411 F 202-608-1429 www.collegerepublicans.org
Table of Contents
Medicaid Expansion Threatening State Budgets! Japans Falling Credit Rating A Warning Sign for US! Judge Uses Obamas Words Against Him to Declare Obamacare Unconstitutional! Obamacare Ruling Has Tied Democrats in Rhetorical Knots! Senate Dems Concede to Earmark Ban, But What Took So Long?! CBO: Interest on Debt Could Hit $7.5 Trillion Over the Next Decade! DCCC Ads Show Democrats Putting Next Election Ahead of the Next Generation! 1099 Repeal a Metaphor for Larger Obamacare Debate! Gov. Cuomo Shows Fiscal Conservatism is Not an Option Its a Necessity! Republican Budget Proposal Makes a Down Payment on Decit Reduction! Unemployment Report Shows January Was Another Ugly Month for Hiring! Democrats Secret Meeting with Lobbyists Show they Arent Serious About Our Decit! Dont Let Tax Reform Be Derailed by Special Interests! Bernankes Says Washington Must Act Now to Preserve Our Future! Higher Education Will Suffer From Obamacares Medicaid Mandate! Happy 100th Birthday President Reagan!! Contagion Threat of European Debt Is Real!
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February Compendium!
Obamas New Economic Team: Incompetent? Or Just Dishonest! Rep. Issa Shows GOP Listening to Main Street! Whether Its Coca-Cola or Ethanol, Government Should Stop Picking Winners and Losers! Closing of DLC Shows Moderate Democrats a Dying Breed! Liberals Delusion Government Regulates Business Better than Free Markets! Gov. Daniels Demands Changes to Broken Obamacare Bill! Gov. Christies Rising Approval Rating Shows Dem Gamble Failed! Solving Our Long Term Budget Problems Requires Reworking Entitlements! Businesses Exist to Make ProtsAnd Thats a Good Thing! Inaction on Decit Coming Back to Bite Obama! Obamas $3.73 Trillion Budget Ignores Our Debt Problem! Economists Agree Obamas Budget is a Flop! Obamas Procrastination on Entitlement Reform Threatening Our Future! Mo Government, Mo Problems CBO Says Obamacare Kills Jobs! Our Raison Debt Mitch Daniels Gives Young Adults an Assignment! Interest On Our Debt Prepared to Skyrocket! The Death of Small IPOs is Hurting our Recovery! Professor Obama Ignores Real Problems In Latest Lesson! Whip Hoyer Accidentally Admits Obamas Budget Problem! The Failure of Keynesian Economics in Democratic Societies! Democrats Defecting Over Obamas Failure to Deal with Debt! Christies Speech Gives Obama a Lesson in Leadership!
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Republicans Happy to Step Into Leadership Void! Rove and Ryan Diagnose Obamas Allergy to Leadership! Wisconsin Unions Show No Willingness to Share in Sacrice! Bipartisan Gang of Six Taking Lead on Decit Reduction! Obama Continues Kicking the Can Down the Road! Obama Must Address National Decit Leave Wisconsin to Address Theirs! Obama Loses Another Intellectual Ally in Economist Mark Zandi! The Forgotten History of Public Sector Unionism! ESPN Interrupts Its Regularly Scheduled Programming toBash Obama?! Taxes on Airlines are Soaring, Leaving Travelers Grounded! A Lesson from Detroit Invest in People Not Things! Indiana Democrats Walk Out Over Vote to Become Right to Work State! Awash in Red Ink, Its Time to Run America Like a Business! Republicans are Not at War with Dems, Everyone is at War with Debt! Democrats Blame Game the Real Culprit if Government Shuts Down!
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Medicaid Expansion Threatening State Budgets

WTF! Those were the words President Obama said almost a week ago in his State of the Union. No seriously, he said WTF. Okay, it wasnt in the sense your probably thinking. After all, were talking about Barack Obama, not Joe Biden. This was still a big fing deal. Obamas WTF moment was winning the future. In his State of the Union, Obama issued a four part plan to win the future. They run the gamut from encouraging innovation, improving education, to rebuilding our roads. But the final critical step in Obamas WTF plan is to make sure we arent buried under a mountain of debt. Which leads me to sayWTF (in the traditional meaning of the acronym). If President Obama was truly concerned about addressing our debt youd think hed do something about our unsustainable entitlement structure. Instead, hes going to extreme lengths to make them worse. Medicaid is perhaps his worse offense. The difference between word and deed is astounding. In his State of the Union, Obama said we must further reduce health care costs including programs like Medicare and Medicaid, which are the single biggest contributor to our long-term deficit. His actions have sent a completely different message. Approximately half of Obamacares muchhyped expansion in coverage is simply the result of expanding Medicaids eligibility. The federal government isnt the only ones whose budget is going to get beat up by Medicaid expansion. Medicaid is jointly funded by state and federal governments, so any expansions in Medicaid means enormous costs for state governments. For its part, Obamacare will alleviate
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some of the budgetary tension by specifying that the federal government will pick up 100% of the costs of the expansion. Thats only until 2020 when states will then be required to pay 10% of the tab. Nevertheless, states are finding it exceedingly difficult to pay their existing share of the Medicaid tab, much less face any expansions. As Kaiser Health News reported yesterday, Financially strapped governors, Congress and the Obama administration could be headed for a showdown over the Medicaid health care program that covers 48 million poor, disabled and elderly people nationwide. Arizonas governor has already asked for permission to drop people from the joint federal-state program, which states say is eating up huge portions of their budgets. But to do so, they need the green light either from Congress or the Obama administration. If they dont get one? States warn they may need to slash payments to doctors and hospitals and make deep cuts in other programs such as education. They could even thumb their nose at the law and cut eligibility, which would force the Obama administration to decide whether to cut all federal Medicaid funding to those states. The problem is that Obamacare eliminates states ability to maneuver out of the financial impacts of the Medicaid expansion. A provision of Obamacare mandates that a state will lose its federal share of Medicaid funding if it restricts eligibility. In other words, its Obamas way or the highway on this one. Obamacare is legislating states into debt. But weve already seen how this story ends. When states have difficulty paying their share of the Medicaid tab, the federal government swoops in to help the unsustainable program save face. For an example look no further than the stimulus bill. Among other healthcare spending, the $787 billion package gave $87 billion to the states to help them pay Medicaid costs. So when states find themselves unable to pay for the increased Medicaid eligibility but the bill doesnt allow them to fix their bottom lines, who do you think is going to come to the rescue? The federal government. And how will the federal government pay for the increase in the deficit? Inevitably through higher taxes.
Simply pushing states, and ultimately taxpayers, into a broken system is not reform. Expanding costs to the point where states are threatening to drop Medicaid is not the way to increase coverage. This is not the way to win the future. Although it does make me say, WTF.
Japans Falling Credit Rating A Warning Sign for US

The United States is heading in the wrong direction. Spending is up, productivity is down; a combination most anyone can recognize as dire. The national deficit in this country is expected to reach $1.48 trillion dollars this year. Now I know everyone is aware this is a lot of money, but can you really even begin to fathom just how much money that is? You could combine the net worth of the Forbes 50 wealthiest people in America, and only reach just over half of the national deficit. (Seriously take a look ) A prime example of what an increasing deficit can do to major world economic powers can be seen in Japan. Last week, financial services company Standard and Poor lowered Japans bond rating a notch on their ratings scale. While raising bond rates may not seem like that big of a deal, it is. The raise in rates is a reflection that investors are becoming increasingly worried that the government will be unable to pay back the price of their bond. The higher interest rates are simply a reflection of that increased risk as investors attempt to hedge their bets. Japans problems closely mirror our own. The S&P said the reason it downgraded their bond rating was because of their appraisal that Japans government debt ratios already among the highest for rated sovereigns will continue to rise further than we envisaged before the global economic recession hit the country and will peak only in the mid-2020s. Now here are some things to keep in mind, courtesy of Kevin Hassett of Bloomberg:

Japans debt was 135.4% of GDP when the S&P first downgraded it from AAA in in February 2001 If the US continues to run its current deficit it will take the US just six years to reach a debt level of 135.4% of GDP Greeces credit rating was downgraded repeatedly in 2009 when its debt level was 105.6% of GDP
In other words, were reaching debt levels which investors may not be willing to bear much longer. That isnt the only factor working against us. Bond investors may be willing to bear high
debt levels if the government presents an ability, or at least a willingness, to deal with the situation. S&P could not find that in Japan. In a statement S&P said that it expects Japans fiscal deficits to remain high in the next few years, which will further reduce the governments already weak fiscal flexibility. The United States seems to be facing a similar problem. Our deficit is creating a dual edged sword in which no matter what path we take to reduce the deficit declining GDP and thus declining revenues will be the result. On the one hand, the CBO predicts that large budget deficits would reduce national saving and domestic investment that would lower income growth in the United States. On the other hand, as the debt grows, it becomes increasingly more difficult to solve the problem without raising taxes to a level that would substantially harm our economy. Our fiscal flexibility is being stretched to the breaking point. Unless we act soon, our government will soon be out of policy options. The United States shares one other scary similarity with Japan an aging population. In its statement on downgrading Japans debt the S&P stated, Japans fast-aging population challenges both its fiscal and economic outlooks. The nations total social-security-related expenses now make up 31% of the governments fiscal 2011 budget, and this ratio will rise absent reforms beyond those enacted in 2004. If that isnt an argument for entitlement reform Im not sure what is. In fact, the CBO recently warned us of the budgetary threat of our aging population. In their Long Term Budget Outlook the CBO warned, All told, CBO projects, the aging of the population and the rising cost of health care will cause spending on the major mandatory health care programs and Social Security to grow from roughly 10 percent of GDP today to about 16 percent of GDP If the United States does not want to share the same fate as Japan we must begin to get our fiscal house in order. A downgrade in our debt would shake the confidence of worldwide investors and potentially lead to the collapse of banks and governments that hold US debt. The S&P has already warned us once. A report from last October said that absent policy and other changes the US could be rated worse than Japans current status within the next decade. Can we really afford to wait to solve our deficit?
Judge Uses Obamas Words Against Him to Declare Obamacare Unconstitutional

The contrast between what President Obama says versus what he does is shocking. If Obama were judged solely by the promises he made in his speeches he would go down as the best President in history. Unfortunately for him, reality always seems to get in the way. When judged by how well he has lived up to his soaring promises his place in history becomes much wellmurkier. The clearest example over the first two years was his rhetoric over the deficit. His State of the Union was the latest example. He said the final critical step in winning the future is to make sure we arent buried under a mountain of debt. He didnt mention that his actions were akin to dropping the shovel and getting behind the wheel of a dump truck to bury us beneath that debt. But Obamas latest say-one-thing-but-do-another moment is with healthcare reform. Judge Vinson the federal court judge who yesterday ruled that Obamacare was unconstitutional even makes it a point to highlight Obamas waffling ways in his opinion. Vinson writes, I note that in 2008, then-Senator Obama supported a health care reform proposal that did not include an individual mandate because he was at that time strongly opposed to the idea, stating that, If a mandate was the solution, we can try that to solve homelessness by mandating everybody to buy a house. President Obama was making the point that Republicans are now making that if the individual mandate was constitutional then the federal government would have limitless power. It just so happens, Judge Vinson shares Obamas previously stated rationale, arguing in his opinion that: The problem. . . is it would essentially have unlimited application. There is quite literally no decision that, in the natural course of events, does not have an economic impact of some sort. The decisions of whether and when (or not) to buy a house, a car, a television, a dinner, or even a morning cup of coffee also have a financial impact that when aggregated with similar economic decisions affect the price of that particular product or service and have a substantial effect on interstate commerce. To be sure, it is not difficult to identify an economic decision that has a cumulatively substantial effect on interstate commerce; rather, the difficult task is to find a decision that does not. The trouble is that President Obama (obviously) said that the individual mandate was a ridiculous expansion of federal government, but when push came to shove, he did the exact opposite.
In the end, he used the individual mandate as a way to force healthier people to sign up for more inclusive coverage in an effort to pay for his massive healthcare expansion. Luckily Judge Vinson was there to call him on it.
Obamacare Ruling Has Tied Democrats in Rhetorical Knots

Judge Vinson just placed himself in the upper echelons of liberals shit list. Apparently liberal ideologues just cant imagine that anyone could find a flaw in their greatest of achievements Obamacare. Theres something thoroughly odd and unconventional about the analysis, said one White House official. Really? The best critique you can come up with is odd and unconventional? This guy is clearly a legal scholar. I mean cmon. Attack the precedent its based on, go after the logic used, argue that its interpretation of the Commerce Clause is way off, but if all you can say is essentially that it is weird, do me a favor and shut your yap. All that tells me is that you really, really, really want to find something wrong with the opinion, but cant think of one darn thing that you is worthy of criticism. Sadly, calling it odd and unconventional seems to be the best liberals could muster. Ezra Klein decided to compare it to Bush v. Gore for the simple, if idiotic, reason that its another case that liberals hate. Jonathan Cohn went on a search for clues to some sort of conspiracy theory and came up with a veiled reference to Tea Party groups. Look, look, its right there on page 42! Judge Vinson was trying to make the point that it seems ridiculous our founders would rebel against a tax on tea if they were then going to create a government that could mandate its purchase. Cohn loses all nuance, essentially pointing and shouting He said tea! He said tea! This he says is an obvious shout out to the Tea Party. To my knowledge liberals have been unable to find any hidden references or codes about Sarah Palin or Glenn Beck. Finally, unable to come up with any of their own critiques, they decided to steal one of conservatives lines of attack judicial activism. Stephanie Cutter of the White House Blog writes a post entitled Judicial Activism and the Affordable Care Act in which she argues, Todays ruling issued by Judge Vinson in the Northern District of Florida is a plain case of judicial overreaching. Jonathan Cohn echoes the argument,
If judicial restraint means anything, it means deferring to the Congress on matters of policy preferencelike, for example, whether its better to run a national health insurance system with a system of regulated private insurance rather than via a single-payer, government-run plan What liberals like Cohn and Cutter fail to understand is that the measuring stick for judicial activism is not Congress, its the Constitution. Obamacare runs so far afoul of the Constitution, by broadening its Commerce powers to the point where Congress could do almost anything, that only judicial activism could interpret it any other way. So why is Judge Vinsons ruling getting liberals undies in a wad? After all, he isnt the first judge to rule that Obamacare is unconstitutional. Ah, but he is the first judge to strike the law down in its entirety. Whereas the previous court found that the individual mandate (perhaps the most Constitutionally odious portion of the bill) could be taken out of the bill without harm, Vinson ruled otherwise. On this issue, liberals shot themselves in the foot. As Vinson writes in his opinion, I note that the defendants have acknowledged that the individual mandate and the Acts health insurance reforms, including the guaranteed issue and community rating, will rise or fall together as these reforms cannot be severed from the [individual mandate]. See, e.g., Def. Opp. at 40. As explained in my order on the motion to dismiss: the defendants concede that [the individual mandate] is absolutely necessary for the Acts insurance market reforms to work as intended. In fact, they refer to it as an essential part of the Act at least fourteen times in their motion to dismiss. Congress knew that the individual mandate was essential to keeping healthcare costs low. By mandating younger, healthier individuals purchase more comprehensive healthcare than they want, or likely need, the bill could effectively subsidize their planned coverage expansion. Congress even said in the Act that, [I]f there were no [individual mandate], many individuals would wait to purchase health insurance until they needed care . . . The [individual mandate] is essential to creating effective health insurance markets in which improved health insurance products that are guaranteed issue and do not exclude coverage of pre-existing conditions can be sold. Now that liberals have spent the better part of the last two days trying, and dismally failing, to argue with Vinson on the merits, the fun part will be watching Democrats argue against themselves. Vinsons agreement with Democratic legislators on the issue of severability essentially
means that their lawyers will have to use their appeal to argue that the individual mandate was not necessary after all. As if their house of cards wont tumble down when you remove the aces that prop up the entire thing. Democrats greatest achievement of Obamas term may also end up being their most spectacular failure. If they cant do any better than call the decision odd, that result seems inevitable.
Senate Dems Concede to Earmark Ban, But What Took So Long?

