Free Republic

California Governor Arnold Schwarzenegger, anticipating a $21 billion state budget deficit, plans to ask President Barack Obama to ease mandates and minimums on social programs to save as much as $8 billion. The Republican governor plans to seek the relief, according to a California official who asked not to be identified because details haven’t been resolved. Instead of seeking one-time stimulus money or a bailout, the most-populous U.S. state wants the federal government to reduce mandates and waive rules stipulating expenditures on programs such as indigent health care, the official said. California is among states most affected by the economic...

On the surface, it might seem like Jacksonville City Councilman Clay Yarborough is a real-life Grinch. He votes "nay" more often than his 18 other council colleagues, opposing public funding for feel-good initiatives like after-school programs, affordable housing and historic preservation. Most of the time, he's the sole dissenter.

WASHINGTON -- * The Senate voted yesterday to raise the ceiling on the government debt to $12.4 trillion, a massive increase over the current limit and a political problem that President Obama has promised to address next year. The Senate's rare Christmas Eve vote, 60-39, follows House passage last week and raises the debt ceiling by $290 billion. The vote split completely along party lines, with Democrats voting to raise the limit and Republicans voting against doing so. There was one defection on each side, by senators up for re-election next year: GOP Sen. George Voinovich of Ohio and Democratic...

Leadership: Alaska's ex-governor asks a question we'd like answered: Why is California's current governor pushing the same policies in Copenhagen that helped drive his state into record deficits and unemployment? The movie series that made Arnold Schwarzenegger a household name involved cyborgs traveling through time to alternately try to destroy or save one John Connor, who would grow up to be the leader of the resistance against a race of machines that ruled the planet. Prominent in the series was his tough cookie of a mom, Sarah Connor. Another Sarah has taken the lead in another resistance against another group...

California: While Gov. Arnold Schwarzenegger worries about rising seas, his state sinks below the waves. Don't mess with Texas, they say. But California and the nation could follow its lead. Last Wednesday, Gov. Schwarzenegger released a new report based on research compiled by the California Energy Commission claiming that by 2100 San Francisco Bay would be more bay than San Francisco, with Fisherman's Wharf and Treasure Island under the rising waters of climate change. His show-and-tell, which included a new Google Earth application the commission spent $150,000 to help develop, goes a long way toward explaining the once-Golden State's slide...

States: The once-great state of California has been reduced to begging from the federal government. But no matter how much help the feds give, the state's fiscal ills won't end until its lawmakers stop spending money. To say California is a mess is an understatement. In the current fiscal year, the state is expected to post a deficit of $21 billion as the budget continues to spiral out of control. Even after last year's epic budget battle, when Californians were hit with $12.5 billion in new taxes and $6 billion more in borrowing, the state still isn't close to bringing...

RICHMOND -- In a blow to financially strapped Richmond and a $20 million victory for Chevron Corp., a Contra Costa County judge has struck down a tax approved by local voters last year that assessed the company for the value of the crude oil it refines in the city. Measure T is unconstitutional because the tax is out of proportion to the business Chevron does in Richmond and the services it receives there, said Superior Court Judge David Flinn. He said the tax also violates state law because it is based on the value of materials that Chevron uses in...

The United States Economy has become like those sub-prime mortgages that almost brought down the banking system last year. We have borrowed more than we can afford but as long as interest rates stay low, we will be able to make payments. Once rates go up, the federal government will have to "default on its homes." Even the NY Times is predicting economic problems for America: ... With the national debt now topping $12 trillion, the White House estimates that the government’s tab for servicing the debt will exceed $700 billion a year in 2019, up from $202 billion this...

For state lawmakers, ringing in the New Year also means getting ready for what's shaping up to be another painful budget season. They'll return to the Capitol Jan. 4 to tackle a deficit that is expected to swell to $6.3 billion by the end of the fiscal year. Filling that hole -- and the $21 billion deficit projected for the next 18 months --tops Senate President Pro Tem Darrell Steinberg's list of priorities for the new year. Steinberg said in an interview with The Bee that while further cuts and new revenues will be needed to close that gap, the...

You have to string together a series of seemingly unrelated events to see it, but this week painted a powerful picture of California's chronic inability to govern itself. As the week began, a legislative committee heard state Treasurer Bill Lockyer describe, in blunt terms, why the state finds it increasingly difficult to market its bonds. Briefly, its budget is chronically unbalanced, it has floated too much debt, and it's now forced to pay higher interest rates on its debts than many Third World nations. Counterintuitively, state schools chief Jack O'Connell a day later urged the Legislature to approve a big...

