WASHINGTON WATCH


What's the Senate Thinking?

From the Heritage Foundation Morning Bell:

April 29 marks the third year in which the U.S. Senate has not passed a budget -- a staggering dereliction of duty, particularly given the country's near-$16 trillion debt. But that's not the Senate's only blockbuster failure under the leadership of Majority Leader Harry Reid (D-NV). From spending to jobs to energy policy, the Senate has totally dropped the ball, leaving one to wonder, "What's the Senate thinking?"

But it's not just a matter of a simple failure or benign neglect, like forgetting to take out the trash. The way some in the Senate are behaving is equivalent to buying a dog but then deliberately choosing not to feed it. These men and women sought elective office, won a seat in the Senate and now have the power to take action to confront America's problems. But under the leadership of Majority Leader Reid, they're making the choice not to do so.

When it comes to the Senate's failure to pass a budget, the facts are bleak. From 2012 to 2022, federal spending per household is projected to rise to $34,602 -- a 15 percent increase. Without entitlement reform, that spending is swelling to a crippling level, exceeding 40 percent of the economy by 2050. Despite all this, the Senate is sitting on its hands and not pursuing the significant reforms that are necessary -- and opting not to pass a budget for three years is emblematic of their reckless inaction.

Last week, in fact, Senate Budget Committee Chairman Kent Conrad (D-ND), whose primary responsibility is to marshal bipartisan support of a budget resolution, declined to take on the task, remarking that it would be too difficult in an election year. Last year was not an election year, and they didn't bother to do it then, either.

Meanwhile, as America continues to wrestle with staggering unemployment and weak job creation, Senate Democrats yesterday blocked an effort to help workers, employers and the U.S. economy.

Republican lawmakers moved to halt the National Labor Relation Board's (NLRB) latest effort to give unions the upper hand in organizing work places. Earlier this year, the NLRB enacted a rule that speeds up union elections, making it easier for unions to grow their ranks by unionizing more workplaces while depriving workers of a truly informed choice in the matter.

Normally when unions try to organize workers in a business, they plan their efforts before they request an election. Once the employer receives an election request, they have a limited amount of time to inform their workers of why unionization might not be right for them. Under the NLRB's new rule, employers will have even less time to make their case, all to the detriment of their employees. Heritage's James Sherk explains the rest of the story that the workers won't hear:

Employers, not union organizers, will explain that unions often do not achieve their promised wage increases, but they always take up to 2 percent of workers' wages in dues. Employers will also point out patterns of union corruption and clauses in union constitutions that levy stiff fines against workers who stray from union rules. Employers are free to tell workers what the union organizers do not.

Because Senate Democrats blocked the effort to put a stop to the NLRB's rule, workers will be more likely to be pushed into unions. And make no mistake, the economic consequences won't be good. Unions reduce profitability, meaning that unionized companies invest less and create fewer new jobs than nonunion companies. Overall, that's bad news for workers, companies and the U.S. economy.

Perhaps the ultimate example of what the Senate is all about emerged yesterday when Majority Leader Reid said he would not help in the House Republicans' effort to force President Barack Obama to approve the Keystone XL pipeline, which could bring up to 830,000 barrels of oil per day from Canada to the United States (as well as jobs, economic growth and tax revenue). "Personally I think Keystone is a program that we're not going -- that I am not going to help in any way I can," Reid said. "The president feels that way. I do, too."

Under Reid's leadership, that's the name of the game in the U.S. Senate. Regardless of the country's exploding debt, soaring energy prices or 12.7 million unemployed workers, Reid and his like-minded colleagues are flat out refusing to do the job they were hired to do, all in accord with the president's agenda. So if you're wondering what the Senate's thinking, now you know. Unfortunately, the country's best interests aren't what they have in mind.


Obama Whispers Away America’s Security

From the Heritage Foundation's Morning Bell:

It is hard to overstate the dangerous implications of what happened this week when President Obama was caught by an open mic sending a message to Russia’s dictator-in-waiting to wait quietly till after the November elections, after which Mr. Obama could make concessions on America’s national defense. The White House is trying to explain this incident away as par for the course in an electoral year. It is not.

