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Breaking: Judge Rules Against Obama Administration on Gulf Drilling Moratorium

June 22, 2010 By Jeff Leave a Comment

A federal judge in New Orleans has lifted the Obama Administration’s six month moratorium on offshore oil drilling. U.S. District Judge Martin Feldman said in his ruling that the Interior Department failed to provide adequate reasoning for the moratorium:

A New Orleans federal judge lifted the six-month moratorium on deepwater drilling imposed by President Barack Obama following the largest oil spill in U.S. history. Shares of drilling services companies jumped on the news.

Obama temporarily halted all drilling in waters deeper than 500 feet on May 27 to give a presidential commission time to study improvements in the safety of offshore operations. More than a dozen Louisiana offshore service and supply companies sued U.S. regulators to lift the ban.

U.S. District Judge Martin Feldman today granted a preliminary injunction, halting the moratorium. Government lawyers told Feldman that ban was based on findings in a U.S. report following the sinking of the Deepwater Horizon rig off the Louisiana coast in April.

“The court is unable to divine or fathom a relationship between the findings and the immense scope of the moratorium,” Feldman said in his 22-page decision. “The blanket moratorium, with no parameters, seems to assume that because one rig failed and although no one yet fully knows why, all companies and rigs drilling new wells over 500 feet also universally present an imminent danger.”

Don’t start celebrating just yet, White House Press Secretary Robert Gibbs said the administration would immediately appeal the decision to the 5th Circuit.

Bottom line, Judge Feldman’s ruling is victory for common sense and the rule of law that will hopefully be upheld by the 5th Circuit.

The Obama Administration’s six month moratorium was ill-conceived  from the start. The seven experts who advised President Obama on offshore drilling safety after the Deepwater Horizon explosion have all gone on record accusing the administration of misrepresenting their views to make it appear they supported a six-month drilling moratorium — something they actually oppose… and something Judge Feldman hones in on in his ruling (PDF):

In the Executive Summary to the Report, the Secretary [Salazar] recommends “a six-month moratorium on permits for new wells being drilled using floating rigs.” He also recommends “an immediate halt to drilling operations on the 33 permitted wells, not including relief wells currently being drilled by BP, that are currently being drilled using floating rigs in the Gulf of Mexico.”

Much to the government’s discomfort and this Court’s uneasiness, the Summary also states that “the recommendations contained in this report have been peer-reviewed by seven experts identified by the National Academy of Engineering.” As the plaintiffs, and the experts themselves, pointedly observe, this statement was misleading. The experts charge it was a “misrepresentation.” It was factually incorrect. Although the experts agreed with the safety recommendations contained in the body of the main Report, five of the National Academy experts and three of the other experts have publicly stated that they “do not agree with the six month blanket moratorium” on floating drilling.

Update (Wednesday, June 23, 2010): The AP is reporting Interior Secretary Ken Salazar intends to issue a new order imposing a moratorium on deepwater drilling in a few days. The report claims Sec. Salazar’s new order will include additional information making clear why the government believes the six-month drilling is necessary.

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Rahm Emanuel On The Way Out?

June 21, 2010 By Jeff Leave a Comment

I’m a little skeptical about this report from the London Telegraph claiming President Obama’s powerful Chief or staff Rahm Emanuel is planning to resign later this year, but it’s making the round so here’s my two cents.

Rahm Emanuel, the White House chief of staff, is expected to leave his job later this year after growing tired of the “idealism” of Barack Obama’s inner circle.

Washington insiders say he will quit within six to eight months in frustration at their unwillingness to “bang heads together” to get policy pushed through.

Mr Emanuel, 50, enjoys a good working relationship with Mr Obama but they are understood to have reached an understanding that differences over style mean he will serve only half the full four-year term.

Friends say he is also worried about burnout and losing touch with his young family due to the pressure of one of most high profile jobs in US politics.

“I would bet he will go after the midterms,” said a leading Democratic consultant in Washington. “Nobody thinks it’s working but they can’t get rid of him – that would look awful. He needs the right sort of job to go to but the consensus is he’ll go.”

An official from the Bill Clinton era said that “no one will be surprised” if Mr Emanuel left after the midterm elections in November, when the Democratic party will battle to save its majorities in the house of representatives and the senate.

It is well known in Washington that arguments have developed between pragmatic Mr Emanuel, a veteran in Congress where he was known for driving through compromises, and the idealistic inner circle who followed Mr Obama to the White House.

