NH jobs lost: As Obama takeover continues

Union Leader Editorial

Sunday, Aug. 1, 2010

Don't think the Obama administration and the Democratic Congress are trying to replace privately-run enterprises at every turn? Perhaps you missed last week's news of more layoffs by the New Hampshire nonprofit that arranges and administers college loans to families.

Under the laughable claim that a federal takeover of these loans will "reduce'' their costs and rescue people from greedy lenders, Obama and friends passed and signed a law last spring that ended private origination of Federal Family Education Loans.

These loans will now be overseen by federal workers in the behemoth known as the U.S. Department of Education.

Not only is this unlikely to reduce costs, it is clearly reducing jobs in the private sector. The New Hampshire Higher Education Assistance Foundation has laid off 35 positions lover the last two months. NHHEAF is hoping it will qualify for some federal work under the new government program, but the feds haven't said when the New Hampshire group might even be able to apply.

Even the non-profit NHHEAF may have become more of a bureaucracy than was necessary in a world of constantly increasing education costs. But it at least wasn't the government, "here to help you.''

America's capitalism is being slowly immersed into what is becoming an ever-thickening stew of government socialism.

When we are in up to our necks, it will be too late to get out.

http://www.unionleader.com/article.aspx?headline=NH+jobs+lost:+As+Obama+takeover+continues&articleId=4838d7fc-265f-4ef7-b569-ce58f028c057

Fed leaders: Economic recovery slower than expected

By Neil Irwin

Federal Reserve leaders marked down their expectations for growth and inflation last month, concluding that the economic recovery is proceeding more slowly than they had thought in the spring but that the slowdown did not warrant new policy actions.

But Fed leaders did agree to explore options for supporting the economy further in case conditions worsen.

"The changes to the outlook were viewed as relatively modest and as not warranting policy accommodation beyond that already in place," said minutes of the Fed's June 22-23 policy meeting, released along with revised economic forecasts. "However, members noted that in addition to continuing to develop and test instruments to exit from the period of unusually accommodative monetary policy, the Committee would need to consider whether further policy might become appropriate if the outlook were to worsen appreciably."

In forecasts made in advance of the meeting and released Wednesday, the officials expected that gross domestic product will grow 3 to 3.5 percent this year, compared with a forecast of 3.2 to 3.7 percent at their April meeting. They modestly downgraded their projection for 2011 as well. That lower growth could translate into unemployment staying higher for longer -- Fed leaders expect the jobless rate to be 9.2 to 9.5 percent in the fourth quarter of 2010, and to be 8.3 to 8.7 percent at the end of 2011, both slightly higher than in April forecasts.

But they see little threat from inflation, projecting that prices will rise 1 to 1.1 percent this year, compared with the 1.2 to 1.5 percent rate they forecast in April. The new outlook is well below the 1.7 to 2 percent inflation rate that the Fed targets over the longer term.

The forecasts are the most explicit confirmation to date that Fed officials have lowered their expectations for growth -- and since their meeting three weeks ago, more weak economic data have been released suggesting a deceleration in the economy, including a reports on June employment conditions, international trade in May and retail sales in June.

Still, the minutes make clear that Fed leaders still anticipate a continued economic recovery, suggesting that most of the policymakers would still resist any push to take new steps to support growth. Members of the policymaking committee "generally saw the incoming data and information received from business contacts as consistent with a continued, moderate recovery in economic activity," the minutes said.

The minutes did note that "financial markets had become somewhat less supportive of economic growth," mainly due to troubles in Europe, and that this was "likely to weigh to some degree on household and business spending over coming quarters."

But the officials appear to place greater weight on data suggesting strength in the business sector. They noted that investment in equipment and software was rising rapidly, and that household spending "continued to advance," even as the weak job market could weigh on consumers.

As The Post reported last week, Fed leaders are starting to discuss policies that they might use to further support growth if the economy continues to weaken, including pledging to keep interest rates low for even longer than now expected, cutting the interest rate on banks' reserves and buying some additional mortgage securities.

Supreme Court extends gun owner rights nationwide

By MARK SHERMAN
The Associated Press
1 hour, 4 minutes ago

WASHINGTON – The Supreme Court ruled Monday that the Constitution's "right to keep and bear arms" applies nationwide as a restraint on the ability of the federal, state and local governments to substantially limit its reach.

In doing so, the justices, by a narrow 5-4 margin, signaled that less severe restrictions could survive legal challenges.

Justice Samuel Alito, writing for the court, said the Second Amendment right "applies equally to the federal government and the states."

The court was split along familiar ideological lines, with five conservative-moderate justices in favor of gun rights and the four liberals, opposed.

Two years ago, the court declared that the Second Amendment protects an individual's right to possess guns, at least for purposes of self-defense in the home.

That ruling applied only to federal laws. It struck down a ban on handguns and a trigger lock requirement for other guns in the District of Columbia, a federal city with a unique legal standing. At the same time, the court was careful not to cast doubt on other regulations of firearms here.

Gun rights proponents almost immediately filed a federal lawsuit challenging gun control laws in Chicago and its suburb of Oak Park, Ill, where handguns have been banned for nearly 30 years. The Brady Center to Prevent Gun Violence says those laws appear to be the last two remaining outright bans.

Lower federal courts upheld the two laws, noting that judges on those benches were bound by Supreme Court precedent and that it would be up to the high court justices to ultimately rule on the true reach of the Second Amendment.

