Cut spending, don't add more stimulus

By Mitch McConnell, Special to CNN

June 27, 2011 9:06 a.m. EDT

Sen. Minority Leader Mitch McConnell, R-Kentucky, answers questions during his weekly news conference May 27.

STORY HIGHLIGHTS

Sen. Mitch McConnell: Debt, deficits have grown dramatically
He says Obama and Democrats aren't focusing on cutting spending
McConnell rejects proposals to increase taxes, add stimulus measures
He says President Obama's policies, including stimulus, haven't helped economy

Editor's note: Sen. Mitch McConnell of Kentucky is the Republican leader in the U.S. Senate.

Washington (CNN) -- Later today, I will sit down with President Barack Obama to discuss his request to increase the nation's debt ceiling, and I will make a request of my own: What, Mr. President, are you prepared to do about the massive deficits and debt that have grown dramatically on your watch?

What Republicans want is simple: We want to cut spending now, we want to cap runaway spending in the future and we want to save our entitlements and our country from bankruptcy by requiring the nation to balance its budget. We want to finally get our economy growing again at a pace that will lead to significant job growth.

The Democrats' response has been a mystifying call for more stimulus spending and huge tax hikes on American job creators. That's not serious, and it is my hope that the president will take those off the table today so that we can have a serious discussion about our country's economic future.

The president claimed last week at a New York fundraiser that he is prepared to bring down the nation's staggeringly high deficit and debt by trillions of dollars, but rather than provide any details, he only listed the things he refuses to cut. This is a problem I hope to raise with him today.

Obama intervenes in deficit talks

Debt ceiling talks stalled?

Obama on investing in US manufacturing

RELATED TOPICS

• National Debt
• Economic Stimulus
• Job Growth
• Barack Obama
• U.S. Democratic Party
• U.S. Republican Party

At some point, Democrats need to realize that the reason our nation's debt has skyrocketed 35% over the past two years is that government spending is out of control.

America does not face a debt crisis because we tax too little, but because Washington spends too much. And tax hikes can't pass the Congress. Not only is there bipartisan opposition, the consequences of massive new tax hikes would be fewer jobs.

The president spoke in his weekly address Saturday about wanting to help manufacturers create jobs. But we know that raising taxes on these same manufacturers, particularly in this economy, will have the opposite effect.

The obvious solution is for Washington to make the kind of tough choices in its own budget that millions of Americans have been forced to impose on themselves over the past two years. Yet President Obama and his allies in Congress remain unwilling to concede the point. Once they get their hands on taxpayer dollars, they seem incapable of letting go.

The $830 billion stimulus bill is just one example. When Democrats passed it, they made two predictions: first, that it would keep unemployment below 8%, and second, that it was a one-time cash infusion meant to prevent a wider crisis. Two years later, unemployment hovers above 9%, and Democrats now demand that we add new stimulus funding. Their commitment to spending and tax hikes is so deeply held, it seems, that they don't even recognize what terrible shape our economy is in and the fact that tax and spend policies of the past two years have made it worse.

Nor do they seem to recognize that the voters are asking for a different approach. Americans didn't elect dozens of additional Republicans to the House of Representatives last November because they wanted their taxes raised. They sent them here to reverse the runaway spending policies that failed.

Since the day the stimulus was signed, Washington has added $3.5 trillion to the national debt and roughly 2 million Americans have lost their jobs. More recently, a slew of troubling economic indicators and dire warnings from credit agencies about the dangers of our debt show that the time for serious action is now.

We have seen the consequences of giving Washington a blank check -- and we think it's time Washington make some of the hard choices that the average American has made over the past two and a half years.

The opinions expressed in this commentary are solely those of Mitch McConnell.

America’s Dumbest Budget Cut

Why Republicans are wrong to put fiscal arithmetic ahead of global influence.

Emmanuel Dunand / AFP-Getty Images

People outside the 2012 Republican candidates debate in New Hampshire.

