Freedom Line Blog

The Small Business & Entrepreneurship (SBE) Council this week released its annual ranking of individual states by business friendliness, and the results aren’t surprising to anyone who understands the importance of lower taxes, less regulation and fewer labor burdens.

After noting the inhospitable business environment cultivated by the Obama White House and the Pelosi-Reid Congress at the national level, SBE Council chief economist Raymond Keating highlights the critical role played by individual states in fostering small business growth.  As Mr. Keating notes, “small businesses, of course, drive innovation, economic growth and job creation.  If we want to get our economy back on a solid, robust growth track, then we need pro-entrepreneur policies at the federal, state and local levels.”

The study incorporates some 36 government-related factors, including tax rates, regulatory costs, state government spending, property rights and energy costs.  And the results are not shocking.  Pro-growth states like Texas, Florida and South Dakota lead, whereas notoriously basket-case states like California and New York sink toward the bottom.

It’s often said that the states serve as policy test laboratories in our federal system, so here’s hoping that someone directing our national levels of government learn the simple lessons offered by the SBE Council’s latest report.

There were three people at the center of the federal government’s response to the economic meltdown during the latter months of 2008. President Obama still employs two. Tim Geithner got a promotion from heading the New York Federal Reserve to Treasury Secretary. Now Fed chief Ben Bernanke is up for rehire. And while the Senate Banking Committee had some heated words for the Fed’s handling of the worsening economic downturn, it offered “measured support” for the man responsible for handling the Fed. This, despite labeling the Fed itself as a “failed” regulator doing a “horrible job.”

And yet, Bernanke is widely expected to be confirmed for a second term. Coupled with Geithner’s tax evasion, one is left to wonder what could have possibly disqualified former Treasury Secretary Hank Paulson from getting a plumb assignment in the Obama Administration.

Today President Obama hosts a “jobs summit” at the White House, and apparently he’s looking for ideas. Unfortunately, the folks in Congress have one in the shape of a second stimulus package – this time to be packaged and sold as a “jobs bill.” And just what’s in a “jobs bill”? Make work projects, short-term subsidies, and tax gimmicks all designed to give businesses an incentive to hire people they can’t afford without a government check. Like the first stimulus package, this kind of fix merely prolongs and deepens the problems facing businesses; namely uncertainty about the future.

If the president is truly interested in getting ideas about how to create more jobs, he should read John Stossel and meditate on this pearl of wisdom:

When government sets simple rules that everyone understands and then gets out of the way, free people create jobs.

Granted, we might lose some middle men. But until the tax system is simplified and the government stops intervening in the free market, people may get jobs, but they won’t have the kind of stability they – or their employers – need to get back to work.

The closed-mindedness of these supposed men of science, their willingness to go to any lengths to defend a preconceived message, is surprising even to me.  The stink of intellectual corruption is overpowering.

Clive Crook on the ClimateGate Global Warming Scandal.

Having never met a tax increase they didn’t like, Democrats voted to increase the Death Tax today.

Under current law, the Death Tax was set expire in 2010.  Now, starting in January, the tax could increase from 0% to 45%.  Not one Republican voted to increase the Death Tax, proving that the GOP still has some semblance of a fiscal spine.

All hope is not lost, however, as the Senate still has to take up the measure and pass the House version of the tax increase.  It must then go to President Obama’s desk for signing.

The final vote was 225 to 200 (218 needed for passage).

As the Senate continues to debate the future of health care in America, the California Medical Association handed the White House a blow today when it announced that it would oppose the current health care bill.

The California Medical Association has more than 35,000 physicians, the second largest state-based group in the nation.   Though the American Medical Association (AMA) is still supportive of the House version of “reform,” state medical associations in Texas, Florida and Georgia have all joined to oppose a government takeover of health care.

Their main objection is reimbursement rates under Medicare.  The Senate bill is set to slash physician reimbursement under Medicare by 40%, and as a result, most doctors would simply refuse to take Medicare patients.

As Dr. Dev GnanaDev noted, “If doctors can’t see you, the only choice you have is the emergency room, which is a very bad way to get healthcare.”

