By DAVID ESPO, AP Special Correspondent
WASHINGTON – President Barack Obama asserted unprecedented government control over the auto industry Monday, bluntly rejecting turnaround plans by General Motors Corp. and Chrysler LLC, demanding fresh concessions for long-term federal aid and raising the possibility of quick bankruptcy for either ailing auto giant.
Obama took the extraordinary step of announcing the government will back new car warranties issued by both GM and Chrysler, an attempt to reassure consumers their U.S.-made purchases will be protected even if the companies don't survive.
"I am absolutely committed to working with Congress and the auto companies to meet one goal: The United States of America will lead the world in building the next generation of clean cars," Obama said in his first extended remarks on the industry since taking office nearly 10 weeks ago. And yet, he added, "our auto industry is not moving in the right direction fast enough to succeed."
Obama, flanked by several administration officials at the White House, announced a short-term infusion of cash for the firms, and said it could be the last for one or both.
Chrysler, judged by the administration as too small to survive, got 30 days' worth of funds to complete a partnership with Fiat SpA, the Italian manufacturer, or some other automaker.
GM got assurances of 60 days' worth of federal financing to try and revise its turnaround plan under new management with heavy government participation. That would involve concessions from its union workers and bondholders. The administration engineered the ouster of longtime CEO Rick Wagoner over the weekend, an indication of its deep involvement in an industry that once stood as a symbol of American capitalism.
Obama's announcement underscored the extent to which automakers have been added to the list of large corporations now operating under a level of government control that seemed unthinkable less than a year ago. Since last fall, the Bush and Obama administrations, often acting in concert with the Federal Reserve, have engineered the takeover of housing titans Fannie Mae and Freddie Mac, seized a large stake in several banks and installed a new CEO at bailed-out insurance giant American International Group.
The latest addition to the list, the once-proud auto industry, has struggled with foreign competition for more than a generation, then was further battered by the recession and credit crisis gripping the economy. Obama said 400,000 industry jobs have been lost in the past year alone, many in Michigan.
Fritz Henderson, newly named as CEO of General Motors, issued a statement saying the company would work "to make the fundamental and lasting changes necessary to reinvent GM for the long term." The company said it hopes to avoid bankruptcy, but added it will "take whatever steps are necessary to successfully restructure the company, which could include a court-supervised process."
Chrysler Chairman Bob Nardelli sought to assure customers, dealers, suppliers and employees that the automaker "will operate 'business as usual' over the next 30 days," while working closely with the government and Fiat to secure the support of stakeholders.
Sergio Marchionne, CEO of Fiat, issued a statement calling the Obama administration's involvement "tough but fair, and we believe we will arrive at a result that will establish a credible future for this crucial industrial sector and that assigns the right priority to the repayment of U.S. taxpayers' funds."
Fiat executives have talked to administration officials about a proposal to acquire a 35 percent stake in Chrysler in exchange for small car technology, transmissions and other items that Chrysler has valued at $8-$10 billion.
There was no immediate response from the United AutoWorkers Union, which will be pressured to make additional wage and benefit concessions under Obama's demand for a revised restructuring plan. One worker, Don Thompson, 56, of Chesterfield Township in Michigan, said automakers were being punished because of public anger over the banking bailout. "They're using us for the mistakes they've made in Washington," he said.
Other workers were critical of what they see as a double standard in how Washington has dealt with the auto industry versus financial institutions, with the ousted Wagoner treated differently than the CEOs of troubled banks. "They're using him as a fall guy," said Frank Rowser, financial secretary for UAW Local 909.
When Wagoner leaves the automaker, he will take a financial package worth an estimated $23 million.
Ford Motor Co., the third member of the Big Three, has not requested federal bailout funds.
Obama said bankruptcy would be a way for either GM or Chrysler to "quickly clear away old debts that are weighing them down so they can get back on their feet," and stressed that either firm would remain open.
"What I am not talking about is a process where a company is broken up, sold off and no longer exists. And what I am not talking about is having a company stuck in court for years, unable to get out," he said.
Still, fears about the industry's future sent stocks plummeting, with the Dow Jones industrial average losing about 254 points. GM plunged 92 cents, or 25.4 percent, to $2.70. Chrysler is not publicly traded.
Obama's remarks were prompted by the expiration of a temporary bailout approved by the Bush administration last winter, with $17 billion in federal funds to help GM and Chrysler survive. Under its terms, the two automakers had until March 31 to submit restructuring plans as it searched for additional federal funds.
At the time, it appeared Bush had avoided an industry collapse on his watch yet had deferred the most difficult decisions for his predecessor.
By his comments, Obama bought himself a little more time, but made it clear it was fast running out. "Now is the time to confront our problems head-on and do what's necessary to solve them," he said.
The administration issued papers detailing the prospects for survival of both GM and Chrysler, credited them with making difficult choices, yet also stressing the difficulties that remain.
It said that while GM's new car of the future, the Volt, "holds promise, it will likely be too expensive to be commercially successful in the short run," the paper said. A GM Web site hails the car for its "revolutionary propulsion system that takes you beyond the power of the battery. It will use a lithium-ion battery with a gasoline-powered, range-extending engine that drives a generator to provide electric power when you drive beyond the 40-mile battery range."
The administration said that even with the changes it has made, GM's own plan is based on overly optimistic assumptions, and also assumes a negative cash flow of $14.5 billion over the next six years. It also says the GM plan does not do enough to solve the problem of "underperforming brands, nameplates, and an excess of dealers."
And yet, it says GM can potentially survive as a freestanding corporation, a judgment it does not make for Chrysler.
Government experts said the firm does not spend enough money on research and development. It also said the "inferior quality of its existing product portfolio and its heavy truck mix leave the company poorly positioned." Additionally, Chrysler is heavily dependent on North America, making it vulnerable to local economic conditions, Obama's advisers said.
They said the administration would consider investing another $6 billion in the firm if it can conclude an agreement with Fiat over the next 30 days that is satisfactory.
"If an agreement is not reached, the government will not invest any additional taxpayer funds in Chrysler," it said.
____
Associated Press Writers Jim Kuhnhenn and Ken Thomas in Washington and Ben Leubsdorf in Warren, Mich., contributed to this report.
Sphere: Related Content
Monday, March 30, 2009
Friday, March 27, 2009
Voters Divided As to Whether Obama Budget Will Help or Hurt Economy
Courtesy of Rasmussen Reports
Voters are evenly divided over whether President Obama’s proposed $3.6 trillion budget will help or hurt the economy.
The latest Rasmussen Reports national telephone survey found that 42% believe it will help the economy while 43% say it will hurt.
The data, combined with two earlier surveys tracking the topic, shows that opinion on both sides of the debate are fairly entrenched. The data also indicates that proposals for health care reform are likely to be the central front in the budgetary debate.
(Want a free daily e-mail update? If it's in the news, it's in our polls). Rasmussen Reports updates also available on Twitter.
Forty-percent (40%) of voters have a favorable opinion of the president’s budget while 46% have a unfavorable view. Those numbers have barely budged from surveys conducted in the first week of March and in mid-March. In all three surveys, the number with an unfavorable opinion of the budget has been at 45% or 46%. The number offering a positive review of the budget was a few points higher in mid-March.
The number who say Obama’s budget will help the economy has stayed between 42% and 44% in each survey. The number who believe it will hurt has increased a bit over the course of the month.
If one of the president’s priorities had to be scaled back to reduce the deficit, 34% would cut back on health care reform, 29% would cut development of new sources of energy, and 20% would cut his plans for education. However, there is a huge partisan gap on this point. For Democrats, health care reform is the last place they’d cut back. For Republicans and those not affiliated with either major party, health care is the first place they’d cut.
These results are consistent with earlier data showing that Democrats consider health care the top budget priority while Republicans and unaffiliateds place a higher value on deficit reduction. It’s a huge challenge since 63% agree with the president’s assertion that “we must make it a priority to give every single American quality affordable health care.”
