Democrats Betting on Gridlock

Steny Hoyer is leading the charge among Democrat Senators to put the brakes on an extension of the 2% payroll tax cut.  After nearly a month of blaming Republicans for the delay in passing the extension and parading around middle class Obama supporters saying how much $40 will change their lives, now Democrats in the Senate look likely to be the ones who kill this extension.

Why are Democrats defecting after a deal had been worked out?  Because the current payroll extension bill makes new federal employees contribute 3.1% to their own pensions.  Apparently we should share sacrifice and have skin in the game unless you are a federal employee.  Currently they contribute .8%.  The government picks up the rest of the tab and returns on the pension are guaranteed.

Meanwhile, many middle class Americans contribute anywhere from 3-10% to their 401k plans with no guaranteed returns and a maximum 3% matching contribution from their employers.  However, Democrats have characterized the plan to increase federal employee pension withholding as a budget war on federal employees.

Democrats appear to have figured out that they are succeeding in blaming congressional gridlock on Republicans.  It also appears that their strategy is to maximize gridlock even if it hurts the middle class.  But if Americans figure out why Democrats are holding up this tax cut extension, sentiment could turn pretty quick.  Democrats are betting against the intelligence of American voters.

Rookie Republican Governors May Shape 2012 Debate

Governor Rick Scott will not be a candidate in 2012. But his actions in the first two months of his governorship will help mold the 2012 debate. In fact, success among conservative governors like him could spell doom for establishment candidates in 2012. Governor Scott is already facing opposition from establishment Republicans in Florida over his hot-off-the-presses budget.

Scott is cutting spending by $5 billion in Florida. This includes pension reform for government workers, merit pay for teachers, firing bad teachers, cutting non-essential services and streamlining government. It also includes eliminating Florida’s business tax by 2018 and cutting property taxes. Every special interest group and person who collects a state paycheck hates him right now.

Rick Scott is emblematic of the new Conservative outsider paradigm

Scott is following a path laid down by Chris Christie in New Jersey and Bob McDonnell in Virginia. And he is joined by many freshmen GOP governors who are rejecting the Keynesian model of stimulus debt spending and returning to the conservative model of cutting government spending and giving the money back to businesses and individuals who actually produce growth.

This is something the GOP majority is struggling with in the fog of Washington politics. While abstractly they have a plan to cut spending by $2.5 trillion over ten years, the House struggled to find $32 billion to cut in this year’s budget.

If the bold, conservative governors who stormed our state capitals in 2008 and 2010 are successful in fixing their state budgets and creating a stark contrast with other more liberal states, the GOP candidate for President will likely be one who can credibly claim to come from the same mold. This will favor potential candidates like Christie, Jindal, and Barbour. If he makes the right moves, Romney may also be able to attach his name to the outsider, conservative governor genre. It may not be good news for potential Senators and House members whose good ideas will be frustrated by Democrat leaders and Republican moderates.

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