Reuters

WASHINGTON - In a renewed attack against President Barack Obama's health care overhaul program, House Republicans voted on Tuesday to deny funding for a central element of the law that sets up marketplaces for people to shop for health insurance coverage.

The bill passed by the House of Representatives would rescind some $1.9 billion in grants that are being made available under the health care law to help states establish insurance exchanges where individuals and small businesses can shop for medical coverage plans.

The exchange idea is central to the law that has faced a number of challenges in Congress and the courts since it was enacted more than a year ago. Tuesday's bill, which passed on a largely party-line vote of 283-183, likely will be blocked by the Democratic-led Senate, just as an earlier effort by House Republicans to repeal the entire health care law was defeated.

Even though the bill targets insurance exchanges, the exchange idea is in fact a major element of a House Republican budget plan that would eventually end traditional government-run Medicare health plan and instead provide subsidies to private insurers to provide medical coverage for the elderly.

The Republican budget plan, drafted by Wisconsin Representative Paul Ryan, would have the elderly shop for subsidized medical coverage on insurance exchanges.

"House Republicans rhetorically exalt the private health insurance marketplace," said Ron Pollack head of Families USA, a health care advocacy group. "They ironically, however, plan to de-fund the creation of such state marketplaces that would enable consumers and small businesses to choose the private health plans they want."

The debate over the exchange bill covered familiar ground. Democrats argued the health care law already helps millions of people. Republicans argued that the law is costly and gives the federal government too big a role in setting coverage benefits.

"This is not a free-market system; it is essentially central planning," said Republican Representative Phil Roe.

Democratic Representative Frank Pallone said the effort to deny federal grants to the states would not kill the exchanges. Rather, it would make it harder for cash-strapped states to establish their own marketplaces and give more power to the federal government, Pallone said.

The health care law calls for the federal government to set up exchanges for states that fail to establish their own.

The nonpartisan Congressional Budget Office said the House bill would delay establishment of state exchanges and save $14.6 billion over the next 10 years mostly because fewer people would purchase government-subsidized insurance.

About 500,000 people would be without health coverage in 2015 because of the delay, CBO said in a recent analysis of the bill.
]]> http://www.klineforcongress.com/news/669/ New York Times

While most Americans say corporations do not pay their fair share in taxes, they still prefer cuts in government spending to increasing taxes on corporations as a means of cutting the federal budget deficit, according to a recent New York Times/CBS News poll.

But when given a choice between raising taxes on corporations and raising taxes on households that make more than $250,000 a year, almost two-thirds of respondents opt for taxing businesses.

There is a strong partisan divide: A majority of Republicans and independents favor cutting government spending over raising taxes on businesses, while Democrats are evenly divided. Democrats strongly support increasing corporate taxes rather than adding to the taxes of affluent households; Republicans and independents are closely divided.

In general, however, few Americans back increasing taxes on American businesses: only 37 percent said corporate taxes should be increased to help reduce the federal budget deficit. The rest agree with an alternative argument that increased taxes would discourage American companies from creating jobs and hurt them in the global marketplace. Thirty-two percent would rather see corporate taxes remain as they are now and 26 percent said taxes on corporate profits should be decreased.

“If you increase taxes, you limit the ability to produce and compete, especially in a global market,” Larry Williams, 70, of Hoover, Ala., said in a follow-up interview. “If we increase taxes on manufacturers, they will turn around and send the work overseas because that’s the only way they can survive,” said Mr. Williams, a retired business owner.

Six in 10 Americans surveyed think companies use their tax savings to give bonuses to executives and dividends to shareholders. About a quarter, 23 percent, said they thought tax savings were mostly reinvested back in the corporation and only 4 percent said savings were used to create new jobs for American workers.

Almost half, 46 percent, said all companies should be taxed at the same rate. About a third said some industries deserved a tax break. Small businesses, green companies and those in the health care industry were most frequently mentioned as deserving of tax breaks. “In this economy we should be supporting smaller business owners, who will, hopefully, eventually turn into larger business owners,” said Scott Cochran, 34, a furniture designer who owns his own business in Columbus, Ohio.

The nationwide telephone survey was conducted March 2 to 7 with 1,266 adults and has a margin of sampling error of plus or minus three percentage points. The complete methodology and questionnaire are available at NYTimes.com.
]]> http://www.klineforcongress.com/news/668/
Ever since the Supreme Court's misguided 2005 decision in Kelo v. City of New London, states have been passing their own laws to protect property owners from abuses of eminent domain. One of those laws was enforced this month in California, and the decision is a major victory for property rights.

In Community Youth Athletic Center v. National City, San Diego Superior Court Judge Steven R. Denton ruled that National City, California's designated blight zone is "invalid and unenforceable." The decision means the city will not be allowed to seize property belonging to CYAC, a local boxing gym that sponsors programs for at-risk kids.

The tale began in 2005 when National City gave private developer Jim Beauchamp the right to build a condo project on the gym's land. The Community Development Commission threatened that if the CYAC were "unable to come to terms with the developer on the sale of your property," then "the developer may request that the CDC proceed directly with the acquisition of your property."

In 2007, the city extended an ordinance designating some 692 properties, including the gym, as "blighted" and therefore subject to eminent domain for 10 years. Facing a slew of bad publicity, National City Mayor Ron Morrison downplayed any threat to the gym itself, but the eminent domain threat hovered around developers' plans for surrounding neighborhood properties, including churches, schools and small businesses.

This was exactly the scenario California legislators had in mind when they passed a post-Kelo law in 2006 requiring the government to show "specific and quantifiable" evidence of blight and that the blight couldn't be improved without eminent domain. The court's ruling chastised the city for failing to document exactly why the targeted properties should qualify as "blighted." "Lack of parking" doesn't qualify, Judge Denton noted dryly.

California has been a leading abuser of eminent domain and the case should resonate with California Republican lawmakers, who have been in the odd position of rejecting an effort by Governor Jerry Brown to jettison the state's some 400 redevelopment agencies because they opposed his overall budget. Getting rid of the redevelopment agencies would save the state roughly $1.7 billion a year amid a roughly $25 billion budget deficit.

According to the Institute for Justice, which represented CYAC, nearly 200 California development projects have used or threatened to use eminent domain laws for private developments, often on the grounds of economic improvement. The victims of the law are often minorities and economically disadvantaged residents, who are unable to protect their businesses and neighborhoods from politically connected developers.

Property takings rarely produce the economic growth their developers promise, and any gentrification of a neighborhood is little consolation to those whose homes and businesses are seized. We're glad average citizens are fighting for their property rights, and we hope GOP lawmakers take Governor Brown up on the offer to send redevelopment agencies to the knackery.
]]> http://www.klineforcongress.com/news/667/ Bloomberg

By taking “extraordinary measures,” the U.S. can keep borrowing until Aug. 2 after reaching its $14.29 trillion legal debt limit no later than May 16 unless Congress acts, Treasury Secretary Timothy F. Geithner said.

The Treasury Department will take steps starting this week to provide additional borrowing room, Geithner said in a letter today to Senate Majority Leader Harry Reid, a Nevada Democrat, and other congressional leaders. The Treasury pushed the August deadline back from July 8 “as a result of stronger-than- expected tax receipts,” Geithner said. The May 16 date is unchanged from an estimate he made last month.

Geithner said the Treasury on May 6 will stop issuing State and Local Government Series securities. The bonds, known as SLGS, “fund a variety of expenditures, including infrastructure improvements across the country,” he said.

“Protecting America’s creditworthiness and our economic leadership position in the world is a duty to our country that is shared by policy makers in both parties, in the legislative branch as well as the executive branch,” Geithner said. “Any attempt by either party to use the full faith and credit of the United States as a bargaining chip to advance partisan policy agendas would be irresponsible.”
Obama’s Outline

President Barack Obama has offered the outlines of a plan to reduce the debt by $4 trillion over 12 years through a combination of spending cuts and tax increases. House Budget Committee Chairman Paul Ryan, a Wisconsin Republican, has proposed cutting spending by $6 trillion over a decade in part by privatizing Medicare and capping Medicaid spending.

If Congress doesn’t raise the debt limit by May 16, the Treasury will declare a “debt-issuance suspension period” under the statute governing the Civil Service Retirement and Disability Fund, Geithner said. That will allow the U.S. “to redeem existing Treasury securities held by that fund as investments.”

Lawmakers “don’t get serious about raising the debt limit until right before Treasury hits the wall,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. “Perhaps the extra few weeks will be helpful, though I suspect that, as usual, negotiators will simply dither until we get close to the drop-dead date, whatever that turns out to be.”
‘Next Steps’

Geithner’s letter shows that “the mechanics are now in motion” for the government to take the “next steps” if the debt limit isn’t raised, said Drew Matus, a senior economist at UBS Securities LLC in Stamford, Connecticut.

SLGS are Treasury securities issued to states and municipalities “to help them conform to tax rules that restrict the investment of proceeds from the issuance of tax-exempt bonds,” Geithner wrote.

Though the updated August deadline “in theory gives Congress additional time to complete work on increasing the debt limit, I caution strongly against delaying action,” Geithner said in the letter. “The economy is still in the early stages of recovery, and financial markets here and around the world are watching the United States closely.”

Matthew Zames, chairman of a Treasury advisory panel and a managing director at JPMorgan Chase & Co. (JPM), said last week that failure to raise the debt limit could be “catastrophic.”
‘Uncharted Territory’

“Any delay in making an interest or principal payment by Treasury even for a very short period of time would put the U.S. Treasury and overall financial markets in uncharted territory, and could trigger another catastrophic financial crisis,” Zames, chairman of the Treasury Borrowing Advisory Committee, wrote in a letter to Geithner.

Treasury also lowered its estimate today for government borrowing from April through June because of higher revenue and reduced government spending.

Borrowing will total a net $142 billion in the current quarter, which is $156 billion less than estimated three months ago, the department said in a statement today. The Treasury also projected borrowing of $405 billion in the three months to Sept. 30. In the quarter that ended March 31, the Treasury borrowed $265 billion, compared with a previous estimate of $237 billion.

The Treasury’s quarterly debt sales announcement is scheduled for May 4.

The Treasury said its forecasts assume a cash balance of $95 billion for June 30 and $115 billion for the end of September.

The U.S. economy slowed more than forecast in the first quarter as government spending declined by the most since 1983 and household purchases cooled. Gross domestic product rose at a 1.8 percent annual rate from January through March after a 3.1 percent pace in the final three months of 2010, the Commerce Department said last week.
]]> http://www.klineforcongress.com/news/666/ Wall Street Journal

Nothing like Paul Ryan's budget, "The Path to Prosperity: Restoring America's Promise," has been heard from a Republican since February 1981, when Ronald Reagan issued his presidency's first budget message, "America's New Beginning: A Program for Economic Recovery." The echoes reach beyond the titles.

Both budgets announced a clear break with the Washington status quo. Reagan reversed the policies of the Carter presidency and the infamous stagflation years of weak economic growth, 18% interest rates and 14% inflation. Reagan's 1981 message posited four reversals: "a substantial reduction" in spending; "a significant reduction in federal tax rates"; relief from federal regulation; and "a monetary policy consistent with those policies."

In our day, the problems are the entitlement-spending time bombs and the twin killers of low growth and high unemployment. The Ryan budget proposes to defuse the Medicare and Medicaid bombs, while, like Reagan, overhauling the tax system to "unleash the genius of America's workers, investors and entrepreneurs."

Paul Ryan is routinely described as wonkish, a policy-detail guy short on political reality. But nervous Republicans need to understand that Reagan's political relevance to the Ryan budget, and to the 2012 presidential campaigns pulling away from the curb, is deeper than these details.

Ronald Reagan was not a nag. Reagan offered the politics of possibility, not the politics of impending doom.

Democrats and Republicans in recent years have both taken to preaching to us every Sunday morning about looming damnation from debt and deficits—even as they made both bigger. Hypocrisy aside, they are right. On its current path, spending on Medicare, Social Security and Medicaid will turn us into a nation of vampires, feeding off each other to stay alive.

However true and awful this prospect, "Repent!" has no history as the road to the White House. People don't want to vote for the king of hell. They want a president able to lead the United States forward and upward. Reagan was a compulsive optimist, an instinct often anathema in oh-so-serious Washington.

No presidential campaign commercial has been more ridiculed by pundits and the press than Ronald Reagan's in 1984, "It's morning in America, again." Running against what was mocked as Reagan's "gauzy" America was the Democratic scold, Walter Mondale. Reagan carried 49 states with a 58% majority; Mr. Mondale carried his home state of Minnesota (by a whisker).

To win and run the country, promising voters the eternal brimstone of deficit reduction isn't enough—and Paul Ryan knows it, just as Ronald Reagan knew it at another time of economic crisis.

Thus Reagan in his 1981 budget message: "The motivation and incentive of our people—to supply new goods and services and earn additional income for their families—are the most precious resources of our nation's economy. The goal of this administration is to nurture the strength and vitality of the American people."

Paul Ryan, in his budget's introduction: "Decline is antithetical to the American Idea. America is a nation conceived in liberty, dedicated to equality and defined by limitless opportunity. . . . This budget's goal is to keep it exceptional, and to preserve its promise for the next generation."

One finds high Cs of optimism in every budget message (well, maybe not the Carter budgets). So, too, Barack Obama's initial February 2009 budget. But the Obama prescriptions reflected Democratic Party politics of our time, which insists that prosperity begins inside someone's head in Washington and then flows out to the country. The country is a taker of what Washington creates or allows—whether the Obama health-care plan or anti-carbon regulations. Reagan-Ryan argues that prosperity is born inside the heads of several hundred million citizens, and that the government's first responsibility is not to kill the yeast.

Both the Beltway Democrats and the conservative deficit hawks share the conceit that the nation's future revolves completely around what they do in Washington. This reduces the people to bystanders. That may work for Europe's parliamentary systems, but it's not the way things work here. Successful politics here draws people into its drama, and that means offering something bigger to believe in than deficit reduction. And guess what, progressives: The "safety net" isn't what moves a nation, either. Think bigger.

Barack Obama, with rhetoric alone, conveyed in 2008 that he was enlisting the whole nation to participate in his sweeping vision. He has not sustained the sweep or the vision. Instead, he withdrew into a truly wonkish world of Beltway-driven policy.

Paul Ryan's budget is inevitably about what Washington does (or refuses to do). But its underlying rationale is to reorder the relationship between Washington and the American people—country first, Washington behind. That notion is what November's startling tea party and independent vote for the GOP was about, and what the party's Senate and House freshmen appear to understand. Properly understood, this is the first presidential budget message of the new Republican Party.

There is a belief about that Ryan's budget is bucking the odds. Don't underestimate its appeal. That's been done before.
]]> http://www.klineforcongress.com/news/665/ The Hill

The House Republican 2012 budget resolution cutting $5.8 trillion over 10 years was reported out of the Budget Committee on Wednesday night after a day-long markup. It now heads to the House floor for a vote set for next week.

As expected, the budget was approved along party lines, with 22 Republicans voting yes and 16 Democrats voting no. The ambitious legislation, which has virtually no chance of being approved in the Senate, reduces 10 years of deficits by $1.649 trillion compared to the status quo and balances the budget shortly before 2040.

The 11-hour markup featured fierce arguments combined with some friendly exchanges.

Committee ranking member Chris Van Hollen (D-Md.), who considers himself a friend of Chairman Paul Ryan (R-Wis.) despite detesting his budget, agreed to shave nine of the expected 30 amendments proposed by Democrats after 19 were defeated along party lines.

Two non-controversial Democratic amendments were accepted.

One would allow states to keep certain types of welfare funds rather than returning them to Washington.

The other, offered by Van Hollen, split the Republicans on the panel but got Ryan's vote. That amendment stated that to solve the budget deficit, security spending must be fully on the table. Ryan argued that his budget, in finding $78 billion in Defense spending to cut, does put it on the table so the amendment is not objectionable.

Five Republicans disagreed and said they do not want to see Defense spending cut further.

Republicans Ken Calvert (Calif.), Todd Akin (Mo.), Tom Cole (Okla.), James Lankford (Okla.) and Todd Young (Ind.) voted no on the Van Hollen amendment.

Blue Dog Democrat Rep. Heath Shuler (D-N.C.) put both sides on the spot by offering as an amendment a fiscal plan based on the bipartisan recommendations of the president's fiscal commission.

Shuler argued that the day's partisan attacks and counterattacks were pointless. Given divided government, he said, both sides should just work on a compromise that, like the fiscal commission, reduces the debt with a combination of two-thirds spending cuts and one-third tax increases.

Chairman Ryan very carefully argued against the tax increases in Shuler's plan and said they would hinder economic growth, but praised Shuler's attempt at bipartisanship.

Van Hollen initially said he would have to vote against the Schuler plan, since he could not support the “time frame” for some of the cuts. He has been adamant that deep cuts in the next few years could jeopardize the economic recovery.

More on the GOP's 2012 budget plan:
Point-by-point analysis | Fast tracked | Dems to offer alternative
Opinion: Rivlin & Domenici | Liberal group: Stealing Medicare

But, in the end, Van Hollen decided to vote “present” along with most Democrats. Rep. Tim Ryan (D-Ohio) voted with Shuler for the Blue Dog's plan.

Shuler had earlier broken with his party and voted with the Republicans in favor extending Bush-era tax cuts for those making more than $1 million per year.

In the end, the markup, which in many ways served as a preview of the debate in the 2012 election, had both sides pretty satisfied that they had done the other party some damage.

Through their amendments, Democrats can now say they got Republicans on the record: refusing to end Bush tax cuts for millionaires; to end Medicaid cuts for seniors in nursing homes; to guarantee no taxes will be raised on those making less than $200,000; to end tax breaks to allow multinational escape paying taxes; to block cuts to Head Start and elementary education; to stop cuts to medical research, new food safety laws, the COPS program and funding for firefighters; to guarantee Social Security won't be privatized; and to fund the Dodd-Frank financial regulations.

Republicans got to profess their small government, pro-growth philosophy fully articulated in a budget plan and to say they produced a debt cutting budget where Democrats have failed. They tried out their defenses of the Ryan plan, arguing its reforms of Medicare and Medicaid are reasonable, and those arguments are now ready for a wider stage.

On a technical note, the GOP 2012 budget resolution, if passed by both houses, would give appropriators a top line number of $1.019 trillion to spend in 2012, the House Budget committee spokesman said Wednesday.

This so-called 302(A) allocation is not immediately apparent in the budget documents released Tuesday by the committee.

The $1.019 trillion is $72 billion less than 2010 spending levels, which were $1.091 trillion, and $102 billion below President Obama's 2012 request which called for a top line of $1.121 trillion.

The GOP 2012 budget resolution assumes the GOP is victorious in its fight on 2011 spending and is able to get $61 billion in cuts compared to 2010 this year. Spending would then decrease another $11 billion next year under the budget reported out of the House Budget Committee on Wednesday.
]]> http://www.klineforcongress.com/news/664/ The Hill

House Republicans on Tuesday unveiled a 2012 budget resolution that would cut $5.8 trillion over 10 years and reform entitlements, igniting a new fiscal battle that could make the fight over 2011 spending look like a minor skirmish.

The architect of the budget plan, House Budget Committee Chairman Paul Ryan (R-Wis.), spent much of the day rebutting liberal accusations that his plan hurts the poor and seniors.

Ryan also tried to reassure conservatives who are disappointed that his plan still adds $8 trillion in debt while failing to balance the budget for at least two decades.

The resolution will be marked up in committee on Wednesday and is headed for a floor vote next week.

 Republican Study Committee Chairman Jim Jordan (R-Ohio) announced that his group is preparing an amendment for floor consideration next week that would go further than Ryan’s plan on cuts in order to balance the budget within 10 years.

 The pushback from the left to Ryan’s plan was fierce. The White House said the budget goes against American values and argued it preserves tax breaks for the wealthy while reducing social programs for the poor.

 “Any plan to reduce our deficit must reflect the American values of fairness and shared sacrifice. Congressman Ryan’s plan fails this test,” spokesman Jay Carney said.

Rep. Sandy Levin (D-Mich.), ranking member of the House Ways and Means Committee, accused Ryan of secretly trying to gut Medicare.

“The Republicans are being dishonest about what they’re up to with this reckless budget,” Levin said. “They are aiming to destroy Medicare for future generations — not save it.”

The National Partnership for Women and Families called the plan a “callous assault on women, children, seniors and everyone who is low-income or is struggling during these tough economic times.”

Democratic Congressional Campaign Committee Chairman Steve Israel (N.Y.) piled on, saying in a statement that Ryan was “forcing seniors to clip coupons if they need to see a doctor.”

Ryan replied that Israel and Democrats should be ashamed of themselves for making distorted claims about the GOP plan. He argued that by increasing patient choice in Medicare and state flexibility in Medicaid, Republicans are preserving the programs and will increase access to affordable care.

Addressing conservative concerns, Ryan said the fact he cannot balance the budget before nearly 2040 shows how serious the fiscal problems facing the country are.

“This just shows you how deep a hole our country is in,” he said.

The budget includes major reforms to Medicaid, which would become a block-grant program, and Medicare, which would be altered to include a voucher system. The plan aims to force a bipartisan solution to bolster Social Security’s solvency at a later date.

Ryan explained that he did not propose changes to Social Security in part because the committee believed it would be “too tempting” for Democrats to attack it, and because it would make a bipartisan compromise on the issue harder.

Ryan presented his budget, called “The Path to Prosperity,” as a jobs plan.

Citing a Heritage Foundation study, the budget says it would create nearly 1 million private-sector jobs in 2013 and bring unemployment down to 4 percent by 2015. It also claims to boost income by $1,000 per year per family. Much of the growth comes from bringing the highest individual tax rate and the corporate tax rate down from 35 percent to 25.

Ryan said his party is well-aware of the political risks it is undertaking by proposing to cut entitlements, and he said Republicans believe “we ought to have a social safety net.”

“Look at these new people,” he said, pointing to freshman lawmakers on his panel who joined him at the press conference. “They came here for a cause. … We could all do something else with our lives.”

Ryan said the nation’s debt crisis was caused by unsustainable spending, and is the most predictable crisis in history. He blamed Obama for failing to lead by presenting a budget that doubles the national debt.

While Ryan’s budget has virtually no chance of making it through the Democratic-controlled Senate, Ryan said he believes elements of his proposal could become law before the 2012 election, particularly if they are tied to a bill that would raise the nation‘s debt limit. Congress is expected to take up such legislation within the next six weeks.

“On the debt limit, we think it gives you a great menu of options and policies to pick from,” he said.

Ryan said he hopes the White House takes a sincere look at the plan, which contains elements proposed by Democrats, the president’s fiscal commission and the Government Accountability Office.

President Obama said Tuesday that he looks forward to having a vigorous conversation and negotiation over the 2012 budget once the fight over 2011 spending is resolved.

“Now, we’ll have time to have a long discussion about next year’s budget, as well as the long-term debt and deficit issues, where we’re going to have some very tough negotiations. And there are going to be, I think, very sharply contrasting visions in terms of where we should move the country,” Obama said.

Echoing that sentiment, Ryan made clear in a speech to the American Enterprise Institute that the budget is poised to become the party’s policy platform in the 2012 elections if there is no agreement on tackling the debt by then.
]]> http://www.klineforcongress.com/news/663/ The Washington Times

Congress on Tuesday revoked the first significant parts of President Obama's health care initiative when the Senate voted overwhelmingly to eliminate a burdensome tax paperwork requirement the law imposes on businesses.

Republicans called the bill "a down payment on total repeal" while most Democrats said it marked an improvement in last year's law. The bill had previously cleared the House and now goes directly to Mr. Obama.

But it marked a rare flash of bipartisanship on a day when Democrats and Republicans otherwise clashed over short-term and long-term spending as they girded for a government shutdown by week's end.

"Just as the executive branch is doing, we're also preparing for the possibility of a shutdown," House Majority Leader Eric Cantor, Virginia Republican, told reporters after a morning meeting at the White House between top Republicans and Democrats failed to produce a breakthrough.