The Supreme Court already has said that most of the guarantees in the Bill of Rights serve as a check on state and local, as well as federal, laws.

Budget illusion: Mass. does better than us

Union Leader Editorial:

Quick quiz: Which state's legislators budget more responsibly: New Hampshire's or Massachusetts'? No, it's not a trick question.

Wednesday night, legislators in Massachusetts approved a state budget that included reductions in lots of state programs and services. Many of those cuts were made necessary when legislators removed $687 million in federal stimulus money from the revenue side of the budget.

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That huge sum had been included in some budget plans all year. But lawmakers decided to take it out because they realized it might never show up. Congress has not appropriated the funds and might never do so.

The money is from something called the Federal Medical Assistance Percentages, which are matching federal funds distributed to states for social and medical service programs. Congress has not decided whether to approve proposed increases for this year. Wisely, Massachusetts Democrats removed the funding from the budget.

"We are, I would suggest, under no illusion that this . . . money is coming," Rep. Charles A. Murphy, D-Burlington, chairman of the House Ways and Means Committee, told The Boston Globe.

New Hampshire Democrats, by contrast, were only too happy to accept the illusion that the money is coming. When they passed state budget fixes a few weeks ago, they included $48 million in FMAP funding even though they knew Congress had not, and might never, approve it. It was irresponsible, but, they decided, easier than cutting $48 million in spending.

Did you ever think you'd see the day when Democratic legislators in Massachusetts could legitimately claim to have budgeted more responsibly than New Hampshire? What is becoming of our once frugal state?

At G-20, Obama to push for public stimulus spending in Europe

By Scott Wilson

Washington Post Staff Writer
Friday, June 25, 2010; 1:11 PM

TORONTO -- President Obama arrived for a meeting of world economic powers Friday with a number of achievements already in hand. But he will have a far more difficult time persuading European leaders to follow his wish on an issue he believes is essential to the economic recovery: the need for public stimulus spending.

In the days leading up to the meeting, Obama secured a change in China's currency policy that could benefit U.S. exports, a European commitment to improve bank transparency rules and anagreement on financial regulatory reform legislation that gives him leverage in encouraging others here to take similar steps.

But as he meets with the Group of 8 in a rural resort town north of here, Obama is appealing to European leaders not to trim back public spending in the midst of a growing debt crisis on the continent. His message has been complicated by Congress, which is blocking his own requests for new deficit spending to stimulate the economy.

Obama holds a far less optimistic view than his European counterparts over the state of the global economy, less sure that it has improved sufficiently since the group's London meeting last year to justify a broad government pullback except from those countries suffering a crush of debt.

Whether he succeeds in persuading European leaders to continue drawing on their strained public treasuries at the G-8, which will be followed over the weekend by the broader Group of 20 summit here, could help determine if the staggering recovery gains momentum in the coming months or dips back into the doldrums.

"There is a fundamental issue going into the meeting over the size and shape of the global recovery," said Edwin M. Truman, a senior fellow at the Peter G. Peterson Institute for International Economics and a former assistant Treasury secretary for international affairs. "And it's fair to say that the administration's position is not the same as those of many other countries."

Obama's message places him at odds with such allies as French President Nicolas Sarkozy and German Chancellor Angela Merkel, both of whom have announced austerity measures in recent weeks.

At home, though, Obama is having a hard time putting his money where his message is.

Facing a difficult midterm election season, Congress has approved only about a quarter of the $266 billion in "temporary recovery measures" that the president asked for in his February budget request.

"We need to act in concert for a simple reason: This crisis proved, and events continue to affirm, that our national economies are inextricably linked," Obama said Friday before departing for Canada. "I'll work with other nations not only to coordinate our financial reform efforts, but to promote global economic growth while ensuring that each nation can pursue a path that is sustainable for its own public finances."On Thursday, the Senate blocked a jobs billthat would have extended unemployment benefits and provide aid to cash-starved states, with Republicans saying the $33 billion it would have added to the deficit was too much. The White House condemned "Republican obstruction at a time of great economic challenge for our nation's families."

In his letter last week to G-20 leaders, Obama outlined his more pessimistic view of the economic recovery. He wrote that "significant weaknesses exist across G-20 economies" and warned that after working "exceptionally hard to restore growth we cannot let it falter or lose strength now."

The International Monetary Fund predicts that the U.S. economy will grow more quickly than European economies over the next few years.

But the recent debt crisis in Greece and the vulnerability of other euro-zone countries has made even fiscally secure European countries reluctant to encourage growth with additional public funds or even maintain current spending levels.

"If we don't do something to confront debt, we will be facing increased pressure in the financial markets," said a senior European diplomat in Washington, who spoke on the condition of anonymity to discuss the issue candidly. "But we also understand what President Obama is saying -- that we can't kill the slow recovery underway."

Congress's reluctance to approve Obama's spending requests, the diplomat said, shows that the United States and Europe are "facing the same problems."

"We're in a somewhat contradictory situation that we have to find our way through," the diplomat said. "In the end, it will be very much a matter of taking this country by country."

In recent weeks, Greece has slashed spending and raised taxes to qualify for an international bailout. Merkel recently proposed cutting defense and public works spending and implementing new taxes, even though Germany's deficit is a relatively safe 5 percent of its gross domestic product.

Sarkozy recently announced tens of billions of dollars in budget cuts and plans to raise the French retirement age to save money on public pensions. British Prime Minister David Cameron also moved to raise the pension age in a budget proposal this week that would also increase taxes and sharply cut government spending.