His abrasive style has rubbed some people the wrong way, while there has been frustration among Mr Obama’s closest advisers that he failed to deliver a smooth ride for the president’s legislative programme that his background promised.

Personally, I would get overly excited about this, first Chiefs of staff often don’t serve for a Presidents entire term… Bill had four of them during his two terms in office. Second the White has issued a rather strong denial telling Fox News the “ludicrous” story was “not worth looking into.”

That said, it may very well be the mid-term elections that decide Mr. Emanuel’s fate for him, if Democrats lose control of the House of Representatives and/or Senate in November Pres. Obama may be forced to replace Mr. Emanuel with a more pragmatic Chief of Staff as he tacks back towards the center. If he doesn’t he’s risks seeing his presidency to run completely off the rails in its final two years.

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Obama Administration to Britain: Drop Dead

February 25, 2010 By Jeff Leave a Comment

I’ll say this much for the Obama Administration: They’re consistent. From the get go they’ve made it clear that longstanding American allies can expected to be taken for granted, insulted and, if convenient, dumped in favor of appeasement. Consequently this administrations decision to not support Britain, our closest ally, in its latest dispute with Argentina over the Falkland Islands shouldn’t come as surprise to anyone…

From the London Times:

Washington refused to endorse British claims to sovereignty over the Falkland Islands yesterday as the diplomatic row over oil drilling in the South Atlantic intensified in London, Buenos Aires and at the UN.

Despite Britain’s close alliance with the US, the Obama Administration is determined not to be drawn into the issue. It has also declined to back Britain’s claim that oil exploration near the islands is sanctioned by international law, saying that the dispute is strictly a bilateral issue…

~ ~ ~

Senior US officials insisted that Washington’s position on the Falklands was one of longstanding neutrality. This is in stark contrast to the public backing and vital intelligence offered by President Reagan to Margaret Thatcher once she had made the decision to recover the islands by force in 1982.

“We are aware not only of the current situation but also of the history, but our position remains one of neutrality,” a State Department spokesman told The Times. “The US recognises de facto UK administration of the islands but takes no position on the sovereignty claims of either party.”

This administrations actions are sad and shameful thing particularly when you contrast them with in unconditional support President Ronald Reagan offered to Margaret Thatcher in 1982 or that Prime Minister Tony Blair provided George W. Bush in the War on Terror. As Toby Young notes in the Daily Telegraph:

For this alliance to survive, both countries must recognise their obligations and, from time to time, that involves one of us setting aside more localised concerns for the sake of the cause. Tony Blair would have preferred it if President Bush had been prepared to wait for a second UN resolution before launching the invasion of Iraq, but he decided that Britain should follow America into battle nevertheless. He recognised that the preservation of the Atlantic alliance had to be prioritised above all else, both for our sake and the sake of the world.

In return, we naturally expect America to side with us when it comes to our own territorial disputes — and this element of quid pro quo was recognised by Ronald Reagan when he backed Margaret Thatcher in the Falklands War. It wasn’t in America’s regional interests to side with us, but Reagan knew the terms of the deal: It was your country, right or wrong. You don’t abandon your closest ally in her hour of need.

So it is truly shocking that Barack Obama has decided to disregard our shared history and insist that we have to fight this battle on our own. Does Britain’s friendship really mean so little to him? Do the sacrifices Britain has made in defence of the Atlantic alliance count for nought? Who does he think will replace us as America’s steadfast ally when she finds herself embroiled in a territorial dispute of her own — possibly with the very same motley crew of Latin American rabble rousers? Spain? Italy? France? Good luck with that, Mr President.

Shame on you , Mr. President, shame. This Administration, in the name of neutrality, has chosen to side with the  aggressive, corrupt Argentine government of Christina Fernandez de Kirchner… A government that is being supported and encouraged by Hugo Chavez and that is threatening to blockade British territory.

We can not let this outrage stand. Call the White House, call your Senators, call your Representatives and tell them that We The People will not allow this administration to throw away the United State’s longstanding special relationship with our closest ally.

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Third Quarter GDP Rises to 3.5%… But…

October 29, 2009 By Jeff Leave a Comment

From Reuters:

The U.S. economy grew in the third quarter for the first time in more than a year as government stimulus helped lift consumer spending and home building, fueling an unexpectedly strong advance.

Signaling the end of the worst recession in 70 years, the Commerce Department on Thursday said the economy expanded at an annual rate of 3.5 percent in the July-September period, snapping four down quarters with its fastest growth pace since the third quarter of 2007 and exceeding forecasts for a 3.3 percent rate.

