Tag Archives: federal spending

A Guide for Squandering Taxpayer Dollars

I’m not sure that the senior-level party planners housed in federal, state and local government bureaucracies need any advice about how to squander taxpayer dollars. But if they do, the General Services Administration provides a pretty good model.

And I guess the folks who used to be in charge of the GSA, which was established in 1949 in part to “develop government-wide cost-minimizing policies,” didn’t get the memo that most folks living in Real World USA [that's anywhere Outside the Beltway] have some big reservations these days about government spending and waste.

So here comes the classic spending boondoggle, as reported in WaPo, “GSA chief resigns amid reports of excessive spending“:

The chief of the General Services Administration resigned, two of her top deputies were fired and four managers were placed on leave Monday amid reports of lavish spending at a conference off the Las Vegas Strip that featured a clown, a mind reader and a $31,208 reception.

Administrator Martha N. Johnson, in her resignation letter, acknowledged a “significant misstep” at the agency that manages real estate for the federal government. “Taxpayer dollars were squandered,” she wrote. At the start of her tenure in February 2010 she called ethics “a big issue for me.” [Note to self: LOL]

Public Buildings Service chief Robert A. Peck, a fixture in the Washington area real estate community on his second stint running the department, was forced out, along with Johnson’s top adviser, Stephen Leeds. Four GSA managers who organized the four-day conference in October 2010 have been placed on adminstrative leave, officials said.

The leadership collapse came hours before GSA Inspector General Brian D. Miller released a scathing report on the $823,000 training conference, held for 300 West Coast employees at the M Resort and Casino, an opulent hotel in Henderson, Nev., just south of Las Vegas. From $130,000 in travel expenses for six scouting trips to a $2,000 party in Peck’s loft suite, event planners violated federal limits on conference spending.

The episode is an embarrassment for the Obama administration at a time when the role and size of government have taken center stage in the presidential campaign. How much government should spend, and on what, will be at the heart of the election-year battles between Democrats and Republicans.

Admittedly, these type of spending debacles take place all the time in business, where the Captains of Industry run the organization for their own self interest. But in that environment, it’s somewhat difficult to quibble with some of the spending for trips, parties, conferences and so on for high-achieving sales people and others who actually contribute to the success of the organization. And if shareholders don’t like it, get rid of management. [Note to self: LOL]

Strikes me as being a different ballgame for government departments and agencies and for government employees, who don’t generate any revenue except what they get from taxpayers. [If you haven't filed your tax return yet, think about it as you work toward the mid-April deadline.]

Anyway, back to the GSA via WaPo:

The GSA, with 12,600 employees in 11 regional offices and the Washington headquarters, also handles much of the government’s procurement and holds a “Western Regions” conference every other year for employees assigned to West Coast offices. The focus is on training in job skills and “an exchange of ideas between ‘higher-ups,’ ’’ the inspector general said.

“As the agency Congress has entrusted with developing the rules followed by other federal agencies for conferences, GSA has a special responsibility to set an example, and that did not occur here,” Miller wrote. In an interview Monday, he credited Susan Brita, a deputy administrator, for tipping off his staff to the spending.

The agency “followed neither federal procurement laws nor its own policy on conference spending,” giving preference to favored contractors, for example, he wrote.

After the conference, GSA employees created an internal Web site that featured photos and videos of the conference highlights. It was not taken down until last week.

Managers ignored several warnings from employees to tone things down, the inspector general said.

Among the “excessive, wasteful and in some cases impermissable” spending the inspector general documented: $5,600 for three semi-private catered in-room parties and $44 per person daily breakfasts; $75,000 for a “team-building” exercise — the goal was to build a bicycle; $146,000 on catered food and drinks; and $6,325 on commemorative coins in velvet boxes to reward all participants for their work on stimulus projects. The $31,208 “networking” reception featured a $19-per-person artisanal cheese display and $7,000 of sushi. At the conference’s closing-night dinner, employees received “yearbooks” with their pictures, at a cost of $8,130.

Wow. Better that the Cleveland Indians spend $75,000 on “team building.”

That notion of “team building,” by the way, is one of the silliest concepts ever advanced by the legions of human resources administrators and other miscreants who make big bucks in organizations without ever seeming to have to do anything. Guess they couldn’t get government jobs. And if you are unfortunate enough to have to attend a meeting or conference with “team building” on the agenda, pack the big flask filled to overflowing with Jameson. Trust me on this one.

Back to the GSA. Now that the expense accounts have been aired in public, what type of repercussions can we expect for those involved? Again, from WaPo:

GSA spokesman Greg Mecher said the agency “is appalled’’ by the inspector general’s findings and will consider disciplinary action against other employees if it is warranted. He pledged fast changes to accounting procedures and increased oversight over conference planners and contractors. Employees will be required to take mandatory training in conference planning. Travel budgets for several regional offices have been reduced, and future “Western Region” conferences have been canceled.

Wow. “Employees will be required to take mandatory training in conference planning.”

You just can’t make some of this stuff up.

The Economy and Jobs: Time to Stop Blaming Bush?

OK. I’ll admit it. I voted for Obama. I blamed Bush and his administration for crashing the economy and getting us into a reckless war in Iraq. And up until a few months ago I figured Obama had a lock on another four years in the White House. No more. In fact, I’m not so sure he merits a second term.

