Freedom Line Blog

Remember the wasteful duplicate engine for the F-35 Joint Strike Figher that just wouldn’t die?

Or, more accurately, that appropriators refused to let die?

Pratt & Whitney won the contract to produce the F-35 engine fair and square.  But forces in Congress continued to promote a wasteful alternative version developed by General Electric/Rolls-Royce.  The Pentagon doesn’t want the duplicate engine.  The Senate voted it down.  The House voted it down.  The Bush White House sought to stop it.  Even the infamously spendthrift Obama White House has sought to stop it.

Most recently, General Electric/Rolls-Royce claimed to offer to “self-fund” development of the duplicate engine for the next few years.  The problem is that “self-funding” is a scheme to eventually place American taxpayers on the hook at a later date.  That is the conclusion of none other than Ashton Carter, Defense Department Under Secretary for Acquisition, Technology and Logistics.  Responding to an inquiry from Senator Joe Lieberman, Carter confirmed that allowing the duplicate engine to continue would eventually mean government funding:

Regarding ‘self-funding,’ as you know, the Department estimates that developing the F136 engine and preparing it for completion would cost $480 million in Fiscal Year 2012 and would take six years and $2.9 billion to complete.  Unless this full expense is covered by the F136 contractor, the ‘self-funded’ effort would simply be a means to reestablish government funding for development of the F136 at a later date.  Furthermore, in order to ensure that the engine was truly self-funded by the contractor, Section 252 would need to state that any and all costs associated with the further development of the F136 engine and preparation for competition would be unrecoverable directly or indirectly in any present (via overhead charges) or future contract with the US Government.  This would extend the prohibition against the Government paying for the support or use of the Government’s property to the contractor’s costs for developing the F136 engine and preparing it for completion.

The Department appreciates your support for the JSF program and your interest in ensuring its success.  It is our firm view that Sections 215 and 252 would significantly impede this objective.”

The F-35 Joint Strike Fighter will help ensure American air superiority into the future, but it is also the largest acquisition program in Defense Department history.  We simply cannot afford to let the wasteful duplicate engine proposal to continue jeopardizing the program’s vitality and cost-efficiency.

In February, President Obama unveiled his irresponsible deficit-inflating 2012 proposed budget.  By April, Obama hastily said “never mind,” scrapped that proposal and offered a vague Budget 2.0 speech after Congressman Paul Ryan (R – Wisconsin) embarrassed him by unveiling his debt-cutting budget roadmap.

The problem is that the so-called leader of the Free World was too afraid to offer any specificity whatsoever, focusing on his reelection instead of the nation’s intensifying fiscal emergency.  At a House Budget Committee hearing last week, Rep. Ryan asked Congressional Budget Office (CBO) chief Douglas Elmendorf whether the CBO had yet been able to estimate Obama’s latest “budget.”  Elmendorf’s not-so-subtle reply:

We don’t estimate speeches.  We need much more specificity than was provided in that speech for us to do our analysis.”

Come to think of it, a lot of voters probably think back to the 2008 presidential campaign and say the same thing.

So much for attempt number two on the “Recovery Summer” that the Obama Administration promised one year ago.

Today, the Labor Department announced that weekly initial unemployment claims jumped to 429,000, an increase of 9,000 from last week’s 420,000.  Even more ominously, Federal Reserve Chairman Ben Bernanke explained yesterday that the Fed has already done all it is prepared to do to increase growth, and expressed the same sort of cluelessness as Obama on why their “stimulus” has failed:

We don’t have a precise read on why this slower pace of growth is persisting.”

The Fed also issued “fairly significant” reductions in its 2011 growth forecast to 2.9% next year (down from a 3.3% growth expectation in April, and from 3.9% in January).  Another “Recovery Summer” like this, and Obama will be borrowing Jimmy Carter’s sweater for his own “Malaise Speech.”

Six months ago this coming Tuesday, the Federal Communications Commission (FCC) and its Chairman Julius Genachowski – Barack Obama’s old comrade and Harvard Law School classmate – hastily imposed the infamous and deceptively-named “Net Neutrality” regulations.  Just days before Christmas and fresh off the Administration’s effective takeover of the automobile, banking and healthcare sectors, Genachowski and his two fellow Democrat Commissioners rammed those regulations through against the wishes of (1) a solid majority of Americans, (2) a rare bipartisan Congressional majority and (3) a unanimous U.S. Court of Appeals for the D.C. Circuit, which declared the FCC’s “Net Neutrality” effort illegal mere months earlier.

