W.H. feels pressure on jobs, spending
Caught between Tuesday’s election results and Friday’s unemployment numbers, the White House faces increased pressure to slow spending next year but also to produce more Main Street jobs to match Wall Street’s recovery.
Going into the 2011 budget cycle, the administration now appears on course to impose close to a freeze on new discretionary appropriations after the double-barrel increases in 2009 and 2010. The costs of the Afghanistan war are a wild card, but even before the polls closed Tuesday, White House Budget Director Peter Orszag was talking up deficit reduction in New York, and his earlier guidance to agencies calls for alternatives that assume a freeze at 2010 funding levels, or a 5 percent reduction.
Republicans warn that President Barack Obama can’t ignore what they see as Tuesday’s backlash against the “overspending” and “overgovernment” in his first year in office. “The Obama administration would do well not to underestimate the intensity of voter opinion on these issues — or the impact they have on independent voters,” Republican pollster Neil Newhouse told POLITICO.
Matched against this sentiment is the increased frustration among Democrats over the jobs outlook — and a continued stalemate with the White House over funding for highway construction.
The Labor Department will release new monthly numbers Friday, and Democrats anticipate no improvement over September’s 9.8 percent unemployment rate. “We face a long road back,” said Rep. Jim McDermott (D-Wash.).
To help the jobless through the holidays, Congress sent Obama a bill Thursday that would add up to 20 weeks in assistance for those who have exhausted their unemployment benefits. But the future of the highway program, hurt by a drop-off in gasoline tax revenues, remains a bone of contention.
The White House has said it wants to extend the current program only through the 2010 elections and then address increased funding. But 15 states are already so short of cash they can’t meet their 20 percent matching requirement. And that number could double next year — greatly reducing the chance to let contracts and create jobs.
House Transportation and Infrastructure Committee Chairman James Oberstar (D-Minn.) has argued for an upfront investment of $80 billion over two years to get over this hurdle.
“The concrete is cracking,” Oberstar said, laughing, hinting that the administration’s resistance is weakening. And though he denies any role in the discussions, White House chief of staff Rahm Emanuel keeps popping up in conversations, drawn into the fray through his ties to old House colleagues, seen in the gym or at dinner.
The big question is where the money will come from. Rep. Steve LaTourette (R-Ohio) said he is prepared to round up 30 Republican votes for a plan tapping unspent stimulus funds — an idea that he said had been discussed by Emanuel with an old Chicago friend, Rep. Jerry Costello (D-Ill.). House Appropriations Committee Chairman Dave Obey (D-Wis.) said he knew nothing of this approach and would oppose it — leaving others to look for revenues.
House Majority Whip Jim Clyburn is most insistent on action requiring some give from the White House.
“I’ve told the administration, I don’t care who says it, that [it] is absolutely wrongheaded,” the South Carolina Democrat told POLITICO. “We have to reauthorize that highway bill for at least four years. I would prefer five or six,” Clyburn said, even if it meant imposing a securities transaction tax on the financial community to cover the costs.
“There are some painless ways to fund the highway bill,” Clyburn said. “Transaction taxes, that’s a painless way; that’s a painless way.”
“Where are the shared contributions to all this? If you’re sitting there on Wall Street, if you’re Goldman Sachs, if you’re making all this money, if you got all this federal money [in a] bailout, and you are paying all these big bonuses to your folks, where is your contribution to this recovery? That’s why it’s painless.”
Rep. Peter DeFazio, a major player on the House Transportation and Infrastructure Committee and a gymmate of Emanuel’s, has been drafting legislation along these lines: “Let Wall Street Pay for the Restoration of Main Street Act.” And the Oregon Democrat argues that the proposed 0.25 percent excise tax would have a negligible impact on the average investor and yield sufficient revenues to both cover increased highway funding and make a down payment toward reducing the deficit.
