Since I recently wrote a post dissing the GOP’s commitment to managing the budget I want to offer a modest atonement by acknowledging the White House for taking a position to reduce the cap on how much farm subsidy one entity can receive.
One White House proposal is to deny crop subsidies to anyone with an adjusted gross income above $500,000 a year, compared to the current limit of $2.5 million AGI.
That Democrats propose such high subsidies, and the GOP may concede, is astounding to me. It seems to me that a reasonable trade is to lower the farm subsidies which apparently favors democratic donors and to also lower subsidies that target GOP donors. Legislators who were not dependent on the donations of these subsidy recipients might warm to this mutual reduction in budget abuse.
A case of good intentions used to obscure greed, the farm bill ostensibly helps to protect the agriculture industry from damaging circumstances. But it also hides widespread corruption by creating a mechanism for politicians to trade unneeded and undeserved subsidies for votes and campaign donations. This bipartisan scam brings together all politicians representing farm intensive communities to collude on the perpetuation of this abuse of public funds. The show points out that the commodity lobbyists are perhaps the best and most effective of their peers.
It seems to me that both parties posture that they want to see these give aways controlled but they do not ever seem to concentrate enough political will to make the changes. It takes true statesmanship and integrity to do the right thing. What complicates this for me is that an otherwise honorable and progressive legislator may also be one who believes that they rely on this pork to stay in office.
All this brings me back to campaign finance reform so that candidates can run for office without having to rely on the donations of those who benefit from government largess. This wouldn’t stop the abuse but it is one of the few reasonable proposals for slowing it down. It may also be far cheaper for the public to subsidize elections than to subsidize urban cowboys.
Now that a turning back of the financial deregulation that began under Reagan and continued under Bush I, Clinton and Bush II looks imminent, what U.S. President is most to blame for the current crisis? Patrik Etschmayer writes for Switzerland’s Nachrichten, “Only when regulations were relaxed under Ronald Reagan did the first rather costly banking disaster ensue: The Savings and Loan crisis. This led to the recession of the early 1990s, which helped secure Bill Clinton’s 1992 electoral victory. But Clinton didn’t heed the warning. Even though it is now no longer discussed, and all fingers point toward George W. Bush - his actions alone could not have resulted in today’s disaster. … Clinton worked until almost the end of his term to abolish Glass-Steagal. The Congress fought him for years just as it had under Reagan and Bush the First. But in 1997, the FED Board of Directors under Alan Greenspan eliminated rules that limited securities trading for savings banks.”
In explaining why things have gone so badly that stricter banking rules are now necessary, Etschmayer writes, “Legal regulation seems to be the only way to rein in the apparently boundless greed - because bankers, speculators, hedge-fund managers and other stock market players large and small - and not only in the United States - seem to have lost the capacity to distinguish between freedom and foolishness.”
Is the United States now embarked on a path toward a more ‘Socialist’ future? Given the crisis in the credit markets and the decline in the value of the dollar, that is the inevitable conclusion of Alexandre Adler, one of France’s foremost historians and strategic thinkers - often characterized as a French ‘neocon.’
In what will be an uncomfortable read for many Americans, Adler writes for France’s Le Figaro, “Is socialism, which was banished from minds and hopes by the collapse of the Soviet system some years ago, rising again out of the spectacular transformations taking place at the center of global capitalism, the United States itself?
Adler goes on, “The outcome of the current crisis will result in such a reinforcement of the state’s freedom of action, that past nationalizations will look like nothing but small potatoes.”
In regard to the U.S. presidential election, Adler concludes, “If we assume a certain stabilization of global markets and the maintenance of the same fiscal policies, we will also see an increasingly extensive redistribution by the state, including a considerable expansion of social security benefits. … The reader will understand that this is Obama’s program, which comes at the end of an economic cycle where, according to recent statistics, salary increases for Blacks and Whites since 2001 have been less than 2.8 percent and less than 1.2 percent, respectively.”
The Chronicle of Alexandre Adler
Translated By Kate Davis
March 29, 2008
France - Le Figaro - Original Article (France)
Here’s a provocation. Not a gratuitous one, but one that has some grounding: Is socialism, which was banished from minds and hopes by the collapse of the Soviet system some years ago, rising again out of the spectacular transformations taking place at the center of global capitalism itself, the United States?
