Another emergency that hasn't gone to waste

There is more money in corporate tax breaks in the fiscal cliff agreement than revenue scheduled to be gained from the tax hikes on the rich. Timothy Carney has run the numbers.

Think about this: just the business and energy tax extenders reduce federal revenue by $67.7 billion in 2013. The tax hikes on the rich Obama won — higher rates on those over $400,000 and reduced deductions on those over $250,000 — raise $620 billion over a decade. As far as I know, we can safely guess that this would be less than $62 billion in 2013.

Unless I’m missing something, the special-interest tax breaks Obama demanded look to be bigger than the money he raised by taxing the rich. If he had just let all these special tax breaks expire — like wind tax credits, algae subsidies, and railroad track maintenance — it would have raised more revenue than his tax hikes on rich individuals and small businesses.

There are corporate benefits for liquor companies, green-energy companies, and Hollywood studios and other groups whose lobbyists were successful. Kinda cozy how that all worked out, isn't it?

The Senators even voted down, 14-10, an amendment to list the corporate interests that receive tax perks on a government website. This "tax extenders" bill passed Mr. Baucus's committee, 19-5 (see the table nearby), and then sat waiting until Harry Reid and the White House stuffed it wholesale into the "fiscal cliff" bill.

Thus Michigan Democrat Debbie Stabenow was able to retain an accelerated tax write-off for owners of Nascar tracks (cost: $78 million) to benefit the paupers who control the Michigan International Speedway. New Mexico's Jeff Bingaman saved a tax credit for companies operating in American Samoa ($62 million), including a StarKist factory.

Distillers are able to drink to a $222 million rum tax rebate. Perhaps this will help to finance more of those fabulous Bacardi TV ads with all those beautiful rich people. Businesses located on Indian reservations will receive $222 million in accelerated depreciation. And there are breaks for railroads, "New York Liberty Zone" bonds and so much more.

But a special award goes to Chris Dodd, the former Senator who now roams Gucci Gulch lobbying for Hollywood's movie studios. The Senate summary of his tax victory is worth quoting in full: "The bill extends for two years, through 2013, the provision that allows film and television producers to expense the first $15 million of production costs incurred in the United States ($20 million if the costs are incurred in economically depressed areas in the United States)."

You gotta love that "depressed areas" bit. The impoverished impresarios of Brentwood get an extra writeoff if they take their film crews into, say, deepest Flatbush. Is that because they have to pay extra to the caterers from Dean & DeLuca to make the trip? It sure can't be because they hire the jobless locals for the production crew. Those are union jobs, mate, and don't you forget it.

And since tax hikes rarely garner the amount of revenue predicted, the disparity will be even worse. It seems that an emergency never does go to waste.

Cruising the web

Sorry for the light posting. I've been having a very relaxing winter break. Plus the news has just been so irritating recently. I'll try to get more back into the swing of things now as it draws to a close.

It sure doesn't sound as if the economy is going to be Obama's main concern any time soon.

They hypocrisy of New York and New Jersey politicians blasting Boehner for not bringing up the pork-laden bill that was supposed to be for emergency relief for areas hit by Hurricane Sandy is beyond ridiculous. I got emails all day long from Chris Christie's PR people who wanted to be sure that word got out about him criticizing Republicans for not passing the bill despite the fact that they had well-reasoned criticisms of stuffing the bill with five times as much pork as money for Sandy victims. And now the House, right on schedule, has passed a pared-down bill with money targeted just for aid to victims of Sandy. So instead of spending $60 billion, they spent $9.7 billion. The pork can wait. And the political grandstanding can grind to a halt. I know that Christie is up for reelection, but does he have to be so unnecessarily obvious about trying to score political points off of criticizing Republicans?

Rather clever of Al Gore to gain $100 million for himself while he sells out his loser TV network to Al Jazeera and then forces cable companies to accept the new Al Jazeera-owned network on their cable stations. And he gets to do it by selling out to a company built on oil money.

James Taranto notes the hypocrisy of liberals who just love talking about diversity, but then classify black conservatives like Tim Scott as tokens.

I hope everyone enjoyed the drama of the fiscal cliff negotiations. That's going to be the new normal in Washington. We have several more of such moments coming up. Wouldn't it be better to craft a plan to avoid such fiscal cliffs in the first place? But no. That would take political courage on both sides of the aisle. And when has this administration had any plan to address our fiscal situation except raising taxes? And then raising them more? As Charles Krauthammer says, the old Obama is back. And that Obama is interested only in raising taxes.

Obama's false modesty about comparing himself to Lincoln doesn't pass the smell test.


It's not often that a squash becomes a historic relic, but this one holds royal DNA.

