Freedom Line Blog

The reason Budget Committee Chairman Paul Ryan gave for begging off of the debt/budget “supercommittee” was because he wants to spend the fall trying to put together major reform of Congress’ budget process — the “how” of crafting the budget rather than the “what” of the budget, although of course the “how” has an absolutely huge effect on the “what.” While I really don’t see why Ryan can’t do both jobs — in fact, I think they should complement each other — it is absolutely admirable that Ryan is dedicated to procedural reforms. The process within Congress has been broken ever since liberals “fixed” it in response to President Nixon’s attempts to “impound” congressionally approved spending. The fix made the process overly complicated, and, despite its advertised aims, actually made it easier for spending to spiral out of control.

A number of thoughtful people have pushed (publicly or privately) budget-process reforms over the years, including two of the best congressmen of the 1990s, Bob Livingston and Chris Cox. In a future column (or several), I’ll gladly delve into the details of various ideas. For now, though, here’s what’s wrong: What was meant to provide multiple checks against overspending has instead created such a convoluted process that everything ends up dumped into mega-bills (“omnibus” legislation) or hurried, last-minute legislative action, or both at the same time. That, in turn, makes it more difficult for the public or for internal congressional budget hawks to discover, highlight, and defeat individual extravagances.

What happens now is that the Budget Committee provides a non-binding “resolution” in the spring with targets for spending within certain broad categories. The Ways and Means Committee handles policy on the major budget drivers, Social Security and Medicare. The Energy and Commerce Committee handles policy on Medicaid. “Authorizing” committees (Agriculture, Transportation, Armed Services, etcetera) handle policy questions on all sorts of federal programs, plus provide the spending parameters for those programs. But that authority doesn’t actually mean that the government, by law, will spend that money; such spending occurs (on discretionary, or non-entitlement, programs) only in an Appropriations bill. The Appropriations Committee, divided into 12 subcommittees, handles the actual spending bills, within the parameters set in the spring budget — if a budget actually has been passed, as by law it is supposed to be, but under the Democrats in the Senate has not been.

Got all that? That’s just the broad overview. The details are even more mind-numbing, and the process even more redundant than the overview would indicate.

In the end, the process should be streamlined, so that the triplicate overlapping of power between the Budget Committee, the Appropriations Committee, and the authorizing committees (not to mention the Ways and Means and E&C power over entitlements) is condensed. One of those three spending-power centers should be stripped of that spending power.

Frankly, as a former press secretary for the House Appropriations Committee, I found the whole system idiotic. What might be a surprise is that I think the best answer might be to eliminate the Appropriations Committee altogether, and instead set up special appropriations subcommittees within each authorizing committee, making those new committees both policy-making and appropriations bodies, with the responsibility (which the authorizers don’t have now) of staying strictly within the overall budget limits for the agencies controlled by each. In short, I would strengthen the Budget Committee’s enforcement powers, while consolidating policy and appropriating within the same set of expert committees. Meanwhile, the legislative schedule would be altered to a far more achievable set of deadlines, ones that also better take into account Congress’ “district work periods,” or “recesses.” Finally, I would severely limit the August recess, allowing no more than 17 days, rather than nearly a full month. With the fiscal year ending on Sept. 30, it doesn’t make sense to interrupt so much actual legislating for such a long time. If Congress wants more time “off,” well, then, it should get its work done earlier in September, rather than bumping up against (or beyond, as is usually the case) the Sept. 30 deadline. If all budgetary work is done before Sept. 30, as a result of taking a shorter August recess, then the reward should be time off at the end of September and/or beginning of October. Otherwise, tough luck.

But that’s just me. All sorts of other people have other ideas. Paul Ryan wants to look into all of this, and create a process that actually makes sense. Good for him.

Cost of Government Day, as calculated by Americans for Tax Reform, falls tomorrow, Friday August 12. “This is the day on which the average American has earned enough gross income to pay off his or her share of the spending and regulatory burdens imposed by government at the federal, state, and local levels.”

This is “a full 27 days longer than 2008.” What’s worse is that further costs, via regulation alone, are built into the system for future years via regulatory burdens imposed by the Dodd-Frank financial bill and by Obamacare. Again, read the summary here. EPA regs also are in the offing, and of course the regulatory behemoth continues via the NLRB, the CPSC, the FDA, and others.

The Obama administration is filled with officious zealots who like to tell other people how to live. The result makes all of our wallets lighter, and erodes our freedom.

