State Debt and Federalism

The NY Times has a front page story on how state budgets are being crushed under the weight of a tremendous debt load that threatens to turn them into Greece, with accounting gimmicks understating the true cost of their fiscal situation, and a looming credit crunch as bond markets become more skittish about lending them money.

There are a lot of important issues here, not the least of which is the fact that it’s only a harbinger of things to come for the federal government as we enter the entitlement crisis. 

But there’s another consequence of the state budget woes that is worth drawing attention to, from the article:

The states can also take refuge in America’s federalist system. Thus, if California were to get into hot water, it could seek assistance in Washington, and probably come away with some funds. Already, the federal government is spending hundreds of millions helping the states issue their bonds.

There’s no doubt in my mind that if states were literally ready to collapse, the federal government would step in and orchestrate some kind of bailout. But any massive bailout would inevitably come with strings attached and translate into a further erosion of state sovereignty. The bigger the crisis and the more states that are involved, the more significant that erosion may be — potentially erasing whatever remaining distinctions there are between state and federal government. 

The Tan Tax and Government Power

One of the more outlandish provisions of the health care legislation is the 10 percent tax on indoor tanning. When it was introduced into the Senate health care bill in December, it injected a bit of humor into the political and policy debate. But to a segment of small businesses across the country, it’s no laughing matter.

A local news station in Seattle has spoken to Mark Willard of a salon called Desert Sun Tanning. “Families, you know, these are people that have invested their life savings into these businesses and that’s how they make their living,” he said. “Unfortunately, now, that tax is going to be passed onto them…It could be very detrimental to their business, and certainly our customers that are going to bear the brunt of this tax.”

Another station in Indiana finds Fun Tan, which employs “a total of 40 people and the owner says they will likely have to let some people go from the salon.”

Dan Skwarcan, the owner, said, ““It’s huge. Think about the total revenue and having to write a check for ten percent of everything you make and give it to the federal government. That is tough.. plus on top of all of the taxes we are already paying today.” 

People might dismiss stories like this that are being replicated throughout the country because a tax on indoor tanning only affects a relatively small segment of the population. Yet the point is that this is a perfect example of the arbitrary nature of government power. Indoor tanning has absolutely nothing to do with health care. But in December, Senate Majority Leader Harry Reid was scrambling to find ways to raise revenue to pay for a massive new government entitlement. An earlier tax on cosmetic surgery was dropped under protest from the Botox Lobby. And poof, just like that, families who depend on indoor tanning for their livelihood are forced to pony up for the greater good. Liberals always like to portray themselves as more compassionate. But remember, liberal compassion is rooted in a willingness to take other people’s money and have government spend it for them.  

Obamacare Vindication Watch

Obamacare hasn’t even been law for more than a few days, and we’re already starting to see the early signs of many of the ramifications that me and other opponents of the legislation had been warning about throughout the debate.

For instance…

Me in July 2009:

Health Care Overhaul Threatens States

The New York Times today:

Some States Find Burdens in New Rules on Health Care

Me this Monday, and on many other occasions:

(M)ajor changes to the health care system aren’t possible without some disruption. Obama can’t guarantee that people won’t lose their current coverage…”

And here’s the Los Angeles Times:

Big employers rethink their healthcare plans

Expect lots more of this in the coming months and years, as criticisms of the legislation start to become reality and Obama’s pledges go up in smoke.

Still Spinning Petraeus and Israel

Stephen Walt, co-author of the Israel Lobby and a leading proponent of the view that U.S. support for Israel is against American national security interests, accuses me of “revisionism” regarding Gen. Petraeus’s views on Israel.

Walt writes that, “Phil Klein at The American Spectator claims that Petraeus is denying he said any of the things previously attributed to him in recent weeks, and is walking back from his own testimony (i.e., prepared statement) to the Senate Armed Services Committee.”

To start with, this has nothing to do with what kind of “claims” I’m making —  I posted a 7-minute video of Petraeus in his own words denying what’s been attributed to him and calling several reports (including one on the Foreign Policy website for which Walt writes) “flat wrong.”

Walt links to this post by Matt Duss at the Center for American Progress, which he says “pokes holes in Klein’s revisionism.”

In the post, Duss tries to suggest that Petraeus really is confirming the point that critics of Israel have been making all along, citing some of the comments Petraeus made to me in the video about the relationship between the Israeli-Palestinian conflict and the broader regional dynamics. Petraeus acknowledged that there was a “spillover effect” that Central Command monitors.

This is part of a broader effort by Israel’s critics to co-opt Petraeus as one of their own. It started with the disputed report in Foreign Policy, which claimed that Petraeus was concerned about Israeli “intransigence” ultimately endangering American soldiers. And it continues today, with a Pat Buchanan column using the same Foreign Policy item on Petraeus to claim that, “As this message has now been delivered by Gen. Petraeus to his commander in chief, Obama simply cannot back down again. If he does not stand up now for U.S. interests, which are being imperiled by Israeli actions, he will lose the backing of his soldiers.”

