Via the National Journal’s Hill Briefs:

The Obama administration will tell Congress Wednesday that it expects to lose about $30 billion of the $82 billion government bailout of General Motors Corp. and Chrysler LLC, two administration officials familiar with the report said today, according to The Detroit News.

Which is odd because as you may recall, it was the auto companies who got at least some portion of the TARP money (that’s right, it wasn’t just Wall Street) but in separate National Journal article from yesterday…

The president boasted that the Troubled Asset Relief Program will spend $200 billion less than expected and said he would use some of that money for small-business loans. That sets up a potential battle with Republicans in Congress who want the funds to be used for deficit reduction.

It’s a strange dichotomy when TARP funds are simultaneously lost and found.  One might think with a spare $200 billion of taxpayer (and Chinese) money we might want to pay down the deficit and help slow down the devaluing of the American dollar.  Don’t get me wrong, I’m all for helping out small businesses.  But you know what small businesses would like even more?  Having their money back and their loans that they do have actually being worth something.

Even Saturday Night Live was able to pick up on this in their own way (It’s SNL, so watch at your own risk).

So I was reading The Hill this evening and while getting my political junkie fix, this story caught my eyes. Speaker Pelosi says “Americans could absorb increased deficit if it means jobs”.

From The Hill

Americans could be ready to “absorb” increases to the deficit if it means higher employment, Speaker Nancy Pelosi (D-Calif.) said Tuesday.

As the Congress prepares to put together a new spending package focused on creating new jobs in the U.S., the Speaker said that while it’s a “false choice” to pose the situation facing lawmakers as a balance between jobs and increased deficits, Americans would rather have jobs.

“So if somebody has the idea that the percentage of GDP of what our national debt is will go up a bit, but they will now — and their neighbors and their children will — have jobs, I think they could absorb that,” Pelosi said in a conference call with liberal bloggers on Tuesday, audio of which was posted by ThinkProgress.

House Majority Leader Steny Hoyer (D-Md.) has said that the lower chamber hopes to move a jobs package by the Christmas holiday recess. Democrats have begun exploring different options for creating jobs, especially as unemployment continues to rise while 2010, an election year for lawmakers, quickly approaches.

Pelosi said deficit growth has been “stunning,” but rejected the idea that a jobs bill would necessarily pose a threat to the deficit.

“We don’t subscribe to the idea that some are for deficit reduction and some are for job creation; we think, again, as I said at the beginning, that’s a false choice,” she said. “We’re never going to decrease the deficit until we create jobs, bring revenue into the Treasury, stimulate the economy so we have growth.”

The Speaker said Democrats must also “shed any weakness” about being confrontational on the issue out of fear that the party would be labeled as insensitive to the deficit.

Pelosi suggested, too, that if lawmakers are reluctant to spend for job creation, similar problems that plagued the U.S. during the Great Depression may strike again.

“If we pull our punch, as they did in the mid-’30s, we shouldn’t be surprised if history repeats itself,” she explained.

“It’s a very important debate for us to have in this country, and I would hope that the president’s speech would be a balance between job creation and sensitive to deficit reduction,” Pelosi added. “But I think if anybody is asked in the public, ‘Would you rather have a job or a percentage of GDP or our national debt will go up a little bit?,’ I think everybody wants a job.”

Let’s look at this a minute shall we? Pelosi has offered different packages none of which did nothing to stimulate the economy, but only created more government and more debt. The last stimulus package hasn’t accomplished anything, save for creating jobs and allocating money to over 400 non-existent congressional districts, and now she wants Stimulus Package Part 2 “The Quest for More Money”. The House passed “Health Care Reform” which, if signed into law, will cause nothing but more government and red tape including the creation or expansion of over 130 agencies. Yeah, because this is what the people want!

Read more after the leap.

The Politico is reporting today that President Obama (or “the Administration”) has requested that GM CEO Rick Wagoner resign in order to qualify for the next round of government loans.

The Obama administration asked Rick Wagoner, the chairman and CEO of General Motors, to step down and he agreed, a White House official said.

On Monday, President Barack Obama is to unveil his plans for the auto industry, including a response to a request for additional funds by GM and Chrysler. The plan is based on recommendations from the Presidential Task Force on the Auto Industry, headed by the Treasury Department.

The White House confirmed Wagoner was leaving at the government’s behest after The Associated Press reported his immediate departure, without giving a reason.

On one hand this is GM’s fault. They should not have been going to the government, hat in hand, to beg for money. When you have to get money of this amount, the lender is going to set the conditions for which they will make the loan. If that means replacing the CEO, then so be it.

On the other hand, it is pure audacity that would cause the government–particularly the Treasury Department–to decide that they know any better than the GM Board of Directors who should be running the company.

This is awful news. Now we have the government not only bailing out companies and industries, but we have them making key business decisions. This is just dipping their toes in the water. Every day seems to be bringing us more news of the Obama Administration becoming more “Statist” (or insert your other totalitarian, large, controlling government term here).

