Wednesday, April 27, 2011

Warren talks presidential politics on NECN

Meredith Warren served as a Republican political analyst on this evening's edition of Broadside with Jim Braude on NECN.

Speaking opposite Democratic analyst Sheila Capone, Warren talked about today's news regarding President Obama's birth certificate and last night's vote in the Massachusetts House of Representative regarding collective bargaining rights for public employees.

Please click on the image above or this link to watch the video online.

Monday, April 25, 2011

FY2012 Budget Deliberations Start Today

Today marks the start of the Fiscal Year 2012 budget debate on Beacon Hill as the House of Representatives begins its budget deliberations at noon.

As is tradition, matters having to do with state revenue (in other words, proposals to raise or lower taxes) are up first. Revenue matters are taken up first so officials know how much money is on the table for allocation later on in the week. Special rules adopted by the House allow for discussion of Lottery revenue as part of this process, but any discussion about other forms of gaming (casinos, slot machines, etc.) is specifically prohibited.

We're not expecting anything significant to happen today on the revenue side... but you never know. We'll post any updates we hear on this page. Until then, stay tuned...

Let the games begin!

Friday, April 22, 2011

Meredith Warren talks presidential politics on NECN's Morning Show

Meredith Warren was the special guest on NECN's Morning Show today, talking presidential politics and discussing the current Republican field of candidates.

Please click here or on the image above to watch the video on NECN's Web site.

Thursday, April 21, 2011

Barack Obama: In a Relationship with Facebook, But It's Complicated

Yesterday, America's rock star president took his message to the streets once again with a visit to Facebook's headquarters for a "town hall meeting."

Obama's money line from the gathering: As leader of the free world, he claimed a legion of 19 million friends on Facebook - but that still puts him behind Spongebob Squarepants.

Cute comment. Ba da bing.

What's interesting to us is that the President is getting a lot of coverage for his Facebook visit mostly because of the medium he chose, not the message he delivered. (For those who are interested, here is a link to the President's official remarks.) It's interesting because, with over 500 million devoted users worldwide, Facebook simply isn't a novelty anymore. Really, it's approaching the status of a public utility.

Donald Trump is burning up pop culture news with rumors of his intentions to run for president, and he's collecting enormous criticism and scorn in the process. But seeing America's novelty president sitting next to social media icon Mark Zuckerberg at Facebook's headquarters and having it live-streamed online really isn't any different from watching Donald Trump on reality television.

It ought to take more than cute comments like the Spongebob line to get re-elected President of the United States -- particularly with a nationwide unemployment rate at over nine percent, a record-breaking $14 trillion budget deficit, and a series of foreign policy troubles.

The question is: will it? We think that remains to be seen.

After all, it's soaring rhetoric, lofty promises and dramatic production value that got President Obama elected in the first place.

We assume that the President will be placed under greater scrutiny this time around as voters rate his actual performance in office, not just his ability to deliver a good speech. But we're not sure if that will happen, or if voters will be convinced that the President it trying really hard to solve long-term problems and that he needs more time to finish the job. After all, that's basically what happened here in Massachusetts with Governor Deval Patrick, who was re-elected convincingly last November despite high unemployment figures and a mounting state debt load.

Tuesday, April 19, 2011

A gloomy forecast for the economy

Historically, there has been a truism that investors have been able to depend on, through good times and bad: the United States economy is a good economic risk and a safe refuge for investment.

So, it should come as no surprise that a media advisory by Standard and Poor's sent shockwaves through the economic community yesterday as the group threatened to downgrade its AAA bond rating for the United States economy in coming years.

Here's the link:

And, you can find out more about how ratings like this are calculated here.

To sum it up, Standard and Poor's changed its overall forecast of our economic health from "stable" to "negative." It believes the size of our national debt and our inability to balance the budget could soon eclipse the enormous size and diversity that have traditionally made our economy so strong. What are the chances these factors will lead to a downgrade of the economy in the next two years? At least one in three.