Here, in essence, is what it appears to be: this was our commander in chief in league with an anti-American autocrat to dupe the American public until after it’s too late. What makes it even worse is that the issue at hand–missile defense–has to do with protecting the American people against the likes of Russia.

We don’t need to exaggerate what happened. All we need is to review what Obama, our President, was caught telling Russia’s current president, Dmitri Medvedev, while the two met at the 2012 Nuclear Security Summit in Seoul, South Korea. Neither man knew the microphones were live and picked up their exchange. Here it is:

President Obama: On all these issues, but particularly missile defense, this, this can be solved but it’s important for him to give me space.

President Medvedev: Yeah, I understand. I understand your message about space. Space for you…


President Obama: (reaching over and putting his hand on Mr. Medvedev’s knee): This is my last election. After my election I have more flexibility.

President Medvedev: I understand. I will transmit this information to Vladimir.

The Vladimir in question is none other than Vladimir Putin, who just won elections in Russia this month under a cloud of suspicion, to replace Mr. Medvedev, who has been a fig leaf president for the past four years while Mr. Putin has wielded power from his post as prime minister.

Mr. Putin, who has been open and public in his disdain for both the United States and President Obama in particular, opposes American foreign policy from Syria to Asia to Latin America. He is the poster child for a new breed of authoritarian world leaders who openly want to thwart America’s intentions. Most recently, Putin used hostile rhetoric toward the United States as a tool in his re-election campaign, labeling opposition leaders puppets of the CIA. That followed Russia’s decision at the United Nations Security Council to veto a U.S.-backed resolution calling for Syrian dictator Bashar al-Assad to step aside.

The President’s surreptitious hat-tip to Putin comes at a dangerous time for the American people and U.S. allies. North Korea is preparing to launch yet another long-range missile, and Iran is in desperate pursuit of a nuclear weapon. Meanwhile, the United States and its allies remain unprotected from the threat of nuclear missiles, and now it appears that Obama wants to cede even more ground to Russia on vital national security issues.

The President, probably sensing the potential gravity of the situation, quickly addressed the incident. He tried to defend himself yesterday by saying:

Frankly, the current environment is not conducive to those kinds of thoughtful consultations. The stories you guys have been writing over the last 24 hours is probably pretty good evidence of that. I think we’ll do better in 2013.
But this is not how democracy works. In asking Mr. Medvedev to tell Mr. Putin to “give me space” until he can be more flexible next year if he gets re-elected this November, Mr. Obama was clearly telegraphing the willingness to give Mr. Putin at least part of what he wants on missile defense. This President has already given too much. In the New START strategic nuclear arms control treaty with Russia, President Obama agreed that U.S. missile defense capabilities must be reduced along with strategic nuclear weapons — essentially laying down America’s arms and its shield, as well.

Now it appears that President Obama wishes to go even a step farther in order to appease Mr. Putin. Where that step leads, we truly don’t know. All we can see is the direction the President is already headed.

The exchange with Mr. Medvedev, lastly, only deepens and validates two already extant and related narratives about our President: one is that he harbors views that are inimical to the American people and only come out in unguarded moments. An example of that is when he said in San Francisco four years ago that Americans cling to their religion and guns bitterly when they’re afraid of the future. The other narrative is that the President will be unshackled once (and if) he is re-elected, and will put in place a plan far more radical than he is letting on in public at the moment.

If concessions to Russia on missile defense are what Mr. Obama wants, he can make his case to the American people and ask them to endorse his policies. To hide them until it is too late and he is safely ensconced in office is unseemly.




Obama Slams Supreme Court over Obamacare

From the Heritage Foundation's Morning Bell:

The highest elected official in the United States dished out an extra helping of irony yesterday when, in speaking at a joint news conference with Canadian Prime Minister Stephen Harper and Mexican President Felipe Calderon, President Barack Obama slammed the Supreme Court as an “unelected group of people” who will have turned to “judicial activism or a lack of judicial restraint” if they strike down Obamacare.

