Saturday, December 8, 2012

December 8, 2012

A Populist Message
by Carol Platt Liebau
December 7, 2012

John Podhoretz notes that Republicans have morphed into the "eat-your-vegetables-and-shut-up" party. There isn't much of a populist message out there from the GOP, which has been maneuvered into seeming like the party that's ready to raise taxes on everyone to prevent them from going up on the "evil rich."

On Monday night, I noted some populist points the Republicans should be making. But there's also one that bears emphasizing: Contrary to their posturing, the Democrats aren't really the party of the "common man." They're the party of government -- the force that bosses the "common man" around.

While the private sector struggles with continued high unemployment and undermployment, for government workers, the unemployment rate is just 4.3%.

State government employees outearn their private sector counterparts by 6%. (Do you like what you're getting at the DMV?)

Government workers work one month less per year and three hours less per week than their private sector counterparts.

In 2010, USA Today found that federal employees' average compensation has risen more than double what private sector workers earn.

Your tax dollars at work, friends.

President Obama's policies aren't really about helping normal, working people get a leg up.  They're about advantaging government -- and government workers -- over those who do work or seek work in the private sector.  And there's a big problem with that: The public sector doesn't produce wealth, it consumes it.  The bigger the President grows government, the more he's going to have to raise taxes on everyone to support his preferred, government "elite" (as even Howard Dean noted).

No, it's not popular for Republicans to defend high earners from tax increases (they may have to give in, though there would be significant silver linings, as Kim Strassel points out).  But they should make it clear that the President's class warfare talk is just a smoke screen for policies that do favor an elite -- it's just the government-based elite, rather than the private sector elite.

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Jim DeMint's Triumph
by Ben Domenech
December 7, 2012

When Jim DeMint drops the mic, he drops the mic right. Sitting in the South Carolina Senator’s office yesterday at 11 AM as he spoke at the Heritage Foundation five blocks away, aides scrambling to answer congratulatory phone calls, it struck me that it is impossible to consider this move as anything but a triumph, a vindication of DeMint’s approach to politics over the past five years.

DeMint’s approach was simple: treat the Senate as one would if you ditched the false collegiality – "where men can smile, and murder whiles they smile" – to one where you recognize that floor speeches change nothing, that process arguments are pointless, and that there can be no true grand bargains on legislation in the age of total distrust.

DeMint set out to change the Senate, and he succeeded by recognizing that the Senate no longer matters or functions in the way it once did. The success of his quest with Tom Coburn to end earmarking is a classic example of his approach: few things were viewed as more sacred to the antediluvian denizens of Capitol Hill prior to DeMint’s crusade, which tapped into conservative populist tendencies far from Washington to change Washington.

There was a view about how Senators should behave, how they should look, how they should act – and in all ways, DeMint rejected it. It was the preface for all he would do in the wake of the Bush years to redefine his party and the conservative movement.

DeMint departs from a Senate caucus now full of his ideological acolytes, ready to step out from under his shadow. It is no exaggeration to say that Marco Rubio, Mike Lee, Rand Paul, Ted Cruz, and many more faces of the party today would not be Senators at all without DeMint’s approach (imagine for a moment how different the Senate Republican caucus would look with Crist, Bennett, Bunning, and Dewhurst – oh, that’s sad). He departs even as he was positioned to take what most of the old guard in the Senate would view as a plum committee position, one where they could hand out favors and glad-hand to their hearts content, to fill a wall with crystal knickknacks and irrelevant legislative accomplishments (also known as the Kay Bailey Hutchison approach).

Instead, DeMint is recognizing that nothing of significance will likely happen in forming policy over the next four years. Rather than be the scapegrace of the Senate, he will aim to transform Heritage into the 800 pound gorilla it can be in Washington.

Many in the media blame DeMint for increasing the increasingly less collegial attitude in the Senate – but he was just ahead of the curve. In the new post-politeness reality, it is in fact more influential to have the resources and weapons of the Heritage Foundation at your fingertips than to be one of a hundred Senators. Let the other Senators play pretend – he’ll be where the action is.

As for Heritage, this move says a great deal, and a great deal of good, about who won the internal battle for the future of the most influential think-tank on the right. Heritage could have gone in another direction - toward the increasingly ineffective and irrelevant old ways of writing white papers no one reads, criticizing a conservative view just to get in the papers, or regurgitating what the Republican Party nominee thinks about something, except with more numbers and charts. Think of it as an analogue for picking between the old Mainline church and DeMint’s PCA church: faced with a decision between existing as an event planner for bored journalists or redoubling their efforts to alter the course of the nation's policy and politics, Heritage chose wisely.

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Fiscal Cliff: Negotiation Failure could be the Best Option
by Howard Richman, Raymond Richman, and Jesse Richman
December 8, 2012

It should come as no surprise that the "fiscal cliff" negotiations are taking place under utterly bogus premises. Instead of significantly cutting $502 billion from the $1,327 billion per year 2012 budget deficit as would take place automatically if the negotiations fail, both parties in the fiscal cliff negotiations are planning to keep the budget deficits at well over $1 trillion per year. The U.S. debt-to-GDP ratio would continue to explode.

According to the Washington Post, the Republican proposal made on December 3 would only seek $220 billion per year in deficit reduction ($2.2 trillion over 10 years):
  • $80 billion revenue through tax reform achieved by closing loopholes and capping deductions.
  • $60 billion in health spending cuts.
  • $30 billion in other mandatory spending cuts.
  • $20 billion gained by changing the way the government calculates cost-of-living adjustments for entitlements.
  • $30 billion in further discretionary spending cuts.
  • According to Politico's November 29 prediction of the eventual compromise, the deal will only produce $260 billion in deficit cuts (2.6 trillion over 10 years):
  • $120 billion from tax increases.
  • $120 billion from discretionary spending cuts.
  • $40 billion from entitlement cuts.
Neither party is willing to risk naming programs that should be defunded. They fear offending one interest group or another. That leaves the automatic across-the-board cuts of the Budget Control Act of 2011, which would take place if the negotiations fail, as about the only way to cut spending. These would cut government expenditures to the same level as four years ago. This is the least we should do.

President Obama has sold his voters on the idea that he can raise enough money to pay for the government's expanding health care, social security, food stamp, and other spending programs simply by taxing the rich. But there has never been enough money available from that source. The most equitable solution would be to restore income and payroll taxes to their level of ten years ago as would automatically take place if the negotiations fail. Then almost all voters would learn the costs, first hand, of increased government spending.

President Obama wants to keep the budget deficits high because he takes the Keynesian view that increased budget deficits stimulate the economy. But this view has been proven erroneous by the Roosevelt depression of 1933 to 1939, by the Japanese depression of the 1990s, and by the failures of the Bush stimulus plan of February 2008 and the Obama Recovery Act of February 2009.

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