The Foundation

“We must not let our rulers load us with perpetual debt.” –Thomas Jefferson

Government & Politics

Deficit Deceit

The Congressional Budget Office released new budget estimates Wednesday predicting that the federal deficit will reach a record of nearly $1.5 trillion this year, or almost 25 percent of GDP. The national debt is fast approaching its current $14.3 trillion ceiling. This grim news came less than 12 hours after Barack Obama tried to sound a note of fiscal responsibility in his State of the Union address – a speech during which the federal debt increased by another $100 million.

Of course, CBO’s projections for the next 10 years assume that all of the Bush tax rates, not just those on the “rich,” will be repealed in 2013; that 25 million more Americans will be hit with the Alternative Minimum Tax; and that Medicare reimbursement rates to doctors will be cut severely. Plus, because of Democrats’ budget gimmickry, CBO still views ObamaCare as a deficit reducer rather than the mammoth entitlement spending that it truly is.

To the contrary, Brian Riedl of the Heritage Foundation calculates that the numbers aren’t as bad as we think … they’re worse. “Annual deficits never fall below $1 trillion” over the next 10 years he wrote, “and even that assumes a return to peace and prosperity.”

Obama’s SOTU response was to push for a “freeze” in non-defense discretionary spending for five years. That sounds serious, but it will save a paltry $26 billion over that time, while his new proposals for “investment” would cost $20 billion each year. Besides, Democrats have also established a new “floor” for federal spending, so this “freeze” means little. Congressional Republicans set out a far better plan – returning spending to pre-bailout, pre-stimulus levels – with the Spending Reduction Act of 2011. This is far from perfect, but it’s a good start.

The road to fiscal sanity will be difficult. “These cuts will go deep and wide and will hit virtually every agency and every congressional district in this country, including my own,” explained House Appropriations Committee Chairman Harold Rogers (R-KY). “Every dollar that we cut will have a constituency, an industry, an association and individual citizens who will disagree with us.” That’s exactly why Democrats have the easier position to defend.

If the Spending Act cuts seem deep, however, consider newly elected Kentucky Republican Sen. Rand Paul’s plan for reducing spending by $500 billion each year. Paul’s ambitious plan calls for eliminating, defunding or consolidating the U.S. Departments of Education, Housing and Urban Development, Energy, and other agencies. “Pretty much everything is in it,” said Paul. He also knows what he’s up against, pointing out that Obama and the Democrats “still see government as a solution to everything.”

Paul makes a convincing case: “By rolling back to 2008 levels and eliminating the most wasteful programs, we can still keep 85 percent of our government funding in place. By removing programs that are beyond the constitutional role of the federal government, such as education and housing, we are cutting nearly 40 percent of our projected deficit and removing the big-government bureaucrats who stand in the way of efficiency in our federal government.” That’s more like it.

Quote of the Week

“Even supporters of the president and the Alinskyite radicalism that dominates his party will find it hard to acclaim [Barack Obama’s] decision to spend 60 minutes sermonizing about government being more important than suffering Americans give it credit for during a hard recession. Are you impressed with the Internet? With your iPad? With that gadget on your car’s dashboard that gets you back on the Interstate after you get lost in a strange city? Thank Washington, because according to the president Washington ‘planted the seeds for the Internet. That’s what helped make possible things like computer chips and GPS. Just think of all the good jobs – from manufacturing to retail – that have come from these breakthroughs.’ If you don’t remember Presidents Carter or Reagan or Clinton bragging about the initiatives of their administrations that would one day bear the fruit of global social networks like Facebook, handheld communication devices like BlackBerrys, and the mobility revolution of Wi-Fi, it’s because they didn’t. Government didn’t bring us any of those things; the private sector did. … Yet all we heard for much of nearly 7,000 words were exhortations to appreciate Washington’s ever-growing role in the U.S. economy.” –Investor’s Business Daily

This Week’s ‘Braying Jackass’ Award

“We want to cut with a scalpel as opposed to a chainsaw.” –Barack Obama

Hope ‘n’ Change: Waivers Pile On

The Hill reports, “A week after Republicans announced plans to investigate waivers granted to organizations for healthcare reform provisions, President Obama’s health department made public new waivers for more than 500 groups.” The waivers exempt recipients from some of the more onerous requirements of the law, such as minimum coverage. Prior to this week, there were already 222 waivers granted to companies, unions or other organizations covering 1.5 million individuals. Now, that list is 729, including four states – Massachusetts, New Jersey, Ohio and Tennessee.

