Author: Heritage

On 01.28.10 10:41 AM posted by Lindsey Burke

It appears that President Obama will exempt education from his so-called spending freeze. Despite the fact that Obama already doubled the Department of Education’s budget through the Omnibus and Stimulus bills last year, he plans to continue the spending binge. The Washington Post reported yesterday:

Administration officials said they could not provide a direct comparison to current elementary and secondary education spending levels, but they said federal education spending would rise overall by 6.2 percent. That would apparently be the largest percentage increase since 2003, not counting the huge infusion from last year’s economic stimulus law.

The Post writes that the President will talk about a $1.35 billion increase to his more than $4 billion Race to the Top Fund, which provides competitive grants to states to implement certain education reforms. The increase comes before the winners of the first round of RttT money have even been announced, let alone before the first $4 billion has been spent.

In addition, the Post signaled that No Child Left Behind, the current iteration of the Elementary and Secondary Education Act, will be the occasion for another $1 billion in new education spending. In a description that invites curiosity about where the money would actually be spent, the Post writes:

The $1 billion fund would be held out as a carrot for a successful legislative conclusion. One top aide to the president described it as an ‘incentive necessary to implement the kinds of reforms that we believe are necessary’.

The Post also notes that Obama will promote the Student Aid and Fiscal Responsibility Act (SAFRA) a higher education bill that would terminate the Federal Family Education Loan (FFEL) program and expand the Federal Direct Loan program. The SAFRA, which has already passed the House and is awaiting action in the Senate, also contains a new $8 billion pre-k program.

Finally, it’s also unclear as to whether the President will revamp or consolidate the federal Head Start program – the $8 billion annual preschool program that was recently found by the Department of Health and Human Services to have zero long-term impact on students.

http://blog.heritage.org/2010/01/28/…eeze%e2%80%9d/

On 01.27.10 07:16 PM posted by Ernest Istook

Throughout his long speech, President Obama never acknowledged that Americans have been sending him a message or that he had bothered to listen. Instead, the sole fault he acknowledged was that “I take blame for not explaining it [his agenda] more clearly.”

He still believes the problem is that people fail to understand his goals. Instead, his problem is that we understand them all too well.*His efforts to make light of his recent political setbacks left a clear impression that he has learned nothing from them. Instead, he presented a long workmanlike speech that is indistinguishable from a routine Presidential address.

Every issue was treated as though it was no more or less important than any other. There was no particular passion or emphasis; just a homogenized product as though each item was blended into a gruel. Call it a smoothie if you wish, but you could also call it pablum. I’ve attended at least 15 State of the Union speeches, and this one will stand out mostly for the fact that Obama could have said he listened to America and learned from us–but he didn’t.

(Former Congressman and Heritage Distinguished Fellow Ernest Istook was in the chamber for tonight’s speech. For more on the State of the Union, visit Heritage at Facebook and on Twitter.)

http://blog.heritage.org/2010/01/27/…e-the-chamber/

On 01.27.10 07:31 PM posted by Conn Carroll

Heritage members and fans are discussing President Barack Obama’s State of the Unions address at Twitter and Facebook right now. And here are just some of our experts immediate reactions to parts of the speech:

State of the Economy
President Obama inherited a global recession and a global financial meltdown. So far, his enacted policies have had no beneficial effect as the 10 percent unemployment demonstrates in spades, and his threatened policies remain perhaps the greatest barrier to a strong economy. The economy will recover, and appears to have started to do so, thanks to the inherent strengths of the American economic system and the energy and hard work of American families and American businesses.

The President now says he is focused intently on getting the economy to create jobs, but his announced policies say otherwise. Altogether, they are little more than a series of benign sounding talking points substituting for serious action, similar in quality and nature to the proposals already advancing in the House and the Senate.
– J.D. Foster

Jobs
President Obama is right to focus intensely on the economy and jobs. When he took office, the unemployment rate was 7.7 percent. One year and $1.4 trillion later (total deficit spending from February, 2009 to December, 2009), the unemployment rate stands at 10 percent, and 3.4 million jobs have been lost.

In addition to his ineffectual fiscal stimulus, Obama has proposed a variety of policies sharing the unified characteristic of being anti-jobs. He proposed higher tax rates on investment and small businesses. He proposed an immensely expensive and unpopular health care reform. He proposed massive additional taxes through cap and trade. It is fair to say the policies of Obama and his congressional allies, through the uncertainties and threats they make toward the producers in the American economy, are the single greatest impediment to economic recovery we now face.

Obama should remember to “First, do no harm.” In that spirit he should remove government barriers to hiring. An executive order suspending the Davis-Bacon Act, for example, would create 160,000 new construction jobs in 2010.

Then Obama should press for policies that will encourage investment and entrepreneurship – the activities that create lasting jobs and will bring employment down. His capital gains tax cut for small businesses is a step in the right direction, although he should apply it to all businesses. Tort reforms that make it more difficult for trial lawyers to extract multi-million dollar jackpots from productive businesses would also spur business investment and hiring.
-J.D. Foster

“Clean Energy” Jobs
The President apparently has dropped the term “green jobs” and instead has adopted the new term “clean energy” jobs. New words, same failed ideas.

Spain provides a case in point.* With a world-leading quantity of both wind and solar electricity (both highly subsidized), Spain’s green-job creation should be second to none.* However a study by Spanish economist Dr. Gabriel Calzada found 2.2 conventional jobs were destroyed for each green job created.* This finding is consistent with Spain’s overall employment situation.* At 19.4 percent, Spain’s latest unemployment rate is nearly double that of not only the United States (10.0 percent) but it is also nearly double the rate for Spain’s European neighbors, France (10.0 percent) and Portugal (9.8 percent).

Budget-busting subsidies and ham-fisted regulations will not help end the recession.* Instead, they will shrink economic activity and prolong the recovery.
-David Kreutzer

New Hire Tax Credit
The tax credit for new hires is another recycled idea from Washington. Last tried in the 1970’s, the tax credit proved to be a windfall for big businesses that were planning to hire anyway. Small businesses, the engine of job growth, did not use the tax credit largely because they were unaware of it and did not understand how to take advantage of the credit.

The small credit does not offset the larger tax increases that the government is threatening to impose through the health care plan and the potential expiration of the Bush tax cuts. The jobs tax credit proposal will likely also delay hiring since businesses that understand the tax credit now face an incentive to postpone hiring decisions to take advantage of the tax credit. Extending the Bush tax cuts and undoing the heavy taxes in the health care legislation is a better step to job creation than this tax credit.
– Rea Hederman

The Bank Tax
President Obama tonight called for a new tax on banks and other large financial institutions, “a modest fee,” he said, “to pay back the taxpayers who rescued them in their time of need.” That sounds great, but in truth, the new tax would do nothing of the kind. Mr. Obama knows that almost every major bank has paid back their bailout funds, with interest. Taxpayers made substantial profits on those repayments.

On the other hand, most of the companies that still owe billions to taxpayers, including Fannie Mae and Freddie Mac, and auto firms GM and Chrysler would not be subject to the tax. In short, Mr. Obama would tax those that have paid back taxpayers, and exempt those who have not.

Mr. Obama also calls for “serious financial reform,” to “guard against the financial recklessness that nearly brought down our entire economy.” Again, that’s a nice sentiment, but most of his proposed reforms would do little or nothing of the kind. In fact, major parts of his proposals would only guarantee additional future bailouts, by treating some companies as “too big to fail,” and creating a resolution process for troubled financials that is so open-ended that it could be used in almost any situation. The better choice, ignored by the President in his speech, would be to amend U.S. bankruptcy law to create an open, expedited bankruptcy process in which an impartial court would oversee the restructuring or closure of large and complex financial firms.
– James Gattuso and David John

Health Care
Despite overwhelming public opposition, the President in his State of the Union restated his commitment to flawed health care legislation that would transfer more power and decisions to Washington and away from patients and families.

These flawed bills would nullify the President’s numerous promises, ranging from allowing Americans to keep their existing coverage to protecting middle class Americans from tax increases. Indeed, the congressional health care legislation would break his pledges for fixing the economy, bringing down deficits, and creating jobs. In fact, the health care bills would cost in excess of $2 Trillion over the next 10 years and increase, not decrease, health care spending. Moreover, projections show the bill, when taken in its entirety, would add billions to the already staggering federal deficit and record government debt. Finally, the bills’ taxes and mandates would weaken the economy and lead to fewer jobs.

All fair-minded Americans, regardless of their political views, have been appalled by process. This includes blatant special interest politics at the expense of taxpayers, including backroom schemes to exempt some groups from provisions of the bill while forcing the rest of Americans to pick up the tab. The subsequent decline in public trust has been aggravated by the cavalier violation of the President’s numerous and highly publicized pledges to guarantee transparency, including C-Span coverage of congressional negotiations.