And in any event, it’s time to stop blaming Bush for the crisis we are facing with a stagnant economy and high unemployment. Obama and his gang have failed miserably to create jobs and restore confidence in the economy. Stimulus One was a flop. And the proposed Stimulus Two doesn’t offer much hope. In fact, I’m becoming convinced that despite Obama’s rhetoric, the administration never expected the American Jobs Act to pass in total. I’m not sure that “better than doing nothing” is a winning strategy these days. We’ll see.

Anyway, this isn’t just the view of a lonely pajama-clad citizen journalist pecking away at the computer in the early a.m. Here’s from Robert Sheer, opining on The Huffington Post, “One Betrayal Too Many“:

It’s getting too late to give President Barack Obama a pass on the economy. Sure, he inherited an enormous mess from George W., who whistled “Dixie” while the banking system imploded. But it’s time for Democrats to admit that their guy bears considerable responsibility for not turning things around.

He blindly followed President Bush’s would-be remedy of throwing money at the banks and getting nothing in return for beleaguered homeowners. Sadly, Obama has proved to be nothing more than a Bill Clinton clone triangulating with the Wall Street lobbyists at the expense of ordinary folks.

That fatal arc of betrayal was captured by a headline in Tuesday’s New York Times: “Soaring Poverty Casts Spotlight on ‘Lost Decade.’ ” The Census Bureau reported that there are now 46.2 million Americans living below the official poverty line–the highest number in the 52 years since that statistic was first measured–and median household income has fallen back to the 1996 level. As Harvard economist Lawrence Katz summarized this dreary news: “This is truly a lost decade. We think of America as a place where every generation is doing better, but we’re looking at a period when the median family is in worse shape than it was in the late 1990s.”

Ah, ouch.

But importantly, how much confidence is there that Obama and his economic team (and let’s not talk about Jeff Immelt, Obama’s Jobs Czar who is making a career at GE out of sending jobs to China) know what he is doing.

Well, the fiasco with “green jobs” and the now belly-up Solyndra doesn’t help much. To paraphrase Ross Perot, that sucking sound is billions of dollars of taxpayer money going down the toilet. Here’s from WaPo, “Obama green-tech program that created Solyndra struggles to create jobs“:

A $38.6 billion loan guarantee program that the Obama administration promised would create or save 65,000 jobs has created just a few thousand jobs two years after it began, government records show.

The program — designed to jump-start the nation’s clean technology industry by giving energy companies access to low-cost, government-backed loans — has directly created 3,545 new, permanent jobs after giving out almost half the allocated amount, according to Energy Department tallies.

President Obama has made “green jobs” a showcase of his recovery plan, vowing to foster new jobs, new technologies and more competitive American industries. But the loan guarantee program came under scrutiny Wednesday from Republicans and Democrats at a House oversight committee hearing about the collapse of Solyndra, a solar-panel maker whose closure could leave taxpayers on the hook for as much as $527 million.

The GOP lawmakers accused the administration of rushing approval of a guarantee of the firm’s project and failing to adequately vet it. “My goodness. We should be reviewing every one of these loan guarantee” projects, said Rep. Marsha Blackburn (R-Tenn.).

Obama’s efforts to create green jobs are lagging behind expectations at a time of persistently high unemployment. Many economists say that because alternative-­energy projects are so expensive and slow to ramp up, they are not the most efficient way to stimulate the economy.

And here’s a perspective from someone unlike me who may actually know what he is writing about: George Will — “Our floundering federal family“:

In societies governed by persuasion, politics is mostly talk, so liberals’ impoverishment of their vocabulary matters. Having damaged liberalism’s reputation, they call themselves progressives. Having made the federal government’s pretensions absurd, they have resurrected a supposed synonym for the government, the “federal family.” Having made federal spending suspect, they advocate “investments” — for “job creation,” a euphemism for stimulus, another word they have made toxic.

Barack Obama, a pitilessly rhetorical president, continues to grab the nation by its lapels, demanding its attention, and is paying the price: The nation is no longer listening. This matters because ominous portents are multiplying.

Bank of America, which reported an $8.8 billion loss last quarter, plans to lay off 30,000 out of a workforce of nearly 300,000. The Postal Service hopes to shed 120,000 of its 653,000 jobs (down from almost 900,000 a decade ago). Such churning of the labor market would free people for new, more productive jobs — except that to reduce unemployment, the economy needs an approximately 3 percent growth rate, triple today’s rate.

Consumers of modest means are so strapped that Wal-Mart is reviving layaway purchases for the Christmas season. The Wall Street Journal reports that Procter & Gamble, which claims to have at least one product in 98 percent of American households, expects hard times for a long time: It is putting new emphasis on lower-priced products for low-income shoppers.

And more:

For two years, there has been one constant: As events have refuted the Obama administration’s certitudes, the administration has retained its insufferable knowingness. It knew that the stimulus would hold unemployment below 8 percent. Oops. Unemployment has been at least 9 percent in 26 of the 30 months since the stimulus was passed. Michael Boskin of Stanford says that, even if one charitably accepts the administration’s self-serving estimate of jobs “created or saved” by the stimulus, each job cost $280,000 — five times America’s median pay.

And research by Garett Jones and Daniel M. Rothschild of George Mason University’s Mercatus Center indicates that just 42.1 percent of workers hired by entities receiving stimulus funds were unemployed at the time. More (47.3 percent) were poached from other organizations, and 10.6 percent came directly from school or outside the labor force.

