The American Spectator and AmSpecBlog

Newt Does a Job on Obama on Jobs

Peter Ferrara — Wed, 09 Dec 2009 06:08:00 -0500

President Barack Obama exulted that the November unemployment report "was the best since 2007." The report showed double-digit unemployment and still further job losses. Apparently, President Obama considers that a major achievement. Rest assured the American people will not.

The army of the unemployed now totals 15.4 million Americans. Another 9.2 million were working part-time "because their hours had been cut back or because they were unable to find a full-time job," according to the Bureau of Labor Statistics. Another 2.3 million "wanted and were available for work." That totals almost 27 million unemployed or underemployed, which would amount to a total effective unemployment rate of 17.5%.

Unemployment among African-Americans is at Depression-era levels at 15.6%. Unemployment among teenagers is at 26.7% because of reckless increases in the minimum wage. The number of long-term unemployed (out of work for more than half a year) smashed records, rising by almost 300,000 to nearly 6 million.

President Obama's Chairman of the Council of Economic Advisors, Christina Romer, displayed just how out of touch the Administration is with this real world in the Wall Street Journal on December 2. She claimed credit for the President's economic policies in stopping "the economic free fall and stabilizing financial markets" and for "restoring confidence and begin[ning] the process of financial market repair." "Restoring confidence" is not what comes to mind when evaluating the impact of the President's policies of record-shattering deficits, explosive government spending, and unprecedented federal debt.

Yet, the President continued high in orbit completely out of touch in his redundant jobs speech yesterday, where he said to reduce the deficit we need to spend more money. Go look it up. But don't be surprised. That is his Keynesian economic policy, where the more the government spends the richer we get.

But the President was both for and against deficits yesterday, blaming Republicans for the federal deficit. His wasted and failed $787 billion stimulus supposedly had little to do with the record shattering $1.4 trillion 2009 federal deficit. Apparently neither did the additional $400 billion in the Omnibus spending bill passed right after the stimulus, and the one-third increase in federal welfare spending, from $522 billion to nearly $700 billion, that he and Congressional Democrats have already adopted.

Back on earth, the numbers show that the deficit for Bush's last year in office was $458.6 billion, only a third of Obama's 2009 deficit. And the deficit for the last budget adopted by the Republicans when they held Congressional majorities was $160.7 billion, only about 10% of this year's Obama/Congressional Democrat deficit. President Obama is now trying to claim success in generating recovery with his $1.4 trillion Keynesian deficit, at the same time he is blaming George Bush and the Republicans for that same deficit. If President Obama did not want a $1.4 trillion deficit, he should have adopted policies to change it when he came into office. Instead, he embraced it as part of his Keynesian economic policy, and as a result it is his deficit, not George Bush's.

Romer, in fact, tries to claim success for the Keynesian deficit and stimulus in her Wall Street Journal article, saying the stimulus "increased employment between 600,000 and 1.6 million." But the ugly reality is that since January the number employed has declined by 3.6 million, while the unemployed have increased by 3.76 million. The claim that the stimulus increased employment is a complete fairy tale produced by a model that assumed the result. The model used by CBO started by assuming that government spending increases GDP by a multiplier of 1.5 times each dollar spent, as claimed by the Administration. With that assumption, it is a pure mathematical calculation to conclude that the stimulus increased employment as claimed.

But economic growth, jobs, and prosperity are not produced by runaway government spending, record shattering deficits, higher welfare benefits, and exploding federal debt, as assumed in the outdated, retro, Keynesian thinking of the untutored extremists now running Washington. That is why the true number for jobs created and saved by the stimulus is exactly zero.

The Failure of Obamanomics

The economy will move into recovery now into next year, and the recession will be declared to have officially ended some time this fall. Expect a symphony of loud celebrations and congratulations for the Anointed One from what Rush Limbaugh is aptly calling these days "the state-controlled media," as President Obama claims personal credit for any positive wiggle in the economy. But that recovery will have nothing to do with the utterly failed Obamanomics for the two reasons explained below.

First, the recovery is long overdue. The recession is officially scored by the National Bureau of Economic Research as starting in December, 2007. From the beginning, Washington tried to counter the recession with old-fashioned Keynesian economics, rather than the more modern, wildly successful, supply-side economics. In February 2008, President Bush joined with Speaker Pelosi to push an entirely Keynesian stimulus package through Congress, based on tax rebates, which are economically equivalent to welfare checks, rather than tax rate cuts, which provide supply-side incentives for growth. Senator Barack Obama at the time strongly supported that "stimulus," which we can see now in retrospect had no positive impact on the economy.

So President Obama, who experience proves does not learn from experience, pushed through another Keynesian "stimulus" bill in February 2009, only wasting 5 times as much money. Still the recession continued, immune to the Keynesian stimulus, and unemployment soared into double digits, even though President Obama promised his stimulus would keep unemployment below 8%. President Obama yesterday claimed again that one-third of his stimulus was "tax cuts." But those tax cuts were again all tax credits, rather than rate cuts, and so were just more Keynesian spending.

The average recession since World War II, which is 65 years ago by now, has been 10 months. The longest previously was 16 months. We have now suffered through almost 24 months since this recession started. The recession may ultimately be officially scored as ending a couple of months ago. But it will still be the longest recession since World War II by far. Keynesian Obamanomics has already failed to end the recession in a timely manner.

Indeed, the recovery is both too little and too late. Historically, the deeper the recession the stronger the recovery. Based on the severity of this recession, real growth over the next year should be 6% to 8%. Indeed, the major tax increases slated to go into effect in 2011 should cause even more rapid growth over the next year, as income is moved forward as much as possible to avoid the later tax increases. That is the yardstick by which to measure this recovery. So far, it appears to be running well below that.

The second reason why the recovery has nothing to do with Obamanomics is that the economy naturally recovers on its own. We don't even remember the business cycle anymore, because Reaganomics was so successful in eliminating it, with 25 years of almost uninterrupted economic growth. But the term business cycle, means the economy naturally goes up as well as down. Every morning people get up and try to figure out how to make their business prosper again, or find a new job. Over time, this process will naturally lead to recovery. That is why the average recession since World War II has ended in 10 months. Barack Obama's Keynesian economics has nothing to do with it. The economy was always naturally going to recover on its own, and should have long before now, if Obama's neo-socialism hadn't gotten in the way.

Conservatives should not try to deny the recovery is happening, or predict continued recession. They should explain why the Obama/Democrat policies have made things worse rather than better, through the record, backbreaking debt, collapsing dollar, rising energy prices, and more. They should explain why we can do better, with free market economic policies. In the 1960s, when the liberals were in power exactly like they are today, the economy was booming (thanks to President Kennedy's supply-side tax rate cuts). But the Democrats were still massacred in the 1966 Congressional elections, and the Republicans still won the White House in 1968, holding the presidency for 20 of the next 24 years. The liberal media was also much more dominant then than it is now.

Gingrich v. Obama

President Obama's so-called Jobs Summit last week was a political charade meant to provide a public relations foundation for a third stimulus package involving still more of the same, brain-dead, Keynesian snake oil. He wasn't interested in listening to anything from anybody at the Summit. He already knew what he was going to propose in the package he unveiled yesterday. Those attending the Summit were just props.

For that third stimulus package, President Obama proposed paying people to "weatherize" homes (cash for caulkers), which, again, will not create any new jobs on net. It will just reallocate jobs from the work that would have been done with those funds in the private sector. That will probably result in a net loss of national income, because the private market allocates resources and workers to the most productive and urgent uses. Extending unemployment benefits further, as Obama proposed yet again, just perpetuates unemployment. The infrastructure spending Obama proposed was supposed to be in the last stimulus. Spending still more funds that should go back to taxpayers or to reducing the deficit on that is again not going to increase overall jobs on net.

President Obama proposed federal loans for small business. But the disastrous experience with Fannie Mae and Freddie Mac shows that the government should stay out of the loan business and political allocation of credit. Credit will flow through established markets if the federal government, including the Federal Reserve, adopts strong pro-growth, sound money policies. Obama also wants a tax credit for businesses hiring workers. But true to his practice of recycling old ideas that are proven failures, the federal government for many years maintained a Targeted Jobs Tax Credit that did the same thing. It was abolished based on studies showing that it only paid companies to hire workers they were going to hire anyway. Other narrow, cramped tax breaks Obama proposed will not promote general economic recovery.

In sharp contrast, former House Speaker Newt Gingrich held his own job summits last week, in Cincinnati, Ohio, and Jackson, Mississippi. Based on what he has heard from small business leaders there and across America, Gingrich has proposed his own jobs plan. While Gingrich was Speaker of the House, federal spending growth was at its lowest level since the 1920s. Gingrich says, "We can apply the same principles that worked then to create jobs and four straight balanced budgets through smaller government, less spending, lower interest rates, and less debt."

The Gingrich Plan provides immediate payroll tax relief by cutting the payroll tax rate by 50% for two years, giving a raise to workers and incentives to small business to create jobs.

Secondly, rather than increase capital gains tax rates by 66% as Obama and the Democrats propose, Gingrich would abolish capital gains taxes altogether, as they just involve double taxation of capital income. That is why this policy has been adopted in 14 out of 30 OECD countries, plus China, Taiwan, Hong Kong, Singapore, and others.

Thirdly, America suffers from the second highest business tax rate in the industrialized world, with a federal rate of 35% and states pushing it close to 40%. By contrast, the average corporate tax rate in the European Union has been slashed from 38% in 1996 to 24% today. Ireland has a corporate tax rate of 12.5%, which has led per capita income to soar from the second lowest in the EU 20 years ago to the second highest today. Our own Treasury Department has said Ireland raises more corporate tax revenue as a percent of GDP than we do with our much higher rates. Corporate tax rates in India and China, our emerging competitors for the future, are lower as well. Gingrich would reduce the federal business tax rate to Ireland's 12.5%.