Theyve waved the white flag. Theyve cried uncle. Somewhere Taps is playing. Senate Democrats have finally given in to Republican demands to eliminate earmarks. Daniel Inouye, the Democratic chair of the Appropriations Committee, said that he would accept a two year ban on earmarks. Given the reality before us, it makes no sense to accept earmark requests that have no chance of being enacted into law. Not exactly what you would call a ringing endorsement of the idea, but what would you expect from a party who has had to be dragged, kicking and screaming, toward the idea that the spending must stop. After all, there wasnt much Senate Democrats could do at this point. The move to ban earmarks begun with House Republicans who adopted a voluntary ban on earmarks in November because they had become a symbol of a Congress that has broken faith with the people. Senate Republicans were right behind them, with newly elected Senator Marco Rubio arguing that the ban shows Republicans are serious about doing what it said we were going to be about limited government, spending reduction, dealing with the national debt. Seeing that the political winds were blowing against his partys stance, President Obama then got on board, using his State of the Union to promise that, If a bill comes to my desk with earmarks on it, I will veto it. If Senate Democrats were late to the party, Majority Leader Harry Reid still hasnt shown up. Last week, Reid responded to the State of the Union by saying,
I think its absolutely wrong and the public should understand that the president has enough power; he should back off and let us do what we do. Reid then took it a rhetorical step further, saying that President Obamas earmarks pledge was nothing but an applause line. Even going so far as to say that the President should, back off. To his credit Obama didnt back off, instead forcing Leader Reid to back down. Nevertheless, it is clear that many Senate Democrats, including Harry Reid, remain out of touch with a public that is seriously concerned about spending in Washington. As Republican Senator Tom Coburn said, Our long-term budget challenges are so great that we cannot afford to spend time, much less taxpayer dollars, securing earmarks. But this is not the end of the battle. Earmarks admittedly account for less than half a percent of federal spending. Nevertheless, they are an important symbol and an important starting place for ending Washingtons spending binge. As Republicans move forward and take the increasingly larger steps that will be necessary to get our budget deficit under control, we can only hope that Democrats will look not at the handwriting on the wall but to the will of the American people.
CBO: Interest on Debt Could Hit $7.5 Trillion Over the Next Decade
What would you do with $17,903? Buy a car? Put a down payment down on a house? Save for your college education? Put it all on black in a game of roulette? Any of those things (yes, even the bad odds of roulette) would be a better investment than what the government will be forced to spend it on. You see, that $17,903 is the amount of money per US citizen that the government will spend on interest payments on the national debt over the next decade. And thats if were being the glass-half-full type. A new report by CNN finds that interest payments on the national debt could range from $5.5 trillion to $7.5 trillion depending on the scenario. When dealing with money and Washington its a pretty safe bet were going to be in the worse case scenario.
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CNN tries to put those numbers in perspective, Between 14 cents and 19 cents of every federal tax dollar collected over the next decade would be eaten up by interest. Thats 14 cents to 19 cents of every tax dollar that will not be available to pay for government services and programs, or to aid Americans and states in the event of an economic downturn or natural disaster. Looked at another way, the cost of interest payments in 2021 alone would trump what the government is expected to spend on defense, Medicare or all of the non-defense discretionary programs. There is simply no justification for the fact that were going to be paying nearly $1 trillion in interest. Democrats like to tick off the beneficial things that taxes go toward it funds education, maintains Social Security, and helps keep our roads paved. But how can you justify taxpayer money going to pay interest on loans given to us by China? No jobs are created, no healthcare is provided, no retiree is made more secure by money that is spent to pay interest on our debt. We get nothing, literally nothing, in return for our tax dollars. In fact, it would have a detrimental effect on the very programs that liberals love to gush about. If we are having trouble paying for Medicaid now, imagine just how hard it is going to be with $1 trillion fewer dollars available in the federal budget. This is not an issue we can continue to put off. The Congressional Budget Office just released a report predicting that the deficit will top out at $1.5 trillion this year the highest dollar figure in our nations history. Its time Washington start doing what is in taxpayers best interest so that we can do something with our tax dollars other than simply pay interest.
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DCCC Ads Show Democrats Putting Next Election Ahead of the Next Generation
In what is possibly the worst idea since green ketchup, Democrats are attempting to leverage the spending debate in their favor. Earlier this week Washington Post blogger Greg Sargent wrote, There are increasing signs that Democrats are adopting a surprisingly aggressive and unapologetic posture in the looming political battle with Republicans over government spending. . . Rather than running from the issue . . . they are treating this as an argument that can be turned to their advantage, if its framed in the right way. One of those increasing signs Sargent was referring to was the Democratic Congressional Campaign Committees decision to launch an ad campaign in 19 congressional districts targeting Republicans for wanting to cut spending. Im not Karl Rove, but it doesnt exactly take a skilled political operative to figure out that doubling down on spending is probably not a sound long-term political strategy. The CBO just released a report that the deficit would top $1.5 trillion this year and CNN found that even in the most optimistic scenario well be paying $5.5 trillion in interest on our debt over the next decade. In other words, not exactly the time to be arguing we need to spend more. The conservative group Crossroads GPS, who played a crucial role in the huge Republican victories in last years midterm elections, is now firing back. As reported by the Washington Posts Aaron Blake, Crossroads is going up in the same 19 districts to highlight the stupidity (theres just no other word) of criticizing Republicans attempts to fix our deficit. Blake reports, A week after President Obama called on Congress to work together, Pelosis gang launched negative ads attacking Sean Duffy for doing the hard work of trying to fix the budget mess she created, says one ad. The fact that Democrats would attempt to push public support away from deficit reduction shows the lengths they will go to put politics over principle. It is an unmistakable fact that our nations
finances are on an unsustainable course. Just last year President Obama said that reducing our deficit is going to require people of both parties to come together and take a hard look at the growing gap between what government spends and what the government raises in revenue. And it will require that we put politics aside, that we think more about the next generation than the next election. That sentiment sure didnt last long. No sooner had Republicans begun offering solutions to our deficit, which will necessarily entail hard choices, than Democrats saw a chance to score some political points. Addressing our spending addiction will not be easy, but it will be made impossible if Democrats continue to play politics. What we need is an adult conversation, not childish finger pointing and misleading ads. What we need is for Democrats to live up to their word to put the next generation before the next election. Unfortunately, their latest partisan games show they are, as yet, unwilling to do that.
1099 Repeal a Metaphor for Larger Obamacare Debate

The U.S. Senate voted on Wednesday to get rid of a small part of the Obamacare bill. The eliminated provision was a requirement that all businesses submit a 1099 tax form on all purchases of goods and services of more than $600. It was designed to ensure that businesses actually keep up with and pay the taxes they owe. Your probably asking what the heck this has to do with healthcare. Good question. The answer is absolutely nothing. In fact, the only reason it was included in the Obamacare bill at all is that it was expected to generate $17 billion in new tax revenue that Democrats wanted to use to lower the cost of their spend-happy bill. The problem is, not long after the bill was passed, almost everyone agreed that it was a terrible, no good, very bad idea. The US Chamber of Commerce said that the new regulations would amount to oppressive regulations that would cause an avalanche of new paperwork for small business owners. As Time blogger Adam Sorenson wrote today, Basically, it wasnt well thought out and shortly after passage, both Democrats and Republicans agreed they wanted it gone. Forget todays 81-17 vote for a moment. Max Baucus, who wrote the freaking thing to begin with, introduced language that would have nixed it last year. Repealing it was even a bullet point in President Obamas State of the Union corporate pep talk on how to Win the Future.
The 1099 measure is pretty much a metaphor for the entire Obamacare bill: poorly thought out, bad for business, and in dire need of repeal. The 1099 provision was passed with the hope that it would reduce the number of businesses who either mistakenly or purposefully cheat the system. In true government fashion, it does this by making a complex tax code even harder to comply with. In other words, the Democrats saw a real problem, and then proceeded to make it worse by piling on more government. The unintended consequences quickly became clear the increased cost of compliance would have cost businesses money and dampened job growth. Obamacare does the exact same thing. To its credit it came in response to a true problem; healthcare costs are rising much faster than inflation and will soon put families and the federal government in a tough financial situation. Rather than offer true reform, went to their go-to maneuver add more government to the mix. The results, even if unintended, have been disastrous. Older generations have been hurt. Obamacare led to 700,000 seniors losing the Medicare Advantage plans because of insurance companies quitting the business. Children have been hurt. Health insurers in 34 states have stopped selling child-only policies because insurance companies have dropped out of the market citing higher costs. High risk patients have been hurt. Obamacares high risk pools have attracted a mere 8,000 people, well short of the 375,000 expected, in large part due to higher than expected costs. Frankly, everyone has been hurt! Health insurers across the board say they will be forced to raise premiums 1-9% to pay for new mandated benefits under the law. Its not just the 1099 provision whose unintended consequences demand that Congress rescind it, its the entire Obamacare monstrosity. Susan Eckerly of the National Federation of Independent Business wrote in a letter to Senators about the 1099 reporting requirement, At a time when we need small businesses to help our economy grow, saddling them with expensive new requirements and paperwork burdens will only further hamper their ability to aid in our economic recovery. She may as well have been talking about the entire bill.
Gov. Cuomo Shows Fiscal Conservatism is Not an Option Its a Necessity

Weve said it before, Democrats are proving it again: fiscal conservatism is not a policy preference it is a real-world necessity.
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In the past Democrats have talked about all the good things government could do, ignoring completely that it would take taxpayer money to do so. The results were cushy pensions for their public employee friends, uncompetitive wages for union allies, and continual growth in the size of the government bureaucracy. As it turns out, government programs cost money. Lots of it. More money than Democrats were willing to ask citizens to pay. The results have been disastrous. Our federal government is facing record deficits for the third straight year and our debt is causing bond markets to shudder. Our states are in possibly worse shape since they dont have the luxury of printing their own money. The result of all this money mischief is that Democrats are beginning to sound a lot like fiscal conservatives. The latest example comes from the deep blue state of New York where Democratic Governor Andrew Cuomo has presented a balanced budget. As the Wall Street Journal reported today, The budget that Mr. Cuomo unveiled this week closes a gaping deficit with major budget reductions, calling for spending cuts in state hiring, education, health care, aid to universities and payments to cities. The plan would balance the Empire States $135 billion budget without a dime of new taxes or borrowing. Remarkably, if his budget passed, the state would spend $3.5 billion less than it did last year. Education cuts? Has this Democrat gone crazy? Doesnt he know that the DCCC is running ads against Republicans in New York, criticizing them for making cuts to education! Pushing for cuts to liberals once-sacred programs is just the start of Cuomos plan to put New Yorks budget on a sustainable path. In an op-ed Cuomo wrote in the New York Post yesterday, In Albany speak, deficit means the amount needed to fund the 13 percent increase (as opposed to a normal rate of increase). For example, if one assumed these programs would increase at the rate of inflation (instead of 13 percent) the $10 billion deficit is really a $1 billion deficit. A cut is then defined as anything less than a 13 percent increase. By forcing the debate to start with such a large hike, the final budget ends up spending much more than the year before even after the Governor attempts cuts.
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. . . We need fundamental reform in the budget system that allows us to recalibrate spending this year to a sustainable level and replace the special interest protection program of automatic, unrealistic increases. If you thought that sounds exactly like what Congressional Republicans have been arguing for the past few years, youd be exactly right. In fact, it might as well have been said by Republican budget-hawk Paul Ryan. Oh wait, it has. In his plan to solve the national deficit Ryan has said, The current budget process uses a baseline to measure the budgetary impact of legislation that instills an upward bias in mandatory spending. For example, the baseline projects the automatic growth in entitlement spending that will occur under current-law formulas, regardless of whether the government has the means to finance this spending. If legislation slows the growth of spending for a program relative to the baseline, it is considered a cut in spending. So what is causing Governor Cuomo to talk and act like a Republican? Is it because he no longer shares liberals fondness for a hearty welfare state, Keynesian economic theory, and an active government? Most likely no. The real answer is that he has realized that there is no choice involved. That style of governance led the state of New York into the debt problems it currently faces only by reducing the role of government will they be able to escape it. Zach Howell, chairman of the College Republicans said it best, The facts are utterly indifferent to the hopes of leftist-utopians who think ever-larger government programs can be paid for with humanitarian zeal. Fiscal conservatism isnt an option its a necessity.
Republican Budget Proposal Makes a Down Payment on Deficit Reduction

Wisconsin Representative Paul Ryan has unveiled House Republicans proposal to shave $74 billion from President Obamas budget. Despite the size of the cuts, Republicans have taken some heat for not fulfilling their campaign promise to cut $100 billion in non-security discretionary spending. The smaller number is not a broken promise, but a reflection of the fact that half of the fiscal year is already behind us. In fact, the pledge lives up to another Republican hope reducing discretionary spending to 2008 levels, if only for the remainder of the year. Congressman Ryan said of the proposal,
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Washingtons spending spree is over, As House Republicans pledged and voted to affirm on the House floor last week the spending limits will restore sanity to a broken budget process and return spending for domestic government agencies to pre-stimulus, pre-bailout levels. Although it wont nearly cover a deficit which the CBO has projected will reach $1.5 trillion over the next year, it is a welcome change of course for a Washington that has been stuck in freespending mode. Republicans following through on their promises to reduce the deficit will hopefully put further pressure on President Obama to finally live up to his deficit rhetoric. Last year President Obama, in a joint session of Congress, said We cannot and will not sustain deficit like these without end. Contrary to the prevailing wisdom in Washington these past few years, we cannot simply spend as we please and defer the consequences to the next budget, the next administration, or the next generation. Except the deficit have continued, even grown, without end. Now Obama seems to have backed off of his earlier concern for the deficit, instead using his State of the Union to double down on more spending. Oops, I meant to say investments. His spending-sidekick in the House, Nancy Pelosi, has been echoing Obamas claim for increased spending on infrastructure and green energy. Yesterday, with Congress out of session, she staged a mock hearing on Capitol Hill in an attempt to pressure Republicans to get on board with more stimulus. Upon getting the details of Republicans plan to save taxpayers $74 billion, Rep. Chris Van Hollen, the ranking Democrat on the Budget Committee, attempted to argue that the cuts could harm the economy. As if governments two-year attempt to buy our way out of the recession has been anything but an utter failure. The fact is, it is our enormous debt and Democrats unwillingness to deal with it that has kept many businesses on the sidelines and led many investors to remain wary. Our economy is beginning to recover from its wounds, in spite of, not because of Democrats attempts at stimulus. If weve learned anything its that continuous spending doesnt work. As Speaker of the House John Boehner said of Democrats, They are calling for another round of more wasteful stimulus spending and expecting it to create jobs despite the fact that it has failed to deliver on their promises over the past two years. Things must to change.
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The Republicans are taking steps to fulfill their pledge to reduce spending. Granted they are only, as Paul Ryan said, a down payment on the fiscally responsible measure that will be needed, but at least they are a credible step. Unfortunately, Democrats have dropped all pretense. Theyve forgotten all that theyve said about the deficit, about burdening future generations, about making the hard decisions. Theyve decided to just stick to their guns and spend, spend, spend. This is not, in Obamas words how were going to win the future.
Unemployment Report Shows January Was Another Ugly Month for Hiring
The good news: The unemployment rate fell sharply from 9.4 to 9 percent, the lowest level in nearly two years. The bad news: The economy generated a measly 36,000. The question you should be asking yourself is does 36,000 people really equal .4 percent of the labor force? The answer is an emphatic, no. So what gives? Is this a good or a bad report? What gives is that the January employment report is unique. Each January the Bureau of Labor Statistics (BLS) makes an adjustment to the population controls that are used to determine the unemployment rate. As explained by the BLS: With the release of January data each year, BLS incorporates population control adjustments into the household survey estimates. The adjustments reflect the Census Bureaus review of the components of population changebirths, deaths, and net international migrationand of the methodology used to estimate population. The results from January on household surveys finds that the BLS has overestimated the population by 472,000 since the 2000 census. So when youre looking at the January unemployment report and wondering how we could slash the unemployment rate but only add a few jobs it is because we essentially slashed the population control used to determine unemployment. Now, on to whether or not this is a good or bad report. Simply put, its bad. The 36,000 jobs that were created was less than a quarter of the 145,000 that economists had expected.
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Look at it this way: We lost more than 8 million jobs during the recession. It also takes about 127,000 new jobs each month just to keep up with population growth meaning that we would have needed to add around 3 million jobs during the recession to keep unemployment levels the same. That means we are about 11 million jobs in the hole. Thirty-six thousand just aint gonna cut it. If we want to return to pre-recession unemployment levels within 5 years well need to create in excess of 300,000 jobs a month. Were at one-tenth of that level presently. So dont buy into the economy is turning the corner bunk. This is not a time for the government to sit back and rest on its laurels. Washington must begin to address the things holding our economy back (1) uncertainty caused by temporary tax extensions and onerous legislation like Obamacare and Dodd-Frank; (2) a corporate tax code that deters growth; and (3) a regulatory system that churns out red tape. A lack of job growth is what is holding our recovery back. And Im sorry Mr. President, but fast trains and windmills arent what is going to bring jobs back to the United States. We need progrowth policies, and we need them now.
Democrats Secret Meeting with Lobbyists Show they Arent Serious About Our Deficit
Democrats love to paint the picture of Republicans cozying up to lobbyists. They are always eating lunch in some impossibly upscale place where average folk couldnt even sniff a reservation, or in some dark, smoke filled, bar smoking cigars and sipping Scotch, their pinky finger stuck out for good measure. The story goes, Republicans are in it for the money, Democrats are the ones left to defend the average people. Yeah, well get ready to toss that fairy-tale out the window. ABC News reported today that key Democrats are gathering together an army of lobbyists and special interest groups who stand to lose big money from Republicans proposed budget cuts. In an e-mail obtained by ABC News, a top staffer for the key Senate Appropriations subcommittee called for a meeting of lobbyists and interest groups that would be affected by expected cuts to the Labor and Heath and Human Services budget. The Jan. 24 meeting was attended by ap-
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proximately 400 people, sources told ABC, and served as a call to arms for those determined to fight Republican budget cuts. One thing everyone should be able to agree on now is that a rising tide lifts all boats, and that a higher [Labor, Health & Human Services] allocation improves the chances for every stakeholder group to receive more funding, the committee staffer for Sen. Tom Harkin, D-Iowa, wrote in an e-mail inviting people to the meeting. While Republicans are searching for ways to trim our exorbitant budget deficit, Democrats are looking for ways to preserve funding for their pet projects. Our debt and deficit represent the largest threat to the next generation. Unless our fiscal path changes drastically, the economy will grow more slowly, the job market will become ever-more competitive, and wages will fall. At the end of the day our American Dream will consist of smaller houses, fewer opportunities, and reduced aspirations. None of that matters to the special interests and lobbyists that Democrats are currently courting to help them fight to keep the government money train rolling. They care about maximizing their results today. That means ensuring teachers unions continue to receive cushy pensions, regardless of how they perform in the classroom. That means ensuring that the Health and Human Services budget doesnt get cut so the hordes of new administrators dont lose their plum government jobs. It means fighting for their individual interests over the interests of all Americans. Paul Lindsay of the National Republican Congressional Committee wrote to reporters, House Democrats will stop at nothing to block efforts to cut spending and reduce the deficit. To help in this fight, theyve enlisted their Senate Democrat colleagues and special interest lobbyists to use scare tactics in order to help continue their government spending binge that continues to inhibit job creation throughout the country. Normally, Id say scare tactics is taking it a little far. But one of ABCs sources inside the Democrats meeting with lobbyists wrote, They said these evil House Republicans are here and theyre going to kill all these programs that support little kids, senior citizens, and health care. Theyre trying to instill the fear of God that Republicans are basically going to blow up all these programs, kill these programs, defund them.
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Such hypocrisy must stop. Our deficit is not something that can be toyed with. Republicans effort to trim the budget represents a long overdue attempt at clamping down on the massive waste of taxpayer money that has defined Washington over the past decade. If Democrats are not going to join us in an honest discussion over how best to address our nations most fundamental problem, instead choosing to talk behind our back with lobbyists, then we will go it alone. Solving our deficit is shaping up to be a battle between special interests and our future. Democrats are showing what side they are on.
Dont Let Tax Reform Be Derailed by Special Interests

We have long encouraged the government to begin the process of fixing our burdensome tax code. It is overcomplicated chock full of credits, deductions, exclusions, and exemptions. Tax reform seems to be a natural place to start a conversation about the future given there is bipartisan agreement that it needs fixed. President Obama used his State of the Union to call for comprehensive reform of the tax code: He said that the corporate code has been influenced by a parade of lobbyists that have rigged the code to benefit a few while the rest are hit with one of the highest corporate tax rates in the world. . . So tonight, Im asking Democrats and Republicans to simplify the system. Get rid of the loopholes. Level the playing field. And use the savings to lower the corporate tax rate for the first time in 25 years without adding to our deficit. It can be done. He applied much the same approach to the individual tax code, arguing for simplification in order to broaden the base and lower the rates. This idea is one that has been championed by many Republicans. Sen. Judd Gregg, the ranking Republican member of the Senate Budget Committee, and Rep. Paul Ryan, the Chairman of the House Budget Committee, have both issued tax reform plans based on maintaining revenue by reducing rates and removing complexity. Weve also pushed for reform because the current codes numerous loopholes create a drag on the economy and is inefficient at raising revenue. Nevertheless, as we push for reform it is important to remember a point that up until now we have failed to mention. Nina Olson, the national taxpayer advocate wrote in her annual report,
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Tax complexity doesnt occur just because of big money special interests. It occurs because of the tax provisions that benefit each one of us. We are the special interests. And until we acknowledge that, tax reform discussions will deteriorate into shouting matches and finger pointing about cutting their special tax breaks and not ours. The road to true tax reform requires each and every one to be willing to stop protecting our own tax breaks long enough to begin a dialogue about what we want our system to look like, so we remain a vibrant nation with a tax system that is transparent to its taxpayersone that is simpler to understand and comply with. If we want to run business incentives or social programs through that system, then we need to have a way to evaluate those programs so we can describe to their taxpayers what is being done and how effective those programs are. On the one hand, that will make tax reform infinitely more difficult because it opens up the opportunity for partisan blame-gaming. On the other hand, it allows us the chance to understand exactly what were up against. Over the past year Republicans like Paul Ryan have been presenting Americans with the choices that lay before us. As Ryan wrote in September, Finding the right level of government for Americans is simply impossible unless we decide which ideal we prefer: a free enterprise society with a solid but limited safety net, or a cradle-to-grave, redistributive welfare state. It is an honest choice. But if we choose to continue what George Washington labeled The Great Experiment, we must understand that it will take personal sacrifice. Our government has been promising us more than they can deliver for too long. We now face the moment of truth can we put politics and personal interest aside in order to return to our ideals of limited government and promote a vibrant free market. So as the push for tax reform heats up lets remember the ultimate goal and not become, as Nina Olsen described us our own special interests. We can achieve reforms that lower rates for all tax brackets by cleaning up the code. Lets not derail that reality with shouting matches by over their versus our tax breaks.
Bernankes Says Washington Must Act Now to Preserve Our Future

