Calls for Rangel to Step Down from Chairmanship

Jackie Kucinich reports at Roll Call that Rep. Boehner has asked that Rep. Rangel step down while ethics investigations into Rangel's serial memory problems are ongoing.

'Boehner’s request comes a week after reports that Rangel failed to disclose $600,000 in assets as well as tens of thousands of dollars in income on his 2007 financial disclosures. ...

“As chairman of the powerful House committee, entrusted with the responsibility of writing the tax laws that affect every law-abiding American citizen, you, along with the Speaker and other leaders of the majority party, have an obligation to help set the pace when it comes to standards of official conduct,” Boehner wrote. “By relinquishing the gavel voluntarily while the Ethics panel does its work, you would demonstrate your respect for this obligation.”

A spokesman for Rangel said Republican attempts to remove Rangel from his post are ill-timed, saying the ethics committee should be allowed to finish its investigation.

“Congress has a comprehensive, bipartisan process for reviewing any allegations made against a Member — the House ethics committee. Chairman Rangel himself initiated the request for the committee to review the allegations made against him,” the spokesman said. “Any action by the Minority Leader or others to prejudge the outcome of that bipartisan process would unfairly undermine the work of the ethics committee.”'

Rangel has repeatedly been under the gun for 'forgetting' to disclose numerous funding sources and to pay taxes, and has been protected by the House Democrats from investigations until recently. While the Ethics Committee is now formally investigating Rangel, Speaker Pelosi has stated that she will not discipline him unless and until he is found guilty by the committee. Perhaps the strangest aspect to this entire matter are the tough and punitive IRS rules, slipped into the health care bill, which would target even accidental tax violators. So far, he's unwilling to put himself through the same ringer he's demanding that other taxpayers be put through.

'Rangel's bill would:

* Punish those who fail to alert the IRS to potentially questionable tax exemptions.

* Bar the IRS from waiving penalties against taxpayers who clearly erred in good faith.

* Double fines in certain circumstances.

"The bill raises penalties and eliminates many of the reasonable defenses that taxpayers have always been able to use when honest mistakes are uncovered," one lawyer told The Post.

In fact, the bill increases fines "in some cases even for honest mistakes," the expert added.

Republicans yesterday ripped Rangel's attempt to go after taxpayers, given his own failure to pay taxes on rental income from his villa in the Dominican Republic and his extensive reporting problems with his financial-disclosure statements to Congress'

Debt, Deficit and the Health Care Debate

(I apologize for the extended posting delay - multiple ill family members (including myself) kept me away from the laptop along with frantic dissertation work. On to the topic at hand):

I'm refraining from posting anything about Sen. Kennedy. There is more than enough material out there, and it seems more fitting to leave his memory to those who knew him. Instead, we return to a familiar topic at The ModCon, deficit and the national debt, and in particular, their impacts on the health insurance/health care (depending on the week) debate. This post begins a series of discussions between BMG and a more liberal friend who will be posting counter-point (or at least, alternative ideas).

A recent article by David Gergen at the CNN AC360-blog site, was entitled "Deficits: Why they might threaten health reform - and what Obama might do." The implied question - "Can the President win the health reform debate given the dramatically increasing deficit and debt burden?' - is an excellent one. Putting aside the merits of particular aspects to the five bills circulating through the two houses of Congress, the very fact that the deficit and total national debt have grown so dramatically in the last eight months, is a large factor in much of the opposition to the proposals. The heart of Gergen's musings are laid out in four paragraphs:

'Yet even the Bernanke story cannot fully deflect attention from the other economic story engulfing the administration today: its official announcement of new economic projections – in particular, its acknowledgment that deficits over the coming decade will be even higher than it said only three months ago. Now, the administration is predicting that instead of $7 trillion in new deficits, the country will rack up a staggering $9 trillion in new deficits for the 2010-2019 period. (The Congressional Budget Office has published its own numbers today that are largely parallel.). Deficits of that magnitude would be extraordinarily dangerous and irresponsible for the country. They would double the national debt, risk much higher inflation, saddle future taxpayers with annual interest payments of over $900 billion, make us even more reliant upon China as a creditor, and over time would weaken us as a great nation. Talk about trend lines that are unsustainable! ... In view of all this, President Obama has a choice. He can push forward with health reform efforts, giving short shrift to these deficit concerns. If so – if he continues to insist that Washington is just too “wee-weed up” — he will find that some of his strongest allies will become more reluctant on a big health reform bill this year. Or he can come to grips with these grim forecasts and present to the nation a credible, comprehensive plan for reining in long-term deficits before Congress acts on health reform. The second path demands more courage – and is also the one of real leadership.'