The President’s remarks imply that the Court, were it to rule the individual mandate unconstitutional, would be acting recklessly in undertaking judicial review of Congress’ unprecedented use of the Commerce Clause to force Americans to buy health care or pay a penalty. The irony in all this is that this President has presided over an Administration that is the epitome of recklessly abusing power, at times in flagrant violation of the Constitution, and has empowered unelected bureaucrats to write scads of new regulations impacting nearly every corner of American life.

Obamacare, of course, is a prime example of that unchecked and multiplying web of the President’s boundless dictates. The law’s Independent Payment Advisory Board (otherwise known as “IPAB”) is packed with unelected bureaucrats who have the power to limit seniors’ treatment options and access to care, essentially ending Medicare as we know it.

On top of IPAB, Obamacare is rife with new regulations, all courtesy of unelected bureaucrats. Professor of law Gary Lawson writes that the implementation of Obamcare “will require many years and literally thousands of administrative regulations, and those regulations will ultimately determine the substantive content and coverage of the law.” In other words, the future of health care in America will not be determined by the people’s elected representatives, but by administrative rulemakings handed down by unelected and largely unknown agency officials. How’s that for a “democratically elected government”?

Obamacare, though, isn’t the only example of the Obama Administration imposing its will via executive fiat. In a new study, Heritage’s James Gattuso and Diane Katz detail 106 new major federal regulations that added more than $46 billion per year in new costs for Americans. And those are regulations enacted not by elected officials who are accountable to voters, but by Washington bureaucrats who can wield their power without having to answer to the people.

While the President is throwing stones at the court, he’s living in a glass house from which he has exercised his tyrannical abuse of power. In January, the President cast aside the Constitution when he illegally appointed Richard Cordray to serve as director of the Consumer Financial Protection Bureau, along with three appointments to the National Labor Relations Board, all without Senate approval, as the Constitution requires. Former attorney general Ed Meese described the President’s actions as ”a constitutional abuse of a high order,” and House Speaker John Boehner (R-OH) said it was ”a brazen attempt to undercut the role of the Senate to advise and consent the executive branch on appointments.”

And this is the President who said in December, “What I’m not gonna do is wait for Congress. So wherever we have an opportunity and I have the executive authority to go ahead and get some things done, we’re just gonna go ahead and do ‘em,” irrespective of whether the people’s duly elected representatives have a say in the matter.

Now that the President is seeing the potential for his signature legislation to go down in flames because of its unconstitutional individual mandate, he is lashing out at the Supreme Court. To date, President Obama has enjoyed ruling with impunity and has attempted to carry out his agenda without so much as a hat tip to the Constitution. But come June when the Court rules on Obamacare, the President might finally see part of his agenda stopped in its tracks.


Obama's Payroll Tax Extension a Disaster for Business, a Debacle for GOP

The GOP’s Payroll-tax Debacle
The Republicans have fallen into President Obama’s trap.

December 23, 2011 12:00 A.M.

by Charles Krouthammer for the National Review


Now that Congress appears finally to have reached a compromise on what must be one of the worst pieces of legislation in years — the temporary payroll-tax-holiday extension — let’s survey the damage.

To begin with, what even minimally rational government enacts payroll-tax relief for just two months? As a matter of practicality alone, it makes no sense. The National Payroll Reporting Consortium, representing those who process paychecks, said of the two-month extension passed by the Senate just days before the new year: “There is insufficient lead time to accommodate the proposal,” because “many payroll systems are not likely to be able to make such a substantial programming change before January or even February,” thereby “creat[ing] substantial problems, confusion and costs.”

The final compromise appears to tweak this a bit to make it less onerous for small business. But what were they thinking in the first place? What business operates two months at a time? The minimal time horizon for business is the quarter — three months. What genius came up with two? U.S. businesses would have to budget for two-thirds of a one-quarter tax-holiday extension. As if this government has not already heaped enough regulatory impediments and mindless uncertainties upon business.

But making economic sense is not the point. The tax-holiday extension — presumably to be negotiated next year into a 12-month extension — is the perfect campaign ploy: an election-year bribe that has the additional virtue of seizing the tax issue for the Democrats.

