Deficit $262 Billion Less Than Expected

Now clocking in at only $1.58 trillion, with a national debt of $11.6 trillion! Praise the lord!!!

Source: http://www.politico.com/blogs/glennthrush/0809/Budget_outlook_brightens__slightly.html

Dems Prepared To Stuff Health Care Down Our Throats

They've got 60; they're now ready to try to use it, according to Politico and Mercury News, among others.

Of course, they blame this on the Republicans, because in the Democrats world, only reform that involves government expansion is true reform, and thus Republicans, who are holding out to only support something they believe in, don't support reform.

It is still unlikely that they will be able to get a public option out of the Senate, as it no longer has popular support (44 for, 47 against, according to the new CBS News poll that continues to show a steady downward trend for the idea) and moderate-to-conservative Dems (Landreiu, Nelson, Warner, Begich, Lincoln, Bayh, etc.) probably wouldn't be able to bring themselves to support it.

The scariest possibility is that the Dems may attempt to use Budget Reconciliation rules, which would only require 50 votes and would allow them to ignore up to 10 moderates, even though those rules are meant only for direct budget-related measures (Robert Byrd, a diehard liberal, has said he would oppose this bill, if they attempted to pass it in this fashion, out of precedent). It would be a decleration of war on Republicans and could be very costly in 2010, but might get the job done. As Republican Punk has said in the past, once a public option is in, there is no getting rid of it. It is an entitlement and people don't vote away entitlements (Welfare being the one exception, and that required a perfect storm even though it only affected a small minority of the population).

We'll keep you updated as news leaks on what a Republican-less reform package out of the Senate would look like.

A Democrat We Can Get Behind

Claire McCaskill, Senator from Missouri and a big-time Obama supporter-turned-leading administration critic from the moderate wing of the Democratic party, has made it her goal to kill Pelosi's push for three new, top-shelf jets to ferry congresspeople and other "dignitaries" (quotes laced with heavy sarcasm) around.

“This just makes no sense. Talk about the wrong message at the wrong time,” McCaskill said. “While American families are tightening their belts there is no way we should be buying extra executive jets. No wonder so many people think we don’t get it."

Everyone who has a grain of fiscal common sense should be getting right in line behind her. This blog is.

Source: Glenn Thrush

Senate Approves "Cash for Cows"

With most attention being paid to Sonia Sotomayor's pending approval to the Supreme Court, the House's request for three new high-end jets, and the ongoing Health Care debate (not to mention the attack on all dissenting opinion), most people missed this vote late last night.

A 60-37 roll call late Tuesday set the tone as an unlikely combination of bipartisan rural farm interests and New York Democratic Sen. Chuck Schumer corralled just enough support to waive budget rules and provide $350 million to help struggling dairy farmers.

It is sad to say that Maine's two Senators joined in this debt-adding measure, which required 60 votes because it increased the Agriculture department appropriations beyond what the Obama administration requested without paying for it with new revenues. There are few times where we get a clear example of Congressmen voting for vested interests (usually there is some claim for "greater good"), but we get a nice juicy one right here.

Read more: http://www.politico.com/news/stories/0809/25858.html#ixzz0NQipCIP2

Huntsman's Four-Day Work Week Worked

Another example of innovative ways to save money being pushed by Republican governors (for those wondering, these men, Pawlenty, Huntsman, Daniels, etc., are the leaders of our party):

Last year, Utah Gov. Jon Huntsman put most state employees on a four-day/10 hours per day work schedule. The goal was to save money on energy and utilities.

Since then, energy use has been cut by 13%, and there are other, positive consequences to the plan, as well.

Employee surveys have also shown that most state workers like the new schedule -- absenteeism and overtime are down and customer complaints have steadily dropped. Even wait times at the Department of Motor Vehicles have decreased under extended hours Monday through Thursday.

Source: GOP 12

Americans Still Not Willing To Make Choices

Since the stimulus package, Americans have seemed to understand that it is better to ride out a recession than to pour out what little is left in the federal purse. Unfortunately, they continue to refuse to accept, to fix the hole Presidents Bubama (as in, Bush & Obama) have torn in the budget, that they will have to take some combination of spending cuts and tax raises.

A new CBS News/New York Times poll shows 53%-31% refusing to take cuts in services (that number increases to 42% if you let them only cut "a few things"), with 56%-41% opposing tax hikes.

The good news, politically, is that people are (slightly) less willing to accept an increase in taxes than they are to letting go of some domestic/economic aid. That will help Republicans in 2010, and especially 2012, when the President is forced to make some tough choices.

