Archives: January, 2011

VIDEO: Nine Cato Experts Break Down the 2011 State of the Union Address

In this video reaction to President Obama’s State of the Union address last night, Cato experts Gene Healy, Benjamin H. Friedman, Jagadeesh Gokhale, Neal McCluskey, Sallie James, John Samples, Justin Logan, Daniel J. Mitchell, Michael F. Cannon, and David Rittgers analyze the president’s address, and make note some of the outright fabrications in it:


If you missed our live blog coverage of the State of the Union address, you can scroll back through the conversation this morning.

White House Backs Off of Obama Earmarks Pledge

In the state of the union speech last night, President Obama said with great force:

[I]f a bill comes to my desk with earmarks inside, I will veto it.

This appeared to settle the earmark question once and for all. The Republican House and Republicans in the Senate had already sworn off earmarks. Senate Democrats, who may have been holding out hope for preserving this prerogative, will not get to do earmarks. So says the president of the United States, veto pen in hand.

But late last night the White House may have begun to modify the president’s pledge. A “government reform factsheet” circulated by White House staff says, “The President intends to veto bills with special interest earmarks.” (emphasis added) This appears to create a class of earmarks that will bring the president’s veto, special interest earmarks, and a class that will not—national interest earmarks, one supposes.

Defining what is an “earmark” is difficult, though not impossible, as the groups that have worked on the earmarking problem can tell you. But the distinction between “special interest earmarks” and “national interest earmarks” appears to be something the president would make for himself. This withdraws a great deal of force from the “no earmarks” pledge.

It’s certainly possible that the “special interest” language in the fact sheet is surplussage simply meant to illustrate that earmarks are a “special interest” problem. But we will have to watch and see whether the president walks away from his statements about controlling earmarks, as he has done before.

Is Obama Serious?

Today POLITICO Arena asks:

Although President Obama proposed a five-year, $40 billion per year freeze in non-security, discretionary spending, and Republicans want to cut spending by at least $100 billion a year, is either side serious about real spending cuts?

My response:

With uncontrolled deficits well into the future and a debt exceeding $14 trillion, for Obama to propose saving only $40 billion per year in discretionary spending over the next five years, while “investing” in pie-in-the-sky things like high-speed rail, wind farms, environmentally destructive ethanol, and the like, is worse than unserious – it’s an insult to our intelligence. Like Obama, many Republicans too treat military spending, among other things, as sacrosanct, but at least they’re proposing more serious budget cuts.

The deeper problem, of course, is systemic. Socialism, a large dose of which we have in America today, brings out the very worst in people. In the name of collective responsibility, it saps and then destroys individual responsibility, leading to a war of all against all. No one wants “his” entitlement cut for fear that his neighbor might profit at his expense – because, after all, “we’re all in this together.” Suspicion and envy are the order of the day. Meanwhile, dreamers like Obama (at least that’s his pose), who promote our collective drift, either can’t or won’t grasp the hard reality until it crashes down upon them, and us, as it is doing now in several of our states and in Europe. For the “hard-hearted” realists among us, November 2012 can’t come soon enough.

Patriotism, Dedication, and Esprit de Corps

From a press release by Law Enforcement Against Prohibition:

[A] U.S. Customs and Border Protection agent… was fired for saying in a casual conversation that legalizing and regulating drugs would help stop cartel violence along the southern border with Mexico. After sharing his views with a colleague, the fired agent, Bryan Gonzalez, received a letter of termination stating that his comments are “contrary to the core characteristics of Border Patrol Agents, which are patriotism, dedication, and espirit [sic] de corps.” Last week, with the help of the American Civil Liberties Union of New Mexico, Gonzalez filed a lawsuit seeking damages.

I know very little about employment law and have no idea whether the agent has a case. But just consider that even some Border Patrol agents are questioning the War on Drugs – and even when it can cost them their jobs.

If it costs you less to speak out, then please, consider doing so. American patriotism is about speaking one’s mind. Dedication to a failed policy isn’t a virtue. And will the firings continue until the esprit de corps improves?

Obama Supports Repealing 1099 Rule

In addition to a corporate tax cut, Obama takes another one out of Cato’s playbook in his State of the Union address. He supported repealing an idiotic IRS requirement in the 2010 health care law that mandated hundreds of millions of additional 1099 tax forms. The president said: “We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses.”

 I called for that reform back in April. Now it’s the GOP’s job to get him legislation to repeal this provision tomorrow.

Obama Calls for Corporate Tax Cut

In his State of the Union, President Obama pulled one from the Cato playbook and called for a corporate tax rate cut.

“But all the rest [of our companies] are hit with one of the highest corporate tax rates in the world. It makes no sense, and it has to change. So tonight, I’m asking Democrats and Republicans to simplify the system. Get rid of the loopholes. Level the playing field. And use the savings to lower the corporate tax rate for the first time in 25 years – without adding to our deficit.”

The stuff about loopholes and simplification–that’s window dressing. The real story is that the reality has sunk in even to liberal Democrats that we are shooting ourselves in the foot with the highest corporate tax rate in the world.

“Loopholes” will take care of themselves if we dramatically lower our tax rate. Chopping the statutory rate will automatically broaden the tax base, close homemade corporate loopholes, and not “add to our deficit” in the long-run.

Cato Live Blog of President Obama’s 2011 State of the Union Address and GOP Response

Please join us at 9:00pm Eastern on Tuesday, January 25, 2011 for live commentary during President Obama’s State of the Union address and the response given by House Budget Chairman Paul Ryan (R-Wisc.). Here is our panel of expert bloggers (click each name for their respective Cato@Liberty archives):

Other Cato scholars may also be contributing.

Come back to this page at 9:00pm Eastern on Tuesday, January 25, 2011 to join us–we look forward to having you, and to sharing our insights with you.

Also, don’t forget to tune into our Facebook page immediately following this live blogging event for live video reaction to the speeches from Vice President Gene Healy and Research Fellow Julian Sanchez.