Instead of overhauling one sixth of the US economy, Congress should stop, and take a step by step approach to increase competition, expand personal choices, and reduce costs for businesses, individuals and families. By reaching out to congressional conservatives, the President could achieve common sense reforms and improve the efficiency of health insurance markets and deliver better value for Americans’ health care dollars.
– Bob Moffit and Nina Owcharenko

The Spending “Freeze”
Obama’s spending freeze would apply to a narrow sliver of spending (somewhere around 1/8th of total spending) and at best, savings would be less than one percent of the total budget. Moreover, it explicitly exempts the very entitlement programs driving future deficits. At a time when the deficit is $1.4 trillion and we face a sea of even worse red ink as far as the eye can see, such a freeze is tantamount to bailing out – forgive the double entendre – the Titanic with a dixiecup. And it would start next year, conveniently after the elections. Freezing spending is the right idea, but this freeze falls short of real action.

This freeze would not be applied across the board, but rather some functions like so-called investment in job creation would increase and other functions like Judiciary (a core constitutional function of government) would receive cuts. This is a normal part of budget writing, setting priorities and making trade-offs. But it’s hardly a freeze. If Obama is serious, he should start with a freeze right now in the form of a rescissions package and demand Congress act on it in an expedited fashion.

If the President is serious about righting the fiscal ship, he needs batten down the hatches and take far tougher actions, like cancelling TARP, ending the stimulus program, and turning his attention to the tsunami of entitlement programs that threaten swamp our economy.

His proposed entitlement commission would have no teeth to tackle surging entitlement spending. It is a hollow gesture, designed to buy time for Congress to kick the can down the road again in an election year so they can pass another huge budget filled with new spending while his Commission dithers away behind closed doors. If he truly refuses to pass this problem along to another generations of America, he should to tell Americans the true cost of entitlement programs ($43 trillion in excess costs) and put these programs on a hard budget with trade-offs across all priorities – not just a narrow sliver of the budget. That’s how budgeting works.
-Alison Fraser

Automatic IRAs
In all the soaring rhetoric and misguided policy proposals in President Obama’s State-of-the-Union address, one,* the Automatic IRA, is a simple, easy to understand way to increase Americans’ retirement security.

Almost half of all US workers are employed by companies that don’t offer any sort of pension or retirement saving plan.* Social Security benefits alone are not high enough for a comfortable retirement, and the programs financial problems means that even those benefits could be lower.* Unless workers can save for their own retirement from the day they first enter the workforce until they retire, either they face retirement poverty, or will need to rely upon yet another new government program.

The Automatic IRA allows workers to save some of their own money in a simple, low cost savings plan.* Employers would deduct the contributions and send it on to a private sector funds manager just as they now deduct federal taxes from the workers and send it to the Treasury.* Investment choices will include a no-cost government bond for new savers to use until they build up enough money to transfer into privately managed funds.* Because an IRA is personal savings, employers would not be required – or even allowed – to match these savings.

The Automatic IRA has wide bipartisan support from the left and right, and was endorsed in 2008 by both the McCain and Obama campaigns.* It is a simple, practical solution to a serious problem.
– David John

Education
President Obama was right to speak tonight about the urgent need to reform and improve American education. But the President is choosing the wrong responses, following failed paths that will put our country deeper in debt, expand dependence on government, and increase burdens on taxpayers — all while rejecting some of the most promising reforms.

A year ago, President Obama stated that his administration would
use only one test to decide which programs to fund — whether or not they worked. But his administration has consistently broken that promise. For starters, President Obama allowed Congress to end the D.C. Opportunity Scholarship program, which has proven to be one of the most effective federal education initiatives in history, improving low-income students’ academic achievement. And he pushed Congress to create a new $8 billion preschool program, while his administration buried a report showing that the federal Head Start program was a colossal failure.

If the President is serious about his commitment to education reform and fiscal discipline, he should press Congress to completely overall the
federal role in K-12 and early childhood education by terminating ineffective programs and reforming remaining ones to empower parents and local leaders use our precious tax dollars to best meet children’s needs.

The President also talked about the need to address the important problem of college affordability. But decades of experience have shown that his costly solution — increasing federal subsidies and placing more of the burden for paying college on taxpayers — hasn’t addressed the root problem of out-of-control college costs. Rather than increasing the burden on taxpayers and growing the deficit, federal and state policymakers should focus on reforming higher education to improve efficiency to lower costs.

That’s the right way to improve college access while reducing the burden on taxpayers.
– Dan Lips

War on Terror
More than 40 minutes into his State of the Union speech, Obama mentioned terrorism. If you weren’t listening carefully, you might have missed it. It was all about 10 sentences.

This isn’t surprising. Obama has at times in the past year seemed reluctant to embrace the responsibility of defending the nation against acts of terrorism. Thus far, President Obama has only given one speech on the war on terrorism in his time in office. He pledged early on to close down Guantanamo Bay and prosecute terrorists in civil courts. And at the same time, he has limited the tools of the CIA and done everything he can to distance himself from Bush era counterterrorism policies, remaining almost silent on reauthorization of the PATRIOT Act, provisions which he is said to support.

These actions are of course cracking under the weight of the national security threats facing the nation. And this lack of enthusiasm for his national security responsibilities has caught the attention of the American public. The Christmas Day plot was a reminder to all of what can happen if an Administration fails in this duty. Americans are asking—will President Obama take the steps necessary to defend the United States against its enemies?

Tonight’s speech was light on rhetoric— and even lighter on substance when it comes to terrorism. What the public expects is for President Obama to be a President engaged in terrorism and ready to do what is necessary to stop attacks. This isn’t an easy job; it’s a no-excuse, 24-7-365 commitment, but it is absolutely necessary.
– Jena McNeill

Child Care Tax Credit
President Obama’s State of the Union proposals tonight to expand the Child and Dependent Care Credit by increasing its size for middle-income Americans goes about tax relief for a limited number of U.S. families in a thoroughly unacceptable way.

The credit discriminates among families with comparable incomes and work effort – simply on the basis of their decision to use or not to use paid day care providers. President Obama’s proposal is similar to one advanced in 1998 by President Clinton, and similar criticisms apply.

The Obama Administration proposal raises the value of the child care tax credit to 35% of allowable day care expenses for families making less than $85,000 a year (with smaller increases for families making from $85,000 to $115,000 per year).

To qualify, parents must pay someone else to care for their children. Parents who make different arrangements in order to maximize the amount of time they can spend with their children are left behind by the Obama proposals. These include families where one parent works full-time and the other works part- or full-time at a different time of day (split shifts) or on weekends, as well as families where one parent foregoes wage income entirely in order to stay home and raise the children.

The diversity of child care arrangements among U.S. families is great. Tax relief for families with children is a need that can be addressed in many ways as well, but whatever way is chosen should be equitable to all families and treat all work-family time options similarly. The Child and Dependent Care Credit fails this key test, and expanding it only aggravates the failure.
– Chuck Donovan

Defense Spending
For a speech well over an hour in length, it was hard not to notice the breezy and brief reference to military needs. The President spoke for only a moment about the need to provide the U.S. military the resources it needs during war and support when forces return home.

Both priorities are incredibly important to sustaining the long-term health of the America’s Armed Forces. However, the President made no mention of his long-term commitment to the military and the urgent demand to give our men and women in uniform a capable array of next-generation systems to defeat any threat in the future, as well as those threats in Iraq and Afghanistan today.

Not including defense spending as part of the President’s domestic discretionary spending freeze is important given ongoing wartime requirements. Yet the President’s 10-year budget plan would dramatically cut defense spending in real terms and as a percentage of the economy.

Providing for the common defense of the American people is the first job of government, not the second, third, fourth or even last responsibility.

When the President’s budget is released to Capitol Hill next week, members of Congress should demand robust resources and spending levels for the military until victory is achieved in combat operations overseas and for several years thereafter to rebuild the force strained by war and coming off a decade of underinvestment.
– Mackenzie Eaglen

Afghanistan
The war in Afghanistan deserved more attention than the one paragraph it was allotted in the speech. Not only is it a crucial theater in the war against al-Qaeda, but the President himself spent a good deal of time in his first year in the White House on two separate policy reviews that produced two major decisions to commit more troops to that struggle. Success in Afghanistan requires the long term support of the American people. This cannot be taken for granted.

The President missed an important opportunity to shore up wavering public support for his Afghanistan policy by explaining how his strategy can bring success, appealing for steadfast public support, and underscoring the huge potential costs of failure in Afghanistan. His emphasis on U.S. troops beginning to pull out in 2011 undercuts the overall U.S. strategy by signaling to our enemies that we are anxious to withdraw. Wars are won by demonstrating resolve and commitment, not by telling our enemies that our patience for the fight is limited.
– Lisa Curtis

Taxes
President Obama in his State of the Union address reiterated again that he wants to raise taxes on those earning more than $250,000 a year. He says we can’t afford to. This is nothing new. He has reiterated his desire to raise taxes on high-earners time and again since he began campaigning for the presidency.

But the president’s insistence to raise taxes on high-earners conflicts with his also oft-repeated pledge that he won’t raise taxes during a time of recession. So which is it? If taxes shouldn’t be raised in a recession why is it alright to raise them on high earners?

The answer is it isn’t. Raising taxes on anyone in a recession is a mistake. Even if we are in the nascent stages of a recovery, now is not the right time to burden the fragile economy with higher taxes. Higher taxes on those making over $250,000 will not only hurt those high-earners, it will hurt those that make much less because there will be fewer jobs and lower wages as a result.

