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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: Peter Dierks who wrote (47014)	11/9/2010 9:44:40 AM
From: Peter Dierks	1 Recommendation Respond to of 71588

Battles Loom Over Tax Breaks, Spending Cuts NOVEMBER 8, 2010. By JOHN D. MCKINNON And DAMIAN PALETTA Newly empowered Republicans pushed Sunday to extend Bush-era tax levels for as long as possible and pledged significant cuts in spending, as President Barack Obama sought to maintain his footing in an escalating budget battle. The fiscal fight over the coming weeks and months likely will be a crucial one for both sides, helping to set the policy and political tone for the next two years and beyond. House GOP Whip Eric Cantor and other lawmakers suggested that Republicans in the coming lame-duck session would press for a long-term extension of current tax levels for all earners, despite Democratic opposition. The Bush-era tax cuts expire Jan. 1 unless Congress acts before then. "I am not for sending any signal to small businesses in this country that they're going to have their tax rates go up," Mr. Cantor said on "Fox News Sunday." Republicans say raising tax rates on higher earners would hit about half of all small-business income. Democrats say that figure is inflated by some large businesses that are structured as small businesses. Sen. Orrin Hatch (R., Utah), who is expected to become the top Republican on the Finance Committee next year, said in an interview that he favored "at least a three-year extension" of all current tax levels, and five years if possible. He cited economists' expectation that growth and job creation are likely to remain soft for several years. For his part, Mr. Obama again signaled newfound flexibility on taxes over the weekend. But he maintained his opposition to any longer-term extension of the higher-earner breaks, setting up an early conflict with Republicans. In a post-election interview with "60 Minutes," Mr. Obama said "there's a basis for a conversation" when it comes to extending tax cuts temporarily for people who earn more than $200,000 and couples who earn more than $250,000 a year. That is a shift from his pre-election opposition to extending those cuts for higher earners. But in his weekly address Saturday, Mr. Obama again proposed a permanent extension of tax breaks for middle-class Americans, and rejected a permanent extension of higher-earner rates, citing deficit concerns. Republicans oppose extending higher-earner tax rates for a shorter period than middle-class rates, arguing it signals an eventual repeal of the higher-earner rates. GOP aides said the tax-cut debate might spill over into next year. For months, Democrats argued against extending the tax breaks for higher earners, pointing to deficit concerns. Republicans say raising the tax rates on anyone would restrain economic growth and heighten uncertainty. Spending curbs were emerging as the second phase of the budget battle, as the White House and new Congress confront a wide range of deficit-reduction proposals early next year, as well as a likely need to increase the federal debt ceiling. Mr. Cantor, the Virginia Republican who is likely to become House majority leader in January, said House Republicans planned to take concrete steps to cut spending before they were forced to vote on any increase in the debt ceiling. "We're going to have at least three to four months [to show] that this is a cost-cutting Congress," he said. But he said keeping the government operating and avoiding a shutdown was as much Mr. Obama's responsibility as Congress's. The federal debt is roughly $13.7 trillion, and administration officials believe they might hit the $14.3 trillion ceiling by May. The government can't issue more debt once it hits the ceiling, which can only be raised by Congress. Sen. Jim DeMint (R., S.C.), an influential tea-party favorite, suggested on NBC's 'Meet the Press" Sunday that he would only be open to voting to raise the debt ceiling if Congress had already agreed to make major cuts in spending and worked to balance the budget. Rand Paul, Kentucky's newly elected GOP senator and another tea-party favorite, said he would advocate an immediate 5% across-the-board spending cut for all federal departments, including the Pentagon. "It's not a revenue problem," he said in response to a question on ABC's "This Week" about whether he would support raising taxes. "It's a spending problem." Rep. Paul Ryan (R., Wis.), who is expected to become chairman of the Budget Committee when Republicans take control of the House next year, targeted the Environmental Protection Agency as an example of areas where cuts could be made, saying on "Fox News Sunday" that the EPA's budget increased 124% under the Obama administration. In his weekly radio address Saturday, Mr. Obama reiterated his proposal for a three-year freeze on domestic non-security spending. But Republicans want much deeper cuts overall, to 2008 levels. In his "60 Minutes" interview, the president suggested a difficult policy struggle ahead. The desire for limited government is "as American as apple pie," he said. "But you're still confronted with a fact that the vast majority of the federal budget are things that people really think are important, like Social Security and Medicare and defense." Write to John D. McKinnon at john.mckinnon@wsj.com and Damian Paletta at damian.paletta@wsj.com online.wsj.com