Several factors, in fact, are emerging and simultaneously coming into play to challenge the foundations of the way Americans live and produce. Remaining faithful to the theory of Marx, we will start with the infrastructure.
Pressed by the imperial necessity of saving the financial system - which hasn’t been this vulnerable since 1930 - FED chairman Ben Bernanke just took the historic decision to socialize the losses of commercial banks. Up to now and to curb panics of global dimensions, the central bank [the FED] only gave loans to banks of deposit [savings banks]. Today, the necessity of saving the entire banking system not only requires a state guarantee for the past investments of investment banks, it also requires the Federal Reserve to loan these commercial banks money for its newer and riskier operations, without which the entire machine threatens to come to a screeching halt.
It must be understood that the financial slight-of-hand now in force has created such imbalance between the equity of major financial institutions and the outstanding loans that they have already incurred, that the state must be transformed into the creditor of last resort, in defiance of the entire doctrine of the free market.
Americans, we know, are much less doctrinaire when it comes to themselves than they are toward their Latin American partners, for example. The outcome of the current crisis will result in such a reinforcement of the state’s freedom of action, that past nationalizations, like that under [former Socialist President François] Mitterand [in 1981] will look like nothing but small potatoes. In effect, under the threat of an impending catastrophe, the FED has become the owner of virtually all of the most dynamic financial institutions, mainly the investment banks, where the debt incurred by the Treasury Department is equal to the strategic equity of the banks.
And the second major turning point ahead: fiscal restraint. Even if in the months ahead, everything possible is done to permit the system to be maintained, it is finished, given the level of decline in the dollar and the mistrust of international financial markets, which is what finances the America’s external budget deficit.
READ ON AT WORLDMEETS.US, along with continuing foreign press coverage of the unfolding financial crisis.
Both houses of Congress endorsed the idea of tax increases for millions of Americans Thursday as Democrats pressed ahead with budget plans that would allow some or all of President Bush’s reductions to die after he leaves office.
Essentially the Democrats are saying that we need to raise revenues to balance the budget without reducing essential services. And that the poor and middle class do not have the resources to have the cost pressed on them.
The GOP believes that the best way to balance the budget is by reducing services. But I just don’t see how it is realistic or honorable to reduce medical care and other services to the disadvantaged or to veterans. The Republicans risk being perceived as arguing in favor of promoting suffering so that significantly better off individuals can remain significantly better off. I imagine a majority of voters will see it this way as well.
But there are other reasonable ideas for refining our budget: Increasing Medicare co-payments and Social Security tax caps, lowering earmarks, reduced waste in our public expenditures (subsidies) and unjustified favors in our tax system.
It may be that the addition of a few Centrist legislators might be the tipping point to achieve a more realistic budget. So please consider supporting congressional candidates who give some indication that they have more allegiance to pragmatic government than their party’s pursuit of power.
It’s only a one year moratorium, but it’s a start. Earmarks aren’t a big deal in the larger scale of budget issues, and many of them may even be good investments in the national interest. But while the GOP would like to think that they are seizing this issue to their advantage I would point out that it was under GOP control that earmarks exploded out of reason, and now, under Democratic leadership, it is being contained.
Ohio Senator George Voinovich has long been known as a deficit hawk. Whether as Commissioner of Cuyahoga County, Mayor of Cleveland, or Governor of Ohio, Voinovich has a strong reputation for insisting that government ought to live within its means. In recent years, that’s made him out-of-step with Republicans in Congress and the White House who have departed from traditional conservative Republican principles to engage in “drunken sailor” spending (to borrow a phrase from a Republican running for President this year).
A ploy used in recent years to make the annual budget appear less deficit-ridden has been to put anticipated spending into extra-budgetary emergency supplemental appropriations. Voinovich wants to put a halt to this practice. According the Columbus Dispatch blog:
Sen. George V. Voinovich next week will make a move to restrict Congress’ ability to pass “emergency” spending bills that aren’t, well, in fact much of an unanticipated emergency.
