Monthly Archives: July 2011

Bachmann Responds to Obama on Debt Limit Deal

Michele BachmannUrbandale, Iowa — Republican presidential candidate Michele Bachmann issued the following response to President Obama’s statement on the proposed debt limit deal:

Mr. President, I’m not sure what voice you’re listening to, but I can assure you that the voice of the American people wasn’t the ‘voice that compelled Washington to act.’ It was you that got us into this mess, and it was you who wanted a $2.4 trillion dollar blank check to get you through the election. Everywhere I travel across the country, Americans want less spending, lower taxes to create jobs, and they don’t want us to raise the debt ceiling.

The President continues to press for a ‘balanced approach,’ which everyone knows is code for increased spending and taxes. Throughout this process the President has failed to lead and failed to provide a plan. The ‘deal’ he announced spends too much and doesn’t cut enough. This isn’t the deal the American people ‘preferred’ either, Mr. President. Someone has to say no. I will.

Boehner Releases Framework of Debt Ceiling Deal

John BoehnerOn Sunday night, Obama announced that a deal on the debt ceiling had been reached. While House minority leader Nancy Pelosi was saying that some or none of her Democrats might vote for the proposal, House Speaker Boehner held a conference with the leaders on the right side of the aisle.

Later Sunday night, he released the details of the framework on his website.

The framework is a two-step increase with a trigger:

Phase one is an immediate $900 Billion increase to the debt ceiling that will hold the government over until roughly February. In exchange for that increase, discretionary spending will be cut and capped immediately which will save $917 Billion over ten years. In an effort to prevent the increase from happening without the savings (remember Reagan anyone?), the ceiling increase will not occur until Congress and the President implement the spending cuts. This would signal that a short term measure will need to be passed to allow a small debt limit increase (perhaps a week’s worth) while Congress irons out the spending cuts.

Phase two: The President can ask for a second debt limit increase of $1.5 Trillion if either a balanced budget amendment to the Constitution is sent to the states for ratification or a the recommendation of a 12-member special committee are implemented that would save more than $1.5 Trillion.

The trigger: Specific spending caps would be put in-place to limit spending. If the government fails to remain below these limits, it will trigger across-the-board cuts to government spending. The trigger is specifically hit if the Joint Committee fails to achieve at least a drop of $1.2 Trillion in the deficit. Once the trigger fires-off, the President can request another $1.2 trillion increase in the debt-limit. If the increase is passed, across-the-board cuts in all government spending equal to the difference between $1.2 trillion and the amount of the deficit reduction enacted by Congress. These cuts would be equally applied to mandatory and discretionary spending, both defense and non-defense. While Medicare would be included in the cuts, Social Security, Medicaid, veterans benefits and government pay (civilian and military) would not be affected.

One way to read the summary presentation from Boehner is that the triggers could cause the spending cuts to be split 50-50 between Defense and Medicare spending. Some reports have said that the Medicare spending would only affect providers (hospitals, doctors, suppliers) not beneficiaries.

As a final note, the framework includes no tax hikes, but the committee will be free to recommend them as a method for reducing the deficit.

 

Band Jockeying

Paul Ryan’s solution for our debt solution held up only with the Conservative segments of the Republican coalition. Reid’s plan only appealed to Democrats and the remaining plans garnered support or disdain from many different factions within Congress, but none of them had the votes to pass.

Now, 11th hour negotiations have been happening in the offices of Congressional leaders and at the White House to find an 11th hour deal that can get the 60 votes needed in the Senate and the 214 votes needed in the house.

Debt Ceiling Plans and Caucuses

With prior plans appealing only to left or right segments of Congress, the current negotiations look to be forming a plan that will focus on creating a large coalition of members of Congress. It will however leave out the far-left and far-right.

By pandering to the middle, Congressional leaders can garner the number of votes that they need without kowtowing to the staunchest factions in their parties. They are actually writing off a portion of their base to achieve the end goal – a debt ceiling deal.

As expected, the Tea Party Conservatives and the Progressive Caucus won’t vote for the compromise. As long as they can keep enough of their centrist factions together, a coalition made up of both parties can pass a negotiated deal.