Virginia Gov. Timothy Kaine (D) proposed Friday replacing the local car tax by increasing income tax $1.9 billion a year. But Republicans in the General Assembly and Gov.-elect Robert F. McDonnell (R) have said they are opposed to any tax hikes. The outgoing governor also proposed about $2.3 billion in budget cuts to help make up for a nearly $4.2 billion shortfall by 2012. ... Kaine recommended eliminating 1,879 jobs as well as 664 layoffs, many of them in the departments of transportation, corrections, juvenile justice and at the University of Virginia. In public education, he would cap the number...

-- After passing a $447 billion spending bill Sunday, Congress faces a Jan. 1 deadline to raise the ceiling on the national debt even as a bipartisan expert panel warned Monday that the United States faces a potential funding crisis. The Peterson-Pew Commission, composed of former members of Congress and budget experts, warned that the federal budget has reached a danger zone much faster than anticipated even a year ago. Like a homeowner swimming in mortgage debt, the government's bills are growing faster than its income, to the point where overseas investors holding U.S. debt could be spooked at any...

The House voted Thursday to permanently extend a 45 percent inheritance tax on estates larger than $3.5 million, canceling a one-year repeal of the tax set to begin next month. A similar effort is afoot in the Senate, but the health care debate there could preclude action on the estate tax before Congress breaks later this month for holidays. There are also disagreements among senators over the tax rate and the size of estates that should be exempt, further clouding the bill's prospects. Lawmakers, however, don't want to delay action until next year because they are wary of enacting retroactive...

WASHINGTON (AP) -- Next year had been shaping up as a great year to get a big inheritance - no federal taxes on it. Congress, however, has other plans for the few wealthy heirs expecting a big boon. Uncle Sam may take a 45 percent cut after all. Under current law, the federal estate tax is scheduled to temporarily disappear next year before returning in 2011 at an even higher rate. But the House is expected to vote as early as Thursday on a bill that would permanently extend the current top rate of 45 percent on estates larger than...

(snip) "I think it's time for us to start looking at this seriously," said Supervisor Gerald W. Hyland (D-Mount Vernon), who has been lobbying behind the scenes for the tax since the board's retreat this past summer. He said a meals tax would bring in about as much as a property tax increase of 5 cents per $100 of assessed value and would be spread over a larger group of people. "The best thing to say to a room full of people is that even though we're in a tough time and a recession, you still go out to eat,"...

When it comes to the problems facing this country, an old slogan comes to mind: "You Ain't Seen Nothing Yet." High unemployment, the recession and a terrorist resurgence in Afghanistan are bad enough. But there are a number of problems on the horizon that could dwarf President Obama's first-year trials. Why the pessimism? In short, we are doing nothing to prepare for the crises to come. (snip) Finally, there is an array of taxes on the horizon -- increased federal income tax rates; promised hikes in health-care surcharge taxes; and even rumors of value-added federal sales taxes. These increases are...

WASHINGTON (Reuters) – A U.S. debt that is topping $12 trillion is raising fresh questions about the cost of President Barack Obama's proposed healthcare overhaul, but those concerns are unlikely to sink the legislation. The Congressional Budget Office, a nonpartisan scorekeeper of federal spending, put the first 10-year cost of the Senate healthcare bill at $849 billion and said it would reduce budget deficits by $130 billion over that period. Republican critics of the overhaul, a top domestic priority for Obama, say those numbers reflect timing gimmicks that skew the bill's costs and that the price tag will be closer...

New York voters aren’t very optimistic about the financial solvency of their state, but they're also sending their elected representatives mixed signals. They oppose budget cuts in a couple key areas but are against tax hikes even more. A new Rasmussen Reports telephone survey in the state finds that 56% of voters say it is at least somewhat likely that New York will be bankrupt by the end of the year. Twenty-one percent (21%) say it is very likely. Thirty-seven percent (37%) believe that outcome is unlikely, but only nine percent (9%) say it is not at all likely. An...

The president says he understands the urgency of our fiscal crisis, but his policies are the equivalent of steering the economy toward an iceberg. President Barack Obama took office promising to lead from the center and solve big problems. He has exerted enormous political energy attempting to reform the nation's health-care system. But the biggest economic problem facing the nation is not health care. It's the deficit. Recently, the White House signaled that it will get serious about reducing the deficit next year—after it locks into place massive new health-care entitlements. This is a recipe for disaster, as it will...

