The American Legislative Exchange Council (ALEC) conducted the survey, titled “Rich States, Poor States.” It examined the latest trends in state economic growth nationwide.

“The data ranks the 2013 economic outlook for states using 15 equally weighted policy variables, including various tax rates, regulatory burdens and labor policies,” the survey ...]]> Red States Lead the Way with Limited Government and Lower Taxes

Arizona is sixth in the nation in a survey that ranked states with the best overall economic outlook for 2013.

The American Legislative Exchange Council (ALEC) conducted the survey, titled “Rich States, Poor States.” It examined the latest trends in state economic growth nationwide.

“The data ranks the 2013 economic outlook for states using 15 equally weighted policy variables, including various tax rates, regulatory burdens and labor policies,” the survey said.

Here is a list of the top ten and bottom ten states in the ranking that measured the overall economic outlook for 2013.

Top Ten

Utah, North Dakota, South Dakota, Wyoming, Virginia, Arizona, Idaho, Georgia, Florida, and Mississippi.

Bottom Ten

Maine, Montana, Connecticut, Oregon, Rhode Island, Minnesota, California, Illinois, New York, and Vermont.

“Nationally, states with low tax rates, limited government regulations and right-to-work laws were most likely to have a better economic outlook than states with high income taxes and burdensome regulations,” the survey said.

The “Rich States, Poor States” survey has been used by state legislators since 2008. Economist Arthur Laffer and Wall Street Journal writer Stephen Moore authored the report, along with  ALEC’s Jonathan Williams.

ALEC is the largest nonpartisan, voluntary membership organization of state legislators in the United States.

The “Rich States, Poor States” survey with individual state data is available at www.alec.org/rsps.

“Well, today is a new day, which means that we’re sure to get a new story from the White House on the IRS scandal.  First they ...]]>

After another week of the White House shifting, revising and walking-back its account of its involvement in the IRS scandal, the American people deserve a straight answer and Republicans “are going to continue to seek answers until we get to the truth,” Speaker Boehner said at a press conference today.  Here’s more:

“Well, today is a new day, which means that we’re sure to get a new story from the White House on the IRS scandal.  First they told us that the White House learned from the news that the IRS was targeting conservative groups, but then we hear the president’s lawyer knew a report was coming.  But, they said that she didn’t know the details.  Of course, we came to find out that wasn’t true either.  And then we learned it wasn’t just the president’s lawyer – it was a number of his closest advisors as well.  And of course, despite first claiming to be blindsided by all of it, we now know that his Deputy Chief of Staff was even involved in the planning of the announcement.

“Drip, drip, drip – every day there’s something new.”

As Speaker Boehner noted, House committees are continuing their investigations into the IRS scandal, most recently with a hearing in the House Oversight & Government Reform Committee, and the administration’s response to the terrorist attacks in Benghazi.  That investigation will continue with a deposition from Accountability Review Board (ARB) co-chairman Ambassador Thomas Pickering, the committee announced this week.  From Speaker Boehner:

“We don’t know how deep this extends within the administration, and that’s why our committees are going to continue to investigate this.  But what is most troubling in this White House is that the lights are on but there doesn’t seem to be anybody at home. 

“The IRS systematically violated the rights of Americans for almost two years.  The Treasury Department knew about this last year. The White House was made aware of it last month, yet no one – no one – thought that they should tell the president.  Fairly inconceivable to me.

“We are going to continue to seek answers until we get to the truth.  The administration hasn’t been upfront with the American people about Benghazi.  They’re suggesting that reporters are criminals for doing their jobs.  And we can’t get a straight answer from them on the IRS.”

“What we’re seeing from this administration is an arrogance of power,” Speaker Boehner said in light of these unfolding scandals, “when Americans can’t count on some semblance of truth and honesty from their government, we’ve got a big problem.”  Even as the House maintains its focus on economic growth and jobs, it will continue fulfilling its obligation to hold the administration accountable and get to the bottom of the IRS scandal, Benghazi, sweeping investigations of reporters – and anything else that warrants the scrutiny of the people’s representatives.

Not quite. In fact, the CBO found that Washington hasn’t done anything to address our long-term debt and it’s still on pace to reach 74 percent of GDP by 2023.  On top of that, if interest rates rise to more typical ...]]> No, the deficit problem is not “solved”

Many in Washington are pointing to the latest Congressional Budget Office (CBO) report to suggest the deficit problem is “pretty much solved” for the next 10 years.  But did the CBO really say that?

Not quite. In fact, the CBO found that Washington hasn’t done anything to address our long-term debt and it’s still on pace to reach 74 percent of GDP by 2023.  On top of that, if interest rates rise to more typical levels, spending on interest payments would “increase substantially.”

“PRETTY MUCH SOLVED”?

