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Monthly Archives: August 2009
In Court Today: Environmentalists Sue Obama Administration by Gregory Hilton —
The major environmental groups howled when George W. Bush removed more than 1,650 gray wolves in Montana and Idaho from the endangered species list in May 2008. They said Bush wanted to eradicate all wolves, was cruel to animals and “the decision demonstrates why he is the worst environmental president in history.”
The Bush action was prominently featured in literature last year advocating the election of Barack Obama. It was not surprising when Bush’s decision was suspended during Obama’s first week in office under a broad directive by White House Chief of Staff Rahm Emanuel.
The radical environmentalists cheered their victory, but what they did not realize was that Obama would appoint former Senator Ken Salazar (D-CO) as Secretary of the Interior. He is a rancher and a lifetime member of the Cattlemen’s Association who is familiar with the damage caused by wolves.
On March 6th of this year Secretary Salazar supported the Bush Administration’s edict regarding wolves. Salazar supported the unanimous recommendation of Fish and Wildlife Service scientists in backing the Bush policy, and said “This was a decision based on science.” Rep. Norm Dicks (D-WA) preferred a decision based on politics. He organized a Congressional letter of protest that was sent to the White House. Dicks said “I just don’t see what this does for us. Here we are alienating people who did the most — who did a lot to help us in the last election.”
Management of the animals now lies with the states, and for the first time in three decades both Montana and Idaho have planned wolf hunts this fall. The Fish and Games Departments in both states had previous written to the other 48 states asking if they would be able to manage wolves. Idaho and Montana offered to capture and transport the wolves free of charge, but no one has expressed an interest.
A coalition of 13 environmental groups has asked U.S. District Judge Donald Molloy to stop the hunts and put wolves back on the endangered species list. The groups include the Sierra Club, Defenders of Wildlife, Friends of the Earth, PETA and the Natural Resources Defense Council. A hearing is scheduled today – the same day wolf hunting permits go on sale in Montana.
Montana’s wolf season calls for a harvest of 75 animals, while Idaho is allowing 220. Wolves were reintroduced to Yellowstone National Park some 15 years ago, and their numbers grow by about 20 percent a year. Several years ago wolves reached the population threshold and other milestones federal officials set as requirements to remove them from the federal endangered species list.
For the past 14 years the residents of Idaho, Montana, and Wyoming have stood by as deer, elk and moose populations have been decimated. Ranchers could not do anything when their lively hood was eaten before their eyes. As usual, the environmental lobby is completely distorting the situation. The Defenders of Wildlife have established a http://www.savewolves.org website with a video narrated by Ashley Judd. Wolves are portrayed a cute and cuddly creatures similar to dogs. Of course they do not mention the reasons for the Bush/Obama policy and they offer no management program of their own. They want you to believe that the only reason for the policy is to allow innocent wolves to be used as target practice by aggressive hunters.
No one is trying to eradicate wolves. These states have monitored hunting seasons, and they do not allow wolves to be killed out of season. For some reason the environmentalists have made a poster child out of the wolf, but once again, they are completely ignoring other species such as elk, moose, deer, sheep and cows.
The environmental groups claim wolves are beneficial to the elk population but the statistics do not support that claim. A 2008 study conducted by Montana State University of Yellowstone’s Northern Range demonstrates wolves are responsible for a 67% decline in the elk population. The highlights are as follows:
The Elk population in 1993 –1995 averaged between 17,000 and 19,000
•Wolves were re-introduced in 1995
•Elk numbers 2005 –2007 Averaged between 6,300 and 6,700
Ed Bangs, the Fish and Wildlife Service’s wolf recovery coordinator for the northwestern United States, told the Associated Press last week that gray wolves will be able to withstand regulated hunting in Idaho and Montana because the states have pledged to maintain a strong wolf population, and the animals will be able to migrate and interbreed with thousands of gray wolves in Canada. “Right now the wolf population is highly diverse. We’ve done as much as we can,” Bangs said. “The science is absolutely rock-solid.”