The announcement by Standard and Poor's is basically a stunning repudiation of any happy talk about the United States economy improving and an indictment of political leaders for their inaction on pressing economic problems. Elected officials in Washington, D.C. need to take immediate notice. Many speculate that the Standard and Poor's rating could be politically-motivated. But even if it is, the underlying factors are indisputable, non-partisan, and in urgent need of remedy.

And, for that matter, political leaders in all fifty states should take heed of these predictions, as the story really isn't that different when it comes to state budgets. To understand more about our position here in Massachusetts, check our out recent blog post about the condition of the state budget.

Monday, April 18, 2011

Debate over tax incentives misses the real object of tax reform

It's tax time, and Sunday's Boston Globe has an interesting editorial about corporate incentive tax breaks in Massachusetts.

Basically, the editorial says we need more information to determine if targeted corporate tax breaks are working in Massachusetts and if some policies lack adequate protections to prevent calamities like the case of our state's investment in Evergreen Solar.

The editorial staff concludes that, "the Legislature should establish an office or commission to monitor economic-development initiatives and police their effectiveness." They might have a point. But, another state office is really the last thing we need right now. Better to convene an ad-hoc commission using existing resources. Staff at the Department of Revenue, the Auditor's office and numerous other state development agencies should be more than capable of evaluating this issue, even if they are joined by the involvement of the Legislature and outside economic and legal experts. It's possible that, as part of their review, they will not only discover weaknesses in our existing tax breaks but also identify opportunities for new incentives as well.

But, we think this argument over corporate tax breaks, while important, also misses the bigger issue. There needs to be an honest and independent review of the entire economic development and business tax system here in Massachusetts, not just our incentive process.

Some of our corporate tax breaks could be faulty. But, their very existence is evidence of an entire corporate tax system that is itself fundamentally flawed. After all, if the system is working, why do companies need a break from it in the first place?

We believe state officials need to adjust their mindset in order to achieve a sustainable economic policy for Massachusetts. State officials spend too much time pondering the possibility that our tax rates and tax laws are leaving untapped corporate revenue on the table. They need to spend more time trying to grow the corporate tax base. That means changing our permitting laws, our employment laws, and our tax code to make Massachusetts an attractive place for businesses to relocate and prosper. Growing our corporate tax base will naturally help to provide for more corporate tax revenue over time in a way that's healthy and sustainable.

The last time a special tax commission was convened by the Governor, it's main objective was to close "corporate tax loopholes." That's a euphemism for raising business taxes. Several years and billions of dollars in corporate taxes later, Massachusetts finds itself in an international hunt for new jobs. The fallacy is that some of these jobs left Massachusetts because of poor economic policy that has yet to be righted.

Governor Patrick can make as many trade missions overseas as he wants, and the state can offer as many incentives as it wishes, but companies will not flock to Massachusetts until we fix the underlying system to make it business-friendly. And, unfortunately, we don't see anyone who has the political courage and ambition to start that process in earnest.

Friday, April 15, 2011

The Top Things the Mass. FY12 House Budget DOESN'T Do

Much is being made of the FY2012 House budget plan, which was released to the public this week and will be debated later this month.

House leaders are focusing on what the budget does, including its spending cuts, increase in local education aid, and municipal health care reform. Some of those things are justifiably positive.

But, there are also many things that this year's state budget does not do and which are worthy of mention. Based on our quick review, here is our list of some of those things:

  • TAXES - One of the best parts of this budget plan is that it does not increase any broad-based taxes. We give House leaders credit for choosing not to increase taxes this year.

  • DEBT AND PENSION COSTS - The proposed 2012 budget does little to address serious structural problems in our state's fiscal management, most notably our high cost of general obligation debt service and our unfunded pension liability. As recently as November 2010, credit rating bureau Standard and Poor's noted that, in its opinion, "the commonwealth's high debt burden and significant unfunded pension and other postemployment benefit (OPEB) liabilities are offsetting considerations to [the state's AA credit rating]." The proposed budget increases debt service costs (0699-0015) by $254 million, or 15%, over last year. In addition, this year's transfer of funds to the state pension fund is up $36 million, or 2.5%, over last year; by FY2017, that number will be just shy of $2 billion. The budget also follows recommendations made by the Governor to extend the funding schedule for the pension fund out to 2040. Together, these two payments alone account for $3.36 billion in state spending, or more than one out of every ten cents our state will spend this year, and nearly as much money as we are spending on education aid to cities and towns.

