Republicans have been looking to the administration to shrink the size of government, reduce the deficit by cutting services and encourage hiring by cutting taxes. Soon, the president will release the budget, and we are expected to see scalpel-like precision in how he will cut spending by reducing redundancies and waste. For the president, who is desperately trying to move right of center, and the Republicans who are looking to starve the government into submission, nothing is sacred (except maybe Medicare, Social Security and Defense).
The contentious relationship that both parties had leading up the Midterm elections created a lot of DOA Bills (my characterization) that would face a united Republican opposition on the floor of the Senate. The Senate was where Bills would go to die. While the lame-duck session showed that pre-election stubbornness may lead to cooperation, the new Congress has not shown signs of improving. Party line votes continue in the house, where the Republicans have symbolically voted to repeal Obamacare. Senate majority leader Reid has already ensured that the bill will not be introduced to the floor. Same game, different party. They get $174,000/yr to essentially ensure that they get that same paycheck 2-6 yrs later. Waste of my money and time.
On the topic of waste of time and money, the TEA party caucus poster boy, Rand Paul (R-KY) has released his budget proposal. While the Republicans have promised to cut $60-100 billion this year, Paul wants to cut $500 billion. And he's totally serious, especially because he has a monopoly on support from really angry people who think emotion, god and guns are the way to govern. But, his proposal is not based in reality. There is a big, fat, obvious line between starving the government and taking it out back and pulling an "old yeller" as Paul is suggesting. So, this budget, which he spent so much wasted time on will not budge beyond the paper it was written on.
The following numbers come from a Washington Examiner article:
Legislative Branch: $1.283 billion (23%)
Judicial Branch: $2.434 billion (32%)
Agriculture: $42.542 billion (30%)
Commerce: $5.322 billion (54%)
Defense: $47.5 billion (6.5% - WOW...that means our Def budget is over $730 billion!)
Education: $78 billion (83%)
Energy: $44.2 billion (100% - Nuclear is shifted to DOD)
Health and Human Service: $26.51 billion (26%)
Homeland Security: $23.765 billion (43%)
Housing and Urban Development: $53.1 billion (100%)
Interior: $10.934 billion (78%)
Justice: $9.057 billion (28%)
Labor: $2.803 billion (2%)
State: $20.321 billion (71%)
Transportation: $42.81 billion (49%)
Veterans: No Cuts
Corps of Engineers: $1.854 billion (27%)
EPA: $3.238 billion (29%)
General Services: $1.936 billion (85%)
International Assistance: $24.3 billion (100%)
NASA: $4.5 billion (25%)
National Science Foundation: $4.723 billion (62%)
Office of Personnel Management: $9.07 billion
Social Security Admin: No Cuts
FCC: $2.15 billion (22%)
ABOLISH: Affordable Housing, Consumer on Fine Arts, Consumer Product Safety Commission, Corporation for Public Broadcasting, National Endowment for Arts, National Endowment for Humanities and State Justice Institute - $2.05 billion
Misc: $44.581 billion
I respect Paul for his ideological orthodoxy. But symbolic gestures like Paul's budget waste time. A lot of his proposed cuts are political nonstarters (cuts in Homeland Security, Defense, Energy, International Assistance, State Interior, Agriculture, Housing and Commerce) because they are linked to long term strategic goals accepted by a majority of both parties. Cuts in Agriculture will stymie economic recovery in rural states, cuts in Homeland Security, Defense, State and International Assistance will hugely affect creating stability in Afghanistan and the Middle East, abolishing Housing completely will create a larger population of homeless and any cuts in Commerce will slow down our economic recovery. Straight abolition of departments in the government, like Energy, Housing and Education, are still considered politically taboo and part of a fringe element.
Rand - If you want to seriously reduce the deficit and government spending, please introduce some common-sense budgets. If not, relegate yourself to the side, give up your salary and stop wasting my time. Then, Congress can get back to business (whatever it does...) and agree (pending a party-line vote) to accept two irrelevant members from the Paul family.