Washington Post: “CBO Says Deficit Problem Is Solved For The Next 10 Years” “It looks like we’ve moved to talking about possible scandals just in time, because according to the Congressional Budget Office, the debt disaster that has obsessed the political class for the last three years is pretty much solved, at least for the next 10 years or so.” (Ezra Klein, “CBO Says Deficit Problem Is Solved For The Next 10 Years,” The Washington Post, 5/14/13)

NOT QUITE

Latest CBO Report Says Long-Term Debt Will Continue To Rise: “Under current law, the debt is projected to decline from about 76 percent of GDP in 2014 to slightly below 71 percent in 2018 but then to start rising again; by 2023, if current laws remain in place, debt will equal 74 percent of GDP and continue to be on an upward path. (“Updated Budget Projections: Fiscal Year 2013 to 2023,” Congressional Budget Office, 5/14/13)

Rising Debt Will Have “Serious Negative Consequences.” “Such high and rising debt later in the coming decade would have serious negative consequences: When interest rates return to higher (more typical) levels, federal spending on interest payments would increase substantially. … Finally, a large debt increases the risk of a fiscal crisis, during which investors would lose so much confidence in the government’s ability to manage its budget that the government would be unable to borrow at affordable rates.” (“Updated Budget Projections: Fiscal Year 2013 to 2023,” Congressional Budget Office, 5/14/13)

 AS INTEREST RATES RETURN TO HISTORICAL AVERAGES, THE DEBT WILL EXPLODE

“The Cost Of Servicing The National Debt Will Explode Once Interest Rates Begin To Rise.” ”Once the Federal Reserve’s easy-money policy comes to an end and interest rates return to their post-World War II norms, the cost of servicing this debt will explode. The cost will increase further as the Fed sells down its $1.85 trillion holding of government bonds, and the Social Security system runs deeper and deeper into the red. The Treasury will then have to pay interest on an ever-growing percentage of the debt. Since the World War II era, the average maturity of outstanding federal debt has been about five years, and the average interest cost on a five-year Treasury note has been 5.9%. At this interest rate, the expected cost of the Obama debt burden will eventually approach some $590 billion per year in perpetuity, exceeding the current annual cost of any federal program except Social Security.” (Phil Gramm and Steve McMillan, “The Debt Problem Hasn’t Vanished,” The Wall Street Journal, 5/21/13)

FAILURE TO ADDRESS KEY DRIVERS WILL RESULT IN MORE PAIN DOWN THE ROAD

Social Security Will Be Insolvent In 20 Years (Affecting Everyone Under 45). (Social Security Administration, The 2012 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, 4/15/12)

The Medicare Trust Fund Will Be Exhausted In 11 Years (Affecting Everyone Under 56).  (Centers for Medicare and Medicaid Services, 2012 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 4/25/12)

CBO Director: Debt Will Be Unsustainable Without “Significant” Changes To Entitlements. “Under questioning from Sen. Ron Johnson, who highlighted the dire state of Medicare and Social Security finances, Elmendorf stated that putting the budget on a sustainable path would require major reforms to entitlement programs or massive tax increases that would hit the middle class.” (Philip Klein, “CBO director: Debt will be unsustainable without ‘significant’ changes to entitlements or broad tax hikes,” The Washington Examiner, 2/12/13)

 Future Generations Could Be Forced To Cover $35 Trillion In Unfunded Promises. “If no changes are made in entitlements such as Medicare, younger taxpayers will have to cover unfunded promises of $35 trillion.   That means future generations, unless lawmakers can break the gridlock and agree to entitlement reform soon, will see massive tax hikes, massive benefit cuts — or both.” (Jim Angle, “Cost of Entitlements: To cover $35T promise, future generations face steep tax hikes,” Fox News, 3/7/13)

“Sacrifice Will Be Required Either Way, But Analysts Say The Pain Is Greater The Longer Lawmakers Wait.” (Jim Angle, “Cost of Entitlements: To cover $35T promise, future generations face steep tax hikes,” Fox News, 3/7/13) 

Massive Tax Hikes Looming: “The CBO reported that in order to keep entitlement benefits where they are, taxes would have to increase by 48 percent in 2030, and by a whopping 86 percent in 2050.”  (Jim Angle, “Cost of Entitlements: To cover $35T promise, future generations face steep tax hikes,” Fox News, 3/7/13)

BankruptingAmerica.org is an educational project of Public Notice, an independent, nonpartisan, non-profit, 501(c)(4) organization dedicated to providing facts and insight on the effects public policy has on Americans’ financial well-being.

A lot of that can be attributed to having lived during a time when you could trust what you read in newspapers so long as you discounted what ran on the editorial page.  These days, just about every page reads like an editorial ...]]> I keep hearing from older Americans that the best thing about getting closer to the end is that they got to live most of their lives in an earlier and much better version of America.

A lot of that can be attributed to having lived during a time when you could trust what you read in newspapers so long as you discounted what ran on the editorial page.  These days, just about every page reads like an editorial dictated by Barack Obama to his favorite ghostwriter, William Ayers.

One example of journalistic bias can be found in the way that the media covered the war in Afghanistan when Bush was the president and the way they’ve covered it since 2009 when Obama moved into the Oval Office.  Over the course of seven Bush years, 575 American soldiers were killed in that war, and another 3,000 were wounded.  Under Obama, the numbers soared to nearly 1,500 dead and 15,000 wounded.  But if you judged by the coverage the war has received, you would imagine those numbers were reversed.

I still recall that when the war in Iraq was going strong, Garry Trudeau would occasionally devote an entire Sunday strip of “Doonesbury” to listing the names of the fallen warriors.  Evidently, when they die with a Democrat in the White House, they don’t matter quite as much.