Even with that battle unresolved, House Republicans opened a new front in the spending wars when Budget Committee Chairman Paul Ryan unveiled his 2012 spending blueprint, calling for major changes to both Medicare and Medicaid, the big health care programs that are projected to drive up federal deficits in coming years.

The government's staggering debt and annual trillion-dollar deficits have dominated the discussion in Washington since the beginning of the year, but have come to a head as Congress races to beat an April 8 deadline, when stopgap funding expires.

Republicans are demanding deep cuts in spending and Democrats have slowly been moving in their direction, though they argue the GOP is pushing too far.

Mr. Obama himself got involved in the negotiations Tuesday, hosting the White House meeting, but he said he shouldn't have to be the referee for the two parties.

"I shouldn't have to oversee a process in which Congress deals with last year's budget where we only have six months left — especially when both parties have agreed that we need to make substantial cuts and we're more or less at the same number," a visibly frustrated president told reporters when he made a surprise visit to the White House briefing room.

Congress is racing against a shutdown deadline because lawmakers failed to pass a budget or any of the dozen annual spending bills before the Oct. 1 start of fiscal 2011.

Democrats, who controlled both the House and Senate last year, shut down Congress in the run-up to the elections and used the postelection lame-duck session to extend tax breaks and unemployment benefits and end the ban on acknowledged gays serving in the military.

Republicans and Democrats have traded proposed cuts this year, but only the House has passed a yearlong funding bill, which includes $61 billion in cuts from 2010 levels.

Democrats, who still control the Senate, have signaled their desire to negotiate a final deal behind closed doors.

They said they thought a compromise had been reached with House Speaker John A. Boehner, Ohio Republican, to cut $33 billion. But Mr. Boehner said no deal was finalized because they couldn't agree on the exact makeup of those cuts or on what legislative add-ons, known as policy riders, to include.

Among those riders are provisions to restrict federal funding for Planned Parenthood and to curb Mr. Obama's authority to implement the health care law.

Stymied in those broader attacks on health care, Republicans managed Tuesday to include a provision to undo the law's tax paperwork requirement.

Sen. Orrin G. Hatch, Utah Republican, said it is "a down payment on total repeal of the onerous health care law."

The measure passed the Senate by a 87-12 vote and was sent to Mr. Obama, whose administration had opposed the bill's changes to the way subsides in the exchange are funded. Democrats said the changes could make people less eager to take part in the exchanges.

After the bill passed, White House press secretary Jay Carney said Mr. Obama is "open" to changing the law.

"We are pleased Congress has acted to correct a flaw that placed an unnecessary bookkeeping burden on small businesses," he said.

The measure has become known as the "1099 repeal" because it would relieve businesses of having to file 1099 tax forms for any person or company they pay at least $600 in a year. It was designed to stop tax cheats, and was projected to raise billions of dollars, which were to be used to fund new health care benefits.

In order to make up for that money in their repeal, House Republicans rewrote the way the government would pay for subsidies under the new health exchanges in the law.

Under current law, consumers are allowed to keep much of the money when the government overpays them, but the new bill would claw back most of that money from taxpayers.

Mr. Ryan's budget blueprint, meanwhile, opens yet another front in the GOP's battle against Mr. Obama's health care law.

The budget calls for repealing the law and making fundamental changes in existing health care programs such as Medicare and Medicaid.

Mr. Ryan would convert Medicaid, the state-federal low-income health program, into block grants to states, and would restructure Medicare, the federal health program for seniors, so that retirees would choose from among a series of private plans and have costs be covered by the government.

Democrats said those plans would hurt the poor and elderly who rely on them.

"It is not courageous to protect tax breaks for millionaires, oil companies, and other big money special interests while slashing our investments in education, ending the current health care guarantees for seniors on Medicare, and denying health care coverage to tens of millions of Americans," said Rep. Chris Van Hollen, the ranking Democrat on the Budget Committee.

Mr. Ryan acknowledged he may be "giving our political adversaries a weapon to use against us," but said the payoff of having the debate will be worth it.

"This is not a budget — this is a cause," he said.
]]> http://www.klineforcongress.com/news/662/ For the Wall Street Journal

Congress is currently embroiled in a funding fight over how much to spend on less than one-fifth of the federal budget for the next six months. Whether we cut $33 billion or $61 billion—that is, whether we shave 2% or 4% off of this year's deficit—is important. It's a sign that the election did in fact change the debate in Washington from how much we should spend to how much spending we should cut.

Steve Moore has the details on Rep. Paul Ryan's plan to cut spending.

But this morning the new House Republican majority will introduce a budget that moves the debate from billions in spending cuts to trillions. America is facing a defining moment. The threat posed by our monumental debt will damage our country in profound ways, unless we act.

No one person or party is responsible for the looming crisis. Yet the facts are clear: Since President Obama took office, our problems have gotten worse. Major spending increases have failed to deliver promised jobs. The safety net for the poor is coming apart at the seams. Government health and retirement programs are growing at unsustainable rates. The new health-care law is a fiscal train wreck. And a complex, inefficient tax code is holding back American families and businesses.

The president's recent budget proposal would accelerate America's descent into a debt crisis. It doubles debt held by the public by the end of his first term and triples it by 2021. It imposes $1.5 trillion in new taxes, with spending that never falls below 23% of the economy. His budget permanently enlarges the size of government. It offers no reforms to save government health and retirement programs, and no leadership.

Our budget, which we call The Path to Prosperity, is very different. For starters, it cuts $6.2 trillion in spending from the president's budget over the next 10 years, reduces the debt as a percentage of the economy, and puts the nation on a path to actually pay off our national debt. Our proposal brings federal spending to below 20% of gross domestic product (GDP), consistent with the postwar average, and reduces deficits by $4.4 trillion.

A study just released by the Heritage Center for Data Analysis projects that The Path to Prosperity will help create nearly one million new private-sector jobs next year, bring the unemployment rate down to 4% by 2015, and result in 2.5 million additional private-sector jobs in the last year of the decade. It spurs economic growth, with $1.5 trillion in additional real GDP over the decade. According to Heritage's analysis, it would result in $1.1 trillion in higher wages and an average of $1,000 in additional family income each year.

Here are its major components:

• Reducing spending: This budget proposes to bring spending on domestic government agencies to below 2008 levels, and it freezes this category of spending for five years. The savings proposals are numerous, and include reforming agricultural subsidies, shrinking the federal work force through a sensible attrition policy, and accepting Defense Secretary Robert Gates's plan to target inefficiencies at the Pentagon.

• Welfare reform: This budget will build upon the historic welfare reforms of the late 1990s by converting the federal share of Medicaid spending into a block grant that lets states create a range of options and gives Medicaid patients access to better care. It proposes similar reforms to the food-stamp program, ending the flawed incentive structure that rewards states for adding to the rolls. Finally, this budget recognizes that the best welfare program is one that ends with a job—it consolidates dozens of duplicative job-training programs into more accessible, accountable career scholarships that will better serve people looking for work.

As we strengthen and improve welfare programs for those who need them, we eliminate welfare for those who don't. Our budget targets corporate welfare, starting by ending the conservatorship of Fannie Mae and Freddie Mac that is costing taxpayers hundreds of billions of dollars. It gets rid of the permanent Wall Street bailout authority that Congress created last year. And it rolls back expensive handouts for uncompetitive sources of energy, calling instead for a free and open marketplace for energy development, innovation and exploration.

• Health and retirement security: This budget's reforms will protect health and retirement security. This starts with saving Medicare. The open-ended, blank-check nature of the Medicare subsidy threatens the solvency of this critical program and creates inexcusable levels of waste. This budget takes action where others have ducked. But because government should not force people to reorganize their lives, its reforms will not affect those in or near retirement in any way.

Starting in 2022, new Medicare beneficiaries will be enrolled in the same kind of health-care program that members of Congress enjoy. Future Medicare recipients will be able to choose a plan that works best for them from a list of guaranteed coverage options. This is not a voucher program but rather a premium-support model. A Medicare premium-support payment would be paid, by Medicare, to the plan chosen by the beneficiary, subsidizing its cost.

In addition, Medicare will provide increased assistance for lower-­income beneficiaries and those with greater health risks. Reform that empowers individuals—with more help for the poor and the sick—will guarantee that Medicare can fulfill the promise of health security for America's seniors.

We must also reform Social Security to prevent severe cuts to future benefits. This budget forces policy makers to work together to enact common-sense reforms. The goal of this proposal is to save Social Security for current retirees and strengthen it for future generations by building upon ideas offered by the president's bipartisan fiscal commission.

• Budget enforcement: This budget recognizes that it is not enough to change how much government spends. We must also change how government spends. It proposes budget-process reforms—including real, enforceable caps on spending—to make sure government spends and taxes only as much as it needs to fulfill its constitutionally prescribed roles.

• Tax reform: This budget would focus on growth by reforming the nation's outdated tax code, consolidating brackets, lowering tax rates, and assuming top individual and corporate rates of 25%. It maintains a revenue-neutral approach by clearing out a burdensome tangle of deductions and loopholes that distort economic activity and leave some corporations paying no income taxes at all.

This is America's moment to advance a plan for prosperity. Our budget offers the nation a model of government that is guided by the timeless principles of the American idea: free-market democracy, open competition, a robust private sector bound by rules of honesty and fairness, a secure safety net, and equal opportunity for all under a limited constitutional government of popular consent.

We can reform government so that people don't have to reorient their lives for less. We can grow our economy, promote opportunity, and encourage upward mobility. This budget is the new House majority's answer to history's call. It is now up to all of us to keep America exceptional.

Mr. Ryan, a Republican, represents Wisconsin's first congressional district and serves as chairman of the House Budget Committee.
]]> http://www.klineforcongress.com/news/661/ Wall Street Journal

Republicans will present this week a 2012 budget proposal that would cut more than $4 trillion from federal spending projected over the next decade and transform the Medicare health program for the elderly, a move that will dramatically reshape the budget debate in Washington.

The budget has been prepared by Rep. Paul Ryan, a Wisconsin Republican and the new chairman of the House Budget Committee, and it represents the most complete attempt so far by Republicans to make good on their promises during the 2010 midterm elections to cut government spending and deficits.

Though Rep. Ryan based the Medicare portion of his budget on a previous plan created in collaboration with a Democrat, Alice Rivlin, a senior fellow at the Brookings Institution and long-time budget expert, the current plan isn't likely to get much Democratic support. Instead, it will set up a broad debate over spending and the role of government heading into the 2012 general election.

The plan would essentially end Medicare, which now pays most of the health-care bills for 48 million elderly and disabled Americans, as a program that directly pays those bills. Mr. Ryan and other conservatives say this is necessary because of the program's soaring costs. Medicare cost $396.5 billion in 2010 and is projected to rise to $502.8 billion in 2016. At that pace, spending on the program would have doubled between 2002 and 2016.

Mr. Ryan's proposal would apply to those currently under the age of 55, and for those Americans would convert Medicare into a "premium support" system. Participants from that group would choose from an array of private insurance plans when they reach 65 and become eligible, and the government would pay about the first $15,000 in premiums. Those who are poorer or less healthy would receive bigger payments than others.

"There is nobody saying that Medicare can stay in its current path," Mr. Ryan said on Fox News Sunday. "We should not be measuring ourselves against some mythical future of Medicare that isn't sustainable."

The proposal would also convert Medicaid, the health program for the poor, into a series of block grants to give states more flexibility. And it is expected to suggest significant cuts in Social Security, while proposing fewer details on how to achieve them.

The federal government expects to spend about $275 billion in 2011 on Medicaid, the program that provides medical care to the poor and disabled, up from $117.9 billion in 2000. The Congressional Budget Office projects Medicaid spending will roughly double by 2021.

Conservative activists who are familiar with the Ryan plan said they expect it to call for a fundamental overhaul of the tax system, with a 25% top rate for both individuals and corporations, compared to the current 35% top rate. It is expected to raise about the same amount of money as the current system, however. Lawmakers already are considering ways to accomplish that by reducing or eliminating some deductions and other tax breaks.

Some conservatives also expected the budget plan to tout a temporary tax change that would let U.S. multinationals bring home as much as $1 trillion in profits at a greatly reduced tax rate. That money currently is parked overseas, beyond the reach of U.S. corporate taxation.

Mr. Ryan and other Republicans on Sunday made it plain a primary goal in advancing the budget plan is to start setting the terms of a debate for the 2012 election, and to move beyond the debate over trimming tens of billions in spending during the remaining six months of the current fiscal year. The government could partially close on Friday if no deal is reached.

Democratic and Republican negotiators have reached agreement on how to divide up $33 billion in cuts for this year, a congressional aide familiar with the talks said Sunday. Specific trims haven't been set, but amounts have been allocated to broad categories like agriculture and interior.

Democrats are pushing to meet the target in part by cuts to mandatory programs, such as agricultural subsidies.

Mr. Ryan wouldn't be more specific in the "Fox News Sunday" interview about his spending reduction targets, saying Republicans were still working on the numbers. The Congressional Budget Office estimates that the government is on track to spend $45.77 trillion in the next 10 years, and that total deficits will amount to nearly $12 trillion if current policies are extended.

By suggesting sweeping changes to Medicare, as well as Medicaid and Social Security, Republican leaders are gambling that Americans are worried enough about the growing national debt to accept overhauling social programs that now cover medical costs or provide monthly incomes for a substantial swath of the public.

As the debate in Congress has shifted to how much to cut federal spending, instead of how much more to spend for stimulus programs or other efforts to prop up the economy, lawmakers in both parties, and President Barack Obama, have said there is no way to make a significant dent in projected deficits without some action to overhaul Medicare, Social Security and Medicaid, which make up 60% of the budget.

Mr. Ryan said Sunday his plan would propose capping overall federal spending at close to "historic levels," which were closer to 20% of GDP during the 1990s through 2008.

Democrats say the GOP plan will leave millions exposed to financial risks. The Medicare premium subsidies would grow more slowly than health costs, they say, so seniors would end up with less coverage.

"All this does is shift the risk and burden of rising health-care costs to seniors on Medicare," said Rep. Chris Van Hollen (D., Md.), the top Democrat on the House Budget Committee. "You're on your own with the insurance industry."

The plan's supporters say it would cut costs without sacrificing quality by introducing competition among insurers.

Mr. Ryan isn't alone in attempting to move the budget debate beyond the 2011 fight and Mr. Obama's 2012 blueprint. A bipartisan group of senators led by Sen. Mark Warner (D., Va.) and Sen. Saxby Chambliss (R., Ga.) and known as the "Gang of Six" is working on a proposal to cut $4 trillion from the projected federal deficit, building from recommendations of President Obama's deficit commission.

Mr. Warner said he is concerned that Mr. Ryan's plan will rely too heavily on cutting social programs, and not take aim at defense spending or "look at major tax reform that would actually raise revenues."

Ms. Rivlin said in an interview Sunday she would have preferred a plan that phased in more quickly and left a traditional Medicare program as a default option for seniors. But overall she supported Mr. Ryan's idea. "What Democrats have to realize is we have to do something," Ms. Rivlin said. "Current policy on Medicare is not sustainable. You can worry about how you structure a premium support program, but I think it's a good way to think about the future of Medicare."

]]> http://www.klineforcongress.com/news/660/ Wall Street Journal

Wanted: A strategy for economic growth, full employment, and deficit reduction—all without inflation. Experience shows how to get there. Credible actions that reduce the rapid growth of federal spending and debt will raise economic growth and lower the unemployment rate. Higher private investment, not more government purchases, is the surest way to increase prosperity.

When private investment is high, unemployment is low. In 2006, investment—business fixed investment plus residential investment—as a share of GDP was high, at 17%, and unemployment was low, at 5%. By 2010 private investment as a share of GDP was down to 12%, and unemployment was up to more than 9%. In the year 2000, investment as a share of GDP was 17% while unemployment averaged around 4%. This is a regular pattern.

In contrast, higher government spending is not associated with lower unemployment. For example, when government purchases of goods and services came down as a share of GDP in the 1990s, unemployment didn't rise. In fact it fell, and the higher level of government purchases as a share of GDP since 2000 has clearly not been associated with lower unemployment.

To the extent that government spending crowds out job-creating private investment, it can actually worsen unemployment. Indeed, extensive government efforts to stimulate the economy and reduce joblessness by spending more have failed to reduce joblessness.

Above all, the federal government needs a credible and transparent budget strategy. It's time for a game-changer—a budget action that will stop the recent discretionary spending binge before it gets entrenched in government agencies.

Second, we need to lay out a path for total federal government spending growth for next year and later years that will gradually bring spending into balance with the amount of tax revenues generated in later years by the current tax system. Assurance that the current tax system will remain in place—pending genuine reform in corporate and personal income taxes—will be an immediate stimulus.

All this must be accompanied by an accurate and simple explanation of how the strategy will increase economic growth, an explanation that will counteract scare stories and also allow people outside of government to start making plans, including business plans, to invest and hire. In this respect the budget strategy should be seen in the context of a larger pro-growth, pro-employment government reform strategy.

We can see such a sensible budget strategy starting to emerge. The first step of the strategy is largely being addressed by the House budget plan for 2011, or HR1. Though voted down in its entirety by the Senate, it is now being split up into "continuing" resolutions that add up to the same spending levels.

To see how HR1 works, note that discretionary appropriations other than for defense and homeland security were $460.1 billion in 2010, a sharp 22% increase over the $378.4 billion a mere three years ago. HR1 reverses this bulge by bringing these appropriations to $394.5 billion, which is 4% higher than in 2008. Spending growth is greatly reduced under HR1, but it is still enough to cover inflation over those three years.

There is no reason why government agencies—from Treasury and Commerce to the Executive Office of the President—cannot get by with the same amount of funding they had in 2008 plus increases for inflation. Anything less than HR1 would not represent a credible first step. Changes in budget authority convert to government outlays slowly. According to the Congressional Budget Office, outlays will only be $19 billion less in 2011 with HR1, meaning it would take spending to 24% of GDP in 2011 from 24.1% today.

If HR1 is the first step of the strategy, then the second step could come in the form of the budget resolution for 2012 also coming out of the House. We do not know what this will look like, but it is likely to entail a gradual reduction in spending as a share of GDP that would, in a reasonable number of years, lead to a balanced budget without tax rate increases.

To make the path credible, the budget resolution should include instructions to the appropriations subcommittees elaborating changes in government programs that will make the spending goals a reality. These instructions must include a requirement for reforms of the Social Security and health-care systems.

Health-care reform is particularly difficult politically, although absolutely necessary to get long-term government spending under control. This is not the place to go into various ways to make the health-care delivery system cheaper and at the same time much more effective in promoting health. However, it is absolutely essential to make wholesale changes in ObamaCare, and many of its approaches to health reform.

The nearby chart shows an example of a path that brings total federal outlays relative to GDP back to the level of 2007—19.5%. One line shows outlays as a share of GDP under the CBO baseline released on March 18. The other shows the spending path starting with HR1 in 2011. With HR1 federal outlays grow at 2.7% per year from 2010 to 2021 in nominal terms, while nominal GDP is expected to grow by 4.6% per year.

Faster GDP growth will bring a balanced budget more quickly by increasing the growth of tax revenues. Critics will argue that such a budget plan will decrease economic growth and job creation. Some, such as economists at Goldman Sachs and Moody's, have already said that HR1 will lower economic growth by as much as 2% this quarter and the next and cost hundreds of thousands of jobs. But this is highly implausible given the small size of the change in outlays in 2011 under HR1, as shown in the chart. The change in spending is not abrupt, as they claim, but quite gradual.

Those who predict that a gradual and credible plan to lower spending growth will reduce job creation disregard the private investment benefits that come from reducing the threats of higher taxes, higher interest rates and a fiscal crisis. This is the same thinking used to claim that the stimulus package worked. These economic models failed in the 1970s, failed in 2008, and they are still failing.

Control of federal spending and a strategy for ending the deficit will provide assurance that tax rates will not rise—pending tax reform—and that uncontrolled deficits will not recur. This assurance must be the foundation of strategy for a healthy economy.

Mr. Becker, the 1992 Nobel economics laureate, is professor of economics at the University of Chicago and senior fellow at the Hoover Institution. Mr. Shultz, secretary of Labor (1969-70), secretary of Treasury (1972-74) and secretary of State (1982-89), is a fellow at Stanford University's Hoover Institution. Mr. Taylor is a professor of economics at Stanford and a senior fellow at the Hoover Institution.
]]> http://www.klineforcongress.com/news/659/ Politico

If Republicans break through the spending gridlock that has seized Capitol Hill, the rest of their agenda is starting to come into focus: defunding, investigating and otherwise beating up on liberal causes.

At every turn, the GOP is attacking sacred cows of the left. The party has already voted to kill all federal funding for Planned Parenthood, a longtime conservative nemesis. NPR may lose its federal support. Republicans have targeted the Environmental Protection Agency for investigation and are moving to kill a federal program that benefits environmental activist groups like Defenders of Wildlife.

Even AARP — once untouchable because of its political and demographic power — is being targeted.

This week, House Ways and Means Committee Republicans unveiled a 34-page report on AARP’s alleged abuse of its tax status in health care reform. The GOP has also gone after teachers unions, which were a target in the House-passed bill to encourage school vouchers in the District of Columbia.

Republican attacks on some of these well-known names in the liberal brand are only beginning, aides and lawmakers say. And nevermind that few of these initiatives stand a chance at becoming law, conservatives are getting in their whacks and sending a message.

“Each of these initiatives is designed to save taxpayers’ money or create jobs or help needy children. The goal is better public policy for the American people,” said Michael Steel, spokesman for House Speaker John Boehner. “When conservative policy goals are opposed by liberal special interests, our goal is to break their rice bowls.”

But House Democrats, who have been mostly powerless in stopping the GOP attacks, contend that Republican attacks on liberal targets undermine their stated goal of job creation as a top priority.

“There is a tendency for the Republican majority to demonize their opposition, as they did with Red-baiting in the 1950s or questioning people’s patriotism,” said California Rep. Henry Waxman, who himself has been a vigorous lawmaker and investigator in the past. “These groups are being punished for their views. I don’t see the constructive side of the Republican criticism. It’s been punitive.”

And even though Republican leaders insist they aren’t waging a coordinated assault on issues liberals hold dear, GOP attacks continue to crop up individually among various members and House committees. Republican leaders and committee communicators also discuss these types of issues in weekly reviews of their agendas.

This week, when the Ways and Means Committee released its report, “Behind the Veil: The AARP America Doesn’t Know,” Oversight Subcommittee Chairman Charles Boustany (R-La.) suggested that the senior citizen lobby’s commercial activities interfere with its tax-exempt status, and he called for an investigation by the Internal Revenue Service to determine whether the group’s “privileged status ought to be revoked.”

Republicans reject criticisms that their AARP review or other investigations have a partisan motive. The 18-month AARP review was spawned by the Democrats’ handling of the health care bill.

“The committee will of course conduct rigorous oversight, but it does not ‘target’ any group and does not target anyone based on their political views. AARP came under the microscope because they inexplicably (at the time) endorsed over one-half trillion dollars in cuts to seniors’ Medicare benefits,” Ways and Means deputy staff director Sage Eastman said in an email. “We now have a better idea of why they may have done so; as the report suggests, they stand to reap over $1 billion in profits from cuts to the very seniors they claim to represent.”

House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) has devoted much attention to internal abuses by federal agencies. But spokesman Frederick Hill said the panel will also be eyeing another favorite conservative target: public and private unions.

Hill noted internal reviews of allegedly excessive compensation packages for federal employees and favoritism to the pensions of union members of the bankrupt Delphi Corp.

When the House approved Boehner’s school-voucher bill Wednesday, debate fell on the broader context of the influence of teachers unions. Despite earlier GOP expectations for bipartisan support, Illinois Rep. Daniel Lipinski was the only Democrat who voted for the bill, which his party viewed as “anti-union.”