Rep. Trey Gowdy (R-SC) has promised to investigate, saying, “If there are exemptions, what was the process by which those exemptions were sought and given? I think those are fair questions to ask.” Forget investigations, just repeal the law.

New & Notable Legislation

Speaker John Boehner (R-OH) and Sen. Joe Lieberman (I-CT) announced legislation this week that would restore the Washington, DC, Opportunity Scholarship Program to provide school vouchers for low-income families to help send their children to private schools. The original OSP, dating back to 2004, was broadly considered a success by parents and analysts who tracked a noticeable rise in reading scores for students who were in the program.

Yet despite the obvious success of OSP and the fact that DC is home to some of the worst public schools in the nation, Barack Obama let the program die in 2009. This was an obvious sop to teachers’ unions, who dislike vouchers because they dilute the public school population and expose the failings of the system in general. Education Secretary Arne Duncan went so far as to revoke 216 scholarships that had already been approved, dashing the hopes of all the families involved. Obama attended private school, and he sends his own daughters to private school as well. It’s nothing short of hypocritical that he would prevent low-income students from having the same opportunity.

Boehner, a long-time supporter of education reform, wants to authorize scholarships in the district up to $8,000 per year for elementary students, and $12,000 for high school students. This is a bargain when one considers that the government spends about $28,000 per pupil per year in DC. Boehner’s bill is a bold move that will reinvigorate the education debate and force Obama to choose whether he really wants reform, or merely a continuing kowtow to the unions.

News From the Swamp: Senate Retirements

The first wave of post-election 2010 Senate retirement announcements has come ashore. Among those heading back to private life in 2012 are Kay Bailey Hutchison (R-TX), Joe Lieberman (I-CT) and Kent Conrad (D-ND). All things considered, this is pretty good news for Republicans looking to take the Senate in 2012. Conrad’s retirement could lead to a pickup for the GOP, which had a strong showing in the state in 2010. The party needs to pick up only four total Senate seats to win the majority. GOP prospects are sweetened by the fact that Democrats have to defend 23 seats in the next election, while the GOP needs to guard only 10. Speculation has begun over who might be next. Jim Webb of Virginia and Herb Kohl of Wisconsin will be facing strong opposition from Republicans, and Ben Nelson of Nebraska and Daniel Akaka of Hawaii might also contemplate retirement if their challenge grows too great.

Emanuel Off the Ballot, Then Back On Again for Chicago Mayor

Rahm Emanuel’s bid for mayor of Chicago hit a speed bump this week when an appellate court decision kicked him off the ballot by ruling that he failed to qualify as a candidate under the residency requirement. All candidates must have been residing in the city for a full year prior to the election in order to run, but the court ruled that Emanuel, who has resided in Washington since early 2009 and didn’t return to the city until last October when he resigned as White House Chief of Staff, was ineligible.

Thursday, however, the Illinois Supreme Court ruled 7-0 that Emanuel did in fact qualify because he was out of the city on the business of the United States, commentary on the merits of that business aside. Emanuel successfully argued that he qualifies for residency because he continued to pay taxes, vote in local elections, own a home, and maintain his drivers’ license.

Emanuel is on the fast track now, with a secure lead in the polls. He has raised nearly $12 million for his campaign, which is more than double his five challengers combined. Of course, his former boss, the president, is also from Chicago and has vocally supported his candidacy, and Emanuel is in with the Daley political machine, one member of which has replaced Emanuel in his old job. It seems that in the Windy City, whatever goes around comes around.

