Posted by on October 20, 2011
In Memory of Staff Sergeant Taylor
The 24th District of Texas has lost one of our own in the Global War on Terror. Staff Sergeant Houston M. Taylor of Hurst died on October 13th in Afghanistan while supporting Operation Enduring Freedom.
Taylor served with the 2nd Battalion, 27th Infantry regiment, 25th Infantry Division. He was married to his childhood sweetheart and a father of two children.
I am deeply saddened to learn of the passing of Staff Sergeant Taylor. There are no words to do justice to the honor with which he served his country. He made the ultimate sacrifice for our nation. My thoughts and prayers are with his family and friends in this time of loss.
Posted by on October 12, 2011
Marchant: Trade deals should be on a fast track to passage
How Not to Grow an Economy
Wall Street Journal
Financial markets are in turmoil, investors are fleeing to safe havens, and the chances of another recession are rising. This would seem to be a moment when government should be especially careful to do no harm, to talk and walk softly, and to reassure business that Washington wants more private investment and hiring.
But this is not how our current government behaves. Day after day brings headlines of another legislative, regulatory or enforcement action that gives CEOs and investors reason to hunker down, retain as much cash as possible and ride out whatever storms are ahead. This is not the way to nurture an already fragile recovery, much less help the economy to endure shocks from Europe, natural disasters or a big bank failure.
Consider the headlines only from last week, a slow week by Washington standards, with Congress out of session and President Obama campaigning for three days before going on vacation. Even in the dog days of August, your government was hard at work undermining economic confidence.
• Monday: "Warren Buffett right about taxes, says Obama." The week began with a one-two tax punch from Warren Buffett and President Obama. The Omaha stock-picker wrote an op-ed begging Congress to raise taxes on millions of Americans who make less than he does, and the President used the first stop of his bus tour, in Cannon Falls, Minnesota, to agree.The week began with a one-two tax punch from Warren Buffett and President Obama. The Omaha stock-picker wrote an op-ed begging Congress to raise taxes on millions of Americans who make less than he does, and the President used the first stop of his bus tour, in Cannon Falls, Minnesota, to agree.
"I put a deal before the Speaker of the House, John Boehner, that would have solved this problem," Mr. Obama said, "and he walked away because his belief was we can't ask anything of millionaires and billionaires and big corporations in order to close our deficit." So America's main job creators are still on notice that a tax increase is in their future in 2013, if not sooner.
• Tuesday: "Federal mortgage role to be preserved: Obama is working to develop new housing policy." A Washington Post story reported that Mr. Obama has directed a White House team to develop a housing plan that would keep the feds deeply involved in mortgage markets, with subsidies and loan guarantees, perhaps even preserving Fannie Mae and Freddie Mac.A Washington Post story reported that Mr. Obama has directed a White House team to develop a housing plan that would keep the feds deeply involved in mortgage markets, with subsidies and loan guarantees, perhaps even preserving Fannie Mae and Freddie Mac.
This contradicts the Treasury's February white paper recommending a much smaller government role in housing without Fan and Fred. A Treasury official responded that the white paper is still guiding policy, but private investors who might want to get into housing finance know the Post story came from someone in authority and have another reason to stay on the sidelines.
• Thursday: "Justice Inquiry Is Said to Focus on S.&P. Ratings." Barely two weeks after Standard & Poor's downgraded U.S. debt over White House protests, we learn that the feds are going after the firm for its ratings on mortgage securities before the financial crisis. The feds say the probe was underway before the downgrade, but the credit rater's mortgage mistakes have been known for years. And why not Moody's or Fitch?Barely two weeks after Standard & Poor's downgraded U.S. debt over White House protests, we learn that the feds are going after the firm for its ratings on mortgage securities before the financial crisis. The feds say the probe was underway before the downgrade, but the credit rater's mortgage mistakes have been known for years. And why not Moody's or Fitch?
The message: If you disagree with this Administration, you'd better lawyer-up.
• Thursday: "Exxon, U.S. Government Duel Over Huge Oil Find." Exxon has made the biggest oil discoveries ever in the Gulf of Mexico at some one billion barrels, but the feds have taken the extraordinary action of denying the oil company what had long been routine oil lease extensions. So Exxon and a Norwegian firm are suing the feds to be able to drill on the leases, spending money on lawyers for permission to create jobs and increase domestic oil production.Exxon has made the biggest oil discoveries ever in the Gulf of Mexico at some one billion barrels, but the feds have taken the extraordinary action of denying the oil company what had long been routine oil lease extensions. So Exxon and a Norwegian firm are suing the feds to be able to drill on the leases, spending money on lawyers for permission to create jobs and increase domestic oil production.