Friday, January 28, 2011
Friday, January 14, 2011
Michael Steele's False Sense of Entitlement
Michael Steele was elected as Chairman of the Republican National Committee less than a week after Barak Obama was elected president. The former Maryland Lieutenant governor was picked as an outsider to distance the Republic Party from the Bush Administration and its catastrophic defeats in the midterm elections of 2006 and the presidential election of 2008. Republicans wanted to reshape their image as a party that could elect a diverse group of internal directors while keeping to its conservative ideologies.
In the months leading up to the 2010 Midterm elections, Steele made some public gaffes that angered the base. His biggest mistake was calling the Afghan war "a War of Obama's choosing." On the face of it, the statement is true. But, its implications were much bigger: a declaration by the representative of the Republican Party showing that opposition to the administration was fair game even when it came to matters of National Security, Terrorism and the War on Terror not because it was inefficient, but because it had the Obama name to it. The use of a "surge" tactic by the Administration was supported by Republican Congressman, and this message showed an ignorance to the origins of the Afghan War (Bush Admin) and the implications of the Afghan War (National Security). Most importantly, it gave the perception that the Republican Party might value political partisanship over something as important as National Security.
His also had management and fiscal mistakes. His chief of staff and other aides were fired after using $2,000 of RNC money at a nightclub in West Hollywood. He also accumulated $20 million in debt with the RNC and lost many donors, catching the ire of the Republican base.
But, on the positive side he engineered the capture of the House of Representatives and major gains in gubernatorial races all over the country. And, he created a Republican 50-state strategy, including Democrat bulwarks that barely held or lost their seats.
Or did he?
While he can take credit for returning the House to Republican control, it was not his strategy that created such a result. Republican congressman like Mitch McConnell, John Boehner and Paul Ryan took the helm in creating strategic language to show a massive divide between the goals of the Democratic-controlled Congress, the Administration and the Public. With the help of extremists like Sarah Palin, Jim DeMint and Dick Armey, the TEA Party arose as a standard bearer for conservative orthodoxy. The administrations fight over the healthcare bill and the perceived notion that they were ignoring the flailing economy worked well for Republicans in the midterm elections. Armed with filibuster, death panels, Obamacare, socialism, mounting debts, bailouts and Government Motors the Republicans Party took back the House from the Democrats and seriously reduced their majority in the Senate. Whether it was grassroots or astroturf, it did not happen because of the leadership of Micheal Steele.
In the months leading up to the 2010 Midterm elections, Steele made some public gaffes that angered the base. His biggest mistake was calling the Afghan war "a War of Obama's choosing." On the face of it, the statement is true. But, its implications were much bigger: a declaration by the representative of the Republican Party showing that opposition to the administration was fair game even when it came to matters of National Security, Terrorism and the War on Terror not because it was inefficient, but because it had the Obama name to it. The use of a "surge" tactic by the Administration was supported by Republican Congressman, and this message showed an ignorance to the origins of the Afghan War (Bush Admin) and the implications of the Afghan War (National Security). Most importantly, it gave the perception that the Republican Party might value political partisanship over something as important as National Security.
His also had management and fiscal mistakes. His chief of staff and other aides were fired after using $2,000 of RNC money at a nightclub in West Hollywood. He also accumulated $20 million in debt with the RNC and lost many donors, catching the ire of the Republican base.
But, on the positive side he engineered the capture of the House of Representatives and major gains in gubernatorial races all over the country. And, he created a Republican 50-state strategy, including Democrat bulwarks that barely held or lost their seats.
Or did he?
While he can take credit for returning the House to Republican control, it was not his strategy that created such a result. Republican congressman like Mitch McConnell, John Boehner and Paul Ryan took the helm in creating strategic language to show a massive divide between the goals of the Democratic-controlled Congress, the Administration and the Public. With the help of extremists like Sarah Palin, Jim DeMint and Dick Armey, the TEA Party arose as a standard bearer for conservative orthodoxy. The administrations fight over the healthcare bill and the perceived notion that they were ignoring the flailing economy worked well for Republicans in the midterm elections. Armed with filibuster, death panels, Obamacare, socialism, mounting debts, bailouts and Government Motors the Republicans Party took back the House from the Democrats and seriously reduced their majority in the Senate. Whether it was grassroots or astroturf, it did not happen because of the leadership of Micheal Steele.