There will be much more to say on this in weeks to come, but here’s an absolutely essential thought for conservatives in Congress: The discretionary spending numbers mentioned in the debt-ceiling deal are upper limits. They do not require so much money to be spent; they only ensure that no more than those limits can be spent. My understanding is that the House has six Appropriations bills outstanding. On all six bills, it should approve significantly less than the limits allow. If conservatives choose their cuts carefully, the left will be forced to explain why, in a time of a ratings downgrade, they want to spend more money on bridges to nowhere, museums for silly things, programs that don’t work, and bureaucrats who won’t work. Get the bills done quickly; avoid a massive “omnibus bill” where so many items get wrapped in all at once that the details of lefty largess get lost. But keep on cutting and saving, saving and cutting. Keep the pressure on, for limited government and for freedom.

Despite its August recess, Congress remains technically in session. Its leaders of both parties should consult with President Obama and act to try to talk sense into S&P, which has caused a market meltdown with its understandable but not-technically necessary downgrade of U.S. bonds.  Rather than berate S&P publicly, American political leaders should consult with S&P privately to see if a few quick steps would convince the rating agency to call off the dogs.

Here are three steps I believe could be done rather quickly, without necessitating extensive hearings or debate, that would help the debt outlook. First, it would be a relatively easy affair for Congress to pass a law instituting a temporary cut in corporate income taxes for repatriated businesses down to 5 percent, as presidential candidate Rick Santorum has proposed. This actually, by all accounting, would create both a short-term revenue gain (5 percent of something is always more than zero percent of anything) and, in the long-term (as the special repatriation rate ends), would continue to generate more revenue if any of the repatriated firms actually remain in the U.S.A.  (Some groups argue that the immediate boost in revenues would be about $50 billion, but that it would lose money in the long run. I buy into only the first assessment; I don’t see how one can count as a revenue loss some revenue that otherwise would never come at all.) If I remember rightly, such an approach has been used in the past, and it worked.

Even liberal Democrat Chuck Schumer has proposed such a step, albeit with a spending idea attached to it. Considering the need to mollify S&P, though, perhaps Schumer can be persuaded to drop his “infrastructure bank” idea for now with promises that it will be at least on the table for the “supercommittee” budget talks coming up.

The second easy step would be to adopt a “chained Consumer Price Index” government-wide, as proposed by the Gang of Six. Forget the technical details for purposes of this blog post; all that’s necessary to understand is that by adopting some tiny changes in how government calculates its cost-of-living adjustments and its tax-rate indexing, spending in the out years can be reduced while revenues creep up just a bit faster, without really changing any economic incentives in any appreciable way.

The third step is one I’m not sure of, procedurally. As of February, the government had on its books  more than $700 billion in “unobligated” funds. I think a small amount of these were rescinded in the Continuing Resolution deal this spring, but I believe that tens of billions of dollars more remain readily available. While I absolutely do not approve of frequent use of presidential Executive Orders, I am under the impression — and this could be entirely wrong, but I think procedurally it would be okay — that at least a portion of these funds could be wiped off the books by executive order, without further congressional action. Either way, congressional action itself shouldn’t be too too hard to expedite, if needed. And none of it should be controversial.

So there: Implement a cut-rate repatriation tax, adopt a chained CPI, and cut unobligated funds. Together, these steps obviously won’t come close to solving the long-range debt problems, but they will reassure markets, perhaps impress S&P enough to give the rating agency an excuse to undo its damage, and reassure the world that the dollar is a currency that won’t collapse. Slow, steady accretions of savings may just be the best way to steady not just the budget numbers, but the entire economy.

Deroy Murdock throws the “pro-choice” label right back at the left. Wow. Good stuff.

One of the biggest decisions that conservative members of the new congressional debt commission will need to face (and this assumes that all six GOPers are conservative; if not, Mitch McConnell and John Boehner should crawl under rocks forever) is whether to try to swing for the fences with a “grand plan” or whether to try to reach the required savings numbers (all of which are subject to the fallacy of misplaced concreteness, but that’s a story for another day) via policy changes that will be as invisible and thus as little frightening as possible.

From a policy standpoint, what’s needed is both approaches at once — i.e., a “super grand plan” that achieves far more savings even than those required under this week’s deal. That’s how big the long-term problem is.

But for now the super grand plan is pie in the sky. The choice is between merely grand, on the one hand, and small ball on the other.

From a political standpoint, the advantage of a grand plan is that it requires buy-in from the moderate Dems and thus takes away the left’s ability to demagogue it. The disadvantage is it lets the leaning lefties look reasonable and, if Obama signs off, reinforces the (false) image he wants to portray as a moderate. It also would probably require some policy compromises that mean the end result won’t actually work as well as conservatives might otherwise hope.