National Security

Warfront With Jihadistan: IG Report on Afghan Readiness

U.S. troops continue to pound al-Qa'ida and Taliban targets in Afghanistan and secure recent gains, but the ground game to get the Afghan government and army ready to take over for U.S forces is becoming seriously bogged down. On Monday, the Special Inspector General for Afghanistan Reconstruction, Arnold Fields, told the Commission on Wartime Contracting that it is doubtful that U.S. authorities can build enough bases and training facilities for the Afghan army by 2013, the year that Afghan forces are supposed to secure their own country.

In order to meet the goal of recruiting and training the 240,000 Afghan soldiers and 160,000 Afghan police that will be needed, the U.S. has 884 projects, valued at $11.4 billion, planned for completion. To date, however, only 133 projects are finished, and just another 78 are under construction. This leaves some 673 projects to be completed by 2013, requiring a miraculous completion rate of about one project per day. That will not happen.

Fields told the commission that there is no overall plan to either set priorities or maximize resources, nor is input from the Afghan government taken into consideration. Throw in questions such as how will the Afghans even be able to maintain these new bases on their own, and it’s clear that 2013 will not be the year the Afghans take over. As we have warned, 2013 is nothing more than an arbitrary and unrealistic timeframe chosen by Obama that, as is now being demonstrated, has no relationship to reality. Our troops deserve better.

On Terror Convictions

The Obama administration, “focused like a laser beam” on unemployment, seems just as “focused” when it comes to justice for victims of terror. Maybe that’s why the murderer of journalist Daniel Pearl, not to mention the mastermind of the 9/11 attacks, Khalid Sheikh Mohammad, still hasn’t been brought to justice after nearly 10 years.

KSM was videotaped decapitating Pearl, and he helped plan the fiery deaths of thousands. Attorney General Eric Holder cannot allow his idiotic decision to try this case in a New York federal court to become a circus and a forum for the terrorists. Even worse, Holder’s inability to face the political consequences of that bad decision makes us a laughing stock around the world.

Meanwhile, 13 years after the fact, a former Guantanamo detainee was sentenced to life in prison after he was convicted of conspiracy in the bloody 1998 bombings of U.S. embassies in Kenya and Tanzania. Ahmed Khalfan Ghailani, who had been held for years at Gitmo, was sentenced by a U.S. civilian court last week, the first such conviction in a civilian court. Of course, that was after he had been acquitted on 284 of 285 charges.

Perhaps this is the reason why the Obama administration announced quietly (and somehow with no howling, no screaming and no sanctimonious cries of “kangaroo court” from the Leftmedia) that it will resume military tribunals for those being held at Guantanamo. Yet somehow lost amid all this is an important question: Will Barack Obama ever summon the decency to apologize for all the Bush anti-terrorism policies – such as wiretaps, renditions, drone attacks, overseas prisons, and military tribunals – that he roundly condemned as a candidate but now tacitly endorses as president? Our guess is no.

In related news, the Department of Homeland Security has announced the end of the much-maligned color-coded terror alert system. DHS Secretary Janet Napolitano said, “In its place, we will implement a new system that’s built on a clear and simple premise: When a threat develops that could impact you – the public – we will tell you.” What a novel concept. Furthermore, she said, “Task Force membership believes the color code system has suffered from a lack of credibility and clarity leading to an erosion of public confidence such that it should be abandoned.” It took a task force to figure this one out?

Egyptian Protests Erupt

Anti-government protests in Egypt broke out this week against President Hosni Mubarak, who Vice President Joe Biden assures us is “not a dictator.” Sure thing, Joe. Tens of thousands have taken to the streets of Cairo and Alexandria calling for democracy and regime change (i.e., “hope ‘n’ change”). There are many aspects to this unrest, perhaps most fundamentally that Muslims are an excitable lot, but our primary interest here is that the government’s response has been to shut down telephone and Internet services. Isn’t it interesting that Barack Obama is pushing for an “Internet kill switch” here in the U.S.? We might want to think twice about giving it to him.