The good new is that the U.S. economy has stopped shrinking, the bad news is that all the growth was driven by emergency government programs like Cash for Clunkers and the $8000.00 first time home buyer tax credit. As Reuters Political Risk bloger James Pethokoukis points out when you strip out Cash for Clunkers 3rd quarter GDP was just 1.6 percent. If you  also strip out the slowing inventory cuts GDP was just 0.6 percent.

The bottom line is this, when you add in the sharp drop in new home sales and the barely there dip in first time jobless claims last week, the economy may be improving but has yet to turn the corner in any meaningful way. These numbers may be enough to make the Obama Administration look good for the next three months, but if they don’t stop these gimmicky programs and do something to spur real investment and create sustainable long term growth we’re headed for a double dip recession that they won’t be able to blame on the Bush Administration.

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Nancy Pelosi: Value-Added Tax is “On the Table”

October 7, 2009 By Jeff Leave a Comment

I’ve mentioned before that the Democrats were laying the groundwork for a European style Value Added Tax or VAT… I wish I could tell you I was wrong but House Speaker Nancy Pelosi confirm that a VAT tax is “on the table” during an appearance on the Charlie Rose show Monday night:

A new value-added tax (VAT) is “on the table” to help the U.S. address its fiscal liabilities, House Speaker Nancy Pelosi (D-Calif.) said Monday night.

Pelosi, appearing on PBS’s “The Charlie Rose Show” asserted that “it’s fair to look at” the VAT as part of an overhaul of the nation’s tax code.

“I would say, Put everything on the table and subject it to the scrutiny that it deserves,” Pelosi told Rose when asked if the VAT has any appeal to her.

The VAT is a tax on manufacturers at each stage of production on the amount of value an additional producer adds to a product.

Pelosi argued that the VAT would level the playing field between U.S. and foreign manufacturers, the latter of which do not have pension and healthcare costs included in the price of their goods because their governments provide those services, financed by similar taxes.

The sad reality is the Federal Government now borrows roughly 50 cents of every dollar it spends, that’s simply unsustainable over the long term… The Obama Administration and Democrats in Congress are either going to have to radically scale back their agenda (something they won’t do) or raise taxes on broad swath of Americans… Something they’re only too happy to do while saying with a straight face “the deficit made us do it.”

Make no mistake a Value Added Tax added on top of our current income tax system will be an economy killer that hits those who can least afford it the the hardest.

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Train Wreck: GDP Decline Twice as Bad as Obama Admnistration Forecast

August 25, 2009 By Jeff Leave a Comment

Ouch, this isn’t good news for President Obama’s agenda… The White House has been using some pretty rosy economic forecasts to sell his agenda. However, those rosy forecasts have finally crashed head-on into economic reality. In short, GDP declined roughly twice as much as they predicted and their out year deficit forecasts will be roughly $2 trillion higher than originally forecast:

U.S. unemployment will surge to 10 percent this year and the budget deficit will be $1.5 trillion next year, both higher than previous Obama administration forecasts because of a recession that was deeper and longer than expected, White House budget chief Peter Orszag said.

The Office of Management and Budget forecasts a weaker economic recovery than it saw in May as the gross domestic product shrinks 2.8 percent this year before expanding 2 percent next year, according to the administration’s mid-year economic review issued today. The Congressional Budget Office, in a separate assessment, forecast the economy will grow 2.8 percent next year. Both see the GDP expanding 3.8 percent in 2011.

“While the danger of the economy immediately falling into a deep recession has receded, the American economy is still in the midst of a serious economic downturn,” the White House report said. “The long-term deficit outlook remains daunting.”

The budget shortfall for 2010 would mark the second straight year of trillion-dollar deficits. Along with the unemployment numbers, the deficit may complicate President Barack Obama’s drive for his top domestic priority, overhauling the U.S. health care system.

“It throws a wrench in health-care reforms,” Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget, said in an interview. “No matter the specific numbers, they’re a constant reminder that we’re in bad, bad shape.”

Frankly, I don’t have a lot of faith in the Administration’s economic recovery forecasts… Not with Bush tax cuts set to expire next year and the general anti-business, anti-capital formation rhetoric coming from the White House and Congress.

The only question that needs to be answered is how can the Obama Administration have any credibility on economic issues at this point?