Gingrich says quite rightly, "Combined with the zero capital gains rate, America would become the most desirable country in the world in which to invest and start a business. This means new jobs and new prosperity."

Instead of reinstating the death tax with a 45% rate, as Obama and the Democrats want, Gingrich would abolish the death tax as well. Gingrich says, "Inheritance is the most powerful accumulator of capital. Studies show that eliminating the death tax would create hundreds of thousands of new jobs." Taxpayers have already paid considerable taxes on any money saved over a lifetime. Taxing it again at death is just abusive, unfair, and arbitrary. Gingrich would also provide for immediate expensing for 100% of new equipment purchases by small businesses, stimulating investment in new, productive technologies.

Exactly the opposite of the regressive Cap and Trade policies of Obama and the Democrats, Gingrich would implement an American Energy Plan that would unleash the private sector to produce low cost, reliable energy supplies from domestic, American, energy sources. This energy development would create millions of new jobs, and generate billions in new revenues for federal and state governments.

Gingrich also favors the same strong dollar monetary policies as Reagan, guaranteeing the dollar remains the world's reserve currency, and ensuring lower interest rates over the long run and more capital investment. He would also balance the federal budget within 7 years by controlling spending and reforming government, as he did with the Republican Congress in the 1990s. He would also abolish TARP and return the money, end all bailouts, and repeal still unspent "stimulus" funding.

Gingrich also favors following the 50% payroll tax cut with a permanent personal account option for that portion of payroll taxes for younger workers, with the personal accounts substituting for an equivalent portion of future retirement benefits. Given historical capital market returns, workers should get much higher benefits as a result than Social Security even promises today, let alone what it can pay, with a continuing safety net guaranteeing that workers would get at least as much as Social Security currently promises them. This would provide a continuing gusher of new savings for capital investment, resulting in more jobs and higher wages.

These policies would reduce unemployment back to 3-4%, and restore long-term economic growth, maybe even another 25-year boom. The American people recognize the common sense behind this Jobs Plan, and would overwhelmingly support it over President Obama's neo-socialism. Just think who you would want debating President Obama on the platform in 2012.

Worse Than the Public Option

Philip Klein — Wed, 09 Dec 2009 12:02:00 -0500

Senate Democrats on Tuesday night reached a tentative deal aimed at assuaging moderate Democrats' concerns about creating a new government health insurance option, but the so-called "compromise" would actually move the nation much closer to a government-run health care system than the public option itself.

Under the terms of deal, as reported by the Washington Post, Democrats would drop the current incarnation of the public option and instead allow the Office of Personnel Management, the entity that runs the Federal Employees Health Benefits Program, to oversee the creation of privately administered plans that would be offered on the new government-run exchanges.

But in a major concession to liberals, the agreement would expand Medicare to Americans over the age of 55, and thus potentially add millions of people to a system that is already on course to bankrupt the country, with a long-term deficit of $38 trillion (or as high as $89 trillion by some measurements). And the deal still leaves open the possibility that a public option would be "triggered" if the new Office of Personnel Management plans don't materialize.

It's worth keeping in mind that the "public option," as originally conceived, was much more of a threat to the private market than the version that ultimately ended up in the Senate bill. Liberals envisioned the public option as a government-run plan modeled after Medicare that would use its bargaining power over health care providers to drive down the cost of insurance premiums. Though the plan's purpose was ostensibly to "compete" with private plans on the new government exchanges, in reality, liberals hoped that over time, the lower premiums would gradually shift more people to the public option, so that eventually they could achieve their ultimate goal of a government-run, or single-payer, health care system.

The public option became a flash point in the health care debate, as critics noted that no private plan would be able to fairly compete against a government plan that could dictate how much they would pay doctors, hospitals and other providers. The government would also be setting the rules for the insurance exchange and if the government plan were to fail, there would be every reason to believe that future lawmakers would use taxpayer dollars to bail it out. A Lewin Group analysis estimated that as originally envisioned, the public plan could attract 131 million people, shifting two-thirds of those enrolled in private plans to government-run health care as businesses dropped their coverage and dumped workers on the government to save money. It also found that as a result of the government's bargaining power, doctors stood to lose $33 billion in income and hospitals would lose $36 billion -- costs that would result in decreased services and shift more costs onto those left with private health coverage.

But over time, the public option was scaled back. In the Senate bill, the government plan could not set reimbursement rates at Medicare levels, and it would not be available to large employers -- only to some small employers and individuals without insurance. And states would at least have the theoretical possibility to "opt out." According to the Congressional Budget Office, total enrollment would only be three million to four million. That doesn't mean the plan still wasn't worth opposing -- along with the rest of the bill -- but simply that it wouldn't be as damaging as when it was originally conceived.

However, expanding Medicare would go further to advance the original aims of liberals than the watered down version of the public option. By definition, the Medicare option (which would eventually be offered on the exchange to those over 55) would set reimbursement rates at Medicare levels, thus putting the squeeze on doctors and offering lower premiums that would make it more difficult for private insurers to compete. As with the public option, liberals will try to argue that the Medicare expansion will be funded by the premiums it collects, but it will benefit from the taxpayer-funded infastructure that is already in place to support Medicare -- not to mention potential subsidies down the road.

As part of the pact, according to the Washington Post, Democrats would impose a new rule that insurers have to pay out 90 percent of the money collected in premiums to fund medical payments.

Proponents of the government plan mockingly question how anybody could be opposed to offering a plan that would offer lower premiums. The problem is that the lower premiums for some impose burdens on others -- reduced services, a shortage of primary care physicians, a shift in costs to those with private insurance, and greater risk to taxpayers. While Medicare's defenders tout the program's low administrative costs, that comes at a cost, too -- massive fraud that, by some estimates, tops $100 billion a year.

The CBO has not yet evaluated the current proposal, but according to a recent Kaiser Family Foundation study, there are about 4 million uninsured Americans between the ages of 55 and 64 -- so that would probably be the minimum amount of people eligible to buy into the expanded Medicare program. Yet according to Census data, the entire 55 to 64 population is 33 million, so there's plenty of room for growth if future lawmakers open the exchanges to more people.

For liberals who view a single-payer, or government-run, health care system as ideal (and that list begins with President Obama), the goal of health care legislation was to move the nation as far as they could in that direction, knowing that the best way to achieve their goal over time was by building on the current system with which people are familiar.

If Democrats unite behind this "compromise" and the broader legislation becomes law, liberals will have largely succeeded. The legislation already expands Medicaid and S-CHIP by 15 million people and coupled with the Medicare expansion, most newly covered Americans would simply be added to the rolls of existing government-run programs. Millions more would be using government subsidies to purchase government-designed insurance policies on a government-run exchange. And the rest of the system would be subject to so many taxes, penalties, and mandates that it wouldn't resemble a private market in any meaningful sense of the word.

Totalitarian Sentimentality

Roger Scruton — Wed, 09 Dec 2009 06:09:00 -0500

Conservatives recognize that social order is hard to achieve and easy to destroy, that it is held in place by discipline and sacrifice, and that the indulgence of criminality and vice is not an act of kindness but an injustice for which all of us will pay. Conservatives therefore maintain severe and -- to many people -- unattractive attitudes. They favor retributive punishment in the criminal law; they uphold traditional marriage and the sacrifices that it requires; they believe in discipline in schools and the value of hard work and military service. They believe in the family and think that the father is an essential part in it. They see welfare provisions as necessary, but also as a potential threat to genuine charity, and a way both of rewarding antisocial conduct and creating a culture of dependency. They value the hard-won legal and constitutional inheritance of their country and believe that immigrants must also value it if they are to be allowed to settle here. Conservatives do not think that war is caused by military strength, but on the contrary by military weakness, of a kind that tempts adventurers and tyrants. And a properly ordered society must be prepared to fight wars -- even wars in foreign parts -- if it is to enjoy a lasting peace in its homeland. In short conservatives are a hard and unfriendly bunch who, in the world in which we live, must steel themselves to be reviled and despised by all people who make compassion into the cornerstone of the moral life.

Liberals are of course very different. They see criminals as victims of social hierarchy and unequal power, people who should be cured by kindness and not threatened with punishment. They wish all privileges to be shared by everyone, the privileges of marriage included. And if marriage can be reformed so as to remove the cost of it, so much the better. Children should be allowed to play and express their love of life; the last thing they need is discipline. Learning comes -- didn't Dewey prove as much? -- from self-expression; and as for sex education, which gives the heebie-jeebies to social conservatives, no better way has ever been found of liberating children from the grip of the family and teaching them to enjoy their bodily rights. Immigrants are just migrants, victims of economic necessity, and if they are forced to come here illegally that only increases their claim on our compassion. Welfare provisions are not rewards to those who receive them, but costs to those who give -- something that we owe to those less fortunate than ourselves. As for the legal and constitutional inheritance of the country, this is certainly to be respected -- but it must "adapt" to new situations, so as to extend its protection to the new victim class. Wars are caused by military strength, by "boys with their toys," who cannot resist the desire to flex their muscles, once they have acquired them. The way to peace is to get rid of the weapons, to reduce the army, and to educate children in the ways of soft power. In the world in which we live liberals are self-evidently lovable -- emphasizing in all their words and gestures that, unlike the social conservatives, they are in every issue on the side of those who need protecting, and against the hierarchies that oppress them.

Those two portraits are familiar to everyone, and I have no doubt on which side the readers of this magazine will stand. What all conservatives know, however, is that it is they who are motivated by compassion, and that their cold-heartedness is only apparent. They are the ones who have taken up the cause of society, and who are prepared to pay the cost of upholding the principles on which we all -- liberals included -- depend. To be known as a social conservative is to lose all hope of an academic career; it is to be denied any chance of those prestigious prizes, from the MacArthur to the Nobel Peace Prize, which liberals confer only on each other. For an intellectual it is to throw away the prospect of a favorable review -- or any review at all -- in the New York Times or the New York Review of Books. Only someone with a conscience could possibly wish to expose himself to the inevitable vilification that attends such an "enemy of the people." And this proves that the conservative conscience is governed not by self-interest but by a concern for the public good. Why else would anyone express it?