The CBO's economic projections for the next decade were grim to begin with, and have been revised further downward over the last month. Spending $1 trillion on overhauling 1/6 of the economy, when the debt has been revised upward to $9 trillion (and the deficit to $1.6 trillion) and within months of TARP 2, the stimulus package and the largest budget in US history, is going to be a tough sell even to supporters.

Many of the Congressional leadership, and in the Administration, seems completely unwilling or incapable of accepting that much of the anger expressed in the Town Hall meetings is not about racism, gasping conservatism, or even plain contrariness, but rather a deep, abiding dislike of governmental creep and stratospheric debt. Dan Gerstein, a former adviser to Sen. Lieberman, recently published a telling article in Forbes.

'In the best-case scenario, the cumulative toll of all this spending and intervening would test most voters' tolerance for another major government expansion on health care. But for many already anxious Americans, it has rapidly resuscitated their skepticism about government and its competence in managing one-sixth of the economy. The fact that so much of what has come out of Congress is every bit as partisan and one-sided as the last eight years is only compounding those doubts--particularly for swing voters.'

The concept that the President and Congress are trying to sell, that one will lower the long-term deficit and debt by increasing government involvement and spending, is ludicrous to most voters. They're well-aware that increasing spending, and increased involvement leads to increasing debt, and therefore the increased need to pay for that debt. There are only two ways to pay the bill: increase taxes, decrease spending. The latter is the principle reason there is so much concern over rationing and a loss of Medicare benefits. The former is already being floated by multiple Administration officials. The more sordid aspects (cronyism and favoritism in particular) of pushing a bill this large are not helping sweeten voter temperaments. Neither is the 'tone-deaf' aspect of the sales pitch coming from the President. Until 'listening' to these real concerns becomes important to the Administration and Congress, the people are going to continue to push back. They desperately need a new tact and fresh ideas; in fact, they should scrap all the current bills under discussion and begin anew. I doubt they have the sense, guts or humility enough to try.

The Great Catastrophe is coming

President Obama warned today of a coming Great Catastrophe if the stimulus bill isn't passed soon (and presumably to his liking). Does that sound like the Great Depression? Is it a threat? I was waiting to see pictures of him with a sandwich board on the, apparently grass-less, Mall lawn.

I wonder what catastrophe will befall if I refuse to pay my taxes come April, simply because I don't want to sod any lawns, ensure that people suit up before sex, or pay for new cars that I won't get to drive. He sure doesn't sound very hopeful to me. Maybe if everyone of the candidates had paid their taxes, and were working together without backbiting, it would go down a little easier. But just as most taxpayers don't want their money going to spa visits and bonus packages for failed CEOs, most of us don't want our money being managed by Washington insiders and tax evaders. Not even a spoon full of sugar could help with this mess.

Fluidity: The Ever Changing Bailout Plan

Henry Paulson defended himself before Congress today, arguing that the original concept of the bailout plan (excuse me, economic recovery plan), which largely involved buying up 'toxic securities' (tied to unknown amounts of bad mortgages), is no longer the best solution to the credit and financial crises. Paulson now argues that $700 billion in tax dollars should be used to buy partial ownership stakes in the banks themselves. Nationalization of banks in the good 'ole USA? The idea boggles the mind. Perhaps it'll mean better management; at least AIG won't use any more of the loan to take its Exec's on nice spa trips; but I can't help thinking that this trip down socialism's memory lane it just going to keep getting darker.

In the meanwhile, AIG is getting another $40B, while American Express convinced the Fed. to allow them to become a real bank in record time, which may now use that status to request a share of the pie. And to top it all off, the Dynamic Duo of Henry Reid and Nancy Pelosi, backed by that happy socialist, Barney Franks, is demanding to bailout the auto industry, mortgage-holders, and just about anything not nailed down, while increasing spending at an enormous pace, deficit-be-damned.

Most of us are sensible enough to cut back on spending when times get tough - to be a little more thrifty. Not the Congress. They seem to think that increasing spending, increasing taxes, and taking over private industry is just the ticket to fix the economy. Now where have we heard this before?