Voinovich’s move comes in the wake of a Government Accountability Office report. The GAO report, released earlier this week, found that the number and cost of so-called supplemental spending bills, which are supposed to be only used when unanticipated emergency needs arise in the middle of a federal fiscal year, has risen dramatically in recent years.
Much of that is due to defense spending. Emergency supplementals, for instance, have been passed in recent years to fund the Iraq war though it would seem that much of those costs could have been anticipated. Supplemental spending bills aren’t subject to the same controls and constraints designed to avoid busting annual budgets and sending the federal deficit spiraling upward.
Voinovich is going to propose an amendment to the Senate budget bill that would tighten up the definition of just what is an emergency…
Voinovich may get himself into trouble again with the crowd that likes to call other Republicans RINOs, Republicans in Name Only, then engage in more of that drunken sailor behavior.
March 6th, 2008 by SWARAAJ CHAUHAN, International Columnist
Economists now tend to agree that India has begun to influence the world economy. That is why the annual ritual of the presentation of the country’s federal budget February end is viewed with great interest not only within India but also in the corridors of economic powers worldwide. The Indian Budget this year becomes important for yet another reason…By the end of 2008 the general elections would be held in the country.
The venerable British magazine The Economist year after year does a fairly good job of analyzing and making sense of the Indian budget that runs into reams and reams of paper, loaded onto trucks and presented in the Indian parliament for discussion and debate.
“In many ways India counts as one of liberalisation’s greatest success stories. For years, it pottered along, weighed down by the regulations that made up the licence raj, producing only a feeble ‘Hindu’ rate of growth. But over the past 15 years it has been transformed into a far more powerful beast. Its companies have become worldbeaters. Without India’s strength, the world economy would have had far less to boast about.
“Sadly, this achievement is more fragile than it looks. Many things restrain India’s economy, from a government that depends on Communist support to the caste system, power cuts and rigid labour laws. But an enduring constraint is even more awkward: a state that makes a big claim on a poor country’s resources but then uses them badly.”
Another major hurdle, says the magazine, is the hulking bureaucracy. “It is not unusual for a country’s bureaucrats and politicians to be less efficient than its businesspeople; and …India’s 10m-strong civil service is the size of a small country, and its unreformed public sector is a huge barrier to two things a growing population needs. The first is a faster rate of sustainable growth: the government’s debts and its infrastructure failings set a lower-than-necessary speed-limit for the economy. The second is to spread the fruits of a growing economy to India’s poor.
“By the government’s own admission, most development spending fails to reach its intended recipients. This is bound to stir up resentment—and risks causing a backlash against business.’
Robert Novak had this item in his political report yesterday:
House Republicans showed how much they really care about losing their fiscal responsibility brand when they rejected Rep. Jeff Flake (Ariz.), the leading crusader against earmarks, for a vacancy on the House Appropriations Committee. They picked Rep. Jo Bonner (Ala.), a former House staffer and a consistent supporter of earmarks. Flake’s goose was cooked earlier when the House Republican Conference did not unilaterally impose a moratorium on earmarks.
I would have thought that by unilaterally abandoning earmarks the GOP could take the high ground on fiscal restraint and have terrific leverage over the Democrats with independents voters. So what fiscal credentials do the GOP want to promote?
Every state’s congressional delegation should develop a list like the one here, posted on the blog portion of Congressman (D, OH-17) Tim Ryan’s website. Although, to be fair, Ryan’s chart could probably be improved by reflecting input from the other 17 congressional delegates from Ohio, since I imagine they have different opinions about whether decreases (or increases) are necessarily a bad thing. And I’d appreciate seeing an even-handed review of how the Ohio delegation believes the state will suffer or succeed as a result of the proposed 2009 budget.
By the way, Ryan didn’t receive any 2007 Gold Mouse Awards from the Congressional Management Foundation for his blog or website, but maybe, by posting such useful information as the budget impact, he’ll be in better shape for the 2008 award season.