U.S. Federal Reserve Chairman Ben Bernanke did not mince words in a speech yesterday to the National Press Club: Were on an unsustainable path.
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His speech was odd, focusing most of his scorn on fiscal policy rather than monetary policy which is typically the purview of the Fed. In fact, Bernanke was laudatory of his work at the Fed, arguing that the controversial program of quantitative easing has staved off deflation and raised yields on long term Treasuries securities. Bernanke said, A wide range of market indicators supports the view that the Federal Reserves securities purchases have been effective at easing financial conditions. Bernanke was not quite so admiring when it came to fiscal policy. Even after economic and financial conditions have returned to normal, the federal budget will remain on an unsustainable path, with the budget gap becoming increasingly large over time, unless the Congress enacts significant changes in fiscal programs, Bernanke said. This unsustainable path would eventually drain funds away from private investment and increase our debt to foreigners, with adverse long-run effects on U.S. output, incomes, and standards of living. He also argued that declining confidence in our ability to get our debt under control would lead to sharply rising interest rates on government debt and, potentially, to broader financial turmoil. So what exactly is pushing America onto the brink of this clear disaster? Our broken entitlement system. In that regard, Bernanke leaves no stone unturned. He says the cost of our healthcare system including Medicare and Medicaid will roughly double as a percentage of GDP over the next 25 years. Then, seemingly forgetting that this was the supposed goal of Obamacare, argued that the ability to control healthcare costs. . . will be critical to bringing the federal budget onto a sustainable path. I can read that as nothing other than a slap in the face of Congressional Democrats. Pointing out that healthcare continues to be on an unsustainable path despite, or possibly because of, Obamacare, points to the utter failure of the bill to live up to its promises. So much for bending the cost-curve? Social Security also didnt escape Bernankes wrath. The retirement of the baby-boom generation will also strain Social Security, as the number of workers paying taxes into the system rises more slowly than the number of people receiving benefits, Bernanke said. Such warnings should serve as a direct repudiation of deficit deniers like Senate Majority Leader Harry Reid who said last month, One of the things that always troubles me is, when we start talking about the debt, the first thing people do is run to Social Security. Social Security is a pro-
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gram that works, and its going to be its fully funded for the next 40 years. Stop picking on Social Security. These problems will soon pose a threat to our nations financial stability. One way or the other, fiscal adjustments sufficient to stabilize the federal budget must occur, Bernanke said, the question is, will we do it deliberatively by a careful debate of our options, or will external investors demand changes in response to a crisis. While President Obama continues to spout the need for more government spending, doing nothing but paying lip service to our rising deficit problem, the times demand more immediate change. Bernanke said, acting now to develop a credible program to reduce future deficits is needed to enhance economic growth in the long run. Sadly, there is very little evidence to suggest that Democrats in Washington are ready to begin the difficult process to trim the budget. Such fiscal chiding is surprising coming from the Federal Reserve chairman, but it highlights the enormity of the challenges we face and Democrats lack of action to solve them.
Higher Education Will Suffer From Obamacares Medicaid Mandate

The once happy marriage between states and the federal government is on the rocks. Like a lot of relationship trouble, the problems centers around money. The Wall Street Journal reports, While designing the Patient Protection and Affordable Care Act, the Pelosi-Reid-Obama troika tried desperately to present a faade of federal fiscal prudence where none actually existedso they off-loaded massive costs on the states. By opening Medicaid to applicants 33% above the poverty line in 2014, ObamaCare could expand Medicaid enrollment by as much as 25%, according to the plaintiffs in the Florida suit. Medicaid, also rife with fraud in part because of its hybrid federal-state management, is already one of the biggest items in state budgets. Thanks to the recession and their own spending excesses, nearly all states are suffering budget shortfalls, some to the point where there is no clear idea where the money will come from to meet pension and bond obligations, let alone operating expenses. The prospect of adding a further huge burden down the line, even with Washington kicking in over half the cost, is appalling.
The question nobody seems to be asking is, when the extra Medicaid costs get dumped on states, what happens to funding for public universities? Public universities are already having to institute surcharges and tuition hikes to make up for the loss of state funding due to the recession. With tax revenues down, and states being forced to pony-up after years of fiscal mismanagement, programs like higher education are in line to receive less funding. The hikes began in 2008 when colleges like the University of Kansas, Texas A&M, and the University of South Carolina rose tuition by 17-26 percent. By 2010, families were faced with tuition hikes of $1,100 on average. The most egregious example was the University of Caifornia who raised tuition by 32 percent, leaving students to pay costs that were three times higher than just a decade earlier. By the time the Obamacare burden becomes a reality for states, they will be facing a much more dire situation. According to the federal government, enrollment in two and four year colleges will grow by another 3 million students by 2014. States cannot afford the obligations already on their books, is it really wise to pile on more? Obamacare represents a step in the wrong direction. Forcing more people into the broken Medicaid system is not the way to increase healthcare coverage, its the way to bankrupt states. With states being forced, thats rightforced, by the Obamacare bill to devote more of their annual budget to Medicaid, higher education funding will diminish greatly. The public university system that we like to tout as the best in the world will suffer mightily. If we really want to solve our healthcare problems, the answer is not an increase in government, its by introducing free market competition to lower costs. Sadly, unless Republicans can repeal and replace Obamacare, our colleges will be the ones to suffer from Democrats dogmatic belief in big government.
Happy 100th Birthday President Reagan!

On this, what would have been President Reagans 100th birthday it is wise to remember his unwavering hope, founded in American exceptionalism, that the United States would rise to meet whatever challenges it was faced with. As he said in his first inaugural address,
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Were not, as some would have us believe, doomed to an inevitable decline. I do not believe in a fate that will fall on us no matter what we do. I do believe in a fate that will fall on us if we do nothing. So, with all the creative energy at our command, let us begin an era of national renewal. Let us renew our determination, our courage, and our strength. And let us renew our faith and our hope. America is facing once again the problems that Reagan worked so hard to solve. As we work towards solutions let us never settle for the mediocrity that comes from government solutions. The answer lies within us, as Americans, if only a limited government will allow us to show it. For as Reagan so often reminded us, In this present crisis, government is not the solution to our problem; government is the problem. So as we march forward into our rendezvous with destiny, never forget we are faced with a choice, either we will preserve for our children this, the last best hope of man on Earth, or we will sentence them to take the last step into a thousand years of darkness. Let us celebrate President Reagans birthday by never forgetting that freedom is a fragile thing and that we must, everyday, do our best to protect it.
Contagion Threat of European Debt Is Real

Warning: Economic wonkishness ahead. This blog has looked extensively at the debt crises that are plaguing many European states. Greece and Ireland have already received an IMF bailout, Portugal appears to be on the ropes, and Spain could be next in line. The main fear driving each of these nations to bailout was the so-called threat of contagion. The question is, what on earth does that mean? We really havent had an answer and we were happy to know that the economists were equally stumped. TaxVox, a blog by the Centre for Economic Policy Research, said that Contagion is one of the more elusive concepts in the current debate about the financial crisis. Indeed, the logic behind it is often unclear. When you think of debt, you dont think of a 28 Days Later style plague that turns government budgets into bloodthirsty zombies. So what gives? Is a debt crisis contagious?
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The short answer is yes. The long answer is yes but the Eurozone may have overreacted to the potential bond market crash of small economies like Greece and Portugal. The contagion effect occurs because when bond markets crash, investors are forced to sell off other assets in their portfolio to meet the demands of their creditors. This leads to a fire sale effect in which pain in one type of asset class (bonds) can cause pain in others (non-financial stocks). After research TaxVox found that the most exposed stocks, ones that are lumped into equity funds with stocks that suffered big losses in the financial crisis, suffered huge losses. In other words, the poor performance of one type of investment in a mutual fund could have a seriously adverse consequences on other types of investments. Or, in the preferred verbiage of our times, bad investment can be contagious. In TaxVox nerd-speak, For each [equity] fund, we calculate fund exposure to financial stocks as the losses induced by financial sector positions in the initial phase of the financial crisis. . . To capture this selling pressure on non-financial stocks, we define stock exposure as the average fund exposure of all funds owning the stock weighted by the fund ownership shares in the stock. Thus, non-financial stocks held mostly by funds with large fund exposure are considered highly exposed stocks. . . . The contagion effect is measured as the (cumulative) stock return difference between exposed and non-exposed stocks in the same industry and country. . . . Exposed stocks are indeed those that suffer the largest stock price drawdown during the financial crisis. The stock price for the 15% most exposed stocks worldwide underperformed relative to non-exposed peers in the same country and industry by 17% at the peak of the stock market downturn. So what does this mean for Europe? It means that if a European investment fund had a lot of Greek, Portugeuese, or Irish bonds and the country went belly-up, the crisis could spread to other types of assets, and thus to other nations. The bigger the nation, the bigger the risk. Greece and Portugal accounted for only 4.7% and 2.1% of all Eurozone debt and thus may have been unable to trigger large fund redemption calls that would have spread to other nations.
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With Spain, Europes fifth largest economy, teetering on the brink of collapse, the threat of asset contagion could become reality.
Obamas New Economic Team: Incompetent? Or Just Dishonest

Obamas old economic team was no great shakes. They were a dream team lineup of economists and professors, but put them together in a room and it was like a cattier, and more entertaining version of Real Housewives of DC. That team has mostly fled back to the ivory towers of academia, or, in the case of Peter Orszag decided it was time to cash in his chips in the private sector. Now weve got a new group of top economists high-mindedly promising to part the sea of red ink and lead us to the economic Promised Land. That leads us to Jacob Lew, the new/old Director of the United Stats Office of Management and Budget. In todays New York Times Lew penned an editorial giving himself a solid pat on the back (while also providing a veiled kick in the pants to President Bush). It reads, When I left the Office of Management and Budget in January 2001, the country had a projected surplus of $5.6 trillion over the next decade. When I returned last November, decisions to make two large tax cuts without offsetting them and to create a Medicare prescription drug benefit without paying for it, combined with the effects of the recession, meant that the nation faced projected deficits of $10.4 trillion over the next decade. Its the paternal, I leave for just a few years and everything goes to crap, type of argument. May have even been a good one too if his economics werent completely wrong. As the Center for Economic and Policy Research retorted in a post entitled, Jacob Lews Scary Oped, they write, Lew boasts about the huge budget surplus at the end of the Clinton administration. He shows no understanding of the fact that these surpluses were largely the result of a stock bubble, which was inevitably going to burst. The story of the economys growth at that point was that the $10 trillion stock bubble fueled a consumption boom, which led to strong economic growth.
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Of course the bubble was not sustainable, when it burst, the consumption it supported also disappeared. We only recovered from the recession when the housing bubble created enough demand to replace the demand lost from the collapse of the stock bubble. . . . Mr. Lew shows no understanding of this basic point. Either this top Obama official is ignorant of basic economics or he is not being honest with the American people. Either way, it is an incredibly scary column. So it appears we traded in a completely dysfunctional economic team for a completely incompetent one. Or worse, a dishonest one.
Rep. Issa Shows GOP Listening to Main Street

Im a generally grumpy guy. Some would even call me a complainer. Im like the old guy from Up without the happy memory montage. But ask me to write down my gripes about Democrats, the state of politics, or even life in general and I may be able to hit five pages. Washingtons winters suck, Comcast customer service is awful, my iPhone is slowing down by the day, andIm already running out of steam. Businesses apparently have a lot more to complain about. Earlier this year, Congressman Darrell Issa, chairman of the House Oversight Committee, reached out to businesses around the country to see what government regulations and red tape were stopping them from growing and hiring. This morning, Rep. Issa released more than 200 of these responses spanning 1,947 pages. 1,947 pages worth of legitimate gripes and groans about the bureaucratic and regulatory burden that is standing in the way of job creation. One of these responses comes from the American Beverage Association. Their concerns are indicative of what many businesses are currently facing: When Congress passed the American Recovery and Reform Act, taxpayer money was allocated for shovel ready projects in an effort to stimulate the economy and create or preserve jobs. Instead, in some instances, this money was spent in way which may have the opposite effect-by denigrating particular products which could result in lost sales and lost jobs Lost sales and lost jobs
How long are we going to continue hearing that? The problem with government created regulations is, as Milton Friedman famously said, the government solution to a problem is usually as bad as the problem and very often makes the problem worse. Then, in true bureaucratic fashion the government then creates more rules, hires more regulators, and spends more money to solve the problem they created in trying to solve the problem. On the plus side, President Obama realizes the threat that the proliferation of government regulation has on continued economic growth. He recently penned an oped in which he spoke of his administrations efforts to restore the entrepreneurialism and vibrant free-markets that made us the most successful nation in the world. Obama wrote, Were also getting rid of absurd and unnecessary paperwork requirements that waste time and money. Were looking at the system as a whole to make sure we avoid excessive, inconsistent and redundant regulation. And finally, today I am directing federal agencies to do more to account forand reducethe burdens regulations may place on small businesses. Small firms drive growth and create most new jobs in this country. We need to make sure nothing stands in their way. On the down side, hes done little more than talk about the regulatory burden for two years now. The adage To say one thing, and do another seems to apply perfectly. President Obama may be talking a big game when it comes to cutting red tape, but his actions paint a different picture. A report by the Heritage Foundation found that the total cost of the rules promulgated by federal agencies totaled nearly $28 billion the highest level ever recorded.
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Mr. President, its time to do more than talk. Its time to start knocking down the regulatory barriers to job growth. Fortunately, Rep. Issa has done your homework for you. Hundreds of businesses have stepped up to the plate, providing detailed and specific recommendations on how to remove the most redundant, burdensome, or counterproductive regulations on the books. How about we actually start Winning the Future as opposed to scratching our heads and saying WT..Heck We need to decrease the size of the governments role in business and stop investing so much of Americans hard earned money. Of course, Ive come to expect little more than talk from the Obama administration. One more thing to put on my list of gripes I suppose.
Whether Its Coca-Cola or Ethanol, Government Should Stop Picking Winners and Losers
When you think of Super Bowl commercials you think of outrageousness. Talking frogs, chimpanzees in business suits, and, lets face it, girls in skimpy outfits (were looking at you GoDaddy.com). Its a time for spectacle, not public service announcements. Nevertheless, an admittedly mind-numbing commercial from the Americans Against Food Taxes (yes, there is such a thing) is garnering some buzz, if only from politics nerds like us. As you may have guessed by the name of the coalition who created the ad, the commercial complains that politicians are trying to control what we eat and drink with taxes. This issue has been in the news a lot recently. California banning Happy Meal toys unless McDonalds meets certain health standards was the most publicized example. Sadly, sugary drinks and Happy Meals are only the most recent government attempts at social engineering via the tax code. The government quietly incentivizes a host of behaviors through tax incentives. Everything from green appliances, to fuel efficient cars, to home ownership, to marriage are subtly encouraged. The question is, is this what we as Americans want out of our government and our tax code? At one time our tax system was viewed with a singular purpose to raise revenue. At some point, when outright spending to encourage certain desired ends became too politically difficult, the government realized it could accomplish the same end through so-called tax expenditures. For instance, if I told you that Congress was going to pass a spending bill that would cost $1.3 trillion over the next decade, youd laugh me right out of town. But that is exactly the 10-year
cost of the mortgage interest deduction that currently exists in our tax code. This idea, that we can subtly shift behavior through a system of penalties and subsidies is fundamentally at odds with maximizing revenue and more importantlyfreedom. Washington Post blogger Ezra Klein agrees with the ridiculousness of using the tax code to influence Americans diets. In todays Wonkbook he writes, Id like to propose common cause with my brothers and sisters in the Coca-Cola Company. Government does need to trim its budget back. And it probably should be doing less to influence us in the checkout lines. So lets make this the year we finally end subsidies to the corn industry. Deal? Deal! That was enthusiasm that Klein probably wasnt expecting. He probably thinks hes putting Republicans in a hard spot here. Hell concede that tax code as a tool for social engineering is a bad idea and in return well concede that ethanol subsidies are an equally stupid concept. Admittedly, some Midwestern Republicans are a little skittish on the idea, despite the fact that thee 45-cent-a-gallon tax credit adds nearly $5 billion to the deficit annually. Nevertheless, ethanol subsidies are an unquestionably bad idea. Ya know when Sen. Barbara Boxer (D-CA) and Sen. Jim DeMint are both against it, its probably a bad idea. Gas made by ethanol is doesnt contain the same energy per unit volume as traditional gasoline, resulting in a reduction in miles per gallon. Yet, ethanol blends cost just as much, the result of billions of dollars worth of subsidies in an effort to encourage development of alternative fuels. The problem is that it takes the equivalent of 1.29 gallons of gasoline to produce enough ethanol to replace a gallon of gas. Not exactly smart economics. So lets stop using the tax code to pick winners and losers in the market both at the checkout aisle and the gas pump. But Ill go Klein one better. If he truly believes that the government should trim its budget and do less to influence us using the tax code, why stop at ethanol? Why not get rid of the tax credits for all the other green fuels out there? Free markets will work to achieve our social endsif we let them.
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Closing of DLC Shows Moderate Democrats a Dying Breed