The voice of many frustrated ranchers was expressed in this letter to the Department of the Interior.
“Dear Secretary Salazar:
Thank you for making the right decision on wolves, and I am so pleased a western rancher such as your self is now in office. As you well know, wolves kill cows, sheep, coyotes, elk, deer, moose and other animals that are otherwise healthy, without need. They will kill whatever they can, and then move on, making a new kill every chance they get.
These environmental groups would have a different attitude if they spent time working, eating, sleeping and breathing with a herd of cattle or a band of sheep.
“I wish they would spend a year feeding the mothers, and bringing the babies into this world during the cold days and dark nights. We then spend our days keeping them fed and healthy. It is very frustrating to see them not killed for food, but torn to bits and left to slowly die just so a pack of wolf pups can play and learn to hunt. If one of these environmentalists was a western rancher they would have a different attitude. I don’t hunt much anymore, but I do help put food on the tables of the world.”
TRIVIA QUESTION: Why was President Bill Clinton’s speech in the Spring of 1995 so controversial? by Gregory Hilton
TRIVIA QUESTION: Why was President Bill Clinton’s speech in the Spring of 1995 so controversial? by Gregory Hilton —
Vice President Al Gore called the heads of all three networks on the morning of June 13th 1995 to obtain a prime time slot for an address by the President that evening. Clinton’s speech was highly controversial within the White House and Chief of Staff Leon Panetta, Erskine Bowles, George Stephanopoulos and Laura Tyson all said they considered resigning because of his message. The Chairman of the Congressional Black Caucus, Rep. Donald Payne (D-NJ), said after the speech ‘This is not leadership. It is BS.’
Several memoirs of the Clinton years have now been written and in hindsight we know about the drama surrounding this speech. The President made a few revisions in the speech to please the First Lady, but he did not change the substance. After the speech he had remorse and thought he might have made the wrong decision. What had Clinton done?”
ANSWER: On June 13, 1995, President Clinton revealed his plan to balance the budget, and while he had previously said this, his staff was dismayed because this time he appeared to mean it. In 1994 he said a balanced budget could be achieved in 10 years, but now he was agreeing to the Republican timetable and was submitting a plan to achieve this goal in 7 years. The Clinton plan delayed many of the hard cuts until he would have been out of office, and it would have balanced the budget in 2002. The liberals were angry because it meant the end of some of their cherished future plans.
The Clinton plan did not reflect the immediate cuts advocated by Republicans but it was still considered a devastating blow to Clinton supporters. The shape of debate was fundamentally changed. The dismay was especially apparent among member of his 1992 “War Room.” James Carville, Mandy Grunwald and Paul Begala had consistently defended Clinton’s liberal campaign promises.
Labor Secretary Robert Reich had written the party’s 1992 campaign manifesto which was called “Putting People First.” George Stephanopoulos told Clinton that if he went ahead with a balanced budget plan their new platform would be known as “Putting People Last.”
After the failure of the effort to adopt a Balanced Budget Amendment to the U.S. Constitution in the Spring of 1995, Republicans proceeded to developing a balanced budget for fiscal year 1996. They had not presented a specific plan by the time of President Clinton’s surprise speech on June 13th.
Clinton knew Congress would soon adopt a budget which would be balanced in the out years. Faced with this inevitability he decided to beat them to the punch by submitting his own balanced budget.
This was ironic because the Clinton Administration had worked diligently to stop balanced budget efforts in the past. For example, the President was involved in the effort to defeat the September 1993 bipartisan Penny-Kasich Deficit Reduction Act. It would have eliminated hundred of useless and obsolete agencies, and outlined a specific cuts. A year later Clinton personally made calls to defeat the Balanced Budget Constitutional Amendment. Labor Secretary Robert Reich said “The President is against simply balancing the budget,” and Clinton said “balancing the budget is not one of our top priorities.”
