Four Ways Obama Has Blocked Job Growth

Wonder who's to blame for today's stagnant economy? Look no further than 1600 Pennsylvania Avenue to see where the buck ought to stop. Though President Barack Obama constantly points fingers at others for America's economic woes, his policies are to blame for preventing the U.S. economy from getting back on track. Before you watch President Obama present his latest jobs plan in his speech on Thursday, be sure you know the four major measures he has taken to prevent job growth in America:

1) Obama's Overregulation

During President Obama's first 26 months in office, his Administration imposed 75 new major regulations, with reported costs to the private sector exceeding $40 billion, as The Heritage Foundation’s James Gattuso and Diane Katz document in "Red Tape Rising: A 2011 Mid-Year Report." That's more than any comparable period on record. The annual cost of regulation--$1.75 trillion by one frequently cited estimate--represents twice the amount of individual income taxes collected last year. Katz and Gattuso write that there are even more regulations in the pipeline, as well.

That's bad news for job growth, and you don't just have to take our word for it. Ask the people who create jobs in America. John Schiller, chairman and CEO of Energy XXI, told CNBC that "if the government would get out of the way, from a regulation standpoint, and let us do what we do good, you'll see us continue to hire and grow this economy."

2) Obamacare

There's a disturbing trend if you look at job growth in America over the past two and a half years. Heritage's James Sherk writes that, following the recession, the U.S. was on a track for a steady recovery. The economy went from losing 841,000 jobs in January 2009--the recession’s low point--to gaining 229,000 jobs in April 2010. But then Obamacare became law. "From May 2010 onward, private job growth improved by only 6,500 jobs per month--less than one-tenth the previous rate," Sherk explains and as illustrated by this chart.

Though correlation doesn't necessarily equal causation, there's reason to believe that Obamcare helped turned off the spigot on job growth. The law imposes costly new requirements on businesses, which remain uncertain of what their costs will be down the road, leaving them to postpone hiring decisions. In fact, one survey showed that 33 percent of small business owners said Obamacare was either their greatest or second-greatest obstacle to new hiring.

3) Big Spending and Runaway Deficits

President Obama's $787 billion stimulus was supposed to create jobs, but instead deficits mounted and economic growth is now stagnant. Meanwhile, all that money intended to "stimulate" the economy had to come from somewhere, which means taxing or borrowing from other sectors of the economy. The result? Less money for investment, and that means less job growth. Brian Riedl explains in The Wall Street Journal:

[L]arge stimulus bills often reduce long-term productivity by transferring resources from the more productive private sector to the less productive government. The government rarely receives good value for the dollars it spends. However, stimulus bills provide politicians with the political justification to grant tax dollars to favored constituencies. By increasing the budget deficit, large stimulus bills eventually contribute to higher interest rates while dropping even more debt on future generations.

4) Pro-Union, Anti-Business Policies

In South Carolina, Boeing sought to build a new factory to produce one of its airliners, which would have created new jobs in the state. Enter the Obama Administration's National Labor Relations Board (NLRB), which filed a complaint against the company, arguing that using a non-union facility constituted an unfair labor practice. And that's just one example of the Obama Administration's pro-union, anti-business policies.

Other recent NLRB decisions include several rulings on snap elections and restricting secret ballot elections, and it instituted a new rule that allows unions to cherry-pick which workers get to vote on unionizing. Rather than putting the economy first, the President has decided to put unions first, and unemployed Americans are paying the price.

Earlier this summer, businessman Steve Wynn said that the Obama Administration has been "the greatest wet blanket to business and progress and job creation in my lifetime." And when Investors Business Daily asked Home Depot co-founder Bernie Marcus, "What's the single biggest impediment to job growth today?" he replied, "The U.S. government." Business owners--those men and women who create jobs in America--know that the Obama Administration is the root cause of the stalled economy.

The American people are catching on. According to a new ABC News/Washington Post poll, 77 percent say the country is headed seriously off on the wrong track, and "Americans by a 2-1 margin, 34 percent to 17 percent, now say [the Obama] administration’s efforts have done more to harm rather than help the nation's economy." On Thursday, the nation will find out whether the President plans to continue the path he set two and a half years ago or finally change direction.

Big Government Rising?

How does a trillion dollars in more federal government spending sound to you? For most Americans, the idea of growing government at a time when deficits are sky high might seem preposterous. But for many on the left, it's the only way they can think of to get the economy moving again, and they think some sort of new New Deal should be included in President Obama’s much-touted jobs speech on Thursday. Their end goal? The continued rise of big government.

Case in point: Congresswoman Maxine Waters (D-CA). On Sunday's Meet the Press, she unveiled her prescription for pulling the U.S. economy out of its slump, and it carries an incredibly high price tag. "I'm talking about a jobs program of a trillion dollars or more," she said. "We've got to put Americans to work. That’s the only way to revitalize this economy."

Now one might write off Waters' call for a trillion in additional spending as hyperbole (after all, she had some choice words for the Tea Party last month), but the amped-up rhetoric demanding bigger government is becoming pervasive on the left, despite a seemingly endless stalemate this summer over the debt ceiling, whether the government should borrow even more money, and what spending could be cut. Now, though, it's clear that liberals are ready to keep up the fight for big government, whether it's Teamsters president James P. Hoffa calling for a war on the Tea Party or Vice President Joe Biden applauding the AFL-CIO for keeping the "barbarians from the gates" -- that is, their political opponents.

It's no surprise that the left favors more government spending--after all, it's the core of their philosophy. Yet for months we have heard President Obama give lip service to cuts in spending, largely in response to the political shift that conservatives and the Tea Party revolution ushered into Washington last November. But with the President's jobs speech on Thursday, Americans may see Obama "go bold" and propose a return to big government.

In his speech to labor unions in Detroit yesterday, President Obama gave a preview of what "bold" means to him: more infrastructure spending. The trouble is that the President tried this approach before in his stimulus plan, and it just didn't work. The stimulus included $48.1 billion for transportation infrastructure, but the funded projects have been very slow to get underway and have had a minuscule impact on economic activity.

An "infrastructure bank" is the latest permutation of the President's plan for more of the same kind of spending. In the President's February 2011 highway reauthorization proposal, the infrastructure bank would be funded by an appropriation of $5 billion per year in each of the next six years and would provide loans, loan guarantees, and grants to eligible transportation infrastructure projects. Translation: more big government spending and more federal bureaucracy. As Heritage's Ronald Utt explains, that's a road to nowhere.

The President's ongoing obsession with an infrastructure bank as a source of salvation from the economic crisis at hand is—to be polite about it—a dangerous distraction and a waste of his time . . . Obama's infrastructure bank would likely yield only modest amounts of infrastructure spending by the end of 2017 while having no measurable impact on job growth or economic activity—a prospect woefully at odds with the economic challenges confronting the nation.

But that's not the only way the President is planning on increasing spending while growing the reach of the federal government. Another of his ideas? New federal funding for school construction, a job that has historically fallen under the direction of state and local governments. Heritage's Lindsey Burke explains why the idea is problematic:

Practically speaking, the federal government is the most inefficient mechanism for financing school construction. If Washington funds school construction, it must pay prevailing wages, which increase costs, on average, by 22 percent. Because of Davis–Bacon labor laws, schools that receive federal funding for school construction would typically have to hire union workers, increasing costs and preventing non-union construction companies from having a seat at the bidding table.

Both the infrastructure bank and the President's plan for funding schools have common denominators: increased spending and the expansion of government. But he's tried that before--in tandem with new regulations--with the only result being more deficit spending, businesses sitting on the sidelines waiting for certainty from the government, and an economy that produced no new jobs in August. And now, as 14 million unemployed Americans wait for the hope and change they were promised, they're getting more of the same from their President and politicians on the left: a movement toward bigger government that will only make matters worse.

A Jobless Labor Day

For 14 million unemployed Americans and their families, this Labor Day will not be a happy one. Instead of enjoying a day off of work, they're suffering a disturbing trend under the Obama economy: Jobs are not being created, the unemployment rate has not improved, and the economy is at a near standstill. Even worse, the labor market's stall might be turning into a decline.

