CRNC Research Compendium December 2010: Editor: Brandon Greife, Political Director

CRNC Research Compendium December 2010
Editor: Brandon Greife, Political Director
College Republican National Committee
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Table of Contents
Democrats Trying to Scare Americans Into Ignoring Decit Woes ! Slurpee Summit Bipartisanship is Likely to Melt! Compromise Isnt Dangerous Its Smart! Boehner and Cantors Plan to Put Government on a Diet! Bailout of Foreign Firms Shows Depth of Our Debt! New Jobs ReportSame Bad News! Want to End Government Wealth Redistribution? Reform the Tax Code! To Solve Decit Americans Must End Self-Serving Morality! Ugly Jobs Report Shows Need for Government to Get Out of the Way! Obamas Bipartisan Bargain Infuriates Democrats! A Conservatives Christmas Wish List! Why Lower Tax Rates Will Help Tax Revenue Rebound! Privatization of Fannie and Freddie is too complicated! An Obama Christmas Carol! Democrats Threaten Higher Taxes for All; Reject Bipartisan Compromise! Polls Show Obama and GOP on the Right Side of Tax Debate! Democrats Determined to Save Face at Expense of Americans!
3 5 7 8 10 12 13 15 16 18 21 22 24 26 35 37 39
December Compendium!
Schumer and Baucus Failed Leadership At Its Finest! Democrats Making Bad Gamble on 2012 Tax Cut Debate! Despite Decit, Tax Deal Fits Conservative Economic Model! Warners Idea to Reduce Red Tape Deserves Closer Look! Healthcare Decision Prevents Opening a Constitutional Can of Worms! Individual Mandate Ruling an Early Christmas Present But Fight Not Over! CBO: Interest on Debt Set to Soar! Economic Growth Key to Solving Youth Unemployment! Census Shows Geographic Win for GOP; Work Still to Be Done on Demographics! Top 10 Dumb Democrat Quotes of 2010! Republicans Spending Lock Box Will Reduce Decit! Investing in Math and Sciences First Requires Entitlement Reform! Obamas Top 10 Top Priorities of 2010! Operation Red November in 2011! Top 10 Democrats Who Bit the Dust in 2010! Top 10 Democrats We Loved to Hate in 2010!
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Democrats Trying to Scare Americans Into Ignoring Deficit Woes

Wonkish, crotchety, and mostly bald, the co-chairs of President Obamas National Commission on Fiscal Responsibility and Reform want you to care about the deficit the way cable television wants you to care about pedophiles. So begins Annie Lowreys latest column for Slate. The point, once you wade through the metaphor-a-minute muck (and the diss to bald people), is that the deficit commission is attempting to scare you into caring. This is apparently much different and much more unacceptable than the liberal philosophy of scaring you into not caring. So while Lowrey uses her column to chide deficit commission co-chair Erskine Bowles for using crazy rhetoric like calling the national debt dangerous (gasp!) liberal commentators have stepped up the scare-tactics. Take for instance AFSCME president Gerald McEntee who said that his organization will not rest until we defeat these unnecessary and dangerous proposals. Apparently Bowles isnt the only one to toss around the word dangerous willy nilly. As it turns out, both the problem and the solution are dangerous. Talk about a Catch-22. But McEntee wasnt alone in conjuring up the potential disaster that lies in store for America if the commissions proposals are passed. Upon hearing the commissions recommendations Nancy Pelosi said that seniors are going to [be forced to] work to 70, no matter what, so we can give a tax cut to the richest people in America. Forced? Youd think were returning to slavery with that kind of talk. So before you start worrying about spending your retirement in a labor camp rather than on your couch watching The Price is Right lets understand some context. First, the commission doesnt mandate that you work until your 70. You can, at your discretion, still retire whenever you darn well please. What Pelosi was referring to was the commissions recommendation to index the retirement ago for Social Security to increases in longevity. People
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are living longer and retiring later, Social Security should be amended to mirror that fact. Second, it doesnt happen at the drop of a hat. The plan is to increase the retirement age by one month every two years. Under the plan the retirement ago would reach 68 in about 2050. It would reach 69 in 2075. Third, the commission factored in a hardship provision so that if you cant toil in the supposed salt mines beyond the age of 62, you can still receive Social Security. The scare tactics didnt end there. After seeing the proposal one Democratic source said, What a crazy proposal, what a crazy proposal. The Huffington Posts Ryan Grim called it an assault on Social Security. And finally, the pice de rsistance, Senator Dick Durbin said there were some things [in the proposal] that I hate like the devil hates holy water. Tell us how you really feel Dick. So when Annie Lowrey chides the fiscal commission for just want[ing] to talk numbers and to scare the living bejesus out of you about debt I wonder if she has read her partys response. The truth is the level of debt is something to be worried about. President Obama said as much on Monday while announcing a pay freeze for federal workers. In his speech he said that, The hard truth is that getting this deficit under control is going to require broad sacrifice. Going forward, were going to have to make some additional very tough decisions that this town has put off for a very long time. We face tough decisions because were dealing with a real problem. Those scaremongers over at the Congressional Budget Office recently said that, A growing level of federal debt would also increase the probability of a sudden fiscal crisis, during which investors would lose confidence in the governments ability to manage its budget and the government would thereby lose its ability to borrow at affordable rates. Pretty doom and gloom. But thats just the thing. Our fiscal future, fueled by rising deficits, an aging population, and an unsustainable entitlement system, is something to be worried about. Lowrey laments that we have to use scary words when speaking of the problem, but as the CBO makes clear, our deficit necessitates the use of some scary words. Scare tactics arent scare tactics if they are used to describe a very real threat. Falsely yell fire in a crowded room and youre liable to get people killed, but if there really is a fire, then you may be saving lives. The same situation applies here. By ginning up concern over a real danger, the fiscal commission is protecting our future. The CBO says that if a fiscal crisis occurs, policymakers would probably need to enact spending cuts or tax increases more drastic and painful than those that would have been necessary had the adjustments come sooner.
That sooner that they speak of is now. So while Lowrey and others are worried about the tone of the warning, forgive the rest of us while we heed it.
Slurpee Summit Bipartisanship is Likely to Melt

With a civil tone having dominated the meeting between President Obama and top Republican leaders, everyone is wondering: will it last? Dont hold your breath. Asking Democrats to work together to move us past our financial fiasco and refrain from reverting back to finger pointing, politicizing, and name calling is like asking the Griswolds to get along at Christmas. Weve seen the bipartisanship song and dance before. Despite calls from his party to stop, President Obama has reached across the aisle several times. But each of those instances has one thing in common their fleeting quality. Just as quickly as the hand extended across the aisle, it was withdrawn before anyone could truly meet it. Sadly, there is little reason to think that the latest ode to togetherness will be any different.
As Nancy Pelosi so cryptically said, apples, oranges, and bananas dont mate. Politicians might all stand under the same American Interest umbrella, but when it comes down to how to achieve that interest, the parties are worlds apart. As is inevitable, both sides are absolutely convinced theyre right. Rightly or wrongly, Democrats appear to have decided that the elections were solely a response to the poor economy, choosing to overlook the hand that they played in making it so. This view has shielded them from understanding the need to change course. In essence they are betting that once the economy improves, American voters will happily go back to voting blue. This overlooks the shifting sands of the voter ideology. The elections were about the economy. But they
also revealed what voters blamed for the economy; namely, big government, big debt, and intervention. Knowing this, Republicans are already drawing battle lines on an expanded front. Speaker-elect John Boehner is not wasting his time on partisan battles on Capitol Hill, hes taking the fight to the states. Boehner is meeting with 15 new Republican governors to strategize ways states to dismantle the implementation of various job-killing plans, like the new health care law, on an individual state level. In addition to finding a sustainable, two front war against specific laws that have been passed during the Democrat dictated 111th Congress, Republicans are already using a take-no-prisoners approach to ensuring an economic rebound. The Senate Republicans have come out swinging by unanimously signing a letter obligating each and everyone one of them to block any piece of legislation introduced by Democrats until tax cuts and a new federal budget passes. The message? Weve got two weeks left to work; ensuring that no American faces a tax increase in a weak economy should be our first priority. This puts Democrats in a bind. Sure they can argue its obstructing other bills, but do they really want to argue the need for the DREAM Act before stopping the largest tax increase in American history? As it turns out the only area of bipartisan agreement is that we should doubt any overtures to bipartisanship. Republican House Whip Eric Cantor, in a note of hesitation, says he want[s] to take [Obama] at face value. But there are clear reasons to be leery. Many Democrats like Representative G.K. Butterfield said that Obama should avoid making any sort of deal with the GOP, because the sentiment in the Democratic Caucus is that we stick with the plan. And as Politico points out, President Obamas previous efforts at bridging the partisan divide, they say, have been neither auspicious nor sustained. While that does not completely discount the genuineness of latest peace offering, it does bring its longevity in question. Both parties are reaching for the goal of jobs, wealth, and stability for America but their means to the end are completely different. Most Americans support the Republican vision. That is why Republicans won such a solid victory in November. While some compromise is OK, Republicans understand that they cant compromise on getting the nation back in fiscal shape. Coupled with Obamas previous history of talking a big bipartisanship game, only to let his actions fall flat, Republicans had better be wary of Obamas latest overtures. There is always a chance that this time is different, especially with Obama expressing his willingness to ignore Democratic leaders, but odds are this slurpee is going to melt.
Compromise Isnt Dangerous Its Smart

Is reaching across the aisle in the spirit of bipartisanship dangerous? Washington Post writer E.J. Dionne thinks so. In his latest column, discussing President Obamas decision to enact a pay freeze for federal workers, Dionne writes, The idea of freezing the pay of federal workers could be a sensible part of a larger, long-term deal that would combine spending reductions with tax increases. Its an obvious element in any negotiation. But Obama simply threw in the federal workers in exchange for well, as best I can tell, nothing. And in the short term, shouldnt jobs and rising incomes be a higher priority than austerity? Worse, every signal out of the White House is that it is prepared to cave to Republican demands for a temporary extension of all the Bush tax cuts, including those for millionaires who are in rather less need of additional income than security workers at Logan or nurses at government hospitals. Given the sentiment, it seems likely that Dionne opposed the Presidents attendance at the Slurpee Summit, aimed at starting a bipartisan conversation as he heads into the second half of his term. And I can almost see Dionne ripping out his hair when President Obama acknowledged that he had not spent enough time working with Republicans in his first two years in office and said that he should have reached out more. Where Dionne sees waiving a white flag, I see Obama make a shrewd political decision. As the President said at his recent meeting with Republicans, the American people did not vote for gridlock. They didnt vote for unyielding partisanship. Theyre demanding cooperation and theyre demanding progress. And theyll hold all of us and I mean all of us accountable for it. That warning was aimed at Democrats just as much as it was Republicans. So while liberal pundits are up in arms about the strategy of Obama giving something (federal worker pay freeze) for nothing perhaps they need to take a step back and understand why. It wasnt because it was a Republican issue. Sure, the idea was first brought up by Republicans in Eric Cantors YouCut initiative, but at its core it was an American idea.
Everywhere, everyday people are making sacrifices because of the economic recession. Regardless of whether it was good political strategy (it was), a federal pay freeze is a symbolic show of unity that the government is also making sacrifices. If we truly want to get jobs back and the deficit under control, every idea cant be viewed as a bargaining chip. Some things will have to stand on their own as good ideas. The same goes for the tax debate. President Obama hasnt showed he is prepared to cave, hes simply shown hes willing to debate. In fact, President Obama has made clear that he doesnt want to extend the tax cuts for upper income earners, but hes smart to keep his options open considering members of his own party favor extending all the cuts. Over the past few months the ranks of Democrats arguing for a temporary extension of all the tax cuts has grown, headlined by some prominent members such as Ben Nelson, Evan Bayh, and Kent Conrad. So when E.J. Dionne asks, Is President Obamas strategy of offering preemptive concessions destined to make enemies of his potential friends in the electorate without winning over any of his adversaries? Id say the answer is rather simple. No. Id say his preemptive concessions, if youd like to call them that, are destined to make him more popular amongst the electorate and better positioned to succeed in the final two years of his presidency.
Boehner and Cantors Plan to Put Government on a Diet

Shining, shimmering, splendid, those are three adjectives that will likely never be used to describe the US budget. Our budget is more like grimy, varnished, and bloated. We have the Jabba the Hutt of budgets. One look at it and you will cringe, disgusted with the excess, waste, and just sheer grossness of it. Personified, you could almost envision it sitting in a beanbag chair picking Cheeto dust out of its bellybutton. As Speaker of the House, John Boehner has decided to put our budget on a diet, before it goes into cardiac arrest. One of Boehners main reforms is to move our budget process away from its current ominous omnibus system that encourages waste and abuse. Instead of one colossal budget (in which nobody has any clue whats in it), Boehner wants to divide the budget into 12 sections that will be passed individually. In other words, the Appropriations Committee would require funding on a department-by-department basis. The 12 new budgets represent the 12 federal departments, and the budget for reach one would have to be ratified separately. Boehner says this will give more accountability to the legislators in charge of the federal budget and will provide some daylight into an otherwise murky process. The reduced size will also help legislators be able to find and surgically excise the most wasteful portions of each budget.
Naturally, this is disconcerting for many long-term members of Congress, Republicans and Democrats alike. One senior Democrat felt that this measure would not be passed because members of Congress would be worried that it would take up too much of our legislators time. That seems to me to be nothing more than a tacit admission that the current budget process, and the hundreds of billions of dollars it spends, doesnt currently receive the time it deserves. And in possibly the best sign that this is a good idea, lobbyists and other Washington insiders are worried that they their influenced would be diminished in a new system. So we have a chance to adopt a new system that puts the budget under a microscope while making the legislators, lobbyists, and insiders who helped run up a $14 trillion tab uncomfortable because they might be left with more bark than bite? Sign me up. Boehner is right. Our current, comprehensive budget process is broken. The US passing a budget that continuously runs trillion-dollar deficits is about as useful as continuously drinking with a failing liver. Not only is it dumb, it is going to kill you one day. We need to quit while we are ahead, or should I say, this far behind. While the budget cuts of Boehners new plan might allow are not guaranteed to be home runs , the plan will, at the very least, help curb our out of control government growth. Another budget reform, one that could would work seamlessly alongside Boehners, is Eric Cantors Cut-As-You-Go plan, or CutGo as it has been dubbed. The idea is to prohibit consideration of a suspension of a bill if it (1) creates a new program without eliminating or reducing another of a similar size; and (2) increases authorizations without offsets. Think of it as a new and improved PayGo for the truly budget conscious legislator. This will be another layer of accountability placed on lawmakers. The new rule ensures that we are putting a stopper on the size of government. If you want a new program, fine, find an older program that we can get rid of, or come up with a way to pay for it. Voters, of course, are generally leery of things that raise their taxes, so this should make legislators think twice about growing the size of government. We have before us two complimentary plans that will hold legislators accountable for their votes while fulfilling the voters desire for smaller government. Realizing these ideas, however, is sure to be difficult. As President Obama found out, changing the political culture and traditions of Washington is not the easiest thing in the world. Fortunately the past elections provided Boehner
with some back up. A new Republican majority coupled with a mandate from voters to get their house in order could be enough to instigate real change. If nothing else, it could force Democrats into the unenviable task of arguing that we need to keep things the same. Good luck with that in 2012. With one victory already that has been described as historic, if Republicans stand behind Cantor and Boehner they have a chance as a second historic change.
Bailout of Foreign Firms Shows Depth of Our Debt