Congressional Democrats, the Clinton cabinet and the White House staff all resented the anti-deficit strategy and Clinton’s new emphasis on a balanced budget.. We now know that this decision and the capital gains tax cut were both key to all of Clinton’s later successes — it turned around the economy and laid the basis for the country’s continuing prosperity.
According to several memoirs the most powerful aide in 1995 was the only person who had correctly predicted the outcome of the 1994 election, Dick Morris. Democrats lost 54 seats in the House of Representatives that year, and 8 seats in the Senate (followed by two defections after the election), giving the Republicans a majority in both houses of Congress for the first time since 1954. The Republicans also had a net gain of 12 governors’ seats in that election.
Clinton had good reason to pay less attention to the people who had given him such bad advice, and he accepted Morris’ advocacy of a balanced budget plan. Morris also said, “We need to tell the liberal Democratic congressional wing to shut up. Their agenda is no longer relevant.”
Clinton’s popularity had declined significantly and many thought he could not be re-elected in 1996. He was no longer the center of attention and said “The President is still relevant” during an April 1995 press conference. His Chief of Staff, Leon Panetta, described this time to NPR: “The statement reflected the president’s concern about the November 1994 election. Republicans won both the House and Senate and not one GOP incumbent lost. There was so much attention focused on Speaker Gingrich, the “Contract With America,” and the efforts on Capitol Hill.
“It concerned him because for two years it was his agenda that he was pushing, and he felt was important to the country. And now suddenly he’s confronting a situation where there’s another agenda that’s being pushed by the Republicans that is consuming most of the attention. And so the real question was where is the relevance of the president in this process?”
The decisive day for the balanced budget would be June 13, 1995, which is the subject of my next article.
The One Vote Failure: The Effort to Enact a Balanced Budget Amendment to the U.S. Constitution By Gregory Hilton
This was a major issue throughout the 1980’s and 1990’s, when it frequently came close to passage. The amendment responded to concerns that federal spending was spiraling out of control, and it would have imposed debt limits on the government. They definitely were needed and the current public debt is $11.7 trillion, or about $37,900 per person. It is increasing at the rate of about $3.92 billion dollars per day.
The Balanced Budget Amendment was clearly in the spotlight with the election of a Republican Congress in 1994. This was the first time in 30 years the GOP was in power in both Houses and item number one in their 1994 Contract With America was the Fiscal Responsibility Act.
It called for an amendment to the Constitution which would require a balanced budget, unless sanctioned by a three-fifths vote in both houses of Congress. This was passed by the House of Representatives as Joint Resolution 1 on January 26, 1995 by a vote of 300 to 132. It then became Senate Joint Resolution 1 and was co-sponsored by all of the Republican lawmakers, except one.
They were joined by 7 Democrats (Bryan (NV), Kohl (WI), Graham (FL), Baucus (MT), Breaux (LA), Moseley-Braun (IL) and Robb of Virginia). A Constitutional Amendment requires a two thirds vote for passage. On March 2, 1995, the Senate failed to adopt it by a vote of 66-to-35. This was one vote shy of the necessary two-thirds. Six Democratic Senators who voted for the resolution in 1994 voted against it in 1995. All of them had been lobbied by President Clinton.
The group included Majority Leader Tom Daschle (SD), Wendell Ford (KY), the Senate Whip, Harry Reid (NV), the present Majority Leader, and Byron Dorgan (ND). Senator Mark Hatfield (R-OR) was the only Republican who broke with his colleagues by failing to support the amendment, and he refused to abstain. Hatfield said it was the most important vote in thirty years on Capitol Hill, but he saw it as “a political ploy to erroneously make Americans think we are actually doing something about the deficit.” An unsuccessful effort was later made to strip Hatfield of his Chairmanship of the Appropriations Committee in retaliation.
Had the amendment passed, the federal government’s power to use deficit spending would have ended. The Amendment was brought up again in June of 1996 when it failed by two votes. The Democratic Party platform opposed the Constitutional Amendment. In addition, Senator Bill Nighthorse Campbell cited the Balanced Budget Amendment as the reason he switched from the Democratic to the Republican Party.