Congress and President Obama should extend the 2001 and 2003 for all taxpayers. The economy can’t afford to do otherwise.
– Curtis Dubay

On Inherited Budgets and Earmarks
The President’s claim that the long-term trillion-dollar budget deficits are “the result of not paying for two wars, two tax cuts, and an expensive prescription drug program” is clearly misleading. While these factors contributed to turning earlier surpluses into deficits, the budget deficit still stood at just $162 billion when the recession began in late 2007. The larger subsequent deficits have been driven by the recession, the financial bailouts, the President’s stimulus bill, and large discretionary spending hikes enacted by a Democratic Congress. Once the recession ends and its costs wind down, budget projections show permanent trillion-dollar deficits driven by Social Security, Medicare and Medicaid growth, as well as the higher discretionary spending baseline, and growing net interest costs on this large debt – not even counting the President’s expensive proposals. While President Bush certainly spent too much, it’s not okay Obama would more than double down.

President Obama’s proposal to post all earmark requests on a single website is strong. Yet the President who promised to “slash earmarks to no greater than 1994 levels” – 1,318 earmarks at a cost of $7.8 billion – just signed into law approximately 10,642 earmarks at a cost of $15.4 billion. He clearly has a long ways to go keep this pledge.
– Brian Riedl

On the Constitution
The former law school lecturer left much to be desired concerning legal issues in his State of the Union address.

First, in addressing the White House’s signature proposal to date, the President failed to give any assurances that he will expend any effort to force Congress to address the serious constitutional failures of the health care mandates in the existing versions of the legislation.

Second, the President ridiculed the Supreme Court’s decision last week in Citizen’s United as opening “the floodgates for special interest.” Contrary to the President’s characterization, the decision properly rejected the idea that the government can decide who gets to speak and ban some from speaking at all, particularly those doing their speaking through associations of members who share their beliefs. Amazingly, he urged Congress to “right this wrong” – amazing because the “wrong” is First Amendment protection of speech rights.

Third, the President claimed that his administration “has a Civil Rights Division that is once again prosecuting civil rights violations and employment discrimination.” This will come as news to anyone who has followed the Justice Department’s shenanigans in the New Black Panther Party case, one in which the Civil Rights Division chose not enforce a default judgment it had secured in a case against individuals caught on tape intimidating voters. Rather than prosecuting civil rights violations, the Obama Justice Department is seeking to evade subpoenas from the U.S. Commission on Civil Rights, which is investigating the incident. If Obama is serious about showing that his civil right division follows and enforces the law, he should begin by complying with the Commission’s subpoenas.
– Robert Alt

Energy
President Obama used his State of the Union address to continue promoting his clean energy and green jobs agenda. His calls for new nuclear power, offshore oil and gas exploration, and other new energy technologies are certainly welcome. The problem is that his program of subsidies, special tax treatment, and government support will not work.

While government programs can create jobs in specific sectors, the President ignores the evidence that these programs end up killing more jobs than they create. Spain has already gone down this road and its experience should give the President caution. Between 2000 and 2008, the Spanish government spent $36 billion in taxpayers money on wind, solar and mini-hydro development. Each green job created cost on average $758,471.

And that is not all. Dr. Gabriel Calzada of the King Juan Carlos University in Spain found that, for every green job created, 2.2 jobs in other sectors were destroyed. While correlation does not imply causation, keep in mind the country’s unemployment rate is currently at 19.4%. This result is predictable because government programs do not yield commercially viable products. Indeed, they stifle the entrepreneurial activities that drive technological innovation in a free market place.

That is why the President should forge a new path for the United States that relies more on free enterprise and less on Washington handouts. If the President believes that the nation needs more nuclear power, then he should reform the regulatory system that continues to stifle progress in the industry. If he believes that we need to gain access to our domestic energy resource by drilling in our offshore waters, then he should lift the ban on those activities. And finally, if he truly wants to see wind and solar power to be commercially viable, then he must stop subsidizing those activities.
– Jack Spencer

Arms Control
President Obama alluded in his speech to the threat of nuclear weapons and his commitment to defending the United States. If only his policies matched the security challenges facing the nation.

First and foremost, he has yet to propose the establishment of a strategic posture that seeks to protect and defend the people, territory, institutions and infrastructure of the United States against strategic attack. He cut the missile defense budget in his first year by roughly 15 percent. He has demanded that the number of interceptors in Alaska and California to provide such a defense be reduced from 44 to 30. President Obama then terminated agreements with the Czech Republic and Poland to field defense facilities in both countries capable of protecting the United States and Europe against long-range missile attacks, particularly against those that are likely to be fielded by Iran. This is not the kind of protect and defend strategy that will effectively address the threats posed by world that is becoming proliferated with nuclear weapons

On the arms control front, President Obama’s policy of seeking a world without nuclear weapons provides virtually no guidance on how the United States will maintain its security as it goes down the disarmament path, given that Iran and North Korea are moving in the opposition direction and China and Russia are modernizing their nuclear forces. The nation’s nuclear weapons infrastructure continues to atrophy as the overall size of the force continues to shrink. He has pursued a new ambitious arms control agenda with Russia incompetently by setting an unrealistic deadline for the negotiations and failing to meet it.

It is all but impossible to avoid concluding that President Obama’s strategic policies are seeking to make American weakness a virtue. Such weakness will not be a virtue, but a danger to the security of the American people, America’s allies and ultimately world peace. If he continues down his present path regarding these issues, one wonders when and under what circumstances a dangerous world will remind him of this fact.
– Baker Spring

Public Diplomacy
In a speech that focused closely on President Obama’s domestic agenda, an hour into his first State of the Union address to Congress, the president got around to the issue of foreign affairs, terrorism and U.S. foreign military engagements. Many around the world have expressed concern that a US administration so focused on domestic priorities and troubles as the current one will be too inward-looking to be deeply engaged in the world. Judging by its placement in his list of priorities, foreign affairs did seem like an afterthought, briefly addressed.

Still, there were assertions of American leadership and a reach for ideas that seemed to be somewhat of a departure for this self-avowedly pragmatic president. “America must always stand on the side of freedom and human dignity,” Obama stated. “American ideas are its greatest source of strength.” And rather than naively reach out to the regimes of Iran and North Korea, the president emphasized their growing isolation, somewhat optimistically holding out the promise of tighter sanctions on Iran. In that sense, the speech reflected some of the hard earned experience of the past year.

In other areas, the speech seemed almost out of touch with reality. The United States has not, as asserted, become a leading nation on climate change — much to the dismay of the Europeans. In Afghanistan, allied nations are hardly coming together to support the president’s surge — indeed French President Nicolas Sarkozy very publicly stated this week that he would not be contributing any more troops to the endeavor, this on the eve of the Afghanistan conference in London. And the fight on terrorism has not, as stated, been advanced by the Obama administration — quite the reverse as the nation has become more vulnerable. Nor has the administration distinguished itself by its support for human rights in Iran — in fact it missed a critical moment to get involved during last summer’s uprisings against the Iranian regime. As for the president’s aspiration to control nuclear materials around the world, a goal to be reached through an international conference — that horse has left the barn a long time ago.

The Obama administrations record for its first year is so thin that improvement will not be hard to come by. Yet, the American leadership that the world needs to see is not likely to become reality before the president speaks again next January.
– Helle Dale

Economic Freedom
In his State of the Union address tonight, President Obama signaled no retreat from the big-government extravaganza of his first year in office. The three year “spending freeze” that he articulated is only a blip in the midst of a panoply of interventionist policies that would further restrain our economic freedom. Consider the followings. President Obama’s proposed “freeze” will not start until 2011, will only apply to only about one eighth of $3.5 trillion budget, and will not be relevant to any of the unspent $862 billion stimulus plan, his health care plan or the House of Representatives’ additional $156 billion stimulus plan.

The shortcomings of Obama’s first year economic policies have vividly reminded many Americans that government stimulus and big government can neither create more opportunity for people nor manufacture enduring prosperity. Unfortunately, rather than recognizing it is time for real “change” and a new approach, President Obama tonight eloquently asked us for more patience with his big government policies and renewed his own allegiance to an ineffective course of policy action. His words, rather than reassuring, have reminded us that our economic freedom is in greater peril than ever.

As the Index of Economic Freedom, an annual independent study by the Heritage Foundation and the Wall Street Journal, has documented, policy choices do matter in determining economic vitality. Unfortunately, America’s economic freedom has been falling–dramatically. While many countries around the world continue on the path of increasing competitiveness and flexibility, the United States is, in many respects, moving in the opposite direction, simultaneously burdening its economy with increasing government spending, uncompetitive tax rates, and barriers to trade and investment that stifle entrepreneurship and dynamic growth. As President Obama stated, “It’s time to get serious about fixing the problems that are hampering our growth.” Unfortunately, many of those problems are caused by government itself, under Obama’s leadership. Many small and large firms are currently postponing spending decisions and projects while they try to discern government’s latest intentions. Others are put off by anti-business rhetoric that demonizes those whose profit-seeking is the very foundation of investment and job creation.

