The Leader's Ledger

Posted by Jessica Straus on August 3, 2012

Good morning,

The most important number from this morning’s jobs report: 5.2 million Americans have been out of work for months and they still are. Unemployment went up, even as the number of Americans in the labor force went down. As Leader Cantor said this morning, “This month’s jobs numbers underscore the failure of the Obama Administration's policies. We won’t see any real change to unemployment until we change the policies that brought us here. The choice is clear: higher taxes or more growth. The President’s push for raising taxes on working families and small business owners is counter to the aim of creating jobs.”

Moment In History: Gabby Douglas, a Virginia Beach native, won the individual all-around Olympic gold medal, becoming the third consecutive American woman to win the coveted medal. “You just have to not be afraid and go out there and just dominate,” Douglas said afterward.

Birthdays: John Parkinson, Tom Brady, Martin Sheen, Martha Stewart, Tony Bennett, Evangeline Lilly, Isaiah Washington, Joan Higginbotham, and Ryan Lochte

Here Are The Top Stories We’re Watching:

1. Jobs Report: Jobs Slightly Up In July But Growth Continues To Slow. Nonfarm payrolls rose 163,000 last month, the Labor Department said on Friday, beating economists' expectations in a Reuters poll for a 100,000 gain. That snapped three straight months of job gains below 100,000 and offered hope for the struggling economy. However, the unemployment rate rose from 8.2 percent in June, even as more people gave up the search for work and a survey of households showed a drop in employment. The closely watched employment report comes two days after the Federal Reserve sent a stronger signal that a new round of major support could be on the way if the faltering recovery does not pick up. Most economists had expected the Fed would launch a third round of bond purchases, possibly at its next policy meeting on September 12-13…The unemployment rate has been stuck above 8 percent for more than three years, the longest run since the Great Depression. "The key question is now is will it be sustained? The backdrop remains challenged, seeing anything meaningfully better than this will in itself be a challenge," said Tom Porcelli, chief U.S. economist at RBC Capital Markets in New York. "We're still in an environment where productivity is slowing, where profit growth is slowing, and we don't think that is a robust environment to see meaningful job gains." Reuters

2. The Obama Economy: Unemployment Is Grim On The National Level, And Worse State By State. While the national unemployment rate paints a grim picture, a look at individual states and their so-called real jobless rates becomes even more troubling. The government's most widely publicized unemployment rate measures only those who are out of a job and currently looking for work. It does not count discouraged potential employees who have quit looking, nor those who are underemployed — wanting to work full-time but forced to work part-time. For that count, the government releases a separate number called the "U-6," which provides a more complete tally of how many people really are out of work. The numbers in some cases are startling. Consider: Nevada's U-6 rate is 22.1 percent, up from just 7.6 percent in 2007. Economically troubled California has a 20.3 percent real rate, while Rhode Island is at 18.3 percent, more than double its 8.3 percent rate in 2007. Those numbers compare especially unfavorably to the national rate, high in itself at 14.9 percent though off its record peak of 17.2 percent in October 2009. CNBC

3. Small Biz: Leader Cantor To Greta: Raising Taxes Will Make It Harder For Small Businesses To Create Jobs. “If jobs is the priority here, if that's the focus, there are two very different approaches to try to go after that goal. One, on the part of the president and Harry Reid, would say that you raise taxes and therefore, somehow, it will benefit all of us and you will see economic growth happen. Instead if you look at the House Republican approach, which actually was supported by 19 Democrats in the House, they said and agreed with us that now is know the time to raise taxes on small businesses if you want to create jobs since they're the job engine of the country…The folks I represent in Richmond, Virginia, tell me, absolutely. You raise my taxes it is going to make my business harder. That will make the business of job creation harder. I don't think there is any question. In fact, there is an independent study that came out a couple of weeks ago when said if you raise the taxes the way the president and Harry Reid want to, it will cost 700,000 jobs. And you make a good point. I mean, for what? Is it all political now? Are we trying to do something which helps the economy grow and help the knowledge engine of jobs, which are small business people.” Fox News Channel

4. Tax Debate: Bipartisan Majority In The House Supported Plan To Ensure Taxes Don’t Go Up On Any American. You wouldn't know it from the lack of media coverage, but the House of Representatives voted to block a tax increase on Wednesday with a big bipartisan majority. No fewer than 19 Democrats broke with Nancy Pelosi and voted with Republicans to extend the current rates on all taxpayers for another year. The bill passed 256-171, despite heavy White House pressure on the Democratic back-benchers to toe the party line. Republicans lost only one Member, who as it happens is leaving Congress this year. Could it be that growth trumps envy on tax policy? Just asking. At least a dozen of what we'll call the Romney 19 come from competitive districts. That includes Larry Kissel and Mike McIntyre of North Carolina, Tim Bishop of New York, Ben Chandler of Kentucky, Jim Matheson in Utah, and Collin Peterson and Tim Walz of Minnesota. This was a vote for political survival for most of them. Wall Street Journal

5. National Security: Strassel: The Obama Jobs Sequester. A year ago, the president demanded a $500 billion "sequester" of defense dollars as a penalty should Congress fail to cut a grand debt deal. Congress of course failed, and Mr. Obama's sequester is now imminent. The sequester slash comes on top of the $487 billion in defense cuts Mr. Obama had already ordered in January of this year, threatening the likes of Mansfield. Defense Secretary Leon Panetta has warned of the damage the sequester will do to national security. Yet the far more immediate political problem for Mr. Obama is that the cuts are compounding his domestic jobs liability—in the final stretch of the campaign. More than one million lost private-sector jobs, to get down to it, as estimated by groups ranging from the National Association of Manufacturers to the Aerospace Industries Association. Military jobs are on the block, but the bulk of the pink slips will come from private businesses—from giant defense companies on down to smaller businesses that are the economic mainstays of their communities. They'll come from states crucial for President Obama's re-election: Virginia, Florida, North Carolina, and more. And they are starting now. Federal law requires employers to provide 60 days notice of big layoffs, and since sequester hits Jan. 2, pink slips must go out by Nov. 2. While companies may not know the exact cuts, they have a good sense and are already acting. Boeing has announced it is closing a Kansas facility, in light of "defense budget reductions." Lockheed is mapping out 10,000 layoffs. EADS North America, Pratt & Whitney, Northrop Grumman, Raytheon—all have the potential to make those dismal Obama job numbers look worse. Mr. Obama's strategy has been to bull ahead, refusing to end the sequester unless he gets his tax hikes, and looking to shuffle off any resulting blame on the GOP. The Republicans this week called his bluff and broke for recess. Wall Street Journal