  • RAINY DAY FUND - Credit agencies have repeatedly flagged ongoing depletion of our state's reserves to fund operating costs as cause for fiscal concern. Moody's Investor Service noted in 2010 that continued depletion without restoration of money as the economy improves would be cause for concern. However, as state officials trumpet improved revenue figures and employment numbers, and despite having spent hundreds of millions of dollars on other supplemental spending this year, state officials are not improving the condition of the Rainy Day Fund. Under their plan, in FY12 there will be another $200 million withdrawal from the Stabilization Fund to pay operating expenses, on top of cancelation of a $100 million statutory deposit into the fund.

  • CITIES AND TOWNS - House leaders are touting their plan to let cities and towns negotiate the cost of co-pays and deductibles (though not premiums) as part of their municipal health care plans without collective bargaining. This is an improvement, and this additional plan design ability will save money. Additionally, Chapter 70 school aid is increasing $119 million, and payment in lieu of tax (PILOT) funding is level-funded. However, there is a steep $65 million (7%) cut in unrestricted aid to cities and towns, which funds many municipal services. So, it is uncertain whether this budget, if adopted, would be a net improvement or a further setback to cities and towns, which have already seen their budgets cut sharply in recent years.

  • STRUCTURAL REFORM - Probably the biggest disappointment is that there is little, if any, structural reform in this budget. As expected, it's basically the same budget as last year, with a few numbers tweaked. Even the Governor's plan to eliminate public counsel services was generally not adopted. Especially in tight fiscal times like these, it's disappointing to see that there are not more ambitious efforts being made to streamline state government or consolidate state services. A newly-proposed grant to promote regionalization of municipal services is one bright spot in this area, but there is much more that could be done.

That's our take. What's your analysis of this budget? Please post a comment for us below and let us know.

Wednesday, April 13, 2011

Mass. House posts its FY2012 State Budget online

Well, it's official. The Massachusetts House of Representatives has submitted its budget plan for FY2012.

You can read the whole thing here:

We open this one up to you for comments. Any thoughts about the budget? Our first glance suggests that it's pretty short on reforms, much as expected.

Tuesday, April 12, 2011

Looks like President Obama isn't the only one getting letters from the Gaddafi family

It's nice to know the spammers are keeping up with current events.

Received today in our e-mail:


Dear Friend,

My name is Al Muttassim Billah Al-Gaddafi (born 1977), a former Libyan Army officer and the National Security Adviser of Libya. I am the fourth son of Libyan leader Muammar Al-Gaddafi. I want to believe that you are familiar with the stories on the media about the unrest in Libya, as the Libyan National Security Adviser to my father, I have warned him to step aside and allow the people of Libya to have their peace but he refused, I cannot die with my father, but during this period my father gave me US$400 Million Dollars cash to keep. I was able to move US$40 Million through diplomatic immunity luggage system to an undisclosed location abroad for safe keeping which I will disclose to you if you come to agreement with me.

Due to our restricted movement, I would want you to present yourself as the beneficiary of the funds, based on this I will issue an authorization letter instructing the release of the deposit to you under 24 hours of confirmation and verification. You will be entitled to 30% of the total sum as your share while 60% will be for me, I will inform you when to transfer my share to me when the problem in my country has finally calm down. The remaining 10% is to cover all expenses that may be incurred in the course of this transaction. This arrangement is known to you and me alone for security reasons. I will not be able to communicate with you on phone because I am hiding in a secured place. If you are able to handle this deal kindly send email to me on my private email: [deleted], I awaiting your positive response, may Allah's peace be upon you.

Monday, April 11, 2011

All budget, all the time

If you follow politics and you're someone concerned about money matters, then this week is the week for you.