It’s time to get government out of the way and let the American people get on with the business of building a better future.
– Ambassador Terry Miller

NATO and Afghanistan
During the Presidential campaign, then-candidate Barack Obama stated that Afghanistan would be his primary focus in America’s battle against terrorism, and that he would rally the international ISAF coalition to recommit to the fight there. In the 12 months since his election, he has ordered 30,000 additional combat troops into Afghanistan, confirmed $2.7 billion in non-military aid from his 2010 budget and maintained broad bipartisan support for the war effort, despite huge tensions over domestic issues such as health care reform. However, he has been wildly unsuccessful in rallying additional international commitment to mission, save the same countries who have long shouldered a disproportionate share of the burden such as the UK. Several European members of NATO including France, Germany, Greece, Spain, and Turkey continue to shortchange the mission in Afghanistan, under-resourcing operations and restricting their troops with nightmare caveats.

During his address to the nation, President Obama stated, “In Afghanistan, we are increasing our troops and training Afghan Security Forces so they can begin to take the lead in July of 2011, and our troops can begin to come home. We will reward good governance, reduce corruption, and support the rights of all Afghans – men and women alike. We are joined by allies and partners who have increased their own commitment, and who will come together tomorrow in London to reaffirm our common purpose.” In order to reach NATO’s goal of handing over security, judicial, and economic responsibilities to the central and local government of Afghanistan, President Obama must first restore stability to Afghanistan. And he will need his Continental partners to support him in doing so. He must rally diplomatic support for the mission at a heads-of-state level, and demonstrate once-and-for-all, that ISAF has the strength, resolve, and staying power to win this war – without arbitrary withdrawal timelines.
– Sally McNamara

http://blog.heritage.org/2010/01/27/…-of-the-union/

On 01.27.10 09:40 PM posted by Mike Gonzalez

I knew the state of the American people was all right even before President Obama walked into the well of the House of Representatives to give what turned out to be an at time hectoring, at other times gloomy, State of the Union speech.*You see, I was very fortunate to get a seat at the speech tonight. A rather good seat. And Providence struck again when John sat next to me a good 45 minutes before the event.

John is a veteran who made it to the U.S. Capitol from Walter Reed Hospital in Maryland. It was also his first time at such an occasion, and we chatted about our good fortune at this once in a life-time opportunity.*I had noticed John amble in, his dignity intact but his leg not functioning well just yet (hopefully just yet). I had paid no attention at first, as I continued picking out worthies out of the crowd (“Hey, there’s Joe Biden!”) until he told me where he was living these days. Then I noticed the Purple Heart. “Which war?” I asked. “Afghanistan,” he answered simply.

He told me about how it happened, how sudden it had been, and how he’d never forget that day in Kandahar back in July. He told me the past six months had been a blur as the doctors continued working on him. I thanked him for his sacrifice, and for keeping our country free, and told him my children prayed for the soldiers and the whole country did.*“Heck, no sacrifice,” he said. “I’d give a part of my leg again. I’d do it, no problem, for this,” he said, spreading his arms wide at the Congressmen below. “Democracy is worth keeping safe and the country is worth keeping safe. We know we’re fighting for democracy. We didn’t have to do this. We enlisted because we believe in our country.”

Can we win in Afghanistan, I asked. He didn’t pause a second. “Yeah, if we have the resolve of the country behind us. We need the country,” he said.

He was the real McCoy, I reckoned, and given our surroundings I had to ask him if he ever thought of running for office. He chuckled. “Nah. I’m too rough around the edges for this town. I speak the truth and too plainly.”

I was getting misty-eyed at that point and began telling John that no, Washington needed more people like that, when the sergeant-at-arms pronounced the words that had delighted me for decades of watching these speeches on TV, “Madame Speaker, the President of the United States.”

The speech for the next hour fell flat, I thought. The President was scolding for much of the night, not an uplifter. He chided Republicans, or Washington, for all his ills. “No wonder there’s so much cynicism out there,” he carped at one point. “No wonder there’s so much disappointment.”

In fact, there was so much hand wringing that I wondered at one point if I wasn’t indeed witnessing a truly historical moment—Obama’s Malaise Speech. I think that epiphany came when he talked about the deficit. Not the budget deficit, “but the deficit of trust.” He complained, in fact, that “deep and corrosive doubts about how Washington works that have been growing for years.”

But the President did not blame his actions for any of this. No. In fact, the best parts were when he showed incredible moxy, as when he railed against earmarks after signing a stimulus bill that included about a gazillion of these pet projects. Or, when the same man who last week hired his campaign guru David Plouffe to help him fix his political problems, nagged his opposition that not every day is “election day… we cannot wage a perpetual campaign!”

At the end, though, what struck me the most was how little sway the President of the United States held. Republicans laughed at him and he could only glare, or complain futilely about their mocking. “That’s how Washington works,” he said at one point, showing frustration. When he threatened, “I want to see a jobs bill on my desk without delay,” he sounded more like a long-forgotten college professor demanding that a homework assignment be turned in on time.

He rightly took a half hour before he started talking about health care, picking just about the time when the highest number of congressmen were looking at their blackberries, and he plead with those in front of him to “take a second look” at the bill the American people had already rejected.

After it was over, John and I chatted some more. I asked him what he thought of the speech. “I thought it was great,” he said. “I liked seeing how the two sides reacted differently to the same parts of the speech. I think it’s that split that makes democracy and our country work.”

Which was why after such a gloomy speech I left the chamber with renewed hope in our country.

(Heritage Vice President of Communications Mike Gonzalez was in the chamber for tonight’s speech. For more on the State of the Union, visit Heritage on Facebook and Twitter and read*reaction from Heritage analysts and experts here.)

http://blog.heritage.org/2010/01/28/…-in-the-house/

On 01.27.10 11:50 AM posted by Brett Schaefer

Richard Grenell, former spokesman of the U.S. Mission to the United Nations from 2001 to 2008, has written another blog detailing how U.S. Ambassador to the U.N. Susan Rice has been less than fully engaged on advancing U.S. priorities at the U.N. Last week, Grenell criticized Amb. Rice for her infrequent attendance at crucial meetings in the U.N. Security Council and her dislike for mixing it up with other nations to advance U.S. policies. Specifically he noted that she has been

absent at many crucial Security Council meetings in New York during some of the world body’s most turbulent times. Rice was even missing from this week’s Security Council debate and vote to add new Peacekeepers to a beleaguered UN operation in Haiti. According to several UN veteran reporters and some US Mission staff, Rice has been missing from crucial negotiations on Iran too. They say that when Rice does attend UN negotiations, she is all too willing to avoid confrontation.

Grenell’s point is valid even if the U.S. was represented at these discussions and negotiations by someone other than Amb. Rice. The presence of the U.S. Permanent Representative to the U.N. sends a signal that the U.S. considers the matter under discussion to be important. The repeated absence of Amb. Rice signals the opposite. Moreover, the impression that the U.S. is unwilling to ruffle feathers at the U.N to press its priorities is far-reaching and counterproductive. Sending a substitute does little good if the policy and diplomatic approach remain constant.

Earlier this week, Grenell added some additional evidence to support his criticism. Specifically, he points to a new study by the Columbia University-affiliated Security Council Report, which concludes:

In 2009 the total number of Council decisions (resolutions and presidential statements) decreased by 26 percent from 2008. The number dropped from 113 to 83, the lowest level since 1991.

Resolutions dropped from 65 to 48 and presidential statements from 48 to 35.

This significant trend is also mirrored in a matching reduction in formal Council activity. The number of formal Council meetings decreased by 20 percent, from 243 to 194.

The number of press statements, which is one indicator of Council decision making at the informal level, also decreased by 23 percent, from 47 to 36.

To be fair, the U.N. Security Council has been increasingly expansive and willing to focus on issues only tangentially related to international peace and security – like global warming – in recent years. Focusing Security Council deliberations on issues more directly related to its core purpose of addressing threats to international peace and security is long overdue.

However, a renewed focus does not explain the decline in Security Council activity in 2009. Grenell attributes the decline in activity to a “lack of American leadership” that has let other nations avoid tough decisions and enables obfuscation and inaction. Grenell, who served under four Ambassadors during his tenure at the U.S. Mission, is as informed as any to reach that conclusion.

http://blog.heritage.org/2010/01/27/…un-ambassador/

On 01.27.10 01:52 PM posted by Mackenzie Eaglen

In his State of the Union address tonight, President Obama is expected to announce a freeze on federal spending with some notable exceptions including one for defense spending. Today, The Heritage Foundation releases a chart book examining the state of the U.S. military.

Most Americans already know the U.S. military is unmatched throughout the world. What they don’t know is that a deeper look reveals the state of the military is one in need of recapitalization after eight years of warfare and coming off a previous decade of underinvestment.

While the men and women in uniform are the best-led and best-trained, their equipment is not keeping up with modern demands. Over the next few days, Heritage will explore some of the trends that have emerged in the Administration’s defense policy and what they mean for national security.

The bottom line: defense spending is under pressure from exploding domestic entitlements. The defense budget is historically low relative to all the nation’s previous wars, and the military’s budget is dwarfed by Social Security, Medicare, and Medicaid, growing exponentially on autopilot. In 2009, defense spending was also eclipsed by financial bailouts and out-of-control spending on other domestic programs.

Defense spending is less than one-fifth of the federal budget, and defense is clearly not the source of the federal government’s fiscal woes.

