Category : President Barack Obama

(RNS) Religious Leaders Praise new Obama Policy on Cuba

Faith leaders with long-term ties to Cuban organizations are hailing a change in White House policy that reduces limits on religious travel to the island nation.

The White House announced Friday (Jan. 14) that President Obama had directed changes that include permitting religious organizations to sponsor trips through a general license. The administration also will create a general license that permits remittances to religious institutions in Cuba that support religious activities.

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, Caribbean, Cuba, Foreign Relations, Office of the President, Politics in General, President Barack Obama, Religion & Culture

In Washington Where News Is Power, a Fight to Be Well-Armed Among Congressional Aides

Mr. [Bobby] Maldonado, 26, is one of the dozens of young aides throughout the city who rise before dawn to pore over the news to synthesize it, summarize it and spin it, so their bosses start the day well-prepared. Washington is a city that traffics in information, and as these 20-something staff members are learning, who knows what ”” and when they know it ”” can be the difference between professional advancement and barely scraping by.

“Information is the capital market of Washington, so you know something that other people don’t know and you know something earlier than other people know it is a formulation for increasing your status and power,” said David Perlmutter, the director of the School of Journalism and Mass Communication at the University of Iowa. “So any edge you can use to get stuff faster, earlier, better or exclusively is very important.”

For Mr. Maldonado, who said that “the information wars are won before work,” that means rising early to browse all of the major newspapers, new polling data, ideological Web sites and dozens of news alerts needed to equip his bosses with the best, most up-to-date nuggets.

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Posted in * Culture-Watch, * Economics, Politics, --Social Networking, Blogging & the Internet, House of Representatives, Media, Office of the President, Politics in General, President Barack Obama, Science & Technology, Senate, Young Adults

David Brooks: Tree of Failure

…this is where civility comes from ”” from a sense of personal modesty and from the ensuing gratitude for the political process. Civility is the natural state for people who know how limited their own individual powers are and know, too, that they need the conversation. They are useless without the conversation.

The problem is that over the past 40 years or so we have gone from a culture that reminds people of their own limitations to a culture that encourages people to think highly of themselves. The nation’s founders had a modest but realistic opinion of themselves and of the voters. They erected all sorts of institutional and social restraints to protect Americans from themselves. They admired George Washington because of the way he kept himself in check.

But over the past few decades, people have lost a sense of their own sinfulness. Children are raised amid a chorus of applause. Politics has become less about institutional restraint and more about giving voters whatever they want at that second. Joe DiMaggio didn’t ostentatiously admire his own home runs, but now athletes routinely celebrate themselves as part of the self-branding process.

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Posted in * Culture-Watch, * Economics, Politics, Anthropology, Ethics / Moral Theology, House of Representatives, Media, Office of the President, Politics in General, President Barack Obama, Psychology, Senate, Theology

George Will on the response to the Tucson tragedy

It would be merciful if, when tragedies such as Tucson’s occur, there were a moratorium on sociology. But respites from half-baked explanations, often serving political opportunism, are impossible because of a timeless human craving and a characteristic of many modern minds.

The craving is for banishing randomness and the inexplicable from human experience. Time was, the gods were useful. What is thunder? The gods are angry. Polytheism was explanatory. People postulated causations.

And still do. Hence: The Tucson shooter was (pick your verb) provoked, triggered, unhinged by today’s (pick your noun) rhetoric, vitriol, extremism, “climate of hate….”

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Posted in * Culture-Watch, * Economics, Politics, House of Representatives, Media, Office of the President, Politics in General, President Barack Obama, Psychology, Senate, Violence

Post-Gazette Editorial–Familiar rampage: American freedom was one of the victims in Tucson

What made this rampage worse than others was the pall it cast over the freedom and ability to perform elected public service — the necessity for political officials to interact openly with their constituents, the need for the public to approach freely the people they send to office. Whatever his intent, Jared Lee Loughner and the rounds he fired took aim on this American form of democratic discourse and, in so doing, put a treasured right of all citizens in jeopardy.

