Can you believe Barry would admit that Washington is more broken than it was four years ago, really? Maybe the most transparent admin in history is really just Chicago style politics... as in, "Hey, get outa my way or I'll kick your face in!"

Posted at 12:25 PM ET, 07/15/2012

July panic for Obama — for good reason

By Jennifer Rubin

Why has the Obama team been publicly wailing about losing out to Mitt Romney in the money race? Why would the president accuse his opponent of not merely being wrong or unqualified but criminal? After all, the polls are tied, so why so much worry in Obamaland?

Like a mystery novel, the answer is in front of our noses: The candidates are still tied in the polls. Let’s go step by step with the most logical explanation of the Obama campaign’s conduct.

The Obama team knew months ago that the economy would not sufficiently improve before Election Day to justify his reelection. Its polling showed simply blaming President George W. Bush wouldn’t be sufficient. The president and his political hacks concluded that it was too late and too risky to adopt a whole new second-term agenda. (It would risk offending either the base or centrists and reveal his first-term agenda to have been entirely inadequate.) So what to do?

Extend the Republican primary by running ads hitting Romney and encouraging Democrats to vote against Romney in Michigan and elsewhere. Then, before Romney could fully get his bearings, unload a barrage of negative attacks, scare mongering and thinly disguised oppo attacks through the mainstream media, taking advantage of many political reporters’ relative ignorance about the private equity field and their inclination to accept whole-hog President Obama’s version of “facts.”

The extent of that effort is only now becoming clear. The Associated Press reports: “President Barack Obama’s campaign has spent nearly $100 million on television commercials in selected battleground states so far, unleashing a sustained early barrage designed to create lasting, negative impressions of Republican Mitt Romney before he and his allies ramp up for the fall.” Think of it like the Confederacy’s artillery barrage on the third day of Gettysburg before Pickett’s charge — you have to in essence disable the other side before the charge begins or its curtains.

Virtually all of the ads were viciously negative, and judging from the number of Pinocchios they’ve racked up, continually and materially false.

But it didn’t work. Romney and Obama are still deadlocked. (The AP quoted Republican operative Carl Forti: “I don’t think . . . [Obama’s] got a choice. He has to try to change the dynamic now, but the polling indicates it’s not working. He doesn’t appear to be making any headway in the polls.”)

Few Democratic pundits are as sharp or as honest as William Galston,who concedes:

On the one hand, the last round of Bain attacks has clearly rattled the Romney campaign, and a smattering of survey evidence suggests that the sustained ad campaign in swing states has scored some points. On the other hand, the Pew survey found no shift since May in swing-state voter preference.

But it’s not too early to say that Obama’s vital signs look dicey. Over the past 33 months, his job approval has been lower than George W. Bush’s at a comparable time in his presidency for all but one week. Bush averaged above 50 percent in the quarter before his successful reelection campaign, while Obama has been stuck in the 46-48 percent range for months. And the famous “wrong track” measure now stands at 63 percent, versus 55 percent in the days preceding the vote in 2004. If these two numbers don’t improve for Obama, his presidency will be in jeopardy. And they probably won’t — unless the economy perks up noticeably.

So the Obama team has shot its wad. Its opponent has more ammo and more money now. Romney hasn’t been mortally wounded. And there isn’t money from Obama to keep up the 4-to-1 spending barrage. In fact without it, Obama might well have fallen behind in the race. So the Obama team pleads for money and turns up the volume of the attacks. (After calling Romney a criminal in July, what’s left for September and October?)

Obama is now committed to a strategy that isn’t working. He’s left to unleash his attack dogs and to pray for a miracle. Maybe the economy will rebound. Perhaps Romney will implode or pick a Sarah-Palin-type for vice president.

The reason, you see, that Obama’s camp has become so frantic in July is that its ineffectiveness in the summer subjects its side to grave risks. Having to defend his record, rely on his debate prowess and be evaluated on the economy over the last three years is as risky as, well, as sending thousands across a vast, empty field as enemy fire rains down upon them.

Oh great, put these kinds of decisions in the hands of the same people that brought us the USPS, TSA, and the EPA...

SCOTT JOHNSON , Powerline.... IN ANNALS OF GOVERNMENT MEDICINE

ANNALS OF GOVERNMENT MEDICINE

The Daily Mail delivers the news of another inspirational example of government medicine in England, much of it packed into the headline: “Elderly patients are being ‘deprived of food and drink so they die quicker and free up bed space’, claim doctors.”

