Recent reports have indicated that the Obama Administration is in “advanced talks” about providing a bailout to financial firm CIT Group, Inc., a leading lender to small and midsize companies. CIT is looking for access to FDIC’s government guaranteed debt program, which would allow them to borrow at lower than market rates with taxpayers taking on the risk of default. They are arguing that if they go down, they could take other firms with them.

However unfortunate this may be to several individual firms, it will not bring down the system. In September and October 2008 we were staring down a global financial meltdown, but now that people have had time to reassess their strategies and re-adjust their business models to the new reality, we’ll see which firms are strong enough to stand on their own and those which cannot. But, this doesn’t mean they must cease to exist. Bankruptcy is a long-standing, legitimate process that gives companies the time and ability to restructure their finances to hopefully reemerge as viable entities.

Government should not intervene in this situation. CIT has many options and putting taxpayers at risk should not be one of them

It has been reported today that for the first time in history, the U.S. budget deficit has moved above the $1 trillion mark.

3 months still remain in the fiscal year, and by the current administration’s own admission, the deficit is expected to reach as high as 1.84 trillion in October.

The reckless spending that this administration has embodied is almost incomprehensible. Yet, they clearly have not gotten the message, and have failed to see the results of their actions. Especially among talks of a ‘Second Stimulus’ after their first package has failed miserably and left America’s unemployment rate at nearly 10%.

Beltway Democrats’ lack of spending restraint will contribute to higher interest rates, soaring inflation and a weakened dollar. The first step to getting our house in order is the reduction of spending, eliminate wasteful and duplicative programs, and instill a sense of fiscal sanity across the entire federal government.

I have stated many times in the past, that Republicans in the White House and Congress have spent too much.  I have said it since I came to Congress in 2005, and I am saying it again today.  However, the budget, spending, and deficits we are now seeing are almost incomprehensible.  The numbers are so large in fact that we fail to conceptualize them.  In order to help with that, here is a chart from the Heritage Foundation detailing the average federal deficit as a percentage of GDP, for Presidents Carter through Obama.  This graph speaks for itself.

 

 

 

There is no doubt that headway has been made in the battle to reform earmarks, at least among House Republicans that is.

Last week, during debate on the Commerce, Justice, and Science (CJS) appropriations bill, 10 amendments were debated on the floor by myself, Rep. Jeff Flake (R-AZ), and Rep. Jeb Hensarling (R-TX). These amendments would strike various earmarks present in the bill.

This alone is altogether not particularly newsworthy, but on average, just under 65% of the Republican conference voted in favor of striking the earmarks in all 10 amendments. I remember in 2006, when it was almost taboo to vote ‘yes’ on measures like these, and there were only a handful of us fighting to reform the process, limit the wasteful spending, and staunch the tide of earmark corruption. Clearly, the message has gotten through to my colleagues.

Of course, there is still much work to be done on this front, but with the majority of the Republican caucus backing reform, perhaps now is the time to address sweeping and substantive earmark reform.

Entrepreneurs Will Reinvent GM's Castoffs

By Rep. John Campbell | Investor’s Business Daily

Before I lost my mind and entered politics, I was in the car dealership business for 25 years. In fact, I was the first Saturn retailer chosen back in 1988, and served on the Franchise Operations Team. I opened one of the first 25 stores in 1990 and eventually owned and operated five Saturn Facilities in Orange County, Calif.

Saturn was truly an American innovation with a great concept, rethinking how cars had been built and sold over the previous 50 years. But Saturn was an entrepreneurial idea, smothered inside one of the world's biggest nongovernmental bureaucracies.

Saturn needed to move, change and react quickly, but it was prevented from doing so. Even Saturn's breakthrough, one-page union contract was eventually replaced with a standard UAW agreement.

The one area where Saturn remained true to its mission, however, was at its retail-dealer level. These committed independent businessmen and women continued to provide customers with industry-leading levels of care and innovation.

Some became disenchanted with GM and the UAW's lack of commitment to the brand and its ideals and left. But many stayed, and that's what Roger Penske is now buying. He wants an excellent, dedicated and creative dealer body through which to sell and service cars.

