Archive for category Congress
IT’S THE SPENDING, Stupid!
Posted by Tom in Congress, Deficit, Economics, Financial Crisis, Financial Policy, National Debt, State Finances on February 20, 2010
John Mauldin’s letter this week follows last week’s Greek tragedy with the “pain in Spain” and future of the Euro. How long will the Germans support the spendthrifts?
He then again brings the same spendthrift problem back across the pond concluding with a reference to Dan Henniger’s WSJ February 18th Wonderland column, It’s the Spending, America. Dan treats the runaway spending which has only accelerated under Obama, Reid, and Pelosi. This despite economists of all stripes saying it is unsustainable. I wanted to comment on the column but couldn’t get the graphic. John Mauldin supplied it and here it is:
“We’ve been grinding toward this moment since 1932. It has always been a question of political physics just how high government could go in the U.S. before it arched over and down. Now we have Washington, California, New York, New Jersey and others all arriving at the same time of reckoning. And all for the same reason, public spending by the public sector—its politicians, its unions, its massive schools of pilot fish.”
This blog has previously railed against Dual Bankruptcies-Federal and State which will indeed occur unless the entitlement spending is reined in and reined in hard. Obama’s deficit reduction commission will wind up a side show unless Social Security, Medicaid, and Medicare are substantially cut, painful as that definitely will be.
Social Security should be means tested and stopped for the upper quartile earners after payments into the system have been returned with some small rate of interest. Cost of living increases should not occur unless the CPI growth exceeds 5% for the year. Retirement age should be lengthened for those under 50 and premiums be increased. Medicaid should be limited to cover only serious illnesses not every sniffle and scratch. Medicare should be means tested and again limited to serious illnesses not every sniffle and scratch; premiums should be increased.
Political will and guts is hard to come by these days. But is seems we should at least be able to expect the current administration to cease its expansion of spending, Obamacare being the prime example followed closely by cap and trade.
Hey, Barack, Harry, Nancy–what part of UNSUSTAINABLE don’t you understand?
Tom Motherway
Greece…A Prelude!
Posted by Tom in Centrally Managed Economy, Congress, Deficit, Democrats, Economics, Financial Crisis, National Debt on February 13, 2010
“Beware of Greeks bearing gifts,” sang Virgil. I fear Greece is today’s Cassandra of mythology, so beautiful that Apollo granted her the gift of prophecy yet, when she did not return his love, cursed her so that no one would ever believe her. Some gift!
John Mauldin’s Weekly E-Letter, which I highly recommend, treats the Greek debt crisis and its causes and consequences. He starts by positing the oft neglected truism of our path-dependent world. Namely, the choices you have made in the past restrict, sometimes drastically, the choices you now have before you. The “if only(s)” and “if I’da(s)” have occurred to all of us as we confront a new situation often forcing a choice of the lesser of two evils.
John traces the creation of the Euro noting the weak Euro nations like Greece got a bit of a pass and an uptick in the translation of the national currency. The local currency overvaluation meant that Greek consumers could buy products previously out of their reach. The government could borrow at lower rates. Spend they did and borrow the government did so that deficits ballooned. National debt is now 254 Billion Euros; Greece needs to borrow 64 Billion, 30 in the next few months.
Other European nations have pledged support, “but!” Germany is calling the shots but so far there is no checkbook out. Imposition of “austerity” conditions, severe ones, portend depression, serious recession, and inflation for generations. The unionized socialist nation will be little tolerant of “austerity.” Strikes have already ensued and are likely to get worse.
For Germany and France a contagion conundrum gets worse. Behind Greece standing in line are Portugal, Italy, Ireland and Spain, the lot known as PIIGS in financial markets. The solvent nations of Europe cannot afford to rescue all the laggards. Moral hazard raises its ugly head once again. Sound familiar?
Then there is the fear of collapse of the banking system. The BIS reports that the largest holders of Greek debt are the French, Swiss and German banks. This is another banking crisis in the making. And it is not just a write down of Greek debt but a mark-to-market of sovereign debt! It’s likely the accounting rules will be rewritten to soften that blow. As you would guess, money is flying out of Greece and the tax avoidance, already 30% of the economy, is accelerating.
As John points out: this is not just a Greek problem. Debt and out of control deficits are a problem all over the developed world. The US is one of the worst with Obama deficits, Obama debt and the unrecognized and never discussed unfunded liabilities. And Obama wants to ADD TO THE DEFICIT with his Obamacare proposal. He has a tin ear to reform of Medicare and Social Security first.