Three-out-of-four voters (77%) remain concerned that Obama’s plan will generate too much government spending.
Two-thirds (66%) fear that the president will have to raise taxes on those earning less than $250,000 a year.
Obama continued to champion his budget in a prime-time press conference Tuesday night, but senior Senate Democrats are questioning the level of spending in it, especially in light of reports that its 10-year deficit projections may be off by as much as $2.3 trillion.
Americans consistently believe that tax cuts are good for the economy and that increased government spending tends to hurt the economy.
In the Rasmussen Reports daily Presidential Tracking Poll for Thursday, 35% of voters Strongly Approve of Obama's job performance while 30% Strongly Disapprove. Sphere: Related Content
Voters are evenly divided over whether President Obama’s proposed $3.6 trillion budget will help or hurt the economy.
The latest Rasmussen Reports national telephone survey found that 42% believe it will help the economy while 43% say it will hurt.
The data, combined with two earlier surveys tracking the topic, shows that opinion on both sides of the debate are fairly entrenched. The data also indicates that proposals for health care reform are likely to be the central front in the budgetary debate.
(Want a free daily e-mail update? If it's in the news, it's in our polls). Rasmussen Reports updates also available on Twitter.
Forty-percent (40%) of voters have a favorable opinion of the president’s budget while 46% have a unfavorable view. Those numbers have barely budged from surveys conducted in the first week of March and in mid-March. In all three surveys, the number with an unfavorable opinion of the budget has been at 45% or 46%. The number offering a positive review of the budget was a few points higher in mid-March.
The number who say Obama’s budget will help the economy has stayed between 42% and 44% in each survey. The number who believe it will hurt has increased a bit over the course of the month.
If one of the president’s priorities had to be scaled back to reduce the deficit, 34% would cut back on health care reform, 29% would cut development of new sources of energy, and 20% would cut his plans for education. However, there is a huge partisan gap on this point. For Democrats, health care reform is the last place they’d cut back. For Republicans and those not affiliated with either major party, health care is the first place they’d cut.
These results are consistent with earlier data showing that Democrats consider health care the top budget priority while Republicans and unaffiliateds place a higher value on deficit reduction. It’s a huge challenge since 63% agree with the president’s assertion that “we must make it a priority to give every single American quality affordable health care.”
Three-out-of-four voters (77%) remain concerned that Obama’s plan will generate too much government spending.
Two-thirds (66%) fear that the president will have to raise taxes on those earning less than $250,000 a year.
Obama continued to champion his budget in a prime-time press conference Tuesday night, but senior Senate Democrats are questioning the level of spending in it, especially in light of reports that its 10-year deficit projections may be off by as much as $2.3 trillion.
Americans consistently believe that tax cuts are good for the economy and that increased government spending tends to hurt the economy.
In the Rasmussen Reports daily Presidential Tracking Poll for Thursday, 35% of voters Strongly Approve of Obama's job performance while 30% Strongly Disapprove. Sphere: Related Content
Monday, March 16, 2009
Cheney Says Obama Has Increased Risks
By A. G. SULZBERGER
New York Times
Published: March 15, 2009
Former Vice President Dick Cheney said Sunday that President Obama had made the country less safe, asserting that the new administration’s changes to detention and interrogation programs for terrorism suspects would hamper intelligence gathering.
Mr. Cheney said the moves suggested that terrorism was now being treated as a law enforcement problem.
“He is making some choices that, in my mind, will, in fact, raise the risk to the American people of another attack,” Mr. Cheney said of Mr. Obama in an interview on the CNN program “State of the Union.”
Since taking office, Mr. Obama has reversed many of the policies championed by Mr. Cheney in his eight years of serving under President George W. Bush. Mr. Obama has announced plans to close the detention camp in Guantánamo Bay, Cuba, within the year, suspended military trials for terrorism suspects and prohibited the interrogation practice known as waterboarding.
But on Sunday, Mr. Cheney said those very policies had produced intelligence — still classified — that helped uncover specific plots.
“I think those programs were absolutely essential to the success we enjoyed of being able to collect the intelligence that let us defeat all further attempts to launch attacks against the United States since 9/11,” Mr. Cheney said of Bush administration policies, echoing statements he made in an interview last month with the Web site Politico.com.
“I think that’s a great success story,” he said. “It was done legally. It was done in accordance with our constitutional practices and principles.”
Mr. Cheney said the Bush administration decided after the 2001 attacks to make fighting terrorism a function of the military rather than law enforcement.
“Up until 9/11, it was treated as a law enforcement problem,” he said. “You go find the bad guy, put him on trial, put him in jail.
“Once you go into a wartime situation and it’s a strategic threat, then you use all of your assets to go after the enemy. You go after the state sponsors of terror, places where they’ve got sanctuary. You use your intelligence resources, your military resources, your financial resources — everything you can — in order to shut down that terrorist threat against you.
“When you go back to the law enforcement mode, which I sense is what they’re doing, closing Guantánamo and so forth, that they are very much giving up that center of attention and focus that’s required, and that concept of military threat that is essential if you’re going to successfully defend the nation against further attacks.”
In what CNN promoted as his first televised interview since leaving office in January, Mr. Cheney touched on a number of other subjects, including the economy, his failure to persuade Mr. Bush to pardon his former aide I. Lewis Libby Jr. and the war in Iraq.
“We’ve accomplished nearly everything we set out to do,” he said about Iraq. “Now, I don’t hear much talk about that, but the fact is, the violence level is down 90 percent. The number of casualties and Iraqis and Americans is significantly diminished. There’s been elections, a constitution. They’re about to have another presidential election here in the near future.”
“We have succeeded in creating in the heart of the Middle East a democratically governed Iraq, and that is a big deal,” Mr. Cheney said. “And it is, in fact, what we set out to do.” Sphere: Related Content
New York Times
Published: March 15, 2009
Former Vice President Dick Cheney said Sunday that President Obama had made the country less safe, asserting that the new administration’s changes to detention and interrogation programs for terrorism suspects would hamper intelligence gathering.
Mr. Cheney said the moves suggested that terrorism was now being treated as a law enforcement problem.
“He is making some choices that, in my mind, will, in fact, raise the risk to the American people of another attack,” Mr. Cheney said of Mr. Obama in an interview on the CNN program “State of the Union.”
Since taking office, Mr. Obama has reversed many of the policies championed by Mr. Cheney in his eight years of serving under President George W. Bush. Mr. Obama has announced plans to close the detention camp in Guantánamo Bay, Cuba, within the year, suspended military trials for terrorism suspects and prohibited the interrogation practice known as waterboarding.
But on Sunday, Mr. Cheney said those very policies had produced intelligence — still classified — that helped uncover specific plots.
“I think those programs were absolutely essential to the success we enjoyed of being able to collect the intelligence that let us defeat all further attempts to launch attacks against the United States since 9/11,” Mr. Cheney said of Bush administration policies, echoing statements he made in an interview last month with the Web site Politico.com.
“I think that’s a great success story,” he said. “It was done legally. It was done in accordance with our constitutional practices and principles.”
Mr. Cheney said the Bush administration decided after the 2001 attacks to make fighting terrorism a function of the military rather than law enforcement.
“Up until 9/11, it was treated as a law enforcement problem,” he said. “You go find the bad guy, put him on trial, put him in jail.
“Once you go into a wartime situation and it’s a strategic threat, then you use all of your assets to go after the enemy. You go after the state sponsors of terror, places where they’ve got sanctuary. You use your intelligence resources, your military resources, your financial resources — everything you can — in order to shut down that terrorist threat against you.
“When you go back to the law enforcement mode, which I sense is what they’re doing, closing Guantánamo and so forth, that they are very much giving up that center of attention and focus that’s required, and that concept of military threat that is essential if you’re going to successfully defend the nation against further attacks.”
In what CNN promoted as his first televised interview since leaving office in January, Mr. Cheney touched on a number of other subjects, including the economy, his failure to persuade Mr. Bush to pardon his former aide I. Lewis Libby Jr. and the war in Iraq.
