Economy & Budget

How's That for Gratitude?

“Congress weighs end to tax break for hedge funds,” says the headline from today’s New York Times. Apparently Democrats are planning a huge tax increase on hedge-fund operators.

A story from Bloomberg News service last August said this: “Democrats are collecting more than two-thirds of the campaign donations from employees of the biggest hedge funds and buyout firms, as the party taps into one of Wall Street's fastest-growing sources of wealth.”

So, how’s that for gratitude?

It shouldn’t come as any surprise that the Democrats were going to find ways to raise taxes on most Americans. They don’t have to say anything. That’s what they do.

But these smart hedge-fund operators really deserve what they are getting from the Democratic majority that they largely delivered. 
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Tax Cuts to Those Who Don't Need It

I was half-listening to the Democratic Forum broadcast live on MSNBC this morning when I heard Sen. Barack Obama (D-Ill.) say something that made me shake my head in disbelief. When discussing differences between himself and President Bush, Obama noted that the president provided “tax cuts to those who don’t need it.” Really?

I wonder if Sen. Obama is up to the task of being president of the United States based on this one particular statement. The last time I checked, the American economy has been fueled, rather than stifled, due to the tax cuts enacted by Congress and signed into law by the president earlier in his term. Did reducing the marginal rates and slicing capital gains rates stimulate the economy — an economy battered by 9/11 and fighting a war on terrorism? Let’s see, where to start? 
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Congress Agrees to Keep Earmarking

Totally misreading the public mood, as always, Democrats and Republicans in the House have reached a deal to include earmarks on the 10 remaining appropriations bills that will pass after the Homeland Security bill goes through without earmarks.

The public wants earmarking stopped! It understands that rather than providing jobs, it is a device lawmakers use to stimulate campaign contributions from the grateful corporate or nonprofit recipients of this largesse. Congress should restore presidential authority to impound money and the line-item veto to fight earmarks. Those who earmark will face tougher scrutiny from the voters than they have ever faced now that the public is alive to earmarking, which consumes $64 billion every year, a healthy slice of total discretionary federal spending.
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Test of Wills in the House as Pelosi’s Popularity Plummets

Look for the House to work late into the night on Friday or possibly Saturday as the new majority will encounter its first real test of wills with the minority over earmarks on three Appropriations bills to be considered on the House floor this week.

Earmarks are growing as a symbol of business as usual in the House, and Appropriations Chairman David Obey’s (D-Wis.) unwillingness to give ground to the Republicans will likely spark a huge fight. My sources tell me that the GOP has over 200 amendments prepared to force Obey to relent and open up the earmark process to public scrutiny.  Obey will likely go to the Rules Committee to force a closure of debate on the spending measures, sparking a bigger rebellion amongst the minority.

This test of wills is inevitable. The good news for staff and lobbyists is they are doing it this week, not the week before the July 4 recess. Hopefully this clash will work itself out before it becomes necessary to screw up the vacations of a lot of people in town.
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Having It Both Ways on Gas Prices

The Democrats continue to try to have it both ways when it comes to gas prices.

Congressional Democratic leaders, on the one hand, complain bitterly about rising gas prices, as they oppose efforts to increase the domestic refining and exploration capabilities that would make gas more affordable.

On the other hand, the liberal left, led by Al Gore, believe that the combustion engine should be eliminated and that there should be a heavy gas tax that would hit consumers the hardest.

Well, which one is it? Do you support higher gas prices or do you not?

My theory is that the Democratic Party is secretly delighted with high gas prices.
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I Spy

What in the heck are the Democrats doing to the intelligence bill?

First, they cut human intelligence funding and shift money to study global climate change. Then, they stick in an earmark to fund a National Drug Intelligence Center that happens to be in the district of Rep. John Murtha (D-Pa.).

It is remarkable to think that in this time of war, a war that is largely being fought in the shadows, by terrorists on one hand and our spies on the other, that Democrats would choose to spend one dime of money on global warming.

But it really isn’t much of a surprise. Since the surrender in Vietnam, brought about by a radically liberal Democratic Congress, the Democrats have largely hated the intelligence community. For example, the Clinton administration slashed human intelligence to the bare bones, leading to the disaster that was Sept. 11.
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DOW Goes Wild

Eight years ago, my friend James Glassman wrote a book called DOW 36,000.

Well, we’re still far from that stratospheric level, but — hey! — 13,000 ain’t bad. And, like every other red-blooded capitalist, I say: Break out the champagne!

Not so fast. Before hitting the bubbly, it’s important to remember that the market is just one indicator of the overall health of the economy. Considering all other factors, the Bush economy is still in the dumps.

Yesterday, for example, the same day the market soared above 13,000 for the first time, the Center for American Progress put out a new report on the level of poverty in this country.
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Minimum Wage in the War-Spending Bill?

Why are Democrats attaching a completely unrelated minimum-wage provision into the Iraq war supplemental? What exactly does increasing the minimum wage have to do with providing our troops the money they need to protect themselves from Iraqi insurgents?

I have two answers: politics and partisanship.

First, the Democratic leadership is trying to trip up moderate Republicans who might want to vote to support an increase in the minimum wage but don’t want to surrender in Iraq. And since they know the president will veto this bill, they can get him on record vetoing a minimum-wage bill when he already said that he would sign one.
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Losing the Common Ground

If the Washington Post is correct, Rep. Wayne Gilchrest (R-Md.) is helping Democrats write the Iraq war-spending bill in the House, but Sen. Olympia Snowe (R-Maine) hasn't been contacted by the Democratic leadership in that chamber. Snowe is one of the top three most moderate Republicans now serving in the Senate and a clear pick up for the Democrats on these showdown votes on Iraq; she even supported the resolution opposing the war. Now as they hunker down for the funding fight Snowe is siding with Republicans but was quoted in the paper as saying "it wouldn't take a lot" to win her over.

What's wrong with these people? The two parties are supposed to work hard to find common ground, not work hard to ignore it when it obviously exists. Sure, Senate Majority Leader Harry Reid (D-Nev.) has joined with Sen. Russ Feingold (D-Wis.) on legislation to cut off war funding by March 31, 2008 — but he hasn't engaged Snowe, who reportedly approves of March 31, 2008 as a target date for ending combat operations.

Reid has a majority of one with Sen. Tim Johnson (D-S.D.) still recovering from brain surgery. In a 50-49 Senate, what could possibly be the reason he isn't he looking for more votes?
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A Lonely Place

OK, it is still recess and, for us reporters, that means a vacation away from members of Congress (they call it a district work period and they are working hard). So in the absence of the echo chamber, Senate Majority Leader Harry Reid’s newfound support for cutting off funding for the Iraq war seemed like one of those passing remarks he is fond of. And later, as it was buried by the Don Imus brushfire, it began to feel like something I had dreamt and not actually read.

But Congress is set to return to town next week and Reid has indeed boldly moved himself outside the mainstream position of his party, a lonely place one cannot exactly return from with ease. He has aligned himself with Sen. Russ Feingold of Wisconsin and supports his legislation for an end to funds come March 31, 2008. Reportedly, Reid made this decision following an emotional visit to Walter Reed Army Medical Center, but I guess we should assume he has actually weighed this question over weeks, if not months.
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