When George McGovern campaigned on giving every household $1,000, he was laughed out of town as a shameless panderer. President Obama is doing exactly the same — a one-year tax holiday that hands back about $1,000 per middle-class family — but with a little more subtlety. Obama is also selling it as a job creator. This takes audacity. Even a one-year extension isn’t a tax cut; it’s a tax holiday. A two-month extension is nothing more than a long tax weekend. What employer is going to alter his hiring decisions — whose effects last years — in anticipation of a one-year tax holiday, let alone one that lasts two months?

This is a $121 billion annual drain on the Treasury that makes a mockery of the Democrats’ reverence for the Social Security trust fund and its inviolability. Obama’s OMB director took Social Security completely off the table in debt-reduction talks under the pretense that Social Security is self-financing. This is pure fiction, because the Treasury supplies whatever shortfalls Social Security faces. But now, with the payroll-tax holiday, the administration openly demonstrates bad faith — conceding with its actions that the payroll tax is, after all, interchangeable with other revenues and never actually sequestered to ensure future payments to retirees.

The House Republicans’ initial rejection of this two-month extension was therefore correct on principle and on policy. But this was absolutely the wrong place, the wrong time, to plant the flag. Once Senate Republicans overwhelmingly backed the temporary extension, that part of the fight was lost. Opposing it became kamikaze politics.

Note the toll it is already taking on Republicans. For three decades Republicans owned the tax issue. Today, Obama leads by five points, a twelve-point swing since just early October. The payroll-tax ploy has even affected his overall approval rating, now up five points in six weeks to 49 percent.

The Democrats set a trap and the Republicans walked right into it. By rejecting an ostensibly bipartisan “compromise,” the Republican House was portrayed as obstructionist and, even worse, heartless — willing to raise taxes on the middle class while resolutely opposing any tax increases on the rich.

House Republicans compounded this debacle by begging the Senate to come back and renegotiate the issue, thus entirely conceding the initiative to majority leader Harry Reid. But Reid had little incentive to make any concessions. House Republicans would have taken the fall for 160 million shrunken paychecks. Every day the White House would have demanded, in the name of the suffering middle class, that Republicans return from vacation and pass the temporary extension.

Having finally realized they had trapped themselves, House Republicans quickly caved, thanks to a fig leaf contrived by Sen. Mitch McConnell.

The GOP’s performance nicely reprises that scene in Animal House where the marching band turns into a blind alley and row after row of plumed morons plows into a brick wall, crumbling to the ground in an unceremonious heap.

With one difference: House Republicans are unplumed.


Obama Mideast Foreign Policy Is In Shambles

From Investor's Business Daily:

http://www.investors.com/NewsAndAnalysis/Article/589188/201110241855/Mideast-Policy-In-A-Shambles.htm?src=HPLNews

Posted 10/24/2011

Diplomacy: As the U.S. careens from debacle to debacle, our policy in the Middle East is now in disarray. American influence is waning, as radical Islamists take over in nation after nation. The damage may be irreversible.

Arab Spring has given way to Arab Fall, and things aren't going well. Not only is Israel, our best friend and only true ally in the region, under siege by its Arab neighbors, but we seem to be walking away from the problem.

Meanwhile, in country after country, those who hate the West in general and the U.S. in particular are making great strides. Increasingly, Iran seems to be the victor. It has long sought to replace the U.S. as the area's dominant influence. Now its hand has been strengthened by the feckless and self-defeating diplomacy carried out by Secretary of State Hillary Clinton and, of course, President Obama.

Crudely, Clinton strode into Libya crowing, "We came, we saw, he died." And yes, Gadhafi was murdered, in part with our help. But what really died was U.S. power in the region — to be replaced by an ad hoc, improvised foreign policy based not on broad U.S. national interest, but on narrow domestic political gain.

Across the Mideast, U.S. interests are taking a beating:

Iraq: Prime Minister Nouri al-Maliki has asked the U.S. to pack up and leave, and Obama, hoping to shore up support with the anti-war left, agreed. Now, after more than 4,000 killed, and hundreds of billions of dollars spent, Iraq will be left with no significant continuing U.S. presence.