The FCC’s maneuver move marked the first time in history that the federal government appointed itself authority to micromanage how Internet service providers operating in the ostensibly free market could and could not operate their own private networks.  Never mind, of course, the years and hundreds of billions of dollars in private investment required to build out and maintain those private networks – desperately-needed investment that continues to create rapid innovation and well-paying jobs.

The FCC’s illegal and unwise “Net Neutrality” regulations immediately jeopardized those billions of investment dollars, and will continue to do so should they somehow withstand judicial scrutiny.

Now, making things even worse, as the bare one-person Democratic majority moves full speed ahead with unnecessary and counterproductive Internet regulations on both wired and wireless Internet networks, Chairman Genachowski appears to be playing games by dragging his feet in order to obstruct the lawsuits and legislation to repeal the FCC’s unauthorized “Net Neutrality” rules.  Specifically, Chairman Genachowski appears to be delaying the publication of the FCC’s order in the Federal Registry to go forum-shopping and avoid the U.S. Court of Appeals for the D.C. Circuit where the FCC lost last year and will likely lose again.

Thus, just like Obama’s Environmental Protection Agency (EPA) and National Labor Relations Board (NLRB), the FCC has become a rogue government agency willing to act beyond its statutory authority to commandeer both the wired and wireless Internet.  As our economy and employment market continue to struggle, now is the time for us to stop the Obama FCC’s rogue effort via the courts and Congress.

Yesterday, Senator Jim DeMint of South Carolina introduced an amendment to block enforcement of the Department of Education’s recently released Gainful Employment rule. CFIF is pleased to see Senator DeMint take action against the rule, which goes too far in regulating private entities, and threatens to eliminate competition in higher education. Members of Congress on both sides of the aisle have made it clear that they oppose this rule, yet Senator Tom Harkin (D-IA) continues to lead a crusade against for-profit institutions. Moreover, Senate Majority Leader Harry Reid (D-NV) and Senator Dick Durbin (D-IL) have threatened to stop DeMint’s amendment in its tracks.

 As an organization that works to preserve free market principles against federal government assault, CFIF applauds Sen. DeMint for speaking out against the overbroad regulations that unfairly target career colleges. We call on all Members of Congress to continue to speak out and join Senator DeMint to prevent the enforcement of this unscrupulous rule.

This morning, the Labor Department announced that the U.S. unemployment rate climbed again to 9.1% this month, up from 9.0% in April.  Just as alarmingly, the net number of jobs created was only 54,000, down from 232,000 in April.  In addition to deteriorating from the previous month, both numbers fell well below the expectations of economists, who had anticipated a decline in the unemployment rate to 8.9%, and 160,000 net new jobs.  This also means that in the 27 months since Obama signed his unprecedented government spending “stimulus,” unemployment has only climbed from 8.2% to 9.1%, even though the Administration projected that he would have it down to 6.5% by now.  By way of comparison, in the same 27 months following the effective date of President Reagan’s tax cuts in January 1983, unemployment plummeted from 10.4% to 7.3%.  The facts speak volumes.

Current commentary on the 2012 presidential race, including here at CFIF, centers primarily on the strength of the germinating Republican field.  The more Barack Obama weakens between now and November 2012, however, the easier the task for whoever emerges from the GOP race.  On that note, two new polls should have Team Obama sweating.  In the first, Rasmussen reports that Obama only leads “Generic Republican” by one point this week.  With most discussion of that generic Republican field focusing on its supposed weakness, that is significant.  In the second, CNN reports that 48% of respondents state Obama’s presidency has been a failure to date, while only 47% rate it successful.  The fact that CNN polled all adults, rather than registered voters or likely voters, is all the more reason for him to worry.

This morning, the Labor Department announced that first-time unemployment claims rose again, from 414,000 last week to 424,000 this week.

As demonstrated by this Labor Department graph, weekly unemployment claims average approximately 300,000 during periods of economic normalcy.  One year ago, the number stood at 463,000 when the Obama Administration proclaimed the arrival of the “Recovery Summer,” yet it never dipped below 400,000 for the remainder of 2010.  We finally dipped into the high 300,000 range in February of this year – still an elevated level – but the number climbed back to 478,000 last month.

This is the Obama “stimulus,” over two years and $1 trillion of government spending later.

It is well known throughout the halls of CFIF that one challenges our own Troy Senik at one’s own risk.  That principle carries additional weight on a week in which George Will, the dean of conservative commentators, cited Troy by name in his column.