In his letter, Obama acknowledged Europe's dilemma, saying there is a "need to commit to fiscal adjustments that stabilize debt-to-GDP ratios at appropriate levels." He also warned that such "consolidation" should be done over "the medium term," citing the "consequential mistakes of the past when stimulus was too quickly withdrawn."

But senior administration officials say the United States is doing just that: stepping down quickly from its public spending over the next year. That is happening largely because the $862 billion stimulus measure passed in February 2009 is due to expire next year.

Administration officials say their efforts to encourage private-sector growth, through small-business tax breaks and other legislation, are designed to make up for the decline in stimulus spending.

The somewhat mixed U.S. message to Europeans leaders means the stimulus debate in Toronto will probably revolve around the pace of the spending retreat, European diplomats and administration officials say.

Heather Conley, director of the Europe program at the Center for Strategic and International Studies, said Obama and European leaders will seek to "differentiate those exit strategies" in the G-20's concluding statement.

"They'll come up with artful terms to suggest we're continuing to work on these issues," she said. "We haven't reached agreement."

In that way, she said, the meeting here is a prelude to the next gathering scheduled for later this year.

"This is not the summit to say, okay, we've weathered the storm," Conley said. "It's to say we're coming out of this in different places, we need to keep up the progress. And I think you're going to see the agenda developing really for the summit in South Korea in November to see if we really have weathered this European debt crisis."

Guest Post by U.S. Senate Candidate Bill Binnie

As a successful businessman, I watched as the "old-guard" Washington politicians tried to fix our economy with a spending binge. I knew it wouldn’t work. And it hasn’t. The big spending “stimulus” package didn’t turn our economy around; it didn’t spur growth, it didn’t give hope to the jobless. Americans deserve policies that do work.

As someone with plenty of experience in the real-world economy, I know what does work. Our prosperity flows from certain key economic principles: fiscal responsibility, free markets and limited government. We need policies that will lower taxes, make government more efficient and eliminate wasteful spending. In short, we need common sense business policies. More importantly, we need to create jobs – good jobs, at good wages.

Fixing our economy won’t be easy. It will require a lot of hard work and a lot of tough decisions. It will also require having leaders in Washington who understand the real-world economy. And that’s why I am running for the US Senate.

As a businessman, I know how to make tough decisions; I know how to balance a budget; I know how to create jobs. And I will use my skills in the US Senate to make a difference. If you support my vision for America, please join my campaign. For more information, please visit: www.binnie2010.com.

Portsmouth, NH Refuses Stimulus Dollars

Here in New Hampshire, we have a new example of a city turning down stimulus money because of the unreasonable and expensive hurdles included in the legislation as a result of special interest giveaways:

As stimulating as it might have sounded at the time, the city recently declined $2.5 million from the American Recovery and Reinvestment Act for its new water treatment plant because federal wage regulations would have forced the city to pay more for the project.

Ranked as the fifth most pressing drinking water project in the state, the state Department of Environmental Services awarded the city $5 million in March 2009 for the project — half of which would be a grant, and the other half borrowed from the state's low-interest revolving loan fund. The award required the city issue an addendum to the request for bids, which was issued a month earlier, asking bidders to include the stimulus money in their proposed budgets.

When the bids came in, the low bidder — Penta Corporation — presented final cost of $21 million with the stimulus funds and $17.3 million without.

So the city said thanks, but no thanks, to the stimulus funds.

"It just didn't make sense," said Deputy Public Works Director David Allen. "It was going to cost us more money to take the money."

Stimulus' Education Parachutes About to Fail

As expected, with stimulus funds starting to peak and decline, local school systems are beginning to see trouble on the horizon:

Congress included about $100 billion for education in the stimulus law last year to cushion the recession’s impact on schools and to help fuel an economic recovery. New studies show that many states will spend all or nearly all that is left between now and the end of this school term.

With state and local tax revenues still in decline, the end of the federal money will leave big holes in education budgets from Massachusetts and Florida to California and Washington, experts said.

“States are going to face a huge problem because they’ll have to find some way to replace these billions, either with cuts to their K-12 systems or by finding alternative revenues,” said Bruce Baker, an education professor at Rutgers University.

The stimulus program was the largest one-time infusion of federal education dollars to states and districts in the nation’s history. As the program took shape last year, Education Secretary Arne Duncan and other officials repeatedly warned states and districts to avoid spending the money in ways that could lead to dislocations when the gush of federal money came to an end.

But from the start, those warnings seemed at odds with the stimulus law’s goal of jump-starting the economy, and the administration trumpeted last fall that school districts had used stimulus money to save, or create, some 250,000 education jobs.

Now the new studies point to the problems likely to beset thousands of school districts when the federal money runs out.

As localities though the nation, and here in New Hampshire, grapple with difficult budgeting choices, it will be interesting to see how this fight plays out when the federal government isn't there to cover over the underlying problem.

Spending Freeze...Literally

The folks at Political Math have a new video explaining that minuscule impact Obama's proposed spending freeze will have on the federal debt.

Just as interesting, look how much money we would save by canceling the remainder of the stimulus:

Stimulus Bill Getting More Expensive

Fox News is reporting that $787 billion has somehow turned out to be an underestimate of the costs associated with President Obama's stimulus bill:

The $787 billion federal stimulus package that Congress passed last year has gotten even bigger -- now expected to cost $862 billion, over the next 10 years, according to the Congressional Budget Office. ...

