Tag: bob mcdonnell

Politicians and Their Friends

The Sunday Washington Post has a lengthy story on Terry McAuliffe’s highly successful “business” career. McAuliffe, of course, is the longtime Democratic fundraiser and “first friendof Bill Clinton who is now the Democratic nominee for governor of Virginia.

How did a lifelong political operative make many millions for himself? The Post reviews:

The pitches to potential investors in a new electric-car company have been unabashed about its promise: It will enjoy “billions” in government subsidies and tax credits, will rise to a dominant position in the U.S. electric-car industry and, perhaps most critically, has a politically connected founder with the savvy to make it all happen….

The prospectus, along with other documents reviewed by The Post, shows how GreenTech fits into a pattern of investments in which McAuliffe has used government programs, political connections and access to wealthy investors of both parties in pursuit of big profits for himself.

That formula has made McAuliffe a millionaire many times over, paving the way for a long list of business ventures, including his law firm, from which he resigned in the 1990s after profiting — along with his partners — from fees paid by domestic and foreign clients seeking results from the federal government.

A review of McAuliffe’s business history shows him often coming out ahead personally, even if some investments fail or become embroiled in controversy.

Or as McAuliffe told the New York Times:

”I’ve met all of my business contacts through politics. It’s all interrelated,” he said. When he meets a new business contact, he went on, ”then I raise money from them.”

And how did Bill Clinton meet his very good friend? Was it in high school? College? At Oxford? The local Kiwanis Club? No, President Clinton was down in the dumps after his electoral thumping in 1994 and needed to get in gear for his reelection campaign. Harold Ickes, “his politically astute deputy chief of staff,” urged him to meet McAuliffe, who had been a fundraiser for President Carter, when he was 23 years old, and Dick Gephardt. McAuliffe quickly recommended renting out the Lincoln Bedroom, and that worked so well that they became fast friends, maybe even “best friends.”

An Unconstitutional Tax Bill in Virginia?

My long-ago colleague Norman Leahy, once a young research assistant at the Cato Institute, has an op-ed in the Washington Post today. I wonder where he got the idea that an act of the legislature is invalid just because it violates the state constitution.

Those praising the Virginia General Assembly’s transportation compromise may not realize that the bill runs afoul of the plain language in the state’s constitution.

Virginia’s constitution is clear that the General Assembly can impose only uniform taxes across the state for similar activities. But the bill that emerged from the House-Senate conference committee last weekend upsets the historic balance between localities and state government; it contains new provisions about taxation, some of which would effectively set up a two-tier system for residents in certain parts of the state. It’s difficult to see how some of these provisions could survive legal challenge….

As a constitutional matter, these local tax provisions could probably be struck down without affecting the rest of the legislation.

But few should know better than Gov. Bob McDonnell (R) that state legislators don’t have the power to impose a discriminatory local tax. He was the state’s attorney general when his office defended before the state Supreme Court the General Assembly’s previous attempt at a transportation tax package. The court rejected the argument.

 

RTD: ‘Insurance Exchange: Just Say No’

Regarding legislation to create an ObamaCare “Exchange” in Virginia, the Richmond Times-Dispatch explains:

Republicans at the General Assembly are falling prey to the fallacy of the false alternative…

[H]ere are the real options facing Virginia: (a) federal bureaucrats determine the form of our exchange, or (b) federal bureaucrats determine the form of our exchange. There is no (c)…

Running a health-insurance exchange would cost a lot of money — money Virginia does not have. Since Washington will dictate how it will be run, Washington should pick up the tab.

‘Virginia Shouldn’t Enable Federal Takeover of Health Care’

Bart Hinkle has an excellent column in the Richmond Times-Dispatch about why Virginia—and all states—should refuse to create one of Obamacare’s health insurance “exchanges”:

Any state exchange will have to abide by the Obama administration’s directives… If Washington is going to dictate the terms, why should Virginia foot the bill?

Va. Gov. McDonnell (Sort of) Takes My Advice, Defers Creating ObamaCare Exchange

In June, I testified in Richmond before Virginia’s Joint Commission on Health Care that Virginia should refuse to create one of ObamaCare’s health insurance “exchanges”:

[ObamaCare’s] health insurance “Exchanges” are scheduled to become operational in 2014.  These new government bureaucracies would enforce the law’s regulations that will drive up health insurance premiums, and would distribute hundreds of billions of taxpayer dollars to private health insurance companies, thereby driving up the national debt…

Neither the Commonwealth nor the federal government has money to waste on new government agencies that might be repealed or overturned tomorrow…

At a minimum, Virginia should defer the question of creating an Exchange until the courts dispose of the constitutional challenges brought against this law.  Legal scholars expect the U.S. Supreme Court to rule on this law in the summer of 2012…If the Court voids the law, Virginia will be glad she waited.

Virginia Gov. Bob McDonnell (R) has inexplicably been gung-ho to create an ObamaCare Exchange. According to the Richmond Times-Dispatch, however, McDonnell may be modulating his tune:

McDonnell said he does not want to create an exchange legislatively until after the court makes its decision on the mandate’s constitutionality. The court will hear arguments in the case in March and possibly rule in July, just after a federal deadline for states to seek grant money to set up exchanges.