Thursday, January 13, 2011
Obama's Speech at Arizona Memorial Service
Visit msnbc.com for breaking news, world news, and news about the economy
Friday, January 7, 2011
Montana Pushes Coal Exports through Washington to China
This creates a zero sum game in regards to global greenhouse gas reduction goals. Here are some misconceptions put in recent articles about Montana coal and Washington:
Seattle gets most of its power from hydro and the rest from a mix of solar, wind and natural gas. In fact, the entire state of WA only get 17% of its electricity from coal. Seattle does not get coal power from Montana, as Gov Schweitzer says.
Millennium Logistics, a subsidiary of Ambre Energy: "there will be no net increase in GHG emissions in the state of WA." False. You might not be burning the coal, but you will have to increase rail traffic. And, unless they cover the cars (which they won't) you will have a dramatic increase in particulate pollution. While it is not GHG technically, particulates are a public health risk (respiratory illness, etc).
Gov. Schweitzer also said that Montana has "relatively clean coal." False. Montana coal is low-sulfur sub-bituminous, which is one step above lignite. Lignite is practically caked detritus and is terrible in quality. Sub-bituminous PRB coal from Montana burns at around 8,000 BTU, which is much lower than bituminous coal from Illinois Basin or Appalachia. This means they need to burn more of it to achieve the same power output. PRB coal also tends to catch fire when sitting in piles, unless properly stored. The dust from the coal also tends to create secondary combustion, which could cause damage in transport or at the facility. None of that can be remotely characterized as "clean."
Seattle gets most of its power from hydro and the rest from a mix of solar, wind and natural gas. In fact, the entire state of WA only get 17% of its electricity from coal. Seattle does not get coal power from Montana, as Gov Schweitzer says.
Millennium Logistics, a subsidiary of Ambre Energy: "there will be no net increase in GHG emissions in the state of WA." False. You might not be burning the coal, but you will have to increase rail traffic. And, unless they cover the cars (which they won't) you will have a dramatic increase in particulate pollution. While it is not GHG technically, particulates are a public health risk (respiratory illness, etc).
Gov. Schweitzer also said that Montana has "relatively clean coal." False. Montana coal is low-sulfur sub-bituminous, which is one step above lignite. Lignite is practically caked detritus and is terrible in quality. Sub-bituminous PRB coal from Montana burns at around 8,000 BTU, which is much lower than bituminous coal from Illinois Basin or Appalachia. This means they need to burn more of it to achieve the same power output. PRB coal also tends to catch fire when sitting in piles, unless properly stored. The dust from the coal also tends to create secondary combustion, which could cause damage in transport or at the facility. None of that can be remotely characterized as "clean."
Monday, December 20, 2010
Mitch McConnell and START Political Posturing
START is the new nuclear weapons reduction treaty signed by President Obama and Russian President Dmitry Medvedev. Here is what Senate Minority leader, Mitch McConnell (R-KY) had to say about trying to put it to vote in the Senate:
“No senator should be forced to make decisions like this so we can tick off another item on someone's political check list before the end of the year”
I'm sorry, but this takes the cake. Political check list?!?!? I'm sorry, wasn't it you and your party that was checking off its "political checklist" when it made a policy to oppose everything the administration offered? Wasn't it your party who opposed unemployment benefits, an energy bill, healthcare bill, independent contract oversight, rape prevention clauses in contractor agreements, financial overhaul in the worst recession and a whole host of other issues so you could score political points for November?
When was this treaty signed? I think it was....APRIL! So your party has had over 8 months to read over this treaty. You could have offered amendments, points of contention, concerns or any other comment you wanted. But...you chose to wait, filibuster, block, obfuscate, dilly-dally, kick-the-can and sit back on your laurels until the last minute. Then, without taking responsibility for being an obstructionist imbecile, you complain that it is fact...the last minute. Arms reductions treaties have always been bipartisan ideas. Wasn't it your party that has daily prayer sessions to the almighty Ronald Reagan? Yah...that same Reagan who went to Iceland to have arms reductions talks with Russian Premiere Gorbachev? Where do you get the idea that arms reductions are political posturing?!?!
