The proposed budget would increase federal spending and the budget deficit just as the American economy has finally begun to stabilize, threatening future prosperity at just this decisive moment.  Perhaps most disconcerting about the Obama budget is that it fails to address in any way the single greatest menace to economic prosperity in the 21^st century and beyond: entitlement spending.  The budget deficit already stands at a staggering $14.1 trillion and continues to grow; as long as entitlement reform continues to be neglected, the American economy will keep moving toward the precipice of insolvency.

The Obama Budget in brief.  The FY 2012 federal budget as proposed by President Obama does next to nothing about the looming entitlement crisis and actually increases non-defense, domestic discretionary spending.  In a press statement on Monday, President Obama sang the praises of his budget proposal, claiming, “Rather than fight the same tired battles that have dominated Washington for decades, it’s time to try something new.  Let’s invest in our people without leaving them a mountain of debt.”

But this very budget actually makes the mountain higher.  J.D. Foster, a budgetary expert at the Heritage Foundation, writes of President Obama’s budget proposal, “Under the President’s budget, the deficit in 2011 will hit a new record of $1.645 trillion, and the national debt held by the public over the next 10 years would nearly double, rising by $ 7.2 trillion.”  In addition, the Obama budget increases domestic discretionary spending by $31 billion in 2012 and total government spending by 49 percent in the next decade.

The colossal spending increases proposed by President Obama—again—will have a calamitous effect on American economic prosperity.  This dangerous trend is unsustainable in the long-term and counterproductive even in the short-term.

Federal spending.  The White House and the Office of Management and Budget agree that their $3.73 trillion budget proposal will raise this year’s budget deficit to $1.65 trillion.  This means that the deficit will reach nearly 11 percent of the national GDP—a figure not seen since WWII.  At the time of this writing, the annual budget deficit is already a whopping $1.48 trillion.  President Obama’s budget proposal would increase the annual budget deficit by 12 percent in FY 2012 alone, and it estimates yet another $1 trillion+ deficit the year after that.

Representative Paul Ryan (R-WI), Chairman of the House Budget Committee and Senator Jeff Sessions (R-AL), the ranking member of the Senate Budget Committee, contend that government spending will increase by a mind-boggling $46 trillion over the next 10 years if President Obama’s budget proposal is enacted.  To put this in perspective, America’s entire GDP is a little under $15 trillion.  It is plain that President Obama has little interest in following through with his pledge to reduce government spending and the federal budget deficit.

Tax Increases.  Just two months after working with Republicans to extend most of the Bush tax cuts for another two years, President Obama proposed a federal budget that is laden with tax increases—some of which appear to be intentionally camouflaged.  For example, he proposes to extend the top tax rate on capital gains and dividends to 20 percent from 15 percent, but the budget describes this as a “tax cut that reduces revenues” by $124 billion in the next ten years.  That’s right: the Obama budget proposes a tax hike but calls it a tax cut that, by its own estimate, will cost the government money in the long-run.  This is nonsense.

As another example, President Obama’s budget proposal prevents the Alternative Minimum Tax from increasing in 2013.  But instead he proposed a $321 billion tax hike to offset the cost of not raising the Alternative Minimum Tax.  Here is another example of reneging on his campaign promises.

Representative Paul Ryan and Senator Jeff Sessions contend that President Obama’s fiscal year 2012 budget would impose a $1.6 trillion tax hike on America’s families and workers.  Contrary to the president’s assertions and liberals’ philosophy, no one can afford these tax hikes right now as the nation emerges from recession—especially considering that their purpose is not actually to balance the budget but, instead, to further expand government spending.

Political opposition to President Obama’s budget proposal.  Leaders from both sides of the political spectrum are angry with President Obama’s unwillingness to reduce government spending and taxes or propose changes to the entitlement system.

Several leading Democrats have criticized President Obama for his unwillingness to reduce federal spending for FY 2012.  “Senator Chris Coons [D-DE] said Obama should have followed through on the recommendations of his own debt commission, which in December proposed nearly $4 trillion in cuts over the next decade that included reforms to Medicare, Social Security, and the tax code.”  Erskine Bowles, former chief of staff to President Bill Clinton and head of President Obama’s debt commission, severely criticized the president’s proposed budget.  Mr. Bowles said that the Obama budget proposal goes “nowhere near where they will have to go to resolve our fiscal nightmare.”  Kent Conrad (D-ND), the chairman of the Senate Budget Committee, said that he could not accept the budget proposal in its current form unless the administration provided him with a specific plan for serious deficit reduction.  Conrad, in an interview with The Hill, said of his reservations about Obama’s budget proposal, “It cannot be the answer that we are going to have a debt of over 100 percent of the GDP.”  Several other Senate Democrats, including Ben Nelson of Nebraska, Joe Manchin III of West Virginia, Bill Nelson of Florida, and Debbie Stabenow of Michigan, have expressed their consternation with President Obama’s budget proposal.  The lack of Democratic support for President Obama’s budget in the U.S. Senate provides Republicans an opportunity to offer major revisions.

This week, House Republicans began drafting their own version of the FY 2012 budget.  At the time of this writing, few specifics of that proposal have been released.  What is clear, however, is that Republicans intend to cut $100 billion in discretionary spending for the upcoming fiscal year.  In addition, the Republican budget proposal will likely include entitlement reform, a drastic reduction in the capital gains and alternative minimum taxes, and significant reductions in the long-term structural debt.

Discussing the need to address the entitlement crisis, Representative Paul Ryan (R-WI) said, “You have to do entitlement reforms if you are serious about this budget, if you are serious about this debt.  The sooner we tackle it, the better off everyone is.”  The Republican caucus in the House is still divided over the intricacies of their budget proposal.  Speaker of the House of Representatives John Boehner will have to ensure that everyone is united whatever revisions they propose.

Conclusion.  President Obama’s proposed budget for FY 2012 fails to address the gravest threats facing the nation in the years ahead: out-of-control spending, as large a budget deficit as we have ever had, and an entitlement system that is breaking the bank.  In November 2010, the American people made it abundantly clear that they had had enough of the reckless spending, tax hikes, and job-killing legislation that define the agenda of Congressional liberals and President Obama.  Syndicated columnist Charles Krauthammer put it well: “A more cynical budget is hard to imagine.”  It is paramount that conservatives in Congress ensure that legislative revisions to the budget include a real reduction in non-defense domestic discretionary spending, the eradication of Congressional earmarks, and drastic alteration to our archaic entitlement system.  Failure to address these problems that the president ignored will simply make the financial crisis worse as it continues to grow.

The National section of the Weekly Political Forecast is authored by PAI’s Deputy Policy Director.

Liberals have directly caused this tremendous increase in filibusters and the inevitable breakdown in bipartisanship.  The Senate leadership, especially Senate Majority Leader Harry Reid, has relied heavily on a procedure known as “filling the Amendment Tree”, a rule that provides the majority with the ability to block amendments proposed by the minority party.  Senator Reid has employed this extreme procedure a whopping 44 times in four years.  The previous six majority leaders combined used this procedure just 36 times in 30 years.  Constantly prohibiting conservatives from offering amendments has left them little choice but to resort to filibustering as practically their only means of influencing the proceedings.