By contrast, as conservatives also know, the compassion displayed by the liberal is precisely that -- compassion displayed, though not necessarily felt. The liberal knows in his heart that his "compassionating zeal," as Rousseau described it, is a privilege for which he must thank the social order that sustains him. He knows that his emotion toward the victim class is (these days at least) more or less cost-free, that the few sacrifices he might have to make by way of proving his sincerity are nothing compared to the warm glow of approval by which he will be surrounded by declaring his sympathies. His compassion is a profoundly motivated state of mind, not the painful result of a conscience that will not be silenced, but the costless ticket to popular acclaim.

Why am I repeating those elementary truths, you ask? The answer is simple. The USA has descended from its special position as the principled guardian of Western civilization and joined the club of sentimentalists who have until now depended on American power. In the administration of President Obama we see the very same totalitarian sentimentality that has been at work in Europe, and which has replaced civil society with the state, the family with the adoption agency, work with welfare, and patriotic duty with universal "rights." The lesson of postwar Europe is that it is easy to flaunt compassion, but harder to bear the cost of it. Far preferable to the hard life in which disciplined teaching, costly charity, and responsible attachment are the ruling principles is the life of sentimental display, in which others are encouraged to admire you for virtues you do not possess. This life of phony compassion is a life of transferred costs. Liberals who wax lyrical on the sufferings of the poor do not, on the whole, give their time and money to helping those less fortunate than themselves. On the contrary, they campaign for the state to assume the burden. The inevitable result of their sentimental approach to suffering is the expansion of the state and the increase in its power both to tax us and to control our lives.

As the state takes charge of our needs, and relieves people of the burdens that should rightly be theirs -- the burdens that come from charity and neighborliness -- serious feeling retreats. In place of it comes an aggressive sentimentality that seeks to dominate the public square. I call this sentimentality "totalitarian" since -- like totalitarian government -- it seeks out opposition and carefully extinguishes it, in all the places where opposition might form. Its goal is to "solve" our social problems, by imposing burdens on responsible citizens, and lifting burdens from the "victims," who have a "right" to state support. The result is to replace old social problems, which might have been relieved by private charity, with the new and intransigent problems fostered by the state: for example, mass illegitimacy, the decline of the indigenous birthrate, and the emergence of the gang culture among the fatherless youth. We have seen this everywhere in Europe, whose situation is made worse by the pressure of mass immigration, subsidized by the state. The citizens whose taxes pay for the flood of incoming "victims" cannot protest, since the sentimentalists have succeeded in passing "hate speech" laws and in inventing crimes like "Islamophobia" which place their actions beyond discussion. This is just one example of a legislative tendency that can be observed in every area of social life: family, school, sexual relations, social initiatives, even the military -- all are being deprived of their authority and brought under the control of the "soft power" that rules from above.

This is how we should understand the award of the Nobel Peace Prize to President Obama. To his credit he has made clear that he does not deserve it -- though I assume he deserves it every bit as much as Al Gore. The prize is an endorsement from the European elite, a sigh of collective relief that America has at last taken the decisive step toward the modern consensus, by exchanging real for fake emotion, hard power for soft power, and truth for lies. What matters in Europe is the great fiction that things will stay in place forever, that peace will be permanent and society stable, just so long as everybody is "nice." Under President Bush (who was, of course, no exemplary president, and certainly not nice) America maintained its old image, of national self-confidence and belligerent assertion of the right to be successful. Bush was the voice of a property-owning democracy, in which hard work and family values still achieved a public endorsement. As a result he was hated by the European elites, and hated all the more because Europe needs America and knows that, without America, it will die. Obama is welcomed as a savior: the American president for whom the Europeans have been hoping -- the one who will rescue them from the truth.

How America itself will respond to this, however, remains doubtful. I suspect, from my neighbors in rural Virginia, that totalitarian sentimentality has no great appeal to them, and that they will be prepared to resist a government that seeks to destroy their savings and their social capital, for the sake of a compassion that it does not really feel.

The Chips Are Down at Intel

Wayne Crews — Wed, 09 Dec 2009 06:08:00 -0500

Former Intel CEO Andy Grove of Intel was Time magazine's "1997 Man of the Year." Now Intel is the Federal Trade Commission's "2009 Company to Fear."

If the FTC gets its way, Intel will be characterized not as a productive marvel that helped turn the rest of us into productive marvels. The chipmaker will be tarred as a Robber Baron instead. Competitors AMD and Nvidia are delighted -- and party to the investigation.

Sometimes people make choices others would prefer they not make. But that is no reason to use force to prevent a company from offering products for voluntary sale. An FTC picking winners and losers is not capitalism. It is crony capitalism. The agency should recognize that Intel doesn't call the shots in the microprocessor market. Consumers do.

And we consumers have many computing options. Desktop computing is only one choice in our increasingly networked world. Smartphones and sub-notebooks grow more popular every year. Who knows what the next decade will bring? Even an antitrust lawyer at the FTC is allowed to adopt these options.

It's true that Intel's chip sales of $32.8 billion are 80 percent of the market -- as measured by number of microprocessors inside computers. But most chips don't go in computers. They go into cars, phones, appliances, toys, and seemingly just about anything else these days.

Chips in "Wintel" desktop computers increasingly constitute just one subset of a vast semiconductor market. Only a small fraction of the chips in non-PC devices are Intel's -- and these devices are where the future lies. Samsung, Texas Instruments, and other companies are dominating Intel in this larger market.

Bottom line, the relevant market cannot be defined merely as "computer chips." All chips -- perhaps barring Pringles, Lay's and Doritos -- are a part of the picture.

Intel's absence from expanding non-PC markets is more than enough to topple its dominance in coming years. Regulators should leave it alone. A generation from now, any consumer product that doesn't include a chip or two will be an aberration.

By all appearances, Intel's past and current disputes with its partners appear to be ordinary patent disputes and exclusive contracts and rebates hyped into "antitrust" violations. Oddly enough, Intel was accused a few years ago of preventing computer manufacturers from installing its chips in a patent dispute case. Of course, it would be more efficient simply to shoot customers as they walk in the door.

Now, the firm stands accused of the exact opposite: shoehorning its chips in at the expense of a rival like AMD. Regulators' charges against Intel have changed over the years, but their verdict always remains the same: guilty.

The FTC's desire to attack a company already in the crosshairs of foreign competition authorities indicates that the agency fundamentally doesn't care about anything other than taking down a target. Consider the fact that anybody who wants a non-Wintel computer can get one. Intel is no "essential facility," similar to electrical power. Many companies are in the computing and architecture game. The market is large, diverse, and competitive.

Internal disputes regarding computer building are squabbles among equals, and they can be resolved. Intel could just as readily claim that computer makers could bully it, since they can demand and get significant price concessions.

Competing chipmakers have no fundamental right to piggyback on Intel's architecture, or to have government grant them a gift of Intel's customers. But they do have a right to give consumers a better deal than Intel. The time and energy they are spending in Washington are time and energy not spent innovating.

We'd be better off prosecuting the DOJ and the FTC for colluding against free enterprise.

'If We Do Nothing'

Robert Stacy McCain — Wed, 09 Dec 2009 06:07:00 -0500

Rhonda Lee Welsch has a vision. "When we go back to Washington next year, there's going be a lot of Harleys," the Florida activist said. "And those Harleys make a lot of noise."

Making noise may not seem like much of a goal to D.C. political strategists, but if thousands of thundering Harleys roll up in front of the White House as part of a national Tea Party march on Washington, Welsch's vision might make more impact than Beltway wizards imagine.

Like many others now suddenly active in the conservative grassroots, Welsch is a newcomer to politics. A divorced mom who has spent most of her working career in the construction and hospitality industries, she's been an eyewitness to the devastation wrought by the recent economic collapse. Florida's unemployment rate is at 11.2 percent, but that official statistic may understate the severity of the downturn.

"Everything's come to a screeching halt," Welsch says of construction work for small contractors in coastal Volusia County, where she lives. With business slow, she began paying more attention to politics, and soon found herself actively involved in the Tea Party movement. A breakthrough moment, she says, was when she joined the 9/12 March on D.C. and attended a seminar on organizing led by veteran conservative fundraiser Richard Viguerie.

Welsch returned to Florida and went to work on her vision: Bike Week Freedom Rally, scheduled during late February's annual motorcycle gathering in Daytona Beach. She's already booked the Volusia County Fairgrounds for the event, hired a rock band for musical entertainment, and is now in the process of raising more money and arranging speakers.

At a Tea Party last month in Orlando, Welsch handed out flyers promoting the Daytona rally. She sees bikers as a constituency instinctively opposed to big government. "Their motto is 'Ride Free, Live Free,'" she says, and getting them involved in the political process could make a difference.

Her turn toward activism has brought some surprises. She was shocked to discover that one TV personality wanted a $25,000 speaking fee plus first-class travel from New York to appear at the Bike Week event. "What's he going to do with that money?" Welsch says skeptically.

Skepticism toward big-money big shots is natural to a grassroots movement that sprang up nearly overnight in February and mushroomed in the span of a few months to bring hundreds of thousands to Washington in September. And one of the biggest big shots feeling the grassroots heat is Florida Gov. Charlie Crist.

In February, Crist joined President Obama at a rally in Fort Myers, Fla., to promote the president's $789 billion economic stimulus plan. That deficit-spending measure ranks high on the list of grievances for fiscal-conservative Tea Party people like Welsch.

