Clown Magic - A New Style Of Governance

Obama and our Congressional Democrats have leapt beyond smoke and mirrors, they have run past the zone of Orwell, and they have now moved into the previously uncharted territory of governing by . . . Clown Magic. It is when they spend us into oblivion and, at the same time, claim the mantle of fiscal responsibility.

A few days ago, the left passed Pay As You Go Legislation, requiring Congress to stop borrowing and pay for new programs by spending cuts or tax increases. As Obama signed it into law, the Congressional Democrats turned out in force to parade before the cameras in their newly bought fiscal hawk costumes. Obama got in front of a camera and waxed eloquent about this watershed development in Democratic fiscal restraint.



Well, you might ask, can't Congress pay for new programs without having to write it into legislation? I mean, there isn't Tony Soprano or some union thug thug hanging around Congress with a gun forcing Nancy Pelosi and Harry Reid to pen spending that vastly exceeds our national bank account, is there?

No, of course not. And sure, this Congress could limit their spending without any need for legislation. But this is Clown Magic - what you see in the left hand is anything but the reality that is palmed out of camera shot in the right. The legislation passed by the left and signed by Obama didn't just have Pay As You Go in there, it also had a provision raising the debt ceiling for our national government by a whopping $1.9 trillion, bringing our debt ceiling to a grand total of $14.3 trillion. Not surprisingly, after telling us all about this new-found Democratic commitment to fiscal restraint, Obama forgot to mention the near $2 trillion in borrowing he and his Democrats just authorized. And he took no questions. It was Clown Magic indeed.

But the Clown Magic doesn't stop there by any means. Here we are but a few days after Congress passed Pay-Go and Obama wants a new "Jobs Bill." So what's the first thing Nancy Pelosi does in the House? Why she passes a $155 billion dollar jobs bill through the House - and then exempts a third of it from Pay As You Go. Hah. You would think that she and Harry Reid would at least wait a week or so before publicly violating the provisions of Pay As You Go - you know, just to keep up the pretenses. But they didn't even let the ink dry on the bill before throwing it under the bus - where it will no-doubt remain until October 2010, when it will be picked up, hosed off and made presentable for the cameras yet again..

The problem with Clown Magic is that, even when practiced by skilled, professional Democratic clowns, like all magic, once you see the device, it really doesn't work. That is the case with the old stimulus bill of a year ago that was supposed to create jobs hand over fist. And, no surprise, using Clown Magic accounting, it has - to the tune of two million jobs according to the White House. Unfortunately for the Democrats, it seems the people have seen the device on that one. Only 6% of those surveyed in a CBS-NYT poll taken within the last two weeks thought that the stimulus had created job one.

Let that sink in. Six Percent.

Heck, just put together the employees of the DNC, Acorn and the SEIU and that's closing in on 7% of the electorate. Apparently even some of them aren't buying it. That is a real problem for Democrats.

And as unfortunately for them, Head Clown Pelosi in the House only knows a few tricks. She has crafted a $155 billion dollar "jobs bill." Despite its name, the bill devotes less than 1/4 of 1% of its spending to small business loans. The rest is pork - - - and includes the doctor fix for medicare that the left took out of Health Care Plan so that they could claim fiscal responsibility on that one.

You might wonder about how a "jobs bill" could pass with so little devoted to small business, since small businesses are responsible for over 80% of new job creation in America. But that is the beauty of Clown Magic - the only things that matter are the name and the spin, not the reality. McQ at Q & O both explains that the bill is just a small version of Stimulus I and he itemizes the bill.

It will only be a few more months before we know if the public has seen the device on the Jobs bill - and all of the above really. This is unique, as never before in our history has an administration tried to govern by Clown Magic. We'll see how it works out for them - though I don't personally see this ending well.