John Muldin concludes: “We are in the fullness of time approaching the End Game. …choices that have been made over the last decades will yield a Greek situation, where there are no good choices. And the longer the hard choices are put off, the more difficult they will become.”
Obama, Reid, Pelosi, the Democratic leftist hear but don’t listen and those of the pseudo-intellectual elite who listen don’t believe. Cassandra, your prophecies are tragic indeed. More so by the immorality toward our grandchildren and unborn great grandchildren.
Tom Motherway
What’s Harry Done For Nevada?
Despite Reid’s campaign ads his popularity is sinking. The state’s voters see the well publicized back room deals he’s cutting for Obamacare and realize that he’s actually doing more for Louisiana with the “Louisiana Purchase” and Nebraska with the “Cornhusker Kickback” than for Nevada. According to a recent Weekly Standard article by Kenneth Y. Tomlinson, the former editor in chief of Readers Digest, “when Paul Laxalt left office in 1987 Nevada got back 98 cents of every dollar Nevadans paid to the federal treasury. Now the state receives 65 cents.” So much for Reid’s “most powerful senator in the history of Nevada” TV ads!
Tomlinson’s article, When Harry Meets Sue, shines a positive light on Sue Lowden. Other candidates are mentioned in this national weekly like Sharron Angle and Danny Tarkanian, but the spotlight is on Sue.
The beautiful former Miss America contestant is anything but a dumb blond. She’s an intelligent, savvy business woman and politician who, from second generation Ellis Island roots, worked to gain an education eventually graduating magna cum laude from American University. A woman of the people she waitressed and won scholarships from beauty pageants to gain an education. She even joined the Bob Hope 1971 Christmas Tour in Viet Nam. A stint as a cub TV reporter lead to a news anchor role that the Las Vegas Sun called one of the most professional in the nation. She is married to Paul Lowden and is the mother of four children.
Upset by a large tax increase in 1991 she took on the state senate majority leader in a largely Democratic district and won. In the state senate was strong in opposing taxes and eventually became the Republican whip. She was targeted by the culinary union in 1996 and lost.
She then became involved in a number of charitable causes, Muscular Dystrophy Association, Juvenile Diabetes Foundation, Salvation Army, and organizations helping severely challenged children. In 2007 she became Republican Party Chair and later incurred the wrath of Ron Paul supporters over convention rules, eventually closing down the convention. She’s certainly not afraid to take a position. Early on she voted for Reid but claims that was a different time.
It’s great to see a positive article on Sue in a respected national magazine with a conservative reputation. So, in answer to the title question, what’s Harry done for Nevada….well, he’s provided a wonderful contrast for candidates of Sue Lowden’s caliber.
Tom Motherway
Just Say No
Posted by Tom in Congress, Deficit, Democrats, Economics, Financial Crisis, Financial Policy, National Debt, Taxation on January 25, 2010
Facing $1.4 Trillion in annual deficits for the next decade, current national debt of $12.3 Trillion and 2009 estimated social security and medicare unfunded liabilities of $107 Trillion, Obama endorsed a bill that would set up a bi-partisan deficit-reduction commission.”These deficits did not happen overnight, and they won’t be solved overnight,” Obama said in a statement. “We not only need to change how we pay for policies, but we also need to change how Washington works. The only way to solve our long-term fiscal challenge is to solve it together — Democrats and Republicans.” Is this just another Obama promise like “no earmarks” or “negotiations on CNN?” Or, is it designed as a set up for the Republicans to cover the Democratic Congress’ and administration’s spendthrift ways?
Let’s see, we’re up in discretionary spending by 8% in 2009, the third such consecutive year since the Democrats took control of the Congress, that’s 25% from $873 Billion to $1.090 Trillion. The non-defense discretionary programs got an 8% bump in 2009 and again in 2010 not even including the $311 Billion in additional “stimulus.” The omnibus 2010 appropriations bill includes: a 120% increase in low income energy assistance, a 30% increase for the corporation for national and community services (SOUND FAMILIAR?), a 22% increase for the essential (?) (read rural congressmen’s) air service, and, of course, a 9% increase for Amtrak. (See Heritage Foundation report here.)
Does anyone remember the inflation rate? How about public employee salaries? Well then, try Congressional junkets? Surely then, the recession, the unemployment rate and our belt tightening? Enough said!