RAND Says Military’s Alternative Fuels Aren’t Worth It

Shocking no one, a new RAND Corporation study concludes that untold billions of taxpayer dollars spent researching alternative fuels have produced no discernible military benefit. According to The New York Times, “In particular, the report argued that the Defense Department was spending too much time and money exploring experimental biofuels derived from sources like algae or the flowering plant camelina, and that more focus should be placed on energy efficiency as a way of combating greenhouse gas emissions.”

Few, if any, economically viable alternative fuels currently exist, so this report is not surprising. Nevertheless, the Pentagon is planning to spend $300 million in “stimulus” funds to improve the military’s fuel efficiency. While the goal is laudable, the central government is uniquely unsuited to test and research alternative fuels.

Predictably, researchers funded by government largesse defend their unbroken record of failure by criticizing each other’s projects and sounding like bureaucrats justifying their existence by describing their important work. The government should stop researching because it isn’t competent enough to improve upon technology that first appeared when traffic lights were invented.

Business & Economy

Income Redistribution: Fannie’s Legal Bill Hits Taxpayers

This week, The New York Times “analyzed” the “accounting irregularities” of mortgage giants Fannie Mae and Freddie Mac that led to the housing meltdown in the fall of 2008. Since the subsequent government takeover of those two companies, the American taxpayer has dished out $160 million to defend Fannie and Freddie bigwigs in civil lawsuits, and that’s only the beginning. The huge price tag was kept a secret until last week, when the companies and their regulator responded to a congressional request spearheaded by Texas Republican Randy Neugebauer, who is now chairman of the oversight subcommittee of the House Financial Services Committee.

It’s still not clear why taxpayers are on the hook for these legal bills. Fannie Mae’s bylaws prevent indemnification of officers and directors when they have breached their duty to the company or shareholders, when they have not acted in good faith or are guilty of intentional misconduct. But when law professor and former assistant secretary of the Treasury Richard Carnell asked why the bigwigs were not paying their own bills, he received this vague response from Edward J. De Marco, acting director of the Federal Housing Finance Agency: “I understand the frustration regarding the advancement of certain legal fees associated with ongoing litigation involving Fannie Mae and certain former employees. It is my responsibility to follow applicable federal and state law. Consequently, on the advice of counsel, I have concluded that the advancement of such fees is in the best interest of the conservatorship.”

If the Fannie and Freddie executives are found guilty, they are supposed to repay the government for their legal fees, but experts agree it will be exceedingly hard to collect that kind of money from individuals.

Unfortunately (but predictably), the Times failed to address two of the main causes leading up to the crisis, namely Democrat Rep. Barney Frank (MA) and Sen. Chris Dodd (D-CT), who pushed their subprime lending agenda and repeatedly opposed calls to get the mortgage giants under control. Indeed, the Times didn’t even bother to reference its own 2003 article in which it outlined the Bush administration’s proposal to prevent precisely the implosion that happened five years later.

Regulatory Commissars: Verizon Sues FCC Over Net Neutrality

Early last April, the Federal Communications Commission (FCC) lost a big one in the courts when the U.S. Court of Appeals for the District of Columbia ruled that the agency lacked authority to require broadband providers such as Comcast, Verizon and AT&T to give equal treatment to all Internet traffic flowing over their networks. The would-be requirement is euphemistically known as network (or “net”) neutrality.

Seven weeks later, in separate letters, 74 House Democrats and 37 Senate Republicans told FCC Chairman Julius Genachowski in no uncertain terms to abandon his plans to impose controversial new rules on broadband providers until the Congress changes the law. Did the FCC get the message? Of course not. Eight months after the FCC lost in the Court of Appeals, the FCC approved “enforceable” net neutrality regulations.

The idea of the FCC as an Internet traffic cop doesn’t sit well with many, including Verizon, which last week became the first company to challenge the FCC’s new set of net neutrality rules. Guess who’s hearing the case – the same court that ruled last April that the FCC lacked authority to issue net neutrality regulations.