The practice in issue goes under the delicate name of a “care pathway.” Like the stairway in the Led Zeppelin song, it’s a pathway to heaven. The Daily Mail explains:

Thousands of terminally ill people are placed on a “care pathway” every year to hasten the ends of their lives.

But in a letter to the Daily Telegraph, six doctors who specialize in elderly care said hospitals across the UK could be using the controversial practice to ease the pressure on resources.

As you might guess, the doctors seem to know what they’re talking about.

Obama’s Goose Is Cooked

He got another rubber chicken for jobs.
Bring on Romney’s filet mignon.

By Larry Kudlow

Obama needed a filet mignon in the June employment report. Instead he got a rubber chicken.

Only 80,000 new jobs were created last month, way below Wall Street expectations. It’s the fourth consecutive monthly disappointment. For a few months last winter, jobs were rising at an average of 225,000 a month. But that has sloped way down to only 75,000. The unemployment rate continues at 8.2 percent, which is the forty-first straight month above 8 percent. The U6 unemployment rate, which includes discouraged workers, is just under 15 percent.

As voters finalize their election impressions this summer, all of this is bad news for the Chicago incumbent.

At a campaign stop in Ohio on Friday, Obama actually said we’re still “heading in the right direction.” Is he kidding? As a stagnant GDP drops below 2 percent, employment falters, retail sales decline, and the ISM index for manufacturing drops below 50 (signaling contraction)? No objective observer can deny that the economy is headed in the wrong direction.

I don’t like playing the pessimist, but the numbers are the numbers. This is exactly what former Clinton advisers James Carville, Doug Schoen, and Stanley Greenberg have been warning Obama about. People just don’t believe the economy is getting better. So he’s gotta change his message.

But what change? Taxing rich people won’t create jobs. Neither will bashing Bain Capital. Obama is surrounded by leftist campaign advisers. And it’s hard to see them shifting gears to something constructive like making a summer deal to extend the Bush tax cuts for a year, or heaven forbid backing off the 20-some-odd tax hikes embodied in Obamacare.

In other words, Obama’s goose may already be cooked.

The Joint Economic Committee (JEC), spearheaded by Texas congressman Kevin Brady, put out a report saying that the Obama recovery now ranks dead last in modern times. That’s a real milestone in the post-WWII era. It’s ten out of ten for both jobs and economic growth. According to the Bureau of Economic Analysis, real GDP has expanded only 6.7 percent over the eleven-quarter recovery since the recession ended. The Reagan recovery at the same stage had increased by 17.6 percent. The Clinton recovery by 8.7 percent.

As for jobs, the Bureau of Labor Statistics reports that the number of private-sector jobs has grown by only 4.1 percent since the cyclical low point. Reagan’s record was 10.7 percent.

So much for Obamanomics. Didn’t work. Still isn’t working. As the JEC put it, spending stimulus, housing bailouts, auto bailouts, financial bailouts, cash for clunkers, cash for caulkers, and $5 trillion in deficit spending left the Obama recovery dead last in modern times.

Whatever happened to the great boom of the ’80s and ’90s, when the animal spirits were strong and the American economy wasn’t held hostage by Europe or China? In an odd twist, both Obama and his top economist Alan Krueger blame “problems built up over decades.” Does that mean they blame Clinton? Reagan?

For nearly 25 years — during those bad old decades — the economy increased 3.3 percent annually. Unemployment dropped from 11 percent to 6 percent to 5 percent to below 4 percent. Obama would swoon for numbers like that. But those statistics come from the era when big government was over, when pro-market forces stopped the expansion of Leviathan, and when marginal tax rates were slashed to grow the economy.

Now the question is, with Obama’s economic goose cooked, does Mitt Romney have what it takes to win the election and provide a pro-growth economic model that will restore prosperity at home and America’s number-one position around the world?

Some powerful figures — including Rupert Murdoch, Jack Welch, and even my brothers and sisters at the Wall Street Journal editorial page — have taken shots at Romney in recent days. But I am more optimistic. In response to his critics on the day of the bad June jobs report, Romney talked about expanding energy resources, approving the Keystone pipeline, cutting taxes, and increasing trade with Latin America. He reaffirmed his intention to cut federal spending and eliminate programs.

Basically, Romney is promising a return to free-market, supply-side policies on taxes, trade, regulation, and spending. Hopefully he will embrace a sound and stable dollar as well. I still believe Romney is the most underrated politician in America today, and that he’s the most conservative Republican standard-bearer since Ronald Reagan.

