GOP hits Obama for lack of urgency to tackle the deficit problem

Senate Republicans have been voicing out hard lately about President Obama’s lack of decisive action in dealing with the budget deficit and government spending. Several GOP Senate members even took their tough remarks against the White House policies over the media.

The wildly ballooning deficit is one intensely debated issue right now in Congress. A few disgruntled Republicans are not all too optimistic about any possible compromise between the president and the Republican-majority House with regard to implementing spending cuts.

Kentucky Republican senator Mitch McConnell went on air in NBC’s “Face the Nation” during the weekend to express his displeasure with the president’s phase on dealing with the problem despite having numerous discussions with him about the issue along with Vice President Joe Biden.

Congress is hard pressed to pass a budget by March 8 to avoid the possibility of a government shutdown. House Republicans have given the Democrat-led Senate more time to look through their proposed $61 billion spending cuts.

It is said that the White House has promised to meet the House Republicans halfway but so far they have been very disappointed with the president’s counter offer of $10.5 billion budget slash. The current budget for the next fiscal year stands at $3.7 trillion, which is already in the red by $1.65 trillion. 

Republicans have accused Democrats for messing up the stimulus package, which according to them has yet to produce any significant impact to the economy and drive to reduce unemployment. Democrats on the other hand have been arguing that the GOP spending cuts will kill recovery that will put even more people out of work.

How America sees the Egyptian riots

The president of the United States just gave his message to the public regarding the riots in Egypt. President Obama’s statement sounded like as if he is already resigned to the idea that embattled Egyptian dictator Hosni Mubarak’s time at helm in the north African country, which is a major US ally, is coming to an end.

The regime has been the dominant figure in Egyptian politics for 30 years and for most of it, the Egyptian people were largely simply supportive of it and passive about their rights. But for the last four days, the people have shown tremendous fury on the streets indication that they have lost their sense of fear to the regime.

Mubarak has himself declared that he is not going anywhere but as his government continues to show helplessness in the face of riots in Cairo, Suez City, and Alexandria in front of a worldwide audience, he simply does not have the political base to stay in power for long.

The United States, on the other hand, could find itself in the wrong side of history as the Obama administration continues to maintain support for the current regime. Understandably, Washington is careful not to pull the plug on Mubarak since there are Islamic fundamentalists determined to take control of the government once the regime steps down.

Obama might not be too thrilled of Mubarak keeping his post but the alternative might lead to another Iran, which the president is not willing to contemplate. He might be open to the idea though of a transition process that could lead to some kind of a compromise with the protesters. However, the lack of a leader on the side of the protesters could pose a significant hurdle to any compromise that can be made.

The Obama administration simply knows it cannot ignore the anger of the Egyptian people, who mostly live on less than $2 a day. It is playing a delicate balancing act since the current regime has been friendly to US interests in the Arab world and it is a major stability force in the region because of its cordial relations with Israel.

US and China response to South Korea’s military drill

Despite Korea DPR’s warnings of retaliation, the Republic of Korea conducted its scheduled live-artillery drill today in Yeonpyeong. As a precaution for a possible North Korean offensive, military commanders launched fighter jets into their airspace to repulse any potential attack.

Just weeks ago, the North Korean army shelled the South Korean island after military exercises of this kind were held, resulting to four casualties. The South Korean government responded with an angry tone threatening to use military force if attacked again. Pyongyang considers the Yeonpyeong waters as part of its territory.

The United Nations (UN) Security Council has earlier called for an emergency meeting to discuss possible actions regarding the military drill by the South but failed to reach a consensus. China and Russia has asked Seoul to stop the drill to avoid igniting a deadly confrontation with its neighbor.

This has caused a divide among the council’s permanent members with the US supporting the exercise while China and Russia voicing against it.

The US has recently sent New Mexico governor Bill Richardson to North Korea as the White House’s unofficial envoy in an effort to deflate the tension ahead of the scheduled exercise. He admitted of talking out the North Koreans from taking any aggressive response.

Meanwhile, during the Security Council meeting, China has expressed willingness to bring together the two Koreas in the negotiating table. China remains a crucial economic and political ally of Pyongyang as the regime is heavily dependent from Beijing for its fuel and food needs.

Will Americans see tax increase in 2011?

The US Senate is poised to approve the economic package negotiated by President Obama and Republicans in Congress over the course of the previous weeks. The bill primarily focuses on the extension of the Bush-era tax cuts although House Democrats are calling for some revisions once the bill gets to them.

As this is happening in Washington, a recent study has been released by the Rockefeller Foundation revealing the widespread effect of the crisis, which began 2 years ago, to Americans. It states that over 9 out of 10 US households were hit substantially during the period of March 2008 to September 2009.