“Putting People First:” What Would Have Happened if the Clinton Agenda Had Been Enacted? by Gregory Hilton
My August 25th article outlined the six critical factors which led to a balanced federal budget in the late 1990’s. This happened on President Clinton’s watch so of course he is entitled to some of the credit, but he is also the person who diligently fought practically all spending reductions, as well as many of the policies that are now an integral part of his legacy. If his 1992 “Putting People First” agenda had been adopted the Clinton Administration would have left office with a large deficit.
It is important to reexamine the original Clinton agenda because it is so similar to President Obama’s current proposals. The major difference is that our outlook is far worse today. Our national debt is $11.7 trillion dollars and our GDP is approximately $14 trillion. Our debt to GDP ratio will be 85% by the end of this year and over 90% next year.
Liberal columnist John B. Judis of “The New Republic” best described the comparison between the Clinton and Obama agenda’s:
“I would draw a distinction between the Clinton of 1992-1994 and the Clinton of 1995-2000. There is enormous political continuity between the Clinton of “Putting People First” (his 1992 campaign manifesto drafted by Robert Reich and Derek Shearer) and today’s Obama administration.
“When Clinton was elected, the economy was in recession, and Clinton’s initial proposals (including a stimulus program, industrial policy, and national health insurance) anticipated what Obama has proposed during his first year. Like Obama, Clinton imagined himself as Franklin Roosevelt’s successor–even paying a conspicuous visit during his first hundred days to Hyde Park. . . after getting repudiated at the polls in November 1994, Clinton had to pursue a much more cautious policy for the rest of his six years. Clinton’s last six years were dominated by incremental reform and “new economy” boosterism. . . Obama is the president Clinton aspired to be in 1993.”
Based on Clinton’s original budget which he submitted in 1993, the deficits from 1995 to 1999 turned out to $902 billion less than the administration’s projections. That is what the deficit would have been if Clinton’s priorities had been approved by Congress and stayed in place. A major part of the reason why we achieved a balanced budget is that Republicans in Congress rejected many of Clinton’s spending proposals.
Because of Clinton’s veto, Republicans were not successful in cutting existing programs during the first two years, but after the 1994 election most of the expensive elements in the President’s domestic agenda were no longer feasible. The expansion of the 1990’s was not because of the administration’s economic agenda, but in spite of it. Some major elements of the Clinton agenda were as follows:
1) In 1993, President Clinton’s $19.5 billion stimulus program was stopped by a Republican filibuster which held despite four Democratic attempts to break it. Not one of the 43 Senate Republicans voted to cut off debate. The GOP emphasized that the stimulus added to the deficit instead of having its spending matched by cuts elsewhere in the budget. This was Clinton’s first serious legislative defeat.
2) The Congress denied the administration the sweeping nationalization of health care they sought during the first two years in office. The total new tax burden that was to be imposed under the Clinton Health Plan was a staggering $1.511 trillion over the first five years, according to the Congressional Budget Office. This included $1.384 trillion to pay for Clinton’s mandatory health alliances, would have entailed a new payroll tax of between 14% and 17% on every working American. In addition, the Clinton Plan would have imposed 17 other new taxes that would have cost $127 billion over 5 years, and $300 billion over ten years. Thus, the average American family would have faced a massive new tax bill of $3,056 per year to pay for Bill Clinton’s plan. The Administration also admitted that health insurance premiums would rise.
3) The budget Clinton submitted in January 1995 called for $12 trillion of new spending over the next seven years and this would result in annual $200-billion deficits. David Broder of the “Washington Post” described this budget buster as a “symbol of Clinton’s failed leadership.”
4) Similar to other Presidents, Clinton was unable to rein in entitlement spending. Social Security, Medicare and Medicaid were not reformed. In his first address to Congress in 1993 Clinton vowed to reform Social Security. He made the same pledge in his last State of the Union Address. President Clinton also promised to slow the growth of Medicare and Medicaid, but nothing happened.