About $21 billion of the added costs stem from higher unemployment compensation payments, while the remainder of the increase comes from food assistance payments and interest payments from states on taxable government bonds, the Washington Times reported.

In its report on the country's dire financial straights, the CBO also cites huge budget deficits, noting that the 2010 fiscal year budget is likely to reach $1.3 trillion.

This report also serves as a continued reminder of the legislation's failure to "save or create" three million new jobs:

The nonpartisan CBO report, published Tuesday, attributes the $75 billion increase to added unemployment-related costs. More Americans are receiving unemployment benefits for lost jobs that the stimulus bill was meant to save, the report says.

Seeing the Light: 56% Now Oppose the Stimulus

A new poll out today shows continued erosion of public support for President Obama's signature economic policy:

A majority of Americans oppose the economic stimulus program, according to a new national poll.

Fifty-six percent of people questioned in a CNN/Opinion Research Corporation survey released Sunday say they oppose the stimulus package, with 42 percent supporting it.

Last March, just weeks after the stimulus bill was signed into law by President Barack Obama, a CNN poll indicated that 54 percent of the public supported the program, with 44 percent opposed.

While this isn't the first poll showing more than 50% opposed to the measure, it does represents the largest favorability gap to date: -14%.

Fiscal Discipline in the State of the Union?

In "we'll believe it when we hear it" news, Bloomberg is reporting that there is a "fighting chance" President Obama will propose a freeze on discretionary spending in next week's State of the Union Address:

There is a “fighting chance” President Barack Obama will propose a freeze in most discretionary spending by the federal government in his State of the Union speech next week, Senator Evan Bayh, an Indiana Democrat, said

“The president can say in this State of the Union address, ‘I’m going to include in my budget a freeze on discretionary spending, I’m drawing a line in the sand, and I’m going to use my veto pen to enforce that,’” Bayh said in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend.

Bayh, 54, said that while he wasn’t certain the president would make such a call, “I think that there’s a fighting chance that he will.”

The senator also said he expects Obama to use the Jan. 27 nationally televised address before Congress to embrace creation of a commission that would suggest spending cuts and tax increases that Congress would be forced to vote on. Bayh met this week with Treasury Secretary Timothy F. Geithner, Vice President Joe Biden and U.S. Office of Management and Budget Director Peter Orszag to discuss such a commission.

Bayh said he doubts Congress would approve establishment of such an independent panel, and that Obama would have to set it up by executive fiat.

Getting the 60 votes likely needed for Senate passage of a bill to create the commission “will be very hard,” said Bayh, a second-term Democrat who will face voters in this fall’s midterm elections. He said that as a result, he expects Obama to “then come forward with an executive commission which is not as good, but is at least there’s a step in the right direction.”

What do you want to know?

Following Scott Brown’s amazing victory in Massachusetts on Tuesday, pundits have broadened their focus to the few dozen other Senate races taking place across the country in 2010, including here in New Hampshire.

As GOP Chairman Former Governor John Sununu said yesterday, our primary process is going to be key in selecting the best candidates to represent the party in November’s contests as we work to continue spreading the fiscal conservative message that was so effective in the Bay State.

STEWARD knows that Granite State voters are experts at asking tough questions of the men and women who seek their votes and this is why we have organized the first question and answer forum with each of the declared Republican Senate Candidates. The forum will be take place at our Grassroots Communications Conference on January 30 and will be moderated by Governor Sununu himself.

We understand that not everyone will be able to attend the conference but wanted to give all STEWARD members an opportunity to ask questions of the candidates.

Please visit STEWARDofProsperity.com/forum to submit your question. We look forward to hearing from you!

Get Out the VOTE!

As you know, today is Election Day in Massachusetts. While Granite Staters don't have a vote in this race, we certainly do have a stake.

As such, STEWARD encourages you to contact any and all family, friends, and colleagues you may have south of the border and urge them to get to the polls in support of Scott Brown.

In State, the NH GOP and others have come together to assist those who want to aid in the effort. Anyone with some free time today should contact BJ Perry for details (bj@nhgop.org) Also, the State Party is encouraging anyone interested to join them at a Victory Party tonight at The Draft in Concord starting at 7pm.

Scott has run a great race and could use your help to put him over the top!

Last Day to Register!

Registration for STEWARD's free "Grassroots Communication in the 21st Century" conference is set to close today - Friday, January 15. If you haven't already let us know you'll attend, please click here to register now.

As you may have heard, we've arranged for a series of high-profile presenters - including former House Speaker Newt Gingrich - to share new media expertise at our day-long January 30 conference in Manchester. We promise: "Grassroots Communication in the 21st Century" will be the pre-eminent New Hampshire organizing event of 2010.

Speaker Gingrich, a conservative who needs no introduction, will be joined by presenters Andrew Breitbart (publisher of the news portals Breitbart.com and Breitbart.tv) and Stephen Gillett (a Senior Vice President, Chief Information Officer and General Manager of Digital Ventures at Starbucks).

STEWARD has also arranged to host the very first GOP Senate candidates' forum of the 2010 election cycle. Governor John H. Sununu, the Republican Party Chairman, will facilitate questions for a panel featuring Kelly Ayotte, Bill Binnie, Jim Bender and Ovide Lamontagne.