Penske is already the distributor in the United States for the Smart car (built by Mercedes), which has demonstrated significant success. He will have the option of having other manufacturers build Saturn branded cars and/or sell other brands with the promise of Saturn treatment and service.

Suppose an upstart electric car company wanted national distribution for its cars — perhaps Saturn would be a good place to get that? Or suppose Peugeot, Renault or other foreign automakers wanted back in the U.S. market, Saturn stores could prove to be a ready and willing conduit.

This sort of "Best Buy" of car retailing, or "contract manufacturing" instead of a company owning the plants that build its cars, is a new and untried concept in the car business. It's risky, but it just might work. That's what entrepreneurs do. They take risks to create something new. Sometimes they succeed. Sometimes they fail.

Saturn can work in the Penske organization. There is no question that it won't be the American-built small car company it set out to be, but it may fulfill the second part of its mission, redesigning how cars are built, sold and serviced. It clearly wasn't working within the GM-UAW structure, and the Obama-UAW bureaucracy now running GM will undoubtedly be many times worse.

Hummer, Opel, Saab, and Chrysler's Viper are all in the process of being sold to smaller, more nimble companies in North America and elsewhere. These troubled brands now have hope when freed from the costs, obligations, arrogance and structure of GM, nationalization and the union's intransigence.

General Motors has been nationalized and is a pawn of the state and the UAW; this will only postpone its inevitable demise. GM as we knew it is gone. The melancholy about the collapse of this great symbol of American manufacturing has permeated through to America's core.

But GM lasted over 100 years. That's actually not bad in a world where technologies and competition change as fast as they do today. How many other companies from 1908 can you think of that are still around today? This is not a failure of American business, but rather a piece of history that is a shining example of American industry for over 100 years.

The fact that GM didn't make it to the 200-year mark is a testimony to free markets and free choice that punish companies that do not change and reward better and fresher ideas. It was a great company once. But time has now passed.

Today, parts of that once great industrial behemoth have a new lease on life with their new smaller owners, and someday, someone will probably take over Chevrolet and Cadillac, revitalizing two of the world's great brands. This is what happens after companies are freed from suffocating government, politicization and bureaucracy.

The story of the American automobile and the American entrepreneur is far from over. The automobile has been a symbol of American independence and freedom since Henry Ford first wheeled the Model T off the production line in 1908, and personal transportation is part of the American ethos. It allows us to go wherever we want, whenever we want without restriction.

The Obama-Pelosi cabal would like us to get out of cars as part of their quest to make us conform to the behaviors that they believe we should have. That won't work. Americans love freedom too much.

The companies will be different, the names will be different, and how cars are powered will be different. But America's love affair with the automobile and its role reinventing it is not over yet.

Put your foot to the floor and enjoy the drive.

Campbell is a second-term congressman representing California's 48th district.

A few days ago I brought your attention to a report that Senator Tom Coburn (R-OK) submitted entitled ‘100 stimulus Projects: A Second Opinion.’ I also said that I would highlight a few of the most ridiculous, and so here is the first installment:

FutureGen

Although President Obama, and Congressional leaders said that the stimulus package would not contain any earmarks, in reality earmarks take on a variety of forms. Take for instance the FutureGen plant in Mattoon, Illinois. This program was an earmark in the past and was lobbied for by then Senator Obama. On June 12, 2009 the Department of Energy announced that FutureGen would receive $1 billion in stimulus funds.

Samuel Bodman, former Secretary of Energy during the Bush Administration concluded that this technology was obsolete, and stated “The likelihood that it would fail, leaving the American people with hundreds of millions of dollars in sunk cost and none of the benefits, is not acceptable.” Accordingly, the Department of Energy terminated funding for the project.

If that doesn’t convince you that this is a poor expenditure of taxpayer dollars, then perhaps this will:

In 2007, the Massachusetts Institute of Technology (MIT) published a report that showed FutureGen’s approach was not the most effective way to go about such experimental new technology. In fact the report specifically states there were “concerns about this particular project” including a “lack of clarity about the project objectives.” MIT concluded “It is important that the U.S. government begin thinking about such a portfolio of demonstration projects and not be singularly focused on any one project, such as FutureGen.”