In a fit of feistiness, I’ll nevertheless do the unthinkable and metaphorically run down those same halls with exposed scissors by responding to Troy’s thoughtful ricochet.com piece “Presidential Race Freefall.” In his column, Troy laments Indiana Governor Mitch Daniels’s decision not to run for president in 2012, saying, “we’re essentially left with Huntsman, Pawlenty, or Romney.  Out of that group, Huntsman is too moderate, Romney is too elastic, and Pawlenty is more acquittable than embraceable.”  He concludes with a fear that, “it’s time to start proceeding to the exits in orderly fashion.”

Those are certainly understandable and justifiable sentiments.  But I have a hunch that a lot of people may be selling Pawlenty short.  Consider that he won the relatively liberal state of Minnesota’s highest office not once, but twice.  That accomplishment included a reelection victory in 2006, a devastating year for anyone running with an “R” next to his or her name, particularly in a state like Minnesota.  In fact, the Democrats recaptured both state legislative houses that November.  So we’re not talking about a candidate whose campaign for national office rests on a flimsy resume constructed in the fair weather of some deeply red state .  Pawlenty’s feat becomes even more impressive when one considers that despite governing a state so blue that it was the only one to support Walter Mondale over Ronald Reagan, he was one of only four governors to earn an “A” grade for fiscal management in 2010 from the Cato Institute.  Notably, Governor Daniels earned a “B” that year.  Then, in announcing his candidacy in Iowa yesterday and appearing afterward on Rush Limbaugh’s show, Pawlenty boldly called for an end to ethanol subsidies from which many in Iowa benefit.

In other words, Pawlenty is a man who has managed to win in difficult electoral environments while maintaining a remarkably strong conservative record.  There may be some steel beneath that mild Clark Kent exterior.

Fully nine weeks ago, President Obama assured members of Congress and the American public that U.S. involvement in Libyan “kinetic military action” would be a matter of “days, not weeks.” Notably, Obama also opined in 2007 that, “The president does not have the power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation.”  Well, according to the 1973 War Powers Resolution, the President must secure Congressional assent for military action or withdraw U.S. forces within 60 days.  Today marks that 60-day milestone.  Well played once again, Mr. President.

As the Senate debates proposed tax rules that would unfairly and discriminatorily target domestic oil and gas producers, the Center for Individual Freedom on behalf of its 300,000 supporters and activists across the United States today formally urged all Senators to vote “NO” on S. 940.   Addressing that counterproductive proposed legislation, Grant Aldonas (former Under Secretary of Commerce for International Trade) and Pamela Olson (former Assistant Treasury Secretary for Tax Policy) warned of its likely destructive consequences in a Washington Examiner opinion piece today.   Here is one particularly relevant excerpt from their commentary:

Rather than offering serious ideas about how to tackle entitlements, cut wasteful spending or reform the tax code, proponents of raising the oil companies’ taxes have seized on the notion that American energy producers benefit from billions of dollars in alleged tax subsidies.

[The] single most damaging thing the proposal does is mortgage our energy future to the state-owned energy giants that now dominate global energy markets. The U.S. economy runs on oil, but we produce only 40 percent of what we consume, meaning our economy and standard of living depend heavily on our access to foreign oil and gas resources.

Reid’s plan works just fine if you are comfortable having America’s energy future decided in Beijing, Moscow, or Tehran. Not so much if you think we should be deciding our own destiny.

Any proposal that would enhance the competitiveness of foreign government-owned oil giants at the U.S. companies’ expense and lead to greater volatility in oil markets and rising prices for U.S. consumers qualifies as a damaging unintended consequence.”  (Emphasis added.)

To read this excellent commentary in full, please click here.

CFIF also urges you to contact your Senators (contact information for your Senators available here) and urge them to vote “NO” on S. 940.

Join CFIF Corporate Counsel and Senior Vice President Renee Giachino today from 4:00 p.m. CST to 6:00 p.m. CST (that’s 5:00 p.m. to 7:00 p.m. EST) on Northwest Florida’s 1330 AM WEBY, as she hosts her radio show, “Your Turn.”  Today’s guest lineup includes:

• 4:00 p.m. CST/5:00 p.m. EST:  Jed Babbin, Deputy Undersecretary of Defense in President George H.W. Bush’s administration – foreign affairs;
• 4:30 p.m. CST/5:30 p.m. EST:  Rep. Doug Broxson, Florida House of Representatives – Florida’s 2011 Legislative Session;
• 5:00 p.m. CST/6:00 p.m. EST:  Mitchell Zuckoff, author of “Lost in Shangri-La: A True Story of Survival, Adventure, and the Most Incredible Rescue Mission of World War II”; and
• 5:30 p.m. CST/6:30 p.m. EST:  Erik S. Jaffe, United States Supreme Court expert – ObamaCare Cases.