And today, in Detroit—which in July had the highest unemployment rate of any metropolitan area in the country—President Obama is due to stand with labor presidents including the AFL-CIO's Richard Trumka, Teamsters' James P. Hoffa, and the UAW's Bob King to tout his bailout of the auto industry and his yet-to-be-disclosed plan to turn the economy around.

The Big Labor backdrop is ironic but not surprising. The union movement has helped lead to the staggering loss of manufacturing jobs in the United States, and the demands it has made on employers and governments help create the very conditions leading to the tragic unemployment in Detroit and across the country. But they are strong political allies of the President—having spent $1.1 billion on politics and lobbying in the last election cycle—and they continue to hold a prominent seat at the table.

It follows, then, that President Obama continues to put the institutional interests of unions ahead of America's economic well-being. In a new paper, Heritage's Rea Hederman and James Sherk explain that the latest example comes from the National Labor Relations Board (NLRB), which issued several rulings recently undermining employer and employee rights: snap elections, restricting secret ballot elections, and a new rule that allows unions to cherry-pick which workers get to vote on unionizing. All these rules are designed to facilitate organizing companies whose workers are unenthusiastic about unions.

Private-sector workers have a right to unionize, of course. Management gets the union it deserves. But unionization has economic costs, as Sherk and Hederman write:

Unions make businesses less competitive and discourage investment. This reduces job growth. Studies show that jobs fall by 5–10 percent at newly organized firms. Going forward, employment grows by three to four percentage points more slowly at unionized businesses than at otherwise identical non-union companies.

The result can be felt in places like the Motor City as unionized manufacturing employment plummets. Since 2005, GM shed half of its unionized workforce. Nationwide, unionized manufacturing employment fell by 80 percent between 1977 and 2010, while non-union manufacturing employment decreased by 6 percent over that same time period. Unions are feeling the effects, with membership falling by over 600,000 workers in 2010 alone. If workers are happy without a union, the government should not foist one on them.

Sherk explains why unions are on the decline:

Union membership has fallen because traditional collective bargaining does not appeal to most workers. Polls show that only one in 10 non-union workers wants to organize. This makes sense: in the competitive private sector, unions can do little to raise their members’ pay. Additionally, most workers like their jobs and believe they are on the same side as their employers.

Fortunately, Big Labor doesn’t have to be the only game in town. Workers want a say in their workplace, but they're becoming increasingly aware of unions' limitations. Private-sector unions have little power to raise their members' wages, while employers have learned that respecting their employees makes good business sense. That is why large majorities of workers say they are satisfied with their jobs and their bosses.

Unions, though, aren't going to go down without a fight. That's why they're lobbying the Obama Administration to protect their interests. Unfortunately, the President is obliging, whether it's by changing the rules of the game to make unionization easier, preventing private employers from locating in right-to-work states—as the NLRB is doing with Boeing case in South Carolina—or pushing for more government spending on infrastructure projects that employ primarily union members (while leaving the rest of the economy in the lurch).

Meanwhile, Americans are suffering from the President's decision to satisfy unions before reducing unemployment, all while there are more signs of a declining labor market than there are of a recovery. There are things Congress and the President can and should do to improve the business climate, such as repealing Obamacare, opening the door to domestic energy production, preventing harmful regulations, passing pending free trade agreements, and reining in the NLRB. Labor Day 2012 can be brighter than today, but Congress and the President must choose the right path to help get us there.

Food Regulators Out of Control

First Lady Michelle Obama’s obsession with “childhood obesity” has bothered many since it began two years ago, especially those who think that White House nagging of parents should be reserved for more pressing issues. Now it is getting more serious, with food regulators starting to infringe on the free speech rights of advertisers.
In the latest upset, four federal agencies known as the Interagency Working Group (IWG) have delivered a plan to drastically censor food advertisers with products deemed to be “too high” in sodium, sugar, or fat that cater to any viewing audience between the ages of two and 11. These advertisers would lose key slots during some of America’s most popular shows, like American Idol, America’s Got Talent, and Glee—simply because the nanny state is “uncomfortable” with what they are selling.
The IWG, formed within the 2009 Omnibus Appropriations Act to study childhood obesity and offer possible solutions, has gone far beyond their descriptive reach. Now, perfectly reasonable companies may be penalized severely.
The regulators plan to get away with this by disguising their rules as “voluntary guidelines.” In reality, the guidelines are anything but optional, according to food manufacturers affected by them.
As Heritage’s Diane Katz explains:The restrictions are voluntary in name only. Food manufacturers can hardly ignore “recommendations” from the very federal agencies that exercise regulatory authority over their every move. It is akin to a cop asking for ID or to search one’s vehicle: While the law treats such citizen cooperation as voluntary, most individuals would not view it as such, nor would the police look kindly on anyone who denies their requests.It’s not just Twinkies and cookies that will be affected, either. Anything deemed to have a little too much sodium or fat will be tested under the new rules, including foods whose very production requires a high sodium content (like pickles) and those that are naturally high fat (like peanuts).
As Katz wrote, “Nutritional staples such as Cheerios, peanut butter, and yogurt are verboten under the proposed standards, which effectively constitute a government-regulated grocery list.”
The regulations hit traditional favorites where it hurts. In turn, the free market and consumer choice is manipulated to fit a misplaced government agenda that doesn’t solve the problem.
Even if the feds are well-intentioned, their action plan isn’t grounded in reliable research. The whole point of the regulations is to curb the growing epidemic of childhood obesity—but the Institute of Medicine found no link between advertisements and children’s food choices.
According to Katz, children have seen about 50 percent less food advertising in the last six years than before that time—yet obesity rates continue to climb. Former FDA Commissioner Dr. Mark McClellan attributes the obesity problem to “physical inactivity”—not caloric intake. In fact, McClellan noted that children’s calorie intake has remained about the same for the last 20 years.
Not only do regulations hinder the market and censor speech; they hurt the businesses behind the labels. Sara Lee CEO Christopher J. Fraleigh recently spoke on the overextended regulations, which will hurt his business in particular:A turkey sandwich made with Sara Lee fat-free lean turkey meat, we would not be able to advertise that on venues, be it the Superbowl or anything that would have a significant child audience, because the product is a little bit too high in sodium…. Current regulation of advertising toward children is a perfect example of regulation that just goes way too far.The Obama Administration’s food regulators think that if you give them an inch, they can take a mile. But when free speech is on the cutting board, they will certainly hear from the people, and the people will not stand for it.