When investigators executed a search warrant at Mr. Loughner’s home, they found an envelope with messages saying, “I planned ahead,” “My assassination” and the name “Giffords.” His YouTube videos contained rambling and incoherent passages, some of them about his becoming the treasurer of a new currency, his belief that he had powers of mind control and the need to fix “English grammar structure” in a congressional district he believed was mostly illiterate.

Newly installed Speaker of the House John Boehner, a Republican, was right Saturday when he said “an attack on one who serves is an attack on all who serve.”

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., House of Representatives, Office of the President, Politics in General, President Barack Obama, Psychology, Senate, State Government, Violence

(NY Times) Slow Job Growth Dims Expectation of Early Revival

Left unsaid [by the President], however, was the fact that job growth was not enough to absorb people entering the work force in the United States, much less to shrink the unemployment rolls.

R. Glenn Hubbard, dean of Columbia University’s business school and former chairman of the council of economic advisers for President Bush, remains a guarded optimist. He sees signs of the economy gaining speed.

“We could run as high as 200,000 per month this year, but keep in mind that might only bring the unemployment rate down to 9 percent,” Mr. Hubbard said. “That does very little for the person who is long-term unemployed.”

The so-called real unemployment rate, which includes those workers who are discouraged or have given up looking for work, stands at 16.7 percent.

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Posted in * Economics, Politics, Consumer/consumer spending, Corporations/Corporate Life, Economy, Federal Reserve, House of Representatives, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Office of the President, Personal Finance, Politics in General, President Barack Obama, Senate, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government

Qanta Ahmed: Fulfilling Our Duty as Muslim-Americans

When New York Rep. Peter King, the new chairman of the House Committee on Homeland Security, called for congressional hearings on radical Islam in America this fall, the reaction from the official Muslim community was swift. Ibrahim Hooper, president of the Council on American- Islamic Relations, said he feared the hearings would become an “anti-Muslim witch hunt.” Abed A. Ayoub of the American-Arab Anti-Discrimination Committee asserted that Mr. King’s proposal had “bigoted intentions.”

While Mr. King has a reputation for adopting polarizing positions””particularly when it comes to immigration””his hearings deserve serious consideration. “There has to be an honest discussion of the role of the Muslim community””what they are doing, what they’re not doing,” he explained to the New York Observer in a Nov. 30 article. “I talk to law enforcement people across the country; they will tell me. . . . They don’t feel any sense of cooperation.”

These concerns are reasonable. Histrionic objections to them only deter Muslims from fulfilling a fundamental Islamic obligation: Meeting our duty to the society in which we live.

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, * Religion News & Commentary, America/U.S.A., House of Representatives, Islam, Office of the President, Other Faiths, Politics in General, President Barack Obama, Religion & Culture, Senate

(Lehrer News Hour) Gerson and Dionne on the Year in Politics in 2010

JEFFREY BROWN: So it is the end of the year, so we’re allowed…to think big, not just the week.

What defines — what defines this year in politics?

MICHAEL GERSON: I don’t know. I — I think it was a year of impatience….

JEFFREY BROWN: E.J. The year?

E.J. DIONNE, The Washington Post: You know, I think the great political scientist, Bono, explained the last three elections — they still haven’t found what they’re looking for….

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Posted in * Culture-Watch, * Economics, Politics, Budget, Economy, House of Representatives, Office of the President, Politics in General, President Barack Obama, Psychology, Senate, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government

Peter Schiff: Home Prices Are Still Too High

From my perspective, homes are still overvalued not just because of these long-term price trends, but from a sober analysis of the current economy. The country is overly indebted, savings-depleted and underemployed. Without government guarantees no private lenders would be active in the mortgage market, and without ridiculously low interest rates from the Federal Reserve any available credit would cost home buyers much more. These are not conditions that inspire confidence for a recovery in prices.

In trying to maintain artificial prices, government policies are keeping new buyers from entering the market, exposing taxpayers to untold trillions in liabilities and delaying a real recovery. We should recognize this reality and not pin our hopes on a return to price normalcy that never was that normal to begin with.

