Thompson Picks Up Backing of a Fiscal Repairman

In recent weeks, William C. Thompson Jr. has been increasingly unfurling mayoral endorsements from African-American and Hispanic leaders, hoping to solidify his base.

But now Mr. Thompson, a Democratic candidate and former city comptroller, is adding someone who is synonymous with fiscal gravitas: Richard Ravitch.

Mr. Ravitch, a former lieutenant governor, is best known as a Mr. Fix-It, beginning in the 1970s, for helping to rescue fiscally wobbly institutions, like the Metropolitan Transportation Authority. He also embodies the kind of old guard Democrat who is comfortable with Wall Street and the corridors of power, and he will lead Mr. Thompson’s budget and finance advisory group.

For Mr. Thompson, Mr. Ravitch’s nod, twinned with the recent endorsement of Merryl H. Tisch, chancellor of the state’s Board of Regents, underscores his broad and diverse base of support. It also signals that, in a liberal Democratic field, Mr. Thompson can appeal to more centrist establishment figures.

Even former Mayor Rudolph W. Giuliani, a Republican, told a television reporter recently that if Joseph J. Lhota, a former deputy mayor of his, were not running, he would most likely back Mr. Thompson, whom he called an “honorable man.”

Mr. Thompson said that the city’s budget challenges meant that this was “an all-hands-on-deck moment.” But he said that “there is no better partner in that effort than Richard Ravitch” to help the city “overcome these fiscal challenges.”

In an interview, Mr. Ravitch said he had “nothing against” the other candidates, especially Christine C. Quinn, the City Council speaker, and Bill de Blasio, the public advocate. But he said he decided to back Mr. Thompson, a longtime friend, because “I think he will be the best fiscal steward by dint of his experience and his personality.”

“He certainly understands that he isn’t going to preside over an expansive period in New York City’s history,” Mr. Ravitch continued.

He added, “It’s important to have broad acquaintances and roots in the political structure, because ultimately whatever choice you make on the tough decisions, you’re going to have a lot of unhappy people, and there has to be a residuum of good will and relationships.”

Mr. Ravitch has made donations to candidates (including $2,000 to Mr. Thompson, and $1,000 to Ms. Quinn, for the 2013 election), but he rarely makes endorsements. In fact, he said he could not remember the last time he publicly backed a citywide candidate (other than himself, he joked, when he ran unsuccessfully for mayor in 1989).

He also said he had voted for Mayor Michael R. Bloomberg, though he declined to say whether he voted for Mr. Bloomberg or Mr. Thompson in their contest in 2009.

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Taxes raised with no fiscal responsibility

(PNI) Three-fourths of households will see their taxes go up on the promise that spending will be looked at in the near future. Huh?

Ronald Reagan raised taxes on the promise that for every dollar of tax increase there would be $3 of future spending decreases. George H.W. Bush raised taxes on the promise that for every dollar of tax increase there would be $2 of future spending decreases. In both instances, the taxes were immediately raised, but the Democrats reneged and spending cuts never came about.

President Barack Obama and the Democratic Party have never shown the slightest interest or the required courage necessary to begin genuine debt reduction. They skirted the law by not passing a budget in three years. The president ignored his own committee's report on how to reduce the deficit.

Instead, Democrats continue to divide Americans by playing class warfare and promoting the crass emotion of jealousy. Individual initiative and responsibility no longer apply.

-- Lowell Ziemann, Scottsdale

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Fear of ‘Fiscal Cliff’ Has Industry Pulling Back

Executives at companies making everything from electrical components and power systems to automotive parts say the fiscal stalemate is prompting them to pull back now, rather than wait for a possible resolution to the deadlock on Capitol Hill.

Democrats and Republicans are far apart on how to extend the Bush-era tax breaks beyond January — the same month automatic spending reductions are set to take effect — unless there is a deal to trim the deficit. The combination of tax increases and spending cuts is creating an economic threat called “the fiscal cliff” by Ben S. Bernanke, chairman of the Federal Reserve.

Until recently, the loudest warnings about the economy have come from policy makers and economists, along with military industry executives who rely heavily on the Pentagon’s largess and who would be hurt by the government reductions.

But more diversified companies like Hubbell Inc. in Shelton, Conn., have begun to hunker down as well.

Hubbell, a maker of electrical products, has canceled several million dollars’ worth of equipment orders and delayed long-planned factory upgrades in the last few months, said Timothy H. Powers, the company’s chief executive. It has also held off hiring workers for about 100 positions that would otherwise have been filled, he said.

“The fiscal cliff is the primary driver of uncertainty, and a person in my position is going to make a decision to postpone hiring and investments,” Mr. Powers said. “We can see it in our order patterns, and customers are delaying. We don’t have to get to the edge of the cliff before the damage is done.”

The worries come amid broader fears that the economy is losing momentum — the annual rate of economic growth in the second quarter fell to 1.5 percent from 2 percent in the first quarter, and 4.1 percent in the last quarter of 2011.

On Thursday, the Commerce Department reported that factory orders unexpectedly fell 0.5 percent in June from the previous month, while data on the labor market released Friday showed job creation still falling short of the level needed to bring down the unemployment rate.

All told, the political gridlock in the United States, along with the continuing debt crisis in Europe, will shave about half a percentage point off growth in the second half of the year, estimates Vincent Reinhart, chief United States economist at Morgan Stanley.

More than 40 percent of companies surveyed by Morgan Stanley in July cited the fiscal cliff as a major reason for their spending restraint, Mr. Reinhart said. He expects that portion to rise when the poll is repeated this month.

“Economists generally overstate the effects of uncertainty on spending, but in this case it does seem to be significant,” he added. “It’s at the macro- and microeconomic levels.”