“We’ve accomplished nearly everything we set out to do,” he said about Iraq. “Now, I don’t hear much talk about that, but the fact is, the violence level is down 90 percent. The number of casualties and Iraqis and Americans is significantly diminished. There’s been elections, a constitution. They’re about to have another presidential election here in the near future.”
“We have succeeded in creating in the heart of the Middle East a democratically governed Iraq, and that is a big deal,” Mr. Cheney said. “And it is, in fact, what we set out to do.” Sphere: Related Content
Thursday, March 12, 2009
National Anthem History video
I understand this is a must see video on the history of our National Anthem.
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Tuesday, March 10, 2009
March 2009 - Obama debt report
From National Debtbusters, the National Debt has increased by $323,781,545,093.18 since President Obama took office on January 20, 2009. This represents an average daily increase of $6,745,448,856.11 since he swore the oath of office.
Sphere: Related Content
Excuse me? “Deficit we inherited?”
Washington, Mar 3 - President Obama and Congressional Democrats have repeatedly claimed they “inherited” the massive deficits plaguing our budgets. Yet a look back at the year in taxpayer-funded bailouts, stimulus, and backstops shows just how unconcerned they are by skyrocketing deficits.So, please, spare us the false outrage.
Deficit Spending
Democrat Opposition? Not Quite
Feb. 13, 2008 – The first “stimulus” bill, H.R. 5140, became law, putting checks in the mail.
215 House Democrats (93%) voted to add $124.4 billion to the deficit (CBO). Senator Obama did not show up to vote.
July 30, 2008 – H.R. 3221 became law, allowing the government to insure $300 billion in mortgage loans. 227 House Democrats (96%) voted to add $24.9 billion to the deficit (CBO). Senator Obama expressed support but did not show up to vote.
Oct. 3, 2008 – H.R. 1424 became law, authorizing $700 billion for TARP. 172 House Democrats (73%) and Senator Obama voted to bailout Wall Street with $700 billion (CBO).
Dec. 10, 2008 – The House passed H.R. 7321 to bail out automakers. When it did not pass the Senate, the Treasury provided a bailout with very similar terms. 205 House Democrats (87%) voted to spend $16.168 billion (CBO) with President-elect Obama’s full support.
Feb. 17, 2009 – The non-stimulus bill, H.R. 1, became law, spending $787 billion on long-time Democrat priorities and pseudo tax relief for non-taxpayers. 246 House Democrats (96%) voted to add $787 billion to the deficit (CBO) with President Obama’s full support.
Feb. 25, 2009 – H.R. 1105 passed the House of Representatives, spending $410 billion on a pork-laden omnibus bill that gave big increases to existing government programs. 229 House Democrats (91%) voted to spend $410 billion with President Obama’s full support. Sphere: Related Content
Deficit Spending
Democrat Opposition? Not Quite
Feb. 13, 2008 – The first “stimulus” bill, H.R. 5140, became law, putting checks in the mail.
215 House Democrats (93%) voted to add $124.4 billion to the deficit (CBO). Senator Obama did not show up to vote.
July 30, 2008 – H.R. 3221 became law, allowing the government to insure $300 billion in mortgage loans. 227 House Democrats (96%) voted to add $24.9 billion to the deficit (CBO). Senator Obama expressed support but did not show up to vote.
Oct. 3, 2008 – H.R. 1424 became law, authorizing $700 billion for TARP. 172 House Democrats (73%) and Senator Obama voted to bailout Wall Street with $700 billion (CBO).
Dec. 10, 2008 – The House passed H.R. 7321 to bail out automakers. When it did not pass the Senate, the Treasury provided a bailout with very similar terms. 205 House Democrats (87%) voted to spend $16.168 billion (CBO) with President-elect Obama’s full support.
Feb. 17, 2009 – The non-stimulus bill, H.R. 1, became law, spending $787 billion on long-time Democrat priorities and pseudo tax relief for non-taxpayers. 246 House Democrats (96%) voted to add $787 billion to the deficit (CBO) with President Obama’s full support.
Feb. 25, 2009 – H.R. 1105 passed the House of Representatives, spending $410 billion on a pork-laden omnibus bill that gave big increases to existing government programs. 229 House Democrats (91%) voted to spend $410 billion with President Obama’s full support. Sphere: Related Content
Monday, March 9, 2009
The Obama team's Limbaugh fixation
Bill O'Reilly
FoxNews
Man, I got out just in time. Last week, I gave up doing the Radio Factor after seven years because I needed to get some sleep. Working 65 hours a week is fine when you're 30, but as Clint Eastwood once opined: A man must know his limitations.
My radio program competed against Rush Limbaugh's show in some markets, and now, in an amazing bit of political gamesmanship, the Obama administration has elevated Limbaugh to Alp-like heights. By publicly attacking the broadcaster, the Obama crew has not only galvanized his loyal audience, but also sent curiosity seekers into his domain. What a ratings bonanza for Limbaugh! Who would want to compete against that?
According to the Web site Politico, Democratic strategists Stanley Greenberg and James Carville polled Limbaugh's popularity and found it lacking among voters younger than age 40. The Web site contends they convinced White House Chief of Staff Rahm Emanuel to go after Limbaugh and define him as the behind-the-scenes leader of the Republican Party. The strategy was to paint the GOP as a leaderless outfit fearful of a high-profile radio guy. Emanuel dropped the propaganda bomb on a morning TV show last Sunday.
In conjunction, Obama's former campaign manager David Plouffe wrote a sarcastic op-ed in the Washington Post claiming the Republican Party is "paralyzed with fear of crossing (Limbaugh)."
Presto, the liberal mainstream media pounced on the new leader of the Republican National Committee, Michael Steele, mocking him for playing second fiddle to Limbaugh. Steele did not like that and told CNN the broadcaster is an entertainer who often pops off. Limbaugh did not like that and lambasted Steele. Under pressure, the RNC chief apologized.
Meanwhile, the Democrats are "lol" as they say on the Net.
But there may be an unintended consequence in this for the White House. By empowering Limbaugh, who already commands an enormous audience, the Obama administration is supplying weaponry to the enemy. Sure, the Democratic home team is yukking this stuff up, but most Americans are steaming mad about the economy and in no mood for shallow political games. If the president cannot get Wall Street to believe in him, demonizing Limbaugh will begin to look like a diversionary tactic, which it might well be.
It is certainly true that the Republican Party is currently taking some lumps, especially among the pro-Obama media. But in politics things can turn fast. If the GOP can develop some strong leadership and a populist vision, it will compete in the 2010 election.
We are living in dangerous times and the folks know it. Fighting with a radio talk-show host may be entertaining, but it is certainly not presidential. Sphere: Related Content
FoxNews
Man, I got out just in time. Last week, I gave up doing the Radio Factor after seven years because I needed to get some sleep. Working 65 hours a week is fine when you're 30, but as Clint Eastwood once opined: A man must know his limitations.
My radio program competed against Rush Limbaugh's show in some markets, and now, in an amazing bit of political gamesmanship, the Obama administration has elevated Limbaugh to Alp-like heights. By publicly attacking the broadcaster, the Obama crew has not only galvanized his loyal audience, but also sent curiosity seekers into his domain. What a ratings bonanza for Limbaugh! Who would want to compete against that?
According to the Web site Politico, Democratic strategists Stanley Greenberg and James Carville polled Limbaugh's popularity and found it lacking among voters younger than age 40. The Web site contends they convinced White House Chief of Staff Rahm Emanuel to go after Limbaugh and define him as the behind-the-scenes leader of the Republican Party. The strategy was to paint the GOP as a leaderless outfit fearful of a high-profile radio guy. Emanuel dropped the propaganda bomb on a morning TV show last Sunday.
In conjunction, Obama's former campaign manager David Plouffe wrote a sarcastic op-ed in the Washington Post claiming the Republican Party is "paralyzed with fear of crossing (Limbaugh)."