Zero New Jobs in America

President Obama enters this Labor Day weekend with a serious problem on his hands. For all intents and purposes, the economy appears to be stuck in neutral, with news out today that the U.S. economy created a grand total of zero jobs in August. This followed two months of near zero growth. Not surprisingly then, the unemployment rate in August remained at 9.1 percent, virtually unchanged since April. In fact, it was completely unchanged, and for the first time since 1945, no new jobs were created—Zero.
America now has the weakest labor market in a generation, and the American people know it. In a new CNN/ORC poll released this week, 65 percent of Americans say they disapprove of how President Obama is handling the economy. And even the White House has downgraded its expectations for the United States' economic future, as The Hill reports:When the 'substantial' economic 'turbulence' of the last two months are [sic] considered, the administration expects the economy to grow as little as 1.7 percent in 2011 compared to last year. That is down from a rosier projection of 2.7 percent growth, made in February.In truth, even a 1.7 percent growth rate would be remarkable at this point, given that the economy grew at an annualized rate of about 0.7 percent in the first half of the year and has since slowed. A 1.7 percent growth rate suggests a remarkable acceleration beginning immediately. More than remarkable, that's incredible.
But none of this is should be shocking news. Earlier this month, the Congressional Budget Office's mid-year assessment of the budget and economic situation, based on data through June and thus ignorant of the recent further slowdown, predicted that the jobless rate will fall only to 8.9 percent by the end of this year but remain above 8 percent until 2014.
If Americans want to return to full employment, which means unemployment would be around 5 percent, then they'll have to wait until 2018 if employers are infused with a new confidence and began hiring at the same average rate they did during the 2003–2007 expansion (+176,000 jobs per month). But 176,000 jobs per month is a far cry from the zero new jobs reported today.
And while the U.S. economy is creating no net new jobs, President Obama is offering no new ideas to fix the problem. In a speech to a joint session of Congress next Thursday, the President is expected to rehash the same expensive, ineffective policies he has tried since his presidency began. And it's an economic philosophy that America has come to know all too well. The President hopes that through the sheer force of spending taxpayer dollars, he can turn the economy around. It isn't working—and neither are nearly 14 million Americans.
Case in point: President Obama's "sunshot" initiative–his proposal to dump taxpayers' dollars into alternative energy projects with the goal of creating green jobs. It has failed, by all accounts. Even The New York Times reported that the President's promise to create 5 million green jobs over 10 years has proven to be nothing more than "a pipe dream." And this week, California-based solar panel manufacturer Solyndra went bankrupt, despite receiving a $535 million taxpayer-funded loan guarantee from the U.S. Department of Energy. End result? About 1,100 people out of work. But during his jobs tour across the Midwest, the President continued speaking of the promise of the green economy.
There's another old idea being bandied about, too–infrastructure spending. Remember the President's $780 billion stimulus, which included infrastructure spending on “shovel ready projects” all across the fruited plain? Despite the government infusion of cash into the economy, no jobs were created in August. As the President joked, "Shovel-ready was not as ... uh .. shovel-ready as we expected."
Yet an "infrastructure bank" rumored to be endowed with up to $30 billion, appears to be a central component of the President's jobs plan next week, and more spending on building roads and bridges is one of Big Labor's favorite subjects, too. AFL-CIO president Richard Trumka this week called for America to spend $400 billion a year over 10 years on public works projects--and that money, conveniently, would directly benefit his union membership at the expense of the U.S. economy.  Whether we need additional government spending on infrastructure is a debate unto itself.  What is clear is that $30 billion spent over some number of years in an economy 500 times greater cannot make much difference.
The two-and-a-half-year Keynesian experiment of flooding the economy with taxpayer dollars has failed, yet the President and his union allies continue to peddle the myth that the only way to save the economy is to spend more. There's another way to go: freeing America's small businesses from the day-to-day shackles of existing over-regulation, freeing families and entrepreneurs of the threat of higher taxes, and cutting spending to eliminate the constraining fear of America's debt crisis. Zero job growth does not have to be America's reality, but changing course will mean ditching the dream that more government spending will save the day.

The Fast and Furious Scandal Continues

A U.S. government gun-trafficking investigation gone horribly wrong has resulted in the death of a U.S. Border Patrol officer, some 2,000 firearms in the hands of criminals, and the dismissal of a 24-year veteran law enforcement official. This is the story of Fast and Furious, and yesterday the latest chapter unfolded when two top officials associated with the operation were removed from their positions, while a third individual resigned.

The story begins in the fall of 2009, when the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) office in Phoenix, Arizona, began selling weapons to small-time gun buyers in the hopes of tracing them to major weapons traffickers along the southwestern border and into Mexico. Their efforts failed, the number of arms unaccounted for numbers around 1,500 as of late July, and about two-thirds of those guns ended up in Mexico, according to congressional testimony.

Tragically, the botched operation has had serious consequences. On the night of December 15, 2010, U.S. Border Patrol Agent Brian Terry was shot and killed during an effort to catch several bandits targeting illegal immigrants in Arizona near the border. When law enforcement rushed to the scene, they discovered two of the killers' assault rifles that were among those sold as part of Operation Fast and Furious. Additionally, 57 Fast and Furious weapons have been connected to at least an additional 11 violent crimes in the U.S.

In December 2010, ATF agent Vince Cefalu spoke out about the operation before the first reports on the story appeared in February. FoxNews.com reports that Cefalu said at the time, "Simply put, we knowingly let hundreds of guns and dozens of identified bad guys go across the border." Other agents later came forward, congressional hearings have been held, and President Barack Obama called the operation "a serious mistake." Cefalu, though, was forced to resign.

Yesterday, more Fast and Furious–related personnel changes came about when the Department of Justice (DOJ) announced that Kenneth Melson, the acting head of the ATF who presided over the operation, is being replaced and transferred to the Office of Legal Policy where he will serve as a senior advisor on forensic science. Heritage's Lachlan Markay reports that "Melson bucked his superiors at DOJ in July by revealing details about the operation to congressional investigators in a closed door meeting with Rep. Darrell Issa (R-CA) and Sen. Charles Grassley (R-IA), who have been investigating the operation in their respective roles."

Also on Tuesday, the U.S. Attorney for Arizona, Dennis Burke, announced his resignation. The Hill reports that "Burke oversaw the legal aspects of the Fast and Furious operation, providing advice to agents involved." And The Arizona Republic reports that the lead prosecutor for Operation Fast and Furious cases in Burke's office was also reassigned Tuesday. Issa, who has led the congressional investigation into the case, said that even with yesterday's news, he will continue looking for answers:

While the reckless disregard for safety that took place in Operation Fast and Furious certainly merits changes within the Department of Justice, the Oversight and Government Reform Committee will continue its investigation to ensure that blame isn’t offloaded on just a few individuals for a matter that involved much higher levels of the Justice Department.

Meanwhile, the White House has said little about Fast and Furious. In June, President Obama said in a press conference: "My Attorney General has made clear that he wouldn’t have ordered gun running into Mexico. . . That would not be an appropriate step by the ATF." He then deflected further questions by citing an "ongoing investigation." And press secretary Jay Carney previously said that the President "did not know about or authorize this operation." But as Heritage's Rory Cooper wrote, "If that’s the case, how could neither he nor Attorney General Eric Holder not know about an operation that everyone else at the Department of Justice seemed to be actively involved in, including the Assistant Attorney General, U.S. Attorney and head of the ATF?"

And if the White House has been silent, so has the media. It has been 57 days since the press has questioned the White House on the matter, when ABC's Jake Tapper peppered press secretary Jay Carney on the issue, asking why the public knows so little about the story, what the Administration is doing to get to the bottom of it, whether the acting head of ATF would go to Capitol Hill to testify on the subject, whether it is something the White House is worried about, and if the President upset about it. Carney's reply: He referred Tapper to the Department of Justice and remarked, "I think you could assume that the President takes this very seriously."

The President should take it seriously. And so should the American people. The ATF sold guns to criminals in Mexico, a life has been taken, and crimes have been committed with the weapons that were trafficked by the federal government. And yet, shockingly, questions remain under the Administration that called itself "the most transparent in history." It's time for more answers.

The Unemployment Empty Promise

Sometime next week—we don't quite know when—President Barack Obama is due to announce his latest jobs plan designed to lift America out of its unemployment doldrums. And though we also don't know the exact details of the plan, there's a pretty good chance it will include several key components we've heard before, one of which is the extension of unemployment benefits.

Much like the President's other likely initiatives, this idea isn't a new one, and the White House has made the argument before that unemployment benefits are the best thing since sliced bread when it comes to stimulating the economy. In a White House briefing earlier this month, press secretary Jay Carney explained the rationale:

[Extending unemployment benefits] is one of the most direct ways to infuse money into the economy because people who are unemployed and obviously aren’t earning a paycheck are going to spend the money that they get. They’re not going to save it; they’re going to spend it. And unemployment insurance, that money goes directly back into the economy dollar for dollar virtually.

So it is—and when it goes back in the economy, it means that everywhere that those people—everyplace that that money is spent has added business. And that creates growth and income for businesses that then lead them to making decisions about jobs—more hiring.

But according to a report by Heritage's James Sherk and Karen A. Campbell, unemployment insurance actually leads to longer periods of unemployment and does not provide the promised stimulative effect. In their paper, they address a 2004 study which concluded that each dollar in additional unemployment insurance increased gross domestic product by $1.73. But, they say, that just isn't so. Research shows that unemployment spending does not result in workers consuming more, and workers with extended unemployment insurance benefits remain unemployed longer. "A 13-week extension of unemployment benefits results in the average worker remaining unemployed for an additional two weeks," they report.