Space for this free conference is limited. Because we're now in the process of making final arrangements, we're closing registration tonight, Friday, January 15.

We look forward to seeing you in Manchester on January 30!

EVENT INFORMATION

WHAT: NH Steward's "Grassroots Communication in the 21st Century" conference

WHEN: Saturday, January 30, 2010 - daylong event kicks-off at 8:30 a.m.

WHERE: Southern New Hampshire University

2500 North River Road

Manchester, NH 03106

REGSITER: www.stewardofprosperity.org/conference

LLC Tax Update

David Health, of the Nashua Chamber of Commerce which has been pushing back hard against the new LLC tax, has an informative write up detailing the tax's impact on small business in today's Union Leader:

Until recently, I have been confident in recommending New Hampshire as the lowest-tax state for small businesses because these businesses pay only the business enterprise tax (BET) at 0.75 percent on compensation paid to owners and employees, and the owners pay no personal income tax. Compare this result to Massachusetts, where the unincorporated business pays no business tax, but the owner pays 5.3 percent personal income tax on his compensation income. New Hampshire wins!

In recent years, however, this winning status has been eroded by increasingly frequent DRA audits challenging deductions of "reasonable compensation." In these audits, DRA asserts that small business owner compensation is actually "profit" subject to the 8.5 percent business profits tax (BPT). When DRA audits convert "compensation" into "profit," the small business owner's aggregate tax burden dramatically increases from the .75 percent BET rate to the 8.5 percent BPT rate.

Add the 2009 tax law and small businesses face a "tax double whammy" that will kill small business growth. Prior to the 2009 tax law, when DRA audits of partnerships and LLCs converted deductible "compensation" into taxable "profit," the tax rate increased from .75 percent to 8.5 percent. But now, the amount recharacterized as "profit" will also be treated as a "dividend" subject to the 5 percent income and dividends tax. Taxing the audited "profit" at the 8.5 percent BPT rate and again as a "dividend" at the 5 percent income and dividends tax rate means a combined tax rate of 13.5 percent.

So, after the 2009 tax law, tax advisers can no longer recommend New Hampshire as a good tax home for small business because the new law imposes burdensome record-keeping and an unprecedented "debt tax." Moreover, due to vague standards and increasingly frequent DRA audits of "reasonable compensation," no one can provide precise guidance on the "combined" New Hampshire tax rate on small business income. One can only say that the combined rate would be somewhere between .75 percent (the BET rate) and 13.5 percent (the combined tax on compensation converted to "profit"). Rightfully, entrepreneurs must reject such uncertainty.

Thankfully, it is starting to appear as though elected officials in Concord are picking up on the outrage:

In passing a law expanding the state's interest and dividends tax to all partnerships and limited liability companies, mistakes were made, Senate Majority Leader Maggie Hassan, D-Exeter, told the Exeter Rotary Club on Monday. Because mistakes were made, changes might be necessary, she hinted.

"Our biggest mistake is not communicating what we did. We had a July 1 deadline, we had $11 million bearing down on us," Seacoastonline.com reported her saying. "If we need to change it, we can."

That is the first hint we have seen from Democratic leadership in Concord that this burdensome tax could be revisited. That's a good sign.

Stimulus Supporters Seeking Cover Under Fuzzy Math and Word Play

There appears to be some rearranging of the deck chairs on the USS Stimulus. First this, yesterday, from ABC News:

The Obama administration has taken some heat and mockery for using the nebulous and non-economic term of jobs being “saved or created” by the $787 billion stimulus program.

So it’s gotten rid of it.

In a little-noticed December 18, 2009 memo from Office of Management and Budget director Peter Orszag the Obama administration is changing the way stimulus jobs are counted.

The memo, first noted by ProPublica, says that those receiving stimulus funds no longer have to say whether a job has been saved or created.

“Instead, recipients will more easily and objectively report on jobs funded with Recovery Act dollars,” Orszag wrote.

In other words, if the project is being funded with stimulus dollars – even if the person worked at that company or organization before and will work the same place afterwards – that’s a stimulus job.

And today this, as reported by the Wall Street Journal:

Assuming that Barack Obama holds another White House press conference—his last was back in July—here's a question worth asking: If the stimulus is truly the success you and your team claim, why are you so reluctant to use the word?

It's a timely question, with Congress returning to Washington this week after a year of record spending. Right now the spotlight is on the effort by the Democratic leadership to ram through a health-care bill—any health-care bill—in time for the president to declare victory in his State of the Union. But a second stimulus may not be far behind, with the House having already passed a version before members left for Christmas.

The House approved its $154 billion second stimulus package in its last vote of 2009, little more than a week after a policy address Mr. Obama delivered at the Brookings Institution. In that Dec. 8 speech, he reviewed the progress of the earlier stimulus—the $787 billion American Recovery and Reinvestment Act of 2009—and used the occasion to call for additional congressional spending. The headlines rightly described what he was proposing as a "second stimulus."

Yet perhaps the most intriguing part of that speech is what the president did not say.

Not once did he use the word "stimulus." If you search under "speeches and remarks" on the White House Web site, it will tell you that the last time the president used the word "stimulus" in public remarks was in an offhand reference in a speech about clean energy in October. A month before that he used the term once in a speech that was about the stimulus. ...

Why the reticence? In itself, "stimulus" ought to be a political positive. After all, describing a bill as a stimulus assumes it will stimulate. Certainly that's the sense that Paul Krugman—a Nobel-winning economist and New York Times columnist—uses it when he complains that the first stimulus was too small.