Presto, the liberal mainstream media pounced on the new leader of the Republican National Committee, Michael Steele, mocking him for playing second fiddle to Limbaugh. Steele did not like that and told CNN the broadcaster is an entertainer who often pops off. Limbaugh did not like that and lambasted Steele. Under pressure, the RNC chief apologized.
Meanwhile, the Democrats are "lol" as they say on the Net.
But there may be an unintended consequence in this for the White House. By empowering Limbaugh, who already commands an enormous audience, the Obama administration is supplying weaponry to the enemy. Sure, the Democratic home team is yukking this stuff up, but most Americans are steaming mad about the economy and in no mood for shallow political games. If the president cannot get Wall Street to believe in him, demonizing Limbaugh will begin to look like a diversionary tactic, which it might well be.
It is certainly true that the Republican Party is currently taking some lumps, especially among the pro-Obama media. But in politics things can turn fast. If the GOP can develop some strong leadership and a populist vision, it will compete in the 2010 election.
We are living in dangerous times and the folks know it. Fighting with a radio talk-show host may be entertaining, but it is certainly not presidential. Sphere: Related Content
Business leery of Obama’s tax plans
By Kent Hoover
New Mexico Business Weekly
The nation’s most successful small business owners could pay higher taxes under President Obama’s budget plan.
The income of most small businesses is taxed at the individual level. The budget plan calls for increasing the top two tax rates to 36 percent and 39.6 percent in 2011, up from the current rates of 33 percent and 35 percent.
These higher-income taxpayers also would not receive the full value of their itemized deductions, and they would see their capital gains and dividends taxed at a 20 percent rate instead of 15 percent.
That’s bad news for small business owners who report more than $200,000 in income as individuals or more than $250,000 as joint filers.
Only 9 percent of taxpayers who report small business income make this much money, however, according to the Center on Budget and Policy Priorities. Plus many of these taxpayers are passive investors in small businesses, not owner/operators.
Most small business owners are middle-income individuals who would receive tax cuts under Obama’s budget and would benefit from his proposal for health care reform, said Robert Greenstein, the center’s executive director.
“In fact, small businesses would win under this budget,” Greenstein said.
Small business owners who make the most money, however, also are the most likely to invest in their businesses and hire additional workers, according to the U.S. Chamber of Commerce.
“If we take away their incentives to take risks, grow and succeed — as this budget does — we will be unnecessarily shooting ourselves in the foot,” said Bruce Josten, the chamber’s executive vice president for government affairs.
The effects of higher tax rates on business decisions “are almost theological questions,” said Clint Stretch, managing principal for tax policy at Deloitte Tax. Some business owners might decide not to expand as a result of higher taxes, but others might invest even more in their businesses so they can earn extra money to make up for the increased tax burden, he said.
The president’s budget plan also includes provisions that could hurt residential and commercial real estate. The limit on itemized deductions for upper-income taxpayers would reduce the value of the mortgage interest deduction for many homeowners, particularly in high-cost areas such as the Northeast and California.
The National Association of Realtors contends the proposal would hurt not only these taxpayers, but also home values across the board.
“There is never a good time to propose something that undermines the basic foundation of homeownership, but given our current housing crisis, this has to be the worst possible time,” said NAR President Charles McMillan, broker of record for Coldwell Banker Residential Brokerage in Irving, Texas.
Commercial real estate investors are concerned about Obama’s proposal to tax “carried interest” — a share of profits paid to managers of investment funds — as ordinary income instead of as capital gains. As a result, taxes on these payments could jump from the current 15 percent to as high as 39.6 percent. This change would apply not only to private equity firms and hedge funds, but also to 1.2 million real estate partnerships that own everything from office buildings to rental housing.
U.S.-based multinational corporations also would see higher taxes under the budget plan. The president proposes reforming laws that allow U.S.-based businesses to defer taxes on income earned abroad until they bring that money back to the U.S. Obama pledged to “end tax breaks for corporations that send jobs overseas.”
That’s “a great one-liner,” said Martin Regalia, chief economist for the U.S. Chamber of Commerce. The proposal, however, would make U.S.-based multinational corporations less competitive against their global rivals, he said. Most foreign-based companies are taxed only once, in the country where the income is earned. U.S.-based companies, on the other hand, are taxed twice on foreign profits — overseas and in the U.S. Allowing corporations to defer their U.S. taxes until they bring the money back to this country takes some of the sting out of this double taxation.
Ending this deferral “could really hurt businesses that are trying to expand outside of their current client base” into other countries, said Mike Metz, executive vice president of tax services at RSM McGladrey.
Tax plan for businesses
Under the budget plan proposed by President Barack Obama, business owners would see the following changes:
Tax increases
• Individual income tax rates would be increased for taxpayers with incomes above $200,000 (single filers) or $250,000 (families)
• The value of itemized deductions for these taxpayers would be reduced
• The tax rate for capital gains and dividends earned by these taxpayers would increase from 15 percent to 20 percent
• Carried interest earned by managers of investment partnerships would be taxed as ordinary income instead of as capital gains
• A company’s ability to defer U.S. taxes on income earned in other countries would be limited
Tax cuts
• The Making Work Pay tax cut ($400 for individuals, $800 for families) would be extended
• Capital gains on investments in small businesses would not be taxed beginning in 2014
• Middle-class taxpayers would get relief from alternative minimum tax
• Research and development tax credit would be made permanent
• More companies would be allowed to carry back net operating losses for five years Sphere: Related Content
New Mexico Business Weekly
The nation’s most successful small business owners could pay higher taxes under President Obama’s budget plan.
The income of most small businesses is taxed at the individual level. The budget plan calls for increasing the top two tax rates to 36 percent and 39.6 percent in 2011, up from the current rates of 33 percent and 35 percent.
These higher-income taxpayers also would not receive the full value of their itemized deductions, and they would see their capital gains and dividends taxed at a 20 percent rate instead of 15 percent.
That’s bad news for small business owners who report more than $200,000 in income as individuals or more than $250,000 as joint filers.
Only 9 percent of taxpayers who report small business income make this much money, however, according to the Center on Budget and Policy Priorities. Plus many of these taxpayers are passive investors in small businesses, not owner/operators.
Most small business owners are middle-income individuals who would receive tax cuts under Obama’s budget and would benefit from his proposal for health care reform, said Robert Greenstein, the center’s executive director.
“In fact, small businesses would win under this budget,” Greenstein said.
Small business owners who make the most money, however, also are the most likely to invest in their businesses and hire additional workers, according to the U.S. Chamber of Commerce.
“If we take away their incentives to take risks, grow and succeed — as this budget does — we will be unnecessarily shooting ourselves in the foot,” said Bruce Josten, the chamber’s executive vice president for government affairs.
The effects of higher tax rates on business decisions “are almost theological questions,” said Clint Stretch, managing principal for tax policy at Deloitte Tax. Some business owners might decide not to expand as a result of higher taxes, but others might invest even more in their businesses so they can earn extra money to make up for the increased tax burden, he said.
The president’s budget plan also includes provisions that could hurt residential and commercial real estate. The limit on itemized deductions for upper-income taxpayers would reduce the value of the mortgage interest deduction for many homeowners, particularly in high-cost areas such as the Northeast and California.
The National Association of Realtors contends the proposal would hurt not only these taxpayers, but also home values across the board.
“There is never a good time to propose something that undermines the basic foundation of homeownership, but given our current housing crisis, this has to be the worst possible time,” said NAR President Charles McMillan, broker of record for Coldwell Banker Residential Brokerage in Irving, Texas.
Commercial real estate investors are concerned about Obama’s proposal to tax “carried interest” — a share of profits paid to managers of investment funds — as ordinary income instead of as capital gains. As a result, taxes on these payments could jump from the current 15 percent to as high as 39.6 percent. This change would apply not only to private equity firms and hedge funds, but also to 1.2 million real estate partnerships that own everything from office buildings to rental housing.