February 3rd, 2008 by SWARAAJ CHAUHAN, International Columnist
In the din and cacaphony of the presidential campaign/election in the US of A, two recent news stories are likely to be overshadowed, if not drowned. First, “Baghdad is drowning in sewage, thirsty for water and largely powerless, an Iraqi official said on Sunday in a grim assessment of services in the capital five years after the US-led invasion,” reports AFP. (More here…)
So how is American occupation better than life under Saddam Hussein? A good question. Once the local populace realises that foreign invaders are on their soil only to take care of their own interests, let’s be quite clear that it will be an ever-going war against terror.
Second, in the USA’s first-ever $3 trillion budget, “President Bush seeks to seal his legacy of promoting a strong defense to fight terrorism and tax cuts to spur the economy. The 2009 spending plan sent to Congress on Monday will project huge budget deficits, around $400 billion for this year and next and more than double the 2007 deficit of $163 billion. But even those estimates could prove too low given the rapidly weakening economy and the total costs of the wars in Iraq and Afghanistan, which Bush does not include in his request for the budget year beginning Oct. 1… Read the rest of this entry »
In the LA Times Editorial “The new Party of Pork” the duplicity of both the Democrats and the GOP is laid bare. There is a collusion to protect earmarks to gain favor with constituents. So I wonder if the geometry of the situation can be altered so that it is less about eliminating earmarks and more about the reasonable and fair management of earmarks.
Instead of arguing to get rid of a perk so fundamental to congressional power, how about a formula to give each member of Congress an earmark budget that is a function of both the population of their district and other federal spending in their district. So if, for instance, a Congressional district averages around 700,000 then a Congressperson would get a budget of $7,000,000 to allocate based on an agreed upon criteria for common good. Self dealing, etc would need to be reviewed. Some control on the amount of earmarks would help level the playing field between incumbents and challengers.
To me this is the Centrist approach: Rather than posturing ineffectively at entrenched self interest, try to compromise on managing it while incrementally reducing its caustic consequences.
November 2nd, 2007 by JOE GANDELMAN, Editor-In-Chief
It sounds as if President George Bush wasn’t kidding when he suggested that one reason he’s still “relevant” is because he has the veto power: after years of not using it, he seems to be in a phase of government by veto…even on a bipartisan measure for a $23 million water bill:
President Bush delivered his threatened veto of a $23-billion water bill Friday, but Congress is virtually certain to reverse it in the first override of a Bush veto.
And Bush and the Democratic-controlled Congress are moving closer to a federal budget showdown that could result in more vetoes.
The House and Senate are expected to move swiftly next week to override Bush’s veto of a bill loaded with water-related projects sought by members of both parties, from shoring up California’s levees to protecting the Gulf Coast from hurricanes.
In a statement accompanying his veto, Bush said, “This bill lacks fiscal discipline.”
The problem for Bush is that he’s a Georgie-come-lately to fiscal responsibility. One recent report noted that he is actually a bigger spender than the poster-boy for big-spending presidents, Lyndon Baines Johnson. And the report says defense is NOT the only reason for the big spending. But Campaign 2008 is approaching and this is what’s called political positioning. MORE:
On Capitol Hill, Sen. David Vitter (R-La.) said, “I am 100% confident that we can override this veto.”
The defiant bipartisan response to the veto underscores the difficulty the president faces in his new zeal to hold down federal spending, especially when it affects highly visible construction projects cherished by lawmakers.
“This will be the first veto this Congress has overridden, and it was all about getting parochial water projects back to their home districts,” said Steve Ellis of Taxpayers for Common Sense, a watchdog group.
The bill would authorize more than 900 projects, such as restoration in the Florida Everglades and the replacement of seven Depression-era locks on the Upper Mississippi and Illinois rivers that farm groups say is crucial for shipping grain.
But profuse use of the veto pen may not be a plus with most Americans in 2008. By then “plight” stories will have been done by newspapers about children who were already receiving health care money that was denied them due to the veto of children’s health care (this will happen in several states).
Stories will also likely detail the continued cost of the war in Iraq, which will provide a counterpoint and contrast to some of the domestic programs denied funds due to the President’s 11th hour discovery that he is running a government that puts a priority on tight spending.
On the other hand, Bush is proving to be a “uniter not a divider” as he promised in 2000 because this veto is already irking both Republicans and Democrats. Note this news story from Michigan:
…But Republicans, who dispensed earmarks with relish until they lost control of the committee last November, are accusing the Democrats of larding up the bill to win members’ support.
