Economy & Budget

Selling weapons to Taiwan was the right decision

On Friday, the U.S. Department of Defense announced the approval of a $6.4 billion arms sales package for Taiwan, including 114 Patriot advanced capability (PAC-3) missiles, 60 Blackhawk helicopters, and two mine hunting ships, among other items. Beijing expressed its indignation through multiple channels, suspended some U.S.-China military-to-military exchanges, and threatened to impose sanctions on U.S. companies that sell arms to Taiwan. Beijing also warned of broader consequences for bilateral relations, suggesting that it might turn a cold shoulder to U.S. requests for cooperation on other international issues.

Critics of U.S. policy toward Taiwan have charged that continuing to support the island is not worth alienating an increasingly influential China, and some have suggested that arms sales are no longer needed given recent, positive trends in cross-Strait relations. Arguments against continuing to support Taiwan rest on questionable assumptions about cross-Strait relations, however, and recommendations for an end to U.S. arms sales to Taiwan are misguided.

Indeed, U.S. support for Taiwan’s security—including arms sales—remains vital for three reasons. First, it provides Taiwan with the confidence it needs to pursue a more pragmatic policy toward China. Second, it underscores the continued relevance of America’s longstanding commitment to Taiwan’s security, which discourages China from attempting to coerce Taiwan. Third, it strengthens the credibility of Washington’s commitments to its other regional friends and allies.

Critics of U.S. arms sales to Taiwan are correct to highlight the growing importance of a cooperative relationship with China on a broad range of international issues from Iran and North Korea to the global financial crisis and climate change. But the United States still has a major role to play in helping to promote stability in the Taiwan Strait, in part by ensuring that Taiwan will be able to engage in dialogue with China from a position of strength.

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Obama's bloated, unbalanced budget request should be dead-on-arrival (Rep. Jerry Lewis)

With the budget request unveiled Monday, it is clear that President Obama has been listening more to the voices liberal Washington insiders than to the American people. At the same time that the Democrat Congress is increasing the U.S. debt limit to the highest levels in history, the President has requested a budget that spends trillions of dollars – much of which will have to be borrowed from foreign countries.

Americans across the country know that $1.4 trillion in new tax increases, $8.5 trillion in added deficits, and $3.8 trillion in government spending this year alone is not a responsible way to manage the federal budget. They also know that yet another $100 billion in scarce taxpayer dollars to continue failed “stimulus” programs will do little to create jobs or improve the nation’s economy.

The American people do not want the kind of massive spending, increased taxes, and misplaced priorities that are included in President Obama’s budget. In my view, this bloated, unbalanced budget request should be dead-on-arrival.

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Thinking caps (Rep. John Campbell)

This morning, President Obama unveiled his Budget proposal for fiscal year 2011.  There is no doubt that the Democrats of the House and Senate Budget Committees will have their own budgetary ideas, to say nothing of Republicans who agree with virtually nothing of the flat out unsustainablity of this President’s budgetary visualizations.

But there are 4 things that this budget will do quite well:  It increases spending, it increases your taxes, it increases the debt, and it increases the deficit.

I will have more on this throughout the week, which will include analysis and numbers, so put your thinking caps on.

Crossposted from Townhall.com.

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The Big Question: Will the budget deficit be a major issue for voters?

Some of the nation's top political commentators, legislators and intellectuals offer their insight into the biggest question burning up the blogosphere today .


Today's question:

With a $1.27 trillion deficit projected by economists, will approving President Barack Obama's $3.8 trillion budget hurt Democrats in November?


Some background reading here.

(Read today's responses after the jump)

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Despite 'spending freeze,' State of the Union proposals cost taxpayers $70 billion

The two major budget-related themes the President hit upon in his State of the Union address were job creation and deficit reduction. What will this mean for taxpayers and how will these themes work together? NTU Foundation went through the speech line-by-line to estimate the costs of the new spending proposals. President Obama outlined items whose enactment would increase federal spending by a net of $70.46 billion per year. Obama’s to-do list included 21 proposals with a fiscal impact, eight of which would boost spending, three of which would cut them, and 10 whose cost or savings were unknown.