U.S.-based multinational corporations also would see higher taxes under the budget plan. The president proposes reforming laws that allow U.S.-based businesses to defer taxes on income earned abroad until they bring that money back to the U.S. Obama pledged to “end tax breaks for corporations that send jobs overseas.”
That’s “a great one-liner,” said Martin Regalia, chief economist for the U.S. Chamber of Commerce. The proposal, however, would make U.S.-based multinational corporations less competitive against their global rivals, he said. Most foreign-based companies are taxed only once, in the country where the income is earned. U.S.-based companies, on the other hand, are taxed twice on foreign profits — overseas and in the U.S. Allowing corporations to defer their U.S. taxes until they bring the money back to this country takes some of the sting out of this double taxation.
Ending this deferral “could really hurt businesses that are trying to expand outside of their current client base” into other countries, said Mike Metz, executive vice president of tax services at RSM McGladrey.
Tax plan for businesses
Under the budget plan proposed by President Barack Obama, business owners would see the following changes:
Tax increases
• Individual income tax rates would be increased for taxpayers with incomes above $200,000 (single filers) or $250,000 (families)
• The value of itemized deductions for these taxpayers would be reduced
• The tax rate for capital gains and dividends earned by these taxpayers would increase from 15 percent to 20 percent
• Carried interest earned by managers of investment partnerships would be taxed as ordinary income instead of as capital gains
• A company’s ability to defer U.S. taxes on income earned in other countries would be limited
Tax cuts
• The Making Work Pay tax cut ($400 for individuals, $800 for families) would be extended
• Capital gains on investments in small businesses would not be taxed beginning in 2014
• Middle-class taxpayers would get relief from alternative minimum tax
• Research and development tax credit would be made permanent
• More companies would be allowed to carry back net operating losses for five years Sphere: Related Content
Friday, March 6, 2009
Rush to President: Debate me!
The following is found on RushLimbaugh.com
RUSH: It is on the record -- thanks to Politico.com -- since last fall, the White House, led by Rahm Emanuel, the chief of staff to Barack Obama, has been targeting me, your host, your harmless, lovable little fuzzball. Their standard operating procedure: they need a demon to distract and divert from what their agenda is. They need a demon about whom they can lie so as to persuade average Americans that they're the good guys, the benevolent good guys, and the mean SOBs are their enemies trying to stop this great young little president from doing miraculous and wonderful things.
Here is a new ad that this union bunch is running in Washington, DC, ladies and gentlemen. And, of course, it's been picked up all over the Web. You guys, if you haven't done so, you gotta go to RushLimbaugh.com. The DNCC, whatever it is, they have a questionnaire up there. It's hilarious. I have to give 'em credit. You can see it right now at RushLimbaugh.com. It is a form letter where any Republican can send a note of apology to me. The note is an apology note to me, and you can fill in your name and the reason you're apologizing. It is funny. I had to laugh when I saw it last night. I instructed Koko, just put it up there, 'cause it's hilarious. It's as good as the old Saturday Night Live stuff back when Saturday Night Live was actually funny. But there's a new ad targeted at your lovable, harmless little fuzzball host from that union bunch. It starts today in Washington, DC, which means it's going to be all over the cable networks pretty soon.
ANNOUNCER: Who is the leader Republicans hailed as a hero last weekend? Was it Sarah Palin?
PALIN: Nope, nope, nope.
ANNOUNCER: Bobby Jindal?
JINDAL: No, no, no.
ANNOUNCER: Michael Steele?
STEELE: No, no, no.
ANNOUNCER: Mitch McConnell?
MCCONNELL: No, no, no.
ANNOUNCER: Then who? Not Rush Limbaugh?
RUSH ARCHIVE: Yes, yes, yes, yes, yes, yes.
ANNOUNCER: Call the Republican leadership. Tell them to just say "no" to the politics of Rush Limbaugh.
RUSH ARCHIVE: I hope he fails.
ANNOUNCER: Paid for by Americans United for Change.
RUSH: That's the union bunch. Can you just see...? (laughing) "Call the Republican leadership and say no to Limbaugh." (laughing) Now, ladies and gentlemen, the Politico story today. I got an e-mail last night from the writer of the story, Jonathan Martin, who did not tell me the full details of what the story they were working on was. He did not tell me that they have discovered that there is a team inside the White House targeting me and that they've been doing this since last fall, when they went out and did some polling data and found out I've got very high negatives among certain groups. So they thought, "Well, this is the guy to demonize! Since Bush is leaving, we need somebody," and so this is being led from the White House. There is an orchestrated attack, daily drumbeat on me from the White House. The participants here are James Carville, Paul Begala and Rahm Emanuel.
But make no mistake about it. Emanuel is the leader of all of this. Carville and Begala are just trying to ride my fame into their fortune and become relevant again. Begala and Carville, don't confuse them with the power brokers that are managing this. It all Emanuel. Begala and Carville are second-rate talking heads on CNN. CNN has no audience. Rahm Emanuel is the power behind the throne -- and don't let his effeminate nature and his ballerina past mislead you on this. He may look effeminate (he was a ballerina at one time) but he has the feral instincts of a female rat defending its young. Well, take a look. When Emanuel and Carville and Begala are together (and I've seen pictures) it looks like a reunion of the Village People. (singing) Y! M! C! A! They are really the official greeters in Roswell, New Mexico, in Area 51 where Carville was born.
My point here is that these are really odious, empty, nasty people who are feasting on their own arrogance. They are power hungry. But, you know what? They've never had a serious debate over ideas. Their goal is to destroy opponents, which is what they're trying to do now. They don't want to engage opponents. Their idea of victory is the destruction of the opponent. They're not for a level playing field. They want to clear the playing field so that their ideas do not have to undergo any scrutiny. So what do they do? They leak stories to The Politico intended to create impressions about their own importance and their brilliance, when in fact they aren't even bit players on the nation's stage. This is Emanuel, and this is Obama.
But I have an idea. If these guys are so impressed with themselves, and if they are so sure of their correctness, why doesn't President Obama come on my show? We will do a one-on-one debate of ideas and policies. Now, his people in this Politico story, it's on the record. They're claiming they wanted me all along. They wanted me to be the focus of attention. So let's have the debate! I am offering President Obama to come on this program -- without staffers, without a teleprompter, without note cards -- to debate me on the issues. Let's talk about free markets versus government control. Let's talk about nationalizing health care and raising taxes on small business.
Let's talk about the New Deal versus Reaganomics. Let's talk about closing Guantanamo Bay, and let's talk about sending $900 million to Hamas. Let's talk about illegal immigration and the lawlessness on the borders. Let's talk about massive deficits and the destroying of opportunities of future generations. Let's talk about ACORN, community agitators, and the unions that represent the government employees which pour millions of dollars into your campaign, President Obama. Let's talk about your elimination of school choice for minority students in the District of Columbia. Let's talk about your efforts to further reduce domestic drilling and refining of oil. Let's talk about your stock market. By the way, Mr. President, I want to help. Yesterday you said you looked at the stock market as no different than a tracking poll that goes up and down.
There's no "up and down" here. We have a plunge. The president yesterday suggested "we're getting to the point where profits and earnings ratios are approaching that point where you want to invest." Uh, Mr. President? There is no "profits and earnings" ratio. It's "price and earnings" ratio. He's the president of the United States. He doesn't know anything about the stock market. He's admitted it before. Let's talk about it anyway. You want to maintain it's a tracking poll? I'd love to talk to you about that. Let's talk about all of these things, Mr. President. Let's go ahead and have a debate on this show. No limits. Now that your handlers are praising themselves for promoting me as the head of a political party -- they think that's a great thing -- then it should be a no-brainer for you to further advance this strategy by debating me on the issues and on the merits, and wipe me out once and for all!