Cruising the Web

A French court has struck down Hollande's 75% tax rate on millionaires because it is not applied equally to all rich people. So now they're going to go back to the drawing board to find ways to tax more people. Meanwhile, those millionaires who are able are leaving the country. I guess these basic effects of confiscatory tax rates have to be learned over and over by socialist governments.

Victims of Sandy are still stranded by "red tape." I guess having Obama say "let it be so" was not enough to make red tape disappear.

Michael Barone reminds us of how government often makes things worse when it steps in. His examples of how government messed up health care, housing, and higher education are spot on. Sadly, once the pattern has been established, politicians just keep digging deeper instead of correcting the original mistake.

The city of Stockton, California is going through bankruptcy because they have promised benefits to city employees that they have no possible way of funding. But instead of reforming those irresponsible promises, they want to stick it to the bondholders who foolishly invested in the insolvent city. If they're allowed to get away with this, look for other bankrupt cities throughout California and the rest of the country to try the same thing. The result will be that no city will be able to sell their municipal bonds.

Now that he's been reelected, the Obama administration is spewing forth new regulations at a rapid clip.

Is globalization reversing?

Cheers to Ringling Brothers and their victory over the bogus lawsuit that the ASPCA brought against them. Now the ASPCA is the one having to shovel up after the elephants.

We can't keep going on as we have been

Let's face it - we cannot have both low taxes and ever-growing government. And few politicians want to face up to that reality. Just raising taxes on the top percent, as Obama wants to do, won't do enough to pay for all that we ask government to do. We would need to raise taxes on everyone. Perhaps, if we stopped paying for the government the people seem to want by borrowing money, people would begin to realize the hole we've dug ourselves into. And both parties are to blame.Veronique de Rugy sums this up.

And here is our lesson for the fiscal cliff. The types of deals that are being discussed by both the president and Boehner don't cut spending or reform the drivers of our future debt (Social Security, Medicare and Medicaid). Instead, they keep taxes low for 98 percent of taxpayers. But this basically means keeping 98 percent of the failed policies of the Bush years. And the failed part, as I noted above, is the growing burden of federal spending.

This country is at a crossroad. We have to choose between raising taxes on everyone to pay for big government or keeping taxes low and seriously cutting spending. Big government spending and relatively lower taxes are not an option. We learned that during the Bush years.

Perhaps Marc Thiessen is right that we should just let taxes go up on everyone so that people start to realize how much government spending is costing us. Americans have gotten used to the fantasy that we can have low tax rates and just keep spending.

Extending the tax cuts shielded the economy from the full brunt of Obama’s economic failures and allowed him to put off job-killing tax increases until his second term. It’s ironic: Obama never passed up an opportunity to blame President George W. Bush for his economic woes, yet he rode the Bush tax cuts to reelection.

Extending the tax cuts also shielded Americans from the costs of Obama’s spending spree. Shopping on a credit card is fun until the bill comes due. But if the bill never arrives, what incentive do people have to stop the spending?

Big government is great if you don’t have to pay for it. Well, now it’s time to pay the bill. Maybe when the costs of the stimulus, Obamacare and exploding entitlements are finally deducted from their paychecks, Americans will rediscover the virtue of smaller government. If they don’t like paying higher taxes to allow for more spending, there’s a simple solution: Demand that politicians in Washington cut taxes and spending instead of expanding them. And if they won’t do it, elect men and women who will.

As Mort Zuckerman writes, nothing being discussed as a last-minute fix for the fiscal cliff is addressing what is really driving our debt.

We are on a trajectory of cumulative fiscal deficits that cannot possibly be sustained. We have gone from being the world's largest creditor nation, with no foreign debt at the end of World War II, to the world's largest debtor, with roughly half of our public debt held by foreign lenders. Over the last four years, our national debt has grown by more than $5 trillion to over $16 trillion. We have to service that debt. The Federal Reserve is keeping rates historically low but here's the cost of paying interest on the debt for fiscal 2012: $359,796,008,919.49.

What do you get for that? Nothing.

The greatest fiscal challenge to the U.S. government is not just its annual deficit but its total liabilities. Our federal balance sheet does not include the unfunded social insurance obligations of Medicare, Social Security, and the future retirement benefits of federal employees. Only in the small print of the financial statements do you get some idea of the enormous size of the unfunded commitments. Today the estimated unfunded total is more than $87 trillion, or 550 percent of our GDP. And the debt per household is more than 10 times the median family income.