Post Office Could Close 2,000 Branches

The U.S. Postal Service, in response to its continuing fiscal crisis, has decided that beginning in March it could close 2,000 branches. That would be on top of the 491 branches it already placed on the chopping block last year. Another 16,000 are under review, and the decision has sparked protests from around the country, particularly in rural areas.

Specifically authorized by the Constitution, the U.S. Postal Service has been a staple of American life since the country’s founding. Even today, many Americans living in small towns see the post office as a meeting place and a link to the outside world. Closing it, they argue, would place an undue burden on its citizens, particularly the elderly. Current U.S. law prohibits closures for financial reasons, but those in favor of the plan are lobbying for a change.

The USPS has been bleeding money since before the recession and suffered an $8.5 billion loss in 2010. Officials blame the digital age for falling revenues, and while it’s true that many people pay bills and conduct other mail-related business online these days, the crisis has also exposed a more likely cause of the budgetary blowout: the postal union. Postal workers, per their union contract, pay less than other federal employees for their health and life insurance benefits. In addition, a law passed by Congress in 2006 mandates that the USPS pre-fund retiree health benefits, forcing the agency to borrow from the federal government to the tune of $12 billion.

This has prompted some politicians, including Senator Susan Collins (R-ME), to demand that the USPS cut employee benefits before resorting to closing branches. Given the union chokehold, however, that doesn’t seem likely.

Around the Nation: Bankruptcy Could Become Option for States

With the prospect of free-flowing federal largesse pretty much out of the question thanks to a newly elected Republican Congress, several states are being pressed to come up with more difficult solutions to their financial problems. Short-term deficits are one thing, but the 800-pound gorilla in the room is the unfunded pension burden many states are staring at. Those billions due to retired state employees will likely drain state treasuries at a time when other services are being cut thanks to continued revenue shortfalls.

Unions remain defiant about their role in the affair. Charles Loveless, legislative director of the American Federation of State County and Municipal Employees, cried that budget cutters “are readying a massive assault on us.” Adopting bankruptcy rules for states similar to the Chapter 9 procedure that municipalities can use would allow states to revamp the union’s lucrative labor and pension contracts.

Yet while Congress may be ready to take such a step, constitutional stumbling blocks such as state sovereignty as well as treatment of bondholders remain. Placing bondholders at the back of the line for repayment could trigger a panic in that normally placid market and raise borrowing rates for cash-strapped states. In any case, the problem isn’t going away soon and the solution may be bitter medicine. Those gold-plated pension packages for government employees may end up going the way of the buggy whip – a reminder of a far different financial era.

Can the Federal Government Discover New Drugs?

It’s a classic ploy: Government creates a problem then turns to itself to solve it. Apparently, our federal government has $1 billion lying around doing nothing, so the Obama administration decided to horn in on the action of drug development. The newly created National Center for Advancing Translational Sciences (NCATS) has been charged with doing the research necessary on chemical compounds, enzymes and gene development to facilitate further investment by private companies. “None of this [research] is intended to be competitive with the private sector,” said Dr. Francis Collins, director of the National Institutes of Health (NIH). Color us skeptical.

NCATS will be a division under NIH, and Collins has vowed to fund the nascent bureau even at the expense of other portions of NIH. The National Center for Research Resources is the most likely target for cutting or outright dissolution.

There are always those who point out that NASA research led to a number of useful items further developed in and marketed from the private sector. But pharmaceutical research is a $45 billion annual industry, and the new group likely will not be required to jump through all the governmental hoops just to bring new drugs to market. Another unanswered question: Will NCATS have the same liability issues as private-sector firms?

It’s those aspects that have dampened the enthusiasm of drug manufacturers to spend the billions required to bring breakthrough products to consumers. No $1 billion “investment” would be needed to fix them.