Changing the Senate rule to make filibustering more difficult would do long-term damage to the legislative process beyond whatever short-term, hamstringing effect such a change would have against conservatives.  Mostly, such a change would solidify power even more centrally within the Senate in the hands of only a few—a dangerous trend no matter which party might compose its majority and clearly antithetical to the Founders’ intentions for that body.

The origins and legality of the filibuster.  The filibuster is a debate by one or more Senators intended to delay consideration of a bill or nomination.  Today, the filibuster is most commonly used by the minority party to block appointments, prolong debate, defeat legislation, and prevent the majority party from usurping excessive amounts of power.  Furthermore, the filibuster serves to empower individual members to participate in the process and for the American people to have their say.

In recent months, Harry Reid and his liberal colleagues in the Senate have branded the filibuster as “unconstitutional and un-American.”  But this is simply false.  The Constitution permits each house of the legislature to determine the rules of its proceedings, and the Senate rule creating the filibuster was passed by a two-thirds, procedural vote long ago.

Senate Rule XXII, created by the Senate in 1917, provided the minority party with the authority to prevent votes on bills, block controversial legislation, and vote against nominees deemed unfit for service.  Heritage Foundation analyst Brian Darling writes, “This tradition is important because it enables all Senators representing all 50 states to participate in every piece of legislation and nomination.  If the Senate jettisons its tradition of extended debate, it will likely cease to be a deliberative body, and the majority party will have unfettered power to pass legislation and confirm nominees with little to no debate.”

Considering a rules change.  The exponential rise in the number of filibusters in recent years has precipitated the Senate’s decision to seriously consider a rules change.  Senator Reid is of the opinion that eliminating or altering the filibuster rule will create greater efficiency.

What Senator Reid fails to mention, however, is that his disinterest in permitting conservatives’ amendments is the direct cause for the increase in the number of filibusters.  Senator Lamar Alexander (R-TN), one of the Senate’s most outspoken critics of a change to the filibuster rule, said of the Republicans’ willingness to use the filibuster, “The demise of the Senate is not because Republicans seek to filibuster. The real obstructionists have been the Democratic majority which, for an unprecedented number of times, used their majority advantage to limit debate, not allow amendments and to bypass the normal committee consideration of legislation.”  Harry Reid’s unwillingness to accept Republican amendments on seminal legislation is the chief reason why the number of filibusters has significantly increased in the two previous legislative sessions because the filibuster is the minority party’s only defense against the Majority Leader’s Filling of the Amendment Tree.

The U.S. Senate was not designed to be a forum for partisan ramrodding of pet agendas at the expense of liberty.  Nor was it intended to be efficient: Senators were once appointed (not elected) by the states to be deliberative elders and to check the popular sentiments expressed in the proceedings of the House of Representatives.  The filibuster is one of few remaining protections of national minority interests.

At the time of this writing, three Senators—Jeff Merkley of Oregon, Tom Udall of New Mexico, and Tom Harkin of Iowa— have drafted legislation that would alter or eliminate the filibuster.  Under each of these proposals, the majority party would be able to exercise unanimous authority over floor debates, committee markups, and the amendment process without interference from the minority.

The Merkley Resolution.  Of the three filibuster reform proposals set to be considered by the Senate later this week, the Merkley Resolution has received the least media attention.  The Merkley Resolution would eliminate all filibusters on motions to proceed to a bill and amendments to bills.  To block nominations, ten filibustering Senators would have to file a motion with the Senate to block a simple majority vote and would have to actually debate in order to continue a filibuster.

The flaws with the Merkley Resolution are threefold.  First, it takes power away from backbench Senators and gives sole authority to the Senate leadership and members of the majority party.  Second, this resolution suggests that debate by members of the minority party is the greatest threat to governing and seeks to severely limit it; this resolution entirely ignores and attempts to override the original purpose of the Senate.  Third, it fails to place any restraint on the majority leader’s authority to Fill the Amendment Tree, the real source of the increase in minority filibustering.  Says Darling, “Senator Merkley’s well-intentioned proposal to fix many of the perceived problems with the Senate falls short of effective reform that would allow the Senate to function properly and enable all 100 Senators to actively participate in the legislative process.”

Rather than restraining the minority party, and preventing them from offering amendments, the personal power of the majority leader should be the target of any rules changes.  The Senate should reject any change to the rules that prohibits all 100 Senators from participating in the legislative process.

The Udall Resolution.  The Udall Resolution argues for repeal of the filibuster on procedural, legal, and Constitutional grounds.  Senator Udall contends that Rule XXII of the Senate Operating Rules is unconstitutional and violates the intent of the Founding Fathers.  In testimony before the Senate Rules Committee, Udall said of the filibuster and Rule XXII, “I believe that the requirement in Rule XXII for two-thirds to vote and end debate on a rules change is unconstitutional, is contrary to the Framers’ intent, and violates the longstanding common law principle that one legislature cannot bind its successors.”  But these objections clearly have little basis in fact and strike of mere partisanship.

Udall’s proposal is simple: he wants a one-time vote now to reduce the Senate threshold for passing all legislation.  He would do away with the three-fifths vote for new laws and the two-thirds vote for rules changes in favor of simple majority votes for all proceedings.  Brian Darling, describing Senator Udall’s position on this issue, writes, “To argue that all supermajority thresholds for votes are unconstitutional is inconsistent with a common understanding of the Constitution.”  

The Framers never intended for the Senate to operate like the House of Representatives, with pure majority rule.  Rather, the Framers saw the Senate as a superior body in which members would be forced to put their partisan differences aside and work together for the betterment of the Republic.  If the Udall Resolution were to pass, the Senate would effectively become nothing more than a second House of Representatives, directly subject to the whims of popular opinion and almost certainly less effective at producing truly good legislation.  The Udall Resolution is the most polarizing and least likely of the three resolutions to attract bipartisan support.

The Harkin Resolution.  Senator Harkin’s proposed change to the filibuster rule, despite being the most accommodating, is fundamentally flawed too.  Much like the Merkley and Udall Resolutions, Senator Harkin’s proposal inhibits the minority party from participating in the legislative process, offering amendments, and having adequate time to debate.  Senator Harkin’s proposal intends to progressively lower the filibuster threshold after a series of successive cloture votes.  In a recent press release, Harkin’s office wrote of the proposal:

“On the first cloture vote, 60 votes would be needed to end debate.  If one did not get 60 votes, one could file another cloture vote and [two days] later have another vote.  That vote would require 57 votes to end debate.  If cloture was not obtained, one could file another cloture motion and wait two more days.  In that vote, one would need 54 votes to end debate.  If one did not get that, one could file one more cloture motion, wait two more days, and 51 votes would be needed to move the merits of the bill.”

