Thursday, April 15, 2010

Stopping the Runaway Congress

Stopping the Runaway Congress
Hugh Hewitt
Thursday, April 15, 2010

When the Senate's Republican leader Mitch McConnell took to the floor this week to denounce the latest version of Chris Dodd's vision for how American finance and banking ought to be run, McConnell eased fears among conservatives of all sorts that the GOP would go along with an alleged Wall Street makeover just to avoid the prospect of an MSM chorus of denunciation of Republicans as obstructionists.

McConnell blistered the Dodd bill as a pathway to future bailouts and in a stroke gave the GOP firm ground on which to fight.

Now if he can only do the same thing twice more.

Disgust with the runaway Congress that blew past the objections of a large majority of Americans when it came to Obamacare has not dissipated in the weeks since the jam-down occured. President Obama's poll numbers have hit new all-time lows and could drop further as the parade of horribles associated with Obamacare gets longer and longer and new and unpleasant surprises seem to emerge every day.

This is not a Congress to inspire confidence. In fact, this Congress inspires a great deal of fear and, in some quarters, loathing. Voters cannot wait until November to deliver the political punishment that always follows parties and politicians who turn their faces against their people who sent them to D.C.

With this sort of voter revolt brewing, Congressional Republicans would be crazy to cooperate in any additional massive exercises in legislation. Principled, vocal and sustained opposition to the growth of government and the massive deficits that have accompanied that growth is the only platform the Republicans need or should want for the fall. They need to be the "party of no" when it comes to the Democrats' agenda.

The banking bill is just one of the big three statutory nightmares the Senate GOP has to oppose, regardless of what the editorial pages of the Washington Post and New York Times opine..

The other two big pushes from the left are for cap-and-tax and immigration "reform." Cooperation with either legislative effort will substantially injure the efforts of grassroots conservatives to rebuild trust with the Republican lawmakers inside the Beltway. It is political suicide to do deals with Democrats right now or any time between now and November. Part of the story of the loss of the Republican majority in 2006 was the refusal of the Congressional Republicans to hold together and make use of the advantage voters gave them in November, 2004. They were not perceived as a fighting party, but as a go-along party.

Much of that suspicion has burnt off, the reward for fighting the good if unsuccessful fight against Obamacare.

All of the good will would be lost if the GOP is seen to partner with any expansion of the federal government at this juncture, or with any erosion in the Constitution's basic structure.

Thus the absolute necessity of stopping cap-and-tax and of opposing all but the most carefully-worded immigration reforms from emerging out of the Senate.

There is zero room for "negotiation" on the former subject, and the continued dalliance of Senator Lindsey Graham with Democrats on the so-called "sector-by-sector" approach on emissions controls threatens not only the economy but also the prospects for Graham's long-time ally John McCain who has been working to repair relations with conservative voters in Arizona in advance of his primary contest with former Congressman J.D. Hayworth. In recent weeks the feeling has been growing that Hayworth's momentum and peaked and that the GOP standard bearer from 2008 was beginning to solidify his standing as a stalwart of the Senate GOP on any number of issues but especially those related to national security. McCain's skepticism of the recent nuclear arms treaty was just the most recent of his high-rpofile and effective statements of opposition to President Obama's agenda. McCain is clearly running as a conservative, and that is a winning approach.

A Graham-led "deal" on cap-and-tax, however, could easily snowball into a full-throated rejection of the D.C. GOP elite, including Senator McCain. This is the message that Mitch McConnell and GOP Whip Jon Kyl have to deliver again and again to the caucus: The electorate is judging us a whole, and they are not in the mood for Beltway compromises and insider deals.

This is probably understood on the subject of immigration as the memory of disaster that was the 2007 push for reform without border security is still fresh enough to warn off would-be deal-makers.

But it is unclear if all GOP senators understand that the same revulsion is waiting any bargain on banking and cap-and-tax.

This is the season for loyal, full-throated opposition and a referendum in the fall on the huge lurch left led by the president, Nancy Pelosi and Harry Reid.

Let's hope that all 41 members of the Rebublican understand the basic dynamic of this election.

Debt’s All, Folks
Robert Knight
Wednesday, April 14, 2010

What with the bailouts, the stimulus, and now the government health care takeover, we’re being told that we face $1 trillion annual deficits for the indefinite future, with a $12 trillion to $20 trillion debt by 2020. In February, Congress raised the federal debt limit to $14.3 trillion. That’s bad.