Three months after Crist's embrace of Obama, howls of outrage erupted when the National Republican Senatorial Committee endorsed the governor for Florida's 2010 Senate race, 15 months ahead of the GOP primary. Erick Erickson of RedState.com declared the NRSC endorsement "wholly unacceptable," and the backlash against the national GOP's interference catapulted Crist's Senate rival, former state House Speaker Marco Rubio, to the status of grassroots rock star.

Despite the fundraising advantages of being the establishment's choice, Crist has seen his poll numbers sag, while Rubio has surged. Crist was also recently hurt by revelations about his close association with Scott Rothstein, who is facing federal charges of defrauding investors in what prosecutors say was a $1 billion Ponzi scheme.

Asked her preference in the Senate primary, Welsch is emphatic. "Rubio, definitely. No question about it," she says. She's considered inviting him to speak at the Bike Week rally, but worries about making the event "too political."

Welsch's own analysis of the contemporary political landscape is not limited to narrow grievances or partisan squabbles. "It's a systemic problem," she says, discussing the top-down approach of leaders in both parties who seem indifferent to the concerns of ordinary Americans.

Since becoming politically active, Welsch has discovered a talent for organizing that suits what she calls her "tactile… hands-on" nature. Previously a mere spectator in politics, her participation limited to voting, she now regrets not becoming involved sooner. "This is what I should have been doing all along," she says.

Welsch's determination to make a difference recalls the can-do spirit of active citizenship that Ronald Reagan celebrated in his first inaugural address. "I do not believe in a fate that will fall on us no matter what we do. I do believe in a fate that will fall on us if we do nothing."

Doing nothing is not an option for Rhonda Welsch anymore, and she knows many others who feel the same way. "We need to form a human chain -- I just want to be one link in that chain."

Reagan was "our last true conservative president," says Welsch, who sees herself as part of a larger effort to revive Reagan's vision of freedom. And when those Harleys come roaring up Pennsylvania Avenue next year, that vision will make a lot of noise.

Washington Emolument

Jay D. Homnick — Wed, 09 Dec 2009 06:06:00 -0500

As the President presses his tux and his luck to pick up the Nobel on Thursday, I am reminded of one of my late grandfather's favorite jokes. Although he died when I was eleven, he managed to tell it to me three or four times.

A fellow drove across the border from San Diego into Tijuana in a big yellow Cadillac every Saturday. Customs officials were convinced he was a smuggler. He and his car were searched repeatedly to no result. Week in, week out, he made his journey to the chagrin of the inspectors. After one of the Customs men retired and asked the man off the record to satisfy his curiosity: "What contraband have you been transporting all this time?"

"Simple. I was exporting yellow Cadillacs to Mexico tax-free. They are huge favorites over there. Every Sunday I crossed back on foot and nobody noticed."

Similarly, while the punditocracy and the commentariat, the intelligentsia and the cognoscenti all searched for accomplishments to justify the award, only one kept her eye on the prize itself. That would be Claudia Monteverdi of Argentina, granddaughter of retired Senator Grigorio Monteverdi and herself a Congressional candidate. This former Miss Latin America is a long-time friend of this column and its de facto South American correspondent. Among other achievements, she has a thoroughgoing command of the U.S. Constitution and the Federalist Papers.

Immediately following the announcement, Claudia began to make the case that it was unconstitutional for Obama to accept the prize. Article I of the Constitution provides that "No person holding any office of Profit or Trust… shall, without the consent of Congress, accept any present, Emolument, Office or Title, of any kind whatever, from any King, Prince or Foreign State." The Nobel is a private fund, but the awardees are determined by members of the Norwegian Parliament.

In short, Claudia maintained, the government of Norway is slipping a big check to the President of the United States. Her case is bolstered, I might add, by the clear agenda the bribe is intended to encourage, i.e. the choosing in all instances of policies deemed peaceful, peaceable, peace-oriented and/or peace-inducing by the pacifist international left. Once again, those who admire this country from foreign shores have a truer sense of its founding vision than many of its own meandering children.

NOW HER CALL has found an echo in the person of Tad Armstrong of Edwardsville, Missouri. Mr. Armstrong is an attorney who founded the ELL (Earn it, Learn it, or Lose it) Constitution Clubs. In an op-ed piece in the St. Louis Post-Dispatch this weekend he confirmed the view that Nobel's dynamite is blowing up the Constitution.

He adds a new wrinkle for folks who regard appeals to the Constitution as quaint and anachronistic. He cites a law passed by Congress in 1966, now numbered as Section 7342 of the U.S. Code, which declares that absent specific consent of Congress any gift or decoration received by a sitting President must be accepted on behalf of the United States and turned over to the Treasury.

Yes, indeed, the disposition of the prize money is not in the hands of President Obama, despite his magnanimous but vague assertion it will be forwarded to charitable causes. Our founders were concerned such gifts might serve as a means of influencing our leaders to make choices in the interest of other sovereigns.

Then again, perhaps all this is absurd. Who would be so overwrought as to suspect a President might be moved to accept European attitudes at the expense of American ones? That he might give more credence to conventional wisdom than to common sense? That he could be swayed by leftist banalities into abandoning an appreciation of American exceptionalism? That he could be moved to regurgitate the pap of Marxist professors in major addresses?

Who would be mean-spirited enough to imagine a President might be seduced into believing America guilty of torture? Of arrogance? Of overusing the resources of the world? Of damaging the physical planet by its consumption and industry? Of interfering into local affairs in South America and the Middle East? Of causing Iranian unrest by something the CIA did in the 1950s? Of causing Palestinians to bridle by favoring Israel overmuch?

The idea that giving an American President a few bucks could make him do and say such things is offensive. In point of actual fact, this goof was saying all those things without demanding anything more in return than flattery. So the Nobel is not a cause, but we are still in plenty of trouble. Please cry for me, Argentina.

Yes, Virginia

Lisa Fabrizio — Wed, 09 Dec 2009 06:06:00 -0500

When we talk, as we are forced to do every year, about the "war on Christmas," we generally focus on the efforts of the ACLU and their ilk to continue their assaults on the symbols of the holiday. From coast to coast lawyers are lining up to snatch away the visions of sugarplums that might otherwise dance in the heads of American children.

Of course what adds to the frustration of Christmas-loving Christians is the way in which the celebrations of other faiths, particularly Islam, have gained in exposure; most notably that our last two presidents have seen fit to bend over backwards in recognizing Muslim holidays. While over in the retail world, stores like Best Buy disdain to use the "C" word but take the occasion of Thanksgiving to wish our Muslim brothers a "Happy Eid al-Adha."

Now the word is out that even Santa Claus is under attack. Some folks on a school board in Massachusetts have compared the use of his image to that of a Swastika. It may have leaked out that the venerable star of stage, screen, and the Macy's Thanksgiving Day Parade is actually a religious symbol; that his cap represents a bishop's miter and the tasty candy canes he hands out to the kiddies are patterned after the crosier carried by that holy man.

Most folks of a certain age understand that, at least in this country, Santa is now the means by which parents keep their kids in line and Madison Avenue sells its wares; kind of like the way liberals invent things like Anthropogenic Global Warming. However, much like the child who saw Mommy kissing Santa Claus, some folks are beginning to pull on the proverbial beard.

Over one hundred years ago, a sweet, trusting, little girl wrote a letter to a newspaper -- when such organs were still deemed trustworthy -- seeking to have her doubts about Santa allayed. Now may be just the time for another such missive:

Dear Editor: I am 18 years old. Some of my conservative friends say there is no Santa Claus. But my journalism teacher says, "If you see it on Fox News, it isn't so." Please tell me the truth; is there a Santa Claus?

Virginia O'Hanlon.
115 West Ninety-Fifth Street

Dear Virginia, your conservative friends are wrong. They have been affected by the propaganda of an anti-statist mindset. They do not believe anything except what they are told by the vast right-wing conspiracy. They think that nothing can be true which is not the product of their almighty pens. In this great country of ours, Virginia, all conservative minds are little as compared with the boundless world of academia about them, as measured by their attempts at grasping the whole of truth and knowledge through something as silly as their so-called religious faith.

Yes, Virginia, there is a Santa Claus. He exists as certainly as the right to abortion in the Constitution and conservative bias in the media. Alas! How dreary would be the world if there were only Fox News and no Santa Claus. It would be as dreary as if there were no viable windmill energy! There would be no blind faith in the New York Times then, no Dan Rather to make tolerable this bourgeois existence. We should have no reliability in science, except for dull facts and figures. The utopian light with which liberalism fills the world would be extinguished.

Not believe in Santa Claus! You might as well not believe in Al Gore! You might get a few thousand scientists to suggest that bogus data was invented to support the claims of global warmists, but even if it could not show that temperatures are rising, what would that prove? It's the same with Santa! Nobody sees Santa Claus, but that is no sign that there is no Santa Claus.

Our most important policy goals are based on things in the world that neither children nor men can see. Did you ever see fairies dancing on the lawn or Barack Obama's birth certificate? Of course not, but that's no proof that they are not there! None but cold-hearted conservatives demand this kind of verification of that which we hold sacred.

You may tear apart our agenda to see if any of it is workable or even constitutional, but there is a veil covering the liberal world which neither Rupert Murdoch nor even Sarah Palin can tear apart. Only by dreaming, hoping and community organizing can we maintain the protection of that curtain and all the supernal beauty and glory beyond. Is it all real? Ah, Virginia, in all our world there is nothing else so real and abiding.

No Santa Claus! Heaven forbid! He lives, and he lives as long as the memory of Dennis Kucinich lives on in the hearts of men. A year from now, Virginia, nay, three years from now, he may continue to make glad the heart of America.

Abortion Funding Ban Defeated in Senate

G. Tracy Mehan, III — Wed, 09 Dec 2009 06:05:00 -0500

The U.S. Senate yesterday defeated a ban on federal funding of abortion, putting at least one Democratic vote for the Democrats' own health care plan in play, that of Senator Ben Nelson (D-Nebraska).