Spending on America’s military is also facing pressure from interest payments on the national debt. Although net interest was only 5.3 percent of the federal budget in 2009 due to record low interest rates and the global economic downturn, it was almost 8.5 percent of the budget in 2008. It is on track to return to similar levels in the next three years.

President Obama’s ten-year budget plan will reduce the defense budget significantly at a time when the military must recover from the wear and tear of wartime. As entitlements, domestic programs, and interest payments balloon, policymakers in Washington are likely to continue turning to the defense budget as a billpayer and bailout.

Washington must address the urgent, ongoing needs of those in uniform or risk further declining readiness and the loss of capabilities the nation has come to rely on for over one half-century. Providing for the common defense is the first job of government.

This investment priority on America’s military should be an easy choice for Washington.

http://blog.heritage.org/2010/01/27/…g-for-defense/

On 01.27.10 01:58 PM posted by Steve Keen

Our nation is on an unsustainable fiscal course. The three major entitlements – Social Security, Medicare, and Medicaid – alone are set to eclipse historical tax levels by 2052 and a realistic assessment of the Congressional Budget Office baseline shows the government piling on an additional $13 trillion over the next ten years.

The time for pointing out the existence of a problem is over. Both Democrats and Republicans now agree entitlement reform must be a top priority. The question now is what exactly the inevitable reform will include. Specifically, does Congress drastically raise taxes and allow spending to skyrocket or do they maintain spending and revenue at historical levels?

This afternoon Congressman Paul Ryan (R-WI), along with several other House Republicans, held a press conference presenting the updated “Roadmap for America’s Future.” The bill, introduced today, would return the nation to a sustainable fiscal path without raising taxes. The proposal, which has been scored by the non-partisan Congressional Budget Office accomplishes this by focusing on four specific areas for reform:

First, the Roadmap would give universal access to health care by providing a substantial tax credit to enable individuals to purchase their own insurance, allowing for the purchase of insurance across state lines and creating state-based high risk pools to provide those with pre-existing conditions affordable health care options.

Second, the bill would reform Medicare specifically focusing on preserving existing benefits for those over 55 and ensuring future generations of elderly citizens have access to affordable care. Fully funding Medical Savings Accounts for low income beneficiaries, and creating a Medicare payment of $11,000 to purchase Medicare approved plans would contain costs and ensure coverage for generations to come.

Third, the legislation would put Social Security spending on a sustainable course by offering citizens the choice to invest in personal retirement accounts comparable to the Thrift Savings Account used by federal employees. This in combination with slightly increasing the retirement age will finally set Social Security on a sustainable path.

Finally, the bill would reform the tax code by implementing a simple two tier tax system. Individuals with income up to $50,000 and households with income up $100,000 would pay 10 percent. Those with higher income would pay 25 percent. The Roadmap also eliminates the alternative minimum tax, the death tax and the corporate income tax. The corporate income tax, which is currently the second highest in the world, is replaced with an 8.5 percent business consumption tax.

These bold reforms mark an important departure from the Washington norm of ignoring the looming fiscal crisis. In the past politicians avoided entitlement reform in an effort to steer clear of a potential political backlash. Congressman Ryan’s Roadmap confronts entitlement reform head on and proves Congress does have the option to return the nation to a fiscally sustainable course without increasing taxes.

http://blog.heritage.org/2010/01/27/…fiscal-future/

On 01.27.10 02:00 PM posted by Conn Carroll

On Sunday’s “Meet the Press,” Chuck Todd discussed an NBC poll that shows 70% of Americans say government isn’t working and commented that because of the “Tea Party crowd,” Republicans can no longer “go home and sell a piece of of pork that they got from Washington.” That’s a good thing.

In the above video, Todd notes:

The message of the Tea Party saying that government doesn’t work … and we have to shrink the size of government is tapping into what we were just discussing before which is this … I want to go to something E.J. said about the Republican Party. I think the most striking thing about the minority party today is that a Republican can’t go home, and it is mostly because of this Tea Party crowd, can not go home and sell a piece a pork that they got from Washington. It is now … when you bring home something, saying “Hey I brought federal dollars home to this,” you are on the defensive.”

Why is this such a sea change for the country? And why is this change such a positive development? First, in his book Government’s End: Why Washington Stopped Working, Jonathan Rauch explained why the current pro-pork way Washington works is so entrenched:

In The Logic of Collective Action, Olson showed that the free rider problem applies to private collective projects no less than to government. The bigger the class of people who benefit from collective action, the weaker the incentive for any particular beneficiary to join or organize, and thus the less likely that a group will coalesce. “In short,” wrote Olson, “the larger the group, the less it will further common interests.”

If that is true, the implications are unsettling. “Since relatively small groups will frequently be able to voluntarily to organize and act in support of their common interests,” Olson went on, “and since large groups normally will not be able to do so, the outcome of the political struggle among the various groups will not be symmetrical.” In other words, small, narrow groups have a permanent and inherent advantage, and “offer triumph over the numerically superior forces because the former are generally organized and active while the latter are normally unorganized and inactive.”

Rauch ends up taking a fatalistic view of whether Americans can ever overcome these forces. He concedes:* “What you see now in Washington is basically what you will get for a very long time to come, even though many people, in fact probably a majority of people, may both wish and vote for something different.”

But if Todd’s assessment of how the Tea Party is already changing behavior in Washington is right, and if incumbents are beginning to see (like Sen. Ben Nelson now does) that winning narrow loopholes and subsidies for your state will actually hurt, not help, you at the polls, then maybe there is hope for our republic yet.

http://blog.heritage.org/2010/01/27/…t-for-america/

On 01.27.10 03:00 PM posted by Alec Aramanda

In a preview of the State of the Union address, President Obama has recommended a plan to help students pay off their debt – with taxpayer dollars, of course.

As Politico reports:

The Obama-Biden Administration will make student loans more affordable by limiting a borrower’s payments to 10 percent of his or her income above a basic living allowance. It will also keep the total cost of loan repayment manageable by forgiving all remaining debt after 10 years of payments for those in public service work and 20 years for all others. The monthly payment for a single borrower earning $30,000 who owes $20,000 in loans would be $115 a month, compared with $228 a month under the standard 10-year repayment plan.

Got that? College graduates saddled with student loan debt who decide to go into “public service work” will have their debt forgiven after 10 years. And if they do anything else, like join the private sector, their debt will be forgiven in 20 years.

At this point, it’s not entirely clear what type of “public service work” would qualify an individual for this deal. But as it stands, the public sector is appealing enough to college graduates. According to USA Today, the number of government employees taking in six-figure salaries has exploded, and the growth of these big-shot salaries has pushed the average federal worker’s pay to $71,206, compared with $40,331 in the private sector.

If implemented, such a plan could very well have some influence on the career paths of young college graduates. And it might have an impact on the rest of Americans. Since the government doesn’t have a vault of money set aside for this sort of plan, taxpayers will foot the bill. Taxpaying hairdressers, plumbers and machinists who chose not to attend college would be forced to pay off the debts of college graduates (at an even higher level if they decide to join the public sector).

Francis Cianfrocco of the New Ledger adds:

Higher education is like healthcare in that payments to providers are already heavily subsidized by government. Also like healthcare, the cost of education is rising every year far more quickly than the general inflation rate…colleges and universities are also like hospitals and medical practices in another sense: with no built-in incentives to cut costs, they don’t cut costs.

Therefore, as college costs continue to rise, future students may be forced to take out larger loans to pay for the increasingly expensive college bill. That means more college debt would be thrust onto the backs of taxpayers. This is a program that would almost certainly grow over time, considering the existing structure of American higher education.

The President should remain committed to helping American college graduates, but he should do that by helping foster job opportunities, as well as by demanding greater efficiency from universities that take federal funds. More job opportunities for college graduates will be created if the government loosens regulations and cuts tax rates for small businesses and entrepreneurs. The private sector remains the dynamic sector of our economy, and the President would do well to remember that when trying to help our college graduates.

http://blog.heritage.org/2010/01/27/…t-loan-option/

On 01.27.10 08:02 AM posted by Brian Riedl

The Congressional Budget Office (CBO) today released a ten-year budget baseline showing $6 trillion in deficits over the next decade. Yet because Congress requires the CBO to include all sorts of unrealistic assumptions (that all tax cuts will expire, that the AMT will never again be patched, that discretionary spending will barely move for a decade), some adjustments must be made.

After building a true budget baseline, the sobering result shows ten-year deficits of $13 trillion. The annual budget deficit never falls below $1 trillion. By 2019, the debt is projected at $22 trillion, or 98 percent of GDP.

These deficits are driven by spending. Even if all the 2001 and 2003 tax cuts were extended and the AMT were patched, 2020 revenues would be just 0.7 percent of GDP below the historical average. Yet 2020 spending would be 5.2 percent of GDP above the historical average. This means that 88 percent of the additional deficits would come from higher spending and only 12 percent would come from lower revenues.

The numbers are truly staggering. Between 2009 and 2020, the national debt would increase by $130,000 per household. By 2020, net interest alone would cost $1 trillion – one-quarter of all tax revenues. Federal spending would reach 25.9 percent of GDP, shattering the post-war record. And these estimates do not include the cost of the president’s health-care and cap-and-trade proposals. His spending agenda — which would be unaffordable even in good budget times — is completely unrealistic given this sea of red ink.