What do Dexia AG, Commerzbank, UBS, and Barclays PLC have in common? Ill give you a hint, there are two correct answers. The first answer is: They are all foreign banks. And, second, drum roll please, they were bailed out by the US! The government regrets to inform you that the US bailout was not limited to our shores. Aid was sent here, there, and everywhere. Nearly $600 billion of credit was shipped directly to foreign banks, even after the Fed had given hundreds of billions of dollars of loans to them. From larger banks of Germany, England, France and Switzerland to the tiny banks of Bavaria and Bahrain, American dollars were sent here, there, and darn near everywhere. The Fed did not discriminate between privatized and nationalized banks either. Even the Korean Development Fund, a bank owned by the South Korea government and created to expedite industrial development in Korea, was bailed out. All comers received funds. Discretion did not exist. The Fed, along with the recipients of this aid, wqy the bailout was necessary. The Federal Reserve was only trying to hold together the crumbling and heavily interconnected financial system, and limit the devastation of the global economy by the failure of banks like Lehman Brothers. If you look closer, however, you will see notice a trend amongst the banks. They were active in US debt markets more specifically, they owned US debt. If the banks were not rescued, they would be forced to sell the US debt they owned. In short, these were the banks that financed our recent spending binge. These banks depended on US dollar loans to fund their holdings of US debt. If the banks failed then the US failed.
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In other words, we are so up to our eyeballs in debt that we have to bailout banks that own our debt to make sure that they keep buying our debt! That is what is disheartening about this situation. It is a revelation of how far the USs financial situation has fallen the last decade. Our habits are dangerous. We must surely realize this now. Going into debt to bail out the people we are indebted to. Is this what we are reduced to? Is the paradigm of American finance essentially a tumor that grows off of money we do not have? It doesnt matter that the government will end up not losing much money on these bailout loans. It doesnt matter if it was a necessity. Im not looking for justification in why the Fed did this. What I am upset about is that this environment existed in the first place. The tolerance for debt accumulation in the country is astounding. Our culture of spending money that we do not have is a chronic problem that affects Americans from the personal level all the way up to the federal level. We are our own parasite in this issue. Everything, fortunately, is not all doom and gloom. The 112th Congress is a breath of fresh air. If Americans as a whole are not willing to make a bottom up shift in American financial sensibilities, we will at least have enough Republicans in Congress committed to making a top down change. With new proposals by John Boehner and Eric Cantor designed to increase legislative accountability and limit government, it looks like we finally have a Congress that is willing to take the lead in fiscal responsibility. Boehner is giving us a plan that will give legislators a greater chance to examine spending bills and trim the excess waste and Cantors idea will put out of control spending in a straight jacket. These are great steps forward. Listen Americans, it wont be easy but we can do this. The government isnt the only one of us with bad spending habits. Yet they have voluntarily moved the spotlight of fiscal responsibility off of Wall Street and back to Capitol Hill. We can do this; after all we were the ones who voted conservatives into a historic number of Congressional, Gubernatorial, and State Legislative offices. We showed in the elections that we have seen the light. Now is time for tangible steps at all levels, top to bottom. No excuses, if the government can change their ways so can we. There is only so many times the debtor can bailout the creditor before the whole system collapses. Weve tempted the fates once. Lets not do it again.
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New Jobs ReportSame Bad News

The new employment numbers are in and it looks like tisnt the season to be jolly. 9.8% of Americans are unemployed. US unemployment once again rose, despite QE2 and the predictions of many economists. For 19 consecutive months the US has had unemployment over 9%. This is the longest stretch with unemployment this high since World War II. I wonder if Americans, with our short attention spans, can even remember April 2009, the last month with sub 9% unemployment. Judging by the numbers it appears that the stimulus just gave 15 million Americans a lump of coal for Christmas. Adding insult to injury for many Americans is that they were told expect the opposite. We wanted to wake up this morning to unwrap the news of shinny new jobs and growth. We were told to except a gain of 150,000 new jobs. Instead, we wake up to news that the economy added a mere 39,000 jobs. We were told to expect the Red Ryder BB Gun and we were given the pink nightmare instead. Our pink nightmare, unfortunately, is nowhere near as adorably funny as Ralphies. Even worse news is that the Federal Reserve is now saying unemployment could be above 9% a year from now. More than six million of the unemployed Americans, 41.9% of the total unemployed, have been out of work for over 6 months. The longer one is unemployed, the harder it becomes to find a job, but now and in the future. What are the 6.3 million people who have been out work for six or months going to do with that news? Can we really tell them to hold on just one year longer? The news is suffocating all hope out of the season. I would love to ask some Progressive saint at the White House or at the Fed what the stimulus and quantitative easing has given these families. An unemployment check is nice, but I would much rather have a job. And I dont think I am alone in that opinion. With a total cost of $814 billion, each temporary job created or saved by the stimulus cost $400,000 per worker. These werent sustainable jobs either, these were temporary positions held up by government issued duct tape. The governments way is not working. If the government wasnt so wrong we should be commending their determination. Every time the government enacts a new plan it is greeted with a lack of results. Well actually, there are results, but they are not the types of results the government was aiming for. The government needs to hurry up and finally realize that more taxes, more bailouts, more intervention is not the way to go. We have had 19 consecutive months of bad results because the government keeps repeating the same mistakes over and over again. The government is like Sisyphus pushing
the boulder up the hill again just to see it roll back to the bottom again, again, and again. There is one major except however, our government can stop at any time. Actually, I take back what I said about the government being Sisyphus. The government is more like Wile E. Coyote, no matter how many times our A.C.M.E. stimulus rockets blow up on us, we will keep trying to make them work. Jobs are the one present our government wont be handing out. We actually have a better chance of getting jobs if we just sit around and hope Santa and his workshop of elves can deliver. At least Santa and his elves have the entrepreneurial quality lacking in the government.
Want to End Government Wealth Redistribution? Reform the Tax Code

Everyone dreads April 15th. Its tax day, the day everyones tax income tax returns are due to the federal and state governments. To put it colloquially, filling out taxes is a pain in the butt. The tax code is so large that nobody really knows just how large it is. One conservative estimate had it pegged at about 67,204 pages long. And after all, who could keep track? Since the beginning of 2001, the IRS own Nina Olsen estimates that there have been more than 3,250 changes made to the tax code, an average of more than one a day. The code is so big, and so complex, that if tax compliance were an industry, it would be one of the largest in the United States, requiring the equivalent of 3.8 million full time workers. Given all that it is simple to understand why everyone this side of H&R Block hates the tax code. The reason for the complexity is a maze of deductions, credits, special preferences, write-offs, exclusions, and exemptions that make filing taxes stressful and exhausting exercise. The tax code neednt be this complex. Republican Congressman Paul Ryan and Senator Judd Gregg have put forth tax returns forms that would fit on a postcard and a sheet of paper respectfully. So why has our tax code grown to such enormous levels? Its a complicated mixture, but two of the biggest ingredients are the lobbying from special interests and a back-door attempt by the government at social engineering. As Richard Stevenson explained in the New York Times, There is [a] reason politicians choose the tax code to pursue policy objectives. In this age of fiscal austerity, new spending programs are a tough sell in Congress. But if the same initiatives are dressed up as tax cuts they look much more palatable.
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Both problems arise from a similar argument so I shall address them together. In each case, someone believes they know, better than you do, what is best for you. They want you to own a house rather than rent, they want you to attend college rather than work, they want you to buy green products rather than normal, albeit cheaper, products. To get you to accomplish each of these things they encourage such action in the tax code by providing you a deduction or a credit for following their pre-approved path. Each of things are arguably good in and of themselves. No one will argue that being an educated, environmentally friendly, homeowner is a bad thing. The bad thing is that the government must necessarily use other peoples money to encourage you to do these things. The renter who is saving for a down payment is necessarily being forced to subsidize the mortgage interest deduction for the current homeowner who is paying taxes. Those were were economically shrewd enough to get through college without a debt burden are necessarily being forced to subsidize the student loan interest deduction of a graduate. All taxpayers were necessarily used to subsidize those who used a tax credit to weatherize and green-ify their homes last year. Apparently we, as citizens in the free market, could not have made these beneficial decisions on our own. Instead as Milton Friedman said, the direction weve been going is that the people are children who have to be looked after by the paternal intelligent intellectuals and government officials who can take care of them. That Big Brother is in Washington and he can look after people. Fundamental reform of our tax code doesnt have to eliminate the good things that the tax code encourages. In fact, a fundamental tenet of any reform project should be that reform should, at worst, be revenue neutral. Any additional money that the government takes in by eliminating the maze of credits and deductions, should be balanced by lower income tax rates. That is what makes Paul Ryans Roadmap for Americas Future so attractive. In return for eliminating almost all deductions and credits, Ryan is able to lower tax rates to 10 percent of income up to $50,000 and 25 percent on any income above $50,000 for a single filer. That would replace the current six tax brackets of 10%, 15%, 25%, 28%, 33%, and 35%. The benefit of lower rates without deductions eliminates the tax codes distortion of the free marketplace. The student who may lament now having to pay the full cost of his student loan interest, should be consoled by the thought that his taxes arent going to pay for someone elses mortgage interest deduction. Despite the seeming win-win situation in which we lower tax rates while cleaning up the messy tax code the idea of fundamental reform faces significant headwinds. The problem, as with so
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many others in Washington, is that each tax break has a constituency. And each constituency stands to lose something. And when constituencies stand to lose they organize against reform. We as voters, in the rare instances we can band together, are the largest special interest group. The need for reform is clear. The question is whether we will pressure our lawmakers to do anything about it.
To Solve Deficit Americans Must End Self-Serving Morality

Dont let anyone tell you differently, solving our national debt will be an epic struggle. It is not as simple as making a few cuts or changing a few taxes. Solving the problem will require a fundamental change in what citizens have come to expect from our government. Year after year Americans are ranked as some of the most generous people in the world. A recent report by the Charities Aid Foundation studied the percentage of people who donate time or money to others and found that the United States tied for fifth. Sixty percent of Americans donate to organizations while close to 40 percent volunteer. As of 2005 Americans donated around $250 billion to charity more than 2 percent of annual GDP. And yet when it comes to giving up government benefits in the name of fiscal sanity we say no thank you. In a brilliant new article Washington Post, columnist Robert Samuelson calls this a new morality. Government benefits, once conferred, cannot be revoked. The problem is that our government has over promised on what taxpayers can deliver. Notice what I said there. The government isnt promising what it can deliver. It doesnt earn anything. Instead, the government is simply an intermediary between what taxpayers promise unto themselves. And in that regard it has failed terribly. In the hope of getting reelected or to win over interest groups, the government has sold us on the notion that through some bit of budgetary magic, youll be able to receive more government benefits than you paid in. Take Social Security for instance. The problem is that the government indexed the Social Security payment structure to wages rather than inflation. In the long term, wages tend to grow about 1 percent per year faster than inflation. This leads to some crazy results. As the American EnterDecember Compendium! 15
prise Institute discovered, a typical worker retiring in 2050 has been promised 47 percent more than todays retirees, and one retiring in 2080 has been promised more than double todays benefits. Despite knowing that we receive more than previous generations, we nevertheless feel entitled to the higher benefits. As Samuelson explained, People expect them and consider them property rights. Just as government cannot randomly confiscate property, it cannot withdraw benefits without violating a moral code. The oldfashioned idea that government policies should serve the national interest has given way to inertia and squatters rights. Solving the debt problem, which can only be done by addressing the fundamentally flawed entitlement system, will require Americans to change this belief. We have to detach ourselves from the fantasy world that politicians have created for us. Samuelson argues that this task should have been the duty of the deficit commission. He argues that their proposal should have been a tool to discredit this self-serving morality. Instead they ducked this challenge and instead performed an accounting exercise to shrink the deficit without trying to define what the government should do and why. But I believe the responsibility primarily relies with us. Our politicians are too politically afraid. The fact that there is a deficit commission at all is an example of that fact. President Obama wanted a bipartisan, non-political cover to come up with recommendations so that he could quickly divorce himself from them should something go awry. Washingtons unwillingness to take a stand is somewhat understandable. They are stuck in the middle between a society that on the one hand professes its love for entitlement programs, but on the other hand despises16 big government. We must provide them a clear path. We must show them that we understand the perils of a large deficit and are willing to adjust our benefits to fix it. It will require giving up something that we were wrongfully promised. A difficult, if not impossible task. But I would rather place my bets with the American people than with Washington.
Ugly Jobs Report Shows Need for Government to Get Out of the Way
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It doesnt take an economist to figure out that last weeks employment report was bad news. The unemployment rate jumped from 9.6 percent to 9.8 percent, not a significant improvement from the 10 percent that marked the lowest point of the recession. The number of long term unemployed remained about the same at 6.3 million, or 41.9 percent of the unemployed. The bad numbers are even worse when comparing them against what economists expected to happen. Economists forecasts predicted that payrolls would grow by 140,000 and the unemployment rate to remain unchanged. Wrong and wrong again. The question is, why are we still getting bad news? Its not because of a lack of corporate profits. As Economics21, a great online resource for economics information and analysis explains, Rather than putting this money to work in the form of employment growth or investment spending, companies have instead build up massive cash reserves. Moodys estimates large corporations have $1 trillion of excess cash on balance sheet. Data from the Fed show that U.S. nonfinancial businesses hold over $2.4 trillion in cash in aggregate. This sort of cash hoarding is unprecedented. All that idle cash is doing little to help spur hiring. Some may interpret those savings, while so many individuals are struggling to find work, as a problem of greed. If only they were willing to sacrifice some of their profits, we could get this economy going again. That is the wrong way to look at things. Corporations, just as individuals, will do whatever is in their best interests. If you are anything like me, you are pinching pennies. I could go out and spend thousands this holiday season in an attempt to prop up consumer demand. I dont. Not because I want the economy to remain in its current doldrums, but because Ive made the personal economic choice, based on the market as it currently exists, that I had better have a savings cushion should something unforeseen happen. Can I then begrudge corporations for doing the same thing? In my view, no. That doesnt mean that something cant be done. In fact, the unforeseen in my case, and the uncertainty in the case of corporations, is largely a result of government-created forces. Back in July, well-respected Washington Post columnist Fareed Zakaria asked business leaders why they were reluctant to invest despite sitting on historic cash levels. One CEO told him, Almost every agency we deal with has announced some expansion of its authority, which naturally makes me concerned about whats in store for us for the future.
One of the problems is the uncertainty over future tax liabilities. As Economics21 explains, this is largely the results of a structural budget deficit that will, at some point, necessitate higher taxes. The current budget deficit of 9% of GDP is the second largest in peacetime history next to the 10% deficit recorded in 2009. While a significant portion of that deficit is cyclical, the structural component could be as much as 6% of GDP. In current dollars, this equates to $885 billion of required deficit reduction. How much increased taxation will be required to close this deficit? Will taxes on capital income corporate income, capital gains, dividends, and noncorporate business income taxed at the individual level be raised? What will be the impact on consumption and investment? Corporations inability to answer these questions is what is holding back spending. The recently announced deal between President Obama and Congressional Republicans should provide a boost in confidence. At least for the next few years, businesses will be certain of their tax liability and be able to invest accordingly. However, these figures show that if we truly want businesses to get off the sidelines and into the game, something must be done to address long-term deficits. Our ability to solve our structural deficit, through some sort of entitlement reform, is necessary to ensure that tax rates remain stable in the long-term. The recent jobs numbers were bad news, but hey, what else is new. Fortunately, corporations have the money to begin hiring and investing again. All we need now is for the government to get out of the way.
Obamas Bipartisan Bargain Infuriates Democrats

