Paul Ryan to Deliver SOTU Response

Rep. Paul Ryan, chairman of the Budget Committee, will deliver the Republican response to next week’s State of the Union address.

In some ways, the response to the SOTU is always a losing proposition, as the the speaker doesn’t get to deliver the speech with all the applause and ceremony surrounding the president’s address. The most recent example of a response falling flat was Louisiana Gov. Bobby Jindal’s disasterous performance in 2009, which dampened his rising star status (though I don’t think it will do long-term damage).

That said, somebody has to do it, and I think Ryan is a savvy choice by Republicans. Ryan has emerged as the GOP’s most articulate and reasonable spokesman for spending restraint and is the only politician in either party who has proposed a specific, comprehensive, proposal to get our nation’s fiscal crisis under control. During the health care debate, he was the most effective Republican at combating President Obama, alaways armed with facts. (See his remarks to Obama during last year’s White House health care summit exposing the accounting gimmicks in ObamaCare, in which Ryan explained that, “hiding spending does not reduce spending.”) I think it’s wise for Republicans to introduce him to a broader national audience and make him the face of a new Republican party that (hopefully) is ready to get spending under control.

GOP statement announcing the decision to have Ryan give response.

  WASHINGTON, D.C. — House Speaker John Boehner (R-OH) and Senate Republican Leader Mitch McConnell (R-KY) announced today that House Budget Committee Chairman Paul Ryan (R-WI) will deliver the Republican address following the President’s State of the Union address to Congress on January 25, 2011.  Last year — in an unprecedented failure — Congressional Democrats chose not to pass, or even propose a budget, punting on a duty that represents the most basic responsibility of governing.  Chairman Ryan will deliver the Republican address Tuesday night from the House Budget Committee hearing room, where the Democrats’ spending spree will end and the Republicans’ push for a fiscally responsible budget that cuts spending will begin.

           In making the announcement, the GOP leaders noted that Chairman Ryan is a leading voice for fiscal discipline and common-sense solutions to cut spending and create jobs.  Known for his thoughtful and detailed critiques of big-government policies, Ryan has helped put to rest the Democrats’ argument that more government spending and higher taxes is the answer to most of our nation’s ills.  His commitment to free enterprise and limited government make him the right choice to outline a vision for how a smaller, less costly government will help create the right conditions for the creation of good, private sector jobs.

           “Paul Ryan is uniquely qualified to address the state of our economy and the fiscal challenges that face our country,” said Speaker Boehner. “We’re broke, and decisive action is needed to help our economy get back to creating jobs and end the spending binge in Washington that threatens our children’s future. I’m pleased that Paul will be outlining a common-sense vision for moving our country forward.”

           Leader McConnell said, “Paul Ryan has spent the better part of the last two years explaining exactly why the Democrat agenda has been so bad for jobs and the economy, and why we need to ditch the government-driven approach in favor of creative, common-sense solutions that put the American people back in charge.  Chairman Ryan’s unique understanding of the fiscal problems we face, his command of policy, and his adherence to the principles of our nation’s founding make him an excellent spokesman for the path that Americans want Washington to take.”

           “Delivering an address to the nation is a unique opportunity, and I am grateful to my party’s leaders for entrusting me with this responsibility,” said Ryan. “I am hopeful that the President will work with the new House Majority to cut spending, reform government, and restore the foundations for growth and job creation.  More than rhetoric, we need results.  I look forward to outlining a vision for a future that fulfills the uniquely American legacy of leaving the next generation with a stronger, more prosperous nation.”

NOTE: Born and raised in the community of Janesville, Paul Ryan is a fifth-generation Wisconsin native. Currently serving his seventh term as a Member of Congress, Paul works to address the many important issues affecting Wisconsin residents and serve as an effective advocate for the 1st Congressional District.  He is the Chairman of the House Budget Committee, where he works to bring fiscal discipline and accountability to the federal government.  He is a senior member of the House Ways and Means Committee, which has jurisdiction over tax policy, Social Security, health care and trade laws.  Paul is a graduate of Joseph A. Craig High School in Janesville and earned a degree in economics and political science from Miami University (OH).  Paul and his wife Janna live in Janesville with their children, daughter Liza and sons Charlie and Sam.