Funnily enough, President Obama's new top economist agrees. Yesterday, the President announced that Princeton University economist Alan Krueger will replace Austan Goolsbee as the White House's chief economic adviser. And though Krueger will play a prominent role in crafting the White House's economic strategy, Heritage's Lachlan Markay reports that Krueger's past research doesn't mesh with the White House's stance on the supposed stimulative benefits of extending unemployment insurance:

Krueger co-authored a paper for the Handbook of Public Economics in 2002 that seems to undercut the economic argument for extending unemployment benefits. The paper found that those benefits tend to increase the length of unemployment by discouraging the search for a new job, and may actually encourage layoffs. Conversely, the paper also found that unemployed persons who are ineligible for benefits search harder for a job and are therefore unemployed for less time.

It's anyone's guess whether Krueger will change his tune now that he's on the President's team, but no matter. When the President launches his new jobs plan, and should he call for an extension of unemployment benefits, as expected, the reality remains the same, regardless of how Krueger addresses his earlier body of work: Unemployment benefits don't stimulate the economy.

There certainly can be other reasons for extending unemployment benefits. Under the Obama economy, the average length of unemployment hit a new record last month, surpassing 40 weeks for the first time ever. But no one—Congress, the President, or the American people—should be under the delusion that economic stimulus and new jobs will result.

The Right Strategy to Fight Terrorism

In what has been described as an "act of international terrorism," news agencies report that a suicide car bomb struck the United Nations building in Abuja, Nigeria's capital, on Friday. Though details are sketchy and there is no immediate claim of responsibility, if the attack is, indeed, an act of terrorism, it reaffirms what we already know: The world continues to face an ongoing threat--and America must be prepared for the next wave of terrorist attacks.

Since September 11, 2001, at least 40 Islamist-inspired terror plots aimed at the United States have been thwarted. And though all categories of successful terrorist attacks against U.S. targets (both at home and overseas) have been on a downward trend since 2005, the number of disrupted plots has risen considerably since 2007. In a new paper by The Heritage Foundation Counterterrorism Task Force, "A Counterterrorism Strategy for the 'Next Wave,'" Heritage lays out steps that America should take to ensure a successful end to the long war against terrorism.

Unfortunately today, the United States is not on a trajectory to adequately counter the terrorism threat. Though America has enjoyed success in thwarting al-Qaeda's efforts against the United States, those victories have come as a result of a decade of taking the offensive in the war on terrorism. Now, though, the Obama Administration is changing course with its new National Strategy for Counterterrorism. Heritage explains:

The Administration now seeks to treat terrorism under a law enforcement paradigm that failed to protect Americans from terrorism when it was adopted by the Clinton Administration before 9/11. In addition, the White House intends to follow a “small footprint” strategy for overseas operations, relying primarily on Special Forces operations, covert action, and strikes with unmanned aerial vehicles.

The President’s strategy cedes the initiative to America’s enemies and provides them the opportunity to reconstitute both their moral and physical assets.

According to the task force, the President's strategy sets America on a course for failure because it fundamentally fails to appreciate that Islamist beliefs are rooted in a culture that equates honor with power--and that means that "by unilaterally withdrawing from the conflict, the Administration allows al-Qaeda to paint a narrative of the U.S. in retreat." One successful major terrorist attack will allow al-Qaeda to claim a "victory" and regain its "honor," further empowering their cause.

Meanwhile, the Obama Administration offered an ambivalent response to the "Arab Spring," failed to capitalize on the opportunity to build a plan for the future of U.S. engagement with the "new" Middle East, has allowed al-Qaeda to physically re-establish itself in the Afghanistan–Pakistan theater, has ignored what al-Qaeda has been doing on a global scale, and has paid insufficient attention to state-sponsored terrorism. The Heritage task force offers its recommendation of what America should do next:

The primary goal of the U.S. counterterrorism strategy must be to prevent the emergence of a global Islamist insurgency. The danger to the security, freedom, and prosperity of the U.S. and the Western world is far graver than what might be achieved by any individual terrorist act. An insurgency is a threat to the fundamental legitimacy of all free societies.

The first element of the U.S. strategy should be persistence, the Heritage task force says, and the right way to conquer the terrorist threat is to divide and defeat the enemy. American can get there through "hard" power and strong bilateral cooperation between the U.S. and nations that share a commitment to defending free, just, and open societies.

Though the United States has had success since 9/11 in combating terrorism and averting attacks at home and abroad, that success did not come easily--and it was not accomplished without taking an aggressive stance against al-Qaeda. Continued terrorist attacks around the world should remind America that the threat to our homeland remains and that the right strategy is needed in order to ensure our continued security at home and abroad.

When Catastrophe Strikes

Yesterday at 1:51 p.m. Eastern Time, a 5.8-magnitude earthquake struck near a small town outside Washington, D.C., the strongest such tremor in 67 years. The geological event, which affected the eastern third of the United States, sent thousands of workers in our nation's capital (and in New York City) scurrying into the streets waiting for news of what to do next. Fortunately, the quake resulted in only some minor injuries and minor damage to buildings, a shortened workday, and gridlock on the streets of Washington, but it is a reminder of America's vulnerability to natural disaster—and that the United States must be prepared to ensure its homeland security.

The Heritage Foundation's James Carafano explains that when an earthquake strikes, "virtually every category of local emergency responder will be required" to help cope with physical injury, fire fighting, hazardous materials, ensuring public safety and restoring infrastructure, and providing shelter, food, and water for displaced persons, if necessary. Where a disaster is severe—earthquakes included—the federal government may deploy assistance.

But the federal government has taken on an increasing role in disaster response. In the new paper "Homeland Security 4.0," Heritage reports that America has over-federalized disaster response in a way that threatens the resiliency of the nation's communities. In his two and a half years in office, President Obama has issued 360 declarations without the occurrence of one hurricane or large-scale earthquake. That continues a 16-year trend during which declarations tripled from 43 under President George H. W. Bush to 89 under President Bill Clinton to 130 under President George W. Bush. As a result, Heritage notes, the Federal Emergency Management Agency (FEMA) is becoming distracted by responding to routine natural disasters instead of preparing for catastrophic natural disasters such as hurricanes, earthquakes, and volcanic eruptions, which could have a national impact:

The federalization of routine disasters requires FEMA to become involved with a new disaster somewhere in the United States every 2.5 days. This high operational tempo is affecting FEMA’s overall preparedness because it keeps FEMA perpetually in a response mode, leaving little time and few resources for catastrophic preparedness. With staffing levels and budgets only nominally above pre-1993 levels, it should be no surprise that FEMA is not prepared to handle a catastrophic disaster.

The federal government's increased involvement in natural disaster response is having an effect on state and local response, too. Heritage homeland security expert Matt Mayer explains that FEMA " has been responding to almost any natural disaster around the country, be it a contained three-county flood, or a catastrophe of near-epic proportions like Hurricane Katrina. As a result, many states and localities have trimmed their own emergency-response budgets, often leaving them ill prepared to handle even rain- or snowstorms without federal assistance. This leaves FEMA stretched far too thin and ill prepared to respond to grand-scale catastrophes." What's needed is an overhaul of the process for declaring federal disasters and dispensing homeland security grants.

Disaster response, though, isn't the only area where America's homeland security needs improvement. Fortunately, since September 11, 2001, the United States has thwarted at least 40 Islamist-inspired terrorist plots aimed at the United States. But the very fact that so many attempts have been made illustrates that defending the homeland is still a challenge. In the "Homeland Security 4.0" report, Heritage finds that "effective homeland security requires a more federalist, decentralized approach of working with state and local government and the private sector."