Republicans are taking the lame out of the lame duck. Republicans, despite having a minority in both houses of Congress, have persuaded President Obama to join them in working to pass a new tax package that ensures nobody will face tax increases during the recession. The deal delivers gifts, to both parties; an unpaid for extension of unemployment benefits for Democrats and an across the board freeze on current tax rates for Republicans. President Obama gets to say that he was able to keep taxes low while also accomplishing an extension of many stimulus-like programs such as a 2 percent payroll tax holiday. The deal has already been christened the grand bargain.
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But what makes this deal even sweeter is the discord that has developed between the White House and Congressional Democrats. Apparently, all that whining about Republican obstructionism was nothing more than a political dog-and-pony show. When push comes to shove, or should I say, when Obama works together with Republicans, Democrats are not too keen on compromise. The bipartisan plan is the right thing to do. Those were Obamas words. And for once, we agree! Certainly this compromise is not perfect. That is an inherent characteristic of a compromise. And yet, Democrats dont think it was the right thing to do.

House Majority Leader Steny Hoyer has said that there was no consensus or agreement reached by House leaders on the Obama deal. Rep. Chris Van Hollen (D-MD) said I have some serious reservations about parts of this deal. . . there are certain elements that I think will cause a great concern to members of our caucus. Senator Bernie Sanders said it was an absolute disaster and an insult to the vast majority of the American people. . . I will do whatever I can to see that 60 votes are not acquired to pass this legislation Rep. Jim McDermott said that This is the presidents Gettysburg. Rep. Anthony Weiner likened the Presidents compromise to punting on 3rd down it seems the president is not seeing the value of being on offense. Rep. Peter Welch circulated a letter attempting to gather support for voting against President Obamas compromise which says, The President gave up without a fight, but you dont have to!
Ouch. Not exactly flattering words. In fact, many liberal pundits are calling for President Obama to be primaried in 2012. Talk about a fall from grace. In two years he went from savior of the Democrat Party (and Washington politics in general) to a complete sell-out who Democrats are thinking about tossing to the curb. But you didnt expect President Obama to sit on the sidelines while all the fingers of blame were being pointed at him did you? The White House responded to the attacks from their Left flank by saying they were left high and dry. We wanted a fight, the House didnt throw a punch, a senior White House official told Jack Tapper. It was like the Jets versus the Sharks except there
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werent any Jets. Senator Schumer says he wants a fight? He couldnt hold his caucus together. Hes right. Literally since the elections the White House has been saying that it only wanted to pass an extension of the Bush tax cuts for the middle class. Neither the House nor the Senate took the ball and ran with it. The bullets are officially flying. Whats more, for once, theyre not being aimed at Republicans. Democratic Leaders in the House said that the Senate should act on the tax cuts first. Obviously if youre going to get something done, I want to watch to see what the Senate does, Hoyer said. Except the Senate was also scared to act. In September, fearing that they didnt have the votes and wanting to avoid being accused of raising taxes in a recession, the Senate also punted. President Obama was left all alone. And he compromised. Millions of Americans were spared from higher taxes next year. Now Democrats are coming out of the woodwork to complain. It doesnt matter that every American will continue to pay the same taxes, or that two million people will now see their unemployment insurance extended, or that we have put incentives in place that may spur hiring. According to some Democrats, what matters is that Obama worked with Republicans. Chances are, compromise will always be premature for those Democrats. So while President Obama and Republicans are sticking to their guns and are working towards bettering tomorrow, those Democrats are sticking to their guns, refusing to work with Republicans, and are calling the compromise an absolute disaster. We all woke up to good news in this mornings paper, though no one knows who we should be thanking. Obama, Republicans, Santa, who is it? I think it is the 112th Congress. The 112th Congress is not here yet, but its shadow is. The 112th Congress, and its historical momentum, are just over the horizon and will be here before we know it. That gives us a second reason to give thanks. We are a few weeks away from finally having a fiscally accountable Congress, who the people stand behind, who is ready to hit the ground running. And that, is the best present of all.
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A Conservatives Christmas Wish List
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Why Lower Tax Rates Will Help Tax Revenue Rebound

There has been a significant amount of hubbub over President Obamas tax deal with Congressional Republicans. Democrats have argued that passing tax cuts for the rich is irresponsible at a time when the deficit is at unacceptable levels. I find it interesting that Democrats are in a position to talk about the deficit considering the stimulus and historic levels of spending. Beyond that, too much emphasis is being paid to how much the tax cuts are going to add to the deficit. To understand why you must keep in mind that tax rates and tax revenues are two completely different things. In fact, tax revenues show very little correlation to the tax rate. In fact, the top marginal rate (the one weve been arguing over so heartily) has fluctuated wildly.

In 1913 the top rate was 7 percent In 1919 it jumped more than tenfold to 73 percent In 1929 it fell back 24 percent In 1945 it had skyrocketed back to 94 percent In 1971 it ebbed down to 70 percent In 2005 we got to the current top rate of 35 percent
Given those rates, one would expect revenues to also wildly fluctuate. For instance, they should be much higher in 1945 than they were in 2005. That just isnt the case. The reason? Something called Hausers Law.
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As you can see, revenue as a percentage of GDP remains almost constant over time. The shortterm fluctuations are statistically significant, ranging from a low of 14.4 percent in 1950 to a high of 20.6 percent in 2000, but over relatively short amounts of time they always trend back to the mean of 18.2 percent. This tells us that tax rates arent that important. Instead, what me must focus on is raising GDP. As White House economic adviser Larry Summers said, the first priority for addressing the budget deficit has to be getting the economy growing again at a rapid rate. In that regard, he said, the tax deal offers the best prospect that was available for achieving the kind of escape velocity that weve been seeking for the past two years. In other words, dont get caught up in the Democrats arguments that the mere idea keeping tax rates the same for high earners is an absolute disaster. Rates, by and large, dont matter. Revenues matter. And the best way to raise revenue is to increase GDP and what better way to accomplish that than through maintaining low tax rates?
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Privatization of Fannie and Freddie is too complicated

The downfall of Fannie Mae and Freddie Mac could have been potentially prevented if both companies had been fully privatized. In the private market, both companies would have to compete with other companies in the financial industry and would not have the same feeling of invincibility granted to them, wrongfully, by the government. Fannie Mae was originally created as a government agency in 1938, but in 1968, it relinquished majority of the government ownership. The company maintained its tax exemptions and kept access to a line of credit from the U.S. Treasury Department. Similar to a private company, Fannie Mae was traded on the New York Stock Exchange. Investors shared a common belief that the government would bail Fannie Mae out if necessary, even though it did not fully back the company. This gave Fannie Mae a competitive advantage compared to its private sector opponents, allowing it to offer lower interest rates. Fannie Maes portfolio expanded rapidly during the housing boom of the early 2000s, in large part because of its enormous purchases of risky mortgages. Fannies sister company, The Federal Home Loan Mortgage Corporation, better known as Freddie Mac, was created by Congress in 1970. Freddie Macs main role was to expand the housing market by buying mortgages from lenders, and then bundling them with other mortgages into a security to sell those to investors with a guarantee. Freddie Mac and Fannie Mae are Government Sponsored Enterprises (GSE), ultimately sharing a similar fate. While the government had little influence on both companies business plans, privatization of Freddie Mac and Fannie Mae in 2008 may have led to a different course of action when managing the subprime mortgage crisis. One of the few people to speak in support of privatization, Senator John McCain suggested the government end the taxpayer-backed conservatorship of Fannie Mae and Freddie Mac. He recommended that the government implement an orderly transition period, the end result being that Fannie and Freddie would operate without government subsidies on a level playing field with their private sector competitors. Of course that didnt happen. Now, these government subsidies have already cost taxpayers $145 billion out of the $400 billion cap Former President Bush set to keep the two companies alive. Fearing that the companies would quickly surpass that cap, Democrats eliminated the cap and
promised to subsidize unlimited liabilities on behalf of the mortgage giants. This meant that taxpayers are on the hook for potentially enormous losses and creates no free market incentive for the GSEs to act financially responsible. Taking McCains idea one step further, Congresswoman Michelle Bachman has recently suggested that Freddie Mac and Fannie Mae should not only privatized, but broken down into smaller companies similar to Bell Systems in the early 80s. Bell Systems, or Ma Bell as it was colloquially known, was the American Bell Telephone Company, which had a governmentgranted telephone communications monopoly. In 1984 a federal mandate was enacted to break up the company into smaller individual companies, allowing competition to enter the market. With more competitors in the market, the prices of the companies were stabilized, maintaining a steady customer base. Similar to Fannie and Freddie, who hold a monopoly on the mortgage industry, breaking them up into smaller components via privatization could stabilize the prices and solidify once again, a strong customer base. Today, Democrats believe that breaking up and privatizing companies as large as Fannie Mae and Freddie Mac would be too difficult. Rep. Paul Kanjorski (D-Pa.) the number two Democrat on the Financial Services Committee said it was too complicated to deal with Fannie and Freddie while also trying to pass stricter regulations on the financial industry. The government has already invested billions of taxpayers dollars in purchasing the faulty mortgages packaged by these companies. Significant change is needed, and foreclosure and refinancing programs are not the solution, a fact the Obama administration is finally beginning to realize. In January 2011, Fannie Mae and Freddie Mac will be further reformed. President Obama is appointing North Carolinas top bank regulator, Joseph Smith Jr. as the overseer of the two companies in an effort to stabilize them. In the meantime some members of Congress are suggesting full privatization or even completely dismantling the two companies. Representative Jeb Hensarling (R-Texas) has introduced a bill that would keep the two failed mortgage companies in government hands for the next two years. After that two-year period, the government would determine if Fannie and Freddie could continue operating as private companies. If they could, they would both be completely privatized and heavily regulated. If they proved to be non-viable, they would be dismantled permanently. The current Freddie Mac and Fannie Mae crisis and control by the Federal Housing Finance Agency (FHFA), has not proven to be as fruitful. With the government in control, Freddie will require an extra $1.8 billion, with the threat of costing taxpayers over $398 billion over the upcoming decade. The reliance on taxpayer dollars to correct the system leaves citizens to pay for the inefficiencies of government-controlled companies. They should be left to the private market
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where they can either compete and survive or fail and disappear. However, by maintaining their pseudo-public, government-operated designation, Fannie Mae and Freddie Mac, will cost the taxpayers billions of dollars.
An Obama Christmas Carol