Other examples of longtime liberal allies that have recently come under scrutiny by the House GOP have been pursued for years by individual members. When Indiana Rep. Mike Pence in February won nearly party-line approval of his amendment to end last year’s $317 million in federal support for Planned Parenthood, he said it was the fourth time he had attempted such a cutoff. The controversy over his amendment looms as one of the “policy” issues that could thwart a final deal between the House and Senate to meet the April 8 deadline to extend federal spending.

Likewise, when the House rescinded funds for NPR in the spending bill, internal meltdowns by top officers at the public radio network facilitated the opposition of longtime conservative foes.

Meanwhile, two Republicans — Sen. David Vitter of Louisiana and Rep. Rob Bishop of Utah — have proposed a bill to curtail environmental groups’ access to federal funds to reimburse legal fees for nonprofits that successfully sue the federal government. Such a move would cut off groups like Defenders of Wildlife and Friends of the Earth.

Waxman said Republican attacks on these programs have been politically motivated as part of the GOP’s efforts to silence opponents.

“They want to stay in power. They don’t want criticism, so they make ad hominem attacks. As with all bullies, they only want silence,” he said. “They are doing it for their base.” In the final deal cutting on the budget bill, he worried that “Republicans are trying to blackmail the Senate and the president” on the so-called policy riders.

Republicans dismiss such attacks or suggestions that they have an overarching game plan to punish groups on the left.

“The Democratic majority in the House again and again protected liberal special interests,” Steel said. “We are addressing the oversights of their oversight.”




]]> http://www.klineforcongress.com/news/658/ Roll Call Staff

The Senate set up a vote for Tuesday on a bill that would make the first significant change to President Barack Obama’s signature health care overhaul law.

Under an agreement reached Thursday, the Senate will vote on a House-passed bill that would repeal a tax-reporting requirement included in the health care law. The vote is scheduled to be held before the weekly caucus lunches.

The provision, which requires companies to file a 1099 form with the IRS every time they conduct $600 worth of business with a vendor, has been panned by Members of both parties, but a group of Senate Democrats have raised concerns over the bill’s method of offsetting revenue that would be lost if the provision is repealed.

The Obama administration supported repealing the provision but expressed “serious concerns” about the bill’s offset in a statement of administration policy released this month. The White House argues that the offset would result in tax increases for certain middle-class taxpayers, but it stopped short of threatening to veto the measure.


]]> http://www.klineforcongress.com/news/657/ The Washington Times

Miffed at the inability of Republicans to deliver on promises of deep cuts in federal spending, tea partyers will converge on the Capitol on Thursday to warn both parties about political repercussions if they don’t act.

The “Continuing Revolution” rally comes amid a drawn-out spending debate that is testing the ties between GOP leaders and the tea party movement, which Republicans acknowledge helped push them to victory in last year’s elections, but which now wants to see its support translate into major legislative victories.

“We expect to see a bunch of frustrated, angry patriots who want to see serious cuts to government spending,” said Mark Meckler, co-founder of the influential Tea Party Patriots. “I think it’s a huge gut check. This is a way for us to judge them and see how serious they are and to prepare for the 2012 election.”

Republicans seized control of the House in the November elections after promising to repeal President Obama’s health care overhaul and pledging to chop non-defense discretionary spending back to pre-stimulus 2008 levels, saving $100 billion in the first year.

Since then, the House GOP has passed and sent a health care repeal bill to the Senate, but Republicans have walked back their targeted spending cuts to $61 billion and are considering a compromise deal offered by Senate Democrats that would cut only about $30 billion.

The mere possibility of that has drawn the ire of Mr. Meckler, leaders from other branches of the tea party movement, and conservative lawmakers who say anything short of the $100 billion in cuts that were promised will be considered a failure. They plan to drive that message home at a rally featuring tea party favorites, such as Reps. Michele Bachmann, Minnesota Republican, and Mike Pence, Indiana Republican, at the Robert A. Taft Memorial just north of the Capitol complex.

“I just know that every time people have come up here, it has made a difference,” said Rep. Louis Gohmert, Texas Republican, alluding to the rally. “I hope it will push our leadership to doing what we promised we would do.”

Senate Democrats are trying to widen the divide between tea partyers and Republican leaders, arguing that House Speaker John A. Boehner, Ohio Republican, must decide between responsible government and tea party demands for deep cuts.

“It’s obvious that he has a difficult situation on his hands. I don’t envy him. He’s getting a lot of pressure from the tea party to dig in his heels, even if it hurts the country and shatters our fragile economic recovery,” said Senate Majority Leader Harry Reid, Nevada Democrat. “What’s worse, the country doesn’t much care for the tea party.”

With negotiations reaching a critical stage, Vice President Joseph R. Biden met with Senate Democratic leaders to urge them to strike a spending deal that keeps the government funded through Sept. 30, the end of the fiscal year.

If no deal is reached, the government would shut down on April 8. Top congressional leaders in both parties have said that is not an acceptable outcome.

But some tea partyers and conservative lawmakers say a government shutdown might be the best way to convince lawmakers from both parties that now is the time to close the spending spigots and get serious about the nation’s annual trillion-dollar deficits and soaring $14.3 trillion national debt.

“The idea that the Democrats think it is reasonable to offer up less than 1 percent of the budget in budget cuts — Americans, I think, are ready to shut down the government over something as insulting as that offer,” said Andrew Langer, president of the Institute for Liberty.

Mr. Langer, one of the rally’s scheduled speakers, said “the $30 billion in cuts is not only nothing, it is an insult to every American who is hungering for meaningful change in D.C. Even $61 billion is an insult. Americans have wanted change for three election cycles and fighting to get to 1 percent of the budget is an insult to all of these people.”

Some lawmakers said House Republican leaders at least need to contemplate a shutdown in order to go head-to-head in negotiations with Mr. Obama.

“I think the Republican leadership and the Democratic leadership have all come to the conclusion that it’s more likely the president would win out in that scenario, because they seem to be informed by the single experience in 1995. Therefore, I think the Democrats wanted to initiate a shutdown because they have a Democratic president who would win this,” said Rep. Steve King, Iowa Republican, a tea party favorite who says his chief goal is to defund the health care law.

Mr. King said he is making his case to Republican leaders, but said they are “not yet” open to the idea of a shutdown.

“There is a coming confrontation between the House majority and Barack Obama,” Mr. King said. “If Republicans should decide that we’re going to avoid a shutdown, the net result will be the president of the United States will get everything he’s willing to fight for.”

Caught in the crossfire from tea partyers and Democrats is Mr. Boehner.

While still negotiating with Democrats, he has intensified his criticism of them, arguing that the House has already passed a bill, while the Senate has not.

“Now the Senate says: ‘We have a plan.’ Well, great — pass the damn thing, all right? And send it over here, and let’s have real negotiations, instead of sitting over there and rooting for a government shutdown,” he said.

The tussle over the current year’s spending is likely to spill into broader fights over the budget for 2012, and whether to raise the national debt limit — two debates that are expected to kick off early next month and are likely to be front and center at Thursday’s rally.



]]> http://www.klineforcongress.com/news/656/ Los Angeles Times

Congressional Republicans are drafting legislation that would require the federal government to develop a plan to add more fencing, sensors, agents and even drones to stop every illegal entry into the United States.

The legislative effort offers another example of how a more conservative Congress has steered the immigration debate away from the Obama administration's two-pronged push for reforms and improved border security, and toward strict enforcement of immigration laws.

In December, a lame-duck House controlled by Democrats passed the Dream Act, a reform that would have created a path to citizenship for some young illegal immigrants in the U.S., but it was narrowly defeated in the Senate.

The Democrats' Senate majority means the latest legislation is unlikely to pass, but the goal may be more political. By continuing to spearhead such measures, Republicans, who feel they are in agreement with most voters, hope to force Democrats to take a position on immigration issues in advance of the 2012 campaign.

The debate's change in tone also comes as census data show that Latinos comprise the fastest-growing block of voters, potentially a complicating factor for Republican strategists. The number of Latino voters is increasing most in states that in 2010 gained congressional seats and Electoral College votes, according to a study released in January by the Pew Hispanic Center.

Immigration skirmishes seem to excite the Republican base, said Wayne Cornelius, a professor emeritus at UC San Diego who has spent more than 40 years studying cross-border migration.

"In the short-term, they calculate they can gain more votes with these hard-liner proposals," he said, but some may have qualms about alienating Latinos.

A Republican strategist acknowledged there was debate within the party about how to handle immigration enforcement without driving away Latino voters who might otherwise agree with the fiscal conservative aspects of the party platform. Republican activists have said they think some Latino voters support the GOP position on immigration.

But many Republicans want a modernized immigration system that is consistent with the values of an immigrant nation, and those party members who speak loudly against reforms are a "vocal minority," said the strategist, who spoke on condition of anonymity because of the sensitivity of the debate.

The U.S. has spent more than $4.5 billion to improve border security in the nine years since the Sept. 11 terrorist attacks, and critics argue that stopping every illegal crossing is an impractical goal.

"It is all just symbolic showmanship. It will never get through the Senate. It may have short-term electoral utility but will not result in any real legislation," Cornelius said.

But Rep. Candice S. Miller, a Michigan Republican who wrote the Secure Border Act of 2011, said in an interview that "Congress needs to reflect the political will of the majority of the American people, which is to secure our borders."

The Republican effort to push the Homeland Security Department to take a tougher stance on immigration enforcement follows a request last year by all seven Republican senators on the Judiciary Committee that asked the department to determine how much money it needed to deport every illegal immigrant the government encountered.

The Homeland Security Department has not estimated the cost, but a 2005 report by the Center for American Progress concluded it would require $206 billion over five years to deport the estimated 11 million people living in the country illegally.

The Obama administration has, in practice, largely supported the argument that border security is the first priority, Cornelius said. "It is really a red herring. We will never have the border secure enough.... Making immigration reform hostage to border security is a recipe for policy paralysis."

Miller's proposed legislation would require the Homeland Security Department to give Congress a five-year plan to bring unlawful entries and smuggling down to nearly zero, and let Congress decide whether to fund it. House Homeland Security Committee Chairman Peter T. King (R-N.Y.) and 10 other Republicans have agreed to co-sponsor the bill, which could be introduced as early as Thursday.

The proposal may come with such a hefty price tag that it's unrealistic to carry out. But Republicans say cost should not be the Border Patrol's concern. "They need to be very candid with us and tell us what they need," Miller said. "We're the ones passing the budgets and we have to decide amongst ourselves."

Customs and Border Protection developed a strategic plan for securing the border by 2014, but some lawmakers say it doesn't go far enough. The Border Patrol reported to the Government Accountability Office that by October 2010 it had control of 873 miles of the nearly 2,000 miles of the Southwest border, or 44%.

Asking the Homeland Security Department how it can stop all illegal entries is "asking the wrong question," said Doris Meissner, former head of the Immigration and Naturalization Service, because law enforcement cannot change the underlying forces — jobs and the illegal drug market — that draw migrants and smugglers to the U.S.

"Members of Congress may want to pour concrete from sea to shining sea," Cornelius said, "but it is simply not realistic."
]]> http://www.klineforcongress.com/news/655/ Wall Street Journal editorial

Treasury Secretary Timothy Geithner called this month for government support for housing to be "transparent, explicit and limited" and to "make private markets the primary source of mortgage credit and the primary bearer of mortgage losses." Hear, hear. But that vision will be impossible to realize if the government continues to confer regulatory advantages on public financial institutions.

Witness the government's announcement yesterday of regulations to overhaul the moribund mortgage securitization market. Last year's Dodd-Frank financial rewrite mandates that lenders keep some portion of loans on their own books as an incentive to make better loans. Congress left regulators to work out the definition of a good loan and the process through which lenders would be required to retain risk.

Yesterday Federal Deposit Insurance Corp. chief Sheila Bair presented the results, which the Federal Reserve has approved but other regulators must now sign off on too. Loans to mortgage borrowers who put 20% cash down and meet other financial standards will be exempt from the new risk limits. Banks that package riskier loans and sell those securities to others would have to keep 5% of the loans on their books. Ms. Bair says that by having "skin in the game," securitizers' risks will be aligned with their bondholders.

There's something to be said for that idea. Some of the biggest housing market blow-ups came courtesy of second-rate lenders that sold the loans to other borrowers—with most of the riskiest stuff backed by the U.S. government. Think Countrywide Financial selling its subprime loan book to Fannie Mae.

But then get this: Yesterday's announcement excluded Fannie, Freddie Mac and the Federal Housing Administration. The three horsemen of the taxpayer apocalypse control some 90% of all new mortgage lending. Yesterday's proposal excludes Fannie and Fred while they're in conservatorship and FHA is excluded altogether by Dodd-Frank. The explanation seems to be that applying the new rules to these outfits would reduce the supply of capital to housing. But by subjecting private lenders to more stringent risk-retention rules, regulators will make it harder for them to compete with their government counterparts.

Tom Deutsch, the head of the American Securitization Forum—a private lobby group—drew the right conclusions when he said yesterday, "Drawing private capital out of the mortgage finance system, rather than encouraging its entry, will only serve to further depress home prices nationwide and keep first-time home buyers out of a housing market suffering from a severe oversupply of available homes."

That's not the vision of a housing revival articulated by Mr. Geithner. Nor is there time to waste: The private market has, as Ms. Bair said yesterday, "virtually ceased to exist." Only two private market securitizations have been done in the past three years. Without private capital to properly price risk, the housing market will take that much longer to revive. Government policy has messed up housing finance from top to bottom, and playing favorites with failed public companies will only make it worse.
]]> http://www.klineforcongress.com/news/654/ The Hill

A top Democrat said Tuesday evening that some of the most controversial "riders" attached to a House spending bill would be a deal breaker in the Senate.

Sen. Charles Schumer (D-N.Y.) said riders to defund Planned Parenthood and the Environmental Protection Agency (EPA) wouldn't fly in the upper chamber.

"The bottom line is that whether it's Planned Parenthood or EPA, we will not accept those riders," Schumer said on MSNBC. "And any thought to the contrary is wrong."

"We believe that they don't belong in a budget bill," he added. "There can be debate on these issues. We believe they would be defeated in the Senate."

House Republicans included a number of riders — measures attached to spending legislation that pursue a broader policy goal, often having to do with social issues — in their legislation funding the government the rest of this year.

The most controversial were those to cut off federal funding to the EPA and Planned Parenthood because it provides abortion services.

The provisions are seen as bargaining chips in the negotiation between the GOP-run House and Democratic-led Senate over a spending bill to fund government the rest of the fiscal year. Senate Majority Leader Harry Reid (D-Nev.) signaled earlier Tuesday that while he wasn't thrilled with the riders, he'd be willing to consider them.

"We're happy to look at the policy riders," he said. "There aren't many of them that excite me, but we're willing to look at them."

But Schumer said that some of the issues were non-negotiable.

"There was some talk today about some riders being accepted by Leader Reid," said the New York Democrat. "But let's be clear, those would be the kinds of noncontroversial riders we haven't heard about."

Democrats' refusal to accept the Planned Parenthood and EPA riders would go a long way toward Schumer's goal of driving a wedge between Republican leaders in the House and the more insurgent class of Tea Party freshmen.

Schumer has talked a good game about GOP leaders' need to divorce themselves from the conservative members of their conference in budget negotiations. Refusing to accept those riders could turn up the heat on House leaders because a number of conservative members have threatened to vote against a final spending package if it excludes, for instance, the measure defunding Planned Parenthood.

]]> http://www.klineforcongress.com/news/653/ The Hill

House Republicans say implementing the Dodd-Frank financial reform law will cost agencies nearly $1 billion this year.

The bill will also require the federal government to hire thousands of new workers, according to a memo being circulated among House Republicans that was obtained by The Hill.

First-year costs for the 11 agencies charged with implementing the Wall Street overhaul will reach about $974 million, the memo states. The memo comes two days before the House Financial Services Committee's oversight subcommittee will explore Dodd-Frank costs.

In addition to new costs, more than 2,800 full-time employees will need to be hired to handle new responsibilities, according to the memo.

On its own, the new Consumer Financial Protection Bureau (CFPB), which has been hotly contested by Republicans, would require up to 1,225 hires to get up and running.

However, not all of those costs will have to be paid by taxpayers. Six of the 11 agencies affected by Dodd-Frank have budgets that are fully or partially funded by fees and other assessments on companies monitored by the agencies. Another is financed by offsetting costs, and another is fully funded by funds from another agency. Just three are funded via appropriations.

For example, the Securities and Exchange Commission (SEC) has its budget set by Congress, but actually funds itself by assessing fees on financial transactions. The SEC, which has been handed major new responsibilities under Dodd-Frank, has requested an increased budget for fiscal 2012, but a spending package approved by House Republicans would instead cut it.

The new Consumer Financial Protection Bureau (CFPB) receives all its funding from the Federal Reserve, which in turn obtains its funding from assessments and other non-taxpayer revenue.
]]> http://www.klineforcongress.com/news/652/ The Hill

Republicans are raising new questions about how much legal leeway the Obama administration has to fix pieces of the healthcare law.

Republicans are targeting the 1,000-plus waivers the Department of Health and Human Services (HHS) has given to groups that can’t meet new annual coverage requirements, as well as a voluntary long-term care insurance program the department acknowledges is deeply flawed.

The push marks a new attack strategy for GOP lawmakers who want to prevent implementation of President Obama’s signature legislative achievement in any way possible.

Republicans have been increasingly critical of waivers granted by the Obama administration to organizations that cannot meet a new mandate to provide at least $750,000 in coverage in 2011. They say the waivers, granted for just the annual limits requirement, are indicative of problems in the law.

The Obama administration says the waivers are a necessary stopgap measure to stabilize the insurance market until individuals can purchase coverage on new state-run health exchanges in 2014.

But House Republicans with oversight powers say the massive overhaul doesn’t explicitly grant the administration power to provide waivers.

“The entire waivers process is predicated on the ability of the secretary to grant waivers in the first place,” said Rep. Trey Gowdy (R-S.C.), chairman of the House Oversight Health subcommittee. “However, this seemingly fundamental step — the statutory basis for waiving compliance with the law — appears to have been wholly neglected by the plain language of the statute.”

An HHS official recently defended the waivers during a hearing on the Hill, pointing out an annual limits provision in the law that says the secretary has the power "to ensure that access to needed services is made available with a minimal impact on premiums."

Gowdy remains unconvinced the law explicitly allows Sebelius to offer waivers for the annual coverage requirements.

“I think it’s interesting that expressed grants of waivers are provided in other pieces of the legislation, and then there’s a little bit of legislative footwork or statutory interpretive footwork that has to be done to reach the conclusion with respect to this piece of legislation,” Gowdy told The Hill. "Is it a fair question to ask? Yes, it is.”

Republicans are also challenging how much authority Sebelius has to alter a new long-term care insurance program, which she acknowledges is “totally unsustainable” in its current form. Sebelius said HHS will consider increasing premiums and tightening eligibility standards to make the Community Living Assistance Services and Supports (CLASS) Act solvent.

But Republicans are pointing to a new Congressional Research Service (CRS) report that questions just how much power Sebelius has to make changes to the voluntary program. The CRS report said a court may find the sweeping healthcare reform law does not provide the HHS secretary with the authority to raise minimum earnings requirements in order to be eligible for the program.

Rep. Denny Rehberg (R-Mont.) recently sent a letter to Sebelius asking about her statutory authority to alter the CLASS Act. Rep. Charles Boustany Jr. (R-La.), who last week introduced a bill to repeal the program, said the CRS report raises serious legal questions.

“The secretary admitted the law made CLASS ‘totally unsustainable,’ ” Boustany said in a statement to The Hill. “Now she wants to rewrite the law through regulations to exclude individuals who meet the minimum earnings requirement specified in the law President Obama signed. The CRS report warns this latest overreach could lead to lawsuits.”

But a former congressional staffer who helped design the long-term care program says the CRS report is far from a smoking gun, arguing the CLASS Act was intentionally built to allow the HHS secretary to make adjustments to the program.

“Until the administration rolls out the program, you won’t know the answer to the sustainability question,” said Connie Garner, a former top staffer for the late Sen. Edward Kennedy (D-Mass.).

“The legislation does not present you with a program yet — it gives the secretary parameters to design one,” Garner said. “People are commenting on something that is not real yet.”
]]> http://www.klineforcongress.com/news/651/ Associated Press

WASHINGTON –  Less than three months into a tea party-flavored Congress, federal budget cuts amount to $10 billion. Government shutdowns total zero.

That translates into twin early triumphs for Republicans, who are determined to reduce spending and have so far defied attempts by congressional Democrats to cast them as an uncontrollable rabble that would just as soon shutter the government as downsize it.

"We've made it clear that a government shutdown is not an option — period," GOP Rep. Hal Rogers of Kentucky, the House Appropriations Committee chairman, said recently as the House was voting to cut $6 billion of the $10 billion while keeping the government running through April 8.

Not exactly.

The rhetorical threat of a shutdown is a recurring one, put to differing uses by various interests in the struggle over the size and scope of the government. As Congress returns this week from a break, that threat hangs over negotiations on legislation to enact tens of billions and keep the government running through the Sept. 30 end of the current budget year.

"If the government were to shut down, I don't think it's because we asked for too much," Rep. Scott DesJarlais, R-Tenn., said recently, neither advocating a shutdown nor ruling one out.

Presidential hopeful Newt Gingrich counseled fellow Republicans on the subject over the winter. "Becoming one more promise-breaking, Washington-dominated, sellout group is a much worse fate — politically and ethically — than having the government close for a few days," he wrote in The Washington Post. As House speaker in the mid-1990s, he led the party into two shutdowns that boomeranged politically, helping President Bill Clinton win re-election and damaging the GOP. Now he's a presidential hopeful and seeks the support of tea party activists.

The current speaker, Rep. John Boehner, R-Ohio, says he wants no part of such talk. But Democrats seize on shutdown-related comments as they work to deflect attention from their own inability to unify on spending cuts, an issue of immense importance to the voters at a time the deficit is over $1.5 trillion and the federal debt exceeds $14 trillion.

"It's clear that there is no path to compromise that goes through the tea party," said Sen. Chuck Schumer, D-N.Y., before Congress began its break. "We urge Speaker Boehner to push ahead without them. We are ready to work with him if he is willing to buck the extreme element of his party."

Schumer spoke after the most recent temporary spending bill passed the House, and to underscore his point, he noted that 54 Republicans voted against the measure. Left unsaid was that 66 of the 87 first-term GOP lawmakers voted for it, along with 85 Democrats, a strong bipartisan showing.

Among Senate Democrats, liberals generally want less in the way of cuts than do the moderates, several of whom face potentially difficult races in 2012.

"There are way too many people in denial around here about the nature of the (deficit) problem and how serious it is," said Sen. Claire McCaskill, D-Mo., who will face the voters in a state that Obama lost in 2008.

The difference in perspective is explained in polling shown privately to Democratic senators over the winter. In a survey by GarinHartYang, a Democratic firm, 63 percent of Democrats polled said their No. 1 priority for improving the economy was government spending to create jobs and help the United States compete globally. By contrast, 28 percent preferred reducing the deficit through spending cuts.

When independent voters were asked the same question, 50 percent favored cuts to reduce the deficit while only 39 percent backed government spending to create jobs. Obama has called for both.

The report also said that when it comes to re-electing senators, "voters have bigger concerns about not doing enough about the deficit than about going too far." The margin was 48-41 among independents, and 50-40 overall. The survey results were obtained by The Associated Press.

Beyond the obvious appeal to Republican party activists, it's unclear whether the shutdown talk within the party is designed to throw the Democrats off balance or perhaps warn Boehner and the rest of the GOP leadership to hold firm in the current negotiations.

In those talks, the initial bargaining positions are clear.

The House has voted for $61 billion in cuts. Senate Democrats haven't agreed publicly to anything more than the $10 billion already enacted. In private negotiations joined by the White House, according to officials familiar with the secretive talks, all sides have acknowledged they must move off their initial figures. Boehner also is defending a series of contentious nonspending provisions that passed the House. Some of those may be acceptable to the White House, but nothing that neuters the year-old health care law or bans Planned Parenthood from receiving federal funds.

