One and Done

Here's an interesting article about Republican National Chairman Michael Steele, who has just dropped out of the race for re-election, and how he has (not?) affected the number of African Americans in the GOP.

http://news.yahoo.com/s/dailybeast/11826_rncvoteblackrepublicansgrademichaelsteele

And So It Begins....

While this picture is representative of a typical day in Northern Virginia at rush hour, it's also meant to signify the virtual "gridlock" that I predict that will unfortunately grip the Congress and the White House once again over the next two years.

President Obama may be at least giving lip service to bipartisanship - as did Bush in 2007 - but not only does House Speaker John Boehner already plan as an initial action for to hold a vote to repeal the health care reform law, Senate Minority Leader Mitch McConnell has also openly stated his main goal is to make sure President Obama is not re-elected. With that sort of opposition, the likelihood of bipartisanship (in public anyway) seems infinitesimal.

Speaker Boehner obviously knows that his repeal bill may sail through Congress only to hit the wall in the Senate. This is just grandstanding for the conservative GOP base and other who are opposed to the health care reform law as it exists. I would imagine that Boehner will later attempt to repeal individual pieces of the law which he feels may have the best shot at removal. Instead of trying to remove parts of the law, I would rather see him work to add something such as tort reform; that is an idea - at least in terms of subjective "pain and suffering" judgements - that I would support. The trial lawyer lobby was certainly instrumental in  preventing the then-Democratic Congress and Senate from including that in the bill.

The new GOP majority in the House - particularly the freshmen Tea Party affiliates - have pledged to cut the federal budget by $100 billion. I would like to support this idea but I continue to have the feeling that the programs Republicans will focus on trimming will generally affect those that need it the most, i.e. social assistance. However, if Congress is willing to look at every government program and department equally, I think there are places where they can find a significant amount of savings.

Let's start with the Department of Defense. In fact, Defense Secretary Robert Gates already has. If his plans come to fruition, that would account for 20% of the Congress' savings by itself! Of course, those who believe that the government's main job should be to "provide for the common defense" may be concerned that the defense cuts may go beyond mere improved efficiency and instead affect the level of human and equipment resources. But considering Secretary Gates is someone who served under the previous administration - thereby fulfilling at least one goal of not changing leaders during wartime - one would like to think that his priorities haven't significantly changed.

How about corporate welfare? I have to wonder if those who were opposed to the bailouts of the banking and automotive industries are also against the money that corporations receive on behalf of research and development. How about we cut back or eliminate the research subsidies that we give out to these private companies?

This may be blasphemous for me to say as I have occasionally benefitted from related opportunities, but let's also take a look at the numerous private government contractors, of which a critical mass exists here in Northern Virginia.  And while a fair amount of contractor employees eventually cross over to the government, how about we expedite the process? Bringing these workers into the Federal fold would eliminate the formerly built-in contractor profit margin and slightly reduce salaries in favor of more favorable benefits. In the long run, I would predict this would save an significant amount of funds, much of which would again come from defense-related work.

UPDATE (January 6): Defense Secretary Robert Gates has really come through in the clutch, identifying up to $78 billion in potential savings! With "only" $22 billion left to cut, perhaps the House of Representatives will be more likely to focus on programs that will affect those individuals and companies who can afford to absorb the loss. One can only dream...

President Obama: Radical Centrist?

Here's an interesting take on President Obama that I stumbled across:

http://www.theroot.com/views/how-barack-obama-became-republican?wpisrc=obinsite

Fair...But Balanced?

As I've been out of town on business with limited computer access , I haven't been able to comment on recent events in a timely manner. But I'm here now... (smile)

Despite all the posturing and protesting on by various Senators and Congress members, it appears that President Obama's recommended compromise of extending the Bush-era tax cuts to all incomes for two additional years in "exchange" for an additional year of unemployment benefits will eventually pass. The fact that few politicians - and citizens in general, perhaps - are happy about all aspects of the recommendation means that it is a good start.

Nonetheless, I'm still not convinced about the benefit of extending the tax cuts to those in the upper-income brackets. However, just as some question the material effectiveness of the Bush/Obama stimulus package over the last two years, I can also respect the argument that conditions could have been much worse over the last eight years without the presumed reinvestment of Bush tax cuts by the upper class. I don't understand, though, why Obama did not push for two more years of unemployment benefits to balance out the benefit to those who are working or otherwise living comfortably.

It will be interesting to see what happens in December 2012 when this issue is brought to the table again. Conservatives will surely see the current tax cuts as a new baseline from which future spending cuts - and, of course, even deeper tax cuts - should be made. Progressives will see the tax cuts as the temporary measure they were meant to be and will bristle at what they see as the continued loss of an estimated $70 billion in annual tax revenue.

Unfortunately, the cuts that will be made - at least if Republican politicians have anything to say about it - will likely happen to programs involving those who most need the help (e.g. Social Security, Medicaid/Medicare, welfare). I've previously shared my skepticism about an increase in charity by upper-income households. U am also concerned that the objects that some desperate "entrepreneurs" may pull out of their proverbial bootstraps may turn out to be morally and legally unacceptable.