Just come on this program. Let's have a little debate. You tell me how wrong I am and you can convince the rest of the Americans that don't agree with you how wrong we all are. You're a smart guy, Mr. President. You don't need these hacks to front for you. You've debated the best! You've debated Hillary Clinton. You've debated John Edwards. You've debated Joe Biden. You've debated Dennis Kucinich. You've debated the best out there. You are one of the most gifted public speakers of our age. I would think, Mr. President, you would jump at this opportunity. Don't send lightweights like Begala and Carville to do your bidding -- and forget about the ballerina, Emanuel. He's got things to do in his office. These people, compared to you, Mr. President, are rhetorical chum.
I would rather have an intelligent, open discussion with you where you lay out your philosophy and policies and I lay out mine -- and we can question each other, in a real debate. Any time here at the EIB Network studios. If you're too busy partying or flying around giving speeches and so forth, then send Vice President Biden. I'm sure he would be very capable of articulating your vision for America -- and if he won't work, send Geithner, and we can talk about the tax code. And if that won't work, go get Bob Rubin. I don't care. Send whoever you want if you can't make it. You don't need to be leaking stories to Politico like this thing that's published today. You don't need to have your allies writing op-eds and all the rest. If you can win at this, then come here and beat me at my own game, and get rid of me once and for all, and show all the people of America that I am wrong.
In fact, Mr. President, you know what, I know these are tough economic times, and you're trying to convince people that you're "saving" the taxpayers money, that you're cutting spending, that you're cutting the deficit. In that vein, I, Mr. President, will send my jet, EIB One, to pick you up and bring you here and take you back to wherever you want to go. You'd love it. It's not as big and luxurious as your jet, but it's got enough seats for your Secret Service detail. But it is something to behold. I'm very proud of it, Mr. President. I worked for it. I paid for it. Taxpayers pay you for your travel. Nobody pays me for mine. I pay for it. I pay for the airplane. I pay for the travel. I pay for practically everything I do. We can talk about that, too. I could tell you what that's like.
And once you land, by the way, I have a fleet of SUVs because I have guests here all the time. I have four or five SUVs. I can send a caravan to pick you up. I'll even put you up at The Breakers. It's a five-star resort. I'll do it all on my dime. We don't want the taxpayers footing any of the bill for this -- and my jet burns a lot less fuel than your two and your C-130 to bring your limousine and SUV caravan here. In fact, you know what, Mr. President? I'll tell you what I will do, if you will do this. I will promise to order some Wagyu Kobe beef at $100 a pound, just like you serve at your cocktail parties and your Super Bowl parties. I'll get it from Allen Brothers in Chicago, since you like that. I know you like $100-per-pound beef. You serve it at the White House.
But I'll cover the cost. I will cover the cost, Mr. President, so that the taxpayers do not have to pay for it, as they did your Super Bowl party, and as they do your Wednesday afternoon cocktail party. So you have no excuses. Your flunkies are demanding this debate. Your flunkies are targeting a private citizen with an enemies list that so far has three or four names on it: Mine; Rick Santelli; Jim Cramer at CNBC; and let's not forget Joe the Plumber, who your allies in Ohio also tried to destroy. The difference is that Joe the Plumber does not have his own microphone every day. They're shutting Santelli up at CNBC. They're going to shut Cramer up pretty soon, too, but he'll go down with a fight. That isn't going to happen here, to me.
I'm calling. I'm ready. I'll do everything I can to facilitate it. You're a very courageous man, Mr. President. I am, after all, just The Last Man Standing. If you take me out, if you can wipe me out in a debate and prove to the rest of America that what I say is senseless and wrong, do you realize you will own the United States of America? You will have no opposition. You have America's media in your back pocket. It's amazing. In 1972, Richard Nixon had an enemies list, and the media was outraged by this. They were outraged. At the same time, those who weren't on it were a little jealous. But they were outraged that a president would engage in this kind of behavior toward the media. Now they go after a private citizen.
Rahm Emanuel is leading the team going after a private citizen, and the Drive-By Media applaud, get on board and help further the mission. We live in different times. So if you can wipe me out -- and, by the way, Mr. President, and Mr. Emanuel: Don't make the mistake of assuming I'm wiping myself out here in the process. I want to thank you guys for elevating me beyond the stature I already earned and achieved, because now more and more Americans have the opportunity to learn who you really are, what your ideas will really accomplish, and what damage and harm I think your policies will bring for a very, very long time to them and to this country. So I want to thank you for the opportunity. Obviously, it's a threat targeting me. I've extended the invitation. I'm looking forward to hearing back from whoever in your cabal one way or the other on accepting my offer.
Sphere: Related Content
Rush Limbaugh challenges Obama to debate on his show
Courtesy of USA Today
Rush Limbaugh, apparently taking to heart the Obama administration's description of him as the leader of the Republican Party, has invited President Obama to come on his radio show for a debate.
The edgy, bombastic conservative, describing himself as a "harmless, lovable little fuzzball" and "the Last Man Standing," wrapped the invitation in a long series of jibes at Obama, his policies, his party, his aides, his speaking style and the entertaining he's done during his six weeks at the White House.
"You are one of the most gifted public speakers of our age. I would think, Mr. President, you would jump at this opportunity," Limbaugh said on his show, which has millions of listeners on more than 600 radio stations.
Read the whole segment here. There's even a cartoon invitation in fancy script.
It's the latest chapter in a tale that began Saturday with Limbaugh reiterating his hope that Obama fails in a nationally televised speech to a conservative group, and has continued all week with Democrats designating him the leader of the GOP and Republicans stumbling over whether to embrace Limbaugh, reject him, ignore him or figure out something else.
We've asked the White House for a response to today's development. Sphere: Related Content
Rush Limbaugh, apparently taking to heart the Obama administration's description of him as the leader of the Republican Party, has invited President Obama to come on his radio show for a debate.
The edgy, bombastic conservative, describing himself as a "harmless, lovable little fuzzball" and "the Last Man Standing," wrapped the invitation in a long series of jibes at Obama, his policies, his party, his aides, his speaking style and the entertaining he's done during his six weeks at the White House.
"You are one of the most gifted public speakers of our age. I would think, Mr. President, you would jump at this opportunity," Limbaugh said on his show, which has millions of listeners on more than 600 radio stations.
Read the whole segment here. There's even a cartoon invitation in fancy script.
It's the latest chapter in a tale that began Saturday with Limbaugh reiterating his hope that Obama fails in a nationally televised speech to a conservative group, and has continued all week with Democrats designating him the leader of the GOP and Republicans stumbling over whether to embrace Limbaugh, reject him, ignore him or figure out something else.
We've asked the White House for a response to today's development. Sphere: Related Content
Tuesday, March 3, 2009
Obama Offered Deal to Russia in Secret Letter
By PETER BAKER
New York Times
WASHINGTON — President Obama sent a secret letter to Russia’s president last month suggesting that he would back off deploying a new missile defense system in Eastern Europe if Moscow would help stop Iran from developing long-range weapons, American officials said Monday.
The letter to President Dmitri A. Medvedev was hand-delivered in Moscow by top administration officials three weeks ago. It said the United States would not need to proceed with the interceptor system, which has been vehemently opposed by Russia since it was proposed by the Bush administration, if Iran halted any efforts to build nuclear warheads and ballistic missiles.
The officials who described the contents of the message requested anonymity because it has not been made public. While they said it did not offer a direct quid pro quo, the letter was intended to give Moscow an incentive to join the United States in a common front against Iran. Russia’s military, diplomatic and commercial ties to Tehran give it some influence there, but it has often resisted Washington’s hard line against Iran.
“It’s almost saying to them, put up or shut up,” said a senior administration official. “It’s not that the Russians get to say, ‘We’ll try and therefore you have to suspend.’ It says the threat has to go away.”
On Tuesday, a press secretary for Dmitri A. Medvedev told the Interfax news agency that the letter did not contain any “specific proposals or mutually binding initiatives.”
Natalya Timakova said the letter was a reply to one sent by Mr. Medvedev shortly after Mr. Obama was elected.
“Medvedev appreciated the promptness of the reply and the positive spirit of the message,” Ms. Timakova said. “Obama’s letter contains various proposals and assessments of the current situation. But the message did not contain any specific proposals or mutually binding initiatives.”