Let’s hope the AMA joins with California doctors to oppose the Senate bill.

The Hill – Democrats Look to Spend $300 Billion on ‘Jobs’
Politico – Democrats Push for Another Stimulus
Rep. Eric Cantor – A Real Jobs Plan
Breitbart – Representative Lobbies for Newspaper Bailout

WSJ Editorial – The New York Tax Revolt
Washington Examiner – Time to Corral ‘Sheriff Biden’
Rep. Bob Barr – The Chicago Gun Ban Challenge
WSJ – Weekly Jobless Claims Decline

Federal Debt: $12.069 trillion

Taxpayers are doing their part to defeat government-run health care by marching, calling Congress and urging others to get involved.

Senator Judd Gregg, someone with direct power to defeat ObamaCare, now has a legislative blueprint for stopping the Senate’s version of health care “reform.”

Among the highlights:

• “Hard” Quorum Calls – requires at least 51 Senators to be present in the Senate chamber for any substantive debate on health care.

• Reading of Amendments and Conference Reports in Entirety – with 2,000 pages to read, it would take days.

• Senate Points of Order – delays legislative business because the Senate is required to take two roll call votes to dispense with a point of order.

• Filibuster by Amendment – until Harry Reid invokes cloture, Senators may offer an unlimited number of amendments.

• Motion to Instruct Conferees – Senators may offer an unlimited number of motions to instruct the Senate’s conferees.

You can do your part to defeat government-run health care by calling 202-224-3121 and telling your Senators to vote “No” on the Senate bill.

Senator Max Baucus caught some of Joe Biden’s foot-in-mouth disease today when he admitted the Senate health care bill would cost $2.5 trillion, far more than what CBO estimated and propoents of the legislation have been touting.  Taxpayers should be thankful for Baucus’ loose lips.

The CBO cost estimate priced the Senate legislation at $848 billion, but that figure does not represent the full cost of the mandates on individuals and employers.  In addition, the bill masks the true cost of the legislation because it doesn’t begin to subsidize health care until 2014.

As Senator Baucus reveals, the true cost of the legislation over a 10-year period is much higher.

Just for a second … health care reform, whether you use a ten-year number or when you start in 2010 or start in 2014, whenever you start at, so it is still either $1 trillion or it’s $2.5 trillion, depending on where you start…

This week Congress will vote on whether to increase the Death Tax from 0% to 45%.  That’s quite the tax hike for an economy with 10.2% unemployment.

Under current law, the Death Tax is set to expire in 2010, but under the misleading, “Permanent Estate Tax Relief for Families, Farmers, and Small Businesses Act of 2009,” Congress could give the gift of a 45% tax hike during this holiday season.

Only in Washington is a 45% tax hike called “Tax Relief.”

You can find the text of the legislation here, but you’ll notice in the bill that the tax threshold is not indexed for inflation.  As a result, in approximately 40 years, half of the U.S. will be hit with the Death Tax.  So much for only soaking the rich.

Call your representative at 202-224-3121 and tell them to vote “No” on H.R. 4154.  Real tax relief means a 0% rate, not 45%.

Below is one of the latest cartoons from Pulitzer Prize-winner Michael Ramirez.

View more of Ramirez’s cartoons on CFIF’s website.

The Hill – Sen. Reid to Unveil New Public Option
Washington Post – President Makes Afghanistan His Own
Sen. Jeff Sessions – KSM in NYC is Bad for America
Markos Moulitsas – Democrats Face Intensity Gap

Stuart Rothenberg – The Dangerous Dozen House Seats for 2010
Politico – Republican Candidates Shun Climate Bill
WSJ Editorial – ObamaCare at Any Cost?
Washington Times – The War on Estate Taxes

Federal Debt: $12.065 trillion

Ever since Republicans lost hold of every major organ of the federal government, the MSM has been pushing a meme about how the right-wing wackos on talk radio represent a radical, uncompromising view of the world that will assure permanent minority status for the GOP. In virtually every instance, I’ve thought this analysis almost comically wrong. Until today.