“Any major expense prior to the court decision is irresponsible and a waste of money,” the governor said at a luncheon meeting with members of the Capitol press corps.

Unfortunately, McDonnell is still laboring under the misapprehension that creating her own Exchange will let Virginia retain a measure of control over her health insurance markets:

McDonnell said he hopes the Supreme Court will strike down the law’s individual mandate, rendering an exchange unnecessary, but he made clear he wants Virginia to operate the exchange if the law stands.

“If we have to do it, I clearly want to have a state-based exchange,” he said.

To read about why Virginia doesn’t “have to do it,” and why there is no defensible rationale whatsoever for an ObamaCare opponent such as McDonnell to create an Exchange, read my Missouri testimony.

To learn how McDonnell may end up saving ObamaCare from repeal by creating an Exchange, read this Wall Street Journal oped by Jonathan Adler and me.

Why Is Virginia Gov. Robert McDonnell Implementing ObamaCare?

I ask this question in today’s Richmond Times-Dispatch:

Virginia Republican Gov. Bob McDonnell…says Obamacare is unconstitutional and therefore illegitimate. Yet he has created a state commission to study whether Virginia should implement an illegitimate law. Since the answer does not appear self-evident to commonwealth officials, let’s walk through the reasons Richmond should refuse to create any new health-care bureaucracies.

Didn’t this guy take an oath to support the U.S. Constitution?

Bob Gates Against the World

Defense Secretary Robert Gates has again made headlines with a proposal to slow the growth of the Pentagon’s budget – already higher than at any point since World War II – by cutting overhead, waste and a top-heavy command structure.

The proposed shuttering of Joint Forces Command (Jif-Com) has elicited most of the press attention today, and prompted an impassioned plea from Virginia politicians, including Gov. Bob McDonnell, that the command remain open. Unhelpfully for Gov. McDonnell, outgoing Jif-Com head James Mattis (who will assume the title of CENTCOM), reportedly supports Gates’s decision.

But this isn’t the first time that opportunistic politicians have latched onto defense spending as a way to sprinkle economic benefits to their constituents, and at the expense of the rest of us. (In the same vein, Gates reportedly repeated his pledge to kill the entire DoD appropriation if it includes the unwanted C-17 and the alternate engine for the Joint Strike Fighter that some members of Congress continue to push.)

Leaving aside the predictable political wailings, the reforms that Gates proposed are neither revolutionary, nor particularly controversial to most objective observers. Politico’s Gordon Lubold and Jen DiMascio in their ever-helpful Morning Defense newsletter point out that “The cuts seemed to take several pages out of the Defense Business Board task force led by [Arnold] Punaro that recently recommended many of the same trims.” (For more on that report, see here.)

The true object of Gates latest round of economizing is to forestall calls for deeper cuts by a public frustrated by the high costs and dubious benefits of our military’s exertions over the years. Gates explained:

“What we need is modest, sustainable growth over a prolonged period of time that allows us to make sensible investment decisions and not have these giant increases and giant decreases that make efficiency and doing acquisition in a sensible way almost impossible.” (my emphasis)

But Gates either misapprehends or mischaracterizes the true source of the problem. U.S. military spending has grown for 13 years, 86 percent in inflation-adjusted dollars from 1998 to 2011. Claiming that uncertainty over future military spending impedes effective planning and creates waste ignores that relative certainty over ever-rising defense budgets has enabled the very waste and mismanagement that Gates now proposes to cure.

Gates also succumbs to (or, worse, propagates) the sort of threat inflation that has afflicted U.S. foreign policy for decades, and about which Ben Friedman and John Mueller have written much. Gates claims that the U.S. military needs to grow because the world is becoming “more dangerous.” More dangerous than what? The notion that a few hundred al Qaeda ragamuffins and their Taliban allies poses a greater threat to Americans than a nuclear-armed Soviet Union is absurd on its face, and yet we spend more on our military today than at the height of the Cold War.

This threat inflation distorts our strategic planning, and does more harm to our long-term security than too many high paid civilians in the Pentagon. Although Pentagon waste and excessive overhead is a problem, it isn’t the problem. The fact that we have too many flag officers doesn’t explain why the United States spends more on its military than every other country in the world. Rather, it is our overly ambitious foreign policy that needlessly wastes U.S. taxpayer resources around the world in quixotic enterprises to rebuild failed states, reform sclerotic political systems, hunt after terrorists, and otherwise defend other countries who should defend themselves.

Cuts in military spending – real cuts, not merely slowing the rate of growth – would impose some short-term pain on an overburdened military that has been used and misused by our political class since the end of the Cold War. A better solution would be to adopt a more restrained grand strategy, one dedicated to defending our security and advancing our interests, but that forced other countries to play a larger role in doing the same. Restraint would allow for a much smaller – and less expensive – U.S. military, and would result in no diminution of American security.

The Washington establishment is unlikely to embrace such a strategy any time soon, however, because it would impose some real constraints on both the military and on Congress, the latter of which continues to use the Pentagon’s budget as a vehicle for dispensing pork under the guise of making Americans safer.

Unhappily for Gates, but especially for our troops, cuts in military spending are likely to come without an attendant change in how our military is used.