Republican Study Committee Releases Spending Cut Proposal

The Republican Study Committee has come out today with a spending proposal, which, Dave Weigel details would:

The proposal does what Republicans have been talking about for two years — “repeal” of remaining stimulus funds (now $45 billion), privatizing Fannie and Freddie ($30 billion), repealing Medicaid’ FMAP increase ($16.1 billion), and what they estimate at $330 billion in discretionary spending cuts. Highlights of these projected annual savings:

– Cutting the federal workforce by 15 percent through attrition, and do this by allowing only one new federal worker for every two who quit.
– Killing the “fund for Obamacare administrative costs” for $900 million
– Ending Amtrak subsidies for $1.565 billion
– Ending intercity and high speed rail grants for $2.5 billion
– Repealing Davis-Bacon for $1 billion
– Cutting annual general assistance to the District of Columbia by $210 million, and cutting the subsidy for DC’s transit authority by $150 million.

Reforms that go after their own perks:
– Cutting the Federal Travel Budget in half, for $7.5 billion
– Cutting the Federal Vehicle Budget by 1/5, for $600 million
– Halve funding for congressional printing – $47 million annual savings
– Ending the death gratuity for members of Congress

And cuts that get revenge for Juan Williams: $445 million from the Corporation for Public Broadcasting, $167.5 million from the NEA, and $167.5 million from the NEH.

The bill would also cut discressionary non-defense discretionary spending back to 2008 levels, and then later back to 2006 levels, which it would then freeze until 2021.

I’m still awaiting a more detailed breakdown of the proposal, which the RSC tells me won’t be released until later today or tomorrow, but in a press release and an op-ed by Sen. Jim DeMint, and Reps. Jim Jordan and Scott Garrett, they claim the proposal would save $2.5 trillion over 10 years. It’s not clear how they get to that number, but I would imagine it’s largely a result of the spending freeze, which would lower discretionary spending relative to projections. The problem with relying on spending freezes is that you still have to figure out down the road where the actual savings are coming from, especially as time goes by and inflation makes it more challenging to meet those annual spending targets. And as we know, we won’t get the long-term debt under control without a serious effort to reform entitlements. That said, at first blush, I don’t see anything in the above list that would not be worthwhile to cut.

As the authors acknowledge, “On its own, passing the Spending Reduction Act will not get us over the finish line — but we will get a $2.5 trillion head start.”

Santorum on Abortion and Obama’s Race

Former U.S. Senator Rick Santorum presidential bid, which already looked like a steep climb, just got steeper.

After referring to President Obama’s infamous line that determining human life was “above (his) pay grade,” Santorum said:

“The question is, and this is what Barack Obama didn’t want to answer — is that human life a person under the constitution?” and Barack Obama says no. Well if that human life is not a person then I find it almost remarkable for a black man to say ‘now we are going to decide who are people and who are not people.”

If we were to give Santorum the benefit of the doubt, he could have been referencing the fact that blacks were counted as three-fifths persons in the Constitution and thus arguing that black people should be especially reticent of government attempts to deny the status of personhood to other human beings. But you have to be tone deaf to not realize how such a remark is going to play out in the modern political environment, especially when you’re combining such volatile issues as race and abortion.

Santorum is admired by supporters for his unapologetic stances on social issues. The problem is, he manages to discuss those issues in a way that alienates people who disagree with him rather than winning converts. Which is one thing if he wants to be a commentator, but a completely different story if he still wants a political career. He should be able to make an argument against Obama’s position on abortion without bringing race into it. Such a statement does not add to, but only distracts from, any argument.