Bring the troops home. Considering how polarized American politics is supposed to be, the consensus on this one point verges on the supernatural.
President Obama recently announced a new schedule for scaling down the U.S. military presence in Afghanistan. A total of 10,000 men will come home this year and a further 20,000 by the end of next summer. The surge is over.
This is not a declaration of victory. It is a declaration of bankruptcy. “From a fiscal standpoint, we’re spending too much money on Iraq and Afghanistan,” a senior administration official told The New York Times. “There’s a belief from a fiscal standpoint that this is cannibalizing too much of our spending.”
There was a time when Republicans—and not a few Democrats—would have been dismayed by such a retreat. Yet in their televised debate just a few days before the president’s announcement, the Republican presidential hopefuls vied with one another to out-dove him.
Frontrunner Mitt Romney took the lead: “It’s time for us to bring our troops home as soon as we possibly can, consistent with the word that comes to our generals that we can hand the country over to the Taliban military in a way that they’re able to defend themselves. Excuse me, the Afghan military to defend themselves from the Taliban.” That was the Freudian slip of the week.
Ron Paul was not to be outdone: “I’d bring them home as quickly as possible. And I would get them out of Iraq as well. And I wouldn’t start a war in Libya. I’d quit bombing Yemen. And I’d quit bombing Pakistan.” Tea Party queen Michele Bachmann also wanted out of Libya: “We were not attacked. We were not threatened with attack. There was no vital national interest…The president was absolutely wrong in his decision on Libya.” And former House speaker Newt Gingrich itched to “say to the generals, ‘We would like to figure out [how] to get out as rapid [sic] as possible with the safety of the troops involved.’ ”
Only Tim Pawlenty and Rick Santorum showed any sign of remembering that troops are in Afghanistan because it was there that Al Qaeda plotted the 9/11 attacks. But neither made any serious attempt to challenge the majority view: America has to bring home the troops because (in Ron Paul’s words) “we could save hundreds of billions of dollars”—a view also endorsed by a late entrant to the GOP nomination race, Jon Huntsman.
Welcome to the brave new world of IOU-solationism—the theory that strategic calculation takes second place to nasty fiscal arithmetic. After all, as former secretary of state James Baker has pointed out, interest payments on the federal debt could exceed defense spending in less than a decade. The Congressional Budget Office has even figured out how much cash could be saved by reducing the number of war-ready troops to just 45,000 by 2015: more than $400 billion over the next five years.
The United States certainly needs to get its fiscal house in order. But any serious analysis of the benefits of defense cuts needs to consider the potential costs of walking away from countries like Afghanistan and Iraq. If radical Islamism is a declining force around the world, I hadn’t noticed.
In any case, it’s manifestly untrue to claim that “Bush’s wars” are the principal cause of our current fiscal malaise. The defense budget last year was 4.7 percent of GDP (higher than at any time under Bush), but the cost of Social Security plus Medicare plus Medicaid was 10.3 percent.
Democrats and Republicans alike need to remind themselves of two stark realities. It’s not defense spending that’s bankrupting America; it’s the spiraling cost of entitlements as the baby boomers retire. Meanwhile, the world beyond our borders isn’t getting any safer (just watch Yemen).
IOU-solationism may poll well. A real leader will dismiss it as a false economy.

Sen. Sessions challenges Obama to make debt talks public

By Daniel Strauss - 06/24/11 04:53 PM ET

The ranking member on the Senate Budget Committee says President Obama needs to bring the negotiations over increasing the debt ceiling out into the open.  

"We might as well stake it out publicly to see what the disagreements are," Sen. Jeff Sessions (R-Ala.) said Friday in an interview with The Hill. "I believe Majority Leader [Harry] Reid and the president desperately are working not to have to reveal their vision for the future, financially. Their vision will include, from what glimpses we've seen, an advocacy for more taxes and less spending cuts."

Sessions said Democrats have been avoiding making public the negotiations and laying out precisely what they want in a debt-limit package because "what they're advocating for, I don't think would be popular."

Earlier Friday, Sen. Charles Schumer (D-N.Y.) said President Obama had already laid out a blueprint of what he wanted to see in a final compromise on raising the debt ceiling.

"You don’t need each detail. It is just an excuse," Schumer said. "I think Speaker [John] Boehner ought to sit in a room and negotiate."

Speaking during a call with reporters, Schumer and the ranking Democrat on the House Budget Committee, Rep. Chris Van Hollen (D-Md.), said some of the provisions Democrats wanted to see in the debt package included an end to oil-and-gas tax breaks as well as changing the depreciation schedule for corporate jets. 

The White House announced Friday that Obama and Vice President Biden would be meeting with Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.) Monday to discuss deficit reduction plans.

The White House's announcement came shortly after House Speaker John Boehner (R-Ohio) called on Obama to "lead" in the negotiations. 