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Posted in * Economics, Politics, Consumer/consumer spending, Corporations/Corporate Life, Economy, House of Representatives, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Office of the President, Personal Finance, Politics in General, President Barack Obama, Senate, The 2009 Obama Administration Housing Amelioration Plan, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government

(USA Today) Medicare to swell with Baby Boomer onslaught

Baby Boomers are about to create a record population explosion in the nation’s health care program for seniors.

Starting on Saturday, Baby Boomers begin turning 65 and qualifying for Medicare ”” one every eight seconds. A record 2.8 million will qualify in 2011, rising to 4.2 million a year by 2030, projections show.

In all, the government expects 76 million Boomers will age on to Medicare. Even factoring in deaths over that period, the program will grow from 47 million today to 80 million in 2030.

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Posted in * Culture-Watch, * Economics, Politics, Aging / the Elderly, Budget, Economy, Health & Medicine, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, The National Deficit, The U.S. Government

Simon Schama: An America lost in fantasy must recover its dream

Sadder, wiser, those of us gathered on the Washington Mall in the freezing morn of Mr Obama’s inauguration can see now that of all the brave, unsustainable hopes uttered by the new young president, the most unsustainable of all turned out to be his Biblical plea to “put away childish things”. He might as well have tried to legislate the word “dream” out of American public discourse. Dreams? Reality? It’s not even close, is it?

Whether fantasy will prevail over factuality, adolescent wishful thinking over maturity, will be the great political motif of the next few years. The omens are not auspicious….

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Posted in * Culture-Watch, * Economics, Politics, Budget, Credit Markets, Currency Markets, Economy, House of Representatives, Office of the President, Politics in General, President Barack Obama, Psychology, Senate, Social Security, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government, The United States Currency (Dollar etc)

(USA Today) Thomas Kidd: Watch your religious language, Mr. President

Sometimes it seems like President Obama just can’t catch a break, from the long-faltering economy to the Gulf oil well explosion. But some problems are just of his own making. Nowhere is this more clear than in his clumsy use of religious language. The president cannot stop stumbling over the religious maxims that have defined us as a nation.

Earlier this fall, President Obama repeatedly misquoted the Declaration of Independence, saying “We hold these truths to be self-evident, that all men are created equal, that each of us are endowed with certain inalienable rights.” Why leave out the “Creator”? Doing this once would have gathered no notice. Twice, and the grumbling began. Three times, and people began to wonder whether he had made a conscious decision to reword this founding document, presumably for the purpose of political correctness.

Another misstep came in his speech in Indonesia a month ago, when Obama told the audience that America’s national motto was E Pluribus Unum, or “Out of Many, One.” Of course, this is incorrect: the national motto, since 1956, is “In God We Trust….”

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., History, Office of the President, Politics in General, President Barack Obama, Religion & Culture

RNS–Obama, in shadow of worrisome polls, embraces 'Christian' label

When President Obama lit the National Christmas Tree behind the White House last year, he spoke of a “child born far from home” and said “while this story may be a Christian one, its lesson is universal.”

This year, Obama referenced that same “child born far from home,” but added a more personal twist: “It’s a story that’s dear to Michelle and me as Christians.”

Three days later, at a Christmas benefit concert, the president again talked about how the story of Christmas “guides my Christian faith.”

What changed? For one, three separate polls in the past year have found that one in four Americans think the president is a Muslim, 43 percent don’t know what faith he follows, and four in 10 Protestant pastors don’t consider Obama a Christian.

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I will take comments on this submitted by email only to at KSHarmon[at]mindspring[dot]com.

Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., Office of the President, Politics in General, President Barack Obama, Religion & Culture

The Hill: Senate Democratss unveil $1.1T spending bill

Senate Democrats have filed a $1.1 trillion omnibus spending bill that would fund the government through fiscal year 2011, according to Senate GOP sources.

The 1,924-page bill includes funding to implement the sweeping healthcare reform bill Congress passed earlier this year as well as additional funds for Internal Revenue Service agents, according to a senior GOP aide familiar with the legislation.