These weapons are tools of a bygone era. This was an era of gunboat diplomacy, brinkmanship, secrecy, containment and war by proxy. Now, we strive for transparency and negotiation over saber rattling. But, this kind of political posturing gets us nowhere. And, I've had enough of the retrogressive politics of the last 2 years.
This should be your new quote, Mitch McConnell. It would make much more sense:
"No senator should be forced to make decisions"
“No senator should be forced to make decisions like this so we can tick off another item on someone's political check list before the end of the year”
I'm sorry, but this takes the cake. Political check list?!?!? I'm sorry, wasn't it you and your party that was checking off its "political checklist" when it made a policy to oppose everything the administration offered? Wasn't it your party who opposed unemployment benefits, an energy bill, healthcare bill, independent contract oversight, rape prevention clauses in contractor agreements, financial overhaul in the worst recession and a whole host of other issues so you could score political points for November?
When was this treaty signed? I think it was....APRIL! So your party has had over 8 months to read over this treaty. You could have offered amendments, points of contention, concerns or any other comment you wanted. But...you chose to wait, filibuster, block, obfuscate, dilly-dally, kick-the-can and sit back on your laurels until the last minute. Then, without taking responsibility for being an obstructionist imbecile, you complain that it is fact...the last minute. Arms reductions treaties have always been bipartisan ideas. Wasn't it your party that has daily prayer sessions to the almighty Ronald Reagan? Yah...that same Reagan who went to Iceland to have arms reductions talks with Russian Premiere Gorbachev? Where do you get the idea that arms reductions are political posturing?!?!
These weapons are tools of a bygone era. This was an era of gunboat diplomacy, brinkmanship, secrecy, containment and war by proxy. Now, we strive for transparency and negotiation over saber rattling. But, this kind of political posturing gets us nowhere. And, I've had enough of the retrogressive politics of the last 2 years.
This should be your new quote, Mitch McConnell. It would make much more sense:
"No senator should be forced to make decisions"
Thursday, December 9, 2010
Compromise
In order to understand national politics, you have to divorce yourself from reality. Politics is a game. This is why we study political science. But, those who don't understand the dynamics of national politics might feel a bit disenfranchised.
It is very understandable to be angry when middle class citizens are having trouble putting food on the table or getting necessary medication when well-off Congressman make seething diatribes, polemics and jeremiads about the principles of fiscal responsibility. Or, when 99ers (those who have exhausted their 99 weeks of unemployment) hear about cutting services to reduce the deficit when they can barely afford to eat. Or maybe when Congressman from states with less people than livestock block much needed money for those who are starving because of their financial principles. For them, damning the ship is fine, if they're already on a lifeboat. There is a definite disconnect between the Hill and the reality in the valley below.
Current national politics are anathema to progress. They have been for the last 1-2 years. For most, this elicited anger towards the Administration and the government. Obama came into office in the Hope that he would Change the course of Washington, as most have tried. He compromised, accommodated, appeased and adjusted. He gave, and they took. And, in November, 2010, they took even more.
Now, what will the Administration do? Do what it does best: Compromise. Republicans took the most vulnerable as hostages by threatening to vote down any unemployment extension, and Obama paid the ransom. Keep the ship afloat if it means negotiating with the pirates. So, he crafted a very Clintonian proposal to cut taxes for those who are making over $250,000/yr for two years, keeping a permanent tax cut for those who are making less than $250,000/yr and increasing the limit on the estate tax from $1 million to $5 million. Mitch McConnell (R-KY) says that most Republicans will fall in line in support of the tax cut. Even the senior fellow at the ultra-conservative American Enterprise Institute has supported the measure. The price-tag: $900 billion over 2 years, of which $300 billion is offset by the stimulus.
In 1996, President Clinton won a second term in a near landslide. He had lost the House and Senate to a Republican insurgency in 1994, led by Newt Gingrich. He cut services, reformed welfare, deregulated the housing industry and compromised to show that he valued progress over principle. Obama is searching for his inner-Clinton.