In 1995, when Harkin first proposed this precedential alteration to the filibuster rule, it was overwhelmingly rejected by members from both political parties.  Lamar Alexander (R-TN), the Senate’s most vociferous critic of filibuster reform, explains, “On the first day of the new Republican majority [in 1995], Senator Harkin proposed a rule change diluting the filibuster.  Every single Republican Senator voted against the change even though supporting it clearly would have provided at least a temporary advantage to the Republican agenda.”

The Harkin Resolution, if passed, would provide Senator Reid and other Senate liberals with unprecedented and immediate new authority.  Senator Alexander best sums up the culture of the Senate: “The reform the Senate needs a change in its behavior, not a change in its rules.”  An important first step for creating better consensus and greater continuity in the Senate is to prevent the majority leader from usurping supreme authority over the legislative process.

Conclusion.  It appears likely at the time of this writing that only the Harkin Resolution will be brought to the Senate floor for a vote.  Members on both sides of the aisle have expressed their dismay with all three reform proposals, but the Harkin Resolution will probably be debated anyway.  All 47 Republicans, as well as six Democrats and Independent Joe Lieberman have stated that they intend to oppose any change to the filibuster rule.  Senators from both sides of the aisle should vote against filibuster reform and instead place a more profound emphasis on changing the behavior and culture of the “world’s most exclusive club.”

The National section of the Weekly Political Forecast is authored by PAI’s Deputy Policy Director.

But any repeal effort would have to also pass in the U.S. Senate and override a certain veto from President Barack Obama.  Even if the House of Representatives were to vote for repeal, this would be dead upon arrival in the Senate.  Due to the current composition of the Senate—52 Democrats, 47 Republicans, and two Independents who usually caucus with the Democrats—full repeal of ObamaCare seems highly unlikely.  In fact, just two Senate Democrats (Ben Nelson of Nebraska and Joe Manchin of West Virginia) have stated that they intend to vote in favor of repealing ObamaCare.

Despite this, important changes could be made that would significantly repair at least some of the existing flaws in ObamaCare and which could prove to be much more realistic to expect.  Private insurance companies could be given greater incentives to build subsidiary companies that offer lower premiums for those who are currently uninsured.  The unconstitutional individual mandate and directly dependent provisions of the legislation could be eliminated. Perhaps most importantly, states could be permitted to opt of, or nullify, this legislation if the needs of their constituents are unfulfilled.  Outright repeal appears highly unlikely, so it will be hypercritical for conservative lawmakers to do what they can to revise ObamaCare in the most important ways.

Repeal Likely in the U.S. House of Representatives.  The House of Representatives appears poised, probably within the next week, to vote to repeal ObamaCare entirely.  Political analysts and policy scholars on both sides of the aisle are in agreement that the House of Representatives has the votes necessary to repeal ObamaCare.

Still, in March 2010, 34 House Democrats voted against ObamaCare, but only 13 of these were reelected in November.  At the time of this writing, just one Democrat, Representative Dan Boren of Oklahoma, has pledged to vote in favor of repealing ObamaCare, and Representative Heath Shuler (D-N.C.), one of the most conservative Democrats in Congress, told The Hill this week that the GOP’s plan to repeal ObamaCare is “immoral.”  But even if every Democrat in the House were to oppose repeal, the Republican majority has the votes necessary for passage.

The House Republican Caucus is united behind the repeal of ObamaCare.  Throughout the duration of the 2010 midterm election campaign, Republicans pledged to make repeal of ObamaCare their foremost legislative priority in the 112^th Congress.  With 242 members, Republican leaders have more than enough votes for repeal.  Representative Michele Bachmann (R-MN), one of the stars of the Republican Party, writes of ObamaCare, “It is already harming the economy and killing jobs.  Employers are seeing their costs for providing health insurance skyrocket, and that’s causing them to hold off on hiring and job creation.”  In the days ahead, expect a vitriolic debate to ensue over all aspects of ObamaCare.

Repeal Faces Obstacles in the U.S. Senate.  The full repeal of ObamaCare will almost certainly fail in the Senate, as Republicans only have 47 members in their caucus and two likely Democrats as allies.  However, Senators Joe Manchin and Mike Johanns (Nebraska’s junior Senator) have introduced legislation that would repeal ObamaCare’s 1099 mandate, which requires businesses, charities, and churches to file an IRS form for any transaction greater than $600.  Senator Manchin, in a press release, writes of his position, “As small businesses struggle to make ends meet, we can’t force them to take on any additional burdens that any reasonable person would reject.”  But even with the support of Senators Manchin, Johanns, and Nelson, the full repeal of ObamaCare will fail.  Due to the fact that the Senate and White House are controlled by Democrats, Republicans will be unable to achieve their goal of repealing this unconstitutional and costly legislation in full.  As a result, Republicans will have to work with their Democratic colleagues to drastically revise and curtail specific provisions of ObamaCare.  Due to the difficulty of outright repeal, America should embrace instead a three-pronged approach to reform.

Strategy #1: Provide health care companies with incentives to reduce premiums or create subsidiary companies.  Throughout the debate over ObamaCare, liberals pilloried insurance companies and held them responsible for the spike in health care costs.  Liberals seem not to realize that insurance companies are businesses and have to make a profit in order to survive; this fact alone should not be considered a point against them.  Rather than demonizing the insurance industry, liberals should have honed in on the real problems: excessive government regulations and mandates, to some extent, but especially the bloated entitlement programs.  The cost of health care is increasing exponentially due to the burdens placed on the medical industry by government.  These cost burdens trickle down from the medical equipment manufacturers to the drug companies, hospitals, insurance companies, and ultimately, to the patients.  The skyrocketing costs of medical care have forced the nation’s leading health care providers, like Humana, Arise, Network, and Affinity, to drastically increase the cost of health insurance premiums, but these costs partly arise from artificial, government-guaranteed increases in economic demand.

If the government is serious about providing every American with access to affordable health care, it should provide the aforementioned insurance companies with incentives to increase, rather than decrease, competition, innovation, and quality in customer service.  Incentives (like tax breaks) could encourage these companies to create subsidiary companies designed to provide lower premiums for those currently without health insurance.  Political leaders from both parties have refrained from discussing this idea, perhaps partly due to the adverse affects that support for “big insurance companies” can have on their reelection prospects.  Congressional leaders should place the well-being of the electorate ahead of their reelection prospects.  Americans are opposed to government-run health care and being coerced into purchasing a government-approved insurance plan.  As a result, lawmakers should replace government-run health care with a plan that provides individual companies with incentives and promotes market diversity.  Individuals and the private sector are better suited to deal with health care policy than the federal government.  Replacing the government-run option with this strategy would be politically advantageous and allow individual citizens to control their own personal well-being.

Strategy #2: Eliminate the individual mandate and directly dependent provisions of ObamaCare.  At the time of this writing, 20 states have filed lawsuits against the federal government on the grounds that the individual mandate provision of ObamaCare violates the Tenth Amendment.  The individual mandate provision specifies that nearly every American will be required to purchase government-approved health insurance by the year 2016.  Never before in American history has Congress required individuals to purchase a private product to qualify as a law-abiding citizen.  Last month, Harry E. Hudson, a judge on the United States District Court for the Eastern District of Virginia, ruled that the individual mandate and directly dependent provisions of ObamaCare were unconstitutional.