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Posted in * Economics, Politics, Budget, Economy, Office of the President, Politics in General, President Barack Obama, Senate, Taxes, The U.S. Government

(Washington Post) Robert Samuelson: Supersized government?

People who wonder what America’s budget problem is ultimately about should look to Europe. In the streets of Dublin, Athens and London, angry citizens are protesting government plans to cut programs and raise taxes. The social contract is being broken. People are furious; they feel betrayed.

Modern democracies have created a new morality. Government benefits, once conferred, cannot be revoked. People expect them and consider them property rights. Just as government cannot randomly confiscate property, it cannot withdraw benefits without violating a moral code. The old-fashioned idea that government policies should serve the “national interest” has given way to inertia and squatters’ rights.

One task of the National Commission on Fiscal Responsibility and Reform ”” co-chaired by Erskine Bowles and Alan Simpson ”” was to discredit this self-serving morality. Otherwise, changing the budget will be hard, maybe impossible. If everyone feels morally entitled to existing benefits and tax breaks, public opinion will remain hopelessly muddled: desirous in the abstract of curbing budget deficits but adamant about keeping all of Social Security, Medicare and everything else. Politicians will be scared to make tough decisions for fear of voter reprisals.

Unfortunately, Bowles and Simpson ducked this political challenge….

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., Economy, Europe, House of Representatives, Office of the President, Politics in General, President Barack Obama, Psychology, Senate, The National Deficit, The U.S. Government

(Reuters) Larry Summers: Recession risk without tax deal

Failure by the U.S. Congress to pass a tax cut deal soon would “materially increase” the risk of the economy stalling and a double dip recession, White House economic adviser Larry Summers said on Wednesday.

Summers, who is leaving his post as Obama’s top economic adviser this month, said Obama’s deal with Republicans to extend Bush-era tax cuts for the middle class and the wealthiest Americans would provide more fiscal support for the economy than most observers expected only weeks ago.

“Failure to pass this bill in the next couple weeks would materially increase the risk that the economy would stall out and we would have a double-dip,” Summers told reporters at the White House.

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Posted in * Economics, Politics, Consumer/consumer spending, Corporations/Corporate Life, Economy, House of Representatives, Office of the President, Personal Finance, Politics in General, President Barack Obama, President George Bush, Senate, Taxes, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government

Obama Administration wants Fannie and Freddie to join program to cut underwater Mortgage Balances

The Obama administration is pressuring Fannie Mae and Freddie Mac, through their primary regulator, the Federal Housing Finance Agency. The administration wants the firms to join a program run by the Federal Housing Administration that allows banks and other creditors, which agree to write down mortgages, to essentially hand off the reduced loans to the FHA.

Federal officials estimate that 500,000 to 1.5 million homeowners could benefit from the program””a fraction of the estimated 11 million borrowers who were underwater as of June 30, according to CoreLogic Inc. That figure represents about 23% of all U.S. households with a mortgage.

Industry executives say the FHA program””as well as a related initiative by Treasury””will be only marginally helpful to the housing market without the participation of Fannie Mae and Freddie Mac. The program completed three loan modifications during its first three months and received 61 applications

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Posted in * Economics, Politics, Economy, Housing/Real Estate Market, Office of the President, Politics in General, President Barack Obama, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government

(London) Times Editorial: WikiLeaks’ latest revelation is an invitation to kill

Is WikiLeaks a serious journalistic enterprise or a wrecking party? The organisation had given the impression that it had been trying to be more responsible in the past month, after having been accused of endangering the lives of US troops and their helpers by releasing the Afghanistan war logs. But yesterday’s publication of a list of facilities deemed vital to US national security is a step back in the wrong direction. There is a dangerous nihilism in the refusal to distinguish between information that embarasses the powerful, and information that potentially puts lives at risk.

