Think of Heritage Action as the Clark Kent of the conservative think tank world — as buttoned-down and statistics-laden as can be, but when the nemesis (Democrats! Liberals!Wishy-washy Republicans!) come into sight, the glasses come off and the lobbying muscles flex.
“Fiscal cliff” — ZAP!
Higher taxes — WHAM!
Deficit spending — KA-POW!
The thrills — and opportunities for heroics — seem greatest when disaster is at hand. Or at least that’s how Mike Needham likes to look at it.
The 31-year-old chief executive of Heritage Action — the lobbying arm of the storied Heritage Foundation — senses victory where others see defeat.
Sure, you could interpret the passage of the Jan 1. fiscal cliff deal as a crushing loss for conservatives, who were pained to see Republicans vote for their first tax increase in more than two decades. But flip the script, Needham urges, and you’ll see that only 85 House Republicans supported the deal; 151 of them voted against it.
“That’s a whole lot of Republicans who kept their purity on the tax issue,” Needham explains. He’s as confident as ever that his group will compel conservatives to hold firm in the next stage of the fiscal fight. Needham will have a partner in former senator Jim DeMint, the conservative firebrand from South Carolina who’s set to become president of the Heritage Foundation in April.
As with DeMint, there’s little that animates Heritage Action more than being in the opposition, where an honorable defeat will always trump a watered-down compromise. Needham’s group has a distinct way to convince itself and others of its rectitude: reams of data and research from the most visible and well-funded think tank on the right. A willingness to go to the brink doesn’t hurt, either.
While some of its compatriots have reconsidered their hardline stances since President Obama’s reelection — even Grover Norquist gave the GOP a hall pass on the fiscal cliff’s tax hike — Heritage Action has retrenched. On Wednesday, House Republicans backed down from the debt-ceiling standoff and voted to suspend it for three months without offsetting spending cuts. But Heritage Action has already settled on the next crisis point to use as leverage: rallying, cajoling and shaming lawmakers to commit to a budget that balances within 10 years. And here, in part, is why Heritage Action calls itself the “new fangs” on the Heritage “beast”:It has no qualms about holding conservative members accountable to their promises — even if it risks a government shutdown. (more…)
Sherk and Zywicki: Obama’s United Auto Workers Bailout
If the administration treated the UAW in the manner required by bankruptcy law, it could have saved U.S. taxpayers $26.5 billion.
By JAMES SHERK
AND TODD ZYWICKIMr. Sherk is a senior policy analyst in labor economics at the Heritage Foundation. Mr. Zywicki is a law professor at George Mason University and a senior scholar at the university’s Mercatus Center. This op-ed is adapted from a longer article published this week at Heritage.org.
EXCERPT FROM THIS ARTICLE: Avoiding these losses would have been straightforward. If the government treated the UAW in the manner required by bankruptcy law, it could have given the stock and promissory notes to the Treasury instead of to the UAW. Labor cost savings and not supporting Delphi pensions would have increased the value of the taxpayers’ shares of GM, while GM would have needed less financing.
Instead, President Obama gave over $26 billion to the UAW—more money than the U.S spent on foreign aid last year and 50% more than NASA’s budget. None of that money kept factories running. Instead it sustained the above-average compensation of members of an influential union, sparing them from most of the sacrifices typically made in bankruptcy. Such spending does not serve the common good. President Obama did not bail out the auto industry. He bailed out the United Auto Workers.
President Obama touts the bailout of General Motors and Chrysler as one of the signature successes of his administration. He argues that the estimated $23 billion the taxpayers lost was worth paying to avoid massive job losses. However, our research finds that the president could have both kept the auto makers running and avoided losing money.
The preferential treatment given to the United Auto Workers accounts for the American taxpayers’ entire losses from the bailout. Had the UAW received normal treatment in standard bankruptcy proceedings, the Treasury would have recouped its entire investment. Three irregularities in the bankruptcy case resulted in a windfall to the UAW.
First, GM and Chrysler owed billions of dollars to the union’s Voluntary Employee Beneficiary Association (VEBA) when they went bankrupt. The union and the auto makers created VEBA in 2007 to assume responsibility for the UAW’s generous retiree health benefits. The benefits allowed UAW members to retire in their mid-50s with minimal out-of-pocket health-care expenses for the rest of their lives. GM owed $20.6 billion and Chrysler owed $8 billion to VEBA as unsecured claims.
A bedrock principle of bankruptcy law is that creditors with similar claims priority receive equal treatment. If you owe $1,000 each on two credit cards, in bankruptcy you cannot choose to pay $900 to Citi and only $200 to Chase. Each of the creditors is entitled to an equal percentage recovery.
In the auto bankruptcies, however, the administration gave the unsecured claims of VEBA much higher priority than those of other unsecured creditors, such as suppliers and unsecured bondholders.