To: Peter Dierks who wrote (47014)	11/9/2010 10:42:54 AM
From: Peter Dierks	Respond to of 71588

Sarah Palin Takes Aim at Fed . NOVEMBER 8, 2010, 7:20 P.M. ET. By SUDEEP REDDY Sarah Palin, delving into a major policy issue a week after the mid-term elections, took aim Monday at the Federal Reserve and called on Fed chairman Ben Bernanke to "cease and desist" with a bond-buying program designed to boost the economy. Speaking at a trade association conference in Phoenix, the potential 2012 presidential candidate and tea-party favorite said she's "deeply concerned" about the central bank creating new money to buy government bonds. Ms. Palin said "it's far from certain this will even work" and suggested the move would create an inflation problem. Monday's remarks, in which Ms. Palin staked out a firm stance on a complex topic, follow criticism from GOP strategist Karl Rove, who questioned her "gravitas" based on her appearance in a cable-television reality show about the Alaskan wilderness. Other Republicans have said she would have to answer for quitting her job as Alaska governor partway through her term. Ms. Palin has made clear she intends to forge a policy profile apart from her celebrity image. She used her Facebook page over the summer to begin laying out foreign policy views, and used a National Review essay last week to caution newly empowered conservatives that compromising with Mr. Obama on spending would result in the GOP "going the way of the Whigs." The Fed last week said it would buy $600 billion in Treasury securities over the next eight months in an effort to lower the 9.6% unemployment rate and ensure that inflation, which is running below the central bank's informal target, does not morph into outright deflation. Foreign officials have criticized the move for weakening the dollar and threatening speculative capital inflows that could hurt their own economies. "When Germany, a country that knows a thing or two about the dangers of inflation, warns us to think again, maybe it's time for Chairman Bernanke to cease and desist," according to Ms. Palin's remarks, obtained in advance by National Review magazine, before the Specialty Tools and Fasteners Distributors Association. "We don't want temporary, artificial economic growth bought at the expense of permanently higher inflation which will erode the value of our incomes and our savings." U.S. politicians generally avoid criticizing the Fed, especially its monetary policy, to maintain the central bank's traditional independence from politics. But several Republican lawmakers last week assailed the Fed's decision to engage in another round of bond-buying, known as quantitative easing. Ms. Palin's remarks Monday were the sharpest yet by a political figure about the Fed announcement. They echoed economists from the left and right who have questioned the policy's effectiveness and potential drawbacks. Ms. Palin's latest speech came within a week of the mid-term elections in which many candidates she backed won key races and helped Republicans take the House, though several of her high-profile picks were defeated. The Phoenix speech Monday appeared to mark a pivot toward a weighty and divisive policy issue—the strength of the dollar and how to boost the U.S. economy. Other countries have attacked the Fed move just days before a big international summit in South Korea. President Barack Obama Monday effectively defended the U.S. central bank at a press conference in New Delhi, noting that U.S. economic growth is "good for the world as a whole." —Peter Wallsten contributed reporting to this article. Write to Sudeep Reddy at sudeep.reddy@wsj.com online.wsj.com

To: Peter Dierks who wrote (47014)	11/9/2010 3:10:52 PM
From: DuckTapeSunroof	Read Replies (1) \| Respond to of 71588

Re: "The New Malaise and How to End It" A certain amount of it is the inevitable long correction period that major financial crashes mandate. Little enough that the government can do about that, the normal de-leveraging process (after housing crash, near collapse of banking sector, etc.) takes many years. But for what government CAN do there is only one hugely productive action they can take: COMPREHENSIVE TAX REFORM of our corrupted and bloated federal tax codes. Slash loopholes and special interest provisions and government attempts to manipulate economic activity. SIMPLIFY the code and LOWER RATES the equivalent amount. (That and mandating balanced federal budgets, placing that requirement in the constitution like the Tea Party is asking for!) Those are the two main productive actions the politicians could take....