6. Foreign Policy: Krauthammer: Romney’s Excellent Trip. At the outset of his recent foreign trip, Mitt Romney committed a gaffe. In answer to a question about the Olympics, he expressed skepticism about London’s preparations. The response confounded and exasperated Romney supporters because it was such an unforced error. The question invited a simple paean to Olympic spirit and British grit, not the critical analysis of a former Olympic organizer. Soon that initial stumble was transmuted into a metaphor for everything that followed. The mainstream media decided with near-unanimity that the rest of the trip amounted to a gaffe-prone disaster. Really? The Warsaw leg was a triumph. Romney’s speech warmly embraced Poland’s post-communist experiment as a stirring example of a nation committed to limited government at home and a close alliance with America abroad, even unto such godforsaken war zones as Afghanistan and Iraq, at great cost to itself and with little thanks… What about the alleged gaffe that dominated reporting from Israel? Romney averred that Israeli and Palestinian economic development might be related to culture. A Palestinian Authority spokesman obligingly jumped forth to accuse Romney of racism, among other thought crimes…Romney’s point about “culture” was to highlight the improbable emergence of Israel from resourceless semi-desert to First World “start-up nation,” a tribute to its freedom and openness, just as free-market Chile stands out from state-dominated Ecuador. Look at how Romney was received. In Israel, its popular prime minister lavished on him a welcome so warm as to be a near-endorsement. In Poland, Romney received an actual endorsement from Lech Walesa, former dissident, former president, Cold War giant, Polish hero. Two staunch U.S. allies salute a man they would like to see lead the free world. Yet the headlines were “shove it” and “culture.” Scorecard? Romney’s trip was a major substantive success: one gaffe (Britain), two triumphs (Israel and Poland) and a fine demonstration of foreign-policy fluency and command — wrapped, however, in a media narrative of surpassing triviality. Washington Post

7. Keeping Tabs: House Energy & Commerce Committee Investigates Solyndra. House GOP report capping a probe of the Obama administration's backing for Solyndra calls the solar firm's collapse a “cautionary tale” of political pressures and misguided policy leading to the loss of about a half-billion taxpayer dollars. House Energy and Commerce Committee Republicans on Thursday released a report on their investigation of Solyndra, the solar panel-maker that struggled after receiving a $535 million Energy Department loan guarantee in 2009 and went belly-up last year. “Solyndra is a prime example of the perils that come when the Federal government plays investor, tries to keep a company and industry afloat with subsidies and attempts to pick the winners and losers in a particular marketplace. Policy and political pressures inevitably come into play to the detriment of taxpayers, as it did with Solyndra,” states the 154-page report available here. The 18-month investigation, which included subpoenas and reviews of internal administration documents, has unfolded alongside frequent political attacks against White House green energy initiatives from the Republican National Committee, Mitt Romney and GOP lawmakers. The report includes findings that a White House budget analyst warned in January 2011 that the federal government may have recovered more money by liquidating the struggling company than allowing the Energy Department (DOE) to proceed with a controversial early-2011 restructuring of the deal. The Hill

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The Leader's Ledger

Posted by Jessica Straus on August 2, 2012

Good morning,

Yesterday, nearly 20 Democrats joined House Republicans to stop the tax hike that will hit all Americans on January 1st. Today, we will pave the way for pro-growth tax reform that will help simplify the tax code and make America more competitive. As Leader Cantor said this morning, “If you want to put a priority on economic recovery, jobs and growth, you ought not to raise taxes. You either want higher taxes or higher growth. That's the bottom line.” We have also made clear we stand ready to act in August if Senate Democrats will work with us to avert the looming tax hikes and defense cuts at the end of the year. While it’s not surprising, it is deeply disappointing that Harry Reid has already decided he would rather continue to play politics and push the economy closer to the edge of the fiscal cliff.

This Day In History: In 1990, Iraq invaded Kuwait gaining control over 20% of the world’s oil reserves. When Saddam Hussein refused to withdraw his troops from Kuwait, the United States launched Operation Desert Storm on January 16, 1991.

Birthdays: Patrick Ruffini, Peter O’Toole, Wes Craven, Garth Hudson, Mary-Louise Parker, and Sam Worthington

Here Are The Top Stories We’re Watching:

1. State Of Play: Leader Cantor: You Either Want Higher Taxes Or Higher Growth. “It comes down to the question, if you want to put a priority on economic recovery, jobs and growth, you ought not to raise taxes. You either want higher taxes or higher growth. That's the bottom line. This insistence that somehow it's just not fair that somebody's not paying enough taxes right now, I think for some it’s a priority. For me and most of us on the Republican side of the aisle, the priority is jobs. We have to win the war on jobs globally and we have to get people back to work here at home. We saw that Ernst and Young put out a study a couple of weeks ago that said the President’s plan, the one that Steny Hoyer supports, will cost the economy over 700,000 jobs.” CNBC

2. Tax Debate: House Votes To Stop The Tax Hike On All Americans. The House approved GOP legislation late Wednesday that would extend all current tax rates for another year, and also turned away a Democratic bill that would have allowed rates to rise for higher income earners. The Job Protection and Recession Prevention Act was approved in a 256-171 vote that saw 19 Democrats vote with Republicans, highlighting division in the Democratic party over taxes. Only one Republican, Rep. Tim Johnson (Ill.), voted no. Democrats voting in favor of the bill were Reps. John Barrow (Ga.), Sanford Bishop (Ga.), Dan Boren (Okla.), Leonard Boswell (Iowa), Ben Chandler (Ky.), Gerry Connolly (Va.), Jim Costa (Calif.), Mark Critz (Pa.), Henry Cuellar (Texas), Joe Donnelly (Ind.), Larry Kissell (N.C.), Dave Loebsack (Iowa), Jim Matheson (Utah), Mike McIntyre (N.C.), Jerry McNerney (Calif.), Bill Owens (N.Y.), Collin Peterson (Minn.), Mike Ross (Ark.), and Tim Walz (Minn.). With the House vote, both chambers have now spoken on tax policy, which will allow both parties to make their case on the campaign trail. The Hill