Heritage's proposals include establishing a framework for empowering state and local authorities to meet their responsibilities for disaster response and domestic counterterrorism operations; adopting a fair, honest, and realistic approach to immigration enforcement that recognizes state and local authorities as responsible partners rather than an "amnesty first" strategy; maintaining the use of key counterterrorism tools, such as those authorized under the USA PATRIOT Act; and rethinking the Transportation Security Administration and restructuring its mission.

Whether it's earthquakes or terrorist attacks, the United States must be prepared for threats to the homeland. But getting the nation's homeland security systems and responses right is among the most difficult challenges in Washington. Over-centralization, pervasive complacency, and entrenched politics stand in the way to more effective homeland security. Now is the time for Washington to make sure it gets it right instead of waiting for a catastrophe to strike.

Obama's "Green Jobs" Pipe Dream

President Barack Obama has a problem on his hands when even his stalwart allies at The New York Times have no choice but to admit to a glaring reality: The President's "green jobs" promise has failed miserably.

On Friday, the Times printed a harsh assessment of the state of the "green" economy—including a conclusion that the President's promise to create five million green jobs over 10 years has proven to be nothing more than "a pipe dream," with California's Bay Area providing a particularly poignant example of how "green" jobs have actually been lost, not gained:

In the Bay Area as in much of the country, the green economy is not proving to be the job-creation engine that many politicians envisioned . . .

A study released in July by the non-partisan Brookings Institution found clean-technology jobs accounted for just 2 percent of employment nationwide and only slightly more — 2.2 percent — in Silicon Valley. Rather than adding jobs, the study found, the sector actually lost 492 positions from 2003 to 2010 in the South Bay, where the unemployment rate in June was 10.5 percent.

California isn't the only place, though, where the green dream is falling short of reality. Last year, Seattle won a $20 million federal grant to invest in weatherization programs. The money was to be spent on insulating crawl spaces, serving to create jobs while helping the environment by reducing the energy needed to heat homes. The program, which was announced at the White House on the eve of Earth Day, has proven to be a total flop. Seattlepi.com reports:

[M]ore than a year later, Seattle's numbers are lackluster. As of last week, only three homes had been retrofitted and just 14 new jobs have emerged from the program. Many of the jobs are administrative, and not the entry-level pathways once dreamed of for low-income workers. Some people wonder if the original goals are now achievable.

Those failures aren't just hitting the West coast, either. In Oak Park, Michigan, a state-government-funded hybrid bus company sits dormant, out of business just two years after it drew acclaim for being part of Michigan's green future, despite millions in state taxpayer funding and a contract to sell buses to be purchased with federal taxpayer dollars. Michigan Capitol Confidential reports that the company failed to meet two performance "milestones" as part of its $2.6 million total loan agreement with the state—and without government funding, the company couldn’t survive.

Despite these green failures—and reports that 80 percent of the $2 billion set aside in the "stimulus" package for green jobs is going overseas, mostly to China--President Obama is continuing to make the pitch that a federally funded green future is central to his plan for rescuing the economy, going so far as to pledge an additional $2.4 billion for green jobs, especially to make batteries for electric cars. The Heritage Foundation's Ernest Istook explains why the President's plan will fail, just like it has in the past:

Green jobs are about government subsidies, cronyism, and job cannibalism. They aren't self-sustaining because they rely on giveaways of taxpayer money and they cannibalize existing jobs...

The green agenda soaks taxpayers.  But it also packs a double wallop because taxpayers are first hit to pay for the subsidies, then everyone is hit by higher energy prices caused by energy taxes and regulations.

As President Obama stays the course, pursuing a well-worn path toward government-subsidized green jobs failures, it's important to point out that there is another way toward real job growth that doesn't require taxpayer subsidies. As Heritage lays out in its "Saving the American Dream" plan, by reversing the growth of the federal government, eliminating unnecessary regulations, and repealing Obamacare, Congress can set America on a better course. It's one that preserves the reality of the American dream, rather than chasing the fiction of a green pipe dream.

What's Next in Libya

All across the world, leaders are hailing the news that Libyan rebels have advanced into the capital city of Tripoli, poised to bring to an end the decades-old dictatorship of Colonel Muammar Qadhafi. But as leaders call for Qadhafi to step down and the regime teeters on the brink of collapse, the United States must develop a strategy for a way forward. The Heritage Foundation's Jim Phillips explains:

The Obama Administration, which stumbled into the war in Libya with no clear military plan or exit strategy, now must fashion a suitable and acceptable way forward. The Administration’s short-sighted effort to score a quick and easy military victory over Qadhafi’s regime failed to end the threat to civilians in “days not weeks,” as President Barack Obama promised. The administration now must scramble to develop and implement a long term strategy for a post-Qadhafi Libya.

The United States must play a role in helping to ensure that the rule of law and representative government take root in a new Libya. Phillips writes:

If the regime suddenly collapses, the United States must be ready to help the rebel Transitional National Council to stabilize Libya, restore the rule of law and prepare the way for an orderly transition to a new representative government.  Washington should facilitate postwar reconciliation and consensus-building between the many political, tribal and local factions that have emerged to fill vacuums in Libya left by the collapse of the regime.  The United States also can help assist Libya’s reconstruction, particularly the rapid repair of Libya’s damaged oil infrastructure, in order to bring Libyan oil exports back to previous levels as soon as possible.

Phillips explains that it will also be necessary to "remain vigilantly engaged in Libya to help prevent Islamist forces, which appear to make up a small but not insignificant part of the opposition coalition, from hijacking Libya’s future.  Even if Qadhafi soon departs from the scene, Libya is likely to remain a turbulent snake pit with heavily-armed political factions for many years to come."

The Spending Threat to Our National Defense

Consider it a warning from the highest levels of the U.S. government. Yesterday, Secretary of State Hillary Clinton and Secretary of Defense Leon Panetta held a joint press event in Washington in which they cautioned that U.S. debt is jeopardizing America's ability to ensure national security and preserve its interests abroad.

Under the Budget Control Act of 2011—the debt ceiling agreement enacted earlier this month—$350 billion in cuts to defense spending must be made over 10 years. But if Congress doesn't reach an agreement on $1.5 trillion in deficit savings, $1.2 trillion in automatic cuts would be made. Half of those would come from the military's budget by 2013. And Panetta said yesterday that those cuts would be disastrous:

This kind of massive cut across the board, which would literally double the number of cuts that we're confronting, that would have devastating effects on our national defense; it would have devastating effects on certainly the State Department.

Clinton agreed. "It does cast a pall over our ability to project the kind of security interests that are in America's interests," she said. "This is not about the Defense Department or the State Department . . . This is about the United States of America. And we need to have a responsible conversation about how we are going to prepare ourselves for the future."

The Heritage Foundation's Mackenzie Eaglen explains that the draconian cuts to our armed forces would result in a military ill-equipped to sustain its mission at home and around the world.

Secretary Panetta said any additional defense cuts—on top of the hundreds of billions over the past several years and hundreds of billions over the next 10 years—would result in a hollow force. The term “hollow force” describes the situation when readiness declines because the military does not have enough funding to provide trained and ready forces, support ongoing operations, and modernize simultaneously.

Like a freshly painted house with no plumbing or wiring inside, the military may appear functional, but in reality it would be too poorly trained and equipped to be reliable without incurring excessive and unnecessary risk.

The U.S. military is already woefully underfunded, and for months the Pentagon has warned that even with $400 billion in cuts—less than half of what the military could face—the United States "may have to scrap some military missions and trim troop levels." And if Members of Congress don't act to reform mandatory spending on Social Security, Medicare, and Medicaid—which account for more than 60 percent of the entire federal budget—the ax will automatically fall on the military (or Congress will be forced to raise taxes to halt the automatic trigger.)

The Constitution clearly states that one of the primary duties of the federal government is to "provide for the common defense." Yet today, because of the government's unrestrained spending, national defense is falling by the wayside. Former Senator Jim Talent (R-MO) writes, "The great irony of our time is that the bigger the federal government has become, the less well it has performed its priority function of providing for the national defense." Now, after all the stimulus spending, the bailouts, and the runaway entitlements, America is seeing the results. Congress must act now to rein in spending so that it can ensure that the government's ability to execute its primary duty remains intact.