Many Americans felt the deterioration of their wealth and income during the period which even saw the value of their investments and home fell like a rock.

Many believe that continues to be the case in 2010. Even Federal Reserve chairman Ben Bernanke himself admitted in his own words that recovery in the US economy is “disappointingly slow” despite all the monetary intervention tools they have utilized such a near-zero interest rates and the billions of dollars the central bank have pumped into the economy.

President Obama’s remarks that the compromise package is a “substantial victory for middle-class families” is in defense of a plan that could face a stiff challenge with Democrats in the lower chamber where they believe can cause significant losses in potential revenues for the government thus limiting their ability to implement economy-spurring plans that address the needs of middle-class America.

Once the bill passes the Senate in the final vote, House Democrats are expected to push for a revision of the estate tax which under the Obama-GOP plan, the first $10 million that couples pass on to their heirs will be exempted from taxation. The balance will be subject to a 35 percent tax rate.

Democrats want a return to the 2009 estate tax levels where the exemption is $3.5 million and the balance was taxed 45 percent. Republicans, meanwhile, threatened that any partisan change to the bill would mean the death of the deal and Americans will be forced to brace for tax increase across all brackets beginning January 1.

Where’s the economy headed now as Democrats oppose Obama’s tax deal?

The markets and the general public continue to hang on to their breath as the president’s bill to prevent taxes from rising may face a grinding halt courtesy of no other less than his own party.

The Democratic caucus voted to sharply oppose President Barack Obama’s compromise tax deal with members of the GOP in Congress, which guarantees a two-year extension of the Bush-era tax cuts for all income brackets.

Obama’s partymates was angered with how the president easily conceded to the Republicans in Congress including extending tax cuts to the so-called wealthy and a lower-than-expected estate tax rate after a $5 million threshold per individual.

Vice President Joe Biden, who negotiated the deal with the GOP, defended the plan and told fellow Democrats that they must either approve of it or not.

Those in favor of it believe this will keep the momentum in the economic recovery considering US unemployment remains a shade under 10 percent. The economic package also guarantees a 13-month extension of unemployment benefits, a 2 percent slash in payroll taxes, and tax breaks for small businesses.

The business sector is generally supportive of the package to be passed as they seek more certainty in the economic outlook for the near term. Some businessmen have suggested that the proposed tax cut extension would allow their companies to purchase equipment and hire more people, both vital to the economic recovery in general.

Aware of the opposition from within its own stable, the White House, in a statement, believed that discussions between both sides will still continue in the next few days and some of the major elements of the economic package will eventually be approved.

Unemployment in older people on the rise

With their savings and investments wiped out by the financial meltdown, the economic crisis has surely claimed people aged 55 and above as its helpless victims. Many belonging in this particular segment of the population are now forced back into the jobs market seeking for work but sadly they are not getting the call back.

In the recently released November jobless report, more than one in every ten Americans are out of work for 12 months or more. Another report by Pew Fiscal Analysis Initiative last April revealed older people had the most difficult time landing a job.

Older workers, who have been working for 20 years or so, find out that their work experience is actually working against them as employers are increasingly looking to hire younger and “cheaper” workers.

Unemployment in the United States spans a broad range of industries including manufacturing and retail. The November jobs numbers showed a weaker-than-expected 9.8 percent unemployment rate, casting a cloud on the Obama administration’s economic strategy.  

A New York Times study shows unemployment rate for aged 55 and above is now twice as it was before the crisis began in late 2008. The same study also reveals poverty is now steadily on the rise in this age group.

Analysts agree that older workers do not only have to hurdle competition against younger workers, but may also find it challenging to get around new technology, which changes rapidly. Many older workers are also questioned by employers on why they were out of work for a long time, diminishing their value on the market.

Obama’s compromise tax deal: Will his own party approve?

This time, the president is directing his talk not to Republicans, but to the congressional members of his own Democratic Party. President Obama even sounded like scolding his partymates as he warned them not to be stubborn for the interest of the American public.

The president offered a gesture of interest in “working together” with Republican lawmakers to pass the highly debated Bush tax cuts, which are set to expire at the end of the year and other economic measures aimed at stimulating the US economy.  

They agreed on certain points including extension of tax rates for all brackets for 2 years, continued government assistance for unemployment insurance claims for the next 12 months, and payroll tax reduction for 1 year that would essentially trim social security contributions paid by workers, are just among the agreed points of the compromise deal which both sides believe will greatly benefit the middle class and boost demand in the economy.

A lot of Democrats are not too happy with the compromise saying the president gave away too much and will not be able to obtain some of the promises he made during the campaign. The president, already expecting opposition to the deal, strongly suggested that he would not let the battle of political ideologies between Democrats and the GOP to claim ordinary Americans as collateral damage.