Nelson, along with Senator Orrin Hatch (R-Utah), sponsored the amendment, which sought to enshrine in law the functional equivalent of the Hyde Amendment into the proposed health care legislation being pushed by the White House and congressional Democrats.

The vote, 54-45 against the Nelson-Hatch Amendment, may also raise questions about the vote of Pennsylvania Senator Bob Casey, Jr., one of the other, very few pro-life Democrats in the upper chamber.

It is tempting to take a benign view of the matter and see this development as a possible derailment of the health care plan, which has evolved into a monstrosity of taxation, spending, and federal bloat. But that would be a mistake, given the moral and social disaster embodied in any sanction of federal funding of the destruction of unborn children at taxpayer expense. Like it or not, there is a real possibility that the health care legislation pushed by Majority Leader Harry Reid (D-Nevada) may still become law given that this is a do-or-die issue for the very liberal majorities in both houses.

Nevertheless, if Reid loses Nelson's vote, and Senator Joe Lieberman (I-Conn.) bolts over a public option, which he has sworn to do, this legislation could still go down in flames.

There is a large contingent of pro-life, Blue Dog and simply scared Democrats in the House of Representatives, which actually passed the Stupak amendment, its version of Nelson-Hatch, who are beginning to think hard about their re-election chances if all the hard work on the life issue comes to naught. With more people telling Gallup that they are pro-life than pro-choice these days, they may wonder why their congressman or woman is still hanging around with the likes of Nancy Pelosi and Harry Reid. Indeed, Harry Reid is not looking to strong at home either.

Reagan's December Declaration: GOP "Not a Fraternal Order"

Jeffrey Lord — Tue, 08 Dec 2009 06:09:00 -0500

Ronald Reagan would have loved Marco Rubio.

Not to mention Pat Toomey.

Rubio, the current State House Speaker is the conservative challenger to liberal Republican Governor Charlie Crist's U.S. Senate bid in next year's Florida GOP primary. Toomey, famously, came within a whisker of beating Republican U.S. Senator Arlen Specter in the 2004 Pennsylvania primary when Toomey was serving as a Republican Congressman from Allentown. The challenge was renewed for 2010. Taking a look at polls that showed Pennsylvania Republicans finally fed up with his liberal views, the final straw being a vote in favor of the Obama stimulus package, Specter chose to switch to the Democrats -- guaranteeing Toomey the GOP Senate nomination.

The challenge to GOP liberals by GOP conservatives has set off the usual teeth-grinding about demands for party "purity." Snapped Michigan Republican Congressman Thaddeus McCotter to The American Spectator's Jim Antle recently: "I've seen the game of trying to purge Republicans of those who are 'RINOs' or not pure enough…I have one question: How'd that work out for us?"

Well, now that you mention it, pretty well, actually.

But let's go back to if not to the beginning but the middle of the beginning on this old chestnut of an argument.

The time? December, 1976. As the story opens on this fifteenth day of the month, ten days before Christmas, the Republican Party is at a crossroads. The dominant force in American politics for generations since its beginning in the 1850's when it came into being around the premiere social issue of the day, the "right" to own another human being -- slavery -- the GOP of 1976 is in trouble.

How did it get here?

Up until 1932, as the late Jack Kemp loved to note, the Republican Party was "the home of black Americans, the party of Lincoln, of economic growth, of equal opportunity." The so-called "progressive movement" -- really a rallying cry for economic redistribution and the politics of envy -- swept through the nation in the form of Franklin Roosevelt's New Deal. While liberal historians love to ignore the fact, Republican Herbert Hoover was enamored of progressives and, unlike his conservative predecessor Calvin Coolidge, considered himself to be one of them. Coolidge took a dim view of Hoover, whom he had kept on as Commerce Secretary in order to preserve a sense of stability following the sudden death of President Harding. Later, Coolidge would gripe that Hoover had spent their entire time together in government giving Coolidge advice "all of it bad."

In fact, Hoover was one of the first of what would become known as the "me-too" Republicans, picking up on progressive movement ideas of the late 1920s and early 1930s and saying "me too" -- only a little less so. Whether the issue was the historic Lincoln beliefs in economic growth and equal opportunity, best expressed in the 1920s by Coolidge's Secretary of the Treasury Andrew Mellon, or the idea of a permanent "gift tax" -- Hoover was as one with progressives, believing that there was only so much wealth to go around and a bigger government had a distinct and ever growing role in managing this wealth. In what would become a familiar pattern with Republican liberals, he was Franklin Roosevelt only less so.

As Amity Shlaes records in The Forgotten Man:

Both preferred to control events and people. Both underestimated the strength of the American economy. Both doubted its ability to right itself in a storm. Hoover mistrusted the stock market. Roosevelt mistrusted it more. Roosevelt offered rhetorical optimism, but pessimism underlay his policies. Though Americans associated Roosevelt with bounty, his insistent emphasis on sharing -- rationing, almost -- betrayed a conviction that the country had entered a permanent era of scarcity. Both presidents overestimated the value of government planning. Hoover, the Quaker, favored the community over the individual. Roosevelt, the Episcopalian, found laissez-faire economics immoral and disturbingly un-Christian.

In one fashion or another, through Hoover's election in 1928 on through to the mid-December of 1976, some variation of this argument had gripped the Republican Party. A string of me-too GOP presidential nominees had faced off against Democrats using this argument to persuade the electorate -- and failed repeatedly. From Hoover himself in 1932 to Wendell Willkie in 1940, Thomas E. Dewey in 1944 and 1948, on through Eisenhower and the Richard Nixon of 1960, only Eisenhower the World War II hero had managed a win -- a win for heroism, not moderation. Scores of self-described "moderate Republicans" had won state and congressional elections in this period, managing with a liberal national press to give the impression that "me-tooism" was the wave of the future in terms of building the GOP.

The argument finally sundered the GOP in 1964, with Arizona conservative Barry Goldwater's victory over GOP liberal New York Governor Nelson Rockefeller. Reagan himself was launched politically during this particular battle, his October, 1964 speech for nominee Goldwater electrifying the blossoming conservative movement.

Nixon appeared to momentarily bridge the gap in 1968 -- presenting himself as a middle road between the views of now Governor Reagan and Governor Rockefeller. Governing as a moderate, Nixon still campaigned relentlessly as a red-meat conservative, the Nixon campaign winning a landslide over liberal Senator George McGovern in 1972 in part on charges the Democrat was representing the party of "acid, abortion and amnesty."

With the resignations of both Nixon and Vice President Agnew as the 1976 campaign season loomed, Reagan, newly retired after two successful terms as Governor of California, watched, appalled, as the new GOP President Gerald Ford nominated Rockefeller as his vice president and started marching the GOP along the same weary and worn-out road to me-tooism. The gauntlet had been thrown, and Reagan picked it up.

On one side in this showdown of the 1976 primary and convention season were Ford and the moderates -- epitomized by Rockefeller and his fellow New Yorker, liberal Republican Senator Jacob Javits -- versus the conservatives as led by Reagan. Once again the "conservatives can't win" argument was trotted out. Once again -- although this time narrowly -- the moderate candidate (Ford, in this case) triumphed. And once again, the moderate Republican nominee lost, this time to Democrat and liberal Jimmy Carter.

By December 15, Reagan had more than had enough. Ford had summoned Reagan, Rockefeller and Democrat-turned Republican John Connally -- the ex-Texas governor who had served Nixon as Treasury Secretary -- to the White House for a chat on the future of the GOP. As liberals were gleefully planning the Carter administration inaugural for the following month, President Ford was trying his best to mend the internal fences of the GOP in true moderate style. Who should be the new GOP chair, he wanted to know? What changes in the party structure should be made.

Reagan quietly seethed. To him, the problem was not party structure. It wasn't this or that person sitting in the chairman's job. It was something else altogether. A handful of days later, sitting in his Los Angeles office, Reagan sat down with a reporter from the New York Times and gave his answer to Ford, Rockefeller, and the party moderates who had by now produced one losing presidential campaign after another for 44 years.

The headline the next day was stark:

REAGAN URGES HIS PARTY TO SAVE ITSELF BY DECLARING ITS CONSERVATIVE BELIEFS

With an accompanying picture of a relaxed and smiling Reagan, the former governor made plain his answer to the question most recently posed in The American Spectator article featuring Congressman McCotter. He answered by rejecting the McCotter premise entirely, in fact turning it around. The way to the future was not by catering to what we now call RINOs -- "Republicans in Name Only" like a Charlie Crist or Arlen Specter today -- or a Jacob Javits of yesterday. Reagan proposed something else.

Instead of appealing to Democrats by becoming more liberal, Reagan saw the answer as "courting conservatives who now call themselves Democrats and independents." Said Reagan, in words that surely astonished the Times reporter:

"The former California Governor said that Republicans could be saved from extinction only by acting quickly to assert the party's ideological identity. A declaration of conservative beliefs, he said in an interview in his Los Angeles office, might drive a number of Northern liberals out of the party, but that loss would be more than offset by potential gains in the South and West."

Did this mean Reagan would support a third party, the reporter asked?

"No!" was Reagan's emphatic answer:

"The largest grouping of a common philosophy is to be found in the Republican Party. Now, if that's true, why do you risk breaking it up to start all over again, because if a third party is started, you know there are people who have a sense of loyalty to the party who would not leave it."

"The Republican Party would not say 100 percent we are going to move over to the new party. You would then break the single biggest grouping of people with the common philosophy that you have in the country. So we should take that as our starting point and build upon it."

So what would this Reagan-approach mean for RINOs? In December of 1976 that specifically meant New York's liberal Republican Senator and Rockefeller ally Jacob Javits, a leading "RINO" of the day -- the Arlen Specter or Charlie Crist, if you will.