At the time of bankruptcy, GM owed these unsecured creditors $29.9 billion, for which they received 10% of the stock of “new” GM, which went public in November 2010, and warrants to purchase 15% more at preferred prices. Yet VEBA got 17.5% of new GM and $9 billion in preferred stock and debt obligations. Based on GM’s current stock price, VEBA collected assets worth $17.8 billion—$12.2 billion more than if the administration had treated it like the other unsecured creditors.
The same thing happened at Chrysler, only to a greater degree. Chrysler’s junior creditors recovered none of their $7 billion in claims. In normal bankruptcy proceedings, the UAW would have also collected nothing. Instead it walked away owning almost half of new Chrysler and a $4.6 billion promissory note earning 9% interest. Had the stock and note gone to the Treasury instead, the bailout would have cost taxpayers $9.2 billion less.
Getty ImagesUnited Auto Workers President Bob King (left) with President Barack Obama at a UAW conference in Washington, D.C., Feb. 28. (more…)
– The Foundry: Conservative Policy News Blog from The Heritage Foundation – blog.heritage.org –
Morning Bell: The Danger of Article 82 and Obama’s Latest Treaty
Posted By Mike Brownfield On May 22, 2012 @ 9:05 am In American Leadership | 63 Comments
Back in 1982, President Ronald Reagan decided not to sign a treaty known as “Law of the Sea” (LOST), a United Nations convention that would raid America’s treasury for billions of dollars, then redistribute that wealth to the rest of the world by an international bureaucracy headquartered in Kingston, Jamaica. But today, the Obama Administration has revived that treaty, and tomorrow Senator John Kerry (D-MA) will hold hearings designed to illustrate its supposed benefits and generate support for its ratification. Without a doubt, Reagan’s decision should stand, and LOST should remain relegated to the trash bin of history.
The rationale for LOST is that it supposedly brings order to the world’s oceans, defines the rights and responsibilities of nations as they navigate and conduct business across the seas, protects the marine environment, and allows for the development of natural resources of the deep seabed. On the surface, these all sound like worthwhile goals. The thing is, the United States doesn’t need to join another United Nations treaty to make it happen.
For more than 200 years before LOST was adopted in 1982 and for 30 years since then, the U.S. Navy has successfully protected America’s maritime interests regardless of the fact that the United States has not signed on to the treaty. The United States’ navigational rights and freedoms have been secure, and they are best guaranteed by a strong Navy.
LOST is not without consequences, either. One of the more nefarious and insidious of its provisions is Article 82, which requires the United States to forfeit royalties generated from oil and gas development on the continental shelf beyond 200 nautical miles – an area known as the “extended continental shelf.” That money, which one estimate says could be worth many billions, if not trillions of dollars, would go to the International Seabed Authority, a new international bureaucracy created by the treaty and based in Jamaica. Heritage’s Steven Groves explains[1] that from there, America’s money could be shipped to the Middle East, Africa, China, and even state sponsors of terror:
LOST directs that the revenue be distributed to “developing States” (such as Somalia, Burma … you get the picture) and “peoples who have not attained full independence” (such as the Palestinian Liberation Organization … hey, don’t they sponsor terrorism?). The assembly – the “supreme organ” of the International Seabed Authority in which the United States has a single vote to cast – has the final say regarding the distribution of America’s transmogrified “international” royalties. (more…)
– The Foundry: Conservative Policy News Blog from The Heritage Foundation – blog.heritage.org –
Morning Bell: A Slashed and Burned Military
Posted By Mike Brownfield On January 27, 2012 @ 9:35 am In Protect America | 79 Comments
The future is not bright for the U.S. military. Yesterday, Defense Secretary Leon Panetta gave America a glimpse of the half-trillion dollars in defense spending cuts requested by the Obama Administration and detailed how the U.S. military’s capabilities would be affected in practical terms. The result is a slashed and burned military that woefully lacks the forces it needs to meet America’s security challenges on a global scale.
On the ground, in the sea, and in the air, American forces will shrink drastically — the Army will shrink by 72,000 people, the active Marine Corps will be reduced by 20,000, the Air Force will see six tactical fighter squadrons de-established while an additional training fighter squadron will be eliminated, the next-generation F-35 Joint Strike Fighter procurement will be slowed, and the Navy will retire seven cruisers and two amphibious ships at an early juncture while delaying the procurements of new ships. To put these cuts in context, we are returning to ground forces levels we had under President Bill Clinton when the Army strained and scrambled to execute smaller missions like Kosovo and Bosnia–let alone significant ground force operations. (more…)
– The Foundry: Conservative Policy News Blog from The Heritage Foundation – blog.heritage.org –
Chart of the Week: Defense Spending Throughout U.S. History
Posted By Rob Bluey On January 8, 2012
President Obama visited the Pentagon on Thursday to outline his plan for gutting our nation’s military[1]. Obama’s vision makes America more vulnerable to foreign threats and leaves our armed forces less able to provide for the common defense. (more…)
Mr. Rivkin served in the Justice Department during the Reagan and George H.W. Bush administrations. Mr. Stimson, senior legal fellow at the Heritage Foundation, was a deputy assistant secretary for detainee affairs at the Defense Department
Call it the triumph of ideology over national interest and honor. Having dithered for nearly three years, the Obama administration has only a few weeks to bring to justice a Hezbollah terrorist who slaughtered five U.S. soldiers in Iraq in 2007. Unfortunately, it appears more likely that Ali Musa Daqduq will instead be transferred to Iran, to a hero’s welcome.
