February 20-22, 2009
Feb 20 04:29 Misery Tour Visits St. Cloud Feb 20 13:52 DFL Leadership Officially Listed In MIA Status Feb 21 03:25 Tying Things Together Feb 21 11:59 The Worst Economic Slump in 75 Years? Feb 22 10:39 Obama's Budget: Cutting the Deficit He Created Feb 22 14:09 Santelli Calls Gibbs's Bluff Feb 22 15:39 Cities to DFL: Enough With the Mandates Feb 22 22:01 They Must Be Skating In Hell
Prior Months: Jan
Misery Tour Visits St. Cloud
The DFL's Misery Tour visited St. Cloud Thursday night. As expected, the event was tipped in the DFL's favor. With House Ways and Means Committee Chairman Loren Solberg presiding over the hearing, the hearing took a predictable path. The testimony taken was broken down into categories, including segments dealing with education, HHS, the judicial system and county governments.
St. Cloud Mayor Dave Kleis was the first to testify and he immediately voiced his concern about mandates the state puts on local governments. Mayor Kleis said that the legislature shouldn't put mandates on local governments if they aren't going to fund them, saying that it's better to let local governments figure out their own solutions. I noticed Larry Haws, Michelle Fischbach, Dan Severson and Steve Gottwalt nodding in approval at that point.
The high point of the night was Janelle Kendall's testimony. She said that the Minnesota County Attorneys Association had a list of suggested reforms that should be implemented ASAP. After she finished her testimony, most everyone in the City Hall chambers applauded her presentation. Here's her list of suggestions:
- Allowing the courts to provide notice of hearings via email vs. mailing paper notices.
- Expanding the use of interactive TV for court hearings so defendants do not need to be transported through out the state for hearings.
- Allowing change of venue where one county can handle all cases that occur in other counties regarding the same defendant, again eliminating the transportation costs.
- Allowing judges to make decisions on sequestering jurors. The cost of keeping jurors overnight is substantial and not needed in all cases.
- Centralize and automate payment of fines and fees online.
- Handle no proof of insurance through the Department of Public Safety rather than courts.
In fact, the one thing that wasn't brought up were specific reforms. To be fair, Chairman Solberg and Assistant Senate Majority Leader Tarryl Clark did say they were interested in them. It's just that most of the people who testified either complained about possible funding cuts or called for increased taxes.
I kept track of the times people mentioned thing that fell into these categories:
- legislature shouldn't raise taxes-- 9 times
- legislature should cut spending-- 10 times
- specific reform suggestions given-- 7 times
- legislature shouldn't cut programs-- 23 times
- legislature to raise taxes-- 5 times
The other thing that was missing from last night's hearing was the DFL's counterproposal. That was both predictable and disappointing. It isn't that the DFL doesn't have its plan in mind. They'll offer some token budget cuts, they'll rely heavily on the stimulus check and they'll raise taxes to fill in the rest of the gap.
That didn't sit well with Bill Woolsey , vice president and general manager of Anderson Trucking Service. Here's what Mr. Woolsey said:
"The reason we're here is because of our local ties to the community and the state," said Bill Woolsey, vice president and general manager of Anderson Trucking Service. "But our company competes both nationally and internationally. Any new taxes makes it harder for us to stay competitive and stay here."Several small businesspeople spoke out against raising taxes, reminding lawmakers that adding to their tax burden might force businesses to leave the state for the Dakotas or other states with better business climates.
Approximately 200-225 people attended Thursday night's meeting, with a significant number of them being lobbyists who visit legislators at the Capitol. One such person mentioned that they'd just seen one of the legislators Wednesday.
The other striking thing about Thursday night's hearing was that many of the people who testified in favor of not cutting programs read from prepared statements. In fact, a number of them looked prepared to give 5+ minute speeches. It was obvious that the people who read from these statements were lobbyists who frequently visited the Capitol.
That's certainly their right. It just isn't representative of the average Minnesotan. It's just more proof that the DFL represents lobbyists first, constituents second.