"The tide of war is receding," Obama says. Really? A new poll shows 73% of Iraqis fear a U.S. withdrawal will let Iran destabilize Iraq. It looks almost as if the U.S. is handing Iraq over to Iran — despite Clinton's empty vow to "stand with our allies and friends, including Iraq."

Libya: Even proponents of the Arab Spring were dismayed by the rebels setting on Moammar Gadhafi like a pack of feral dogs. It doesn't bode well for democracy or the rule of law. Libya's first post-Gadhafi leader, Mustafa Abdul-Jalil, wants Sharia to be the "basic source" for Libya's law, killing off any hopes for civil society in the country and dimming hopes for a moderate democracy to replace Gadhafi's tyranny.

Egypt: The White House earlier this year walked away from America's long-time support for Hosni Mubarak's regime, as Egypt became poster-boy for the Arab Spring. What did it bring us? A new, hard-line against Israel, and the strong possibility that the radical Muslim Brotherhood will take a leading role in the new regime — a major setback for Egypt and, despite $2 billion a year in aid, for U.S. influence.

Afghanistan: It was Obama who called this the war we needed to fight. Increasingly, though, as in Iraq, he seems inclined to cut and run. Despite the effective use of drones to kill suspected Taliban and other terrorist leaders, he is looking for a way out, signaling interest in talking to the Taliban.

Worse, Afghan President Hamid Karzai, whose democratic regime has been propped up by more than $55 billion in aid and 2,774 American deaths, said he would "stand by Pakistan" if it went to war with the U.S. Another diplomatic triumph.

Pakistan: Despite its ally status, it continues to shelter Taliban and al-Qaida remnants in its northwestern frontier. Formal defense ties with the U.S. belie the harsh reality: Pakistan's powerful ISI intelligence agency is almost openly pro-Islamist, with extensive ties to Islamic terror groups in the region.

Worse, there are growing signs Pakistan, the only country in the region other than India with nuclear weapons, is aiding other nations in the region to acquire "Islamic" nukes, possibly for use against Israel.

Turkey: The election of Tayyip Erdogan has heralded a major change. Once a staunch U.S. ally and still a member of NATO, the once-secular government has turned Islamist, with predictable results: It has embraced Iran and rejected its once-warm ties with Israel. Turkey's government let itself be used as a staging ground for a provocative, gun-running flotilla to break Israel's blockade on Hamas in the Gaza Strip. Because of inept U.S. diplomacy, Turkey can no longer be counted in the Western camp.

Tunisia: The place where the Arab Spring started, this is another country whose election this month, coming shortly after Gadhafi's death, was supposed to be a peaceful benchmark for democratic hopes. But as of Monday, that didn't appear to be the case.

The Islamist Ennahda party was leading in the polls. Its leader, Rachid Ghannouchi, wants to do to Tunisia what Erdogan has done to Turkey — Islamicize its legal system and government. So much for democracy and civil society.

Syria: The nation's Baathist leader, Bashar al-Assad, has launched a massive repression of protests — murdering hundreds for exercising their most basic rights. Amnesty International reports the regime has resorted even to torturing dissenters in the hospital.

Iran: We've saved the worst for last. U.S. policy toward Iran is almost entirely a botch. During the 2009 "Tehran Spring," the U.S. remained weirdly silent — though this was the one revolt that might have actually born democratic fruit. Today, Iran edges closer by the week to having a nuclear weapon, as it continues to deny its people basic rights and executes those who oppose it.

It openly aids terrorist groups such as Hezbollah and Hamas, while giving arms and cash to Islamic extremists who kill U.S. troops in Iraq and Afghanistan. Iran has all but declared war against the U.S., but Obama and congressional Democrats simply refuse to recognize the depth of Iran's enmity.

This is a long list of our recent failures, but by no means a comprehensive one. Increasingly, Obama has taken an arms-length approach to the region, preferring to use drones and proxies to get rid of those we dislike — Egypt's Mubarak, Libya's Gadhafi and, perhaps soon, Syria's Assad.

Unfortunately, the administration's weakness will leave a void for radical Islamists to fill.