Moderate Democrats are a dying breed, but they arent going out without some fireworks. The latest sign of their demise is that the centrist Democratic Leadership Council has declared it is closing up shop for lack of funds. Ben Smith of Politico explains the reason, The DLC, a network of Democratic elected officials and policy intellectuals had long been fading from its mid-90s political relevance, tarred by the left as a symbol of triangulation at a moment when theres little appetite for intra-party warfare on the center-right. The left was not exactly upset by the announcement. Markos Moulitsas of the liberal blog the DailyKos wrote, Where is the grave, so I can go dance on it? . . . Another boogeyman dead and buried. But dont celebrate too much. Their mantle has been picked up by the even more nefarious Third Way. It appears there is just no place for centrism amongst the left. Darcy Burner, president of the Progressive Congress, said the DLCs woes are a representation of whats happening right now in Democratic politics, namely that progressives are winning the battle for the party. Blue Dogs in the House are likewise being pushed out of the party. Rep. Heath Shuler told MSNBC that We still have not had that connection between the Blue Dog members and leadership. In fact he said, there has really been no communication whatsoever. Moderate Democrats arent going down within a fight. Politico reported today, A handful of moderate Senate Democrats are looking for ways to roll back the highly contentious individual mandate the pillar of President Barack Obamas health care law a sign that redstate senators are prepared to assert their independence ahead of the 2012 elections.
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. . . And its not just health care. The senators are prepared to break with the White House on a wide range of issues: embracing deeper spending cuts, scaling back business regulations and overhauling environmental rules. These Senate Democrats, along with their Blue Dog brethren in the House, understand that the liberal way was not working. Enormous government spending programs were creating a larger deficit, not more jobs. Unfortunately, Democratic leadership nor the leftist fringe of the grassroots want to hear from them. They have staked their position as one where compromise is demonized. Ashley Bell, former president of the College Democrats of America, said it best, I think the midterms showed you really cant be a conservative and be a member of the Democratic Party. Sad, but true.
Liberals Delusion Government Regulates Business Better than Free Markets

President Obama used his State of the Union to make the argument that, We have to make America the best place on Earth to do business. Currently, its not. In an effort to solve the problem President Obama and Rep. Darrell Issa have both attempted to solve the problem by finding and correcting excessive, inconsistent and redundant regulations. In his State of the Union Obama said that to reduce barriers to growth an investment, Ive ordered a review of government regulations. When we find rules that put an unnecessary burden on businesses, we will fix them. Rep. Darrell Issa, the chairman of the House Oversight Committee, decided to help President Obama fulfill this goal. He asked businesses and trade groups to identify government regulations that are imped[ing] the type of permanent, private-sector job creation necessary to successfully lower unemployment.
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Yesterday, Rep. Issa publicly released nearly 2,000 pages of submissions he had received from businesses in an effort to jumpstart talks on how to stimulate the economy at no cost to taxpayers. Unsurprisingly, many liberals have taken exception to Rep. Issas report. They argue that the government regulations that are in place are the result of their attempts to protect the public from a businesses profit motive. At a time when corporate profits are at their highest level in history, they argue, doesnt it seem a little ridiculous that they should complain about keeping mine waste out of water and lead paint out of childrens toys! Slate writer Timothy Noah summed up the argument in a recent column: Should we care when business complains about burdensome regulation? Not a lot. By definition, a regulation is a government requirement that business uphold responsibilities to the public at large that, left to its own devices, business would rather avoid. If business leaders were naturally inclined to sacrifice their companies narrow interests whenever these conflicted with those of the general population, regulation would be unnecessary (and business leaders would not be recognizably human). There are two problems with this traditional liberal complaint. First, there is no evidence that government protects the interests of the consumer better than free markets do. Second, contrary to Noahs argument, companies interests very rarely conflict with those of the general population. Adam Smith said the in the Wealth of Nations, It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own self interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their own advantages. Smith argues, just as I do today, the powerful force of profit and self-preservation always outweighs the altruism of bureaucrats in Washington. If you learn that a companys product is unsafe, or even engages in business practices that do not align with your own, you will choose to buy something else.
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Nobel Prize winning economist Milton Friedman explained the concept by saying, pushing harmful, dangerous, or unpopular products is is very poor business practice not a way to develop a loyal and faithful clientele. He does admit that accidents will occur, but the difference is that a private firm that makes a serious blunder may go out of business. A government agency is likely to get bigger. Certainly, there are some areas when a business profit motive will trump the consumers welfare. But this situation is limited to areas in which the people who are hurt or benefited by a particular action are obscured, in other words, there is a market failure. This often happens in the case of environmental regulations, in which the government attempts to put a cost on pollution that falls through the free-market pricing system. Our government is walking the fine line that President Obama laid out in his State of the Union. We must find ways to make America business friendly while also taking responsibility for our deficit. Finding and eliminating burdensome regulations that add nothing to consumer safety but add substantial heft to our bureaucracy is one of the best ways to accomplish this dual goal. It is sad that it is being impeded by the well-intentioned, but flawed belief in governments ability to supplant the market. As Milton Friedman famously said, One of the great mistakes is to judge policies and programs by their intentions rather than their results.
Gov. Daniels Demands Changes to Broken Obamacare Bill

Ever wonder how you can square peg fits into a round hole? Answer: You cant. Ever wonder how you can reduce the deficit while enrolling millions into Medicaid? Answer: Obamacare! Oh wait you cant. As it turns out, trying to reduce the deficit with a bill that does nothing to reform the drivers of higher healthcare costs is like trying to slam a square peg into a round hole. It just doesnt make sense.
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Governors across the nation are attempting to rectify this engineering flaw by whittling away at the edges of the Obamacare peg. In the words of our man Mitch Daniels, Indianas Governor, The presidents health-care reform law is a massive mistake. It will amplify all the big drivers of overconsumption and excessive pricing [And] add trillions to the deficit. Daniels knows a little something about addressing deficits. When Daniels took office in 2004, Indiana had a long-standing deficit of $600 million deficit and hadnt balanced the budget in seven years. He balanced the budget in just his first year. After four years he had paid off all of the states outstanding debt and had a surplus of $1.3 billion in the bank. The results have been remarkable. Today, Indiana has a AAA credit rating (the first in state history), which it has maintained despite the economic downturn. Because he used budget cuts and efficiencies rather than tax increases to address the deficit, Indiana has also become a friend to businesses. The Weekly Standard writes, No other state in the Midwestall of them, like Indiana, dependent on a declining manufacturing sectorcan match this record. Venture capital investment in Indiana had lagged at $39 million annually in the first years of this decade. By 2009 it was averaging $94 million. Even now the state has continued to add jobs7 percent of new U.S. employment has been in Indiana this year, a state with 2 percent of the countrys population. For the first time in 40 years more people are moving into the state than leaving it. It is no wonder that CNBC named Indiana the Most Improved State for Business in the country and the state is now near the top of every national ranking of business attractiveness. Obamacare threatens to undue all of Daniels hard work. The healthcare bill will require states to add 15 million more citizens to the Medicaid rolls. Daniels estimates that the price to [Indianas] taxpayers at $2.6 billion to $3 billion over the next 10 years. The additional Medicaid burden is not even the worst part in Daniels eyes. Perhaps worse, the law expects to conscript the states as its agents in its takeover of health care. It assumes that we will set up and operate its new insurance exchanges for it, using our current welfare apparatuses to do the numbingly complex work of figuring out who is eligible for its subsidies, how much each person or family is eligible for, redetermining this eligibility regularly,
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and more. Then, we are supposed to oversee all the insurance plans in the exchanges for compliance with Washingtons dictates about terms and prices. Not only does Obamacare force states to pick up a chunk of the tab for the enrollment increases, it passes off a huge chunk of the bureaucratic burden as well. It should go without saying that this is probably not the best time to be adding things to state budgets. State revenues have been hit especially hard by the recession and many are scrambling to find places to cut, often being forced to cut basic governmental services in order to afford their public pensions. Increased healthcare costs could be the straw that breaks the camels back. Thats why forward-thinking governors like Daniels are attempting to get out ahead of the budget-busting Obamacare bill, thinking of ways to introduce free-market principles in what will otherwise lead to a government takeover of health care. Among his proposals are:

Waiving all the mandates that force citizens to buy healthcare benefits that they dont need Eliminating any provisions discriminating against consumer driven plans such as health savings accounts The ability to make changes to Medicaid so that millions of people arent simply shuttled into a broken system
Fortunately, governors like Daniels have some leverage. If the federal government needs states to run their exchanges, states have a powerful bargaining chip to force Washington to accede to some demands. If the federal government is hell-bent on forcing a square peg into a round hole, lets at least whittle off the sharp edges. It is admittedly not a perfect solution. That could only be achieved by implementing true free market reforms into the healthcare marketplace. Nevertheless, it is a huge step in the right direction and we can only hope more governors follow Daniels lead.
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Gov. Christies Rising Approval Rating Shows Dem Gamble Failed

The Democrats cynical gamble now looks about as smart as betting on Pittsburgh in the Super Bowl. The gamble was despite voters saying they want to reduce the deficit, when push comes to shove they will vote out the politicians who made the cuts. Washington Post blogger Greg Sargent explained the rationale in a recent post, Dont look now, but there are increasing signs that Democrats are adopting a surprisingly aggressive and unapologetic posture in the looming political battle with Republicans over government spending. Rather than running from the issue . . . they are treating this as an argument that can be turned to their advantage, if its framed in the right way. A Democratic strategist familiar with ongoing discussions says Dems have been encouraged by recent polling on these questions. While polls undoubtedly show that the public supports reducing government spending in general, Gallup recently found that sizable majorities oppose cuts to education, funding for the arts and sciences, Social Security and Medicare. Democrats move is cynical because it is pure election politics, completely ignoring the budgetary realities that threaten to push us towards insolvency. It is a strategy based in short term success for the Democratic Party, even if it meant long term disaster for the nation as a whole. As it turns out, gambling against Americans is a bad idea. It is no doubt true that Americans love many of the programs government funding supports. Older voters will fiercely defend Social Security, young adults want to maintain public subsidies for higher education, and everyone in between has likes something or another funded by the government. But that doesnt mean we as a society do not understand that our government cannot continue to live beyond its means. The latest proof comes from who else, the king of in-your-face budget cutters, Chris Christie. A Quinnipiac University poll out today finds that 52 percent of New Jersey voters saying they approve of governor Christie. Thats up 6 points since December. Eight in ten Republicans, and more importantly, 55 percent of independents approve of the job Christie has done.
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Deep cuts in public budgets and a popular governor dont usually go together, said Peter Woolley, a Fairleigh Dickinson professor who has also polled New Jersey. Woolley was right. Thats just what Democrats were gambling on. But things have changed. Our nations dire fiscal straits have reframed the debate. Voters understand that we cannot remain on our current spending path and that we have a choice to make more taxes or less government. Regardless of what choice they make voters are increasingly rewarding politicians who engage in the debate rather than continue on with their head in the sand. Democrats had better adjust their strategy. Any more gambles like this and they will soon find their party has gone belly up.
Solving Our Long Term Budget Problems Requires Reworking Entitlements

Whenever Im driving along a beaten down highway, zone out and go on autopilot, I end up at home; right back where I started. This is what is going to happen if the only measures taken to reduce the deficit are putting on a five-year freeze on discretionary spending and reducing the federal budget to 2008 levels. If I remember correctly, 2008 was not exactly rainbows and butterflies. Unless we pursue further measures to reduce spending, the US will hit the deficit ceiling at 75mph without an airbag and end up submerged in a ditch on the side of the road. According to the Former Republican Senator Alan Simpson in the article Leaving Entitlements on Auto Pilot Will Crush the U.S. Economy, getting rid of the healthcare law, voting to end taxpayer funding of presidential campaigns, cutting the congressional budget and earmark process and proposing billions in spending cuts for the remainder of the fiscal year, are not sufficient to make a dent in the current $14 trillion dollar deficit. All of these proposed cuts are nothing but a drop in a very large bucket. In order for the deficit to truly be reduced the band aid needs to be ripped off quickly. The pain will be short and intense, but the problem will have been addressed. This will mean the implementation of targeted reductions in programs once viewed as sacred cows. We have no choice if we want to avoid the crap hitting the debt-ceiling fan. One of the suggestions being made by Former Republican Senator Alan Simpson is to increase the retirement age to receive Social Security to 68 by the year 2050. Thats 40 years away. By that time current college aged Americans and twenty-somethings will be nearing retirement age. The idea of raising the retirement age will surely not be popular, it means members of our generation will have to work longer to receive the same benefits, but the alternative is infinitely
worse. If you dont do anything with Social Security when you waddle up to get your check in the year 2037, youll get 22 percent less, Simpson said. After 2037 the programs finances get even worse, running deficits to the point where the program may not be able to exist at all. Better to have benefits start at 68 than the program go bankrupt and we receive no benefits at all. Making the necessary changes now will allow us to start planning our retirement earlier. It makes a lot more sense to plan for your own future than to play Russian Roulette on a program that may not even exist by the time we retire. Social Security is not the only entitlement in dire need of reform. There are a significant number of Americans that believe that everything should be handed to them on shiny, I can see myself in its luster, platter. America was not built on a foundation of entitlement. We were founded upon the ideal of freedom, and an essential facet of freedom is individual responsibility. Unlike the social welfare states of Europe that have attempted to equalize results bringing down the successful and raising up the failures we have allowed individuals to succeed and fail based upon their own merits. The resultant prosperity has allowed us to create a safety net to ensure that those who fall through the cracks of society, through no fault of their own, can be provided with a means of support. But our safety net has expanded to the point where it threatens to not only catch those who fall, but to ensnare everyone beneath its crushing weight. The bottom line is that Republicans are definitely making strides in the right direction with concerns to reducing the deficit. However, the Pledge to America document that aided Republicans in the recent election season, promised $100 billion to be slashed from government spending. Of the $100 billion only $74 billion has been slashed, leaving another $26 billion out in limbo land. The GOP leaders have, as Rep. Paul Ryan said, made a down payment on a more fiscally responsible Washington. Now is not the time to go on auto-pilot. Now is the time to get behind the wheel and make the hard cuts our nation needs for future generations to prosper.
Businesses Exist to Make ProfitsAnd Thats a Good Thing

The government wants businesses to create jobs. Sounds like a good enough policy, right? Sadly, it shows a fundamental misunderstanding of the motivating factors of free markets. Businesses, for the most part, dont care about creating jobs. On a macro level, the primal force that drives them is profits. A letter to the Wall Street Journal from Donald Boudreaux, an economist at George Mason, makes the point perfectly.
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Yesterday Pres. Obama pleaded with members of the U.S. Chamber of Commerce: Ask yourselves what you can do for America. Ask yourselves what you can do to hire American workers, to support the American economy, and to invest in this nation (Obama Vows to Knock Down Business Barriers, Feb. 8). The job of entrepreneurs, investors, and business owners and managers is to invest and to produce in ways that are most likely to yield the highest profit in the market. Period. By doing so, businesses follow the best available signals to guide them to promote the well-being of others. The additional goals that Mr. Obama wants business people to pursue sound splendid when trumpeted in public speeches but, in practice, are far too nebulous to be workable. No business person can possibly know enough to do consistently and successfully what Mr. Obama asks. As on so many issues, Adam Smiths wisdom remains relevant: By pursuing his own interest he [the business person] frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. Sincerely, Donald J. Boudreaux People may be disgusted by profit-hungry companies. In fact, that dislike was likely behind President Obamas messaging decision to pit Wall Street versus Main Street. As if the interests of the big-bad companies, whose CEOs sit in leather chairs looking down on the peons below them, were at odds with the average workers futile attempt to find work in a down economy. The truth is, that disgust is misplaced. Without a profit motive the economy simply breaks down. As Milton Friedman described in his book Free to Choose, Profit provides the incentive for investment in factories and machines, and for developing new products and methods. This investment, these innovations, have, over the years, raised the productivity of the worker and provided the wherewithal for higher and higher wages. Not only have they led to higher wages, profits are the only reason jobs exist in the first place. A businessmans naked self-interest in maximizing profits is what inevitably leads his business to grow. He doesnt increase production because he really wants everyone to have whatever cool thingamajig it is that he just invented, he increased production because he wants to be able to sell
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more and increase profits. He will hire as many workers, to make as many of the product as the market will reasonably bear. So when the government wants businesses to hire more workers in order to get the economy moving, understand they are one step behind the curve. What they should really want is businesses to make more profits, to boost productivity, knowing that the inevitable result is more jobs and more wealth. Then again, thats asking President Obama to understand economics, something he has shown he is either unwilling or incapable of doing.
Inaction on Deficit Coming Back to Bite Obama

Obama thinks he had us fooled. He thinks hes still playing under the rules of campaigns, where we can only judge you based on what you say, where promises actually hold weight with voters. He was wrong. Obama is finding out the hard way that once youre in the White House its put-up or shut-up time. To be sure, hes talked a big game. In last years State of the Union he said families across the country are tightening their belts and making tough decisions. The federal government should do the same. Oops. A recent report by the CBO found that the 2011 budget deficit will come in at $1.5 trillion the highest amount ever recorded. Undettered, Obama was back at the lectern in 2011, using his State of the Union to make a renewed push for deficit reduction. We are living with a legacy of deficit spending that began almost a decade ago . . . Now that the worst of the recession is over, we have to confront the fact that our government spends more than it takes in. That is not sustainable. Every day, families sacrifice to live within their means. They deserve a government that does the same. Fool us once, shame on you. Fool us twice, shame on us.
Fortunately, a new Gallup poll shows Americans are catching on to the fact that Obamas deficit speeches are never followed up with action. Gallup explains, President Barack Obamas approval rating for handling the federal budget deficit has gone from bad to worse in recent months, even as his ratings on all other major national issues have generally held steady. Currently, 27% of Americans approve of Obama on the deficit, down from 32% in November, while 68% disapprove. Among the bad news for Obama, only 19 percent of independents approve of Obamas handling of the deficit. The deficit is also the issue where Obamas approval amongst Democrats is at its lowest level 57 percent.
Its time for Obama to stop talking a big game about our deficit and get to work coming up with real ways to reduce spending. Its time he stops putting his debt on our tab!
Obamas $3.73 Trillion Budget Ignores Our Debt Problem

President Obamas 2012 budget is set to hit Congress desk in the next few hours. Sadly, it appears to be more of a disaster than the Super Bowl halftime show. The White House predicts that this years deficit will be a staggering $1.6 trillion a full $100 billion higher than the CBOs earlier projections. Deficits would then hover in the $1 trillion range for the foreseeable future.
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The problem is, no one can predict how long that foreseeable future will last. With deficits as far as the eye can see, at some point the CBOs warnings will come true and our creditors will demand some serious changes. The hope would be that President Obama would begin to instill those changes now, while we still had control over the process, versus waiting until a debt crisis in which our creditors would demand the keys to the budgetary car. Obamas budget reflects an unwillingness to push for any of these changes. Earlier this year President Obama put together a bipartisan deficit commission, tasked with coming up with a plan to reduce government spending and put us on a fiscally sustainable course. Their plan would overhaul the tax code, trim spending on Social Security, Medicare, Medicaid, and defense. It was an ambitious plan that would slash deficits by $4 trillion over the next 10 years. And it still didnt go far enough. Obamas budget reflects none of the deficit commissions recommendations. Theres no tax reform, theres no entitlement reform, theres no reform period. Theres just more of the same. Democratic chairman of the fiscal commission, Erskine Bowles, told the Washington Post, that Obamas proposed budget goes nowhere near where they will have to go to resolve our fiscal nightmare. Alice Rivlin, another Democratic member of the commission, added, I would have preferred to see the administration get out front on addressing the entitlements and the tax reform that we need to reduce long run deficits. But they clearly made a tactical decision that this is not the best way to get a positive result. The question is, a positive result for whom? It is certainly not a positive result for America. Under the Obama budget our national debt is going to continue its steep ascent, creating an even bigger budgetary headache for younger generations. The only person it could be positive for is President Obama himself. By ignoring politically contentious reforms to cherished programs like Social Security, Obama can avoid potential electoral backlash. Abdicating responsibility is a short-term and shortsighted strategy. Continually putting off necessary reforms while continuing to throw money to pet constituencies may be enough to keep you in office in 2012, but is a sure path to long term ruin. Young adults overwhelming supported Obama because they believed he would represent their viewpoints and interests in the White House. This budget shows he is doing neither.
Economists Agree Obamas Budget is a Flop