3. The Obama Economy: Weekly Jobless Claims Increase. The number of U.S. workers filing applications for jobless benefits rose last week, continuing an uneven pattern that suggests job creation was likely modest in July. Initial jobless claims, an indication of layoffs, increased by 8,000 to a seasonally adjusted 365,000 in the week ended July 28, the Labor Department said Thursday. Economists surveyed by Dow Jones Newswires had forecast 370,000 new applications for jobless benefits last week. Claims for the July 21 week were revised up to 357,000 from an initially reported 353,000. Still the four-week moving average of claims, which covers nearly all of July, fell by 2,750 to 365,500, the lowest level since March. The moving average is considered a more-reliable measure because it smoothes out weekly data. A Labor Department official said claims are volatile in July due to temporary layoffs in the automotive industry. The numbers come a day ahead of July's payroll report. Typically job creation increases when layoffs decline. Economists expect that the economy added 95,000 jobs in July, which would be a slight improvement from the 80,000 added in June. They see the unemployment rate stuck at 8.2%. Wall Street Journal

4. Pro-Growth: Rep. Schock: Reform Taxes, Don’t Raise Them. President Obama claims his tax hike only affects 3 percent of Americans. But according to the nonpartisan Joint Committee on Taxation, that translates into nearly 1 million of the most profitable small businesses across the country who are in a position to grow and hire. The President’s tax increases would hit over 50% of all the income generated by small businesses. The Small Business Administration (SBA) states that small firms accounted for 65 percent, or 9.8 million, of the 15 million net new jobs created between 1993 and 2009 – this is 7 out of 10 new jobs created. Yet, this tax increase is focused on precisely the same group of individuals most likely and capable of hiring new workers…I believe there is better approach. This week the House will vote to extend all the current rates for one year to provide certainty for individuals and small businesses. During that year, the House Ways and Means Committee, on which I serve, can continue to move forward with comprehensive tax reform which will simplify our tax code for both employers and individuals, leaving us with lower tax rates for both and setting the stage for private sector economic growth to flourish. These reforms include a top corporate tax rate of 25% and eliminating the six rate categories for personal income and replacing them with two: 10% and 25% for individuals. By doing so, we can throw out the 70,000 pages of tax code, no longer have the highest business tax rate in the world, and lower the individual rates; making the tax code fairer, simpler, and reducing the yearly tax obligations for everyone. Town Hall

5. Small Biz: Drop In Small Business Lending Only One Symptom Of Our Ailing Economy. Lending to small businesses fell in June to the lowest level since October, a report showed on Wednesday, suggesting the economy's recent loss of momentum is likely to persist absent any new action by policymakers. The Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of financing to small U.S. companies, sagged to 98.5 from 103.8 in May, PayNet said. The index, which points to changes in overall economic growth several months in the future, has fallen in five of the past six months. "Small businesses really took a dive," said PayNet founder Bill Phelan. "What this means is, the slowdown is going to continue." Borrowing rose 2 percent in June from a year earlier, the slowest year over year pace since July 2010. Reuters

6. ObamaCare Update: Small Firms Hit Hard By Health Law. Randall Tabor, who owns two Quiznos sandwich restaurants in Virginia Beach, Va., once aspired to triple the number of outlets he owns. But after the federal health-care overhaul passed in 2010, Mr. Tabor says, he shelved those plans. The law requires that employers with 50 or more full-time workers provide health insurance to employees by 2014 or pay a penalty. Mr. Tabor, who employs 36 people at his two Quiznos shops and another restaurant, wants to stay small so he doesn't trigger the requirement…Restaurants and retailers face some of the toughest changes now that the Supreme Court has kept the overhaul in place. These industries historically are among the least likely to provide insurance to workers. Many franchisees of big chains hover around the threshold at which they will be required to start insuring workers or pay the penalty. With high turnover and a large percentage of part-time and seasonal workers, restaurant and retail operators must juggle several variables in figuring out whether they will cross the threshold…Some restaurant owners who offer limited health-benefit plans say they will drop them and pay penalties rather than provide the more expensive insurance required under the law. For employers above the threshold, the penalty starts at $2,000 a worker, although the first 30 employees don't count toward the levy. John Motta, who owns 10 Dunkin' Donuts in New Hampshire and 10 in Virginia, said he offers workers a choice of two insurance plans and pays half the premiums. He is weighing whether to drop coverage but said the cost of the penalty could put him out of business in Virginia, where his stores are struggling. Other franchisees are looking at ways to avoid the requirement by cutting workers' schedules so they work fewer than 30 hours a week—the law's definition of a part-time worker—since only full-time workers are counted toward the insurance coverage requirement. Wall Street Journal

7. National Defense: Obama Administration Holding Back Information On Defense Cuts & Potential Layoffs. Republicans, however, complain that a move by the Department of Labor this week advising contractors against sending out layoff notices in advance of the elections is aimed at letting the White House off the political hook for Obama’s strategy of taking defense spending hostage. Under the Worker Adjustment and Retraining Notification Act, employers are supposed to give at least 60 days notice of expected mass layoffs, but the DOL said doing so would be inappropriate under the law. The guidance noted that it’s not clear at this point where the cuts would come from and that both parties are working to find an alternative to the sequester…“The only reason the administration sent out this guidance to employers earlier this week was to keep people in the dark about the impact these defense cuts will have — until after the election,” Senate Minority Leader Mitch McConnell said. The Kentucky Republican complained that even as the administration was telling private employers not to issue layoff notices, the Office of Management and Budget was issuing guidance this week to agencies to start preparing for the looming cuts.“So let’s get this straight: Government workers should prepare for cuts, but private businesses and their employees shouldn’t?” McConnell asked, calling it another sign of the president’s “contempt for the private sector.” “What a perfect summary of this administration’s approach to the economy and jobs over the past three and a half years...The private sector’s doing just fine. It’s the government that needs help. That’s the message the administration’s sending,” he said. Roll Call