That said, the president’s proposal to freeze discretionary spending (outside of defense, homeland-security, veterans, and international-affairs spending) for three years is somewhat helpful. The savings won’t be large — perhaps $20 billion per year — but this is the low-hanging fruit. Of course, these programs comprise only one-eighth of the budget ($420 billion), and they can still feast on their 19 percent hike over the past two years, plus their $311 billion in mostly unspent stimulus funds.

Still, the CBO numbers show that the low-hanging fruit will only save so much. Drastic reform of the federal budget is needed.

Cross-posted at The Corner.

http://blog.heritage.org/2010/01/27/…aggering-debt/

On 01.27.10 08:54 AM posted by Nick Loris

Over 2,500 business leaders are flying in from around the world on carbon-spewing planes to the Swiss ski resort Davos for the World Economic Forum (WEF). If they were planning on taking a sports utility vehicle (SUV) or a limousine from the airport to the resort, they better think again:

Conference organisers have asked the business elite to leave their gas-guzzling limousines and SUVs, the traditional mode of transport for any self-respecting banker, at home. However, those who insist on turning up in their ostentatious cars will not be banned from entering the conference. Rather, cars that do not conform to the event’s vehicle specifications will not be eligible to receive a cherished “green sticker” that permits access to special security areas.”

Environmentalists have been quick to point out that this is nothing more than a gimmick. Greenpeace Switzerland’s Bruno Heinzer said, “From there you can see the intentions of the WEF, it’s really just to give itself a good image.” Rob Bailey, of Oxfam International (a non-governmental organization that fights poverty and injustice), asserted, “If you try to imagine the overall carbon footprint of the meeting, you will see that those restrictions on cars are probably going to be just a rounding value.” Interestingly, diesel cars will get the “green” light and avoid the conference’s ban.

The green initiative in Davos is a clear example of an underlying theme of the radical environmental movement: Controlling lives. It’s about forcefully changing peoples’ behavior and telling them what to do. The goal for environmental alarmists may be a cleaner planet but their “we-know-what’s-best-for-you” initiatives will drive people away faster than it will bring them in. If environmentalists are labeling the SUV ban in Davos as a gimmick, one can only imagine what sweeping regulations and initiatives they would have put in place if they did have their way.

Consumers have unique preferences when it comes to purchasing a vehicle. Whether it is safety features, reliability, fuel economy, style, comfort, price and/or handling, trade offs exist. Fuel economy versus size is among the biggest trade-offs, but perhaps people need an SUV because they have kids or they are safer when driving along snowy and icy roads at, say, a ski resort. If the radical environmental movement gets their way, we’ll have less trade offs because we’ll have less choices. And just like the Green Initiative in Davos, it won’t provide any tangible benefit to the environment.

http://blog.heritage.org/2010/01/27/…the-green-bus/

On 01.27.10 08:59 AM posted by James Phillips

Iran’s Green Movement opposition has proven to be a stronger and more persistent political force than many advocates of diplomatic engagement with Iran’s dictatorship had expected. This development, as well as the regime’s continued duplicity and foot-dragging on the nuclear issue, has led some to revise their thinking about supporting regime change in Iran. For example, Richard Haass, a self-professed “card-carrying realist” who formerly opposed the Bush Administration’s support for regime change, now has changed his mind. He has written an essay in the current issue of Newsweek that assesses that “Iran may be closer to profound political change than at any time since the revolution that ousted the Shah 30 years ago.”

Unfortunately, the Obama Administration remains wedded to its engagement policy, which unrealistically seeks to strike a deal with the implacably hostile regime, whose self-defined ideological legitimacy is based on unceasing hostility to the United States. Even if a diplomatic agreement could be reached on the nuclear issue, against all odds, it would be foolhardy to expect Iran’s unscrupulous dictatorship to permanently abide by such an agreement. Yet the administration continues to seek such a deal over the bloodied heads of Iran’s opposition forces. Because it continues to define its foreign policy in large part as the opposite of President Bush’s, regime change in Iran is not change that the Obama Administration can believe in.

http://blog.heritage.org/2010/01/27/…an-believe-in/

On 01.27.10 10:00 AM posted by Richard Sherwood and Vivek Rajasekhar

Time and time again, congressional leaders have denied that the proposed health care legislation would result in a federal takeover of health care.* Proponents of Obamacare claim that consumers would retain personal choice in selecting health plans and physicians.* For example, consider President Obama’s comments at a Raleigh, NC town-hall meeting on July 29, 2009:* “Nobody is talking about some government takeover of health care.* I’m tired of hearing that…Under the plan I’ve proposed…if you like your health care plan, you keep your health care plan.”

The President and Congressional leaders fail to mention that, under the House and Senate bills, the federal government would determine the kind of health plans Americans get— the kinds of insurance Americans would get, the level of coverage they can receive, and the premiums, co-payments and taxes they would pay.* It even mandates that all individuals purchase a government-defined level of health insurance coverage, regardless of their personal wants or needs.

The sheer quantity of new bureaucracy created by the legislation underscores the fact that this is nothing less than a federal takeover of health care.* According to a preliminary analysis by the Heritage Foundation, the House bill (HR 3962) would results in 105 new federal programs, boards, councils, commissions, panels, or agencies.* The Senate bill (HR 3590) would create even more at 117.* Talk about red tape!

The statutory language, though is only the beginning. Both bills establish a framework for even more massive and detailed federal regulation. Plus, the possibilities for frenzied special interest lobbying are endless. There are grants for medical home pilot programs, grants for comparative effectiveness research, grants for quality assurance programs, just to name a few.

The new federal agencies and bureaus are charged with designing, evaluating, implementing, and coordinating some new program. The details are largely left up to their Director and, of course, the Secretary of Health and Human Services, who is empowered with unprecedented control over health care decisions. And if you’re looking for a specific price tag for the new agencies or bureaus, you’re out of luck; many are appropriated “such sums as may be necessary.”

For those who want to cede a huge amount of control over their personal lives to Washington, the health care legislation is made to order. For Americans who value their personal liberty, all they have to do is to read the fine print. Through the wonders of the Internet, it is all readily available on fixhealthcarepolicy.com.

http://blog.heritage.org/2010/01/27/…lth-care-bill/

On 01.27.10 11:00 AM posted by Israel Ortega

A seemingly uneventful transition of power will take place today in the small Central American country of Honduras as Interim president, Roberto Micheletti, hands over the keys to the presidential palace to president-elect Porfirio “Pepe” Lobo. The occasion will be marked with the usual pomp, celebration and traditions that mark any presidential inauguration. But for the people of Honduras, tomorrow’s inauguration will be nothing short of historic. Hondurans will welcome the closing of a turbulent chapter in their storied history.

For months (if not years), democracy and the rule of law in Honduras have been in constant assault. Arrogance and defiance characterized former Honduran President, Manuel Zelaya, as he worked furiously to trample on the state’s constitution to advance his selfish desires to extend his stay in the presidential palace in the likeness of Venezuelan president Hugo Chavez and Daniel Ortega.

Thankfully the people of Honduras were quick to recognize the danger of allowing their bombastic president with amending the state’s constitution. Perhaps it may have something to do with Hondurans having seen this telenovela before when dictators and despots ruled over the people indefinitely. The rule of law prevailed when Manuel “Mel” Zelaya was removed from office in defense of the state’s constitution.

Despite having the facts on their side, defenders of democracy and the rule of law in Honduras were largely given the cold shoulder. Our own country sided with Manuel “Mel” Zelaya despite overwhelming evidence to the contrary.

The people of Honduras bravely carried out their planned presidential election on November 29, 2009 with the eyes of the world watching. The Heritage Foundation was in Honduras, on the ground, covering the election as democracy was being tested in our hemisphere. The people of Honduras spoke loud and clear in favor of democracy despite threats of violence and calls for boycotting the electoral process. Close to sixty percent of eligible Hondurans showed up to the polls to exercise their civic duty.

Nearly two months after this historic vote, the people of Hondurans have every reason to celebrate. They proved to the world that despotism and totalitarianism are not replacing democracy and the rule of law. But as our 2010 Index of Economic Freedom reveals, Hondurans must confront the realities of how corruption and an inefficient judicial system continue to starve their country of true economic freedom.

Hondurans must seize on their defense of political freedom

http://blog.heritage.org/2010/01/27/…-for-honduras/

On 01.27.10 01:11 PM posted by Rory Cooper

Today, the Orlando Sentinel reports that President Obama will introduce a budget next week which will cut future exploration funding from NASA, including the planned missions to the Moon and Mars set in motion following the Columbia disaster.* On first glance, this may appear to be a budget cutting move to fall in line with the drop-in-a-bucket spending freeze Obama has proposed.*But it isn’t.* In fact, NASA’s budget is increasing.* So if NASA’s budget is increasing, why are exploration plans being put on hold?*Obama is halting America’s exploration of the unknown so we can explore…global warming.

According the Sentinel: “…the White House will direct NASA to concentrate on Earth-science projects — principally, researching and monitoring climate change.” NASA will reportedly receive a budget increase of $200-$300 million over its current $18.7 billion budget.

