North Carolina Federation of Republican Women – Legislative Report
Brenda T. Formo nc.eagle.eye@live.com
July 16, 2010
More Big-Government Control Dodd-Frank Wall Street Reform and Consumer Protection Act (over 2000 pages)
Thursday, July 15 the Senate voted 60 to 39 to pass the Dodd-Frank Act. The Democrats needed three Republican votes to get the 60 votes required, after Senator Byrd died and Senator Feingold D-Wisconsin said that he would be a “no” vote. The usual suspects, Senators Snowe and Collins of Maine and Brown of Massachusetts gave cover to the Democrats for the bill’s passage.
The bill gives President Obama’s regulators authority to seize firms considered to be near collapse. It also provides unions more influence on corporation boards. Representative Barney Frank, co-writer, has said he wants a more “European model” with union seats on the board of directors. His action guarantees a redistribution of wealth away from shareholders to special interests.
The Wall Street Journal reports that the rewrite of financial rules is “the biggest expansion of government power over banking and markets since the Depression.” Ten regulatory agencies will “write hundreds of new rules governing finance.” Lobbyists and the government prove to be the power-brokers.
The Commodity Futures and Trading Commission will have 30 “team leaders” to determine and implement new rules for derivatives. They say they need $45 million just to get started for new staffing.
An Investors’ Business Daily (IBD) editorial states that “a new poll of 1,002 Americans by the Certified Financial Planner Board of Standards found that four in five believe Congress and regulators have failed ‘to deal with the financial market problems and their impact on American investors.'” Fannie Mae and Freddie Mac are ignored in the bill and IBD says they “played a definitive role in creating the subprime derivatives market, funded or backed trillions in questionable mortgage loans, and still control half the U.S. mortgage market.” Bizarrely, they’re sacrosanct in the “so-called ‘reform,’ even after already costing U.S. taxpayers $146 billion.”
The $50 billion bailout fund is still in the bill which gives the Federal Deposit Insurance Corporation (FDIC) unilateral power to either bail out or declare insolvent any financial entity that they consider to be in trouble. There will also be a profound effect on the economy because “new regulations would restrain lending, slash capital spending as much as $6 billion a year and kill as many as 120,000 jobs, according to a Business Roundtable group representing companies with $6 trillion in revenue and employing over 12 million people.”
A former Security and Exchange Commission (SEC) Chairman Harvey L. Pitt has said the bill is a “failure that will only create more problems for federal regulators.” Pitt says the bill should be entitled, “The Lawyers’ and Lobbyists’ Full Employment Act.” He says the likelihood that Congress or the administration has actually read or understands the bill is remote; only congressional staffers and lobbyists know specific provisions in the bill.
$1 Trillion Budget Deficit (June 2010, with three months to go)
Predictably, President Obama and the Democrats continue to blame the budget deficit on the Bush tax cuts in 2001 and 2003, not on their own uncontrolled spending. The Wall Street Journal addresses the three most prominent myths posed by Democrats.
– Clinton had a $5.6 trillion surplus which Bush turned into deficits. The truth is that the $5.6 trillion surplus never existed. It was a projection made by the Congressional Budget Office (CBO) in January 2001 to cover 10 years. “It assumed that late-1990’s economic growth and the stock market bubble (which had already peaked) would continue forever and generate record-high tax revenues. It assumed no recessions, no terrorist attacks, no wars, no natural disasters, and that all discretionary spending would fall to 1930’s levels.”
– Current deficits are the result of President Bush “not paying for two wars, two tax cuts, and an expensive prescription drug program,” according to President Obama in his State of the Union address. The truth is that the “wars, tax cuts and the prescription drug program were implemented in the early 2000s, yet in 2007 the deficit stood at only $161 billion.” What occurred was “collapsing revenues from the recession along with stimulus spending,” according to the WSJ article.
– Declining revenues are causing future deficits. “The fact is that rapidly increasing spending will cause 100% of rising long-term deficits.” Tax revenues have continued to be about the same over the past 50 years, amounting to 18% of gross domestic product (GDP). The problem is that spending is surging to unprecedented highs, heretofore averaging about 20% of GDP and currently projected to be 26.5% of GDP by 2020.
Keeping Score Short and Simple
The last Republican budget was for Fiscal Year (FY) 2007, at which time the Republican Congress and President Bush had a $161 billion deficit.
Under Democrat and Pelosi control in FY 2008, before the recession, the deficit was $459 billion.
In 2009 the deficit was $1.4 trillion, under President Obama and the Democrat Congress
As of June 2010, the deficit is $1 trillion, with three months to go in the FY.
Democrats Spearheading Another Stimulus Bill Even with the deficit looming and setting records, the Democrats want another stimulus package passed. Considering all five of the recent attempts at fiscal stimulus, the amount soars to $1.085 trillion, more than funding for the wars in Afghanistan and Iraq, according to a National Review article. The unemployment rate is steady at about 10 percent which seems to negate the reasoning for the stimulus.