The financial industry is sure to fight any such levy and enjoys powerful allies, such as Sen. Chuck Schumer (D-N.Y.). But the anti-Wall Street sentiment in Congress goes well beyond DeFazio’s populist caucus. And the administration admits it will also be looking for new sources of revenue as part of its 2011 budget, due in February.
In this context, some transaction tax could potentially be part of a compromise in smoothing out the adjustment in capital gains taxes as Congress and the president decide which of the Bush-era income taxes will survive — and which will expire.
The capital gains tax rate is slated to rise from 15 percent to 20 percent, but if House Democrats succeed in adding their surtax on the wealthy, it could be a swing of 15 percent to 25.4 percent for big investors in January 2011. That’s enough to have some officials worried about the impact on the markets as individuals cash in on gains at the end of next year, and one option would be to use transaction tax revenues to craft a gentler glide path.
Obama in the past has cast himself as a supporter of long-term investments encouraged by capital gains tax breaks. By contrast, advocates of a transaction tax argue that it would fall more heavily on frequent traders and short-term speculators.
“It would be a good thing if we could do it internationally, but those transactions are so internationally mobile you can’t do it in one country,” House Financial Services Committee Chairman Barney Frank (D-Mass.) told POLITICO. “Stocks trade on multiple exchanges. That’s one of the few where the business community has a legitimate anti-competitive argument.”
Unemployment tops 10 percent
Democrats – headed into an historic health care vote this weekend — got smacked in the face with a 10.2 percent unemployment rate in October, the government reported Friday.
The 10.2 percent figure is well above the 9.9 percent that economists expected and breaks the psychological barrier of 10 percent, breaking double digits for the first time in 26 years. It's the last headline the Obama administration wanted to see going into the House healthcare vote.
In all, employers shed 190,000 non-farm jobs last month.
The tough numbers arm House Republicans with fresh political ammo against the trillion-dollar House health care bill, which could come to a vote as early as Saturday. The GOP has been relentlessly pushing the narrative that Democrats obsessed with creating ever-bigger government at the expense of the economy.
"As unemployment tops 10 percent this holiday season, Republicans have put jobs and the economy first, and are focused on developing real solutions that will put Americans back to work," House Minority Whip Eric Cantor (R-Va.) said. "Increasing taxes on small business, as Democrats will do to pay for government run health care, is the wrong approach."
Even thought it was a point higher than expected, the upward trend in unemployment comes as no surprise to economists and administration officials alike. Nonetheless, the increase is an uncomfortable reminder for the Obama administration that they’re facing a long string of bad headlines on the economy, despite other evidence that the economy is shaking off the recession.
There’s wide consensus that the jobless rate will surpass 10 percent before it starts to head back down, and it could remain above 10 percent well into 2010. Hiring typically lags behind other signs of economic recovery in a recession, and this recession has seen deeper job cuts than previous recessions.
It’s also sure to up the pressure on Democrats to take steps to boost job creation – all while being careful not to do anything large enough to earn the label of “stimulus,” which would suggest that the first one they did this year didn’t work.
Democrats did what they could to insulate themselves ahead of the October jobs report, clearing an extension for jobless benefits Thursday, as well as some tax breaks, including an expanded homebuyer tax credit.
“The bill will mark another step toward a boost in our economic growth and it will make critical investments for our families and our workers,” House Speaker Nancy Pelosi said Thursday.
Charlotte Leaders Give Harry Jones A Bonus, Cut Mental Health Care...Vote No Next Elections!
Charlotte Politicians especially the Democrats, think just because Anthony Foxx recently slid into Mayor McCrory's seat, everything will be smooth sailing from here on out.
Their arrogant behavior demonstrated by giving Charlotte-Mecklenburg County Harry Jones a $38,000 Bonus he does NOT deserve, proves Charlotte's Leaders actually think they rule the roost and that Voters are Stupid!
Notice how they didn't approve of Jones' bonus until AFTER Foxx won the Mayor's race. Sneaky bunch aren't they?
If Charlotte Politicians were bold and arrogant enough to pull this stunt, voters can be assured that when they get some more Stimulus Funds into their hands its going to be wasted on experiments and junk just like in the past.