1,000 Days Under President Obama

From The Heritage Foundation Morning Bell:

Today marks the 1,000th day of Barack Obama's presidency, and unfortunately for America, those days have been marked by deeper deficits, lost jobs, prolonged unemployment, and bigger government. Meanwhile, many of those charged with leading the federal government have all but abdicated their responsibilities.

The national debt stands at $14.9 trillion--$4.2 trillion of which has been added since Obama took his oath of office. Fourteen million Americans are unemployed--that's 9.1 percent of the workforce. The unemployment rate has been above nine percent for 840 of the 1000 days, and the average unemployed worker has been without a job for more than 9 months. All told, 2.2 million jobs have been lost under Obama's watch, despite the White House's claims that the President's $787 billion stimulus would create 3.3 million net jobs by 2010.

Unfortunately, instead of leading America toward fiscal sanity and a stronger economy, the President is taking the country in the opposite direction. Last week, his latest proposal to "stimulate" the economy with another $447 billion in spending failed to pass the Senate, but instead of recognizing that more taxing and spending is not what America wants or needs, he's redoubling his efforts. Today, the President is starting another bus tour to sell a different version of the same plan--this time broken up into pieces of taxing and spending still big enough to choke a horse. It's the same plan, only in different packaging. Former Congressman Ernest Istook explains the danger:

Even segmented versions of Obama’s $447 billion plan can be used to squeeze in those worst parts. That’s because it’s almost impossible to get both the House and the Senate to enact identical versions of a bill, thus requiring a conference committee to "work out the differences"--which sometimes includes adding distasteful details.

While it's good news that the Senate rejected the President's jobs plan, the bad news is that the Senate has utterly failed to help put America back on a strong fiscal path. Senator Jeff Sessions (R-AL) and House Budget Committee chairman Paul Ryan (R-WI) point out that it's been 900 days since Senate Democrats last adopted a formal budget plan, calling it "a national disgrace."

As required by law, House Republicans presented a budget in committee, brought it to the floor, and passed it earlier this spring. It was an honest, detailed, concrete plan to put our budget on the path to balance and our economy on the path to prosperity. But Senate Democrats, during this time of national crisis, failed even to present a budget plan — in open defiance of the law and the public they serve.

What we have seen from the Obama Administration is bigger government, more regulations, and massive amounts of government spending in the hopes of stimulating the economy. The trouble is that it hasn't worked, as the numbers show. Obama promised that his $787 billion stimulus would save or create 3.5 million jobs by the end of 2010. It didn't, and given the jobs that were lost, he came up 7.3 million jobs short of his goal. His health care plan, better known as Obamacare, did not reduce health care costs as promised and is in fact responsible for increasing costs in 2011. On top of that, the law will price many unskilled workers out of full-time employment.

And those are just the big-ticket items. Over the last 1,000 days, America has seen increased regulations, a 9,000-earmark omnibus bill, a government union bailout, a Wall Street reform bill that will do more harm than good, a nuclear arms treaty that is detrimental to missile defense, a refusal to expand domestic energy production, federal overreach into education, an undermining of the rule of law, and a dark cloud hanging over our military's future due to a failure to ensure adequate defense spending.

In yesterday's Wall Street Journal, James Freeman writes of an interview with billionaire Mortimer Zuckerman--Democrat, real-estate mogul, and New York Daily News owner. "Among business executives who supported Barack Obama in 2008, [Zuckerman] says, 'there is enormously widespread anxiety over the political leadership of the country.' Mr. Zuckerman reports that among Democrats, 'The sense is that the policies of this government have failed.'" Given the track record of the Obama Administration over the last 1,000 days, they would be right. Bigger government has not put America on a stronger fiscal path, it hasn't created jobs, and it hasn't built a stronger economy.

There is a better way. Heritage's Saving the American Dream plan charts a course that fixes the debt, cuts spending, and restores prosperity. It redesigns entitlement programs, guarantees assistance to those who need it, and saves the American dream for future generations. If Congress and the President want to move America forward, create new jobs, and spur businesses to grow and invest, then piling on debt, raising taxes, and increasing spending is not the answer--no matter how much Obama would like it to be.




S&P Downgrades the U.S.