The reality is that — whatever their intellectual shortcomings — the conservative talking heads usually do a pretty good job of keeping the GOP honest. Unfortunately, some of them seem to be totally abandoning that charge when it comes to President Obama’s troop surge in Afghanistan.

Rush Limbaugh had some relatively muted criticisms for Obama’s plan on his radio show this morning, but Sean Hannity was positively apoplectic on Fox tonight in the aftermath of the President’s speech at West Point.  Hannity hit Obama hard for “dithering” on the decision making process, shorting General McChrystal’s troop request, and not being “passionate” enough. His reaction was churlish and desperate.

The reality is that Obama (of whom I have little positive to say on virtually any other issue) is boldly choosing to alienate his own political base by embracing the kind of strategy that we know can work based on the Bush experience in Iraq.

Criticisms over the amount of troops are misguided. Obama already ordered a mini-surge earlier in the Spring; he seems to be making a serious effort to get NATO to supply the forces to make up the difference between new American deployments and Gen. McChrystal’s request; and, if the Bush experience is any indicator, the final number of new troops deployed will likely be higher than Obama’s initial estimate.  On top of all this, there’s a bizarre line of criticism that it was somehow inappropriate for Obama not to take McChrystal’s recommendation without a single alteration.  As Commanders-in-Chief, Presidents are not supposed to be  passive receptacles of their military advisors’ recommendations.  Effective wartime leaders push back and push back hard. That doesn’t necessarily mean that Obama got the decision right, but he certainly has the methodology down.

There are plenty of legitimate points of criticism. While Obama was right to enter into a serious deliberative process, the “dithering” claim has some merit — a quarter of a year is too long to leave the theater adrift. The focus on timetables for withdrawal is also a mistake and one that’s liable to get the President into hot water come 2012. His caveat about “conditons on the ground,” while welcome as a matter of strategic principle, only muddies the rhetorical waters further.

All that being said, Obama has made a courageous decision that will shape the rest of his presidency. It’s the right call for the nation. Pundits on the right should keep their powder dry.

Desperate to fend off challenges from both his left and right in his campaign to perpetuate a seemingly-endless Senate tenure, Senator Arlen Specter (Fair Weather Party – PA) has introduced legislation amounting to a trial lawyers’ bill of rights.

Last year, the United States Supreme Court issued an important but underreported decision requiring plaintiffs to state a plausible claim in order to proceed with burdensome litigation.  Namely, according to Justice Anthony Kennedy for the majority, there must be “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”

That doesn’t sound like too much to ask of a litigant, does it?

After all, anyone who has found themselves individually named in a lawsuit after some ambulance-chasing plaintiffs’ attorney has cast the widest imaginable net in naming potential defendants can attest to the oft-abusive nature of our judicial system.  Even when the likelihood of ultimate liability is almost nonexistent, the sheer cost in terms of dollars, time and emotional energy to defend frivolous suits can be steep.

But even that minimal requirement is apparently intolerable to Senator Specter.  Or, more accurately, to the plaintiffs’ lawyers who can help save his hide from the electoral fire through campaign support.  He has therefore introduced the “Notice Pleading Restoration Act of 2009,” which would require a court to establish absolute metaphysical certainty that a claim won’t prevail before dismissing it.

Specter’s proposed bill is very, very dangerous, particularly at a time when tort reform and restraining unnecessary litigation costs are critical to our economic recovery and national well-being.  But to Senator Specter, that’s apparently a small price to pay to retain Senatorial privileges six more years.

For those following the most recent Iranian hostage crisis involving British sailors, Meir Javedanfar has an interesting analysis in The Guardian.  Aside from Iran seemingly picking a fight with the lesser partner in the Anglo-American alliance, the mullahs who run the country may also be responding to a threat from a source they can’t easily control: a Persian language news station operated by the British Broadcasting Corporation (BBC).

BBC’s Persian language radio service dates back to 1940, while its newly inaugurated TV service is now almost one year old. In this short space of time, the TV service has attracted large audiences in Iran, and the reason is simple: it is the most impartial Persian language broadcast available.