Extreme Left Wing Caucuses to Ask Obama to Unilaterally Raise Debt Ceiling

It is being reported today that the Congressional Black Caucus and Progressive Caucus, two of the most extreme left-wing factions within the Democrat party, will go to the White House tomorrow to demand that the President use a flawed interpretation of the 14th amendment to raise the debt limit without Congressional approval.

This move is in response to both of the caucuses disdain for the compromise bill that is coming from bicameral negotiations. It would seem that the progressives are now the ones causing dismay and delay in the debt ceiling talks.

In what could only be called a dereliction of duty and perhaps a violation of their oath of office, the left-most elements of the Democrat party would have the President do what only Congress was given the power to do – borrow money.

Specifically, the far left will instruct the President to use section 4 of the 14th amendment to the Constitution:

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

The most serious problem with the 14th amendment argument is that if the debt ceiling isn’t raised, there would be no challenge to the validity of the current publicly-held debt. What would happen is that no more debt could be added to that amount.

Bonds would be serviced and could continue to be serviced for the foreseeable future. Those bonds represent the publicly held debt.

What the progressives want to do is get future spending categorized as debt. That would include paychecks for Department of Energy employees, federal regulators, etc. If those workers are furloughed, they are not working and are therefore owed nothing. No further debt is accrued.

Members of Congress, albeit extremists, would prefer to cede their power to the executive branch rather than perform their Constitutional duty.

New York Times Still Calling Reid’s Bill Failure “Republican Filibuster”

This afternoon, Senate Majority Leader Harry Reid’s debt bill, S.627, failed to get to a vote for passage. The vote to end debate, otherwise known as a cloture vote, failed 50-49 as 60 votes are required to end debate.

Although Harry Reid has refused two offers by Senate minority leader Mitch McConnell to vote here and now on passage which would only require a 50 vote margin, the New York Times is putting the blame for Sen. Reid’s delay tactics on Senate Republicans.

Senator Harry Reid, the majority leader, had convened the Senate at noon, then moved to a procedural vote on his own proposal for raising the debt ceiling. Senate Republicans had been filibustering that plan, which House Republicans rejected on Saturday, and the vote on breaking the filibuster fell 10 votes short of the 60 votes needed under Senate rules.

Reid-votes-nay-cloture

from: Senate.gov roll call vote to end cloture on S.627

What the Times didn’t report was that one of the people “filibustering” Reid’s bill is .. Harry Reid himself. The Senate’s own roll call reflects the reality of the situation – Harry Reid voted “nay” on the vote to end the filibuster (the cloture vote image right).

If this is a filibuster, Harry Reid is leading the way.

 

Correcting Bad Economics

I was recently added to a political discussion group and while the topics covered are interesting, the premise of the group is faulty and based on some skewed version of history and economic theory. In this article, we will pull apart the mission statement and note the major inaccuracies, since they are prevalent in many other debates.

“In the aftermath of a global recession, as we have seen a massive failure of deregulated subprime-mortgage securities poison the global economy, we seem to be stuck with the same old economic debates.”

This opening sentence shows us where the author is coming from; He is essentially under the belief that deregulation is what caused the mortgage meltdown. Such is not the case, and anyone that makes the argument that the US has been deregulated in any substantial way has not been paying attention. As I pointed out in an earlier article,  the amount of regulations has gone up for 16 out of the last 30 years with the only significant (and sustained) drop happening during Reagan.

The main cause for the subprime-mortgage “poison” was the government instituting regulations. While the beginnings of the problem can be traced to the 1940’s, it wasn’t until the 1977 Community Reinvestment Act, a vague and crudely-worded piece of legislation, that the issue snowballed. Essentially, banks were forced to lend to people that couldn’t pay the loans back (in the interest of “fairness”). The loans were, naturally, high-risk, so the banks bundled them up into a “security” and sold them to other institutions. Those companies realized it as a bad deal and sold them to other institutions, and so on until the last company holding the bag got shafted. This never would have happened without government intervention in the marketplace. (I am aware of counter arguments made by somewhat reputable sources regarding the 1977 CRA, specifically that a problem caused by such an old law is a “silly’ notion. I contend that those authors lack the ability to see a causal relationship to actions and seek to gloss over the evidence in order to fit their ideological viewpoint).