Judge Hudson’s ruling will most likely lead to further legal challenges.  Hudson’s ruling is the first major step in a lawsuit that is almost certainly destined for the U.S. Supreme Court.  Conservatives at all levels of government fervently oppose the individual mandate and directly dependent provisions of ObamaCare.  In the upcoming legislative session, Republicans should offer a series of amendments and revisions to remove the unconstitutional provisions from ObamaCare.

Strategy #3: State Nullification.  With the Senate and White House controlled by the Democratic Party, repeal of ObamaCare is virtually impossible and the above-described changes difficult.  Thus, the only viable solution for preventing ObamaCare from taking full effect is for state legislatures to enact legislation that nullifies ObamaCare.  Nullification is a process by which individual states attempt to invalidate a federal law or legislation that it deems unconstitutional.  Even if the U.S. Congress fails to repeal the entire law (which would almost certainly require overriding a presidential veto), the states could effectively undermine its execution one piece at a time.  At the time of this writing, eight states—Arizona, Florida, Michigan, Missouri, Ohio, Pennsylvania, Virginia, and Texas—have already introduced legislation that nullifies ObamaCare, and one state—Arizona—has passed a state Constitutional amendment that nullifies ObamaCare.  Overturning ObamaCare probably has to start at the state level in order to be practical.

Conclusion.  In the weeks ahead, national media attention will be fixated on the Congressional and judicial drama that is set to ensue over ObamaCare.  The House of Representatives is scheduled to vote for repeal of ObamaCare early this week, which will likely be the next act in the drama, but the legislation stands little chance of passing in the Senate.  So long as ObamaCare remains the law of the land in its current form, health care quality can only decrease, the budget deficit will soar, employers will cut their labor force, and the American economy will be hamstrung.  The 112^th U.S. Congress should pass a health care revision that encourages private sector competition, free-market capitalism, and protects individual liberty, and the states should be unafraid to defend their Constitutionally-guaranteed sovereignty.

The National section of the Weekly Political Forecast is authored by PAI’s Deputy Policy Director.

Is the Tenth Amendment to the Constitution the reason for States to regain control of their destiny, putting an end to the myth (believed by too many) that money from the Federal government is ‘free’ money?  Will the unfunded mandates from the Federal government to the States come to a common sense rightful end?

Will Article 1, Section 8, of the United States Constitution (specifically the commerce clause) be upheld as the founding fathers intended and Congress passed?  Or, will the United States Supreme Court rule differently in regard to health care reform?  An example of how ridiculous this could turn out to be is: The government is part owner of an automobile company.  Does that mean we all must buy only those cars?  Common sense tells us that this would be outrageous.

Will the greatest document ever written, the Constitution of the United States, be returned to its initial goal of establishing a government that secures the Blessings of Liberty to us and our posterity?  We can thank a group of Americans who recently came together to fight for the meaning of this document, to protect it, honor it, and to demand respect for it from the elected officials who took an oath to uphold it.  This group adopted the name “Tea Party” and this movement spread across this nation.  No one can ignore their impact in the 2010 election and should not ignore the impact they will continue to have in future elections.  Elected officials work for the people.  It should only be common sense to expect this.

Will common sense and conservatism be applied and used again?  Common sense is good sound, practical judgment derived from experience rather than study.   Conservatism will keep this country on the right course of liberty and the pursuit of happiness.

The year 2011 will become a great year if conservatism and common sense influence the decision making of this great nation.

Submitted by Dave Swarthout, Commentary Associate

Neither party is elated over the core provisions of the tax cut compromise.  Democrats oppose extending the Bush-era tax cuts for those making $250,000 per year, and Republicans are opposed to extending unemployment benefits and the capital gains tax increase that will also result from the compromise.  Earlier this week, liberals in the House Democratic caucus sent President Obama a vitriolic letter condemning his willingness to compromise with Congressional Republicans on extending the Bush tax cuts for the “wealthiest one percent.”  Jerrold Nadler, representing New York’s 17^th District, labeled Congressional Republicans as “a bunch of gangsters who blackmailed the Democrats in order to ensure that the nation’s wealthiest retain their tax cuts.”  Furthermore, Senator Bernard Sanders (I-VT), Congress’s only avowed Socialist and a fervent opponent of extending the Bush-era tax cuts, delivered an eight-and-a-half hour oration on Friday to condemn the administration for “selling out middle-class Americans.” Senator Sanders’ filibuster was the longest since Strom Thurmond’s 24-hour speech opposing the passage of the Civil Rights Act of 1957.

Many publications like the Huffington Post, New Republic, and the Washington Post have argued that President Obama’s compromise could cost him the Democratic nomination in 2012, but this seems unlikely.  The last incumbent president to lose his party’s nomination was Chester Arthur (R-VT) in 1884, and despite enraging some in his liberal base, it is highly unlikely that President Obama will lose the Democratic Party nomination in 2012.

The Bush-era Tax Cuts.  On January 1, 2011, the largest tax cuts in American history are set to expire.  Economists from both sides of the political spectrum agree that the Bush tax cuts restored economic growth following the heinous terrorist attacks on September 11, 2001.  Peter Orszag, the former director of the Office of Management and Budget under President Obama, wrote in September, “Higher taxes now would crimp consumer spending, further depressing the already inadequate demand for what firms are capable of producing at full tilt.”  Though he also suggests that “[m]aking all the tax cuts permanent would expand the deficit by more than $3 trillion over the next decade,” he fails to see that their renewal will increase government revenue and reduce the structural deficit in the long-run.

House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid have led the American people to believe that these tax cuts have benefited just the wealthiest one percent of the citizenry, but it was actually the middle and lower classes that benefited most from these tax cuts.  In fact, the non-partisan Bureau of Labor Statistics notes that nearly 92 million taxpayers received a tax cut of $1,083 in fiscal year 2003, which number increased after that date due to the framework of the legislation. What liberal pundits, polemicists, and politicians neglect to cite is that the most affluent Americans received substantially less assistance from the 2003 tax cuts than their lower and middle class brethren, and many ended up paying more money in taxes than in years prior.  Economists Stephen Moore and Arthur Laffer, in their new book entitled Return to Prosperity: How America Can Regain its Economic Superpower Status, write, “In 2005, the percentage of income taxes (which included dividends and capital gains) paid by the richest one percent hit an all time high of 39 percent.”  In reality, the share of taxes paid by the wealthiest one percent of Americans increased immediately following the passage of the Bush tax cuts.  As these statistics indicate, the 2003 Bush tax cuts benefited lower and middle income citizens at least as much, if not more, than the wealthiest citizens.  Allowing the Bush tax cuts to expire would therefore weaken the financial stability of middle class Americans, erode consumer confidence, and prolong our economic recession.