Problem is that these discretionary increases add to the “baseline” for future years!
Why should Republicans participate in the inevitable tax and tax solution that the Democrats have in mind? As demonstrated, they will not cut and cut, the only correct solution.
There are two reasonable alternatives to put to these out-of-control fools: one, tell them to repeal all non-defense discretionary spending enacted in the last three years and start with a zero baseline budget, and two, tell them NO, HELL NO! Let them clean up their own mess!
The second is easier to explain to America. Some of us still have our wits about us and would appreciate it! Say HELL NO!
Tom Motherway
Are Some in the MSM Starting to Act Like Journalists?
This seems too good to be true Jack Cafferty sounds off on CNN using a CBS report as his source! We report–you decide!!!
YES, YES, YES !!!!
Posted by Tom in Congress, Constitution, Financial Policy, Politics on January 8, 2010
Perhaps you’ve seen the email recently circulating. No, that’s not an exclamation from a porn movie, but the excitement I would imagine is about the same. It is subtitled, “HOW YOU FIX CONGRESS,” in an effort to promote a “Congressional Reform Act of 2009.” After discounting ye of little faith who say this would be impossible, and merely tilting at windmills, the email sets out the salient features:
- Term Limits: 12 years, both House and Senate.
- No Pensions: Pay while in office but no retirement plan.
- Social Security Only: Congress’ retirement fund moved to Social Security.
- Prohibits Congress voting pay increases which are set at lower of CPI or 3%.
- Congress gets no special health care system, but only what all citizens get.
Reading this brought to mind the 1994 Contract with America. This Republican effort by Newt Gingrich and some young Congressional reformers had similar popular appeal:
- require laws that apply to the rest of the country also apply to Congress;
- select an independent accounting firm to audit Congress for waste, fraud, and abuse;
- cut the number of House committees, cut staff by one-third;
- limit the terms of committee chairs;
- ban casting proxy votes in committee and require that meetings be public;
- require a three-fifths majority vote to pas a tax increase;
- and implement zero-based budgeting for the Federal Budget.
As history shows while most of these points got past the House they died in the Senate. And that points up the difficulty with YES, YES, YES. Congressional action requires passage by both chambers and the signature of the president. Even then, such action can be amended or repealed by the next Congress. So, to be effective significant changes in the way the government operates must be accomplished by constitutional amendment.
The amendment process is cumbersome, as it should be. There two routes for proposal: constitutional convention of the states which was never used, or proposal by Congress with a 2/3 majority in both chambers. Then the proposed amendment requires ratification by 3/4 of the states, either by state convention (used once) or by the state legislatures (used all other times).
So, what we need is a new contract with America but one that commits to propose select constitutional amendments. It would be well to limit the number of these to say, term limits and equal applicability of the laws to Congress and citizens.
As to the House and Senate rules of operation, committees, seniority and the like, these can by custom be changed by the respective chamber only. Some would argue that custom has the force of common law.
There’s no question that reform in Congress and the government in general is needed. It’s worth the tilting at windmills efforts required. And, there is never a better time than now when the voters have been exposed to the ugly processes being foisted on us by the Democratically controlled Congress.
Tom Motherway
What Price Prostitution?
Posted by Tom in Congress, Constitution, Deficit, Nationalized Health Care on December 22, 2009
Harry Reid got his 60 votes dealing his “cash for cloture.” Problem is that the cash is yours, or more appropriately that of your children, grandchildren and descendants for several generations. Because the bill will not reduce the deficit but increase the deficit some $300 Billion–this for the simple reason that Congress will not cut Medicare the $480 Billion required in the bill. Old folks vote, and vote consistently; the pols won’t cross them. So the unsustainable mountain of federal debt grows higher!
George Will says it well: “Reid was buying the votes of senators whose understanding of the duties of representation does not rise above looting the nation for local benefits. And Reid had two advantages — the spending, taxing and borrowing powers of the federal leviathan, and an almost gorgeous absence of scruples or principles. Principles are general rules, such as: Nebraska should not be exempt from burdens imposed on the other 49 states.” (via RealClearPolitics – Obama Claims Two Unsightly Triumphs.)
