Archive for April, 2011

A Plague O’ Both Your Houses!

Posted on April 5, 2011. Filed under: Uncategorized |

Mercutio Romeo And Juliet Act 3, scene 1, 90–92

“If we ran our company this way, we would be out of business before the end of the month”. Those are the words of a Fortune 500 client after spending two days walking the halls of Congress and learning about the Congress’ budget travails. In fact, two recent polls – one from the Pew Research and the other from the Washington Post – reveal roughly the same information. Approximately 37-39 percent of the population will blame either the Democrats or the Republicans, or both to equal measure, if the government is shut down on Friday.

I imagine the rest of the polled group either doesn’t care anymore or are so entirely fed up with elected officials that they actually think it would be a good thing to shut the monster down for a while. From our perspective, the impasse reflects a basic lack of leadership from both parties. Hence, we would like to recommend a rereading of Harvard law professor, William Ury’s classic negotiating skills book, Getting Past No. Passing budgets two weeks at a time is shameful. Passing legislation (such as the health care bill) that is crammed down the throats of the opposing party, only to be repealed three months later is really not a legislative success at all. A deal, that’s what the American people want… Just a deal.

Just today yet another budget plan was revealed. Rep. Paul Ryan, (R- WI) proposes trillions of dollars of cuts over the next ten years. “The Path to Prosperity” is filled with analysis, charts, graphs and sound reasoning. One Democratic insider who knows Ryan well has suggested that Ryan “is the real deal and Presidential material”. We will keep watching and weighing in as appropriate.

In contrast to the trillions in red ink, the President announced the launch of his Presidential re-election campaign. Perhaps you missed the small print that asks each member of his National Finance Committee to raise a minimum of $350,000. The President is counting on raising over $1 billion for his reelection. I received my first invite from the President today… Small Dinner and Discussion with President Barack Obama, $35,800 per guest, $71,600 per couple. Really???

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U.S. Energy Policy, It’s All in the Balance

Posted on April 5, 2011. Filed under: Uncategorized |

Unrest in the Middle East and new concerns over the safety of nuclear power are muddying an already fractious debate over U.S. energy at a time when America should be striking a balance between its energy needs and protecting the environment.

As the world watches the bloodshed in Middle Eastern capitals and the nuclear crisis that followed the earthquake and tsunami in Japan, it is critical that the U.S. remain clear-headed about the impact world events may have on our energy policy.

Safe nuclear power is essential if the U.S. is to move toward energy independence, a fact that cannot be overshadowed by clouds of radioactive particles rising from crippled plants in Japan. And if the events in Libya, Syria, Tunisia, Egypt and elsewhere tell us anything, it’s that U.S. reliance on Middle East oil has got to be contained.

President Obama made both points in a recent speech at Georgetown University: “Obviously, the situation in the Middle East implicates our energy security. The situation in Japan leads us to ask questions about our energy sources.”

Every time the price of a barrel of oil on the world market rises by $10, a gallon of gas goes up by about 25 cents here at home. And since the U.S. imports oil at a rate of 11 million barrels of oil a day, that price is largely determined elsewhere. Obama wants to cut oil imports by one-third in just over a decade, a worthy and achievable goal.

At the same time, Americans are expressing deep concern about the safety of nuclear energy. A recent USA Today/Gallup poll found the number of Americans who are worried about nuclear energy safety increased from 57 percent to 70 percent in the wake the Japan disaster.
Here again, Obama is proposing a sensible plan: continue to exploit nuclear power, but make sure it is as safe as possible.

“I’ve requested a comprehensive safety review by the Nuclear Regulatory Commission to make sure that all of our existing nuclear energy facilities are safe. And we’re going to incorporate those conclusions and lessons from Japan in design and the building of the next generation of plants. But we can’t simply take it off the table,” Obama said.

About one-fifth of the electricity produced in the U.S. comes from nuclear power plants which do not emit carbon dioxide into the atmosphere. This brings us to the environmental side of the balance sheet.
On Capitol Hill, some lawmakers want to stop the Environmental Protection Agency from regulating carbon-based emissions altogether. The Republican-controlled House has already passed such language and the Senate is considering attaching it to a small-business bill.

Under a 2007 Supreme Court ruling, the EPA is required to regulate greenhouse gases unless science shows they aren’t to blame for climate change. Democrats argue that blocking that requirement is short-sighted and would stall investment in clean-energy technologies.

