Thursday, March 31, 2011

Coming to a head

Last year, facing massive losses in the midterm election, Democrats in Congress faced a dilemma, a true no-win situation. Congress is responsible for passing an annual budget which funds the operation of the government. These Democrats faced an even more painful thrashing in the polls if they passed a budget which did not deal with the massive budget deficit and the exploding debt which it is causing. This thrashing would come from a segment of the population I will refer to as the fiscally sane, primarily made up of the 51% of the population who pay taxes. On the other hand, if Congress took the steps necessary to reign in spending and curb the deficit, they would incur the wrath of their base, the statist left who rely on ever-larger and more intrusive government for their power and livelihood.

Faced with these options, the Democrats did the courageous thing: nothing. They opted to not take a stand at all, and to not pass a budget, an unprecedented negligence of duty. That is why the United States Government is operating without a budget today, a state of affairs so foolhardy that you wouldn't ever run your own household that way.

What is the result? In February, the Federal Government ran a deficit of $223 billion, the largest monthly deficit ever, for any country, for anything on earth. In fact, the deficit for February was larger than the deficit for the entire year of 2007. The Government continues to operate based on "Continuing Resolutions" which essentially provide funding at the current level for a few more weeks at a time.

Each time, with the threat of a government shutdown looming, Republicans in the House negotiated for slightly bigger spending cuts, while Democrats fight for the status quo. The result has been very little change, with nearly insignificant cuts to spending which still leave us with trillion dollar deficits for years to come.

The groundswell of voters who threw out the old Democrat power structure last November didn't want a minor correction in the way government fiscal policy was approached, resulting in us going bankrupt slightly more slowly. The election was a clear mandate for a course reversal back to sound fiscal principles of lower spending, smaller government, lower taxes, and an environment which creates jobs and produces wealth through the power of the private sector flourishing in a free market.

Cutting discretionary spending is a good starting point, but even if discretionary spending was cut to zero, we would still face a massive and unsustainable deficit of nearly a trillion dollars. Therefore, reforming entitlements is necessary. Left alone, Social Security and Medicare will die. To save them, they must be reformed and rescoped, as part of a comprehensive change in the way government manages money.

The opportunity to make that happen is approaching, and it is vital that our representatives do not miss it. Just as it took some political guts for Governor Scott Walker to stand up to the union thugs in Wisconsin, it will take real will power to not cave in under the pressure which is sure to come, but if there was anything behind the campaign rhetoric, now is the time to show us by taking action.

Currently the government's debt limit stands at $14.29 trillion. We will reach that limit in just a few months, and Congress will either have to raise the limit once again, start printing money in massive amounts, or cut spending by more than 30% across the board. Given the options, any politician would be inclined to once again take the courageous course and sink our kids further into debt.

In 2006 when Senator BO voted against raising the debt limit to $8.965 trillion he said that, "Raising America's debt limit is a sign of leadership failure." Now that he is leading and he is the one asking to take America closer to insolvency, he wishes that we would forget those words. But what else could we call BO's plunge into debt with no plan to ever get out of it, and nothing but proposals for more spending? It is a failure of leadership of a magnitude never seen before, as evidenced by the fact that BO's own projections show that he intends to increase the national debt in eight years by more than all of the Presidents before him, combined, in the 226 years of American history.

But Congress does not have to cave in to BO's pressure to allow his unchecked spending frenzy to continue. The House of Representatives is where all Legislation begins, and the Republican majority there can attach any conditions they desire to a bill increasing the debt limit. They have the power to ensure that Washington fundamentally changes the way they manage money, so that it will be responsible and sustainable. Here are a few suggestions:
  1. Defund Obama's $105 billion slush fund intended to pay for implementation of the bureaucracy to support Obamacare.
  2. Repeal Obamacare, a massive new entitlement which has already failed to deliver its most basic promises of reducing costs and being deficit-neutral.
  3. Reform Social Security and Medicare. These entitlement programs account for many trillions of dollars of unfunded liabilities which, if left as they exist today, will result in financial collapse and and inability to pay anything in the future.
  4. Make the Bush tax cuts permanent. The looming tax increase scheduled for 2013 is hanging over the head of every business considering whether to hire new employees and grow the business. Job creation will not resume until that tax increase is canceled.
  5. Create a statutory cap on the debt-to-GDP ratio, with aggressive benchmarks to meet each year until the ratio is brought down to a sustainable level of somewhere around 0.5.
There will, without a doubt, be much wailing, gnashing of teeth, demagoguery, whining, and name calling from the big-government statists in response to these actions. Victims of the "draconian" cuts will be trotted out for us to pity. As with Obamacare, most of their sob stories will be entirely fictional. All will be based on the tenant that capable and productive people owe a living to incapable and unproductive looters. None will face the reality that, as painful as facing fiscal reality may be in the short term, it is far better than paying the price for doing nothing, resulting in a debt spiral and economic meltdown which will make events in Greece look like nothing. When America's debt goes into default, who will bail us out? The European Union? China? The UAW, GM, or Fannie Mae?