Updates below the fold (2nd update 12:15pm)

(*Editors Note* The following op-ed was written by Howard County GOP Chairman Craig Dunn and will appear in next week in the Kokomo paper – Josh)

If Rush Limbaugh or Sean Hannity or Glenn Beck would have asked the question, the considerable heft of the liberal left in the media would have vilified them for the impudence of the question. However, this time the person asking the tough question was Kokomo’s native son and 60 Minutes reporter, Steve Kroft. The question was simple and straightforward, “Are you punch-drunk?” Krofts’ short and to-the-point question came after President Obama continued to laugh and chuckle through a serious interview on the United States economy. The President never did quite get the question answered so I’ll ask it again, “Mr. President, are you punch-drunk?”

Let me state that on the issue of the American economy, there is no option for failure. Republicans and Democrats alike are rooting for the success of the Obama Administration in turning our economy around, restoring faith in the financial system and in creating good paying jobs for everyone. However, I can honestly say that I am not surprised at the apparent incompetence of the Obama Administration in dealing with the problem. The recipe for continued failure is present for all to see. First, we elected a person President who has only two years in the Senate before he decided that he was “the one.” President Obama never held a job in private enterprise, never met a payroll and never had his own economic fate depend on his sweat equity. Second, Obama has been saddled with, arguably, the two worst Congressional leaders in history, Speaker Nancy Pelosi and Majority Leader Harry Reid. Speaker Pelosi seems hell-bent on a rush to Socialism, while Majority Leader Reid seems intent on using his considerable political power to line the pockets of every Nevada special interest that can muster the strength up to stick an oily hand out. This disastrous Congressional leadership, coupled with runaway pork barrel spending, social engineering, special interest catering and reckless deficit spending has seriously crippled Obama from the beginning. Third, Obama has demonstrated a total inability to attract the best and brightest to his economic team. Where John Kennedy was able to motivate some of the very best minds in America to serve their country, Obama has been left to try and rescue the Titanic with a collection of Ivy League tax cheats, inexperienced policy wonks and men who helped create the problems that we now face.

(Read more after the leap)

Does all this government spending and the bailouts got you down?  Think our government could put our taxpayer money and resources to better use use?  So do these guys.

By the way, in case you missed it, according to the GOP Whip twitter feed, House Democrats just voted to let AIG execs keep their bonuses on a procedural vote.

The Chicago Tea Party, inspired by CNBC’s Rick Santelli. From Fox 32 Chicago:

In the coming months-and certainly in the next Congressional election and Presidential election-will use the FY 2009 Federal budget numbers and attribute those numbers to President Bush as the budget that President Obama inherited. But here is something that we will have to pay attention to: as of today, only 3 of 12 appropriations bills for FY 2009 (which started in October 2008) have been passed. Specifically, the three that have been passed are Homeland Security, Defense, and Military Construction-Veterans. The remainder have been operating on continuing resolutions.

Well, the rest of the core appropriations bill (HR-1105) has been introduced on Monday by Representative Obey (D-WI). The Republican Study Committee has released a legislative bulletin on this bill. They note a couple of things that shouldn’t surprise us:

1. It requests $19.2 billion (4.9%)  more than President Bush requested for FY 2009
2. It requests $31.6 billion (8.4%) more than FY 2008’s actual budget
3. The overall budget (including the other 3 appropriations bills) results in a 7.7% increase of FY 2008
4. The majority of HR 1 (the $787 billion stimulus bill, signed by President Obama) includes appropriations that would normally have gone into this budget–$185 billion will hit the FY 2009 budget
   

While President Bush was by no means a fiscal conservative, there will be a major effort to shift blame for these number to the Republicans for the next two election cycles which we must not leave undefended.

I’m shocked to learn that inflation is actually on the rise! Why, who would think that spending like drunken sailors (with apologies to drunken sailors) might actually result in inflation?

The AP is reporting that wholesale prices increased 0.8% in January and the “core” inflation rate increased 0.4%. Both numbers were much higher than the “experts” predicted. One of those experts–the Chairman of the Federal Reserve–isn’t worried:

He [Fed Chairman Ben Bernanke] said that once the economy begins to rebound and financial markets stabilize, the Fed will be able to quickly reverse the actions it has taken before inflation becomes a problem.

Forgive me if I’m not comforted. Our fiscal policies–started by President Bush, but quickly being perfected by President Obama–are so irresponsible that it appears that inflation will become a problem long before the economy “begins to rebound”. Then what is Bernanke going to do?

It is about stinkin’ time.

WWLTV in Louisiana is reporting that Governor Jindal is not simply going to take the stimulus money being offered by the U.S. Congress and President Obama.

“We’ll have to review each program, each new dollar to make sure that we understand what are the conditions, what are the strings and see whether it’s beneficial for Louisiana to use those dollars,” Jindal said at a recent gathering in Jefferson Parish.

