Coburn, Conrad Discuss Payroll Tax Cut Extension

With the government once again deadlocked on the issue of extending the payroll tax cut, both the Democrats’ and the Republicans’ plans have been voted down in the Senate. With less than a month to go before the end of this year, the question is whether American families will be looking at paying more taxes in the next?

In an attempt to answer that question, Republican senator Tom Coburn of Oklahoma and Democrat Kent Conrad of North Dakota sat down with Fox News Sunday this weekend.

Republicans were criticized for favoring an extension of the tax cut without paying for it with a surtax on high-income earners as has been proposed by Democrats. Coburn agreed, arguing that the notion of creating a temporary tax break and paying for it over ten years was why America is “bankrupt as a nation.”

Whether or not we continue a reduction in the amount of taxes that come to Social Security is one thing. Paying for it, we have so much waste in Washington to take ten years to pay for it is ridiculous.

With Republicans critical of the tax cut extension and Democrats pushing for it, the parties find themselves in unfamiliar territory. Usually, it is the Republicans who want to lower taxes.

Coburn dismissed the Democrats’ exercise as “pure politics. It was all for playing a game,” he said.

America is tired of that. They want real solutions to the problems we have. And all we were doing is playing a charade and America saw right through it.

Senator Conrad disagreed. He argued that an extension of the payroll tax cut would help the American middle class in tough economic times. Letting it lapse could cost one million jobs, he claimed, and reduce short-term growth prospects. “What the country needs right now is additional lift for the economy.”

Republicans have for several years insisted that raising taxes in the middle of a recession was a terrible idea.

When Senator Coburn was asked what he thought would happen, he said it was likely that both the tax cut and unemployment benefits would be extended for another year but added that, “the question the American people ought to ask is, where is the backbone in Washington to actually pay for these extensions in the year in which the money is spent?”

Gates Warns Against Isolationism After Afghanistan

Secretary of Defense Robert Gates speaks to United States Marines deployed in Afghanistan, March 9, 2010
Secretary of Defense Robert Gates speaks to United States Marines deployed in Afghanistan, March 9, 2010 (DoD/Cherie Cullen)

Secretary of Defense Robert Gates is due to retire two weeks from now. The only leftover from the Bush Administration in President Barack Obama’s cabinet reflected on the war in Afghanistan and the future of American armed forces in interviews with Fox News Sunday and CNN’s State of the Union.

A number of American combat forces are scheduled to withdraw from Afghanistan this summer. Asked how many troops could start coming home, Gates cautioned in an interview with ABC last week that the president’s “judgement call has to be made in a context of a wide variety of issues.”

On Fox this Sunday, Gates reiterated that his job was to present the president with various options and lay out the potential complications that come with them. He refused to mention a specific number however so Chris Wallace asked instead what he thought of the administration’s strategy. “We have had a lot of success over the last fifteen months in Afghanistan,” he said, praising the “surge” initiated by President Obama. “The conditions on the ground are far better than they were a year ago.” The president, he added, would not jeopardize the gains made by the military under his watch.

When asked if he was concerned about the growing isolationism in his own party, Gates said that he worried about politicians who see defense and American engagements around the world as a way to reduce the nation’s fiscal woes. “I believe that misstates the problem,” he said before pointing out that as a share of gross domestic product, defense spending is at its lowest since before World War II except for a brief spike in the 1990s. He urged skeptics of the war to wonder, “what’s the cost of failure?”

On CNN, Gates explained that “failure is a huge challenge for the United States” and could have “costs of its own that will linger with us for a longer time as was the case in Vietnam.” The parallel with the Vietnam War is appropriate, he told Newsweek. “That is we came to the right strategy and the right resources very late in the game. President Obama, I think, got the right strategy and the right resources for Afghanistan — but eight years in.”

“We abandoned Afghanistan once and we paid a very heavy price for it in the attacks of 9/11,” Republican senator John McCain said on ABC’s This Week on Sunday. “For us to abandon Afghanistan to the tender mercies of the Taliban and radical Islamic extremists, I think would be repeating mistakes we made before.”