On top of all of this, FutureGen’s website states that it is a public-private partnership. Obviously it has a public component because it is receiving tax dollars from the federal government, but can you imagine your private company receiving $1 billion of taxpayer’s money without any impetus or necessity to produce a substantive product?

I’ll let you be the judge.

When spending season rolls around on Capitol Hill, Americans cringe, and for good reason. But this season something is different. Yesterday evening when Congress began debate on its spending bills, it was brought to a screeching halt at the first sign of a Republican amendment, 30 minutes in.

It has been a long standing tradition that the spending bills that Congress considers are done using what is called an ‘open rule’ which allows for an unlimited amount of amendments to the bill, but the cabal led by Speaker Pelosi, President Obama, and Senator Reid has squelched the voice of opposition once again. Instead, they have decided to limit the number of Republican amendments, breaking with the open-rule precedent for the first time in as long as anyone can recall.

We’ve seen it in the automotive industry in the abrogation of dealer contracts and moving Americans out of cars, and now we are seeing it in how Congress spends the money of the American people. This is just further indication that if Obama, Pelosi, and Reid can’t coerce you into doing what they want, then they will force it upon you. They are trying to control much of our lives and now they want to silence opposing views.

With this move, Democrats will now be able to spend even more taxpayer money without interference. House Republicans are meeting today on how to fight this, to be sure though, there is a resistance brewing.

Back when the stimulus package was being debated, I was a vocal critic. I penned an op-ed for the Orange County Register, I blogged on it, and I took to the airwaves to discuss potential areas for improvement and why the package wouldn’t provide the impetus for growth as it was being advertized.

Well, while President Obama, and his Capitol Hill cohorts tout the many successes of this so-called stimulus, Senator Tom Coburn (R-OK), a doctor by trade, has issued a second opinion on the matter.

His report provides a look at 100 examples of questionable stimulus projects worth $5.5 billion. Senator Coburn is quick to say that his second opinion is designed to educate taxpayers, policymakers, and the media, on how to prevent these missteps moving forward. The real question is, will the lesson be learned?

Over the next few days I will highlight some of my favorite examples in Sen. Coburn’s report, so stay tuned.

As promised, here are two more proposals House Republicans have offered to President Obama in order to reduce the deficit and save taxpayer’s money.

Terminating Duplicative Education Programs

The Department of Education currently administers hundreds of separate education programs. Many of these programs are duplicative of other programs. In many cases, schools have the flexibility to use other federal funds for the purposes of some of these targeted programs. Eliminating duplicative education programs will streamline Federal education initiatives and provide savings. The President recognized this when he proposed terminating several duplicative programs in his budget. Building on the President’s recommendations, additional savings can be achieved by eliminating the following programs:

 

Last week House Minority Leader John Boehner & House Minority Whip Eric Cantor submitted a letter to President Obama outlining proposals to reduce the Deficit and provide savings for American Taxpayers. Here are a few highlights of these proposals.  The bottom line is, we’ve got to stop spending money we don’t have, and probably can’t get even if we wanted to. 

Terminate Funding For The National Drug Intelligence Center
 
The National Drug Intelligence Center (NDIC) has been the subject of significant public debate recently because it unnecessarily duplicates the work of other agencies and its justification seems to have more to do with its powerful patron than its benefits to the taxpayer. Terminating NDIC would save taxpayers $44 million next year and $220 million over five years.

Eliminate Unnecessary Federal Offices Such As The Treasurer Of the United States

The office of the Treasurer of the United States was established on September 6, 1777. The Treasurer was originally charged with the receipt and custody of government funds. Over 200 years, the duties of the Treasurer changed significantly.  At different times, the Treasurer managed the government’s balance sheets and the printing of our currency. Many of these duties over time were given over to more specialized offices and officers, including the Financial Management Service and the Bureau of Printing and Engraving – but the office of the Treasurer remained in place. The most recent organizational chart for the Department of Treasury makes clear that none of these or any other offices report to the Treasurer. The job description contained on the Treasury’s website describes the Treasurer as a consultant, advisor, spokesman, and surrogate within the Department.

There are many examples of places the government can save…we’ll do more of these tomorrow.