Republican Women Reach Out

While RWRO encourages bipartisan compromise in the debt ceiling debate, GOP leaders and lawmakers should not yield to Obama and the Democrats’ empty threats, which are only intended to shock the public. Never letting a crisis go to waste, Democrats are using the fate of the nation’s financial credit to posture themselves for the 2012 elections, while also refusing to acknowledge the role that their irresponsible and unchecked spending for the past two years has played in getting us to this critical point.

Even If He Hadn’t Said So, We’d Know the President Is Bluffing

Jagadeesh Gokhale
Senior Fellow, Cato Institute

The president’s Wednesday night warning to House Majority Leader Cantor to not “call his bluff” suggests that… well, he’s bluffing. But the president has already been playing some transparently thin cards in this game of poker, including his melodramatic — but highly questionable — hint that Social Security checks would be interrupted on August 2.

The go-to strategy in a literal train wreck is to jump off a nanosecond just before the collision. The debt-limit debate is more complicated, however, because no one really knows what the effect would be if the deadlock on budget negotiations continues through August 2nd.

Debt-rating agencies may soon downgrade U.S. debt. But does the debt of a country on a fiscal path to borrow and spend 45 percent more than its revenues — at a time when its debt already equals its annual output — really warrant a AAA rating? Won’t House Republicans really be doing investors a service by revealing a more honest debt rating?

One might argue that the real objective is to shift to a more responsible fiscal path, and that there are better ways of doing so than getting stuck on the debt limit problem. But the very fact that we are on a path of massive fiscal indiscipline — namely, an unsustainably steep projected increase in government spending — implies that fiscal rectitude will not happen without a trip to the brink of the precipice. The debt limit offers a policy lever to shift the nation’s spending trajectory, and it is only fitting and proper that it should be used it to force the issue.

Regarding a potential “bluff” by the president and high officials of the Treasury and the Federal Reserve: It’s only natural that they would sound the most dire of alarms. There is no guarantee that the government would default on its existing contractual debt and that financial markets would tank even if such a temporary technical default were to occur. But the risk of such events is not zero and no high government officials would wish to risk it on their watch.

A hint about whether and how much President Obama might be “bluffing” is his unwarranted warning that Social Security payments could not be guaranteed if the debt limit is not increased. There is every reason to believe that those payments could and would be made in full in August — and for many more months — no matter whether the budget deadlock is resolved by August 2nd.

The debt limit encompasses both debt held by the public, and that held in intra-governmental accounts such as Treasury IOU’s in the Social Security Trust Funds. Even if the debt limit is reached, Social Security payments covered by incoming payroll taxes would not be delayed. As some observers correctly point out, payroll taxes are insufficient to cover present-law Social Security benefits. But that’s true only on an annual basis. Because the payroll tax rate is applied to earnings, those tax withholdings generate more revenues during earlier months of the year than during later ones — when higher earners’ taxable earnings limit is reached and payroll tax collections decline. That means the still quite small annual payroll tax shortfall will not emerge until November or December of this year. Therefore, no Social Security beneficiaries should miss their payments in August.

Even if payroll taxes were to fall short of scheduled benefits on August 3rd, there is a way to ensure that Social Security checks are mailed on time. The Social Security Trust Funds would simply exchange their Treasury IOUs for cash from Treasury, financed out of non-Social Security taxes. This is exactly how they are to be used in the event of a payroll tax shortfall anyway. But this redemption of Trust Fund IOUs would reduce federal debt below the current debt limit. Treasury could then simply issue more public debt to recover the cash — in effect exchanging debt to the Social Security Trust Funds for debt held by investors.

This information about how to negotiate through the laws governing the debt limit and the Social Security Trust Funds should be common knowledge among experts at Treasury, the Social Security actuaries, and the White House staff. The fact that President Obama feels compelled to demagogue the issue speaks volumes about how much he might really be bluffing.

RWRO continually emphasizes its belief that a smaller government contributes to a bigger economy. Newly-appointed Vice-Chair of the NRSC, Carly Fiorina, supports our view as well.

Big government is not way to stronger economy

By CARLY FIORINA | 7/12/11 4:44 PM EDT

The engines of a thriving economy can be stalled by politics and bad government policy. Incentives for innovation can be ignored — until innovators and job creators move elsewhere.

Today, when any job can go anywhere, they may not come back. At a time of relentless, hyper-paced global competition, competitive advantage can be lost — and never regained.

Consider California. Once a haven for innovators, job creators and dreamers of every kind, its population is now shrinking and its unemployment rate is at historic highs. Despite some of the country’s highest tax rates, California also has one of the highest budget deficits. Businesses of all kinds are strangled in a thicket of regulation and the people who should be served by government aren’t.