Although President Obama and Democrats want more spending, Congressional Republicans and some Democrats have blocked the fifth stimulus involving the extension of long-term unemployment benefits because of the deficit with Republicans indicating that cuts should be made to other programs to finance the bill.
Several GOP members have offered solutions including House Minority Whip Eric Cantor’s idea to “enact a broad-based corporate-income-tax-cut instead of the hodgepodge of temporary rebates and carry-backs that eventually passed.” The Republicans want to make it possible for businesses to make long-term plans instead of suffering through the current uncertainty.
180 Degrees Out of Phase
– Consequences of President Obama’s Halt on U.S. Oil Drilling
Despite judicial decisions that allow oil drilling, President Obama continues with executive orders to halt drilling oil. The consequences are that Gulf of Mexico oil rigs have gone to Egypt’s Nile River delta and a second rig is going to the Republic of Congo currently in a war with Ugandan rebels.
– Muslim Outreach
NASA chief Charles Bolden recently told Al-Jazeera news that President Obama had asked him to “reach out to the Muslim world” to help Islamic nations “feel good” about their scientific accomplishments. White House spokesman Robert Gibbs refuted Mr. Bolden’s comments saying it “was not the task of NASA.” This was news to Rep Pete Olson, ranking Republican on the Space and Aeronautics House Subcommittee (NASA oversight) who has said that Bolden told him about the plan last month and that the “initiative was very real until somebody slammed the brakes on it.” Olson said, “The last thing we need to be doing now is spending precious space dollars . . . on outreach to any religion . . . we need to spend money on human space exploration.”
-Obamacare Abortions
The Washington Times has reported that on June 28, the federal government approved $160 million in taxpayer funding going to Pennsylvania for a “high-risk” insurance program that will provide for “any abortion before the 24th week of pregnancy.” The key Pennsylvania state law “allows abortion if a single doctor decides it is necessary for reasons that include psychology, emotions or the woman’s age.” Fox News has reported that New Mexico will also get abortion funding under Obamacare. (What happened to President Obama’s Executive Order saying there would be no abortions federally funded under the Health Care bill?)
N.C. Legislature The N.C. General Assembly completed its session for 2010 last Saturday morning, July 10. They approved a budget of almost $19 billion. Republicans voting against the bill said it did not address the $3 billion shortfall for next year and did not do enough to cut taxes for small businesses.
The session involved Democrats compromising on economic incentive actions favoring tax breaks to the movie industry and for “green” companies in industrial parks.
The Senate and House also voted on legislation that requires the police to take DNA samples from people they arrest. The belief is that the DNA will help to solve crimes that remain open. Race became an issue for Representative Angela Bryant, D-Nash who said “black people will be disproportionately infringed upon because we’re disproportionately affected.” A counter-point was made by Representative Bill Faison, D-Orange who said that “the bill is not racial because people of all races commit crimes.”
Also, reforms have been approved for the Alcoholic Beverage Control system and computer-based sweepstakes games have been banned.
Governor Perdue has until August 9, 2010 to act on the bills.
A N.C. House committee of six (3 Republicans and 3 Democrats) has been formed to review the chamber’s policy on prayers, as a result of a Christian minister saying that he was asked not to mention Jesus in a prayer at the start of a floor session.
Sources: The Wall Street Journal, “Law Remakes U.S. Financial Landscape,” by Damian Paletta and Aaron Lucchetti, Jul 16, 2010 and “Impact to Reach Beyond Wall Street,” by Randall Smith, Ruth Simon and Deborah Solomon, Jul 15, 2010; Investors Business DailyThe Daily Beast, “The Ugly Truth About Financial Regulatory Reform,” by Harvey Pitt, Jul 14, 2010; The Wall Street Journal, “The Bush Tax Cuts and the Deficit Myth,” by Brian Riedl, Jul 13, 2010 and “Finance Bill Close to Passage in Senate by Damian Paletta, Jul 13, 2010; finance.yahoo.com, “Federal budget gap tops $1 trillion through Jun,” by Martin Crutsinger, Jul 13, 2010; Rushlimbaugh.com, Jul 12, 2010; nationalreview.com, “Mechanical Failure,” by Stephen Spruiell, Jul 12, 2010; The Examiner, “NASA responds to White House: Outreach mission stands,” by Byron York, Jul 13, 2010; hotair.com, “Congressman: WH directive to NASA confirmed,” Jul 14, 2010; The Washington Times, “Editorial: Obamacare abortions on tap,” Jul 13, 2010; Fox News, Neil Cavuto, Jul 15, 2010; MyNC.com, “NC Legislature Adjourns For Year After Ethics Bill,” Jul 11, 2010; charlotteobserver.com, “NC House panel formed to examine prayer rules,” AP, Jul 13, 2010. editorial, Jul 13, 2010 and “Idled Gulf Rigs Head For Africa,” Jul 13, 2010;
North Carolina Federation of Republican Women Dena Barnes
President
North Carolina Federation of Republican Women ncfrw.com
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