Reagan was clear -- and firm:

Senator Javits might have some problems staying within the party. Again, however, we are not ushering anyone out of the party. We are simply saying, "What does our party stand for?" If the great majority agrees with the philosophy, and some say it's a philosophy they can't go along with, that's a decision for every individual to make. A political party is not a fraternal order. A party is something where people are bound together by a shared philosophy.

On January 20, 1977, Jimmy Carter took the oath of office as the 39th president, settling down to the nitty-gritty of a liberal administration whose guiding lights were economic scarcity, cutting defense spending and a belief that Americans and the world had an "inordinate fear" of Communism that could best be resolved by accepting the permanent presence of the Soviet Union and a Communist Eastern Europe.

Eleven days after Carter's swearing-in, Reagan announced the formation of what the Times called a "permanent political group to back conservative Republican causes and candidates." Citizens for the Republic -- which in 1976 had been Citizens for Reagan -- was an early precursor of the idea that is now personified by groups like the Club for Growth.

Five days after that, Reagan appeared in person to give the main address to a fledgling group of activists called the Conservative Political Action Committee. Said the former Governor:

Our task now is not to sell a philosophy but to make the majority of Americans, who already share that philosophy, see that modern conservatism offers them a political home. We are not a cult. We are members of a majority. Let's act and talk like it.

Ronald Reagan's December declaration in 1976 is as relevant today as it was then.

Reagan was not about "purging" anyone. He was about inclusivity -- understanding that conservatism was not a cult but rather the majority philosophy of the American people. It was a philosophy that, boldly identified and presented, was more than capable of both winning elections and governing the country.

As it turned out, of course, Reagan was right. In 1980 Senator Javits was defeated in the New York Republican primary by a little-known conservative named Alfonse D'Amato. Stung, Javits clung to the ballot as the Liberal Party nominee. He lost his seat to D'Amato in the Reagan landslide -- the same conservative landslide that brought an end to some of liberalism's most celebrated names like McGovern, Birch Bayh of Indiana and Frank Church of Idaho.

Reagan didn't have to "purge" RINOs, as Congressman McCotter's remark might suggest. He simply brought the party back to its philosophical roots of economic growth, equal opportunity, colorblindness, and support for social issues that had begun the party and led it to repeated victories up until 1932. Those who turned their backs on this historically rooted party philosophy, like Javits, not only left the party in defeat but had their careers ended for good. In doing this Reagan ushered in another era of conservative philosophical inclusiveness and clarity, which in turn led to revolutionary changes in the modern world.

How'd that work out for us?

Again, contrary to the McCotter thought, it worked out pretty well. Scratch that. Very well. And having cast that Reagan approach aside in 2008, and in 2006 before that, the results of RINOism -- the approach of Willkie and Dewey and Dole and McCain -- should say something to Republicans if they are willing to listen.

Ronald Reagan was right all those many Decembers ago. A recent Gallup poll demonstrates yet again that he would still be right today.

Today's RINOs, today's Javits, are free to go, like Arlen Specter -- or free to stay, like Charlie Crist. But conservatism is not a fraternal order. As Marco Rubio and Pat Toomey understand along with Ronald Reagan, it's a political philosophy. And a winning one.

It doesn't take a rocket scientist to realize President Reagan would know exactly what conservatives should be doing today in the Obama era. Actually, he already said it.

"We are members of a majority. Let's act and talk like it."

Which is exactly what Marco Rubio and Pat Toomey are doing.

Covering Up for ACORN

Matthew Vadum — Tue, 08 Dec 2009 06:08:00 -0500

The newly released "independent" review of the ACORN undercover prostitution video saga is a breathtakingly audacious work of fiction.

There is hardly a word of truth to be found anywhere in the document's 47 pages. The report unveiled yesterday by former Massachusetts Attorney General Scott Harshbarger is an all-you-can-eat buffet of lies and distortions that faults ACORN only for poor management practices.

No wonder those who organized the news teleconference yesterday kept the event so brief. The call lasted just 36 minutes, an amazingly brief period considering the level of public interest in ACORN's ongoing scandals and the complexity of the issues involved. Within that, the question-and-answer session was barely 23 minutes long.

Only five reporters were called upon and four of them lobbed softballs. One of the so-called reporters was actually politics professor Peter Dreier of Occidental College, a consultant to ACORN who wrote a report blaming the media for the group's woes. In "First They Came for ACORN," one of Dreier's over-the-top Huffington Post op-eds, the radical academic likened ACORN critics to Nazis.

Although I joined the electronic queue to ask a question, the teleconference was abruptly cut off after John Fund of the Wall Street Journal asked a series of tough questions.

Nonetheless the conference call was revealing.

It examined Harshbarger's report, which lays the blame for ACORN's myriad institutional shortcomings almost entirely on former chief organizer Wade Rathke. The document focuses on the hidden-camera videos in which James O'Keefe and Hannah Giles posed as pimp and prostitute. In those videos, ACORN employees across the nation offered the couple detailed advice on how to break the law and not get caught.

Harshbarger, a former president of the liberal group Common Cause selected by ACORN to aid in damage control, shrugged off the employees' behavior.

"While some of the advice and counsel given by ACORN employees and volunteers was clearly inappropriate and unprofessional, we did not find a pattern of intentional, illegal conduct by ACORN staff," he wrote.

In a conference call ACORN chief organizer Bertha Lewis gloated about how the report exonerated her group. Coming on the heels of her Oscar-worthy National Press Club speech in October in which she not only depicted ACORN as an innocent victim but also as a whistleblower that tried to nip the subprime mortgage crisis in the bud, Lewis told some brand new whoppers.

She said, "ACORN's leadership is pleased that this evaluation shows that even the low level employees did not engage in any illegal activity or seek to encourage it."

Reporters participated in listen-only mode in the teleconference Monday so the sounds of robust laughter did not disrupt the press event.

Anyone who watched the videos knows that ACORN employees bent over backwards to advise O'Keefe and Giles on how to defraud the U.S. government, obtain government money under false pretenses, engage in money laundering, smuggle illegal aliens into the country, and facilitate child prostitution.

The only reason the employees didn't participate in the schemes they devised was that O'Keefe and Giles never followed through. We'll never know with perfect certainty, but does anyone seriously believe that most of the ACORN employees shown in the videos didn't want to follow through?

One helpful staffer offered to help the couple claim the child tax credit for underage prostitutes from El Salvador. One worker offered the couple a discount on tax preparation fees for the prostitution business. One told them how to hide undeclared income by burying it in a tin can.

The report also gets creative, arguing that ACORN and ACORN Housing are completely separate entities.

ACORN Housing is the ACORN network's largest affiliate. As such, it functions as a kind of automated teller machine funneling grants and loans through the ACORN empire. The gigantic cash machine that is ACORN Housing has taken in the bulk of the $53 million in federal funding that the ACORN network has received since 1993.

The Harshbarger study describes ACORN Housing as "a separately incorporated organization (not a subsidiary or affiliate) with which ACORN contracts for homebuyer and foreclosure programs."

This is, of course, patent nonsense.

ACORN frequently plays a game of corporate musical chairs when it gets into trouble. When an ACORN affiliate does something admirable, ACORN emphasizes the ties it has to that affiliate. When an affiliate does something infamous, ACORN plays dumb and its byzantine organizational structure allows it to claim plausible deniability. It's always been this way.

To avoid public scrutiny, ACORN recently scrubbed its website of its "allied organizations page." In October last year it listed ACORN Housing near the top of that page, noting that ACORN "established" that organization "in 1986 to build and preserve housing assets." The ACORN website also listed ACORN Housing as an affiliate in a "sister organizations" list.

Elizabeth Kingsley, ACORN's lawyer, described the relationship between ACORN Housing and ACORN in an internal legal memo last year.

ACORN Housing may very well want to be independent of top-down control by the ACORN headquarters, but it's not. Kingsley noted that ACORN Housing (AHC) has complained before about being dominated by ACORN headquarters.

Kingsley criticized ACORN for "thinking of all these different corporations as part of the family." ACORN affiliates "have wanted to maintain that they are not 'affiliated,' 'related,' or 'controlled' by or with each other, for various legal purposes, while allowing actual control to be exercised in a highly coordinated manner."

She faulted ACORN for "trying to pretend that these groups are not connected to one another." She also noted in a passage about political activity that "ACORN lacks the protective walls needed to ensure that various types of activity are kept sufficiently separate."

So what's changed on an institutional level in the year and a half since Kingsley wrote her memo? It's not at all clear from reading the Harshbarger report.

Moreover, tax liens currently pending against ACORN Housing provide more proof that it is run by ACORN headquarters.

Currently, 25 tax liens pending against ACORN Housing list the organization's address as 1024 Elysian Fields Avenue, New Orleans, Louisiana, the former funeral home that until recently served as ACORN headquarters. Those 25 tax liens were issued by California, Indiana, New Mexico, New York, Pennsylvania, and Texas.

Yet ACORN Housing says its home address is 209 West Jackson Boulevard in Chicago, Illinois. Perhaps tax collectors in all six states have it wrong.

There are even more financial ties between ACORN Housing, ACORN, and the rest of the ACORN network.

ACORN Housing has paid ACORN affiliate Citizens Consulting Inc. (CCI) $2,928,027 since 1997. CCI is the financial nerve center of the ACORN network. Money disappears into the CCI vortex never to be seen again.

ACORN Housing also lends money to other members of the ACORN network. For example, in its Tax Year 2007 tax return, ACORN Housing discloses lending $1,477,451 to ACORN and other ACORN affiliates. The return also discloses a loan of $119,509 from ACORN Housing to ACORN.

Surely Harshbarger knows these things, yet he seems unembarrassed to associate himself with this report that whitewashes the activities of a radical advocacy group-turned organized crime syndicate.

That's how important ACORN is to the left and the Democratic Party. It's not going away any time soon.