Something I can’t get my head around is how quickly public opinion can make a U-turn.  Take gun laws.  In December, 2012, 57% of those polled wanted them made stricter.  In March of this year, the number dropped to 47%.  I am certainly not arguing for more legislation, but how it is that 10% of the people can do a complete reversal in three months?  I mean, even the likes of Obama and the Clintons didn’t have the gall to switch their stance on same-sex marriages quite that quickly.  Instead, they evolved, which is political-speak for checking which way the wind’s blowing.

Speaking of guns, the Second Amendment distinctly states that the federal government will do nothing to infringe on the rights of the people to own them.  Clearly, when the government passed Dianne Feinstein’s ban on assault rifles in the 1990s, it was definitely infringing.  But, then, ever since Lincoln decided to ignore writs of habeas corpus, politicians, as well as Supreme Court justices, have increasingly come to regard the Constitution as nothing more than a list of suggestions.

Sen. Feinstein, who certainly has earned her place among the most hypocritical members of the U.S. Senate, last year insisted she would get to the bottom of the scandal that saw this administration passing along security secrets to the NY Times…until she realized it could only be Barack Obama or one of his flunkies.

In a somewhat related matter, Richard Blum’s firm was recently assigned the task of selling off 56 buildings housing post offices, meaning millions of dollars in commissions.  In case his name doesn’t ring a bell, Dianne Feinstein is Mrs. Richard Blum.

One of my readers, Randall Slafsky, called my attention to an article in the Washington Post.  It stated that the Arctic Ocean is warming up, icebergs and glaciers are disappearing and in some places, the seals are finding the water too hot for their usual activities.

It went on to report that no white fish are being found in the eastern Arctic, while vast shoals of herring and smelts which have never before ventured so far north, are being encountered in the old seal fishing grounds.  Moreover, within a few years it is predicted that due to the ice melt, the sea will rise and make most coastal cities uninhabitable.

The AP news story actually ran in the Post on November 2, 1922.  Who would have ever guessed Al Gore was that old?

Apparently, I’m not the only person who has noticed that liberals are constantly giving new meaning to the word “hypocrisy.”  Cartoonist Dixon Diaz pointed out in his takeoff on “Peanuts” that liberals oppose people having the right to smoke; drink large sodas; eat cookies; use gas, oil and coal; celebrate Easter and Christmas; use incandescent bulbs; or own guns.  The only area in which they’re truly pro-choice is when it comes to abortions.

In another strip, he had his version of Lucy telling Linus that he and his fellow conservatives are racist, sexist, homophobic, gun-toting, religious fanatics.  When Linus points out that she and her fellow liberals support Muslims, who are racist, sexist, homophobic, gun-toting, religious fanatics, she replies, “That’s their culture.  You have no right to judge them.”

To which I and most conservatives can only say, quoting that eminent philosopher, Charlie Brown, “Good grief!”

Senior Aides Shielded Obama On IRS Scandal
The Washington Post reports, “As soon as White House counsel Kathryn Ruemmler heard about an upcoming inspector general’s report on the Internal Revenue Service, she knew she had a problem. The notice Ruemmler saw on April 24 gave her a thumbnail sketch of a disturbing finding: that the IRS had improperly targeted tea party and other conservative groups. She shared the news with White House Chief of Staff Denis ...]]>

Spending Daily | May 23, 2013

Senior Aides Shielded Obama On IRS Scandal
The Washington Post reports, “As soon as White House counsel Kathryn Ruemmler heard about an upcoming inspector general’s report on the Internal Revenue Service, she knew she had a problem. The notice Ruemmler saw on April 24 gave her a thumbnail sketch of a disturbing finding: that the IRS had improperly targeted tea party and other conservative groups. She shared the news with White House Chief of Staff Denis McDonough and other senior White House aides, who all recognized the danger of the findings. But they agreed that it would be best not to share it with President Obama until the independent audit was completed and made public, in part to protect him from even the appearance of trying to influence an investigation. This account of how the White House tried to deal with the IRS inquiry — based on documents, public statements and interviews with multiple senior officials, including one directly involved in the discussions — shows how carefully Obama’s top aides were trying to shield him from any second-term scandal that might swamp his agenda or, worse, jeopardize his presidency.”

“The Unaccountable Executive”
The Wall Street Journal editorializes, “Every day brings new revelations about who knew what about the IRS targeting conservative groups during President Obama’s re-election campaign, but the overall impression is of a vast federal bureaucracy run amok. While the White House continues to peddle the story of a driverless train wreck, taxpayers are being treated to a demonstration of the dangers of an unwieldy and unaccountable administrative state. Look, Ma, no hands! In his press events, Mr. Obama has said that while he learned about the Cincinnati rogues on the news, he plans to ‘hold accountable those who have taken these outrageous actions.’ But the White House began its response by pushing the line that the IRS is an ‘independent agency,’ and Mr. Obama has since given the impression that he sits atop a federal government which he does not, and could not possibly, control.”

