Review & Outlook: The Presidential Divider - WSJ.com

The Presidential Divider
Obama's toxic speech and even worse plan for deficits and debt.

Did someone move the 2012 election to June 1? We ask because President Obama's extraordinary response to Paul Ryan's budget yesterday—with its blistering partisanship and multiple distortions—was the kind Presidents usually outsource to some junior lieutenant. Mr. Obama's fundamentally political document would have been unusual even for a Vice President in the fervor of a campaign.

The immediate political goal was to inoculate the White House from criticism that it is not serious about the fiscal crisis, after ignoring its own deficit commission last year and tossing off a $3.73 trillion budget in February that increased spending amid a record deficit of $1.65 trillion. Mr. Obama was chased to George Washington University yesterday because Mr. Ryan and the Republicans outflanked him on fiscal discipline and are now setting the national political agenda.

Mr. Obama did not deign to propose an alternative to rival Mr. Ryan's plan, even as he categorically rejected all its reform ideas, repeatedly vilifying them as essentially un-American. "Their vision is less about reducing the deficit than it is about changing the basic social compact in America," he said, supposedly pitting "children with autism or Down's syndrome" against "every millionaire and billionaire in our society." The President was not attempting to join the debate Mr. Ryan has started, but to close it off just as it begins and banish House GOP ideas to political Siberia.

Mr. Obama then packaged his poison in the rhetoric of bipartisanship—which "starts," he said, "by being honest about what's causing our deficit." The speech he chose to deliver was dishonest even by modern political standards.
***

The great political challenge of the moment is how to update the 20th-century entitlement state so that it is affordable. With incremental change, Mr. Ryan is trying maintain a social safety net and the economic growth necessary to finance it. Mr. Obama presented what some might call the false choice of merely preserving the government we have with no realistic plan for doing so, aside from proposing $4 trillion in phantom deficit reduction over a gimmicky 12-year budget window that makes that reduction seem larger than it would be over the normal 10-year window.
The Deficit Speech

Mr. Obama said that the typical political proposal to rationalize Medicare's gargantuan liabilities is that it is "just a matter of eliminating waste and abuse." His own plan is to double down on the program's price controls and central planning. All Medicare decisions will be turned over to and routed through an unelected commission created by ObamaCare—which will supposedly ferret out "unnecessary spending." Is that the same as "waste and abuse"?

Fifteen members will serve on the Independent Payment Advisory Board, all appointed by the President and confirmed by the Senate. If per capita costs grow by more than GDP plus 0.5%, this board would get more power, including an automatic budget sequester to enforce its rulings. So 15 sages sitting in a room with the power of the purse will evidently find ways to control Medicare spending that no one has ever thought of before and that supposedly won't harm seniors' care, even as the largest cohort of the baby boom generation retires and starts to collect benefits.

Mr. Obama really went off on Mr. Ryan's plan to increase health-care competition and give consumers more control, barely stopping short of calling it murderous. It's hardly beyond criticism or debate, but the Ryan plan is neither Big Rock Candy Mountain nor some radical departure from American norms.

Mr. Obama came out for further cuts in the defense budget, but where? His plan is to ask Defense Secretary Bob Gates and Joint Chiefs Chairman Mike Mullen "to find additional savings," whatever those might be, after a "fundamental review." These mystery cuts would follow two separate, recent rounds of deep cuts that were supposed to stave off further Pentagon triage amid several wars and escalating national security threats.

House Budget Committee Chairman Paul Ryan responds to President Obama's deficit reduction speech.

Mr. Obama rallied the left with a summons for major tax increases on "the rich." Every U.S. fiscal trouble, he claimed, flows from the Bush tax cuts "for the wealthiest 2%," conveniently passing over what he euphemistically called his own "series of emergency steps that saved millions of jobs." Apparently he means the $814 billion stimulus that failed and a new multitrillion-dollar entitlement in ObamaCare that harmed job creation.

Under the Obama tax plan, the Bush rates would be repealed for the top brackets. Yet the "cost" of extending all the Bush rates in 2011 over 10 years was about $3.7 trillion. Some $3 trillion of that was for everything but the top brackets—and Mr. Obama says he wants to extend those rates forever. According to Internal Revenue Service data, the entire taxable income of everyone earning over $100,000 in 2008 was about $1.582 trillion. Even if all these Americans—most of whom are far from wealthy—were taxed at 100%, it wouldn't cover Mr. Obama's deficit for this year.