Originally posted Friday, February 20, 2009, revised 22-Feb 2:37 PM
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DFL Leadership Officially Listed In MIA Status
Factoring in what I saw last night, it's time to officially declare DFL leadership in the MIA category. It's time we looked at this in timeline form, starting with Sen. Tarryl Clark's statement on At Issue over a month ago:
Hauser: You can talk about reform all you want but reform inevitably ends up meaning that some people that are getting state services now won't be getting them after this reform, whether it be in HHS, whether it be in education, early childhood, any of those things.While there's no doubt that some difficult decisions will have to be made, it's equally true that a number of reforms that achieve cost savings are available if people are willing to look for them. I've previously said that cost savings are dramatically different in nature than budget cuts because cost savings maintain service levels while cutting the cost of delivering services. Budget cuts simply means cutting money from budgets, which may lead to cutting services.
Tarryl: Sure, and an estimate, a good estimate would be that maybe we could figure out how to save about $500 million.
It's important that we recognize the fact that some budget cuts are worthwhile if the services that are rendered aren't high priority or important items.
The next example of the DFL's leadership going MIA is their refusal to present their priorities, goals and spending levels. Rather than affixing a date to their refusal, I'd categorize it as ongoing. Despite all the days for which DFL legislators took out-of-session, tax-free per diem , the DFL still hasn't presented a budget. Contrast that with the specific proposals that the House and Senate GOP have submitted. Here's a joint statement released by Senate GOP Communications Director Michael Brodkorb and House GOP Communications Director Kevin Watterson on one of the GOP's reform proposals:
(St. Paul) ; Responding to the likelihood that Minnesota budget deficit will be close to $7 billion, Republican members of the Minnesota House and Senate announced a legislative proposal today to cut the pay of legislators and constitutional officers by 5 percent.While House and Senate Republicans are proposing cost-cutting measures, the DFL holds hearings where DFL activists who rely on government largess for their livelihoods testify that government can't be cut.
If enacted into law, the base pay for legislators would drop from their current amounts to $29,583 per-year, with the estimated total savings per biennium of $676,441.20. [Please see the attached table for salary information for legislators and constitutional officers.]
"At a time when the budget deficit is growing larger by the minute, legislators need to set an example in St. Paul by cutting their own compensation and that of constitutional officers," said Senator Geoff Michel (R-Edina). "The legislative branch must be part of the budget solution and before we go through the entire state budget, line by line, we should find savings in our own budget."
Currently, Minnesota statutes (15A.082) establishes a 16-member Compensation Council to provide salary recommendations for the Governor, Lieutenant Governor, Secretary of State, State Auditor, Attorney General, and legislators. The Legislature can adopt these recommendations, adopt with modifications (such as a percentage), or establish altogether different rates.
While the constitutional officer salary is a percentage of the Governor's pay, this bill makes individual salaries independent. This bill also provides transparency to the public by placing actual compensation amounts in law.
"This plan should absolutely be part of the discussions that take place around Minnesota over the next two weeks. Legislators have to be willing to step up and show leadership in doing what it will take to balance the budget," said Representative Dan Severson (R-Sauk Rapids). "If we're not willing to put ourselves and our salaries up for debate, then we won't have a lot of credibility among the people we hear from during these meetings."
I said in this post that the highlight and lowlight of the testimony was stark. I said that Janelle Kendall's testimony was the the highlight because she cited a number or specific reforms. This morning, Jenny Theis, a special assistant to the County Attorney, sent me the list of reform proposals. Here's the list of proposals that Ms. Kendall cited during her testimony:
- Allowing the courts to provide notice of hearings via email vs. mailing paper notices.
- Expanding the use of interactive TV for court hearings so defendants do not need to be transported through out the state for hearings.
- Allowing change of venue where one county can handle all cases that occur in other counties regarding the same defendant, again eliminating the transportation costs.
- Allowing judges to make decisions on sequestering jurors. The cost of keeping jurors overnight is substantial and not needed in all cases.
- Centralize and automate payment of fines and fees online.
- Handle no proof of insurance through the Department of Public Safety rather than courts.
The reason why I restate their testimonies is because one represents new thinking, the other represents status quo thinking . Especially in times of difficult financial times, it's imperative that we think of ways to cut costs. Sometimes that means eliminating programs entirely, especially if they're more wish list material than supplying important needs. Sometimes, that means finding ways, like the MCAA did, of providing constitutionally mandated services at the best price possible.