8. Foreign Policy: Congress Overwhelmingly Approves New Sanctions On Iran. Congress voted Wednesday to slap sanctions on Iran's energy, shipping and financial industries, convinced that increasing the economic pressure on Tehran will derail its suspected nuclear weapons program. The House overwhelmingly passed the bill 421-6 and a short time later, the Senate approved it by voice vote. The measure now heads to President Barack Obama for his expected signature. The legislation builds on the current penalties directed at financial institutions that do business with Iran's central bank and adds sanctions to undermine Tehran's oil income. "Ultimately, we will all be judged by a simple question: Did we stop Iran from getting a nuclear weapons capability?" said Rep. Ileana Ros-Lehtinen, R-Fla., during the House debate. "If the answer is no - if we fail - then nothing else matters. If we fail, it would be of no comfort to the American people, whose security and future would be put in danger. If we fail, it would be of no comfort to our ally Israel, whose very existence would be put in danger." Associated Press

9. Keeping Tabs: The Death Tax: One More Reason The Democrats’ Tax Plan Is Destructive. There is no more vivid or offensive example of the “you didn’t build that” philosophy on the books than the federal death tax, which supposes that when you die a hefty portion of everything you built up over a lifetime ought to go to government. It’s a vestige of the feudal days when all property was owned by the king. That’s probably why the death tax is the “worst tax — that is, the least fair” according to polling by the Tax Foundation. And it’s also why our founders thought the idea of seizing an estate at death so outrageous that they prohibited it as a penalty for treason in the U.S. Constitution (Article III, Section 3). And yet now, seizing more than half of it as a penalty for accomplishing the American dream is the preferred policy of Democrats in the United States Senate. You’re born. You work hard. You pay your taxes all your life. Maybe, you build something along the way. But when you die the IRS can tax you again. This year, they can take 35 percent of everything above $5 million. Senate Democrats announced yesterday that as of January 1, they want to raise that to 55 percent of everything above $1 million. And because the $1 million is not indexed to inflation, over time this confiscatory tax would hit almost everyone who achieves some success and wants to pass it on. That means family farms and businesses will be forced to shut down when the founder dies just to pay the tax bill. Former Congressional Budget Office director Douglas Holtz-Eakin estimates that the Democrats’ 55 percent death tax would destroy as many as 1.5 million small-business jobs, walloping an already weak economy. That’s the problem with taxing “the rich” — even after they die — the real pain is suffered by the people they employ, who lose their jobs. Daily Caller

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The Leader's Ledger

Posted by Jessica Straus on August 1, 2012

Good morning,

Campaigning yesterday the President said his second term will be “geared towards how do we rebuild this economy.” The President has spent his first term proving to the American people that even when his party controlled Congress, the only thing on his agenda has been policies of spending, regulation and higher taxes that have led the economy further down the rabbit hole. House Republicans have forward our solutions to keep the economy strong, stop the tax hike on hardworking taxpayers and responsibly replace the pending cuts that will impact our national security and jobs. As Leader Cantor said today, “We support a pro-growth agenda to create jobs through small businesses and beyond. The other side is going to demonstrate that it supports higher taxes. The choice is clear, you either want growth or you want more taxes.”

This Day In History: In 1961, Six Flags Over Texas, the first of the Six Flags parks, opened. Its name refers to the six flags that have flown over the state of Texas across its history: France, Spain, Mexico, Texas, the Confederate States of America, and the United States.

Birthdays: Ed Gillespie, Tempestt Bledsoe, Adam Duritz, Robert Cray, Sam Mendes, Dom DeLuise, Joe Elliot, Taylor Negron, and Francis Scott Key

Here Are The Top Stories We’re Watching:

1. National Security: GOP Leaders To Reid: House Will Return in August if Senate Votes to Stop All the Tax Hikes, Stop Defense Cuts. In a letter to Senate Majority Leader Harry Reid, Mr. Boehner said Republicans only reluctantly agreed last year to include defense spending cuts in the deal that allowed President Obama to raise the debt ceiling. He said the GOP is now eager to work out an agreement that would head off the cuts, but he said Democrats are blocking that. “Translation: We’re putting this right at your doorstep. You own it. If Harry Reid, Nancy Pelosi and Barack Obama want to own a small business tax hike and a devastating cut to our national defense, they are now set up perfectly to do so,” Mr. Boehner told his House Republicans in a closed-door meeting, according to text his office released. Washington Times

Read the entire letter from Speaker Boehner, Leader Cantor, Whip McCarthy and Chairman Hensarling.

2. Pro-Growth: Rep Graves: Stop The Tax Hike On Small Businesses. This week, America will have the chance to observe two very different paths in Washington. One road would lead to increased taxes on small businesses, with further dragging down the economy; the other would lead to job creation by stopping a tax hike on the very entities most likely to invest and hire. Surprisingly, the President and Senate Democrats would like to let the lower rates expire for income above $200,000 for individuals and $250,000 for married couples. Instead of increasing taxes on well-to-do individuals, allowing these tax rates to go up actually hits struggling small businesses. This plan would raise taxes on about 940,000 small businesses, according to the nonpartisan Joint Committee on Taxation. This simply doesn’t make any sense. Why would anyone think that raising taxes on job creators in a sluggish economy is a good idea? CNBC

3. Tax Debate: Tsunami Of Tax Hikes Set To Hit The American People. A tsunami of tax hikes is set to hit the American people in 2013 if Congress fails to act. Here are some snapshots of how Taxmageddon affects the country, drawn from the research of The Heritage Foundation’s Center for Data Analysis (CDA). The Nation: $494 billion total tax increase on all Americans; Families: $4,138 average tax increase; Baby Boomers: $4,223 average tax increase; Millennials: $1,099 average tax increase; Low-Income Workers: $1,207 aver¬age tax increase; Retirees: $857 average increase; States: $1,929 (WV) to $5,161 (CT) range in average tax hikes per return; Congressional Districts: $1,236 (NY-16) to $13,951 (NY-14) range in average tax hikes per return. Clearly, Congress needs to take immediate action to “remove the uncertainty clouding jobs and family finances by removing the threat of Taxmageddon now.” Heritage