So far, though, the real surprise is not how hard it's been to cut spending, but how easy.

The $10 billion total so far was drawn from administration recommendations. There was little Democratic criticism, and Republicans pocketed them gladly, each time calling for more.

The White House wants more, too, as Obama looks ahead to his 2012 re-election campaign.

"We can agree to additional savings and we want to look and find the savings that we can all agree on," says his budget director, Jack Lew. "It's going to be somewhere in the middle."
]]> http://www.klineforcongress.com/news/650/ Washington Post editorial

WHEN WAS the last time an American president stood before an audience in a foreign country and announced that he looked forward to importing more of its oil? Answer: Just over a week ago, when President Obama joined political and business leaders in Brasilia in hailing the fact that their newly discovered offshore petroleum reserves might be twice as large as those in the United States. Americans “want to help with technology and support to develop these oil reserves safely, and when you’re ready to start selling, we want to be one of your best customers,” Mr. Obama said.

Brazil is probably a more stable, secure supplier than, say, Libya. Still, the president’s words were ironic. Brazil already produces vast quantities of a fuel — ethanol — that the U.S. government, under a policy long supported by presidents and farm-state members of Congress from both parties, has promoted as a green alternative to gasoline. But the United States, protecting its own heavily subsidized ethanol industry by means of a 2.5 percent tariff and a 54-cent-per-gallon duty, prevents Americans from importing all but trivial amounts of the stuff from Brazil. Therefore, we need more oil — much of it imported. In Brasilia, Mr. Obama spoke of strengthening U.S.-Brazilian technical cooperation on ethanol but did not propose allowing U.S. protectionist measures to lapse after their scheduled expiration on Dec. 31.

As for offshore drilling, Mr. Obama’s enthusiasm for punching holes in the ocean floor off Brazil is hard to reconcile with his decision, announced Dec. 1, to keep the waters off the East and West coasts and the eastern Gulf of Mexico off-limits to exploration indefinitely. His policy was a reversal of an earlier decision he had made to open some of those areas. We can understand that reversal, after the massive oil spill in the western Gulf last year. And, demonstrating a measure of flexibility even after the disaster, the administration has announced five deep-water drilling permits in the western Gulf since the spill.

The vast majority of U.S. shores, however, have remained off-limits for decades. This, too, is a policy made by two parties, with Republicans opposing drilling when it suited them; President George W. Bush prevented drilling off the Florida Gulf Coast in part to boost his brother Jeb’s 2002 run for a second term as governor. But it is tough to reconcile with U.S. eagerness to “help” Brazil pump oil off its coasts and ship it here. U.S. companies, enticed by government loan guarantees, are already lined up to sell Brazil drilling equipment and services. Forget the implications for U.S. dependency on foreign sources. What does this posture say about American regard for the natural environment outside U.S. territory?

Privileged residents of scenic landscapes in America have long cried “NIMBY” — “Not In My Back Yard” — to stave off unwanted but necessary projects, from railway tracks to wind farms to power lines. Now NIMBY-ism, it seems, has become U.S. policy on offshore oil production. But the Nigerias, Angolas and Brazils of the world do not have that luxury. This makes no sense, economically or environmentally, and, sooner or later, a more balanced view must prevail.
]]> http://www.klineforcongress.com/news/649/ Politico

Democrats are under siege as they mark the first anniversary of health care reform Wednesday — and they won't get much help from the star-studded, $125 million support group they were once promised.

Wal-Mart Watch founder Andrew Grossman unveiled the Health Information Campaign with great fanfare last June. Tom Daschle and Ted Kennedy's widow, Vicki, were expected to lead the effort. They'd have help from former White House Communications Director Anita Dunn. They'd have an office in Washington with 10 or 15 operatives backing the Affordable Care Act and those who supported it.

And they'd have money to spend: Grossman hoped for $25 million a year for five years.

But nine months later, the Health Information Campaign has all but disappeared. Its website hasn't been updated since the end of last year. Its executive director and communications director are gone. There's no sign that it has any money. And neither Daschle nor Dunn will return calls asking about it.

Grossman laid out the plans for the campaign in an interview with POLITICO in June, saying the group hoped to add corporate representatives to its board and then win people over by speaking to them with “respect.”

“The law is in effect, and the best thing we can do now is explain it,” Grossman said then.

But asked this week about the Health Information Campaign, Grossman declined to talk on the record.

The Health Information Campaign was active for several months after Grossman’s announcement in June. In September, it pumped $2 million into a national television ad campaign touting the law’s first insurance reforms. In October, it announced that veteran labor activist and political director James Chiong would serve as its executive director.

“We’re going to run a very sophisticated campaign,” Chiong told POLITICO at the time. “I think we’ll be aggressive on TV, aggressive in making all these diverse partnerships with groups that have health as part of their portfolio.”

But that aggressive approach never came.

In December, Chiong traveled to Pensacola, Fla., to talk to reporters and activists about the benefits as a federal judge there considered legal challenges from more than 20 states. And although the campaign participated in protests on Capitol Hill in January, its website was last updated in December, with news of a court ruling in Virginia that has since been appealed.

Chiong did not respond to a request for comment.

The Health Information Campaign’s website directs press inquiries to its communications director, Erikka Knuti, but she did not respond to a phone call or an e-mail message. In her Twitter bio, she now refers to herself only as a “lady flack doin' her thing in the world of D.C. politics.”

In February — eight months after Grossman announced the formation of the Health Information Campaign — POLITICO reported that a trio of high-powered Democratic operatives were in the early stages of a new initiative to coordinate messaging on health care reform.

It's not clear whether the effort is a replacement for or a continuation of the Health Information Campaign.

One of the three operatives, former Ben Nelson staffer David Di Martino, said this week that the new group's goal is to “recharge the effort and coordination” among various pro-reform groups.

“Our strategy has been the same since Day One. Our tactics and plan have been adjusted,” Di Martino said. “Our goal is to highlight the benefits of the law, move the country forward and define the risk of repeal.”

Di Martino defended the Health Information Campaign, saying that its “initial effort is paying off” in anniversary events in 35 states across the country.

But that’s a far cry from the five-year, $125-million vision Grossman laid out in June.

Di Martino declined to discuss the budget or the source of funds for the new pro-reform effort.

But one thing is clear: The pro-reform effort could certainly use the kind of sustained help that the Health Information Campaign once promised.

Although Democrats insisted that the ACA would become more popular once the congressional debate ended and the benefits started to kick in, the reverse has actually happened. According to a Kaiser Health Tracking poll released Friday, 46 percent of the public opposes the law, up from 40 percent a year ago. Only 42 percent support the law, down from 46 percent a year ago.

Pro-reform groups — such as Families USA, Americans United for Change, Health Care for America Now, SEIU, Small Business Majority, U.S. PIRG and Herndon Alliance — are holding nearly 200 events this week to mark the one-year anniversary. Former House Speaker Nancy Pelosi has been making the rounds in support of the law, and House Minority Whip Steny Hoyer put out a statement Tuesday saying that the law has “given American families new patient protections and greater freedoms."

But there will be no re-creation of the festive East Room bill signing ceremony of a year ago; President Barack Obama will just be returning from a trip to South America.

Earlier this month, the White House Office of Health Reform, which helped ensure all the pro-reform groups were talking to each other, officially closed its doors, moving the health care policy work to the Domestic Policy Council.
]]> http://www.klineforcongress.com/news/648/ Wall Street Journal op-ed

Today is the first anniversary of the greatest single assault on our freedom in my lifetime: the signing of ObamaCare. As we consider what this law may do to our country, I can't help but reflect on a medical miracle made possible by the American health-care system. It's one that holds special meaning for me.

Some years ago, a little girl was born with a serious heart defect: Her aorta and pulmonary artery were reversed. Without immediate intervention, she would not have survived.

The infant was rushed to another hospital where a surgeon performed a procedure at 1 a.m. that saved her life. Eight months later, when her heart was the size of a small plum, an incredibly dedicated and skilled team of medical professionals surgically reconstructed it. Twenty-seven years later, the young woman is now a nurse in a neonatal intensive care unit where she is studying to become a nurse practitioner.

She wasn't saved by a bureaucrat, and no government mandate forced her parents to purchase the coverage that saved her. Instead, her care was provided under a run-of-the-mill plan available to every employee of an Oshkosh, Wis., plastics plant.

If you haven't guessed, this story touches my heart because the girl is my daughter, Carey. And my wife and I are incredibly thankful that we had the freedom to seek out the most advanced surgical technique. The procedure that saved her, and has given her a chance at a full life, was available because America has a free-market system that has advanced medicine at a phenomenal pace.

I don't even want to think what might have happened if she had been born at a time and place where government defined the limits for most insurance policies and set precedents on what would be covered. Would the life-saving procedures that saved her have been deemed cost-effective by policy makers deciding where to spend increasingly scarce tax dollars?

Carey's story sounds like a miracle, but America has always been a place where medical miracles happen. Since 1970, American doctors have won more Nobel Prizes for Medicine than all other countries combined. According to McKinsey and Co., thousands of foreigners come to the United States every year for medical care they cannot get at home—due to rationing or because it is simply not provided. And cutting-edge drugs to treat serious illnesses are more widely available in the U.S. than abroad.

Take cancer as one example. Compared to the U.S., breast cancer mortality is 9% higher in Canada (according to the government statistics of each country), 52% higher in Germany and 88% higher in the United Kingdom (according to studies published in Lancet Oncology). Prostate cancer mortality is 604% higher in Britain.

Those in need of timely care from specialists are better off in the U.S. Drawing on several peer-reviewed studies, Dr. Scott Atlas of the Stanford University Medical Center notes that patients who need knee and hip replacement, cataract surgery, and radiation treatment wait months longer in the United Kingdom and Canada than in the United States.

The plain truth is that the American system is better at rewarding innovation and responding to consumer needs. But the history of government-led care is there for all to see. Are we doomed to repeat it?

For the first time in U.S. history, a personal inaction (not purchasing something, in this case, a health- insurance plan) will be deemed unlawful. The person not committing this act (or is it committing an inaction?) will be subject to a fine. Or is it now, as the government contends, a tax? I'm confused.

This is precisely what Nancy Pelosi, Harry Reid and President Obama wanted. The Patient Protection and Affordable Care Act was sprung on an unsuspecting public with barely enough time for anyone to read it. Remember Speaker Pelosi's famous line? "We have to pass the bill so that you can find out what is in it." Unbelievable.

I am convinced that ObamaCare was designed to lead to a government takeover of our entire health-care system, which is one-sixth of our economy. As I traveled around Wisconsin in the last year, I asked thousands of people a simple question: "Do you think the federal government has the capability of running one-sixth of our economy?" Only two people ever raised their hands.

Our health-care system has problems that must be addressed. But ObamaCare will make those problems much worse. Instead of increasing consumer choice, it narrows it. Instead of encouraging innovation, it stifles creativity. Instead of expanding access to care, it will ration it. And instead of allowing competition to help bring down costs, it increases spending and puts our health-care system on a path to ruin.

The defects with the president's health law are so serious and widespread that the administration has already granted over 1,000 waivers to protect businesses, labor unions and other organizations from its most onerous provisions. We need to recognize that the finest health-care system in the world is at risk—and repeal ObamaCare before it's too late.

Mr. Johnson, a Republican, is a senator from Wisconsin.
]]> http://www.klineforcongress.com/news/647/ Washington Post

Democratic House members held a ceremony marking the one year anniversary of the passage of the Health Care Act on Capitol Hill in Washington on Thursday, March 17. (Harry Hamburg - AP) One full year after President Obama signed the Affordable Care Act (aka the health care bill) into law, public opinion on it has been remarkably unaffected by the massive amounts of spin put out by both sides over the last 365 days.

A Kaiser Family Foundation survey taken this month found the numbers on health care basically unchanged. Gallup finds the public almost evenly divided; again, barely different from their 2010 numbers. Polls generally show a slight tilt against the law, with Republicans more enthusiastic in their opposition than Democrats in their support.

“I think everything that could have been tried has been tried,” said William Galston, a former policy adviser to Bill Clinton. “The debate next year will not be so much an effort to get people to change their minds as to mobilize people whose minds are already made up one way or another to vote.”

So, how did we get to this political stalemate on health care?

After privately conceding that they had lost the message war during much of the process-dominated fight surrounding the health care law, White House officials predicted that health-care legislation would become more popular once it was passed, arguing that the ugly congressional battle had colored peoples’ views. The law did get a post-passage bump in polls, with slightly more people in favor than opposed.

But the administration’s longter-term education effort around the bill hasn’t done much to build momentum for the law. About half of people are still confused by it, with 52 percent of respondents telling Kaiser that they don’t still don’t have enough information about how the legislation will impact them personally. Lack of understanding is higher among the uninsured and low-income populations, groups that the White House repeatedly argued would benefit most from the law. Meanwhile, a new Gallup poll finds that 58 percent of Americans are still greatly concerned about the availability and affordability of health care.

Not all Democrats think the PR battle is over. “It’s still a difficult sell, and there’s work to do and we’re doing it,” said David DiMartino, a Democratic strategist. “With an effort, over time I think support will go up.” He argued that when pollsters explain individual provisions of the bill, support goes up — suggesting there’s room for overall public opinion to improve with education.

One heartening thing for the White House is that while public opinion is static on health care, there seems to be little appetite for a repeal effort that some Republicans are championing. In the Kaiser poll, only 39 percent would like to either repeal the law or repeal and replace it with a Republican alternative.

“One of the challenges for Republicans is pretty straightforward — to come up with the replace part,” said Republican pollster David Winston. “People are sort of waiting to see what it is they offer.”

For many Republicans, keeping opinion of the law divided might be victory enough. Even if they can’t repeal the law, they have kept Democrats from getting any political benefit from its passage. And opponents argue that disapproval is trending upwards. Republican pollster Whit Ayres pointed to the Pollster.com graph of poll averages from the past two years:

Some independent pollsters, on the other hand, argue that the gap in reliable surveys is so small that the shifts are insignificant. Health care also churns many Republican base voters into a furor. The party was able to capi­tal­ize on that energy boost in races across the country in 2010, a blueprint GOP strategists hope to follow again in 2012.

What’s clear from the mounds of data that have come out to mark the one year anniversay of the bill’s passage is that opinions on health care aren’t likely to shift much by the 2012 election — particularly since many of the larger pieces of the legislation don’t go into effect until 2014.

When that happens, opinion might actually evolve as voters will be able to assess the full impact of the law (or at least close to it). Until then, however, the political debate over President Obama’s health care law is largely settled. And that’s a good thing for Republicans.
]]> http://www.klineforcongress.com/news/646/ USA Today

WASHINGTON — House Republicans who crafted two short-term spending bills made $5.3 billion in cuts by going after some of Washington's least popular spending: those congressional pet projects known as "earmarks."

"Protecting nearly $5 billion in earmarks from cuts sends the wrong message," says Sen. Tom Coburn, R-Okla.

Even so, a congressional report shows they left $4.8 billion in earmarks untouched — and critics of congressional pork say they should go after it.

"Many in Congress promised taxpayers a full earmark moratorium, not a half moratorium," says Sen. Tom Coburn, R-Okla., an earmark opponent who requested the report from the non-partisan Congressional Research Service. "Protecting nearly $5 billion in earmarks from cuts sends the wrong message to taxpayers."

Most of the remaining funds that congressmen set aside for pet projects are in defense, military construction and veterans affairs, according to the report last week. They account for $4.1 billion of the $4.8 billion that could be cut.

"There's no reason defense earmarks should be sacrosanct," says Steve Ellis, an earmark watchdog with Taxpayers for Common Sense. "In fact, they're more insidious."

So why haven't House Republicans gone after special-interest spending at the Pentagon?

"Clearly, that's something we're going to do," says Jennifer Hing, a House Appropriations Committee spokeswoman.

She says the full-year spending bill — which would have funded the government through Sept. 30 — sought to cut $8.1 billion from defense, including some accounts often used for congressionally favored projects. That bill was rejected by the Senate, leading to the two shorter-term bills. The most recent bill keeps the government running until April 8.

Hing says the short-term bills also attacked congressional projects by declaring that the earmarks in the 2010 spending bills "shall have no legal effect."

Without also cutting those accounts by the amount of the congressionally directed projects, money could end up going to earmarked projects anyway — "not necessarily because of earmark instructions, but for other criteria," says the Congressional Research Service report, authored by analyst Jim Monke.

Among the projects in the 2010 defense bill which could continue to receive funding: $31.5 million for the C.W. Bill Young Bone Marrow Donor Recruitment and Research Program, named for the Republican congressman from Florida; $20 million for the World War II Museum in New Orleans, sponsored by Sens. Mary Landrieu, D-La., and David Vitter, R-La.; and $18.9 million for the Edward M. Kennedy Institute for the United States Senate, sponsored by Sen. John Kerry, D-Mass., and Rep. Ed Markey, D-Mass.

Other untouched earmarked accounts include $697 million at the Department of Transportation — mostly for mass transit and federal highways.

The U.S. Army Corps of Engineers also continues to get funding by earmarks, some of which were requested by President Obama. Ellis says those projects are so heavily earmarked that by eliminating them, "you'd cease to have a corps. That's the entire agency's funding."
]]> http://www.klineforcongress.com/news/645/ Wall Street Journal

Today, the Ronald Reagan Presidential Foundation, the Manhattan Institute and The Wall Street Journal will host a morning seminar concerning the economic legacy of Ronald Reagan. The get-together couldn't be timelier.

Reagan came into the White House facing an economy as troubled as ours—one that had even higher unemployment, catastrophic interest rates (18% for mortgages) and a stock market that in real terms had fallen 60% from its mid-1960s levels. When he left office eight years later, the U.S. had become an economic miracle: 18 million new jobs had been created; Silicon Valley had blossomed, becoming a global symbol for innovation; and the stock market was experiencing a bull run that, despite dramatic ups and downs, didn't end until the turn of the 21st century, after the Dow had expanded 15-fold. The expansion of the U.S. economy exceeded the entire size of West Germany's economy, then the world's third-largest.

How did this happen? You could make the case that Reagan's economic miracle had its origins at a Washington, D.C., restaurant in 1974. That December night, 34-year-old University of Chicago professor, Art Laffer, scribbled a single—and now legendary—curve on a cocktail napkin to illustrate to a group of President Ford's advisers why a proposed plan to raise taxes would not increase government revenues. Mr. Laffer posited that deep cuts in existing tax rates would stimulate the economy and ultimately lead to far higher government revenues. Conversely, increase the tax burden and government receipts would fall below expectations because of a weaker economy.

Mr. Laffer's curve headed off the tax boost, but the Ford people did not accept the conclusion that big reductions in tax rates were just what the anemic U.S. economy needed. However, when Reagan met with Mr. Laffer and other like-minded thinkers several years later, he quickly grasped the Laffer Curve's fundamental message.

The concept that a free market unencumbered by barriers, government regulation and taxation will create the most growth-friendly economic environment was simple but radical. After taking the oath of office, Reagan went to work to convince the American people of the benefits of supply-side economics: lower taxes, less regulation, and less government spending, as well as a monetary policy focused on ridding us of the seemingly incurable disease of ever-rising inflation.

Reagan's program was a resounding success. Its centerpiece was the Economic Recovery Tax Act of 1981, which dramatically cut income tax rates for everyone. He managed to pass the bill during his first eight months in office, with bipartisan support in a divided Congress.

Critics howled that Reagan was being financially irresponsible, but the president pressed on. Once his cuts were fully phased-in and the hard fight against inflation was won, the economy took off like a rocket. Reagan's achievements set up a great, long boom in the U.S. and the world that didn't end until the economic crash in 2007. (Yes, there were periods of slower growth rates before that year, but none can be compared to the crash of 2007.)

At the same time, Reagan's British counterpart, Prime Minister Margaret Thatcher, was accomplishing similar feats by taking an axe to Britain's draconian tax system. Almost overnight, Britain went from being Europe's economic weak link to being the continent's most vibrant large economy.

Unfortunately, Reagan was unable to permanently rein in domestic spending and many of his reforms were undone by his successors. Washington politicians slid back into their bad habits, cluttering the tax code with new brackets, exemptions, deductions, phase-ins, carve-outs and special breaks for special interests. And the crucial importance of a strong dollar has been forgotten during the last decade, with terrible results. Today we are once again beset by a Carter-esque malaise, wherein we must accept abnormally high unemployment and the notion that printing more dollars is the way to recovery.

Yet Barack Obama's 2011 State of the Union address was sprinkled with Reagan-like phrases, full of the 40th president's trademark confidence. "The future is ours to win," Mr. Obama said. "But to go there, we can't just stand still." He pledged to "knock down barriers that stand in the way of [American companies'] success." We were told that the president had held meetings with Reagan administration officials, and that he'd even read Lou Cannon's biography of Reagan during his winter vacation.

It's true that both men came into office facing turbulent economies. But there the similarities end.

Reagan aggressively embraced free-market, supply-side principles that empowered the American people to rebuild and creatively expand our economy and standard of living. In contrast, the Obama administration has expanded the powers of government over us and our economy on a scale never before seen in peacetime American history. President Reagan understood, and fervently believed in, the American spirit of free enterprise. So far, President Obama hasn't shown that he does.

Mr. Obama still has time to learn the real lessons of Reagan's success. Will he?

Mr. Forbes, chairman and editor in chief of Forbes Media, is co-author of "How Capitalism Will Save Us: Why Free People and Free Markets Are the Best Answer in Today's Economy" (Crown Business, 2009). He is also a trustee of the Ronald Reagan Presidential Foundation.
]]> http://www.klineforcongress.com/news/644/ The Hill

The economy and federal deficits are Americans’ most pressing concerns, a recently released Gallup poll found.

According to the polling outfit, roughly seven in 10 said they worried “a great deal” about the economy, with another 22 percent stating they were fairly concerned about the issue. On federal spending, 64 percent were greatly worried, and 23 percent fairly anxious.

The poll was conducted in early March — before the Japanese earthquake that created a partial meltdown at a nuclear plant and caused some roiling to global markets.

Still, Gallup found that the economy was one of the two most worrisome issues for Democrats, Republicans and independents. The economy has now been the top concern for Americans since 2008, according to the polling company. Healthcare topped the list before that and continues to rank quite high among Americans' concerns.

Democrats were not as worried as the other two groups about federal spending. Unemployment, which 57 percent of respondents said they worried a great deal about, was among the top four pressing concerns for all three groups.

Gallup also found energy affordability and availability to be the one issue that voters are substantially more concerned about this year.
]]> http://www.klineforcongress.com/news/643/ Politico

Less than two weeks after he delivered a maiden floor speech denouncing President Barack Obama’s “failure to lead” on cutting deficit spending, freshman Sen. Joe Manchin is taking his argument home to his West Virginia constituents.

Warning that “we cannot ignore the fiscal Titanic of our national debt and deficit,” the Democrat will stress his unwillingness to simply rubber-stamp his party’s positions in a Monday morning speech at the University of Charleston.

“There are some in Washington who believe we can simply ignore the fiscal peril we face as a nation,” he will say. “They are wrong.”

Facing a tough battle for a full term in the Senate, Manchin is making clear efforts to distance himself from what he sees as dithering on the national debt, coming from Democrats and from Washington as a whole. The former West Virginia governor asked earlier this month: “Why are we doing all this when the most powerful person in these negotiations — our president — has failed to lead this debate or offer a serious proposal for spending and cuts that he would be willing to fight for?” Last week, 63 senators signed a letter to Obama asking him to play a larger role in solving the debt crisis.

Manchin has also “gone rogue” in his efforts to get reelected, meeting with Senate Republican leaders to discourage them from pouring cash into his 2012 race and hinting that he might not vote for Obama next year.