In other words, he’s some real filet mignon.

– Larry Kudlow, NRO’s economics editor, is host of CNBC’s The Kudlow Report and author of the daily web log, Kudlow’s Money Politic$.

Imperial incompetence

By CHARLES KRAUTHAMMER

Syndicated columnist

letters@charleskrauthammer.com

Though overshadowed by the shocking Supreme Court decision on health care, the court's Arizona immigration decision, issued three days earlier, remains far more significant than appreciated. It was generally viewed as mixed or ambiguous because the Justice Department succeeded in striking down three of the law's provisions.

However, regarding the law's central and most controversial element – requiring officers to inquire into the immigration status of anyone picked up for some other violation – the ruling was definitive, indeed unanimous.

No liberal-conservative divide here. Not a single justice found merit in the administration's claim that this "show me your papers" provision constituted an impermissible pre-emption of federal authority.

On what grounds unconstitutional? Presumably because state officials would be asking about the immigration status of all, rather than adhering to the federal enforcement priorities regarding which illegal aliens would not be subject to deportation.

For example, under the Obama administration's newly promulgated regulations, there'll be no more deportation of young people brought here illegally as children (and meeting certain chronological criteria). Presumably, therefore, the Arizona law is invalid because an officer might be looking into the status of a young person the feds now classify as here legally.

Beyond being logically ridiculous (If a state law is unconstitutional because it's out of sync with the federal government's current priorities, does it become constitutional again when federal policy changes?), this argument is "an astounding assertion of federal executive power," wrote Justice Samuel Alito in a concurrence.

The Obama Justice Department is suggesting that "a state law may be pre-empted, not because it conflicts with a federal statute or regulation, but because it is inconsistent with a federal agency's current enforcement priorities. Those priorities, however, are not law. They are nothing more than agency policy."

And there's the rub: the Obama administration's inability to distinguish policy from law. This becomes particularly perverse regarding immigration when, as Justice Antonin Scalia points out, what the administration delicately calls its priorities is quite simply a determination not to enforce the law as passed.

This is what makes so egregious the Obama claim that Arizona is impermissibly undermining federal law. "To say, as the court does," writes Scalia regarding those parts of the law struck down by the majority, "that Arizona contradicts federal law by enforcing applications of the Immigration Act that the president declines to enforce boggles the mind."

Consider this breathtaking cascade: An administration violates its constitutional duty to execute the law by deliberately refusing to enforce it. It then characterizes its non-enforcement as simply establishing priorities. It then tries to strike down a state law on immigration on the grounds that it contradicts federal law – by actually trying to enforce it!

The logic is circular, oxymoronic and the very definition of executive overreach. During the Bush-43 years, we were repeatedly treated to garment-rending about the imperial presidency, to major hyperventilation about the "unitary executive." Yet the current administration's imperiousness has earned little comparable attention.

Perhaps because President Obama has been so ineffective. It's hard to call someone imperial who's failed so consistently. Or maybe not. You can surely be imperial and unsuccessful. Waterloo comes to mind.

Regardless of results, however, Obama's presumption is Olympian. He takes America into a war in Libya with U.N. approval, but none from Congress. Yet that awful Bush had the constitutional decency to twice seek and gain congressional approval before he initiated hostilities.

The Department of Health and Human Services issues Obamacare regulations treading so heavily on the free-exercise rights of Catholic institutions that Obama's own allies rebel. The new regulation concocted to tame the firestorm blithely orders private insurers to provide free contraceptives to employees of the objecting religious institutions.

By what possible authority does a president order private companies to provide free services? To say nothing of the 1,200 Obamacare waivers granted with royal arbitrariness according to the (political) whims of an HHS secretary.

And now immigration. Obama adopts a policy of major non-enforcement of the immigration law – a variant of the very DREAM Act he could not get through even a Democratic Congress – and promulgates it unilaterally, while his Justice Department claims the right to invalidate state laws that might in some way impinge on that very non-enforcement.

The Republican presidential campaign centers on the ineffectiveness of this administration: failure at home, passivity abroad. A fine electoral strategy. But as citizens we should be grateful. Given the administration's extravagant ambitions, incompetence is its saving grace.

This will be great for small business, right?

SCOTUS Ruling Means Bigger, More Intrusive IRS

By Elizabeth MacDonald

Emac's Bottom Line

Published June 29, 2012

FOXBusiness

IRS officials on background tell FOX Business the U.S. Supreme Court ruling on health reform gives the IRS even more powers than previously understood.

