Mar 08 2009

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Washington Fiddles While the Country Burns

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Juxtaposition can be a tool of irony and clarity.

Consider the announcement last week that the unemployment rate has jumped to 8.1%. That’s 12.5 million Americans now out of work; equal to the populations of Los Angeles, Chicago, Houston, Phoenix, Philadelphia, San Antonio and parts of San Diego combined.1

On the same day, we learned that Harry Reid is one vote shy of closing on a $410 billion Omnibus appropriations bill to fund the Federal government through the end of the fiscal year. The bill, which has swelled in tandem with the expanded Democratic majorities in Congress, now includes $13 billion for 9,287 earmarks – pet spending projects by individual members of Congress.2

Amid rising unemployment, home foreclosures, bankruptcies and growing economic uncertainty, do you know what types of projects our elected representatives’ believe are so important as not to require hearings, debate and amendment?

  • Funds for a tattoo parlor in California.
  • Funds for a lobster foundation in Maine.
  • A staggering $22 million for the JFK Library in Boston.

(and my personal favorite)

  • Funds for Swine Odor & Manure Management Research in Iowa.3

I wish I was making this up.

John McCain, bless him, was back on point, attempting to shame his colleagues into removing the earmarks.

McCain first made a common sense proposal to continue to fund the government at 2008 levels, a move that would eliminate the earmarks and saving billions is discretionary spending.

That amendment was defeated 32-63.4

McCain will get another chance today when he will propose an amendment that would strip the earmarks out of the bill.

Don’t bet the mortgage money on it.

In the best of times, this type of irresponsible spending largesse is antithetical to any accountable view of budgeting. Republicans were thrown out of power in 2006 in part due to unseemly use of earmarks to promote incumbency. But, amid a global economic downturn, is it wrong to expect that Congress would at least take note and change accordingly?

On the other end of Pennsylvania Avenue, the Obama administration’s response to this has been troubling on a number of levels.

Let’s remember that during the campaign debate with McCain in Oxford Mississippi last autumn, candidate Obama pledged himself to earmark reform. In fact, he promised to go “line by line” in the budget to eliminate waste.

Now? Peter Orszag, Director of OMB, dismissively called the pork-laden Omnibus, “last year’s business.”5 As if to highlight White House impudence on earmarks, Chief of Staff Rahm Emanuel secured $8.5 million for 16 projects for his district in the Omnibus before assuming his White House duties.6

Where does this leave Obama’s credibility?

As you think that through, consider the more conspicuous issue here.

If the government is incapable of marshalling the political courage to cut $13 billion in identified superfluous spending on pet projects, what credibility does the Administration or Congressional leadership have when we start talking about “real money”? The $700 billion stimulus?  The $3.6 trillion budget blueprint with the rivers of red ink that comes with it?

“No one messes with Joe,” Obama said with assurance in appointing his VP as the waste and abuse guardian for the Stimulus funds.

Where’s Joe now?

Are you frightened yet?  You should be.

This is not Monopoly money we’re talking about. It’s your retirement; college funds for your children, your inheritance for your heirs. Yet in the middle of economic crisis for many Americans, it’s business as usual in the halls of Congress and for the strategic planners in the White House.

And the seeming indifference and smug assurance toward unnecessary spending seems symptomatic of larger leadership deficiencies in tackling the economic problems in proper order to assure the fastest recovery.

The Washington Post made this astute observation:

“Analysts increasingly view the Administration’s actions so far as insufficient given the scope of the problem. The stimulus package was designed to “save or create” 3.5 million jobs, according to the Administration. But the nation has already lost 4.4 million jobs since the start of the recession. Many banks and other financial institutions, whose health is critical to the economy, are teetering and the Treasury department has yet to finalize the details of its plan to remove from their balance sheets, the toxic assets dragging them down.”7  (emphasis added)

You know our situation is dire when the Washington Post is making the case that the Administration and Democratic leaders haven’t focused on priorities appropriately.

Instead, the Congress began this session by passing the largest spending bill in history, transferring untold billions into the public sector; but it did not address financial institutions, toxic debt or access to capital.

The President’s budget blueprint uses the economic crisis to lay out the greatest reorientation of government priorities since the New Deal, without demonstrating how the program impacts the problem at hand.