In his early March floor speech, Manchin blasted the president for largely staying out of budget negotiations and for proposing too few cuts, and on Monday he will repeat many of those tropes. He will also say that he is not voting for a measure to raise the debt ceiling – expected in April – unless the vote is tied to “a real budget plan that begins to fix our fiscal mess.” Top House Republicans have said that they would only support a measure to raise the debt ceiling if it were linked to a measure to cut spending.

“I have never put together a budget – be it my family’s or as governor – that was based on how much we wanted to spend, but on what we had,” he will say. “We cannot make budgets based on the next election; they must be based on the next generation.”

Manchin will stress that he plans to stand firm in his fiscal conservatism. “We must get our fiscal house in order. We must be honest about what we value and what we need to spend your taxpayer dollars on — not what just sounds good,” he says. “In the coming weeks, we will face many difficult budget decisions. I know it will not be easy. I know that it will take compromise. I know it will be partisan and difficult. I know that everyone will have to give up something and no one will want to relinquish anything. But we cannot ignore the fiscal Titanic of our national debt and deficit.”
]]> http://www.klineforcongress.com/news/642/ Washington Post

“This is a very special month for us because one year ago we passed the historic Affordable Health Care Act, which has made a difference in the lives of the American people.” — House Minority Leader Nancy Pelosi (D-Calif.)

 House Democrats held a birthday party last week for passage of the health-care law. Just as we looked at Senate Minority Leader Mitch McConnell’s floor speech noting the milestone, we will now examine some of the claims made by Democrats.

McConnell framed his speech in negative terms, citing data to back up his language. Both Democrats and Republicans can pick and choose numbers and studies to make their case, but we found that generally McConnell did not exaggerate or use bogus figures. In fact, he correctly described a Congressional Budget Office analysis suggesting a potential reduction in employment of 800,000 jobs (technically, one-half of 1 percent of household employment in 2021) that other Republicans have misrepresented.

By contrast, House Democrats appear to show little hesitation about repeating claims that previously have found to be false or exaggerated. So let’s take a tour through the numbers.

“It's about jobs. Does it create jobs? Health insurance reform creates 4 million jobs, and in the last 12 months the private sector has added 1.5 million new jobs, and of that a quarter of a million were in the health insurance industry.” — Pelosi

Here, Pelosi is repeating a talking point from the health-care debate. The 4 million figure comes from a report by the Center for American Progress, a liberal-leaning group, which estimated that universal health care would add 250,000 to 400,000 jobs a year. Pelosi took the top end of the range and then multiplied it by 10, a numerical sleight-of-hand that Polifact last year labeled “half true.”

A Pelosi spokesman noted she has been using this statistic for 14 months now, but we frown on the reuse of statistics previously found to be suspect.

In this case, since the bill has passed, the Congressional Budget Office has done its own analysis (the one McConnell cited) that cast some doubt on the CAP analysis, written before the bill was passed into law. Presumably, members of Congress should pay more attention to estimates by their own budget agency than think tanks that promote their agenda. Repeating this dubious statistic is worth at least a Pinocchio or two. (About our rating scale)

The second half of her statement comes from the Bureau of Labor Statistics, but it doesn’t really mean anything. Health-care jobs have long been an important part of new private-sector jobs, so 260,000 being created in the last 12 months is not out of the ordinary. For example, BLS figures show that in 2007, there were 381,000 health care jobs created; in 2006, 324,000 jobs; and in 2005, 271,000 jobs. The CAP study was not making any prediction about health-care jobs, but all jobs, so it is unclear what point Pelosi is making with this statistic.

“It's about reducing the deficit. Again, it reduces the deficit more than $1 trillion over the life of the bill.” — Pelosi

This is another bogus statistic for which we have previously awarded three Pinocchios.

The CBO estimated $143 billion in deficit reduction over 10 years in the health-care law, but about $19 billion of it came from unrelated items. As we have noted, the remaining $124 billion was based on a number of assumptions that called that estimate into question.

But Pelosi claims more than $1 trillion in deficit reduction by using a 20-year figure that is particularly absurd.

 As we wrote in January: “There are too many uncertainties to be precise, and the CBO itself merely offered a tentative guess of a "broad range of around one-half percent of GDP," with significant caveats. Democrats simply took that percentage, multiplied it against the predicted size of the GDP 20 years from now (itself a pretty fuzzy figure) and, presto, they had a number. But it's a fairly meaningless one.”

“In fact, when you look at the percentage of employers with 10 employees or less that offer health care, it rose from 46 percent in 2009, and it went up to 59 percent in 2010, at the end of last year, an incredible increase that we have. That shows that it is working.” — Rep. Henry Cuellar (D-Tex.)

Another three-Pinocchio statistic! We also picked this apart in January so we are surprised this golden oldie is still in use by Democrats.

The statistic comes from a Kaiser Family Foundation survey that was largely conducted before the health care bill was passed, so it is pretty irrelevant. Moreover, the study said the main reason for the shift was not because more companies were offering health insurance but because more that did not were going out of business.

Gary Claxton, the main author of the report, also told us that the data set for small firms — the one Cuellar cited — was too tiny to reach any conclusions.

So, rather than showing that the health care law is “working,” the survey that is the source of this statistic does not show that at all.

 Jose Borjon, a spokesman for Cuellar, said in an e-mail: “Thank you for bringing your January 19, 2011, Washington Post Fact Checker article to our attention.  Congressman Cuellar based his quote from a December 27, 2010, Los Angeles Times story by Noam Levey. Thank you for bringing to light the correct characterization of the Kaiser employer survey. Nevertheless, stories across the country, from North Carolina to Kansas, demonstrate that small businesses are increasingly taking advantage of the small business tax credit to provide health care to their employees.”

The Times article does provide anecdotal evidence that health insurance companies are aggressively marketing a small-business tax credit in the law to sign up new customers, but it does not include the statistic that Cuellar used. Democrats need to drop this ”fact” from their talking points.
]]> http://www.klineforcongress.com/news/641/ Wall Street Journal

One knock on Barack Obama in the 2008 election was his record as an Illinois state senator, where he repeatedly ducked tough issues by voting "present." It seems old habits die hard.

If you'd like to know where the leader of the free world stands on those NCAA rankings, just turn on ESPN. ("I think Kansas has more firepower," he explained as he filled out his bracket.) Wondering what the commander in chief thinks about gun laws? Don't worry—he's in favor of those already on the books, according to a recent op-ed.

If, however, you are curious about where the most powerful man in the universe stands on Libya, radiation, a possible government shutdown, the future of Social Security, or rising oil prices, don't look to the White House. Those issues are tough. Those issues risk mistakes. Those issues might mean unhappy voters. And right now, it's approval ratings the White House cares about.

Obama advisers are spinning their excuses for the president's absence (he needs to stay above the fray, he believes in international agreement). Conservatives, for their part, are beginning to argue the "incompetence" line. A combination of all is probably at work, along with an even greater impulse: political safety. Mr. Obama got a taste of falling approval ratings last year. The White House has worked hard to get those numbers back up and wants to keep them there until Mr. Obama has a GOP opponent and can go into campaign mode—where he's at his best.

And so as Moammar Gadhafi has visited a bloodbath on opposition forces, the White House has for weeks spun its wheels at the United Nations, waiting for someone else to go first. The White House has argued intervention might provoke an Arab backlash against the U.S., and it could be it actually believes such crazy talk. Yet it seems equally concerned that any U.S.-led military action in Libya—no matter how minor—will invite comparisons to the dreaded Bush warmongers and prove unpopular.

And as Congress lurches from one budget crisis to the next, President Obama leaves negotiations to Vice President Joe Biden. It has been clear for weeks the only way this gets settled is for Mr. Obama and House Speaker John Boehner to find a fiscal 2011 spending-cut number that gets bipartisan support. But Mr. Obama worries that number will be too much for the left, and not enough for the right, and that means . . . controversy.

Today he instead leaves for a five-day Latin American tour. On that trip he will not be visiting Colombia or Panama, whose trade deals he's squelched since he took office. Trade deals, after all, don't always sit well with the public (and rarely with unions).

It took until yesterday for Mr. Obama to address Japan's nuclear problem, and only then to clarify that Americans should and should not be worried about radiation, while also knowing that U.S. power plants are and aren't safe. The president had been touting a new love for nuclear energy (to coax Republicans into a "clean-energy" deal), but the White House is now worried Japan is the hydrogen version of the BP oil spill, and thinking the safest short-term policy is incoherence.

Entitlement reform? Are you people nuts? Who ever won an election on entitlement reform?

The White House's greater interest right now seems to be throwing little bones to its left. A quip here about the Wisconsin labor dispute, a gun-control op-ed there. A promise to quit defending the Defense Against Marriage Act. Yet even these are tiny bones, designed not to hugely upset the broader public.

Careful is the word. Compare this to George W. Bush, who ordered an Iraq surge despite dismal approval ratings.

A "present" strategy didn't hurt the Illinois state senator, who went on to become president—and that may be what's guiding the president's team now. Then again, the White House is discovering there are greater consequences for a "present" president. The administration is realizing, for instance, that a victorious Gadhafi is not in fact to Mr. Obama's, or the world's, advantage—one reason it is now adopting a more aggressive posture.

It also hardly seems a winning strategy for the White House to keep the president's approval ratings below the 50% he needs for re-election. He in particular risks alienating congressional Democrats, who are wearying of being left to handle public criticism. If they start to believe the president is looking out only for himself, they'll do the same. Even if that means undermining pieces of his agenda.

There is another way, of course. The Americans who voted in 2008 didn't vote "present." They voted for a leader. They might even reward Mr. Obama for doing that job.
]]> http://www.klineforcongress.com/news/640/ Politico

Democrats in Congress are grappling with a question as they negotiate a spending deal: Who's in charge?

The top two Democratic leaders in the House have twice split on whether to approve short-term government funding bills that cut billions from federal accounts. Senate Democrats haven’t put forward a long-term spending plan that can move through their chamber, and Democrats on both sides of the Capitol say they have no idea where the White House stands or who’s running the show.

The result is a rank and file that is confused about its direction and unhappy with the leadership — or lack of it — on when to go along with the Republican-controlled House on budget matters and when to stand and fight.

“The sum and substance of our strategy can’t be waiting for the other side to [mess] up,” Rep. Anthony Weiner (D-N.Y.) told bloggers Wednesday.

But for many Democrats, that’s exactly what their leaders’ short-term strategy amounts to.

In a follow-up interview with POLITICO, the Brooklyn liberal said if there is a more elegant Democratic plan, “it’s such a Jedi mind-meld going on that it hasn’t filtered down to my level.”

On Tuesday, Democratic disarray allowed House Speaker John Boehner (R-Ohio) to push through a three-week spending bill cutting $6 billion from federal programs despite 54 of his own members breaking ranks. Democrats missed an opportunity to either leverage their votes for concessions or simply sink Boehner’s bill and show more clearly the depth of his problem with the right wing of his caucus. Minority Leader Nancy Pelosi of California and 103 of her colleagues voted no, while Minority Whip Steny Hoyer of Maryland and 84 other Democrats voted yes. The numbers were the exact reverse of the last short-term spending bill.

Boehner’s inability to control his majority caucus helped obscure the divisions on the Democratic side — but they are real and they are deep. Some want to cut and cut now. Others say the failure to articulate a coherent anti-Republican message prevents Democrats from drawing sharp distinctions for voters.

“Where are we going to fight?” said Rep. Mike Capuano (D-Mass.). “Where is the president going to lead? And are we going to follow?”

Pragmatists in the party leadership such as Maryland Rep. Chris Van Hollen, the ranking Democrat on the Budget Committee, and Democratic Congressional Campaign Committee Chairman Steve Israel of New York voted with Hoyer. Liberal leaders, including assistant leader Jim Clyburn of South Carolina and caucus Chairman John Larson of Connecticut, went with Pelosi.

So while Tuesday’s vote made plain that Boehner now needs Democratic support to keep the government operating, Democrats still don’t have a position to rally around. Democratic optimists say the break in Republican ranks is a window of opportunity for their party to begin winning the message war and force concessions from the GOP.

But it also gives Boehner an opening to work with centrist Democrats to offset Republican defections, freezing out both the Pelosi wing of the Democratic Party and the tea party wing of the GOP.

Though they acknowledge a missed opportunity on Tuesday — Democrats say they had no idea so many Republicans would defect — liberals express confidence that a weakened Boehner will now move toward them to finish the year’s spending bills, and that will help unify them around a negotiated position.

On the conservative side of their caucus, Rep. Collin Peterson (D-Minn.) said he’s ready to vote for a six-month spending bill that finishes off the fiscal year as long as it doesn’t eliminate funding for Head Start and NPR affiliates. Peterson, who often mingles with Republicans on a House balcony, said Boehner’s camp used rank-and-file liaisons to seek conservative Democrats’ support for the short-term bill before Tuesday’s vote.

“There’s more of that going on,” Peterson said.

That may not bode well for Democratic leaders as they move from the relatively simple task of completing last year’s spending bills to the stickier wickets on the legislative playing field. Some Democrats insist that now is the time to address long-term deficits and debt. The two parties are jockeying for the upper hand when Congress is forced to raise the debt ceiling later this year, and the fight over fiscal 2011 spending is backing up against the fiscal 2012 budget and the ensuing appropriations bills for the year.

In separate meetings with Senate and House Democrats in the past week, senior administration officials, including chief of staff Bill Daley, top White House lobbyist Rob Nabors, political adviser David Plouffe and Budget Director Jack Lew, have heard the frustrations of lawmakers who aren’t sure whether the White House even has a position on a long-term spending bill.

Adding to the frustration, Senate Democratic sources say the White House told senators at a private Democratic Policy Committee meeting last Thursday that polling shows the public isn’t engaged in the fight over finishing last year’s spending bills. Administration officials say privately that’s an overly simplistic characterization of why they’re approaching the battle over the continuing resolution the way they are.

But tension remains.

“There are two things you hear time and again: One, where’s the White House? And two, what are we for that we can point to?” said a Senate Democratic source.

“Our negotiations and conversations are being treated confidentially on our end, because that is what we have committed to,” White House spokeswoman Amy Brundage said.

Some Senate Democrats who face reelection in 2012 want the chance to burnish the buckles of tightened belts by voting for more dramatic spending cuts than they have been offered by Senate Democratic leaders.

But their leaders are holding fast to the position it is time for House Republicans to make a counteroffer.

“Last week, the Senate held two test votes — one on H.R. 1 and one on a Democratic alternative. We knew that neither one would have the votes to pass, but we held the votes anyway; and sure enough, they both went down. The purpose of those votes was to make it clear that both sides’ opening bids in this debate were nonstarters and thus pave the way for a serious, good-faith compromise,” New York Sen. Chuck Schumer, the third-ranking Democrat in the Senate, said on the floor Wednesday. “But unfortunately, an intense, ideological tail continues to wag the dog over in the House of Representatives.”

Citing a failed Democratic measure that would have funded the government at $10 billion less than current levels, rather than the $61 billion mark House Republicans approved, Senate Majority Whip Dick Durbin of Illinois told POLITICO in a brief interview that “we know we have to come off that number.” But he quickly added “to some extent.”

But what will please a diffuse Senate Democratic Caucus and appease House Republicans? That remains anyone’s guess. Democratic and Republican aides acknowledge a final bill would likely amount to less than the $61 billion House Republicans seek and exclude some of the more controversial policy preferences of that chamber’s conservatives. For example, a rider eliminating funding for Planned Parenthood is a nonstarter in the Senate — even with some moderate Republicans.

But real questions remain: Would politically vulnerable Senate Democrats vote for smaller or larger spending cuts if given the chance? How much are House Democrats willing to sacrifice from federal accounts in order to keep a long-term bill free of controversial social policy riders?

The real negotiations are going on between the staffs of Boehner and Senate Majority Leader Harry Reid (D-Nev.).

Sen. Bob Casey (D-Pa.) said there’s “universal frustration” with the process but he’s confident “we’ll get an agreement” on the 2011 spending. “I think a deadline is probably the best driver.”

Now, that deadline is set at April 8.
]]> http://www.klineforcongress.com/news/639/ Washington Times

Before the 2010 midterm elections, Republicans promised an intense focus on creating and preserving American jobs. But spending and program cuts instead have dominated their agenda since taking control of the House in January — so much so that Democrats now accuse the GOP of reneging on a key campaign pledge.

In an effort to re-ignite their jobs mantra, House Republican held a "jobs forum" at the Capitol Wednesday. Panel guests included business owners and industry executives from across the country who complained that government roadblocks have stymied operations and kept them from hiring more employees.

GOP leaders in attendance, including Speaker John A. Boehner of Ohio, Majority Leader Eric Cantor of Virginia, Majority Whip Kevin McCarthy of California, Chief Deputy Whip Peter J. Roskam and House Republican Conference Chairman Jeb Hensarling of Texas, stressed the need to loosen business regulations, lower taxes and make it easier for U.S. companies to compete globally.

"The American people are still asking the question: 'Where are the jobs?'" Mr. Boehner said. "It's pretty clear that part of the reason they're still asking that question is that government is in the way of job creators in America.

"Obviously, more regulations, higher taxes creates more uncertainty."

The Ohio lawmaker went on to blame government regulators for the national job funk, saying "we have the most adversarial regulatory system in the United States than almost anywhere in the world."

Mr. Boehner also pressed the Obama administration to wrap up work on a package of long-delayed, Bush-era international trade pacts.

"More trade will create more jobs here in America," he said.

Mr. Cantor appeared on two cable news shows Wednesday to push the GOP jobs initiative. On MSNBC's "Morning Joe" he said the forum "for the first time" would provide a venue "dedicated to members of Congress listening to job creators, rather than seeking to see how we can spend taxpayer dollars to create jobs."

But Democrats say the Republican talk rings hollow because the GOP has failed to offer specific legislation this year designed to create jobs.

"I think it's evident they didn't have a [jobs] plan," said Rep. Debbie Wasserman Schultz, Florida Democrat, during a Wednesday news conference on Capitol Hill. "They spent a lot of time deceiving the American people, pulling the wool over their eyes, having a facade over each of their candidates' campaigns that only talked about the importance of focusing on jobs."

The lawmaker said House Republicans' true legislative priority was repealing the 2010 health care reform law and slashing money for worthy programs.

"The dark side truly came out after the 112th Congress was sworn in," she said. "The American people are starting to get a picture of what their true intentions were."

Meanwhile in the Senate, the controlling Democrats have rallied around a jobs theme, as Majority Leader Harry Reid has pegged several noncontroversial bipartisan measures — including mundane reforms of patent laws and airline safety — as "jobs bills." The strategy has helped the Nevada Democrat portray his caucus as being serious about lowering the national unemployment rate while avoiding a potentially damaging fight politically over spending and programs cuts.

Mr. Reid said the patent bill, which at first glance seemingly has little to do with jobs, will create up to 300,000 jobs "by promoting innovation and protecting small businesses." And a bill that calls for updating the nation's aging air-traffic-control system would help create and protect 280,000 jobs by "investing in airports across the country and improving our infrastructure," Senate Democrats said.

Both bills easily passed the Senate.

But Republicans insist their proposed spending and tax cuts would boost the economy, making it easier for the private sector to grow and create jobs.

They also have defended their push to repeal the health care law, calling it one of government's biggest inhibitors to job growth.

"When you look at our efforts as the new majority here in the Congress, our No. 1 goal is to create an environment — assist in creating an environment — where employers can begin to hire again," Mr. Boehner said.

]]> http://www.klineforcongress.com/news/638/ USA Today

WASHINGTON — House Republicans said Wednesday that a new government agency designed to protect consumers from problems with mortgages and other financial products has too much power. They also criticized it for participating in a federal-state effort to force mortgage servicers to change the way they foreclose on troubled homeowners.

But testifying to Congress, the White House official assembling the new Consumer Financial Protection Bureau made no apologies. Elizabeth Warren said the agency is badly needed, long overdue and might have helped the country avoid the housing and financial crises of the last several years had it been created earlier.

“If there had been a consumer agency in place, the problems in mortgage servicing would have been exposed early and fixed while they were still small, long before they became a national scandal,” the Harvard law professor told the financial institutions subcommittee of the House Financial Services Committee.

Financial Services Chairman Spencer Bachus, R-Ala., said the agency will likely be “the most powerful agency that’s ever been created in Washington.” He and other Republicans have complained that Congress doesn’t control the bureau’s budget, that it will be headed by a director and not a bipartisan commission, and that it has strong leeway to decide which financial products it will curb.

“You have a lot of discretion and a lot of power, but I see very little accountability,” Bachus said.

GOP lawmakers also challenged the bureau’s role in a push by federal agencies and the 50 state attorneys general to force five large U.S. banks to agree to make it easier for struggling homeowners to avoid foreclosure and rework their mortgages.

They complained that the agency will not go into business until July 21, meaning it has no authority until then. The bureau was created by last year’s financial markets overhaul law.

Warren said the agency will play no role in any formal settlement with the banks. But she said the bureau has been asked to give advice to government officials involved in the effort and has done so, since it will eventually have authority to set mortgage servicing standards.

“We are not only glad to be helpful, we are proud to be helpful,” she said.
]]> http://www.klineforcongress.com/news/637/ Reuters

WASHINGTON - Congressional Republicans on Wednesday will stage their first outright challenge to 2010's Dodd-Frank financial regulation reforms with a fistful of bills favoring private equity firms, derivatives end-users and corporate CEOs.

After months of trying to defund and defang Dodd-Frank at the administrative level, Republicans are finally unveiling draft legislation that would repeal or amend parts of the laws approved after the severe 2007-2009 financial crisis.

The bills face a long road ahead. Republicans may be able to obtain House passage, perhaps with Democratic support on some issues. But Senate action could be hard to come by and the Obama administration could veto any measure it opposes.

"It's the first direct assault," said a congressional aide. "Up until now it's been about trying to deprive the agencies of what they need to implement Dodd-Frank."

One of the bills to be introduced would exempt private equity firms from registering with the U.S. Securities and Exchange Commission, as required under Dodd-Frank.

The bills could represent the beginning of a long-awaited "technical corrections" measure, said two lobbyists who favor one of the bills.

Private equity firms typically pool capital from investors and pump it into leveraged buyouts, financial restructurings and corporate takeovers. They offer an alternative to public capital markets and allow the companies they back to operate beyond the reach of regulators.

Registration "imposes a burden on them while doing nothing to make the financial system more stable and less risky," said a Republican staff memo obtained by Reuters that explains the bills and their background.

Dodd-Frank was approved in July by Democrats, with the strong support of President Barack Obama, over the opposition of all but a few Republicans. Regulators are working hard to implement hundreds of new regulations mandated by the laws.

Under Dodd-Frank, new oversight is imposed on the $600 trillion over-the-counter derivatives market, including credit default swaps like those that undermined bailed-out former insurance giant American International Group.

One of the Republican bills would amend Dodd-Frank in a way that would shield end-users of OTC derivatives from new central clearing requirements and the costs involved.

Another Republican bill would repeal a part of Dodd-Frank that requires public corporations to disclose the median pay of all their employees, the total pay of the chief executive officer and a ratio comparing the two numbers.

This so-called "sticker shock" provision promised to be embarrassing to CEOs whose pay often dwarfs that of lower-level workers by multiples unseen in other nations.

The GOP staff memo said complying with the provision would be too costly and time-consuming for companies.

A fourth bill would repeal a Dodd-Frank provision exposing credit rating agencies, such as Moodys Corp or Standard & Poor's, to legal liability in cases where their ratings were found to be inaccurate.

A final bill, not dealing with Dodd-Frank, would raise to $50 million from $5 million the limit under which small companies may access the public capital markets without having to undergo the full SEC registration process.
]]> http://www.klineforcongress.com/news/636/ Politico

When President Barack Obama opened the first meeting of his fiscal commission last April, he promised to be “standing with them” as they produced recommendations for curbing the nation’s escalating debt.

Republicans and Democrats say they are still waiting.

While Obama has said he’s committed to deficit reduction, he has also has made clear it is secondary, at least for now, to his “winning the future” agenda. And that reflects a strategy driven by what his senior aides believe voters care about most — jobs, not deficits.