This parody is faithfully based on excerpts from the original A Christmas Carol written by Charles Dickens. An Obama Christmas Carol
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The economy was dead: to begin with. There is little doubt whatsoever about that. The fact of its death had been attested to by countless of economists, pundits, and number crunchers. President Obama refused to admit it, instead saying that the stimulus did its job. But the fact remained, the poor economy was as dead as a door-nail. There is no doubt that the economy was in dire straights. This must be understood, lest nothing Im about to say will seem wondrous. After a day of fighting with his own party over tax cuts, President Obama, crawled in to bed, and exhausted, fell asleep upon the instant. When a nightmare of Pelosi hounded his dreams, President Obama awoke to a dark room. He struggled to pierce the darkness with eyes more suited to a fluorescent office, when the chimes of the National Cathedral struck four quarters. Barack listen to find out the hour. The great iron bell rang from six, to seven to eight, all the way up to twelve. This was impossible! Barack knew he had been up past two, working with Robert Gibbs to try and find a way to pacify his liberal critics. No, no, no, thought Barack, something must be wrong. This surely must be a prank. Where is Rahm? This must surely be his doing. I thought he was in Chicago, he must be back. Barack settled back into bed. The thought of Pelosi yelling at him bothered him exceedingly. Just as he slipped back into the warm comfort of sleep his nerves were jolted with the bells of the church started again. Ah, it must be noon, he gasped, It is not midnight! But I have things I must be doing. The economy is in shambles, my Left flank is crumbling, and those tax cuts wont pass themselves. But where is Axelerod? Where is Pete Rouse? Is this Michelles doing? Surely they wouldnt have let me sleep through the day. Barack ran to the windows, heaving back the lead lined curtains and glazed through the thick windows. More darkness stood there. With arms outstretched the nighttime greeted Baracks gaze. I must be overworking, thought Obama. The stress of the economy must be taking its toll on my mind.
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Certain that this was nothing more than a waking dream, Barack decided his best option was to go back to bed. He fluffed his pillows, held his covers tight, and let his eyelids slide down to sleep. I Barack laid there for an hour, in a restless sleep. He heard the chimes of the next hour. At that moment, the moment of the final deep, dull chime, his room became washed in a pure light and the curtains of his bed were drawn. A fantastical figure stood before him. It was old and young, corporeal and transparent, close yet at the same time it was as if the figure was being seen from a great distance. Who, and what, are you? Barack demanded. Surely this was a dream, he was thinking. The only way to wake is to make it to the dreams climax. I am the Ghost of Christmas Past. Long Past? No. Your past. Barack was flabbergasted. He had never had a dream as strange as this one. Before he could think of what to say next the Spirit said: Your salvation, then. Lets go! Before Barack could begin to ponder the spirits words, it had flashed its hand forward, grabbing Baracks arm. Immediately, the room dissolved and he found himself travelling back through time. Ah! Barack said, as he surveyed their location. I was a young student here. This is where I began my dream of becoming President. This is Cambridge; this is where I attended law school
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Barack was conscious of sights and smells; each one reminds him of a thousand hopes and promises of change, long, long, forgotten. Do you remember the way to your home? asked the Spirit. Of course, I could walk it blindfold! cried Barack. As they walked the streets, Barack recognized every house, every tree, and every person. After all, he was popular and smart. The first back president of the Harvard Law Review. These were the days Barack would wistfully become nostalgic for. For these were days when Obamas detached intellectualism were alive and well appreciated. Couples in love with the season and each other hurried past them. Young scholars, eyes ablaze with passion, wander around them. Children, with their runny noses and rosy cheeks, took no notice either. These are but shadows of things that have been, said the Ghost. They have no consciousness of us. Before he knew it, a very familiar building loomed in front of Obama. It was his old apartment. The pair entered the building, climbed the flights of stairs, and came to a dilapidated door, that was, unlike its neighbors, absent of any decoration, devoid of any cheer. The ghost turned the tarnished knob revealing the world that had been his. He had been an academic, an impressive student, and a nice guy. As editor of the Law Review he had reached across the aisle to win support from the conservative minority on campus. A sob escaped Obama, for before him sat a young man, clearly happy with where he was. A newspaper sat on the table beside him. The Spirit touched him on the arm and pointed for Obama to look at the headline: A bold faced Reaganomics are Here grabbed Baracks eyes. Barack picked up the paper, skimming through the charts and graphs.
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Real economic growth averaged 3.2% during the Reagan years versus 2.8% during the FordCarter years. Real median family grew by $4,000, after no growth during the pre-Reagan years. Interest rates, inflation, and unemployment fell faster under Reagan than they did immediately before his presidency. The charts and figures explained the revelry that had existed on campus, or whatever kind of vision Barack was in or, compared what existed in the world Barack presided over. People here were not worried about their unemployment, the economy, or their job prospects following graduation. Their minds were confident and secure in the knowledge that their economy was strong. No, no, no, Barack said, shaking his head. Remove me, I cannot bear it. Haunt me no longer with these visions of where our nation should be. My plan would have worked had it only been larger! The government must be large and spend, I just know its true. I told you that these visions were shadows of the past, said the Spirit. They are the economic truth, dont blame me. The light seeping through the lines of the Spirit suddenly became extinguished. Obama was exhausted, and overcome by the heaviness of his eyelids; and further, of being back in his bedroom. He staggered to his bed and had barely reached it when he sank into a heavy sleep. II Awaking in the middle of a particularly loud snore, and sitting up to gather his thoughts, Obama heard the church bell once again strike One. Obama was blanketed in assurance that he had awoken from nothing more than a very vivid dream. Now, being prepared to continue his nights sleep, to say Barack was startled with what happened next would be an understatement. A sphere of bright light, more alarming than a dozen Bidenesque flaps, appeared above his chest. Instantly, Barack knew what he needed to do. He rose, slid
his feet into his slippers, and shuffled to the door. The moment his hand touched the lock a strange voice called him by his name, and bade him to enter. He obeyed. It was the Oval Office, as it had been that day, but with one surprising transformation. The walls and ceiling were draped in mistletoe and strings of Christmas lights, flickering in jolly patterns. The wax glaze of fake holly, mistletoe, and ivy reflected the merry light, as if so many little mirrors had been scattered there; and such a mighty blaze went roaring in the fireplace. Mounds and hills of cooked turkeys, ham, pies, a plethora of holiday goodness, took up every free space on the floor. In the corner of the room sat a jolly Giant, rosy cheeked and with a warming smile. Come in, exclaimed the Ghost. Come in! Barack entered the room, meekly, shoulders hunched. The Giants eyes were jovially round, clear and kind, but Barack made sure their gazes did not meet. I am the Ghost of Christmas Present, roared the Spirit. Obama was taken aback by the grandiosity of his appearance. The Giant was clothed in red and green, a satin robe of the highest warmth and comfort. The ample folds of the garment revealed a chest that was bare, as if disdaining to be warded or concealed by any artifice. A holly wreath was crowned upon his brow, set here and there with shining icicles. Dark brown locks gave way to a genial face and an unconstrained demeanor. You have never seen the likes of me before! the Spirit shouted with glee. Never, Barack agreed. The Ghost of Christmas Present rose. Come and touch my robe, the Spirit said, as he motioned to Obama. Immediately the feast that adorned the Oval Office disappeared, the White House spun into nothing, and Washington itself ceased to exist. When Barack came to his sense he realized he was at a Christmas dinner party. Here, here, a mans voice, presumably belonging to the host spoke, summoning everyones attention.
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I wanted to thank everyone for being here, the man said, There is very little to be hopeful about this holiday season, but I hope this party has served as a welcome distraction from the harsh economic conditions that exist outside. Thats not the only thing we need distracting from, a voice shouted. Finding a job now is hard. But dare I say that our children face an even bleaker future! A grim expression suddenly took everyones face. Yes, yes, the host continued, we need not reminding. What are they talking about? inquired Barack. These people are using this party as a change to forget the sad state of our economy, answered the Spirit. But I dont understand. Why wont the economy improve? Why does the future remain so bleak, Obama pressed. Well what have you done to change it, the Giant asked. They fear the uncertainty that you, by your actions, have created. These people dont know what to expect in the coming New Year. The average family is facing a $3,000 hike in their taxes at a time they can least afford it. Money that small businesses could use to hire new employees is being held in reserve, unsure of where the economy is heading. Big businesses are not hiring because they dont know how much it will cost to address the new regulations surfacing every day. Two million people dont know if their unemployment benefits are going to be renewed or if they are going to expire. People are being unemployed for longer and longer stretches of time, and the longer they are unemployed the harder it is to find a job. Uncertainty has gripped even the most certain of men. Uncertainty is the fear that can paralyze an entire nation. Barack looked again at the families and he saw that their faces were not joyless, for they smiled at one another, but he could see the lines of uncertainty that creased their faces. Church bells rang twelve in the distance. The bells caught Baracks attention. He gazed off into the distance to see where the sound came from. When Barack turned his head back to the Giant, he found that the specter was there no more. As the last chime from the church tower ceased to
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resonate in the air, Baracks eyes beheld a solemn Phantom, draped and hooded, coming, like a mist along the ground towards him. III The Phantom came. Slowly, gravely, silent was its approach. The very air through which this Spirit moved seemed to be corrupted with gloom and was absent hope. A cloak, torn and tattered, of the emptiest black, concealed its face, its form. The garment revealed nothing, save one outstretched hand. Who are you? asked Barack. Are you the Ghost of Christmas Yet to Come? Having been in the presence of multiple ghosts this night, Barack thought he should have been used to this kind of company. What am I to do? cried Barack, Will you give me no answer? The Spirit pointed at a path that appeared before them. Barack then set off down the path with ghost gliding by his side. The pair entered a city. And a city, dark, desolate, and deserted it was. Boards covered the windows of the cities buildings. Large swaths of properties lay decrepit and abandoned. The citys inhabitants filled the streets, apparently unable to find work. As they continued, Barack peered into the few windows of homes that were leaking out light. Their floors were bare. There were no decorations to celebrate the season. There were no presents, gifts, or even joy to be found. Barack could see families sitting down for dinner. The Ghost and Obama came to a grungy looking hole in the wall. The Ghost pointed to the door, and Barack obediently entered the building. They entered a large room. Looking around at its stained walls and chipped ceilings, Barack realized it was a bar. Barack and the Spirit then moved to settle in a corner of a bar to listen to the conversations. All the conversations were the same. They were without out hope, they were angy that the institutions they had paid into for their entire lives were no longer there to support them. They spoke
of a government that had collapsed under its own weight. Its entitlement programs and profligate spending had overshadowed its effectiveness. Taxes had risen to a level that sapped Americans of their entrepreneurial spirit. Businesses had shuttered or moved overseas to avoid the crushing burden of uncompetitive tax rates. The conversations spiraled down more and more despondent paths. Obama realized what future this was. This was the future in which the government failed its people. The dawning realization shook his very core. More taxes, more regulations, more government had crushed his country. The people could not live, much less prosper, under the weight of all their taxes. A compromise between Democrats and Republicans was never reached. The amount of money people owed to the government multiplied over night. Try as they might, the people could survive under that regime. People could not pay back their debts, their mortgages collapses, banks fell apart, businesses sank. People would not compromise, Barack thought, no consensus could be reached on what to do with taxes, no one would put aside their partisan politics to solve the budget crisis. And the moment we ignored our biggest problems, the moment that spirit of comprise died, so did the hope of millions of people. Obamas heart sank. This is not what he wanted. This was the farthest thing from it. He looked at the Ghost with pleading eyes, shaking his head as if to say no, it cant be true. The Specters icy gaze surrendered no compassion. With a loud crack, Barack bolted upright. He was back in bed. IV A week had passed since that fateful night. Barack was standing alone in his office. As his eyes flickered up to this television, a faint smile bore across his face. The television swarmed visions of Democrats he had considered partners swirling in front of him. The face of Steny Hoyer was the first he saw. Barack recognized this press conference. It was being held to lambast the deal that President Obama had worked so hard with Republicans on. Not appropriate, the voice roared. Unacceptable. Clearly, a number of us believe there could have been a better result.
Zero to compromise in 3.5 seconds. I dont think the president should count on Democratic votes to get this deal passed, lambasted a second voice. This voice was that of Anthony Wiener. The harangue continued. This is the presidents Gettysburg, lectured Jim McDermott. Peter Welchs pointing finger appeared next on the screen. The President gave up without a fight, but you dont have to! Bernie Sanders appeared next. This is an absolute disaster and an insult to the vast majority of the American people, Sanders said, as he kept up the offensive, I will do whatever I can to see that 60 votes are not acquired to pass this legislation. The screen returned to a pulpit of progressive pundits recommending that Barack should face a Democratic primary in a few years. Barack knew why his heart had changed. Barack knew the truth of his intentions. He knew he did not cede to pressure or bullying. He knew he had seen the Ghosts of Christmases Past, Present, and Future. His own heart laughed; and that was quite good enough for him.
Democrats Threaten Higher Taxes for All; Reject Bipartisan Compromise

After 54 Democratic Representatives signed a letter to House Speaker Nancy Pelosi swearing that they would not vote for the Obama-McConnell compromise, House Democrats have emphatically rejected the tax compromise from Obama and the Republicans. We have tremendous concerns about what was given away by the White House to Mitch McConnell and the Senate, said Representative Peter DeFazio. The White House has fired back, insisting that the deal with Senate Republicans will not be changed.
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We now have an enormous game of chicken. On the one hand we have Liberal Democrats, spearheaded by Nancy Pelosi, who are willing to see taxes go up on everyone, because shes angry at the bipartisan compromise worked out by her President. On the other hand are conservative Democrats, the President, and Republicans, who in the spirit of ensuring that the tax rates remain as they are, were willing to cede some ground and compromise. Democrats are now throwing a hissy fit, arguing that they were shut out of the process, and have now come out with a list of their own demands. Thats right, they have a list of demands. President Obamas hostage analysis is sounding more and more accurate, he just got the hostage-taker wrong. Among the things Democrats are demanding is a change to the estate tax provision, an extension of Build America bonds, tax extenders for pet green energy industries, and new research and development tax credits. Word is they are also demanding eleven pipers piping and eight maids-a-milking before they will even consider voting for the deal, taxpayers be damned. So much for President Obamas thinking that, the more they (Democrats) look at it, the more of them are going to say This makes sense. This Is the right thing to do. I expect everybody to examine it carefully. Whiffed on that one. In their fits of rage it has become hard to tell if Democrats are mad because they believe Obama was bullied into accepting unacceptable provisions, or because it was they, the Democrats, in the last gasp of their House majority, who were not consulted on the deal. The more I read, the more it seems like the latter. Take Democrat Chris Van Hollen who lamented that, the House never signed off on this, so its certainly not a done deal. And as The Hill reported, Democratic leaders acknowledged they were not involved in the negotiations Obama conducted with Republicans over the weekend. Asked if the House was adequately included in the talks, Majority Leader Steny Hoyer (D-Md.) replied: I dont think House Democrats think so. Cry me a river. President Obama seems to be the only Democrat in town who is willing to listen to the results of the recent elections. If House Democrats havent figured it out yet, they lost. Big time. Were talking historic type losses. Your way didnt work, its time for something new.
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The tax cut agreement is that something new. Its an actual compromise, something that weve seen very little of in the past two years. Each side gained something that made the other hold its nose. Democrats got an extension of many of their budget-busting stimulus programs. Republicans got a temporary extension of all the tax cuts as well as a compromise on the estate tax. Nobody is completely happy the hallmark of a good negotiation. Well perhaps I shouldnt say nobody is happy. The polls, which the Democrats consistently ignored for the past two years, show that 66 percent of all Americans favor a temporary two-year extension of all Bush-era tax cuts. What platform are Democrats standing on now? Is it a platform of their principles, of what is right for America? No, legislation of the 111th Congress did nothing but hurt American businesses and American individuals. Are they standing on a populist hope? No, a strong majority of Americans agree with the direction Republicans want to take America. No, no, no no, Democrats are screaming, even as the majority of Americans are shouting yes, yes, yes, yes. There is no telling what a final, passed compromise will look like. Democrats are already trying to commandeer the proposal; Democrats like Senator Reid who wants the language of the final bill to include things like the legalization of online gambling. If youre wondering what that has to do with tax cuts the answer is absolutely nothing. One thing is certain, however, Democrats are being left behind and theyre angry about it. With Democrats throwing the political equivalent of an immature, reactionary, temper tantrum, its no wonder Obama has left them behind.
Polls Show Obama and GOP on the Right Side of Tax Debate
In politics you ignore the people at your own peril. Apparently Democrats dont care. Throughout the health care debate they consistently ignored poll after poll showing that the public did not like the bill. They spent with reckless abandon despite polls showing that our deficit was a legitimate concern for many voters. Now, having learned nothing from their Election Day slaughtering, House Democrats are back at it, rejecting a tax cut bill that the majority favored. Undeterred, Democrats have stuck to their guns, arguing that they welcome a debate with Republicans over raising taxes. They saw it as an opportunity to paint the GOP as a party who solely cares about the wealthy. Unfortunately for them, that was never the Republicans position. Time after time, GOP leaders reiterated the now common phrase, You dont raise taxes in the middle of a recession.
The Republican plan was never about singling out any one group over another. They understand that keeping as much money in everyones pockets as possible is the only way to encourage spending, hasten investment, and get the economy going. Even famed economist Mark Zandi of Moodys argued that, This will make a difference. It will add a lot to growth in the first half of next year, when the recovery will be at its most vulnerable. It really seals the deal for the recovery evolving into a self-sustaining economic expansion. If that doesnt go far enough to explain to you the importance of passing the package, consider what top White House adviser Larry Summers had to say. If they do not pass this in the next couple of weeks, it will materially increase the risk of the economy stalling out and that we would have a double-dip. Jaw-hits-floor. Nevertheless, the Democrats feel they can win the political argument. They somehow believe that they people are on their side. Gallup says differently. A recently released Gallup poll found that two-thirds of Americans (66%) favor extending the 2001/2003 tax cuts for all Americans for two years. . . The poll shows that even a majority of Democrats favor an extension of the tax cuts for everyone. So who is opposed to this? What constituency are the House Dems fighting for. Believe it or not, there is one. Its that tiny sliver of the public who identify themselves as Liberal Democrats. The data shows that 64% of Conservative/Moderate Democrats support the deal involving tax cuts and unemployment benefits. On the other hand only 39% of Liberal Democrats feel the same way. That is a 25% swing in support among people who are in the same party!
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This is a time for the outgoing Democratic majority to put their ego aside. As President Obama chastised his own party, People will have the satisfaction of having a purist position and no victory for the American people and we will be able to feel good about ourselves and sanctimonious about how pure our intentions are and how tough we are. In the meantime, the American people are still seeing themselves not being ableto pay their bills because unemployment insurance went out. That cant be the measure of how we think about public service. That cant be the measure of what it means to be a Democrat. Couldnt have said it better myself. And if the Gallup poll is any indication, the majority of people agree with him.
Democrats Determined to Save Face at Expense of Americans