Judge blocks parts of Ga. immigration law

By GREG BLUESTEIN, Associated Press – 1 day ago

ATLANTA (AP) — A federal judge on Monday temporarily blocked parts of Georgia's strict new law targeting illegal immigration from taking effect, including a provision that authorizes police to check the immigration status of suspects without proper identification and to detain illegal immigrants.

Georgia's became the latest in a string of state laws that have been at least temporarily stopped by legal challenges. All or parts of similar laws in Arizona, Utah and Indiana also have been blocked by federal judges.

Judge Thomas Thrash also granted a request from civil liberties groups to block a part of Georgia's law that penalizes people who knowingly and willingly transport or harbor illegal immigrants while committing another crime.

"The defendants wildly exaggerate the scope of the federal crime of harboring under (the law) when they claim that the Plaintiffs are violating federal immigration law by giving rides to their friends and neighbors who are illegal aliens," he said.

The judge was especially critical of that provision, blasting the state's assertion that federal immigration enforcement is "passive." Thrash noted that federal immigration officers remove more than 900 foreign citizens from the country on an average day.

He also wrote that the state measure would overstep the enforcement boundaries established by federal law. Thrash noted that there are thousands of illegal immigrants in Georgia because of the "insatiable demand in decades gone by for cheap labor" in the agriculture and construction industries. But he said the federal government gives priority to prosecuting and removing illegal immigrants who have committed crimes.

The civil liberties groups had sued to have those and other provisions blocked before they took effect Friday, though Thrash did toss parts of that lawsuit. The groups had argued that the law allows unreasonable seizures; blocks a constitutional right to travel; and restricts access to government services on the basis of national origin. The judge dismissed those claims, along with allegations the measure violates property rights and the state constitution.

Nonetheless, the groups hailed the ruling.

"This is a victory that matches the trend nationally. It should send a really strong signal to other states considering such laws," said Karen Tumlin, a lawyer for the National Immigration Law Center.

Georgia Attorney General Sam Olens said in a statement his office plans to appeal the court's ruling. He said he was pleased that parts of the lawsuit were dismissed.

The law's main sponsor, Republican state Rep. Matt Ramsey, called the judge's ruling a temporary setback.

The judge also was concerned about the wider implications of the law on trade and diplomatic relations, which were laid out by Mexican officials in court documents.

"The conflict is not a purely speculative and indirect impact on immigration. It is direct and immediate," he wrote.

The federal judge also accused the state of "gross hypocrisy" in its argument that Georgia's crackdown would prevent the exploitation of illegal immigrants.

"The apparent legislative intent is to create such a climate of hostility, fear, mistrust and insecurity that all illegal aliens will leave Georgia," he said.

"Curiously, the court writes 'all illegal aliens will leave Georgia' if the law is enforced, as if it is appalled at the thought of people attaining visas before coming to our nation," said Brian Robinson, a spokesman for Georgia Gov. Nathan Deal.

Similar laws elsewhere have met similar fates. A federal judge has blocked the most controversial parts of the law in Arizona, where Gov. Jan Brewer has said she plans to appeal to the U.S. Supreme Court.

In Utah, a federal judge temporarily blocked that state's law last month. A hearing is set for mid-July to determine if the law can go into effect. And on Friday, a federal judge blocked parts of Indiana's law.

On Friday, many parts of the law will take effect. Among them is one that makes it a felony with hefty penalties to use false information or documentation when applying for a job. Another creates an immigration review board to investigate complaints about government officials not complying with state laws related to illegal immigration.

Starting Jan. 1, businesses with 500 or more employees will have to use a federal database to check the immigration status of new hires, a requirement that will be phased in for all businesses with more than 10 employees by July 2013. Also starting Jan. 1, applicants for public benefits will have to provide at least one state or federally issued "secure and verifiable" document.

Statement on European Council meeting

Monday 27 June 2011

A statement by the Prime Minister David Cameron to the House of Commons following the European Council meeting in Brussels on 23-24 June 2011.

Read the statement

[Check against delivery]

With permission, Mr Speaker, I would like to make a statement on last week’s European Council.

The main focus of the Council was rightly on Europe’s economy.

In advancing Britain’s national interest I had two objectives.

First to ensure that Britain did not have to contribute to any new Greek bail-out through the European Financial Stability Mechanism.