But for the first time in his administration, government money does not actually equate to government jobs. “One administration official said the budget will send a message that it’s time members of Congress recognize that NASA can’t design space programs to create jobs in their districts. ‘That’s the view of the president,’ the official said.” So this is actually a jobs-cutting outlay.

President Obama spent the better part of 2009 growing the size of government despite record job losses in the private sector. While unemployment rose above 10%, the number of federal, state and local government union employees rose by 64,000 in 2009. The view of the President, as demonstrated by his actions, is that the government is precisely designed to create jobs in member’s districts. So is the real reason for this shift in focus?

The real reason is that liberals have long viewed NASA as a global warming research entity rather than the exploration agency that President John F. Kennedy ably set on a course for the stars. And this is despite the recent discoveries that NASA’s global warming leaders, such as James Hansen, may have been manipulating data to suit their political needs for some time. While exploration enthusiasts wanted to see rockets lift for the heavens, environmentalists wanted to see satellites watching ice caps.* President Obama will most likely face stiff congressional opposition from both sides of the aisle if he continues on this path towards charging NASA with a purely Earth science mission.

http://blog.heritage.org/2010/01/27/…lobal-warming/

On 01.27.10 06:29 AM posted by Conn Carroll

Tonight in his State of the Union address, President Barack Obama is expected to propose a “freeze” on government spending. Obama’s spending “freeze” will only last three years, will not start until 2011, will only apply to a $447 billion slice of the federal government’s $3.5 trillion budget, and will not apply to any of the unspent $862 billion stimulus plan, his health care plan or the House of Representatives’ additional $156 billion stimulus plan. Despite all the loopholes, time limits and procrastination, the President should still be commended for beginning to acknowledge reality. And as a new report issued yesterday by the Congressional Budget Office (CBO) shows, the reality is this: the U.S. government has an insatiable spending problem.

The CBO’s summary of the report is bad enough: “Under current law, the federal fiscal outlook beyond this year is daunting … accumulating deficits will push federal debt held by the public to significantly higher levels. At the end of 2009, debt held by the public was $7.5 trillion, or 54% of GDP; by the end of 2020, debt is projected to climb to $15 trillion, or 67% of GDP.” But as bad as those numbers are, our fiscal health is actually worse. The CBO is forced by Congress to make a number of unrealistic assumptions about future revenue and spending changes. But their report makes up for this by including alternative projections that make more realistic assumptions. Heritage fellow Brian Riedl crunched those numbers and found:

• The public debt — $7.5 trillion at the end of 2009 — is projected to triple to $22.1 trillion by 2020.
• Over what would be President Obama’s eight years in office if re-elected, baseline budget deficits are projected to total $9.7 trillion — nearly triple the $3.3 trillion in deficits accumulated by President George W. Bush.
• By 2020, the budget forecasts a $1.9 trillion annual budget deficit, a public debt of 98 percent of GDP and annual net interest spending surpassing $1 trillion.

Our country simply cannot afford to be spending $1 trillion in net interest in 2020. So what is the driving force behind these unsustainable deficits? Unprecedented rises in government spending. More Riedl numbers:

• Since World War II, federal spending has generally remained between 18 and 22 percent of GDP. During the Bush Administration, spending increased from 18.4 to 20.9 percent of GDP.
• Discretionary spending has increased 25 percent in three years — not even counting the $311 billion in discretionary stimulus spending and approximately $150 billion in annual spending on the global war against terrorists.
• In 2009, federal spending reached 24.7 percent of GDP — the highest level in American history outside of World War II. Non-defense spending reached an all-time record of 20.1 percent of GDP.

Comparing our government’s prolific spending habits with the decline in revenues from the recession, Riedl concludes: “Between 2010 and 2020, recession-depleted revenues are projected to gradually rebound to 17.6 percent of GDP (slightly below the 18.3 historical average). Spending is projected expand to 25.9 percent of GDP — well above 20.7 historical average. Compared to those averages, 88 percent of all additional deficits by 2020 come from additional spending (5.2 percent of GDP above average), and only 12 percent comes from low revenues (0.7 percent of GDP below average).”

So 88% of all of our crippling debt problems come from our government’s inability to control its spending habits. Put in this light, President Obama’s spending “freeze” is just a drop in the bucket. A credible commitment to reduce government spending would go much farther. For starters, the remaining TARP and stimulus funds should both be rescinded. Next, instead of the President’s fungible “aggregate” spending freeze, tough hard spending caps should be enacted. Finally, Congress should disclose the massive unfunded obligations of Social Security, Medicare and Medicaid; put those programs on long-term budgets; and enact the necessary entitlement and programmatic reforms that can keep government within those limits.

Quick Hits:

• Due to the fact that President Barack Obama’s $787 billion stimulus failed to stem job losses, the Congressional Budget Office now says the scheme will cost American taxpayers $862 billion, thanks to a higher than expected unemployment benefits total.
• Sens. Evan Bayh (D-IN) and Blanche Lincoln (D-AR) say they won’t support a deal with the House to pass selective parts of their health care bill through the Senate using reconciliation, and Sen. Ben Nelson (D-NE) says Congress should start over entirely.
• The leaders of the 9/11 Commission — former-New Jersey Gov. Thomas Keane (R) and former-Rep. Lee Hamilton (D-IN) — told a Senate panel Tuesday the Obama administration mishandled the interrogation of the failed Christmas Day airline bomber.
• Sens. Blanche Lincoln (D-AR) and Jim Webb (D-VA) signed on to a letter to Attorney General Eric Holder condemning the Obama administration’s decision to try Khalid Sheikh Mohammed in a civilian court.
• According to a new congressional report, the United States is still unprepared to respond to the threat of large-scale bioterrorism.

http://blog.heritage.org/2010/01/27/…nding-problem/

On 01.27.10 07:10 AM posted by Anthony B. Kim

In a recent poll by the*Wall Street Journal and NBC news, a majority of Americans expressed their frustration with the approach our government has taken in response to the financial crisis and economic slowdown. Just 43 percent of the respondents expressed satisfaction with how President Obama has handled the economy, a decline of 13 percentage points from a year ago. The disapproval vividly reflects disappointment toward economic policy decisions and management over the past year.

As the downward-trending poll numbers suggest, a majority of our fellow citizens are not comfortable with the “dramatic change” we have witnessed. The quest to enlarge and mobilize government in the name of rescuing and rebuilding our economy has created both economic uncertainty and a considerable degree of anxiety about our economic future.

There has always been tension between the state and the free market. The genius of the American economy has been its ability to balance the two, with policies that preserve stability while promoting innovation. However, as shown in the*2010 Index of Economic Freedom that was released last week, the battle has tilted decidedly toward big government. The magnitude of the recent loss of economic freedom has been alarmingly high, with considerable negative implications for our economic future. While many countries around the world continue on the path of economic liberalization, the United States is, in many respects, moving in the opposite direction, simultaneously burdening its economy with increasing government spending, uncompetitive tax rates, and barriers to trade and investment that stifle entrepreneurship and dynamic growth.

By burdening our economy with even bigger government and stifling it with less economic freedom, we are creating a dangerous economic environment where opportunities are missed, and lingering uncertainty undermines our economic potential.

In one of his many inspiring speeches, President Obama in fact talked about the importance of innovation:

“[There is] an important role that we can play, laying the ground rules to spur innovation. That’s the role of government — to provide investment that spurs innovation and also to set up common-sense ground rules to ensure that there’s a level playing field for all comers who seek to contribute their innovations.”

As a matter of fact, the proven path to stimulating economic growth is to advance economic freedom by promoting policies that generate a virtuous cycle of innovation, vibrant economic expansion, and more opportunities for people. Economic freedom is strongly linked to innovation and business initiatives that cumulatively lead to greater economic vitality for all.

As the findings of the*2010 Index demonstrate empirically, today’s successful economies are not necessarily geographically large or richly blessed with natural resources. Many economies have managed to expand opportunities for their citizens by enhancing their innovation capacities that are among the chief engines of economic prosperity.

Unfortunately, our economy’s dynamic innovative pulse is slowing in the presence of ever more bloated government.

No doubt that the vigor of our ongoing recovery depends on private businesses that will flourish with greater economic freedom. However, many small and large firms are currently postponing spending decisions and projects until they see more clearly government’s latest intentions. Others are put off by anti-business rhetoric that demonizes those whose profit-seeking is the very foundation of investment and job creation.

It is time to put back our country onto the right course. In preparing for his second State of the Union address this Wednesday, President Obama should be reminded of how to best spur innovation, not throttle it. The tool of choice—economic freedom—requires only an understanding that the people, expressing their wishes freely in the market-places of America, know better than any central planner or government bureaucrat what they need to get moving again.

http://blog.heritage.org/2010/01/27/…-spur-economy/

On 01.27.10 07:13 AM posted by Paul Rosenzweig

“We slipped up.”* That’s what Patrick F. Kennedy the Undersecretary of State for Management said at a Senate hearing last week about the Christmas Day bomb plot and the arrest of Umar Farouk Abdulmutallab.

He has a gift for understatement.

But the real question isn’t whether we “slipped up” – everyone knows we did.* It’s rather how and why we did?* The truth is that this was a failure of policy, not of law.* We did it to ourselves.