Obama’s administration, which is largely innocent of business experience, knew its experts would be wizards at investing taxpayers’ dollars. Oops. After receiving more than half a billion stimulus dollars in loan guarantees, bankrupt solar-panel maker Solyndra has shed nearly all of its more than 1,100 workers.

Ah, time to stop blaming Bush.

Just sayin’.

 

 

The Otter Defense: Can Congress Pass Anything?

OK. I’ll admit it. I didn’t watch either the Prez or John Boehner spin the facts and posture for the 2012 elections on TV last night. Instead, I watched Larry David’s Curb Your Enthusiasm on HBO.  Admittedly, the debt debacle Inside the Beltway is great farce — but at least with Larry David you can laugh along with the absurdity.

So what if there is no enthusiasm in the House or Senate for either of the plans now on the table? And I wonder if we own the table or are just renting it from China? Oops. I digress.

Anyway, in the midst of all the spin and bullshit over what is happening (or not), David Brooks has a thoughtful article in the NYT this morning outlining how we got into this mess, “Congress in the Lead“:

Some of us like to think big. We thought at the beginning of this debt crisis that it might be possible to reach a Grand Bargain. This deal would make a serious dent in the country’s awful debt problem. It would begin to reform entitlements. It would involve enough revenue to forestall ruinous cuts in domestic programs.

The Grand Bargain would yield obvious political benefits. President Obama would show independents that he could move to the center. Republicans would be able to brag about a big reduction in the size of government.

Alas, the dream of a Grand Bargain died Friday evening for three reasons.

First, it was always going to be difficult to round up the necessary Congressional votes. Republicans didn’t want the tax increases. Democrats didn’t want the entitlement cuts.

Second, the White House negotiating process was inadequate. Neither the president nor the House speaker ever wrote down and released their negotiating positions. Everything was mysterious, shifting and slippery. One day the president was agreeing to an $800 billion revenue increase; the next day he was asking for $400 billion more. Spending cuts that seemed to be part of the package suddenly seemed hollow. Negotiating partners disappeared.

It was phenomenally hard to figure out exactly who was offering what. Democrats in Congress were kept in the dark and were understandably suspicious. It was all a recipe for misunderstandings, hurt feelings and collapse.

Third, the president lost his cool. Obama never should have gone in front of the cameras just minutes after the talks faltered Friday evening. His appearance was suffused with that “I’m the only mature person in Washington” condescension that drives everybody else crazy. Obama lectured the leaders of the House and Senate in the sort of patronizing tone that a junior high principal might use with immature delinquents. He talked about unreturned phone calls and being left at the altar, personalizing the issue like a spurned prom date.

Obama’s Friday appearance had a gigantic unintended consequence. It brought members of Congress together. They decided to take control. The White House is now on the sidelines. Democratic and Republican Congressional leaders are negotiating directly with one another.

The atmosphere has changed. It now seems more likely that we will get a deal. It just won’t be as significant as we Grand Bargainers originally wanted.

John Boehner and Harry Reid will continue to verbally abuse each other. But there’s a script to their taunts. Nobody’s feelings are hurt. The old pros are perfectly capable of exchanging clichéd volleys in the morning and then going off and negotiating with each other in the afternoon.

Furthermore, the negotiating process has changed. On Monday, both Boehner and Reid produced proposals. The main points were written down and available for all to see. Each side not only represented its own views, it sent signals about where future agreements could be found.

Boehner released a plan that involved statutory spending caps with an enforcement mechanism to make sure the cuts are real. Reid released a plan involving bigger long-term spending cuts, with much of the heavy lifting done by a bipartisan select committee. These two carefully coordinated plans are different, but they naturally fit together.

With a little imagination, it’s easy to see how they could be merged to give everybody something. Republicans would get some guaranteed spending reductions. Democrats in swing states could campaign on a nominal multitrillion-dollar debt reduction while protecting entitlements. Republicans wouldn’t have to vote on raising the debt ceiling until after some guaranteed spending cuts. Democrats could count the reduced Iraq and Afghanistan war costs as part of the spending reductions.

It’s not clear if an arrangement would really push the next debt ceiling fight until after the 2012 election, but even that could presumably be fudged, especially if Democrats were willing to give the Republicans broader spending cuts and a balanced-budget amendment vote in the Senate.

On the one hand, there has been an outbreak of sanity since Congress took control. On the other hand, the deal they are working on doesn’t come close to cutting the $4 trillion or so many say would be required to prevent a downgrade of the U.S. debt.

This should be a humbling moment for the White House, and maybe a learning experience. There are other people who have been around Washington a long time. They know how to play this game. As a result of their efforts, we may see some debt reduction but nothing big and transformational. Obama won’t get his centrist election boost. Republicans won’t have to wrestle with tax increases. Democrats won’t have to wrestle with entitlement reform.

The Old Guard wins. Obama’s televised campaign speech Monday night was behind the times. The action has moved to Capitol Hill.

Oh, boy. Congress has the ball.

Wonder when China will repossess the table?

And is it just me, or are the leaders in Congress and the administration now adopting the Otter Defense strategy from the movie Animal House as a way to win favor with voters?

Talking Turkey About Debt and the Economy: We’re Spent

I sure can’t see how the deficit-reduction debacle that has the Prez and Congress frozen is going to play out. Yesterday the so-called Gang of Six made a comeback with a plan to shave nearly $4 trillion from the deficit through spending cuts and revenue increases.