Clean-energy technologies are the long-term solution, but for now it makes sense to take reasonable steps toward easing our reliance on foreign oil while continuing to rely on safe nuclear power. And the environment must remain in the mix.

It is a delicate and elusive balance, but one the U.S. must pursue.

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Five Signs Pointing to a Continuing Resolution Deal Being Struck

Posted on April 5, 2011. Filed under: Uncategorized |

A government shutdown is the Damocles sword dangling above Capitol Hill lawmakers as time to reach an agreement on a Continuing Resolution to keep the government running through the end of the fiscal year is quickly drawing to a close.

Congressional Democrats say the spending cuts being demanded by the Tea Party wing of the GOP is a bridge too far. For their part, Tea Party Republicans say they aren’t backing down or backing away from their $61 billion in spending cuts and dozens of bill riders aimed at gutting the EPA and defunding National Public Radio, Health Reform and Planned Parenthood.

The latest news coming out of Washington has to be disheartening for those looking for a last minute agreement on a Continuing Resolution before the April 8th deadline. Still, according to our sources on the Hill there are least five reasons to hope a government shutdown can and will be avoided:

Reason No. 5—Republican and Democratic lawmakers making the rounds of this Sunday’s morning news shows, including Senators Harry Reid (D-Nevada) and Lindsey Graham (R-South Carolina), predicted that Congress would strike a deal this week that would avert a federal shutdown on Friday. It’s in no one’s best interest, including taxpayers, to allow even a partial shutdown. Shutdowns cost money with no productive output.

Reason No. 4—the two sides have already agreed on the $33 billion amount of spending cuts; $10 billion in cuts have already been decided; and, according to aides to lawmakers on both sides, the appropriations committees in the House and Senate are working hard to cut $23 billion more from the FY 2011 budget. As Vice President Joe Biden said last week—“We’re all working off the same number now.”

Reason No. 3— the economy is showing signs of recovery, but it is a weak and slow moving recovery. A shutdown will decrease spending by public employees, hurt businesses with federal contracts, and increase consumer unease. The domestic economic applecart could be tipped over or further slowed by a shutdown.

Reason No. 2—the Tea Party rally, meant to put pressure on lawmakers to make even deeper spending cuts, only drew a few hundred demonstrators to Capitol Hill last Thursday. Similar Tea Party rallies in the past attracted thousands. Could the movement be losing steam? In addition, while Republicans are convinced that Democrats would be blamed for any shutdown, polls don’t confirm this view. Polls show voters would blame both parties and the President, so a shutdown has a high risk factor for 2012 elections for all involved, including Republicans.

And, the Number One Reason to hold out hope that there won’t be a government shutdown on Friday—Sen. Paul Ryan (R-Wisconsin).

On Tuesday, Ryan, the House budget committee chairman, unveiled details of the Republican 2012 budget plan that over the next 10 years would slash government spending by as much as $6.2 trillion in part by cutting spending on entitlement programs; specifically Medicare and Medicaid.

Speaker Boehner believes by revealing Ryan’s plan he will be able to convince reluctant Republicans, including the Tea Party, to accept the $33 billion budget compromise for 2011 by arguing that they will have the opportunity for even deeper spending cuts in the 2012 budget. Legislative efforts related to FY 2012 and the debt ceiling are where the bigger results rest and hence, more deficit reduction for fiscal conservatives. A federal shutdown makes those deals harder to achieve.

Likewise, this “you will have additional opportunities to take another bite of the apple” approach being employed by Boehner to his members, is what we at Turner GPA are advising to clients and potential clients. Although budget cutting fever on the Hill is running high, there are opportunities that can be mined to influence legislation and protect specific federal funding, but that window is closing fast.

Can a budget compromise be reached in time to avoid a shutdown? Or will lawmakers buy more time with a GOP proposed one-week CR? And if that is the case, will President Obama veto a stop gap CR as he has already indicated he would?

It is a soap opera, and at this point it’s anyone’s guess what will happen. The only thing that is sure is in the event that compromise can’t be reached and there’s a government shutdown, you can point the finger of blame in one direction—at the freshman House Republican lawmakers. As one of Turner’s top operatives on the Hill correctly notes: “Clearly, it’s the Tea Party tail that is wagging the Republican dog.”

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