The Bush-era tax cuts significantly altered the federal income tax structure, by reducing the tax brackets from 15, 28, 31, 36, and 39.6 percent, to 10, 15, 25, 28, 33 and 35 percent.  This reduction of the income tax rates allowed citizens to retain a greater percentage of their annual income, and, in turn, stimulate the economy.  In addition to lowering the income tax rates, the Bush-era tax cuts eliminated the estate tax, from 45 percent to zero, on all estates valued above $3.5 million; increased the child tax credit from $600 to $1,000 per child; eliminated double taxation for businesses and corporations; and halved the capital gains tax rate, from 30 percent to 15.  Economists on both sides of the political spectrum agree that lower tax rates enhance consumer spending and stimulate the economy.  President Obama and Congressional Republicans, in their compromise plan, pledged to leave the income tax rates at their current levels. This is particularly important for the lowest-income Americans, because if the 10 percent income tax bracket ceases to exist, their tax burden stands to increase by 50 percent immediately.

President Obama’s Compromise with Republicans.  Earlier this week, President Obama and Congressional Republicans agreed to extend the Bush-era tax cuts, in full, for the next two years.  Additionally, the “tax cut compromise,” as it has been christened by the mainstream media, cuts 2011 payroll taxes by two percent and provides small businesses with tax cuts for capital investment.  Now, the U.S. Senate must also approve the bill before it can become law.  President Obama, discussing the compromise and the need for its enactment, said, “The proposal is by no means perfect because it includes provisions that Democrats and Republicans both dislike…But this is a good deal for the American people.  The vast majority of the tax cuts in this plan will help the middle-class.”

In addition, the proposed law will extend unemployment benefits for 13 months for those who have been out of work for over six months.  One common misnomer about the extension of the unemployment benefits is that they are only being extended for those who have surpassed the 99-week statutory limit.  In actuality, the compromise legislation states that the entire unemployment benefits program, not just individual benefits, will be renewed.  Under the compromise, the two federally funded unemployment benefits programs—Emergency Unemployment Compensation and Extended Benefits—will be extended for another 13 months.  In addition to these two programs, the nation’s unemployed are eligible to receive state aid as well.  Each of the 50 states has its own unemployment compensation plans.  Under the Emergency Unemployment Compensation plan, citizens are eligible to receive 34-53 weeks of federal compensation, whereas those enrolled in the Extended Benefits program receive 13-20 weeks of federal unemployment compensation.

Republicans in Congress opposed this extension because they contend that government aid is deterring citizens from seeking employment.  Senator Jim DeMint (R-SC) stated that so long as extension of unemployment compensation and an increase in the estate tax remain focal points of this compromise, he will oppose its enactment.  Furthermore, Senator DeMint, discussing his opposition to the legislation as it currently stands, stated, “We don’t need a temporary economy, which means that we do not need a temporary tax cut.  A permanent extension of our tax rates would allow businesses to plan five to ten years in advance, and that is how you build an economy.”  Additionally, Senator DeMint’s office, in an email to CNS News, wrote, “While [DeMint] is open to a temporary extension of all current tax rates without new deficit spending, he has also made it clear that temporary extension will not be a true stimulus to create the jobs our economy desperately needs.”

So long as unemployment compensation, an increase in the estate tax, and copious amounts of new deficit spending remain focal points of this compromise, some conservative Republicans may oppose its enactment, but it looks as though the Senate will have the votes to pass the bill.

Senator Sanders’ Filibuster.  Senator Bernard Sanders (I-VT), Congress’s lone Socialist, has pledged to do anything to prevent the extension of the Bush tax cuts for another two years.  Thus, on Friday, December 10^th, Sanders gave an eight-and-a-half hour oration condemning the tax cut deal, corporations, wealthy Americans, and free-market capitalism.  During his speech, Senator Sanders referred to America’s wealthiest citizens as “crybabies, who are making out like bandits.”  According to Senator Sanders, the wealthiest Americans were responsible for the recent economic recession, the toxic mortgages, and the decline of the stock market.

A filibuster in the U.S. Senate usually refers to any dilatory or obstructive tactic used to prevent a measure from being brought to a vote.  Technically, Sanders was not attempting to prevent a vote on the tax cut compromise, but he did aim to create a spectacle.  Since the November elections, Republicans have had 40, not 41, votes in the Senate because Senator Sam Brownback, of Kansas, has been away in Topeka transitioning into his new job as the state’s governor.  With just 40 votes in the Senate, Republicans are unable to prevent a Democratic member from filibustering legislation.

Even though Senator Sanders and his liberal colleagues in the Senate are poised to attempt to prevent the passage of the tax compromise, six moderate Democratic Senators—Joe Manchin, Joe Lieberman, Ben Nelson, Jim Webb, Kent Conrad, and Mark Pryor—have all indicated that they intend to support extension of the Bush-era tax cuts for another two years.  Conversely, only one Republican—Jim DeMint—has indicated that he will oppose the tax cut compromise.  It appears certain that the Senate will approve the tax cut compromise when it comes to the floor for a vote.

Liberals’ Concerns.  Since President Obama announced the tax bill compromise last week, leading Democrats have been critical of the compromise and their own president.  Representative Peter Welch (D-VT), discussing the Democratic Party’s opposition to the tax cut compromise, said, “We support extending tax cuts in full for 98 percent of American taxpayers, as the president initially proposed.  He should not back down, nor should we.”  Additionally, Representative John Conyers (D-MI) calls the tax cut compromise “[l]egislative blackmail by the Republicans.”

Many Democratic lawmakers have argued that President Obama sold out the Democratic Party and his liberal base by compromising with Republicans on extending the Bush-era tax cuts.  Anthony Weiner, a liberal from New York City and one of the most fervent opponents of the tax cut compromise, said that he was “sick of Democrats always punting on third down.”

In an attempt to quell party infighting, President Obama reached out to the scion of Democratic Party politics, former president Bill Clinton.  In a speech to the White House Press Corps and Congressional Democrats on Wednesday, Clinton urged his fellow Democrats to support the passage of the tax cut compromise, stating to the White House Press Corps, “I do not believe that there is a better deal out there.”  Despite Clinton’s strong support for the tax cut compromise, liberal members of Congress remain committed to preventing its passage, but it appears unlikely that liberals will have enough votes in either house of Congress to prevent passage of the tax cut compromise.

Conservatives’ Concerns.  As described earlier, Senator Jim DeMint’s three major qualms with the tax cut compromise are as follows.  First, the compromise makes the tax cuts temporary, not permanent.  He contends that Congress should pass legislation that extends the tax cuts for the next five years.  Second, DeMint opposes the extension of federal unemployment benefits for another 13 months.  Third, DeMint has stated that he will not support any tax cut measure that increases the federal budget deficit.  Wesley Dent, a spokesman for Mr. DeMint, said of the Senator’s position on the tax cut compromise, “Senator DeMint does not support the deal as currently structured, as it includes huge new deficit spending and death tax hikes on small businesses that would kill hundreds of thousands of new jobs.”