Now if Social Security and welfare are going to indeed take a hit, let's look at other supposed "sacred cows" that conservatives may favor such as defense (as recommended by the bi-partisan Bowles-Simpson commission) as well as capping the tax benefit of mortgage deductions and dividend interest.

Playing The Percentages

I read an article recently which, in defense of extending the Bush-era tax cuts to the wealthy, claimed that those in the upper-incomes pay seventy-something percent of all taxes. For the sake of argument, let's say that they pay 75%.

I'm reminded of my college sociology class where the professor said that despite stereotypes, people would be "shocked" to hear that white people actually make up the majority of prisoners in the penal system.  My first thought was, "That's because there's more white people in the country. Duh!"

By the same token, it would make sense to me that the wealthy pay 75% of the country's taxes as they bring in (at least) 75% of the country's revenue. "Duh!" We're not even accounting for international tax shelters and other options to which the lower and middle classes don't have access.

At best, fiscal conservatives may say that the lack of upper-income tax cuts on financial and employment recovery was due to concern about fighting two wars during the first six years and insecurity about presumably "anti-business" Democratic goals during the last four years.

At worst, I believe that the wealthy, just like most everyone else in these economic times, simply held onto their money to preserve their standard of living.

In the end, it would appear that Democratic Congress members from moderate-to-conservative states who, fearing a later Tea Party-fueled backlash, will not cap an extension of the Bush-era tax cuts during the upcoming lame duck session. Given that the Bush/Obama stimulus packages have had all of two years to work, it will be interesting to see how rapidly the extended tax cuts "trickle down" for the greater good over the next two years.

November 3, 2010 - The Aftermath

OK...

So I was not too surprised at last night's election results. I had become convinced that the House of Representatives would be switching to the GOP although I had hoped (correctly) that the Democrats would be able to hold onto the Senate. I only hope that the Administration and Congress can find some common ground to move the country forward instead of just pre-gaming for 2012. The Clinton/Gingrich years, where compromises like welfare reform were accomplished, would be a better model than the Bush/Pelosi years which were largely filled with gridlock.

Despite the wishes of Boehner and Co., I don't think cutting both taxes and spending will be any more effective in general than raising both of them. One will have to go in the opposite direction of the other. As I often say here, each end of the economic spectrum can do more to contribute to the common good even in these tough times. However, while the lowest-income households can only contribute increased effort, the highest-income households already possess enough access to informational and financial resources to withstand a temporary sacrifice. I don't believe a combination of voluntary charity and compulsory bootstrap-pulling will be enough to make up the difference.

I predicted two years ago that if Obama  and the Democratic Congress emulated the no-compromise style of  the Bush Administration and Republican Congress, then they too would lose their government monopoly. Unfortunately, this scenario has come to pass; I just didn't think that it would happen in only two years. Then again, for fiscal conservatives that gritted their teeth through eight years of "Big Government" Republican policies under Bush only to be confronted with "Even Bigger" Government under Obama, the Tea Party was a reaction whose voice was heard. (Edit after first two replies: Granted, Tea Partiers and mainstream Republicans alike have railed against the possibility of the "biggest tax increase in history"...which of course follows the biggest tax decrease in history from which upper-income households benefitted the most. However, the intended "trickle-down" effect from said households appears to have been, at best, no more materially effective over the last nine years at saving or creating jobs than has Obama's two-year-old stimulus package.) At least Boehner admits that this opportunity is not a mandate so much as an audition. Let's just hope that beyond the soundbite rhetoric, substantive work can actually get done over the next two years.

The Pledge To America

On another social network, a friend of mine posted the Republican-drafted Pledge for America:
http://www.foxnews.com/projects/pdf/pledgetoamerica.pdf.

While I agreed with few of the concepts, I was glad to finally see more specifics about what the GOP aspires to do.

Here is my response to my friend's post with a bit more thorough spell checking:

Much of the first few pages look like they could have been written by Pelosi and Reid four years ago.

I'm cool with medical malpractice tort reform; i.e. a max limit on subjective "pain and suffering" not the actual lifetime medical costs. I'm sure the Democrats had to placate the trial lawyers lobby by not including it.

Letting people buy insurance across state lines sounds good in theory. I have heard that some states currently have very few choices. My concern is that this plan would ironically result in an oligopoly of companies who adopt the "Wal-Mart approach" of undercutting smaller insurance companies and later, after buying or bankrupting said companies, raising their rates.

Interesting graph on page 13. I wonder how much weight they truly gave Bush's bailout spending. At least they made Clinton look relatively good. Imagine that!

I don't agree that the individual mandate to purchase health insurance is a "tax". Every time an uninsured person uses the ER as their primary care facility, we insured people pay a "tax" in higher rates.

Judging from the emphasis on defense spending on pages 19 and 20, it sounds like all we have to do is convince all able-bodied poor to put themselves up on the front lines and that would balance the starvation of social programs to fund the increase in military investment.