4. Small Biz: Rep. Tim Scott Visits South Carolina Small Business. Customers at the Piggly Wiggly in Moncks Corner were met with a surprise Friday, as U.S. Rep. Tim Scott spent two hours at the store bagging groceries and talking politics. Scott greeted customers and carried on casual, friendly conversations with staff and shoppers as he placed their groceries into plastic bags. This was the third installment of “Talkin’ Shop With Tim,” during which Scott works at a first congressional district business for a few hours to give local job creators and families a chance to share challenges they are facing and what he can do to help, according to a press releaseThe U.S. Food and Drug Administration redefined “restaurant” to include locations “where the sale of food is the primary business activity of that establishment,” thus including grocery stores and convenience stores under the definition, Smith added….Scott said grocery stores have profit margins of about two percent, and this extra burden will shrink that margin and result in the store having fewer employees. The regulation goes into full effect in January 2013, Scott said. “We’re trying to prevent this burden,” he said. “I owned a business for 15 years. I know what it costs to hire an employee.” “The sum total has an effect on us and all businesses,” Piggly Wiggly Director of Corporate Affairs Christopher Ibsen said. “Our profit margins are so small. It’s one or two percent in good times. We’re dealing in nickels and dimes.” The Berkley Independent

5. ObamaCare Update: Company Won’t Expand Due To ObamaCare Tax. An Indiana company's decision to scrap expansion plans due to a looming tax on medical devices has renewed pressure on the Senate to consider a House-passed bill repealing the tax…Companies in the medical device industry for months have been calling on Congress to strip the provision. Amid the complaints, though, several firms have already taken steps to cut back U.S. investment out of concern for the tax's impact. Cook Medical, an Indiana-based medical equipment manufacturer, last week said it's nixing plans to open five new plants in the next five years -- claiming the tax will cost between $15 million and $30 million a year, cutting into money that would otherwise go toward expanding into new facilities in the Midwest. "Unfortunately, we have had to shelve these expansion plans and look overseas for that," Allison Giles, vice president for federal affairs with the company, told "It's a huge amount for us." …The Affordable Care Act imposed the 2.3 percent tax on medical devices beginning in 2013…Cook Medical also argues that the impact is greater than just a 2.3 percent uptick in taxes, and that the impact on actual earnings is closer to 15 percent…A Senate Republican Policy Committee report last month said companies are already "shrinking their payrolls" in advance of the tax, pointing to the announcement last November by medical device firm Stryker Corp. to lay off 5 percent of its workforce in advance of the tax. Fox News

6. Big Govt: We Need Entitlement Reform If We Want True Economic Growth. According to George Mason University's Mercatus Center, nearly 150 million Americans receive some form of federal assistance…First, let’s acknowledge the simple reality that we can no longer afford such programs as we have known them…[W]hat too often is ignored in the contests over entitlement reform, streamlining the tax code, closing the deficit and related battles is the effect of federal benefits on the psyche of those not only enjoying but, increasingly, depending on them. That dependence is both financial and psychological. It is also dangerous. We are becoming what historian Niall Ferguson calls an “anti-risk culture.” The regulatory, supervisory and tax regimes of federal, state and local governments on the one hand, and the soothing assurance that should one fail, government aid almost invariably will be on the way on the other provide wonderful disincentives for the uncertain ventures needed to keep our economy vibrant. Guaranteed benefits incentivize mediocrity. Knowing that one will receive health insurance, no matter what, income and other goodies will cause at least a significant part of the population to coast rather than thrive. This is not to suggest we do away with every federal benefits program. We should modernize the various programs such that greater personal choice and comprehensive market-based reforms are implemented. The assurance, however, that Uncle Sam will always be there erodes, at least for some, the desire to achieve that has driven America’s historic and unparalleled growth. Washington Times

7. The Obama Economy: Tax Hikes Will Slow Growth, Destroy Jobs, But Won’t Reduce The Deficit. The Democrats, in particular, want to depict the Republican Party as beholden to the rich, while creating the image that their own party—President Barack Obama's party—represents the true interest of the poor and middle class. Hopefully, voters will see past this façade, and understand that the real choice is not between rich and poor, it's between growth and stagnation, and it's between having a successful debt reduction and a failed one. Basic economics suggest that higher tax rates reduce the benefit of working and therefore cause people to work less. They also dampen consumption because people with lower after-tax incomes consume less. This holds for people of all income classes—those earning more than $200,000 and those earning less. The additional impact of high tax rates on small business owners is that they are left with insufficient capital to invest in their businesses and have less money to hire new workers. Empirical research in economics widely documents these effects on small business owners. What's more, tax hikes are not even very effective at reducing long-run debt. US News

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The Leader's Ledger

Posted by Jessica Straus on July 31, 2012

Good Morning –

On the 100th anniversary of Milton Friedman’s birthday, we remember the American Nobel Laureate economist once wrote of the Great Depression, “like most other periods of severe unemployment, [it] was produced by government mismanagement rather than by any inherent instability of the private economy.” Under President Obama’s mismanagement of the economy, Americans’ confidence in the prospect of economic growth continues to drop to historic lows. The President’s push to saddle struggling small businesses with a massive tax increase further jeopardizes job creation. As a new survey shows, 70% of small business owners say they will not be able to hire new workers in the coming months, despite the fact that many businesses are understaffed. That is why House Republicans will vote this week to stop the tax hike to return optimism and opportunity to small businessmen and women and working families.

This Day in History: In 1964, Ranger 7, an unmanned U.S. lunar probe, took the first close-up images of the moon—4,308 in total—before it impacted with the lunar surface northwest of the Sea of the Clouds. The images were 1,000 times as clear as anything ever seen through earth-bound telescopes.