In the early evening of Jan. 20, 2007, in the city of Karbala, south of Baghdad, five black SUVs approached the location of a regular meeting between U.S. and Iraqi military officers. Inside the vehicles, which mimicked U.S. transports (to avoid heightened scrutiny), were a dozen individuals dressed in U.S. military uniforms and bearing U.S. weapons. Their drivers spoke English.
Upon reaching their target, the occupants opened fire on the Americans. One U.S. soldier was killed on the spot. Four others were kidnapped, tortured and executed.
The mastermind of this brutal attack? Ali Musa Daqduq, a Lebanese national and Hezbollah commander. U.S. forces captured him in March 2007, and, in interrogation, he allegedly provided a wealth of information on Iran’s role in fomenting, training and arming Iraqi insurgents of all stripes.
With U.S. troops set to exit Iraq at the end of December, all detainees in American custody there have been transferred to the Iraqis except for Daqduq. He is set to be turned over in a matter of weeks. Based on past experience with released detainees who were in Iranian employ, U.S. officials know that Daqduq will promptly re-emerge in Iran, shaking hands with dignitaries and leading parades, before rejoining his Hezbollah colleagues.
Multinational Forces IraqMultinational Forces Iraq provided the photo of Ali Musa Daqduq during the briefing in July 2007.
This outcome would be an insult to the American servicemen who have lost many comrades to insurgents such as Daqduq, who consistently failed to comply with the laws of war. Indeed, the Iraq war is the first conflict in modern history where the U.S.—having complied with the laws of war by promptly prosecuting American troops believed to have violated those laws—did not bring to justice a single one of the hundreds of captured enemy combatants who have killed Iraqi civilians, American soldiers and contractors. Impunity for war criminals debases the laws of war, violates our international legal obligations, and is inconsistent with American values. (more…)
– The Foundry: Conservative Policy News Blog from The Heritage Foundation – blog.heritage.org –
Morning Bell: Agenda 21 and the Threat in Your
Backyard
Posted By Mike Brownfield December 5, 2011 In American Leadership |
Ready to trade in your car for a bike, or maybe a subway instead? Interested in fewer choices for your home, paying more for housing, and being crammed into a denser neighborhood? You can have all this and more if radical environmentalists and “smart growth” advocates have their way and local, state, and the federal government impose the policies set forth in the United Nations’ Agenda 21.
You might have heard of this nefarious-sounding policy in a recent Republican presidential debate[1], but even if you haven’t, here’s some background information: Agenda 21 is a voluntary plan adopted at the 1992 United Nations Conference on Environment and Development. It calls on governments to intervene and regulate nearly every potential impact that human activity could have on the environment. The end goal? Getting governments to “rethink economic development and find ways to halt the destruction of irreplaceable natural resources and pollution of the planet.”
As adopted, Agenda 21 was described as “a comprehensive plan of action to be taken globally, nationally and locally by organizations of the United Nations System, Governments, and Major Groups in every area in which human impacts on the environment.” That includes hundreds of specific goals and strategies that national and local governments are encouraged to adopt. And that translates into restrictive zoning policies that are aimed at deterring suburban growth. Ultimately, they suppress housing supply and drive up home prices, in turn imposing unnecessary costs, especially on middle- and lower-income households. These policies contributed to and aggravate the real estate bubble by putting inflationary pressures on housing prices. (more…)
Here’s the Abstract: Agenda 21, a voluntary plan adopted at the 1992 United Nations Conference on Environment and Development, unabashedly calls on governments to intervene and regulate nearly every potential impact that human activity could have on the environment. However, Agenda 21 is non-binding; it depends on governments for implementation. If opponents focus excessively on Agenda 21, it is much more likely that homegrown smart-growth policies that undermine the quality of life, personal choice, and property rights in American communities will be implemented by local, state, and federal authorities at the behest of environmental groups and other vested interests. Preventing American implementation of Agenda 21 should therefore be viewed as only one part of a broader effort to convince U.S. government officials to repeal destructive smart-growth programs and prevent the enactment of new ones.