Nobody seems to know what to think. Should Democrats love the tax deal reached by President Obama and the Republicans or should they hate it? Democrats have been vocal about the fact that they hate it. Senator Sherrod Brown (D-OH) called President Obama a sellout over the tax compromise. Representative Jim McDermott argued that he feared Obama was being bullied by Republicans and described the tax cut debate as the presidents Gettysburg. Senator Bernie Sanders topped off the vitriolic comments from the Left by saying the deal is an absolute disaster and an insult to the vast majority of the American people. Prominent conservative thinker and columnist Charles Krauthammer cautions that those Democrats may want to take another look. In his column Krauthammer argues that, Barack Obama won the great tax-cut showdown of 2010 and House Democrats dont have a clue that he did. In the deal struck this week, the president negotiated the biggest stimulus in American history, larger than his $814 billion 2009 stimulus package. It will pump a trillion borrowed Chinese dollars into the U.S. economy over the next two years which just happen to be the two years of the run-up to the next presidential election. This is a defeat?
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If Obama had asked for a second stimulus directly, he would have been laughed out of town. Stimulus I was so reviled that the Democrats banished the word from their lexicon throughout the 2010 campaign. And yet, despite a very weak post-election hand, Obama got the Republicans to offer to increase spending and cut taxes by $990 billion over two years. Pardon me if I dont care. Most Democrats think that theyve lost. A few prominent Republicans are pointing out how much Democrats gain. Democrats argue that the plan shows a willingness to sacrifice large principles in exchange for paltry concessions. Republicans are saying that this is in essence a bigger injection of funds than the much-decried stimulus. Again, I dont care. Now, allow me to clarify. I care deeply about the plan. Ensuring that taxes do not go up is an absolute necessity. White House economic adviser Larry Summers warned that a failure to pass the package would materially increase the risk that the economy would stall out, and we would have a double-dip recession. What I dont care about is if Democrats feel that they won or not. Sadly, that seems to be what most people in Washington, especially Congressional Democrats, are debating. They seem to have finally dropped all pretense of caring about what is best for the American people. Gone is all the talk about ensuring that tax rates dont go up before they leave for the holiday break. A concern for the people has been replaced by a ferocious need to save face. They felt left out of the discussion and now, despite the fact that they are getting a $990 billion bill that would have made Keynes blush, they still say no. In fact, theyre coming to the bargaining table with their own list of demands. As the Heritage Foundation writes, Well now Senate Majority Leader Harry Reid (DNV) has submitted a bill, and it is clear that negotiations are still very much open at least for the left. Politico reports that in order to buy the votes of Senators Maria Cantwell (DWA) and Barbara Boxer (DCA), Reid added cash subsidies for wind and solar corporations that were originally part of Obamas first failed stimulus. And Senator Tom Harkin (DIA) was also able to trade his vote for more ethanol subsidies. Other sweeteners added to buy leftist Senate votes include subsidies for energy-efficient appliances and mass-transit benefits for employees. I began this post by asking a question. Should Democrats love the tax deal or hate it? It was the wrong question. At the end of the day, no American sitting at home cares. They only want to know, as they gather around their kitchen table to do their finances, whether or not the government will be taking more money out of their pocket. The question everyone in Washington should be asking is whether Americans love the bill or hate it. Sadly, that would require looking
beyond their egos. A seemingly impossible task for a Democratic Party determined to save face in their last gasp as the majority in Congress.
Schumer and Baucus Failed Leadership At Its Finest

Its hard to find many positive adjectives to describe Congressional Democrats. The only one I can think of is loyalty. Not loyalty to the American public mind you. Loyalty to their own leadership. What else would explain keeping the exact same leadership team in place following their Election Day shellacking. Nevermind that this shows how completely out of touch with the average American they are, their loyalty to leaders like Pelosi is admirable in its misguidedness. As Sean Pearlstein sarcastically explains in the Washington Post, Democratic leaders blame Republicans. They blame the Senate rules. They blame the president. They blame uncooperative colleagues. They blame everyone but themselves not just for this, but for Congresss overall inability to tackle pressing problems. So it should be no surprise that when the new Congress takes office next month, the lineup of Democratic leaders in both chambers will be pretty much the same. Why shake things up when everything is going so well? Its like your favorite NFL team who is just determined to run the ball straight ahead every play, despite gaining no more than a yard, and with Peyton Manning at quarterback. Colts fans know exactly what Im talking about. Their persistence is commendable, but ya just wish theyd try to change it up a little. Two of the Democrats leaders have been in the news today, for all the wrong reasons, which makes me further wonder about the intelligence of their strategy of staying the (failed) course. The first, Chuck Schumer, is the third ranking Democrat in the Senate and was recently appointed to hold the additional role of chairman of the Senate Democratic Policy Committee. Schumer was the chief proponent behind an idea to extend the tax cuts for anyone earning up to $1 million a year.
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The White House dismissed the idea. As one administration official said, the bottom line is that he had a short-term partisan strategy for point scoring that would have been really costly in the long run and for which people would be properly angry. The debate has threatened to pit Schumer and Obama, who Politico calls arguably the Democratic Partys two most influential message strategists, against each other. Egos have collided. The result is a fractured party with Schumer intent on staying the liberal course while Obama tries his hand at bipartisan. A much different type of problem is presented by Max Baucus, chairman of the Senate Finance Committee Chairman. Pearlstein of the Washington Post says that, For my money, theres no better example of the failure of the Democratic leadership than [Baucus]and, in particular, his performance on the presidents deficit-reduction commission. As it turns out, he was appointed to a commission whose sole purpose was to address the deficit problem despite the fact that he had led the fight against its creation. Once appointed the Washington Post reports that he had one of the commissions worst attendance record, refused to provide constructive input, and when asked why he voted against the Commissions proposal, offered the farcical explanation that it was bad for rural America. In other words, Democrats have a leader who has patently abdicated his duty to lead on the most important long term issue our nation faces. This is the best the Democratic Party has to offer? These are their leaders? No wonder they got trounced in November. And if they cant understand the need to unite behind bipartisan solutions rather than fight amongst themselves, or put aside their ego to produce a credible plan to address our deficit, I would expect them to get trounced again in two years.
Democrats Making Bad Gamble on 2012 Tax Cut Debate

Democrats are gamblers. And as it happens, they are bad ones. In gambling parlance they would be called the fish. They make bad bets, lose their money, but always come back for more. It happened with the stimulus. They passed historic levels of new spending, betting that it would help the economy recover to the point voters would be willing to overlook the ridiculous pricetag.
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It happened with Obamacare. With Americans having expressed their concern over the size and cost of government, Democrats gambled that once the bill was passed, voters would be so enamored with the benefits that they would ignore its more unseemly elements. Despite this dismal record, Democrats bought some more chips and are back at the poker table. Their latest bet? Tax cuts. Austan Goolsbee, the chairman of the White House Council of Economic Advisers, said Sunday on Meet the Press that, In 2012, I believe they will have to stand up and defend, on their own merits, that they think that these high-income tax cuts work. In essence they are gambling that Republicans will face a much more difficult time defending tax cuts when the economy is back on its feet. Theyre betting that voters will no longer be willing to buy the Republican notion that raising taxes on anyone would slow the recovery, since presumably the economy will have recovered. Interestingly, they already made this very same bet. As the Washington Post wrote in July, President Obama and Democratic leaders in Congress are setting the stage for a high-stakes battle over taxes in the final weeks before the November congressional elections, betting that their plan to eliminate tax breaks for the wealthy will resonate with voters who have lost houses and jobs to what many see as an era of Wall Street greed. This past summer Democrats thought that the looming debate over taxes would create the perfect opportunity to paint Republicans as the party of the wealthy. It didnt work like that. Republicans wanted all the tax cuts extended. They didnt parse by economic class. Taxes needed to remain lowfor everyone. It was a message that obviously resonated. President Obama eschewed negotiations with his own party, instead choosing to sit down with Republican leaders to hammer out a compromise. A deal was ultimately reached, and despite some initial rage and frustration, Democrats appear ready to sign on to the agreement. They lost their initial gamble, but now say that they are going to double-down on the same bet in an election year? Doesnt seem like good politics to me. Mainly because it rests on a poor premise. Democrats bet relies on a substantial improvement of the economy. They believe that this will undercut the argument that Republicans offered this year that raising taxes will harm the recov-
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ery. But, if the economy recovers enough to undermine this line of though, doesnt it simply prove Republicans point that tax cuts bolster the economy? Would Republicans actually be in a stronger position? After all, would Democrats be prepared to stand up in an election year and argue that we must eliminate the very tax cuts that spurred our recovery? Perhaps. History shows theyre bad gamblers.
Despite Deficit, Tax Deal Fits Conservative Economic Model

After days of Democratic hissy fits and tantrums over President Obamas agreement with Republicans, a tax deal appears likely to pass. White House adviser David Axelrod said over the weekend, We have a framework, we have an agreement, and I dont anticipate that its going to change greatly. I think were going to get strong support on both sides of the aisle. The first hurdle appears to be cleared. The Senate will hold a key test vote today, but Senate Majority Whip Dick Durbin (D-IL) said on Sunday that Harry Reid and I have been on the phone over the weekend and I can say that we have a good cross-section of the Senate Democratic caucus, from left to right, who are prepared to accept this. Even as Democrats appear prepared to accept the deal, many conservatives remain leery. After all, this is a package that well-respected conservative columnist Charles Krauthammer called the biggest stimulus in American history, larger than his $814 billion 2009 stimulus package. To be intellectually honest, hes right. Overall the federal government will lose around $800 billion in revenue because of the package of tax cuts and credits. Some of those credits go towards extending admittedly bad programs from the stimulus, like windmill subsidies. No, you didnt misread that. Windmill subsidies. But a majority of the cost is going to keeping more money in the pockets of middle class Americans. However, we must understand that lost revenue isnt the same as spending. When the government loses revenue through lower taxes, it means Americans get to keep more of their own money. When the government spends, it means they are allocating your money for their priorities. As Paul Ryan recently said, keeping tax rates where they are and preventing them from going up is not spending because that is peoples money in the first place.
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They do, however, have the same impact on the deficit a fact that makes conservatives anxious. But incoming House Budget Committee Chairman Paul Ryan also had something to say about that. In a recent interview with the Wall Street Journal, Ryan attempted to allay some of conservatives deficit concerns in urging them to support the tax cut deal You cant get the deficit down, get the debt in the right direction, without economic growth, without job creation, and you will stifle job creation make no two ways about it if you raise tax rates in JanuaryWhat we do know is, you will damage the economy if these tax rates occurFor my money pro-growth tax policy combined with spending cuts and entitlement reform are the necessary conditions to get this thing going in the right direction. Fortunately, the pro-growth tax agreement between President Obama and Republicans is a good first step towards economic growth. Upon news that the tax cut package was likely to pass, Bank of America boosted its 2011 GDP forecast from 2.3 to 2.8%. As we wrote last week, Gross Domestic Product, not tax rates, is the true indicator of tax revenues. By boosting GDP, the tax deal has the ability to get the economy going again without a large decline in tax revenues. So conservatives take heart. Republicans spoken concerns about the deficit werent an election year trick. They havent forgotten about the long-term threat that our debt poses. Quite the contrary, they understand that addressing our deficit requires a dynamic and competitive economy. Now that it appears we have taken the steps to initiate some pro-growth tax measures, we can begin to solve the other parts of the puzzle government spending and a broken social safety net.
Warners Idea to Reduce Red Tape Deserves Closer Look

In an op-ed in todays Washington Post, Democratic Senator Mark Warner has an interesting idea to jumpstart the economy. He wants to eliminate the regulatory uncertainty businesses face by limiting the amount of red tape the government creates. I was initially skeptical. After all, Democrats rarely own up to the fact that business uncertainty is a force holding back the recession. As liberal columnist Paul Krugman recently wrote, How much truth is there to these [uncertainty] claims? None. So to see a Senate Democrat that was
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once touted as a presidential candidate say, we must address the regulatory uncertainty felt by many of our small and large businesses, I was waiting to read the catch. So I dug a little bit into his idea. As it turns out, it is mostly copied from Britains Conservative Party. Thats a good sign. Then came the real kicker. I found a post from liberal blog DailyKos that eviscerated Warners idea, saying he is flatly wrong and his idea is so ridiculous that it deserves some attention and derision. Now Im intrigued! If the DailyKos hates it, thats as sure a sign as any that it must be a pretty darn good idea. As it turns out, it is a good idea. He argues that one of the problems in our regulatory system is that it actually favors those federal agencies that consistently churn out new red tape. In this town, expanded regulatory authority typically is rewarded with additional resources and a higher bureaucratic profile, and there is no process or incentive for an agency to eliminate or clean up old regulations. To solve the problem he is promoting a regulatory pay-as-you-go system in which federal agencies would have to identify and eliminate one existing regulation for each new regulation they want to add. The government simply piles regulation upon regulation, rarely taking a look at the ones theyve already created. The result is a mish-mash of cobbled together rules that occasionally contradict each other and often overlap. The problem is that many businesses, entrepreneurs, and workers are left to traverse this maze of government red tape, creating an enormous drag on profitable activity. As Warner points out, According to the U.S. Small Business Administration, the estimated annual cost of federal regulations in 2008 exceeded $1.75 trillion. Imagine the stimulative effect if even a third of that was injected into the economy! The idea is not new to Washington, or even to Democrats. Al Gore promoted a red tape reduction program. In an attempt to reinvent government Gore cut $28 billion in waste from the budget each year, and in the process stripped 16,000 pages of regulations from the federal register. But the regulatory pay as you go has seen its greatest success in Britain. They viewed regulatory reform not simply as a way to promote economic recovery, but as a process that can help to meet the broader challenges faced by the United Kingdom such as climate change and globalization. A report produced by the British government predicts that their effort to reduce administrative burdens would lead to direct savings for businesses and consumers of 0.3 percent of GDP. To understand just how much savings that is, consider that our 2009 GDP was $14.3 trillion. If we saved the equivalent of .3%, that would equal around $43 billion that would stay in the hands of businesses and consumers. Not bad for the common sense task of eliminating waste and redundancy in our regulatory framework!
If nothing else the measure would require agencies to catalog their current regulations, a task that will enable significant eliminations of stale, duplicative, or harmful regulations that have been overlooked amidst the clutter. The only concern is that it would create regulatory churn. Old regulations would be constantly replaced with new, in an attempt to perfect the system. Overall this would make the framework more volatile in the short term, at least until a balance of size versus effectiveness could be reached. Nevertheless, this result could undermine the goal of creating certainty. Misgivings aside, the one-in, one-out or regulatory pay-as-you-go system that Warner advocates appears to be a positive contribution to the debate over how to get the economy going again. Its ability to aid business, all while shrinking government and reducing government spending, should earn it a careful examination by lawmakers. A pro-growth, small government idea from a Democrat? It seems the recent elections were a wake-up call to at least a few members of the party across the aisle. Now lets see if we can work together to wake up the economy.
Healthcare Decision Prevents Opening a Constitutional Can of Worms