Listen live on the Internet here.   Call in to share your comments or ask questions of today’s guests at (850) 623-1330.

There’s new political malfeasance from the Obama Administration.  Its Department of Education has sent the destructive so-called “Gainful Employment Rule,” which unfairly persecutes and effectively eliminates private college competition in higher education, over to the Office of Management and Budget for final review.

In addition to its harmful effects, the Rule is also riddled with corruption, from allegations of insider trading to defective Government Accountability Office reports.  The Education Department’s handling of this issue has been simply appalling.  Even more outrageous is the fact that the Department has not made the most recent version of the Rule – the one that was just sent to OMB for final review – available to the public.

In February, we applauded the House of Representatives when it passed a bipartisan amendment to H.R. 1 that stated that “no funds may be used to ‘implement, administer or enforce’ the U.S. Department of Education’s proposed Gainful Employment rule, nor may the Department ‘promulgate or enforce any new regulation or rule’ that would have the same effect as the Gainful Employment rule.  Unfortunately, however, that amendment was not included in the final budget.  But the battle to preserve student choice and market freedom in higher education is far from over.

At a time when our country has fallen behind in the rate of college graduates, we need competition in higher education now more than ever if we want to survive in an increasingly competitive world economy.  The Rule is clearly not close to being ready for final review, and the Department of Education must  reconsider its implications.  Most particularly, its harmful impact on less wealthy and working students who rely on career colleges and ultimately on our economy.

Here’s more encouraging news:  Americans are “getting it” on the issue of federal deficits and debt.  According to a new Gallup survey, an overwhelming 73% to 22% majority blames excess spending for the deficit, not insufficient taxation.  Barack Obama and his liberal apologists seek to blame “tax cuts for the rich” and insufficient revenues as the problem.  But as illustrated by the Heritage Foundation’s newly-released 2011 Budget Chart Book, our budget would still be approximately balanced if spending merely returned to early 2000s levels.  Does any serious person contend that government was too small in the first half of the 2000s, that government didn’t spend enough, that the poor and hungry were somehow cast out on the cold streets, that bureaucrats went unpaid?  Of course not.  The problem is explosive spending growth.  Obama oversaw an 84% increase in domestic discretionary spending, including his failed “stimulus,” in just his first two years.

Fortunately, Americans see through his attempt to demand even more taxpayer dollars to feed the insatiable leviathan he hopes to enlarge.

Although the campaign for America’s fiscal survival continues, it is important to recognize battle victories along the way.

CFIF has participated in the effort to stop the duplicative, unnecessary and wasteful second engine for the new F-35 Joint Strike Fighter that refused to die.  Pratt & Whitney was awarded production of the F-35 engine, but forces in Congress perpetuated the wasteful General Electric/Rolls-Royce second engine.  The Pentagon doesn’t want it.  The Senate has voted it down.  The House has voted it down.  The Bush White House sought to stop it.  The Obama White House has sought to stop it.

Unfortunately, the second engine project rambled on at a cost to taxpayers of $1 million per day, because of Beltway pork-barrel political forces and the previous Congress’s failure to even pass a 2011 budget.

But at long last, the Defense Department this week instructed G.E. and Rolls Royce that the second engine contract has been terminated.  This is progress.

Observers like Charles Krauthammer are correct:  Barack Obama’s partisan budget attack this week was a “disgrace.”  Almost every sentence was tawdry, caustic or simply dishonest.

One suggestion early in Obama’s speech stood out because it is so easily refuted by simple numbers.  Namely, his latest attempt to scapegoat the Bush Administration and portray his own record deficits as somehow attributable to it:

We increased spending dramatically for two wars and an expensive prescription drug program -– but we didn’t pay for any of this new spending.  Instead, we made the problem worse with trillions of dollars in unpaid-for tax cuts -– tax cuts that went to every millionaire and billionaire in the country; tax cuts that will force us to borrow an average of $500 billion every year over the next decade.  To give you an idea of how much damage this caused to our nation’s checkbook, consider this:  In the last decade, if we had simply found a way to pay for the tax cuts and the prescription drug benefit, our deficit would currently be at low historical levels in the coming years.”