Representative Marco Rubio has pledged to vote against raising the debt ceiling until real steps are taken to deal with the long-term fiscal situation. Let him know that the voters support him and will stand by him when the statists attack his principled stand.

Let your Representative know that we expect real and significant action to restore fiscal sanity to the budget process, and we expect them to demand it before they agree to one more dollar of debt.

Wednesday, March 09, 2011

Come and take it!

This week Texas celebrates the 175th anniversary of it's independence from Mexico. The story of the Alamo is certainly compelling, as a handful of men took a stand against tyranny and fought for freedom against all odds, defying the much larger army of Santa Anna. Legendary figures such as James Bowie, Davie Crockett, and William Travis fought to the death for something they believed in.

At the center of the conflict was the action taken by Mexican President Antonio Lopez de Santa Anna, who replaced Mexico's Constitution with a new document, The Seven Laws, which disolved Congress and established him as the military-backed dictator. Santa Anna, fearing that the Texans were too independent, moved to solidify his control by disarming the outer colonies.

The conflict came to a head when Santa Anna attempted to take a small bronze cannon which the Texas militia had at Gonzales. Texans met the Mexican army at Gonzales with a flag defiantly daring the Mexicans to "Come and take it".

The Mexicans went home without the cannon, but returned with a much larger army, resulting in the battle of the Alamo, and ultimately in Texas victory at San Jacinto.

It occurs to me that we could use some of that spirit of defiance to tyranny in America today. When politicians and government bureaucrats chip away at our basic freedoms, instead of giving it up willingly and complacently going back to sleep, it is time to tell them to "Come and take it." They govern by the consent of the people. They work for us. We should not fear them, they should fear us.

They want to strip away our Second Amendment rights, just as Santa Anna came to confiscate the Texans cannon. Come and take it!

They want to take our autonomy in how we get medical care. Come and take it!

They want to take our property rights, imposing ever higher taxes to fund wealth transfer programs they have no authority to conduct. Come and take it!

They want to mortgage our future, burying our kids in debt which will consume most of what they produce in their entire lives. Come and take it!

They want to use our money to nationalize industries and bail out failed businesses. Come and take it!

They want to tax energy, bar the use of our own resources, and regulate the gas we exhale, stifling the economy, destroying jobs, and increasing our dependence on countries hostile to America? Come and take it!

It is time to say "No more!" You can have America when you "Come and take it". 2012 is coming and we will remember.

Wednesday, March 02, 2011

Death Panels

During the Obamacare debate, Sarah Palin was lambasted by statists for suggesting that BO's bill would result in rationing of care by government bureaucrats who would sit in their Washington DC offices and decide who would live and who would die based on their actuarial tables and cost/benefit formulas. She called them "Death Panels".

Turns out she was right.

In December the FDA rescinded the approval of Avastin for the treatment of breast cancer.

Avastin is a miracle drug that currently represents the last, best hope for women with metastatic breast cancer. Each year 17,500 women are treated with Avastin, a late-stage breast cancer drug that restricts blood flow to tumors, slowing their growth, shrinking them, sometimes even eliminating them. The drug typically extends a patient's life for a few months, but in some cases they live for years. Both the Susan G. Komen Foundation and the Ovarian Cancer National Alliance strongly support use of Avastin and have been publicly urging the FDA not to revoke its approval. The National Comprehensive Cancer Network, a nonprofit alliance of oncologists that produces treatment standards recognized in more than 100 countries, still supports the drug as a breast cancer treatment.

In making recommendations, the FDA's Oncologic Drugs Advisory Committee is supposed to consider only clinical evidence of the drug's safety and effectiveness. However, ODAC member University of Nebraska oncologist Jean Grem stated that the drug's hefty price tag was a factor in their decision. Revoking Avastin's approval would reduce the cost of government-funded health care by nearly half a billion dollars, but it would also make the lifesaving treatment unavailable to patients with private insurance. The decision to rescind Avastin's approval is currently being appealed, and hopefully will be overturned. However, the fact that the FDA wields the power to deny the public access to a treatment because of government budgetary considerations remains problematic.

The government drug-rationing that begins with Avastin isn't going to stop with Avastin. Dr. Donald Berwick, the Obama administration's recess appointee heading up the Centers for Medicare and Medicaid Services, has said that "it's not a question of whether or not we will ration health care," but "whether we will ration with our eyes open."

As I argued during the Obamacare debate, rationing of care will have a devastating impact on innovation of new treatments. This case illustrates how that will happen. Genentech, a division of Roche Pharmaceuticals, spent $2.3 billion in research and development to produce Avastin. If the FDA can refuse to allow a new treatment because of government rationing rather than clinical effectiveness, companies will simply stop investing the huge sums of money necessary to develop new lifesaving treatments.

When government takes control of your health care, your life is in the hands of unaccountable bureaucrats who you can't fire, and they will make decisions which you can not appeal, decisions which can greatly impact your life, decisions which may mean death for you or a family member or loved one, decisions which should rightfully be made by you and your doctor, not by the Federal Government.