Unfortunately, this crisis is not about politics. It is about an American government that is threatening to lose all sense of fiscal reality and fall into a debt trap that would ensnare every citizen, and probably the entire world. The next Republican leader will hopefully be the one who can combine conservative austerity measures with the Roosevelt-Kennedy skill at rallying the country behind a necessary cause. And he is probably going to have to raise taxes too. It is impossible to know who that is (David Petraeus, if he chose to enter politics, comes to mind), but for the sake of everyone, pray they're out there.

Ahnuld Watch: New Film Industry Tax Credits Take Effect

All eyes are back on the biggest RINO (that's Republican-In-Name-Only) in the country, Arnold "bounce the bi's off the tri's" Schwarzenegger, as California approved inevitable Oscar winners Beverly Hills Chihuahua 2 and Naked Gun 4 for tax credits under "The five-year, $500 million incentive program, signed into law in February, began accepting applications on July 1. In a statement, Schwarzenegger said the tax credits were crucial for retaining film and television productions — and the economic multiplier effects - in California."

Oh Ahnuld. You do not understand that the reason the movie industry is starting to spread out is the same reason every other major industry is leaving: high taxes and regulations. Meanwhile, Texas, arguably the most fiscally conservative state in the nation, is barely feeling a recession and is getting a constant influx of new citizens. Seriously, a U-haul rental from San Francisco to Houston costs nearly three times as much as the same distance and time going the other way. That is the market speaking in spades right there.

So here's an idea: rather than taking away revenue from one of the largest budgets disasters in American history, you should remove the many subsidies for favored industries you've instituted as Governor and lower taxes for ALL industries (and more importantly, people). Hollywood will come back, as there are economies of scale already, but then the market will form new industries in other areas where California has comparative advantage, that you are nowhere near smart enough to realize.

Maybe than you can run a conservative government instead of a Corporatist one. Again, just a thought.

Read more: http://www.politico.com/news/stories/0709/25556.html#ixzz0MfcGzePb

Strange Bedfellows: Republicans Are Joined By Greens In Opposing Maine Tax Reform

If the endorsement of the Wall Street Journal editorial board and The Economist magazine weren't enough to let the Maine Republican Party know they were wrong in opposing the Democrats' tax reform, this should be the final sign needed. The GREEN PARTY...yes, the party of Ralph Nader, Jello Biafra, and Pat LaMarche...is joining the Republicans in opposing the reform by calling it a "flat tax."

A quick recap of the reform: it would simplify the current four-tiered progressive income tax code that ranges up to 8.5% for the top bracket by cutting it to 6.5% for families earning under $250,000 and 6.85% for everything above that. To make up for the lost revenue, it expands the sales tax to cover previously exempt favored industries such as amusements, repairs, tourism, etc. and raises the tax by 1% on lodging and meals. So basically, it makes the tax code simpler, flatter, and broader. In essence, more fair and a step in the direction Republicans supposedly want.

Lower and flatter income taxes are always a good thing because it creates incentive for workers to keep working. Broader taxes mean that the state will avoid the trap seen in California, New York, and some European countries, whereby all the taxes come from a small percentage of the population and once a recession hits, revenue plummets.

Republican opposition to this package is based solely on politics. They smell blood, thinking that the Democratic control from top to bottom within the government during a recession will allow them to retake the Blaine House for the first time in 16 years and the legislature for the first time in 30+ by whipping up populist rage. And it is this kind of petty, anti-ideological politics that explains why they haven't.

Read More: http://kennebecjournal.mainetoday.com/news/local/6664630.html

Dems Want To Pull Military Information Funding

The Defense Department wants nearly $1 billion next year for its greatly-expanded Information Operations programs. But lawmakers are putting on the brakes, saying the end product is often ineffective “propaganda” and a costly distraction from the military’s core mission.

The House Appropriations Committee fired the first shot Tuesday, ordering deep cuts from the 2010 budget and the termination of many IO activities now underway. Altogether the Pentagon’s $998 million request would be cut in half, and the remaining funds frozen until the Defense Department submits a fuller accounting of its plans and where the money has been going since 2005.

Iran has "propaganda" in Iraq, Afghanistan, Palestine, and Lebanon. Syria has "propaganda" in Iraq, Palestine, and Lebanon. Russia has "propaganda" in Eastern Europe. China has growing "propaganda" all over the world. Meanwhile, the Pentagon tries to counter it with a program to show people that we are not the charicatures they think we are, and the Democrats want us to fight a war one-handed.

And people wonder why Hobbes prefered the sole sovereign.