The advantages of small ball are that it avoids a huge fight, thus potentially locking in whatever advantages the right seems to have now over Obama, and it leaves to conservatives — if they sweep the 2012 elections — the ability to implement REALLY good policy reforms in 2013. Disadvantages? It continues to allow the left to lie about what the GOP plans are, and thus to demagogue those purported plans.

What do I mean by “small ball?” Formula changes. Things like a “chained CPI,” or inflation adjustor, that saves money over time — except that the design of the “chain” would be ratcheted up, in terms of savings, from what the Gang of Six proposed. A quick and easy solution for savings would be to suspend all inflation adjustments government-wide for one year, or perhaps all inflation adjustments up to 3% (if inflation exceeds 3%), and call it a one-time “correction” for 30 years of ever-so-slightly (on average) overstating the true inflation rate. Another small-ball move that actually is almost sure to be part of any package, big or small, will be to tie the Medicare eligibility age to that of Social Security, which is rising slowly for the next 15 years or so. To save more money, that eligibility-age hike (for both programs) could be accelerated just a tad, so that the new age of eligibility reaches 67 (from 65) a year sooner than it would under current law.

Anyway, things like that are “small ball” in that they are almost imperceptible, but when all combined they add up to significant savings over time.

I don’t know which approach is best — grand plan or small ball. But it’s a choice that will need to be made soon.

More on this in future posts.

Not to beat a dead horse, but the next item of business for conservatives should be to make the case for, and pass legislation enabling, economic growth. To do this, those on the right need to bury the hatchet of the last two weeks, stop attacking each other, and work together again. Moderate Republicans are not the enemy; they may just not be sufficiently friendly. Or, from the mainstream conservative standpoint (i.e. John Boehner), the Tea Partiers aren’t the enemy; they just act like it sometimes.

In actual goals and actions, there is far more that unites the right than that should divide it. Pick up the pieces, consolidate whatever gains were made, and move on. Growth is the answer. Tax reform is the means.

Here was my take on things, this morning, at The American Spectator.

Short version: I think the debt deal DOES, in effect, protect pretty well against tax hikes, but it does not protect enough against defense cuts of an unwisely large size.  But the ultimate fate of defense, and indeed of all of this, will depend on the 2012 elections — and in the meantime, the change in direction of government spending will probably be noticeably helpful. Conservatives have every right to grumble about this result. But wise conservatives will certainly not reject it out of hand. In short, it’s a close call that probably will attract slightly more conservative votes than it will repel.

As House and Senate negotiators scramble to fashion a deal that can garner 60 votes in the Senate, 216 or 217 votes in the House, and President Alinsky’s signature (I still smell a last-minute torpedo job from The One), three keys should guide the Republican leaders. First, defense spending should be significantly protected. Second, absolutely no tax hikes should be part of the “trigger” mechanism for the second round of savings, and the Senators and House members appointed by GOP leaders to the commission should also be known anti-taxers who have signed the ATR pledge. Third, and this is of utmost importance: In order to reassure conservatives, the domestic discretionary spending cuts should be even more front-loaded than the Boehner plan was. The revised Boehner plan cut $22 billion in the first year; the new one OUGHT to cut at least $25 billion, and it should accordingly cut more in the second year than Boehner’s revised plan did.

Frankly, we should not care much what the caps are in years nine and ten; but history shows that spending caps actually tend to work in the first two or three years at least — and that if savings are achieved for more than one year, the “baseline” for future spending tends to drop and stay dropped for another two or three years — so the first two or three years are crucial.

Frankly, as long as these three conditions are met, I think Reaganite conservatives will have won, on behalf of the public, a reasonably decent victory.

At the American Spectator, I’ve been keeping tabs.

In a brilliantly argued open letter to House Republicans, former Sen. Fred Thompson — nobody’s definition of a squishy moderate — makes the same points I have been trying to make, namely that the Boehner plan should be seen as a significant victory for conservatives. As Thompson writes, “I respectfully suggest that you rake in your chips, stuff them in your pockets, and tell the dealer to deal the next hand.” Why? Thompson explains:

There is only so much you can do in this deal. Put it into perspective. Right now we are on a path to a $26 trillion debt in ten years, and this is using bogus assumptions about growth and interest payments. The federal government spends over $10 billion a day. We have over $70 trillion in unfunded Medicare liabilities. A problem of this size can be dealt with only by persuading the American people what must be done on a consistent basis over a long period of time. It can’t be done with fits and starts and silver bullets. The issue is not where we will be when the debt-ceiling bill is done, it is where we will be in ten years.