Losing a Senate race by 18 points isn’t usually the launching pad for a presidential run six years later, and this latest controversy isn’t likely to help whatever chances remained for a Santorum comeback.

Via CBN’s David Brody.

UPDATE:

Santorum responds to the criticism:

“For decades certain human beings were wrongly treated as property and denied liberty in America because they were not considered persons under the constitution.  Today other human beings, the unborn of all races, are also wrongly treated as property and denied the right to life for the same reason; because they are not considered persons under the constitution.  I am disappointed that President Obama, who rightfully fights for civil rights, refuses to recognize the civil rights of the unborn in this country.”

Via Life News.

Milton Friedman on JFK’s Inaugural Speech

On the 50th Anniversary of John F. Kennedy’s innaugural address, I couldn’t help but think of Milton Friedman’s take on the speech’s most famous line, which served as the opening of Friedman’s 1962 classic Capitalism and Freedom:

“In a much quoted passage in his inaugural address, President Kennedy said, “Ask not what your country can do for you – ask what you can do for your country.” Neither half of the statement expresses a relation between the citizen and his government that is worthy of the ideals of free men in a free society. The paternalistic “what your country can do for you” implies that government is the patron, the citizen the ward, a view that is at odds with the free man’s belief in his own responsibility for his own destiny. The organismic, “what you can do for your ‘country” implies the government is the master or the deity, the citizen, the servant or the votary. 
To the free man, the country is the collection of individuals who compose it, not something over and above them. He is proud of a common heritage and loyal to common traditions. But he regards government as a means, an instrumentality, neither a grantor of favors and gifts, nor a master or god to be blindly worshipped and served. He recognizes no national goal except as it is the consensus of the goals that the citizens severally serve. He recognizes no national purpose except as it is the consensus of the purposes for which the citizens severally strive.

The free man will ask neither what his country can do for him nor what he can do for his country. He will ask rather “What can I and my compatriots do through government” to help us discharge our individual responsibilities, to achieve our several goals and purposes, and above all, to protect our freedom?  And he will accompany this question with another: How can we keep the government we create from becoming a Frankenstein that will destroy the very freedom we establish it to protect?

ObamaCare Repeal Passes House 245-189

The House of Representatives voted 245 to 189 to repeal the national health care law.

The legislation attracted more votes in the House than the initial passage of the law itself, which received 219. Just three Democrats, however, joined Republicans in voting for repeal — Dan Boren, Mike Ross and Mike McIntyre. Full roll call here.

While this particular repeal bill won’t move further, it could have some longer term political ramifications. Republicans needed to hold the vote so that in 2012 they can tell their voters, “you elected us and we passed repeal, but to complete the process we need to take back the Senate and the White House.” At the same time, there were 13 Democrats who voted against the original health care bill who are still in the House, meaning that Republicans can now paint the 10 who didn’t vote for repeal as supporters of the law.

The vote was also a victory for the tea parties. Nine months ago, Nancy Pelosi, then described as the most powerful Speaker in the history of the House, was able to jam through the health care law over fierce opposition from Republicans and the American people. At the time, repeal was seen as a joke and high profile Republicans seemed to be distancing themselves from it — or at least talking in terms of repealing only the worst aspects of the law. But now, not only have Republicans taken over, but they’ve made repeal their first act of any significance, and every member of their caucus has voted for it.

Democrats who I spoke to outside the House floor were dismissive of the vote.

“This is basically an unfortunate waste of time of the House of Representatives,” Rep. Tim Bishop, a Democrat from New York, told me. “This has no chance of being enacted into law, and we should spend our time doing what the American people told us they want to do, which is work on getting this economy back on track and putting people back to work.”

He went on, “An issue that has been fully litigated, as this one has, when there is absolutely no chance of this measure ever being enacted into law, I’d say the House’s time would be much better spent engaged in the work the American people sent us here to do.”

Rep. Barney Frank was a bit more measured in his comments.