President Obama will soon present his 2012 budget to Congress. With a pricetag of $3.73 trillion and a projected deficit of $1.6 trillion, you have to wonder what Obama was thinking. I mean, is this really the best you can do? Economists who have gotten their hands on an advanced copy of the budget have been asking similar questions. If there responses are any indication, Obamas big-spending budget could be the biggest flop since The Last Airbender. (As an aside, is it still possible to call M. Night Shyamalans movies flops? His career trajectory looks like our budget deficit in reverse.) Heres a sampling of reviews from some non-partisan budget experts:
Non-partisan budget experts blasted the budget even before exact details were known. The entitlement and tax reform agenda will apparently be deferred yet again, said Robert Bixby, director of the Concord Coalition, a fiscal watchdog group. It makes you wonder what the point was of having a commission in the first place. USA Today Erskine Bowles, the Democratic chairman of the fiscal commission, said the White House budget request goes nowhere near where they will have to go to resolve our fiscal nightmare. Washington Post Maya MacGuineas, president of the Committee for a Responsible Federal Budget, accused the White House of a political unwillingness to tackle the tough issues before a fiscal crisis forces action. - USA Today Its a slow train wreck coming and we all know its going to happen, said Bret Barker, an interest-rate analyst at Los Angeles-based TCW Group Inc., which manages about $115 billion in assets. Its just a question of whether we want to deal with it. There are huge structural changes that have to go on with this economy. Bloomberg As economists deeply concerned about our nations future, we urge a change in direction. To support real economic growth and support the creation of private-sector jobs, immediate action is needed to reign in federal spending. Letter from 150 economists to President Obama The budget confirms that Mr. Obama is not taking the lead in embracing the kind of farreaching deficit-reduction plan recommended in December by a bipartisan majority of his fiscal commission. It proposed saving $4 trillion over a decade through specific cuts in spending for domestic, military and entitlement programs and new revenues from overhauling the tax code. New York Times
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With the budget he is to unveil Monday, President Obama has not opted for the bold, comprehensive approach to reining in the fast-growing federal debt that his own fiscal commission has said is needed, now. New York Times
President Obamas budget proposal continues to put off the difficult choices necessary to get our nation headed in the right direction. What good was the bipartisan deficit commission if the budget you put together completely ignores their proposals? We need a change in direction, not this perfect storm of suck that you call a budget.
Obamas Procrastination on Entitlement Reform Threatening Our Future

College students are pros at procrastination. We have mastered the art of waiting until the very last minute possible to get something done on time. Sure, it may mean pulling an all-nighter in the dorm study lounge or a couple of late nights in a library study carrel, but inevitably, we get it done. President Obama on the other hand hasnt quite mastered the fine art of procrastination. To be sure, hes got the delaying part down pat. The prez can put off hard decisions better than just about anyone. If delaying were an art form hed be Picasso. Unfortunately, he doesnt quite grasp the second, necessary, part of procrastination get it done. His new budget, which will be sent to Congress today, may have been one of his last best chances to present a plan to deal with our entitlements. Instead, he puntedagain. Sure, Obamas budget trims a bit here and there. It calls for spending cuts and tax hikes that total about 14 percent of the $8 trillion in projected deficits over the next decade. But its tinkering with a problem that requires a complete overhaul. Think of it this way, the budget deficit in 2008, just a few short years ago, was $407 billion. This years deficit will be $1.2 trillion more than that. President Obama likes to ignore this year, arguing that next year the deficit will fall to $1.1 trillion. Progress, they argue. Jack Lew, director of the Office of Management and Budget, had the audacity to say that this budget has a lot of pain. . . This is a tough budget.
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If this is tough, I cant imagine what words he would have described the budgets in the 2000s. I mean, does he seriously believe that spending triple the amount we were in 2008 is progress? Did I somehow miss 300% inflation that happened over the last four years, because if not, I think were being sold some snake oil here. The trouble is the presidents unwillingness to focus on the main driver of our deficit problems: entitlements. The Wall Street Journal reports that Social Security, Medicare, Medicaid, and other entitlements will consume 60 percent of all federal spending next year, or $2 trillion. In the next decade the cost of these programs will continue to skyrocket, jumping by more than one-third to $3.3 trillion. Not only has President Obama scorned Republicans attempts at addressing our entitlement problem, he has ignored members of the bipartisan deficit commission that he put together. The Washington Post reported today, Some who worked on Obamas fiscal panel were also disappointed by his decision not to endorse any of the major elements of their deficit-reduction plan, which calls for raising the Social Security retirement age, charging wealthy seniors more for Medicare and limiting popular tax breaks such as the mortgage interest deduction. The plan has attracted support from key members of both parties and is the focus of an effort in the Senate to develop a bipartisan spending plan. I would have preferred to see the administration get out front on addressing the entitlements and the tax reform that we need to reduce long-run deficits, said Alice Rivlin, a commission member who served as budget director in the Clinton White House. Obamas refusal to adopt any of the commissions recommendations shows that there may be some growing cracks in the Democratic ranks. Late last week, before the White House Budget had been released, Steny Hoyer, the second-ranking House Democrat, argued that entitlement reform is a must if we want to reduce our deficit. I have said and continue to believe that the president . . . need[s] to sit down and come to grips with how we deal with entitlements, defense spending, and discretionary spending, because the deficit is, in fact, a crisis, said Hoyer. When asked whether the President should take the lead, Hoyer argued that the president took the lead when he appointed the commission that has reported, the Bowles- Simpson commission. I think the recommendations they made are very useful recommendations. That doesnt mean I agree with every one of them. But weve got to follow a formula similar to the recommendation of not only that commission, but of Domenici-Rivlin commission.
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Hoyers faith in President Obamas leadership was not rewarded. Not only was the deficit commissions formula not followed, it appears to have been ignored in its entirety. Under Obamas budget our entitlements will continue on, as broken as ever, pushing America nearer to a fiscal collapse. Simply put, the stakes are too high to procrastinate any longer. The tipping point on our debt is quickly approaching. If students procrastinate too long, we may fail a class. If President Obama waits too long to deal with our deficit, the worlds largest economy may begin to fail.
Mo Government, Mo Problems CBO Says Obamacare Kills Jobs

There is a fine line between awesome and awful. Take last nights Grammys for instance. Cee-Lo came out looking like mix between a tie-dyed chicken and a Roman gladiator and performed with a group of Muppets as backup singers. As if that wasnt weird enough, Gwyneth Paltrow came out to make it a duet. Somehow, someway it worked. I couldnt turn away. And then there was Lady Gaga who arrived on the red carpet in an egg. She then emerged, er hatched, from the egg to perform her latest single. Not all that crazy for a performer who made headlines earlier this year for wearing a meat dress, but nevertheless strange. But where Cee-Los performance was irrepressibly cool, Gagas stunt left her with egg on her face. The point is, both performances were alike in the fact that they were incredibly weird, but only one was able to pull it off. So it goes with healthcare reform. Democrats and Republicans have both put forth plans to change the current system. They also share similar goals lower premiums, increased coverage, and bend the cost-curve downwards. The difference is how they accomplish that goal. Its here that Republicans come out looking like Cee-Lo while Democrats look like Gaga. While Republicans plan would lower costs by introducing competition, Democrats achieve their coverage gains by simply mandating people by insurance. Unsurprisingly, these mandates are having an enormous impact on companies ability to hire workers or maintain employees.
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Doug Elmendorf, Director of the Congressional Budget Office, testified last week: Rep. [John] Campbell: Thank you, Mr. Chairman, well and Dr. Elmendorf and well continue this conversation right now. First on health care, before I get to before I get to broader issues, you just mentioned that you believe or that in your estimate, that the health care law would reduce the labor used in the economy by about 1/2 of 1 percent, given that, I believe you say, theres 160 million full-time people working in 20-21. That means that, in your estimation, the health care law would reduce employment by 800,000 in 20-21. Is that correct? Director Elmendorf: Yes. The way I would put it is that we do estimate, as you said, thatemployment will be about 160 million by the end of the decade. Half a percent of that is 800,000. So much for Nancy Pelosi insisting that Obamacare is about jobs. In its life, it will create 4 million jobs 400,000 jobs almost immediately. Thats the trouble with government involvement in just about anything they become so convinced in their ability to solve one problem by adding more government that they fail to consider the side effects of their actions. One of the worst side effects of Obamacare has been the hidden penalty on employers. When implemented Obamacare forces employers to offer government approved health insurance or else pay federal taxes for failing to comply with the law. Economic research think-tank Economics21 argues that this mandate, Will discourage business development and growth. Small firms with 50 or fewer workers will have a very strong disincentive to expand. These business can avoid the new penalties by staying small; growth will simply add new costs and burdens. Mo government, mo problems. What we need is to take the government out of the equation and let free markets go to work. This is the goal that Republicans have been pushing for since the start of the debate. Sure, both sides may be pushing for the same thing, reforming our healthcare system, but Democrats, like Lady Gaga, just laid an egg.
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Our Raison Debt Mitch Daniels Gives Young Adults an Assignment

College Republicans have officially taken over CPAC. One reporter wrote that, Looking over the sea of faces in the ballroom at the Marriott Wardman Park, one could be forgiven for thinking they were at a convention of College Republicans. Shes right. More than half of this years CPAC attendees were college students, showing that young adults are a growing part of the conservative movement. And why shouldnt we be. College students and younger generations will bear the brunt of todays decisions. Debt and deficits may not take their toll now, but when taxes are inevitably forced higher or benefits forced lower, it is young adults who will be paying for them. Entitlements like Social Security and Medicare may be doing wonders for todays retired population, but they will mean little to young adults unless substantial changes are made. Over the past several decades young adults have neglected politics, and likewise, politics has neglected them. Recently, that has led to some disastrous consequences. Fortunately, CPAC is just the latest sign that young adults are not resigned to a fate that includes higher taxes, more government, and smaller dreams. Indiana Governor Mitch Daniels, a stalwart fiscal conservative, used his CPAC speech to frame the deficit fight as a generational struggle. The American project is menaced by a survival-level threat. We face an enemy, lethal to liberty, and even more implacable than those America has defeated before. . . . I refer, of course, to the debts our nation has amassed for itself over decades of indulgence. It is the new Red Menace, this time consisting of ink. We can debate its origins endlessly and search for villains on ideological grounds, but the reality is pure arithmetic. No enterprise, small or large, public or private, can remain self-governing, let alone successful, so deeply in hock to others as we are about to be.
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. . . Do I exaggerate? Id love to be shown that I do. Any who think so please see me in the hallway afterward, and bring your third grade math books. If a foreign power advanced an army to the border of our land, everyone in this room would drop everything and look for a way to help. We would set aside all other agendas and disputes as secondary, and go to the ramparts until the threat was repelled. That is what those of us here, and every possible ally we can persuade to join us, are now called to do. It is our generational assignment. It is the mission of our era. Forgive the pun when I call it our raison debt. Lets make no bones about it. The fight over deficit spending is a fight over our future. It is a generation threat that requires a generational response. We must no longer be content to sit on the sidelines while others promise and spend away our future. With so much at stake, we must make our voices heard. Obviously, CPAC is a great place to listen. Now, we must take the message and spread it. That means any number of things, from joining or starting a College Republican chapter, to volunteering on behalf of campaigns, to using social networks to spread the message, to, perhaps most importantly, voting in 2012. As we go out and advocate for reduced government, remember the purpose for doing so. It is not, as many liberal opponents would label it, a painful path of despair that shows we have given up hope in our government. Rather, as Daniels describes, Americas way forward is brilliant with hope, as soon as we have dealt decisively with the manageable problems before us. Daniels path, and the one young adults must tread, is one in which we must display a heart for every American, and a special passion for those still on the first rung of lifes ladder. Upward mobility from the bottom is the crux of the American promise, and the stagnation of the middle class is in fact becoming a problem, on any fair reading of the facts. Our main task is not to see that people of great wealth add to it, but that those without much money have a greater chance to earn some. Young conservatives are in a fight. There can be no doubt about that. That doesnt mean that we mustnt be hopeful, because in essence, hope is exactly what were selling. Not the prepackaged hope that Obama sold but failed to deliver, but hope that we can get back to becoming an opportunity society in which anyone can succeed. That is the American Dream and the American way. It is not some sad funeral dirge, it is a celebratory march back towards a bright future. Daniels wrapped up his speech by saying that All great enterprises have a pearl of faith at their core. Working together, young adults can be that pearl.
Interest On Our Debt Prepared to Skyrocket

Quick quiz: What is the fastest growing portion of the federal budget? A. B. C. D. Social Security Medicare Medicaid Interest on our debt
The costs of Medicare, Medicaid, and Social Security are all set to skyrocket in the near future. Our inability to control healthcare costs and the aging of the Baby Boomer generations will strain the finances of our biggest health and retirement programs. Nevertheless, A through C are wrong. The biggest driver of our deficit in the coming years is actually interest on our debt. Nick Gillespie and Veronique de Rugy explain the problem in an article for Reason, The main driver of the growth, however, is interest spendingthe bar tab for our binge. The CBO projects that in the next 70 years, public money spent on interest will grow from 1.4 percent of GDP (or $204 billion in 2010 dollars) to almost 41.4 percent of GDP (or $27.2 trillion in 2010 dollars). In the short term, the cost of our debt will reach 3.8 percent of GDP by 2020 and 7 percent of GDP by 2030. Today spending on interest represents about a third of the cost of Social Security; in 20 years it is expected to exceed the cost of that program. Or if you like pictures (also courtesy of Reason):
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For some perspective, consider that annual federal revenues have averaged 18 percent of GDP since 1950. This has happened despite wild fluctuations in individual income tax rates. So unless something changes and the government is able to get a firmer grip on our wallets, yearly interest on our debt will grow to more than double annual tax revenues. That of course is complete fantasy, it will never happen, because our creditors will never let it happen. A debt crisis would wrack our nation long before then. Of course that doesnt mean that we have the luxury of ignoring entitlements. The deficits they have and will cause are the primary reason we find ourselves with sky-high interest payments. Rather, it underscores the need to address our deficits, the result of unsustainable spending, now. Unfortunately, President Obamas just-released budget does very little to control the growth of our national debt. It whittles away at the edges of discretionary spending while leaving the primary drivers of spending alone. Hopefully the Republicans will offer a more serious solution, one that addresses entitlements, and works to erase the debt principle that threatens our future.
The Death of Small IPOs is Hurting our Recovery
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There has been much debate about the reason our economy has begun to stagnate. A lack of math and science majors, our growing uncompetitiveness in a global economy, and government spending that may be crowding out private investment are some of the better theories. This morning I came across another interesting one a dearth of small companies going public. Prolific entrepreneur and occasional blogger Jeffrey Stewart explains the problem on his site, Urgent Speed: But the US IPO torrent has turned into to a trickle. Today only the largest of companies can go public, generally only those with over $500 million dollars of market capitalizations. In the 80s there were IPOs where the net proceeds were less than $900K. AT&T, Disney, General Electric, Genentech, Cisco, Intel, Microsoft, Google and E-bay all had a public offering. Since going public, they have all benefited from the credibility, profile and prestige associated with being publicly traded companies. And of course the access to capital, both as IPOs, and perhaps even more importantly, with secondary offerings. Would the phone, talking movie, television, personal computer, and internet industry have been as innovative if these leading companies were instead acquired as a division of Western Union? I think not, but that is the future of most venture-backed companies today. M&A (merger and acquisition) has become the only available exit for growth investors and Founders. Long term this presents a problem. It is an interesting observation and argument. Small companies with big ideas need significant amounts of cash to bring their products into the marketplace. Unfortunately, cash isnt exactly easy to come by. Angel investors are one way, unfortunately they are dying out, partially the result of recent Obama policies to out more limits on angel investors. Initial public offerings (IPOs) are another way. These allow small companies to have the funds to expand without losing their flexibility to quickly adapt. Unfortunately, policies, such as the increased regulatory expense of Sarbanes-Oxley, and the death of the smaller investment firms, the momentum has shifted towards a focus on bigger transactions. Small start-ups and the potential for innovation that they carry is thus lost into the ether.
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Instead of IPOs, smaller companies are left with few options if they want to expand. Chief among these is being merged or acquired by a much larger company. Sounds great, but as Stewart notes, large companies have a track record of wasting innovation opportunities. . . New, well funded, stand-alone leadership is needed to drive innovation.
Professor Obama Ignores Real Problems In Latest Lesson

Professor Obama took to the lectern yesterday to give everyone a little lesson in fiscal responsibility. How on earth Obama, he of the $4.3 trillion in debt, can talk to us about fiscal responsibility is beyond me. In a press conference yesterday he listed the two main problems in regards to our national debt. First, weve got a big problem in terms of accumulated interest that were paying, and thats why were going to have to whittle down further the debt thats already been accumulated. The second problem is rising health care costs and programs like Medicaid and Medicare whose costs, once you get past this decade, [are] going to start zooming up again. In explaining his budget against this backdrop he says, What weve done is to try and take this in stages. Now typically, the stages are in some way correlated to the problems that have been laid out. Thats where Obama throws a curveball. Rather than deal with either of these two problems, Obama says we must first get control of our discretionary budget. The question is, why should discretionary spending, arguably the lesser of the problems be addressed first? Its like stubbing your toe on your way into the emergency room for a heart attack and having the doctor tell you, Well get around to that ticker of yours, but first lets see what we can do about this toe. But even that is a false metaphor. Doctor Obama wouldnt even fix your toe, hed just wiggle it around a little bit and proclaim the problem fixed. His plan essentially lives up to his promise to put a five year freeze on discretionary spending, enabling him to focus on priorities by shifting money away from other programs. The problem is that he is freezing them at current levels. In case you hadnt noticed, were spending a lot more now than we were two years ago, meaning
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Obamas budget isnt really a sacrifice at all. It does more to lock in profligacy than usher in change. Even though Obamas budget completely ignores entitlement reform, or even hint at future reform, he is beginning to talk a big game. He used his press conference to argue that step number two is going to be how do we make sure that were taking on these long-term drivers and how do we start whittling down the debt. And thats going to require entitlement reform and its going to require tax reform. Treasury Secretary Geithner echoed Obamas call for a focus on entitlement saying, the U.S. must rein in budget deficits and tackled entitlement spending that will reach untenable, unsustainable levels. We have a real problem in the next 10 years, Geithner said. Its about a huge imbalance between commitments and resources. Okay, great talk. Obama and Republicans are apparently on the same page. The question is, why didnt any of this newfound concern over entitlement spending show up in the actual budget. If youre really serious about long term deficits as a result of these programs then reforming them seems to be a logical place to start. Instead, Obamas all talk. The too-late discussion of entitlements seems to be more of a pushback against the growing criticism of his budgets failure to deal with the true problem. Its a careful triangulation strategy meant to appease the grumblers. But until his actions actually back up the tough talk, pardon me while I zone out.
Whip Hoyer Accidentally Admits Obamas Budget Problem