Birthdays: Rep. Joe Wilson, J.K. Rowling, Wesley Snipes, Bill Berry, Mark Cuban and Bill Bennett

Here Are The Stories We’re Watching:

1. State Of Play: Economic Confidence Continues To Decline, Down To January Levels. Americans' confidence in the economy declined last week to -29, matching levels not seen since early January. The decline may be due to the estimate of slower-than-hoped second quarter GDP growth. Confidence had peaked at -16 in late May after a series of encouraging jobs reports, but when subsequent reports were less positive, Americans' confidence headed in the opposite direction. Still, confidence is higher now than it was in the latter part of 2011…Economic confidence has not been able to maintain the positive momentum seen during the first half of 2012. As the U.S. government's unemployment rate fell in late 2011 and early 2012, economic confidence improved. However, in recent months, unemployment has been stuck around 8.2% and the economy shows little sign of significantly improving in the near future. Americans may sense the lack of positive momentum, reflected in the growing majority opinion that the economy is getting worse, and thus, their confidence is declining. Democrats alone are somewhat upbeat in this regard, indicating that they feel the current administration still has the ability to turn the economic situation around. The jobs report that the U.S. Bureau of Labor Statistics releases on Friday will likely play an important role in economic confidence in August. If it is positive, it may counteract the disappointing GDP report. However, if it is negative, it may send economic confidence further downward. Gallup

2. Pro-Growth: President Obama’s Policies Are Hostile To Economic Growth, We Need A Climate That Helps Business Grow. President Obama's riff on small business—"If you've got a business, you didn't build that, somebody else made that happen"—has become a major controversy…The context of the speech indicates the president really did mean that "you didn't build that." But let's give him the benefit of the doubt; let's assume he merely meant that business is impossible without government institutions that create the infrastructure for the economy to operate. As Mr. Obama's deputy campaign chief Stephanie Cutter said, in clarifying his original remarks on July 24, "We build our businesses through hard work and initiative, with the public and private sectors working together to create a climate that helps us grow. President Obama knows that." But business is certainly not getting "a climate that helps us grow" from the current administration. That administration has instead created a hostile climate through its regulatory policies. The news media report almost daily about new regulatory burdens. More generally, according to an analysis in March by the Heritage Foundation, "Red Tape Rising," the Obama administration in its first three years adopted 106 major regulations (those with costs over $100 million), compared with 28 such regulations in the George W. Bush administration. Heritage notes that there are 144 more such major regulations in the pipeline…There are many other burdens placed on business. Example: The Americans With Disabilities Act is being interpreted by the Justice Department to require all hotel-based swimming pools to provide increased access to disabled persons. This will come at a high cost per pool. Many hotels and motels are small, family-run enterprises. This requirement will either lead to an increase in prices or to a decision not to have pools at all. Either policy will induce patrons to shift to larger chain motels. Interestingly, the application of this rule has been delayed for existing pools until Jan. 31, 2013, after the election. Families vacationing this summer will not notice the new requirement. If we accept the plain meaning of Mr. Obama's speech, it indicates that he does not believe in the importance of entrepreneurs in creating businesses. But if we accept the reinterpretation of his speech in light of his administration's deeds, it indicates a belief that a hostile regulatory climate poses no danger to economic growth. Either interpretation means that this administration is not good for business. Wall Street Journal

3. Small Biz: Economic Slowdown Under President Obama Keeps 70% Of Small Business Owners From Hiring, Despite Being Understaffed. Many small business owners are holding back on adding more employees in the coming months because of concerns about the economy — even as some report that their businesses are understaffed. That’s the main takeaway of a new poll of more than 500 small business owners along the East Coast by lender TD Bank. Seventy percent of the respondents said they plan to maintain their current employee levels. Only 21 percent said they plan to hire one or more workers in coming months. Among the respondents, 35 percent said they were somewhat or significantly understaffed, the bank said. Small businesses employ about half of all U.S. workers, so the survey findings don’t bode well for a pickup in the pace of hiring by the private sector. The U.S. gained an average of only 75,000 jobs in the April-June quarter, after averaging 226,000 in the first three months of the year. The slowdown in job growth has come as the U.S. economy continues to plod along at a sluggish pace, stoking concerns that employers may be holding back on plans to hire more workers. Associated Press

4. Jobs Numbers: Nearly Half Of Recent College Grads Are Unemployed, Most Don’t Believe Their Generation Will See Success. The share of American 18- to 24-year-olds who were employed fell to 54 per cent last year, the lowest since the labour department began tracking data in 1948, according to the Pew Research Center. The share who are in college has risen, but the researchers say this only partly explains the drop. The jobless rate for Americans age 16 to 24 is above 16 per cent, more than twice the national rate. Youth unemployment has reached crisis levels around the world, with almost 13 per cent of the global youth labour force out of work this year, according to the International Labour Organisation. But the problem has a unique flavour in the US, where the weak job market has collided with record levels of educational debt – about $25,000 for the average graduate…Young Americans are well aware of their precarious place in today’s economy, with only 16 per cent in a Rutgers University survey of recent university graduates believing their generation will have greater financial success than the one before. About half of the students surveyed had full-time jobs. This leaves a firmer economic recovery closely tied to the fortunes of a generation gripped by high levels of debt – and falling incomes from the jobs that require the education the debt buys. Financial Times

5. National Defense: Armed Services Chairman McKeon: The Danger Of President Obama’s Inaction And Failed Leadership On Sequestration. House Republicans, acting responsibly, have passed a plan that replaces the first year of cuts to military and domestic spending through reforms to entitlement programs. If Democrats still find that unacceptable, I hope they can at least use it as the basis for a compromise. That path involves using spending cuts and reforms that can attract bipartisan support in place of the impending cuts to our military. To date, the president has been unwilling to embrace this approach; such a plan would make the bipartisan savings unavailable to reduce the price tag of his ambitious slate of post-election spending. There is no reason that such a compromise can’t be reached in September or October. It might make larger agreements on taxes and domestic spending more difficult, but it would prioritize our obligation to national security and the men and women who provide it. In the meantime, the president and Senate Democrats’ inaction is doing damage. I fear the assessment one of our senior military leaders expressed privately is spot-on: America’s inability to govern ourselves past sequestration plays directly into the hands of those who spread a narrative of American decline and, ultimately, would thrust us into a more dangerous world. If the United States faced an external enemy who threatened to do this kind of damage to our national security, the president would have the primary obligation to resolve it. To avert these cuts is to intimidate our enemies, reassure our allies and keep faith with those who have sacrificed so much for so long. The commander in chief must act. Washington Post