• Thursday: "Fed Eyes European Banks: Regulators Scrutinize Ability of Institutions' U.S. Units to Fund Themselves." The Wall Street Journal quotes Federal Reserve Bank of New York officials as saying they're worried about the condition of European banks and are on the job making sure that any problems don't damage American banks. It's nice to know U.S. regulators are earning their pay, but the spectacle of regulators publicly broadcasting troubles at European banks does nothing to calm already jittery interbank markets.The Wall Street Journal quotes Federal Reserve Bank of New York officials as saying they're worried about the condition of European banks and are on the job making sure that any problems don't damage American banks. It's nice to know U.S. regulators are earning their pay, but the spectacle of regulators publicly broadcasting troubles at European banks does nothing to calm already jittery interbank markets.
• Thursday: "Obama to push stimulus plan." The President signals more government fiscal action, to be unveiled after Labor Day. Ideas on the table: New spending on roads and a tax credit for companies that hire workers.The President signals more government fiscal action, to be unveiled after Labor Day. Ideas on the table: New spending on roads and a tax credit for companies that hire workers.
The thinking, say aides, is to pressure Republicans to pass these proposals or look indifferent to high unemployment. So even as he proposes to reduce deficits far into the future in ways that will depend on decisions by future Congresses, the President will fight to increase spending immediately. Americans may conclude they've heard this cognitive dissonance before.
None of these stories by themselves—or even a week of them—is enough to undermine a recovery. But the cascade of such stories day after day—about new regulations, new prosecutions or fines against business, new obstacles to investment, more spending and higher taxes—contributes to the larger lack of business and consumer confidence.
It's impossible to quantify the impact of such policies on lost GDP or lost job creation, but everyone in the real economy understands how such signals work. The great tragedy of the Obama nonrecovery is that this Administration still doesn't realize the damage it is doing.
2011 Transportation Summit
I recently had the privilege of participating in the 14th Annual Transportation and Infrastructure Summit presented by the City of Irving and the Greater Irving-Las Colinas Chamber of Commerce. Every year this conference brings together policy makers, private sector leaders, and trade associations to discuss our nation’s current transportation projects.
Below is a list of transportation projects I wanted to bring to your attention that affect the 24th Congressional District:
- DART Green Line – Completed in December 2010, the Green Line consists of 20 stations beginning in Farmers Branch and Carrollton running down to Southeast Dallas.
- DART Orange Line – With an estimated 2012 completion date, this North Texas line will travel through the heart of Irving to the DFW Airport. Both the Orange and Green lines will provide numerous opportunities for economic growth in our cities.
- DFW Connector – To accommodate the rapid growth in Northeast Tarrant County, this project is focused on improving mobility at the north end of the DFW International Airport along highways 114, 121, and 360.
- LBJ-635 Project – This five-year project covers the north and east portions of the Lyndon B. Johnson Freeway. The project will add 13 miles of new express lanes to relieve traffic congestion for North Texas commuters.
A New Strategy for Economic Growth
Wall Street Journal
By KEVIN WARSH AND JEB BUSH
As the economy continues to struggle, we are reminded of a course offered at Yale University titled "Grand Strategy." Drawing on a weighty curriculum of history and philosophy, the course seeks to train future policy makers to tackle the complex challenges of statecraft in a comprehensive, systematic way. Clearly, U.S. economic policy is sorely lacking an effective grand strategy, and we are likely to endure high unemployment, weak economic performance and trying financial markets until such a strategy is articulated and pursued.
Policy makers should cease the barrage of ad hoc, short-term policy initiatives. Is increased federal spending across government agencies a grand strategy? How about checks in the mail to spur spending? Cash for clunkers to move auto inventories? Fast trains and faster Internet? Mortgage modification programs and fleeting tax credits to re-stoke home ownership?
Inducing consumers to do today what they would otherwise do tomorrow is hardly a grand strategy. Hundreds of billions in "stimulus" spending has stimulated little but more debt. Forty-eight months have passed since the onset of the financial crisis, 26 months since the recession technically ended. Yet job creation remains remarkably weak, and markets deeply uneasy.
We can't go on like this.