The next item on the timeline that justifies putting the DFL leadership on the MIA list is Gene Pelowski's infamous email:
From: Gene Pelowski [mailto:Rep.Gene.Pelowski@house.mn]Rep. Pelowski's email ties in perfectly with Sen. Clark's statement about how they can't find sufficient savings. Tarryl said that $500,000,000is the most that can be expected in savings. Rep. Pelowski's email encouraged DFL activists whose livelihoods depend on government largess to testify that cutting spending is impossible.
Sent: Tuesday, February 17, 2009 10:13 AM
This Friday, February 20, there will be a bicameral hearing held in our region. Senators and Representatives from both political parties will be in Winona from 3:30 to 5:30 PM, Winona City Hall, 207 Lafayette St. The purpose of this hearing is to get testimony from affected programs in every level of government, education, health care or service impacted by the cuts suggested by the Governor's state budget.
I am writing you to ask that you or a designee get scheduled to testify. You may do this by going to the House website at www.house.mn and clicking on "Town Meetings".
We would ask you to focus your comments on the impact of the Governor's budget including what is the harm to your area of government or program. Please be as precise as possible using facts such as number of lay offs, increases in property taxes, cuts in services, increases in tuition, elimination of programs. To be respectful of the time necessary to hear from a large number of constituents it would be advised to use no more than 3-5 minutes to convey your message. If you choose to provide handouts or printed materials, please plan to bring approximately 25 copies, enough for committee members and media.
Sincerely,
Representative Gene Pelowski
District 31A
That was predictable because the DFL is invested in spending ever-increasing amounts of money. That's what happens when you're disinterested in finding cost-saving efficiencies.
It's imperative that government workers, whether they're working at the municipal or county level or whether they're working at the state level, aggressively look for ways of providing constitutionally mandate services at the most cost-effective price.
It's imperative because taxpayers and small businesses are burdened enough.
Most importantly, it's imperative because the DFL's leadership has been MIA on this important issue.
Originally posted Friday, February 20, 2009, revised 12-Mar 1:44 PM
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Tying Things Together
AllahPundit's post on HotAir is scary reading. Here's what makes it scary:
At a forum with reporters on Thursday, the head of the department that has traditionally taken the lead on global oil-market policy, was asked what message the Obama administration had for the Organization of Petroleum Exporting Countries at its meeting next month.It sounds like Obama's cabinet requirements are that cabinet officers either have to be corrupt or clueless. This guy sounds like he fits into the clueless category.
I'm not the administration , the Cabinet secretary replied. I will be speaking and learning more about this in order to figure out what the U.S. position should be and what the president's position is. The day before, reporters asked him about OPEC output levels after a speech to a group of utility regulators. He responded that the issue was "not in my domain."
I know I've harped on this these awhile but it still fits. The Obama administration is still not earning America's trust. They were 'hired' to fix the banking system. The rollout of that plan has incited fear amongst Wall Street experts. Obama was hired to clean up the banks' toxic assets. That's been a failure thus far. They were hired to fix the economy. People have reached the conclusion that the stimulus bill, which Nancy Pelosi wrote and that President Obama signed with just 3 Republican votes, wastes alot of money.
The Obama administration's scattergun approach with the stimulus bill isn't inspiring confidence with Main Street or Wall Street. People are wondering when we'll stop sliding.
Add onto that the fact that the Energy Secretary is insisting that he isn't "the administration" and it's reaching laughingstock status. That's before people read Jennifer Rubin's article :
The president then has a two-fold problem. First, the economy is worsening. By seizing the tiller with a series of rescue plans (crafted and approved almost exclusively by Democrats) and promising he will save millions of jobs (the precise figure keeps shifting) he and his Democratic allies in Congress now own the economy and will be held responsible for the progress of the recovery. Second, the very policies which they intend to implement are proving to be unpopular both on Wall Street and on Main Street.The way that the stimulus bill passed was President Obama's worst nightmare. Getting three liberal Republicans to vote for the bill won't provide any cover for his administration or to Congressional Democrats. This isn't how you build longlasting majorities. It's how you lose them.
You can see the panic beginning to rise in his media fan club. Paul Krugman eyes the latest Fed report predicting high unemployment through 2011 and whines, "Who'll stop the pain?" Michael Kinsley is fretting that we are in for a bout of inflation.