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Pulling Defeat From The Jaws Of Victory

Obama campaigned to the center, he is governing from the far left. And it is clear that his major policies are not supported by the majority of Americans. As the election of Scott Brown to the Kennedy's ancestral seat punctuated, the public is delivering a backlash. What has the GOP done to further that backlash for the past year? Absolutely nothing. Which is precisely what they should have been doing. When your opponent is committing suicide, you stand out of the way. What you don't do is give them the number to the suicide hotline and hire them a publicist who will blame the suicide attempts on you.

But that is just what it seems our GOP is doing. The only way Obama will be able to salvage the 2010 and 2012 elections will be if he succeeds in painting himself as reasonable and the Republicans as obstructionists - or, if in an act of insanity, the Republicans become complicit in Obama passing his socialist agenda into law, either by joining in or refusing to filibuster. In this regard, meeting with Obama on the left's health care legislation and allowing "Pay As You Go" legislation to escape Congress without a filibuster are just mind numbingly stupid errors.

I recently blogged on why the GOP should reject Obama's offer to meet on the health care monstrosity and how they should make a counteroffer to meet on deficit reduction and spending excess. But it seems that the GOP is planning to attend, regardless. They are insane.

And now we have Obama signing Pay as You Go legislation into law today. Pay As You Go was passed on a party line vote a few days ago, along with an increase in the national debt ceiling. If any piece of legislation deserved to be filibustered, it was that piece of Orwellian dribble. I have blogged on this legislation here and here. Pay as You Go does nothing towards imposing fiscal responsibility, it provides a smoke screen for Democrats both to claim fiscal responsibility and to justify tax increases, and because of the accounting rules of the CBO, it makes it virtually impossible for future Congresses to enact tax cuts. So it was both a propaganda victory for the left, a way to deflect attention from another increase in the national debt ceiling, and a brake on conservatives. That is a big win for the left. Way to go GOP.

If the GOP doesn't have the backbone to explain to America why they are filibustering a piece of horrendous legislation, if they think not using the filibuster will protect them from the left demagouging the issue, they are utterly insane. Obama is on the defensive and the GOP is demurring because they think the public is too stupid to understand reality. These jokers will pull defeat from the jaws of victory between now and November, I am sure of it.

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The Orwell-Obama-Hoyer Pay As You Go Legislation

Democrats won't be the party of deficits.

Rep. Steny Hoyer (D-Md), Congress Must Pay for What It Spends, WSJ, 25 June 2009

To see Democrats at their most Orwellian, no need to go further today than Steny Hoyer in the WSJ, shilling for Obama's "pay-go" legislation and blaming all deficits on a combination of profligate Bush spending and "reckless" Bush tax cuts. As the Wall St. Journal's senior economic writer, Stephen Moore, explained in a recent interview:

President Obama can read the opinion polls, and he is seeing what we've been talking about every night, which is the American people are absolutely incensed about the debt that's going on in this country. And so now President Obama is trying to sound like a born-again deficit hawk.

The difference between Obama's words and deeds is a vast and yawning chasm. It is true that the greatest sin of post-Reagan era Republicans has been to jettison fiscal discipline. It is a fundamental failure that has allowed the left to paint Republicans as hypocrites. But for the left to claim the mantle of "fiscal discipline" for themselves is to pass beyond the bounds of any reasonable definition of the word "hypocrisy" and enter into Orwellian space. But that is precisely where Hoyer, on behalf of Obama, takes us today.

The Hoyer article deserves a full roasting, so here goes.

In recent years, America's fiscal story has been one of steady decline -- from record surpluses to record deficits. In 2001, the federal government had a projected 10-year surplus of $5.6 trillion. Today, we are looking at a fiscal year 2009 deficit of $1.7 trillion.

"Steady decline?" In other words, today's multi-trillion dollar deficit is the natural evolution of the Bush years? The actual budget deficit in 2006, before Pelosi, Reid and the Democrats took control of the purse strings, was $248 billion. The only way you go from that to a $1.75 trillion deficit in 2009 and describe it as a "steady decline" is to redefine the word "steady" to mean "fell off a cliff."