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., Blogging & the Internet, Defense, National Security, Military, Economy, Foreign Relations, Globalization, Office of the President, Politics in General, President Barack Obama, Science & Technology, Terrorism, The U.S. Government

Washington Post–Tax-cut deal reached between Obama, Republicans

President Obama and congressional Republicans agreed Monday to a tentative deal that would extend for two years all the Bush-era income tax breaks set to expire on Dec. 31, continue unemployment benefits for an additional 13 months and cut payroll taxes for workers to encourage employers to start hiring.

The deal has been in the works for more than a week and represents a concession by Obama to political reality: Democrats don’t have the votes in Congress to extend only the expiring income tax breaks that benefit the middle class. The White House estimates that the proposed agreement would prevent typical families from facing annual tax increases of about $3,000, starting Jan. 1.

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Posted in * Economics, Politics, Budget, Consumer/consumer spending, Corporations/Corporate Life, Economy, House of Representatives, Office of the President, Politics in General, President Barack Obama, President George Bush, Senate, Taxes, The National Deficit, The U.S. Government

(Bloomberg) Payroll Tax Holiday Discussed in Talks on Bush Rates

The Obama administration proposed a year-long reduction in payroll taxes of 2 percentage points as part of a broader compromise to extend Bush-era tax cuts temporarily, a congressional aide said.

The proposed reduction was offered as an alternative to renewing the “Making Work Pay” tax credit, a creation of President Barack Obama that expires Dec. 31 along with lower income-tax rates enacted in 2001 and 2003, the aide said, speaking on condition of anonymity. Some Senate Republicans oppose the credit.

Negotiators also are discussing including Obama’s proposal to allow a full deduction for equipment purchases that currently must be deducted over time, an administration official said. The proposal would accelerate $200 billion in tax savings for companies in the first year and benefit 1.5 million companies and several million individuals who run businesses, according to White House estimates.

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Posted in * Economics, Politics, Budget, Economy, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, Taxes, The National Deficit, The U.S. Government

(WSJ) Bid to Keep Tax Cuts For Middle Class Fails

The U.S. Senate on Saturday defeated two attempts by Democrats to extend the Bush-era tax cuts for the middle classes permanently, in rare weekend votes that likely had little effect on wider negotiations to reach a compromise about extending the tax cuts.

The Senate voted 53-36 to reject an attempt to initiate debate in the chamber on a measure that would have extended lower tax rates for individuals who earn less than $200,000 and couples earning less than $250,000.

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Posted in * Economics, Politics, Budget, Economy, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, Taxes, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government

US Deficit-Cutting Plan Falls Short of Needed Votes

A bold plan to slash the U.S. budget deficit fell short Friday of winning support needed from a presidential commission to trigger congressional action, but it was expected to help shape future budget debates.

The plan found more backing than many anticipated, from Democrats and Republicans, and parts of it could be used in President Barack Obama’s next budget, due in February, as well as in congressional proposals to follow.

A formal commission vote did not occur, but 11 members said they supported the plan and seven said they did not. It needed 14 votes to be sent to Congress for legislative action.

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Posted in * Christian Life / Church Life, * Culture-Watch, * Economics, Politics, Consumer/consumer spending, Corporations/Corporate Life, Economy, House of Representatives, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Office of the President, Parish Ministry, Politics in General, President Barack Obama, Psychology, Senate, Stewardship, The National Deficit, The U.S. Government

Persistence of Unemployment Likely to Test the U.S.

The longer people stay out of work, the more trouble they have finding new work.

That is a fact of life that much of Europe, with its underclass of permanently idle workers, knows all too well. But it is a lesson that the United States seems to be just learning.

This country has some of the highest levels of long-term unemployment ”” out of work longer than six months ”” it has ever recorded. Meanwhile, job growth has been, and looks to remain, disappointingly slow, indicating that those out of work for a while are likely to remain so for the foreseeable future. Even if the government report on Friday shows the expected improvement in hiring by business, it will not be enough to make a real dent in those totals.