Culture & Policy

Tucson Shooter Pleads Not Guilty, Sheriff Could Face Recall

Sixteen days after his shooting rampage in Tucson killed six people and injured 13 others – including Rep. Gabrielle Giffords (D-AZ) – Jared Lee Loughner pleaded not guilty on Monday to three counts of attempted murder. More charges will be forthcoming. Of course, the fact that he researched assassins before his attack won’t help his “not guilty” plea. The Associated Press reports that Loughner “smiled and nodded but didn’t speak as he appeared in court.”

One person who had no trouble wagging his tongue in the wake of the attacks, however, was Pima County Sheriff Clarence Dupnik. With blood still marking the crime scene, Dupnik announced his one-man verdict, pointing all fingers at the Tea Party and right-wing radio. Well, it looks as if the people of Pima County don’t fancy being taken for a political spin, and they aren’t supporting their local sheriff. Instead, some are getting behind an effort to recall Dupnik. “Sheriff Dupnik played a critical role in bringing an all-time low to American politics and drove a wedge deep between right and left,” notes John Bambenek of BigGovernment.com. “His demonstrated lack of integrity has shattered the public trust and he can no longer effectively continue in his role.” We couldn’t agree more.

Keith Olbermann: The End of an Error

After nearly eight years on MSNBC and with no warning, lefty ranter Keith Olbermann abruptly announced last Friday the end of his nightly “Countdown” show, saying that the evening’s edition would be his last. Blogger Doug Powers noted that the “blogosphere lit up … when the news of his exit … was announced,” with Huffington Post commentators “pledging to never watch MSNBC’s primetime shows again” (probably cutting the network’s viewership in half).

In stark contrast to the blogosphere’s excitement, NBC Universal issued perhaps the blandest statement possible regarding Olbermann’s departure, noting simply, “MSNBC and Keith Olbermann have ended their contract. The last broadcast of ‘Countdown with Keith Olbermann’ will be this evening. MSNBC thanks Keith for his integral role in MSNBC’s success and we wish him well in his future endeavors.”

Olbermann has long been known to his various employers as an insufferable jerk, but if some fans have their way, his “future endeavors” will include a run to replace retiring Connecticut Senator Joe Lieberman. A group of “Olbermann for Senate” activists has already set up Facebook and Twitter pages, and a website is soon to follow. (If that doesn’t work out, there may be a windbag sheriff’s vacancy in Arizona opening up soon.) Too bad Olbermann couldn’t have announced his candidacy during his last show. At least then he could have gotten the word out. Oh wait, never mind. No one watched him anyway.

Climate Change This Week: About Those Himalayan Glaciers…

In an inconvenient development, researchers have released findings that Himalayan glaciers are advancing, not melting, as was reported in 2007 by the Nobel Prize-winning UN Intergovernmental Panel on Climate Change. In fact, the UN panel had said the glaciers would be gone by 2035. Dr. Rajendra Pachauri, who chaired the UN committee, later admitted the report’s error, which was sourced to a report from the militant environmentalist World Wildlife Fund. Pachauri didn’t offer to give back the Nobel, though.

According to the UK Telegraph, “The new study by scientists at the Universities of California and Potsdam has found that half of the glaciers in the Karakoram range, in the northwestern Himalaya, are in fact advancing and that global warming is not the deciding factor in whether a glacier survives or melts.” The authors conclude, “Our study shows that there is no uniform response of Himalayan glaciers to climate change and highlights the importance of [rock and mud] cover for understanding glacier retreat, an effect that has so far been neglected in predictions of future water availability or global sea level.”

And Last…

Many of you know Democrat Rep. Dennis Kucinich as the ever-failing far-left presidential candidate from Ohio. The diminutive Kucinich has provided more than his fair share of laughs over the years, but he may have just outdone himself. The congressman has filed suit against the operators of the congressional cafeteria, seeking $150,000 in damages because of a vegetarian sandwich wrap he bought there in April 2008. More precisely, the source of the problem was the olive pit in the sandwich that he bit into, which allegedly caused “serious and permanent dental and oral injuries.” The suit further claims that the food “was unwholesome and unfit for human consumption.” We can’t yet confirm reports that the pit was actually a wire planted by Tea Party troublemakers, but we’re looking into it.