And why is the Boehner bill a win?

At the beginning of the debt-ceiling debate, a realistic, optimistic outcome essentially would have been this: The Republicans would take the initiative and put their plan before the American people. The debt-ceiling increase would be accompanied by corresponding spending cuts. There would be no new taxes. You would drive a hard bargain in the face of unrelenting presidential and Democratic demagoguery — some of it on national television — drawing the attention and focus of the American people to the truth about our country’s fiscal and economic situation. Sure, people would initially ask, “Why are the Republicans now willing to take this thing to the wire when a debt-limit increase has usually been pro forma?” But at the end of the day, more Americans than ever before would understand what is going to happen to us as a country if we continue our current path. In this optimistic scenario, President Obama’s duplicity would become apparent, and he’d be politically diminished as a result.

As I argued, “Here’s what they understand: $1.2 trillion of savings from domestic discretionary programs, with real, enforceable budget caps, over ten years, is a huge accomplishment…. The history is this: Never before has Congress used the debt ceiling hike to force serious budget savings. Any successful use of this debate toward that end should be counted as a significant accomplishment.”

One of the biggest mistakes Republicans made in the 1995-96 “government shutdown” battle was failing to understand when they had won. Rather than pick up their winnings from the table and banking them, they kept fighting over mere scraps — and then ended up losing the scraps anyway, along with the PR victory that would have been theirs.  They did the same thing when they needlessly fought over unimportant details of the impeachment inquiry of 1998, turning public anger that had been focused against Bill Clinton into sympathy for Clinton and anger at them. Under the rules proposed by Democrat Dick Gephardt, Clinton STILL would have been impeached, without the GOP looking bloodthirsty.

This debt limit fight has reached the same point: Conservatives have engineered what should be seen as a significant victory, but they aren’t accepting what they have won. Again, they could be snatching a major defeat from the jaws of a reasonably decent victory.

Some hard-liners in the House are refusing to support John Boehner’s latest plan. They seem to believe it’s doesn’t achieve enough savings.

Not to be too blunt about it, but they need to get a clue.

James Capretta, who trashed the Gang of Six plan, says Boehner’s plan is okay. So does Grover Norquist.

Here’s what they understand: $1.2 trillion of savings from domestic discretionary programs, with real, enforceable budget caps, over ten years, is a huge accomplishment. And it still leaves on the table some of the low-hanging entitlement fruit (a “chained” Consumer Price Index adjustment) and some of the mid-hanging entitlement fruit (hiking the Medicare eligibility age merely to coincide with that of Social Security). So that means that part of the other $1.6 trillion in savings, to come from the later commission, is actually likely to be fairly easy to achieve as well.

The history is this: Never before has Congress used the debt ceiling hike to force serious budget savings. Any successful use of this debate toward that end should be counted as a significant accomplishment. Sure, some on the hard right — and I have ALWAYS been hard-right on cutting spending — may complain that Boehner’s plan isn’t as good as the original “Cut, Cap, and Balance.” So the bleep what. Anybody who ever expected CC&B to become law in its original form wasn’t living in the real world. James Madison and Roger Sherman didn’t design our system to allow one House to steamroll both the other congressional chamber and the president (although they did indeed give more power to the House of Reps. vis-a-vis the president, on domestic issues, than it has historically made use of).  The U.S. government is designed to force compromise.

Frankly, the Boehner plan isn’t a 50-50 compromise; it’s a win for conservatives, for fiscal responsibility, and for the nation. It effectively changes the trajectory of spending for the first time since Washington started bingeing again (after three good years) in the fall of 1998. It’s a remarkable achievement when working against the most leftist president in history. Conservatives should not torpedo it.

As I have written and argued repeatedly for months, President Obama wants a crisis. He plans to use a crisis to seize even more power for himself and for the government. Now he is a significant step closer to his goal. Despite his finger-pointing con-job in his nasty press conference this afternoon, Obama is the one who deliberately torpedoed the budget talks. He is the one who has yet to put an actual plan on the table. He is the one who refused to even let GOP negotiators talk. He is the one who insisted through most of the year that no other provisions be attached to the hike in the debt limit — that the debt limit hike should be “clean” rather than include even a single cost saving. Now, as Speaker John Boehner just said, and as so many others have said in less vivid language, “dealing with the president is like negotiating with a bowl of Jello.” He just won’t stay still. And he’s doing it on purpose. He’s doing it because he doesn’t want a deal. He wants a crisis. This is a very dangerous game he’s playing, but he’s playing to win. And if he wins, we all lose — we lose financially, and we lose at least some of our freedom. Mark my words. This is what Obama’s game is. To try to win it, he has been fibbing, faking, and fulminating. Once he wins it, he will do far worse.