If the Clinton Health Plan had been enacted it would have created new federal entitlements that would have exploded the deficit. By 1998, just the second year in which Clinton’s plan was to be in effect, the total cost of these government subsidies would have been larger than any federal program except Social Security and Medicare. This plan alone would have stopped the balanced budget.
Today marks the 170th anniversary of the date the Amistad slaves were arrested at Montauk, NY. The speech by former President John Quincy Adams before the Supreme Court was portrayed in the movie “Amistad,” and it is an outstanding defense of liberty. In 1841, Adams represented the defendants pro bono before the Supreme Court. He successfully argued that the Africans should not be deported to Cuba but should be considered free.
Adams won their freedom, with the chance to stay in the United States or return to Africa. He made the argument on the grounds that the U.S. had prohibited the international slave trade, although it allowed internal slavery.
In his last term, Adams served in the House of Representatives and spoke with freshman Rep. Abraham Lincoln (IL). Adams is the only major figure in American history who knew Lincoln as well as all of the Founding Fathers.
President Bill Clinton began 1994 by promising to produce a balanced federal budget in a decade. The GOP captured Congress that November with a pledge to balance it in just 7 years. It was the most popular part and the first item in their Contract With America. Clinton opposed the GOP 7 year plan plan and said it was far better to do this in ten years because of “the pain we would inflict on our elderly, our students, and our economy just isn’t worth it.”
The President did not know it then, but America would have balanced budget in just four years. President Clinton began 1995 but advocating numerous new spending programs, but he does deserve credit for abruptly changing course that Spring. The changing is best signified by the most memorable line from his 1996 State of the Union Address: “The era of big government is over.” He would also apologize for raising taxes too much but solid economic growth was setting in by the time of his 1996 re-election campaign. It had nothing to do with Clinton but Americans gave him much of the credit. Clinton’s approval rating increased significantly and so did the job market. Unlike 1993 and 1994, Clinton stayed in the middle and won re-election handily.
Despite his conciliatory rhetoric, Clinton aggressively fought Republicans on budget issues from 1995 through 1997. He never would have agreed to drop many of his spending programs without the GOP Congress. There was a ferocious budget battle and the federal government was shut down for 24 days during the 1995 budget negotiations when President Clinton refused to agree to spending reductions in the GOP budget. He submitted five different budgets in 1995 but none of them was balanced.
Joe Klein described this time in his book, “The Natural:”
“In the summer of 1996, Clinton’s grand first-term dreams had shriveled into a set of proposals. He would spend all of 1997 working on a balanced-budget agreement with the Republicans. The 1997 Balanced Budget Agreement–the first nominally balanced budget in 30 years–received insufficient attention. . . . The 1997 BBA was an achievement ignored by Clinton’s critics on the left (who wanted bigger social programs), on the right (who wanted less spending), in the press (who mostly didn’t notice), and in academia. “These aren’t big pieces of legislation. These are scraps off the table,” said one critic.”
In 1997, the Republican Congress passed a tax-relief and deficit-reduction bill that was resisted but ultimately signed by President Clinton. It lowered the top capital gains tax rate from 28 percent to 20 percent; created a new $500 child tax credit, and increased the estate tax exemption from $600,000 to $1 million. The result was almost immediate. Capital gains tax payments skyrocketed at the lower rate. This was helped by the use of stock options that were exercised during the internet boom. The result was nearly $90 billion in extra income in the late 1990’s.
This allowed Clinton to propose a balanced budget for 1999 in his 1998 State of the Union message. The proposal came three years ahead of the forecast from1997’s balanced budget pact with the Congress. The compromise that was achieved laid the foundation for the economic boom of 1997, 1998, 1999 and the first half of 2000.