Yesterday was the first day since I graduated from law school that I actually wish I was back in a law classroom. I would have been willing to undergo three hours of a Socratic-style beatdown to listen to some law scholars debate Judge Hudsons decision that the individual mandate provision is outside the scope of the Constitutions Commerce Clause. In dealing the first Constitutional blow to healthcare reform, Judge Hudson ruled that, Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntary enter the stream of commerce by purchasing a commodity in the private market. Requiring Americans to buy insurance would invite unbridled exercise of federal police powers, Judge Hudson wrote.
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Previous Supreme Court precedent has found that Congress can regulate almost any economic activity. The question is whether not purchasing healthcare insurance counts as activity. Despite receiving an A in Constitutional Law (pats himself on back) I think its best to leave the Commerce Clause arguments to the heavy hitters. So as Constitutional scholar Ilya Somin notes, The Obamacare indivudal mandateseems to regulate inactivity not purchasing a product. Somin goes on to dismiss the two arguments for why such inactivity should nevertheless count as economic activity. First, some scholars argue that by avoiding the insurance market, purchasers are nevertheless involved in an economic activity because they are influencing the market by changing supply and demand. As Somin notes, if this is the definition, then Congress could not only force people to purchase any product of any kind, it could also force them to engage in just about any other kind of activity that affects the price of some good or other that Congress set outto control. Second, supporters of the individual mandate argue that the healthcare market is unlike other markets. As Attorney General Eric Holder wrote in todays Washington Post, none of us is a bystander when it comes to health care. All of us need health care eventually. Do we pay in advance, by getting insurance, or do we try to pay later, when we need medical care. That is absolutely true. But it misses the point. We will all, most likely and at some point, need health care. But healthcare is different than insurance. This is where supporters of the law engage in some rhetorical sleight of hand by discussing it in terms of healthcare, rather than insurance, theyve redefined the market to fit their need. Each of us will require care, but who is to say what that will be. I may need a relatively inexpensive prescription. You may need a hundred thousand dollar heart transplant. But the individual mandate is not about individual need, it is about ensuring that the relatively healthy pay into the system to ensure that there is money to pay for the relatively sick. To do so it sweeps everyone into the same regime forcing you to buy a defined plan of minimum benefits not tailored in any way to need. The problem, as Somin notes, is that if you take this argument one step further, it leads to some ridiculous outcomes. For instance,
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Consider the case of a mandate requiring everyone to purchase General Motors cars in order to help the auto industry. Sure, there are many people who dont participate in the market for cars. But just about everyone participates in the market for transportation. Or how about, A requirement that each citizen purchase a gym club membership and exercise for one hour per day could be defended on the basis that, otherwise, people will be less healthy, which will make it more likely they will spend more money on medical care, health insurance, and perhaps other forms of exercise. Ruling that the individual mandate is constitutional opens up a can of worms. Both of the supporters arguments in favor of the constitutionality of the healthcare law leads to a reading of the Commerce Clause without limits. If the government can force you to do something you otherwise wouldnt have done on the basis that not doing it is an economic activity, is there literally anything that Congress cant regulate. I defy you to name me one. No really, try. Our modern jurisprudence may encourage this result, but I have a hard time believing that was part of the Framers design for a limited government.
Individual Mandate Ruling an Early Christmas Present But Fight Not Over
District Court Judge Henry Hudson gave an early gift to many conservatives this week, ruling that the individual mandate in the Democrats healthcare bill is unconstitutional. Before we all toast our eggnog, Hudsons decision wasnt the end of this story. Two district court judges have previously ruled that the individual mandate was constitutional (unsurprisingly, they were Clinton appointees). More importantly, Hudson ruled that the individual mandate was severable from the balance of the enactment. Translated from legal jargon, that means that he ruled solely on the constitutionality of the individual mandate, not the bill in its entirety. Finally, the judge refused to grant an injunction that would have stopped all enforcement of the bill. The government is thus free to continue building the infrastructure necessary to implement the remainder of the legislation, at least until a higher court rules on the matter.
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Taken together, Hudsons ruling was a blow to Obamacare, but not a fatal one. At least, not yet. Some liberal columnists and supporters of the law were actually heartened by the decision. The Washington Posts Ezra Klein writes, The real danger to health-care reform is not that the individual mandate will be struck down by the courts. Thatd be a problem, but there are a variety of ways to restructure the individual mandate . . . The danger is that, in striking down the individual mandate, the court would also strike down the rest of the bill. In fact, thats exactly what the plaintiff has asked Hudson to do. Hudson pointedly refused. I think this overlooks some major problems that the bills supporters will be faced with. First, this puts the White House and Democrats who fought hard for the bill on defense. Our nations recent economic struggles have led to a resurgence of Constitutional conservatism. People have identified the failures of our current government and wax nostalgic for the Framers vision of a limited government with an emphasis on individual responsibility. Being on the wrong side of the Constitution is not a good place for a politician to be. As the New York Times writes, It provides another rallying point for conservatives as they make the case that government is overreaching and must be reined in. So far it has been an easy case to make. Take Democratic Congressman Pete Stark who was asked the question, if the government can
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force people to buy healthcare under the Constitution, what cant they do? His response? The federal government can do most anything in this country. Sadly, hes right. Nevertheless, we are beginning to see a backlash against such logic. Mondays ruling serves as yet another rallying cry against federal government overstepping. Democrats will now be forced to defend their healthcare law against the backdrop of a limited government. Not an enviable position to be in. Second, the individual mandate is more crucial to the success of the healthcare law than Klein and other liberals would like to admit. In fact, part of Secretary Sebelius argument in favor of using the Necessary and Proper Clause to prove the laws Constitutionality is that, Without full market participation, the financial foundation supporting the health care system will fail, in effect causing the entire health care regime to implode. Unless everyone is required by law to purchase health insurance, or pay a penalty, the revenue base will be insufficient to underwrite the costs of insuring individuals presently considered at high risk or uninsurable. The laws financial footing was already on shaky ground. A significant portion of the public backlash was in response to the legislations expected cost. The individual mandate actually hid an enormous chunk of costs. Healthy people, who would be forced to overpay compared to their expected health outcomes, were expected to be the financial base upon which the whole system was built. If nothing else, the fines levied on those who failed to get healthcare would put a dent in the bills bottom line. But removing the individual mandate eliminates these two revenue generators, revealing the utter disastrousness of Obamacares pricetag. As peoples anger over the rising cost erupts, there are two possible outcomes. The Washington Post argues that it will force more aggressive reforms than even Obama has proposed in the form of some kind of government-run, single payer system. The more likely scenario in my opinion is that the public revolts against government intrusion in healthcare altogether. As the threat of our deficit becomes an increasingly larger issue, the push for smaller government reforms and significant reductions in government spending will become more vigorous. I have trouble believing that a country pushing government austerity will simultaneously open up to an entirely government run healthcare system. Despite Judge Hudsons ruling, conservatives should hold off on dancing around the Christmas tree, but if nothing else, we should take heart that this puts a little coal in Democrats stockings.
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CBO: Interest on Debt Set to Soar

Having an enormous debt leads to some enormous problems. Budget deficits force the United States to borrow more money from abroad or issue more Treasury bonds here. Both of those can reduce (crowd out) domestic investment in private sector enterprises. This, in turn, depresses economic growth and can cause substantial long-term harm to the economy. Since tax revenues are largely tied to GDP, lower economic growth means less government revenues, and an even worse deficit picture. It is a vicious cycle that is hard to escape from. Today, the CBO is out to put a little more coal into Washingtons stocking. In a post entitled Federal Debt and Interests Costs the CBO discusses the unprecedented growth of government and debt and explains the impact this will have on borrowing costs. Interest is one of the more overlooked side effects of our spending habit. We discuss the deficit, our unfunded liabilities, how healthcare spending is growing faster than inflation, and the growth of discretionary spending, but rarely do we hear about interest. But as with all borrowers, every dollar that is lended to us, must be paid back with interest. Fortunately, being the United States has some perks in this regard. The fact that we are the largest economy and the dollar serves as the worlds reserve currency, allows us to borrow more cheaply than just about anyone. As the CBO points out, Although the federal government has increased its net borrowing by more than $3 trillion in the past two years, net interest costs dropped from $253 billion in 2008 to $197 billion in 2010 because of remarkably low interest rates. Unfortunately, those favorable borrowing terms wont last forever. Long-term interest rates are expected to go up as the economy gets into gear. Likewise, our debt will likely give foreign lenders pause unless we pay a higher interest rate to offset the risk. The costs of those higher rates will be substantial. As the CBO explains in its report,
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In CBOs August projections . . . borrowing to finance projected deficits, in combination with an expected rise in interest rates, leads to a fourfold increase in net interest payments over the next 10 years, from $196 billion in 2010 to $778 billion in 2020. Larger deficits would result in even greater interest costs. That is the equivalent of paying out a new stimulus package every year. But unlike the stimulus, where at least some of the money was funneled back towards useful projects, paying the interest rates gains us nothing. It is money spent, with nothing gained. As Donald Marron, a member of George W. Bushes Council of Economic Advisers explained, the more it borrows the higher its debt service obligations, so the more it needs to borrow. Trying to borrow yourself solvent is as futile as attempting to drink yourself sober. Sadly, that appears exactly what Washington is trying to do. Solving our interest rate problem begins with paying down our debt. With a federal budget already stretched to its limits, and projected entitlement costs only expected to rise, the last thing we can afford is to devote an enormous chunk of revenues to paying interest on our debt. Having an enormous debt causes enormous problems. Creating brave solutions will take brave politicians. Vote accordingly.
Economic Growth Key to Solving Youth Unemployment

One of these things is not like the other . . .
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As you can see, since the year 2000, older age groups have seen a sharp increase in their labor force participation. This has come at the expense of younger workers who are being squeezed out. The USA Today explains, the portion of people ages 16-24 in the labor market is at the lowest level since the government began keeping track in 1948, falling from 66% in 2000 to 55% this year. The reason is that people aged 50 and up are staying employed longer than at any time in our history. That is just another consequence of the down economy. As peoples investments, mainly in the real estate market, became devalued, people felt less wealthy. To make up for the perceive loss of money, they felt they needed to work longer. And with it becoming increasingly difficult to find work, many older Americans simply hung on to the jobs they had. The crowding out effect cannot be blamed on older workers. The true problem is an economic growth rate that is too small to absorb those who want to enter the labor force. In the third quarter of 2010, the economy (as measured by GDP) grew at a 2.5 percent rate. While certainly better than shrinkage, it wont allow us to reach full employment for well over a decade. As the USA Today figures show, young adults and those preparing to enter the labor force will bear the brunt of that pain. That is why it is imperative that we increase economic growth. Fortunately, Republicans have a plan. Incoming House Budget Committee Chairman Paul Ryan recently told the New York Times, We need growthFor my money, pro-growth tax policy, combined with spending cuts and entitlement reforms, are the necessary conditions to get this thing going in the right direction. In other words, weve got growth in three steps: 1. Favorable tax policy, 2. Spending cuts, 3. Entitlement reform. The compromise between Republicans and President Obama was an attempt to accomplish step one. Although, the deal is certainly imperfect, in that the temporary rates dont nearly maximize growth in the way that permanent rates would have, it represents a positive sign that the parties can work together moving forward. The work is far from done. For our government to ensure long-term growth, it must begin to address its reckless spending habits and unsustainable entitlement structure. Only then can we get economic growth on a path towards full employment. Only then will we be able to solve the problem of joblessness amongst younger generations.
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Census Shows Geographic Win for GOP; Work Still to Be Done on Demographics
Republicans must have been very good girls and boys this year. It seems like every week now they are getting a political gift. Between the election results, the approval of the tax package, and the judicial blow to Obamacare, the conservative stocking is just about jam packed. Well its time to make a little more room under the tree. Yesterday the Census Bureau announced the results of its decennial census that left many in the Republican party shouting joy to the world. States in the South and the West are set to gain the most seats, with most coming at the expense of the Northeast and Midwest. This represents an enormous coup for Republicans and their future electoral hopes. Of the changes, ten seats are leaving states that voted with President Obama in 2008, while states that voted for John McCain are gaining eight seats. Of the states set to gain seats, Texas will gain four, Florida will gain two, and Arizona, Georgia, Nevada, South Carolina, Utah, and Washington will each gain one. Of those eight states, only Nevada and Washington have a Cook Partisan Voting Index that favors Democrats. The electoral shakeup doesnt end there. Early next year, state governments will begin carving up newly drawn House districts to satisfy the Constitutional requirement that each district have roughly the same number of people. Redrawing the district boundary lines may be a powerful tool for Republicans to further gain the upper hand from this decades population shifts. Tim Storey, an expert in redistricting at the National Conference of State Legislatures, told the New York Times, Republicans are in the best position since modern redistricting began. That is the result of the historic gains made by Republicans in state governments this election cycle. All told, Republicans picked up 680 seats in state legislatures the largest statehouse seat gain by either party in history. Republican representation in statehouses nationwide is larger than at any point since 1928. The new seats translate into new GOP control of 196 of the 336 districts whose borders are drawn by state legislatures, while Democrats control only 49. That is nearly a fourto-one advantage in redistricting. Before you break into carols and start pounding eggnog in celebration, the results arent all tinsel and mistletoe. The geographic trends look promising. The South and West, which typically tilt Republican, are set to gain seats at the expense of traditionally Democratic areas. But the demographic trends are likely to tell a different story.
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Over the next few months the Census Bureau will begin releasing more detailed results of the census, including data on race, ethnicity, and age. One would expect a significant percentage of the growth to be the result of the increasing population of minorities, particularly Hispanics. So although Republican states will see gains, it could be Democratic districts that have experienced the growth. Or as Tim Storey explains, Just because Texas is getting four new seats does not mean Republicans will get four new Republicans to Congress. As this graph from Alan Abramowitz shows, black and other nonwhite populations will make up nearly 35 percent of the electorate by 2020.
Young voters, who went 66%-to-32% for Obama are also adding to their ranks each year. As todays younger generations become a greater percentage of the electorate, Democrats could build a base of support that Republicans will struggle to overcome. This is not to say that Republicans have lost the battle. Its simply to say that we must get to work playing catch up. The conservative message is an inclusive one of self-empowerment and
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limited government, neither of which should preclude the party from being competitive among young adults or minorities. However, the Republican Party must make an increased effort to court these voters. This does not mean sacrificing principles, it means crafting and targeting your message in a way that resonates with all voter groups. College Republicans stand on the front lines of this plan. We understand that younger generations are the most diverse in our nations history. Standing pat is akin to ceding the future. We must aggressively court young adults, who represent future voters, and minorities, who will increasingly become the deciding force in future elections. So even as we cheer the census results, understand that weve only won geographically, there is still much to be done demographically.
Top 10 Dumb Democrat Quotes of 2010