Mr. Obama sought more tax-hike cover under his deficit commission, seeming to embrace its proposal to limit tax deductions and other loopholes. But the commission wanted to do so in order to lower rates for a more efficient and competitive code with a broader base. Mr. Obama wants to pocket the tax increase and devote the revenues to deficit reduction and therefore more spending. So that's three significant tax increases—via higher top brackets, the tax hikes in ObamaCare and fewer tax deductions.

Lastly, Mr. Obama came out for a debt "failsafe," which will require the White House and Congress to hash out a deal if by 2014 projected debt is not declining as a share of the economy. But under his plan any deal must exclude Social Security, Medicare or low-income programs. So that means more tax increases or else "making government smarter, leaner and more effective." Which, now that he mentioned it, sounds a lot like cutting "waste and abuse."

Mr. Obama ludicrously claimed that Mr. Ryan favors "a fundamentally different America than the one we've known throughout most of our history." Nothing is likelier to bring that future about than the President's political indifference in the midst of a fiscal crisis.

The Blog | The Blaze

Only 45% of Americans Are Working — Lowest Since 1983! Meredith Jessup

The share of Americans working fell to its lowest level in 2010 since women started entering the workforce in big numbers three decades ago, USA Today reports:

Only 45.4% of Americans had jobs in 2010, the lowest rate since 1983 and down from a peak of 49.3% in 2000. Last year, just 66.8% of men had jobs, the lowest on record.

The bad economy, an aging population and a plateau in women working are contributing to changes that pose serious challenges for financing the nation’s social programs.

“What’s wrong with the economy may be speeding up trends that are already happening,” says Marc Goldwein, policy director of the Committee for a Responsible Federal Budget, a non-partisan group favoring smaller deficits.

Another key finding is the decline of men in the workplace as the number of construction and manufacturing jobs continues to fall.

All in all, these are troubling trends for the country as more and more people are depending on support from a shrinking population of those who work.

Paul Ryan Responds to President’s Disappointing, Partisan Speech | U.S. Congressman Paul Ryan

Paul Ryan Responds to President’s Disappointing, Partisan Speech


April 13, 2011

WASHINGTON – House Budget Committee Chairman Paul D. Ryan made the following statement after listening to the President’s speech on deficit reduction:

“When the President reached out to ask us to attend his speech, we were expecting an olive branch. Instead, his speech was excessively partisan, dramatically inaccurate, and hopelessly inadequate to address our fiscal crisis. What we heard today was not fiscal leadership from our commander-in-chief; we heard a political broadside from our campaigner-in-chief.

“Last year, in the absence of a serious budget, the President created a Fiscal Commission. He then ignored its recommendations and omitted any of its major proposals from his budget, and now he wants to delegate leadership to yet another commission to solve a problem he refuses to confront.

“We need leadership, not a doubling down on the politics of the past. By failing to seriously confront the most predictable economic crisis in our history, this President’s policies are committing our children to a diminished future. We are looking for bipartisan solutions, not partisan rhetoric. When the President is ready to get serious about confronting this challenge, we'll be here.”

*****

Key Facts About the President’s Speech

General:

Counts unspecified savings over 12 years, not the 10-year window by which serious budget proposals are evaluated.

Postpones all savings until 2013 – after his reelection campaign.

Runs away from the Fiscal Commission’s recommendations on Social Security – puts forward no specific ideas or even a process to force action.

Calls for the appointment of another commission, after mostly omitting from his Fiscal Year 2012 Budget any of proposals submitted by the commission he appointed last year.

Non-specific framework fails to meet Fiscal Commission's definition of sustainability.

Taxes:

Proposes to raise taxes on the American people by more than $1 trillion, devastating our fragile economy and stifling job creation.

Endorsed the Fiscal Commission’s ideas on taxes, which specifically called for lower tax rates and a broader base, but then called for higher tax rates. Which is it?