Federal dollars make up, on average, 30% of State government revenues. What is so bad about this is that almost every dollar of Federal money comes with a string that either increases state bureaucracy or requires equal spending by the State on the same program or other requirements that make State budgets balloon.

So kudos to Governor Jindal for not simply gobbling up the cash that is being thrown at his state and actually looking out for his people.

UPDATE: The AP is reporting that in addition to Jindal, 5 additional Republican governors are contemplating turning down portions of the porkulus bill money. The governors to be praised are: Rick Perry of Texas, Haley Barbour of Mississippi, Sarah Palin of Alaska, Mark Sanford of South Carolina, and Butch Otter of Idaho.

Thanks to the efforts of Rep. Tom Price (R-GA), the Republican Study Committee Chairman, Americans can see how easy it is to change spending items in a massive spending bill.  Handwritten notes on bills changing the amount of money to be spent, or the purposes for which it may be spent, is not change that brings about better government and a growing economy:

By: Brian Sikma

When the economy slows down it is appropriate for the government to take action to help solve the problem.  Doing nothing is not the right response, just as doing the wrong thing is not the right response.   The stimulus bill advanced by President Obama and crafted in a partisan fashion by Democrat leaders in Congress, is not the stimulus plan that we need.  We need an economic policy that promotes job creation and rewards work and saving, not an economic policy that bails out irresponsible companies, discourages efficient work, and penalizes success.

Any attempt to help the economy must focus on helping the American people.  That may sound self-evident to those of us here in the heartland of America, but it is a lesson that needs to be learned by our leaders in Washington.  The proposed $825 billion stimulus bill contains massive amounts of new government spending that will not help Hoosiers rebuild their economy and move forward.  The reason is because government spending spent on government priorities and directed towards projects that are supported by those who believe in a bigger and more complex government, will not meet the needs that we face.

The “stimulus” bill contains $600 million for new cars for government employees, $50 million for artistic endeavors, $400 million for climate change research, billions of dollars to remodel and redecorate government offices, and even a provision spending $200 million for new sod on the National Mall.  It also doubles the size of the Department of Education and increases that agency’s involvement in our every day lives.

The passage of the stimulus bill would boost the size of our national debt to 95% of our country’s annual gross domestic product.  This stimulus plan is supposed to cure an ailing economy, but it is on track to be worse than the ailment itself.

Instead of spending the money of hardworking Americans on frivolous and unnecessary projects, and forcing them to either pay higher taxes or further bury their children and grandchildren under a mountain of excessive national debt, Congress and the President should embrace an alternative plan.  By focusing on tax cuts that lower our nation’s record high tax on employers, allow more individuals to keep their hard earned money, and that reward savings and investment, Washington can help the American people lift themselves out of an economic mess caused by government mismanagement.

The American economy is strong enough to sustain this slowdown, and the American people are resilient enough to weather this storm.  If government is to help and not hinder the recovery, it should focus on a solution that benefits the American people, not a solution that benefits bureaucrats in Washington.

A British economic analyst and writer has made dire predictions for the global economy if the “Buy American” provision that was heavily backed by Rep. Pete Visclosky (D-IN 1) stays in the stimulus bill and is signed into law by President Obama.  Comparing the provision to the “protectionism” of the 1930s (more specifically the Smoot-Hawley Tariff of the 1930s, which raised tariffs on over 20,000 different products) Financial Times writer Willem Buiter declared “if the Buy American provisions of the Economic Stimulus Package were to become law, this would amount to an economic declaration of war on the rest of the world.”

What one of Indiana’s own Congressmen has failed to learn from history and economics is nevertheless being picked up on by economists both here at home and abroad.  Engaging in populist economic protectionism is risky when times are good and catastrophic when times are bad, as they are now.  Even though in percentage terms the American economy, and thus most if not all of the global economy, is still stronger than it was during the Great Depression or even some of the bleak economic times of the 1970s and the start of the 1980s, it certainly will not be able to survive the shock of a massive limitation on trade policy.

There were many factors that contributed to the implosion of the housing market and the financial markets that relied so heavily on the easy lending and loose monetary policies that made the housing market expand like a California wildfire.  But the single impact of suddenly clamping down on the global market and attempting to halt trade by limiting government purchasing contracts to only those products made here at home will be perhaps the single most important factor in taking us into a full blown depression.

It is true that the “Buy American” provision does not raise tariffs on any imports and that it is confined to only government spending as part of contracts provided for in the $825 billion stimulus bill-spending that I believe is not the best way to stimulate the economy-but when that government spending accounts for a significant portion of a nation’s GDP (the newly added debt would push the total amount of government debt obligations to 95% of GDP by 2010), it has reverberations throughout the non-government sectors of the trade markets.

As Mr. Buiter said in concluding his article “Yes we can. I hope we don’t.”  America does not need to travel the road to serfdom to reach economic prosperity.  Good intentions will not change the fact that the current path our government is on will have deeply unfortunate, and frustratingly avoidable, consequences.