Read more: http://www.politico.com/news/stories/0709/25327.html#ixzz0M76hV9UR

Eric Cantor: Democrats Running An Appropriations Autocracy

From a new Politico editorial:

By the time the remaining three appropriations bills are completed later this month, the Democrats will most likely have passed 12 appropriations bills under an eye-popping 12 closed rules. During the 12 years Republicans controlled the House, which ended in 2006, the most appropriations bills to come to the floor in one year under a closed rule was four. That happened in 1997.

Obey and the Democratic leadership justify their heavy-handedness by claiming that when given open rules in 2007, Republicans used dilatory tactics to hold the appropriations process hostage. (In 2008, Congress packaged most appropriations bills in an omnibus, which it didn’t pass until this past February.) Democrats vow not to allow Republicans to engage in this supposed intransigence again.

Yet the facts belie the Democrats’ argument. In 1995, the first year of the Democrats’ last period in the minority, the House considered appropriations bills on 31 days for a total of 205 hours. Yet in 2007, when Republicans were relegated to minority status, appropriations bills took just 23.3 days for a total of 170 hours. Republicans offered amendments we believed were important, and as the facts indicate, we did not engage in any kind of extraordinary delaying.

Read more: http://www.politico.com/news/stories/0709/25167.html#ixzz0Luoi4sVI

60+% of the Country Oppose Stimulus; 60+% Support Stimulus

A new ABC/Washington Post poll shows that polling depends entirely on how you ask the question:

"Would you support or oppose additional federal spending above the 787 billion dollars already set aside to try to stimulate the economy? ... Do you feel that way strongly or somewhat?"

StronglySupport SomewhatSupport SomewhatOppose StronglyOppose Unsure
18 17 18 43 3

"Would you support or oppose new federal spending of about 800 billion dollars on tax cuts, construction projects, energy, education, and health care to try to stimulate the economy? ... Do you feel that way strongly or somewhat?"

StronglySupport SomewhatSupport SomewhatOppose StronglyOppose Unsure
43 27 9 17 3

This means, despite impressive numbers showing people strongly oppose a general second stimulus and do not want to add to the deficit (see previous polls), Republican hopes that they could regain power simply on the deficit alone were misplaced. Any opposition to stimulus needs to be three-tiered:

1. The massive deficit (obviously)
2. The fact that the previous stimulus did not work and any new one would be ineffective as well
3. The particulars of the package must be exposed as not worth it...more so than the last package where Republicans focused on things like birth control, which, while it shouldn't have been in there, was only a small piece.

Source: Polling Report

$23 Trillion

A series of bailouts, bank rescues and other economic lifelines could end up costing the federal government as much as $23 trillion, the U.S. government’s watchdog over the effort says – a staggering amount that is nearly double the nation’s entire economic output for a year.

If the feds end up spending that amount, it could be more than the federal government has spent on any single effort in American history.

In fact, $23 trillion is more than the total cost of all the wars the United States has ever fought, put together. World War II, for example, cost $4.1 trillion in 2008 dollars, according to the Congressional Research Service.

Even the Moon landings and the New Deal didn’t come close to $23 trillion: the Moon shot in 1969 cost an estimated $237 billion in current dollars, and the entire Depression-era Roosevelt relief program came in at $500 billion, according to Jim Bianco of Bianco Research.
The annual gross domestic product of the United States is just over $14 trillion.

In addition, TARP proves to be the perfect example of how giving government power will inherently lead to further (undemocratic) expansion.

Originally, TARP was intended, Barofsky writes, to facilitate “the purchase, management, and sale of up to $700 billion of “toxic” assets, primarily troubled mortgages and mortgage-backed securities.”

But that plan was soon rejected, and the TARP instead became a grab bag of bailout initiatives, including bailouts for GM, Chrysler and auto parts suppliers as the federal government struggled in real time to contain a spiraling economic disaster.

Barofsky reports that TARP has come to include 12 separate programs that include a total of as much as $3 trillion.

God bless George W. Bush and Barack Obama. I'll be over here, listening to Morrissey and slowly becoming an anarchist.

Read more: http://www.politico.com/news/stories/0709/25164.html#ixzz0Lpgw44MW

Democrat-Appointed Head of Congressional Budget Office Says What John McCain and Virtually Every Health Economist Has Been Saying For A Year

In an ominous sign for proponents, Congressional Budget Office Director Doug Elmendorf told the Senate Budget Committee that none of the bills he has seen would contain health care costs to reduce them significantly over time. This is the main argument offered by Obama and Democrats as to why Congress can spend $1 trillion and save money.

“In the legislation that has been reported we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount,” Elmendorf said.

“And on the contrary, the legislation significantly expands the federal responsibility for health care costs.”

Elmendorf said health analysts say the way to do it by changing the preferential tax treatment for health insurance.