Government health and retirement programs are growing at more than twice the speed of the economy. At the current rate of spending, revenue would have to rise “by more than 50 percent” just to keep debt at its current level, according to the Government Accountability Office. That means tax increases across-the-board, now and in the future.

Medicare:

Instead of proposing structural reforms that would actually reduce health care costs, the President proposed across-the-board cuts to current seniors’ care.

Strictly limits the amount of health care seniors can receive within the existing structure of unsustainable government health care programs.

Gives more power to unelected bureaucrats in Washington to determine what treatments seniors should or shouldn’t get, against a backdrop of costs that continue to rise.

Conceded that the relentlessly rising cost of health care is the primary reason why the nation is threatened by debt, and implicitly conceded that his health care law failed to solve the problem.

Eviscerates the only competitive element anywhere in health-care entitlement programs – the competition amongst Part D prescription-drug plans – which allowed the drug benefit to come in 41 percent under budget.

Medicaid:

Acknowledges that the open-ended financing of Medicaid is a crippling financial burden to both states and the federal government, but explicitly rejected the only solution to this problem, which is to give states the freedom they need to design systems that work for the unique needs of their own populations.

Defense:

Proposes more cuts on top of $78 billion in cuts included in his own defense budget, which he proposed just two months ago – all at a time when he continues to task the military with new missions.

Secretary Gates has said that the military needs 2 percent – 3 percent real growth just to keep executing the missions that DOD has already been assigned.

Secretary Gates described deficit reduction plans that let budget targets drive defense policy as “math, not strategy.”

It’s What Happens When the Stupid Party and Evil Party Get Together | RedState

It’s What Happens When the Stupid Party and Evil Party Get Together

Posted by Erick Erickson (Profile)

Tuesday, April 12th at 4:46AM EDT

There is a quote out there that sometimes get attributed to Republican Senate Leader Everett Dirksen and sometimes not. The quote is that there two parties in Washington — the stupid party and the evil party. Every once in a while the stupid party and the evil party get together and do something that is both stupid and evil. In Washington, that is called bipartisanship.

Our United States Senate, led by Republican Senator Saxby Chambliss of Georgia and Democratic Senator Mark Warner of Virginia are on the verge of leading the Congress into doing something both stupid and evil.

It will be heralded by the Washington Press Corp as a grownup act of bipartisan.

To give you a sense of just how bad it is, even Barack Obama is getting in on the act and signaling he will support what Chambliss and Warner come up with if only as a way to shut down serious conversation about Paul Ryan’s “Path to Prosperity.”

Last year, Barack Obama formed a Deficit Reduction Commission. The Commission’s report came out and Barack Obama promptly treated it like it was an illegitimate child worthy of being shunned.

The White House did not mention it. During Obama’s State of the Union address he glossed over and ignored the panel. He punted on every significant issue.

Fast forward to last week. Congressman Paul Ryan introduced his “Path to Prosperity.” Even Democrats were calling Paul Ryan “courageous” for his willingness to step out there. The chairmen of the Deficit Commission, Erskine Bowles and Alan Simpson, praised Ryan’s leadership. Many people noted Barack Obama’s absence from the debate.

So Obama has to do something. The Washington Post reports Obama will come out and give a lot of platitudes without much substance, but he will claim that his platitudinal direction is far better than Paul Ryan’s substantive direction.

He will have Saxby Chambliss and Mark Warner to back him up.

Already Chambliss and Warner are out subtly criticizing Paul Ryan’s plan. They are downplaying its significance and making it clear that it won’t pass the Senate.

What Chambliss, Warner, and four other Senators have in store for us is the stupid and evil solution — raise taxes, restructure entitlements, and do it in such a way that it keeps the citizenry of the republic fueling the leviathan.

Saxby Chambliss gave away the game in an interview with the Atlanta Journal. He said, in part, “[Y]ou’ve got to have enough money to run the government, and then you’ve got to have excess money to start paying down on that debt.”

What we know of the Chambliss-Warner plan is that while entitlements will be reformed and the tax code simplified, restructuring programs, entitlements, and taxes will involve keeping Washington at the center of all reforms.

It is stupid to do this because keeping Washington at the center of all reforms will mean that eventually the leviathan will come looking for future sacrifice again. The appetite will be unabated.