Hmm. Revenue increases. House Republicans still don’t seem to be thrilled by that. Here’s from WaPo, “New debt plan gain support in Senate; House passes balanced-budget measure“:

Neither Obama nor Boehner embraced the specific details of the Gang of Six proposal, and it was not immediately clear how the strategy might influence debt-limit negotiations. House Majority Leader Eric Cantor (R-Va.) said in a statement that the plan contains “some constructive ideas for dealing with our debt,” but he objected to the revenue goals, arguing that “a tax increase is the wrong policy to pursue with so many Americans out of work.”

Well, the Prez has invited members of Congress to the White House again today and said that it is time to “start talking turkey” about reaching an agreement.

Hey. I enjoy talking turkey as much as anyone. Gobble. Gobble. But it concerns me that, as the Prez noted yesterday, we’ve reached the eleventh hour and everyone still appears to be talking in generalities from working papers and outlines. Wonder if where you work this would be acceptable on an important project? I digress.

Anyway, if Eric Cantor is at the White House today with his hand covering his lips you’ll know that either he is talking ham not turkey or he doesn’t want anyone to read his lips on hiking taxes. I digress again.

But I would like to see some specifics. For instance, while chasing the treadmill belt this early a.m. I heard on Fox News that the Gang of Six plan includes measures to eliminate deductions on mortgage interest and charitable contributions. Really?  Might be good. Maybe not. Yet it sure seems like every time Congress and the Prez wait until the clock strikes twelve to do something it turns to shit goes from bad to worse.

And people — even me — understand the relationship and pitfalls off spending too much and taking on too much debt. That’s the reason the economy is flatlining and we’re not as a nation generating near enough new jobs. Here’s an interesting perspective on the economy from David Leonhardt in the NYT, “We’re Spent“:

THERE is no shortage of explanations for the economy’s maddening inability to leave behind the Great Recession and start adding large numbers of jobs: The deficit is too big. The stimulus was flawed. China is overtaking us. Businesses are overregulated. Wall Street is underregulated.

But the real culprit — or at least the main one — has been hiding in plain sight. We are living through a tremendous bust. It isn’t simply a housing bust. It’s a fizzling of the great consumer bubble that was decades in the making.

The auto industry is on pace to sell 28 percent fewer new vehicles this year than it did 10 years ago — and 10 years ago was 2001, when the country was in recession. Sales of ovens and stoves are on pace to be at their lowest level since 1992. Home sales over the past year have fallen back to their lowest point since the crisis began. And big-ticket items are hardly the only problem.

The Federal Reserve Bank of New York recently published a jarring report on what it calls discretionary service spending, a category that excludes housing, food and health care and includes restaurant meals, entertainment, education and even insurance. Going back decades, such spending had never fallen more than 3 percent per capita in a recession. In this slump, it is down almost 7 percent, and still has not really begun to recover.

The past week brought more bad news. Retail sales in June were weaker than expected, and consumer confidence fell, causing economists to downgrade their estimates for economic growth yet again. It’s a familiar routine by now. Forecasters in Washington and on Wall Street keep saying the recovery’s problems are temporary — and then they redefine temporary.

If you’re looking for one overarching explanation for the still-terrible job market, it is this great consumer bust. Business executives are only rational to hold back on hiring if they do not know when their customers will fully return. Consumers, for their part, are coping with a sharp loss of wealth and an uncertain future (and many have discovered that they don’t need to buy a new car or stove every few years). Both consumers and executives are easily frightened by the latest economic problem, be it rising gas prices or the debt-ceiling impasse.

Earlier this year, Charles M. Holley Jr., the chief financial officer of Wal-Mart, said that his company had noticed consumers were often buying smaller packages toward the end of the month, just before many households receive their next paychecks. “You see customers that are running out of money at the end of the month,” Mr. Holley said.

Gobble. Gobble.

Just sayin’.

Prez on Debt Limit: “Don’t Call My Bluff”

Wow. Things are starting to get nasty Inside the Beltway as the Prez and members of Congress play kick the can with the nation’s debt limit and government spending. The daily White House meetings should be televised. Great reality TV.

In yesterday’s episode, the Prez reportedly said several times “enough is enough” and then abruptly walked out of the meeting. Go figure.

Here’s from a story on The Huffington Post, “Obama Warns Cantor ‘Don’t Call My Bluff’ As Debt Talks Stall“:

Lawmakers and the White House had what nearly every party is describing as a “tough” and “testy” meeting on the debt ceiling Wednesday afternoon, culminating in a stormy exchange between President Barack Obama and House Majority Leader Eric Cantor (R-Va.).

It was the fifth straight day of talks, but the first in which attendees, speaking on background, were willing to admit that steps were taken backwards. According to multiple sources, disagreements surfaced early, in the middle and at the end of the nearly two-hour talks. At issue was Cantor’s repeated push to do a short-term resolution and Obama’s insistence that he would not accept one.

“Eric, don’t call my bluff. I’m going to the American people on this,” the president said, according to both Cantor and another attendee. “This process is confirming what the American people think is the worst about Washington: that everyone is more interested in posturing, political positioning, and protecting their base, than in resolving real problems.”

Cantor, speaking to reporters after the meeting, said that the president “abruptly” walked off after offering his scolding.