[V]oters have consistently believed that tax cuts would do more than increased government spending to stimulate the economy and create jobs. Now that the nation’s unemployment rate has reached 10.2%, voters continue to hold that view. The latest Rasmussen Reports national telephone survey shows that 62% believe tax cuts are a better way to create jobs and fight unemployment. Only 21% believe that additional stimulus spending is a more effective tool. Earlier this year, as the first stimulus package was being debated in Congress, 62% of voters wanted the plan to have more tax cuts and less spending. Given a...

Did I just see a trail balloon launched? Over at a Wall Street Journal conference, Christina Romer, chairman of President Obama’s Council of Economic Advisers had this to say about deficit reduction: But the chairman of the president’s Council of Economic Advisers admitted that health reform and a growing economy isn’t enough to bring down the deficit. She did mention one other place that revenue could come from: letting the Bush tax cuts expire. Me: Since Obama already wants to get rid of the income and capital gains tax cuts for wealthier Americans that expire at the end of 2010,...

Buried in this Friday story on Obama's future plans is a curious statement, attributed to White House Budget Director Peter Orszag, which didn't get nearly enough attention: Orszag has said the spending blueprint, for the budget year that begins Oct. 1, 2010, would put the nation "back on a fiscally sustainable path" and suggested it would include a mix of spending cuts and new revenue-producing measures. "New revenue-producing measures." In other words, more tax increases -- increases beyond the dozen or so that are already planned in the health care reform package. President Obama's advisors understand that they have to...

Unemployment is foremost on everyone's mind today. Yet jobs can continue to leave the U.S. because of the threat of new taxes, the convergence of technology, the ease of digital collaboration and ready access to abundant foreign engineering talent. Multinational corporate executives may have to move R&D, product development, management and manufacturing overseas when there is no longer a comparative advantage to staying in the United States. A shocking thought for sure, but it's the new reality. After Japan, the U.S. has the world's highest corporate tax rate, and there is seemingly no willingness by Washington to bring rates down....

Our kids are the ultimate credit market, and the rest of us are all pre-approved! By Mark Steyn Just between you, me, and the old, the late middle-aged, and the early middle-aged: Isn’t it terrific to be able to stick it to the young? I mean, imagine how bad all this economic-type stuff would be if our kids and grandkids hadn’t offered to pick up the tab. Well, okay, they didn’t exactly “offer” but they did stand around behind Barack Obama at all those campaign rallies helping him look dynamic and telegenic and earnestly chanting hopey-hopey-changey-changey. And “Yes, we can!”...

America died by willing suicide, like a giant Jonestown. The people followed the yellow brick road to the wizard of Oz, who, secretly, was the king wearing new clothes no-one could see through though they were invisible. He swallowed them up in a mist of delusion and before they knew it, the The Pretender became top of the world, Ma. That was when the USA died, willingly, without a media whimper. The media love to eat themselves sick on Obamasugar. And it would be nice to moan about the stupidity of the people. Yes, many were stupid, but there is...

It's not just California that's dragging the country down. Did you know Wisconsin was in trouble? A new report by the Pew Center on the States, called Beyond California: States In Trouble, shows us the 10 that are weighing the country down. The ranking looks at budget gaps, foreclosure rates, lost state revenues, unemployment, money-management practices, and where "super-majority" requirements are killing efforts to fix the financial mess. Scores for each category are tallied for an overall ranking. We bring you the top 10, counting down from bad to worst. The higher score, the bigger the crisis. California gets a...

House Democrats are funding their new entitlement with a 5.4% surtax on incomes above $500,000 for individuals and above $1 million for joint filers. The surcharge is intended to snag the greatest number of taxpayers to raise some $460.5 billion, and so the House has written it to apply to modified adjusted gross income. That means it includes both capital gains and dividends. That surtax takes effect on January 1, 2011, or the day the Bush tax rates of 2001 and 2003 expire. Today’s capital gains tax rate of 15% would bounce back to 20% because of the Bush repeal...

President Barack Obama plans to announce in next year's State of the Union address that he wants to focus extensively on cutting the federal deficit in 2010 – and will downplay other new domestic spending beyond jobs programs, according to top aides involved in the planning. The president's plan, which the officials said was under discussion before this month’s Democratic election setbacks, represents both a practical and a political calculation by this White House. On the practical side, Obama has spent more money on new programs in nine months than Bill Clinton did in eight years, pushing the annual deficit...

The same economic pressures that pushed California to the brink of insolvency are wreaking havoc on other states, a new report has found. And how state officials deal with their fiscal problems could reverberate across the United States, according to the Pew Center on the States' analysis released Wednesday.The 10 most troubled states are: Arizona, California, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin.Other states -- including Colorado, Georgia, Kentucky, New York and Hawaii -- were not far behind.The list is based on several factors, including the loss of state revenue, size of budget gaps, unemployment and...