But take a look at the actual historical deficit data, with particular attention to 2007, which was the last year under a Republican Congress and White House.  That year’s deficit came in at $161 billion, which is one-tenth the size of Obama’s projected record $1.65 trillion 2011 deficit.  That 2007 deficit was also down from $378 billion in 2003, when the tax cuts, Iraq invasion and drug benefit occurred.  In his usual straw-man manner of argumentation, Obama mocked those who claim we can reduce our debt by eliminating “waste, fraud and abuse,” but what better way to characterize his latest un-presidential harangue?

Gasoline prices have increased from the $3 range to the $4 range in just one year, we’re approaching all new record prices set in 2008 even though it’s not even summer driving season yet.  But ignore higher gas and food prices, America.  They only matter if you actually drive or eat. Federal Reserve Vice Chair Janet Yellen says it’s all “transitory,” and we need to keep the “stimulative” inflationary monetary spigots open because it “continues to be appropriate.”

Even the European Central Bank is raising interest rates in an attempt to avert inflation.  Of course, there isn’t an Obama reelection campaign to sustain over there.

Quote of the day from The Wall Street Journal’s L. Gordon Crovitz, writing in his weekly “Information Age” column:

In high-tech, by the time the political and legal systems catch up to an issue, the issue is moot.”

Whether anti-trust, so-called “Net Neutrality,” public broadband endeavors, wireless data roaming mandates or anything else, you can always count on bureaucrats to be a day late and a dollar short.  Are you paying attention, FCC?

Shouldn’t America ensure that its military personnel and their families continue to receive paychecks, regardless of whether budget negotiations result in a deal or a federal shutdown? Barack Obama apparently doesn’t think so.

As bargaining continued yesterday, House Speaker John Boehner (R – Ohio) introduced legislation that would keep the government open one additional week and maintain military funding through the end of 2011 so that members of the armed forces would continue to be paid.  The House quickly passed that bill, including 15 Democratic votes.  Obama, however, grotesquely promised a veto, bizarrely labeling it a “distraction.”

Frankly, this entire debate wouldn’t be necessary if the preceding Congress overwhelmingly controlled by Obama’s own party had simply passed a 2011 budget.  But for the first time since the inception of the Budget Act, they simply abdicated that basic responsibility.  Regardless, our military is stretched thin across the globe, and many families live paycheck-to-paycheck.  This obviously isn’t of paramount concern to a president who clearly seems to welcome a government shutdown.

This is one of the most shameful and pathetic episodes in an already shoddy presidency.

One would think the Federal Communications Commission (FCC) had learned its lesson by now.

In the past calendar year, the FCC’s extralegal power grabs have brought judicial rebuke from a unanimous Court of Appeals for the D.C. Circuit, widespread public opposition and rare bipartisan Congressional condemnation.  But instead of internalizing those lessons, the FCC has once again endeavored beyond its legal authority by voting to impose data roaming mandates on private wireless carriers.  In a correspondence to the FCC, CFIF set forth the ways in which its latest rogue action is not only without legal foundation, but also unwise as a matter of public policy.

First, Section 332 of the Communications Act explicitly states that private mobile service providers “shall not be treated as a common carrier for any purpose under this Act.”  By  requiring wireless providers to forcibly enter agreements with other wireless carriers and allow non-customers to roam on their data networks, the FCC has violated that express provision. 

Second, a vibrant market for data roaming agreements already exists, meaning that this FCC action is unnecessary.  Carriers large and small already engage in very high rates of partnership, including Rural Cellular Association (RCA) members.  These agreements cover 3G and even 4G networks, contrary to extremists’ claims.  Indeed, numerous smaller carriers currently advertise nationwide broadband data coverage despite possessing relatively narrow license areas, meaning that they already have secured data roaming agreements.  Further, the prices negotiated in roaming agreements continue to decline. 

Third, the FCC’s bureaucratic intrusion into this realm will have the perverse effect of discouraging new investment and job creation in this cutting-edge sector.  After all, the FCC’s mandates will create incentives to piggyback on other networks rather than invest in new ones.  Carriers must be able to differentiate themselves and compete against counterpart carriers in the free market, which the FCC’s proposed mandates will undercut.  As data use continues to increase and smart phones impose new demands on network capacity, the inevitable result will be congestion, delay, fewer jobs and less investment.

Today’s FCC vote thus exceeds its legal authority and undermines new investment, while ignoring the fact that data roaming agreements are already prevalent.  It merely provides the latest evidence that the rogue FCC must be brought back to Earth, whether via Congress or the courts.