“I know why he lost his temper. He’s frustrated. We’re all frustrated,” the Virginia Republican said.

Democratic officials had a different interpretation. “The meeting ended with Cantor being dressed down while sitting in silence,” one official said in an email. “[The president] said Cantor could not have it both ways of insisting on dollar-for-dollar and still not being open to revenues.”

And at the same time, there appears that some are giving serious consideration to Mitch McConnell’s wet dream to solve the debt issue. As best I can tell, he wants to give the Prez the authority (without Republicans having to vote on it) to hike the debt ceiling — with the subsequent hope and prayer that there will be spending cuts implemented in three stages.

For once I agree with the editors at WaPo who opine this morning “McConnell’s escape hatch: The best Washington can do?“:

The McConnell plan offers political cover for cowardice and irresponsibility. If it is the best Washington can do, it is better than nothing. But it’s not much of an advertisement for what Washington can do.

Meanwhile, back in the real world, the USA women’s soccer team advanced to the finals of the World Cup on Sunday with a thrilling victory over France. Here’s a great report from Sally Jenkins in WaPo, “U.S. women’s soccer team takes joy in forging its own identity“:

Pardon any typos; they’re the result of sprains from doing an Abby Wambach slide across the living room floor after watching the U.S. women’s soccer team make the World Cup final. The American women have at last forged their own identity, those gorgeous toughies, with their bulging shoulders and their sweat-plastered hair and their habit of storming and screaming their way out of trouble.

Bulletin to the spray-on tan crowd: Beat it. The big girls are here.

Just a thought here but worth considering.

Perhaps the Prez, Eric Cantor and the others trying to figure what’s on or off the table these days are getting testy because they can’t watch the live broadcasts of the USA women’s team and the World Cup matches.

Let’s hope they aren’t meeting about the deficit during the final on Sunday. Things could get really dicey in the West Wing.

Uncle Sam: How Much Money Do You Get?

As best I can tell, I don’t receive any money directly from Uncle Sam. I’m eligible to collect Social Security, but I’m not as yet. Saying that, plenty of people are getting substantial folding green from the federal government. And I’m not just talking about federal government employees, members of the military and so on.

Here’s an interesting and informative NYT article, “Economy Faces a Jolt as Benefit Checks Run Out“:

An extraordinary amount of personal income is coming directly from the government.

Close to $2 of every $10 that went into Americans’ wallets last year were payments like jobless benefits, food stamps, Social Security and disability, according to an analysis by Moody’s Analytics. In states hit hard by the downturn, like Arizona, Florida, Michigan and Ohio, residents derived even more of their income from the government.

By the end of this year, however, many of those dollars are going to disappear, with the expiration of extended benefits intended to help people cope with the lingering effects of the recession. Moody’s Analytics estimates $37 billion will be drained from the nation’s pocketbooks this year.

In terms of economic impact, that is slightly less than the spending cuts Congress enacted to keep the government financed through September, averting a shutdown.

Unless hiring picks up sharply to compensate, economists fear that the lost income will further crimp consumer spending and act as a drag on a recovery that is still quite fragile. Among the other supports that are slipping away are federal aid to the states, the Federal Reserve’s program to pump money into the economy and the payroll tax cut, scheduled to expire at the end of the year.

“If we don’t get more job growth and gains in wages and salaries, then consumers just aren’t going to have the firepower to spend, and the economy is going to weaken,” said Mark Zandi, chief economist of Moody’s Analytics, a macroeconomic consulting firm.

Job growth has remained elusive. There are 4.6 unemployed workers for every opening, according to the Labor Department, and Friday’s unemployment report showed that employers added an anemic 18,000 jobs in June.

In Arizona, where there are 10 job seekers for every opening, 45,000 people could lose benefits by the end of the year, according to estimates from the state Department of Economic Security. Yet employers in the state have added just 4,000 jobs over the last 12 months.

OK. The NYT editors would argue to extend jobless benefits and other safety net benefits until hell freezes over. But realistically that ain’t going to happen — with the Prez and liberals and conservatives in Congress facing some tough choices about how to cut spending. (For an interesting perspective on the debt-ceiling debacle under way Inside the Beltway see Dan Balz in WaPo, “In debt-ceiling talks, Obama tries to keep his balance.”)

So again that brings us to jobs. If we can’t figure out a way to generate and sustain enough quality jobs for those who want and need them today and tomorrow, then we are going to become France. Go figure.

And David Brooks opines in his NYT opinion article this morning that there is no “magic lever” to job creation or fixing the economy.

These three groups — bankers, Democratic Keynesians and staunch Republicans — have one thing in common: They all believe they have identified the magic lever. They believe they can control their economic fate.

Some of us do not believe there is a magic lever. Deficit spending stimulates growth, but not by that much. Tax increases are bad, but they are not disastrous. We believe that there are a thousand factors that go into economic growth, and no single one is dispositive.

We look at the tax cuts of 2001 and do not see tremendous gains. We look at the tax increase of 1982 and do not see a ruinous disaster. We look at high deficit eras and low deficit eras and do not see an easy correlation between deficit spending and growth. On the contrary, if you look around the world there’s a slight negative correlation between government size and prosperity.

We believe that if you rest everything on a single lever (Increase deficits! Cut taxes!), you give people a permission slip to be self-indulgent. They will spend or cut to their hearts’ content and soon you’ll be facing national bankruptcy. We believe that even if you are theoretically right, your policies will be distorted by human frailties and special interests.