Obama’s reluctance to join the debate in a sustained way has provoked rising frustration among lawmakers from both parties, who are speaking more forcefully about what they view as his absenteeism on one of the most pressing issues before them.

But until House Republicans join their Senate GOP counterparts in appearing open to raising revenues, the administration is reluctant to weigh in too heavily, believing that a grand bargain that would inflict bipartisan pain will be difficult to attain. So, Obama has kept at arm’s length a group of six Republican and Democratic senators working on a deficit-reduction framework, not yet convinced that their efforts will be the vehicle by which a deal is struck.

“The president’s approach to the larger set of budget issues raised by his own fiscal commission is very, very cautious up to now,” said William Galston, a policy adviser to former President Bill Clinton and a senior fellow at Brookings. “He has not embraced it, not by a long shot. It is clear that whatever he wants to accomplish, he doesn’t want to accomplish it alone and he doesn’t want to step out first.”

Obama’s light touch isn’t winning over the Hill.

Senate Minority Leader Mitch McConnell (R-Ky.) made the latest attempt to draw Obama into the debate sooner than the president would like, threatening to withhold Republican votes on the administration’s request to raise the debt limit unless it is coupled with a “credible” effort to rein in Social Security, Medicare and Medicaid spending.

McConnell’s move followed a nudge by Sen. Chuck Schumer (D-N.Y.) to broaden talks on the short-term budget to include entitlements and revenue increases, a scathing speech by Sen. Joe Manchin (D-W.Va.) for Obama to get more involved in budget issues and increasing calls by Democratic lawmakers for presidential leadership.

Administration aides said Obama fully supports efforts to tackle the country’s long-term budget problems but that it is Washington — not the public — that is agitating for the president to wade into every legislative debate. This is a subtle shift in strategy from the past two years, when the president could be mistaken for a prime minister, expending much of his political capital in ushering bills through Congress.

The gripes, which have flowed steadily from Capitol Hill regardless of the level of White House immersion, are really more a plea by lawmakers for presidential cover on tough decisions, aides have said.

“This is a process. It is not a one-act play,” said Geoff Garin, a pollster who has done messaging work on the deficit debate for Senate Democrats. “We are early in Act 1 of a four-act play.”

But the growing divide between Congress and the White House isn’t simply about presidential involvement. Often, the president doesn’t seem to be speaking the Hill’s language.

After the Senate deadlocked last week over how to cut billions from the budget, Obama on Monday called for a rewrite of the federal education law — and made a full-throated pledge to shield education from the budget knife.

“I’m determined to cut our deficits. But I refuse to do it by telling students here who are so full of promise that we’re not willing to invest in your future,” Obama said during a visit to Kenmore Middle School in Arlington, Va. “I’m not willing to tell these young people right here that their education isn’t a priority.”

In the eyes of deficit hawks, Obama has passed up several opportunities to push the issue to the center of his agenda.

He convened the fiscal commission last February, a move cast as an attempt to start an adult conversation about a metastasizing problem. It was quintessential Obama — the professor who likes to take the long view and serve up a bit of castor oil because it’s the right thing to do.

“Everything is on the table,” he said at the time. “That’s how this thing is going to work.”

When the commission chairmen offered their final recommendations in December, several months after Obama promised that he would be “standing with them,” the president declined to endorse the report, saying only that it was important work that he would study closely.

The State of the Union address and his 2012 budget request came and went without Obama embracing any major components of the commission’s plan, which called for raising the retirement age for Social Security and cutting Medicare and Medicaid benefits. He did adopt some elements, including an overhaul of the corporate tax code and a freeze in pay for federal workers.

Now, with lawmakers suggesting a look at entitlement reform during the short-term budget negotiations, White House aides said they aren’t ruling it out, but their preference is to finish the continuing resolution first and deal with the long-term budget issues later, once the threat of a government shutdown is averted.

The administration has also signaled that it wants an unfettered vote on the debt-limit increase — the next major spending vote, as early as April, after the short-term budget is finished — rejecting McConnell’s threat to withhold Republican support unless the vote was coupled with a broader deficit-reduction plan,

“The president believes it would be reckless and irresponsible to put the full faith and credit of the U.S. at risk by refusing to increase the debt limit,” White House spokeswoman Amy Brundage said in a statement. “Failing to act would have devastating consequences for our economy and middle-class Americans, and Republicans agree.”

White House attempts to put off the debate will work as long as House Republicans go along on the debt limit, which isn’t clear yet. House Speaker John Boehner (R-Ohio) has said defaulting on the country’s debt would be a “financial disaster,” suggesting that he would avoid such an outcome at all costs. But with a caucus anxious to make real progress on spending cuts, Boehner will face pressure to link it to deficit-reduction measures — finally forcing the administration’s hand.

Boehner has promised to release a budget soon that tackles entitlement reform, but even he has acknowledged that the public isn’t ready to accept the tough medicine and that lawmakers need to educate voters.

Senate Budget Committee Chairman Kent Conrad (D-N.D.) agreed. A leader of the bipartisan Senate negotiating group, Conrad said its biggest obstacle is public opinion.

A recent Wall Street Journal/NBC News polls found that Americans across all age groups and ideologies, including tea party supporters, believe it was “unacceptable” to make significant cuts in entitlement programs as a way to shrink the deficit.

Conrad joked that he isn’t in “huge demand on a lot of the comedy shows” — the kind of forums to which politicians turn in order to reach voters who aren’t glued to cable news programs.

“There is only one president,” Conrad conceded, when asked whether Obama was the one who should be doing that.

“The question is, when does he wade in? I believe, as I have said a lot of times, it needs to start [in Congress] on a bipartisan basis and at some key moment, I’m confident the president will lead.”
]]> http://www.klineforcongress.com/news/635/ The Hill

Rep. John Kline (Minn.), the House Republicans’ point man on education, has a blunt response to President Obama’s aggressive push for Congress to rewrite federal education law by August: Don’t rush me.

The new chairman of the House Education and Workforce Committee sees election-year politics behind Obama’s hurry to overhaul the George W. Bush-era No Child Left Behind law, which Congress approved nearly a decade ago.

“I’m very much aware that 2012 is a presidential election year and presidential politics will start to dominate what goes on around here,” Kline told The Hill in an interview Tuesday in his Capitol Hill office. “So there is a little bit of urgency to move, but I’m not going to rush this and do it wrong.”

Kline also said the House would not approve a single comprehensive education bill and would instead break up the reauthorization of No Child Left Behind into separate pieces of legislation. The move is a reflection of orders from Speaker John Boehner (R-Ohio) to scrap the thousand-page bills that Republicans decried under the Democratic majority.

“We’re just not going to do it,” Kline said of passing a comprehensive bill. He added that lawmakers were still “stinging” from the mammoth pieces of legislation that Democrats passed in the last two years

The chairman’s comments come as the Obama administration mounts a coordinated campaign to spur Congress into action on the issue. The law was due for reauthorization four years ago, and school districts nationwide are barreling toward a 2014 deadline for meeting proficiency benchmarks, with crippling sanctions in place, up to and including school closures, if they don’t. The Department of Education warned last week that if the law isn’t changed, more than 80 percent of the country’s public schools will be “failing” by next year under standards set by current law.

During a speech Monday in Virginia, Obama called on Congress to send him an education reform bill he can sign “before the next school year begins.”

In the House, the pressure falls to Kline, whom Boehner tapped in 2009 to take over as the top Republican on the Education and Workforce (then Education and Labor) panel. At 63 and in his fifth term, the retired Marine colonel is a rookie chairman leading a committee flush with new conservative members, including several freshmen who campaigned against the very existence of the Department of Education.

Unlike healthcare and other highly polarized issues Obama has tackled, the seeds of bipartisanship on education have already been planted. The president has won praise from the GOP for some of his reform efforts, including the Race to the Top program, and his Education secretary, Arne Duncan, has forged solid relationships with top Republicans on Capitol Hill.

“We all agree that we need to fix No Child Left Behind,” Kline said. “It’s our common recognition that that status quo is unacceptable, which is pushing us to work in as bipartisan a way as we can to replace that law.”

A former chairman of the Education panel who recommended Kline for the post, Rep. Buck McKeon (R-Calif.), said the urgency was real. “Now we’re up against crunch time, and ’14 is going to come right quick. And everybody’s going to be in panic mode,” he said. “So they better get it done now. Otherwise there’s going to be a real major catastrophe.”

Kline praised the administration’s outreach to Republicans on education, particularly in contrast to its approach to healthcare reform in 2009 and 2010, which the GOP roundly criticized. A “Gang of Eight” Republican and Democratic committee leaders has been meeting regularly on education issues for months, most recently with Obama at the White House last week.

Like other Republicans, Kline singled out Duncan, whom he called “a wonderfully nice man.”

“He’s impossible not to like,” the chairman said. Duncan, he said, began calling him more than a year ago, when House Republicans were in the minority, to discuss No Child Left Behind. In those early conversations, Kline detected a hint of contrition from the presidential confidant at the conclusion of the costly healthcare debate. “He told me that he wanted to do this differently than other legislation,” Kline said. “I don’t think he specifically mentioned healthcare, but that’s the way I heard it.”

In a statement to The Hill, Duncan called Kline “a tireless champion for education reform.”

“He's a leader I have tremendous respect for, and his vision and commitment to children will be critical as we work to fix No Child Left Behind this year,” he said.

Warm words aside, Republicans and Democrats will have to bridge a considerable philosophical gap over how the parties view the federal role in education. There is near-uniform agreement that the Republican Party of 2011 is not the same as the one that approved the expansive education law in 2001, when Bush made it the centerpiece, along with tax cuts, of his domestic policy agenda.

Boehner then held Kline’s post at the helm of the Education and Workforce Committee, where he helped shepherd Bush’s proposal to passage. But education advocates say that even then, it was clear No Child Left Behind was Bush’s baby, not Boehner’s.

“Boehner, in effect, took Bush’s speech [on education] and wrote it into the law that became No Child Left Behind,” said Jack Jennings, president of the Center on Education Policy. In the years since, Jennings said, Boehner “more or less disowned No Child Left Behind.”

Kline was not in Congress in 2001, but he said that knowing what he knows now, he would have opposed it. “In my mind, they put too large an intrusion of the federal government into K-12 education,” he said. “Speaker Boehner and virtually everyone else has recognized that there’s some very large mistakes in No Child Left Behind.”

A Boehner spokesman, Michael Steel, said the Speaker “is confident Chairman Kline will be a powerful advocate for effective education reforms that increase flexibility, choice and parental involvement.”

On the timing of the overhaul, Kline said he acknowledged to the president that the Senate was moving ahead of the House thus far. The chairman of the Senate Education Committee, Tom Harkin (D-Iowa), has said he wants to introduce legislation by Easter.

“They’re going to move at their pace, and they’re going to have to understand, and I think they do, that we’re going to move at our pace,” Kline said.

The chairman downplayed the policy differences with the 11 new Republicans on the committee, but he said that acclimating them to the issues would take time. “Half of my committee is made up of new members of Congress, so there’s a certain amount of education, and I use that word advisedly, that needs to go on,” Kline said.

Colleagues say Kline’s military background is visible in his leadership style, but that he works to build consensus.

“He’s a very firm guy, but he’s been a very pleasant person to work with,” said Rep. George Miller (Calif.), the committee’s top Democrat and former chairman. “He’s firm, and he’s very good at telling you what he thinks he can do, and what he thinks he can’t do. … He’s pretty straightforward. I appreciate that.”
]]> http://www.klineforcongress.com/news/634/ The Washington Post

As the debate over keeping the federal government funded continues to dominate the agenda in Washington, House Republicans are redoubling their efforts to make sure that the issue of job-creation – a message that largely fueled their sweeping wins last November – does not get lost in the mix.

As part of that effort, House Republicans are hosting an interactive Forum on Job Creation this morning hosted by Chief Deputy Whip Peter Roskam (R-Ill.) in the Capitol Visitors Center.

In an interview Wednesday morning, House Majority Leader Eric Cantor (R-Va.) cast the event, which runs from 10:30 a.m. to 11:30 a.m. and is being live-streamed on the Web, as an opportunity for business owners to tell Congress what they believe should be done to fuel private-sector job growth – as well as for House Republicans to drive home the message that the ultimate goal of their proposed spending cuts is job creation.

“So much has gone on in Washington and Congress and the White House to sort of think that we could wave a wand and spend money to create jobs,” Cantor said.

“We’re actually going to listen to CEOs of some of the largest companies in the country and then from some of the smallest, and everything in between, to hear what it is they think should be done or what they need to begin to make investments to create jobs. That’s what all of this is about right now — while we’re heavily engaged in the discussion about spending and cutting spending, it is all really about trying to create an environment for job creation in the private sector.”

Attending Wednesday’s jobs forum are Darlene Miller, president of a Minnesota machining company and a member of President Obama’s jobs council; Aris Papadopoulos, who heads a Norfolk-based heavy building materials company; Jim Plante, president of a San Diego genomics company; Belinda Shafer, owner of a West Virginia construction company; Ignacio Urrabazo Jr., president of Commerce Bank in Laredo, Tex.; and Carl Schramm, president of an entrepreneurship advocacy group in Kansas City.

The interactive part of the forum includes a live “Twitter wall” and several participants who are appearing via teleconference.

Cantor said that in addition to reducing spending, House Republicans are also focused on creating jobs through cutting federal regulations – which the House has already taken steps on — and simplifying the tax code, which the House Ways and Means Committee is examining.

Congress must “stop the regulatory overreach that’s impeding the ability to create jobs,” Cantor said, citing efforts underway to limit the Environmental Protection Agency’s greenhouse gas regulations, the national health-care law, Federal Communications Commission regulations and others. “Pick your acronym, there are regulations at work, frankly, that really demonstrate a disconnect on the part of bureaucrats versus what small-business people need.”

House Republicans face hurdles, however, when it comes to the issue of whether cutting spending will result in job growth. Democrats point to multiple reports that the House Republican spending bill could result in job losses, including one projection that as many as 700,000 jobs could be lost by next year.

In addition, a Washington Post/ABC News poll released this week shows that Americans are conflicted about whether they believe cutting spending will result in job growth. Forty-one percent of poll respondents said that they believe big cuts in federal spending are likely to create jobs, while 45 percent said they think sweeping cuts are more likely to result in job losses.

Cantor said Wednesday that he hadn’t seen the specific numbers in The Post poll but that overall, Republicans “want to make sure that our message is one that we’re really on the side of the taxpayers.”

“Washington ought to be about tightening its belt, just like taxpayers have been,” Cantor said. “Washington ought to be spending the people’s money the same way that they spend it. And we ought to be acting with complete transparency and accountability. That’s what today is about.”

House Democrats have criticized Republicans for holding the jobs forum 11 weeks into the 112th Congress before any specific legislation on creating jobs has reached the House floor.

“The American public has made it very clear, they want leaders who will come together to find solutions that will put America back to work, while ensuring that we can out-innovate, out-educate, and grow our economy. It’s time for the GOP to stop talking and start working for American families,” said Ellis Brachman, communications director for House Democratic Caucus Chairman John Larson (Conn.)

Cantor responded by noting that the current battle over funding the federal government has taken place because the last Congress failed to pass a budget

“First I’d say to the Democrats, it was because they didn’t act on the spending bills; that has by necessity forced us to deal with the mess that they left,” Cantor said, adding that House Republicans see Wednesday’s forum as “the next step to demonstrate that we’re committed to growth.”
]]> http://www.klineforcongress.com/news/633/ The Hill

The Obama administration, which has taken flak from Republicans for granting more than 1,000 one-year waivers for a portion of the health care reform law, still faces an important question of how to handle waivers in 2012 and 2013, before a major component of the law goes into effect.

The one-year waivers are typically granted to organizations that offer limited health insurance, known as “mini-med” plans, that sometimes provide as little as $2,000 in annual coverage.

They are meant as a stopgap measure until new state-run health insurance exchanges open, which will mark the end of the so-called “mini-med plans,” according to the Department of Health and Human Services.

But the exchanges don’t start up until 2014, meaning HHS must come up with a plan for stabilizing the health insurance market for an additional two years when this round of waivers expires.

The department is just starting to deal with the problem, but its task is complicated by the lack of existing information about the low-value plans, HHS Secretary Kathleen Sebelius told The Hill on Friday.

“It’s a portion that frankly there isn’t a lot of data about,” Sebelius said. “Part of the waiver issue is also for companies to submit data on where they are, what the plans look like. A lot of them don’t even file at the state level.”

The healthcare law requires a phase-out of annual dollar limits on benefits, with a minimum limit of $750,000 in 2011. The limits gradually rise until they are completely eliminated in 2014.

The waivers for that requirement, which so far covered about 2 percent of the private insurance market, have forced Democrats to go to bat for health plans they have repeatedly criticized. They say the state insurance exchanges will allow consumers to shop for affordable, quality coverage, but until 2014, even the worst insurance is better than none at all.

“I think the balance is some coverage, even if it is pretty skimpy and not very sufficient, versus no coverage, and that’s what we’re trying to look at,” Sebelius said. “For a lot of these folks, there is no other option until we get to the state-based exchanges.”

Republicans have eagerly criticized the waivers as proof that the law doesn’t work, and they have accused the administration of using them to reward union allies.

“The fact that over 1,000 waivers have been granted is a tacit admission that the healthcare law is fundamentally flawed,” said House Energy and Commerce Committee Chairman Fred Upton (R-Mich.), who leads one of two panels that have asked HHS to provide more details on the waivers.

The waivers will receive heightened scrutiny on Tuesday, when the House Oversight’s heath subcommittee examines the criteria and methodology used for evaluating waiver applications.

Republicans have asked HHS for an explanation of why some groups’ applications were denied. On Friday, Sebelius told a House Appropriations subcommittee that HHS has approved more than 98 percent of waiver requests.
]]> http://www.klineforcongress.com/news/632/ Wall Street Journal

Republican lawmakers are preparing this week to introduce a series of legislative proposals to gradually reduce the role of Fannie Mae and Freddie Mac.

The effort represents a tactical shift from the comprehensive approach for a speedier wind-down of the mortgage-finance giants that Republicans backed during last year's negotiations on the Dodd-Frank Act.

That legislation would have started cutting the government's ties to the mortgage giants or begin winding them down in two years. The bill's sponsor, Rep. Jeb Hensarling (R., Texas), has said he still plans to reintroduce his legislation later this year, and leading House Republicans say they are still committed to the goal of winding down Fannie and Freddie and handing their role over to the private sector.

The decision to take a piecemeal approach with individual bills reflects the challenge in forging a political consensus—even among Republicans—around overhauling the nation's housing-finance infrastructure. And as the housing market continues to be vulnerable, deep caution greets any proposal that might pass on higher borrowing costs to consumers.

If Republicans advance individual bills, that could offer more opportunities for cooperation with the White House than if they advance a single bill outlining a more immediate wind-down of Fannie and Freddie.

Rep. Scott Garrett (R., N.J.), who heads the House subcommittee on capital markets, plans to unveil some of those bills on Tuesday. One measure would accelerate the wind-down of the firms' combined $1.5 trillion mortgage portfolios, which are already set to decline by 10% annually. Other bills would eliminate the firms' federal affordable-housing goals and gradually raise the guarantee fees that Fannie and Freddie charge lenders, a decision now made by the firms and their federal regulator.

Some of these ideas were embraced by the White House in its "white paper" released last month.on the future of housing finance For example, the White House advocated raising guarantee fees to help bring private capital back to the mortgage market. The Obama administration has said it hopes to have legislation addressing Fannie and Freddie within the next two years, but it hasn't provided a more specific timetable for any overhaul.

The moves also come amid a long-standing political fight. Democrats faced heavy criticism last year from Republicans for excluding Fannie Mae and Freddie Mac from their sweeping financial-regulatory overhaul. Now, with Republicans controlling the House of Representatives, Democrats are tagging that position as posturing.

"The Republicans have pretended for a while that they knew what to do," said Rep. Barney Frank (D., Mass.). "Now that they have to govern, they're not sure." Mr. Frank says the Republican leadership "doesn't have the votes" for a more immediate overhaul. In a statement, a spokesman for Mr. Garrett said he is committed to "protecting taxpayers and getting private capital off the sidelines."

Republicans say individual bills have a better chance at forcing the Democratic-led Senate to take up Fannie and Freddie. GOP lawmakers say they're concerned the impetus for overhaul could weaken as the housing market settles out and the memory of Fannie and Freddie's collapse fades. That view was echoed by Treasury Secretary Timothy Geithner at a hearing earlierthis month.

"What we're trying to do as a team here is figure out the best strategy to get the ball moving," said Rep. Randy Neugebauer (R., Texas). One key question is whether "you can get a comprehensive bill passed," he said. "Part of being in leadership is making sure when you bring policy ideas forward, that you've got the ... votes to pass it."

Last month's White House proposal called for gradually phasing out Fannie and Freddie and offered three options for what might follow them. The first option, which is supported by many conservative Republicans, would provide no loan guarantees to protect mortgage investors beyond those made by existing agencies such as the Federal Housing Administration.

The second option would create some type of government backstop that would kick in only in market emergencies. The third would create new federal loan guarantees to replace some of the roles played by Fannie and Freddie and enjoys support from a cross section of consumer groups and the real-estate and banking industries. Many Democrats, and some Republicans, have indicated their preference for such a model.

Winding down Fannie and Freddie will be tricky: They guarantee around $5 trillion of mortgages and, together with federal agencies, are responsible for backing around nine in 10 new mortgages. Any of the options are likely to raise borrowing costs, and that could make lawmakers reluctant to taking action now given the fragility of the housing market, says Brian Gardner, a policy analyst at Keefe Bruyette & Woods. He says there's little chance that Congress and the White House will agree on a bill before the 2012 election.

Republicans have argued that a fully private mortgage market will leave taxpayers less exposed to mortgage losses. "There's more market discipline in the system," said Mr. Neugebauer. "People are going to be paying more attention to the underlying mortgages."

Others say the risks assumed by Fannie and Freddie could simply move into the federally-insured banking sector or federal loan agencies and that taxpayers would still be exposed to losses in a crisis. "It looks like it's a more private solution, but it may not be in the end," Mr. Geithner said at a House hearing earlier this month.
]]> http://www.klineforcongress.com/news/631/ Wall Street Journal editorial

Wisconsin and Minnesota are often lumped together as similar states, but this year they are showing how elections matter. In November the Badger State elected a GOP legislature and Republican Scott Walker, who is trying to cut spending and taxes, while Minnesota voters narrowly chose liberal Democrat Mark Dayton, who is doing the opposite.

And then some. To close Minnesota's budget deficit, Mr. Dayton first proposed to raise the state's top income tax rate to 13.95% from 7.85%. That would have given Minnesota the distinction of having the highest state income tax in the nation, racing ahead of current leaders Oregon and Hawaii at 11%. The Dayton plan would even have topped New York City's combined state-city rate of 12.62%.

Mr. Dayton, who inherited his wealth from a department-store empire, saw his proposal routed in the state legislature. But he still wants to raise the top rate to 10.95%.

He defends this tax wallop by arguing it is about "restoring tax fairness" in Minnesota. Fairness? According to the state's own tax data, the richest 10% of Minnesota families already provide 54% of the state's income tax revenue. The bottom 10% make money off the income tax as they get cash-back tax credits.

We won't repeat our lecture about high state taxes driving citizens to move to lower tax climes. Our point today is about political choices. In Wisconsin, government unions are fighting furiously against Mr. Walker's cuts in state employee benefits. Their alternative? Raise taxes the way Mr. Dayton wants to do. In recent years, this has become the default union policy and thus the first priority nearly anywhere that Democrats get power.

New Democratic Governor Dan Malloy is trying to raise income, sales, liquor, cigarette and other taxes in Connecticut. In California, Democrat Jerry Brown wants a $12 billion extension of income and sales tax hikes that were supposed to be "temporary." New York Governor Andrew Cuomo is trying to hold the line against a tax increase, despite pressure from fellow Democrats who dominate the state assembly, but he's a rare exception. We can't remember when the fiscal policy gulf between the two parties was as great as it is today.
]]> http://www.klineforcongress.com/news/630/ Politico

The budget debate has been galloping away from Democrats since the passage of a two-week spending bill — and President Barack Obama tried to grab back the reins on Wednesday.