The single largest item Obama mentioned was a call to pass cap-and-trade legislation, with an annual outlay cost of $51.5 billion. Other large initiatives included immigration reform ($9.8 billion), subsidies for retirement savings among low-income Americans ($3 billion), and nuclear non-proliferation ($2.7 billion).

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How democrats pulled the U.S. economy back from the brink (Sen. Byron Dorgan)

When President Barack Obama took the oath of office about a year ago, he inherited the biggest economic mess since the 1930's: millions of Americans losing their homes to foreclosure and their jobs to a steadily deteriorating economy, huge budget deficits fueled by tax cuts for the wealthy and two wars his predecessor simply put on the national credit card, mushrooming national debt and some of the biggest barons on Wall Street in financial collapse.

A year later, we take stock. The President's State of the Union speech provided a good overview. A new document just released by the U.S. Senate's Democratic Policy Committee, which I chair, takes a similar look at the challenges we faced in 2009 and the work the President and Democrats in Congress accomplished to keep the economy from completely collapsing.

The Bush recession was wide and deep, as difficult as we've seen since Herbert Hoover's Great Depression. It took much of the past year to enact the economic rescue program and put it in place. We are now beginning to see some significant results.

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Crushing the status quo with policies that work (Rep. Duncan Hunter & Rep. Jason Chaffetz)

With unemployment nationwide stagnating at 10 percent, Americans are growing tired of failed recovery efforts and seemingly unending excuses.  What is abundantly clear is that the problems facing our economy and plaguing the job market cannot be corrected through the same policies that continue falling short for so many Americans.

The top issue for Americans today is the economy.  People are rightly worried about the availability of jobs and the projected impact of policies such as a government takeover of health care or cap and trade legislation on long-term recovery and growth.  Plenty of ideas have been put forward that depart from the current course of government expansion and intervention, yet these proposals are routinely pushed aside in favor of the status quo.   

There is no shortage of talent among those who stand ready to work but, through no fault of their own, are unable to rejoin the workforce.  Our focus must now turn to getting these individuals back to work, which is an attainable goal as long as we direct the necessary attention toward creating real jobs that are accessible to working families.

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A need to end the too-big-to-fail policies

Community bankers don’t cry wolf unless there really is one prowling close by.  For nearly three decades, the Independent Community Bankers of America (ICBA) has been warning policymakers that the financial services system was becoming dangerously overconcentrated. It’s not safe or healthy to have four financial institutions controlling over half of our nation’s banking assets. It’s not fair to the citizens of Main Street to have so much of our economy put at risk by the reckless behavior of handful of megafirms on Wall Street. Unfortunately, the current financial crisis has increased the threat of too-big-to-fail because the megabanks have only gotten larger, more complex and more interconnected.  It’s time to hold these firms accountable before they do any more damage.

Suddenly, we’re not the only ones sounding a warning.  The president, prominent economists, legislators and regulators are all joining ICBA in delivering the same message. And. if you visit our website, MyCommunityMyBank.org, you’ll see what average Americans are saying about the pressing need to end too-big-to-fail. 

People who understand what’s at stake understand that ending the too-big-to-fail policies of recent years is one of the most urgent goals facing the nation, and the only way to truly protect consumers, small businesses and the economy. Institutions that are so large and so complex that their failure would pose a grave threat to the financial system, taxpayers and economy must be eliminated to avoid future financial crises. Financial regulators must be given the authority to restructure, downsize and even dissolve, in the most extreme cases, the institutions that fall into this category. 

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The Big Question: Is Obama's spending freeze a good idea?

Some of the nation's top political commentators, legislators and intellectuals offer their insight into the biggest question burning up the blogosphere today .

Today's question:

President Barack Obama plans to unveil a three-year freeze on all non-military discretionary spending. Is this good public policy? Will Obama be able to convince appropriators to hold the line?

For background read this.


(Read today's responses after the jump.)

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The message of Massachusetts: Jobs.

Bill Clinton saw it clearly when he was running for President against Bush I. It became his mantra: “It’s the economy, stupid.”

Clinton wanted to reform health insurance too. But he understood that during a recession, the first priority is jobs.

