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Tuesday, January 25, 2011

My Response to the State of the Union Address

"I consider the foundation of the Constitution as laid on this ground that 'all powers not delegated to the United States, by the Constitution, nor prohibited by it to the states, are reserved to the states or to the people.' To take a single step beyond the boundaries thus specially drawn around the powers of congress is to take possession of a boundless field of power, not longer susceptible of any definition. ... [The Constitution] was intended to lace them up straightly within the enumerated powers. ... In questions of power, then, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution." — Thomas Jefferson

Tonight, January 25, 2011, President Obama gave his second State of the Union Address. Unlike his first STOU address that was filled with wild applause from a partisan audience this one was more subdued and with much less applause, especially from the Vice President and Speaker of the House.

The address lasted a little over one hour and was filled with platitudes about investment and reducing spending —two diametrically opposed actions. I could spend a great deal of time addressing every point Obama made, but that would probably bore you to tears. Instead I will attack a few of his main points, ones that I have the greatest passion for. The text for Obama’s address is shown in italics.

Half a century ago, when the Soviets beat us into space with the launch of a satellite called Sputnik¸ we had no idea how we’d beat them to the moon. The science wasn’t there yet. NASA didn’t even exist.  But after investing in better research and education, we didn’t just surpass the Soviets; we unleashed a wave of innovation that created new industries and millions of new jobs.

This is our generation’s Sputnik moment. Two years ago, I said that we needed to reach a level of research and development we haven’t seen since the height of the Space Race. In a few weeks, I will be sending a budget to Congress that helps us meet that goal.  We’ll invest in biomedical research, information technology, and especially clean energy technology – an investment that will strengthen our security, protect our planet, and create countless new jobs for our people.

This business of investing in clean energy is a scam that will line the pockets of firms like General Electric with tax dollars. If clean energy was such a desirable commodity the private sector would be doing this on their dollar. In this case investment means more government subsidies for business

When I was part of the management team at the civil engineering firm where I was a part owner we talked about investment at every management meeting. To us investment meant taking a share of the profits and putting them towards developing new markets, new technology or recruiting. Rather than pocketing some of the profits and taking a Mediterranean cruise we would use them for targeted investments with defined metrics for determining the success of the investment. We did not increase our debt to make these investments like the federal government does. In the parlance of government speak investment means spending.

Of course, the education race doesn’t end with a high school diploma. To compete, higher education must be within reach of every American. That’s why we’ve ended the unwarranted taxpayer subsidies that went to banks, and used the savings to make college affordable for millions of students.  And this year, I ask Congress to go further, and make permanent our tuition tax credit – worth $10,000 for four years of college.

Because people need to be able to train for new jobs and careers in today’s fast-changing economy, we are also revitalizing America’s community colleges. Last month, I saw the promise of these schools at Forsyth Tech in North Carolina. Many of the students there used to work in the surrounding factories that have since left town. One mother of two, a woman named Kathy Proctor, had worked in the furniture industry since she was 18 years old.  And she told me she’s earning her degree in biotechnology now, at 55 years old, not just because the furniture jobs are gone, but because she wants to inspire her children to pursue their dreams too. As Kathy said, “I hope it tells them to never give up.”

If we take these steps – if we raise expectations for every child, and give them the best possible chance at an education, from the day they’re born until the last job they take – we will reach the goal I set two years ago: by the end of the decade, America will once again have the highest proportion of college graduates in the world.

Education, education and more education: This is the mantra of every president for the past two decades. How much more federal money are we going to pour down this rat hole. Over the past twenty years we have increased federal spending on education by 100% with no change in test scores or high school graduations. One or two anecdotal examples are not enough to justify any more spending.

According to the Cato Institute, a libertarian think tank, the Department of Education will spend $107 billion in 2010, or about $900 for every U.S. household. It employs 4,100 workers and operates 169 different subsidy programs.

Subsidizing education is not one of the 18 enumerated items in the Constitution. What is the sense for the states sending their citizen’s tax dollars to Washington only to have them diminished by the salaries and benefits of 4,100 federal employees and then sent back to the states burdened with unfunded mandates? We can cut the budget by $107 billion by doing away with the Department of Education and let the states and local school districts deal with education spending on a local level where the citizens will have a greater voice in how the money is spent.

Our infrastructure used to be the best – but our lead has slipped. South Korean homes now have greater internet access than we do. Countries in Europe and Russia invest more in their roads and railways than we do. China is building faster trains and newer airports.  Meanwhile, when our own engineers graded our nation’s infrastructure, they gave us a “D.”

We have to do better. America is the nation that built the transcontinental railroad, brought electricity to rural communities, and constructed the interstate highway system. The jobs created by these projects didn’t just come from laying down tracks or pavement. They came from businesses that opened near a town’s new train station or the new off-ramp.

Over the last two years, we have begun rebuilding for the 21st century, a project that has meant thousands of good jobs for the hard-hit construction industry. Tonight, I’m proposing that we redouble these efforts.

We will put more Americans to work repairing crumbling roads and bridges. We will make sure this is fully paid for, attract private investment, and pick projects based on what’s best for the economy, not politicians.

Within 25 years, our goal is to give 80% of Americans access to high-speed rail, which could allow you go places in half the time it takes to travel by car. For some trips, it will be faster than flying – without the pat-down. As we speak, routes in California and the Midwest are already underway.

This undoubtedly one of the largest boondoggles the federal government can spend money on. Already several states (Ohio and Wisconsin) have rejected federal monies for high speed rail. I have just published a blog on this issue and I stict to what I have written.

As for roads and bridges these should be paid for by the states from there gas tax dollars. This is a pure user tax. You purchase gasoline, drive your car or truck over the roads and you pay for the road. Gas taxes paid to the federal government should go to the highway trust fund and returned to the states with lower taxpaying citizens for roads that we all use in interstate commerce. The highway trust fund should not be robbed to pay for other programs, which is a common practice in Washington, D.C. New interstate highways or freeways should be built by the private sector and financed through tolls, as most of the world does. Environmental regulations will have to be streamlined so the process will not take twenty years or there will be no investors.

We are living with a legacy of deficit-spending that began almost a decade ago. And in the wake of the financial crisis, some of that was necessary to keep credit flowing, save jobs, and put money in people’s pockets.

But now that the worst of the recession is over, we have to confront the fact that our government spends more than it takes in. That is not sustainable.  Every day, families sacrifice to live within their means. They deserve a government that does the same.

So tonight, I am proposing that starting this year, we freeze annual domestic spending for the next five years. This would reduce the deficit by more than $400 billion over the next decade, and will bring discretionary spending to the lowest share of our economy since Dwight Eisenhower was president.

This freeze will require painful cuts. Already, we have frozen the salaries of hardworking federal employees for the next two years.  I’ve proposed cuts to things I care deeply about, like community action programs. The Secretary of Defense has also agreed to cut tens of billions of dollars in spending that he and his generals believe our military can do without.

Freezing inflated federal salaries will not cut it. We need a rollback on salaries and a cut of at least 25% of the federal work force. There are just too many federal employees doing the jobs that could be performed by the private sector, when needed. What the federal government needs is the “Yellow Pages” test. If you can find the service in the yellow pages you buy it on a competitive basis. You don’t hire life-long federal staff to do jobs the private sector could do just as well.

There are many more points in Obama’s address that I can take issue with, but this is enough for now.

The big test is to what the Republican House will do in the months to come. Last November they were given a mandate to cut spending, not by a few dollars, but by at least two trillion dollars. They have their job cut out for them and they better get on with it or there will be another big change in 2012.

You can read the entire text of the State of the Union Address by clicking here

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