Second to support efforts to bring stability to the Eurozone and growth to Europe as a whole, while fully protecting Britain’s position.

Let me take each in turn.

Greece

First, the situation in Greece.

As I have always said, Britain isn’t in the Euro…

…and while I’m Prime Minister it never will be.

So we should not be involved in the euro area’s internal arrangements.

Only Eurozone countries were involved, alongside the IMF, in the first Greek bailout.

Only Eurozone countries have been involved in discussions about potential further bailouts.

So it is absolutely right not to use the EU wide European Financial Stability Mechanism for future support to Greece.

That’s what I asked for an assurance about at this Council.

And that’s what I got.

Mr Speaker, this was not a simple matter.

Article 122 of the European Treaty is being used to provide aid for Eurozone countries that have mismanaged their economies.

That was not our choice. It was agreed before this government took office.

We have dealt with it for the future because when the new permanent arrangements – replacing the European Financial Stability Mechanism – come in from 2013, we will not be part of them…

…and Article 122 will no longer be used for Eurozone bailouts.

That was the deal I secured last December.

But we still had to deal with the prospect of a bail-out under the existing arrangements.

Under qualified majority voting this required real negotiating effort.

This government has consistently stood up for the interests of British taxpayers.

And, Mr Speaker, as a result, the British taxpayer will avoid a potential liability of billions of pounds.

Stability and growth

My second objective was to support efforts to bring stability to the Eurozone and to promote growth across Europe.

While we are not in the Eurozone, we would be affected – badly affected – by a disorderly outcome to this crisis.

Why?

First, banks across the world – including the UK – hold government debt of all Eurozone countries, including Greece.

Second, the effect on other countries far more exposed to these debts would have a knock on effect on us.

As Sir Mervyn King made clear when unveiling last week’s Financial Stability Report…

…the present difficulties in the Eurozone are “the most serious and immediate risk to the UK financial system”

It has always been a long-standing principle that the British government does not comment publicly on market sensitive issues.

And I am not going to depart from that very wise approach.

What is important is that a solution be found quickly, which is credible in the markets, and which will address over time Greece’s fundamental problems and contribute to providing stability in global markets and the world economy.

One element of that solution must, in my view, be using the time we now have to ensure banks and banks’ balance sheets are strong enough to withstand any problems and difficulties. And that there is full transparency across the financial system.

In the UK we are stepping up efforts to ensure our own banking system is resilient to risks originating from the Eurozone.

This needs to be done right across Europe, it needs to be done now, and it needs to be done properly.

I argued for this very strongly at the Council.

And that’s reflected in the language in the Communiqué.

As a first step that means the current stress tests being conducted in the banking sector, must be conducted properly and transparently, unlike last time…

…and that Europe must implement in full, rather than water down, the new detailed Basel capital and liquidity standards.

Mr Speaker, a key way in which we can help all economies in Europe – including the Eurozone – is to promote sustainable economic growth.

The best stimulus available for European economies is to make sure we are promoting competition, deregulation, supply-side reform, innovation, structural changes and also using the EU to advance the cause of free trade, both via Doha and where appropriate through bi-lateral deals.

Following the proposals that Britain set out at the last council…

…and which many Member States now support…

…I pressed in particular for concrete steps to reduce the burdens on small businesses and microenterprises, vital to promoting innovation, jobs and growth.

The Council agreed that “the regulatory burden on SMEs needs to be further reduced.”

And that the European Commission would now assess the impact of new regulations on micro enterprises and identify existing regulations from which micro businesses should be excluded.

This mirrors what we are already doing in Britain. And it is absolutely the right thing to do.

For too long, Council conclusions have focused only on what Member States should do, rather than on what the European Commission needs to do itself.

Other issues

Mr Speaker let me briefly turn to other issues raised at the Council.

There were three of significance.

Migration, the Arab Spring and the accession of Croatia.

First, migration.

Britain does not participate in the Schengen Border Area.

And we are not going to weaken our border controls.

As an island, Britain has an important geographical advantage in preventing uncontrolled immigration.

At the same time practical measures to strengthen the external borders of Europe are in Britain’s interests too.

But there was a proposal ahead of the Council to suspend the measures in the Dublin Regulation that allow us to return asylum seekers to the first safe country they arrive in.

Together with Chancellor Merkel, I made sure these proposals were rejected and they are not referred to in any way in the Council conclusions.