The tax cuts and the capital gains tax reduction caused a burst of tax revenue and this also helped to swell the stock market expansion. Prosperity led to an unprecedented 60% increase in tax income in the final Clinton years. By cutting the rate of taxation, the revenues collected from capital gains were increased by nearly $90 billion, and this outpaced the expectations of even the most optimistic forecasters. This proved that tax rate cuts do work to stimulate economic growth and tax revenue growth as well. There was also an explosion in venture capital activity in the late 1990’s.
In 1995, before the tax cut, just over $8 billion of venture capital was invested into the economy. By 1998, the first full year in which the capital gains tax cuts were in effect, venture capital pumped almost $28 billion into the economy. From 1997 to 2000 the economy grew 4.2% and it was bolstered by technological advances which led to the Internet-based “New Economy.” The so-called Tech or Dot com Bubble lasted from 1998 to 2001.
The downside to all of this is that the crash of the dot-com bubble wiped out $5 trillion in market value of technology companies from March 2000 to October 2002. The dot-com bubble burst on March 10, 2000, when the technology heavy NASDAQ composite index peaked at 5,048.62, more than double its value just a year before.
“When I took the office the deficit for 1998 was projected to be $357 billion, and heading higher. This year our deficit is projected to be $10 billion, and heading lower. For three decades, six presidents have come before you to warn of the damage deficits pose to our nation. Tonight, I come before you to announce that the federal deficit–once so incomprehensibly large that it had eleven zeroes–will be, simply, zero. I will submit to Congress for 1999 the first balanced budget in 30 years. ” – President Bill Clinton, 1998 State of the Union Address
America’s economic outlook was significantly different a decade ago. There was a large trade deficit in 1999, but the other economic indicators were sound. Was this due to policies advocated by the Clinton Administration? Was it the Clinton Administration which achieved a balanced budget, a surplus, 22 million new jobs, as well as solid economic growth in the late 1990’s?
Supporters of the former President obviously think so, but an examination of that era reveals a different story. Many Republicans believe the economic success of the 1990’s happened despite the Clinton Administration, not because of it. They emphasize that President Clinton battled Republicans on taxes, the balanced budget amendment, deficit reduction and welfare reform.
All of these things initiatives were eventually forced on Clinton by a GOP Congress. Clinton does deserved credit for NAFTA, GATT and for not interfering with monetary policy. He also realized that a favorable business climate fostering economic growth trumped any government jobs program.
This is a good time to look back on the Clinton Administration. All of the major memoirs have been written. Historians are also able to place the Clinton Administration in perspective, and away from the political passions of that era. There were many factors which led to the booming economy and ultimately the balanced budget. This was achieved without making substantial cuts in the budget and we also did not receive a windfall of new cash from tax hikes.
Clinton was successful in passing a major tax hike in 1993, and its failure to raise revenue from the upper brackets is described in my August 22nd article. It took years of bitter debate, but in 19977 President Clinton signed the Balanced Budget Amendment, and in two years a balanced budget was obtained. The six major factors in achieving this milestone were as follows:
1) The election of a Republican Congress in 1994 which wiped out what was left of the Clinton economic agenda. This was the first time in 30 years the Republicans had control of both the House and Senate. The new Congress was able to stop 90% of Clinton’s spending initiatives, and they held down the overall rate of spending to below 2% annually. These actions were a powerful message for the stock market. The market increased by 2% during 1993 and 1994, but it soared over 20% from 1995 through 2000.
2) Passage of the capital gains tax reduction and the balanced budget amendment. The cap-gains tax dropped from 28 percent to 20 percent in 1997 – and revenues from that tax alone accounted for 12 percent of all individual income-tax payments from 1997 to 2000 – up from just 7.9 percent from 1993 to 1996. The result was nearly $90 billion in additional income.
3) The end of the Cold War which allowed for $150 billion in Pentagon reductions. This accounted for one-third of the deficit reduction. Military modernization programs were delayed throughout the 1990’s, and they proved to be necessary in the next decade.