Politicians and commentators continue to blather obtusely about the meaning of Massachusetts Senate candidate Martha Coakley’s loss to a Republican in a heavily Democratic state. Like Coakley and her advisors, they’ve failed to see the obvious, failed to learn from Clinton’s victory: 

It’s the economy, stupid.

Poll results show that Massachusetts voters punished Coakley – and Democrats -- for neglecting the issue most vital to them: jobs. If politicians had studied earlier polls or attempted to actually get in touch with mainstream, Main Street Americans, or just listened to AFL-CIO President Richard Trumka’s Jan. 11 address at the Washington Press Club, they’d have known to focus on jobs. The message of Massachusetts should be clear: If Democrats want to save their own jobs in the mid-term elections this fall, they must create jobs now. 

A poll taken as far back as the first week in December exposed voters’ anger over the economy. The bipartisan Battleground Poll showed this: A huge majority of those surveyed ranked improving the economy and jobs as the most important tasks for Congress. It was 40 percent, compared to healthcare reform, at just 15 percent.

Here’s what pollster Celinda Lake said about the results:

“The number one thing Democrats have to do is prove they really have a jobs program and an economic program that is going to sell on Main Street.” 

That was a month before the Massachusetts vote. In the meantime, the U.S. Bureau of Labor Statistics announced unemployment numbers for December – and they were worse in 43 states than they had been in November. Joblessness in Michigan, a high population heartland state, was the highest in the country at 14.6 percent. Only the rates in two other states, Rhode Island – 12.9 percent -- and South Carolina -- 12.6 percent, beat that in one of the dozen largest economies in the world – California. There it was 12.4, significantly higher than the U.S. average of 10 percent. 

People are hurting. Pay attention, politicians. Pay attention. 

They didn’t. In the Massachusetts race, they were talking about terrorism and baseball.

In a Research 2000 poll done for MoveOn.org, 95 percent of Massachusetts residents surveyed ranked the economy as either important or very important to their candidate choice. Research 2000 questioned 1,000 registered voters – half of whom voted for Republican Scott Brown and half of whom did not vote at all. 

Among those who voted for Obama in 2008 but Brown in 2010, 51 percent said they believed Democratic policies helped Wall Street more than Main Street. 

It’s the economy, stupid. The Main Street economy.

Similary, in a Hart Research Associates poll conducted on election night in Massachusetts, 79 percent of voters said electing a candidate who would strengthen the economy and create more good jobs was the single most important factor in their decision. The most crucial quality for a candidate, they said: Someone who would fix the economy. 

The Bush II Great Recession is more than two years old now. Workers are frightened and angry. They see bailouts for Wall Street, big bonuses for bankers and unemployment continuing to rise. 

They will vent their frustration on politicians. Massachusetts showed it. Trumka warned about it earlier this month in his talk at the Press Club:

“At this moment, the voices of America’s working women and men must be heard in Washington – not the voices of bankers and speculators for whom it always seems to be the best of times, but the voices of those for whom the New Year brings pink slips and givebacks, hollowed-out health care, foreclosures and pension freezes – the roll call of an economy that long ago stopped working for most of us.”

He went on: “Working people want an American economy that works for them – that creates good jobs, where wealth is fairly shared. . .”

He recommended immediate implementation of the AFL-CIO’s five-point jobs creation program – a plan that would produce 4 million jobs and includes dramatically increasing federal infrastructure and green jobs investments and direct lending of the refunded bank bailout money to small and medium sized businesses that can’t get credit because of the financial crisis. 

Just as important is implementation of the recommendations in the Framework for Revitalizing American Manufacturing report issued by the White House manufacturing task force in December. That report contains concrete measures to revive manufacturing in the U.S. to generate real wealth, not the illusory paper assets counterfeited on Wall Street. 

Trumka called for immediate action, not going slow, not taking half steps. Those who seek delay are “harming millions of unemployed Americans and their families,” he said, and jeopardizing economic recovery.

He ended with this warning:

“The reality is that when unemployment is 10 percent and rising, working people will not stand for tokenism. We will not vote for politicians who think they can push a few crumbs our way and then continue the failed economic policies of the last 30 years.”

Workers executed that warning in Massachusetts. 

What Americans want is jobs.  

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