Rep. Steny Hoyer, the second ranking House Democrat, unintentionally gave away the game yesterday. In speaking about the push to rein in discretionary spending Hoyer said, You will still have an operating deficit this year if we cut every nickel of discretionary spending. Bingo.
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Im sure Hoyer, being a Democrat, meant that quote to be an indictment of Republicans plans to make significantly deeper cuts to discretionary programs than Obamas budget. He likely meant it as, the problem is too big to solve, so be happy with the partial solution were offering. After all, its progress. But since Im not a nihilist, and refuse to resign our country to persistent trillion dollar deficits, I read it a different way. I interpreted it to mean, discretionary cuts are all well and good, but to truly address the problems were going to have to reform entitlements. Viewed from this perspective, Hoyers statement was an indirect indictment of Obamas budget, one that completely ignores the question of entitlements. Republicans have said they will take a decidedly different track. At a press conference on Monday House Majority Leader Eric Cantor promised that the GOP budget would be a serious document that will reflect the type of path we feel we should be taking to address the fiscal situation including addressing entitlement reform. So Hoyer nailed it. We cant come close to solving our deficit if we focus solely on discretionary spending, which makes up only 18 percent of the budget. The answer lies in what Hoyer didnt say. That we must look beyond Obamas budget, to the realm of entitlements, if we want to eliminate our operating deficit. Fortunately, that appears exactly what Republicans plan to do.
The Failure of Keynesian Economics in Democratic Societies

Economist Alex Taborrok over at Marginal Revolution has an interesting post today about the failure of Keynesian politics. Not Keynesian economics, mind you, but Keynesian politics. In making the argument he cites my favorite economist-turned-partisan hack Paul Krugman. Krugman writes, The important thing, I think, is that [President Obama] has effectively given up on the idea that the government can do anything to create jobs in a depressed economy. In effect, although without saying so explicitly, the Obama administration has accepted the Republican claim that stimulus failed, and should never be tried again.
Whats extraordinary about all this is that stimulus cant have failed, because it never happened. Once you take state and local cutbacks into account, there was no surge of government spending. As Taborrok astutely notes, this sounds very similar to the same thing Paul Krugman said about the New Deal: Now, you might say that the incomplete recovery shows that pump-priming, Keynesian fiscal policy doesnt work. Except that the New Deal didnt pursue Keynesian policies. Properly measured, that is, by using the cyclically adjusted deficit, fiscal policy was only modestly expansionary, at least compared with the depth of the slump. Taborrok uses this as a jumping off point to talk about alternatives to Keynesian politics that focus on preventing or installing solutions before, rather than after, the crisis arises. All well and good, but Krugmans points point me in a different direction the complete and utter failure of Keynesian economics. What neither Krugman nor Taborrok seem to want to mention is that economics and politics are inextricably tied together. Take Krugmans point on the most recent stimulus. He argues that in effect there was no stimulus because all of the money spent by the federal government simply replaced money that wasnt being spent by state and local governments, thus negating its effect on aggregate demand. In order to be counted as a stimulus in Krugmanland, the federal government will in essence, have to spend the first trillion to fill the void left by other levels of government, then spend an undisclosed, but no doubt enormous sum, to impact consumers purchasing power. Were talking enormous sums of money. Were talking politically impossible sums of money. Especially now that concern over debt and deficits has become a flash-point in Washington. If something is impossible, as Krugmans Keynesian dream stimulus surely is, then it has failed, whatever the reason for its failure may be. The root of this failure is our democracy. We as taxpayers are threatened by a trillion dollar gamble on a potentially incorrect theory. That is why Keynes himself said that his theory can be much easier adapted to the conditions of a totalitarian state than . . . under the conditions of free competition and a large degree of laissez-faire.
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So Krugmans dream has basis in reality, we just have to become a totalitarian state in order to try it out. Are you ready to make the switch?
Democrats Defecting Over Obamas Failure to Deal with Debt

Its clear to anyone who cares to read anything but the Washington Post that Obamas proposed budget is an absolute mess. A multi-trillion monstrosity whose only significant progress consists solely of trimming away at the budgetary edges of a few discretionary programs. Of course the Washington Post had to get all melodramatic about it. Crumbling inner-city sidewalks, dirtier drinking water, more debt for some college students and higher heating costs for low-income families could be part of the legacy of President Obamas proposed budget, says the Post. Thats right, Obamas budget is going to turn us into a third-world country seemingly overnight. Before long well be living in mud huts, boiling our drinking water, and reverting to being hunter-gatherers. Makes you wonder how we possibly made due 5 years ago when the budget was a full $1 trillion less than it is today. While some wackjob writers are up in arms about the itsy-bitsy cuts, it is good to hear that Senate Democrats are questioning whether the budget goes far enough to address the deficit. Erik Wasson and Jordan Fabian from The Hill reported yesterday, Democrats joined Republicans on Tuesday in criticizing President Obamas budget request for doing too little to bring down the national debt. Senate Budget Committee Chairman Kent Conrad (D-N.D.) faulted Obama for not taking on entitlement reform, and during testimony by Office of Management and Budget (OMB) Director Jack Lew, suggested the administration was not being serious enough about reducing the deficit. Sen. Chris Coons (D-Del.), a member of Conrads panel, said Obama should have followed through on the recommendations of his own debt commission, which in December proposed nearly $4 trillion in cuts over the next decade that included reforms to Medicare, Social Security and the tax code.
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Coons said the commission laid out the kind of strong, broad vision that we need to take on not just the deficit but the debt. I think in large part, the strongest work of the commission is absent in this budget, he said. Obama probably doesnt like to hear that. With a Republican majority in the House of Representatives and Democrats holding a slim 51-47 lead in the Senate, Obama cannot afford too many defectors. Granted, that the votes of Democratic Senators like Conrad and Coons will likely depend on the specifics of the Republican plan that has not been presented yet. Nevertheless, its enough to make Obama sweat bullets. The President has already promised to veto the tentative Republican plan because it would sharply undermine core government functions and investments key to economic growth and job creation. But you dont have to look at very many previous budgets to realize that is hooey. In reality, a veto would place Obama in a very tough spot. He would have two branches of government, including a bipartisan majority in the Senate, arguing that the government needs to reduce its deficit or else risk a crisis. Does President Obama really want to stand up, in the year before elections, and say no? Does he really want to take a stand and say that trillion dollar deficits are acceptable? If so, good luck. With that nonchalant attitude over what American voters agree is an serious problem, it could be tough to stay President. Then again, I hear the Washington Post editorial board may be hiring.
Christies Speech Gives Obama a Lesson in Leadership

The change Obama talked about in his campaign turns out to just be chump change. President Obamas false hope, best exemplified by a State of the Union speech in which he spoke of how we were going to out-innovate, out-educate, and out-build the world, but provided no plans on how we were going to pay for it, was matched yesterday by Chris Christies new brand of hope.
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Whereas Obamas vision is built on more spending, which he carefully labels investment, Christies hope is built on his unwavering faith in individuals. The Governor addressed what The President and so many others on Capitol Hill are afraid to: our deficit, driven by unsustainable entitlements, and ignored under President Obamas budget proposal. Of course, these issues have been discussed ad nauseum, but the President has refused to solve them. If his words were worth a dollar our entitlements would be running a surplus. Sadly, theyre not; so while Obama keeps on yapping, our entitlement crisis keeps on growing. That is not hope. Sure, I may be inspired by the words, but I am ever-more discouraged when they do not translate into action. Im left with a feeling that Obama has no intention to do what he says, but rather than he is content to sit back and wait for someone else to make the politically difficult decision to reform popular programs like Social Security. But as Christie said yesterday, My childrens future and your childrens future are more important than some political strategy. Youre going to have to raise the retirement age for Social Security. Whoa, I just said it, and Im still standing here. I did not vaporize! Chris Christie can talk, because hes done it. In his first two years in office hes tackled problems head-on, refusing to blink in stare-downs with powerful political interests like teachers unions. Leadership today in America has to be about doing the big things and being courageous, we have to bring a new approach and a new discipline to this. The leadership he is referring to is one that remains to be seen with the current administration. Obama is playing an elaborate shell game with the American people, doing everything he can to draw Americans eyes away from the big problems we face. It comes off as hopeful, after all, who doesnt want to have a Sputnik-like moment, but when you realize the sleight of hand, it comes off as cynical. He says the big things are high speed rail, the big things are high speed internet access for almost 80% of America or something by some date. One million electric cars on the road by some date. Ladies and gentlemen, that is the candy of American politics. Those are not the big things. Because let me guarantee you something, if we dont fix the real big things there are going to be no electric cars on the road. There is going to be no high speed internet access or if there is youre not going to be able to afford to get on it. We are not going to be able to care about the niceties of life-the investments that Washington wants to continue to make.
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The big things Obama needs to be talking about are the budget, the deficit, and how we are going to preserve the American Dream for the next generation. He wont talk about these things because its not a sound strategy according to the political playbook hes been reading out of for the past two years. It teaches the time-tested principles for politicians wait, wait, and when pushed, obfuscate. Well its time to toss that thing out the window. We need real leadership and real solutions. So when Obama took to the lectern yesterday and preached patience, call him out on it. He said, part of the challenge here is that this tow lets face it, you guys are pretty impatient. If something doesnt happen today, then the assumption is its just not going to happen. Right? Right! As Christie explained, What that means in Trenton and what I suspect it means in Washington also is this. It means we are going to drag our feet for as long as we can until we hope it dies a natural death because God knows we dont want our fingerprints on it for murdering it, but we also dont have the guts to do it. With a deficit of $1.6 trillion we cant afford to be patient. With a Social Security system that is going to be insolven in the next 30 years we cant afford patience. With a broken Medicare system that will run out of money within the next decade we cant afford to be patient. Patience is part and parcel of the old playbook, we want action. Were just the generation to demand it. Leaders like Chris Christie are just the people to see it through.
Republicans Happy to Step Into Leadership Void

Chairman of the Senate Budget Committee, Democrat Kent Conrad, scolded the White House budget director Jacob Lew at hearing Tuesday by saying History will condemn us if we dont do substantially more [to reduce the debt] than is in this budget. I feel it puts at risk the economic security of this country. Senator Conrad, a fellow member of President Obamas party, stated this in reference to the Obama administrations release of their budget proposal, and he hit the nail on the head.
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The Obama administration claims that their new budget proposal is a starting point. Many within his own political party refer to it as a joke instead. Democrat Erskine Bowles, who cochaired the presidents Fiscal Commission, stated, The budget goes nowhere near where they will have to go to resolve our fiscal nightmares. And hes absolutely right, how can a $3.7 trillion dollar spending plan be considered a starting point? This years current deficit will set a new bar, reaching over $1.6 trillion as the Congressional Budget Office (CBO) conservatively estimates. So with fiscal year 2011 already five months underway, a spending plan of $3.7 trillion dollars is not what Americas tax payers need. We need a break! Obamas budget misses out on two key fiscal issues: fixing entitlement programs, and bringing gross debt down below 100% of the national GDP, a level that has historically been associated with debt crises in other nations. Gross debt includes many different types of economic burdens, including Treasury bonds owned by citizens and foreign governments (aka China), and debt owed to specific funds such as those for entitlement programs. Currently, with a high gross debt, many economists, and even Obamas Debt Panel believe that we are stunting and hurting economic growth by not dealing with them. We must stop borrowing from countries like China, and fix funding for programs like Social Security before things get even worse. The presidents budget also focuses almost solely on discretionary spending. Discretionary spending only accounts for roughly one-third of all Federal spending. Obama has dropped the ball on the most important sectors of the budget, programs such as Social Security, Medicare, Medicaid and yes, even the Department of Defense. These are the true cash cows of the Federal budget and must be dealt with quickly. Many on both sides of the aisle have called out Obamas failure to deal with entitlement programs and instead punt the issue over to Congress. House Budget Chairman Rep. Paul Ryan said, The President didnt lead. He didnt put anything out there. He actually is accelerating the debt crisis. We think there ought to be some leadership, and I guess were going to have to the ones that provide it. Fortunately we have Republicans like Rep. Ryan who are willing to take the initiative to provide a sustainable budget that tackles the tough issues like entitlement programs because obviously the President and his party are not. Although the final budget proposal will not be unveiled for a few weeks, there is little doubt that Rep. Ryans budget, which Republicans have already said will tackle entitlement reform head on, will lead us toward a more fiscally sound future.
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Rove and Ryan Diagnose Obamas Allergy to Leadership

Leadership and Washington should go together like peas and carrots. After all, Washington is the center of our government; the home of our elected officials, the people we voted for, I assume, to lead. In a 2006 interview, then Senator Obama seemed to agree with this view, saying, I always believe that ultimately, if people are paying attention, then we get good government and good leadership. Well were paying attention. In particular, we noticed that the so-called leader of the free world failed to show any leadership in dealing with our entitlement and debt crises. So while leadership and Washington should go like peas and carrots, its beginning to sound like chocolate and mayonnaise. President Obama has yet to exemplify any type of budgetary guidance, other than moving forward with his boyhood dreams of conducting trains, (in this case, his absurd intellectual fetish with high speed rail). The budget the President released Monday was nothing short of inadequate. The major issues affecting the debt right now, entitlements such as Medicare, Medicaid, and Social Security, were completely overlooked. This unsustainable path must change, and leadership must be used to achieve the necessary measures in getting this country back to fiscal responsibility. Republican strategist and former Bush chief of staff Karl Rove assesses the situation in a recent Wall Street Journal editorial. He argues, This is a dereliction of duty, although it has a certain political logic: The budget is not meant to be taken seriouslyits meant to be quickly forgotten so that the administration can turn attention to, and attack, what congressional Republicans do about federal spending. Its a cynical gamble being made by Obama. The hope is that Republicans will be forced to take the lead on dealing with the deficit, making difficult cuts to popular programs in the process. This will allow Democrats to cry foul, cozy up to interest groups who are threatening to lose their clout (or at least their funding) and paint Republicans as heartless politicians. But as Rove makes clear, if Obama thinks this will cripple Republicans then he badly misreads public opinion.
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Enter the ideas of Congressman Paul Ryan (R-WI), who is showing through word and deed that Republicans will not shy away from the difficult decisions Obama is daring them to make. All these political pundits say were walking right into this trap, and theyre going to demagogue us and all of this stuff, Ryan said. Talk to the 87 freshmen who had our entitlement reforms that I personally put out. . . Were going to confront these challenges, and I, personally, believe the country is ready for this. I think the people are ahead of the political class. Not only are we ready for a fiscally fit government that abides by the budgetary rules that each of us have to live by, were ready for some leadership. Fortunately, Rep. Ryan has an answer for that as well. Where he has failed on these critical issues, especially the health care entitlements, we plan to step in the breach and provide that kind of leadership by showing the country how we would do things different, Put it this way: The president didnt lead. He didnt put anything out there. He actually is accelerating the debt crisis. So, if we do not do anything, then where does this even get begun? If theres zero leadership in Washington, then nothing gets done. We think there ought to be some leadership, and I guess were going to have to be the ones that provide it. Ryan is right, we cannot stay on our current course. Sure Obama repeats the talking point that his budget will cut the deficit by $1 trillion over 10 years. What he doesnt tell you is that it simply isnt enough. Under his budget the U.S. government will be adding $7.2 trillion to the deficit over the next decade. And even that may be a stretch considering Obama assumes economic growth that is 25 percent higher than other economic forecasters. Rather than display the qualities of a leader, the President wants to make sure he secures what every struggling American wantshis own job. Republicans havent shown any trepidation. Ryan and his Republican colleagues understand that it is imperative to get out in front of this mess, and start making the necessary cuts to get our country back on a sustainable path. I think its important that you do comprehensive health care entitlement reform and other kinds of entitlement reform. As simple as this message sounds, Its obviously something the President and his fellow Democrats in Congress are afraid to even say, let alone do.
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Our country is in big trouble right now. The President must make the decisions necessary to make the change he vehemently portrayed in his campaign election. The President doesnt need to worry about his job next election, he needs to worry about the jobs, and economic welfare in general, of the American people.
Wisconsin Unions Show No Willingness to Share in Sacrifice

Its one thing about the money. Wed be willing to negotiate the money. [But] hes trying to take away our human rights. So says Laurie Bauer, a 51 year old library media specialist in Wisconsin, speaking about the governors effort to introduce budget cutting reforms to public sector unions. Really? You want to make this about human rights while simultaneously arguing against right-towork laws? Wisconsin is currently a union shop state, meaning that employees must either join the union or pay the equivalent of union dues. Its either pay up or get out. Such extortionismlite, is not exactly what I think of when I hear the words human rights. The fact is, its all about the money. The state needs to save more of it in order to close a $137 million deficit and public sector employees want to keep more in their pockets. I dont blame them necessarily, theyve legally negotiated their salaries with prior elected officials. But that doesnt mean it isnt time for some change. After all, are we so quick to forget this episode that happened this past November, as reported by the National Review: In a letter [Gov. Walker] asked outgoing Democratic governor Jim Doyle to refrain from finalizing contracts with state union employees. The governor nonetheless continued to negotiate the contracts, and when he finalized them, the assembly pushed ahead, even pulling one Democratic assemblyman out of jail (where he was serving a 60-day sentence for drunk driving) for a day so that he could cast the tie-breaking vote in favor of the contracts. But in a surprise move, Democratic senate majority leader Russ Decker voted against the contracts. Outraged Democrats stripped Decker of his leadership position that same day. So dont let me hear sob stories from unions about how this was a fair deal between them and government. The fact is, the you scratch our back and well scratch yours approach to swapping election votes for hearty concessions leaves the average taxpayer out to dry.
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As it stands Wisconsin public sector workers have secured pay and benefits well above that of the average private sector worker. Currently, union workers in Wisconsin pay only 6 percent of their health care premium costs. They also receive a generous defined-benefit pension in which they contribute only .2 percent of their gross pay towards their retirement. Governor Walkers bill would raise the average employee contribution to 5.8 percent of salary for pensions and 12percent toward health insurance premiums. As the Wall Street Journal wrote today, If those numbers dont sound outrageous, you probably work in the private economy. The comparable nationwide employee health-care contribution is 20% for private industry, according to the Bureau of Labor Statistics. The average employee contribution from take-home pay for retirement was 7.5% in 2009, according to the Employee Benefits Research Institute. In other words, even with the changes, they are still doing better than the national average of private sector workers! Public sector union workers just dont want to say its about the money. They dont want to admit that even with the changes, not only will they still be substantially better compensated than private workers, but will also still pay less towards pensions and healthcare than the average government worker across the country. Unwilling to admit that, theyre going to extremes. Theyre drawing parallels between Gov. Walker and Hosni Mubarak, the recently deposed dictator of Egypt. Theyre calling it a throwback to communist Poland and East Germany. And if all else fails, they pull out the tired line its all about the kids. Of course, its tough to say its all about the kids when 40 percent of the teachers called in sick, in an apparent protest to the proposed cuts. If its about the kids, youll get in the classroom and teach. But its not about the kids, or human rights, or Gov. Walker being a fascistic dictator, its about money. And the bottom line is that the state has to save more of it. Ideally wed do this through shared sacrifice, but the public sector unions have shown no desire to be a part of it.
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Bipartisan Gang of Six Taking Lead on Deficit Reduction