The IRS now gets to know about a small business's entire payroll, the level of their insurance coverage -- and it gets to know the income of not just the primary breadwinner in your house, but your entire family’s income, in order to assess/collect the mandated tax.

Plus, it gets to share your personal info with all sorts of government agencies, insurance companies and employers.

And that's just the tip of the iceberg. "We expect even more lien and levy powers," an IRS official says. Even the Taxpayer Advocate is deeply concerned.

The IRS army will inexorably increase in size, too. The IRS will now add new agents to hunt down tax cheats, as it has been budgeted to spend $303.5 million building a new system, erected on the back of its old system, to oversee the effects of the health law, including making sure people get the new tax credits they deserve under the law.

As for the new IRS workers, the Government Accountability Office said the total will be about 4,500, with nearly 4,000 slated for enforcement.

On the $303.5 million for health care, the GAO said the IRS will “continue the development of new systems and modifications of existing systems as well as other IRS enforcement systems for health reform."

Throughout, the IRS will be the agency enforcing the law, collecting these mandate penalties, as well as determining whether individuals buy “adequate” health coverage, and whether small businesses provide “affordable” coverage to workers under the new law.

  

However, Nina E. Olson, who runs the Taxpayer Advocate Office [TAO], a federal IRS overseer, has warned the new health law may require more IRS intrusions on taxpayer privacy, to determine whether individuals got appropriate health coverage, and whether small businesses provide “affordable” coverage, all of which is defined by the government.

That’s because the health-reform law’s individual mandate requires almost all legal residents of the United States to have “adequate” health-care coverage, as determined by the federal government. And it requires businesses of all sizes must provide “affordable” coverage as defined by the federal government.

Health reform’s insurance mandate says if you do not have “adequate” insurance, you’ll have to pay a fine as part of your tax return. If your business doesn’t provide “affordable” coverage,  that business may have to pay a fine to the IRS, too, as part of its tax return filings.

The TAO has noted Americans must now tell the IRS under the new law:

    *Insurance plan information, including who is covered under the plan and the dates of coverage;
    *The costs of your family’s health insurance plans;
    *Whether a taxpayer had an offer of employer-sponsored health insurance;
    *The cost of employer-sponsored insurance;
    *Whether a taxpayer received a premium tax credit; and
    *Whether a taxpayer has an exemption from the individual responsibility requirement.

The TAO has warned: “This is different from the type of information the IRS typically deals with, and some taxpayers may feel uncomfortable about sharing it with the IRS.”

Olson has said the new law could even ramp up tax evasion: “As a result, some taxpayers could be tempted to not file a tax return or file a return with incorrect or incomplete information, creating problems for both the taxpayer and the IRS."

The TAO has also reported that “obtaining this new information will require the IRS to communicate with entities and government agencies that it may not deal with now,” including:

    *New state-run insurance exchanges;
    *Employers;
    *Insurance companies; and
    *Government insurance programs.

But the TAO has warned that the IRS may not have the necessary skill sets, budget, or staffing to adequately enforce the new health reform law.

Olson notes that the federal tax code is already so complex that even the IRS makes numerous mistakes in administering it.

In the TAO’s 2010 annual report, the service’s overseer says that Congress has been forcing the IRS to oversee more and more social benefit programs, including the Affordable Care Act.

Already, the IRS enforces and collects Medicare and Social Security taxes, making those federal programs’ overhead costs appear lower than they are.

"As part of the recent health-care legislation, the IRS will face a number of decisions and guidance projects unrelated to its employees' traditional expertise and skill set," the TAO has said, and now, with the new law, "the IRS must administer the following health care provisions: the Premium Assistance Credit, the Individual Penalty for Lack of Coverage, the Employer Penalty, and the Small Business Tax Credit."

The IRS should revise its mission statement to make it clear that it is administering social benefits as well as collecting revenue, TAO said. 

And it’s the intrusiveness of the health reform law that has raised eyebrows. What does the IRS base your mandate penalty on? This is where it gets nutty.

The TAO says that the “IRS will need to determine a taxpayer's compliance with the individual [insurance] mandate and assess a penalty if coverage is inadequate.”

However, the penalty isn’t based on just your personal net income. The penalty will be based on an entirely different number that is more than just your paycheck earnings — your ‘household income.’

“This determination is based on a concept of 'household income,’” TAO has said, adding, “this may differ from the income reported on the taxpayer's return, because it is a composite of all of the income reported by members of a taxpayer's household -- information that may not be readily accessible to the IRS."