Nothing valuable or helpful to Constituents. No, instead that money will be wasted fulfilling personal Political Favors and other junk, along with more Property Tax Increases for voters (low income and middle class citizens only) of course.
Well guess what people??
In case you've missed the latest news reports Democrats recently lost important races in Virginia, New Jersey and New York City!
NY-23 was just a mercy win, not anything to really brag about.
Perhaps Charlotte's Leaders aren't aware of this fact but Virginia is a key state for Political victory.
Voters who were fed up with status quo drama and broken campaign promises showed their displeasure at the polls on Super Tuesday 2009.
If Anthony Foxx does a poor job (I hope he doesn't) and if Pres. Obama doesn't get this country's High Unemployment Rate (10% and rising) situation under control, Democrats will NOT survive another sweeping victory like 2008 for a long time!
This includes North Carolina because Senator Richard Burr (R-NC) is looking pretty good to voters right about now. Including Democrat voters.
Only a few dumb diehards are still voting Straight Tickets or along strict Partisan party lines.
There are now more Dems voting for Republicans, more Republicans voting for Dems, more Black voters casting ballots for White Candidates and Independent Voters doing their own thing.
Do Charlotte's Leaders really think that Dirty Politics, the Charlotte Observer, Law degrees, Fraternity brothers or Sorority sisters will be able to save them during the next two elections if they continue this Tax and Spend, Public Corruption, Cronyism crap?
Do they also really think Partisan Politics is the answer to longevity in Public Office?
If Charlotte Politicians especially Dems, really believe those false ideologies I have some swamp land in Florida I want to sell them. Ha Ha!
So....
If Charlotte's Leaders especially Dems, keep up their same status quo stupidity, during the next two elections (2011 & 2012) NOT even Black Voters are going to support them.
You think that Voters, especially Black Voters are stupid??
Just ask former Greensboro Mayor Yvonne Johnson or Creigh Deeds.
While your at it also check out the Atlanta Mayor's Runoff election scheduled to take place this December between Caucasian candidate Mary Norwood and African-American candidate Kasim Reed.
People are tired of Status Quo Politics!
Charlotte Leaders you better wake up and stop being Arrogant or your days in Public Office will be short lived.
Here's a word to the wise: "He who laughs first, laughs last".
Jones gets bonus but total pay is same
Mecklenburg County Manager Harry Jones will receive a $38,400 performance bonus, but his total compensation remains the same as last year, under a deal unanimously approved Wednesday by county commissioners.
Charlotte-Mecklenburg County Commissioners praised Jones for, among other things, leading the county during a difficult economic time.
The "pay-at-risk" money - which commissioners have in previous years called a performance bonus - is part of an overall $302,854 compensation package. It also includes $215,655 in base salary.
The pay plan keeps Jones' compensation the same as in 2008-09, though a board committee determined he actually would have been due more money this year, said commissioner Dumont Clarke.
Jones, however, asked that his pay be kept level. "That was his request," said commissioners' Chairman Jennifer Roberts. He "wants to be treated like all the other county employees." The county didn't award any merit raises this year.
Jones' evaluation has been in the works for weeks, with talks largely being kept private initially as allowed by state law.
But some commissioners acknowledged last month that paying the money could raise questions in light of steep budget cuts across the county. Two other local public officials - Charlotte City Manager Curt Walton and Charlotte-Mecklenburg Schools Superintendent Peter Gorman - declined merit raises or bonuses for themselves and staff to help save money.
Jones is eligible for a higher bonus than Gorman or Walton, up to 30 percent of his base salary.
Commissioners Chair Jennifer Roberts said the board had a "difficult conversation" about the pay plan because of the economic conditions.
Still, commissioners also have said they wanted to reward Jones for meeting goals previously outlined by the board.
Clarke said Jones told commissioners earlier Tuesday evening that 2008-09 was both his most challenging and best year as manager.