Further, the Clinton surplus was the function of an accounting gimmick with Social Security enacted during the 90's. Social Security surpluses of those years - and continuing through today - were used to buy government bonds, thus making the annual revenues a part of the general funds of Congress (and that a profligate Congress spent wholesale every year). It was and is a vast Ponzi scheme. Our actual national debt increased every year under Clinton. Social Security is now a time bomb set to blow up because the left in Congress refused to do anything about it. The huge number of baby boomers who gave the government the illusion of surpluses in the Clinton years are starting to make claims on the system that will steadily grow and overwhelm the system in just a few years.

A number of factors have brought us to this cash-strapped point, including reckless tax cuts, the cost of two wars, entitlement programs that have grown on autopilot, and the necessary, though costly, efforts to get our economy out of recession.

Wow. There is not a shred of intellectual honesty in that sentence.

1. Bush's tax cuts not only raised tax revenues because of an expanding tax base, they did so at the greatest rate in our nations history.


That was completely predictable from the historical data we have on the effect of tax cuts on the American economy during the 1920's, 60's and 80's..

2. The cost of the two wars we are fighting added to our deficit, but pale in comparison to real culprit, the growth in domestic spending. To put this in perspective, the total cost of the Iraq War from 2003 to 2008 was $551 billion dollars. Obama quadrupled that in his first hundred days with massive domestic spending - which, as an important aside, he did at the cost of our national defense. His budget reduces defense-related R&D, cuts major weapons systems, cuts missile defense, and holds defense spending below inflation, resulting in an ever-shrinking defense budget. As Michael O'Hanlon wrote in the Washington Post:

After three months of very impressive decisions regarding national security, President Obama made perhaps his first significant mistake. It concerns the defense budget, where his plans are insufficient to support the national security establishment over the next five years.

The truth of our deficits is ever increasing profligate spending above tax receipts on the domestic front - something Obama has just put on steroids.

3. The entitlement programs didn't grow on auto-pilot. "Auto-pilot" suggests that no one has attempted to curb the growth. The truth is that Steny Hoyer and the left beat back every attempt at reforming Social Security. Does this look like "auto-pilot" to you.



4. The massive spending by Obama was not "necessary" to get our economy out of recession. It was a choice the left made to fund every liberal special interest program they could think of under the rubric of Keynesian economics. Other alternatives to stimulate the economy were equally viable, but none offered the left a chance to go hog wild at the public trough.

But by far the worst decision was the abandonment in the Bush years of the principle that our country should pay for what it buys. It's time to learn from that error and establish that principle in law. President Obama has made the pay-as-you-go rule -- a.k.a. "paygo" -- a central part of his campaign for fiscal responsibility. Under paygo, Congress is compelled to find savings for the dollars it spends.

This is a joke, right? True, Bush and the Republican Congress deserve opprobrium for their lack of fiscal discipline. But their lack of discipline is infinitesimal compared to Obama and the far left who control Congress and the purse strings today. In this instance, a WaPo graph is worth nine trillion words:


The truth is that this pay-go legislation is a penultimate act of political cynicism. Its the left trying to cover-up their Obama Gone Wild spending spree by turning reality on its head. There are two truths to this snake oil Steny Hoyer is peddling. The "pay-go" legislation Hoyer is hawking specifically exempts Obama's multi-trillion dollar pet projects from its restrictions. It will provide cover for the largest planned expansion of spending and borrowing in our nation's history. It's only practical effect beyond pure propaganda for Obama will be to make tax cuts a thing of the past.

In the 1990s, paygo proved to be one of our most valuable tools for climbing out of a budgetary hole. As President Obama put it earlier this month, "It is no coincidence that this rule was in place when we moved . . . to record surpluses in the 1990s -- and that when this rule was abandoned, we returned to record deficits that doubled the national debt."

President George W. Bush and the Republican Congress set paygo aside, turning borrowed money into massive tax cuts for the most privileged. Borrowing made those tax cuts politically pain-free as long as Mr. Bush was in office, but it only passed the bill on to the next generation -- along with ever-inflating interest payments.

