Bailout Update

Apparently, as are much things in life, the initial facts about the ‘new’ bailout package were not nescessarily reported accurately by news outlets.  I was just reading Daily Kos and they are doing an ‘oops’ too.

The bailout package is not the blatant pork barrel package that it sounded like this morning.   What the Senate did was take several issues on the table already: AMT tax, disater relief, energy credits, and a few other items and added it to the package in the hopes of getting those items passed with more votes than typically would have occured (e.g. provide more political coverage).  So, my initial rant on this new package was a little off base – particularly to my accusation against the Republicans.

It’s funny, the Senate is usually more level headed, less partisan, and more conservative (not politically, but acting) then the House. It did seem odd they were adding all these ‘sweenters’ from the get-go without further negotiations with the House.  

Now, I still have a problem with the package – particularly the AMT tax.  I fully agree that the tax does need to be changed as it puts an added burden on many middle class families.  However, my concern is the same as it was this morning and the same the Congress and various Presidential administrations have had for many years – that there is no offset for reducing the AMT.  Tax receipts are being reduced significantly without cuts in spending or tax increases in other places.  Again, I think it is a ‘what the hell’ philosophy – we are in bad debt already, we are making it worse, why not add more too it and do the dirty deed we’ve been avoiding for years.   I don’t think it’s the proper way of addressing the need to change the AMT.

As for the other ‘sweetners’ they do not seem as significant as the the press reported earlier in the day and are not significant drivers in boosting the cost of the bill.  Most of them are can’t lose propositions during Congressional campaigning and eases some of the ire of the voter.  In a lot of ways, it backs many into a corner who won’t vote for the package – what Congressman wants to come out against disater relief tax credits or energy credits?

I am currently watching the Senate vote and the yea’s are very bi-partisan.  It’s interesting, just like in the House, some of those in a dog fight election voted nea (Elizabeth Dole, for example).  It just passed 74-25 with only Kennedy not voting.

Obama Showing True Leadership Today

Mr. Obama was on the Floor of the Senate today speaking for the bailout package.  As the leader of his party, he felt it important to go on record on the Floor to address the vote tonight.

Mr. McCain, who dropped everything to screw up the original bill and did not stay until a deal was worked as he promised and couldn’t deliver votes from his party – for which he now leads, did not address the chamber.

Score another point for Obama being in DC for 1/2 the day and actually on the ground trying to ensure the votes were there to pass.  At the same time, McCain wasn’t in DC….

Who is showing leadership? Hmm….

McCain’s Foreign Policy Adviser – Sarah Palin

Umm, yeah – from Politco:

John McCain said Wednesday that he has turned to Alaska Gov. Sarah Palin for advice on foreign policy issues “many times in the past.”

“She has the world view that I have and is very highly qualified and very knowledgeable,” McCain said during an interview on NPR.

“I’ve turned to her for advice many times in the past, I can’t imagine turning to Senator [Barack] Obama or Senator [Joe] Biden because they’ve been wrong,” the Arizona senator said of his running mate. “I certainly wouldn’t turn to them, and I’ve already turned to Governor Palin particularly on energy issues and I’ve appreciated her background and knowledge on that and many other issues.”

Seriously?  I mean, it’s one thing to defend your running mate. However, I really didn’t think McCain was so out of touch with reality that he would lie and say he uses her as a foreign policy adviser.   This means one of two things – either he is so out of touch he doesn’t realize how pathetic her foreign policy knowledge is or he is so out of touch as to what the electorate thinks of her.  I mean, its a bit of a stretch even in her defense, to claim she’s a foreign policy adviser.

The Bailout Package gets a lot WORSE!

As much as I don’t like the idea of passing the $700B bailout package, I thought it was a necessary evil the had to get done.  I think Republicans were to blame for it’s failure and the stock market correction on Monday.

Well, with the participation of the Democrats, they have now taken a gut-wrenching bill and made it nearly unacceptable.  In doing so, they may still not get it past the House.  Representatives McConnell and Reid – leaders for both parties came up with a set of additional items to help flow passage -but they aren’t without some potential roadblocks.  The details are still sketchy, but based on what CNN is reporting:

1) Business Tax Breaks

2) Elimination of AMT tax

3) Increase in FDIC insurance by 150K per account

4) Clean Energy credits

5) Oddly – a mental health provision to cover at the same rate health insurance is covered.

The Mental health coverage, in this bill, is bizarre but might be aimed at Democrats to support the bill.  Apparently, the clean energy tax credits were going to get passed in the future – so that isn’t a big deal.  The FDIC insurance from 100K to 250K is ok.  Understand, this really affects mostly the wealthy and I doubt most of them keep 250K in bank accounts rather than investments.

The two I have a huge problem supporting – business tax breaks and elimination/reduction of the Alternative Minimum Tax (AMT).  The first problem is neither one of them is paid for.  That is, it will be an added burden to this bill.  What was a $700B package is now (per the estimates I read) a $800B+ package.  The AMT tax is something that must be addressed and fixed.  It’s been on the agenda of Congress for many years.