From the Heritage Foundation's Morning Bell:

On Friday evening, Standard & Poor's (S&P) downgraded the U.S. credit rating from AAA to AA+. As we and other conservatives warned, the spending reductions in the deal negotiated by President Obama to raise the debt ceiling were inadequate, and S&P reacted as we predicted but sooner. Neither Moody's nor Fitch, two other rating agencies, have downgraded federal debt yet, but they are not providing much rosier outlooks.

Decades of over-spending and over-borrowing by the federal government have damaged America's creditworthiness. Congress after Congress, President after President, the federal government spent every penny it took in—and borrowed over $14 trillion on top of that—to try to keep happy the voters to whom the government made promises it could not afford. The government kept shifting the burden of paying the bills forward onto future generations.

Well, the future has arrived, and it is bleak. Our economy is weak, millions of Americans are out of work, and America is so deep in debt that we have lost our good credit rating. Our nation needs to drive federal spending, including our ever-growing entitlement programs, down toward a balanced budget while maintaining our ability to protect America and without raising taxes. That is the sound path forward to a stronger economy with smaller government and more real jobs.

The White House's first reaction to this news was to blame S&P itself, claiming that their math was wrong as spokesmen pointed out S&P's past rating failures. Correcting the math didn't correct the problem, however, and so S&P went ahead with its downgrade. Debating S&P's credibility misses the more important point, which is there for all to see: Projected deficit spending properly raises questions about U.S. credit quality.

We cannot waste time shooting the messenger when the message itself is impossible to ignore: It's the spending.

Unsustainable entitlement programs have been built up over many Congresses and Presidents. Elected officials from both parties over many decades helped push us closer to this point. But the last chance to start correcting the problem before damage to America's credit occurred was during the recent debate over the debt limit.

Regrettably, President Obama and the Senate liberals refused to allow reforms to any entitlement programs and refused to make significant cuts in other federal spending unless they could raise taxes on America. Conservatives rightly resisted increasing taxes, which is a recipe for economic disaster during an economic slowdown. The resulting deal on the Budget Control Act brought little in the way of spending cuts and lots in the way of increased borrowing, and it was the last straw that cost America its top credit rating. President Obama and his liberal allies on Capitol Hill brought America's credit down

The White House claims that its tax-hike centered "grand bargain" would have prevented a downgrade, yet they still have not told us what was in that "bargain." Even as Senate Democrats are nearing three years without a budget, President Obama has offered to the American people rhetoric and class warfare, rather than solutions and responsible leadership.

Other liberals went out of their way this weekend to blame this downgrade on the Tea Party, with Senator John Kerry (D–MA) going as far as calling it the "Tea Party downgrade" on NBC's Meet the Press. Former Obama advisor David Axelrod echoed that coordinated spin on Face the Nation. Besides proclaiming for all to see that the liberals have no solutions themselves, this argument ignores the facts.

The Tea Party's primary focus is our nation's fiscal health. If it were not for the Tea Party's positive influence, Congress would still be spending, taxing, and borrowing with little regard for the burden it is placing on future generations. Only months ago, President Obama was demanding a so-called "clean" debt limit increase that would allow him to keep on borrowing without any cuts to spending.

As our colleague J. D. Foster points out in his expert analysis of Friday's downgrade, the debate over the debt limit was the substantive ideas of the conservatives versus empty political rhetoric of liberals:

In the course of negotiations on the debt ceiling, congressional Republicans tried tirelessly to get the President and Senate Democrats to get serious about cutting spending. All Obama and Senate Majority Leader Harry Reid (D–NV) could do was carp about symbolic tax hikes on the rich, oil companies, and their latest silly affection—corporate jets. To be clear, despite the perilous state of the nation's finances, the President's sole objective was ideological and symbolic: Even if Republicans had caved on tax hikes, which they wisely refused to do, the revenue gains would have been inconsequential compared to the spending cuts that are necessary. The President played politics while the nation's credit rating was set to burn, and now it has.