But DeMint seems to be in the minority in his own party, as Representative Paul Ryan (R-WI), Chairman-elect of the House Budget Committee, said that Republicans are not interested in changing the tax cut deal.  Rather, Ryan asserts, Republicans want to see it enacted as written.

Still, not all conservatives are pleased with the terms of this compromise.  Syndicated columnist Charles Krauthammer, in a scathing article in Friday’s Washington Post, criticizes Republicans for compromising their principles, drastically increasing the federal budget deficit, and allowing President Obama to gain the upper hand on the tax cut issue, pointing out that “Stimulus I was so reviled that Democrats banished the word from the lexicon throughout the 2010 campaign.  And yet, despite a very weak post-election hand, Obama got the Republicans to offer to increase spending and tax cuts by $990 billion over two years. Two-thirds of that is above and beyond extension of the Bush tax cuts but includes such urgent necessities as windmill subsidies.”

Conclusion.  Though Krauthammer makes a valid point that the tax cut compromise was a political victory for President Obama, it is unlikely that Republicans would be able to negotiate another compromise that extends the tax cuts in full as Senator DeMint hopes.  Allowing the Bush-era tax cuts to expire in their entirety would pose a calamitous threat to American economic stability.  Conversely, extension of the Bush tax cuts in the manner proposed will help restore consumer confidence, create jobs, and ensure that the American economy once again becomes an engine of economic growth.

The National section of the Weekly Political Forecast is authored by PAI’s Deputy Policy Director.

President Obama, his liberal allies, and the mainstream media have led the American people to believe that these tax cuts have benefited just the wealthiest one percent.  If one examines the facts, however, they will notice that it was the middle and lower classes that benefited most from these tax cuts, not the wealthiest one percent.  In actuality, the share of taxes paid by the wealthiest one percent of Americans increased by five percent immediately following the passage of the Bush tax cuts.

A failure to renew the Bush tax cuts will have a demonstrable effect on America’s fiscal future and further dissipate any hope of economic recovery.  If the Obama Administration fails to renew the Bush tax cuts, we will see a titanic amplification of the Capital Gains tax, the Estate Tax, also known as the “death tax,” federal income tax, and a drastic diminution in consumer spending. The purpose of this article is to examine the effects the Bush tax cuts have had on the American economy since their inauguration in 2001, the reasons why renewal is hypercritical and the consequences of allowing these tax cuts to perish.  With the American economy on the precipice of calamity, and little indication of economic rejuvenation in less than three years, the regeneration of the Bush tax cuts is a critical necessity.

History of these Tax Cuts & Analysis of their Impact

In 2001, the United States Congress, at the behest of President George W. Bush, passed the Economic Growth and Tax Relief Reconciliation Act, instituting what was, at the time, the largest tax cut since 1981.  Through the passage of this legislation, President Bush was able to ensure that this $1.35 trillion tax cut policy would become a reality.

The Bush tax cuts of 2001 spawned economic growth in a myriad of ways.  First, the drastic lessening of the U.S. federal income tax brackets from 15, 28, 31, 36, and 39.6 percent, to 10, 15, 25, 28, 33 and 35 percent enhanced consumer confidence and precipitated greater economic expansion.  Aside from fostering greater economic prosperity, the core objective of the Bush tax cuts was to ensure that American citizens would be able to retain more of their own money.  It was Bush’s hope that this money would be used to stimulate what was, at the time, a beleaguered economy.

Second, the Bush tax cuts increased the child tax credit from $500 to $1,000.  Lastly, and this author argues most importantly, the 2001 Bush tax cuts phased in a colossal decrease in the aforementioned estate tax (“death tax”), and instituted a one year suspension of that tax in 2010.  The estate tax is the amount of taxes owned on one’s assets or estate after they have perished.  An increase in the estate tax puts a grossly unnecessary burden on the benefactor’s family.  World renowned economists Arthur Laffer and Stephen Moore, in their seminal new tome, Return to Prosperity: How America Can Regain its Economic Superpower Status, note that President Barack Obama intends to prolong, not eliminate the estate tax.

As aforementioned, the estate tax is currently at 0%, and is set to expire in 2010.  By prolonging this superfluous tax, the tax will return to 45% on all estates worth more than $3.5 million.  For the vast majority of Americans, this tax is inconsequential, as the vast majority of them will never accumulate an estate of $3.5 million.  Dick Morris, Bill Clinton’s former chief campaign strategist, and a newly-enshrined Republican, noted that the estate tax is only paid by the top two percent of American families.  As the reader can see, if the Bush tax cuts are not renewed the estate tax would be another subtle tax directed only at the wealthier classes of our society.

An increase in the estate tax equates to less investment by those in the upper income brackets, and ultimately, a denigration of U.S. economic growth and productivity.   For the sake of American fiscal and economic stability, it is important that the estate tax is eradicated.  While the 2001 tax cuts labored vociferously to balance the budget and restore American prosperity, they were unsuccessful in meeting their intended objective, as a result of the heinous attacks of September 11, 2001.

President Bush and the Republican Congress, in an effort to minimize the severity of one of the most inexorable economic recessions in American history, passed a second tax cut in early 2003. The Jobs Growth and Tax Relief Reconciliation Act of 2003 initiated a tax cut proposal of $550 billion, coupled with the aforementioned $1.35 trillion dollar tax cut of 2001.  Upon the passage of this second tax cut, the American economy soared to new heights.  In fact, from 2003-2008, America witnessed its greatest economic expansion since the presidency of Theodore Roosevelt.

The 2003 tax cuts comprised a plethora of decisive features.  First, the Bush tax cuts provided a significant income tax reduction for married couples.  This feature would later go on to spark controversy as many same-sex couples argued that they are deserving of this tax benefit, though same-sex marriage is illegal in nearly every state.  Second, the 2003 tax cut precipitously increased the child tax credit from $600 to $1,000 per child. The increase in the child tax credit was a direct result of President Bush’s staunch support of family values.     Third, the tax cut ended the longstanding tradition of double taxation of income and investments.  As a result, the stock market and 401K plans saw a marked increase.  Furthermore, in October of 2006, the Dow Jones Industrial Average reached its pinnacle, exceeding 15,000 points.  If the Bush tax cuts are not renewed, these numbers will plummet even lower, due to the reinstatement of double taxation.

Lastly, the Capital Gains Tax diminished exponentially as a result of the 2003 tax cuts.  The reduction in the Capital Gains Tax rate from 20 to 15 percent created $745 billion in new government revenue over a four-year period.  President Obama has made it clear on numerous occasions that he is poised to increase the Capital Gains Tax rate from 15 percent to an atrocious 30 percent.    As the reader can see, increasing the Capital Gains Tax rate will stifle economic productivity and ultimately lessen the government’s revenue intake.  Millions of American families will be in a state of financial ruin if the Bush tax cuts are not renewed.