Did IRS’s Lerner Waive Right to Plead the Fifth?
Bloomberg reports, “A U.S. House committee chairman said the Internal Revenue Service official who refused to answer his panel’s questions today about her involvement in scrutinizing small-government groups may have waived her right to avoid testimony and might have to return. Lois Lerner, a mid-level official at the center of the controversy over IRS treatment of small-government groups, invoked her constitutional right not to testify after reading a statement denying that she had committed any crimes. Representative Darrell Issa, chairman of the House Oversight and Government Reform Committee, said Lerner might have waived her constitutional right against self-incrimination by making a substantive opening statement.”

The IRS Scandal and a Culture of Intimidation
Senator Mitch McConnell editorializes in The Washington Post, “Revelations about the Internal Revenue Service targeting conservative groups have raised important questions about the Obama administration’s commitment to the First Amendment. Yet there is ample evidence to suggest that the culture of intimidation in which these tactics were allowed to flourish goes well beyond one agency or a few rogue employees. For years, administration officials have used the power of the federal government to isolate their opponents. Meanwhile, the unionized employees who populate the IRS and other agencies across the country routinely take their cues from union bosses, whose political donations and speeches show their support for the White House. When it comes to rewarding friends and punishing enemies, the IRS is not alone. In fact, recent efforts to revive the so-called Disclose Act suggest that these tactics are alive and well in Washington. This bill, which would force grass-roots groups to make their member and donor lists public, may seem benign to some. But as a longtime defender of the First Amendment, I have always seen it for what it is: a backdoor effort to discourage those who disagree with the Obama administration from participating in the political process.”

Poll: 53 Percent Say Their Health Care Situation Will Worsen Under Obamacare
Fox News reports, “Majorities of American voters say their family will be worse off under the Affordable Care Act, and think it would be better to go back to the pre-ObamaCare health care system. A Fox News poll released Wednesday finds that while 26 percent of voters say their health care situation will be better under the new law, twice as many — 53 percent — say it will be worse.  Another 13 percent say it won’t make a difference.  Almost all Republicans (85 percent) and just over half of independents (51 percent) say they will be worse off under ObamaCare.  Nearly half of Democrats expect to be better off (48 percent), while about one-quarter believe they will be worse off (24 percent). Young voters and seniors are pessimistic about ObamaCare.  Majorities of those under age 35 and those 65+ think things will be worse under the 2010 health care law.”

GAO Report Finds GAO Recommendations Aren’t Being Made, Costing Taxpayers Billions
The Hill reports, “Congress and the Obama administration have scrapped just a fraction of the duplicative programs targeted for cuts by Government Accountability Office (GAO), the agency’s chief told lawmakers Wednesday. Comptroller General Gene L. Dodaro said just 12 percent of more than 300 recommendations issued by GAO since 2011 to eliminate, combine or modify duplicative programs have been fully carried out. … The hearing follows the release of the latest in a series of GAO reports finding billions of taxpayer dollars are being wasted on government overlap spread across dozens of federal agencies. Among its findings is the existence of two separate programs responsible for federal catfish inspections, 76 different drug abuse programs and a general lack of coordination between departments charged with providing veterans services.”

Insurers Under Pressure from Health Group Linked to Administration
The Hill reports, “The links between a nonprofit promoting President Obama’s healthcare law and the White House have created an ‘air of expectation’ that insurers will contribute to the group, according to an insurance industry official. Current and former administration officials have taken on leadership and fundraising roles for Enroll America, a nonprofit aiming to make sure people sign up for new coverage options. As the ties grow deeper, the organization has come to feel like ‘just an arm of the administration,’ said one official who works closely with insurers.  Health and Human Services (HHS) Secretary Kathleen Sebelius has already come under fire from congressional Republicans because she has raised money for the organization. They say it puts inappropriate pressure on insurers, who will need the department’s approval to sell their products through a federally run insurance exchange in more than half the country.”

“Kathleen Sebelius, Meet Oliver North”
Lamar Alexander writes in The Wall Street Journal, “Major news outlets in recent days have reported that U.S. Department of Health and Human Services Secretary Kathleen Sebelius is raising money from the private sector—including from health-care executives—for use by a private entity that is helping to implement ObamaCare. The entity, Enroll America, is run by a former White House aide. The Washington Post quoted an HHS spokesman last week saying, ‘We requested additional money [from Congress] . . . but we didn’t receive any additional funding for the exchanges. So we had to come up with Plan B.’ My immediate thought was: Isn’t ‘Plan B’ what got Oliver North in trouble during the 1980s?  … A select Joint Committee of Congress investigated what became known as Iran-Contra. The problem was not just where the money came from, but also where and how it was spent. Article I of the U.S. Constitution does not permit government officials to spend money that Congress has refused to authorize or appropriate. Federal laws such as the Anti-Deficiency Act make this behavior unlawful. … If the money being raised by Ms. Sebelius is being spent to do an end-run around Congress, then the Obama administration had better brush up on its Iran-Contra history.” 

“Stop Lavishing Money on Rich Farmers Who Don’t Need It”
Bloomberg editorializes, “The deal in December to avert the so-called fiscal cliff had one welcome consequence: It derailed a new farm bill, the $100 billion annual spending package that’s renewed every five years and filled with subsidies for some of the U.S.’s most prosperous businesses. To keep the money flowing to farmers, as well as to food-stamp recipients, the 2008 bill was extended until this September, allowing Congress time to come up with a bill that would cut unnecessary handouts to farmers while preserving safety-net programs. Instead, Congress is poised to make ill-advised cuts and dole out fresh largess to farmers who don’t need it. … Congress should build on this, starting with strict means testing for farm benefits. U.S. farmers as a group, with an average annual household income of more than $89,000, are much better off than most Americans. This year, farm net income will reach $128 billion, the highest in inflation-adjusted terms in 40 years. Congress also should cap subsidies to individual farmers at $40,000 a year, saving $1 billion annually.”