As for “same old economic debates,” these debates have been happening since the dawn of civilization. Some believe that humans are fit to make their own economic decisions, while others seem to believe we need a government to make those decisions for us. It is an argument pitting liberty against government control. With the historical record clearly showing the greatest leaps in humankind having happened in direct proportion to the amount of economic and political freedom citizens possess, you’d think this debate would have been over centuries ago.

“The U.S. has never been purely socialist, not purely capitalist, except in the era of the banker and industrial robber barons of the late 1800’s.”

This is a cop-out, and is historically accurate to the point that the late 1800’s did see a rise in economic freedom, but it began to unravel with the McKinley administration (who enjoyed Republican control of Congress) and ended with Teddy Roosevelt and his “trust-busting” policies.

The use of the term “robber barons” is enlightening. While the term is applicable in the train industry, where railroad executives worked with the government to pass legislation (which is not capitalism), it is not applicable when applied to the likes of John Rockefeller and Standard Oil, the usual scapegoat who was able to grab a huge market share by eliminating waste and inefficiency in the fuel refining process, which allowed him to sell his fuel cheaper (which was better for consumers) and reap huge profits (which was better for him and his workers).

Yes, there were a lot of swindlers, but all of these regulations only hurt the honest businessman. It’s like the gun arguments involving gun-free zones; a criminal intent on murdering people is not going to stop because a certain area is “gun-free.” They have already made the decision to commit murder. A regulation banning his weapon of choice from a certain area is not going to stop him. In fact, the evidence points that it only encourages them.

“We have people advocating the same old trickle down deregulatory approach which has greatly helped the top 1%.”

Here, we see the beginnings of the class warfare argument, which is a stance rooted in envy, greed, and seeks to influence the worst parts of human nature. Steve Jobs is in the top 1%, so the argument goes that he should have to pay more in taxes and be regulated more. The flip side to the argument that the class-warfare warriors never seem to understand is how much more productive individuals and society as a whole is by the fact that Steve Jobs exists and is allowed to make his products. He and his team work hard and provide superior products to people who want them, and he should be allowed to keep the money he earns selling those products. Any so-called societal obligation has already been paid in full by the very nature that he made people more productive and grew the economic pie, of which everyone at all levels is able to enjoy.

“As for liberals or left-wing people like myself, I advocate government programs for the poor and disenfranchised as I know full well the ills of bureaucracy, inefficiency, waste, fraud, etc of our government.”

This is the revealing statement, where the author lets his views be known. The problem is that it contradicts itself. How can one advocate for government programs while simultaneously acknowledging the problems associated with them?

The fact of the matter is that those very government programs the author, and those associated with his belief structure, do not work for the simple fact that politicians and bureaucrats make decisions based on a political return, not an economic return. They have no fiscal discipline, and are not subject to the rules of the marketplace, so their job security is based on whether or not they can hand out more goodies and not on job performance. Never mind that those goodies are laced with poison and paid for on the backs of others.

Never in the history of mankind has centralized planning or class-warfare worked. Besides the faulty economic basis for such theories, i.e. class-warfare was only valid when the rich were the ones writing the laws and jailing the people who did not pay up, it ended when capitalism (meritocracy and free markets) came into effect.

“We cannot return to full-fledged Keynesianism and wax nostalgic over a past far better than the present, but we need to examine what clearly works well under the rubric of “social democracies” whose middle and poor classes benefit and progress from governments’ support of education, green technology, and universal health care. We have to consider the government’s role in providing the jobs and sustainable economies of the future as contrasted from the current oligopoly of fossil fuel companies, drug companies, big banks, the media conglomerates, all these being functional fascisms dictating the world economy.”

Again, with the class-warfare argument. He seeks to segregate people into groups and wants to equalize outcomes, which is impossible. The best that we can do, the path that we are morally obligated to seek, is one that frees people to go as high as they want while placing no burdens on their fellow man. The notion of all men being created equal escapes those like the author, who sees people as incompetent and in need of a benevolent force to take care of them.