Interventionists like McCain seem to be in the minority among Republicans however. There is division within the party not just over the intervention in Libya but American involvement in Afghanistan as well. Centrist presidential candidates Mitt Romney and John Huntsman have both suggested to withdraw from the country altogether; something Senator McCain, himself a former presidential contender, warned against.

“I wonder what Ronald Reagan would be saying today?” he pondered, arguing that isolationism is a stark departure from traditional conservative foreign policy. “That is not the Republican Party that has been willing to stand up for freedom for people for all over the world.”

Gates agreed that “Congress is all over the place” and “the Republicans are a perfect example. I mean, you’ve got the budget hawks and then you’ve got the defense hawks within the same party. And so I think there is no consensus on a role in the world.”

“I’ve spent my entire adult life with the United States as a superpower,” the former intelligence director reminisced in Newsweek, “and one that had no compunction about spending what it took to sustain that position. It didn’t have to look over its shoulder because our economy was so strong. This is a different time.”

More than half of Americans believe that the war in Afghanistan has not been worth fighting according to a poll recently conducted for ABC News and The Washington Post. 73 percent of respondents said that the United States should withdraw a substantial number of troops from the country this summer.

Gates acknowledged that the American people were tired of war on State of the Union but he stressed that “the United States had a very limited commitment in Afghanistan until well into 2008. And we didn’t have the right strategy and the right resources for this conflict and a lot of resources — those needed to do the job — until the late summer of 2010.”

“We were diverted by Iraq,” the secretary admitted, “and we basically neglected Afghanistan for several years.” The president’s responsibility, he said on Fox News Sunday, “is to look out for the long term national-security interest of the United States. He has to have a longer view.”

Mitch Daniels, Mike Huckabee Talk 2012

Two possible Republican presidential contenders for 2012, Indiana governor Mitch Daniels and former Arkansas governor Mike Huckabee, appeared on Fox News Sunday this weekend.

Daniels, who as governor has managed to avert the sort of fiscal catastrophe looming that is in many other states, is in the middle of a stalled legislative session as many Indiana Democrats are in Illinois to avoid having to vote on public-sector reforms.

The opposition originally left the state in protest of a bill that would make Indiana a “right to work” state, allowing employees to opt out of joining a labor union if there is one in their field of work. That bill is dead now but the Democrats have yet to return, citing eleven more bills that they won’t vote on.

Daniels refused to negotiate as long as the Democrats were out of the state. “While they are subverting the democratic process, there is nothing to talk about,” he said, adding: “they ran off to Illinois ostensibly over the right to work bill. But as soon as they got what they wanted there, they issued an ultimatum from a hot tub over there with about ten more items.”

The issue in Indiana is rather a different one from Governor Scott Walker’s legislative effort in Wisconsin. Democratic lawmakers there have also fled the state while unions protest a measure that would strip them of their collective bargaining right. Across the country, Republican governors have taken on public-sector unions which often extract far more generous pay and benefits for their members than workers in the private sector enjoy.

Daniels effectively undercut public-sector unions’ ability to collectively bargain six years ago and has since worked to balance his state’s budget. Since 2004, the 49 other states in the nation increased their debt levels by an average of 40 percent. Indiana has paid down its debt by 40 percent and is one of only nine states to have the highest rating from all three rating agencies. Indiana’s business climate has improved significantly as a result of the governor’s tax cuts. The state has added jobs at twice the national pace.

The governor has been urged by many conservatives to seek his party’s presidential nomination but Daniels told Fox that he hadn’t made a decision yet. According to The New York Times‘ David Brooks, this is the Republican Party’s quandary. “The man who would be the party’s strongest candidate for the presidency is seriously thinking about not running.”

Daniels might not match Barack Obama in grace — “If it comes down to height and hair, I probably wouldn’t do very well,” he told Fox — but could on substance, according to Brooks. “They could have a great and clarifying debate: What exactly are the paramount problems facing the country? What is government’s role in solving them?”