I think we’ve all been broke before. Large men come and break your thumbs and threaten your family, and then you hide out in a dumpster until it all blows over. That’s all well and good for an individual, but what happens if our entire country goes broke? Robert J. Samuelson raised this concern in the Washington Post, and it got me worried, even though I didn’t quite understand it all (which perhaps actually increases the worry). We can’t just hide America in a dumpster (and even if we could, I bet that goody-two-shoes Canada would rat us out); we...

Governor David Paterson called an unusual joint session of the Legislature Monday to implore recalcitrant lawmakers to close the state's huge budget gap before New York runs out of money. To some lawmakers it's nothing more than a photo op to help Paterson get re-elected. But the governor is dead serious. He said if the Legislature doesn't cut the budget now the state could run out of money by next month

Ron Dellums, who earns about $184,000 as Oakland mayor on top of a congressional pension, appears to owe the Internal Revenue Service at least $66,554. A lien has been placed against his property for failing to pay taxes for 2006. According to the East Bay Express, which broke the story, Mayor Dellums and his wife, who file jointly, may owe more than $239,000 in taxes, mostly for the years he worked as a lobbyist in Washington, DC.

Taxing text messages? Some Vallejo voters are saying OMG. The North Bay city, with its ever-shrinking revenue stream, is asking voters Tuesday to expand its utility tax to include text messages, private phone networks, pagers and voice-over-Internet services. It's an idea that's spreading around California, as more than 40 cities have similarly expanded their utility taxes at the ballot box as a way to raise money. "We don't use our cell phones a lot, but we think this gives the city a blank check," said retired Mare Island shipyard worker John Kocourek of Vallejo, who's been working against the measure....

FRANKFURT (Dow Jones)-Greek and Portuguese government bonds came under pressure Thursday after rating agency Moody's Investors Service issued fresh warnings on the countries' sovereign credit ratings. Moody's placed Greece's A1 currency ratings on review for possible downgrade, and it also changed the outlook on Portugal's Aa2 rating to negative, citing serious fiscal deterioration in Greece and structural economic challenges and a lack of will to challenge them in Portugal.

ACRAMENTO — As oil companies continue to reap record profits amid strained state revenues, a pair of Democratic lawmakers are hoping to tap into their deep pockets by installing an oil severance tax that could relieve growing pressures to cut more state services. Assemblyman Pedro Nava, D-Long Beach, introduced a bill Monday called the Fair Share Act, that would impose a 10 percent oil severance fee on extractions from California wells to bring in $1.5 billion to the state's coffers. A similar bill that has already cleared one committee, by Assemblyman Alberto Torrico, D-Fremont, would impose a 9.9 percent fee,...

Here is video of GOP Sen. Minority Leader Mitch McConnell on This Week with George Stephanopoulos today, where he said Democrats are getting nervous "over this increasing view that Congress is acting like a teenager with their parents' credit card, not worried about who's going to have to pay the bill." What a great way to say it! . . . (VIDEO)

The real 2008 federal budget deficit was $5.1 trillion, not the $455 billion previously reported by the Congressional Budget Office, according to the 2008 Financial Report of the United States Government released by the U.S. Department of Treasury, Jerome Corsi's Red Alert reports. The difference between the $455 billion "official" budget deficit numbers and the $5.1 trillion budget deficit based on data reported in the 2008 financial report is that the official budget deficit is calculated on a cash basis, where all tax receipts, including Social Security tax receipts, are used to pay government liabilities as they occur. The calculations...

Someday, some way and somehow, California will overhaul the way it finances services because the current system is unsustainable. We cannot continue to depend on a few thousand high-income Californians as the core of the state revenue structure. Their taxable incomes are increasingly erratic, and sooner or later, many will flee California's high marginal tax rates to states such as Florida, Nevada or Texas that have no income taxes. Did Tiger Woods, the first billion-dollar athlete, relocate from California to Florida because of better weather or nicer golf courses? Somehow, one doubts those were his motives. Getting his mail in...

Director of two non-profits, Les Leopold will discuss how Wall Street's casino-like practices which caused the first meltdown are back, and nothing has been done to protect U.S. taxpayers from another crash and bailout..