Before the “common era,” that benevolent force was sold to mankind as a god-in-the-flesh whose divine power was mandated by heaven. His argument is little different and constitutes a societal regression, which is ironic since the people who use those arguments consider themselves “progressive.”

The latter part of that quote is important. The only role government has in a free society in providing sustainable economies is twofold, and is centered around the notion of keeping us free. The first is to protect us from force, which takes form in the defense of our borders (outside threats) and the defense of our selves and property (home-grown threats) with military and law enforcement. Secondly, the government should provide a court system so, in the case someone brings undue force against his neighbor, he can take them to court and have the matter judged by an independent arbiter.

The purpose of government is not to jump into the economy and start picking favorites, controlling people, and passing arbitrary regulations that make everyday living even harder. Such policies, which the author advocates, creates the very “functional fascism” he is railing against.

“The market for regular citizens cannot possible be free with the concentrations of power into ever fewer hands.”

Yet he would put control of that market in the hands of regulatory agencies controlled by 535 members of Congress, a president, and 15 cabinet members? One cannot make the argument that such a plan gives us more power when you consider that Congress is only at a 6% approval, hasn’t passed 20% in recent memory, and yet they still get reelected time and time again.

“Getting power back to the people cannot happen under the persistent stagnation of stereotyped economic polemics.”

Polemics (attacks) on leftist economic policies are warranted because those policies have never worked in the history of mankind despite 10,000 years of experimentation with centralized control. Whether you call the fascist, socialist, socialist-light, communist, tribalist, progressive, or liberal, they all fail horribly and only after sucking away the talent and motivation of a people. Such policies need to be attacked, discredited, and buried because real people’s lives are at stake.

What he said is true regarding polemics against capitalism. Capitalism is incredibly misunderstood even though it is essentially the easiest to understand: You are free to make your own economic decisions. It is because of this misunderstanding that I added the first picture in this article.

“We need to find common ground, try to understand the merits of theories we are predisposed to oppose before we can shift the paradigm. Shifting the paradigm is necessary to move forward and extricate ourselves from the transnational corporate tyranny impeding personal freedom and potential for growth.”

The “transnational corporate tyranny” is a straw man argument, though any sort of tyranny caused by corporations could not exist were it not for the regulations and amount of government control he advocates. No company can force you to buy a product, only government. No company can form a cartel without the assistance of government (i.e. the railroad industry in the 1800’s). In a free market, absent of the massive amount of regulations in place today, such companies cannot exist because a dozen competitors would rise up to take their market share.

In this argument between freedom and control, there can be no middle ground. You cannot say you are for freedom while advocating a new set of Jim Crow laws that put people into various groups and treat them differently under the law. 80% of millionaires in this country are self-made, first-generation, and they get that way through dedication, frugality, and hard work. They produce products people are willing to buy, and do so by hiring people willing to do the work. Enacting laws that essentially steal their money to fund corrupt programs does more harm to society than anything else. Such is the folly of “liberals and left-wing people.”

(Crossposted at Federalism Online)

Reid Delays Senate Vote on His Proposal Until 1pm Sunday

Just after 10pm on Saturday night, Harry Reid announced that the Senate vote on his debt bill was being moved from 1am on Sunday morning to 1pm Sunday afternoon eastern time.

Reid mentioned that negotiations were ongoing.

What comes out of these negotiations is likely to be a watered-down combination of several plans. The two-phase debt ceiling increase with an ultimate increase that will put the argument well past the 2012 elections. It will have the gimmicky cuts from all of the plans and will likely contain a non-binding vote on the Constitutional amendment to balance the budget which will NOT pass the Senate.

*update* vote for cloture (to end debate) on S.627 has failed. Reid joined other Senators in a vote that prevents a vote for passage on the plan at this time.

 

Compromise is a good thing!

Compromise can be a good thing,  but let me tell you what I thought yesterday about the happenings on the Hill.

I still wondered why Speaker Boehner, who was on the Sean Hannity show a few days ago, stated, “The Mack Penny Bill was worth looking at” had done absolutely nothing with regard to that bill? Even the media is saying very little about it. Why is that?