One of the common misnomers about tax cuts is that they benefit only the wealthiest citizens.  Much to the chagrin of President Obama and congressional liberals, the argument that the Bush tax cuts only benefited with wealthiest one-percent is erroneous.  In fact, the non-partisan Bureau of Labor statistics notes that nearly 92 million taxpayers received a tax cut of $1,083 in fiscal year 2003. That number has increased in recent years, due to inflation, and the framework of the legislation.  Moreover, 46 million married couples received an average tax cut of $1,716.  Furthermore, 34 million families with children received a tax cut of nearly $1,473.  What liberal pundits, polemicists, and politicians neglect to cite is that the most affluent Americans received substantially less money from the 2003 tax cuts than their lower and middle class brethren, and ultimately ended up paying more money in taxes than the year prior.

Economists Stephen Moore and Arthur Laffer, in their new book Return to Prosperity: How America Can Regain its Economic Superpower Status, wrote, “In 2005, the percentage of income taxes (which included dividends and capital gains) paid by the richest one percent hit an all time high of 39 percent.  The top five percent paid nearly 60 percent of their income tax, close to an all-time record.”  As these statistics indicate, the 2003 Bush tax cuts benefited lower and middle income citizens more than those of more exorbitant financial means.     Allowing the Bush tax cuts to expire would weaken the financial stability of middle class Americans, deter consumer confidence, and prolong our economic recession.

To Approve or Not Approve, That is not the question.

The Obama Administration’s desire to deal a crushing blow to the Bush tax cuts would have disastrous and hap hazardous effects on the American economy.  The Heritage Foundation, the nation’s preeminent conservative think-tank, notes that if the Bush tax cuts are not reapproved by the 112^th Congress, the 10 percent tax bracket, one that benefits low-income Americans, would disappear, ultimately forcing the nation’s most desolate citizens to pay more of their already meager salaries in income tax.  Taxpayers with children will lose well over 50% of their child tax credits.  Third, taxes on dividends and capital gains will see a precipitous increase; and, lastly, the aforementioned estate tax, or death tax, would increase from zero to fifty-five percent.  All of these factors provide excellent examples of why it is crucial to extend the Bush tax cuts.

The Heritage Foundation contends that if the Bush tax cuts are reapproved, total employment will increase by 1,087,000 jobs per year; the nation’s Gross Domestic Product (GDP) will be $11 billion higher after inflation; personal savings will grow by $163 billion per year, after inflation; and, most outstandingly, After-tax household income will grow by an average of $274 billion per year.  The latter statistics prove that the Bush tax cuts will restore American prosperity, restore fiscal order, and bring about an end to this obstinate economic recession.

Aside from reforming our dilapidated and outmoded entitlement system, balancing the budget and cutting spending, extending the Bush tax cuts is the most fundamental priority of the Obama administration this year.  On January 1, 2011, the Capital Gains tax rate will increase, the estate tax, which is currently defunct, will rise to 55%, the tax bracket for the most financially strapped Americans will increase, and the economy will remain in recession.  If America wants to remain the most affluent nation in the history of the world, it is hypercritical that the Bush tax cuts are extended for another ten years. With Americans growing more petulant daily with the state of country’s financial situation, it appears that the Bush tax cuts have an excellent chance of being extended for a lengthy period of time.  If liberal troglodytes are at all concerned about their political fortunes, they would support extension of the Bush tax cuts.  Renewal of the Bush tax cuts will restore consumer confidence, fiscal sanity, lead to a balanced budget, end the economic recession, and ultimately, restore American prosperity.  It cannot be repeated enough.

The 111th Congress has enacted $352 billion net tax increases.  Most of the tax hikes were permanent and most of the tax cuts were temporary. There were seven dollars in permanent tax hikes for every dollar of permanent cuts. Keep in mind this does not take into account the higher taxes set to kick in on January 1, 2011.

Fortunately for American taxpayers, the midterm elections have increased the number of Taxpayer Protection Pledge signers in Congress.

Reported by The State Policy Network, Nov/Dec Edition 2010

Aside from regaining general control of the United States House of Representatives, the Republican Party also unseated three prominent committee chairmen: John Spratt (D-SC), Chairman of the House Budget Committee; Ike Skelton (D-MO), Chairman of the House Armed Services Committee; and, Jim Oberstar (D-MN), Chairman of the House Transportation and Infrastructure Committee.  In any other election, these long-serving incumbents might have been easily reelected.  Not only was the 2010 midterm election a referendum on the policies of the Obama administration, it was a referendum on politics-as-usual, incumbency, and out-of-control spending.  Each of these factors contributed to the demise of these long-serving incumbents.

One of the biggest upsets in the 2010 midterm elections came in South Carolina’s 5^th Congressional District.  Comprising the northernmost counties in South Carolina, this area has not been represented by a Republican since 1883.

Incumbent Representative John M. Spratt, Jr., the Chairman of the House Budget Committee, has represented this rural Congressional district since 1983.  Since his inauguration in 1983, Senator Spratt has been one of the most highly respected members of Congress.  State Magazine called him “one of his party’s most reliable bridges to the Republican side.”  Additionally, National Journal, one of the nation’s preeminent political periodicals, featured him on its cover as one of the “standout members in the United States Congress.”

Representative Spratt’s penchant for bipartisanship and his strong work ethic have gained him the respect of members on both sides of the aisle.  His most notable legislative accomplishment was the Balanced Budget Act of 1997.  Representative Spratt worked in conjunction with House Budget Committee Chairman, John Kasich (R-OH), to make this legislation a reality.  Upon passage of this legislation, the United States witnessed unprecedented economic growth.  But Spratt, upon assuming the chairmanship of the House Budget Committee in 2006, became one of the leading advocates of the liberal agenda.  He was an outspoken supporter of TARP (Troubled Asset Relief Program), the auto industry bailout, and ObamaCare, all of which were unpopular in South Carolina’s 5th Congressional District.  His support for these costly and unpopular legislative initiatives led to his defeat in 2010.

Representative Spratt was defeated by political novice and Tea Party-endorsed candidate Nick Mulvaney, 55 percent to 44 percent.  Spratt’s defeat leaves the Democrats scrambling for a Ranking Member on the House Budget Committee.  It appears that a battle will ensue between Reps. Marcy Kaptur (D-OH) and Allyson Schwartz (D-PA) for this coveted position.  On the Republican side, Paul Ryan (R-WI) will take over as Budget Committee Chairman.  Under Ryan’s auspices, the House Budget Committee will attempt to reign in out-of-control spending, streamline the Congressional budgeting process, pass a balanced budget amendment, and begin deliberating on the future of Social Security.  Spratt’s unexpected defeat leaves the Budget Committee without one of its most widely recognized members. 

Another major blow to the Democratic Party came in Missouri’s 4th Congressional District, where incumbent Representative Isaac “Ike” Skelton, IV, was narrowly defeated by his Republican challenger, State Representative Vicky Hartzler, 50 percent to 45 percent. The 4th District, which comprises Jefferson City and the Kansas City suburbs, had not elected a Republican since 1953.