At the Conservative Political Action Conference in Washington this month, Daniels characterized America’s national debt as a “new red menace,” urging Republicans to rally voters under the banner of fiscal conservatism despite policy differences they might have with independents.

While the costs of federal entitlement and health-care programs are skyrocketing, few politicians have volunteered concrete policy solutions but Daniels has. When asked what he would do about Social Security, the governor said that he would bifurcate it, raise the age in which people get it, and if someone has a better idea he’d like to hear it. Medicare would be turned into a voucher program.

Former Arkansas governor Mike Huckabee may be a more likely contender for the presidency yet he wrote in his latest book, A Simple Government, that he hated the process of campaigning. On Sunday he clarified that remark. “I love campaigning,” he said. “I don’t enjoy what I would call the peripheral of it, which is the part you dread. And the peripheral is you spend so much of your time defending rather than actually going out and talking about issues that you think would make America a great country.”

Huckabee, who attempted to secure the Republican presidential nomination in 2008, harshly criticized Barack Obama in his book, writing, “Just about everything he thinks is good for America is actually bad for our present and worse for our future.”

On Fox News Sunday, he added that the accumulation of debt that has occurred under this administration is horrifying and hampering growth. “I mean, the first rule is, if you’re in a hole, quit digging. If you’re a family and you just lost your job and you’re broke, you don’t go out and go on a spending spree. You start figuring out how to cut your expenses.”

Chris Wallace asked Huckabee about his apparent breach of Ronald Reagan’s “eleventh commandment” which told Republicans not to speak ill of fellow party members. Huckabee has criticized the health-care reform scheme which Mitt Romney enacted as governor of Massachusetts, calling it “socialized medicine.”

Huckabee noted that there’s a difference “in Ronald Reagan saying don’t speak ill of another Republican and don’t evaluate what another Republican’s proposals are” before urging Romney to distance himself from health-care reform. “I don’t have a problem with a governor in any state taking risk, trying something bold,” said Huckabee. “But if it doesn’t work, for heaven’s sakes, let’s not put it in all fifty states.”

Asked whether he’s running for president, Huckabee said that he’s waiting to see how people respond to his book. “This book is my message. This book is what I stand for and what I believe. I want people to say, you know what, that guy has got ideas we can live with. Or maybe they’re going to say this guy is a crazy fool.”

Hollyweird Takes a Crack at Objectivism

So it looks like Hollyweird is making a film version of Atlas Shrugged (1957).

The trailer of what is supposed to be the first part in a trilogy looks awesome. Now my issue is, can they make this not only true to the message that government has as much place in a free-market economy as a fox in the chicken house, but can they make it a lot less boring than the novel?

I’d like to state at this point that I have a love/hate relationship with the works of Ayn Rand. I do happen to love the smaller government, “get the hell off my lawn” sentiment of her works. It is almost enough to overcome the preachiness of Atlas Shrugged and the questionable definition of “capital o” Objectivism. Which one to take on first? Well, who is John Galt? Let me try to answer the one I can in as few words as possible to begin with.

My philosophy is a bit complex. Some would say it is flexible, others would say my philosophy is cobbled together with chewing gum and a sledgehammer. I would say I waiver between objectivism (note the lowercase “o”) and utilitarianism in that being what I do in my best interest and what I do to make myself happy. My ethics professor would say I’m an objectivist. Mostly in that if there is a way to make more money I’ll take it, and this is by and large true.

Here is my issue with what Ayn Rand calls Objectivism: Let’s say there is a charity drive. I think it’s for a good cause and it will actually help some poor slob. I would want to give some money to this charity. Giving would make me feel good and feeling good is in my interest. According to the “lower case o” objectivist, what I’m doing is objectively right. A “capital o” Objectivist would state that giving money to the charity has no clear material gain to myself so what I’m going is objectively wrong.