In Washington, all eyes will be on Congress as members put pen to paper to solidify a compromise and avoid a government shutdown. But even before this process is finished, members are also turning their attention to two major fights looming on the horizon - debate over whether to raise the nation's debt ceiling, and the debate over the 2012 budget. If you thought the back-and-forth over last week's threatened shutdown was riveting, then get ready for more.

Then, there's Massachusetts. This week is traditionally the time when the House releases its budget for the coming fiscal year. Look for the document itself to be released mid-day Wednesday, with something like 1500 amendments filed by the end of the week, and a debate after school vacation week.

What's interesting is that all of this discussion is unlikely to produce meaningful change regarding the fiscal health of our state or our nation.

Republicans in Washington scored a major victory last week in getting Democrats to concede to spending cuts, even if they were less than what Republicans wanted. But, these cuts do not produce the systemic reform that is needed to address real deficit and debt reduction. Likewise, the state budget here in Massachusetts is unlikely to yield any meaningful change in the way our state operates, and will likely do little if anything to trim our state debt load, help to make our pension system sustainable, or reform entitlement programs.

As members of the public, we have the luxury of being able to sit back and enjoy good political theater as politicians spar over fiscal matters. But, as taxpayers, our patience should be growing thin as government inaction persists. The truth is that the fiscal health of our nation and our state can't afford to wait any longer for sizable reforms to be enacted - and that's something people of all political persuasions should be able to agree on. We need courageous leaders willing to rise up to this challenge and to take action.

Friday, April 08, 2011

Shutdown of what, exactly?

Today's national news is being dominated by talk of an impending shutdown of the federal government.

Much has been made of the list of services which presumably might be unavailable to Americans as early as this weekend.

But, before you get too concerned about the shutdown, consider this:

What did the federal government do for you last weekend that you're worried about losing this weekend?

OK, so we're being a little snarky and cynical. But, here's why that's actually an important question.

For both sides of the political debate, the budget showdown in Washington seems to be more about posturing and messaging for the 2012 election than anything else.

If most people nationwide can identify certain things right off-the-bat that make them worry about the shutdown, then that's essentially a public relations victory for President Obama and Democrats in Congress because it means that people are not worried about the size of government. Democrats are looking to blame Republicans for a failure of leadership and for proposing Draconian budget cuts that would be harmful. They are also appealing to their core constituencies to preserve funding for certain targeted programs.

On the other hand, if there's nothing most people find immediately troubling about the shutdown, or if most people actually think shutting down the government for a little while might be a good idea, then that's essentially a victory for House Republicans. They are trying to convince people that the overall fiscal health of the country is what's at stake and that government is too large, while also appealing to their core constituencies to cut funding for certain targeted programs.

The stakes are high for both sides. But the danger here is that people will be most interested in having a government that runs well, and they will be left with an overall feeling that it's Washington in general that has failed them. That's bad news for both parties trying to garner support in 2012. Take, for example, the decline in ticket sales that sometimes follows lockouts of professional sports leagues.

Is this what will happen to incumbents in 2012? Or, will one side clearly win the current public relations battle? We will probably start to get a good idea as early as next week - assuming there is no last-minute deal down in D.C.

Thursday, April 07, 2011

Why We Need a Paul Ryan Figure Here in Massachusetts

If you follow national politics at all you know that there is a budget battle royale brewing down in Washington, D.C. this week. Things are getting so heated that, at times, CNN has started posting a ticker counting down the seconds until a possible government shutdown on Friday.

Finding himself at the center of it all is a congressman named Paul Ryan (R – WI). As the House budget chief, Ryan has proposed a series of long-term spending cuts worth just over six trillion dollars throughout the next decade.

We want to be very clear that we do not necessarily endorse the specific proposals in Congressman Ryan's plan to cut federal spending. However, we greatly admire and respect him for having the courage and forethought to make this proposal in the first place. (Reportedly he has been working on honing the plan for many years). People should take it seriously, and we hope it will encourage a robust dialogue in Washington for years to come. Ryan's proposal may or may not be the right one, but at least he is offering a solution to real problems, even if it turns out to be the wrong solution in some way(s). It is up to his critics to match his plan with their own version if they think it is flawed; it is possible to doubt Ryan's conclusions, but the problems he addresses are real.