Conservatives Propose Higher Debt Limit in Return for Balanced Budget
The Washington Times reports, “Conservative Republicans said Wednesday that they will demand that Congress produce a budget that balances in 10 years in exchange for agreeing to raise the federal debt limit, and that House Speaker John A. Boehner promised as much during a GOP retreat this year. One member of the rump group of conservatives said another option Republican leaders are mulling — to tie a debt increase to a general plan for tax reform — is ‘nonsensical.’ Rep. Raul R. Labrador, Idaho Republican, called that option — apparently shopped to him by leadership — ‘a slap in the face,’ though he said he would be ‘open-minded’ about a separate vote on tax reform in general. … ‘The agreement was that any debt ceiling increase would correspond with the reforms that are necessary to meet the requirements in our budget — to get us to a balance in 10 years,’ the Louisiana Republican said at a monthly forum of conservative members of Congress.”

Lack of Confidence Causing Companies to Hold Onto Cash
Bloomberg reports, “Any lament that U.S. executives are sitting on a record $1.73 trillion at their companies instead of investing in plants and equipment may be about to get louder. … The trends, based on data from about 2,300 U.S. companies compiled by Bloomberg, suggest executives’ lack of need or confidence to invest deepened with threats of federal spending cuts and the economic slowdowns at home, in Europe and China. … ‘When uncertainty is rearing its head, you want to preserve cash,’ said Walter “Bucky” Hellwig, who helps manage $17 billion at BB&T Asset Management in Birmingham, Alabama. Among his wealthy clients who own businesses, he said, ‘it’s all about cost management and a reluctance to invest. They’re not laying people off, but when somebody quits they don’t replace them. That goes into building cash.’”

Commerce-Secretary Nominee Understated Income by $80 Million
The Wall Street Journal reports, “On the eve of her Senate confirmation hearing, commerce-secretary nominee Penny Pritzker alerted Congress that she mistakenly understated her 2012 income by at least $80 million. The admission came in new financial disclosure documents that Ms. Pritzker filed with the Senate on Tuesday. The newly disclosed payment came from U.S. accounts and was tied to Ms. Pritzker’s work over the past decade carrying out a complex plan to divide her family’s assets—work that included restructuring, managing and selling various trusts, said her assistant, Susan Anderson. Ms. Anderson said the omission was due to an inadvertent ‘clerical error.’”

“The Fed Squeezes the Shadow-Banking System”
Andy Kessler, a former hedge-fund manager, editorializes in The Wall Street Journal, “Here is the great economic paradox of our time: Despite the Federal Reserve’s vast, 4½-year program of quantitative easing, the economy is still weak, with unemployment still high and labor-force participation down. And with all the money pumped into the economy, why is there no runaway inflation? Federal Reserve Chairman Ben Bernanke told Congress on Wednesday, that ‘We are pushing real hard at this point but there are a lot of headwinds.’ But the usual excuses—commercial banks not lending, not enough government spending, weak retail sales, Europe in disarray—are straw men. The Fed has even discussed an exit strategy from its asset purchases, but without ever explaining why its buying spree led to so little economic growth. The explanation lies in the distortion that Federal Reserve policy has inflicted on something most Americans have never heard of: ‘repos,’ or repurchase agreements, which are part of the equally mysterious but vital ‘shadow banking system.’”

BankruptingAmerica.org is an educational project of Public Notice, an independent, nonpartisan, non-profit, 501(c)(4) organization dedicated to providing facts and insight on the effects public policy has on Americans’ financial well-being.

It may be the only answer. Multiple committees in the House and Senate are investigating the scandal. Attorney General Eric Holder has opened a criminal investigation. Meanwhile, the daily drip of new IRS misdeeds goes on, with more targeting of conservative organizations seeking tax-exempt status ...]]> Probe requires independent, non-partisan investigator with broad latitude

As the IRS scandal continues to grow worse, Washington’s political and media buzz machine is alive with the prospect of the appointment of a special prosecutor.

It may be the only answer. Multiple committees in the House and Senate are investigating the scandal. Attorney General Eric Holder has opened a criminal investigation. Meanwhile, the daily drip of new IRS misdeeds goes on, with more targeting of conservative organizations seeking tax-exempt status coming to light.

The scandal acquired the added element of high drama in a House committee hearing Wednesday when IRS official Lois Lerner invoked the Fifth Amendment against self-incrimination. Former IRS Commissioner Douglas Shulman came under sharp questioning over allegations that he failed to notify the committee about the targeting of conservative groups.

Democratic Congressman Stephen Lynch raised the prospect of a special prosecutor as he grew frustrated with Shulman’s nonresponsive answers. It was the first suggestion of a special prosecutor by a Democrat.