That’s where I disagree. By feeling better about myself, I can without hesitation go after the moneymaking opportunities that may present themselves to me because the nagging voice has been bound, gagged and beat over the head several times. Mind you, the voice wouldn’t be there in the first place, regardless of whether I’d given to charity or not.

This is of course given to you by someone who has at best one semester of philosophy under his belt.

As for my longer answer, it comes down to this: I don’t like being preached to. It is why I can’t sit through an entire episode of Rush Limbaugh’s or Glenn Beck’s. I know quite well that I’m right. It’s the same with people on the other side of the aisle. You’re wasting your time and mine telling me that I’m the cause of the world’s problems because I’m white and born to the middle class. Sorry buddy, I never owned a slave and I never beat or killed a Native American for no other reason than his race. There is no guilt here. Try around the corner.

All right, back on target. I don’t need to be told the way I think is right. I have a deep down dislike for socialism and a burning hate of communism. And it is a matter of detail. I just seriously don’t want the government involved in my life be it personal or fiscal. I know that either one will tell me that they have no interest in my personal life, but once you have one you will get the other.

I once listened to an audio version of Atlas Shrugged. It seemed not a single character could go without a page of philosophical diatribe.

Don’t take this as me not liking Ayn Rand however. She also made things I didn’t hate or really disagree with. Her interview with Phil Donahue for example, that was a fun thing to watch as Donahue was trying to fight way above his intellectual class. It was like watching a 4’2″ drunk picking a fight with an in his prime Mike Tyson.

And I loved The Fountainhead (1947) with Gary Cooper. One of the best movies I’ve seen. Since it was Rand herself who wrote the screenplay for the film, she is certainly capable of making something I like.

And that is what I’m hoping from this movie — that it will be well made and faithful to the spirit of the book. I hope it will be entertaining as well as engaging and I hope that it will make people wonder, “Do we really need to have the government in our business?”

I hope it but I doubt it. The chance of the film staying true to the novel is handicapped by the fact that Rand died in 1982 and therefore couldn’t write the screenplay. This makes me wonder if the screenwriter Brian Patrick O’Toole is up for the challenge. I haven’t seen anything written by him before but he was a co-producer of Dog Soldiers (2002) which I have seen and liked. It might have been a werewolf flick but it was a very well done werewolf flick.

I guess we’ll see on April 15, Tax Day in America, if this film is up to snuff. I expect reviews to be mixed and moviegoers to be divided based on their personal views. But if the film is as grand as the trailers then I shall be overjoyed. If it isn’t, I’ll always have The Incredibles (2004). It’s like Atlas Shrugged for five year olds.

Barbour Discusses Potential White House Run

On Fox News Sunday, Mississippi governor Haley Barbour talked about his potential candidacy for the Republican Party’s presidential nomination.

Barbour was immediately asked about his past as a lobbyist in Washington, something which most people would see as a mark against the governor. But Barbour sees it as an advantage that he holds over possible contenders. The president’s job is to lobby to Congress, to America’s allies, even to its enemies. “That’s what presidents do for a living,” he explained. “Presidents try to sell what’s good for America to others in the world, as well as to Americans.”

As governor, Barbour managed to balance Mississippi’s state budget at a time of considerable fiscal crisis. He told Fox News Sunday that he had saved the Mississippi taxpayers hundreds of millions of dollars in Medicaid spending by seeing to it that the people who were on it were actually eligible for the program. Applied to the federal level, similar measures could help save many hundreds of billions of dollars more, he claimed.

Earlier in the week, Barbour touted his fiscal credentials at the Conservative Political Action Conference where many potential Republican candidates for the presidency speeched. “You can save money on entitlements,” he told the CPAC crowd Saturday; “you just gotta have the will to do it.”

When asked about the fact that spending in the state of Mississippi went up during his term, Barbour admitted that when he became governor, “spending actually increased 28 percent.” Without raises in tax rates though, revenue increased 42 percent during his first term. “We did it because we had more taxpayers with more taxable income. That’s how you get the revenue up.”