As loyal Bay State residents, when we hear about Paul Ryan's proposal, it also makes us think of Massachusetts. Specifically, it makes us wish that there were someone – anyone, from either party – here in Massachusetts who would have the motivation to file a similarly-courageous proposal for cutting state spending and streamlining state services.

Next week, the House of Representatives is due to file its version of a Fiscal Year 2012 spending plan for Massachusetts state government. The problem with this budget is that, like others like it in the past, it likely will not contain meaningful, systemic reform that is needed to address long-term financial problems the Commonwealth faces.

Basically, Massachusetts political leaders gather each year and reach an agreement on their consensus estimate for available revenue next year. Several months later, they pass a budget into law that basically fits last year's budget into this new figure. Sure, they tweak it a little, (usually) adding or (occasionally) subtracting a little bit to make the numbers add up. But, on the whole, the budget that gets passed each year is mostly a dusted-off copy of the previous year's budget.

This process lacks vision, and it harms taxpayers as a result.

Massachusetts has significant fiscal problems it must address, and they are similar to the problems faced in Washington. Credit rating agencies repeatedly flag the disproportionate size of our state debt load as cause for financial concern. The same is true of the unfunded liability within out state pension system. The cost of entitlement programs continues to increase. And state spending continues unabated.

The only way to successfully address these problems is to dismantle the state budget and to reconstruct it piece by piece. The budget process should not be a function of pitting one line item against another based on the power of advocacy groups. It should be a process that adopts a long-term, responsible vision for state capital and operational spending, with appropriate reserves, and which sets priorities for the provision of government services within those limits. This process would allow for proper emphasis on programs we all want to see government provide so that no one in this state falls through the cracks. And, it would provide a leaner, meaner state government that better serves the needs of the people it represents.

Say what you will about Paul Ryan's plan, but his vision and his approach are aimed at doing exactly what we're talking about. And, for that, we salute him.

Will there be a Paul Ryan in Massachusetts this year? We sincerely hope so. But frankly, we doubt it. After all, last week's House Democratic Leadership retreat to the Berkshires does not appear to have produced any meaningful results this week. And, as soon as the House budget is filed and members propose amendments, what is the next order of business in the House? School vacation week.

So much for progress.

Wednesday, April 06, 2011

Let's play fair

According to today's Boston Globe, national Democratic party officials are leaning heavily on Massachusetts lawmakers to delay the date of the Bay State's 2012 presidential primary election.

The story makes it clear that the motive behind the move is to front-load the national primary process with more conservative states - thereby making the selection of a more conservative GOP nominee more likely - so as to draw a sharper contrast to President Obama and increase Obama's chances of re-election.

This is the most ridiculous ploy we've heard in a long time, and we are relieved to hear that, according to the article, Bay State political leaders - particularly Secretary of State Galvin - don't seem interested in the idea.

National Democrats, it seems, are scared about President Obama's prospects for another term in office. Even the Obama campaign's launch video alludes to it.

As well they should be.

Sitting presidents generally benefit from political inertia. It falls upon their challengers to make a clear and convincing case for removing the incumbent from office.

However, in 2012, President Obama has two difficult challenges ahead of him on this front.

First (and as we have alluded to in the past in this blog), we believe it is going to be difficult for President Obama to inspire the nation the same way he did when he swept into office in 2008. His popularity was so immense then that he was frequently compared to a rock star; some took it so far as to make biblical references. For Obama, the good news is that he raised the bar in presidential politics such that there are greater-than-usual expectations on his 2012 opponents to move and inspire the nation themselves. But, the bad news is that these same expectations are on Obama himself. To win, he will have to convince people he was not just a one-hit-wonder.

Which brings us to our second point. When times are tough and achievements are scarce, the political inertia which usually benefits incumbents can become political quicksand. There is nothing a political challenger likes more than to be able to blame their incumbent rival for all the world's problems. Incumbents can weather the storm by making the challenge seem petty or unfair. But if the challenge is credible, the incumbent is in danger of losing his office.