I've repeatedly said that Republicans should let Democrats own the stimulus bill. That's precisely what they did. Now the White House is attacking a credible, boisterous opponent. While it's probably politically necessary at this point, it isn't helping their reputation.
The question that will soon be asked is whether, and when, Democrats will start fending for themselves rather than trusting the Obama administration. I'm betting that a bunch of Blue Dogs are quickly reaching that point already.
That's the surest sign that an administration is flailing.
Originally posted Saturday, February 21, 2009, revised 26-Jan 11:30 PM
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The Worst Economic Slump in 75 Years?
According to this Bloomberg article , Sen. Christopher Dodd described the current economic conditions the worst economic slump in 75 years. Don Luskin has a solution for the current economic conditions: Stop rescuing everthing in sight.
I wrote here several weeks ago that the stimulus' bill would be an expensive dud, nothing but a big-government power-grab. And I wrote last week about what a disaster the unveiling of Treasury Secretary Timothy Geithner's half-baked bank rescue plan was. It's now gotten even worse, now that we can see a deadly surprises hidden in the "stimulus" bill, and now that we've heard the administration's plans for mortgage foreclosure relief.
No wonder my CNBC colleague Rick Santelli went a little bit berserk in his broadcast Thursday morning from the floor of the Chicago Mercantile Exchange, warning that all the bailouts, programs, rescues, stabilizations and stimuli are turning our capitalist nation into Cuba. He got the floor traders so stirred up it seemed for a minute there that an armed revolution was going to start at any moment.
It's time that President Obama stopped proposing new bailouts on a seemingly daily basis. It's time he let some banks fail. And it's definitely long past time for him to pull the cramdown provisions in legislation, which would allow courts to change the contract between the lender and the borrower.
Cramdown and other provisions were proposed to help people. Unfortunately, the supposed cure is a drain on the banking system. Some solution that is. Clearly, people don't have confidence in President Obama's solutions. If they did, Rasmussen's consumer confidence ratings wouldn't be tanking:
The Rasmussen Consumer Index, which measures consumer confidence on a daily basis, rose a point on Friday and gave back that point on Saturday. Confidence fell to an all-time low last Monday and has stayed just above that level ever since. At 56.8, the Consumer Index and down nine from a month ago.
The Rasmussen Investor Index dropped a point-and-a-half on Saturday to 60.7. Investor confidence is down one point from a week ago and down nine points from a month ago.
Eight percent (8%) of Americans rate the economy as good or excellent and 10% say it is getting better.
Consumer confidence is dropping, as is investor confidence. That's a deadly combination because it highlights the fact that investors have stopped investing and consumers have stopped buying anything but the essentials. These numbers, coupled with Timothy Geithner's TARP II proposal and President Obama's mortgage bailout and President Obama's less-than-stimulating stimulus bill , are driving confidence down that this administration has the right solution to these major problems.
I've said in conversations before that strong economies are fueled first by smart policies, then by people simply having confidence in the American economy. It's my theory that people are realizing that Obama administration policies are radical and risky. That combination of qualities doesn't instill confidence in anyone.
That's why it's important that the administration starts adopting less radical policies. It's also important that they stop the bailout mania. Their 'government-should-do-everything' attitude hurts the economy.
Continuing with that attitude won't cure our ills. It's time this administration stopped digging.
Originally posted Saturday, February 21, 2009, revised 26-Jan 11:26 PM
Comment 1 by J. Ewing at 21-Feb-09 02:59 PM
You are presuming sanity, intelligence, and rationality that are nowhere in evidence among liberals. You point to all of the evidence that their policies are wrong, dangerous, and stupid, but they will simply claim that they are brilliantly doing all the right things, and it's only your stupid immorality that fails to recognize it.
So who you gonna believe, the pronouncements of our betters, or your lyin' eyes?
Obama's Budget: Cutting the Deficit He Created
According to this Washington Post article , President Obama's first budget will focus on reducing the deficit he helped create. Here's what he said during his weekly radio address:
In his weekly radio and Internet address today, Obama expressed determination to "get exploding deficits under control" and described his budget request as "sober in its assessments, honest in its accounting, and lays out in detail my strategy for investing in what we need, cutting what we don't, and restoring fiscal discipline."This coming from the man that just went on an historical spending spree, much of which is a payoff for the Democrats' political allies. Think about the money that's being spent in the name of bailing out GM. It's actually being spent to prevent GM and Chrysler from filing Chapter 11 bankruptcy, which would force the UAW into renegotiating their pension and health care contracts.