Reason 3 of 7 to Vote McCain: Taxes and Revenue Streams

One year ago, the Wall Street Journal reported on the inverse relationship between higher taxes rates and revenue streams (click the title link to see the original). In short, they reported an often observed truth - within limits, tax rate reductions lead to better reporting and more complete payment, thus increasing government income streams. This should make sense even on a basic and general level. If one is not taxed unreasonably, one is more likely to report full income, and not attempt to evade one's tax burden. If one is taxed at the 70% level, however, 'escape and evasion' becomes the modus operandi. That is exactly what Obama is proposing to do, and its only real effect is going to be to raise the deficit.

The current deficit is expected to top $ 1 trillion shortly, and even if Obama can get Congress to limit tax increases to the $120 K mark of income (yes, the goal has moved again), and even if not one household in that income bracket made any attempt to evade taxation, that tax burden will not overcome the current deficit. If all of Obama's spending proposals go through, the deficit is likely to top $4 trillion in short order, leaving two choices: increases taxes on everyone from $40K/annually on up, or leave a huge deficit that will be the responsibility of several generations to pay. This is not a fiscal policy that will lead to increased employment and growth - it's a jobs-killer. If one adds in the increased taxes on Capitol Gains, Medicare, health insurance, etc., it becomes impossible to maintain a limit on who sees a tax increase and who pays. In fact, those additional tax burdens ensure that everyone sees a tax increase, and that our grandchildren will be paying for the country's addiction to easy spending and welfare. John McCain is right - what we need is a return to fiscal discipline, limited spending, and the right policy to grow jobs and the economy, namely a freeze or reduction in taxes. Do the right thing for your country and your children - Vote McCain.

Reason 2 of 7 to Vote McCain: The "S" Word

If one reads the website for the World Socialist Movement, one is left with a Utopian view. Everyone will voluntarily work at what they most want to and share goods in common that are produced only for use, according the website. Karl Marx was a little more blunt, and called for a proletarian revolution, while Socialist Action states that socialism can not be enacted through normal democratic processes, and calls for mass protest and revolution. Don't panic! Obama isn't going to start a world-revolution , and I doubt anyone cares whether or not he shared toys or a peanut butter sandwich. Because despite the Utopian language of some, and revolutionary language of others, the heart of socialism is the sacrifice of individual liberty for the sake of collective thinking and control of production. That is the heart of socialism. I've heard plenty of people state that they wouldn't mind a little sacrifice of liberty in exchange for care and justice for the poor, state health care, and yes, some wealth redistribution - that is as long as they were on the receiving end. But that's one of the main problems with socialism. It tells us that we all need to help each other, and then whips right around and tells us that some of us are too successful and others deserve a share of that success. This concept reminds me of Barry Goldwater's 1964 Republican Convention acceptance speech where he famously said, "Extremism in the defense of liberty is no vice. And let me remind you also, that moderation in the pursuit of justice is no virtue." There is no vice, in the mind of the socialist, in extreme redistribution, and their is no virtue in moderating that stance.

Now I am a Christian, and the Bible has more verses about the poor and destitute than just about any other subject. It is my Christian duty to provide true charity (love) to any who need and want it. That is my Christian duty. But is it the responsibility of the state? Most of us could agree that the state should bear a collective responsibility to help those who truly need help, particularly those who, for whatever reason, can not physically work or better themselves. But what about those who can. If I out-compete my neighbor, and earn $10K more a year, is he entitled to some of my earnings, simply because I did better? I don't believe that. Further, every state that has tried this system long-term has failed, been forced to change, or exists in a perpetual twilight (ala Cuba). It's very true that Capitalism unchecked descends into chaotic greed, and that all Capitalism rests in part on some measure of competition. But, socialism is a disincentivizing system. It reward mediocrity.

Competition is what motivates individuals to push hard, to succeed beyond the expectations of their social setting. That is the very heart of the Middle Class in the US - a desire to better oneself, rather than to be assigned a place in society, and have nothing to work for. Competition increases a society's wealth and productivity. Socialism makes society dependent on the government . That is why McCain and Palin have been labeling Obama a socialist. Not because he shared something, but because he wants to share other people's somethings, and then convince them it was all their idea in the first place. And even if Obama is only moderately socialist in his leanings, even if Biden was really just making another 'gaffe' when he declared that the tax increases would begin at $150K, there is Congress to contend to. The current Congressional leadership (note to the constituencies of these clowns - vote them out!) has made it very clear that they will push for redistribution, and that the burden will start at incomes far lower than $250K.

Tomorrow (well, later today) - taxes. For now, go to the name link below for a hilarious take on the election. The video is on Slashdot.org. It was posted by samzepus, and I bow to his creativity.