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Pres. Obama Backs Offshore Drilling… Just Not in U.S. Waters

August 19, 2009 By Jeff Leave a Comment

I was going to comment on this Wall Street Journal editorial yesterday but I didn’t get to it… In short the Obama Administration has finally embraced offshore oil drill, unfortunately it’s not in the U.S.:

You read that headline correctly. Unfortunately, the Obama Administration is financing oil exploration off Brazil.

The U.S. is going to lend billions of dollars to Brazil’s state-owned oil company, Petrobras, to finance exploration of the huge offshore discovery in Brazil’s Tupi oil field in the Santos Basin near Rio de Janeiro. Brazil’s planning minister confirmed that White House National Security Adviser James Jones met this month with Brazilian officials to talk about the loan.

The U.S. Export-Import Bank tells us it has issued a “preliminary commitment” letter to Petrobras in the amount of $2 billion and has discussed with Brazil the possibility of increasing that amount. Ex-Im Bank says it has not decided whether the money will come in the form of a direct loan or loan guarantees. Either way, this corporate foreign aid may strike some readers as odd, given that the U.S. Treasury seems desperate for cash and Petrobras is one of the largest corporations in the Americas.

But look on the bright side. If President Obama has embraced offshore drilling in Brazil, why not in the old U.S.A.? The land of the sorta free and the home of the heavily indebted has enormous offshore oil deposits, and last year ahead of the November elections, with gasoline at $4 a gallon, Congress let a ban on offshore drilling expire.

I’m going to defer to Sarah Palin here because rather than offer substantive commentary I’m tempted to say something inflammatory like… if this doesn’t take the cake for asinine, moronic moves by an American administration I don’t know what does… Oops, anyway here’s Gov. Palin:

For years, states rich with an abundance of oil and natural gas have been begging Washington, DC politicians for the right to develop their own natural resources on federal lands and off shore. Such development would mean good paying jobs here in the United States (with health benefits) and the resulting royalties and taxes would provide money for federal coffers that would potentially off-set the need for higher income taxes, reduce the federal debt and deficits, or even help fund a trillion dollar health care plan if one were so inclined to support such a plan.

So why is it that during these tough times, when we have great needs at home, the Obama White House is prepared to send more than two billion of your hard-earned tax dollars to Brazil so that the nation’s state-owned oil company, Petrobras, can drill off shore and create jobs developing its own resources? That’s all Americans want; but such rational energy development has been continually thwarted by rabid environmentalists, faceless bureaucrats and a seemingly endless parade of lawsuits aimed at shutting down new energy projects.

Gov. Palin is right, the simple reality is whether we like it or not oil and natural gas fuel our economy… While it’s good to see the Obama Administration supporting offshore oil drilling, their efforts would be better directed at encouraging the tapping of domestic resources and creating jobs for Americans rather than $2 billion of taxpayer money overseas.

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WSJ: Obama Advisers Set Groundwork to Raise Taxes on Middle Class

August 4, 2009 By Jeff Leave a Comment

You don’t have to be an economist to realize the Obama Administration’s budget numbers don’t add up and that he’s going to have raise taxes on more than just those earning more than $250,000.00 to pay for his agenda. With that in mind it’s not surprising that White House economist Larry Summers and Treasury Secretary Timothy Geithner essentially floated the idea of a middle class tax hike on last weekend’s political talk shows:

Few of President Obama’s 2008 campaign pledges were more definitive than his vow that anyone making less than $250,000 a year “will not see their taxes increase by a single dime” if he was elected. And he was right, very strictly speaking: It’s going to be many, many, many billions of dimes.

Asked about raising taxes on the middle class on Sunday on CBS’s “Face the Nation,” White House economist Larry Summers wouldn’t repeat Mr. Obama’s pre-election promise. “It is never a good idea to absolutely rule things out no matter what,” Mr. Summers said—except, apparently, when his boss is running for office. Meanwhile, on ABC’s “This Week,” Treasury Secretary Timothy Geithner also slid around Mr. Obama’s vow and said, “We have to bring these deficits down very dramatically. And that’s going to require some very hard choices.”

These aren’t even nondenial denials. The Obama advisers are laying the groundwork for taxing the middle class while claiming the deficit made them do it.

The liberal establishment is even further along in finally admitting that Mr. Obama wasn’t, er, telling the truth. A piece in the New York Times over the weekend declared in a headline that “the Rich Can’t Pay for Everything, Analysts Say.” And it quoted Leonard Burman, a veteran of the Clinton Treasury who now runs the Brookings Tax Policy Center, as saying that “This idea that everything new that government provides ought to be paid for by the top 5%, that’s a basically unstable way of governing.” They’re right, but where were they during the campaign?