She said Mr. Medvedev perceives the development of Russian-American relations as “exceptionally positive,” and hopes details can be fleshed out at a meeting on Friday in Geneva between Foreign Minister Sergei V. Lavrov and Secretary of State Hillary Rodham Clinton.
Mr. Obama and Mr. Medvedev will meet for the first time on April 2 in London, officials said Monday.
Mr. Obama’s letter, sent in response to one he received from Mr. Medvedev shortly after Mr. Obama’s inauguration, is part of an effort to “press the reset button” on Russian-American relations, as Vice President Joseph R. Biden Jr. put it last month, officials in Washington said. Among other things, the letter discussed talks to extend a strategic arms treaty expiring this year and cooperation in opening supply routes to Afghanistan.
The plan to build a high-tech radar facility in the Czech Republic and deploy 10 interceptor missiles in Poland — a part of the world that Russia once considered its sphere of influence — was a top priority for President George W. Bush to deter Iran in case it developed a nuclear warhead to fit atop its long-range missiles. Mr. Bush never accepted a Moscow proposal to install part of the missile defense system on its territory and jointly operate it so it could not be used against Russia.
Now the Obama administration appears to be reconsidering that idea, although it is not clear if it would want to put part of the system on Russian soil where it could be flipped on or off by Russians. Mr. Obama has been lukewarm on missile defense, saying he supports it only if it can be proved technically effective and affordable.
Mr. Bush also emphasized the linkage between the Iranian threat and missile defense, but Mr. Obama’s overture reformulates it in a way intended to appeal to the Russians, who long ago soured on the Bush administration. Officials have been hinting at the possibility of an agreement in recent weeks, and Mr. Obama’s proposal was reported on Monday by a Moscow newspaper, Kommersant.
“If through strong diplomacy with Russia and our other partners we can reduce or eliminate that threat, it obviously shapes the way at which we look at missile defense,” Under Secretary of State William J. Burns said about the Iranian threat in an interview with the Russian news agency Interfax while in Moscow last month delivering Mr. Obama’s letter.
Attending a NATO meeting in Krakow, Poland, on Feb. 20, Defense Secretary Robert M. Gates said, “I told the Russians a year ago that if there were no Iranian missile program, there would be no need for the missile sites.” Mr. Obama’s inauguration, he added, offered the chance for a fresh start. “My hope is that now, with the new administration, the prospects for that kind of cooperation might have improved,” he said.
The idea has distressed Poland and the Czech Republic, where leaders invested political capital in signing missile defense cooperation treaties with the United States despite domestic opposition. If the United States were to slow or halt deployment of the systems, Warsaw and Prague might insist on other incentives.
For example, the deal with Poland included a side agreement that an American Patriot air defense battery would be moved from Germany to Poland, where it would be operated by a crew of about 100 American service members. The administration might have to proceed with that to reassure Warsaw.
Missile defense has flavored Mr. Obama’s relationship with Russia from the day after his election, when Mr. Medvedev threatened to point missiles at Europe if the system proceeded. Mr. Medvedev later backed off that threat and it seems that Moscow is taking seriously the idea floated in Mr. Obama’s letter. Kommersant, the Moscow newspaper, on Monday called it a “sensational proposal.”
Mr. Medvedev said Sunday that he believed the Obama administration would be open to cooperation on missile defense.
“We have already received such signals from our American colleagues,” he said in an interview posted on the Kremlin Web site. “I expect that these signals will turn into concrete proposals. I hope to discuss this issue of great importance for Europe during my first meeting with President Barack Obama.”
David E. Sanger and Thom Shanker contributed reporting from Washington, and Michael Schwirtz and Ellen Barry from Moscow. Sphere: Related Content
New York Times
WASHINGTON — President Obama sent a secret letter to Russia’s president last month suggesting that he would back off deploying a new missile defense system in Eastern Europe if Moscow would help stop Iran from developing long-range weapons, American officials said Monday.
The letter to President Dmitri A. Medvedev was hand-delivered in Moscow by top administration officials three weeks ago. It said the United States would not need to proceed with the interceptor system, which has been vehemently opposed by Russia since it was proposed by the Bush administration, if Iran halted any efforts to build nuclear warheads and ballistic missiles.
The officials who described the contents of the message requested anonymity because it has not been made public. While they said it did not offer a direct quid pro quo, the letter was intended to give Moscow an incentive to join the United States in a common front against Iran. Russia’s military, diplomatic and commercial ties to Tehran give it some influence there, but it has often resisted Washington’s hard line against Iran.
“It’s almost saying to them, put up or shut up,” said a senior administration official. “It’s not that the Russians get to say, ‘We’ll try and therefore you have to suspend.’ It says the threat has to go away.”
On Tuesday, a press secretary for Dmitri A. Medvedev told the Interfax news agency that the letter did not contain any “specific proposals or mutually binding initiatives.”
Natalya Timakova said the letter was a reply to one sent by Mr. Medvedev shortly after Mr. Obama was elected.
“Medvedev appreciated the promptness of the reply and the positive spirit of the message,” Ms. Timakova said. “Obama’s letter contains various proposals and assessments of the current situation. But the message did not contain any specific proposals or mutually binding initiatives.”
She said Mr. Medvedev perceives the development of Russian-American relations as “exceptionally positive,” and hopes details can be fleshed out at a meeting on Friday in Geneva between Foreign Minister Sergei V. Lavrov and Secretary of State Hillary Rodham Clinton.
Mr. Obama and Mr. Medvedev will meet for the first time on April 2 in London, officials said Monday.
Mr. Obama’s letter, sent in response to one he received from Mr. Medvedev shortly after Mr. Obama’s inauguration, is part of an effort to “press the reset button” on Russian-American relations, as Vice President Joseph R. Biden Jr. put it last month, officials in Washington said. Among other things, the letter discussed talks to extend a strategic arms treaty expiring this year and cooperation in opening supply routes to Afghanistan.
The plan to build a high-tech radar facility in the Czech Republic and deploy 10 interceptor missiles in Poland — a part of the world that Russia once considered its sphere of influence — was a top priority for President George W. Bush to deter Iran in case it developed a nuclear warhead to fit atop its long-range missiles. Mr. Bush never accepted a Moscow proposal to install part of the missile defense system on its territory and jointly operate it so it could not be used against Russia.
Now the Obama administration appears to be reconsidering that idea, although it is not clear if it would want to put part of the system on Russian soil where it could be flipped on or off by Russians. Mr. Obama has been lukewarm on missile defense, saying he supports it only if it can be proved technically effective and affordable.
Mr. Bush also emphasized the linkage between the Iranian threat and missile defense, but Mr. Obama’s overture reformulates it in a way intended to appeal to the Russians, who long ago soured on the Bush administration. Officials have been hinting at the possibility of an agreement in recent weeks, and Mr. Obama’s proposal was reported on Monday by a Moscow newspaper, Kommersant.
“If through strong diplomacy with Russia and our other partners we can reduce or eliminate that threat, it obviously shapes the way at which we look at missile defense,” Under Secretary of State William J. Burns said about the Iranian threat in an interview with the Russian news agency Interfax while in Moscow last month delivering Mr. Obama’s letter.
Attending a NATO meeting in Krakow, Poland, on Feb. 20, Defense Secretary Robert M. Gates said, “I told the Russians a year ago that if there were no Iranian missile program, there would be no need for the missile sites.” Mr. Obama’s inauguration, he added, offered the chance for a fresh start. “My hope is that now, with the new administration, the prospects for that kind of cooperation might have improved,” he said.
The idea has distressed Poland and the Czech Republic, where leaders invested political capital in signing missile defense cooperation treaties with the United States despite domestic opposition. If the United States were to slow or halt deployment of the systems, Warsaw and Prague might insist on other incentives.
For example, the deal with Poland included a side agreement that an American Patriot air defense battery would be moved from Germany to Poland, where it would be operated by a crew of about 100 American service members. The administration might have to proceed with that to reassure Warsaw.