“If this committee is prevented by obstruction or refusal to answer the questions that we need to get to the bottom of this, you will leave us no alternative but to ask for the appointment of a special prosecutor or appointment of special counsel to get to the bottom of this,” Lynch said.

Saying he would like to see the matter handled in the House committee, Lynch said IRS officials had stonewalled in a recent hearing and provided no names and no direction.

“This can’t continue. I hope that’s not the approach of the IRS going forward because there will be hell to pay if that’s the route we choose to go down.”

Up to now, calls for a special prosecutor have been limited. Republican Governors Bobby Jindal of Louisiana and Scott Walker of Wisconsin, two of the most prominent GOP governors, have endorsed the idea.

Senate Minority Leader Mitch McConnell appears to be open to the idea as well, but has not made a specific call. “We will have to see how things develop,” he said.

Holder could turn the IRS investigation over to a special prosecutor based on existing federal statutes. A special prosecutor would operate under the authority of the Justice Department with all the authority of a U.S. attorney. The Attorney General can dismiss a special prosecutor only under extraordinary circumstances.

Holder would need to be careful to appoint a prominent lawyer with impeccable credentials to fill the post. Ideally, it would be a Republican respected for bipartisanship, such as a former U.S. attorney or federal judge.

Appointment of a special prosecutor would be a mixed bag of risks and rewards for the Obama administration.

On the one hand, it would be a foil to GOP-led congressional investigations. Congress could continue its investigations as a separate branch of government, but a special prosecutor would focus the investigation and blunt charges of partisanship.

In addition, a special prosecutor would provide cover to administration officials and Democrats in Congress, weary of the daily ritual of answering media questions as new charges become public.

On the other hand, a special prosecutor would take the IRS investigation out of the hands of the administration. Given the administration’s penchant for secrecy and control, Holder and the president could see a special prosecutor as a loose cannon, free to carry the probe wherever it leads.

As the 2014 midterm elections grow closer, the stakes will grow higher for Democrats and Republicans alike in the IRS scandal. Republicans have a potent weapon given that IRS targeting was aimed at conservatives in the GOP base; Democrats fear destruction the Obama administration comes under increasing fire for violating the basic right of free political speech.

Democrats may soon join Republicans in the call for a special prosecutor. If the chorus grows on both sides of the aisle, it will be a perfect storm that the administration may be unable to resist.

WASHINGTON, D.C. - U.S. Congressman Paul  Gosar, D.D.S (AZ-04) questioned former IRS Commissioner Douglas Shulman at today’s House Oversight and Government Reform Committee hearing entitled “The IRS: Targeting Americans for Their Political Beliefs.” Rep. Gosar’s line of questioning demonstrated a continued pattern of IRS leaks and a long history of inaction by the former IRS Commissioner to investigate.

Rep. Gosar issued following statement: “Getting the truth and demanding accountability from President Obama’s IRS should not be too much ...]]> Rep. Paul Gosar Demands Answers on IRS Targeting

WASHINGTON, D.C. - U.S. Congressman Paul  Gosar, D.D.S (AZ-04) questioned former IRS Commissioner Douglas Shulman at today’s House Oversight and Government Reform Committee hearing entitled “The IRS: Targeting Americans for Their Political Beliefs.” Rep. Gosar’s line of questioning demonstrated a continued pattern of IRS leaks and a long history of inaction by the former IRS Commissioner to investigate.

Rep. Gosar issued following statement: “Getting the truth and demanding accountability from President Obama’s IRS should not be too much to ask for. Yet, officials in this administration continue to offer excuses and half-truths for what has developed into a disturbing trend. Tax information about the President’s political opponents has been leaked. Americans were targeted for their political beliefs. I will relentlessly pursue the truth and hold those guilty of gross incompetence accountable.”

Video of Congressman Gosar at the hearing can be found HERE or below.

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In the speech scheduled for delivery at the National Defense University in Washington, Obama will once again call for closing the U.S. military prison at Guantánamo Bay, Cuba. In addition, the president will address the controversial use of drones to attack terrorists.

Guantánamo Bay has ...]]> Speech Includes Renewed Call to Close Guantánamo

While the Benghazi cover-up remains in the headlines, President Obama will move to shift the focus Thursday in a wide-ranging speech designed to define the administration’s counterterrorism policy.

In the speech scheduled for delivery at the National Defense University in Washington, Obama will once again call for closing the U.S. military prison at Guantánamo Bay, Cuba. In addition, the president will address the controversial use of drones to attack terrorists.

Guantánamo Bay has been an issue since the first day of Obama’s first term when he signed orders to close the prison within a year. The proposal went nowhere as Congress blocked funding for the transfer of Guantánamo Bay detainees to prisons inside the United States.

Guantánamo Bay is back in the news as detainees pursue a hunger strike to protest their confinement and slow pace of transfers. The administration has been in talks to transfer detainees to Yemen and Afghanistan in advance of a move to close the prison.

The president is likely to encounter congressional resistance again. Republican Senator Kelly Ayotte voiced concern that detainees transferred in the past have returned to the battlefield in Yemen.

“We know there is significant al Qaeda activity in Yemen,” she said. “I obviously have some serious questions about Yemen.”

Ayotte added that the administration should outline an interrogation policy rather than urging the closure of Guantánamo.

“We need an interrogation and detention policy,” she said. “Then you can get to the next step of what to do with Guantánamo.”