But it’s only the beginning. Does anyone seriously think the current spending binge is all we can expect from this Porky Pig Congress? Programs are sprouting like crabgrass. The horrifying numbers we are now hearing about future deficits reflect projections of existing program spending. They do not count the inevitable spending that will flow from all the yet-to-be unleashed goodies that Congress and Obama have in their hip pockets.

Federal programs grow like Paul Bunyan and live far beyond their usefulness. There is simply no incentive to cut programs or staff, which would signal loss of power and prestige. Government managers face no profit motive or expectant stockholders. Businesses and households cut back if they overspend. The government just comes up with more ways to tax us, and in increasingly sneaky fashion. Have you looked at your phone bill lately? Who stuck all those esoteric charges there, with such names as “federal connection fee” or “Fred the bureaucrat’s lakefront retirement home fund?”

But let’s get back to the big stuff. The “doc fix” to restore physicians’ fees in Medicare that are artificially low and have been restored annually since 1997 will cost $200 billion over the next 10 years. This was not in the health care bill (what do doctors have to do with health care?) so Congress could pretend the massive bill will actually cut the deficit.

The health bill alone is expected to create upwards of 159 new agencies. And then there are the three elephants in the room: Social Security, Medicare and Medicaid, each of which is projected to break the Baby Boomer Bank in just a few years with unfunded liabilities in the trillions.

Will this tsunami of deficit spending staunch the congressional habit of creating new programs? Ha. And ha ha. You are such a child.

Let’s take short trip into Federal Program Land, which is in Washington, D.C., whose posh suburbs are exploding with tax-derived wealth from the rest of the nation.

In 1997, the Heritage Foundation produced a list of the Top 10 obsolete federal programs. The No. 1 federal boondoggle? The Economic Development Administration, which, Heritage scholar Scott Hodge noted, “duplicates the activities of at least 62 other community development programs. The EDA will spend $350 million this year to spur local economic growth. Yet a recent GAO study found the EDA had no impact at all. Zippo.”

Fast forward 13 years to 2010, and the release of the FY 2008 report of the EDA, which is a branch of the Commerce Department.

The agency spent $30.8 million in salaries and such items as $9.4 million for the “Global Climate Change Mitigation Incentive Fund.” All told, the EDA’s budget was $780 million, including $500 million in disaster relief funds (p. 7). That used to sound like real money until the multi-billion “stimulus” and bailouts.

Out of the agency’s total budget, according to the report (p. 4), “EDA awarded investments that totaled approximately $302 million. Of this amount, approximately $220 million funded construction projects that are expected to create about 59,000 jobs and generate nearly $7 billion in private investment, according to grantee estimates at the time of the award. This yields an average cost of $3,697 per job and a private capital investment to taxpayer dollar ratio of 31 to 1.” Wow! Sounds great. But not compared against the actual cost of each job created by the federal economic “stimulus” funds, which ranges from $30,000 to $500,000, according to USA Today.

Note the phrase “according to grantee estimates at the time of the award.” Let me translate, with dialogue provided by Elmer and Norm at the Podunk County development agency:

ELMER: Hey, Norm. We fill out this EDA form and we can get a mess o’ federal cash for the county to “create” jobs.

NORM: Is that all? Pass it over.

ELMER: We got to estimate how many jobs this grant will create.

NORM: They pony up about $3,700 per job, so we need to ask for $370,000 to create 100 jobs. And let’s say those jobs will generate, oh, I don’t know, how about $11 million in private investment?

ELMER: What kind of jobs?

NORM: Green jobs, Elmer. Think green.

Okay, it’s more complicated than that. But multiply this by thousands of federal grants across the nation, and you can see why it costs so much federal money to “create” jobs and how local, county and state governments get hooked on “free” cash.

And it’s why the tax-hungry Congress and Obama Administration are gearing up to impose a Value Added Tax (VAT) on Americans, just like the onerous, hidden taxes of Europe. A VAT taxes the value of a product at each stage of development. The paperwork alone is enough to keep hundreds of thousands of bureaucrats employed. And Americans won’t “see” the taxes on that $7 loaf of bread. They’ll think the baker or the store owner is greedy.

Meanwhile, as the monster munches away on a new revenue stream, Congresspersons will rub their hands together and find ways to “help” us with new programs.

Only $20 trillion in debt by 2020? Don’t count on it.

No comments: