Wednesday, December 19, 2012

December 19, 2012

Mark Foley: Boehner’s ‘Surrender’ Inevitable in Fiscal-Cliff Talks
by By Todd Beamon and Kathleen Walter
December 18, 2012

Former U.S. Rep. Mark Foley tells Newsmax TV that House Speaker John Boehner is “going to have to wave the white flag of surrender” and accept tax increases to reach a deal with President Barack Obama to avert the fiscal cliff expected to occur at the end of the year.

“We have a spending problem more than we have a revenue problem, but there’s got to be a decision to be made to get a little bit of both,” Foley, the popular Florida Republican who resigned his seat in 2006 after five terms, tells Newsmax in an exclusive interview. “We’ve got a divided Congress. We’ve got a Democratic presidency, we’ve got a Democratic Senate and we’ve got a Republican-led House.

“We can bay at the moon as long as we want. We’re going to hit the fiscal cliff. So, Boehner has to concede,” he added. “Boehner’s going to have to wave the white flag of surrender, that we’re going to allow some additional revenue — but I would suggest the Democrats better, including the president, figure out what we’re doing with entitlements, work on reducing some defense spending — waste, fraud, and abuse — and find a way to not just simply say we’re going to keep spending, spending, spending.”

Boehner is not wrong to consider revenue increases in his talks with Obama, Foley said.

“Most people don’t use a million-dollar homestead exemption to deduct interest from their income. If you adjusted that to $500,000 to properly reflect what the average homeowner needs in a mortgage deduction, you could reduce that exemption and bring in a lot of cash revenue,” Foley said. “Technically, yes, that’s a tax increase on those who have more than $500,000 in mortgage loans, but shouldn’t we design a program that benefits the majority rather than a select few?

“Let’s design a tax code that satisfies the broad middle class. The rich, if they lose a little deduction, aren’t going to notice it. The poor aren’t taking advantage of it. It’s the middle class that we protect by doing so. When you allow that to happen, you raise revenue so then we have a chance to fill in the deficit.

“But if the Democrats are allowed to spend that enhanced revenue, then you’ve really at zero as far as an accomplishment,” Foley added. “That’s why both sides have to work together. Bring a little bit of revenue through some mechanism of the tax code but, really, dramatically reduce spending — and, there, we see a brighter future for America.

“If it’s simply force Republicans to raise taxes and we don’t want to do anything with spending, then this disaster will continue.”

And, any increase in the nation’s debt ceiling should be tied to a Congressional vote, he said.

“It causes people to reflect on the urgency when there’s that debt-ceiling limit, because it makes people remind themselves. If you just put it on autopilot, people lose sight of the fact that we’re in a financial free-fall and we are in a dangerous place.

“That’s the reason for credit limits on individual borrowers: to prevent them from going broke. Our nation has to have the same trigger,” Foley said. “So I disagree completely when the president says let me have ultimate power and let me raise the debt ceiling as I need it. Unfortunately, this man would borrow us into the grave.”

Rank-and-file Republicans should give Boehner some slack during these demanding negotiations, Foley said.

“He’s always in jeopardy. You’ve got a majority leader who probably wants his job. You’ve got a majority whip who wants his job. But when that speaker has to make decisions that reflect the best interest of the nation, there are those who are in extraordinarily safe districts who squawk.

“But this man has to control a body of 435, so I hope they give him the flexibility to properly negotiate,” Foley said. “Hopefully, he won’t give up too much — and we will resolve this problem.”

That includes keeping up the pressure for Democrats to make cuts and changes to Social Security and Medicare.

“Social Security is not supposed to be the end all, be all of your retirement,” Foley said. “People say what if they raise the retirement age? I can’t retire until I’m 67. No, you don’t get paid until you’re 67. You can retire when you’re 35. That’s the free will of the environment. You can do anything.

“Yes, there are those that work hard at average jobs — and 67 may be a burden, but we’re living longer, we’re living healthier, and even people now in our generation who turn 65, they don’t want to retire. They want to stay in the workforce until 72. But if it’s going to be around for your child, Timmy, when he needs Social Security, it better be a system that has longevity.

“The same with Medicare,” he added. “You can’t provide every ounce of healthcare to a growing, age-eligible population without some requirement to suggest the wealthier pay a higher premium or take less out. So I don’t begrudge them. That’s one of the most urgent issues.

“Democrats better get to the table and stop the squawking about you’re hurting the elderly because nobody has proposed, including Paul Ryan, to hurt the elderly.”

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It's the Spending, Stupid
by John Stossel
December 19, 2012

Listening to progressive media pundits, I'd think the most evil man in the universe is Grover Norquist, head of Americans for Tax Reform. His crime? He heads a movement that asks political candidates to pledge not to raise taxes.
I think Grover accomplished a lot. But I wish he'd convinced politicians to pledge not to increase spending.

President Obama says raising taxes to cut the deficit is a "balanced" approach.

Balanced ...

But what's "balanced" about raising taxes after vast increases in spending? Trillions for war, Medicare, "stimulus" and solar panels. Tax receipts rose -- after tax-rate cuts -- from $1.9 billion in 2003 to $2.3 billion in 2008, the year the recession started. That increase couldn't keep up with the spending. The deficit doubled -- actually, more than doubled -- as politicians increased spending to nearly $4 trillion! Our debt, at more than $16 trillion, now exceeds our gross domestic product.

Ludicrous, irresponsible spending is why we're in trouble. As columnist Ron Hart points out, Bill Clinton's balanced budget spent $1.7 trillion. "Adjusted for inflation," he writes, "our federal government would (have) a $200 billion surplus. But instead of increasing government spending in line with normal inflation, under Bush and Obama we are spending $3.8 trillion today. Democrats, who believe we have a 'revenue' problem instead of a 'spending' problem, must also think they have a bartender problem, not a drinking problem."

The media obsess about tax rates, but spending is more important. As Milton Friedman taught us, spending is a far more accurate gauge of the government burden. If government spends a dollar, that dollar is taxed away from someone. If it's borrowed, it's removed from productive use, setting the stage for higher taxes later. If the government prints more dollars to fund spending, our purchasing power falls. Transferring purchasing power from the people to the government via inflation is a form of taxation.

If Republicans and Democrats reach a deal, the tax increases will be real -- but spending "cuts" probably illusions. If they actually happen, they will only be reductions in already planned increases. The Wall Street Journal notes that when the two parties talk about cutting spending by $4 trillion over a decade, "those numbers have no real meaning because they are conjured in the wilderness of mirrors that is the federal budget process. Since 1974, Capitol Hill's 'baseline' has automatically increased spending every year according to Congressional Budget Office projections ... . Tax and spending changes are then measured off that inflated baseline."

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Review of Benghazi attack faults ‘grossly’ inadequate security, leadership failures
by Anne Gearan
December 18, 2012

An independent investigation of the fatal attack on a U.S. diplomatic post in Libya on Sept. 11 found that “grossly” inadequate security and reliance on local militias left U.S. diplomats and other personnel vulnerable, the State Department told Congress on Tuesday.

The review of the assault on the mission in Benghazi, Libya, that killed Ambassador J. Christopher Stevens and three other Americans faulted systemic failures of leadership and management deficiencies at senior levels within two bureaus of the State Department, according to an unclassified version posted on the department’s Web site Tuesday night. 

The review by the Accountability Review Board said the temporary, lightly defended compound where Stevens died lacked disciplined oversight of its security operations. The diplomatic post’s ad hoc nature, with inexperienced staff members working there for short periods, “resulted in diminished institutional knowledge, continuity, and mission capacity,” the report said.

Finally, the report said State Department officials in Washington ignored requests from the U.S. Embassy in Tripoli, the Libyan capital, for additional guards and better security for the Benghazi compound, which served as a temporary U.S. consulate for eastern Libya. It also said that there had been worrisome incidents in the weeks before the attack that should have led to increased security, but the report did not identify any specific threats to the compound on Sept. 11.

The report said State Department security personnel on the scene and CIA officers at a nearby annex used as an operations base had responded in a timely and appropriate manner, and it absolved the U.S. military of any blame, saying there was not enough time for a military response that would have made any difference.

Despite the broad security failures, the report did not single out any individual officials as violating procedures and did not recommend any disciplinary action.

The report also concluded that, contrary to initial reports by the Obama administration and by media outlets, there was no protest outside the outpost ahead of the attack and that the assault on the diplomatic compound and the CIA annex was carried out by terrorists.

Stevens and another diplomat, Sean Smith, were killed inside the compound. Two other Americans, CIA contractors Tyrone Woods and Glen Doherty, died in the attack on the annex. Ten people were injured in the assault.

The panel’s report “provides a clear-eyed look at serious, systemic challenges,” Secretary of State Hillary Rodham Clinton wrote in letters to the Senate Foreign Relations Committee and the House Foreign Affairs Committee. She said that the State Department had already begun to address the lapses and that she accepts “every one” of the recommendations for improvement.

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