As I indicated above, a good part of the budget "surpluses" of the 1990's were nothing more than accounting changes that, in essence, made of Social Security a ponzi scheme. To the extent there was any fiscal discipline, it was the discipline imposed by Newt Gingrich and the House on the Clinton administration. As discussed in the quote below, pay-go legislation played little if any role in imposing fiscal discipline during the 90's as it was regularly ignored under House rules.

Pay-go was terminated in 2001 to allow for the Bush tax cuts - and you can see the result in the graph above. We didn't lose revenues, we gained them on a historic scale. Yet under pay-go, the math would have ignored this historical certainty and required massive cuts in spending to enact the tax cuts. Pay-go, since revived by Pelosi as a House rule in 2007, has been equally ineffective. It has been regularly ignored whenever convenient for Democrats - such as, for example, when passing Obama's massive 9,000 ear-mark strong "stimulus" package. This from Brian Riedl at the Heritage Foundation:

PAYGO has proven to be more of a talking point than an actual tool for budget discipline. During the 1991-2002 round of statutory PAYGO, Congress and the President still added more than $700 billion to the budget deficit and simply cancelled every single sequestration. Since the 2007 creation of the PAYGO rule, Congress has waived it numerous times and added $600 billion to the deficit.

Creating a PAYGO law and then blocking its enforcement is inconsistent and hypocritical. And given their recent waiving of PAYGO to pass a $1.1 trillion stimulus bill, there is no reason to believe the current Congress and the President are any more likely to enforce PAYGO than their predecessors were. And even if it were enforced, PAYGO applies to only a small fraction of federal spending (new entitlements). Consequently, PAYGO is merely a distraction from real budget reforms that could rein in runaway spending and budget deficits.

You can read the rest of Mr. Hoyer's Orwellian scratchings here. Pay-go legislation really is political cynicism taken to its zenith. And neither Steny Hoyer nor Obama display the least bit of intellectual honesty in pushing it as political cover for an experiment in deficit spending that could truly doom our economy.

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The 'Pay-go" Cover-up

"Pay As You Go" is a massive fraud Obama is playing on the American people. I blogged below, in "Just How Orwellian Is This - 'Obama To Claim Mantle Of Fiscal Responsiblity,'" that Obama's proposed "pay as you go" legislation has massive loopholes allowing him to forego paying for all of the massive debt we are about to take on as a result of his planned social programs. It is pure smoke and mirrors being used to paint the utter profligacy of Obama as "fiscal responsiblity." I also pointed out another aspect of such legislation - that it makes it near impossible to institute tax cuts of the type that have raised revenue every time they have been tried. Now the WSJ chimes in, making the same points:

This from the WSJ:

Some things in politics you can't make up, such as President Obama's re-re-endorsement Tuesday of "pay-as-you-go" budgeting. Coming after $787 billion in nonstimulating stimulus, a $410 billion omnibus to wrap up fiscal 2009, a $3.5 trillion 2010 budget proposal, sundry bailouts and a 13-figure health-care spending expansion still to come, this latest vow of fiscal chastity is like Donald Trump denouncing self-promotion. . . .

But Mr. Obama must think the press and public are dumb enough to buy it, because there he was Tuesday re-selling the same "paygo" promises that Democrats roll out every election. Paygo is "very simple," the President claimed. "Congress can only spend a dollar if it saves a dollar elsewhere."

That's what Democrats also promised in 2006, with Nancy Pelosi vowing that "the first thing" House Democrats would do if they took Congress was reimpose paygo rules that "Republicans had let lapse." By 2008, Speaker Pelosi had let those rules lapse no fewer than 12 times, to make way for $400 billion in deficit spending. Mr. Obama repeated the paygo pledge during his 2008 campaign, and instead we have witnessed the greatest peacetime spending binge in U.S. history. As a share of GDP, spending will hit an astonishing 28.5% in fiscal 2009, with the deficit hitting 13% and projected to stay at 4% to 5% for years to come.