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Posted in * Economics, Politics, * International News & Commentary, America/U.S.A., Consumer/consumer spending, Corporations/Corporate Life, Economy, Federal Reserve, House of Representatives, Labor/Labor Unions/Labor Market, Office of the President, Politics in General, President Barack Obama, Senate, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government, Treasury Secretary Timothy Geithner

Mort Zuckerman–The deficits we face are a dagger pointing at the heart of the American economy

The global prosperity of much of the 20th century would seem to belie the pessimists, but I don’t think there is much doubt the moral authority of the West has dramatically declined in the face of the financial crisis. It has revealed deep fault lines within Western economies that have spread to the global economy.

The majority of Western governments are running fiscal deficits of 10 percent or more relative to GDP, but it is increasingly clear that there will be no quick fixes, that big government and fiscal deficits will not bring us back to the status quo ante. Indeed, the tidal wave of red ink has meant that the leverage-led or debt-led growth model is dead.

Developed countries will be forced to deal with their debt on every level, from the personal to the corporate to the sovereign. Being able to borrow may have made people feel richer, but having to repay the debt is certainly making them feel poorer, particularly since the unfunded liabilities that many governments face from aging populations will have to be paid for by a shrinking band of workers.

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Posted in * Culture-Watch, * Economics, Politics, * International News & Commentary, America/U.S.A., Budget, Consumer/consumer spending, Corporations/Corporate Life, Economy, Federal Reserve, Globalization, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, Social Security, Taxes, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government, The United States Currency (Dollar etc)

Delaying Vote, Debt Panel Splits on Taxes and Spending

The chairmen of President Obama’s debt-reduction commission have been unable to win support from any of the panel’s elected officials for their proposed spending cuts and tax increases, underscoring the reluctance of both parties to risk short-term political backlash in pursuit of the nation’s long-term fiscal health.

The chairmen of the commission ”” former Senator Alan K. Simpson, a Republican, and Erskine B. Bowles, a Democrat and former chief of staff to President Bill Clinton ”” delayed for two days, until Friday, a final vote by its 18 members.

They said the delay was to provide more time to look at the final package, but it also gave them further opportunity to woo some of the 12 members of Congress on the commission, six from each party, whose support will be critical if the plan is to be taken seriously as a blueprint for eventual legislation.

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Posted in * Economics, Politics, Budget, Economy, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, Social Security, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The U.S. Government, The United States Currency (Dollar etc)

Cities sweat funding as Congress picks over 'earmarks'

Cities are bracing to lose millions of dollars in funding for transportation and community projects, from subway lines to youth centers, because of a renewed push in Congress to ban lawmaker-directed spending known as “earmarks.”

With the incoming Republican majority in the House of Representatives committed to ending the practice and the Senate facing a vote to ban earmarks today, local officials are scrambling to find ways to pay for projects in case the federal funding never arrives.

Spending bills in the House for the 2011 fiscal year include more than 3,000 earmarks worth $3 billion, according to the budget watchdog Taxpayers for Common Sense ”” from $2.5 million for a transportation center in Rochester, N.Y., to $250,000 for park upgrades in Gonzales, La.

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Posted in * Economics, Politics, City Government, Consumer/consumer spending, Corporations/Corporate Life, Economy, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, Taxes, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government

Peter Wallison and Edward Pinto–How the Government Is Creating Another Housing Bubble

It is hard to believe, but it looks like the government will soon use the taxpayers’ checkbook again to create a vast market for mortgages with low or no down payments and for overstretched borrowers with blemished credit. As in the period leading to the 2008 financial crisis, these loans will again contribute to a housing bubble, which will feed on government funding and grow to enormous size. When it collapses, housing prices will drop and a financial crisis will ensue. And, once again, the taxpayers will have to bear the costs.

In doing this, Congress is repeating the same policy mistake it made in 1992. Back then, it mandated that Fannie Mae and Freddie Mac compete with the Federal Housing Administration (FHA) for high-risk loans. Unhappily for both their shareholders and the taxpayers, Fannie and Freddie won that battle.

Now the Dodd-Frank Act, which imposed far-reaching new regulation on the financial system after the meltdown, allows the administration to substitute the FHA for Fannie and Freddie as the principal and essentially unlimited buyer of low-quality home mortgages. There is little doubt what will happen then.