Roberts said Jones "has done a very, very good job, an excellent job as manager in a very difficult year." She cited Jones' work addressing budget cuts because of falling tax revenues and his work on the Critical Needs Task Force to help address social services needs in the community.
But the county also faced questions about inadequate accounting at the Department of Social Services, including an investigation into possible misused money in a charity program for Foster Children. The county announced steps to help shore up practices within DSS, including putting its finances under control of the main county finance department.
Mecklenburg has offered bonuses to the manager for years, but decided five years ago to restructure the pay system to reflect a CEO-style package of a base salary with another piece of pay tied to performance.
Under the plan, Jones is eligible for a bonus of up to 30 percent of his annual salary based on a series of criteria, including how well the county performs on annual goals and a management plan approved by commissioners. Based on his current salary, he could have received a bonus up to about $65,000 this year.
Jones has not received the full bonus since commissioners approved the new pay structure in 2004.
Clarke said Jones' performance in the past year earned him more money. He said he's being paid about 10 percent less than what his performance score called for.
Cuts in mental health
Also on Tuesday, commissioners approved about $2.76million worth of service cuts to the county's Area Mental Health department because of reduced money from the state. The state cuts were actually larger, but county staff has promised $3.7 million to help make up the gap.
Jones said he hasn't yet identified where the money would come from.
Foxx: No property tax hike for streetcar
Democratic mayoral candidate Anthony Foxx said Thursday he wouldn't raise property taxes to pay for a streetcar, despite his vote to move ahead with the project and suggestions from city staff that a hike may be needed.
"We aren't proposing or considering any increase in property taxes, and now would be a terrible time to think of that," he told the Observer. "I will not raise property taxes for the streetcar."
The streetcar and property tax issues came up when Foxx and Republican John Lassiter spoke to a luncheon of the Charlotte Regional Mortgage Lenders Association at the Myers Park Country Club.
Lassiter has also opposed property tax increases.
The rivals, both at-large city council members, were on opposite sides last month when council Democrats overrode Mayor Pat McCrory's veto of $4.5 million to start design work on the line.
The project, which would run from Johnson C. Smith University through uptown to Eastland Mall, would cost over $450 million. It's unclear where the money would come from.
"I could not promise to build something I didn't know how to pay for," Lassiter told the mortgage group.
Foxx defended his vote. He said the line would bring economic development to neighborhoods that need it. One study showed new development could generate $112million in new property taxes over 20 years.
"The future of our city is dependent on making every part ... a great place to live in," he told the group.
On Monday the city staff outlined ways to pay for the line to the council's Transportation Committee, which Foxx chairs. One option called for creating a special taxing district along the line and enacting a 4-cent tax hike for every $100 of taxable value. Another called for a citywide tax increase of 2 cents.
The city's current tax rate is 45.86cents.
"By supporting the streetcar, I'm not committing myself to a property tax increase," Foxx said later.
During the meeting, he defended his vote for a 2006 city budget that raised property taxes 9 percent - the first increase in at least a decade. Lassiter voted against the budget.
Foxx said the tax hike helped pay for the 70 new officers the police chief requested, more than in the no-new-tax budget supported by Lassiter and McCrory. It also brought in money for new roads and neighborhood improvements.
He suggested that without the tax hike, Charlotte's crime rate might not have gone down. Police say it's down 20percent from a year ago.
"You can't out a price on (a) family's sense of safety, put a value on the life saved because we had the additional police officers," he told the group.
Lassiter has criticized "unnecessary and unmanaged government spending" that he says had nothing to do with police, roads or neighborhoods.
Thursday he alluded to this year's General Assembly actions that raised the state sales tax by a penny and enacted surcharges of 2 percent or 3percent on some taxpayers. He told the mortgage lenders that he'll keep taxes down.
"We're in a high-taxed city in a high-taxed state," he said. "We've got to right the ship."
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Sources: Politico, McClatchy Newspapers, Charlotte Observer, Charmeck.org, Google Maps
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