But the Israel bashers are making two major errors in interpreting Petraeus’s position, as he clearly described it to me on Wednesday. The first is that Israel’s critics see the Israeli-Palestinian conflict as central to our challenges, while Petraeus says it’s one of many factors “that influence the strategic context in which we operate.” The conflict was important enough to mention in a 56-page report that Central Command presented to the Senate Armed Services Committee, but he did not mention it in his own opening remarks before the committee. (For a rundown of what else was in the report, check out this post by Michael Weiss.) 

The second major mistake opponents of Israel are making about Petraeus is to conflate his saying the Israeli-Palestinian conflict is important, with taking sides in the conflict one way or another. Petraeus is making the narrow point that whether there is progress on the peace front (or a lack thereof) will affect the regional dynamics. That isn’t the same as taking the position that the primary barrier to peace is that Jews are building homes where they aren’t supposed to, and if only we could get Jews to stop living in the wrong places, then we’d be able to create peace. It isn’t saying anything about Israeli intransigence. And he certainly isn’t saying that U.S. lives are being put at risk by Israel. As Petraeus told me, “There is no mention of lives anywhere in there. I actually reread the statement. It doesn’t say that at all.” Yes, as Duss notes, he did say that Secretary of State Hillary Clinton “articulately and clearly conveyed our policy.” But as a military officer, he can’t set U.S. policy, so of course he’s going to want to publicly affirm that he supports current policy.

Furthermore, Petraeus also mentioned that there were “a whole bunch of extremist organizations, some of which by the way deny Israel’s right to exist.” So I could just as easily claim that Petraeus thinks America should put more pressure on Palestinians to abandon terrorism, and that he thinks that their unwillingness to recognize Israel’s right to exist is the true barrier to peace, and thus, makes his job harder. But I won’t, because I don’t want to put any words in his mouth.

It’s pretty amazing the lengths that critics of Israel will go to in order to distort the facts. Petraeus said that blogs had “spun” his position, and by the context of his remarks, it was clear that the blogs he was referring to were the ones operated by critics of Israel who were trying to suggest he was affirming their own views. At the same time, he argued that Max Boot at Commentary had “picked apart this whole thing, as he typically does, pretty astutely.” Boot’s follow up on the matter is here. But honestly, if you’re interested in this topic and haven’t done so already, just watch the video of Petraeus explaining his own position.

It’s Over — For Now

The House, by a 220 to 207 margin, just voted to pass the final reconciliation changes to Obamacare, with 32 Democrats voting “no.” And just like that, the legislative push on health care that has consumed Washington for over a year is  over.

However, as I explored here and here, the broader debate over the future of our nation’s health care system is still in its early stages.

Petraeus on Prez Talk: No Means No

MANCHESTER, N.H. — Here’s what Gen. David Petraeus had to say on Wednesday during a press conference prior to a scheduled speech at St. Anselm College in Manchester, New Hampshire, on speculation that he might be run for president:

“I thought I’d said no about as many ways as I could. I really do mean no. We have all these artful ways of doing it. I’ve tried Shermanesque responses, which everybody goes and finds out what Sherman said was pretty unequivocally no. I’ve done several different ways. I’ve tried quoting the country song, ‘What Part of No Don’t You Understand?’ I mean, I really do mean that. I feel very privileged to be able to serve our country. I’m honored to continue to do that as long as I can contribute, but I will not, ever, run for political office, I can assure you. And again, we have said that repeatedly and I’m hoping that people realize at a certain point you say it so many times that you could never flip, and start your career by flip-flopping into it.”

Asked about his party identification, he said: “I actually stopped voting in 2002 and I certainly won’t vote again while I’m in uniform. I think it’s known that we were registered as Republicans.”

Petraeus Sets the Record Straight on Israel

Earlier this month, a posting on the Foreign Policy website caused a firestorm by reporting that in January, Gen. David Petraeus “sent a briefing team to the Pentagon with a stark warning: America’s relationship with Israel is important, but not as important as the lives of America’s soldiers.”

According to the dispatch by Mark Perry (an advocate of talks with terrorist groups), Petraeus requested that the West Bank and Gaza be shifted to his Central Command (from European Command) so that the U.S. military could “be perceived by Arab leaders as engaged  in the region’s most troublesome conflict.”

The report, which was presented as context for the recent blowup between the Obama administration and Israel, was quickly seized on by critics of Israel as confirmation of their view that U.S. support for Israel hinders America’s national security interests.

Soon, other blogs followed up by reporting that Petraeus echoed this sentiment in testimony before the Senate Armed Services Committee. For instance, in a post titled, “Petraeus Makes His Move,” Talking Points Memo’s Josh Marshall wrote, “Now we have (Petraeus) saying it in his own words.”

But on Wednesday, Petraeus poured cold water on the controversy, explaining in detail why “all three items…were wrong, frankly.”