President Obama, congressional liberals, and their allies believe that if we remain silent on our fiscal future, then markets and credit agencies will not notice our perilous future. Thus we heard from liberal pundits and politicians who called the debt debate a "manufactured crisis"—as if everything would be fine with more blank checks. The problem of federal over-borrowing and over-spending was and is real, as the credit downgrade and market reactions reflect. Congress and the President must fix the problem and fix it now.

Liberals this week will try to equate revenue increases with tax hikes. But that is simply not factual. Government revenues increase when we have greater economic growth and more taxpayers in the workforce. That economic growth is impossible with job-killing tax hikes and increased regulation. Raising taxes on taxpayers earning $250,000 or more hits entrepreneurs, small business owners, and investors, thus slowing economic growth still further.

In the next 10 years, once the economy recovers, revenue will rapidly approach and will likely surpass its historical average of 18.5 percent of GDP, while spending is projected to shoot past its historical average of 20.3 percent to 26.4 percent of GDP. Government spending will have increased by 22 percent just on President Obama's watch.

Yet some liberals were still calling for more debt and deficits this weekend in the name of new "stimulus." On Friday evening, Obama's former economic advisor Christina Romer said the first failed stimulus she helped design should have been bigger and argued for a new and larger stimulus saying: "What I want is more now."

That is, more of what President Obama has given us in the past—fruitless new spending programs. This would give us a bigger problem, not a solution. With America and the world in the grips of an economic slowdown, we need action to create economic growth and jobs and restore America's credit. We do not need more government.

As dire is the domestic situation, as Foster notes, the consequences for the global financial crisis may be worse:

In today's global economy, however, the U.S. credit rating downgrade may prove catastrophic. Prior to the credit rating downgrade, Europe was already teetering on the brink. Last week European stock exchanges plunged 10 percent, their worst weekly losses since November 2008. The long-building government debt crisis in Europe, which had been so unsuccessfully papered over just a few weeks ago by its leaders, is reaching the boiling point, threatening to wash over not just the worst offenders like Greece and Portugal but also some of the pillars of the European Union like Spain and Italy.

We cannot improve domestic or global economic conditions by becoming more like Europe. America can do better by adopting better ideas.

Heritage has offered its fiscal plan, "Saving the American Dream," which would balance the budget in 10 years and lower our debt-to-GDP ratio to 30 percent (from the 100 percent it reached last week). It would accomplish this through responsible reform of Social Security, Medicare, Medicaid, and the tax code.

As Foster concludes:

A number of sound incremental reforms can garner strong bipartisan support and can substantially improve these program's sustainability and the nation's finances. The President must lead his party to join hands with Republicans in the joint select committee to embrace these reforms and be ready to enact them, saving far more than $1.2 trillion and far sooner than November 23. The objective for the nation, the President, and the joint select committee is clear: drive down spending—including and especially on entitlement programs—toward a balanced budget while protecting America and without raising taxes. Properly done, this would lead to economic growth, more jobs, less government, and a restoration of the nation's credit rating. It can be done.

It can be done.




Obama's Jobless America

Excerpted from the Heritage Foundation Morning Bell:

The economic news keeps getting worse for America. Last month, the unemployment rate went up to 9.1 percent, the economy added only 54,000 jobs, and the average length of unemployment rose to more than nine months, the longest since the Labor Department started keeping track in 1948. But despite all the writing on the wall, President Barack Obama wants you and the 13.9 million unemployed Americans to hang on for the ride.

In his weekly address on Friday, President Obama played down May's terrible unemployment numbers as mere "bumps on the road to recovery" and blamed America's latest economic woes on high gas prices (which he can do something about, but hasn't), the earthquake in Japan, and "unease about the European fiscal situation." Meanwhile, his chief economic adviser, Austan Goolsbee, parroted his boss's "bumps on the road" line and, on Sunday, told America not to worry about the jobs report, remarking, "Don't bank too much of any one month's jobs report. You want to look at a little bit of a trend to get a more accurate barometer." Goolsbee announced his resignation yesterday.


           

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  • U.S. Unemployment Rate: 5.0%
  • CA Unemployment Rate: 6.3%
  • Federal Deficit: $503 Billion
  • National Debt: $19.5 Trillion

    Source: Bureau of Labor Statistics
  • National Debt Clock


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