4) The PAYGO or pay-as-you-go statutory budget controls were obtained for President George H.W. Bush in exchange for increasing taxes as part of the 1990 budget agreement. The budget situation would have been worse without them, but PAYGO was not the panacea portrayed by its advocates in 1990.
5) Welfare reform which resulted in $38 billion in savings. The number of families receiving AFDC payments declined from 14.3 million to 6 million. Nationally, cash-assistance rolls were cut by 60%, and former welfare recipients were required to work. . In 1992 Clinton had vowed to “change welfare as we know it,” and pollster Dick Morris told him that if he vetoed welfare reform a third time he would not be re-elected. Clinton caved and signed the bill one week before the 1996 Democratic Convention.
6) The golden age of venture capitalism. The dot com bubble burst and the economy was slipping into recession when Clinton left office, but the late 1990’s were years of solid of economic growth. Silicon Valley did transform the world, and the funding from venture capitalists was possible in part because the Reagan Administration had lowered the top tax rate from 70% to 35%, cut marginal rates and helped free up the money that started the Tech Boom.
Afghanistan will be our next big issue. In two weeks our commander, Gen. Stanley McChrystal, will send his report to the White House. He is expected to recommend three options: 15,000, 25,000 or 45,000 additional troops. If Obama and the Joint Chiefs says this is necessary, Sen. McCain will support the request for more troops. Their mission will be doubling the Afghan police and army forces to a total of 400,000.
Senators Russ Feingold (D-WI) and Bernie Sanders (D-VT) have already said they will lead the opposition, and 14 House Members have signed a joint letter to Obama pledging to work against any additional troops. The Senators will appear at the DC premiere of a new anti-war movie, “Get Afghanistan Right,” and a left wing coalition is being formed. Our terrorist enemies live in Afghanistan, and this week’s vote proved the people want democracy. The Taliban attacked polling stations and cut off the fingers of some voters. The left wing always attacked Bush by saying Afghanistan was the necessary war. We will soon know if they really meant it.
Adm. Mike Mullen, the Chairman of the Joint Chiefs of Staff, appeared on NBC’s “Meet the Press” this morning and said he was worried about declining public support for the war on Afghanistan.
The Taliban claims to be a religious organization but they take credit for spraying battery acid in faces of little Afghan girls. They are intent on stopping the education of girls, and the Taliban has already destroyed 478 schools. Many schools have been set on fire or endured attacks from mustard gas rockets. The cruel Taliban attacks will continue, but they are not going to win.
In 2001, only a million Afghan children were enrolled in school, all of them boys. The education of girls was banned. Today, approximately 7 million Afghan children attend school, of which 2.6 million, or roughly a third, are girls. All of the children receive a free school lunch from U.S. AID. There are 23 year old young women in elementary school because they never were given that opportunity earlier in life. Practically all of their parents are illiterate, but change is slowly coming.
A Washington Post/ABC News poll this week reveals that a majority of Americans now believe that Afghanistan is not worth fighting for — and only 24% back a troop increase. While 45% say the American troop commitment there should actually be reduced. For over two years Barack Obama has often said: “The real war on terror is in Afghanistan,” and I hope he will be able to convince his supporters of the importance of the U.S. and allied mission.
Earlier this week the Obama Administration rolled out a new economic forecast that added $2 trillion to deficit projections from 2010 to 2019. The new total is over $9 trillion and many experts believe the President will have to eventually raise taxes on the middle class. The administration is already intent on a significant tax boost for the wealthy, so it useful to review the past results.
The most memorable soundbite from his 1988 acceptance speech at the Republican National Convention was when George H.W. Bush said: “And I’m the one who will not raise taxes. My opponent now says he’ll raise them as a last resort, or a third resort. But when a politician talks like that, you know that’s one resort he’ll be checking into. My opponent, my opponent won’t rule out raising taxes. But I will. And the Congress will push me to raise taxes and I’ll say no. And they’ll push, and I’ll say no, and they’ll push again, and I’ll say, to them, ‘Read my lips: no new taxes.’”