Tuesday, March 01, 2011

The General Welfare clause

If you are a liberal, there are only three phrases in the Constitution that you are aware of:
  1. Provide for the general Welfare
  2. Separation of Church and State
  3. Right to privacy
You are undeterred by the fact that only one of these phrases actually occurs in the Constitution, and you have never actually bothered to read the entire sentence containing that phrase, in spite of your eagerness to use that phrase to justify nearly all of your legislative agenda.

Congress uses the "Welfare" clause to claim the authority for just about anything they want to do, from punishing people who don't buy a certain product to regulating the gas you exhale.

The "Welfare" clause is found in Article 1 Section 8 of the Constitution, which enumerates the powers of Congress:
The Congress shall have Power to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States.
Liberals who quote this never quote the entire sentence, or even bother to mention "the common defense" which they find to be yucky icky. Nor do they acknowledge the meaning of the word "General" which requires that their actions benefit everyone, not pay off one person at the expense of another. They can't be bothered to consider the context of the language which indicates that the phrase does not give them the authority to do anything they want so long as they claim that it is for the general welfare. James Madison said it like this: “With respect to the two words ‘general welfare,’ I have always regarded them as qualified by the detail of powers connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators.”

The drafters of the Constitution discussed the actual meaning of the welfare clause at great length, and clarified exactly what it means and what it does not mean. Thomas Jefferson made the case that the clause specifies reasons for which Congress may collect taxes (or as one reader pointed out, borrow money, which is just a tax to be collected in the future), and does not grant Congress any other authority for sweeping forays into people's lives for our own good.
"To lay taxes to provide for the general welfare of the United States, that is to say, "to lay taxes for the purpose of providing for the general welfare." For the laying of taxes is the power, and the general welfare the purpose for which the power is to be exercised. They are not to lay taxes ad libitum for any purpose they please; but only to pay the debts or provide for the welfare of the Union.They are not to do anything they please to provide for the general welfare, but only to lay taxes for that purpose. To consider the latter phrase not as describing the purpose of the first, but as giving a distinct and independent power to do any act they please which might be for the good of the Union, would render all the preceding and subsequent enumerations of power completely useless. It would reduce the whole instrument to a single phrase, that of instituting a Congress with power to do whatever would be for the good of the United States; and, as they would be the sole judges of the good or evil, it would be also a power to do whatever evil they please... Certainly no such universal power was meant to be given them. It was intended to lace them up straitly within the enumerated powers and those without which, as means, these powers could not be carried into effect." --Thomas Jefferson: Opinion on National Bank, 1791. ME 3:147-148
Jefferson made the argument that the "Welfare" clause did not give Congress the authority to do anything, so long as it was claimed to be "for the general welfare" because such an interpretation would render the following enumeration of powers meaningless. Why should the Constitution list out in great detail the specific actions which Congress is authorized to take if all of those actions and more are authorized by the welfare clause?
"Our tenet ever was that Congress had not unlimited powers to provide for the general welfare, but were restrained to those specifically enumerated, and that, as it was never meant that they should provide for that welfare but by the exercise of the enumerated powers, so it could not have been meant they should raise money for purposes which the enumeration did not place under their action; consequently, that the specification of powers is a limitation of the purposes for which they may raise money." --Thomas Jefferson to Albert Gallatin, 1817. ME 15:133
Jefferson had good reason to be concerned, as politicians, eager to expand their own power, have indeed used this clause to claim the authority to impose all sorts of laws which have nothing to do with laying taxes, and even when they are writing tax laws, those laws are rarely uniform, but instead are written to grant special status to the author's supporters and constituents. You can read through the sixteen enumerated powers granted to Congress, but you won't find anything permitting them to do much of what they do today. There is nothing permitting them to redistribute wealth from those who produce it to those who don't. Congress has no authority to mandate that citizens buy medical insurance or to punish those who don't comply. Congress has no business telling you what kind of light bulb to use or what kind of toilet to have in your bathroom. Neither do they have the power to dictate to banks who they must lend money to, bail out failed companies, attempt to control or stimulate the economy, or nationalize industries. Most of the intrusive busybody laws passed by Congress are based on a blatant misapplication of the welfare clause.
"Aided by a little sophistry on the words "general welfare," [the federal branch claim] a right to do not only the acts to effect that which are specifically enumerated and permitted, but whatsoever they shall think or pretend will be for the general welfare." --Thomas Jefferson to William Branch Giles, 1825. ME 16:147

“If Congress can do whatever in their discretion can be done by money, and will promote the General Welfare, the Government is no longer a limited one, possessing enumerated powers, but an indefinite one, subject to particular exceptions.” – James Madison, 1792
And finally, from a letter Jefferson wrote to George Washington:
"If it were assumed that the general government has a right to exercise all powers which may be for the 'general welfare,' that would include all the legitimate powers of government, since no government has a legitimate right to do what is not for the welfare of the governed." --Thomas Jefferson to George Washington, 1792. ME 8:397