Looks like President Obamas deficit commission may not have been a complete waste after all. Sure, Obama himself attempted to pretend it didnt happen, completely ignoring their recommendations in his recently released budget. But a bipartisan group, being named the Gang of Six, is apparently working behind closed doors to come up with a deficit reduction package that hews closely to the recommendations of the deficit committee. Wait, havent we already used Gang of Six this year. Werent they the Max Baucus-led group of Senators who worked on a compromise for the healthcare bill? Apparently politicians who form in groups of six must be titled a gang. Much like a gaggle of geese and a school of whales, six congressmen is a gang. Seems like we could come up for a better name for this. Maybe the Six Squad. No, sounds like an early 90s hip-hop group. The Syndicate of Six? No, sounds like theyre about to put someone in cement shoes and put them in the bottom of the Potomac, not negotiate a deficit reduction deal. The Cutters Clique. No. Alright, Ill stop there. But I digress, Budget Chairman Kent Conrad (D-ND), Majority Whip Dick Durbin (D-IL), Tom Coburn (R-OK), Mike Crapo (R-ID), Mark Warner (D-VA) and Saxby Chambliss (R-GA), have come together to hopefully kickstart the discussion on getting our debt under control. The Washington Post reports, The group hopes to advance the commissions recommendations, which would reduce deficits by $4 trillion over the next decade. Doing so would require lawmakers to embrace some politically perilous policies, however, including raising the retirement age to 69, charging wealthy seniors more for Medicare and ending some cherished but expensive tax breaks. Taking the commissions report as its template, the group is drafting legislation that would direct congressional committees to find a way to put it into effect. On taxes, for example, the legislation would have tax-writing panels in the House and Senate develop a tax overhaul that would raise hundreds of billions of dollars in additional revenue and lower the top tax rate, which stands at 35 percent. While the groups tax treatment requires a closer look to ensure that it is revenue neutral, their forward-thinking approach to entitlements deserves praise. One of the best recommendations is
setting explicit annual limits on discretionary and mandatory spending, and if Congress was unable to meet the limits, the White House budget office would be forced to make across the board cuts. Such a plan exemplifies that the Gang of Six understands the problem even if difficult decisions are made, future Congress may not have the guts to abide by them. The plan would take the pressure off, or should I say, force the hand, of future Congress to abide by the deficit reduction measures. When it comes to the debt we cant put our hope in future Congress or have patience with our current leaders to act. The problem only grows bigger by the day, lets take the steps to solve it now.
Obama Continues Kicking the Can Down the Road

What we have done is kicked the can down the road. We are now at the end of the road and are not in a position to kick it any further. We have to signal seriousness in this by making sure some of the hard decisions are made under my watch, not someone elses. President Obama to the Washington Post in December of 2009. So what has President Obama done for the last two years? Kicked the can down the road further and faster than any president in history. Actually, its probably safer to say he hired Colts kicker Adam Vinatieri to an exorbitant government salary, with a sweet pension package, to kick the can for him. And now that we are at the end of the road, or should I say, the end of our rope, President Obama had his last chance for a Hail Mary touchdown for the win. Instead, his budget was a complete whiff. It didnt touch entitlements and its sole accomplishment was freezing spending at this years levels (which are the highest in history.) Its akin to going for a 70 yard field goal when you need 7 points to win. Nevertheless, hes still preaching patience. As if two years of spending record amounts of money was somehow an indicator that at his core he truly cared about the deficit. As David Brooks writes in todays New York Times,
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He started making the promise back when he was in the Senate. In The Audacity of Hope, published in 2006, he expressed alarm at the mountain of debt caused by $300 billion annual budget deficits. (Theyre now $1.6 trillion.) During the presidential campaign, he pledged to put away childish things and tackle the tough budget issues. During the transition, he said the time to act on the debt is now. . . He said he would start a budget initiative in February 2009. He made the [deficit reduction] pledge yet again at a press conference this week. Right now is not the time, the president always says, but tomorrow we will get serious. But tomorrow never comes. So the mantle of leadership has passed to Capitol Hill. While Obama asked for patience yet again, Eric Cantor announced that Republicans will put entitlements on the table. It may be politically risky, but it looks more like leadership to me. To us as well.
Obama Must Address National Deficit Leave Wisconsin to Address Theirs

This White House just cant get it right. Earlier this year President Obamas team was lambasted for their slow and uncoordinated response to the oil spill in the Gulf of Mexico. Now, they are being taken to task for how quickly and forcefully they jumped in to stop Wisconsins attempt to solve their budget deficit. Its a sad indictment of a broken Washington when a President is quicker to try and stop deficit reduction than to stop oil from spilling onto our shores. Nevertheless, the President has held nothing back, deploying his powerful political operation in an effort to thwart Governor Scott Walkers proposed legislation, which would reduce the states debt burden by lowering union benefits. As we detailed on Friday, under Gov. Walkers bill Wisconsin public employees would still contribute less of their salary to healthcare and pension benefits than the average government worker, much less private sector employee.
Facts unfortunately matter little to Democrats, who see an opportunity to cement the support of a key contributor of both votes and money in the lead up to the crucial 2012 presidential race. Politico reported that, Organizing for America, Obamas 2008 grassroots campaign effort posted a statement on its website late Thursday, announcing it is mobilizing on the ground in Wisconsin to defend the rights of public employees from an attempt by the governor to take away their right to organize. Obama himself didnt hold back from criticizing the legislation, saying theyre just making it harder for public employees to collectively bargain generally, seem like more of an assault on unions. Nevermind, the fact that public employees in Wisconsin must either join the union or pay dues; somehow that fact always gets left out in the discussion over the right to organize. And despite President Obamas attempt to make this an issue of us versus them battle, this is not a fight with unions, its a fight to fix the deficit. To his credit, Gov. Walker has avoided attempts to reduce an honest debate to partisan yelling. He told Fox News that, Ive said repeatedly [that] good, decent people work for the government. But they shouldnt be excluded from what everybody else in society is going through in these tough economic times weve all got to be in it together. I think were focused on balancing our budget, Walker said. It would be wise for the president and others in Washington to focus on balancing their budget, which they are a long ways from doing. Sigh. Our President just released a budget that completely ignores the fact that we have an enormous debt crisis, instead adding $7.6 trillion to our debt over the next 10 years. Now, he directs the resources of the Democratic National Committee and his outsized political clout in an attempt to demonize states that are attempting to deal with their own budget concerns. Whats wrong with this picture? Its as if Obamas ego is getting in the way, saying if I cant reduce the deficit, than nobody can. Sadly, his thought process is not likely so juvenile. Instead, its a political play with very high stakes for the American taxpayer. On the one side you have big-government lackeys who create or foster dependence on government programs. They hope is that once people have had their first taste of government spending they will fight tooth and nail to ensure that its not removed. On the other side you have the average taxpayer, the one who works hard, creates his own success and pays his taxes.
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Over the past few decades the first group has grown in relation to the second. Government and the amount it spends has continued to skyrocket upwards. Now the bill is coming true and so too is the first real test of progressive (read: big-government policies). Gov. Christie in New Jersey has already fought this battle, winning concessions from teachers unions in order to balance his budget without raising taxes. Gov. Walker is now facing the same struggle. But Democratic power players like President Obama werent caught off guard this time. They now understand that their worldview is coming under attack by the forces of budgetary prudence and plain old common sense. Simple concepts like, we cant spend more than we take in, and, government workers should be paid in line with the private sector, are finally taking root. The ideological argument to follow will be heated; so it goes when a partys foundation is threatened. But it is an argument the Wisconsins citizens deserve to have because their future is literally at stake. Their state budget is an unmitigated disaster and the status quo is unacceptable. In order to have the adult conversation necessary, Obama and his team of operatives need to turn their attention to Washington, and get to work solving our nations problems.
Obama Loses Another Intellectual Ally in Economist Mark Zandi

When Mark Zandi speaks, President Obama usually listens. On the one hand, hes the chief economist of Moodys Analytics, a firm that provides capital markets and risk management professions with the latest research and advice. On the other hand, hes been one of Democrats biggest cheerleaders, aggressively supporting an enormous stimulus and further government spending to get the economy on track. As the Washington Post wrote in 2009, The 49-year-old economist is a Democratic dream, a former adviser to GOP presidential candidate John McCain who advocates spending over tax cuts as the best way to deliver a quick jolt. The founder of Moodys Economy.com now asserts that even if it reaches $900 billion, the current package may be too small. His PowerPoint presentations are a staple at congressional hearings. In floor speeches and news conferences, Democratic lawmakers confer on Zandi an authority once bestowed on Alan Greenspan, the former Federal Reserve chairman.
Now, Zandi is once again dominating the news, not for agreeing with Obama, but for taking him to task for his budget-busting budget. In an op-ed for the New York Daily News Zandi writes, President Obamas recently released 10-year budget plan doesnt engender much confidence that our fiscal problems will be resolved anytime soon. Obama has put forth a budget that isnt sustainable even on paper. Zandi was never really known for beating around the bush. So while Obama is out spouting comments like, [W]hen I was sworn in as President, I pledged to cut the deficit in half by the end of my first term. The budget Im proposing today meets that pledge, Zandi is happy to provide a dose of perspective. Zandi writes, The economy is gaining traction and the deficits will narrow as the stimulus fades and tax revenues rise. Even if this President and Congress didnt do anything, the deficit would nearly be halved this year and early on in the next Presidents term. In other words, Obamas budget actually does nothing to help him accomplish his promise. In reality, an improving economy and the resulting higher tax revenues accomplish that. The question is, with Obamas favorite go-to talking point rendered moot, what exactly does Obamas budget accomplish? Not much. Zandi writes, Even when the economy is in full swing, the deficit will still be unsustainably large. Interest payments on the debt will continue to mount, and unless policymakers make some hard choices on government spending and tax policy, the cost will ultimately swamp us. The answer? Zandi doesnt give a perfect prescription, choosing to avoid details, in favor of broad principles. Nevertheless, this one-time Obama ally does give Obama one strong nudge in the right direction, saying that historical experience shows that the economies of countries that tackle their budget problems primarily through spending cuts perform better in the long run. The question becomes, now that Zandi has gone from supporter to criticizer, will he still have Obamas ear or will the President find another go-to economist who supports his every move. Time will tell, but one thing is for sure, Obama is losing intellectual allies fast.
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The Forgotten History of Public Sector Unionism

Franklin D. Roosevelt was an unabashed friend of unions. One of his signature pieces of legislation was the National Labor Relations Act, which encouraged the creation of labor unions and severely limited employers ability to respond to the demands of unionized workers. The bill, along with other favorable legislation, made labor unions a dominant group in the so-called New Deal Coalition that carried Democrats to victory for decades. Roosevelt went so far as to say that, If I went to work in a factory the first thing Id do is join a union. Sadly, things have changed since Roosevelts time. Private sector unions have outlived their usefulness and are doing more to harm then help the middle class. Regardless, it is interesting to note that Roosevelt, the stalwart supporter of private sector union rights, was adamantly opposed to public sector unions. Daniel DiSalvo, a political science professor at the City College of New York, wrote recently in National Affairs, Meticulous attention, the president insisted in 1937, should be paid to the special relations and obligations of public servants to the public itself and to the Government. . . .The process of collective bargaining, as usually understood, cannot be transplanted into the public service. The reason? F.D.R. believed that [a] strike of public employees manifests nothing less than an intent on their part to obstruct the operations of government until their demands are satisfied. Such action looking toward the paralysis of government by those who have sworn to support it is unthinkable and intolerable. Roosevelt was hardly alone in holding these views, even among the champions of organized labor. Indeed, the first president of the AFL-CIO, George Meany, believed it was impossible to bargain collectively with the government. Roosevelts fears about public sector unions are being played out in Wisconsin. In an effort to protect their unsustainable pension system and bargaining practices, many public sector unions have gone on an unofficial strike. Moreover, theyre enlisting others help. ABC News reported that Wisconsin doctors threw their support behind teachers protesting the Republican governors attempt to strip unions of their bargaining powers, saying they would write sick notes for teachers to skip work to demonstrate. Fox News has reported that union workers obtained the notes from alleged doctors standing on street corners handing them out to whomever asked.
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Classes are being cancelled, school days are being missed, many government functions are at a standstill because of union protests. To reiterate Roosevelt, such action looking toward the paralysis of government is unthinkable and intolerable. Wisconsin unions, and the Obama administration who has taken to supporting them, should heed the AFL-CIOs (the largest federation of unions in the US) historic advice: In terms of accepted collective bargaining procedures, government workers have no right beyond the authority to petition Congress a right available to every citizen. Then again, unions have shown through word and deed that they think they are above the average citizen.
ESPN Interrupts Its Regularly Scheduled Programming toBash Obama?

Im an unabashed fantasy sports nerd. I study Sabermetrics nearly as much as I study politics. I can tell you if a players getting unlucky using BABIP, tell if hes really worth keeping in free agency using VORP, and how well he performs in LIPS. If that sentence didnt make one single lick of sentence to you, congratulations, you have more of a life than I do. Anywho, reveling in my fantasy nerd-dom, I was reading ESPNs annual Bad Predictions Review. The column is essentially a summary list of all the forecasts made by ESPNs panel of experts that turned out to be totally, and often embarrassingly wrong. For instance, countless scores of sports pundits predicted that San Francisco and Dallas were guaranteed, sure-fire, cant miss teams to go to the Super Bowl. Oops, they didnt even make the playoffs. So here I am, perusing the sports column, chuckling at these writers stupidity (I mean, did you really think T.O. would lead Cincinnati to the Super Bowl!?!?), when I come across an altogether different prediction. It read, White House Predicts Loaves and Fishes for Everyone in Fiscal Year 2038: In early fall 2010, when incumbents were standing for re-election, the Congressional Budget Office predicted the FY2011 federal deficit would be $1.1 trillion, bad enough. On Jan. 26, 2011, the CBO said the real deficit would be $1.5 trillion the $400 billion increase alone exceeding the worst U.S. total deficit before 2003. What happened on Jan. 25, 2011? President Barack Obama, addressing Congress, called for fiscal restraint.
In January 2000, the Congressional Budget Office projected a federal surplus of $4.3 trillion for the decade ending in 2010. Actual was a deficit of about $6 trillion. Hey, they were off by only $10 trillion! In 2009, the CBO said Social Security outlays would not exceed revenue until 2017 at the earliest. Instead, this has already happened. ZING! Ya know youve been a little loose with taxpayers money when ESPN is calling you out for reckless spending! It was enough to make me stop reading , put down the column and say whoa. After all, I can pretty much guarantee that there is going to be no worse prediction than being off by $10 trillion. Alright, alright, so maybe the guy saying he was 100 percent positive that Favre would never play again, was a little worse. But still, $10 trillion is pretty bad.
Taxes on Airlines are Soaring, Leaving Travelers Grounded

Interesting question from Becky Quick, a CNN Money contributor: Which item do you think has the most federal taxes and fees attached to it: (1) a can of Budweiser, (2) a carton of Marlboro Reds, (3) a Smith & Wesson Centennial revolver, or (4) a roundtrip airline ticket from Chicago to St. Louis? If you guessed the beer, cigarettes, or gun, youd be wrong. Federal taxes and fees tally up to about 5% for the beer, 18.2% for the cigarettes, and 10% for the revolver. But buying an airline ticket pushes the boundaries of government taxation, initiating a slew of taxes and fees most of us never knew existed a passenger ticket tax, a flight segment tax, a frequent-flier tax, a cargo waybill tax, a commercial jet fuel tax, and a 9/11 fee, just to name a few. I recently found a reasonably priced fare of just $151 for that roundtrip ticket to St. Louis. But tack on the fees and taxes and the total price came to $185.80, a markup of more than 20%. Ms. Quick may even be underestimating the number of taxes and fees the government places on airlines. The International Air Transport Association lists the current taxies levied on airlines: Airport and Airway Trust Fund (FAA)

Passenger Ticket Tax 7.5% Slight Segment Tax $3.70 Frequent Flyer Tax 7.5% International Departure Tax $16.30 International Arrival Tax $16.30
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Cargo Waybill Tax 6.25% Commercial Jet Fuel Tax 4.3 cents Noncommercial Jet Fuel Tax 21.8 cents Noncommercial AvGas Tax 19.3 cents
Environmental Protection Agency
LUST Fuel Tax .1 cents
Local Airport Projects
Passenger Facility Charge up to $4.50
Department of Homeland Security

September 11th Fee $2.50 Aviation Security Infrastructure Fee Varies APHIS Passenger Fee $5.00 APHIS Aircraft Fee $70.75 Customs User Fee $5.50 Immigration User Fee $7.00
A majority of these taxes and fees were designed to go to one of two purposes: the maintenance and construction of our airways infrastructure or the creation and implementation of our post-9/ 11 air safety system. Sounds great in theory, but the results are more questionable. Take, for instance, the Airport and Airways Trust Fund. The fund was created to fill in the funding gaps for infrastructure projects that were lagging behind the enormous boom in civilian flying. Over time, the fund has begun to diverge from its original purpose at extreme costs to travelers. A report for the Government Accounting Office finds that FAA Trust Fund expenditures have risen from under $10 billion in 2000 to $15.5 billion in 2010. To pay for the steep cost increases, the government has taken to raising taxes and fees, putting a squeeze on many airlines and passengers. Kenneth Button, a professor of transportation policy at George Mason University, has a theory as to why. Button told the New York Times that airlines are vulnerable conduits for these types of taxes because air travel was once considered a luxury, creating the perception that passengers have deep pockets. And putting the fees on airline tickets, he said, makes them easier to collect.
Senate Republicans saw an opportunity to cut significant expenditures from the Airport and Airways Trust Fund, hopefully eliminating some of the incentive to raise taxes or, if nothing else, beginning to pay down our deficit. The GOP proposal, put forth by Sen. John McCain would reduced the budget the Essential Air Service program, which subsidizes commercial flights to very small, rural communities. And were talking big subsidies. The AP gave some examples from a report in 2009: Some of the subsidies, to places like Ely, Nev., Cape Girardeau, Mo., and Havre, Mont., are eyepopping. Ely, in Democratic Senate Majority Leader Harry Reids state, leads the pack with a $4,500 per passenger subsidy, according to new data from the Senate Appropriations Committee. Just 414 people flew out of Ely last year. Thats 0.7 passengers per flight, which means that some planes fly empty of passengers. For Havre, each of its 359 passengers 0.6 passengers per flight received an almost $2,900 subsidy. Sadly, the bill was defeated in the Senate 61 to 38, largely along partisan lines. Unless something is done soon, FAAs trust fund will continue to run significant deficit. In other words, look for more airline taxes to be added to the already substantial list in the near future.
A Lesson from Detroit Invest in People Not Things