The truth is that paygo is the kind of budget gimmick that gives gimmickry a bad name. As Mr. Obama knows but won't tell voters, paygo only applies to new or expanded entitlement programs, not to existing programs such as Medicare, this year growing at a 9.2% annual rate. Nor does paygo apply to discretionary spending, set to hit $1.4 trillion in fiscal 2010, or 40% of the budget.

This loophole matters, because on the very day Mr. Obama was hailing paygo the House Appropriations Committee was gleefully approving a 12% increase in 2010 nondefense discretionary spending, the third year running that Democrats have proposed double-digit increases. Or consider that the 2010 budget resolution included a $2 billion increase for low-income heating assistance as an entitlement change that should be subject to paygo. But Congressional Democrats simply classified it as discretionary spending, thereby avoiding the need for $2 billion in cuts elsewhere. C'est-la-paygo.

Mr. Obama's new proposal includes even more loopholes. There's an exception for Congress's annual alternative-minimum tax "patch," which is worth at least $576 billion over 10 years; for any of the Bush tax cuts that Mr. Obama decides he wants to extend past 2010; and to protect against planned cuts in Medicare doctor payments. These carve-outs alone spare Democrats from having to come up with some $2.5 trillion in spending cuts or new taxes. To add insult to profligacy, the rules also allow the Administration to run huge early deficits for its looming health-care bonanza, and only pay for it later -- say, after 2012. . . .

The real game here is that the President is trying to give Democrats in Congress political cover for the health-care blowout and tax-increase votes that he knows are coming. . . .

The other goal of this new paygo campaign is to make it easier to raise taxes in 2011, and impossible to cut taxes for years after that. . . . In the longer term, if a GOP Congress or President ever want to cut taxes, paygo applies a straitjacket that pits those tax cuts against, say, spending cuts in Medicare. The Reagan tax reductions would never have happened under paygo. . . .

Read the entire article.

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Just How Orwellian Is This - "Obama To Claim Mantle Of Fiscal Responsibility"

Obama is claiming the "mantle of fiscal responsibility?" Obama is to fiscal responsiblity what Bill Clinton is to chastity.

Yet according to Reuters, that is what is happening. Obama, the man who has brought us to the edge of financial ruin, the man who has quadrupled our national debt in just a few months, the man who added more to our national debt than all other presidents combined, now wants to "claim the mantle of fiscal responsiblity." Indeed, our Profligate Spender in Chief is now all set to claim said "mantle" by introducing "pay as you go" legislation. As Obama explained yesterday:

"The 'pay as you go' principle is very simple. Congress can only spend a dollar if it saves a dollar elsewhere," Obama said in a speech at the White House attended by several Democratic members of Congress.

Can this man be any more disingenuous? Shameless? Hypocritical?

Sure!!!

How, you ask. Simple - just a little smoke and mirrors. His "pay as you go" legislation come with special dispensation for Obama's proposed health care and other major plans. As the AP explains, Obama's "pay as you go" legislation . . .

. . . would carve out about $2.5 trillion worth of exemptions for Obama's priorities over the next decade. His health care reform plan also would get a green light to run big deficits in its early years. But over a decade, Congress would have to come up with money to cover those early year deficits.

The "mantle of fiscal responsiblity" indeed. This would make even George Orwell blush.

Is there anyone who believes the left would actually cut spending to add new social programs? Is there anyone who believes this will actually result in voluntary fiscal restraint in a decade, when Obama is safely out of office? Indeed, even as Ben Bernanke is sounding the alarms about the need to reduce the defecit now, Obama is planning for ever more spending on borrowed money - 2.7 trillion of it.

And lastly, the problem with this type of legislation is that it makes tax cuts that much harder to pass. But the truth is that cutting taxes has, every time it is tried, resulted in more tax revenues. This legislation is more designed to defeat Repulican attempts at tax cuts than it is at imposing fiscal discipline on the most undisciplined President and Congress our nation has ever known.

Obama is spending us into ruin. And he does so while the train whistle of economic disaster gets ever closer.

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