It is very understandable to be angry when middle class citizens are having trouble putting food on the table or getting necessary medication when well-off Congressman make seething diatribes, polemics and jeremiads about the principles of fiscal responsibility. Or, when 99ers (those who have exhausted their 99 weeks of unemployment) hear about cutting services to reduce the deficit when they can barely afford to eat. Or maybe when Congressman from states with less people than livestock block much needed money for those who are starving because of their financial principles. For them, damning the ship is fine, if they're already on a lifeboat. There is a definite disconnect between the Hill and the reality in the valley below.
Current national politics are anathema to progress. They have been for the last 1-2 years. For most, this elicited anger towards the Administration and the government. Obama came into office in the Hope that he would Change the course of Washington, as most have tried. He compromised, accommodated, appeased and adjusted. He gave, and they took. And, in November, 2010, they took even more.
Now, what will the Administration do? Do what it does best: Compromise. Republicans took the most vulnerable as hostages by threatening to vote down any unemployment extension, and Obama paid the ransom. Keep the ship afloat if it means negotiating with the pirates. So, he crafted a very Clintonian proposal to cut taxes for those who are making over $250,000/yr for two years, keeping a permanent tax cut for those who are making less than $250,000/yr and increasing the limit on the estate tax from $1 million to $5 million. Mitch McConnell (R-KY) says that most Republicans will fall in line in support of the tax cut. Even the senior fellow at the ultra-conservative American Enterprise Institute has supported the measure. The price-tag: $900 billion over 2 years, of which $300 billion is offset by the stimulus.
In 1996, President Clinton won a second term in a near landslide. He had lost the House and Senate to a Republican insurgency in 1994, led by Newt Gingrich. He cut services, reformed welfare, deregulated the housing industry and compromised to show that he valued progress over principle. Obama is searching for his inner-Clinton.
Tuesday, November 30, 2010
Oh No.....its...THE DEFICIT!!!!
It sneaks in when nobody notices and steals your house, your job, your money, and...your dog (no....not Scruffy!). It will plague your children, kill your retirement and persuade us elect optometrists from Kansas to the Senate! Its...its...The DEFICIT!!!! (cue 1950s sci-fi music)
Well...maybe its not that bad. One this is for certain: we need to reduce it. Polls have shown that a small amount of people can represent the entire country. And, the general consensus in Congress is that people prefer spending cuts over tax increases. But, (as the article says) there is a lingering problem: which programs do we cut? And, will those cuts even affect our ballooning deficit? Here are some ideas that have been floated, and some suggestions that I think might work to cut down on this multi-trillion pound Gorilla:
1. Cut Major Entitlements (Social Security, Medicare, etc) - Political non-starter. With high unemployment and an aging baby-boom generation, the need for entitlements is higher than ever. And, remember those TEA party signs: Take your government hands off my Medicare. Idiocy aside, this shows that even the perception of cutting/rationing entitlements is the wrong thing to do. The only problem is that Social Security is running out of money. The Millennial Generation should care about this, if you can get them to.
Alternative(s): Cut waste in the system. Raise retirement age to 70.
2. Cut Earmarks - Had some support in Congress. But, earmarks represent less than 1% of the budget deficit. So, it would amount to a symbolic gesture...a very BAD symbolic gesture. Some of the small businesses and contract firms in states like California (unemployment at 12.4%) will lose funding and will be forced to lay off workers. Unless you like retrogressive economies, then you would be in favor of keeping earmarks. And, Senators and Reps are like to boast about the projects and jobs they have brought to their states through earmarks. Well...not John McCain (see "hypocrite" in the dictionary). Maybe he should take a hard look at the Central Arizona Project, the huge government funded infrastructure scheme that brings water from the Colorado River to Arizona. Nevermind.
Alternatives: Luckily this didn't pass the Senate.
3. Freeze Government Workers Pay - This idea of a 2-yr salary freeze for government workers has been floated by the administration. This would save about $5 billion. The current budget deficit is $1.3 trillion, and is expected to rise. With some calculations...that is about .385% of the current deficit or about 1/260. But, it is politically favorable. The idea that the government is willing to cut its spending on workers gives the impression that they are on their way to cutting their overall spending. I approve.