Since its entry into the Union, in the aftermath of war and the midst of gold fever, the state has seemed an improbable colossus. But again and again, California has made its way through hours of challenge – not only surviving intact, but emerging as a model for the rest of the nation. In the 19th century, despite immense geographic, ethnic, political, and social differences, Californians managed to form a cohesive identity, resisting numerous efforts to divide the state. They overcame the "curse of natural resources" that so long afflicted other commodity-rich states (and still afflicts some, like Alaska), laying the groundwork...

through a series of social, political, and economic experiments, California has acted as America's foremost laboratory of innovation, trying out ideas the country as a whole would go on to adopt. In the 1960s under Governor Pat Brown, the state offered a model of modernization, building the most advanced education and transportation infrastructures in the nation. Under Brown's successor, Ronald Reagan, it offered a model of conservative governance that would go on to transform American politics. Hollywood has made California a crucial part of America's cultural identity, and Silicon Valley has put it at the heart of our vision of...

As major Capitol business and labor groups denounced a tax overhaul package released Tuesday by a blue-ribbon commission, Gov. Arnold Schwarzenegger essentially embraced the plan, whose key components would flatten the state's income tax and install a new form of consumption tax on businesses. The Republican governor said he would sign the plan if it landed on his desk in its current form, although he acknowledged that lawmakers should have the chance to analyze and "tweak" the proposal. Schwarzenegger called a special legislative session on Tuesday to deal with the package, and he said he wanted lawmakers to act on...

John Podesta compared the nation’s current budget crisis to the situation former President Bill Clinton faced in 1993 and said some form of a value-added tax is “more plausible today than it ever has been.” “There’s going to have to be revenue in this budget,” said Podesta, Clinton’s former chief of staff and co-chairman of President Barack Obama’s transition team, said in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing today.

House Democrats are considering an insurance tax to help pay for their health care overhaul plan, even though such a funding scheme is bitterly opposed by labor unions that are among the party's most loyal constituencies. House Speaker Nancy Pelosi, D-Calif., said Friday a tax on high-cost health insurance plans is "under consideration" as Democrats search for consensus within their ranks before taking a bill to the House floor later this fall. "We just have to see how much money we need for what," Pelosi said. "And if we're taking the bill down in cost, there are other provisions in...

While both the political will and a desire to compromise may be lacking, there is no shortage of proposed solutions to various aspects of state government's financial woes. In addition to a special commission on tax reform appointed by Gov. Arnold Schwarzenegger and legislative leaders, two reform groups have put forward suggested fixes to the tax system and budget process. And earlier this month, legislative leaders announced formation of a two-house committee charged with finding ways to make the system more efficient. Here's a look at some of the ideas being floated: • Shift more of the personal income tax...

Well, its over,we got the word today Federal Reserve Chairman Ben Bernanke announce it, the Recession is "very likely over at this point." Great News Right? Well maybe not. Before you take out the champagne and invite your friends over for a party understand that there is much more to the story. Bernanke went on to say that we will have an under-performing economy well into next year "From a technical perspective the recession is very likely over," Bernanke said, cautioning that unemployment is likely to remain high. "It's still going to feel like a very weak economy for some...

(CNSNews.com) - Despite a still-lagging U.S. economy and rising unemployment rate, House Democrats announced late yesterday that they will seek a massive increase in federal income taxes to help pay for the national health-care reform proposal that President Obama is urging Congress to enact this summer. House Ways and Means Chairman Charles Rangel (D.-N.Y.)revealed late Friday afternoon that House Democrats will seek to increase income taxes by $540 billion. The move, which had been discussed earlier in the week by House Democrats, broke in an Associated Press story that was published at 4:14 PM Eastern Daylight time on Friday afternoon...

California's gasoline taxes are 43 percent higher than the national average, according to a recent study by University of California and California State University economists. Since 1997, Californians have paid up to 60 cents more per gallon of gas than residents of other states. That is simply unacceptable. Major fuel consumers and employers in this state, like United Airlines, who rely heavily on affordable fuel prices, are being hit hard by these California-only fuel polices. What causes this disparity in fuel prices? It's simple: California prices are increasingly inflated by the state's policies, taxes and fees. These California-specific rules and...

<p>"At what point do we run out of money?" President Obama was asked in May. "Well, we are out of money now," he replied. That was when he projected the deficit to be $7 trillion over the next 10 years. Now his administration admits the number likely will reach $9 trillion. We sure are out of money -- and the true deficit number probably is at least another $1 trillion bigger.</p>

The Democrats in Congress are beginning to look like college freshmen with their first credit card. Now, like an observant parent, the American public is saying "enough already " as reflected in a Rasmussen poll survey of likely voters.