The news just keeps getting worse the more you look at our unfunded liabilities. But the Democrats refuse to talk about any reform of entitlements as part of the fiscal cliff negotiations and they've ignored those problems for the past four years. Obama gave the brush-off to his own commission established to address these problems and all we got were platitudes from him during the campaign and scare talk about what Ryan and Romney proposed. Yesterday, he answered David Gregory's softball questions by lying about how much spending he'd cut in 2011. He's still putting up the pretense that counting money he was never intending to spend in Iraq is a spending cut. Everyone knows that is just as laughable as if I'd decided to count in my family's budget the money we are saving by not buying that second house in the Bahamas that we have no intention in purchasing. But such is how accounting is done in Obamaworld. I prefer this explanation of the U.S. Budget for Dummies that has been going around the internet.

* U.S. Tax revenue: $2,170,000,000,000
* Fed budget: $3,820,000,000,000
* New debt: $ 1,650,000,000,000
* National debt: $14,271,000,000,000
* Recent budget cuts: $ 38,500,000,000

Let’s now remove 8 zeros and pretend it’s a household budget:

* Annual family income: $21,700
* Money the family spent: $38,200
* New debt on the credit card: $16,500
* Outstanding balance on the credit card: $142,710
* Total budget cuts so far: $38.50

Cruising the Web

Amity Shlaes explains how public-sector unions divide workers into two groups: those older workers who got sweet deals and those newer workers who got lesser deals once governments woke up to how they were bankrupting their citizens.

Social Security ran close to $50 billion in deficit in 2012. But some politicians like Dick Durbin want to claim that there is no crisis. Instead he wants yet another blue-ribbon commission to study the question. How many commissions have we had already on entitlements?

What kind of naivete must a CEO have to imagine that politicians who haven't been able to "come together" to prevent us going over the fiscal cliff would suddenly smack their heads and decide to compromise once they see the "come together" message on their Starbuck's cup? Do Barack Obama, Harry Reid, and John Boehner even get their coffee from Starbucks?

Daniel Henninger rightly notes that we have come to see more and more examples of government policy being inadequate to accomplish the goals such policies are supposedly designed to accomplish. Of course, for those who always see government as the correct solution to any policy question, the only answer to such inadequacies is even more government.

Mickey Kaus has some fun ridiculing Politico's seeming inability to detect BS when it comes from the Democrats.

Journalists who used to pride themselves on their ability to be neutral in any kind of story sure seem eager to take sides when the issue is gun control. I still remember Peter Jennings and Mike Wallace stating how they wouldn't warn American troops of a surprise enemy attack because reporters shouldn't involve themselves in a story. That was a despicable attitude then. But now reporters don't even pretend that they don't have an agenda.

Cruising the Web

I'd like to wish all my readers a very Merry Christmas. May you have a wonderful holiday with your friends and family.

This is an inspiring story of a real-life NFL player who retired and is now inspiring students at his old high school to study math and improve their grades. It reads like a made-for-TV movie, but is so much more moving because it's true life.

Home air conditioning has been saving lives.

This new movie about FDR spending a weekend in 1939 with the King and Queen of England sounds absolutely terrible. Do we really need to have FDR portrayed as an immoral cad who took time off from talking about the advent of war in Europe to manipulate a woman into servicing him sexually. There is no historical evidence to back up such a story, but somehow these moviemakers thought it was just fine to make up such a Clintonian storyline.

Even supporters of Barack Obama are starting to notice his solipsism. He can't even eulogize Senator Daniel Inouye without turning it into a speech all about himself.

Here in North Carolina, much of the talk is over the academic scandal engulfing UNC Chapel Hill. But it basically comes down to this - if they're going to admit student-athletes who aren't capable of doing college-level work, then ultimately they're going to end up cutting a lot of corners to make them look like they're still eligible to play. And it's no defense to say that not all the students taking these bogus classes and having their grades changed were athletes so the NCAA shouldn't care. This first supposedly neutral report from former Governor Martin is totally insufficient and seems to have been grossly negligent in its scope. It's a scandal for this to have gone on so long at the university. And if the NCAA doesn't care about this sort of scandal, then what good are they?

Let's not forget how John Kerry has time and again supported the bad guys in Latin America.

I agree with Philip Klein - why would anyone want John Boehner's job? But then people always seem to emerge who want to grab the reins of power even if there isn't all that much power involved.

Ed Morrissey explains how the federal government drives income inequality.

How scummy is it that the head of the Chicago Teachers Union would take the occasion of the massacre in Newtown to claim that Teach for America support policies that "kill and disenfranchise children from schools across this nation"? There has been some low politicking using this tragedy, but his has to be one of the lowest attempts out there.

Barry Rubin explains why it's just a myth to think that Obama has gotten any more favorable towards Israel.