Perhaps the reluctance to call the new package a second stimulus has something to do with the extravagant promises Mr. Obama made to sell the first. Less than a month into Mr. Obama's presidency, the first stimulus was pushed through partly on the promise that doing so would keep unemployment south of 8%. With Friday's jobs numbers, the same people who sold us that one now have to explain why keeping unemployment at 10% is progress.

The Journal article goes on, "It's classic Beltway. In Washington when your policies don't work, you don't change them. You change the name and hope nobody notices."

Thankfully, taxpayers can see through the smokescreens.

"Spend a lot or spend nothing at all, it didn't matter..."

An AP story today dispels the myths behind the most visible part of the Democrat's stimulus bill/jobless recovery:

Ten months into President Barack Obama's first economic stimulus plan, a surge in spending on roads and bridges has had no effect on local unemployment and only barely helped the beleaguered construction industry, an Associated Press analysis has found.

Spend a lot or spend nothing at all, it didn't matter, the AP analysis showed: Local unemployment rates rose and fell regardless of how much stimulus money Washington poured out for transportation, raising questions about Obama's argument that more road money would address an "urgent need to accelerate job growth."

Obama wants a second stimulus bill from Congress that relies in part on more road and bridge spending, projects the president said are "at the heart of our effort to accelerate job growth."

Construction spending would be a key part of the Jobs for Main Street Act, a $75 billion second stimulus to revive the nation's lethargic unemployment rate and improve the dismal job market for construction workers. The House approved the bill 217-212 last month after House Speaker Nancy Pelosi, D-Calif., worked the floor for an hour; the Senate is expected to consider it later in January.

AP's analysis, which was reviewed by independent economists at five universities, showed that strategy hasn't affected unemployment rates so far. And there's concern it won't work the second time. ...

There was no difference in unemployment trends between the group of counties that received the most stimulus money and the group that received none, the analysis found.

Despite the disconnect, Congress is moving quickly to give Obama the road money he requested. The Senate will soon consider a proposal that would direct nearly $28 billion more on roads and bridges, programs that are popular with politicians, lobbyists and voters. The overall price tag on the bill, which also would pay for water projects, school repairs and jobs for teachers, firefighters and police officers, would be $75 billion.

Job Losses Continue, Unemployment Holds Steady...Sort Of

The New York Times reports:

The United States economy lost more jobs than expected in December, tempering hopes for a swift and sustained recovery from the Great Recession.

The Labor Department said Friday that the economy shed another 85,000 jobs last month, but that the unemployment rate held steady at 10 percent.

In a surprise that highlighted the erratic nature of economic renewal, the government reported that 4,000 jobs were actually created in November — rather than a loss of 11,000 the government had originally projected — the first gain in nearly two years.

Though jobs were lost in December, the unemployment rate did not rise, an indication that more jobless workers had given up their search for work.

For more on the real unemployment number, the percentage of Americans out of work who for one reason or another have given up on the job hunt, Yahoo News:

Beyond Friday's lackluster headline payroll figures, the "real" unemployment rate rose to 17.3% and the average hourly work week remained near record lows at 33.2. In addition, the average duration of unemployment rose to 29.1 weeks as the ranks of the long-term (or "permanently") unemployed continue to swell. Furthermore, the household survey showed a decline of 589,000 employed persons to the lowest level since 2003, according to Miller Tabak.

In sum, fewer people are working, more Americans are dropping out of the labor pool and those who are working are working fewer hours: Average hourly earnings up just 2.2% vs. a year ago in December, lowest rate since 2004 and vs. an average gain of 3.3% over the prior decade, according to Miller Tabak.

State Democrats Draining Rainy Day Fund

Via Grant Bosse and NH Watchdog:

The Legislative Fiscal Committee will be asked tomorrow to drain nearly $80 million from the state’s Rainy Day Fund to cover the remaining deficit from Fiscal Year 2009.

State Comptroller Edgar Carter and Commissioner Linda Hodgden have submitted a late request to the Fiscal Committee to transfer $79,733,939 from the Revenue Stabilization Reserve Account, commonly known as the Rainy Day Fund, into the state’s General Fund. The Fiscal Committee will take up the request tomorrow morning.

The two-year budget approved in June planned to draw down $37.8 million from the Rainy Day Fund in order to pay for state spending. Comptroller Edgar Carter tells the Josiah Bartlett Center that the state’s loss in the JUA Lawsuit has forced him to transfer $40 million more than planned.

“This is a larger than expected draw down, principally related to the fact that the Superior Court ruled against our ability to use $65 million from the JUA,” Carter explained.

On October 1, 2009, the state issued its Surplus Statement for FY09, showing that the Rainy Day Fund would have $76.1 million remaining. Tomorrow’s transfer would leave the fund with less than $40 million.

The $80 million deficit for FY09 does not include an additional $45 million in JUA funds budgeted for FY10, nor the fact that current year revenues are already more than $30 million below projections. Josiah Bartlett Center President Charlie Arlinghaus projects that the total budget hole, including the $110 million JUA Lawsuit, could reach $300 million by the end of June 2011.

Health Care Overhaul Becomes More Secretive

Throughout the 2008 campaign, President Obama promised the American people that the negotiations over his signature health care reform would be widely broadcast. Today, Democrats in Congress, with the blessing of the President, made it clear they have no intention of going that route:

President Barack Obama and congressional Democratic leaders agreed Tuesday to forgo a formal conference committee for reconciling the Senate and House health care bills, according to three Democratic congressional aides.