The Federal Government now borrows nearly 50 cents of every dollar it spends, that’s just not sustainable… The Obama Administration is going to have to radically scale back it’s agenda or raise taxes on broad swath of American tax payers. They’ve already floated the idea of a European style Value Added Tax and now they’re setting the table for a “the deficit made it necessary” defense of a middle class tax hike.

After all as the as Wall Street Journal concludes:

The undeniable reality is that you can’t run a European-style welfare-entitlement state without European-style levels of taxation on the middle class (and eventually without low European-style growth and high jobless rates). It’s looking more and more like Mr. Obama’s no-middle-class-tax pledge was one of the greatest confidence tricks in American political history.

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Tax Revenues Continue to Plunge

August 3, 2009 By Jeff Leave a Comment

From the Associated Press:

The recession is starving the government of tax revenue, just as the president and Congress are piling a major expansion of health care and other programs on the nation’s plate and struggling to find money to pay the tab.

The numbers could hardly be more stark: Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression, while the federal deficit balloons to a record $1.8 trillion.

Other figures in an Associated Press analysis underscore the recession’s impact: Individual income tax receipts are down 22 percent from a year ago. Corporate income taxes are down 57 percent. Social Security tax receipts could drop for only the second time since 1940, and Medicare taxes are on pace to drop for only the third time ever.

The last time the government’s revenues were this bleak, the year was 1932 in the midst of the Depression.

Ouch, no wonder the Obama Administration wanted to delay the release of the mid-summer budget update… This is a train wreck.

It’s no wonder the Obama Administration wanted to hide these numbers in July, with businesses struggling and tax revenues crashing their rosy deficit projections are about to meet economic reality head on… He’s going to have to drastically scale back his domestic policy agenda, there simply isn’t money to pay for things health care reform.

Now we know why they were in such a rush to push through health care reform.

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Reid: No Health Care Vote Before August Recess

July 23, 2009 By Jeff Leave a Comment

Senate Majority Leader Harry Reid effectively pulled the rug out from under Pres. Barack Obama and House Speaker Nancy Pelosi today by announcing that the Senate will wait until the fall to debate and vote on the presidents health care reform proposals:

Senate Democratic leaders on Thursday abandoned plans for a vote on health care before Congress’ August recess, dealing a blow to President Barack Obama’s ambitious timetable to revamp the nation’s $2.4 trillion system of medical care.

Senate Majority Leader Harry Reid, D-Nev., delivered the official pronouncement, saying, “It’s better to have a product based on quality and thoughtfulness rather than try to jam something through.”

His words were a near-echo of Republicans who have criticized what they have called a rush to act on complex legislation that affects every American.

Reid’s announcement isn’t particularly surprising, he doesn’t have the votes in Senate and despite her claims to the contrary I doubt Speaker Pelosi has them in the House either… If they did there’s nothing the Republicans could do to stop them from passing the bills. The Democrats have sufficient majorities in the House and Senate to pass their Health care reform bill without a single Republican vote.

The fact that they can’t get it down says more about the popularity of this bill and leadership abilities of Pres. Obama, Speaker Pelosi and Majority Leader Reid than it does about Republican opposition.

The fight isn’t over though, the just got a lot longer and bumpier but the Democrats aren’t going to give up on this. As Marc Armbinder points out Sen. Reid is more than likely going to spend his summer recess trying to reconcile what the Seante Finance Committee is willing to pay for with what the Senate Health, Education, Labor and Pensions Committee wants.

As an aside, that oft quoted “47 million uninsured Americans” statistic is at best misleading… As CNSNews.com points then number comes from a Census Bureau report published in August 2008. The actual number given in the report is 45.65 million people without health insurance, of them 9.73 million are foreigners, leaving only 35.92 million Americans who were uninsured. Of that 36 million roughly 12 million are eligible for Medicaid and the State Children’s Health Insurance Program–but haven’t signed up.

Once you drill down through all the numbers you’re left with roughly 10-12 million uninsured Americans who would prefer to have insurance but can’t afford it. Politicians and pundits who continually cite that 46, 47 or 48 million uninsured number without providing the full context are doing a great disservice to their constituents or readers.

Bottom line if our elected leaders were really interested in addressing the uninsured they’d focus their efforts on increasing participation in existing programs like Medicaid or SCHIP and providing a safety net for those how want insurance but either don’t qualify for existing programs or who are excluded because pre-existing conditions.

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