The Wall Street Journal reported that the president would discuss the broad outlines of the administration’s approach to fighting Al Qaeda and its affiliates, including the use of unmanned drones.

The Journal said one incentive for the president’s speech is the administration’s belief that there has been a shift in the counterterrorism threat following the elimination of much of al Qaeda’s leadership. With the al Qaeda threat scattered, the administration is exploring ways to address more expanded terrorist threats.

Reuters reports that Obama’s use of drones to attack terrorists remains controversial and has increased tensions with countries such as Pakistan.

Obama reportedly will discuss the legal framework under which the United States acts against terrorists, including the use of drones. In addition, he reportedly will announce a shift of the control of drones from the CIA to the Pentagon.

Reuters recalled the president’s pledge in his State of the Union speech early this year when he said he would work with Congress to assure that the targeting, detention, and prosecution of terrorist suspects was consistent with U.S. law. Nevertheless, drone use is controversial among some lawmakers who seek legislation to clearly delineate the use of unmanned aircraft.

The president will reiterate what he claims are major successes in fighting terrorists worldwide. The speech will look ahead as well, but the counterterrorism policy speech is unlikely to dampen efforts to answer lingering questions about Benghazi and the failure to protect American diplomats and soldiers.

Star Witness to Plead the Fifth in IRS Hearing

The Associated Press reports, “A House committee taking Congress’ latest look at the Internal Revenue Service’s mistreatment of tea party groups will apparently have to do so without input from the star witness. IRS official Lois Lerner will invoke her constitutional right to not answer questions on Wednesday at a House Oversight and Government Reform Committee hearing, her lawyer told the panel in ...]]>

Spending Daily | May 22, 2013

Star Witness to Plead the Fifth in IRS Hearing

The Associated Press reports, “A House committee taking Congress’ latest look at the Internal Revenue Service’s mistreatment of tea party groups will apparently have to do so without input from the star witness. IRS official Lois Lerner will invoke her constitutional right to not answer questions on Wednesday at a House Oversight and Government Reform Committee hearing, her lawyer told the panel in a letter. Lerner triggered the recent IRS uproar at a legal conference nearly two weeks ago, when she revealed that the agency had subjected tea party and other conservative groups seeking tax-exempt status to extra scrutiny during parts of the 2010 and 2012 election seasons. She also apologized for the actions. …In Lerner’s absence, Wednesday’s spotlight will be on another witness: Neal Wolin, the Treasury Department’s deputy secretary.”

“The Debt Problem Hasn’t Vanished”

Phil Gramm and Steve McMillin editorialize in The Wall Street Journal, “President Obama has raised the national debt by nearly $6.2 trillion, the equivalent of $78,385 per family of four. It is true that projected deficits recently have been reduced. April tax filings increased 28% from 2012, but much of this was thanks to a one-time rush at the end of 2012 to report income before rates rose in January. The second largest reduction in the deficit came from Fannie Mae FNMA +9.94% taking a one-time accounting adjustment. But unless the economy soars, or a significant budget agreement is reached, the most lasting legacy of the Obama presidency will be a $10 trillion increase in the national debt—a burden that bodes ill for the nation’s future. Once the Federal Reserve’s easy-money policy comes to an end and interest rates return to their post-World War II norms, the cost of servicing this debt will explode. The cost will increase further as the Fed sells down its $1.85 trillion holding of government bonds, and the Social Security system runs deeper and deeper into the red. The Treasury will thenhave to pay interest on an ever-growing percentage of the debt. Since the World War II era, the average maturity of outstanding federal debt has been about five years, and the average interest cost on a five-year Treasury note has been 5.9%. At this interest rate, the expected cost of the Obama debt burden will eventually approach some $590 billion per year in perpetuity, exceeding the current annual cost of any federal program except Social Security.”

“Heads won’t roll at the IRS”

According to POLITICO, “Lawmakers pressing for more heads to roll at the Internal Revenue Service are going to be disappointed. ‘Why weren’t more people fired?’ Senate Finance Committee Chairman Max Baucus (D-Mont.) demanded at a hearing Tuesday on the IRS’s targeting of conservative groups, channeling the frustration of his colleagues. Turns out it’s not so easy. In fact, it appears that no one has been formally reprimanded and a spokesperson for the union representing IRS workers said it hasn’t been called to help any employees yet. Most employees involved in the targeting program are covered by protections for federal workers that could drag out the termination process.”

Treasury and White House Had Talks on Disclosing IRS Story

The Hill reports, “The White House said Tuesday that senior officials took part in discussions over how the IRS would disclose its targeting of conservative groups, marking the latest shift in the White House’s official line on the matter. Press secretary Jay Carney told reporters that Mark Childress, deputy chief of staff, spoke twice with Treasury Department officials about the IRS’s public relations strategy. ‘This was just part of trying to find out when and under what circumstances this information would be released, made public and what those findings would be,’ the press secretary said. Carney, however, made clear that White House officials were not involved in the discussions leading up to Lois Lerner’s disclosure at a May 10 conference of the American Bar Association that groups had been targeted, an apology the IRS now acknowledges came from a planted question. … The latest shift from the White House came the same day that Treasury Secretary Jack Lew criticized the IRS’s roll-out of the findings that the agency had given extra scrutiny to Tea Party organizations.  Both Treasury and White House officials have said that the department basically acted as a conduit between the White House and the IRS as the agency was figuring out its public relations strategy.”