This has not been an easy endeavour as it has meant being subject to heavy criticism from both sides. For example, many anti-regime elements, especially monarchists, have at times accused it of being pro-Khamenei, because of its refusal to toe their line of attacking the regime at every opportunity. The fact that the service also looks at the positive aspects of the regime, and portrays the views of both sides has given it much credibility, as well as audience. So when it does broadcast about developments in Iran, especially those that cast the regime in a negative light, many more people are willing to accept its findings, thanks to its credibility and reputation for airing both sides of the story.

A government lashing out at a news outlet because of its fair and balanced reporting?  Only in Iran…

In his book “America Alone”, Mark Steyn discusses the “strong horse, weak horse” theory of foreign affairs. When terrorists like Osama bin Laden see a strong horse and a weak horse, they will necessarily like the strong horse. Traditionally, weakness was shown by the absence of power. Among many modern nations, it is evidenced by the refusal to use power. In either case, weakness is a provocation to those seeking to do harm.

And, as Ivan Krastev describes in today’s Washington Post, President Obama’s weakness on foreign affairs – silence on the killings of Iranian dissidents, making nice with dictators, bowing to the Japanese emperor – is signaling an over matched man in critical times. The Russians are familiar with a leader whose celebrity masks his country’s drop in prestige.

Obama himself is largely viewed in Russia as the American Mikhail Gorbachev, but Russians are less impressed than other Europeans have been with Obama’s brilliance and rock-star popularity. They remember the Gorbi-mania that conquered the globe at the moment the Soviet Union was about to crumble. Russians are tempted to view Obama’s global reformism and his progressive agenda as an expression of American weakness and not as an expression of America’s regained strength and legitimacy.

What does all this mean for the “reset” policy? First, it means that Russians will not be in a hurry to respond to the positive signals coming from Washington, and any perception of Washington weakness will diminish Moscow’s willingness to cooperate even in areas of common interest and common concern. It is not Obama’s deference but his strength that can persuade the Kremlin to cooperate with Washington. Simply put, to persuade Russians to join him, Obama must first demonstrate that he does not need them. He needs a clear victory, whether against the Taliban in Afghanistan, Iran’s nuclear ambition or Beijing’s habit of devaluing its currency. Obama must show strength for the “reset” policy to succeed.

Chances are Obama’s decision tonight to send less than the requested amount of troops to Afghanistan will do nothing to achieve either a clear victory in Afghanistan or more esteem for the Russians (or anyone else for that matter).

Taxes, higher premiums and rationing.  That’s what consumers will face if the Senate’s version of health care reform becomes law.

According to a new report released by the Congressional Budget Office (CBO), some self-insured individuals could see a jump in premiums if the Senate bill becomes law.   In some instances, the hike in premiums could be upwards of 13%.  As CBO Director Doug Elmendorf wrote on his blog yesterday, “The average, unsubsidized premium per person covered (including dependents) for new nongroup policies would be about 10 percent to 13 percent higher in 2016 than the average premium for nongroup coverage in that same year under current law.”

And for those of you who have employer-based “platinum” health insurance?  Expect new taxes on you and your employer.  The CBO projects that 1 in 5 people with employer-based coverage will be subject to the new 40% excise tax on health insurance.

With projected costs of the Senate bill reaching $6 trillion over ten years, it’s no wonder that 53% of the nation opposes this sordid version of “reform.”

The Hill – EPA Pushes for Higher-Ethanol Gasoline
Politico – GOP Establishment Scorns Purity Test
USA Today – Obama Takes on Holiday Agenda
Washington Examiner – Big Government Serves Big Business
Fred Barnes – What Obama Needs to Say at West Point

Brett Joshpe – A Public Option Won’t Benefit U.S.
WSJ Editorial – Sen. Specter Would Make it Easier for Terrorists to Sue
National Review Online – Health Care Bill Will Raise Premiums
Red State – A NY-23 Scenario in Maryland?
The American – The Case Against Net Neutrality

Federal Debt: $12.061 trillion