“The Republicans have met their commitment to voters to vote for repeal, but it won’t go anywhere in the Senate, and we’ll move on legislatively,” Frank said. “I think it was more of a legitimate political statement. I don’t use ‘political statement’ as a bad word. It was a legitimate political statement, making clear what their position is.”

Repeal Through Reconciliation

House Republicans are soon expected to pass their bill repealing the national health care law, but the bill won’t go any further than that given Democratic control of the Senate.

To do a clean repeal of the entire bill, Republicans would have to maintain control of the House in 2012 while gaining the White House and a 60-vote majority in the Senate. That’s unlikely to happen, which means that it’s more likely Republicans will have to pursue a more piecemeal approach. In the short term, there will be some efforts to defund ObamaCare — but that will only get them so far. If Republicans are willing to use reconciliation, however, they could make a major dent in ObamaCare with a simple majority in the Senate. Though this method would still require them to take back the White House, they wouldn’t need 60 votes in the Senate.

Last year, I spoke with former Senate parlimentarian Robert Dove about the prospect of repealing ObamaCare through reconciliation, and he gave me this simple formula: “Anything that reduces the deficit is okay…and nothing that increases the deficit is okay.” The key thing to keep in mind is that this is judged on a provision by provision basis, not taking into account the legislation as a whole.

What this means is that it will require a lot of political fortitude by Republicans, because to meet the requirements of reconciliation, the bill would have to focus on rescinding benefits, which account for the bulk of the cost of ObamaCare. Chief among them are the expansion of Medicaid and the subsidies to purchase insurance on government run exchanges. The Republicans would not be able to use reconciliation to repeal regulations, tax increases, or Medicare cuts.

However, were they to show the courage to repeal the government benefits, it would make it easier to go after other aspects of the bill. Without the subsidies to purchase insurance, the new exchanges that provide the infastructure for ObamaCare would be effectively gutted and the mandate forcing people to purchase insurance becomes even harder to defend. At the same time, it would be difficult to justify the tax increases — totaling $770 billion through 2021.

Today’s vote on repeal, as I noted before, is a no-brainer — it’s the bare minimum Republicans should do. But it is only the first step in a long and arduous process that will require an increasing amount of resolve by Republicans.

Dem Compares GOP to Nazis

And the loser of the “new tone” contest goes to Rep. Steve Cohen, Democrat of Tennessee.

ABC reports:

In an extraordinary outburst on the House floor, Rep. Steve Cohen (D-TN) invoked the Holocaust to attack Republicans on health care and compared rhetoric on the issue to the work of infamous Nazi propagandist Joseph Goebbels.

“They say it’s a government takeover of health care, a big lie just like Goebbels,” Cohen said. “You say it enough, you repeat the lie, you repeat the lie, and eventually, people believe it. Like blood libel. That’s the same kind of thing. And Congressman Cohen didn’t stop there.

“The Germans said enough about the Jews and people believed it–believed it and you have the Holocaust. We heard on this floor, government takeover of health care. Politifact said the biggest lie of 2010 was a government takeover of health care because there is no government takeover,” Cohen said.

The Left’s False Hypocrisy Charge Against Republicans

Of all the arguments liberals have been making during the health care debate, among the most tenuous is the idea that Republican members of Congress who accept government sponsored health insurance are being hypocrites for favoring repeal of government-sponsored health insurance for other Americans. Today, bloggers over at Think Progress post what they evidently think is a clever video of them challenging Republican members to explain why they accept government health care benefits.

The explanation for this is quite simple. Most Americans receive their health insurance through their employers, and members of Congress are employees of the government. Hence, the government helps pay for their coverage.

To extend the logic being used by liberals would mean that if Democrats were to propose a law in which the federal government sends $100,000 checks to every lower-income American, any Republican members who still collected their salaries would be hypocrites for opposing it.

Et tu, Priebus?

Michael Steele tells the Frum Forum’s Tim Mak that he feels betrayed after appointing Reince Priebus to be RNC general counsel, only to watch Priebus oust him as chairman. “I know exactly how Caesar felt,” Steele said.