If the IRS finds you have fallen short of the law, it would hit you with a penalty tied to your household income (which may be that of an individual or several family members).

Under the new health law, the IRS penalty would be based on “modified adjusted gross income,” not adjusted gross income that you normally report at the bottom of the first page of your tax form 1040, before you take deductions or personal exemptions.

The modifications add back in things like non-taxable interest and excluded foreign income to this number.

Next, to assess the fine, the IRS would take the total household income divided by the number of household members who must have insurance under the law.

Got that?

This raises questions of your responsibility for your other household members to abide by the new health reform law. All of this could mean a heavier enforcement hand at the IRS.

The IRS will need more training in privacy requirements, in order to avoid a drop in tax compliance, the TAO said, as taxpayers may feel they need to protect their confidential household income information for everyone who lives under the same roof. And that could also mean more IRS lien and levy powers.

And what would your health reform penalty look like?

The IRS penalty is either a fixed dollar amount, or a percentage of income above the filing threshold, whichever is greater. The law sets the fixed dollar penalty at $95 in 2014, $325 in 2015, $695 in 2016, and indexed to inflation thereafter (capped for a family at 300% of the individual amount).

The percentage of income penalty rises at a lower rate than the fixed dollar amount, from 1% in 2014, to 2% in 2015, and to 2.5% in 2016 and after, and then is capped at the national average premium for what’s called “bronze” coverage, which provides the least amount of coverage under the new law, 60% before the patient must chip in for co-insurance, deductibles and co-payments.

There’s more. Small businesses may get hit too. Less than half of small businesses insure workers, says a House Committee on small business. About 60% of America’s uninsured -- or 28 million -- are small business owners, workers, and their families, it says, adding insurance costs for small businesses have increased 129% since 2000.

The IRS and Treasury have put out for public feedback a new rule to help small businesses contend with a big penalty under health reform that could potentially smack them with tens of thousands of dollars in costs, a fine that could hit already cash-strapped small businesses.

Submarined in the new health-reform law is this big onerous penalty, called a “shared responsibility payment,” that the government can slap against businesses with more than 50 workers if they don’t provide “affordable” health benefits to their full-time employees, which the government gets to define.

The health-reform law exempts all small businesses with fewer than 50 employees from the law’s “shared responsibility requirement,” which begins in 2014. But beginning in 2014, employers with 50 or more employees that do not offer health insurance coverage will pay a fine of $2,000 per full-time worker if any of their employees turn around and get premium tax credits through the new health insurance exchanges.

Even if the small business has 51 workers, and that one worker gets a tax credit to help them buy insurance -- a tax credit provided under health reform -- the small business still has to pay a fine.

And beginning in 2014, the government will slap businesses with a higher, $3,000-per-employee penalty if the government finds they provide workers “unaffordable” health insurance. And who gets to define “unaffordable”? The government.

How is it defined? The government will assess the $3,000 penalty if any worker has to take a tax credit or has to enroll in state health exchanges because his or her boss pays less than 60% of the full value of the coverage, or the premium the employee pays is more than 9.5% of household income.

Again, this means more IRS intrusion into small businesses.

But the Treasury Department and the IRS have asked for input from the public on a proposed “safe harbor” for 2014 that says small businesses would not have to pay the new fine, so long as they can prove to the government their health insurance is really “affordable.”

So how can companies qualify for this safe harbor?

Watch this – because again health reform has raised serious privacy issues about how much the government can know.

The small business has to prove to the IRS that its insurance is affordable by showing the government the wages that it paid to employees, instead of reporting to the government the employee’s household income.

Meaning, the IRS would deem a business’s coverage affordable so long as a worker’s premium costs did not exceed 9.5% of his W-2 wages.

The IRS said in a statement: “By allowing employers to base their affordability calculations on each employee's W-2 wages (which employers know) instead of each employee's household income (which employers generally would not know), the safe harbor could provide a more workable and practical method for measuring the affordability of an employer's coverage.”

Want to see the headaches the small business has to go through to figure out the penalty owed to the government? The penalty is $2,000 per employee, but the business must first knock out from the math the first 30 workers -- part-timers don’t count.

Example: If you have 51 full-time employees and 15 part-time employees throughout the year, and one full-time employee is receiving a tax credit to help them buy health insurance, your business will have to pay:

51 (the number of full time employees) - 30 (the first 30 employees are excluded) 

21 x $ 2,000 = $42,000