From The Associated Press:

The six have met in private for several months, even as House Republicans and Obama developed more partisan plans that have little chance of being enacted into law because of Washington’s divided government.

House Republicans passed a nonbinding plan in April that calls for reducing annual deficits by a total of $6.2 trillion over the next decade. It includes no tax increases but calls for transforming Medicare from a program in which the government directly pays medical bills into a voucher-like system that subsidizes the purchase of private insurance plans.

Obama has outlined a plan to reduce borrowing by $4 trillion over the next 12 years. His plan includes $1 trillion in tax increases and is less specific about how he would cut benefit programs.

(more…)

According to news reports, Team Obama and House Republicans are at least $50 billion apart in the budget negotiations for FY2011. I’m willing to bet that Team Obama and Senate Democrats won’t agree to even $20 billion in spending cuts.

And that’s a far cry from the GOP’s annualized $100 billion pledge-to-America mark, and an even farther cry from the hundreds of billions of dollars in cuts that are necessary over the next five to ten years. As I recall, the Simpson-Bowles deficit commission suggested more than $1 trillion in cuts to the domestic discretionary baseline over ten years. I think the Paul Ryan plan would do the same.

Surely the Tea Party advocates will push the GOP to stay on message and stay the course. That’s what last November’s elections were all about. And if a satisfactory deal cannot be reached, one that keeps the GOP spending-cut pledge and includes a spending-limit rule with real teeth, then why not shut down the government?

Reading through various reports from the Wall Street Journal and Washington Post, you get the sense that no great harm will come from a shutdown. Social Security checks will be mailed. Other benefit payments will be met. Air-traffic controllers will do their jobs. Border protection and military operations will continue. Uniformed military personnel will be exempted. The Post Office will do its business uninterrupted. And incoming revenues can be designated for interest payment on the debt.

Doesn’t sound that bad to me. It sure isn’t the end of the world.

(more…)

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

Download Podcast | iTunes | Podcast Feed

On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Jim Pethokoukis and Pejman Yousefzadeh to discuss last night’s State of the Union speech.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Thoughts on Obama’s SOTU speech
FACT CHECK: Obama and his imbalanced ledger
The laundry list from Obama’s non-laundry-list State of the Union address
Rep Paul Ryan (R-WI) Delivers the Republican Address to the Nation
James Pethokoukis on Reuters
Pej at Chequer-Board
(more…)

Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

Download Podcast | iTunes | Podcast Feed

On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Francis Cianfrocca to discuss the latest jobs numbers, which put unemployment at 9.8%, and how plans by Obama’s deficit reduction committee may impact small businesses.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Jobs Up 39,000, Well Below Hopes as Rate Hits 9.8%
Commission’s final deficit report preserves controversial spending cuts; panel to vote Friday on whether to endorse plan
Report of the National Commission on Fiscal Responsibility and Reform
Hotline Whip Count: Deficit Commission Looks Dead

(more…)

From AFP:

US President Barack Obama on Monday proposed a freeze on most government pay in a move to trim the country’s massive deficit.

The White House said the two year freeze would save two billion dollars in the 2011 fiscal year.

The measures will apply to all civilian federal employees including at theDepartment of Defense.

Military personnel will not affected.

(more…)

Click to Play

With Rob and James cruising the Bahamas this week, we draft Pat Sajak to guest host with Peter. He reminisces about Bill Buckley and Merv Griffin, and let’s us in on what’s it’s like to be a celebrity conservative. Then, Claire Berlinski joins to discuss our junk and the TSA, royal weddings, and the the inside story behind her cross town move. Finally, Ricochet contributor Steve Manacek stops by to talk about the Deficit Commission and why we should be afraid. Very afraid.

For links mentioned in this podcast, or to comment directly, please join us at Ricochet.

According to Ben Smith of Politico, Andy Stern, longtime President of the Service Employees International Union, is rumored to be resigning from his position. From the Politico post:

Service Employees International Union President Andrew Stern, one of America’s most prominent labor leaders, is set to resign, according to a member of the union’s board and another SEIU official.

The President of an SEIU local based in Seattle, Diane Sosne, broke the news to her staffers at 11:35 this morning, local time.

“Last night I received confirmation that Andy Stern is resigning as President of SEIU. He has not yet made a public announcement; we will share the details as we become aware of them,” Sosne wrote in an email obtained by POLITICO.

Sosne offered no explanation for the move, but another SEIU official speculated that Stern had finally tired of the draining job.

Read the entire Politico post here.

Hmmmm…I’d speculate differently. Here are my top guesses:

(more…)

Several weeks after the Senate rejected Barack Obama’s plan to create a bipartisan congressional panel charged with decreasing the deficit, the president will use his executive authority to create the National Commission on Fiscal Responsibility and Reform.

The less-powerful bipartisan commission, chaired by Erskine Bowles and Alan Simpson, will be tasked with formulating a plan to decrease the federal budget deficit to 3% of GDP by 2015.

Yawn.

With the signing of this executive order, Obama will add fiscal responsibility to his growing library of political theater. Thus far, his other featured films have starred earmarks, lobbyists, Sonia Sotomayor, bipartisanship, etc. Unsurprisingly, they all share a common theme: disingenuousness. You’re welcome to grab some popcorn and take a seat, but as you watch the production of fiscal responsibility featuring Obama the deficit hawk, keep in mind you’re only being entertained.

(more…)

It can be no secret by now that President Obama did not have a signature achievement his first year in office. Of all his major initiatives, health care, cap and trade, civilian trials for terrorists and the “stimulus” bill – only the so-called stimulus bill was enacted. Hardly a success, as more Americans than not know what Paul Krugman and E.J. Dionne do not – that it was a bad idea. Worse for the Democrats — none of those efforts have produced a greater consensus or momentum for them or Obama. To the contrary, the Democrats lost key races in 2009, a Democrat House Member defected to the Republicans, the nation is more divided than ever and the Democrat Party is in disarray — as in the Obama presidency.

Not to be out-done by 2009, in 2010, the Obama presidency has endured:

(1) the loss of the Kennedy seat (which is how the Democrats view that race) even though Obama stumped for the Democrats’ candidate;

(2) Obama’s deficit commission was shot down;

(3) The unions are warning the Democrats that they are “going to have a hard time getting members out to vote”;

(more…)

Reckless spending increases under both Bush and Obama have resulted in unprecedented deficits, which is the reason for boosting the nation’s debt limit by an astounding $1.8 trillion. Government borrowing has become such a big issue that some politicians are proposing a deficit reduction commission, which may mean they are like alcoholics trying for a self-imposed intervention.

But all this fretting about deficits and debt is somewhat misplaced. Government borrowing is a bad thing, of course, but this video explains that the real problem is excessive government spending.

Fixating on the deficit allows politicians to pull a bait and switch, since they can raise taxes, claim they are solving the problem, when all they are doing is replacing debt-financed spending with tax-financed spending. At best, that’s merely taking a different route to the wrong destination. The more likely result is that the tax increases will weaken the economy, further exacerbating America’s fiscal position.