The whole interview is here.

Obamacare’s Skeptical Investors

With House Republicans poised to vote on repealing the national health care law later today, we’re going to hear a lot of numbers being thrown around, as supporters of ObamaCare tout the Congressional Budget Office estimate that the law will reduce the deficit and opponents arguing that it’s really a budget buster when you put aside the gimmicks.

Advocates of the national health care law say those of us who have been critical of Democrats’ fiscal claims are either lying, being misleading or simply cherry-picking CBO numbers that bolster our case while ignoring those that don’t. But the reality is that ObamaCare skeptics are merely applying a different mode of analysis to determine whether the law is fiscally responsible. And there’s nothing controversial about that — in fact, it’s something that’s done regularly in the financial community when it comes to evaluating companies.

When I worked as a financial journalist on the equities desk at Reuters, one of our biggest tasks was to weed through thousands of corporate earnings statements each quarter. When a company announced its earnings, most of the focus came down to whether it missed, met, or exceeded that quarter’s expected earnings per share (EPS) number. But as we came to learn time and again, that number wasn’t always the most accurate gauge of a company’s overall fiscal position, because the numbers were often reverse-engineered to meet targets. Some more skeptical investors would put less emphasis on the EPS number, and raise concerns about a company’s debt, cash flow, sources of revenue, or a myriad of other indicators.

There are many well-publicized examples of companies whose earnings statements obscured their true financial position, whether it was with Internet startups during the dot-com bubble, mortgage companies during the housing bubble, or other high-profile accounting cases such as Enron. Those investors who looked beyond the headline numbers and questioned the bullish analyses by many Wall Street analysts ended up being vindicated in many of these cases. 

Those defending the fiscal responsibility of the national health care law often remind me of the corporate executives I would hear on conference calls touting their companies’ financial strength.

The problem is not with the analysts at the CBO, who merely evaluate what is put in front of them, but with those ObamaCare advocates who quote the CBO’s headline deficit reduction number, and act as if that’s the end of the story.

President Obama set out two main fiscal goals during the health care push — that the legislation would cost “around $900 billion” over 10 years and that it wouldn’t add to the deficit. And according to the CBO, Democrats were able to achieve that. But a deeper look at the numbers shows, for instance, that the only way Democrats were able to come close to that $900 billion figure was by delaying the major spending provisions (representing 98 percent of the legislation’s cost) until 2014, making it appear cheaper over the CBO’s 2010 through 2019 budget window. In reality, the true 10-year cost, once fully implemented, is well north of $1 trillion.

The various ways the legislation’s authors were able to achieve the deficit reduction number have been well documented. For instance, Democrats claimed $70 billion in premiums from a new long-term care insurance program called the CLASS Act as deficit reduction, even though that money is supposed to pay for the program’s future benefits. And the deficit reduction claims also assume that all of the Medicare cuts will be fully implemented as written, which the CBO cautions has not historically been the case, and that the so-called “Cadillac tax” on expensive health care plans will go into effect in 2018 over objections of labor unions.

Defenders of the law would argue that it’s disingenuous to make an argument based on the assumption that the law won’t be enacted as written. But even if one were to grant that, Democrats are still left with an unorthodox path to fiscal responsibility — one that drastically increases America’s entitlement obligations at a time when the nation is in the early stages of a long-term debt crisis caused by an inability to pay for the entitlements that we already have. The problem is that the combination of Medicare cuts and tax increases used to pay for ObamaCare are no longer available to offset the ballooning costs of these existing entitlements. Even more specifically, during the campaign, Obama proposed raising the payroll tax on higher incomes to help make Social Security solvent — instead, such a tax is being enacted to pay for the new health care law.

For the past two years, Democrats have been desperately trying to sell Americans on the idea that government can provide health insurance to all those who don’t have it and save money at the same time. But they’ve encountered a nation of skeptical investors.