It is evil to do this because these reforms are guaranteed to further enslave future generations of Americans to Washington, D.C.

In Saxby Chambliss, Mark Warner, and Barack Obama’s world view, Washington, D.C. is the indispensable party. Any conversation about block grants, handing power and money to the states, etc. is unserious and not grownup. They view themselves as the masters of our destiny.

They will commit us to a bipartisan compromise that, in ten years, we will be having to fix. They will do so in way that makes the nation poorer. But they’ll win praise from the Washington media and liberal commentariat.

Conservatives, this is the next fight. They will tie this to the debt ceiling. We can stop them, but we must act fast. Conservatives should stake their ground on a balanced budget amendment and passage of Paul Ryan’s reforms.

The stupid and evil compromise must be stopped. It is, at its core, made of the same flawed conventional beltway wisdom where the smartest guys in the room get together, hammer out a deal, have the media praise it, and get it passed. In other words, it is exactly like every other deal that has gotten us into the fiscal mess we are in right now.

Carrie Lukas: There Is No Male-Female Wage Gap - WSJ.com

There Is No Male-Female Wage Gap
A study of single, childless urban workers between the ages of 22 and 30 found that women earned 8% more than men.

By CARRIE LUKAS

Tuesday is Equal Pay Day—so dubbed by the National Committee for Pay Equity, which represents feminist groups including the National Organization for Women, Feminist Majority, the National Council of Women's Organizations and others. The day falls on April 12 because, according to feminist logic, women have to work that far into a calendar year before they earn what men already earned the year before.

In years past, feminist leaders marked the occasion by rallying outside the U.S. Capitol to decry the pernicious wage gap and call for government action to address systematic discrimination against women. This year will be relatively quiet. Perhaps feminists feel awkward protesting a liberal-dominated government—or perhaps they know that the recent economic downturn has exposed as ridiculous their claims that our economy is ruled by a sexist patriarchy.

The unemployment rate is consistently higher among men than among women. The Bureau of Labor Statistics reports that 9.3% of men over the age of 16 are currently out of work. The figure for women is 8.3%. Unemployment fell for both sexes over the past year, but labor force participation (the percentage of working age people employed) also dropped. The participation rate fell more among men (to 70.4% today from 71.4% in March 2010) than women (to 58.3% from 58.8%). That means much of the improvement in unemployment numbers comes from discouraged workers—particularly male ones—giving up their job searches entirely.

Men have been hit harder by this recession because they tend to work in fields like construction, manufacturing and trucking, which are disproportionately affected by bad economic conditions. Women cluster in more insulated occupations, such as teaching, health care and service industries.

Yet if you can accept that the job choices of men and women lead to different unemployment rates, then you shouldn't be surprised by other differences—like differences in average pay.

Feminist hand-wringing about the wage gap relies on the assumption that the differences in average earnings stem from discrimination. Thus the mantra that women make only 77% of what men earn for equal work. But even a cursory review of the data proves this assumption false.

The Department of Labor's Time Use survey shows that full-time working women spend an average of 8.01 hours per day on the job, compared to 8.75 hours for full-time working men. One would expect that someone who works 9% more would also earn more. This one fact alone accounts for more than a third of the wage gap.

Choice of occupation also plays an important role in earnings. While feminists suggest that women are coerced into lower-paying job sectors, most women know that something else is often at work. Women gravitate toward jobs with fewer risks, more comfortable conditions, regular hours, more personal fulfillment and greater flexibility. Simply put, many women—not all, but enough to have a big impact on the statistics—are willing to trade higher pay for other desirable job characteristics.

Men, by contrast, often take on jobs that involve physical labor, outdoor work, overnight shifts and dangerous conditions (which is also why men suffer the overwhelming majority of injuries and deaths at the workplace). They put up with these unpleasant factors so that they can earn more.

Recent studies have shown that the wage gap shrinks—or even reverses—when relevant factors are taken into account and comparisons are made between men and women in similar circumstances. In a 2010 study of single, childless urban workers between the ages of 22 and 30, the research firm Reach Advisors found that women earned an average of 8% more than their male counterparts. Given that women are outpacing men in educational attainment, and that our economy is increasingly geared toward knowledge-based jobs, it makes sense that women's earnings are going up compared to men's.