6. New Video: Whip McCarthy: It Doesn’t Make Sense To Punish American Families And Small Businesses Already Struggling To Make Ends Meet. House Majority Whip Kevin McCarthy (CA-22) today released “Taxation Nation: Angelo’s Story,” a new video in which third generation restaurant owner-operator Michael Passalacqua tells the 73-year-old story of Angelo’s Restaurant, drawing the connection between the health of America’s restaurant industry with the local economies their business revenue goes to support and what effect President Barack Obama’s tax hike would have on communities like Washington, PA…This week, House Republicans led by Majority Whip McCarthy will vote to ensure that no American family or small business sees their taxes increased right now. “With the economy already at a near standstill, the President’s proposed tax hike on American small businesses comes at the work possible time for job creators,” Majority Whip McCarthy said. “Independent reports confirm that raising taxes on more than 900,000 small businesses threatens 710,000 jobs and would reduce economic output by 1.3%. It just doesn’t make any sense to punish American families and small businesses already struggling to make ends meet in this tough economy.” Whip McCarthy’s Office

7. Keeping Tabs: House, Senate Negotiators Back New Bipartisan, Bicameral Iran Sanctions. Congress is pressing ahead with a new package of crippling sanctions on Iran, expanding on financial penalties and targeting Tehran's energy and shipping sectors in the hope that economic pressure undercuts its suspected nuclear weapons program. House and Senate negotiators reached agreement late Monday on legislation that builds on the current penalties directed at financial institutions that do business with Iran's central bank. The new bill would impose sanctions on anyone who mines uranium with Iran; sells, leases or provides oil tankers to Tehran; or provides insurance to the National Iranian Tanker Co., the state-run shipping line. Lawmakers hope to vote on the bill this week before their month long August recess, with a House vote possible Wednesday. The measure has one crucial backer - the powerful American Israel Public Affairs Committee, the pro-Israel lobbying group - and extensive support from Republicans and Democrats. "This bipartisan, bicameral Iran sanctions legislation strengthens current U.S. law by leaps and bounds," said Rep. Ileana Ros-Lehtinen, R-Fla., chairwoman of the House Foreign Affairs Committee. "It updates and expands U.S. sanctions, and counters Iran's efforts to evade them. The bill sends a clear message to the Iranian regime that the U.S. is committed, through the use of sanctions, to preventing Iran from crossing the nuclear threshold. Associated Press

Off The Beaten Path:

Giant Panda Delivers Sixth Cub At San Diego Zoo

US Olympic Swim Team Sings “Call Me Maybe”

Michael Phelps, Ryan Lochte Call Me Maybe Parody

The Leader's Ledger

Posted by Jessica Straus on July 30, 2012

Good morning,

This week the House will vote to stop the tax hike on all Americans and put forward our plan for pro-growth tax reform. In contrast, the President and his party are pushing tax hikes on small businesses and working families. Doubling down on failure, House Democrats have demanded a vote on the President’s plan. With this vote, Democrats will make it clear to the American people that their only plan is a disastrous tax hike that will cost the economy 700,000 jobs and take more money from working families and small businessmen and women.

This Day In History: In 2003, the last of 21,529,464 Volkswagen Beetles built since World War II rolled off the production line at Volkswagen's plant in Puebla, Mexico. One of a 3,000-unit final edition, the baby-blue vehicle was sent to a museum in Wolfsburg, Germany, where Volkswagen is headquartered.

Birthdays: Rep. Quico Canseco, Katherine Helm, Arnold Schwarzenegger, Lisa Kudrow, Jaime Pressly, Hilary Swank, Paul Anka, Tom Green, and Bud Selig

Here Are The Top Stories We’re Watching:

1. State Of Play: House Will Vote This Week To Stop The Tax Hike On All Americans. House Republicans plan to cap their summer-long focus on economic issues this week by voting to extend the Bush-era tax cuts to all Americans. After months of votes to repeal the 2010 health-care law and regulations enacted by the Obama administration in the last three years, GOP aides said they wanted to end the summer with a focus on tax cuts in order to carry this week’s momentum on to the campaign trail during the August recess. The GOP proposal would extend all tax cuts for another year. It differs significantly from a plan passed last week by the Democratic-controlled Senate that extends the cuts only for households and individuals earning $250,000 or less. Despite those differences, House Speaker John A. Boehner (R-Ohio) said he plans to permit a vote on the Democratic plan, which is expected to fail in favor of the GOP bill. Washington Post

2. Stalled Economy: Uncertainty Preventing Businesses From Expanding And Hiring. The U.S. economy slowed sharply in the second quarter, growing just 1.5% as consumers slashed spending and businesses grew more cautious about hiring and investing, underscoring that an already wobbly recovery is losing even more steam…That downward slope in growth is worrisome to economists. As the economy loses steam, a pullback can become self-reinforcing as businesses and consumers worry about the future. The slowing economy, along with government data showing the recovery has been weaker than thought, raises the specter that a sudden shock—such as an escalation of Europe's crisis, or next year's looming tax increases and spending cuts—could shove the U.S. back into recession…The latest report adds to recent signals that could push the Federal Reserve toward taking new steps to spur growth. Not only is growth slow, Friday's report showed inflation running below the Fed's 2% objective. Fed officials will meet on Tuesday and Wednesday to consider their next steps…"The economy is kind of being strangled," said Bob Baur, chief global economist at Principal Global Investors. "We underestimated how much uncertainty may have contributed to a lack of desire to expand and hire." Mr. Baur expects 2% to 2.5% growth in the second half of the year but has "grown more cautious," he said. Wall Street Journal

3. Obamanomics: It’s a Miracle The Economy Is Still Growing Under Obama’s Stifling Agenda. Investors aren't investing or are sending their money abroad because the President is promising to wallop them with huge tax increases on January 1. Businesses aren't purchasing as much new equipment, or hiring as many workers, because they don't know what the real costs will be from new regulation and ObamaCare. A new report by the Progressive Policy Institute—run by Democrats—finds that if business investment had tracked the normal trend rate during this recovery, investment would be $1.4 trillion higher. The report fingers regulation on business and American investors finding better returns abroad. Yet Mr. Obama's solution is to raise the capital gains and dividend tax rates. In this policy environment, the miracle is that the U.S. economy is still growing as much as it is. That is a tribute to the natural desire of Americans to better themselves, to create the next Apple, or to discover the next technique for pulling natural gas out of shale rock. Wall Street Journal