Prior to his election to the United States House of Representatives in 1976, Ike Skelton served as the prosecuting attorney for Lafayette County (1957-1960), Special Assistant Attorney General of Missouri (1961-1963), and as a member of the Missouri State Senate (1970-1976).  Skelton has remained popular in this conservative-leaning district despite his liberal voting record.  National Journal notes that in 2009, Representative Skelton voted with Nancy Pelosi and the Democratic Party 95 percent of the time.  On domestic issues, Skelton has long followed the party line.  He voted against the 2001 and 2003 Bush tax cuts, against the Reagan tax cuts of 1981 and 1984, and for Cap and Trade.

Conversely, on national security and social issues, Skelton has compiled a somewhat more conservative voting record.  Skelton is a supporter of traditional marriage, pro-life, opposed to embryonic stem cell research, and has long been an ardent supporter of the Iraq War. Perhaps his best-known legislative accomplishment on the national security front was the controversial “Don’t Ask, Don’t Tell” legislation.

In 2006, after the Democratic Party regained control of the House of Representatives, Rep. Skelton was appointed chairman of the Armed Services Committee.  Under his auspices, defense spending remained stagnant; the United States increased its troop presence in Afghanistan, and spending for the Iraq War increased.  Skelton’s loss, coupled with the loss of John M. Spratt, Jr., the ranking Democrat on the Armed Services Committee, will propel Rep. Solomon Ortiz (D-TX) to the position of Ranking Member.  Howard “Buck” McKeon (R-CA) will become the new chairman of the House Armed Services Committee.  The loss of this moderate and highly respected Democrat could leave liberals on the Armed Services Committee in a precarious position.  While Rep. Ortiz is more than qualified to serve as the ranking member, he has been less willing to compromise with Republicans than his predecessor, Ike Skelton.

Maybe the most unexpected victory for the Republican Party came in Minnesota’s 8^th Congressional District, which borders northwest Wisconsin and Michigan’s Upper Peninsula.  James Oberstar has represented this rural district since 1975, and it has not been represented by a Republican since 1947.

Prior to 2010, Representative Oberstar had never faced a formidable Republican challenge.  In each of the three elections prior to 2010, Oberstar received well over 60 percent of the vote.  Oberstar, an internationally recognized expert on aviation and aviation safety, has been a member of the Transportation and Infrastructure Committee since the onset of his Congressional career.  Prior to being appointed to the position of ranking member (2004) and then chairman (2006), Rep. Oberstar served as the ranking member of the powerful House Aviation subcommittee.  In addition to serving as the chairman of the House Transportation and Infrastructure Committee, Oberstar is the co-chairman of the Congressional Travel and Tourism Caucus and the co-chairman of the Great Lakes Task Force.  Oberstar’s stoic and affable demeanor, coupled with his penchant for bipartisanship, has made him one of the most well-respected committee chairmen in the 111^th Congress.  Oberstar has worked hard with ranking member John Mica (R-FL) and Aviation Subcommittee Ranking Member, Tom Petri (R-WI), to ensure that the legislative priorities of both parties are afforded equal representation.

Jim Oberstar’s narrow defeat in 2010 came as a surprise to many political pundits.  Representative Oberstar had never received less than 64 percent of the vote in any of his previous elections.  In 2010, however, Oberstar garnered only 46 percent of the vote, compared to 48 percent for his Republican opponent, Chip Cravaack.  The Duluth News Tribune, one of the leading newspapers in northern Minnesota, called Cravaack’s 4,400 vote victory over the 18-term incumbent “one of the biggest upsets in Minnesota political history.”

Oberstar is a hybrid when it comes to his policy positions.  He is pro-life, a fervent supporter of the Second Amendment and traditional marriage, but opposed to free trade agreements (NAFTA and CAFTA), a supporter of the cigarette tax, corporate income tax and the capital gains tax, and was a vocal critic of President Bush’s decision to invade Iraq in 2003.  Oberstar’s loss to a political novice was precipitated by his recent support for ObamaCare, Cap and Trade, the auto industry bailout, TARP, his status as a “career politician” and his extremely high party loyalty score (97%).  Of the three committee chairmen defeated in their bid for reelection last Tuesday, Oberstar’s loss was the most unexpected.  But Oberstar’s liberal views on tax policy, government spending, and national security were incongruent with the views of his constituents and ultimately led to his defeat.

The 2010 election, like many other midterm elections, was a “wave election,” in which control of Congress flips from one party to the other.  Now, more than ever, it is of paramount importance that conservatives lead by standing true to their principles of limited government, individual freedom, and fiscal restraint.

The National section of the Weekly Political Forecast is authored by PAI’s Deputy Policy Director.

FORECAST HIGHLIGHTS:

• His familiarity with Obama, his penchant for policymaking, his fierce loyalty and liberal worldview create a combination that will make him a highly successful chief of staff.
• While it is too early to know how exactly Emanuel’s departure will affect the Obama presidency, one thing is clear; the president’s liberal base will be pleased with the end result.

One question being posed by commentators in the mainstream media is: What affect will the departure of Rahm Emanuel as White House chief of staff play on the remainder of Barack Obama’s term as president?

A question such as this is difficult to answer, due to the fact it requires a great deal of speculation and supposition.  Rahm Emanuel was a hybrid chief of staff; he was very active in the administrative side of the presidency but took a hands-off approach when it came to policy formulation and implementation.  Emanuel relished media attention and was famous for his combative and no-nonsense style.  He will be replaced by the meeker and more media reticent Pete Rouse.

In a fascinating Washington Post article released on Friday10-01-2010, Scott Wilson noted that Rouse, if appointed as permanent chief of staff, intends to drastically reorganize the West Wing and take a more hands-on approach to policymaking and implementation than his predecessor.

Peter Rouse is a longtime congressional aide and served as Barack Obama’s chief of staff when Mr. Obama was a member of the United States Senate.  Rouse has been an Senior Adviser to President Obama since the January 2009 inauguration.  Scott Wilson of the Washington Post asserted that Emanuel’s departure could be beneficial for President Obama and his domestic policy agenda.  Wilson noted that Emanuel’s combative style and willingness to compromise has infuriated the left-wing of the Democratic Party.

Conversely, Peter Rouse, the taciturn, Ivy League educated policy wonk, is reserved in nature, fiercely loyal to the president and unwilling to compromise on any of the administration’s core policy positions.

The other major advantage Rouse poses is his longtime service to Barack Obama.  As mentioned, Rouse, prior to his service as a Senior Adviser to the President of the United States, served as Barack Obama’s chief of staff during his tenure in the United States Senate.  His familiarity with Obama, his penchant for policymaking, his fierce loyalty and liberal worldview create a combination that will make him a highly successful chief of staff.

While it is too early to know how exactly Emanuel’s departure will affect the Obama presidency, one thing is clear; the president’s liberal base will be pleased with the end result.

President Obama’s reelection hinges on his policy agenda going forward, his ability to articulate his message and, most importantly, the work of his chief of staff.  If Pete Rouse is unable to reorganize the White House and convince the president to moderate his policy agenda, conservatives will regain control of the White House in 2012.

In the next two years, Pete Rouse, if he is promoted from interim to full time chief of staff, will have an arduous task ahead of him trying to bring continuity to a fragmented administration.