The decision means that the White House, Senate Majority Harry Reid and House Speaker Nancy Pelosi will attempt to reach an agreement through private negotiations with key lawmakers. Once a deal is struck, the bill will go back to the House for passage, then to the Senate and on to the president’s desk — a legislative path that has been described as “ping pong.”

The decision to bypass the conference committee, which the aides said came during an Oval Office meeting Tuesday, formalized what many Democrats had long known: If they have any hope of passing the health care bill quickly, they would need to circumvent the normal order of business.

But the move — though not unusual in the increasingly gridlocked Congress — has drawn sharp criticism from Republicans and even some Democrats, who say Obama is not living up to his promise of a transparent process.

If you were curious, here are a few examples of the President promising transparency throughout the campaign, via Breitbart TV:

Newt Gingrich to Headline STEWARD Event

STEWARD today announced former Speaker of the House Newt Gingrich will headline our upcoming Grassroots Communications Conference.

The event is scheduled for January 30th at Southern New Hampshire University. Free and open to NH residents, visit stewardofprosperity.org/conference for more information and to register.

Here is John DiStaso's Union Leader coverage of the breaking news:

With his profile and penchant for controversy as high as ever, Newt Gingrich will return to New Hampshire for the first time in nearly three years at the end of the month.

The Granite Status has learned that Gingrich, the former U.S. House speaker and author of the mid-1990s ‘Contract with America,’ will keynote a ‘Grassroots Communications Conference’ sponsored by businessman Fred Tauch's…STEWARD watchdog organization on Jan. 30. The daylong event is scheduled to be held at Southern New Hampshire University in Manchester. …

He last visited New Hampshire in the spring of 2007 for a book signing and to organize workshops for a nationwide ‘Solutions Day’ that his 527-group, American Solutions for Winning the Future, held in September of that year. Gingrich can been seen almost nightly on one news network talk show or another commenting on health care, the war on terrorism, the Obama administration and the state of the GOP.

In New Hampshire, he'll join other speakers at the conference in talking about "emerging methods of communications to reach voters, constituents and activists," according to STEWARD.

In a release to be issued later this week, STEWARD, an acronym for Save The Economy Without Accumulating Record Debt, says the conference "will empower participants to disseminate a conservative message, organize and mobilize online."

Gingrich noted in a statement released to the Granite Status that in the summer of 2008, American Solutions ‘gathered the signatures of 1.5 million Americans who supported our “Drill Here, Drill Now, Pay Less”’ campaign in support of offshore drilling, an online grassroots achievement that created the momentum that led to the repeal of the executive and legislative branch bans.

"I look forward to discussing with New Hampshire conservatives how to utilize new media to drive our message of safety, prosperity and freedom and spur people to demand real change from their government," Gingrich said.

Other speakers so far scheduled for the conference are Andrew Breitbart, publisher of Breitbart.com and Breitbart.tv, and Stephen Gillett, Starbucks' Digital Ventures senior vice president, chief information officer and general manager.

Concord political strategist Michael Dennehy, a consultant for STEWARD and Tausch, called Gingrich "the pre-eminent creative thinker in the Republican Party. We could not ask for a better national figure to help underscore the importance of new media communications in campaigns and public advocacy today."

States and the Stimulus: The Gift that Keeps on Giving

The Weekend Edition of the Wall Street Journal had an interesting read detailing one of the stimulus concerns that opponents have been warning of since the beginning: States will be unable to continue the excessive spending in the new year.

Read it all if you have a chance, but here is the meat:

First, in most state capitals the stimulus enticed state lawmakers to spend on new programs rather than adjusting to lean times. They added health and welfare benefits and child care programs. Now they have to pay for those additions with their own state's money.

For example, the stimulus offered $80 billion for Medicaid to cover health-care costs for unemployed workers and single workers without kids. But in 2011 most of that extra federal Medicaid money vanishes. Then states will have one million more people on Medicaid with no money to pay for it.

A few governors, such as Mitch Daniels of Indiana and Rick Perry of Texas, had the foresight to turn down their share of the $7 billion for unemployment insurance, realizing that once the federal funds run out, benefits would be unpayable. "One of the smartest decisions we made," says Mr. Daniels. Many governors now probably wish they had done the same.

Second, stimulus dollars came with strings attached that are now causing enormous budget headaches. Many environmental grants have matching requirements, so to get a federal dollar, states and cities had to spend a dollar even when they were facing huge deficits. The new construction projects built with federal funds also have federal Davis-Bacon wage requirements that raise state building costs to pay inflated union salaries.

Worst of all, at the behest of the public employee unions, Congress imposed "maintenance of effort" spending requirements on states. These federal laws prohibit state legislatures from cutting spending on 15 programs, from road building to welfare, if the state took even a dollar of stimulus cash for these purposes.

One provision prohibits states from cutting Medicaid benefits or eligibility below levels in effect on July 1, 2008. That date, not coincidentally, was the peak of the last economic cycle when states were awash in revenue. State spending soared at a nearly 8% annual rate from 2004-2008, far faster than inflation and population growth, and liberals want to keep funding at that level.

Slew of New Year's Taxes

As 2010 begins, New Hampshire Watchdog has put together a couple of lists detailing about a dozen likely or re-instituted state and federal taxes we will face in the new year.