We will not have our border controls compromised in this way.

Arab Spring

Next, the Arab Spring.

On Libya, the Council agreed a declaration confirming its full support for UN Security Council Resolutions 1970 and 1973…

…and the efforts our brave servicemen and women are undertaking to implement them.

There is now real unity of purpose and political will across the European Union on this issue.

The wider world is turning against Qadhafi too, recognising that the Transitional National Council are the only credible diplomatic body which can represent the people of Libya right now.

The Russians and Chinese have accepted the importance of the Transitional National Council.

And Premier Wen made this point to me in our meeting this morning.

Qadhafi is increasingly isolated.

Indeed today the International Criminal Court has issued a warrant for his arrest.

Qadhafi is now a fugitive from international justice.

The pressure and the time is telling on Qadhafi.

And we will not let up until the job is done.

On Syria, the Council condemned in the strongest possible terms the ongoing repression and the unacceptable and shocking violence of the Syrian regime against its own people.

And at my instigation we expressed particularly grave concern about what Syrian troops are doing close to the Turkish border.

On the Middle East more generally, the Council called on all parties to engage urgently in negotiations…

…and, on the fifth anniversary of his capture, demanded the immediate release of Gilad Shalit.

Croatia

Finally, Mr Speaker let me turn to Croatia.

Earlier this month I met Prime Minister Kosor and welcomed her country’s progress towards completing European membership negotiations.

At the European Council we agreed that these negotiations would be concluded at the end of this month.

Croatia’s success points the way for the rest of the Western Balkans, whose aspirations to join the European Union we have always strongly supported.

Conclusion

Mr Speaker, at this Council Britain achieved some important objectives.

We have protected the interests of the British taxpayer.

We have secured agreements to promote and safeguard economic growth.

And we have protected Britain’s borders from uncontrolled migration.

And I commend this statement to the House.

The Critical Role of Manufacturing

Uploaded by whitehouse on Jun 28, 2011

President Obama visits the Alcoa Davenport Works in Bettendorf, Iowa and speaks about the critical role manufacturing plays in the American economy. June 28, 2011.

A Renaissance in American Manufacturing

Uploaded by whitehouse on Jun 24, 2011

President Obama kicks off the Advanced Manufacturing Partnership (AMP), a national collaboration between the government, industries, and universities to invest in cutting-edge technologies, create new jobs and bring about a renaissance in American manufacturing. June 24, 2011

Weekly Address: Strengthening America by Investing at Home

Published on Jun 25, 2011 by whitehouse

Speaking from Carnegie Mellon University, President Obama discusses the vital role advanced manufacturing will have in strengthening our economy and creating good, middle-class jobs.

Walker signs balanced budget that cuts schools

Sunday, June 26, 2011

Wisconsin Gov. Scott Walker (WLS-TV)

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June 26, 2011 (ASHWAUBENON, Wis.) -- Gov. Scott Walker has signed his first budget, which plugs the state's $3 billion shortfall but also slashes funding for public schools and the University of Wisconsin System.

Walker signed the budget Sunday at a private ceremony at a Green Bay manufacturing company.
Democrats assailed the budget as an attack on middle class values since it cuts funding for public schools by $800 million, reduces funding to the University of Wisconsin system by $250 million and cuts tax credits for poor people.
But Walker says it's a responsible plan that doesn't raise sales or income taxes, does away with the shortfall and leaves the state with a surplus.
The budget also includes tax breaks for manufacturers and large companies.

After heated debate, Wis. union law takes effect

Tuesday, June 28, 2011

Wisconsin Gov. Scott Walker (WLS-TV)

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June 28, 2011 (MADISON, Wis.) -- After months of heated debate, ear-splitting protests and legal maneuvering, Gov. Scott Walker's polarizing collective bargaining changes are finally set to become law.

Secretary of State Doug LaFollette published the law in the Wisconsin State Journal on Tuesday. The law is now set to take effect on Wednesday.
The measure requires almost all public employees, from teachers to librarians, to contribute more to their health care and pensions. It also strips them of nearly all their collective bargaining rights. State employees will see the first reductions in their paychecks in late August.
Tens of thousands of protesters occupied the state Capitol for weeks as they protested the plan. A Madison prosecutor filed a lawsuit to block the measure, but the state Supreme Court earlier this month upheld the law.