The people in my group (you might call us conservatives) are more likely to embrace a low and steady approach to fiscal policy. Control debt. Control entitlements. Keep tax levels reasonable and the tax code simple. Work on the economic fundamentals: human capital, productivity, labor market flexibility, open trade, saving and investment. Don’t believe you can use magic levers to manipulate growth month to month.

Well, we’ll see. Looks like the Prez and members of Congress have stalled on the budget, federal spending and job creation for such a long time that a magic lever should would be welcome.

Debt Summit: On the Table or Off?

I don’t understand why the TV networks don’t broadcast live the so-called summit at the White House Sunday night where the Prez and the head sleds in Congress are going to get together to consider how, when or if they are going to agree to increase the federal debt limit.

If nothing else, this would be great reality TV.

I would also like to see the size and shape of the table they are going to sit around. It must be huge — since everything is either on the table, or some items are on with others (like, ah, tax hikes) are off. Apparently.

On the table. Off the table. More Inside the Beltway buzz phrases like the “new normal.”

OK. Since there won’t be any live TV and the chattering class will most likely be mute until long after I’m asleep, here’s a preview provided by Fox News, “Tensions Flare Ahead of White House Deficit Summit“:

Partisan tensions were flaring ahead of a critical summit Sunday evening at the White House, where aides say President Obama plans to make one last push for a major deficit-reduction deal amid doubts on both sides.

Fox News has confirmed that the talks are still on despite a surprise announcement from House Speaker John Boehner that rattled the almost-optimistic mood surrounding the negotiations.

The speaker, claiming the White House was pushing too hard for tax hikes while not pushing hard enough for entitlement reform, said Saturday evening that lawmakers should aim for a smaller deficit-reduction deal. Instead of the $4 trillion package officials were talking about just days ago, Boehner suggested negotiators aim for a deal that would be worth about half that over the next decade.

Senate Republican Leader Mitch McConnell, speaking on “Fox News Sunday,” confirmed that a $4 trillion package is now off the table.

“Everything they’ve told me and the speaker is that to get a big package would require big tax increases in the middle of the economic situation,” McConnell told “Fox News Sunday.”

Earlier in the week, Democrats had been sparring with the White House over its perceived willingness to deal with the GOP on entitlement reform. But Boehner’s statement on Sunday turned their focus back to hammering Republicans for their insistence on no tax hikes in the deficit talks.

“All they want is to cut Medicare/Social Security and protect the rich,” a senior Democratic congressional aide told Fox News.

Rep. Xavier Becerra, D-Calif., said there must be “shared sacrifice” in any deal.

“Everything has to be on the table. But pretty quickly, my Republican colleagues said, everything should be on the table except taxes. That doesn’t seem fair,” he told “Fox News Sunday.”

On the other side, Sen. Jim DeMint, R-S.C., accused Obama of “gaming Republicans.”

“It’s hard to take him seriously here,” he said on “Fox News Sunday.”

The partisan recriminations cast a pall over the talks Sunday evening. After a bipartisan meeting at the White House Thursday, officials were talking ambitiously about a grand bargain — one which might cut spending, address all three major entitlements, achieve tax reform and make other monumental changes in exchange for a “yes” vote on raising the $14.3 trillion debt ceiling before an Aug. 2 deadline.

The fact that Republicans — those pushing hardest for spending cuts and entitlement reform — were scaling back those goals Sunday signaled the negotiations were still in a tenuous place.

White House Chief of Staff Bill Daley nevertheless said Obama will push for a big deal out of Sunday’s meeting.

“Everyone agrees that a number around $4 trillion is the number that will make a serious dent on our deficit,” Daley said. “That’s what he wants to see. … This president’s still committed to doing big things.”

Daley, speaking on ABC’s “This Week,” called Boehner’s statement “unfortunate.”

Treasury Secretary Timothy Geithner reiterated Sunday that a failure to negotiate a package and raise the debt ceiling by Aug. 2 would have “catastrophic” consequences for the economy.

However, he and other officials expressed confidence that no matter the course of negotiations, Congress will ultimately vote to lift the cap.

Wonder if it would be helpful to get Judge Judy to attend. At least maybe she could help decide what should be on or off the table.
Sigh.

Pat Buchanan and Spinning a Defict Solution

Well, this should be interesting. Now that the Casey Anthony trial and verdict is yesterday’s news, attention is finally swinging back to one of the big fish in the national issues skillet: reducing the federal deficit. And Prez O upped the stakes considerably yesterday as WaPo is reporting that the administration is OK with deep cuts in Social Security and Medicare.

Alert the militia and get the women and children off the streets. This could get nasty.

The liberals argue that reducing the deficit is important as long as spending cuts don’t strike deep into social programs and fall entirely on the middle class and low-wage earners. And gee. Some tax increases sure would be nice. The conservatives argue that government spending and the deficit must be slashed — the more the better — and without any offsetting new taxes or revenue enhancements.

Ah, something has to give here. And both sides will be “spinning” the eventual agreement to claim victory. That should be worth a few yukes, if nothing else.

That brings me to Pat Buchanan, the former Nixon speechwriter, GOP presidential candidate, TV Talking Head and now conservative-in-residence on MSNBC.