Britain's Taxing Mistake

Tom Bethell — Tue, 08 Dec 2009 06:08:00 -0500

The pundits say that supply-side economics is dead. If they mean it is unfashionable, I agree. If they mean that supply-side reductions in tax rates will not help ailing economies, or that increases will not hurt them, I disagree. Anyway, the argument is about to meet a real-world test in Britain.

It has long been argued by supply-siders that reductions in marginal tax rates will bring in more revenue, not less. More jobs will be created and the economy will flourish, everything else being equal.

Many analysts do not accept this argument, partly because of our careless use of language. We talk of "tax cuts," a phrase that conflates tax rates and revenues -- prices and quantities. Such language builds into our thinking the assumption that tax revenues rise or fall in proportion to rates. It ain't so.

Think of it this way. You run a fast food place and you sell hamburgers for $10. But not enough money is coming into the till. So you raise the hamburger price to $11. Do you really expect sales to increase ten percent? Think again. How about reducing the price to $7.50? Does you revenue then go down, or up?

Think of tax rates and tax revenues in the same way.

In the U.S., the most important applications of the supply-side idea arose with the Kemp-Roth capital gains tax rate reduction in 1978, and then with President Regan's reduction in the top income tax rate (from 70 to 40 percent) in 1981. These changes launched an economic boom that lasted for 25 years. They also brought in tax revenues that were vastly higher than predicted.

Journalists almost always talk of "tax cuts" or "tax increases" when reductions or increases in tax rates is what they should be saying. Their excuse is that "tax cut" is more convenient and uses half the space. But in this case brevity is the soul of confusion. Also, of course, most journalists are liberals and want to believe that if the government raises tax rates, we have no choice but to fork over more money. Taxes are compulsory.

Here are the changes that Alistair Darling, the British Chancellor of the Exchequer, promises for next year. In April, the top income tax rate will be increased to 50 percent, from the current 40 percent, and will apply to taxable income above 150,000 pounds. This is the sharpest increase in tax rates seen in Britain for over 30 years.

That is the first piece of bad news for Britain, but here is something equally bad. The country must hold a general election no later than June. Almost certainly it will be in May, 2010. The leader of the Conservative Party, David Cameron, is ahead in the polls, but his support has fallen, and a hung Parliament now looms as a possibility.

What does Cameron say about the approaching tax-rate increase? If elected, he says, he will not -- at least in the beginning -- do anything about it. He merely holds out the hope that he will be able to reduce the top rate before the end of his first term.

I heard this last month from my brother, who is involved in Conservative politics at the local level in Britain. He even got himself elected as a councilman. Anyway, my immediate reaction to that news was that Cameron deserves to lose the election, simply on the tax issue alone.

In several other ways, Cameron has attempted to minimize his differences with Labour, as though he believed that the problem for conservatives is that they are not politically correct enough. He soon signed on to the global warming scare, for example. As a conservative, Cameron is to Margaret Thatcher what Bob Dole was to Ronald Reagan.

Here are some more tax increases that are due to go into effect in England. Fuel tax will be increased by 3.5 percent in April. (A gallon of gas already costs $7 to $8 in Britain -- mostly taxes.) And the value added tax, reduced this time last year to 15 percent to alleviate the financial crisis, will soon be moved back up again to 17.5 percent. The Labour Government is also drawing up plans for a windfall tax on the bonuses recently paid to bankers. And a planned increase in the threshold level at which inheritance taxes take effect has been scrapped.

Here is a one-word reason why these assaults on the rich are a bad idea: Switzerland. The rich whom the government is taking aim at are also the best placed to avoid the poison that is being prepared for them. They can leave the country and claim non-domiciled status for tax purposes. Switzerland is the destination that has been in the news.

A high-end real estate agent in London has recently been holding Swiss-relocation seminars and some of the city's wealthiest people have been briefed on the advantages of heading off for Geneva or Zurich.

"There was virtual indifference to the U.K. tax system when people were paying 40 percent," said the managing director of the group holding these (oversubscribed) seminars. "But when you're talking about 50 percent, all of a sudden HM Revenue and Customs is in for a bit of a surprise. There are high net worth guys out there saying enough is enough."

As the supply-siders would say, 40 percent of something is a lot more than 50 percent of nothing.

"Companies from McDonald's, the fast food operator, to Informa, the British publisher, are on the move to Switzerland, because of onerous corporate tax rates," according to the Sunday Telegraph.

As for the rate at which tax refugees are taxed in Switzerland, my brother tells me that it can be negotiated with the government. Negotiated! That is what you call enlightened government. The Sunday Telegraph reported:

"Swiss personal tax rates are as low as 20 percent and there have been reports of UK-based executives being offered a ten percent rate as the government steps up its drive to entice high earners in."

One problem: Housing supply "is limited and rules denoting who is able to buy a property are rigorous." Property prices in Switzerland are high, "but pale compared to top end sites in London."

In addition to collecting revenue, the looming tax changes in Britain are intended to punish the rich. President Obama has the same attitude. He was told by a leading journalist last year that the reduction in capital gains tax rates by both President Clinton (in 1998) and President Bush (in 2003) had been followed by revenue increases. (And the stock market promptly boomed in both cases.) Obama's response was that that didn't matter because raising those tax rates was a matter of "fairness."

Prediction: The performance of the British economy is set to decline. In the last year the (London) FTSE 100 stock index has largely mirrored the movement of the Dow Jones Industrial average. Today, it costs $1.65 to buy a pound. That price will surely decline. One caveat: If Obama and the Democrats succeed in raising tax rates here next year, paralleling the changes expected in Britain, then all bets are off. I doubt if that will happen. But if it does, Obama can say goodbye to his Democratic majority in Congress.

Department of Excellence

Robert Stacy McCain — Wed, 09 Dec 2009 15:51:00 -0500

Why do so many of America's educational institutions languish in mediocrity, while the University of Alabama soars toward the triumphant pinnacle of excellence?

TUSCALOOSA, Ala. - Alabama students and faculty won't have to worry about missing class to attend the national title football game in Pasadena.
The university canceled classes from Jan. 6-8. . . .
The top-ranked Crimson Tide plays No. 2 Texas on Jan. 7 at the Rose Bowl.

Let's face it, folks: Insignificant schools like Harvard and Yale simply lack the kind of commitment to excellence necessary to becoming a genuinely first-class institution of higher learning.

If you don't mind your kid becoming a loser, send him to Cambridge or New Haven. Only winners need apply at Tuscaloosa.

Anti-Free Speech Protesters in Copenhagen

Paul Chesser — Wed, 09 Dec 2009 15:29:00 -0500

I just got back from one of many gatherings across the country where freedom-loving citizens watched a live Webcast hosted by Americans for Prosperity. Policy director Phil Kerpen and president Tim Phillips reported from the U.N. Climate Change Conference in Copenhagen, and their event almost immediately was hijacked by global warming zealots:

For those of us here in the Raleigh area, it was reminiscent of the Leftist shout-down of Colorado Rep. Tom Tancredo a few months back when he visited the University of North Carolina at Chapel Hill:

Just shows these kids are learning nothing from their parents or their schools except how to shout down opponents with meaningless platitudes, rather than how to engage and rebut positions on the issues.

The Polls Are Getting Even Worse for Dodd

Brian O'Connell — Wed, 09 Dec 2009 15:03:00 -0500

Rasmussen reported Tuesday that Senator Chris Dodd is polling thirteen points behind former Republican Congressman Rob Simmons, six points behind ex-World Wrestling Entertainment CEO Linda McMahon, and one point (statistically tied) behind businessman and former Ron Paul advisor Peter Schiff in his 2010 re-election campaign. The same polls taken in September showed Dodd ten points behind Simmons and three points ahead of Schiff. Politico suggested Wednesday that the NRSC might be laying low on the Dodd attacks so that he does not get pushed out of the race.

The Good War vs. the Bad War

W. James Antle, III — Wed, 09 Dec 2009 14:38:00 -0500

Daniel Larison isn't sure there is any good that can come from Republicans who oppose President Obama's Afghanistan policy on anything other than noninterventionist grounds. He writes, "With respect to Afghanistan, this coalition of the unprincipled is particularly unwelcome, not least because the Afghan war has always been as legitimate as the Iraq war was not."

We are now learning that there were a lot of Democrats who were as opportunistic in their support of Afghanistan -- it gave them a good war to support while opposing the bad war in Iraq -- as some Republicans are in their newfound desire to get out of Afghanistan. But let's deal with Larison's statement about the two wars on its own merits: In 2001-02, I think he is absolutely right. Afghtanistan was not a preventive war, it was an act of self-defense against the terrorists who attacked America and the government that was giving them safe haven. But is this still true in 2009? Remeber that the strictest noninterventionist Republicans now opposing the Afghan surge -- Ron Paul, Walter Jones, Jimmy Duncan -- all voted to go in eight years ago.

I'm open to the argument that preventing a worse government from taking over Afghanistan would benefit our national security, in part by making it more difficult for a worse government to take over more strategically important Pakistan. But I am deeply skeptical of our ability to accomplish much in terms of nation-building there. So while I don't agree with, say, Diana West about what constitutes just military tactics, I am inclined to agree with her about the pointlessness of the course we are now embarking upon.

Baucus is Wrong! Wrong! Wrong!

Philip Klein — Wed, 09 Dec 2009 13:24:00 -0500

Sen. Baucus, speaking on the Senate floor earlier this afternoon, erroneously claimed that the Congressional Budget Office determined that small business owners would see their health insurance premiums stabilize, or even fall slightly, if the Senate health care bill passed. But in reality, the CBO found that the bill would have virtually no impact on premiums for small businesses, and could even slightly raise them beyond what they otherwise would be if we did nothing.

In his remarks, Baucus told the story of a small business that was scrambling to maintain its workers, and was eventually forced to sign up with a provider that raised premiums by 20 percent, to avoid a 30 percent hike from another insurer.