Missile defense has flavored Mr. Obama’s relationship with Russia from the day after his election, when Mr. Medvedev threatened to point missiles at Europe if the system proceeded. Mr. Medvedev later backed off that threat and it seems that Moscow is taking seriously the idea floated in Mr. Obama’s letter. Kommersant, the Moscow newspaper, on Monday called it a “sensational proposal.”
Mr. Medvedev said Sunday that he believed the Obama administration would be open to cooperation on missile defense.
“We have already received such signals from our American colleagues,” he said in an interview posted on the Kremlin Web site. “I expect that these signals will turn into concrete proposals. I hope to discuss this issue of great importance for Europe during my first meeting with President Barack Obama.”
David E. Sanger and Thom Shanker contributed reporting from Washington, and Michael Schwirtz and Ellen Barry from Moscow. Sphere: Related Content
Candidate Obama vs. President Obama
By Ruth Marcus
Washington Post
One of the challenges for presidential candidates who turn into presidents is finding ways to wiggle out of unaffordable or ill-advised campaign positions without attracting too much notice.
President Obama managed to do this twice in his new budget: once explicitly, once by implication. Good for him, because both moves signal a better, more fiscally responsible approach.
The budget made a dramatic, smart and little-noticed pivot from his campaign-trail promise to cut taxes on 95 percent of Americans. Candidate Obama’s original plan -- a plan I criticized at the time as unduly expensive and poorly crafted -- provided for tax credits of $500 per individual or $1,000 per couple; couples making as much as $200,000 annually would qualify for a partial credit. The size of the credits was scaled back in the stimulus package, to $400 and $800. But the big switch came when now-President Obama released his budget last week. The “Making Work Pay” tax credits were there -- but for the first time they were contingent on revenue from auctioning permits in the administration’s proposed cap-and-trade program to alleviate climate change. In other words: no cap-and-trade, no tax credits.
This is extremely clever. A cap-and-trade regime is, in effect, a carbon tax, a penalty on pollution that would be passed along to ordinary Americans. It makes sense to require polluting industries to pay for the impact of their activities, and to give them the incentive to move to less polluting approaches. At the same time, it makes sense to alleviate the costs that would impose on individuals.
In fact, it makes so much sense that this is what Obama envisioned during the campaign. Back then, he promised to devote some cap-and-trade revenue to investing in alternative energy, and to save most of the rest “for rebates and other transition relief to ensure that families and communities are not adversely impacted by the transition to a new energy, low carbon economy.”
So the tax credit that Obama now promises to finance with cap and trade revenue replaces a rebate he already promised. Two proposed tax cuts have, in effect, been merged into one. An expensive tax credit is paid for with a valuable social program. Obama does not get dinged for abandoning an expensive and high-profile campaign promise, but he has managed to disappear a different one.
There was another potential pivot implicit in Obama’s health care proposal. He identified $634 billion in revenue over ten years to pay for the program, but he acknowledged that this would only cover about half the cost of universal coverage. Lawmakers working on the issue would have to come up with the rest.
For the Willie Suttons of health policy, there’s one obvious place to find that kind of money: the expensive, counter-productive, unfair and regressive preference for employer-provided health built into the tax code. Health care offered by employers is not considered part of workers’ taxable wages. This is expensive, costing about $200 billion a year. It is counter-productive because it encourages overconsumption of health care. It is unfair because those who must purchase insurance on their own generally do not receive special tax treatment. It is regressive because higher-income employees, who are taxed at higher brackets, receive a greater benefit from the exclusion.
On the other hand, there is the slight problem that when Republican nominee John McCain proposed to tax the value of employer-provided insurance, and instead to provide tax credits to buy insurance, Obama blasted him for seeking a $3.6 trillion tax hike on American workers, “the largest middle-class tax increase in history.” Hard to now turn around and endorse something similar.
Hence, the dog whistle of the Obama budget when it comes to paying for health care reform: You can't hear him saying "let's think about taxing employer-provided health care" unless your ear is turned to that pitch. Obama's budget does not make that proposal, but it is the predictable consequence of everything he lays out. If (a) health care should be financed in a deficit-neutral way and (b) more revenue is needed, then (c) cutting back in some way on the tax preference for employer-provided insurance cannot be far behind. It’s not exactly a profile in courage for Obama not to say this straight out. Yet the logic of his budget is that it implicitly signals an openness to doing so.
These are both good moves -- even if, in a political season, they might be labelled flip-flops. Sphere: Related Content
Washington Post
One of the challenges for presidential candidates who turn into presidents is finding ways to wiggle out of unaffordable or ill-advised campaign positions without attracting too much notice.
President Obama managed to do this twice in his new budget: once explicitly, once by implication. Good for him, because both moves signal a better, more fiscally responsible approach.
The budget made a dramatic, smart and little-noticed pivot from his campaign-trail promise to cut taxes on 95 percent of Americans. Candidate Obama’s original plan -- a plan I criticized at the time as unduly expensive and poorly crafted -- provided for tax credits of $500 per individual or $1,000 per couple; couples making as much as $200,000 annually would qualify for a partial credit. The size of the credits was scaled back in the stimulus package, to $400 and $800. But the big switch came when now-President Obama released his budget last week. The “Making Work Pay” tax credits were there -- but for the first time they were contingent on revenue from auctioning permits in the administration’s proposed cap-and-trade program to alleviate climate change. In other words: no cap-and-trade, no tax credits.
This is extremely clever. A cap-and-trade regime is, in effect, a carbon tax, a penalty on pollution that would be passed along to ordinary Americans. It makes sense to require polluting industries to pay for the impact of their activities, and to give them the incentive to move to less polluting approaches. At the same time, it makes sense to alleviate the costs that would impose on individuals.
In fact, it makes so much sense that this is what Obama envisioned during the campaign. Back then, he promised to devote some cap-and-trade revenue to investing in alternative energy, and to save most of the rest “for rebates and other transition relief to ensure that families and communities are not adversely impacted by the transition to a new energy, low carbon economy.”
So the tax credit that Obama now promises to finance with cap and trade revenue replaces a rebate he already promised. Two proposed tax cuts have, in effect, been merged into one. An expensive tax credit is paid for with a valuable social program. Obama does not get dinged for abandoning an expensive and high-profile campaign promise, but he has managed to disappear a different one.
There was another potential pivot implicit in Obama’s health care proposal. He identified $634 billion in revenue over ten years to pay for the program, but he acknowledged that this would only cover about half the cost of universal coverage. Lawmakers working on the issue would have to come up with the rest.
For the Willie Suttons of health policy, there’s one obvious place to find that kind of money: the expensive, counter-productive, unfair and regressive preference for employer-provided health built into the tax code. Health care offered by employers is not considered part of workers’ taxable wages. This is expensive, costing about $200 billion a year. It is counter-productive because it encourages overconsumption of health care. It is unfair because those who must purchase insurance on their own generally do not receive special tax treatment. It is regressive because higher-income employees, who are taxed at higher brackets, receive a greater benefit from the exclusion.
On the other hand, there is the slight problem that when Republican nominee John McCain proposed to tax the value of employer-provided insurance, and instead to provide tax credits to buy insurance, Obama blasted him for seeking a $3.6 trillion tax hike on American workers, “the largest middle-class tax increase in history.” Hard to now turn around and endorse something similar.
Hence, the dog whistle of the Obama budget when it comes to paying for health care reform: You can't hear him saying "let's think about taxing employer-provided health care" unless your ear is turned to that pitch. Obama's budget does not make that proposal, but it is the predictable consequence of everything he lays out. If (a) health care should be financed in a deficit-neutral way and (b) more revenue is needed, then (c) cutting back in some way on the tax preference for employer-provided insurance cannot be far behind. It’s not exactly a profile in courage for Obama not to say this straight out. Yet the logic of his budget is that it implicitly signals an openness to doing so.
These are both good moves -- even if, in a political season, they might be labelled flip-flops. Sphere: Related Content
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