Here’s an initial list, complements of research from the Senate staff, of how you bribery money was spent:
In the original Reid amendment:
- Louisiana Purchase ($300M) (section 2006, page 432, line 14)
- Florida Medicare Advantage grandfather clause ($25-30B) (section 3201, page 895, line 9)
In the new Reid amendment:
- Nebraska ($100M), Vermont ($600M), Massachusetts ($500M): Adds three targeted state FMAP provisions. Specific FMAP bonuses for VT, MA, and NE (starting at page 96, line 9). VT gets a 2.2% FMAP increase for 6 years for their entire program. MA gets a 0.5% FMAP increase for three years for the entire program. NE gets 100% FMAP for newly-eligibles forever. (section 10201, page 96, line 9)
- Hawaii: Adds a DSH extension (section 10201, page 101, line 6).
- Michigan, Connecticut: Amends section 508 extension so that hospitals in Michigan and Connecticut have option to benefit under section 508 if it means higher payments. This was also done in previous legislation. (section 10317, page 174, line 9)
- Montana, South Dakota, North Dakota, Wyoming: Dorgan/Conrad frontier amendment adds 1.0 hosp wage index for those states. MT, SD, ND and WY would qualify (AK and NV also qualify but would not benefit because they are already above 1.0 wage index value). Also establishes a 1.0 practice expense GPCI floor for physicians in those states. (section 10324, page 208, line 16)
- Libby, Montana: Medicare coverage for individuals exposed to environmental health hazards in or around the geographic area subject to an emergency declaration as of June 17 2009.. The EPA announced a public health emergency at the Libby Montana asbestos superfund site on June 17, 2009. Posted at http://www.epa.gov/region8/superfund/libby/phe.html <http://www.epa.gov/region8/superfund/libby/phe.html> (section 10323, page 193, line 21)
- Nebraska and Michigan: Carve-out from the insurance fee for Nebraska Blue Cross/Blue Shield and Michigan Blue Cross/Blue Shield. (section 10905, page 369, lines 10-25 though page 370, lines 1-15).
- Nebraska: Carve-out from the insurance fee for medigap policies sold by Mutual of Omaha and other companies. (Section 10905, page 371, line 1)
- Connecticut Hospital ($100M): Dodd took credit <http://www.google.com/hostednews/ap/article/ALeqM5jk5LKXjjlToRUNXFB_OKs7AoX4EgD9CNFKM00> for this last night, but was it bait for Lieberman as well? $100,000,000 For “Health Care Facility” “At A Public Research University In The United States That Contains A State’s Sole Public Academic Medical And Dental School.” (Manager’s Amendment To H.R. 3590, Pg. 328) <http://www.politico.com/static/PPM145_chris.html>
Now you may think this is crass, unscrupulous and unprincipled as does George Will. But I see this portending the Animal Farm to which Obama is leading us. For, despite Constitutional protections like equal protection of the laws and due process, “All animals are equal, but some animals are more equal than others.”
Tom Motherway
They’re They Go Again…Wasting Your Money
Anyone want to spend $2.7 Million for surgical operations in space? How about $1.6 Million for a tram to the Huntsville Botanical Garden? No, well then, I’m sure you’d want $1.3 Million of your hard-earned tax dollars to go to the UC Davis study of delta smelt breeding patterns? Just kidding. But this from Fox News isn’t:
Mixed in are more than 5,000 earmarks totaling $3.9 billion, according to watchdog Taxpayers for Common Sense.
Pork-watchers are only just beginning to sort through the earmarks, which typically are goodies set aside for the districts of members of Congress, as the bill tracks toward a final vote. So far, they've uncovered gems ranging from $700,000 for a shrimp fishing project in Maryland to $30,000 for the Woodstock Film Festival Youth Initiative to $200,000 for a visitor's center in a Texas town with a population of about 8,000.
“Let’s stop the madness,” House Republican Leader John Boehner said, before the bill passed without any GOP support. Twenty-eight House Democrats also opposed it.
via FOXNews.com – Watchdogs Cry Foul Over Thousands of Earmarks in Spending Bill.
Seems that neither Congressional Democrats nor Obama have any concept of whose money they are spending-sorry, waisting, how hard we work for it, that we’re in financially difficult times, and that they don’t know what the hell they are doing! Yeah, Pelosi, Reid and Obama promised that earmarks would be a thing of the past. Seems like it’s back to the future!
Tom Motherway
The Real Party of Wall Street & Big Business….The Democratic Party
Posted by Tom in Business, Centrally Managed Economy, Congress, Government Regulation, Politics on December 12, 2009
The Republican Party has been the party tagged with the Wall Street-Big Business Label. This has presented Democrats with a convenient collection basket which they pass around rather effectively. At the same time they promote the Republican business-association fallacy.