Should we celebrate the closing of the wage gap? Certainly it's good news that women are increasingly productive workers, but women whose husbands and sons are out of work or under-employed are likely to have a different perspective. After all, many American women wish they could work less, and that they weren't the primary earners for their families.

Few Americans see the economy as a battle between the sexes. They want opportunity to abound so that men and women can find satisfying work situations that meet their unique needs. That—not a day dedicated to manufactured feminist grievances—would be something to celebrate.

Ms. Lukas is executive director of the Independent Women's Forum.

The Rich Aren’t Getting Richer - National Review Online

The Rich Aren’t Getting Richer
Actual super-wealthy households saw their income decline.

Are the rich really getting richer? That’s a pretty standard line from the Left, a lament usually cited in the course of calling for higher tax rates. Robert Reich is particularly fond of this mode of attack: A recent post of his was headlined, “For 70 years, the wealthy have grown wealthier.” Professor Reich probably doesn’t write his own headlines, but it’s a common enough sentiment for him, and his prose is rich with phrases such as “the super-rich got even wealthier this year.”

He isn’t alone in employing this mode. Take this from an April 7 Salon article: “And surely the rich don’t need that 25 percent top rate in the way poor folks need programs like TANF and seniors need Medicare — about 90 percent of all American income gains since the 1970s have gone to the top 10 percent of earners.”

This is not true.

The numbers generally cited in support of this argument do not actually tell us much about what has happened to the incomes of wealthy households over time. That’s because the people who are in the top bracket today are not the people who were in the top bracket last year. There’s a good deal of socioeconomic mobility in the United States — more than you’d think. Our dear, dear friends at the IRS keep track of actual households (boy, do they ever!), and sometimes the Treasury publishes data about what has happened to them. For instance, among those who in 1996 were in the very highest income group isolated for study — the top 0.01 percent — 75 percent were in a lower income group by 2005. The median real income of super-rich households went down, not up. The rich got poorer. Among actual households, income grew proportionally more for those who started off in the low-income groups than those that began in high-income groups.

That wasn’t even an unusually good decade in terms of mobility. During the horrible, horrible Reagan years, as National Review noted back in 1991, the average income growth for actual households in the lowest income bracket was 77 percent over the course of a decade; income growth for actual households in the top group was only 5 percent during those same years. Of those who were in the poorest fifth in 1979, 85.8 percent had moved to a higher bracket by 1988, and 14.7 percent of them moved to the top bracket — which is to say, the poor of 1979 were more likely to be the rich of 1988 than to be the poor of 1988. The poor got richer, and some of them got a lot richer. Reagan’s record has not been matched — Ronald Reagan was the champion of the poor, as it turns out — but economic mobility has been pretty stable for the past 20 years: About 50 percent of U.S. households move from one income group to a different one every decade, and actual households initially in the low-income groups see proportionally more income growth than do actual households initially in the high-income groups.

When somebody says that that top 1 percent saw its income go up by X in the last decade, they are not really talking about what happened to actual households in the top 1 percent. Rather, they are talking about how much money one has to make to qualify for the top 1 percent. All that really means is that the 3 million highest-paid Americans in 2010 made more money than did the 3 million highest-paid Americans in 2000, the 100,000 highest-paid Americans this year made more money than did the 100,000 highest-paid Americans made in 2000, that the 50,000 highest-paid Americans made more money this year than did the 50,000 highest-paid Americans made in 2000, that the 1,000 highest-paid Americans this year made more money than did the 1,000 highest-paid Americans made in 2000, etc., which is not shocking. But, as the Treasury data show: They are not the same people.

When Robert Reich writes that “super-rich got even wealthier this year,” he is making a statement that is not true in most cases — 75 percent of the Clinton-era super rich were not members of the Obama-era super rich. In fact, Treasury found:

* Income mobility of individuals was considerable in the U.S. economy during the 1996 through 2005 period with roughly half of taxpayers who began in the bottom quintile moving up to a higher income group within ten years.
* About 55 percent of taxpayers moved to a different income quintile within ten years.
* Among those with the very highest incomes in 1996 — the top 1/100 of one percent — only 25 percent remained in the group in 2005. Moreover, the median real income of these taxpayers declined over the study period.
* The degree of mobility among income groups is unchanged from the prior decade (1987 through 1996).
* Economic growth resulted in rising incomes for most taxpayers over the study period: Median real incomes of all taxpayers increased by 24 percent after adjusting for inflation; real incomes of two-thirds of all taxpayers increased over this period; and median incomes of those initially in the lower income groups increased more than the median incomes of those initially in the high income groups.