For those not familiar, it was a tax invented in the 60’s to be applied to high-income earners to ensure they don’t over use tax shelters.  Unfortunately, Congress never adjusted for inflation and, over the years, it has hit the middle-income earners.  The problem with changing the tax structure is that the Government has relied on those tax receipts from the AMT to fund our budget.  In the past, Congress hasn’t been able to change the tax because it would create a huge addition to the deficit as a result of the significant amount of income would be lost.  In this plan, it’s almost like they are saying, ‘what the hell, we are screwing the debt/deficit anyway – might as well take care of it now.”  Let’s be clear – This will not be something that affects most ‘middle-class’ Americans.  Mostly, it will affect the top 5-10% of wage earners (in most circumstances).  So this isn’t relief to the family of four in Ohio making $60K per year and struggling to get by.

Second, the business tax breaks are something that the GOP would love to get passed. It helps their constituency.  Their blackmail on the vote is going to, again, help the upper-middle class and wealthy – not that Ohio family.  This too will add to our debt/deficit because no spending offsets are part of the bill.

I’ve been railing for this bill to pass for a week now.  However, this is not one that I am sure I can support anymore.  Not even because of my belief that it isn’t fair and opportunistic by the GOP – I do think that. But, I can’t support it because it adds additional debt without spending cuts for things that are not priorities right now to free up credit and get the economy moving.  For anyone who claims that these tax breaks will help the economy – realize this is the same philosophy of the Republicans over the last three Republican administrations – supply side economics (trickle down).  It won’t help, just make the rich – richer.

Unfortunately, while this may get more Republicans on board, it will probably cost the Democrats votes.  Those who believe, as I do, that whatever we do should be done only to support fixing the crisis and not making our long term debt worse than it needs to be.  In addition, those Democrats who don’t vote for the bill may have a tougher election fight – as the Republicans can claim those Democrats don’t want to help the middle-class.

Finally, since the bailout failed the American public is very quickly changing their opinion on the bailout package (as I predicted in previous posts).  According to news sources  – the calls are now running 50/50 on the bailout package.  Even the House seems to be more responsive to the initial package.

It’s unfortunate that this package is turning into the type of bill that everything else in Congress ends up being – weighed down with a lot of ‘junk’ that gets away from the core issue and core problem.  This isn’t pork barrel the traditional sense – but make no mistake – it is a type of pork barrel politics.

Moderator of the VP Debate’s Conflict of Interest and Potential Delay the Debate?

If you haven’t seen the headlines blazed across the screen at Drudge, you haven’t seen the breaking news that Gwen Ifil, the moderator for tomorrow’s Vice Presidential Debate has a book coming out called The Breakthrough: Politics and Race in the Age of Obama.

Let me unequivocally state – she should not moderate the debate.  Regardless of whether the book is pro-Obama or not, she has a overtly obvious vested interest in his election.  If he wins, her book should sell better.  To me it is unconscionable to take this position as moderator knowing you have this book coming out.

The McCain campain states they were not aware of the book.  I haven’t heard commentary from the Obama campaign, whether they knew about it or not. Regardless, the debates should be free from overt accusations of pandering to a particular candidate.  Beyond that, this will now overshadow the debate and the pundints will assess her performance as much as Biden and Palin’s after the debate is complete.

I’ve never been a fan of Gwen Ifil.  I thought her performance in the 2004 debate was poor (though I didn’t think she was as ‘in the can’ for Edwards as some might claim).  Her questions were not as insightful as I believe they could have been.   In the few times I’ve watched her, I’ve never found her to be a correspondant or pundint that makes you think or provides insight with any releveant detail to support her position.  With this event, she has now proven her self to be less than open and honest.

Her moderation of this debate, would probably benefit the Democratic candidate.  Regardless, the discussions of the issues should be honest and should allow the voters an unfettered chance to judge the candidates. 

At this late point, this could pose some huge problems.   The McCain/Palin ticket has a reason they could withdrawl until a more suitable moderator is found.  They could go back with Jim Lehrer in two weeks (since he would want to prepare).  Charlie Gibson would be a possibility, as he’s done them in the past.  Perhaps, for a short turn-around time, you’d even go with someone more shallow like Larry King.  The problem is, both campaigns would have to agree, and that may not be an easy task. 

Don’t discount the ploy to move this debate.  The GOP, rightfully, should be concerned about the objectivity that Ifil would bring.

Breaking: McCain wants to be a Dictator?

From the Des Moine Register McCain states: “If I was dictator, which I always aspire to be”.  He didn’t seem to be joking. Here’s the short clip:

Sorry for quality and the Bush segement. it’s been tough finding a link that works to embed.

If you want the full clip from the Register click this link that goes to the Register’s videos. It’s the one that’s titled Economic Bill Failure.    Here is another link from saradevil.  That link goes directly to the video.