The debt-limit debate caused policy makers to recognize what citizens already knew: We must put our fiscal house in order. Cutting spending is essential. But we will never cut our way to prosperity.
So, what should be the economic grand strategy? In a word: growth.
Stability has replaced growth as the foremost objective of economic policy. But growth over the next 10 years is more consequential to our well-being than any new regulations promulgated by the Financial Stability Oversight Council or cost-cutting considered by the new congressional super committee. Absent strong growth, any projected improvements in the country's fiscal position won't materialize.
The grand strategy is sector-neutral. It doesn't have favored industries or political parties. It does not seek to curry favor with special interests. The grand strategy fights statism everywhere.
The grand strategy goes out of its way to ensure that big companies are not advantaged at the expense of smaller, entrepreneurial competitors. If banks are "too big to fail," they are too big. They must be allowed to succeed or fail on their own merit, without any hint of government support. The failed behemoths at the core of housing finance, Fannie Mae and Freddie Mac, should be wound down. Robust, dynamic competition is a far better way to allocate credit.
The grand strategy need not—and should not—be grandiose. It should avoid overpromising. Fiscal and monetary policies can help mitigate the effects of shocks to the economy, but they run grave risks if their goal is to target asset prices. When investors' perceptions of Treasury securities change rapidly, they tend to be far less sure about the price of riskier assets, like stocks. The resulting volatility in financial markets harms growth.
A pro-growth strategy is decidedly long term in orientation. It aims for higher standards of living five, 10 and 20 years out, long past the next election cycle. It replaces the false promise made to the next generation of entitlement-program recipients with a solvent, dependable model that encourages work and savings. Reforming Social Security before costs multiply and uncertainties spread is both fairer and more growth-oriented. And enacting consumer-driven health-care policies represents the best way to control costs and improve patient care.
An effective growth strategy confronts tough challenges before they become intractable. The strategy is a threat to those who take refuge in our burdensome tax code, and it is a great source of encouragement to those who seek higher rates of return on physical and human capital. Hence, fundamental tax reform—dramatically lowering tax rates for individuals and companies while eliminating loopholes, deductions and credits—is critical to economic growth.
Achieving strong growth requires the free flow of capital, goods and ideas. We have world-class products and services to sell to the growing middle class in emerging markets. We must find our voice to resist the rising tide of economic protectionism and recognize the job-creating benefits of our pending free trade agreements with South Korea, Colombia and Panama.
The growth strategy also demands an abiding respect for the rule of law, and stable, cost-effective rules of the road from regulators. A constantly changing regulatory regime kills investment and limits economic growth. The strategy also demands investing in our own natural resources, such as shale gas and the commensurate infrastructure to re-industrialize our country, creating jobs here in the U.S. rather than shipping hundreds of billions of dollars abroad.
Finally it means ensuring that the opportunities presented by a growing economy are matched by the skills of the next generation. We need to transform our education system through higher standards, merit-based teacher compensation and school choice. No grand strategy will prevail unless far more of our high-school graduates are college or career ready.
Stronger economic growth is not just about economics. Growth unleashes human potential. It turns personal aspirations into positive achievements. And it lays the predicate for a better, stronger, more prosperous and opportunity-filled America. Our weak economic recovery has dashed the hopes and dimmed the prospects of too many of our citizens. And it has put America's place in the world at risk.
We should resist the temptation to wrangle with the green eyeshade folks who question our prospects. Instead, we must take actions that demonstrate our resolve and resiliency. We must restore our faith in growth economics and reform our policies accordingly. This will bring strength to our markets and reaffirm our place in the world.
Mr. Warsh, a former Federal Reserve governor, is a distinguished visiting fellow at Stanford University's Hoover Institution. Mr. Bush, governor of Florida from 1999-2007, is president of Jeb Bush and Associates, LLC.
A Tea Party Triumph - Wall Street Journal Editorial
If a good political compromise is one that has something for everyone to hate, then last night's bipartisan debt-ceiling deal is a triumph. The bargain is nonetheless better than what seemed achievable in recent days, especially given the revolt of some GOP conservatives that gave the White House and Democrats more political leverage.
The big picture is that the deal is a victory for the cause of smaller government, arguably the biggest since welfare reform in 1996. Most bipartisan budget deals trade tax increases that are immediate for spending cuts that turn out to be fictional. This one includes no immediate tax increases, despite President Obama's demand as recently as last Monday. The immediate spending cuts are real, if smaller than we'd prefer, and the longer-term cuts could be real if Republicans hold Congress and continue to enforce the deal's spending caps.