Over at The American Spectator, I explain why conservatives should accept a scaled-down version of the Gang of Six plan on the budget. Let me make it even more clear. Herewith, the Hillyer Plan, which has legislative elements simple enough that they should be able, on a fast track, to be passed by Aug. 2 — and if not, by about mid-August (which means a delayed August “recess”), which would require a temporary extension of the debt limit which all sides should accept. But let’s be up front about this: Sometimes, Washington gets WAY too tied up with official accounting “scores” of budget proposals, when in truth almost all out-year projections are nonsense, with huge shifts in numbers dependent on unpredictable effects of economic growth, inflation, and other factors. The Hillyer Plan would specifically NOT be “scored” in advance, because the point isn’t to figure how many economic assumptions can dance on the bead of an abacus. Instead, the guiding principle should be good policy combined with overall debt reduction, without worrying about whether the reduction officially hits a specific numerical target. As Jack Kemp and the Gingrich Congress showed, economic growth can and will balance a budget that is reasonably restrained.

Okay, here’s the plan:

1) Permanent (non-sunseted), three-tiered rates for both individual and corporate income taxes, at 12%, 24%, and 30%.

2) Capital gains taxes at the same levels — except that the calculation of the base price would be indexed for inflation for the first time, and no individual capital gain under $5,000 would be taxed.

3) Complete elimination of taxes on ordinary stock dividends. Dividend taxes require far too much accounting for far too little bang for the buck.

4) A cap on the deduction for mortgage interest at $3,000 per month (adjusted upward for inflation every five years). Owners of McMansions will be getting a big enough break via cutting the top rate from 35% to 30% that this trade-off will be more than worth it. A cap, too, on the deduction for state and local income taxes, set at perhaps $10,000. (This would have the effect of at least subtly pressuring high-income-tax states to reduce their own tax rates, while of course gaining at least a little money for the feds.)

5) Complete and permanent elimination of the Alternative Minimum Tax.

6) Elimination of Barack Obama’s hated tax break for private jets.

7) Elimination of all tax breaks for corn ethanol, combined with elimination of the import tariffs on cellulosic ethanol.

8) From the Gang of Six plan: Shift to the chained-CPI (a more accurate measure of inflation) government-wide starting in 2012, along with the following specifications for Social Security: (1) exempt SSI from the shift for five years, and then phase in the shift over the next five years; and (2) provide a minimum benefit equal to 125% of the poverty line for five years. (According to CBO, the shift to chained-CPI would result in the annual adjustment growing, on average, about 0.25 percentage points per year slower than the current CPI.)

9) From the Gang of Six plan: Repeal the CLASS Act.

10) Allow the Dems to pick any business tax “loopholes” of their choice for elimination, of up to $150 billion over ten years, of which the GOP would be obliged to accept $100 billion of them. (Note: The selection of options, first by the Dems and then by the GOP, could easily be done within two weeks.)

11) Require the administration by law, within a year, to approve permits to open enough federal-government-owned lands to energy development to produce, via royalties and taxes, at least $100 billion in federal revenue over the next ten years. This idea stems from a column by Gary Palmer of the Alabama, not yet available online. Palmer explains: “According to the U.S. Department of the Interior and the Bureau  of Land Management, there are 800 billion barrels of recoverable oil from oil shale in the Green River Formation. This is three times more than the proven oil reserves of Saudi Arabia. The Green River Formation covers about 11 million acres in Colorado, Utah and Wyoming, with about 80 percent of the recoverable oil in a 1,225 sq. mile area of western Colorado. The federal government owns or manages 73 percent of the lands that contain significant oil shale deposits in the West and 80 percent of the recoverable oil in the Green River Formation.”

12) Immediately remove authority to spend at least $75 billion in whatever “unobligated” funds still remain (some were withdrawn a few months ago in the 2011 Continuing Resolution).
13) Pass a shell budget resolution that sets overall non-defense Appropriations limits for 2012 of $25 billion less than the combined budget authority approved for 2011 (in actual dollars, without an inflation adjustment).