Unless Congress acts to extend the tax provisions and comes up with a budget deal that averts the planned reductions in military spending and other government programs, taxes will rise by $399 billion while federal government spending will fall by more than $100 billion, according to an analysis by the Congressional Budget Office. The end-of-year battle comes after Democrats and Republicans have failed over the last year to reach long-term agreements on how to tackle the budget deficit.

Last week, Congressional leaders did manage to agree tentatively to keep the government financed through next March, extending a deadline that had been set to expire Oct. 1, but that deal did not address the extension of the tax cuts or spending reductions.

All together, the fiscal cliff’s total impact equals slightly more than $600 billion, or 4 percent of gross domestic product, and if no action is taken, the Congressional Budget Office projects the economy will shrink by 1.3 percent in the first half of 2013 as a result.

With many Fortune 500 companies now setting budgets and planning for 2013, chief executives say they cannot afford to hope for the best. Wall Street is also paying more attention: over the last few weeks, chief executives of companies like Honeywell, U.P.S. and Eaton all cited the uncertainty as a threat to earnings in the second half of 2012.

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Competing fiscal plans blocked in divided Senate (Reuters)

WASHINGTON (Reuters) – Senate Republicans and Democrats rejected each other's economic stimulus bills on Thursday, underscoring their inability to craft a bipartisan solution on job creation before next year's elections.

All 47 Senate Republicans, joined by two of President Barack Obama's fellow Democrats and one independent, stopped a key piece of Obama's $447 billion economic stimulus plan.

The $35 billion proposal would raise taxes on millionaires to create or protect 400,000 jobs for teachers, firefighters, police officers and other first responders. In a 50-50 vote, its backers fell short of the needed 60 votes in the 100-member chamber to clear a Republican-led procedural roadblock.

"For the second time in two weeks, every single Republican in the United States Senate has chosen to obstruct a bill that would create jobs and get our economy going again. That's unacceptable," Obama said in a statement vowing to continue pushing for passage of the plan "piece by piece."

Democrats fired back by blocking a Republican bid to repeal a 3 percent withholding tax on business set to take effect on January 1, 2013. The 57-43 vote was also short of the needed 60 to stop a procedural roadblock by Democrats. Ten Democrats crossed party lines to vote in favor of the measure.

Democrats control the Senate, 53-47.

Both sides accused the other of jockeying for position in advance of the 2012 presidential elections that seems certain to feature the economy as the top issue.

"Protecting millionaires and defeating President Obama are more important to my Republican colleagues than creating jobs and getting our economy back on track," charged Senate Democratic Leader Harry Reid.

"The American people want us to do something about the jobs crisis," said Senate Republican leader Mitch McConnell. "What Republicans have been saying is that raising taxes on business owners isn't the way to do it."

WASHINGTON GRIDLOCK

Obama's approval rating is only about 41 percent largely because of his inability to bolster the economy. But Congress is even more unpopular: its approval rating is about 12 percent after budget battles pushed the government to the brink of a shutdown and an unprecedented default.

With the U.S. jobless rate stuck above 9 percent for five straight months, a recent Wall Street Journal-NBC poll showed that voters back Obama's bill by a two-to-one margin.

Obama spent three days this week campaigning in North Carolina and Virginia, key states in his reelection bid, to promote his jobs bill and crank up pressure on Republicans.

The president's strategy is to force Republicans to accept his proposals or be painted as obstructing economic recovery.

Republicans counter that Obama's plan are laden with wasteful spending and job-killing tax hikes on millionaires.

McConnell argued that the Republican bill to repeal a pending 3 percent withholding tax on business mirrored a provision that Obama included in his own jobs bill.

Democrats disagreed, noting that Obama's proposal would have delayed implementation of the tax, not repealed it.

In issuing a veto threat shortly before the Senate vote, the White House also pointed out that the Republican measure, unlike Obama's proposal, called for $30 billion in spending cuts to cover lost tax revenue.

Obama's overall $447 billion bill seeks to create jobs with a mixture of stimulus spending and tax cuts for the middle class and small businesses. It would be financed by a 5.6 percent surtax on millionaires.

McConnell rejected Democratic charges that his party is trying to hurt the economy to damage Obama's reelection bid.

"If Republicans wanted the economy to fail, we'd all line right up behind the president's economic policies, rather than opposing them," McConnell said.

(Reporting by Thomas Ferraro; editing by Anthony Boadle)

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Howard Dean called a ‘fiscal conservative’ (Daily Caller)

Former presidential candidate Howard Dean showed he wasn’t opposed to being labeled a fiscal conservative at a panel held by the National Press Club on Thursday.

At the event, which aimed to address the growing burden of Medicaid, the ex-chairman of the Democratic National Committee admitted his belief that Medicaid block grants can work under certain conditions.

“Many people don’t know this, [but] Gov. Dean is actually a fiscal conservative,” panel moderator Ray Scheppach said, eliciting a smile from Dean.

Dean also reiterated his less liberal tendencies in his comments on the federal government’s approach to Medicaid funding.

“I hate to say this, and sound like a real fiscal conservative, but I don’t think the federal government should do much,” Dean added. “If we keep feeding the beast it’s going to keep getting bigger,” he said, leading Scheppach to note that Dean’s values sometimes stray from those of the Democratic Party.

But Dean’s policies haven’t always resonated with fiscal conservatives. He has long been a proponent of raising taxes in certain instances and was quoted by MSNBC in April as saying the only solution to the deficit problem was to “cut spending and raise taxes.” (Howard Dean: Boehner is a ‘good Speaker’)

And despite his latent right-wing comments, Dean’s not about to jump his party’s ship: While expressing some support for block grants, Dean carefully noted, “I’m not sure I like Paul Ryan’s block grant [plan].”

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