4. Bush Tax Cuts (this has subsections...ooohhhh)
a. Keep the tax cuts for all - Will add about $4 trillion to the deficit over the next 10 years. But, according to Republicans and some moderate Democrats, it will give businesses financial certainty, allowing them to start hiring. Once hiring picks up, the economy will recover more rapidly and more taxes will flow back to the government to cut down on the debt.
b. Keep for tax cuts for all...for 2 years - This might give businesses certainty about finances, while not adding significant amounts to the deficit. I approve.
c. Keep the tax cuts only for those making less than $250,000/yr - Will add $700 billion to the deficit over the next 10 years. But, it does not give an incentive for big companies to begin hiring. And, rich people will complain about their taxes (not like they don't already). But, it will help those hit hardest by the recession: the middle class. Individual and family incomes won't see a tax increase, and the tax increase to those making over $250,000 will add money to the coffers of the government, thereby possibly reducing some of the deficit effect.
d. Let them expire - Will avoid a substantial increase in the deficit. But, it will increase taxes across the income spectrum. This might create financial uncertainty for businesses, which might result in less hiring. This represents a longer term solution for debt reduction. But, it could possibly harm the fledgling recovery in the short term. The only reason I consider approval of this plan is because it sends a signal to the rest of the world that the U.S. is ready to get serious about debt reduction. This could give international investors more certainty and help the US economy recover in the long run.
5. Wild Card: Invest in Clean Energy and Domestic Energy Exploration - Currently, we send $2 billion/day (~$700 billion/yr) to regimes in South America and the Middle East for oil. Because we have no oversight over the funding, some of the money is invariably funneled to organizations that support terrorism. We also have no control over price, as the major oil supplier OPEC, is a cartel. So, if we were to invest in domestic energy sources like solar, wind, geothermal, tidal, hydro and nuclear (possibly not cost effective) we can offset OPEC oil demand. In the short term, we can use environmentally sound drilling methods to extract Natural Gas to replace oil. This will cut down on pollution, encourage the growth of the renewable energy sector, create jobs and significantly reduce the deficit. Win, win, win.
6. Cut Defense/Security Spending - There are aspects of this plan that are political "non-starters." These include: cutting pay of combat soldiers, cutting the pay of non-combat soldiers, cutting Homeland Security's budget, cutting counter-terrorism/intelligence and cutting equipment, recovery and/or personnel funding for the wars in Iraq and Afghanistan. But, do we need military bases all over the world? If we were to close non-essential military bases in places like Okinawa and Germany, we could have extra personnel on reserve and could cut costs. Although it is political poison, if the country is willing to get serious about debt reduction, it has to go through the defense budget with a fine tooth comb and take out the waste. This also should include reassessing the performance of, and instituting more oversight on, military contractors.
The main concerns of the Administration should be to reduce spending and create jobs. If Congress can rise above partisanship to complete these essential tasks, then the recovery, and our financial future will be less unstable. And, we will send a signal to the rest of the world that we are serious about debt reduction.
Well...maybe its not that bad. One this is for certain: we need to reduce it. Polls have shown that a small amount of people can represent the entire country. And, the general consensus in Congress is that people prefer spending cuts over tax increases. But, (as the article says) there is a lingering problem: which programs do we cut? And, will those cuts even affect our ballooning deficit? Here are some ideas that have been floated, and some suggestions that I think might work to cut down on this multi-trillion pound Gorilla:
1. Cut Major Entitlements (Social Security, Medicare, etc) - Political non-starter. With high unemployment and an aging baby-boom generation, the need for entitlements is higher than ever. And, remember those TEA party signs: Take your government hands off my Medicare. Idiocy aside, this shows that even the perception of cutting/rationing entitlements is the wrong thing to do. The only problem is that Social Security is running out of money. The Millennial Generation should care about this, if you can get them to.
Alternative(s): Cut waste in the system. Raise retirement age to 70.