In CPAC’s presidential straw poll, Barbour took the last place with but a single percent of the vote. He explained on Sunday that the poll was closed before he had had a chance to speak. Having addressed the audience though, the governor said that several people had told him that they wished they had voted differently.

Barbour’s history as a lobbyist isn’t the only thing standing in the way of a presidential run. Some of the statements he has made about growing up in the racially segregated South have caused controversy. He explained on Fox this Sunday that when we said he didn’t remember things as being “that bad,” he was referring to his own childhood, not the Mississippi of the 1960s. He urged people to look at his record instead of his childhood.

We have more African American elected officials in Mississippi than anywhere in the country. I’ve had outstanding African American members of my administration. You know, I’m proud of that record and I’ll put it up.

Asked about his presidential ambitions, Barbour said that he was “serious” but wouldn’t make a decision until April. “I’m not somebody who has wanted to run for president all of my life,” he added. “But right now, I think the country is in such straits, we’ve got to have a huge change.”

Boehner, McConnell Call for Spending Cuts

As America braces for austerity, the top Republicans in Congress spoke about ways to rein in public spending on Sunday morning. The new Speaker of the House, John Boehner sat down with Fox News Sunday while Senate Minority Leader Mitch McConnell of Kentucky appeared on Meet the Press.

The Congressional Budget Office released its most recent figures on the country’s fiscal crisis this week, forecasting that up to the year 2021, the federal government will continue to run deficits and grow the national debt.

The deficit is set to reach $1.5 trillion this year alone, equaling nearly 10 percent of GDP. By the end of this fiscal year, the debt will have increased to 70 percent of gross domestic product. If no significant spending reductions are made, it could grow up to 100 percent by the end of the decade.

President Barack Obama addressed the reality in his State of the Union speech this week but other than a ban on congressional earmarks and a five year freeze in discretionary domestic spending, which accounts for barely $400 billion of the total budget, he proposed few spending reductions. He called for increased investment in education and infrastructure rather to enhance American competitiveness.

McConnell was “disappointed” with the president’s unwillingness to address America’s looming entitlement disaster yet Republicans haven’t fully endorsed plans to reform Medicaid, Medicare and Social Security either even as they account for a third of all federal expenditures.

The reason, said McConnell on NBC’s Meet the Press Sunday, was that entitlement reform should be a bipartisan effort. “I think the president needs to be more bold,” he suggested. “We’re happy to sit down and talk about entitlement reform with the president.”

On Fox News Sunday, the new Speaker of the House was all the more audacious. While McConnell referred to the upcoming vote on raising the federal debt ceiling as an “opportunity,” Boehner said that the American people would not “tolerate” an increase in the debt limit “without serious reductions in spending and changes to the budget process so that we can make sure that this never happens again.”

The country will not default on its obligations though. That, according to the Ohio congressman, would be “a financial disaster not only for our country, but for the worldwide economy.” He added that it would be nigh impossible to create jobs under such circumstances.

Should Congress refuse to raise the debt ceiling, it would technically herald the bankruptcy of the United States and threaten the stability of the dollar, the world’s main reserve currency.

In order to rein in federal spending, Boehner said that while Republicans won’t push for cuts across the board, items as the health insurance mandate, stimulus funding and mortgage subsidies have to go.

On the matter of entitlements, Boehner, like McConnell, called on the president to lead — especially in his own party. With Senate Majority Leader Harry Reid denying that Social Security is even in trouble, Boehner said he didn’t know “how we begin to move down the path of having this adult conversation that I’d like to have and I, frankly, like the president would like to have.”

Neither Party Cheers Tax Cut Compromise

With the current session of the United States Congress coming to an end, the tax cuts brought about during the Bush Administration are due to expire. After months of fierce discussion between Democrats and Republicans about the need of maintaining existing tax rates, a compromise was reached between opposition members of the Senate and the White House this week. But some Democrats in Congress have already vowed to vote against the deal.