14) Before final passage of this whole package, pass “Sense of the House” and “Sense of the Senate” resolutions (there’s no time for actual legislation before Aug. 2 to implement the specifics)  supporting the following items in the Gang of Six spending outline:

• Health, Education, Labor, and Pensions would find $70 billion.
• Homeland Security and Government Affairs would find $65 billion.
• Agriculture would find $11 billion while protecting the Supplemental Nutrition Assistance Program.
• Commerce would find $11 billion.
• Energy would find $6 billion and may propose additional policies to generate savings that would be applied to the infrastructure deficit or to reduce the deficit.
• Judiciary would find an unspecified amount through medical malpractice reform.

• Impose spending caps and security/nonsecurity firewalls.
• Sequester accounts at the end of the year to recoup any excessive spending by Congress.
• Restrict the use of emergency designations that circumvent the spending caps.
• Prevent Congress from exceeding the caps by requiring a stand-alone resolution subject to a 67-vote threshold, in order to isolate that vote to increase the deficit from any other policy items.

• Achieve program integrity savings of $26 billion in entitlement programs to curb fraud, abuse, and other wasteful spending government-wide.
• Create a working group to provide updated budget concepts for CBO and OMB.

There. I hate to have a “14-point” plan because it has the cringe-inducing whiff of Woodrow Wilson, but that’s just how the numbering came out. Anyway, I believe every one of the first 13 points could actually be enacted in law by Aug. 2 or certainly by August 15, and while the resolutions in Point 14 obviously do not have the force of law until subsequent legislation enacts them, it would have enough moral force, with enough public attention, to effectively force compliance as soon as the complicated legislative wheels could operate.

The bipartisan “Gang of Six” has been in bad odor with conservatives for months now because it always has been seen as a sell-out and a way to force tax hikes into law with bipartisan cover. But the deal outlined today actually claims to represent a net tax cut of $1.5 trillion over ten years. It would actually lower marginal tax rates on both individuals —

* Simplify the tax code by reducing the number of tax expenditures and reducing individual tax rates, by establishing three tax brackets with rates of 8–12 percent, 14–22 percent, and 23–29 percent.

* Permanently repeal the $1.7 trillion Alternative Minimum Tax.

— and businesses:

Establish a single corporate tax rate between 23 percent and 29 percent, raise as much revenue as the current corporate tax system, and move to a competitive territorial tax system.

I haven’t had much time to study all the details, but it looks like this deal would achieve $500 in real savings in the short term and then set up about as good a budget “cap” system as I’ve ever seen, without triggering tax hikes. I reserve final judgment, but, frankly, I don’t see anything in here for conservatives to seriously object to.

Fred Barnes’ story at the Weekly Standard about our supercilious, self-important, rude, overbearing, blowhard of a president is absolute must reading. It explains why these budget talks have been unproductive: because Barack Hussein The One The Redeemer Obama has absolutely no regard for anybody else’s opinion, no patience with dissent of any kind — and no manners. In short, he’s a boor — a boor with authoritarian inclinations:

The president has been less genial away from the prying eyes of the press and the public. In the private talks, he’s dominated the discussion with the eight most senior members of Congress in an overbearing way not likely to lead to compromise. He’s been argumentative. He’s come across as President Blowhard.

After Sperling briefed the group on the deficit cap proposal, House Democratic leader Nancy Pelosi addressed another subject. When a Republican participant criticized the deficit cap, Obama interrupted with a monologue. When the Republican tried to speak a second time, the president quickly cut him off and delivered another sermon on why the criticism was wrong.

I have argued all along that Obama doesn’t really even want a deal. He wants  a crisis. His behavior — pretending to be the adult and compromiser in public while actually torpedoing progress in private — is exactly that of somebody who is trying to foment a crisis from which he can benefit.

That’s why Charles Krauthammer makes sense:

[D]are the president to put the country in default on the basis of ‘I won’t accept anything short. I only want something that will serve me on Election Day.’

All of this talk about a Balanced Budget Amendment is fine and dandy, but it has NOTHING to do with the debt ceiling fight. It is literally impossible to get a BBA in time for the debt limit deadline. The best thing to do is to stop talking and actually pass spending cuts attached to a short-term lifting of the debt limit. Even better, doing a shorter-term debt limit hike also means the spending cuts, while substantial, are less likely to include things against which Obama can demagogue. In other words, the cuts, while not as big in total dollars, can be more carefully chosen for PR purposes — and they will accompany a more restrained debt-limit hike, which itself sends a message that conservatives refuse to give carte blanche to debt as high as Obama wants the new limit to be.

Yes, call Obama’s bluff. The way to do that is to pass a politically palatable bill with real savings — and leave extraneous things out of it.