Instead of Cut, Cap and Balance or the Mack Penny Bill, Speaker Boehner’s bill passed. If compromises were made, then surely the essentials of cut, cap, and balance or even parts of Mack’s Penny bill were in the bill – or not.

Like many others, I had just assumed that the compromise would bring parts of all the different legislation into a bill that would garner support. Seeing what actually passed – he sold-out.

I felt bad for Speaker Boehner, and all he is going though. But, isn’t that what he is paid to do? Talking with Democrats is a necessary part of creating legislation, but NOT doing what the American people have hired him to do is unacceptable.

Yes, it is hard to take a stand. No one said it would be easy, but deal with it Boehner! This entire issue is about the deficit and more specifically .. spending.

2012 is not that far away, Mr. Speaker –  time to get to work!

Sausage-Making, Mediscare and a Vote [Video]

On Saturday afternoon, the blow-hards of Congress fired off salvo after salvo at each other before holding a vote that was a foregone conclusion.

The House version of Harry Reid’s debt ceiling bill was coming up for a vote and the following debate took place just before the scheduled vote.

House Version of Reid’s Debt Bill Fails House 173-246

Senate Majority Leader Harry ReidDemocrats joined Republicans in voting down the House version of Senate Majority Leader Harry Reid’s debt bill on Saturday.

In a 173 to 246 vote, 10 Democrats crossed the aisle to vote against the bill.

In the pre-vote debate, a large part of Democrat commentary was in disagreement with the choice of rules under which the vote was being held. Under “suspension rule” 2/3rds majority was required for the bill to pass. It also limits debate and allows for no amendments. This rule set is intended to get a vote as quickly as possible.

Even if standard, simple-majority rules had been put in-play, the bill would have failed by a large margin.

Sen. Reid had spent much of Friday telling reporters that his bill was the only one that could pass both houses of Congress. So far, he has refused two offers by Senate Minority Leader McConnell to hold a vote on his bill in the Senate and now the House version of his bill has failed in the House.

BATS 1000 Index Declines 4.1% This Week

8YXE2AT7XSTS KANSAS CITY, Mo., July 29, 2011 /PRNewswire/ — BATS Global Markets, a global stock market operator, reports the BATS 1000(SM) Index (Ticker: BATSK) down 4.1% for the trading week ending July 29. The S&P 500 Index declined 3.9% on the week.

The BATS 1000 Index ended the trading week down 630.08 points to close at 14,774.48 as of 4 p.m. ETtoday. The Industrials and Manufacturing sector, which was down 6.5%, led the declines.  The Utilities sector, down 2.2%, was the best performing sector on the week.

Below is an overview of the BATS 1000 Index and sub-indices for the week:

Ticker Index Name Performance
BATSK BATS 1000 Index -4.1%
BATAR BATS Alternative Resources and Energy Sector Index -4.8%
BATBM BATS Basic Materials Sector Index -4.8%
BATBS BATS Business Services Sector Index -4.8%
BATCG BATS Consumer Goods Sector Index -3.1%
BATCS BATS Consumer Services Sector Index -3.1%
BATFN BATS Financials Sector Index -3.6%
BATHP BATS Healthcare and Pharmaceuticals Sector Index -4.5%
BATIM BATS Industrials and Manufacturing Sector Index -6.5%
BATTC BATS Technology and Communications Sector Index -3.5%
BATUT BATS Utilities Sector Index -2.2%

Opposition Emerges to Democrat “Main Street Fairness Act”

WASHINGTON, July 29, 2011 /PRNewswire-USNewswire/ — NetChoice strongly opposes the so-called “Main Street Fairness Act,” introduced in the Senate today by Sen. Richard Durbin (D-IL) and in the House of Representatives by Rep. John Conyers (D-MI).  The proposed legislation would impose unfair and disproportionate collection burdens on small businesses, while adding less than three-tenths of one percent to state and local tax revenues.

“Congress often says that small businesses are the backbone of the economic recovery, but these new collection costs will break the backs of many small online businesses,” said Steve DelBianco, executive director of NetChoice. “This legislation fails to define safe harbors for small businesses, virtually guaranteeing that small and medium retailers will receive little help in complying with thousands of state and local tax jurisdictions.”