California demonstrates that even one of the world’s largest economies can reach a tipping point — where the disincentives for economic growth and job creation overwhelm even extraordinary human talent and natural resources.

Yet President Barack Obama and his allies seem determined to impose California’s economic experience on the nation. Look at what’s happened so far: Our nation has started down the slippery slope of lost opportunity. Democrats’ failed stimulus package, 9.2 percent unemployment, $14 trillion in debt, not to mention the economic damage that could be done by Obamacare and the hundreds of regulations yet to be written under the Financial Regulatory Reform Act.

This has been on my mind since Sen. John Cornyn (R-Texas), chairman of the National Republican Senatorial Committee, asked me to help Republicans regain the majority in the Senate in 2012.

Republicans understand that the American dream starts with a job. Maintaining our economic power in the world requires that we create jobs here at home. While America has been the world’s most prolific and productive innovator, we are not on a trajectory to sustain our innovation and leadership.

But job creators could count on a majority Republican Senate to uphold three core principles fundamental to U.S. economic vitality.

First, it would decentralize power whenever possible. Whether in business or government, decentralizing power holds decision-makers more accountable to their customers and constituents. Decentralized decision-making is faster, more innovative and more flexible — all vital in a complex, constantly changing world

Second, it would value individuals ahead of institutions. Republicans place their faith in an individual’s ability to choose his or her own path and distrust that a faceless bureaucracy is better at making decisions. Modern technology helps the individual to be smarter and more effective than a bureaucracy.

Third, Republican senators know that job creators make better decisions for our economy than government agencies. Job creators in any size business are held to account: by customers’ demands for a good product at a good price; by investors’ demands for a good return, and by the challenge of competitors to do it better or cheaper.

Republicans understand that government must set appropriate boundaries for risk in a capitalist economy. But the bottom line is that when businesses profit, they grow and hire.

Democrats disagree with these principles. They put their faith in bigger government. And the government bureaucracy has grown. So government is less manageable and less transparent.

Ours was intended to be a citizen government. That is why it is important for those who understand what it takes to create jobs and sustain businesses get involved in the political process. Job creators play a special role — for they are the true purveyors of the American dream.

Carly Fiorina is the new vice chairwoman of the National Republican Senatorial Committee. She is the former chief executive officer of Hewlett-Packard.

RWRO continually emphasizes its belief in small government, significantly reduced government spending, less taxes, and fiscal responsibility in government spending. After the Republican landslide of the 2010 elections, the Obama administration and Democrats should have heard this message loud and clear. Instead, while the nation faces a debt crisis, Democrats refuse to yield to spending cuts and threaten the stability and security of our military in their demands for cuts in defense spending.

No Defense Cuts or Tax Increases in Debt Deal

By Marc A. Thiessen, Published: June 27

President Obama will meet with congressional leaders today in an attempt to revive the debt-limit talks that broke down last week over the Democrats’ insistence that any deal must include tax increases. The president knows full well that Republicans are not backing down on taxes — but he is using the issue to extract other concessions, such as getting the GOP to back his plan for massive and irresponsible reductions in defense spending. Will Republicans walk right into his trap?

Critics say Republicans are being unreasonable in rejecting any tax hikes. In an editorial last week,The Post called GOP leaders “childish and irresponsible” and pointed out that Democrats have agreed to accept $2 trillion in spending cuts while Republicans are refusing to accept any tax increases in exchange. “Where is the Republican flexibility?” the paper asked.

Let’s be clear: Compromise here isn’t spending cuts for a tax increase; compromise is spending cuts for a debt-limit increase. Republicans elected in the Tea Party wave of 2010 campaigned on a promise to reduce the national debt. They are now being asked to turn around a half a year later and vote to raise the national debt. The vast majority of Republican voters don’t want them to raise the debt limit at all. The only way these Republican legislators can vote for a debt-ceiling increase without getting thrown out of office is to show their constituents that they secured unprecedented cuts in current spending — and ironclad constraints on future spending — in exchange. Tax increases? They are not even part of the equation.

Yet Republicans are letting the Democrats use the tax issue to extract concessions. GOP leaders need to realize that they are the ones with the leverage in these negotiations. What are Democrats going to say if GOP leaders simply refuse to go along with their demand for tax hikes or give them defense cuts in exchange? “Sorry, Mr. Speaker, no deal — let the country default”? Of course not. President Obama does not have the luxury of letting the debt-limit talks fail and then blaming the GOP for a government default. If the dire predictions of his treasury secretary are to be believed, the consequences of a default would be so calamitous that Obama cannot allow it to happen. He must sign whatever debt-limit increase Republicans give him.