The 24-hour news cycle has its negatives. Essentially it has meant that journalism is out, sensationalism is in. Analysis is out, punditry is in. But all that on-air face time does have one positive it guarantees some entertaining gaffes. While this sound-byte dependency is slowly killing true political discourse, it at least lends itself to comedy. So in that vein, here are our Top 10 Dumb Quotes from Democrats: Honorable Mentions:
As opposed tosStanding outside Fenway Park? In the Cold? Shaking hands? Massachusetts Senate candidate Martha Coakley responds to a Boston Globe question if she was being too passive in her campaigning strategy. Her lack of devotion (and blasphemous comments on the Red Sox) may have tipped the scales toward Republican Scott Brown in an election which set the tone for the rest of the year. His mom lived in Long Island for ten years or so. God rest her soul. And- although, shes wait your moms still your moms still alive. Your dad passed. God bless her soul. Joe Biden speaking to Irish Prime Minister Brian Cowen. When asked if she had any comments on Israel, long-time White House correspondent Helen Thomas said, Tell them to get the get the hell out of Palestine. Remember, these people [the Palestinians] are occupied and its their land. Its not Germany, its not Poland. When asked where Israeli Jews should go: They should go home, to Poland, Germany and America and everywhere else.
!"# And secondly, when is it ever a good idea to tie up a woman and ask her to kneel before a false idol, your god, that you call Aqua Buddha? Kentucky Senate candidate
Jack Conway attempts to turn a college prank into a question of religion in a debate with Rand Paul. The strategy ultimately backfired, causing Conways unfavorability numbers to skyrocket leading up to the election. $# The rent is too damn high. - New York gubernatorial candidate Jimmy McMillan during an on-air debate. Although technically he falls under the Rent is Too Damn High Party he is actually a registered Democrat. Dont expect him to go away. He recently declared that he would run for President in 2012 saying, Im covering after [Obamas] black a**. Hes got a way with words. %# My fear is that the whole island will become so overly populated that it will tip over and capsize. Rep. Hank Johnson (D-GA) expresses his concern that the planned buildup of military personnel on the island could cause it to literally tip over. After the hilarious media response, Johnson tried to clarify his statements saying that he was using a metaphor for reaching the tipping point of the islands fragile ecosystem. Sure. &# Now, theyre saying I groped a male staffer. Yes, I did. Not only did I grope him, I tickled him until he couldnt breathe and four guys jumped on top of me. It was my 50th birthday. Ex-Congressman Eric Massa (D-NY) stirs up trouble for himself while talking to Glen Beck after resigning over sexual harassment allegations by one of his aides. If the quote wasnt ridiculous enough, it led to one of the more ludicrous articles weve ever read, literally attempting to scientifically answer the question of whether guy-on-guy tickling is normal. '# Im exhausted of defending you, defending your administration, defending the mantle of change that I voted for and deeply disappointed with where we are right now. Maryland resident Velma Hart expressed her disappointment in President Obama, whom she voted for in the 2008 presidential elections. In a sad epilogue to the story, Hart recently lost her job as the result of downsizing due to the persistently poor economy. (# This is a big f**king deal. US vice-president Joe Biden whispers this to Barack Obama during the signing of the historic U.S. healthcare program. It turned out to be a big deal for Republicans who leveraged voters dislike of the bill toward historic gains in the midterm elections. 4. F**king retarded White House Chief of Staff Rahm Emanuel blew up at liberal groups during a weekly strategy session over their plans to run attack ads at conservative Democrats who may have voted no on Obamas health-care overhaul. Inter-party squabbling became a hallmark of the Democratic House in 2010.
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)# Another thing we can do for jobs is make toys of me, especially for the holidays. Little dolls. Me. Like maybe little action dolls. Me in an army uniform, air force uniform, and me in my suit. They can make toys of me and my vehicle, especially for the holidays and Christmas for the kids. Thats something that would create jobs. So you see I think out of the box like that. Its not something a typical person would bring up. Thats something that could happen, that makes sense. Its not a joke. South Carolina Democratic Senate candidate Alvin Greene in an interview explaining his fool-proof plan to get the economy jumpstarted again. Its all about thinking outside the box! *# Today is a big day in America. Only 36,000 people lost their jobs today, which is really good Majority Leader Harry Reid speaking on the Senate Floor about new job figures. The comments immediately backfired, showing that the public wasnt buying the liberal spin over their big-spending attempts to fix the economy. !# We have to pass the (health care) bill so you can find out what is in it. Nancy Pelosi. The comments became the metaphor for an out of touch Congress who simply refused to listen to the will of the people. What did we miss?
Republicans Spending Lock Box Will Reduce Deficit

Im not sure Toby Keith or Hank Williams Jr. were thinking politics when they sang, a little less talk and a lot more action, but it pretty much sums of the mood of the electorate in 2010. People were tired of Washington paying lip service to our biggest problems while in practice following their own agenda. The clearest example came from the economy. The economic collapse had led to sky-high unemployment and persistent joblessness for many Americans. Nevertheless, Democrats had their blinders on, focusing like a laser on healthcare reform while the economy continued to decline. Of course, thats what Democrats were doing, not what they were saying. Throughout the year Democrats consistently said they were focusing on jobs. In President Obamas state of the union he said that high unemployment is why jobs must be our number one focus in 2010. But as of June, the only plan Democrats had come up with was the so-called Recovery Summer that was meant to highlight the success of the stimulus bill. That began a trend for Democrats. Rather than put forth any ideas on how to jump-start the economy, they
simply relabeled and repackaged existing ideas into jobs bills. Nancy Pelosi said a cap-and-trade energy bill is all about jobs, jobs, jobs, jobs. She also said that passing Obamacare would lead to the creation of four million jobs (almost half of the total jobs lost during the recession.) Americans grew tired of Democrats talk. They wanted results. Frankly, they wanted a party that would live up to its promises. And Republicans made big promises. They promised a smaller, less spend-happy government, a promise that is short in words but long in deed. As new Speaker of the House John Boehner explained it, its pretty clear the American people want us to do something about cutting spending here in Washington and helping to create and environment where well get jobs back. So now it is the Republicans chance to live up to their words. Theyre off to a fast start. In the month since the elections the Republicans have already:

Stopped the omnibus spending bill, Repealed the Gephardt Rule which provides automatic increases in the debt limit upon the adoption of a new budget resolution, Changed the pay-go rules so that bills must be offset in longer windows than just 10years
But one recently unveiled change in the House rules may be their biggest step yet towards reining in our unruly deficit. The rule creates a lock box for any money saved through spending cuts passed through the House. The idea is to ensure that the money is put toward deficit reduction rather than simply spent elsewhere. Currently, the House rules and budget process encourage any savings in the form of spending cuts to merely be plowed into other government programs. The result is that spending cuts never lead to a smaller government, only to a reorganization of the same big government. Brenan Buck, spokesman for the House GOP transition team said that, The reforms included in this package provide the House with new tools to achieve the goal of reining in out of control spending in Washington. The new spending reduction account allows members to explicitly dedicate savings from an amendment to spending reduction something that under current House rules can only be done rhetorically.
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Republicans are done with rhetoric. They understand that its time we start to get things done. In other words, its time for a little less talk, and a lot more action.
Investing in Math and Sciences First Requires Entitlement Reform

Investing in math and science is the way to solve the economy. A great idea. And somehow liberals have co-opted it to make it sound like their own. Todays Los Angeles Times for instance contains an article entitled, Fixing the Economy the Scientific Way, arguing that the federal government must spend more money on math and science education. They point to the fact that over the last 40 years the governments support of science has declined 60% as a portion of GDP. They then argue that Republicans will only make the problem worse, pointing to their pledge to reduce federal spending on nondefense-related science research to pre-stimulus levels. There is a lot wrong with this argument. For instance, given that the stimulus was a one-off, emergency spending measure, Im not sure you can call a return to pre-stimulus investment a reduction. If we simply kept all stimulus programs intact forever and ever it would be akin to adding $800 billion to our deficit annually, not exactly a financially or politically sound proposition. The bigger problem is that liberals argument ignores the reason governmental support of science funding has been declining relative to GDP. The problem is that the government over the last four decades has been forced to spend on other things. Our mandatory spending, on such things as Medicare, Medicaid, and Social Security, has been driven upwards, leaving less and less to be spent on discretionary budget items. Moreover it is not going to get better without major changes. The CBO predicts that federal spending on major mandatory health care programs will grow from roughly 5 percent today to about 10 percent in 2035 and will continue to increase thereafter. As the following chart from the Heritage Foundation shows, the increase in costs of entitlements and anti-poverty programs are forcing reductions elsewhere.
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If we want to increase our investment and math and science as a pathway to future prosperity we must understand one thing: we are not working with unlimited funds. We cant simply increase science investment because it is a good idea. A budget requires prioritization. Making math and science a priority means making something else less of a priority. Sadly, prioritization is even difficult given that our budget is being tyrannized by entitlement spending. Now, and especially in the future, these programs are taking up such a large slice of the budgetary pie that there simply isnt enough money to pay for core government functions, much less science grants. That is why fiscal conservatism, through principled spending, is the true path toward promoting scientific advancement. For an example as to why, look no further than Texas. Doing research for this post, I googled math and science investment in an attempt to find long term trends in how much the government spent. To my surprise one of the top returns was an article entitled Perry announces math and science investment. The Perry the article is referring to is the Republican governor of Texas, Rick Perry. As it turns out, in 2009, right in the heart of the recession, Texas announced it was investing $160 million to expand Texas Science, Technology, Engineering and Math academies. But how!?! After all, Texas doesnt have an income tax and has one of the nations lowest overall tax burdens. Yet through shrewd spending and their ability to attract businesses to the
state, Texas has weathered the economic storm better than most, even managing to maintain an $8 billion rainy day fund. This financial flexibility, accomplished by keeping government spending relatively low, is what enabled them to increase their science and math spending in response to a need. The federal government lacks that flexibility. Dont be fooled into thinking that solving our economic issues are as simple as giving more money to math and science. It would be a good start and a great investment. But Medicare and Social Security, programs liberals love, are stopping us from doing so.
Millennials Need Something to Hope For

Millennials are running out of hope. The economic crash and the government spending binge which followed it has left us with diminished income opportunities and a sizeable debt to payoff. All-in-all the federal government under the Democrats seemed to forget about us young adults. So argues a new article by Joseph Lawler in the American Spectator entitled Millennials and Hope. Lawler argues that, TRAGICALLY, the laws that Obama and the Democrats have passed to counteract the supposed decline of the middle class, such as the health care bill and parts of the stimulus, are at odds with what future generations need to continue moving up the income ladder as Americans have been doing. In other words, to appeal to the middle class, which is not in trouble, the Democrats in power are waging a war on the young workers of tomorrow, who are. Specifically, the Democrats are committed to serving the interests of public sector workers, and especially teachers unions. And this affiliation is just one of many ways in which Democrats support enormous present and structural federal budget deficits. The Democrats neglect of youth-friendly reforms together with their commitment to deficits amounts to what liberal budget expert Isabel Sawhill called a double whammy for the younger generations. On the one hand, the programs they need are not going to be there, and on the other hand theyre going to be stuck paying the bills for the elderly population and for the deficits that were creating. Rather than a focus on teachers unions, what we need is drastic changes in our education system. Rather than adding a healthcare plan, what we need is entitlement reform. Rather than piling up
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deficits in the false hope that it will help the economy today, what we need is a dose of concern over future generations. In short, what we need is a Washington who truly cares about future generations. What we need, is something to be hopeful about. Sadly, Democrats havent provided us with much of that.
Obamas Top 10 Top Priorities of 2010

What do you think President Obamas top priority should be? If youre like most people you probably said job creation or fixing the economy. Either would be a logical choice considering the rampant joblessness and overall dire state of our economy. Now normally when you think of top priority, you think of one thing. Namely, the issue that requires your attention first. So what is President Obamas top priority? As CBS discovered earlier this year, Obama has quite a few top priority issues. But not one to rest on his laurels, President Obama has come up with a range of new top priorities. So here it is. President Obamas Top 10 Top Priorities of 2010. Honorable Mentions:
Building Relationships with Spiritual Leaders: Thats why engaging priests, pastors, rabbis and other religious and community leaders across the country on issues that impact our families is one of President Obamas top priorities Special Assistant to the President Joshua DuBois Securing our Southwest Border: I have made securing our Southwest Border a top priority since I came to office. That is why my administration has dedicated unprecedented resources and personnel to combating the transnational criminal organizationsacross the border with Mexico
!"# Student Loan Reform: If we can cut those middlemen out [of the government loan programs], then youve got several billion dollars that you can invest in the programs that I just described.This is something that Ive made a top priority. President Obama 9. Stem Cell Research: President Obama made expansion of stem cell research and the pursuit of groundbreaking treatments and cures a top priority when he took office. Press Secretary Robert Gibbs
%# Energy Security: We talked about issues of how the climate is changing. We talked about how it threatened our national security because were dependent on other countries for what makes our country run . . . I dont accept second place for the United States of America. And thats why our energy security has been a top priority for my administration President Obama &# START Treaty: During a trip to Asia in November President Obama told Russian President Dmitry Medvedev that getting the Senate to ratify the nuclear weapons treaty was a top priority President Obama '# Free Trade Agreements: I dont want to close off trade with other countries I want to open those countries because thats a lot of where the growth is and thats where we can sell our products and weve got a competitive advantage. But weve got to keep on pushing and be tough in our negotiations, and thats something thats going to be a top priority. So thats on the trade side. President Obama (# Education: And thats why that is why, from day one of this administration, weve made excellence in American education excellence for all our students a top priority President Obama +# Middle Class Tax Cuts: My number-one priority is making sure that we make the middleclass tax cuts permanent, that we give certainty to the 98 percent of Americans who are affected by those tax breaks. President Obama )# Gulf Oil Spill: There has never been a point during this crisis in which this administration, up and down up the line, in all these agencies, hasnt, number one, understood this was my top priority getting this stopped and then mitigating the damage President Obama *# Helping Small Businesses and Banks: If we can start loosening up credit for small businesses, and helping smaller and community banks with their lending portfolios, that will make a huge difference in terms of the pace of our economic growth. So this is really a top priority for our administration. !# Job Creation: We agreed to continue working aggressively on our highest economic priority, which is creating jobs for our people. President Obama
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Rather than paying lip service to the constituencies behind these top priorities, heres to hoping Obama gets down to business and actually focuses on getting our economy back on the right track.
Operation Red November in 2011