He regretted the strong language four years later when the phrase was endlessly repeated by opponents Bill Clinton, Ross Perot and Pat Buchanan. A tax increase, which included a new top bracket of 31%, was necessary for Bush to obtain the 1990 Budget Agreement. Among those telling Bush to go along with the tax increase were OMB Director Richard Darman, White House Chief of Staff John H. Sununu, Gerald Ford, Paul O’Neill, and Lamar Alexander. The headline of the New York Post the next day read “Read my Lips: I Lied.” Bush was raising taxes rates on the upper brackets mostly by ending their deductions and exemptions. It didn’t work: Individual income taxes brought in 8.3 percent of GDP in 1989 and just 7.6 percent of GDP by 1992.
Even though Bush was breaking his word and this would end his political career, Bush went along with the compromise because the agreement contained deficit reductions and PAYGO. PAYGO required all future spending increases to be offset by decreases. It was thought that this would control all future increases and eventually the deficit would be wiped out.
PAYGO was in effect from 1991 to 2002, and while it sounded great, the Congress had fooled Bush because numerous loopholes were discovered to avoid its restrictions. Discretionary spending was totally exempted from PAYCO. That includes programs such as defense, education, environmental protection or 38 percent of federal spending. Noram increases in entitlement spending are also not covered. Anytime PAYCO presented a problem for Congressional spenders they just waived it. “PAYGO is like quitting drinking, but making an exception for beer and hard liquor,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.
Former President Bush now says the tax increase was one of his greatest regrets. He did not realize the PAYGO pledge was highly exaggerated and “I should have held out for a better deal.”
In fairness to Bush, PAYGO and statutory budget controls were useful in restraining entitlement increases. The situation would have been worse without them, but PAYGO was not the panacea portrayed by its advocates in 1990.
President Bill Clinton also broke his promise to pass a middle class tax cut but it had little impact on his popularity. The 1990 Budget Agreement did not reduce the deficit significantly and it remained a major issue in 1992. Independent candidate Ross Perot campaigned as a fiscal conservative. He had never held elective office and when his lack of experience was criticized in the presidential debates he responded “I have no experience in creating a $4 trillion debt.” Public opinion polls showed Perot with over 40% of the vote in June of 1992, and if the election had been held at that point Perot would have received a landslide 408 electoral votes. Republicans concentrated all of their fire on Perot in the Spring of 1992 and Bill Clinton was able to use this time to reduce his substantial negative ratings.
Similar to George H.W. Bush, Clinton’s solution to the deficit was a tax the rich plan. This was an essential part of his 1993 tax hike, which is similar to President Obama’s current proposal to raise revenue by increasing taxes on the top 5% of income earners.
No Republican voted for Clinton’s 1993 tax hike which passed the House of Representatives by one vote. It also took Vice President Al Gore’s tie-breaking vote to secure final passage in the Senate. Dozens of Democrats went down to defeat a year later for supporting the tax hike.
According to Dr. Alan Reynolds of the Cato Institute, “Clinton piled on another layer of high tax rates, 36 percent and 39.6 percent, while also greatly hiking taxes on Social Security benefits of working seniors. That failed, too: Individual income taxes brought in only 7.8 percent of GDP in 1993 and ’94, 8.1 percent in 1995. Federal revenues did not get much above the 1989 level until 1997 – when they rose because the capital-gains tax was cut.”
Similar to Bush, Clinton himself later admitted that taxes were increased too much. In fairness to Clinton, his tax hike took place when America was viewed as a low tax nation. Foreign companies were then coming to the United States because our taxes were lower than what they had to compete with at home.
This situation is far different today because so many other nations have now lowered taxes to foster economic growth. There has been no employment growth in places such as Silicon Valley in the last decade because U.S. companies are choosing to locate more employees in lower-tax areas such as China, India and Eastern Europe. This is another reason why President Obama’s tax proposals are unlikely to generate significant revenue.