Obama's Tour of Denial and Blame

It's being billed as a listening tour—a three-state journey across the Midwest where President Barack Obama will hear directly from Americans about the economy and talk about his ideas for job growth. Instead, though, it has the characteristics of a political campaign swing, and the rhetoric the President has brought along for the ride is marked by a desperate effort to blame someone other than himself for America's economic woes.

The President's tour began yesterday in Cannon Falls, Minnesota, where in one breath he pointed his finger at Washington's broken politics and in the next he blamed "a string of bad luck ... a bunch of things taking place over the last six months that were not within our control."

You had an Arab Spring in the Middle East that promises more democracy and more human rights for people, but it also drove up gas prices -- tough for the economy, a lot of uncertainty.  And then you have the situation in Europe, where they're dealing with all sorts of debt challenges, and that washes up on our shores.  And you had a tsunami in Japan, and that broke supply chains and created difficulties for the economy all across the globe.

As much as the President would like to bill his three-state tour as an exhibition in listening or leadership, it's more of an exercise in cognitive dissonance—of blaming everything but his own policies for the reality of America's dire economic straits, rather than taking responsibility for his presidency.

That reality has manifested itself in a big way. In every state, a vast majority of Americans see the economy as getting worse, according to a new Gallup poll. The only exception is in Washington, D.C., where taxpayer spending has feathered the nest of the federal government, creating a cushion from the harsh existence of 9.1 percent unemployment, an average duration of unemployment hitting a record high of 40 weeks, and a tepid pace of economic growth that could leave joblessness at permanently high levels. Contrast Obama's results with the promise of his presidency, as articulated in his inaugural address:

The state of our economy calls for action, bold and swift.  And we will act, not only to create new jobs, but to lay a new foundation for growth.  We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together.

Lest America forget, President Obama had two years of a Democrat-controlled Congress to effect that bold and swift action. And boy, did he take action. He and his liberal allies in the House and Senate gave America a $780 billion stimulus that the President promised would save or create 3.5 million jobs by the end of 2010. (He came up 7.3 million jobs shy.) And then there was the 2,700-page behemoth known as Obamacare, the 9,000-Earmark Omnibus Bill, $3.22 trillion in new debt, a $26.1 billion government union bailout in the summer of 2010, the $3 billion Cash for Clunkers program, and the Dodd-Frank Wall Street Reform bill.

Somehow, though, all that action was not enough. So in January, the President used his State of the Union Address to convey to America that he was singularly focused on job creation. And here America sits, seven months later, watching President Obama tour the Midwest delivering that same message, this time calling for piecemeal job creation policies including more stimulus and infrastructure spending, a renewal of the payroll tax cut that was initially passed in December last year, tax credits for companies who hire veterans, a trade deal that he fails to send to Congress yet blames them for not passing, and tax increases on job creators. Though the President calls his ideas new and bold, he's only delivering more of the same tired thinking that has left America in an economic rut.

On top of the spending and debt, the President has promulgated stifling regulation while calling for job-killing tax increases. Meanwhile, his Administration is going out of its way to work against job creation—the National Labor Relations Board has taken action against the Boeing Company for creating jobs in right-to-work South Carolina while also pushing for pro-union policies that harm employers and workers.

Fortunately, the President's way is not the only way. Rather than going back to the Keynesian well and relying on the hand of government, the President and Congress should restrain government and allow entrepreneurs to thrive. That doesn't require a listening tour and placing blame. That requires being a leader and recognizing that the policies of the past two and a half years have not worked—that it's time for a new way, and a new speech.

The Devastating Threat to Our Security

It sounds like something out of a movie. A nuclear weapon detonates at high altitude, generating a burst of electromagnetic energy that devastates the United States--destroying electronics, collapsing communications, halting transportation, and shutting down all electrical power. Unfortunately, the threat of an electromagnetic pulse (EMP) strike is all too real, and it's time America's leaders wake up to the reality.

But a nuclear weapon isn't the only way an EMP can be generated. Even unusually powerful solar activity could produce catastrophic destruction in the United States. No matter how it's generated, the chaotic effects are the same. First, the electromagnetic shock can disrupt electrical devices. The second effect is similar to lightning—a power surge that would burn circuits and immobilize electronic components and systems. The third is a pulse effect that flows through electricity trans­mission lines, damaging distribution centers and fusing power lines. Any of these can cause irreversible damage to an electronic system. And the United States would effectively be sent back to the 19th century, to a world without cars, cell phones, computers, or any other electronics.

If history is any guide, an EMP would be catastrophic. In 1859, British astronomer Richard Carrington observed an unusually large solar flare. Later, the flare reached earth. Telegraph operators were knocked unconscious. Their machines caught on fire as the EMP effect from the flare surged through the lines. When this event occurred, only a small portion of the world was electrified. A solar flare of this magnitude today might have a much more devastating impact.

"An event that could incapacitate the network for a long time," stated one participant in a U.S. National Academies of Science study, "could be one of the largest natural disasters that we could face." In the film 33 Minutes: Protecting America in the New Missile Age, Dr. William Graham, chairman of the Congressional EMP Commission, explains what that disaster would look like:

Medical services wouldn't be available because they need electric power. Telephones wouldn't work. The traffic lights would stop working. Big traffic jams. Transportation would be shut down. Electronic fund transfers wouldn't work so you wouldn't get your paycheck. You wouldn't be able to use your credit card. Food stocks would run out very quickly. Everything we know about life today that makes it convenient and efficient would be shut down.

On August 15, 2003, 55 million people received a brief object lesson in what life would be like after an EMP event when a major blackout occurred throughout the northeastern United States and Canada. For the most part, services were restored within a day. That would not be the case after an EMP event. Heritage's James Carafano explains in a new paper the potential impact on the United States--and the world:

The result of a massive EMP event could be devastating. Communications would collapse, transportation would halt, and electrical power would simply be nonexistent. Not even a global humanitarian effort would be enough to keep hundreds of millions of Americans from death by starvation, exposure, or lack of medicine.

Nor would the catastrophe stop at U.S. borders. Most of Canada would be devastated, too, as its infrastructure is integrated with the U.S. power grid. Without the American economic engine, the world economy would quickly collapse. Much of the world’s intellectual brain power (half of it is in the United States) would be lost as well. Earth would most likely recede into the “new” Dark Ages.

Yet despite the threat—and the fact that six national commissions and major independent U.S. government studies have independently concurred with the significance of the danger—Congress has merely deliberated it but has not taken substantive action. Meanwhile, the Administration and federal agencies remain mostly ambivalent.

Carafano recommends actions the U.S. government can take to guard against an EMP attack: funding comprehensive missile defense to intercept and destroy a missile bound for the United States; developing a National Recovery Plan and a plan to respond to severe space weather emergencies; and more research on the EMP threat to ensure that the United States fully understands the scope of the danger and can prepare cost-effective countermeasures.

That's why it is time to make August 15 National EMP Awareness Day to wake up America’s leaders to the looming threat. An EMP strike should be recognized as a clear and present danger—one that could be devastating if it finds the nation ill-prepared.

President Obama Sticks to Stimulus Script

In the 1993 comedy Dave, a small-town presidential impersonator is called on to pretend to be the actual President of the United States when the commander in chief takes ill. Dave steps into the White House, takes his new role too far, and with wide-eyed innocence promises America, "I'm initiating a program to try to find a decent job for every American who wants one." Yesterday in Holland, Michigan, President Barack Obama made a strikingly similar pledge:

Over the coming weeks, I’m going to be putting out more proposals, week by week, that will help businesses hire and put people back to work. And I’m going to keep at it until every single American who wants a job can find one.

It's anyone's guess if President Obama was taking a page from Dave's playbook, hoping that the magic of Hollywood or the power of a populist message would resonate with Americans, helping to turn around his plummeting poll numbers. But a few things were clear in the President's speech: Despite all evidence to the contrary, he is still clinging to the notion that the federal government can create jobs, he remains utterly disconnected from the reality that the American people are fundamentally dissatisfied with the direction he is taking the country, and he is doggedly sticking to his favorite script—the story of more federal spending coming to America's rescue.