“With more clarity, White House adds to confusion on IRS”

Dan Balz writes in The Washington Post, “It is never good for an administration when a front-page newspaper article about an ongoing controversy begins as follows: ‘The White House offered a new account Monday of how and when it learned . . . ‘ That’s what readers of The Post awoke to on Tuesday. In trying to contain the controversy and protect President Obama, White House officials have only added to questions about what happened. Until this week, the story of how White House officials learned that the Internal Revenue Service was targeting conservative groups was fairly straightforward. White House counsel Kathryn Ruemmler was notified in late April that a Treasury Department inspector general’s audit of the IRS was nearing completion. The president, officials said, didn’t find out about any of it until May 10, when it became public. The implication was that Ruemmler was told in general terms about the report and that the information was kept within her office. But over the past few days, officials have offered a more detailed description of what really happened. Ruemmler was informed that political targeting had taken place and shared that information with White House Chief of Staff Denis McDonough and some others on the senior staff. And there were subsequent discussions between White House and Treasury officials about the report. But no one shared any of this information with the president.”

“Sleeper Scandal Awakens for Obama, Post-Election”

The New York Times reports, “The allegations had all the makings of a perfect election-year scandal that might threaten President Obama’s chances for a second term and re-energize a listless Tea Party movement: an activist president, running an overbearing government, treating conservative groups unfairly by wielding the federal taxing power to undermine his adversaries. But a year ago, when the current Internal Revenue Service scandal that has swirled around Mr. Obama first emerged, Washington — and, apparently, the White House — shrugged. … For a White House typically equipped with well-honed political radar designed to sniff out and derail conservative conspiracy theories about Mr. Obama, the potentially damaging events at the I.R.S. seemed to pass with little notice.”

Sequester: Part 2

According to The Hill, “An unwelcome sequel is scheduled for January release and it’s titled Sequester: Part 2. It is increasingly likely that this second round of indiscriminate cuts will reprise the first sequester, with concomitant public frustration about Washington’s inability to budget rationally. … The second year of the 2011 Budget Control Act was supposed to be easier. From 2014 on, the act imposed spending ceilings on the government that were meant to force appropriators to make considered decisions on spending cuts instead of across-the-board slashing. But it appears likely that Congress will fail to agree to specific cuts, and will punt the decisions to agencies.”

House Panel Approves Plan with $28 Billion Increase for Defense

POLITICO reports, “Sequestration 2 opened at the House Appropriations Committee on Tuesday as Republicans won approval of their dramatic plan to reallocate the reduced funding available after the second round of spending reductions slated for October. Discretionary spending would drop to $967 billion — $17 billion below where appropriations stand now after the first round of cuts in March. And within this tighter cap, labor, health and education programs are to be transformed into a virtual GOP bank to help finance a $28 billion increase for defense.”

Poll: Obama Approval Rating Down, Voters Say Government ‘Out Of Control’

Fox News reports, “After a week of revelations about government spying on reporters and the Internal Revenue Service targeting conservatives, most voters feel ‘like the federal government has gotten out of control and is threatening the basic civil liberties of Americans.’ At the same time, a new Fox News poll finds disapproval of President Obama’s job performance is above 50 percent for the first time in a year, his honesty rating is at a new low and half of voters already think he’s a lame-duck. Overall, 45 percent of voters approve of the job Obama’s doing, down from 47 percent last month.  Just over half — 51 percent — disapprove of his performance, up from 45 percent last month.  This is the first time disapproval of Obama has topped 50 percent since April 2012. … Which of the current Obama administration scandals is the most troublesome to voters?  The largest number says the IRS targeting of conservative groups (32 percent), and that’s closely followed by Benghazi (27 percent).  About one in five say the Justice Department seizing the phone records of reporters concerns them the most (21 percent).”

Senate Republicans Deeply Divided On Budget

POLITICO reports, “Senate Republicans disagreed sharply on Tuesday over whether to send the upper chamber’s budget to conference with the House. The unusually high-profile disagreement pitted GOP Sens. John McCain of Arizona and Susan Collins of Maine against Ted Cruz of Texas and Rand Paul of Kentucky, the latter two siding with Senate GOP leadership against sending the budget to conference. … With the impending need to raise the limit, Senate leadership won’t rule out raising the debt ceiling as part of a budget deal. And as the White House tries to use the budget and debt ceiling negotiations to strike a grand bargain on the deficit, there is a strong likelihood that any possible agreement will include multiple elements. … Paul objected to the motion. In the past few weeks, those objecting included Cruz, Minority Leader Mitch McConnell and Sen. Mike Lee of Utah. … Cruz has been working to paint the fight over going to conference as about the debt ceiling, arguing that a deal to raise the nation’s borrowing limit could be included in a budget crafted by the conference committee. In that case, the increase would need only 50 votes instead of 60 votes, which Cruz argued would obstruct his power as a senator to oppose an increase in the debt ceiling. Paul and Cruz insisted that a provision be included in the conference agreement to prevent the debt ceiling from being included in the deal.”

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