Like 2010, Operation Red November in 2011 will be a grassroots movement by College Republicans nationwide to recruit and mobilize college students to vote and volunteer for Republican candidates in local and state elections. Currently, plans are being written to hire, train and deploy highly trained College Republican field Operatives to work alongside our 200,000 members on 1,500 campuses across country to make November 2011 as red as November 2010! For Operation Red November in 2011, the keys to success are: Recruiting, Training, Mobilizing and Web Activism.
Recruit. We will deploy College Republican field representatives to lead in the recruitment of new Republican students, targeted voter registration drives, campus canvassing, and organizing College Republican meetings on each campus. In 2011, we will deploy field representatives to do just that, and their presence in targeted areas will be crucial for victory. In addition, we will hire a regional field director to supplement local volunteer and field representative activities during key points during the election cycle. Train. As the nations largest grassroots political organization, training our members is vital to our continued success. Training programs cover every subject from youth activism to campus projects to fundraising to recruitment. Our field representatives will go through extensive training to fully understand their goals, establish state-specific plans for the fall, and elevate the skill level of our statewide leadership teams. When in the field, they will use this training everyday as they recruit and mobilize college students to vote and volunteer for Republican candidates. Mobilize. When the time comes, we will deploy thousands of College Republican volunteers from areas with fewer contested races to swing regions around the country. They will make a significant impact on the margins in closely contested congressional and gubernatorial races providing hundreds of thousands of man-hours making phone calls, walking neighborhoods, and performing the general ground work of campaigns. College Republican field representatives will coordinate weekly volunteer events in fall 2011 targeted around the field program. These volunteer efforts will include weekly nationwide
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pushes to get out the vote for Republican candidates. Although these events are critically important, the pinnacle of the field program is the final 96 hours before the election. During this time, field representatives will mobilize thousands of volunteers to get-out-thevote just days before the election to help ensure Republican victory.
Web Activism. We have engaged in an aggressive and finely tuned effort to reach out to youth voters online and engage them in messages tailored to the concerns of the Millennial generation. Voter registration forms, issue education, and links to center-right and allied coalitions are just a click away via www.CollegeRepublicans.org. We also reach out to tens of thousands of college students everyday through Facebook, Twitter, YouTube and FourSquare.
The College Republicans have launched Operation Red November in recognition that the ground has never been more fertile to win the support of Americas youth. Discouraged and upset from Democrats broken campaign promises, students are looking to the power of ideas. Through Operation Red November, the College Republican National Committee is driving and defining the debate among young people, and providing them with a major organized grassroots effort to elect responsible leaders who advocate for fiscally responsible change. If you would like to join with College Republicans and become an important part of Operation Red November, here are several ways you can take action: 1. Take the Operation Red November pledge to vote and volunteer for Republican candidates in 2011. Pledge yourself to Republican victory here. 2. Become a fan of Operation Red November on Facebook and suggest the page to your friends as well. Become a fan on Facebook here. 3. Tell your friends and family about Operation Red November by sending them an introductory email. Send an Operation Red November email to everyone in your inbox here. 4. Find the College Republican chapter nearest you and get them on board with making November 2011 as red as it can possibly be. Check to see if there is a College Republican club on your campus here. If there isnt one, learn how to start a club here. 5. Please consider giving to Operation Red November because its the generosity of supporters like you that make this possible. Make a donation here
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Top 10 Democrats Who Bit the Dust in 2010

The 2010 elections have been called nearly every natural disaster imaginable. From a Republican Tsunami, to a Political Hurricane, to the Earthquake Elections, its safe to say the midterms were a big deal. While Republicans made huge gains, Democrats suffered some terrible losses. So who were the top Democrats to bite the dust in 2010? Heres our Top 10 !"# Rep. Tom Perriello (VA-5) Perriello was only a freshman, but was nevertheless one of the more closely watched races in the nation. The reason is his close relationship with President Obama who singled him out for being courageous in voting for healthcare reform. That relationship manifested itself on the campaign trail where President Obama made several trips to campaign on Perriellos behalf. His loss signaled the ever-shortening coattails of the President and his policies. $# Rep. Rick Boucher (VA-9) Having spent nearly three decades in office and as chairman of the House Communications, Technology and Internet Subcommittee, Boucher was an important voice in a policy area of growing importance. His loss will likely serve as a death blow to the controversial net neutrality bill that could have opened the door to greater regulation of internet lines. His loss also means that Democrats lose a powerful voice in support of the capand-trade bill. %# Rep. Jim Oberstar (MN-8) Oberstar, chairman of the powerful Transportation and Infrastructure Committee, was first elected in 1974, having served 18 straight terms in one of the safest Democratic seats in the nation. In fact, hes never won by less than double digits and captured 70 percent of the vote in his last election. As one local newspaper wrote of his shocking loss, Oberstar has been around Washington politics so long that when he started as a congressional aide in the early 1960s, the House still had spittoons and women couldnt wear pants. But with a less than flattering record on spending and earmarks, it was time for Oberstar to go. &# Rep. Alan Grayson (FL-8) More loud than important, Grayson makes the list because of his combative and visible style. Grayson ran one of the more despicable campaigns in recent memory, calling his opponent Taliban Dan while taking Dan Websters words out of context.
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In one of his more infamous lines, Grayson said that Republicans healthcare plan was for patients to die quickly. As it turns out, his words better describe his political career. '# Rep. Ike Skelton (MO-4) Another of the Democratic old guard in Congress, Skelton had survived 17 election cycles spanning 33 years of service. Because of his loss Democrats lose a powerful player on a powerful committee with Skelton having served as chairman of the House Armed Services Committee. He was a strong supporter of the military, a social conservative, and he voted against Obamacare; nevertheless, his ouster shows the enormity of the Republican wave that defined the 2010 elections. (# Rep. Chet Edwards (TX-17) From Vice Presidential candidate in 2008 to out of office entirely in 2011, it has been a steep political fall for one-time rising star Chet Edwards. Edwards had been one of the more resilient members of the Democratic party. He was the only targeted Democrat to survive redistricting in 2003, and has won consistently despite a heavily Republican district. After all, his district encompasses George W. Bushs ranch! Edwards loss symbolizes that Republicans are finally ready to win where they should. +# Rep. John Spratt (SC-5): As the Budget Committee Chairman, Spratt was one of the more powerful leaders of Congress. Leader may not be the right word considering his committee failed to pass a budget for the first time in the history of the modern budget process. His loss is also historic, Spratts seat had not been held by a Republicans since Reconstruction! )# Rep. Paul Kanjorski (PA-11) The 13 term Democrat was the second-ranking member of the House Financial Services Committee where he chairs the Capital Markets Subcommittee. Thats a long way of saying hes important. His subcommittee is responsible for overseeing mortgage giants Fannie Mae and Freddie Mac which have cost taxpayers billions of dollars and are in dire need of reform. He was also a major player in crafting the financial overhaul, adding a provision that allows regulators to force businesses hand if they felt their actions were risky. His loss means Democrats lose a key expert in an area that is sure to be at the top of both partys agenda. *# Sen. Russ Feingold (D-WI) The news headlines read The End of a Progressive Champion following Feingolds defeat to Ron Johnson. He was widely known for being the only Senator to vote against the PATRIOT Act following the 9/11 attacks on the World Trade Center. Hes also voted to the left of his own party by voting against the bailout of financial institutions and the regulations of Wall Street because they didnt go far enough. He liked to call himself a maverick, but to voters he was just another liberal Democrat.
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!# Gov. Ted Strickland (OH) The race symbolized the enormous Republican gains made in nationwide governors races in a crucial redistricting year. It also sets the table for the 2010 presidential race. As one Democratic strategist explained, If we can hold on to Ohio, we can create a firewall for President Obama. He can lose all other eight states he flipped [from the Republican column,] but if he holds Ohio, he can win with exactly 270 [electoral] votes. Ted Strickland losing makes the math that much more difficult for Democrats in 2012. Agree? Disagree? Let us know what we missed by commenting below.
Top 10 Democrats We Loved to Hate in 2010

Theres nothing in this world so sweet as love. And next to love the sweetest thing is hate, said American poet Henry Wadsworth Longfellow. Hes right. In that spirit, weve compiled a list of the top 10 Liberals We Loved to Hate in 2010. These are people who do the most ridiculous things, say the most absurd stuff, and generally just get under our skin. But at the end of the day we still find ourselves hopelessly churning through the news to see what bizarre things these people would say or do next. And God bless them, they rarely let us down. So here it is, the 10 Democrats We Loved to Hate in 2010: 10. Ben Nelson: For a few moments in 2010, we actually did love this guy. He, and his merryband of Democratic misfits, seemed prepared to vote with Republicans and put an end to Obamacare in the Senate. The longtime abortion opponent argued that the bills language to ban public funding of abortion is not sufficient. And then he sold out. In exchange for a yes vote, Reid gave Nelson permanent and full federal aid for his states expanded Medicaid population. For proving that your morality has a price, we love to hate you Senator Nelson. 9. Paul Krugman: There is no doubt that hes smart. Just read one of his columns and hes sure to tell you that. But any iota of intelligence is covered up by his thick doses of smarm. Well, smarm, and a limited range of ideas. Pick up his column and I can almost guarantee you it covers one of the following topics: the stimulus was too small, debt is good, austerity is bad, dont worry about inflation, Republicans dont care about the deficit, or, my personal favorite the stimulus was too small. Regardless, I still find myself drawn to his column just to hear him call Paul Ryan, one of the few politicians with ideas on the deficit, a flimflam man with ideas drenched in flimflam sauce. Where does he come up with this stuff! So, for going from Nobel to noxious in no time flat, we love to hate you Mr. Krugman.
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8. Barbara Boxer: Barbara Boxer is an angry woman. Im sorry, I should have said Senator Boxer. Wouldnt want to face the same fate as Brigadier General Michael Walsh whom she chided for not calling her by her title. Interrupting the General during his testimony Boxer said, Could you say senator instead of maam? Its just a thing. I worked so hard to get that title. Id appreciate it. Well she sure isnt working hard to earn our respect. Beyond her climate change crusade, her main accomplishment in the Senate has been perfecting her condescending, haughty, patronizing, and paternalistic style. And for that, we love to hate you madam Boxer. 7. Rachel Maddow: The queen of conspiracy theories. Once you sort through the inanity of her show, it really consists of three fundamental parts: (1) the part where she taps her pen on her desk to authoritatively prove her point, (2) the part where she conflates the opinion of one Republican onto the entire party to show just how kooky we really are, and (3) the part where she shows a clip of a Republican in office followed by her weird and repeated intonation of the phrase youre lying. For having a schtick as predictable and boorish as Digger Phelps tielighter, we love to hate you Ms. Maddow. 6. Keith Olbermann: Another one we used to love! Granted it was back when he was a Sportcenter anchor rather than an MSNBC partisan hack. Now he just comes off as a more caustic, less entertaining version of John Stewart. In fact, Olbermanns show has become such a parody of liberal hatred, that fellow left-winger Stewart skewered Olbermann at his Rally to Restore Sanity. To appear less divisive, Olbermann immediately suspended his Worst Person in the World gimmick because its satire and whimsy have gradually gotten lost in some anger. Dont worry, were here to pick up where Keith left off. So for being the Worst Person in the World, you Mr. Olbermann are someone we love to hate. 5. Helen Thomas: She has covered the administrations of 10 presidents in a career spanning 60 years. She was the first female office of the National Press Club and the first female member and president of the White House Correspondents Association. But she promptly through that all away in the past year by making a variety of anti-Semitic comments. Saying that the Jews should get the hell out of Palestine and go back home to Poland, Germany, and America and everywhere else with a camera stuck in your face is a quick way to end a career. She then retired and apologized. But we hadnt heard the last of Ms. Thomas. In December she apparently went back on her apology saying that I paid a price, but its worth it to speak the truth. And because we too must speak the truth, we proudly proclaim Helen Thomas someone we love to hate. 4. Joe Biden: He may only be Vice President of the United States, but he is without a doubt the President and Supreme Ruler of gaffes. This year was filled with them. From wrongly saying that the Irish Prime Ministers mother had died (she alive and well) to whispering audibly to the President that signing the healthcare bill was a big f**king deal, Biden was always fun to be around. But our personal favorite gaffe-of-the-year was when Biden visited a frozen custard store
in Wisconsin. When Biden asked what he owed the manager said, Dont worry, its on the houseLower our taxes and well call it even. Never one to stay quiet for long Biden asked the manager, Why dont you say something nice instead of being a smartass all the time? For making buying frozen custard a national incident, and keeping conservatives wildly entertained in the process, Joe Biden is a man we love to hate. 3. Harry Reid: Another gaffe-prone politician. This years biggie was the revelation that the Senate Majority Leader described Barack Obama as a light skinned African-American with no Negro dialect, unless he wanted to have one. But what really made us love to hate him was his wonderful mismanagement of his enormous Senate majority. His failure to keep the Democratic coalition together in the healthcare debate, partly because of the special deal he gave his home state of Nevada, led many Democrats to decry his lack of leadership. Somehow he squeaked by this election cycle, meaning we get at least six more years of this Senator that we love to hate. 2. Alan Grayson: This loudmouthed liberal made headlines for all the wrong reasons in 2010. From saying the Republican healthcare plan was for patients to die quickly, to calling a female Federal Reserve adviser a K-Street whore, to nicknaming his Republican opponent Taliban Dan after taking his words out of context, Grayson wasnt known for holding back. I mean, you know youre a crazy liberal when the best the left-leaning New York Times can say about you is: Grayson has catapulted himself to national renown for outlandish rhetoric and a pugilistic political style that makes him seem less staid lawmaker than a character on the lam from one of his Orlando districts theme parks. The voters didnt appreciate his crazy antics, voting him out of office after one term. Id like to say that well miss you Alan Grayson, but the truth is wont, though we do still love to hate you. 1. Nancy Pelosi: Could it have been anyone else!?! Pelosi, even more than President Obama, became the face for everything that was wrong with the Democratic Party. She was out of touch, imperialistic, and whats more, didnt care one bit. Its all perfectly summed up in her now famous line, We have to pass the (health care) bill so you can find out what is in it. But despite her partys enormous losses the former Speaker of the House refused to go away quietly. Instead she announced that she would be returning as the House Minority Leader. More time in the spotlight for Nancy P-ego-si, the number one liberal we absolutely love to hate.
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CRNC Research Compendium December 2010: Editor: Brandon Greife, Political Director

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CRNC Research Compendium December 2010: Editor: Brandon Greife, Political Director

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CRNC Research Compendium December 2010

Editor: Brandon Greife, Political Director

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