The Huffington Post’s November 19th article, The 15 Biggest Congressional Recipients of Wall Street Campaign Cash, is revealing. For the 2010 election cycle so far 11 0f the top 15 recipients are Democrats. Here’s the list.
| Rank | Recipient | Party | Amount |
| 15 | Barney Frank | D | $387,749.00 |
| 14 | Carolyn Maloney | D | $396,750.00 |
| 13 | Ron Wyden | D | $404,750.00 |
| 12 | John Thune | R | $407,950.00 |
| 11 | Jim Himes | D | $430,123.00 |
| 10 | Richard Shelby | R | $502,150.00 |
| 9 | Blanche Lincoln | D | $515,000.00 |
| 8 | Eric Cantor | R | $516,197.00 |
| 7 | Arlen Specter | D | $552,175.00 |
| 6 | Mark Kirk | R | $557,375.00 |
| 5 | Michael Bennet | D | $612,804.00 |
| 4 | Chris Dodd | D | $752,698.00 |
| 3 | Harry Reid | D | $1,038,210.00 |
| 2 | Kirsten Gillibrand | D | $1,173,400.00 |
| 1 | Charles Schumer | D | $2,167,300.00 |
And it’s not only Wall Street. Jonah Goldberg’s December 9th post in National Review Online, The Real Fat-Cat Party, praises Tim Carney’s new book “Obamanomics” citing the drug industry’s contribution to Obama was 3.58 time its contribution to McCain. Jonah also mentions GE’s leadership of the U.S. Climate Action Partnership not because GE is a tree hugger but because it “stands to make billions from carbon pricing, thanks largely to investments in technologies that cannot survive in a free market without massive subsidies from Uncle Sam.”
The economists call this corporate influence buying “rent seeking,” that is the manipulation of government regulation and subsidies to attain revenue and business advantage that could not otherwise be attained in the free market. The political corollary for this is “vote seeking” or more appropriately, “power seeking!” The Democrats wrote the book on that.
So in essence we have a symbiotic relationship between big business-wall street and Congressional Democrats. I became personally aware of that when I questioned an old friend who was a partner in a Wall Street hedge fund on that fund’s employment of John Edwards the former Democratic Senator and VP Candidate. My chiding question was, is your firm going into the plaintiffs trial lawyer business! His response, no all these guys are Democrats and that’s where their money goes! In truth their connected at the hip and it has paid off for both sides. Just consider: the financial bailout, TARP, Obamacare, the House cap and trade bill, and the House financial regulatory package.
Who are the losers? We the taxpayers are. The small businesses which create a majority of the jobs and a majority of the innovation in this country are also losers. Likewise the younger generation will lose with the gigantic intergenerational transfer of benefits; the younger generation will get stuck with increasing deficits, an unsustainable mountain of debt, and a lower standard of living.
So the next time someone tries to blame it on the Republicans as the party of big business, set ‘em straight. It’s those damn Democrats!
Tom Motherway
Is a US VAT Inevitable?
Posted by Tom in Congress, Economics, Financial Policy, National Character on November 15, 2009
Bruce Bartlett in his November 13th Forbes post thinks so basically because the gaping budgetary holes and debt peaks will be impassable without one. He admits that with a VAT we will be on Friedrich Hayek’s comfortable Road to Serfdom. And he suggests that once on that road we like the Europeans will be hard pressed to turn off.
It is hard to fault his argument. Our problems–to a large extent caused and certainly exacerbated by the Obama agenda–are so large that they cannot be overcome under our traditional structure. Obama and his clueless Democratic minions Reid and Pelosi believe that money grows on trees and that China and our trading partners will keep buying our increasingly worthless paper even while we continue to wage a trade war with them.
Could significant enough cuts be made in our budget? Undoubtedly, the could; very few things are beyond the realm of possibility. Will significant enough cuts ever be made? Undoubtedly, they never will be made, as this is one of the few things that is definitely beyond the realm of possibility.
The sad truth is that while a VAT could help, it will assuredly also hurt. Like bailouts it would be a cure which also causes the disease. Giving the politicians a new source of funds will only hasten our path on that Road to Serfdom. I don’t know about you, but my money is on a VAT as Obama hastens our Europeanization.
Tom Motherway