In the immediate aftermath of 9/11 the Defense Advanced Research Projects Administration (DARPA) began work on techniques of data analysis called “knowledge discovery” techniques.* They gave the project an unfortunate name — Total Information Awareness — and did a poor job of reassuring troubled civil libertarians that the program would not become a “Big Brother” tool.* The research was killed.* But the concept behind the research was visionary and those are precisely the tools that, if we had them today, would have made it more likely that we would have connected the “dots” of the Abdulmutallab plot.* Here’s why:

The evidence is increasingly clear that the problem was not a failure of intelligence collection.* If public news reports are to be believed it now appears that there was a reasonable amount of information about or related to Abdulmutallab.* According to the New York Times we knew about possible underwear bombs, we knew about an unnamed Nigerian who might strike America during Christmas, and we knew from his father that Abdulmutallab had become increasingly radicalized and had been in contact Anwar al-Alwaki, a Yemeni radical.* We had a partial name for a terror plotter – “Umar Farouk.”* And we may even have known (though it is not yet certain) that the British had denied Abdulmutallab a visa, a boon that we, on the other hand, had granted him.

But what to do with all that information?* And why didn’t the dots get connected in the way we would have wanted?** Some, like my colleague Nathan Sales think that there still remain institutional barriers to sharing information and that means that agencies are still hoarding data.* No doubt.

But there is a deeper and more insidious problem – one that institutionally we have yet to overcome.* The problem is that there is simply too much information out there.* And information without context is nothing but noise.* Only context and analysis transform information into knowledge and only knowledge is actionable.

Consider:* the National Counter Terrorism Center (NCTC) is one of two institutions we rely on to conduct all-source analysis of terror threats (the other is the CIA).* The NCTC’s computer systems have links to more than 30 separate government systems, with more than 80 distinct databases.* According to the Director of National Intelligence, Admiral Dennis Blair, each day the NCTC gets thousands of pieces of intelligence from around the world, reviews thousands of names, and puts 350 new names onto the watchlist – the list that Adbulmutallab was not put on.

This is a veritable flood of data.* In hindsight, of course, it is very easy to see the pieces that connect together to form a picture of Abdulmutallab’s plot.* But those 10 or so bits of information were floating in an ocean of other data – literally millions of different individual entries from thousands of different sources in a host of different databases.

Hindsight is always 20/20.* What we need is foresight.* And the problem is that we continue to fixate on a human solution to our lack of foresight.* We continue to rely on the intuition of analysts to provide the insight we need.* It is all well and good to say “with the NSA intercept about a Nigerian we should have started looking at all Nigerians” or “we should have begun looking at everyone named Umar Farouk” but those leaps of insight and anticipation are not routine – they require analysis and consideration.* And that requires time – time to ponder the necessity of making precisely that inquiry.

But time is what our analysts don’t have.* At least not enough of it.* Not with the flood of data we are seeing.* They have to prioritize and move certain lines of inquiry to the top of the pile.** Probably, as Admiral Blair has said, the warning from his father should have moved the “Yemen/Nigeria/Bomb” issue to the top of everyone’s pile.* But as that question moves up to the top, other intelligence questions move down.* The truth is that not all of the pieces of information rise above the noise level … and so long as we rely on human intuition to tell us what to pull out of the noise and what not to, we are going to make mistakes.

What we lack is not human intuition.* Rather we lack the tools to make human intuition effective and automated.* The head of the NCTC told a rather shocked Senate committee the other day that, in effect, NCTC analysts don’t have a “google-like” tool for database inquiries.* They can’t, for example, simply type in “Umar Farouk” and pull up all the pages with links to that name.

But even that wouldn’t be enough – because there would likely still be far too many “Umar Farouk” pages for any analyst to review (especially if instead the name we had was, for example, “Omar Abdul”).* What is necessary, as the Markle Foundation has said persistently, is for us to authorize and invest in tools that allow for automated analytics – things liked tagged data (so that corrections to information are automatically transmitted for updates), identity resolution techniques (so that “Umar” and “Omar” are both considered), and persistent queries (so that a question that an analyst asked last month about Umar Farouk persists in the databases and is automatically linked to a father’s warning about his son Umar when that comes in three weeks later).* We need automated knowledge discovery systems – ones that run continuously and repeatedly so that every day we check for new information about “Umar Farouk” and about all the other hundreds of thousands of intelligence leads.* These are tasks that take time –and time is what computers have plenty of.

We don’t have those tools now.* In part it’s a question of investment and development.* But at its core it is a question of policy and politics.* Without the tools needed we develop what Jeff Jonas calls “enterprise amnesia.”* He’s right, and it’s our own fault.

All decisions have consequences.* Our decision to stop research on data analytic tools back in 2003 has led, in an almost straight line, to our analysts’ difficulty in sifting the signal of a real terrorist, like Abdulmutallab, from the noise of thousands of bits of data.* It’s time to rethink our priorities and our policies.

Paul Rosenzweig is the Principal at Red Branch Consulting PLLC and the former Deputy Assistant Secretary for Policy at the Department of Homeland Security. This post first appeared in the Harvard National Security Journal.

http://blog.heritage.org/2010/01/27/…hristmas-plot/

On 01.26.10 01:01 PM posted by Conn Carroll

Two weeks ago,*CBS News filed a story on the over 100 people (including Senators, Representatives, their spouses, and staff) that flew to the failed United Nations Conference on Climate Change in Copenhagen on the taxpayers dime. At the time, Congress had not yet filed their expense report. CBS has now followed up on the story.

Watch CBS News Videos Online
From CBS’ report:

For 15 Democratic and 6 Republican Congressmen, food and rooms for two nights cost $4,406 tax dollars each. That’s $2,200 a day – more than most Americans spend on their monthly mortgage payment.
…
Pelosi’s office did offer an explanation for the high room charges. Those who stayed just two nights were charged a six-night minimum at the five-star Marriott. One staffer said, they strongly objected to no avail. You may ask how they’ll negotiate a climate treaty, if they can’t get a better deal on hotel rooms.

All told, CBS put the final tab at over $1.1 million. And that was just for the legislative branch. That did not include the over 60 members of the Obama administration who flew to Copenhagen for failure on the taxpayers’ dime.

But even worse would have been if Obama had succeeded in signing an agreement. According to a Heritage Foundation analysis of the Waxman-Markey energy legislation, under cap-and-trade, for a household of four, energy costs (electric, natural gas, gasoline expenses) would rise by $436 in 2012 and by $1,241 by 2035, averaging $829 over that period. Higher energy costs would increase the cost of many other products and services. Overall, Waxman-Markey would reduce gross domestic product by $393 billion annually and by a total of $9.4 trillion by 2035.

http://blog.heritage.org/2010/01/26/…lure-cost-you/

On 01.26.10 10:00 AM posted by Conn Carroll

This weekend three different White House advisers speaking on three different Sunday shows gave three different answers as to how many jobs President Barack Obama’s $787 billion stimulus had been “created or saved.” This coming just two weeks after the White House issued a memo supposedly ending the administration’s use of the jobs “created or saved” phrase. And that memo was inspired by several dozen reports that many thousands of the jobs the Obama administration had claimed were “saved or created” by their stimulus were entirely fake.

So really it should come as no surprise that the American people have come to believe that the Obama stimulus has been a massive waste of resources. CNN reports:

Nearly three out of four Americans think that at least half of the money spent in the federal stimulus plan has been wasted, according to a new national poll.

A CNN/Opinion Research Corporation survey released Monday morning also indicates that 63 percent of the public thinks that projects in the plan were included for purely political reasons and will have no economic benefit, with 36 percent saying those projects will benefit the economy.

Twenty-one percent of people questioned in the poll say nearly all the money in the stimulus has been wasted, with 24 percent feeling that most money has been wasted and an additional 29 percent saying that about half has been wasted. Twenty-one percent say only a little has been wasted and 4 percent think that no stimulus dollars have been wasted.

When President Obama was selling his stimulus to the American people his White House Council of Economic Advisers released a report promising that if his plan became law, unemployment would never go higher than 8.2% and the U.S. economy would support 138.6 million jobs by December 2010. In reality, unemployment is still at 10% and President Obama is 7.7 million jobs short of his promise. Heritage Foundation Senior Policy Analyst Brian Riedl explains why:

Congress does not have a vault of money waiting to be distributed. Every dollar Congress injects into the economy must first be taxed or borrowed out of the economy. No new spending power is created. It is merely redistributed from one group of people to another.
…
Yes, government spending can put under-utilized factories and individuals to work–but only by idling other resources in whatever part of the economy supplied the funds. If adding $1 billion would create 40,000 jobs in one depressed part of the economy, then losing $1 billion will cost roughly the same number of jobs in whatever part of the economy supplied Washington with the funds. It is a zero-sum transfer regardless of whether the unemployment rate is 5 percent or 50 percent.
…
The government rarely receives good value for the dollars it spends. However, stimulus bills provide politicians with the political justification to grant tax dollars to favored constituencies. By increasing the budget deficit, large stimulus bills eventually contribute to higher interest rates while dropping even more debt on future generations.

http://blog.heritage.org/2010/01/26/…imulus-wasted/