Since the beginning of his presidency, Barack Obama has promised that he would spend America out of the recession using the power of the purse, infusing the U.S. economy with stimulus spending in order to save or create millions of jobs. He failed. Despite a $787 billion stimulus package, the unemployment rate is 9.1 percent, job creation is anemic, and as Heritage's James Sherk and Rea Hederman, Jr., explain in a new paper, the average duration of unemployment hit a new record last month, surpassing 40 weeks for the first time ever.

Yet the President is falling back on more stimulus spending as a solution. In his speech yesterday, Obama told his audience to contact their representatives (again) and demand more spending on infrastructure. And he called for Congress to set aside their divisions so more money can be spent in the Department of Energy to further his green agenda. If you think this is all a re-run, that's because it is. And we know how the story ends. That's because an undeniable truth emerges from the President's stimulus fiction: Government spending does not stimulate economic growth. Heritage's Nicolas Loris explains why:

Sure, the government can create jobs. They can use our taxpayer dollars to hire workers to dig holes and fill them back up. But if there’s no net gain in productivity and wealth, the job is a waste.

For instance, we could replace all of the world’s mechanized agriculture equipment with hoe wielding farmers, and that would create jobs. But it would also significantly reduce productivity and efficiency. The economic reasoning for switching from more efficient machinery to less efficient human capital is such a baseless plan any politician suggesting it would be laughed out of office.

The failure of government stimulus spending has played itself out time and time again. In the New Deal, Japan in the 1990s, President George W. Bush in 2001 and 2008, and the Obama stimulus last year all failed to generate the hoped-for stimulus.

Yet the President keeps telling his story, and he keeps taking credit for the supposed success of his economic stimulus. But the American people aren't buying it. As the stock market surges and plummets, Americans' confidence in the economy keeps sinking—hitting lows not seen since March 2009 during the recession, according to a new Gallup poll. They're looking for a new direction—one of fiscal restraint and smaller government that they voted for last November.

It's time to stop re-running the same big-government storyline and put America on a new road of fiscal discipline headed toward economic growth. Congress and the President can start by balancing the budget, lowering spending, and reforming entitlements as laid out in Heritage's "Saving the American Dream" plan. Yesterday, President Obama said, "We can’t afford to play games—not right now, not when the stakes are so high for our economy." He's right. But unfortunately, he isn't proposing the ideas needed to put American back to work.

Wisconsin Holds the Line

The liberal political machine was in full throttle. Millions of dollars in campaign ads streamed on TV. An army of union workers descended on the state in a massive grassroots voter mobilization effort. But when the dust settled, the smoke cleared, and the votes were counted, the conservative majority that swept into Wisconsin last November remained intact last night despite an unprecedented recall effort designed to bring an end to Governor Scott Walker's reforms.

Yesterday in Wisconsin, Democrats tried to recall six GOP senators in an attempt to gain a foothold in the state's legislature—they lost in four of the races, failing to regain a majority in the state senate. Those losses came despite a $14 million effort waged by unions and liberal groups from across the country, including the AFL-CIO, UAW, AFSCME, MoveOn.org, Teamsters, UFCW, NEA, SEIU, and People for the American Way.

The recalls marked the latest battle in the war between liberals and conservatives being waged in the birthplace of American progressivism, and once again, progressivism lost. And it's no wonder.

In last November's election, the Tea Party surge brought new conservative voices to Wisconsin's state government, and under the leadership of Governor Walker, a new way of thinking took hold in the state's capital. Wisconsin faced the fourth highest tax burden in the country, the state carried a $3 billion structural deficit, and unions had a monopoly on power. In June, Heritage's James Sherk explained just how sweet of a deal the state's unions had:

Government employees in Wisconsin paid just 6 percent of their health care premiums and next to nothing for generous pensions, and the average teacher in Milwaukee makes $101,000 a year. Government union contracts also require layoffs to occur on the basis of seniority. Long-time government employees can rest assured that they will never get laid off.

Enter Governor Walker's sweeping reforms, including a new budget and a new collective bargaining law restraining the unions' power. His proposals woke the unions from their sated slumber, spurring massive protests that shut down the state's capitol, and14 Wisconsin senate Democrats fled to Illinois where they hid out for more than three weeks in an attempt to block the law. Ultimately, the reforms passed, they survived legal challenges, and now the state is reaping the benefits.

As America continues to struggle with unemployment, Wisconsin added a net of 9,500 new jobs in June — more than half the 18,000 created nationwide. Meanwhile, neighboring Illinois lost 7,200 jobs in June--and the state's government is pursuing the well-worn liberal path of drastically higher taxes in order to combat crippling deficits. Heritage's Rob Bluey reports on Wisconsin's new-found success:

Wisconsin’s resurgence comes after three years of job losses — more than 150,000 jobs were lost in the three years before Walker became governor. Since he took office in January, the state has added 39,300 private-sector jobs. That puts Walker on pace to exceed his goal of 250,000 new jobs in four years.

In Wisconsin, the voters took notice. In a state that Barack Obama won handily in 2008, where unions have a historical stronghold, and where millions were spent to halt the tide of conservatism, the movement toward reform continues. Last night's recall elections show that the Tea Party wave, even in the bluest of states, is no fluke.

White House Rules by Fiat Once Again

In the shadow of yesterday's disastrous Wall Street meltdown and President Barack Obama's address to the nation, a lesser-noticed piece of news emerged from the Obama Administration: By executive fiat, the White House is once again circumventing Congress in the name of advancing the President's agenda.

It's a story we've heard before. Where President Obama can't legislate, he will use executive branch action to accomplish his agenda. In the past, he has applied that tactic in the auto bailout, EPA regulations, and Obamacare. Now he's using this approach to remake No Child Left Behind (NCLB)—the most significant K-12 education law—by granting states conditional waivers from the onerous provisions of NCLB in exchange for adopting a yet-to-be-specified set of executive branch education policy priorities. The news came in an announcement from the Department of Education:

With the new school year fast approaching and still no bill to reform the federal education law known as No Child Left Behind, the Obama administration will provide a process for states to seek relief from key provisions of the law, provided that they are willing to embrace education reform.

The Department of Education is taking this unilateral action in order to insulate schools from NCLB's unintended consequences. NCLB requires all students to be proficient in English and math by 2014, a worthwhile but unrealistic goal that is placing federal heat on schools. As a result, states and local school leaders have been focused on compliance with Washington, not the needs of the children they teach. Heritage's Lindsey Burke explains that "the waiver route is a bad precedent that neither provides long-term relief for states nor solves the underlying problem with accountability, which would be more effective if directed to parents, not bureaucrats." Burke writes:

Circumventing Congress by granting states conditions-based waivers will exacerbate Washington’s decades-long history of failure at improving educational outcomes. In fact, the Administration’s NCLB “blueprint” is NCLB on steroids—ballooning the federal role in education by calling for resource equity among schools and national standards and tests.

One might think that if there is a problem with NCLB, then the President would look to Congress to change the law. But the legislative process on this 600-page law hasn't moved fast enough for his liking, so the Administration has resorted to the quick-fix waivers to make the change it believes in. Senator Tom Harkin (D-IA) came to the White House's defense, blaming House Republicans for slowing down the legislative process and saying that it's justifiable for the President to act on his own accord:

This Congress faces real challenges reaching bipartisan, bicameral agreement on anything. Given the ill-advised and partisan bills that the House majority has chosen to move, I understand Secretary Duncan's decision to proceed with a waiver package to provide some interim relief while Congress finishes its work.

Harkin isn't the only one on the left to lament the slowness of the legislative process. On ABC's This Week on Sunday, pundit Cokie Roberts bemoaned the fact that America's separation of powers created the circumstances leading to Standard & Poor's decision to downgrade the U.S. credit rating: "[T]he problem that we have here is the Constitution of the United States of America which actually does require people to come together from different perspectives whether it's divided government or not. We have divided branches of government under any circumstance."