I’ve always respected Buchanan and his viewpoints, although I certainly don’t agree with him on everything. But unlike most of the Inside the Beltway pundits, he has the ability to talk about important and complex issues in a way that is clear, understandable and based on enough common sense that even a rube like me sitting here in the heartland can figure out what he is talking about. He’s kind of the counterpoint to the D.C. policy wonks and think tank crowd.

Here’s a story from Mediaite, “Pat Buchanan: It’s ‘Suicidial’ for Republicans to Raise Taxes, ‘Obama Will Fold‘”:

MSNBC’s conservative commentator Pat Buchanan took on the entire Morning Joe panel as he explained that President Obamais ignoring political reality if he thinks tax increases of any kind could pass the Republican-controlled House of Representatives. Buchanan states that any Republican who signs such a deal would face angry and unforgiving constituents back home, therefore he predicts “Obama will fold.”

Despite pleas from Mika Brzezinski for Republicans to put something on the table and economic arguments from Steven Rattner regarding why revenue increases are necessary, Buchanan maintained the Republican ground:

“Philosophically, they don’t believe you raise taxes when you got 9% unemployment. It’s not only politics, it is principle and philosophy. They think it’s the wrong way to go. I think it’s the wrong way to go. You don’t do it simply because somebody says ‘wouldn’t it be nice if we both gave something?”

Rattner was optimistic that Obama will stare down Republicans and get a big compromise, yet Buchanan remained doubtful, since any tax increase “would be suicidal” for Republicans who would essentially be going back on their pledge. Furthermore, “why do it for a President of the United States who has just accused them of being worse than Sasha and Malia,” Buchanan wondered. In the end, the only thing everyone seemed to agree on is that America is “strategically overextended,” and Buchanan depressingly concluded “the empire is coming down.”

Buchanan’s right.

If the Republicans agree to tax increases — and they can try to spin that as closing loopholes, revenue enhancements, whatever until the cows come home — and lot of them in Congress will be going home and staying home after the 2012 elections.

And if history is a guide, in the end, Obama will fold.

Let the spinning begin.

Read My Lips: No New Taxes

I wonder what George Bush the Senior thinks about the current kerfuffle Inside the Beltway over hiking the debt ceiling and the federal budget. Prez O said yesterday during his presser that additional revenue — tax increases and the elimination of certain corporate benefits — had to be part of any debt-reduction package. The Republicans said about taxes: no way.

Kind of an interesting policy and political debate with both parties heading in opposite directions.

And many of the newly elected conservative members of Congress got their tickets punched by voters back home by pledging not to raise taxes, if not cut them along with reduced government spending across the board.

George Bush the Senior as he launched his bid for the White House issued the great TV sound bite: “Read my lips, no new taxes.

Alas, he caved — and became a one-term president.

Here’s from the NYT article “In Deficit Plan, Taxes Must Rise, President Warns“:

President Obama pressured Republicans on Wednesday to accept higher taxes as part of any plan to pare down the federal deficit, bluntly telling lawmakers that they “need to do their job” and strike a deal before the United States risks defaulting on its debt.

Declaring that an agreement is not possible without painful steps on both sides, Mr. Obama said that his party had already accepted the need for substantial spending cuts in programs it had long championed, and that Republicans must agree to end tax breaks for oil and gas companies, hedge funds and other corporate interests.

In a 67-minute news conference, Mr. Obama cast the budget battle as a tug of war between the interests of the rich — like owners of corporate jets, who he said get generous tax breaks — and those of the middle class, the elderly and children.

Directly challenging Republican leaders, Mr. Obama said, “Everybody else has been willing to move off their maximalist position — they need to do the same.”

At the same time, Mr. Obama, under assault frfom Republicans on the campaign trail for an unemployment rate that remains above 9 percent, asked voters to understand that the economic recovery would take time but said that Washington, even in its current financial straits, could still do more to help. He expressed support for extending a reduction in payroll taxes for an extra year, providing loans for road and bridge-building and approving trade pacts that could help spur exports.

While the president expressed hope for a budget deal before the government’s borrowing authority expires in early August, he scolded Republican lawmakers for putting off hard decisions until the 11th hour, saying that his daughters did not procrastinate that way with their schoolwork.

“Malia and Sasha generally finish their homework a day ahead of time,” the president said, in a tone of rising exasperation. “They don’t wait until the night before. They’re not pulling all-nighters.”

The House speaker, John A. Boehner, flatly rejected Mr. Obama’s call for new tax revenues, saying the “president’s remarks ignore legislative and economic reality.”

In a toughly worded statement, Mr. Boehner said the House would vote to raise the debt limit, as the White House has demanded, only if the administration agreed to a deal that contained deep spending cuts and no tax increases.

Oh, boy.

“Read my lips: no new taxes.”

We’ll see.

Can We Create Enough Jobs?

I opined yesterday about the possibility that the USA will become a country of McWorkers. And even my gratuitous reference to Pippa didn’t create a firestorm among readers. Maybe we’ve given up on the notion of significantly reducing unemployment. And maybe we can’t create enough jobs — especially ones that provide some measure of security, benefits and adequate pay.

This just isn’t the early morning rant of a pajama-clad citizen journalist. Two writers with big megaphones — Arianna Huffington and Katrina Vanden Heuvel — shouted about the same issue in separate opinion pieces yesterday and this morning.