Instead of calling this the auto bailout, we should apply truth-in-advertising rules and call it what it really is: the UAW bailout.
Unless President Obama starts saying no to the Democrats' political allies, he doesn't stand a chance of reducing the deficit during the first half of his administration. Based on his actions thus far, why should I believe that President Obama is interested in saying no to the Democrats' special interest allies?
While it isn't likely that he'll say no to the UAW or other Democratic allies, it's nonetheless important that he do that for the economy's sake.
Posted Sunday, February 22, 2009 10:41 AM
Comment 1 by walter hanson at 22-Feb-09 03:54 PM
Gary here's a way to address Obama's lack of truth in advertising. The fiscal year 2007 budget had a deficit of $244 billion dollars. Obama said he was going to cut the deficit in half. That means Obama is planning to cut the deficit to $122.
Yet I heard the number $533 billion as the goal. I think he's off by $400 billion dollars.
Walter Hanson
Minneapolis, MN
Santelli Calls Gibbs's Bluff
Watching this video, it's obvious that Rick Santelli isn't shying away from the fight he picked with the Obama administration on the home mortgae bailout:
Gibbs brought this on himself by insisting that Rick Santelli didn't know what was contained in the Obama administration's mortgage bailout. Instead of shying away and hiding in a corner, Santelli mentioned that he's particularly appalled at the Obama administration's attempt to let courts rewrite mortgage interest rates, even noting that the legislation would allow courts to rewrite what the principle left on the mortgage.
I think Mr. Gibbs was betting on his calling out Mr. Santelli would silence him. If that was his thinking, it backfired. Not only that but Santelli accepted his offer of getting together with Gibbs. I'm positive that Gibbs wasn't expecting that.
Santelli's accepting Gibbs's offer of discussing the mortgage bailout policy over coffee puts Mr. Gibbs in a difficult position. If Mr. Gibbs accepts Santelli's offer, he'll be asked some difficult questions on TV, questions that he'd rather not answer. If Mr. Gibbs doesn't accept Santelli's offer, he looks like a wimp with a big mouth and big microphone.
Given Mr. Gibbs's difficulties, I'm confident that that isn't the position the White House wants Mr. Gibbs in.
Posted Sunday, February 22, 2009 2:10 PM
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Cities to DFL: Enough With the Mandates
If there's a message that city governments sent to state legislators during their Desperately Seeking DFL Leadership Tour, it's that they're tired of all the unfunded mandates that legislators have burdened cities with. This Brainerd Dispatch article cites another example of city officials delivering that message:
Brainerd City Administrator Dan Vogt said the Brainerd City Council made $678,000 in cuts this week, equaling about 7 percent of the city's working fund. The city is four police officers below the needed level and is talking about furloughs and wage freezes, he said. Vogt asked for a reduction in state mandates.It's apparent that Mr. Vogt thinks that Brainerd has set smart policies but that they can't implement all of the policies they want because unfunded and underfunded mandates are getting in the way.
A good question going forward for citizens to ask the DFL if they're interested in eliminating the counterproductive mandates they've imposed on local officials . A good question for businesses to ask the DFL is if they're interested in eliminating mandates that provide little benefit to the company or their employees .
I'd suggest that cities have a list of specific mandates they think should be eliminated. I'd suggest that businesses should put their list together, too. I'd further recommend that cities and businesses talk a small handful of legislators into putting legislation together that would eliminate those unfunded and underfunded mandates.
Mr. Vogt isn't the only city administrator who's talked about cutting mandates. St. Cloud Mayor Dave Kleis spoke about that issue at Thursday night's hearing:
St. Cloud Mayor Dave Kleis was the first to testify and he immediately voiced his concern about mandates the state puts on local governments. Mayor Kleis said that the legislature shouldn't put mandates on local governments if they aren't going to fund them, saying that it's better to let local governments figure out their own solutions.What's most upsetting about unfunded mandates is they're essentially the state government telling people like Mayor Kleis that they know how to run their city better than Mayor Kleis knows how to run it. Unfunded mandates from the federal government to state governments are the fed's say of telling people like Gov. Pawlenty or Gov. Mitch Daniels that they know how to run Minnesota or Indiana better than Gov. Pawlenty or Gov. Mitch Daniels know how to run their states.