What does the US House bill on tax cut extension mean to you?

As expected, Democratic and Republican leaders in the US House of Representatives voted along party lines regarding the debate on the extension of the Bush-era tax cuts. The voting favored those who want an extension of the tax cuts but only for middle-income individuals and households. 

Incoming House speaker John Boehner of Ohio led the Republican move in the Congress’ lower chamber to extend the lower tax rates and expanded tax credits signed during the Bush administration, which was supposed to expire by the end of the year, but had to settle on a bill meant only for the middle class while the same measures for the wealthy were allowed to expire.

Boehner, who sees it as a political maneuvering on the part of the Democrats who want to satisfy those who oppose extending the tax cuts to the wealthy, warned that the bill will not pass in the Senate. President Barack Obama has been pushing for a limited extension of the tax cuts covering only individuals earning less than $200,000 and married couples earning less than $250,000 a year.

The Republicans, emboldened by their sweeping victory in the last elections, voted against the bill saying it will be hurtful for the economy and for higher-income taxpayers.

Essentially, the House bill means people earning within the $250,000 and $250,000 income thresholds would continue to enjoy the lower 10 to 33 percent income tax rates and 15 percent tax rate on dividend income and capital gains.

People earning beyond the threshold will have their tax rates increased in the range from 35 to 39.6 percent while capital gains tax would increase to 20 percent.

Republicans hope that the bill will be eventually killed when it goes to the Senate and are eyeing a legislation that will not impose any tax increases for anybody.

What to do with the Bush tax cuts?

Fresh from the Thanksgiving celebrations, politicians in Washington are set to meet this week to determine the future of the Bush tax cuts that are set to expire at the end of the year.    

President Obama hopes to sit down with bipartisan Congressional leaders to decide whether or not to let the tax cuts expire, which many agree will be a crucial decision considering the fragile economic recovery in the United States.

The summit, which was supposed to be held last month, is not expected to result to any finalized agreement but rather will begin a series of discussions between the Democrat president and a Republican-led Congress. Both the White House and Capitol Hill agree that raising taxes at this point would be detrimental particularly to middle income Americans.

The Democrats, who were “shellacked” in the recently held mid-term elections, earlier proposed a tax hike measure to households earning over $250,000 a year. This is especially tricky since several analysts predicted this will hit small businesses which are considered the lifeblood of the economy that is currently suffering from unemployment of near 10 percent.    

There is also much speculation whether the current “lame-duck” Congress can achieve something significant regarding the tax cuts debate although some quarters see the Bush tax cuts will be extended for another 2 years in time for the next presidential polls.

A backgrounder of the Korean conflict

World leaders lined up to condemn the hostilities in the Korean peninsula which caused the death of two South Korean soldiers and injured dozens more after North Korea shelled the island of Yeonpyeong. This is just eight months after the communist North sunk a South Korean warship which was also viewed then by many as an act of provocation by the Kim Jong-Il regime.

Technically, the war between the two Koreas, which goes all the way back to the 1950s, is still ongoing and only a Cold War-era armistice, which eventually separated the two states, is the thing that kept an all-out war from breaking out again although a few skirmishes have erupted in between.

For centuries, the Korean peninsula was under the influence of foreign powers including China and Japan. When the Second World War was nearing its end, the Soviet Union and the United States took their respective claim in the area as they tried to chase away the Japanese forces out of the country.

The northern part of the 38th parallel belonged to the Soviets in which they created their own communist state while the southern part came under American occupation. As the North became stronger militarily and economically under the guidance of the Soviets and communist China, they decided to invade the struggling South with the aim of unifying the two Koreas under a Marxist system.

The United States and its allies came to the South’s aid but found themselves not only fighting the North Korean army but also against the Chinese, who came to the side of its communist neighbor. As the war wore on, it eventually became unpopular among the American public and as the new Eisenhower administration took rein in Washington, it signaled the start of a possible end to the war.

After a final toll of 2 million casualties, a truce was signed setting the border back to its pre-conflict site at the 38th parallel. Until now, the area surrounding that zone is still one of the most militarized areas in the world as the two countries are still technically at war.

Today, South Korea is among the world’s economic powers and a leader in exports and technology advancement. North Korea claims itself as a military state and has constantly been under scrutiny by the international community for its armed nuclear programs and human rights abuses.

It is quite understandable that the North will provoke such incidents, like the one that just happened in Yeonpyeong because the basis of their existence is essentially to achieve military victory. What is crucial is how the South will respond and how long its patience will last from the constant bullying by the communist regime.