“That happens today, and it is wrong," Baucus declared. "Wrong! Wrong! Wrong! So if you’re a small business person under this bill, you’re going to find your premiums are going to be much more stable, and there’s going to be a much greater pool into it, so your premiums, actually, as the CBO says, should be less. Not by a lot, but less. But stable. You don’t have to worry about an insurance company coming to you next year and saying, ‘We’re going to charge you a lot more.’”

But the CBO found that whether or not the bill passes, premiums would go up on small businesses. The only question was whether they would be marginally higher or lower in 2016 than they would otherwise be. Specifically, the CBO estimated "that the change in the average premium per person resulting from the legislation could range from an increase of 1 percent to a reduction of 2 percent in 2016 (relative to current law)." Get that? Relative to the current system that is "Wrong! Wrong! Wrong!" the bill could lower premiums modestly, but it could also increase them slightly.

Put in dollar terms, the CBO found that, "average premium per policy in the small group market would be in the vicinity of $7,800 for single policies and $19,200 for family policies under the proposal, compared with about $7,800 and $19,300 under current law."

So that means that under an optimistic scenario, a typical small business could hope to save $100 seven years from now on an expensive family policy, compared to what the business would have paid under the unsustainable status quo. At the same time, it's also possible that the business could end up paying even more for insurance than if we simply did nothing.

Daily Must-Reads

Brian O'Connell — Wed, 09 Dec 2009 13:21:00 -0500

Feinstein says it is morally correct to force taxpayers to federally fund abortions (CNS)
The British are upset that they don't think Obama sees the special relationship as that special (Daily Mail)
Western countries aren't the only nations facing immigration issues. In Southern China, Nigerian immigrants struggle against poverty, deportation, in the "Chocolate City" of Guangdong (Asia Times)
Social Secretary Desiree Rogers reportedly said that the Obamas wanted a "nonreligious" Christmas (Fox News)

Socialized Medicine -- So What?

W. James Antle, III — Wed, 09 Dec 2009 13:15:00 -0500

That's the gist of this article on AOL News. Writes Andrea Stone: "Never mind that the public debate and advocacy ads depict nightmare scenarios of 'government bureaucrats' denying medical care, the recent controversy over breast cancer screening being only the latest. Taxpayers already cover nearly half of the nation's health care spending."

The question, of course, is whether we want to expand that government control of health care or move toward more of a true free-market model. Unfortunately, Republicans seldom frame the issue in that way, preferring to instead score points off of Democrats voting for Medicare cuts.

Bayh or Bye

W. James Antle, III — Wed, 09 Dec 2009 12:53:00 -0500

Chris Cillizza has an interesting item about how Evan Bayh's vote for the Nelson-Hatch amendment -- which would have imposed serious restrictions on taxpayer funding of abortion in the health care bill -- signals the end of his national aspirations. Bayh, who'd previously voted to ban partial-birth abortions, would now have a really tough time overcoming the objections of pro-choice activists. And he's moved right on just enough issues to give him trouble in other policy areas too.

Cillizza's right that we probably won't see a President Bayh, but I think the rollcall on Nelson-Hatch signals something more basic: the political difficulty of representing a red state and voting for taxpayer funding of abortion. Bayh is up for reelection in 2010 and is trying to avoid handing a possible Republican challenger easy ammunition. It was the strategy employed by the last Democrat who ran against John Hostettler, current Congressman Brad Ellsworth.

Ted Kennedy in a Skirt

W. James Antle, III — Wed, 09 Dec 2009 12:15:00 -0500

Or smart pantsuit. As expected, Martha Coakley easily won yesterday's Democratic primary to succeed the late Sen. Edward M. Kennedy. She'll face off against Republican State Sen. Scott Brown on Jan. 19.

Medicare "Compromise" Is Worse Than the Public Option

Philip Klein — Wed, 09 Dec 2009 12:11:00 -0500

Over on the main site, I just posted a piece explaining why the so-called "compromise" that would expand Medicare eligibility to those over 55 is actually worse than the current incarnation of the public option.

Lowden: Harry Reid's "Greatest Fear"; Health Care Will Doom him

Joseph Lawler — Wed, 09 Dec 2009 11:09:00 -0500

Nevada Republican Senate hopeful Sue Lowden hit incumbent Majority Leader Harry Reid hard on health care reform this morning at an American Spectator press breakfast. Lowden knocked Reid's Senate draft bill, predicting that the attempted health care reform will be "his Waterloo." Lowden premised her opposition to HarryCare on the grounds that it would include plans that pay for abortions and a tax on those who fail to purchase insurance that would unconstitutional. If elected in 2010 to replace Reid, Lowden stated, she would vote to repeal health care reform that looks like the current Senate bill if given the opportunity.

Lowden, a former Nevada state senator and chairman of the Nevada Republican Party, also claimed that in a large Republican primary field she is "Harry Reid's greatest fear in the general," because of her background as a state legislator and ability to fundraise. In explaining why Nevada voters seem in the polls to have become disenchanted with Reid, Lowden called Reid "not a charming guy" and "a bully," and noted that he had failed to bring Nevada major pork projects like past important Democratic senators such as Lyndon B. Johnson for Texas or Robert Byrd in West Virginia.

Lowden faces a primary battle featuring a dozen potential challengers, including Danny Tarkanian, real estate businessman and son of legendary UNLV basketball coach Jerry Tarkanian, and ex-assemblywoman Sharron Angle. Lowden, holding a narrow primary lead in recent polls, declined to contrast her policy positions with those of Tarkanian or Angle, choosing instead to highlight her own personal background as an advantage in a general election against Reid.

ClimateGate Alarmists Don't Like What They've Created

Chris Horner — Wed, 09 Dec 2009 10:36:00 -0500

So I see that the global warming alarmists exposed in their own words, computer code and other evidence as having falsified the premise for their -- what is also revealed to be inescapably -- agenda are now saying they've received death threats.

Well.

I refer them to the death threats and actual physical attacks that their side, which wholly relies upon intimidation of one kind or another, have been administering for years against those who would dare stand up for their scientific discipline. They are compiled in "Red Hot Lies: How Global Warming Alarmists Use Threats, Fraud and Deception to Keep You Misinformed." Incidentally, in the chapter "Stupid Science Tricks" I also name the ClimateGate actors by name and detail what they now admit to have been doing to get this hysterical campaign where it is. ClimateGate does not provide revelations, they are affirmations.

But more to the point, and acknowledging that all intimidation and certainly threats (and the attacks they have engaged in) are wrong, can we please just grasp that this is a movement whose entire existence has been one big, long running death threat, of "do what I want or everyone dies!"? In fact, in the very interviews in which they claim the death threats they can't help but lapse right into the childish and by now disgraceful routine.

Sorry that they now claim to be living the life their movement has imposed on others for year. But these people are really, very pathetic.

As Time Goes By

Wlady Pleszczynski — Wed, 09 Dec 2009 09:35:00 -0500

Time magazine senior editor Belinda Luscombe's bio describes her as "one of TIME's most versatile writers and editors." I'll say. In an online column today she reports that Examiner.com owner Philip Anschutz "is a noted political conservative, who recently bought the American Spectator from Rupert Murdoch." You heard it there first.

AP: Dems Drop "Public Option" As Part of Health Care Deal

Philip Klein — Tue, 08 Dec 2009 20:29:00 -0500

The Associated Press is reporting that Senate Democrats have reached a tentative deal that would drop the so-called public option.

Although they have not yet announced details, reports in recent days have centered on a pact that would have the entity that runs the federal employee health care system oversee the creation of privately administered non-profit plans that would be offered on the new government exchanges. In return for giving up the public option, liberals would be rewarded with a plan to expand Medicare to those age 55 and over, and to expand Medicaid eligibility to 150 percent of the federal poverty level.

The new proposal would have to be evaluated by the Congressional Budget Office.

UPDATE: Brian Beutler reports that the deal still leaves open the possibility of a "triggered" public option, and that the Medicare expansion would be begin in 2011. While there would be no subsidies for the first three years, after 2014, Medicare would be offered on the exchanges to those over 55, who would be able to use the subsidies already created by the bill to pay for it. And, according to Beutler, Medicaid would not be expanded to 150 percent of the federal poverty level.

Senate Kills Nelson Abortion Amendment

Philip Klein — Tue, 08 Dec 2009 17:37:00 -0500

The Senate just voted to table Sen. Ben Nelson's abortion amendment, by a 54 to 45 vote.

The vote could prove significant because Nelson has claimed he would filibuster any bill that did not include his Stupak-like abortion language.

The amendment would have required 60 votes to be adopted, but Democrats chose to table, or kill it, which only requires a simple majority.

In the lead up to the vote, Senate Majority leader Harry Reid tried to claim pro-life credentials before coming out against the Nelson measure. "I've consistently cast my vote against abortion," Reid said.

But he went on to claim that the underlying health care bill preserves current law and prevents taxpayer money from subsidizing abortion, while arguing that the Nelson provision went further.

"We have to keep moving toward the finish line and cannot be distracted by detours or derailed by diversions," Reid said. And echoing Obama, he insisted, "This is a health care bill, it is not an abortion bill."

UPDATE: Here's the official roll call. Republican Sens. Olympia Snowe and Susan Collins voted in favor of tabling the amendment. Democrats voting against tabling it (and thus for the amendment) were: Sens. Nelson, Bob Casey, Evan Bayh, Byron Dorgan, Kent Conrad, Ted Kaufman, and Mark Pryor.

UPDATE II: The Hill reports: "It’s made it harder to be supportive. We’ll just have to see what develops,” Nelson said after the vote. “We’ll have to see if they can make it easier.”

And on working with Reid to find common ground on abortion: "I had no Plan B," Nelson said. "Maybe somebody else has a Plan B, but I don’t see that this is one where there’s really any room for compromise."