Together, these challenges pose real trouble for Obama's 2012 campaign. The 2008 election was all about the audacious promise of hope and change. This one is about an audacious request for people to still believe in that unfulfilled promise four years later. Wars have not ended; they have expanded. The economy remains a quagmire. Foreign policy is a shambles. And, all of these things provide fodder to Republican candidates seeking to make the case that people are not "better off than they were four years ago," even if Democrats contend the President is a victim of inherited problems, political disagreement or long-term issues which take more than four years to solve.

Monday, April 04, 2011

Two Thumbs Down

It was a moment even Hollywood couldn't have scripted.

There I was, out for my early morning walk. It was a cool, crisp morning. Birds were starting to chirp. The sunrise was majestic. (No joke, there was actually a rainbow in the sky this morning.)

And, then, it happened.

A thrill went up my leg, just like Chris Matthews four years ago. It was my cell phone delivering me a feverish announcement from CNN that President Obama has formally announced his re-election campaign with an online video.

I couldn't wait to get home to watch. It made me walk faster. I was starting to get tired, but in the background, all I could hear was the voice of inspiration that had brought hope to an entire nation.

Yes I can. Yes I can. Yes I can.


Look, full disclosure here: We tend to support conservatives, so a heavily-Democratic message usually leaves us cold. But, we try hard to be open-minded in this blog, and we also usually appreciate the artfulness of a good political ad, regardless of the substance. For example, we appreciate Hillary Clinton's "It's three a.m." ad from four years ago as a goosebump-inducing piece of advertising.

So, with that said, here it is: President Obama's video is one of the worst pieces of political advocacy we have ever seen.

It's boring. It's not inspiring at all. It's devoid of any substance. It says nothing. It lacks any sort of vision. It's full of lame excuses. It's seemingly an exclamation point on the end of an unlikely presidency that has been short on meaningful accomplishment. There is no recounting of any achievements Obama has had, or leadership qualities he possesses.

The message is essentially this: We should all get together to re-elect President Obama because electing him four years ago, as a completely unknown and unqualified candidate out of nowhere, was pretty cool. So, let's do it again. One woman even says she's nervous about the campaign.

And this is supposed to be the change we can believe in? This video doesn't even do a convincing job of conveying what has been aptly called "the hopey-changey thing."

Contrast Obama's ad today with this message from early in his first campaign:

Big difference.

We think there is an important take-away from this video. Republican candidates for president this year are saddled with the challenge of basically having to out-do President Obama's campaign from four years ago in order to win. But, at the same time, Obama himself has a challenge ahead of him to one-up his own 2008 campaign. And, this video makes it look like that's a tall challenge. Like it or not, a lot of these campaigns are won or lost in the media.

Basically, this ad amounts to a call out to disenchanted 2008 Obama supporters asking them to reenergize. But it also leaves the president exceedingly vulnerable to charges that the nation is in a position that is essentially the same - if not worse off - than it was in four years ago. The Republican candidate who makes the case for this most convincingly, and who offers the clearest and most inspiring alternative, will win in 2012.

Game on.

Friday, April 01, 2011

Top Ten Things Overheard This Morning At The 2011 Mass. House Democratic Leadership Retreat at UMass Amherst

10. "Dude... what time is it, and where are we right now?"

9. "Today's presentation by Evergreen Solar on the topic of sustainable economic development has been canceled. This retreat will be in a brief recess..."

8. "Ooh. It snowed. Mistah Speakah, can we go outside and build a snowman?"

7. "I call shotgun on the way back."

6. "Very nice presentation on economic statistics, Professor. Now, can you please tell us, what's the probability of a win at today's Sox opener?"

5. "OK, ok. Here's a pop quiz: Two major companies leave Massachusetts at the same time, one traveling South at a hundred miles an hour, the other one..."

4. "Hey, this place is really nice. What do they do here?"

3. "Why, yes, I'm always happy to pose for a picture. Um, wait, are you a reporter?"

2. "SOOO glad we didn't invite the Republicans to this..."

1. "Psst. Hey, can we claim a per diem for this?"