The White House has tried to keep its distance from Senate and House negotiators, fearing being dragged into another partisan food fight after the bipartisan triumph of the December lame-duck session. But White House officials now see the political initiative they enjoyed just weeks ago slipping away, amid divisions among Senate Democrats and an emerging GOP strategy of dragging Obama into an endless string of stopgap spending measures that could have long-term drawbacks for the White House.

That has Democrats — as “Where’s the president?” becomes a GOP rallying cry — hankering to negotiate a long-term budget deal as quickly as feasible, even if it means having to confront, however superficially, the third-rail issue of entitlement reform.

“For Republicans, it’s phenomenal to do all these little deals because it makes them look like they are actually doing something when they are really doing nothing,” said an administration official, who predicted passage of a three-week extension before the looming March 18 deadline to keep the government running.

“They would like nothing better than to make us look like tax-and-spend liberals ... and the longer they can drag this out, the better,” the official added.

Obama’s team — which had anticipated a messy internal GOP fight between mainstream Republicans and tea party faithful — now worry that the contours of a winning GOP strategy on the budget is coming into focus: a series of small deals, with escalating cuts that force the president to defend his pet social and development programs at a time when he had hoped to position himself as a fiscal hawk.

It also remains wary of any deal that involves major changes to Medicare, Medicaid and Social Security — and administration officials say that a bipartisan group of six senators working on entitlement reform will not have a seat in negotiating sessions.

Democrats hoped a pair of Senate votes Wednesday on competing budget plans would strengthen their hand, yet the outcome appeared to undercut their leverage. The Democratic proposal, which cut only $6.5 billion in federal spending, received fewer votes than the Republican version, which slashed $61 billion.

Obama invited Senate Democratic leaders to the Oval Office on Wednesday in hopes of forging a unified strategy that will force House Republicans to negotiate a longer-term deal.

The immediate spur for the meeting, according to Hill Democrats, was criticism from Sens. Dianne Feinstein (D-Calif.) and first-termer Joe Manchin (D-W.Va.), decrying Obama’s lack of leadership on the budget. White House press secretary Jay Carney disputed that the meeting was a response to the criticism, saying the the president has been “engaged.”

On Thursday, administration negotiators — including Obama’s budget chief Jack Lew and the administration’s top legislative affairs official, Ron Nabors — are expected to hammer out some of the details in a meeting with the Senate Democratic Caucus, according to a person with knowledge of the situation.

At the same time, Vice President Joe Biden, delegated as a top budget negotiator by Obama, pursued a semi-comical second track: reaching out long distance to Senate Minority Leader Mitch McConnell (R-Ky.) and House Speaker John Boehner (R-Ohio) from Russian President Dmitry Medvedev’s dacha.

Boehner and McConnell were not charmed. Quipped one GOP aide: “The idea of the vice president managing budget negotiations on Capitol Hill from the Russian prime minister’s dacha might seem unrealistic even in a James Bond movie.”

A few hours earlier, Sen. Chuck Schumer (D-N.Y.) launched a pre-emptive political attack of his own, softening his previous objection to including entitlement reform in a long-term deal, while challenging Republicans to consider tax cuts on the wealthy.

“The negotiations haven’t started yet,” Schumer said. “They may not start on the seven-month [continuing resolution] for a few days. If they want to sit down and negotiate right tomorrow, we’re ready, and I’m sure the White House is ready.”

Schumer said Democrats have shown a willingness to be flexible, but Republicans have yet to move off their insistence to cut at least $60 billion from the budget.

“We are willing to move,” Schumer said. “We have shown that in the proposal we’ve put on the floor. Where are they willing to move? Because if they stick to their bill, as of now, it is not going to pass.”

The next logical step would be a series of bipartisan staff discussions to create the outline of a possible deal, followed by a negotiating session between Obama, Democratic leaders, Boehner and McConnell. But that possibility seems far off, and nothing has been scheduled yet, annoying some Republicans, who are calling for their own confab with Obama.

“The president should convene a leadership meeting on both sides,” said Sen. Olympia Snowe (R-Maine). Snowe suggested that Obama and her leadership “can sit down and sort of work through a template — and I think that’s the bottom line here. ... And I think it’s important to hear the president’s voice in all of this so that he can lead the way. That’s the essence of the presidential leadership: ... to convene a group and begin to stake out the ground that’s essential and that’s in the best interest.”

Still, the decisive defeat of GOP and Democratic spending bills in Wednesday’s Senate floor votes clears the way for real bipartisan talks, if both sides are willing.

“With this vote out of the way, we’re going to do some serious negotiations now,” Senate Majority Leader Harry Reid (D-Nev.) told reporters after leaving Senate Minority Whip Jon Kyl’s office after the vote. “This paves the way to get something done.”

Reid met with Kyl — but there appears to be no imminent negotiating sessions between the parties and with the White House, congressional aides said.

Schumer gave a speech earlier Wednesday calling for lawmakers to expand the focus of their negotiations from a small slice of discretionary spending to include entitlements such as Medicare and Medicaid — a shift in strategy for the Senate majority, which has been hesitant to embrace entitlement reform.

“My view ... is that the only way you’ll get both real deficit reduction and job growth is not by focusing solely on domestic discretionary, even though there has to be cuts there,” Schumer said.

He boosted the work of a bipartisan Senate group negotiating a long-term deficit reduction deal. Asked whether talks for the current fiscal year budget would get rolled into a broader attempt to address the debt, Schumer was noncommittal.

“I think it’s likely that we try to finish 2011 first, but you can use the model of what the group of six is doing to try to solve 2011 as well,” Schumer said.

“We’re going to look at everything,” Reid said.
]]> http://www.klineforcongress.com/news/629/ Washington Times editorial

Big government doesn’t come cheaply. According to Congressional Budget Office (CBO) figures released Monday, the budget deficit for February hit a staggering $223 billion - meaning the Obama administration added more in debt last month than was borrowed in all of 2007. It’s no secret that these mounting bills must eventually come due in the form of higher taxes or a deflated currency. Either alternative would hit consumers hard.

Since Barack Obama was sworn in as president, each American taxpayer’s share of the federal government’s IOU has grown to $50 per day - more than the average cell-phone user is billed in an entire month. The monthly share of the deficit is $1,500 per taxpayer - about what the average household spends on a mortgage. On an annual basis, each taxpayer owes $18,250 - more than an Old Dominion resident would pay in tuition at the University of Virginia or a nonresident would spend at the University of Maryland.

In January 2009, the national debt stood at $10.6 trillion. Fueled by the so-called stimulus, this debt grew by $3.6 trillion in just two years. The magnitude of this amount is difficult to grasp without a comparison. Under Mr. Obama, government has been borrowing $4.6 billion each and every day. That’s more than it cost to construct the world’s tallest building, Dubai’s Burj Khalifa. In other words, the amount of future productivity being sapped from the American economy would be sufficient to construct a new 160-story skyscraper every day of the year.

This looming burden will eventually hit, but it will not fall on every American. According to the latest Tax Foundation figures, 90,718,339 paid more in taxes than they received in 2008. The price of present, past and future bureaucracy will fall on these shoulders. According to CBO’s rosiest projections, we are on track to hit $18.2 trillion in debt within the next 10 years. Each taxpayer would have to cough up $200,620 to retire that debt.

The current Republican plan would trim 2011 spending by $58.6 billion and lighten the weight around the necks of future generations by one-third of 1 percent. America’s looming insolvency calls for more than half-measures and convenient trimming around the edges. Government has grown too large and too intrusive. It must be rolled back by a return to spending levels no greater than those found in the 2006 budget. This is hardly an extreme suggestion; it’s not like people complained about not having enough government around five years ago. Such a change would have the added benefit of returning desperately needed capital to the private sector.

The actions of Mr. Obama and his congressional allies betray a lack of faith in the promise of capitalism to raise the living standards through economic growth. We’ve tried two straight years of Keynesian stimulus, and this discredited theory has produced no better results than it did under Mr. Obama’s ideological forerunner, Jimmy Carter. It’s now up to the House Republican majority to use the upcoming debt-limit vote to inform the president that his partying at the nation’s expense must come to an end.
]]> http://www.klineforcongress.com/news/628/ Washington Times

National Public Radio found itself swept up in a perfect storm of criticism and static Tuesday after an undercover videotape captured a top executive condemning tea party supporters as "seriously racist" and suggesting the nonprofit network would be better off without its federal taxpayer subsidies.

Conservative muckraker and underground videographer James O'Keefe and two costumed actors posing as potential Muslim donors managed to document outgoing NPR development executive Ron Schiller vilifying grass-roots conservatives and questioning NPR's need for millions of federal dollars, all over lunch at a tony Georgetown restaurant.

"The tea party is fanatically involved in people's personal lives and very fundamental Christian — I wouldn't even call it Christian. It's this weird evangelical kind of move," Mr. Schiller said to his convincing lunchmates, who were posing as members of the Muslim Education Action Center, a fictitious interest group with a convincing fake website.

"Tea party people aren't just Islamaphobic, but really xenophobic, I mean, basically they are, they believe in sort of white, middle-America gun-toting. I mean, it's scary. They're seriously racist, racist people," the executive continued.

NPR distanced itself from the comments and from Mr. Schiller, who resigned from NPR a week ago to take a post at another Washington nonprofit, but reaction to the tape, which the 26-year-old Mr. O'Keefe posted online Tuesday, was swift.

"At a time when our government borrows 40 cents of every dollar that it spends, we must find ways to cut spending and live within our means," said House Majority Leader Eric Cantor.

"This video clearly highlights the fact that public broadcasting doesn't need taxpayer funding to thrive, and I hope that admission will lead to a bipartisan consensus to end these unnecessary federal subsidies," the Virginia Republican said.

"Remove NPR from the federal budget and be done with it. … It's time to push Big Bird out of the nest so he can fly on his own," said Rep. Doug Lamborn, Colorado Republican, who has led efforts to cut NPR's funding.

The tone captured on the 11-minute edited tape illuminates a persistent image problem for the Washington-based network.

"NPR hates Middle America, plain and simple. The utterances from NPR officials underline that these taxpayer-funded bureaucrats loathe most of the taxpayers who feather their comfortable nest," said Media Research Center President Brent Bozell.

"Their contempt for 'scary' middle Americans belies their ridiculous claims of concern for rural stations and their absurd declaration that somehow NPR is the epitome of fairness and balance," Mr. Bozell said.

In a scene straight from a B-grade spy movie, the actors pretended to offer a sizable donation to Mr. Schiller and Betsy Liley, NPR's current director of institutional giving, who was also at the meeting.

During the two-hour conversation, Mr. Schiller mocked skeptics of global warming and chuckled over a comment that NPR should be known as "National Palestinian Radio."

He also assured the two actors that NPR "would be better off in the long run without federal funding."

Mr. Schiller recently departed NPR to become arts program director at the nonpartisan Aspen Institute.

"Schiller embraces and lives the values that we share as a community," said the group's president, Walter Isaacson, when announcing the hire last week. "I am very pleased that he has agreed to join us to help us build a strong and vibrant arts program."

Tea partyers joined a call to Congress to stop NPR's federal funding.

"Mr. Schiller himself candidly admits in the video that NPR doesn't need federal funding, and welcomes the opportunity to slant their reporting without the oversight of the taxpayer," said Mark Meckler, national coordinator for the Tea Party Patriots, an umbrella group for the movement that claims some 15 million members.

"Let's take his advice and pass legislation that would defund the clearly biased news organization that is out of touch with Americans across the country," Mr. Meckler added.

In the aftermath of the sting, NPR management immediately scrambled to stay transparent with the public, tracking the course of their own story in the press and dutifully supplying links to the coverage and the video.

By afternoon, the broadcaster had switched to crisis management.

"The fraudulent organization represented in this video repeatedly pressed us to accept a $5 million check, with no strings attached, which we repeatedly refused to accept. We are appalled by the comments made by Ron Schiller in the video, which are contrary to what NPR stands for," said NPR Marketing Vice President Dana Davis Rehm. "Mr. Schiller announced last week that he is leaving NPR for another job."

Meanwhile, the events cap a particularly trying period for NPR.

A report in The Washington Times on Monday found that NPR and PBS stations that ask their audiences to contact Congress to protest Republicans' proposed spending cuts may violate laws preventing nonprofits or government-funded groups from lobbying.

The undercover video was released less than 24 hours after NPR's CEO, Vivian Schiller — no relation to the former executive — appeared at the National Press Club to straighten out the broadcaster's public image and take questions from journalists about NPR funding, the controversial termination of news analyst Juan Williams' contract and other issues.

She dismissed charges of liberal bias at NPR as a "perception issue," claiming the broadcaster was "red state and blue state."

Mr. O'Keefe, no stranger to extreme and sometimes questionable tactics, is the same rogue journalist who brought the Association of Community Organizations for Reform Now (ACORN) to its knees in 2009.

With costumed fellow activist Hannah Giles and a hidden camera, Mr. O'Keefe captured employees of the federally funded voting rights group giving Mr. O'Keefe, posing as a pimp, advice on hiding prostitution activities. ACORN filed for Chapter 7 bankruptcy and liquidation in late 2010.
]]> http://www.klineforcongress.com/news/627/ RealClearPolitics

My friend E.J. Dionne Jr., a liberal columnist for the Washington Post, is a fine man with, I feel safe in asserting, a warm heart. But he betrays in a recent column a persistent failing of the left -- imperviousness to evidence.

Describing Speaker Boehner's tactics in the budget fights with Democrats, Dionne wrote:

"Begin with the outrageous $1.1 billion, 15 percent cut from Head Start, a program that offers preschool education to roughly 965,000 poor children. According to the Center for Law and Public Policy, this would knock 218,000 kids out of Head Start and force 16,000 classrooms to close. That is an excellent way to lose the future, as Obama ought to be saying. What could be a better use of public money than helping our poorest children early in life so they might achieve more in school, and later?"

Like most liberals, Dionne is enchanted with the idea of Head Start -- the romance of a government program that would provide care, nutrition, education, and skills to impoverished preschoolers in order to erase, to the degree possible, the handicaps poverty imposes. That was the idea in 1965, when Head Start was founded. Lyndon Johnson declared, upon signing the enabling bill that "Today, we reach out to five and half million children held behind their more fortunate schoolmates by the dragging anchor of poverty." Head Start, he promised, would be their "passport" out.

It would have been worth the $166 billion taxpayers have spent on the program since 1965 if a significant portion of Head Start alumni did improve their educational outcomes and escape poverty. But that did not happen.

As any number of studies have demonstrated over the years, the effects of Head Start are modest to nugatory. Stephan and Abigail Thernstrom chronicled the failure in "No Excuses." One study found that Head Start students were slightly more likely to be immunized than others -- a good thing of course, but a) not primarily what the program was sold as, and b) achievable far more cheaply through other programs like Medicaid. A 1969 study found that any gains participants displayed faded away in the early grades. By third grade, Head Start graduates were indistinguishable from their non-participating classmates. Rather than scrap the program, President Nixon (a sheep in wolf's clothing where domestic policy was concerned) concluded that, "Head Start ... must begin earlier in life, and last longer, to achieve lasting benefits."

Later surveys showed similarly dismal results. By 1987, even the program's founder, Yale psychologist Edward F. Zigler, declined to claim educational benefits for the program. But as the Thernstroms concluded, "Everyone could agree that poverty was hard on blameless children, so any federal effort purporting to help them was difficult to attack without seeming mean-spirited."

That remains true, as witness Mr. Dionne.

A just-released study by the Department of Health and Human Services delivers incredibly harsh news about Head Start. A large, nationwide survey of 4,600 preschoolers who were randomly assigned to either the Head Start (experimental group) or no program (control group) were studied on 114 different measures ranging from academic skills to social-emotional development, to health status. The study found no statistically relevant effects from the Head Start program by the end of first grade.

If a study falls in the forest and the major news organizations fail to report it, does it make a sound? Hardly a whimper. A few conservative websites like Heritage, CATO, and the Independent Women's Forum noted the results, but elsewhere, all was silence.

Or, not silence actually, complete denial. President Obama had boosted funding for Head Start from $6.8 billion in 2008 to $9.2 billion in 2009. Secretary of Health and Human Services Kathleen Sebelius and Education Secretary Arne Duncan support even greater "investments" in the failed program in the future. Study? What study?

According to Douglas Besharov of the University of Maryland, it costs $22,600 annually to keep a child in a year-round Head Start program. Typical preschools run about $9,500. But the price simply doesn't matter. The lack of results doesn't matter. The only thing that seems to matter is that liberals are able to preen about their compassion -- oh, yes, and condemn anyone not impervious to evidence as heartless.

Copyright 2011, Creators Syndicate Inc.
]]> http://www.klineforcongress.com/news/626/ Washington Times

The federal government posted its largest monthly deficit in history in February, a $223 billion shortfall that put a sharp point on the current fight on Capitol Hill about how deeply to cut this year’s spending.

That one-month figure, which came in a preliminary report from the Congressional Budget Office, dwarfs even the most robust cuts being talked about on the Hill, and underscores just how much work lawmakers have to do to get the government’s finances in balance again.

The Senate plans to vote Tuesday on competing proposals to cut spending, but Democrats have rejected GOP-backed cuts of more than $50 billion, and Republicans have ruled out Democrats’ cuts of less than $10 billion, meaning neither plan will draw the 60 votes needed to overcome a filibuster and pass.

“We’ve all done the math and we all know how these votes will turn out: Neither proposal will pass, which means neither will reach the president’s desk as written. We’ll go back to square one and back to the negotiating table,” said Senate Majority Leader Harry Reid, Nevada Democrat.

The two sides are facing a March 18 deadline, which is when the current stopgap funding bill expires. Without a new spending agreement by then, the government would shut down.
**FILE** Glen Perkins delivers copies of the fiscal 2012 budget to the Senate Budget Committee hearing room in Washington on Feb. 14. (Bloomberg)**FILE** Glen Perkins delivers copies of the fiscal 2012 budget to the Senate Budget Committee hearing room in Washington on Feb. 14. (Bloomberg)

The House two weeks ago passed a bill that would cut $57 billion more from 2010 spending levels, including major reductions in a number of domestic programs.

Over the weekend, a top Senate Democrat said his party can accept no more than $6 billion in domestic cuts, and pointed to the proposal his colleagues introduced Friday that trims from several areas.

But a new set of numbers from the CBO indicates that Senate Democrats’ proposal actually totals only $4.7 billion when measured as reductions compared with the previous year’s spending.

So far, budget negotiations have not produced much visible progress.

President Obama designated Vice President Joseph R. Biden Jr. as his point man in the conversations, and Mr. Biden convened a meeting with congressional leaders last Thursday at the Capitol. But Mr. Biden is traveling in Europe this week on a long-planned trip to meet with foreign leaders.

White House press secretary Jay Carney hinted that Mr. Biden could still participate by phone, but declined to say whether anyone else was taking the lead in the talks in his absence.

“I’m not going to specify, simply to say that a variety of staff members, senior staff members, have been in conversations with folks on the Hill about this,” the spokesman said.

Republicans argue that Congress needs to tackle not only short-term spending, but long-term growth in the costs of Social Security and Medicare as well.

“Something must be done, and now is the time to do it. Republicans are ready and willing. Where is the president?” said Senate Minority Leader Mitch McConnell, Kentucky Republican. “Suddenly, at the moment when we can actually do something about all this, he’s silent.”

According to the CBO, the government has notched a $642 billion deficit for the first five months of fiscal 2011, which is slightly less than last year’s pace. Income tax revenues are rising faster than spending, which accounts for the marginally improved picture.

But interest on the debt continues to grow, reaching $101 billion through the end of February — a 12.5 percent increase over 2010.

The nonpartisan CBO’s February deficit number is preliminary. The Treasury Department will issue the final number later this week.

February is traditionally a bad month for federal finances. The previous two records were $220.9 billion, posted exactly a year ago, and $193.9 billion in February 2009.
]]> http://www.klineforcongress.com/news/625/ Wall Street Journal

Sports fans relish this time of year for the NCAA Championship Basketball Tournament, aka "March Madness." But this year the tournament has a serious contender for that title. March is also ObamaCare's anniversary month.

Last year, President Obama gave Congress an arbitrary deadline to pass his health-care takeover legislation before the Easter recess at the end of March. This forced lawmakers to hurry their votes on a deeply flawed bill that very few of them had read. Worse, many made false promises to secure final passage.

We're already seeing ObamaCare's madness in its first year of implementation, which is why the American people continue to call for defunding, repealing and replacing it with more sensible reforms. Here are a few examples of the mayhem.

• More than half the states—28 and counting—are challenging the law in court, saying that it violates the constitutional rights of their citizens and the sovereignty of the states. A new study from the Senate Finance and House Energy and Commerce Committees found that as a result of ObamaCare, budget-strapped states face at least $118 billion in unfunded mandates during the first 10 years after the law takes effect.
• Health and Human Services Secretary Kathleen Sebelius has handed out nearly 1,000 waivers to allow select companies, unions and states to escape, at least temporarily, some of the burdensome new insurance rules she has created. This is a continuation of the trend of the "Cornhusker Kickback" and the "Louisiana Purchase" that Senate Democrats used to get the law passed in the first place, and that so disgusted the American people.
• Independent experts have shown that the cost of health insurance will rise faster than it would have without the law. The Congressional Budget Office expects the price of a family policy in the individual market to be $2,100 higher by 2016 than it would have been had the law not passed. In at least 20 states, it's now impossible to buy child-only health insurance because of Ms. Sebelius's onerous new rules.
• Seniors are at risk of losing access to physicians and medical care. Medicare actuaries say that the cuts built into the law will force as many as 40% of providers to eventually stop seeing Medicare patients or go bankrupt.
• Many thousands of people are already losing the health insurance they have now as companies are exiting markets for individual, small group and Medicare Advantage coverage.
• The former director of the Congressional Budget Office, Douglas Holtz-Eakin, says that the costs of ObamaCare are set to explode when employers opt to drop coverage and send their workers to the new, federally subsidized health exchanges for coverage. He estimates that this will drive up the cost of the law by $1 trillion or more in the first 10 years.

The list goes on and on. It's time to stop the ObamaCare madness before it becomes another entrenched entitlement program.

To protect taxpayers and our health sector, Congress can begin by defunding ObamaCare at every opportunity. Next we need a president and a Congress that will vote to repeal the law and start over with sensible reforms. The stakes are high for the capacity of patients and doctors to choose and control their medical choices, and for all Americans' freedom and prosperity.

If we do this right, in March of 2013, instead of jumping through more of ObamaCare's hoops, let's hope we will be able to focus on basketball's March Madness instead.

Ms. Turner is president of the Galen Institute. Mr. Cortes is executive director of Let Freedom Ring. Ms. Higgins is president and CEO of Independent Women's Voice.
]]> http://www.klineforcongress.com/news/624/ The Hill

Likely voters overwhelmingly believe deficit reduction is crucial to America’s future, but generally oppose raising revenue through tax reform to cut those deficits, a new poll conducted for The Hill found.

A full 95 percent of likely voters believe that lowering the debt is either very or somewhat important, the poll found, with only 2 percent finding the issue not at all or not very important.

Not surprisingly, respondents had a more nuanced take on tax reform, with likely voters saying they prefer spending cuts to tax increases to shoulder the brunt of lowering the country’s debt.

Still, a plurality endorsed the general idea of lowering tax rates while eliminating many tax credits and deductions. Respondents were split, however, on whether they would be willing to give up their long-held deduction for mortgage interest, a tax expenditure that has received backing of powerful supporters like President Reagan during past pushes to overhaul the tax code.

The Hill’s poll of 1,000 likely voters, conducted March 2, comes as tax reform has been discussed for months. In its report issued last year, President Obama’s fiscal commission devised a plan to use a combination of tax-code changes and spending cuts to get the country’s fiscal situation more in line.