It is beyond outrageous that, at the last minute, the Obama administration is trying to stop the execution of a brutal rapist-murderer in Texas today, completely ignoring the precedent in an earlier case (Medellin) — on the grounds that the poor abused rapist/murderer wasn’t told he could contact the Mexican embassy (he was a Mexican national) before proceedings against him began.

Having looked at this, I tend to agree that the failure here to contact the embassy was a harmless error and that, unlike in countries that use summary executions and have no other procedural safeguards, this guy has had PLENTY of opportunity to have his arguments heard. I see no legal reason to halt the execution and no moral reason to pass the proposed law that would block such executions while federal courts review the cases. (In short, the legislation would give foreign nationals GREATER rights to escape scot-free than the already significant protections in law for American citizens.)

Methinks the Obama administration should worry less about protecting Mexican killers and should worry more about having given weapons to other Mexican killers who used the weapons to murder American border personnel.

If they didn’t actually hold some positions of power, today’s liberal activists and supposed intelligentsia would engender serious pity because of their profound ignorance, lack of logic, and intellectually indefensible sentiments masquerading as principles. The latest case in point is the truly goofy New Republic piece by Ed Kilgore, previously best known for using a book review to posit that just about any backlash against Barack Obama is a sign that racism still reigns in large swaths of America. Now Kilgore analyzes the growing use of the term “constitutional conservatism” as if it not instantly understandable on its face but instead as if it is some sort of radical plot, alien to American democratic traditions. Worse, he avers it is a secret code, a radical-right “dog whistle” that lets right wingers and only right wingers know that what is being proposed is a return to the idyllic 1920s. Of course, in light of Kilgore’s previous meme of “Mommy, look, they’re all racists!!!,” it is no accident that he uses the term “dog whistle,” which is usually used by leftists to describe racist signals that only fellow racists can hear or understand.

Read Kilgore’s whole benighted piece, if you can stomach its intellectual vacuousness. But especially note this incredibly… well, I don’t quite know the word to describe its idiocy, but its incredibly moronic passage:

In their backwards-looking vision, constitutional conservatives like to talk about the inalienable rights conferred by the Founders—not specifically in the Constitution, as a matter of fact, but in the Declaration of Independence, which is frequently and intentionally conflated with the Constitution as the part of the Founders’ design.

What, pray tell, are we to make of this? Could Kilgore possibly be saying that that Declaration of Independence is not “part of the Founders’ design”? Is he actually complaining about ascribing the ideals of the Declaration to the practice of interpreting the Constitution? If anything, the Left has been known in the past for complaining that the Constitution was an unfortunate counter-revolution by moneyed interests upset at the supposed leveling mentality of the Declaration; now Kilgore seems to be complaining that the Declaration’s ideals should not be seen as inherent within the constitutional structure — as if those ideals themselves, and thus the Declaration, somehow pollutes the Constitution with some crazy nonsense about natural rights.

This is ludicrous. Whether or not the Constitution’s framers succeeded in implementing the Declaration’s ideals (conservatives rightly argue that they did), there can be no doubt that when the states ratified the Constitution their debates were all about making sure that their rights were being sufficiently safeguarded. The nationwide ratification struggle was all about natural rights.

Kilgore goes on to write this jaw-dropping sentence:

It’s from the Declaration, for instance, that today’s conservatives derive their belief that “natural rights” (often interpreted to include quasi-absolute property rights or the prerogatives of the traditional family)… were fundamental to the American political experiment and made immutable by their divine origin.

The subtext is clear: Gee, these folks are lunatics to believe in “quasi-absolute property rights,” which derive solely from a misreading of the Declaration, not from the Constitution itself.

Oh, really? Then why does the Constitution specifically say that “no state shall … pass any … law impairing the obligation of contracts?” Why does it restrict the power of eminent domain by requiring “just compensation” and insisting that it only be effectuated for “public use”? Why does the Constitution say that nobody shall be denied of “life, liberty, or property, without due process of law?” And why, if the Declaration and the Constitution are not to be conflated, do so many of the same or similar formulations occur in each, the most notable of which is of course the repetition of the “life, liberty, property/pursuit of happiness” language?

The left not only doesn’t understand the Constitution; it seems to not even really know the Constitution, or perhaps not even have actually read it. It certainly does not have a clue about how the Founders themselves clearly thought of the Constitution as the practical means of applying the ideals of the Declaration.

There is nothing radical whatsoever about insisting that the law of the land actually be interpreted to mean what it meant when it was first adopted (recognizing, of course, that the “law of the land” in constitutional terms means the law that came into being when any current constitutional provision was adopted —  obviously meaning that where amendments have been adopted, it is the original meaning of those amendments, not he original meaning of the language they replaced, that is relevant).