2. Cut Earmarks - Had some support in Congress. But, earmarks represent less than 1% of the budget deficit. So, it would amount to a symbolic gesture...a very BAD symbolic gesture. Some of the small businesses and contract firms in states like California (unemployment at 12.4%) will lose funding and will be forced to lay off workers. Unless you like retrogressive economies, then you would be in favor of keeping earmarks. And, Senators and Reps are like to boast about the projects and jobs they have brought to their states through earmarks. Well...not John McCain (see "hypocrite" in the dictionary). Maybe he should take a hard look at the Central Arizona Project, the huge government funded infrastructure scheme that brings water from the Colorado River to Arizona. Nevermind.
Alternatives: Luckily this didn't pass the Senate.
3. Freeze Government Workers Pay - This idea of a 2-yr salary freeze for government workers has been floated by the administration. This would save about $5 billion. The current budget deficit is $1.3 trillion, and is expected to rise. With some calculations...that is about .385% of the current deficit or about 1/260. But, it is politically favorable. The idea that the government is willing to cut its spending on workers gives the impression that they are on their way to cutting their overall spending. I approve.
4. Bush Tax Cuts (this has subsections...ooohhhh)
a. Keep the tax cuts for all - Will add about $4 trillion to the deficit over the next 10 years. But, according to Republicans and some moderate Democrats, it will give businesses financial certainty, allowing them to start hiring. Once hiring picks up, the economy will recover more rapidly and more taxes will flow back to the government to cut down on the debt.
b. Keep for tax cuts for all...for 2 years - This might give businesses certainty about finances, while not adding significant amounts to the deficit. I approve.
c. Keep the tax cuts only for those making less than $250,000/yr - Will add $700 billion to the deficit over the next 10 years. But, it does not give an incentive for big companies to begin hiring. And, rich people will complain about their taxes (not like they don't already). But, it will help those hit hardest by the recession: the middle class. Individual and family incomes won't see a tax increase, and the tax increase to those making over $250,000 will add money to the coffers of the government, thereby possibly reducing some of the deficit effect.
d. Let them expire - Will avoid a substantial increase in the deficit. But, it will increase taxes across the income spectrum. This might create financial uncertainty for businesses, which might result in less hiring. This represents a longer term solution for debt reduction. But, it could possibly harm the fledgling recovery in the short term. The only reason I consider approval of this plan is because it sends a signal to the rest of the world that the U.S. is ready to get serious about debt reduction. This could give international investors more certainty and help the US economy recover in the long run.
5. Wild Card: Invest in Clean Energy and Domestic Energy Exploration - Currently, we send $2 billion/day (~$700 billion/yr) to regimes in South America and the Middle East for oil. Because we have no oversight over the funding, some of the money is invariably funneled to organizations that support terrorism. We also have no control over price, as the major oil supplier OPEC, is a cartel. So, if we were to invest in domestic energy sources like solar, wind, geothermal, tidal, hydro and nuclear (possibly not cost effective) we can offset OPEC oil demand. In the short term, we can use environmentally sound drilling methods to extract Natural Gas to replace oil. This will cut down on pollution, encourage the growth of the renewable energy sector, create jobs and significantly reduce the deficit. Win, win, win.
6. Cut Defense/Security Spending - There are aspects of this plan that are political "non-starters." These include: cutting pay of combat soldiers, cutting the pay of non-combat soldiers, cutting Homeland Security's budget, cutting counter-terrorism/intelligence and cutting equipment, recovery and/or personnel funding for the wars in Iraq and Afghanistan. But, do we need military bases all over the world? If we were to close non-essential military bases in places like Okinawa and Germany, we could have extra personnel on reserve and could cut costs. Although it is political poison, if the country is willing to get serious about debt reduction, it has to go through the defense budget with a fine tooth comb and take out the waste. This also should include reassessing the performance of, and instituting more oversight on, military contractors.
The main concerns of the Administration should be to reduce spending and create jobs. If Congress can rise above partisanship to complete these essential tasks, then the recovery, and our financial future will be less unstable. And, we will send a signal to the rest of the world that we are serious about debt reduction.
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