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Posted in * Culture-Watch, * Economics, Politics, Economy, House of Representatives, Housing/Real Estate Market, Law & Legal Issues, Office of the President, Politics in General, President Barack Obama, Senate, The 2009 Obama Administration Housing Amelioration Plan, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government

Sheila C. Bair: Will the next fiscal crisis start in Washington?

Even as work continues to repair our financial infrastructure and get the economy moving again, we need urgent action to forestall the next financial crisis. I fear that one will start in Washington. Total federal debt has doubled in the past seven years, to almost $14 trillion. That’s more than $100,000 for every American household. This explosive growth in federal borrowing is a result of not just the financial crisis but also government unwillingness over many years to make the hard choices necessary to rein in our long-term structural deficit.

Retiring baby boomers, who will live longer on average than any previous generation, will have a major impact on government spending. This year, the combined expenditures on Social Security, Medicare and Medicaid are projected to account for 45 percent of primary federal spending, up from 27 percent in 1975. The Congressional Budget Office projects that annual entitlement spending could triple in real terms by 2035, to $4.5 trillion in today’s dollars. Defense spending is similarly unsustainable, and our tax code is riddled with special-interest provisions that have little to do with our broader economic prosperity. Overly generous tax subsidies for housing and health care have contributed to rising costs and misallocation of resources.

Unless something is done, federal debt held by the public could rise from a level equal to 62 percent of gross domestic product this year to 185 percent in 2035. Eventually, this relentless federal borrowing will directly threaten our financial stability by undermining the confidence that investors have in U.S. government obligations….

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Posted in * Economics, Politics, Budget, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Currency Markets, Economy, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, Social Security, Taxes, The National Deficit, The U.S. Government, The United States Currency (Dollar etc)

Obama needs to strike delicate balance on Islam

The fact that nearly 20% of Americans say that President Obama is a Muslim has certainly not kept him from talking to Muslims. Just in the past week, the president gave his second major address to the Muslim world, and issued greetings to Muslims for Eid-ul-Adha, the celebration of Abraham’s “willingness to sacrifice his son.” Even in this small act of presidential courtesy, however, Obama had to tread very carefully. Note that the administration did not include the name of Abraham’s son. Muslims believe that Abraham was willing to sacrifice Ishmael, while the Jewish and Christian Scriptures contend that it was Isaac ”” indeed, this is one of the most fundamental divergences between these religious traditions. The president wants to acknowledge the Muslim holiday, without exacerbating religious tensions.

In matters large and small, Obama has to strike a delicate balance regarding Islam. It is not that he has taken an unprecedented interest in Islam: President Thomas Jefferson had his copy of the Quran, and President George W. Bush discussed Islam just as much as Obama. But because of the ongoing war against jihadist terror, the controversy about the Ground Zero mosque, and especially because of persistent (if absurd) rumors about the president’s own faith, Obama has a special burden to carry about Islam. He must communicate that America’s millions of Muslims are fully welcome here, and that America is not at war with the Muslim community at large. Yet he must also maintain moral clarity about the menace of jihadist terrorism.

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Posted in * Culture-Watch, * Economics, Politics, * Religion News & Commentary, Foreign Relations, Islam, Office of the President, Other Faiths, Politics in General, President Barack Obama, Religion & Culture, Terrorism

WSJ: Fan and Fred's New Boss

Given previous comments by Mr. Smith, taxpayers may soon be longing for the return of acting FHFA director Edward DeMarco. The Journal reports that, at a 2007 Senate hearing, Mr. [Joseph] Smith blamed predatory lenders and a lack of federal regulation for the housing crisis. Blaming the bankers and calling for more bureaucracy will earn Mr. Smith plenty of new Beltway friends, but if he remains unaware of the myriad steps regulators took to inflate the credit bubble and misallocate capital into housing, then no one should expect him to drive reform.

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Posted in * Economics, Politics, Economy, Housing/Real Estate Market, Office of the President, Politics in General, President Barack Obama, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government