“We have a subsidy for larger health insurance policies in our tax code, and that like other subsidies encourages more of that activity,” Elmendorf said. “Reducing that subsidy would reduce that.”

Read more: http://www.politico.com/news/stories/0709/25031.html

Issue Numbers Good for Republicans to Keep Hammering Debt Message

Now that Congressional Republicans have rediscovered their fiscal souls and oppose deficit spending again after 8 years of letting the Bush administration run rough-shod all over them, a variety of polls released yesterday seem to show that this is probably their best issue (along with Gitmo, which is a tad bit more controversial), and a much stronger one than we thought.

These numbers can all be found on Polling Report (most of it here: http://www.pollingreport.com/budget.htm) and don't require much commentary.

• 50% of Americans say they will base their 2010 congressional vote on the candidates feelings concerning Economic Stimulus(stimuli?). The next biggest issue is 23%.
• 54% of Americans are either not very or not at all confident that the last stimulus will ever work. 52% do not even think it will produce jobs.
• Depending on the poll, either a 52%-36% or 61%-33% margin opposes a new stimulus.
• 71% would prefer a slower recovery to an increased deficit.
• And, to those who do not believe people will vote based on deficit issues, 67% (correctly)believe that the deficit affects their everyday lives and finances.
• Finally, President Obama has fallen, for a few polls in a row now, to the point where the country is virtually split right down the middle (with a few undecided) on whether they approve of his economic policies.

Sorry Harry, A Conservative Second Stimulus Is Still One Stimulus Too Many

Harold Ford, Jr., former Rep. and Senate candidate from Tennessee and currently the leader of the moderate Democratic Leadership Council (of Bill Clinton fame), has a new editorial on the Politico calling for a new stimulus. You can read it for yourself here: http://www.politico.com/news/stories/0709/24927.html.

Ford stakes out an honerable position: attempting to craft a package that would entice Republicans and Blue Dog Dems concerned about the economy. In fact, his proposals, consisting of loans, not grants, to the States and a "vacation" from payroll taxes, paid for with returned TARP money, were central tenets of the Republican stimulus alternative. Surprisingly, he even advocates sacrificing expanded coverage in health care in order to get both reform and this new stimulus package without further breaking the budget:

It is also critical that we take concrete steps to restore fiscal balance in the long run. New budget estimates for health care reform show that tough measures to rein in spending and curb reimbursements can have a significant impact on the rate of growth in costs. The unfortunate truth is that cost-cutting may need to be prioritized over expansion of coverage, which, in any case, is unsustainable without massive cost savings.

The problem is the last stimulus went too far. If we could refund some of that money, specifically the $200 billion or so that had nothing to do with stimulus and solely sought to further the progressive agenda, conservatives and most of the nation could get behind this. Unfortunately, Pelosi, Reid, and Co. have made it clear to people like Paul Ryan and John Thune who would like to pursue this path that it is not going to happen. If that is the case, we are at such a tipping point budget-wise that the negative effects of any added debt are so great in the long term that the benefits in abating the recession now would be moot when the economy lurches back into a deeper one in 10 years.

Obama Pretends That He Underestimated The Crisis

Barack Obama's advisors want us to believe that he did not know that revenues were going to be weak when he wrote the FY 2010 budget earlier this year.

Christina Romer, chairwoman of the White House’s Council of Economic Advisors, said in a POLITICO interview that the administration — like many independent economists — did not fully anticipate the severity and pace of this recession. She said the White House will be updating its official forecasts.

Another challenge was that the slowdown “was going from a relatively normal recession into
something much worse, and we were at a pivot point, if not a turning point,” Romer said.

"Relatively normal recession"? That was not what Obama was saying at the time. The focal point of the last two months of his campaign (besides "Yes, We Can" rhetoric) was discussion of the worst crisis since the Great Depression. Once elected, he used the severity of the crisis to claim that we needed a massive expansion of government spending and power. Here is him speaking on the topic as President-elect:



There are only two answers to this apparant contradiction. He was either playing up the severity of the crisis to increase the government's control over the economy (as his Chief of Staff Rahm Emmanuel said, "you never waste a crisis.") Or, more likely, he downplayed the severity during his budget because he knew there was no way to appease his deficit hawk AND liberal progressive supporters at once, and showing that he could expand health care and stifle growth with Cap-and-Trade while still working the post-recession budget back towards stability was the closest he could get.

The fact of the matter is, tough decisions will need to be made concerning the deficit, and hopefully the President will stop playing coy and start thinking about what his choices will be.

Read more: http://www.politico.com/news/stories/0709/24899.html#ixzz0LGAv87Vx&C