Petraeus made the remarks in response to a question by TAS at a press briefing held prior to a scheduled appearance St. Anselm College in Manchester, New Hampshire. (Watch video of the full exchange here.)

To start with, Petraeus said he never requested to have the West Bank and Gaza added to his responsibilities as leader of the military’s Central Command. He said that “every year or so” commanders submit a plan that takes a geographic look at their areas of responsibility, and then there’s discussion about whether it would make sense to redraw the boundaries. For instance, he said, last time Sudan, Somalia, Ethiopia, Eritrea and Djibouti were shifted to the Africa Command.

“Typically, there’s a question of should we ask to have Israel and Palestinian territories included, because what goes on there is obviously of enormous interest to the rest of the Central Command area, which is the bulk of the Arab world,” Petraeus said. However, he emphasized that it was “flat wrong” to claim he actually requested responsibility for the areas.

He said the report was “based on ‘bad gouges,’ as a sailor would say — bad information.”

He also refuted the claim that he had sent a request to the White House, saying he “very rarely” sends things to the President, and only does so if he’s specifically asked.

In addition, he explained that the quote that bloggers attributed to his Senate testimony was actually plucked out of context from a report that Central Command had sent the Armed Services committee.

“There’s a 56-page document that we submitted that has a statement in it that describes various factors that influence the strategic context in which we operate and among those we listed the Mideast peace process,” he said. “We noted in there that there was a perception at times that America sides with Israel and so forth. And I mean, that is a perception. It is there. I don’t think that’s disputable. But I think people inferred from what that said and then repeated it a couple of times and bloggers picked it up and spun it. And I think that has been unhelpful, frankly.”

He also noted that there were plenty of other important factors that were mentioned in the report, including “a whole bunch of extremist organizations, some of which by the way deny Israel’s right to exist. There’s a country that has a nuclear program who denies that the Holocaust took place.”

Petraeus continued, “So we have all the factors in there, but this is just one, and it was pulled out of this 56-page document, which was not what I read to the Senate at all.”

In an effort to tamp down the controversy, Petraeus said, he spoke to Gabi Ashkenazi, chief of staff of the Israel Defense Forces, and reassured him that the reports were inaccurate. He also said he sent Ashkenazi a blog post written by Max Boot of Commentary, which he said “astutely” picked apart the erroneous information that’s been floating around.

When asked about the claim that the perception that the U.S. is too reflexively pro-Israel puts American soldiers at risk, Petraeus said, “There is no mention of lives anywhere in there. I actually reread the statement. It doesn’t say that at all.”

He said the only point was that moderate Arab leaders are worried about a lack of progress in the peace process.

“Their concern is that those who promote violence in Gaza and the West Bank will claim that because there’s no progress diplomatically, the only way they get progress is through violence,” he said. “And that’s their concern.”

Critics of Israel have tried to co-opt Petraeus as somebody who shared their view that U.S. support for Israel has become a liability for America. But in reality his only point is that lack of progress in resolving the conflict is one factor — among many others — that affects the dynamics of the region.

Petraeus Says Reports About His Stance on Israel Were “Flat Wrong”

Earlier today, I had the chance to ask Gen. David Petraeus to respond to the recent debate over his position on how the Israeli-Palestinian conflict affects the broader U.S. objectives in the region. A number of blog and media reports have suggested that Petraeus is increasingly concerned that failure to resolve the conflict, and the perception in the Arab world that the U.S. is too reflexively pro-Israel, is significantly jeopardizing U.S. objectives in the region — and even putting American troops in greater danger. I plan to write more on this, but first I wanted to post the video of my full exchange with Petraeus, which occurred during a press conference prior to his Wednesday appearance at St. Anselm College in Manchester, New Hampshire. If you aren’t familiar with the story, here’s the post on Foreign Policy’s website that started the controversy, which Petraeus told me was wrong in all the key respects. And here’s the Max Boot post from Commentary that Petraeus told me accurately reflects his position.

Petraeus in NH

General David Petraeus on Wednesday denied speculation he would run for President.

“I will not run for political office, I can assure you,” Petraeus told reporters this afternoon, before his scheduled speech tonight at St. Anselm College in Manchester.

He said he’s tried to say no in as many ways as he can, including quoting the country song, “What Part of No Don’t You Understand?”

Petraeus said he hasn’t voted since 2002, but acknowledged that he was a registered Republican before that.

A New Hampshire resident, Petraeus said his appearance today is part of a broader effort by the military leadership to be accessible to the public.

He also refuted blog reports that claimed he thinks U.S. support for Israel endangers the U.S. mission in the region.  

More to come.

Reconciliation is Underway

This afternoon, the Senate opened 20 hours of debate on the reconciliation bill of changes to the health care legislation. Democrats only need 51 votes to pass it, so Republicans don’t have the ability to stop it outright. But they do have the ability to offer amendments to force Democrats into embarrassing votes, since Democrats want to avoid amending the bill, or else it has to get sent back to the House for another vote. One such amendment that Sen. Tom Coburn is offering would deny Viagra to sex offenders.