4. Dem Delusion: Rep. Debbie Wasserman Schultz Defends Dismal Economic Numbers. ”We have made progress from where we were when President Obama took office. The economy had just contracted almost by 9%. Now we've begun to turn things around and had our 12th straight quarter of growth. We have a long way to go. We need to make sure that we can continue to move forward in creating jobs and getting the economy turned around. The best way to do that is make sure we can get Congress to adopt the American Jobs Act that the President proposed, which would ensure we could create a million jobs right now, that we could take the bill the Senate just passed to extend the middle class tax breaks. That ball is in Republican Speaker John Boehner’s court. If we make sure we can provide certainty to the middle class, extend those middle class tax breaks right now, adopt the President's Jobs Act, then we will continue to make the kind of progress we need to have.” CBS Face The Nation

5. New Poll: Obama Tax Hikes Not A Priority For Most Americans, Jobs, Deficits, Government Corruption Top List. Creating good jobs, reducing corruption in the federal government, and reducing the federal budget deficit score highest when Americans rate 12 issues as priorities for the next president to address. Americans assign much less importance to increasing taxes on wealthy Americans and dealing with environmental concerns…Americans' to-do list for the president on Jan. 20, 2013 -- whether it be Obama or Romney -- includes creating good jobs, reducing government corruption, and reducing the federal budget deficit. Supporters of both candidates agree about the importance of jobs and corruption, while the deficit is a higher priority for Romney supporters than Obama supporters. In turn, Obama supporters believe the next president should have healthcare, Social Security and Medicare, and public education among his highest priorities. Job creation has certainly been and will continue to be a major topic during the remainder of the campaign. And both candidates will surely need to outline their plans for reducing the federal budget deficit. However, it is unclear whether government corruption will become a major issue in the campaign, even though Americans see reducing it as an important goal. Gallup

6. Small Biz: Virginia Small Business Owner To The President: We The Businesses Built This. In the president's view, it's not the hard work or the talent of entrepreneurs that have built their businesses; it's some combination of luck and government support. Immediately after arguing to business people that somebody else made their success happen, Obama didn't point to their families or their workers or their investors. Instead, he highlighted the government's contribution. He said, "The Internet didn't get invented on its own. Government research created the Internet so that all the companies could make money off the Internet." The president's belief that government makes success happen helps to explain his hostility toward business, as well as his latest proposed tax increase. Obama believes that small businesses owe the government, and he believes they have not been paying their fair share. Nothing could be further from the truth. We are businessmen. Some of us built those businesses from nothing. Others added to what their fathers and grandfathers created. But we can promise you one thing — it was not the government that made our success possible, and this president hasn't made things any easier. The reams of new regulation that Obama has piled on top of our businesses don't make it easier to keep the doors open. The new burdens imposed by ObamaCare don't encourage us to hire new workers, and the president's proposals for yet more taxes will only make it more difficult to meet a payroll and support our families… Government didn't build this country. Its people did. We continue to build it today. We aren't coming to Obama with our hands out. We don't need his help. All that we ask is that he get out of our way. And if he does that, then we will do what he's spent his entire first term failing to accomplish — get this economy back on its feet and restore the prosperity of America. Roanoke Times

7. ObamaCare Update: Doctor Shortage Likely to Worsen With Health Care Law. The Association of American Medical Colleges estimates that in 2015 the country will have 62,900 fewer doctors than needed. And that number will more than double by 2025, as the expansion of insurance coverage and the aging of baby boomers drive up demand for care. Even without the health care law, the shortfall of doctors in 2025 would still exceed 100,000. Health experts, including many who support the law, say there is little that the government or the medical profession will be able to do to close the gap by 2014, when the law begins extending coverage to about 30 million Americans. It typically takes a decade to train a doctor…The health care law increases Medicaid’s primary care payment rates in 2013 and 2014. It also includes money to train new primary care doctors, reward them for working in underserved communities and strengthen community health centers. But the provisions within the law are expected to increase the number of primary care doctors by perhaps 3,000 in the coming decade. Communities around the country need about 45,000. New York Times

8. National Defense: Senator Ayotte: Dems Using Military As ‘Bargaining Chip’ In Fight Over Sequester Cuts. A freshman Republican senator accused the White House and congressional Democrats of using the military as a bargaining chip in a debate over spending cuts. "It makes me sick that some in Washington, particularly some of the Senate Democrats want to play, and even our president unfortunately, want to use our military as a bargaining chip," said Sen. Kelly Ayotte (R-N.H.) told CNN's "State of the Union" on Sunday. Ayotte said House and Senate GOP leaders have asked President Obama to come to the table to figure out how to resolve the issue of sequestration, a plan passed by Congress a year ago that would cut $1 trillion in spending over 10 years, including $500 billion from defense. The Hill

9. Israel Policy: Leader Cantor: Pelosi Remarks About Jews 'Patronizing and Deeply Insulting'. House Majority Leader Eric Cantor fired back at Nancy Pelosi for her remarks about Republican Jews, calling the comments “patronizing and deeply insulting,” according to the Weekly Standard. Pelosi, the House minority leader, recently told Bloomberg News that Republican Jews are "being exploited." Responding to a question about whether President Barack Obama will do as well with Jewish voters this time around, Pelosi said, according to a transcript from the “Political Capital” show, “I think that he will, because the fact is when the facts get out. You know, as many of the Republicans are using Israel as an excuse, what they really want are tax cuts for the wealthy. So Israel, that can be one reason they put forth. Host Al Hunt then said, “That’s why some of the Republican Jewish supporters are really active.” To which Pelosi responded: “Well, that’s how they’re being exploited. And they’re smart people. They follow these issues. But they have to know the facts. And the fact is that President Obama has been the strongest person in terms of sanctions on Iran, which is important to Israel. He’s been the strongest person on whether it’s Iron Dome, David’s Sling, any of these weapons systems and initiatives that relate to Israel. He has been there over and over again.” The remarks left Cantor and other Republicans fuming. "It is both patronizing and deeply insulting for Nancy Pelosi to suggest any Jew is 'exploited' for their political beliefs or that support for Israel is somehow an 'excuse' for anything,” Cantor said, according to the Weekly Standard. “Such thinking diminishes the importance of issues affecting Jews everywhere." Newsmax

Off The Beaten Path:

Senators Join Set Of “Parks & Recreation” In Washington

Palin Visits Chick-fil-A

Team USA Hugs The First Lady

2013 House Calendar

If the Senate does not act, the sequester will take effect in:

Time since the House passed a solution:

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