For its part, the Obama administration has especially expressed interest in reforming the corporate tax code in a way that does not add to the deficit. But some Republicans on Capitol Hill have called for more comprehensive tax reform, and appear less concerned about whether a tax-code overhaul would bring on more debt at first.

Forty-two percent of likely voters appear to share the GOP’s line of thinking, believing that a tax-reform plan should lower taxes and bring in less revenue.

Less than a third (29 percent) of respondents believe tax reform should produce extra revenue earmarked for deficit reduction, while only about one in five (19 percent) believe an overhaul of the tax code should be revenue-neutral — the path the Obama administration has called for in its push for corporate tax reform.

On this particular issue, Independent voters had almost exactly the same thoughts as likely voters at large, with 44 percent backing the concept of a tax-reform plan that lowers taxes and brings in less revenue.

As for the mortgage interest deduction — which allows homeowners to subtract the amount of their yearly mortgage interest payments from their taxable income — 42 percent of likely voters said they could live without it in exchange for lower tax rates, while 41 percent favored keeping that deduction.

Opinions diverged when it came to the income level of respondents: the income group most willing to leave the deduction behind was of those making less than $20,000 annually (55 percent favored doing away with it). Taxpayers making between $60,000 and $75,000 a year showed the strongest attachment to it (59 percent favored keeping it), while the most evenly split income group was of those making more than $100,000 a year (44 percent in favor, 43 percent not).

The Hill’s poll also found that only a quarter of likely voters approved of the basic ratio that the president’s fiscal commission proposed — two-thirds spending cuts, one-third tax revenue — to bring down budget deficits. More than half of likely voters preferred a bigger proportion of savings to come from spending cuts.

A Pew Research poll from December found that more than nine in 10 believed the federal budget deficit is a major problem. But that survey also found that Americans disapproved of the debt panel’s proposals by a 48 percent to 30 percent margin.
]]> http://www.klineforcongress.com/news/623/ Washington Times editorial

As Congress looks for ways to trim the budget, the Environmental Protection Agency (EPA) represents an opportunity for up to $9 billion in savings. This outfit has become little more than an advocacy group for trendy leftist causes operating on the public’s dime. Many liberal policies being promoted are so unpopular that congressional Democrats can’t muster the votes to get them through the proper legislative process. So they go to the EPA instead.

That’s why the EPA announced Tuesday that it had revised the deadlines imposed on certain companies for reporting so-called “greenhouse gas” production. A facility that manufactures paper, for example, would have to determine whether it “emits 25,000 metric tons of carbon-dioxide equivalent (CO2e)” per year. The agency guesses that this covers about 10,000 businesses which would then be forced to measure their carbon-dioxide output, maintain detailed records and submit reports to EPA busybodies.

All of this extra work is required not to make companies more productive or more competitive in the marketplace. Instead, it increases the EPA’s power over the private sector in the name of fighting the purported effects of global warming.

Although we are led to believe that each metric ton of carbon dioxide brings the planet closer to the brink of destruction, companies won’t be compelled to report the greenhouse-gas emissions of their own employees, about a dozen of whom would produce a metric ton of carbon dioxide while breathing on the job for a year. “This carbon dioxide is part of a natural closed-loop cycle and does not contribute to the greenhouse-gas concentrations in the atmosphere,” the EPA website explains. “Natural processes of photosynthesis (in plants) and respiration (in plants and animals) maintain a balance of oxygen and carbon dioxide in the atmosphere. Thus, the carbon dioxide from natural process is not included in greenhouse-gas inventories.”

This line of thinking betrays the unscientific basis of the EPA’s endeavor. If a CO2 molecule is making the planet warmer, it doesn’t matter whether it came from a factory or an animal or a bureaucrat. It interacts with the atmosphere in exactly the same way. The EPA rule reflects a more mystical view of climate change in which individual CO2 molecules can differ. Mother Earth looks favorably upon molecules from “sustainable” sources. Those from SUVs, factories and cigars anger her. Instead of blessing the planet with cold, she will curse it with warmth.

The left isn’t even consistent with such beliefs. First lady Michelle Obama’s “Let’s Move” campaign encourages kids to be less lazy and sedentary and increase their physical activity for better health. Never mind that this could be catastrophic to the planet. As a child’s muscles burn calories through exercise, respiration increases and the amount of carbon dioxide exhaled can double. By comparison, encouraging children to take more naps would cut their carbon-dioxide output in half.

Mrs. Obama wants active lifestyle habits to carry over into adulthood, where a grown man can exhale as much as 150 grams of carbon dioxide when running for a mile - nearly as much as a Toyota Prius covering the same distance. Either exercising tots are not doing their part to save the planet, or carbon-dioxide molecules simply aren’t as evil as the EPA claims.

The House has voted to defund the EPA’s greenhouse-gas campaign. It ought to go further and ask why a federal agency is needed when all 50 states have their own departments of environmental quality, natural resources or environmental protection. If the left wants to pursue pseudo-scientific mysticism, it should do so without taxpayer money.
]]> http://www.klineforcongress.com/news/622/ Reuters

MADISON, Wis (Reuters) - Wisconsin Governor Scott Walker vowed on Thursday never to compromise on the core of his plan to curb the power of public sector unions and said investors should buy the state's bonds precisely because he was taking a tough stance.

In an interview with Reuters Insider exactly two weeks after state Senate Democrats fled to Illinois to stall action on Walker's proposal, he said public sector unions must be reined in to allow local governments to cut costs.

"I want to be different. I want to be unique. I want to be an innovator here and give my local governments the ability to manage their own budgets. On that part, we can't compromise," the newly elected Republican said.

He added that he saw room to talk with opposition Democrats on "the process." He did not specify what that meant, but talks were reported to be under way with the 14 Democrats who departed the state. Various media accounts said the Democrats were seeking minor modifications to Walker's proposal on workplace safety and recertification of unions in exchange for the senators returning to Wisconsin.

Earlier on Thursday, Walker told reporters that unless the Democrats returned, he would begin preparing layoff notices for some 1,500 state workers by the end of this week in order to achieve the necessary budget savings.

Walker said it was "outrageous" that Democrats left Wisconsin rather than debating or voting on his proposal.

"The crisis that is occurring is for one reason and one reason only -- because the 14 left and abandoned their jobs."

The governor said that he has instructed senior Republican lawmakers and his inner circle to reach out to "some of the more reasonable" Democratic members of the state Senate.

"Unfortunately, they go back to their caucus, and extremists in their caucus pull them back to Illinois. We need to find a way for them to break free of that and ultimately come back to the capital," Walker said.

Republicans need just one Democratic senator to return in order to reach the quorum required for a floor vote on the proposal.

Walker's proposal has sparked a major confrontation with organized labor and the largest protests in Wisconsin since the Vietnam War. At least 70,000 people marched in Madison last Saturday to demand he withdraw his union plan.

But Walker showed no signs in the interview of backing down. He said investors should buy Wisconsin debt because its pension system is fully funded and his budget proposal would lower the state's structural deficit 90 percent by the end of fiscal 2013. This contrasted favorably with states such as Illinois and California, he said.

"We made the tough decisions to make the point to the investor that while it was tough doing it, we actually had the courage of our convictions," Walker said. "This is exactly the place you want to invest in because it is rock solid. There's nothing that is going to shake us."

Asked about the delay in refinancing the state's debt that is tied to the union dispute, Walker said he was "cautiously optimistic" that time remained to resurrect the restructuring plan.

"If they (Democrats) came back tomorrow, for example, we'd still try and see if we could talk to our bank and see if we could push this (refinancing) forward because its much better than losing $165 million in savings," he said.

The proposal to curb unions also included a provision allowing the debt restructuring that Walker's administration has estimated would save $165 million, and that has been held up by the larger controversy. Democrats have said Walker is bluffing on the urgency of the debt refinancing.

Walker's union proposal would allow collective bargaining on wage levels only up to the rate of inflation, require rank-and-file members to vote to recertify their union representation ever year, and require union members to assume more of the cost of their health insurance and pension plans.
]]> http://www.klineforcongress.com/news/621/ Wall Street Journal editorial

'I am aware that I have not convinced everybody here to be a member of the Affordable Care Act fan club," President Obama told a group of Governors over the weekend, and he could have mentioned a majority of the public too. But he did promise to give states "the power to determine their own health-care solutions." If only this were more than political maneuvering.

Mr. Obama endorsed a bill sponsored by Oregon Democrat Ron Wyden and Massachusetts Republican Scott Brown that would putatively give states more flexibility and allow them to opt out of certain mandates. In theory, it sounds great: States could experiment with their own reforms, or as the President put it, "I don't believe that any single party has a monopoly on good ideas. And I will go to bat for whatever works, no matter who or where it comes from."

Mr. Obama's new faith in federalism is trailed by his customary rhetorical asterisk. Any state that the Administration decided deserved a waiver would still need to cover the same number of uninsured, and its coverage would still need to include the same comprehensive benefits and be as "affordable" as the Administration says it should be. That is, it must be as heavily subsidized.
So perhaps states could opt out of some consumer or employer mandates, which is a minor release valve. But they would still need to find other mechanisms to achieve the same liberal priorities, which in practice leaves little room to innovate—especially for a straight tax deduction or credit to purchase individual coverage or alternative insurance designs like high-deductible or value-based plans. That's why Democrats had nothing to fear from adding such a provision originally. The Wyden-Brown bill merely moves it forward by three years, to 2014.

The reality is that the liberals who wrote this bill really do think they have a monopoly on good ideas, and they do not include markets. Democrats are more than happy to give the states more freedom, as long as the states use it to impose comparable government control. That may be why we hear that White House health staffers Stephanie Cutter and Nancy-Ann DeParle have been privately telling liberal interest groups that this is a way to increase centralization—for instance with a state-based "public option" or even single payer.

The law required the Administration to promulgate the waiver standards "not later than 180 days after the date of enactment of this Act," a deadline long past. Perhaps the delay is a measure of how important state flexibility was to the White House until it needed tactical political cover. But it's also an opportunity for a lions-and-lambs moment, if the President is sincere.
Indiana's Mitch Daniels and 20 other Governors recently wrote to the Administration requesting a genuine relaxation of the waiver standards, and expanding them to Medicaid. This is a particular concern for Hoosiers, because Heath and Human Services is trying to kill Mr. Daniels's "Healthy Indiana" Medicaid reform, which is run under a special federal dispensation. The program has been a huge success, but HHS doesn't like it because it features a health savings-like account.

On that score, the Heritage Foundation's Stuart Butler, who has been pulling for health-care federalism for years, suggests that the waivers be granted by an evenly divided bipartisan commission. Also notable is that large businesses can sponsor insurance largely free of regulatory interference under the 1974 law known by the acronym Erisa, which governs 59% of workers insured through their jobs. Why not states too?

The ObamaCare debate—now into its third year—has proved that there is nothing close to a national consensus and that some very large portion of the country opposes the President's command-and-control entitlement model. Mr. Obama is trying to finesse that political reality, even as he still won't yield on the substance.


]]> http://www.klineforcongress.com/news/620/ Wall Street Journal

Billionaire philanthropist Bill Gates will step into the national debate over state budgets Thursday with a call for states to rethink their health care and pension systems, which he says stifle funding for public schools.

Mr. Gates in an interview said he will use a high-profile conference Thursday in Long Beach, Calif., to urge that more attention be paid to how states calculate their employee-pension funding and health-care obligations. "These budgets are way out of whack," Mr. Gates said. "They've used accounting gimmicks and lot things that are truly extreme."

The comments come after Mr. Gates spent more than a year studying the issue and enlisting the advice of leading academics and others.

The talk will be at a meeting of leading thinkers called the TED conference. Mr. Gates will outline how, as he sees it, rising state health-care costs and flawed pension accounting hamper the ability of states to pay for education. He said he'd use California as an example to illustrate his point.

"I'm just very worried about the investments we make for kids' education and what that means for the future," he said. "It's going to take voters to really look at that." Without that, he said, "The default course—where the health care costs are squeezing out education — is quite bleak."

Dennis Van Roekel, president of the National Education Association, which has 3.2 million members, said U.S teachers have been trying to make up funding shortfalls by raising their contributions to their pension plans. He added that pensions are one of the reasons schools can attract quality teachers.

"People within public services know they are not going to make a high salary but they know that you have some semblance of retirement security," Mr. Van Roekel said in an interview.

As co-chair of the Bill & Melinda Gates foundation, Mr. Gates focuses most of his efforts on three areas: global health; overseas development; and U.S. education.

Yet he occasionally uses his stature in the service of other causes, and when he does, it's very deliberate. Two years ago, Mr. Gates used the same TED conference to outline his views on energy. That talk was the start of an increasingly higher profile by Mr. Gates in national discussion on the state of government investment into energy-related research and nuclear power. His involvement has stirred debate on streamlining the licensing process for U.S. nuclear-power facilities.

He said he is concerned that states' public employee-benefit costs could now stand in the way of broader changes. These include programs Mr. Gates's foundation backs that aspire to use technology (including cameras that monitor classrooms) and strengthened teacher evaluations to improve K-12 education.

"Those goals will never be met with the kinds of cuts that we're seeing right now" in education, he said.

One focus of Mr. Gates is public pension funds' use of a relatively high discount rate to calculate obligations. The discount rate is an assumed rate of return used to calculate the current value of a future liability.

The higher the rate, the smaller a fund's obligations appear—and the less that states need to contribute to their pension funds. Critics blame this accounting approach for contributing to state pension shortfalls, estimated nationwide to total more than $1 trillion.

Pension funds say their discount rates are prudent when considering investing returns over several decades.

Mr. Gates downplayed any suggestion that his view on pensions will court controversy. "The only position I'm taking you could call a political position is that I wish education spending can go up," he said.

Over two days last September, Mr. Gates hosted experts in state pensions and health care at his office near Seattle. Several of the participants continue to advise Mr. Gates.

Among the participants in the meetings were Jeremy Gold, an independent actuary, who argues that state and local government accounting methods understate the true size of pension liabilities; Robert Clark, a North Carolina State University professor who has written a book on the history of public pension funds in the U.S.; and Alicia Munnell, director of the Center for Retirement Research at Boston College, whose research has focused lately on the cost of state and local pension plans.

Along with his comments Thursday, Mr. Gates will unveil a new set of tools to his personal Web site, "The Gates Notes."The tools allow visitors to click through U.S. maps that show state-by-state the funding status for pension obligations and retiree health-care benefits.

There is also a feature on Mr. Gates's site that ranks how much each state spends on programs such as higher education and prisons, as a percent of its total budget. "A lot of society's resources go into state budgets and yet it has been made complicated enough and the accounting is bad enough that people haven't had a sense of what's going on," Mr. Gates says in a video on the Web site.
]]> http://www.klineforcongress.com/news/619/ Boston Globe

IF WISCONSIN Governor Scott Walker were getting a dollar for every protester, politician, and pundit accusing him of union-busting, attacking public-sector employees, or waging a war on working people — to say nothing of those likening him to Hosni Mubarak and Adolf Hitler — it wouldn’t be long before he could personally close his state’s $137 million budget shortfall.

To angry protesters occupying the Capitol building in Madison, it may seem clear that Walker’s bill restricting the scope of collective bargaining for government employees is “an assault on unions,’’ as President Obama called it, and no doubt many of them would agree with the AFL-CIO that “nothing less than democracy, fundamental rights, and freedom are at stake’’ in the fight over public-sector bargaining.

But they aren’t at stake. There is no “fundamental right’’ to collective bargaining in government jobs. Indeed, labor leaders themselves used to say so.

Arnold Zander, the Wisconsin union organizer who became the first president of the American Federation of State, County and Municipal Employees, wrote in 1940 that AFSCME saw “less value in the use of contracts and agreements in public service than . . . in private employment.’’ Instead of collective bargaining, he explained, “our local unions find promotion and adoption of civil service legislation . . . the more effective way’’ to serve the interests of government employees. As late as the 1950s, AFSCME considered collective bargaining in the public sector desirable but not essential, and viewed strong civil-service laws as the best protection for government workers.

In December 1955, in a New York Times Magazine essay on “Labor’s Future,’’ no less a union icon than AFL-CIO president George Meany wrote: “The main function of American trade unions is collective bargaining. It is impossible to bargain collectively with the government.’’

Obviously, Big Labor’s outlook later changed. Dozens of states passed laws that authorized collective bargaining in the public sector, and public-sector unionism skyrocketed in the decades that followed. The Bureau of Labor Statistics reported in January that while union membership has dwindled to just 6.9 percent of the private-sector workforce, among public employees it has grown to more than 36 percent. Today most union members work for government. With public-employee dues swelling union coffers by hundreds of millions of dollars annually, it’s no surprise that organized labor and its allies now embrace collective-bargaining in the public sector as a “fundamental right’’ that only a union-busting tyrant would threaten.

Yet even today, public-employee collective bargaining is far from universal. According to a General Accounting Office summary, in only about half the states are unions allowed to negotiate labor contracts for most public workers. The other states either limit bargaining rights to specific government employees, such as teachers or firefighters, or ban public-sector collective bargaining outright. Among the states that don’t allow public employees to bargain collectively are North Carolina, Texas, and Indiana; at last report, “democracy, fundamental rights, and freedom’’ were doing just fine in all of them.

And then there are federal employees. Obama scolds Walker for trying to restrict collective bargaining by government employees to wages, yet the 2 million federal civilian (non-postal) workers Obama presides over can’t even bargain over that much: The wages, hours, and benefits of federal employment have never been subject to union contracts. The president appears to be perfectly OK with that. Last November he unilaterally announced a two-year pay freeze for all federal civilian employees, informing them — no negotiating — that they were going to “make some sacrifices’’ adding up to $2 billion this fiscal year.

Does this mean that federal employees are oppressed and underpaid? Hardly. Average federal wages far outstrip those in the private economy. When benefits are included, federal worker compensation averages $123,000 — more than double the private-sector average of $61,000. Federal employees don’t need collective bargaining to be treated well, and the lack of bargaining rights has not busted federal-employee unions.

As even labor leaders once acknowledged, it is civil-service rules, not collective-bargaining rights, that safeguard public employees’ interests when it comes to hiring, promotions, and discipline. Wisconsin could abolish public-sector collective bargaining entirely, and its government workers would still be strongly protected from management abuse — and as free as they are today to join unions able to advocate on their behalf.

Wisconsin Republicans are targeting only the public unions’ overweening political clout. They pose no danger to the welfare of public employees — let alone to “democracy, fundamental rights, and freedom.’’
]]> http://www.klineforcongress.com/news/618/ National Review

The last few weeks have seen something of a tactical change in the Obama administration’s approach to defending the health-care bill enacted last year. In two instances, the administration has admitted that the law is a hugely problematic and burdensome mess and given the appearance of a willingness to do something about it. But in both cases, that willingness turns out to be far less than it seems.
 
First, in a Senate Finance Committee hearing last month, HHS Secretary Kathleen Sebelius admitted that the CLASS Act—which is the new entitlement program for long-term care in Obamacare — is “totally unsustainable” as it’s laid out in the law. She then repeated the point before the House Ways and Means Committee, saying “we very much share the concerns that have been expressed that, as written into law, the framework of the program was not sustainable.” She insisted, however, that the law gives her the flexibility to completely redesign the program on her own, without any new authority from Congress, and that she could do it in a way that would make the program less than totally unsustainable.
 
The CLASS Act was basically a gimmick intended to game the CBO process so that the overall bill could be scored as reducing the deficit. The law says this new program would start collecting premiums five years before it starts providing benefits, so that within the ten-year budget window that the CBO is required to score it would turn out to have a net surplus and so help offset some of Obamacare’s other costs. But once the program really got going, it would very quickly start running huge deficits. Having passed the bill (in part on the back of this and other absurd “deficit reduction” claims), the Obama administration now wants to avoid the impression of being caught off guard when its fiscal assumptions collapse and so is acknowledging what has been obvious to basically all outside observers from the beginning: that the CLASS Act is a budgetary time bomb. So, as the New York Times put it (with a tone of credulity worthy of Pravda in its heyday), “administration officials, who played down such concerns 15 months ago, say they now share them.” Everyone’s entitled to a change of heart, right?
 
Then this week, President Obama himself seemed to signal another such change on the question of Obamacare’s impositions on the states. Speaking to a group of governors yesterday, the president said he would support legislation that would allow states to opt out of some of Obamacare’s requirements (including the individual mandate, the employer mandate, and the state exchanges) if they show they can achieve exactly the same results in some other way. Obamacare itself actually already contains such a provision, but it would allow states to apply for such waivers starting in 2017—after these mandates and requirements have been in place for three years. Obama now says he would let states apply for waivers in 2014, when the new rules begin.
 
This change of heart, like the one regarding the CLASS Act, is a concession to the fact that the law’s requirements are understood by many state officials (of both parties) as immensely burdensome and problematic. But like the one regarding the CLASS Act, it is also not an actual concession in practice. The states would be required to show that their alternative policies would provide the same or greater insurance benefits to the same or greater number of people, presumably as assessed by HHS. So it allows no flexibility regarding ends, and therefore very little flexibility regarding means. In fact, while it would allow conservative-leaning governors essentially no freedom to move in the direction of greater competition and more consumer-driven health care (which conservatives tend to see as the actual path to reducing costs and therefore insuring more people while improving quality) it would give liberal-leaning governors significant freedom to move in the direction of more government control. Indeed, as the New York Times notes today, while the approach Obama supports would not allow for many consumer-driven reforms it “might allow interested states to establish a single-payer system in which the government is the sole insurer.” And of course, it would not actually tell governors exactly what they should do in advance but—in the pattern of the larger law, which is also powerfully evident in Sebelius’s claim to be able to make sweeping changes on her own—it would let HHS decide what counts and what doesn’t. As former HHS Secretary Mike Leavitt told the Washington Post:

Obama was essentially telling states, ‘We’ll give you permission to ask for permission sooner rather than later.’ What Republicans are saying is that we don’t want to have to ask for permission at all, because we can’t afford to build the system that you’ve laid out for us.

It seems that the administration has landed on a new way of dealing with the fact that the health-care debate will be far from over when the president is up for reelection next year. Rather than defend their health-care law, they’re going to say that it has many huge problems that they want to fix, but then allow for only those fixes that do not actually permit a different approach to our health-care financing crisis. They must hope that this will counteract the growing practical concerns about the law. But admitting that Obamacare is deeply flawed and that some major claims made on its behalf before it passed were false should have a very different effect: It should strengthen the case for repealing the law and replacing it with actual health-care reform.
]]> http://www.klineforcongress.com/news/617/ Star Tribune

3M Co. CEO George Buckley said in an interview with the Financial Times that President Obama's "anti-business" attitudes could have manufacturers shifting production out of the U.S. to Canada or Mexico.

"We know what his instincts are -- they are Robin Hood-esque," he told the newspaper.

Buckley said companies could shift operations out of the U.S. as a result.

About two-thirds of the Maplewood giant's $26.7 billion in sales last year came from outside the U.S. In its most recent annual report, the company said it has 76 manufacturing operations in 28 states and about 115 in 38 foreign countries.

It isn't the first time Buckley has said public policy could spur 3M to expand overseas instead of in the United States. In a speech to business leaders last year at the University of St. Thomas in Minneapolis, Buckley emphasized that elected officials need to cut corporate taxes, adding that combined federal and state corporate taxes in Minnesota are among the highest in the world.

"If I have a chance to invest in a factory in Ireland at zero [corporate taxes], or a factory in Korea at 15 percent, or a factory in Singapore at zero, or a factory in Germany at 25, why would I want to invest in Minnesota or the United States?" Buckley said in an interview after his St. Thomas speech.

He also said the economic stimulus package was "the economic parallel to giving a man a fish instead of teaching him how to fish."

3M spokeswoman Jacqueline Berry said Monday that the company had gotten a few calls -- some praising and other criticizing Buckley's most recent remarks -- sinc