Harvard economics professor Edward Glaeser has an interesting diagnosis of the problems that plague Detroit, Detroits problems were compounded because the city in distress invested in structures, rather than people. Federal support has been almost entirely focused on physical capital, like housing and transportation infrastructure. In 1948, the Federal government started doling out cash for urban renewal, and by the 1950s it was spending seriously on transportation. In the 1980s, with federal aid, the city built its People Mover, which now glides quietly over essentially empty streets.
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Detroits never needed more housing or transportation. Declining cities are practically defined by having too much infrastructure relative to people. A monorail has little value when buses can already move quickly on uncongested roads. Washington Post blogger Ezra Klein cites Glaesers thesis to ask the question whether the auto industry crippled Detroit. This, of course, would run counter to the traditional conservative attack, made all the more important given current events, that unions are what killed the Motor City. Im not going to go that direction, instead Id like to focus on what this means for Obamas plans. President Obama has been an advocate of massive spending to upgrade, and in some cases, overhaul our infrastructure system. He said the stimulus contains the largest investment increase in our nations infrastructure since President Eisenhower created the national highways system half a century ago. Well invest more than $100 billion . . . Apparently that wasnt enough. President Obama was back in 2010 announcing a a new plan for upgrading Americas roads, rails and runways for the long-term. Over the next six years, we will rebuild 150,000 miles of our roads enough to circle the world six times. We will lay and maintain 4,000 miles of our railways enough to stretch from coast to coast. And we will restore 150 miles of runways and advance a next generation air-traffic control system that reduces delays for the American people. Finally, Obama tried to make the sale in the greatest of all venues, the 2011 State of the Union. He argued that over the last two years, weve begun rebuilding for the 21st century . . . And tonight, Im proposing that we redouble those efforts. His state goal was to give 80 percent of Americans access to high-speed rail and high speed wireless coverage to 98 percent of Americans. The question is, are following down the same road that led Detroit to ruin? Namely, are we investing in structures, rather than people? Sure, Obama can talk all he wants about urban renewal and his wonderful goals of our transportation system, but in the end will we have too much infrastructure relative to people? Liberals will argue that our infrastructure system is crumbling. That we are falling behind the rest of the world who is building high speed trains and internet grids. That to stay competitive in the world we must have a competitive infrastructure system. All well and good, but I dont want
to be left with the same problem as Detroit a billion dollar People Mover with no people to move. The federal focus on physical capital and not human capital is distressing. Glaeser writes that, like Silicon Valley in the 1960s, Detroit had an abundance of entrepreneurs fighting to find the new, new thing. Ford, Durant, David Dunbar Buick, the Dodge Brothers, the Fisher Brothers, Henry Leland it seems as if Detroit once had an automotive genius on every street corner. The trouble is that we are now operating in a global economy. Ezra Klein makes the point that. If you build a train in Detroit, you can be pretty sure itll stay in Detroit. You cant say the same for its residents. The same can be said for America. We can build a state of the art infrastructure and be pretty sure itll stay in America. You cant say the same for our companies or workers. The fact is, money talks. If you want to make sure our companies stay here, sure, things like infrastructure will help, but ultimately theyre looking at the total compensation package, the largest portion of which is labor costs and tax burdens. Well almost always lose when it comes to labor costs. That is where our advantages in higher education system, infrastructure, and innovation come in to play to offset the additional cost of workers. But there is no reason we shouldnt have globally competitive tax burden. Sadly, that is not the case. Today, the combined U.S. corporate tax rate is 39.3% meaning we have the highest corporate income tax rate in the developed world. So sure, lets invest in our people, but lets also leave some money in their pockets to invest for themselves. If not, we may find ourselves a lot like Detroit easy to get around, if for no other reason than were devoid of people.
Indiana Democrats Walk Out Over Vote to Become Right to Work State
President Franklin Roosevelts concerns about public sector unions are once again proving true. Roosevelt argued that, The process of collective bargaining, as usually understood, cannot be transplanted into the public service because a strike of public employees manifests nothing less than an intent on their part to obstruct the operations of government until their demands are satisfied. Such action looking toward the paralysis of government by those who have sworn to support it is unthinkable and intolerable.
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Such fears proved well founded in Wisconsin schools and the government had to be shut down in protest of the union bill. Democrats in the Senate boycotted the planned vote, fleeing the state to go to Illinois. Oddly enough, Senate Democrat Julie Lassa said we believe were standing up for democracy. They werent alone. Wisconsins teachers also decided to flee, in this case their classrooms, in order to go to Madison to protest the vote. CNN reported that the Madison Metropolitan School District was forced to cancel classes for three straight days because of anticipated teacher absences. Now, Roosevelts fears are spreading to other states. Politico reported this afternoon: Democrats in Indianas legislature are said to be fleeing the state Tuesday to block a vote on an anti-union bill, repeating the move used by Wisconsin Democrats to avoid voting on legislation there. Members of the Indiana House are headed to Illinois or Kentucky to avoid having to vote on a right-to-work law, which would allow non-union members to work in unionized companies, the Indianapolis Star reported. When the House was called into session Tuesday morning, just two of its 40 Democratic members were on hand. In all, 58 legislators were present in the chamber, nine fewer than the 67 needed for a quorum. That is worth repeating: Democrats in Indiana are fleeing the state because they dont want to allow a vote on becoming a right to work state. This would allow members of unionized workplaces the freedom to not join a union. Currently, Indiana is a union shop state, forcing employers to fire employees who have not joined the union or paid union dues. Yet, somehow, someway, liberals are twisting this into a fight over power. Idiots like Paul Krugman have written that, What Mr. Walker and his backers are trying to do is to make Wisconsin and eventually, America less of a functioning democracy and more of a third-world-style oligarchy. How you can equate a law allowing workers the choice to join, or not join, a union with an oligarchy is beyond me. Nevertheless, such brash statements and heated debate is exactly what Roosevelt feared. With Democrats leaving the state, and quite literally going into hiding rather than participating in the vote, they have paralyzed government. Such an action by those who have sworn to support it is unthinkable and intolerable. Unless apparently, youre a union memberor someone trying to get their vote.
Awash in Red Ink, Its Time to Run America Like a Business

Its one of the oldest rhetorical tricks in the book. You take a seemingly mundane argument and you push it to its logical extreme in order, supposedly, to show the cracks that always existed in the foundation but that people were somehow overlooking. Its one of liberals favorite tricks. Conservatives will say, I think we need to reform Medicaid. Liberals then throw a temper tantrum and say, While youre at it, why dont you just get rid of the whole program, let all the poor people who cant afford healthcare just suffer in the streets. What can you do to defend that?!? Conservatives must automatically go into defense mode to try and argue that wasnt what they were proposing at all. And heres the first rule of politics never, ever, be on defense. Theres a better chance of Charlie Sheen being back on an episode of Two and a Half Men then there is a winning the argument if youre only playing defense. That tactic has been taken to the extreme by prominent liberal blogger Mathew Yglesias. In a new post he writes, If youre trying to look at America from a balance-sheet perspective the problem is very clear. Its not entitlements and its not Social Security and its not Medicare and its not health care costs its the existence of old people. Old people, generally speaking, dont produce anything of economic value. They sit around, retired, consuming goods and services and produce nothing but the occasional turn at babysitting. The optimal economic growth policy isnt to slash Social Security or Medicare benefits, its to euthanize 70 year-olds and harvest their organs for auction. With that in place, you could cut taxes and massively ramp-up investments in physical infrastructure, early childhood education, and be on easy street. Yes, he actually wrote that. And even though he was about as sincere as a Lindsay Lohan apology, its still a terrible argument. The craziness was in response to a growing theme among conservatives that America should be run like a business. More specifically, Yglesias rant was leveled against a post by Silicon Valley investor Sarah Lacy, in which she writes How can we be so apathetic when we see true abysmal fiscal neglect, especially when its that of a pseudo-company (the United States government) in which we all essentially own shares? . . . If politicians reported to voters the way management reports to shareholders, no one would finish out their terms.
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In true liberal fashion, Yglesias takes a reasonable argument, albeit one he doesnt like, and pulls a Joan Rivers. That is, he stretches, pulls, slices and dices it beyond all recognition. Youll notice that nowhere does she mention euthanasia; in fact, all she says is that Medicare and Medicaid are the biggest culprit for why our financial system is so untenable. It was still enough to get Yglesias worked up enough to go into a Mel Gibson-esque hysteria. Lost in that hysteria is any semblance of reason. He overlooks the fact that if the American government made decisions like a prudent company, we, as citizens, would be obligated to act as prudent workers. What does that mean? It means that we need to plan for our retirement. We need to save and invest in such a way that Social Security and Medicare are allowed to act as they were intended as social safety nets and not catch-all government programs. Unlike the assumptions made in Yglesias straw man argument, its not the existence of old people, that is the problem, its the fact that our system has not required them, over the course of their lives to contribute in money as much as they will receive in benefits. Americas government, just like any company, has no duty to completely care for each of workers through their retirement. What it does have the obligation to do is to provide reasonable means by which its workers can comfortably retire on their own. That isnt killing people, as Yglesias suggests, its giving them the freedom to live.
Republicans are Not at War with Dems, Everyone is at War with Debt
American politics increasingly resembles a kind of total war. That is the conclusion of columnist Ronald Brownstein in the National Journal. Brownstein argues that President Obama is facing a two-front war, with the GOP House majority on the one side, and Republican governors on the other. Brownstein writes, Whatever the governors motivations (one mans posturing, after all, is another mans principle), their unreserved enlistment into Washingtons wars marks a milestone. It creates a second line of defense for conservatives to contest Obama even after he wins battles in Congress. It tears another hole in the fraying conviction that state capitals are less partisan than Washington. And it
creates a precedent that is likely to encourage more guerrilla warfare between Democratic governors and a future Republican president. American politics increasingly resembles a kind of total war in which each party mobilizes every conceivable asset at its disposal against the other. Most governors were once conscientious objectors in that struggle. No more. Except Brownstein forgot two fronts in this supposed (read: made-up) war against Obama. First, conservative Democrats in the Congress. Youve heard enough about the Blue Dogs over the past election cycle, so I wont dig into them here. Suffice it to say they were, and are, a driving force for fiscal restraint in a Democratic House caucus that seems bent on spending mounds of taxpayer cash. Simply put, our healthcare system would look radically different if it werent for their concerns with the public option. Cracks are also beginning to emerge in the Senate. Take Senator Claire McCaskill, a Missouri Democrat, who said My Party, honestly, is in denial about how severe the problem is. They think they can just nibble around the edges. She, along with Republican Senator Jeff Sessions, offered a plan could slash as much as $4.5 trillion from the budget over the next 10 years. If youre keeping score at home, that is more cuts than even the most ambitious Republican plans in the House! And it was proposed by a Democrat! The fourth front Obama has to fight is Democrat governors. New York governor Andrew Cuomo used his State of the State address to argue we need to hold the line on taxes, we need a spending cap, and we need to close the $10 billion gap without any borrowing. Cuomo is not alone in sounding like a fiscal conservative. In California, new Gov. Jerry Brown used his inaugural address to say that When dealing with a budget gap in the tens of millions, I must point out that it is far more than waste and inefficiency that we have to take out, going on to list things like healthcare, income assistance and tax incentives that would need to be cut. So there you have it. Obama is fighting a four front war, which is a more confusing way of saying, hes surrounded. Brownstein attempted to make the point that politics is becoming more polarized along partisan lines than ever. Implying that somehow the system has broken down. This overlooks a second, and in my mind more plausible thesis that it has nothing to do with politics, and everything to do with our financial struggles. Our debt and deficits care little for the little R or D beside your name. It doesnt care what caused it, it cares that it gets paid back.
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The ranks, or flanks, of conservatives arent growing because we sat down at a big table and laid out a total war strategy. Its because party-blind finances are driving a unified movement. Everyone is realizing, almost simultaneously, that our state and federal finances are so deeply out of whack that weve got to make some drastic changes. Obamacare (liberals favorite example of the total war conspiracy theory) has become the rallying point for this diverse set of actors. But take a deeper look and its easy to understand why. Obamacare not only busts the federal budget, which accounts for Congressional disapproval, it also busts state budgets, by expanding Medicaid and implementing vast bureaucratic burdens onto state governments. The war is not between Republicans and Obama. The war is between everyone and unsustainable spending. And until we stop demagoguing the issue into one of politics, its a war well never be able to win.
Democrats Blame Game the Real Culprit if Government Shuts Down

Democrats are reviving an age-old Washington strategy: the old despite the fact that we have no intention of cutting the budget, we really need to blame Republicans for the resulting government shutdown, so maybe if we blame them enough before hand, the public will forget whats really going on trick. Strong move. There is no doubt theyve mastered the tactic. Why its working is another question entirely. Its enough to make you wonder if Justin Biebers PR team taken over the Democrat Party. Theres simply no other explanation for why such an overtly craptastic strategy is resonating with the media. After all, its such a clear ploy to avoid making the difficult choices necessary to get the budget under control. Democrats are literally the only ones talking about it. In just the past week House Speaker John Boehner has said, Theres not one Republican talking about government shutdown. Our goal is to cut spending because it will lead to a better environment for job creation in America. Senate Minority Leader said pretty much the same thing, As Republicans focus on constructive ways for the two parties to work together on cutting spending and debt, Senator Schumer (DFebruary Compendium! 88
NY) seems strangely preoocupied with the notion of a government shutdown . . . Most Americans and even many in his own party have come to realize that the gravity of our current fiscal problems calls for constructive dialogue. Nevertheless, youve got columnists like Frank Rich stuck in the liberal echo chamber, either unable or unwilling of realizing that Republicans are the ones working to get the problem resolved. In yesterdays column Rich writes, Still heady with hubris from the midterms and having persuaded themselves that Gingrichs 1995 history cant possibly repeat itself radical Republicans are convinced that deficit-addled voters are on their side no matter what. Look at Boehners quote, now back to Richs, now back at Boehner, now back to Rich, sadly Rich isnt Boehner, but if he stopped pandering to the liberal New York Times readership and actually listened to what conservatives were saying he could be as respected as Boehner. Look down. Back up. Where are you? Youre reading a column talking about a man, liberal men should sound like. (If you dont get that reference: A: You dont watch enough TV, and B: Please, for your own sake, watch the best commercial of the year HERE) The fact is, liberal pundits like Rich, and Democratic Congressmen like Schumer are clearly trying to muddle the facts. Its a blatant ploy. Its about as subtle as the Lady Gaga entrance to the _________ awards. Really, any of them would work fine in that sentence. There are four steps to passing a Continuing Resolution and ensuring that the government doesnt shut down. Step 1: the House passes a CR, Step 2: the Senate passes a CR, Step 3: it is sent to a conference committee to resolve the differences, Step 4: the President signs it. Really, its a whole hell of a lot more complicated than that, but cmon, cut me some slack, reading a column about the entire legislative process would be about as entertaining as the Real Housewives of Boise. The House, led by Republicans, have put forward their proposal. They offered $61 billion in budget cuts over the course of the year, and in order to get the process moving were willing to agree to a short term CR with $4 billion in cuts. Neither of those comes close to solving our $1.65 trillion deficit problem this year. Nevertheless, Senate Democrats threw up their hands and called the measure extreme and reckless. What cuts did they propose you may be asking. Well, none. All in all, theyre pretty content with where were at.
So if youre keeping score at home, Republican House passes a continuing resolution, Senate Democrats refuse to bargain. Remind me again who were blaming for the government shutdown? The ball is in the Democrats court. House Republicans have been working feverishly to come up with some iteration of cuts that Democrats wont brand as extreme, Democrats appear appear content to sit back and run through Rogets for new synonyms for extreme. One can almost hear the discussion going on in Harry Reids office last week: Reid: What adjective should we go for next? Aide 1: How about drastic? Reid: No, overplayed. Aide 2: How about imprudent? Reid: Who am I, Webster? I dont even know what that means. Aide 3: Oooh! Ooh! I got one. Excessive. Reid: Good work. Print up a press release, try to use the phrase excessive cuts at least 18 times. And throw in a draconian if ya can. Makes us sound smarter. So as John Boehner takes to the airwaves to once again encourage working together to cut spending and rein in government not shut it down, what will Democrats do? Something tells me theyll keep doing nothing. And then theyll blame Republicans for it.
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February &#39;11 Issue Debrief

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February &#39;11 Issue Debrief

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CRNC Research Compendium February 2011

Editor: Brandon Greife, Political Director

College Republican National Committee

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Medicaid Expansion Threatening State Budgets

College Republican National Committee

College Republican National Committee

Japans Falling Credit Rating A Warning Sign for US

College Republican National Committee

College Republican National Committee

Judge Uses Obamas Words Against Him to Declare Obamacare Unconstitutional

College Republican National Committee

Obamacare Ruling Has Tied Democrats in Rhetorical Knots

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Senate Dems Concede to Earmark Ban, But What Took So Long?

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1099 Repeal a Metaphor for Larger Obamacare Debate

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Gov. Cuomo Shows Fiscal Conservatism is Not an Option Its a Necessity

College Republican National Committee

College Republican National Committee

Republican Budget Proposal Makes a Down Payment on Deficit Reduction

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College Republican National Committee

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Dont Let Tax Reform Be Derailed by Special Interests

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Bernankes Says Washington Must Act Now to Preserve Our Future

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Higher Education Will Suffer From Obamacares Medicaid Mandate

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Happy 100th Birthday President Reagan!

College Republican National Committee

Contagion Threat of European Debt Is Real

College Republican National Committee

College Republican National Committee

Obamas New Economic Team: Incompetent? Or Just Dishonest

College Republican National Committee

Rep. Issa Shows GOP Listening to Main Street

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College Republican National Committee

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Closing of DLC Shows Moderate Democrats a Dying Breed

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Liberals Delusion Government Regulates Business Better than Free Markets

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Gov. Daniels Demands Changes to Broken Obamacare Bill

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Gov. Christies Rising Approval Rating Shows Dem Gamble Failed

February '11 Issue Debrief

February '11 Issue Debrief