This means Republicans hold all the cards. So why on earth are they even thinking about giving Obama deep cuts in national defense in exchange for dropping his demand for tax increases that he knows he will never get? In November, Defense Secretary Robert Gates warned that even a 10 percent cut from the Pentagon budget, roughly $55 billion, would be “catastrophic” to the U.S. military. Obama has already cut more than $400 billion in defense programs since taking office, and he has proposed an additional $400 billion in defense cuts over the next 10 years.

As Gary Schmitt of the American Enterprise Institute has pointed out, if these cuts are enacted, the Obama administration will have chopped more than $800 billion from the Pentagon’s previously planned spending. In other words, our men and women in uniform will effectively be paying for Obama’s failed stimulus with cutbacks in needed equipment, training and force structure. Is that really what the GOP wants to do? Pay for the stimulus on the backs of our military? If Republicans really aspire to be constitutional conservatives, their first responsibility is to provide for the common defense. Congressional Republicans should not be a party to Obama’s plan to hollow out our military — they should fight it.

Far from giving Obama deep cuts in national defense, Republicans should the ones making the demands in these negotiations — including more domestic spending cuts and a balanced-budget amendment that will force the government to live within its means. If Democrats balk and the Aug. 2 deadline set by the Treasury Department arrives without an agreement, so be it. The sky will not fall. Republicans can simply pass a small, temporary debt-ceiling increase — and attach some of the $2 trillion in spending cuts the Democrats reportedly accepted in the negotiations led by Vice President Biden.

If the Democrats still won’t sign on to an acceptable agreement when that temporary debt-limit increase runs out, Republican leaders can pass another small increase with still more of these spending cuts attached. And if Democrats still don’t agree when that temporary debt-limit increase runs out, Republicans can pass temporary increases with spending cuts attached again . . . and again . . . and again.

Democrats will cry foul, but in the end, the Democrat-controlled Senate will pass, and President Obama will sign, every temporary increase the House approves — because the alternative is unthinkable. The message from Speaker John Boehner should be: The GOP will not allow the government to default — but Republicans will not raise the debt limit without deep cuts in federal spending. And Republicans will not raise taxes or hollow out our military — period.

Republicans have something the president not only wants but something he desperately needs. They need to stop negotiating with themselves and looking for ways to capitulate to the Democratic demands, and start using their unprecedented leverage to extract concessions from the other side.

RWRO strongly believes in protecting our national security through border security, intelligence operations, and detaining and prosecuting enemy combatants. The latest news that a Somali terrorist was detained on a Navy ship then released is troubling.

Obama’s terrorist ‘catch and release’ policy
By Marc A. Thiessen

This morning The Post reports that a Somali terrorist named Ahmed Abdulkadir Warsame was held and interrogated on a Navy ship for more than two months before being flown to New York to stand trial. The Post reports this morning that he “is the first foreign terrorism suspect captured by the administration outside the United States and moved to this country for trial.” This news comes a week after Vice Adm. William McRaven told the Senate Armed Services Committee that the Obama administration has no clear plan for handling captured terrorist leaders if they are caught alive outside the war zones of Afghanistan and Iraq. McRaven testified that that “in many cases” suspects captured in secret are taken to a U.S. Navy ship until they can be tried in a U.S. court or transferred to the custody of an allied country, but if neither option is feasible, he said, the terrorist is let go. “If we can’t do either one of those, then we will release that individual,” McRaven told the committee.

Which leaves the obvious question: If Warsame is the first suspect to be transferred to the United States for trial, what happened to the others?

The United States’ top special operations commander told Congress that because the United States has no place to hold captured terrorists we have simply been letting them go. In his testimony, Adm. McRaven used the phrase “in many cases,” which seems to indicate that not only has this happened, but it has happened in numerous instances. Well, exactly how many al-Qaeda terrorists have been taken into U.S. custody on Navy ships and released by the Obama administration? Who are these terrorists? Where were they captured? Who decided to release them? Where were they released? And what has become of them since?

Until now, it was believed that the administration was not capturing senior terrorists alive outside the war zones of Afghanistan and Iraq, but simply killing them. Last year, The Post reported that there had been no known high-value detentions by the United States since Obama took office. Now, it appears, we have indeed been capturing such terrorists — and setting them free. If so, this is an outrage. With Adm. McRaven’s testimony, and today’s news, the administration owes the American people — and the United States Congress — some answers, and fast.