“Past attempts to pass similar legislation included a specified safe harbor that protected small businesses from the cost and complexity of a new Internet tax.  Today’s legislation leaves the job of defining such safe harbors up to the unelected tax administrators on the SSTP’s Governing Board.  That’s like letting the foxes run the hen house.”

“This Governing Board claims to have simplified definitions, but it defines beef jerky as ‘candy’ while defining cotton candy as not candy.”

“According to the SSTP’s own study, small businesses spend 17 cents of their own money to collect and file every dollar of sales tax they send to their home states.  This bill would force small online retailers to collect for two dozen states, requiring expensive software updates, inviting exposure to an army of auditors, and cutting into resources they’d rather spend on building businesses and creating jobs.”

“It’s a cruel irony to call this job-killing bill the ‘Main Street Fairness Act,'” DelBianco said. “Online sales are about the only way small retailers can survive being steamrolled by the big-box chains who are behind this bill.”
NetChoice joins a broad array of organizations and elected officials that oppose the measure.  Today’s bill has no bi-partisan support, in stark contrast to the long list of bipartisan sponsors of House Resolution 95, Supporting the Preservation of Internet Entrepreneurs and Small Businesses.   That resolution opposes “any legislation that would grant State governments the authority to impose any new burdensome or unfair tax collecting requirements on small online businesses and entrepreneurs.”

8YXE2AT7XSTS

The Obama Economy is So Bad – Even the Illegals are Leaving

Border PatrolEver since Obama took office, Americans (translation: citizens) have been asking him to deal with the illegal immigrant situation. Unbeknownst to the majority of Americans, Obama did actually have a plan to curtail illegal immigration from Mexico – destroy the American economy.

While the United States is struggling with worsening unemployment Mexico’s unemployment rate is now 4.9 percent – much worse than America’s 9.1% rate.

Apparently, our current leadership can fail at economics even worse than the corrupt politicians in Mexico and the illegal immigrants are figuring that out. It is estimated that about 300,000 undocumented immigrants have left California since 2008.

The good news is that Obama’s secret new strategy to defend our borders is successful despite an incredible lack of attention, leadership or funding. A constitutional responsibility achieved without the expenditure of a single tax payer dollar – GENIUS!!

Reid Shows Signs That He Does Not Have 60 Votes for His Bill [Video]

Senate Majority Leader Harry Reid does not have the votes to pass his own debt ceiling bill. Reid spent Friday night addressing the Senate in an attempt to blame Republicans for his inability to garner 60 vote support in the Senate for his legislation.

Reid has 53 democrats that will vote for just about anything he puts in front of them. If he wants 7 more votes, he would have to compromise, but not much. He doesn’t want to negotiate – at all. That will delay the debt ceiling proceedings at least one more day.

The reason for the delay is cloture. A cloture vote would have ended debate and set it to a vote for passage. Reid refused McConnell’s offer for a cloture vote and that then requires a super-majority (60-vote threshold) to pass.

Considering the vote to table House Speaker Boehner’s bill only passed 59-41, Reid may have every reason to worry.

Here’e the video: GOP’s McConnell offers to give Reid an immediate vote on his bill and Reid turns it down while simultaneously calling the maneuver a GOP filibuster.

Now Reid may have trouble getting a single, large debt ceiling hike through the Senate and the despite moderate GOPers casting dispersion at them, the Tea Party holding the line may well have forced him to compromise for the first time in several years.

Vote Succeeds on Boehner’s Compromise Debt Bill 218-210

The bill passed with an eight vote margin: 218-210. Five democrats did not vote and in a show of ultra-partisanship, not a single democrat crossed the isle to vote yes.

From the right side of the House, 22 republicans voted against it and 218 for.  GOP no votes were: Amash, Bachmann, Broun(GA), Chaffetz, Cravaack, DesJarlais, Duncan (SC), Gowdy, Graves (GA), Huelskamp, Johnson (IL), Jordan, King (IA), Latham, Mack, Mulvaney, McClintock, Mulvaney, Paul, Southerland, Walsh (IL), Wilson (SC).

Now the bill will be hastily taken over to the Senate where Senate Majority Leader Harry Reid has promised to table it. The next move is on the Senate.