Democrats and the president have routinely blamed Republicans for holding the extension of middle-class tax rates and unemployment benefits “hostage” to tax cuts for “millionaires and billionaires,” or the richest 2 percent of Americans. In recent months, Republicans have blocked other legislation in Congress before, they say, Washington assure the people that their tax rates will not go up next year.

Confronted with this stalemate, President Obama, in a statement last week, said that he was unwilling to let “working families across this country become collateral damage for political warfare” in Washington. “I’m not willing to see two million Americans who stand to lose their unemployment insurance at the end of this month be put in a situation where they might lose their home or their car or suffer some additional economic catastrophe,” he added. So he announced a compromise agreement: a two years extension of current tax rates coupled with a thirteen-month extension of unemployment benefits. “It’s not perfect,” the president admitted, “but this compromise is an essential step on the road to recovery.”

Some members of his own party beg to differ and Congressman Chris Van Hollen of Maryland explained why on Fox News Sunday. Even if there are some House Democrats who “haven’t adjusted to the post election reality,” most are willing to compromise but upset about the estate tax cut, he explained. “That doesn’t help the economy,” according to Van Hollen. “It hurts the deficit. And most importantly, the Republicans did not insist on the estate tax being part of the central portion of this deal.”

The estate tax break — which according to Van Hollen would cost the government $68 billion in revenue — would lower rates to 35 percent on estates over $5 million as opposed to the current 45 percent tax on estates worth more than $3.5 million. Paul Ryan, who will succeed Van Hollen as chairman of the House budget committee in the next Congress, characterized it as a double tax on death. “Economists will tell you that it’s really not a tax that soaks the rich,” he said, “but it’s a tax on capital that deprives business investment and therefore job creation.”

If liberal Democrats successfully manage to stall or vote down the compromise agreement, Paul promised that Republicans next year, once they have a majority in the House of Representatives, will prevent any tax increase. “And we’ll do it retroactively after the first of the year.” Unsurprisingly, Van Hollen was quick to add that he did not intend to block the compromise altogether

The White House seems confident that the deal will pass. Senior advisor to the president David Axelrod said on ABC’s This Week that he expected “strong support on both sides of the aisle.” He warned Democrats that unless they accept the compromise, hundreds of thousands of unemployed Americans would see their benefits cut next year. The alternative is to “put money in the pockets of middle-class people,” he said.

Axelrod, who was Obama’s chief strategists during the presidential campaign, was all the more explicit on CNN’s State of the Union. “You can focus on what you don’t like and cut your nose off to spite your face, and that would be the wrong thing to do,” he said, adding that Congress should approve the deal because “everyone understands what it means to the economy if we don’t get this done.”

The greater question for the American economy is the ballooning national debt however. The federal government currently borrows more than a third of what it budgets and there are no plans to seriously rein in spending.

Even if restoring balance to the budget is possible at existing tax rates if only Washington freezes spending levels, it seems unlikely that Democrats will accept cuts during the next two years unless they are offset by some tax increases.

Congressman Ryan, who has proposed radical spending cuts and entitlement reforms in the past, was asked about the deficit on Fox News Sunday but wouldn’t say how exactly he intends to balance the budget next year. Extending the tax cuts isn’t so much a fiscal measure though. “I’m not going to make any bones about this and say this is a great growth package,” he told CNBC Wednesday. “They have some demand side Keynesian stuff in here I’m not particularly a fan of,” he complained then, “but this is probably the best deal we can get.”

On his Fox Business show this Friday, David Asman also criticized Democrats who pretend that stimulating consumption will help the recovery. “Our economy’s health is judged by how much we produce, not by how much we buy,” he said. “The more Americans work and produce, the stronger our economy grows. And that’s what gives us the wealth to buy and consume, not the other way around.”

With unemployment rates stuck at 10 percent, Asman said Congress shouldn’t do anything that could undermine job creation. “We need economic policy that encourages work and production a lot more than we need policies meant to encourage consumption,” he explained. “That’s why any tax increase is insanity right now.”