President Bush plans to try to revive his Social Security reform effort by offering the Democrats tax increases to get them to go along with a package of long term cuts in future promised benefits. White House minions have been on the Hill for most of this year trying to sell this plan to Republicans. Personal accounts are gone from the reform effort, or will receive only token support to be given up to close the final deal with the Democrats.

Microsoft has much more to lose than gain from Net Neutrality. Just like it’s never smart to play with matches in a windy weather when you own a forest, it’s never smart to push for permanent regulation of market power when the political winds are blowing much more regulatory and your company has more market power than any other...

By any measure compared to Microsoft, broadband markets are vastly more competitive and fragmented than Microsoft’s core markets. No broadband company has anywhere near Microsoft’s depth or breadth of market share, nationally and internationally, and in both consumer and business markets.

Is Microsoft implicitly asking for permanent regulation of its operating system and Office?

In Congress, the minority life is mostly talk and little action, and yet for advocates of minimal spending and low taxes, that may not turn out to be so bad. It's easier to promote fiscal discipline in theory than to practice it as a party leader or committee chairman...

"Now that Republicans are in the opposition, they're going to be the most saintly budget hawks you can imagine," said American Enterprise Institute economist Kevin A. Hassett. With the absence of power, he notes, comes the absence of accountability and blame. As Hassett put it, "being in the minority means never having to say you're sorry."

"We need to examine the bills in the light of the last election, in which I think the American people were unhappy with our spending habits," Sen. Jeff Sessions (R-Ala.) explained to reporters. He and his allies, including Sen. Jim DeMint (R-S.C.) and Sen. Tom Coburn (R-Okla.), want Congress to pass a "continuing resolution" to extend funding from the previous fiscal year. "We'd save the taxpayers a lot of money," Sessions said.

It's time to gear up. The Senate showdown on earmarks is next week. The good guys, Tom Coburn and Jim DeMint, are battling the appropriators and the big spenders. There were indications late last week that a "continuing resolution" would be issued, which would potentially save taxpayers up to $17 billion. However, I'm now getting word from a source on the Hill that the CR isn't a done deal.

Man detained in duck egg scandal

...Police in northern China's Hebei Province have detained Zhu Laiyong who sold Sudan IV, the carcinogenic industrial red dye, to poultry farmers who had mixed the dye with feed. The investigation found Zhu sold the red dye to poultry farmers after he promised to purchase contaminated red-yolk duck eggs at a higher price.

Correction: Nov. 24, 2006

A front-page article Thursday about Treasury Secretary Henry M. Paulson Jr.’s enlisting of Ben S. Bernanke, the chairman of the Federal Reserve, to help persuade China to change its economic policies referred incorrectly to the amount of dollar-denominated American debt held by China. It is several hundred billion dollars, not several hundred million.

Consider the case of the expansion of a Veterans Administration facility near Pittsburgh. The VA's planning projections, used to justify the project, show rising service demands by patients in the area. The VA's own data shows that actual service use trends and veteran demographics indicate that the Pittsburgh VA has passed its peak volume and that demand will begin a steady decline before the new facility is even completed in 2009. Other VA documents indicate that existing capacity at the nearby Heinz Division, in addition to existing and planned new capacity at the University Drive Division, can readily accommodate realistic service demand estimates.

This $200+ million project got part of its momentum from Senator Arlen Specter trying to give his colleague Rick Santorum something to brag about -- bringing federal money back to the Pittsburgh area -- as if that would help his doomed reelection efforts. Santorum lost, but the pork project lives on. Besides being useless and a waste of federal money, the VA expansion will cost the neighboring townships millions in extra costs for highway, waste treatment and other expenditures for decades to come.

This project only exists as an excuse to spend money. There is no need for it. The VA patient population doesn’t need it, nor is there even any political credit to be received. The locals are either intimidated, unaware or outraged. The local media is mostly disinterested or stupefied.

The famous Alaskan pork barrel "bridge to nowhere" was outrageous -- but it was only an example of congressional hubris hitting a new high. It was, as they say in finance, a nonrecurring event. This VA project presents an opportunity to go after the more prevalent virus, namely the perception on Capitol Hill that project spending is rewarded back home.

To protect my sources, no links are available on this story.

Posted by Donald L. Luskin at 12:15 PM | link