A Cap & Trade tax for Greenhouse Gas emissions, cradle to grave education expansions, the beginnings of single-payer nationalized health care, and a constellation of business and personal tax increases, including the class warfare tax increase on the innovators and entrepreneurs already paying 60% of all federal income taxes. The red ink in the proposed budget plan belies any conventional terms of reference to describe it. Amid all the new programs and spending there’s no banking solution in here either.

Instead, poor Tim Geithner sits “home alone” in arguably the most important chair after Obama’s, working without the benefit of fellow appointees, to develop a plan to deal with the toxic assets that will get financial institutions lending and provide access to credit for consumers and businesses, spurring growth.

So cavalier was the Administration about the banking crisis that when Obama set Treasury up for a bank lending reform announcement during his first press conference, Geithner was left the next day to underwhelm the world with a plan without details.  Wall Street dropped like a stone.

Taken all together, there is a certain unreality about this.

Obama continues to stump, even though he won the election.

On Friday he was in Ohio with 25 law enforcement cadets who would have been laid off but for the $700 billion stimulus bill. For his part, Vice President Biden was in Miami to trumpet $4 billion in stimulus spending for police overtime and crime lab improvements.

Tell me, on symbolism or substance, is this how you think Obama and Biden should be spending their time? Does spending your tax dollars on police retention and overtime, or on crime lab improvements make you more optimistic about the economy?

Do you get disgusted that both events were held in election “swing states”?

What about Obama being “astonished” by the unemployment numbers?  How does that make you feel?

Candidates are allowed to be astonished, but not Presidents.

Presidents are supposed to know.

And in talking about the economy, President Obama is still trapped by his false “all or nothing” campaign rhetoric.

“There were those who argued that our recovery plan was unwise and unnecessary. They opposed the very notion that government has a role in ending the cycle of job loss at the heart of this recession.  There are those who believe that all we can do is repeat the very same policies that led us here in the first place.”

This is infuriating, diversionary and ultimately vacuous.

Anyone willing to look at the record knows that it was never a choice between Obama’s plan and nothing.

And it seems that the sinister bogeyman of “they” remains a staple of the Obama monologue. I assume these are the “dark forces” of society, bent on our very destruction that Obama and Co., are here to protect us from.

As a citizen, I promise vigilance.

For instance, I certainly oppose the Dodd-Frank complicity in the implosion of Freddie and Fannie under subprime lending guidelines that forced reckless mortgages out the door and led to the housing and Wall Street meltdowns in parallel, the banking crisis and our current economic whirlpool.

Of course, I’m not entirely certain this is who Obama was referencing…

The larger point here is that the rhetoric is tired and unequal to the tasks at hand.

It is becoming harder and harder not to conclude that our elected representatives simply don’t have a clue what they are doing.

Instead of private sector led recovery, we get government transfer payments as stimulus. Instead of a budget plan for innovation, accountability and transparency, we get reordered government, replete with new mandates, taxes and regulatory burdens that stymie growth and individual choice.

It’s as if the doctor is crowing over a successful appendectomy while the patient was actually in for a heart transplant.

All of this political and economic mayhem can be boiled down on Monday with Harry Reid’s effort to get the Omnibus bill passed.

Want to measure the will of Washington as guardian of your tax dollars?

Watch C-Span.

This evening, the McCain amendment to strip out earmarks from the spending bill predictably, if sadly failed. 32-63.

The culprits were bipartisan. Republicans Kit Bond, Lamar Alexander, Thad Cocharan, Susan Collins, Lisa Murkowski Pat Roberts, Richard Shelby, Arlen Specter and Roger Wicker all voted with a majority of Democrats to kill the McCain bill.  Democrats Evan Bayh, Maria Cantwell, Russ Feingold and Clair McCaskill stood with McCain and the rest of the Republicans.

So, three days after 651,000 Americans were officially added to the unemployment rolls, Congress is going to use your tax dollars for swine odor research.

You should be mad.  Very, very mad.

“Change you can believe in?”

I laugh until the reality makes me cry.

1. Wikipedia – US City Populations 2008

2. HR 1105 Omnibus Appropriations Act 2009

3. Ibid

4. Thomas HR 1105 S.Amendment 592

5. Washington Post 3-6-09

6. Seattle Times 3-3-09

7. Washington Post, 3-7-09 “Job Losses Could Drown Stimulus”, A1



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