Here’s from Heuvel’s WaPo article, “Why aren’t the powers that be tackling the job crisis?“:

Washington is the only city in America where housing values are going up. That may help explain why the political class is so divorced from the nation’s agonies. Sure, the entire nation celebrated the dispatch of Osama bin Laden, but when it comes to the economy, the Beltway is a world unto itself.

Two years from the official beginning of the “recovery,” America continues to suffer a deep and punishing jobs crisis. One in six Americans of working age is unemployed or underemployed. College students, laden with record levels of debt, are graduating into the worst jobs market since the Great Depression. Long-term unemployment is at unprecedented levels. At current rates of job growth, we won’t return to pre-recession employment levels until 2016. And the jobs that are being created — largely in the service industry — tend to have lower pay and benefits than the jobs that were lost.

Then she criticizes leaders in both parties — Republicans first but with the Democrats taking a turn at bat as well — for doing just about everything but advancing realistic proposals to create jobs.

As Ezra Klein of The Washington Post noted, it is a measure of Washington’s remove from the country that the two plans were unveiled by the two bodies with the least power to make anything happen — the minority House Democrats and the minority Senate Republicans. Those who do have the power — the White House, the House Republican majority and the Senate Democratic majority — remain silent about jobs. Instead, they are locked in a macabre dance to the death on deficits — oblivious to the human casualties caused by mass unemployment.

This might be diversionary, at best, were America not in such dire straits. Home values are falling again. Wages aren’t keeping up with prices. States and cities are laying off more employees. The trade deficit is rising, despite the lower dollar. Masked by the statistic of 9 percent unemployment are 25 million people in need of full time work. Mass unemployment, particularly in a society like ours with such a limited safety net, is a tale of misery, one that resounds across the country and goes virtually unheard in our capital. Americans think Washington isn’t listening — and they are right.

Next up, Arianna Huffington, writing “If American Can Do Whatever We Set Our Mind To, How Come Our Leaders Won’t Set Their Minds On Jobs?

“We do big things,” President Obama said during his State of the Union speech in January. And, in fact, we do. Sometimes. Finding and dispatching Osama bin Laden certainly qualifies. “We are once again reminded,” the president said after announcing the terrorist’s death, “that America can do whatever we set our mind to.”

But if that’s true, why are our leaders so accepting of a stagnant economy? If they really focused on the havoc it is wreaking on the lives of tens of millions of Americans, they would, in the memorable words of Richard Clarke, be running around with their hair on fire.

But they’re not. Instead, they express concern but resign themselves to the fact that, as White House economic adviser Austan Goolsbee put it in an interview with HuffPost, the economy has “a long way to go.” Meanwhile, we’re being asked to accept years of underemployment, low growth and draconian cuts to America’s social safety nets as the “new normal.” Or, as Bill Clinton put it in a different context, the “tyranny of low expectations.”

It’s a testament to these low expectations of our leaders that we’re supposed to take recent economic figures as some kind of good news. In March, the economy added 216,000 jobs and the unemployment rate fell from 8.9 percent to 8.8 percent. Not bad. But not good, either. And if you take a closer look at the numbers, you’ll want to keep that celebratory champagne on ice. Because while adding jobs is obviously better than shedding them, even if we continue to add 200,000 jobs a month, it would take until 2019 to achieve the employment level we had when the recession started. “There are still five unemployed workers per job opening,” Heidi Shierholz, economist with the Economic Policy Institute, told HuffPost, “far worse than the worst month of the early-2000s recession.”

What’s more, much of the downturn in the unemployment rate was actually caused by people giving up and leaving the workforce. As the New York Times noted, participation in the workforce fell to 64.2 percent, the lowest mark in 25 years. If you were to factor those who have stopped looking for work into the official unemployment rate, it would be 9.8 percent. If you were to include those working part-time who would rather be working full-time, it would be 15.7 percent. “Being happy with the falling unemployment rate right now,” said Wells Fargo’s Jeremy Ryan, “would be like being happy that your team won because the other team’s bus broke down on the way to the field.”

And the point?

How are these not hair on fire numbers?

Yet our leaders, who are supposed to be doing big things, seem instead to have made their peace with “the new normal.” Take the Fed: it could be doing a lot more to create jobs, but instead it’s guarding against the phantom bogeyman of inflation. “Why has Mr. Bernanke decided to accept widespread unemployment for years on end, even though he believes he has the power to reduce it?” asked David Leonhardt. “After all, does the economy feel as if it’s on the verge of overheating?” Hardly.

At the New America Foundation’s conference about the Federal Reserve, the Peterson Institute’s Joe Gagnon said that the Fed’s timidity is responsible for the loss of 1 million jobs. “Apparently,” writes Mark Thoma, “the millions and millions of people who are unemployed, some of whom won’t be reemployed until years from now if we do nothing to help, are supposed to be patient because people with power over policy are worried about inflation and higher interest rates.”

Our elected leaders aren’t any better — less focused on the job crisis than on arguing about how to best divvy up harsh cuts to the social safety net and programs that benefit the middle class. Meanwhile, profits for the Fortune 500 jumped by 81 percent in 2010, to $318 billion. Clearly big things aren’t out of reach for everybody.

OK. I know that we have a number of important issues — none with easy answers — that we have to deal with: federal debt and spending, taxes, health care, education, immigration, and the threat to our nation’s security at home and abroad among them.

But I hope the elites Inside the Beltway and elsewhere haven’t given up on the need to create enough jobs to get our country back working again.