Obama and Republican Leaders Put American on Road to Recovery - image csmonitor
The Senate effectively squashed a 1.3 trillion dollar “budget” that was laden with earmarks after Senate Minority Leader, Mitch McConnell (R-KY) handed Senate Majority Leader, Harry Reid (D-NV) the option of continuing operations until the Senate reconvenes in January . The government has run on this type of spending measure since early this year, as Democrats have failed to put together a budget. The Omnibus Bill that Senate Democrats had attempted to ram through in a lame-duck session, included 1900 plus pages and $1.3 trillion dollars in spending, which lawmakers would not have had time to read or debate before the end of this session. Massachusetts Senator John Kerry (D), yesterday asked why lawmakers in the Senate would need to read the bill (video of Kerry included:source Real Clear Politicts) – a comment that was earnest in his support for earmarks and spending projects hoped for by Democrats and some Republicans prior to the Congress changing hands with a fiscally restrained Republican Majority in January. Of import to Kerry were several items in the bill, including $8 million in spending for the Kennedy Institute in DC as well as $600,000 to study scallops! When the nation’s taxpayers are tightening their belts, and doing without, these types of debt heavy projects, adding to future individual tax burdens, are a slap in the face of Kerry’s and like-minded Lawmakers on Capitol Hill’s constituents.
After dropping the budget, the Senate and Congress agreed in a show of bipartisanship rarely seen in Washington since 2006 when the Democrats took control of both Houses, a bill to extend the Bush tax cuts, and additional tax cuts proposed by President Obama, was passed at midnight and sent to President Obama for his signature. The bill, worked out between the Obama administration and Republican members of the House and Senate, includes an extension of unemployment benefits in 26 states that participate in the Federal program for up to 13 months at a time when the unemployment rates is near 10%. With the tax cuts extended for two years, businesses that have been holding back on hiring, should begin to hire, incentives are included for new businesses that would add additional private sector jobs badly needed to support the government in new tax revenue. The tax cuts combined with the unemployment benefits are projected to add $800 billion to the deficit, however, that projection may change as entrepreneurs and small businesses develop (and pay taxes) and all businesses hire employees (more taxes from employees), effectively reducing the unemployment rolls (reduction in Federal Spending).
One cannot anticipate an overnight “fix”, however, as with previous tax cuts, the unemployment rate and increase in Federal and State Revenues were realized within a one to two year time frame. That said, with the elimination of a pork laden budget, which will be revised with the Congress reconvenes in January under new Republican leadership, with promises from Speaker Boehner (D-OH), to introduce spending cuts by the week, while producing a budget that is fiscally responsible, coupled with tax cuts designed to boost hiring on the parts of business and spending on the part of consumers with more money in their pocket, the process of recovery may be expedited.
The following year should be one which keeps those watching the Capitol on their toes, as Obama appears to be more than willing to work with the new majority who has indicated they will do the same, running the government as it should be, on compromise and openness with the American Public. However, once the 2012 campaign season kicks off – it may be difficult for those who will be on the campaign trail (including the President, all members of Congress, and over half of the Senate) to maintain this level of bipartisanship, or have the time to accomplish much while the various members are on recess to campaign. In that wise, the American taxpayer receives a double bonus, as a government that is run on a premise of fiscal responsibility for a year, will have the same cast of characters in 2012 that are adverse to passing bills without a thorough reading and debate.
The healing has begun and will continue with the new Congress in the first week of January 2011. That said, one issuer to see headlines regarding Ms. Pelosi and Mr. Reid, espousing the “tax the rich” dogma, and attempting to stymie the Republicans from effectively downsizing government at every turn. It is, without the majority Democrats enjoyed for four years, akin to making a lot of noise and spitting into the wind while the Republicans and those likeminded Democrats govern with the President. It will be interesting to see which side the press of the nation takes, as this unfolds, one would have to lay odds against the President and the Republican controlled Congress – chances are that Pelosi and Reid will receive a great deal more airtime complaining about everything and anything. Not exactly the best strategy for winning hearts and minds for the “Progressive” cause of big government.
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