Yes, Mr. Kilgore, we believe in constitutional conservatism. It’s not a dog whistle to say so. But to fail to understand its clear and unobjectionable meaning, one would really need to be a cur.

David Malpass and Stephen Moore have a great column at the Wall Street Journal about investment money flowing out from the United States rather than into the U.S. from abroad:

Americans are taking their investment dollars abroad at a faster pace than foreigners are bringing capital to these shores. In 2010, for example, U.S. investment abroad was $351 billion—$115 billion higher than foreign investment here. Economic recoveries are periods when investment capital usually surges into a country, but since this weakling rebound began in the middle of 2009 the U.S. has lost more than $200 billion in investment capital. That is the equivalent of about two million jobs that don’t exist on these shores and are now located in places like China, Germany and India.

One cause of this bad situation is federal over-spending:

Today, foreigners are financing food stamps and the next bridge to nowhere while Americans are building state-of-the-art production systems abroad. This is the real pernicious “crowding out effect” of the federal government’s borrowing.

But another big cause is high corporate income taxes, which make investment here far less rewarding:

Capital flows to where it is most highly rewarded, and low marginal tax rates on the returns to capital and business income create a gravitational pull on global funds.

Even former President Clinton says so:

“We’ve got an uncompetitive rate. We tax at 35 percent of income, although we only take about 23 percent. So we should cut the rate to 25 percent, or whatever’s competitive, and eliminate a lot of the deductions so that we still get a fair amount, and there’s not so much variance in what the corporations pay.”

The problem, in short, is that nobody has any incentive to invest those dollars, or to lend them for investment, here in the United States. Eliminate the corporate income tax and, immediately, every American corporation becomes more profitable by as much as a third. All the pensioners who own stock in those companies get richer — immediately. All the workers with company stock-share plans get richer. Prices will drop as companies can make more money, net, even with lower prices. Companies also would save billions of dollars spent in tax-form preparation, and in time spent figuring out tax-avoidance schemes. The economy will get more efficient when tax considerations no longer distort decision-making.

Real interest rates will drop due to market forces (rather than through panicky fiats from the Federal Reserve Board). And, wonder of wonders, companies that have been moving operations overseas will now reverse course and race back within our shores — bringing hundreds of thousands of jobs with them. All of those complaints about “outsourcing” will end, virtually overnight.

That’s why this is one “pro-corporate” reform that also is overwhelmingly pro-labor. The Congressional Budget Office has noted that “domestic labor bears slightly more than 70 percent of the burden of the corporate income tax.”

At last measurement, the corporate income tax was taking in $195 billion per year. I argue that a large chunk of that would be recovered, even without the dynamic growth effects of the tax cuts, via near-immediate growth in dividends and capital gains and therefore in the taxes on those dividends and capital gains. I further argue that, under any reasonably dynamic analysis, especially one which takes into account the tremendous growth in tax revenues after prior cuts in taxes on investments, the economy won’t actually lose any money at all — but the whole economy will be stronger, jobs will be more plentiful, and even the ethics of Washington will be improved:

Indeed, it is all the mucking around in the weeds of the tax code and in the pig trough of spending earmarks that leads otherwise well-meaning congressmen to become favor-dispensers rather than statesmen. Without a corporate income tax to fool with constantly, a huge chunk of the grounds for favor-dispensation will be taken away.

So, again, eliminate the federal corporate income tax entirely. Doing so would go a long way toward completely ending the recession.

About all I have to say today, I said in this column at The American Spectator:

As much as the American book-buying public has shown deep interest in the superstars of the nation’s founding period, too little attention has been paid to some of the other legislative workhorses and statesmen of the period, and too few lessons thus learned from their examples. As we celebrate Independence Day on Monday, we should move beyond the famous Jefferson-Adams-Franklin troika, in order to marvel at the great decades of public service of the two other members of the committee charged with drafting the Declaration of Independence.

Those two were Roger Sherman of Connecticut and Robert R. Livingston of New York — and they were no mere window-dressing on the committee, much less in public life…. what’s instructive is that the disparate backgrounds of the other two, Sherman and Livingston, demonstrate the wonderful meritocracy and social mobility that existed, even then, in the bustling New World…. [Looking at the scope of their careers,] they give the lie to the now-fashionable notion that there is something inherently wrong or suspicious about holding public office for many years. Long service is not necessarily corrupting. Conversely, being new to the political scene is not necessarily a virtue.

Again, read all about it here. Happy Independence Day!