“Welcome Kmart shoppers,� said Representative Harold Rogers, Republican of Kentucky. “This is the shopping mart for those who are nervous about supporting the precipitous withdrawal of troops. This is an effort to buy votes. Whether you are a spinach farmer or salmon farmer, there’s something in here for you.�
Among other changes to the president’s initial request for $103 billion, the committee tacked on $3 billion in relief measures for the Gulf Coast, $3.7 billion in agricultural assistance, $500 million to fight wildfires and $60 million for Pacific Coast fisheries.
…It was impossible to know who proposed most of the measures.
I believe that some earmarks are appropriate for the overall well being of citizens and the economy. But they should be discussed in open deliberation as part of the overall priorities of our tax dollars. Using these funds merely to buy votes is disrespectful of us taxpapers and is inefficient fiscal management.
I would support some formula to distribute money in some fair proportion to the population in a Congressperson’s district to the extent that those funds are a prudent investment in our wellbeing and competitiveness.
One reason I tend not to identify only with one party is that power is corrupting; and while the new boss may pander to the reformers who helped them gain power it is only a matter of time that special interests will press for their share of the booty.
I hope that the GOP evolves into a credible force for the efficient management of government operations and more competitive, publicly financed, elections increasingly free of special interest influence. If for no other reason than becoming and promoting a viable alternative to the inevitable decline of those in power.
Perhaps the new moderate Republican Leadership Council can lead this evolution.
The top Republican on the House Ways and Means Committee has come under fire from conservative activist Grover Norquist for cooperating with Chairman Charles Rangel (D-N.Y.) on a package of small-business tax cuts that the committee approved on Monday.
Norquist charged on Tuesday that the tax breaks — totaling more than $1.8 billion — are paid for by tax increases that Democrats will use against Ways and Means ranking member Rep. Jim McCrery (R-La.) and other Republicans in the 2008 election.
“McCrery is making a very damaging mistake in voting in committee and in having his members vote in committee for a tax increase,� Norquist said in an interview with The Hill.
He predicted that Democrats will attack the Republican votes as favoring tax increases, and that no one will remember that those tax increases were only meant to offset tax cuts included in the bill.
The House is expected to vote on the tax bill before the end of the week. Ways and Means approved it unanimously with little debate after a 30-minute markup, and the bill will probably be rolled into the minimum-wage legislation awaiting conference with the Senate.
According to Norquist, obstructing the Democratic majority in the House can pay off more than working with it. He said that Rangel, who has pledged to restore comity between Democrats and Republicans on Ways and Means, acted as an obstructionist when former Chairman Bill Thomas (R-Calif.) headed the committee.
“What did he get out of that? Control of the House,� Norquist charged.
In an interview, McCrery disagreed with that assessment, which he said represents the “narrow view� of the political world. “For Grover to imply that the reason Democrats won back the majority is because Charlie was an obstructionist is a giant leap,� McCrery said.
He said he and House GOP leaders decided to work with Rangel on the tax bill because small businesses would be hurt by the minimum-wage increase and needed tax relief. In addition, he said, it is illogical to conclude that House Republicans should have fought the House Democrats on the tax bill once Democrats signaled a willingness to consider the tax legislation in connection with the minimum-wage hike. House Democrats previously had argued for a clean minimum-wage bill.
Sitting back and throwing bombs at the Democratic Party will only increase public cynicism in the political and governmental world, McCrery added…
Bravo, to Chairman Rangel’s open mindedness to consider Small business tax cuts and for the GOP members of Ways and Means who risk the ire of tax ideologues in favor of a reasonable compromise. I hope this is a prelude of collaboration yet to come.
Ohio Senator George Voinovich has long been known as a deficit hawk. Whether as Commissioner of Cuyahoga County, Mayor of Cleveland, or Governor of Ohio, Voinovich has a strong reputation for insisting that government ought to live within its means. In recent years, that’s made him out-of-step with Republicans in Congress and the White House who have departed from traditional conservative Republican principles to engage in “drunken sailor” spending (to borrow a phrase from a Republican running for President this year).