Or, as the authors of the study put it: “While the share of income of the top 1 percent is higher than in prior years, it is not a fixed group of households receiving this larger share of income.” (Incidentally, Treasury underestimates mobility by excluding the most mobile population from its study: those under 25. It does this in order to avoid including school-to-work transitions in the data, though presumably it’s catching a fair number of law-school graduates and freshly minted MBAs.)

Progressives ignore this income mobility when denouncing the wicked, wicked rich and their income-hogging ways. This leads to a lot of bad analysis and stupid rhetoric. From Robert Reich, for example: “[The poor] see people at the very top getting away with, well, the equivalent of murder.” Does he really mean the equivalent of murder? Yes, and he writes wistfully of the lynching to come: “An angry population and an angry populace could just as easily turn their anger toward the very rich. Again, it is in the interest of the people at the top to actually call for a more equitable distribution of the gains of economic growth and a better tax system.” Listen up, Thurston Howell III: It’s Reichonomics — or else. But the income-mobility figures suggest that those gains already have been more widely distributed than most people think. (In no small part, incomes are distributed over time: Most people earn more money as they get older.)

So, about those rich, and about that Reich: You’d think a guy who used to be secretary of labor would know better. And I think he does.

— Kevin D. Williamson is a deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialism, just published by Regnery. You can buy an autographed copy through National Review Online here.

Rand Paul invokes Ayn Rand on efficiency - Darius Dixon - POLITICO.com

Rand Paul invokes Ayn Rand on efficiency

Send to a friendRand Paul invokes Ayn Rand on efficiency

Rand Paul recently turned his attention to Ayn Rand's 1937 novel 'Anthem.' | AP Photo Close
By DARIUS DIXON | 4/12/11 1:46 PM EDT

For Sen. Rand Paul, legislation setting new efficiency standards for appliances evokes the nightmare future Ayn Rand warned us all about.

“On the energy efficiency standards, I think that in order to be consistent with a free society we should make them voluntary,” the Kentucky Republican said, turning a routine markup hearing in the Senate Energy and Natural Resources Committee into something of a libertarian book club.
Continue Reading

POLITICO 44

Paul offered an amendment to remove the appliance bill’s enforcement authority, but first he turned his attention to Rand’s 1937 novel “Anthem.”

“In that novel,” Paul said, “individual choice is banned and the collective basically runs society.”

Paul gave a brief summary of the circumstances surrounding the novel’s protagonist, named Equality 7-2521, and the lack of the freedoms he must endure.

“Over time, he discovers the subway and rediscovered the incandescent light bulb,” he said. Paul described how the novel’s character then takes the light bulb to a leadership council and “they take the light bulb and, basically, it’s crushed beneath the boot heel of the collective.”

Similarly, the U.S. government is trying to distort the marketplace of consumer products, said Paul, who has also complained about 2007 legislation that imposed tightened efficiency standards for light bulbs.

“I’m not suggesting that this collective is against electricity, per se, or for quashing individualism,” Paul said. “I am suggesting that we’re against choice.”

Sen. Jim Risch echoed Paul’s remarks.

“I have real difficulty explaining to my constituents what in the world the government is doing telling them what kind of light bulbs they can and can’t have,” said the Idaho Republican.

Committee Chairman Jeff Bingaman of New Mexico opposed Paul’s amendment, saying similar energy efficiency bills have become law on six previous occasions, and all were bipartisan and signed by Republican presidents.

Paul’s amendment failed 16-6. All the committee Democrats and a handful of Republicans, including ranking member Lisa Murkowski of Alaska, opposed the amendment. The overall appliance efficiency bill passed out of the committee 18-4.

Read more: http://www.politico.com/news/stories/0411/53030.html#ixzz1JQjYAZ7q