First, in addition to the 30-plus new or increased taxes and fees already instituted, here are 5 other increases Democrats in Concord are likely to consider at the suggestion of Department of Revenue Commissioner Kevin Clougherty:

1) Real Estate Transfer Tax: The Real Estate Transfer Tax, or RETT, is among the most cyclical of New Hampshire’s business taxes. It booms when the real estate market is hot, and craters when real estate slows. Currently, home buyers and commercial real estate buyers pay a 0.75% tax when real property is transferred. Clougherty outlines three possible expansions of the RETT. The DRA Memo charts projected revenues for Fiscal Years 2010 and 2011 based on the current rate, and on increasing the rate to 1%, 1.15%, 1.25%, and 1.5%. It also calculates how much revenue would be generated if the tax included an exemption on the first $25,000, $50,000, $75,000, or $100,000 in property value. According to the DRA memo, the RETT would have generated anywhere between $69 million to $200 million over the next two years based on the tax rate and exemption levels chosen. However, the most controversial change suggested by the DRA Memo as an extension of the RETT to cover refinancing as well as property transfers. According to Clougherty, taxing real estate refinancing would generate revenue as the real estate market and interest rates decline, cushioning the cyclical nature of real estate tax collections. Governor John Lynch originally supported this expansion of real estate taxes, which met with thunderous protests from the real estate community, who argued that the new tax would target homeowners attempting to refinance their mortgages in order to stay in their homes. Lynch and the Legislature eventually shelved the Refi Tax

2) BET Credits against the BPT: As the Business Enterprise Tax was designed as a way to spread New Hampshire’s business tax burden away from its largest firms and over a broader base, the new tax was written so that no business would pay twice. All firms pay the BET, but only businesses making a profit in a given year pay the Business Profits Tax. However, tax payments under the BET are fully credited against BPT liability. Effectively, businesses pay either the BET or the BPT, which is higher, but not both. The DRA Memo cites 2208 statistics in which 18,154 tax filers applied for $121,506,595 in BET credits against the BPT, of which $41 million was from the top 100 business taxpayers. Clougherty says that since the business tax base shrinks during a recession, lawmakers can’t count on that large an increase in revenues if the credit were removed this year. He also warns that the tax increase would have a disproportionate impact on the largest taxpayers, and hit the banking community especially hard due to the way that interest in treated under the tax.

3) BET Thresholds: The Business Enterprise Tax requires businesses large and small to pay the state based not on their profits, but on their total receipts. The tax was put in place in 1993 to broaden the state’s business tax base, which had concentrated to a few large, profitable businesses paying the Business Profits Tax. But the BET only kicks in after a business has reached a threshold of $150,000 in gross receipts or $75,000 in enterprise value. Once a business grows to that level, it pays 0.75% in taxes on every dollar that comes in the door, regardless of expenses. The DRA Memo suggests lowering those thresholds to their original levels of $100,000 and $50,000, and estimates that the lower threshold would generate an additional $2 million annually.

4) Net Operating Losses: Under current law, businesses are allowed to carryover net operating losses into future tax years in order to offset future tax liability. The carry forward amount for NOL’s generated after July 1, 2005 is $1 million each year. The DRA Memo mentions that the original carry forward amount was limited to $250,000 annually back in 1988, and was NOL’s could only be carried over for five years. The DRA Memo does not estimate how much additional revenue would be generated by reverting to the lower limits.

5) Online Booking of Room Rentals: According to the DRA Memo, online travel companies charge customers for hotel occupancy taxes when they book their rooms, but pay only a portion of those taxes to local and state governments. Clougherty argues that the issue in current under litigation, but recommended that New Hampshire create a new category of “wholesaler” to apply to online travel companies. However, administering this tax, and collecting it from out-of-state businesses with no link to New Hampshire could be difficult. Clougherty explains that his office is working with the Federation of Tax Administrators to draft federal legislation to enable states to collect taxes charged by online travel companies.

Federally, a number of tax increases kicked in at the stroke of midnight due to inaction by Democrats in Washington (via the Heritage Foundation):

The House has passed legislation (H.R. 4213) that would have extended 63 current tax provisions, but the Senate failed to bring this bill to a vote. Thus, all of these provisions expired at midnight last night. Notable provisions as reported today by Tax Notes include:

Deduction of state and local general sales taxes (section 164) (Personal Tax Incentives)

Additional standard deduction, up to $500 for individuals and $1,000 for couples, for state and local property taxes (section 63) (Personal Tax Incentives)

Research tax credit and alternative simplified credit (section 41) (General Business Tax Incentives)

New markets tax credit (section 45D) (Community Assistance Provisions)

Empowerment zone incentives (sections 1391 and 1202) (Community Assistance Provisions)

Renewal community tax incentives (sections 1400E, 1400F, 1400I, and 1400J) (Community Assistance Provisions)

District of Columbia Investment Incentives (sections 1400, 1400A, 1400B, and 1400C) (Community Assistance Provisions)

Net disaster loss designation and $500 limit per casualty for personal casualty losses attributed to federally declared natural disasters (section 165) (General Disaster Relief Provisions)

Expensing for qualified disaster expenses (section 198A) (General Disaster Relief Provisions)

Biodiesel and renewable diesel incentives (section 40A) (Energy Incentives)

Alternative motor vehicle credit for heavy hybrids (section 30B) (Energy Incentives)