That type of arrogance shouldn't be tolerated whether it's Speaker Kelliher and Senate Majority Leader Pogemiller telling Gov. Pawlenty how to run Minnesota or it's President Obama and Speaker Pelosi telling Gov. Pawlenty or Gov. Mitch Daniels how to run Minnesota and Indiana respectively.
BULLETIN TO SPEAKER KELLIHER AND MAJORITY LEADER POGEMILLER: St. Paul isn't the center of wisdom on how to run St. Cloud, Brainerd and other cities. People like Dave Kleis are perfectly capable of running his city efficiently.
BULLETIN TO PRESIDENT OBAMA AND SPEAKER PELOSI: Washington, DC isn't the center of wisdom. People like Gov. Pawlenty and Gov. Mitch Daniels are perfectly capable of running their state efficiently.
The need for most unfunded mandates is limited, especially consider people like Mayor Kleis are running cities. The need for federal unfunded mandates is limited because people like Gov. Pawlenty, Gov. Daniels, Gov. Jindal and Gov. Barbour are doing an effective job running Minnesota, Indiana, Louisian and Mississippi respectively.
It's time state governments halted the transfer of decisionmaking from cities to state capitols. It's time that federal governments halted the transfer of decisionmaking from state capitols to Washington, DC.
It's time they started trusting local officials like Dave Kleis and Tim Pawlenty.
Posted Sunday, February 22, 2009 3:39 PM
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They Must Be Skating In Hell
After reading the opening paragraph of Tom Friedman's NYTimes column , I'm starting to believe that they're passing out figure skates in hell. Check this out:
Reading the news that General Motors and Chrysler are now lining up for another $20 billion or so in government aid, on top of the billions they've already received or requested, leaves me with the sick feeling that we are subsidizing the losers and for only one reason: because they claim that their funerals would cost more than keeping them on life support. Sorry, friends, but this is not the American way. Bailing out the losers is not how we got rich as a country, and it is not how we'll get out of this crisis.I laid out the criteria for whether businesses should be allowed to die over a month ago. Here's what I said then:
A good rule of thumb in determining whether something should be allowed to die is whether it can't survive without frequent government assistance payments.I should've included other criteria, specifically whether we'll miss the company if it dies and whether they'd emerge as a healthier corporation from reorginization bankruptcy. If going through reorganization will make them healthier for the long run, then it's imperative that we let such companies 'die'. If we won't miss the companies when they go out of business, let them die.
I can't agree with everything from this paragraph from Friedman's column but I did find something worthwhile in it:
I've been traveling all across the country on a book tour, and every evening I return to my hotel with my pockets full of business cards from inventors in clean energy. Our country is still bursting with innovators looking for capital. So, let's make sure all the losers clamoring for help don't drown out the potential winners who could lift us out of this. Some of our best companies, such as Intel, were started in recessions, when necessity makes innovators even more inventive and risk-takers even more daring.Mr. Friedman is right in saying that this "country is still bursting with innovators looking for capital." I don't doubt that for a split second. It's his next statement that bothers me most. Saying that we should "make sure all the losers clamoring for help don't drown out the potential winners who could lift us out of this" sounds too much like Uncle Same picking winners and losers for my liking.
It's time we got the toxic assets off the books, established sane levels of banking and lending regulations, then provided tax incentives to spur the next investment movement. If that happened, government wouldn't have to pick winners and losers. The markets would take care of that.
Posted Sunday, February 22, 2009 10:07 PM
Comment 1 by J. Ewing at 22-Feb-09 10:22 PM
The secret to understanding this is defining the term "we." If "we" are the government, picking winners and losers is beyond their level of competence. If "we" are the ordinary citizens not wanting to bail out this big failures, then that is the correct approach.
Comment 2 by Gary Gross at 22-Feb-09 10:40 PM
Considering the fact that Friedman is a liberal, I'm betting he's looking at it from the government's perspective.