No wonder liberals are howling. They have come to believe in the upward spending ratchet, under which all spending increases are permanent. Not any more.
The second phase of the deal is less clear cut, though it also could turn out to shrink Leviathan. Party leaders in both houses of Congress will each appoint three Members to a special committee that will recommend another round of deficit reduction of between $1.2 trillion and $1.5 trillion, also over 10 years. Their mandate is broad, and we're told very little is off the table, but at least seven of the 12 Members would have to agree on a package to force an up-or-down vote in Congress.
If the committee can't agree on enough deficit reduction, then automatic spending cuts would ensue to make up the difference to reach the $1.2 trillion minimum deficit-reduction target. One key point is that the committee's failure to agree would not automatically "trigger" (in Beltway parlance) revenue increases, as the White House was insisting on as recently as this weekend. That would have guaranteed that Democrats would never agree to enough cuts, and Republicans were right to resist.
Instead the automatic cuts would be divided equally between defense and nondefense. So, for example, if the committee agrees to deficit reduction of only $600 billion, then another $300 billion would be cut automatically from defense and domestic accounts (excluding Medicare beneficiaries) to reach at least $1.2 trillion.
This trigger is intended to be an incentive for committee Members of both parties to agree on more cuts, but defense cuts of this magnitude would do far more harm to national security than they would to domestic accounts that have been fattened by stimulus. This is the worst part of the deal, and Mr. Obama's political goal will be to press Republicans to choose between tax increases and destructive defense cuts. The GOP will have to fight back and make the choice between domestic cuts and harm to our troops fighting multiple wars.
While the "trigger" includes no revenue increases, the committee itself could agree to raise taxes to meet the $1.2 trillion deficit reduction target. This means GOP leaders Mitch McConnell and John Boehner have to be especially careful in their choice of appointees. No one from the Senate Gang of Six, who proposed tax increases, need apply. The GOP choices should start with Arizona Senator Jon Kyl and House Budget Chairman Paul Ryan, adding four others who will follow their lead.
One reason to think tax increases are unlikely, however, is that the 12-Member committee will operate from CBO's baseline that assumes that the Bush tax rates expire in 2013. CBO assumes that taxes will rise by $3.5 trillion over the next decade, including huge increases for middle-class earners. Since any elimination of those tax increases would increase the deficit under CBO's math, the strong incentive for the Members will be to avoid the tax issue. This increases the political incentive for deficit reduction to come from spending cuts.
Mr. Obama's biggest gain in the deal is that he gets his highest priority of not having to repeat this debt-limit fight again before the 2012 election. The deal stipulates that the debt ceiling will rise automatically by $900 billion this year, and at least $1.2 trillion next year, unless two-thirds of Congress disapproves it. Congress will not do so.
Given how much the current debate has damaged the public perception of Mr. Obama's leadership, this will be a relief at the White House. This is part of the negotiating price that Mr. Boehner had to pay because of the back-bench revolt that showed he couldn't guarantee a debt-limit increase with only GOP votes. This gave Democrats more leverage.
The same supposedly conservative Republicans and their talk radio minders may denounce this deal as a sellout, but we'll be charitable and assume they've climbed so far out on the political ledge they don't know how to climb back without admitting they were wrong. They're right that this deal doesn't "solve" our fiscal crisis, but no such deal is possible as long as liberals run the Senate and White House.
The debt ceiling is a political hostage the GOP could never afford to shoot, and this deal is about the best Republicans could have hoped for given that the limit had to be raised. The Jim DeMint-Michele Bachmann-Sean Hannity alternative of refusing to raise the debt limit without a balanced-budget amendment and betting that Mr. Obama would get all the blame vanishes upon contact with any thought. Sooner or later the GOP had to give up the hostage.
The tea partiers pride themselves on adhering to the Constitution, which was intended to make political change difficult. Yet in this deal they've forced both parties to make the biggest spending cuts in 15 years, with more cuts likely next year. The U.S. is engaged in an epic debate over the size and scope of government that will play out over several years, and the most important battle comes in the election of 2012.
Tea partiers will do more for their cause by applauding this victory and working toward the next, rather than diminishing what they've accomplished because it didn't solve every fiscal problem in one impossible swoop.
Wall Street Journal Editorial -- "Tea Party Triumph" -- August 1, 2011