The White House is well aware of the separation of powers "problem." In a press conference yesterday, White House press secretary Jay Carney was pressed on where President Barack Obama's "sense of urgency" is in light of Standard & Poor's decision to downgrade the U.S. credit rating and whether the President should call Congress back into session to address the problem. His response? "The reality that we live in is that this is -- as set up by the founders -- is a government that has different branches with different amounts of power, and we need to work together to get significant things done, and we’ll continue to do that."

Though Carney says the White House will "work together to get significant things done," the Administration's actions on education this week aren't reflective of that sentiment. In fact, they fly squarely in the face of proposals in Congress to restore state and local control over education and to begin reducing the federal role in education. Burke explains that the House Education and the Workforce Committee has completed significant work on major proposals to restore state control over education and put power in the hands of those closer to the student. But putting power in the hands of the people is not the Obama Administration's goal. Instead, it wants to extend Washington's tentacles into local schools.

The federal government has totally failed to improve America's educational outcomes, and now the Obama Administration has grabbed the wheel of government and is steering us further down a dead-end road. Instead of more Washington red tape, states need more control over their schools. Conditional waivers for NCLB aren't the answer. Instead, Congress should allow states to completely opt out of NCLB through proposals that are approved by Congress. Meanwhile, the White House might want to take a lesson in constitutional governance.

It's the Spending

On Friday evening, Standard & Poor's (S&P) downgraded the U.S. credit rating from AAA to AA+. As we and other conservatives warned, the spending reductions in the deal negotiated by President Obama to raise the debt ceiling were inadequate, and S&P reacted as we predicted but sooner. Neither Moody's nor Fitch, two other rating agencies, have downgraded federal debt yet, but they are not providing much rosier outlooks.

Decades of over-spending and over-borrowing by the federal government have damaged America's creditworthiness. Congress after Congress, President after President, the federal government spent every penny it took in—and borrowed over $14 trillion on top of that—to try to keep happy the voters to whom the government made promises it could not afford. The government kept shifting the burden of paying the bills forward onto future generations.

Well, the future has arrived, and it is bleak. Our economy is weak, millions of Americans are out of work, and America is so deep in debt that we have lost our good credit rating. Our nation needs to drive federal spending, including our ever-growing entitlement programs, down toward a balanced budget while maintaining our ability to protect America and without raising taxes. That is the sound path forward to a stronger economy with smaller government and more real jobs.

The White House's first reaction to this news was to blame S&P itself, claiming that their math was wrong as spokesmen pointed out S&P's past rating failures. Correcting the math didn't correct the problem, however, and so S&P went ahead with its downgrade. Debating S&P's credibility misses the more important point, which is there for all to see: Projected deficit spending properly raises questions about U.S. credit quality.

We cannot waste time shooting the messenger when the message itself is impossible to ignore: It's the spending.

Unsustainable entitlement programs have been built up over many Congresses and Presidents. Elected officials from both parties over many decades helped push us closer to this point. But the last chance to start correcting the problem before damage to America's credit occurred was during the recent debate over the debt limit.

Regrettably, President Obama and the Senate liberals refused to allow reforms to any entitlement programs and refused to make significant cuts in other federal spending unless they could raise taxes on America. Conservatives rightly resisted increasing taxes, which is a recipe for economic disaster during an economic slowdown. The resulting deal on the Budget Control Act brought little in the way of spending cuts and lots in the way of increased borrowing, and it was the last straw that cost America its top credit rating. President Obama and his liberal allies on Capitol Hill brought America's credit down

The White House claims that its tax-hike centered "grand bargain" would have prevented a downgrade, yet they still have not told us what was in that "bargain." Even as Senate Democrats are nearing three years without a budget, President Obama has offered to the American people rhetoric and class warfare, rather than solutions and responsible leadership.

Other liberals went out of their way this weekend to blame this downgrade on the Tea Party, with Senator John Kerry (D–MA) going as far as calling it the "Tea Party downgrade" on NBC's Meet the Press. Former Obama advisor David Axelrod echoed that coordinated spin on Face the Nation. Besides proclaiming for all to see that the liberals have no solutions themselves, this argument ignores the facts.

The Tea Party's primary focus is our nation's fiscal health. If it were not for the Tea Party's positive influence, Congress would still be spending, taxing, and borrowing with little regard for the burden it is placing on future generations. Only months ago, President Obama was demanding a so-called "clean" debt limit increase that would allow him to keep on borrowing without any cuts to spending.

As our colleague J. D. Foster points out in his expert analysis of Friday's downgrade, the debate over the debt limit was the substantive ideas of the conservatives versus empty political rhetoric of liberals:

In the course of negotiations on the debt ceiling, congressional Republicans tried tirelessly to get the President and Senate Democrats to get serious about cutting spending. All Obama and Senate Majority Leader Harry Reid (D–NV) could do was carp about symbolic tax hikes on the rich, oil companies, and their latest silly affection—corporate jets. To be clear, despite the perilous state of the nation's finances, the President's sole objective was ideological and symbolic: Even if Republicans had caved on tax hikes, which they wisely refused to do, the revenue gains would have been inconsequential compared to the spending cuts that are necessary. The President played politics while the nation's credit rating was set to burn, and now it has.

President Obama, congressional liberals, and their allies believe that if we remain silent on our fiscal future, then markets and credit agencies will not notice our perilous future. Thus we heard from liberal pundits and politicians who called the debt debate a "manufactured crisis"—as if everything would be fine with more blank checks. The problem of federal over-borrowing and over-spending was and is real, as the credit downgrade and market reactions reflect. Congress and the President must fix the problem and fix it now.

Liberals this week will try to equate revenue increases with tax hikes. But that is simply not factual. Government revenues increase when we have greater economic growth and more taxpayers in the workforce. That economic growth is impossible with job-killing tax hikes and increased regulation. Raising taxes on taxpayers earning $250,000 or more hits entrepreneurs, small business owners, and investors, thus slowing economic growth still further.

In the next 10 years, once the economy recovers, revenue will rapidly approach and will likely surpass its historical average of 18.5 percent of GDP, while spending is projected to shoot past its historical average of 20.3 percent to 26.4 percent of GDP. Government spending will have increased by 22 percent just on President Obama's watch.

Yet some liberals were still calling for more debt and deficits this weekend in the name of new "stimulus." On Friday evening, Obama's former economic advisor Christina Romer said the first failed stimulus she helped design should have been bigger and argued for a new and larger stimulus saying: "What I want is more now."

That is, more of what President Obama has given us in the past—fruitless new spending programs. This would give us a bigger problem, not a solution. With America and the world in the grips of an economic slowdown, we need action to create economic growth and jobs and restore America's credit. We do not need more government.

As dire is the domestic situation, as Foster notes, the consequences for the global financial crisis may be worse:

In today's global economy, however, the U.S. credit rating downgrade may prove catastrophic. Prior to the credit rating downgrade, Europe was already teetering on the brink. Last week European stock exchanges plunged 10 percent, their worst weekly losses since November 2008. The long-building government debt crisis in Europe, which had been so unsuccessfully papered over just a few weeks ago by its leaders, is reaching the boiling point, threatening to wash over not just the worst offenders like Greece and Portugal but also some of the pillars of the European Union like Spain and Italy.

We cannot improve domestic or global economic conditions by becoming more like Europe. America can do better by adopting better ideas.

Heritage has offered its fiscal plan, "Saving the American Dream," which would balance the budget in 10 years and lower our debt-to-GDP ratio to 30 percent (from the 100 percent it reached last week). It would accomplish this through responsible reform of Social Security, Medicare, Medicaid, and the tax code.

As Foster concludes:

A number of sound incremental reforms can garner strong bipartisan support and can substantially improve these program's sustainability and the nation's finances. The President must lead his party to join hands with Republicans in the joint select committee to embrace these reforms and be ready to enact them, saving far more than $1.2 trillion and far sooner than November 23. The objective for the nation, the President, and the joint select committee is clear: drive down spending—including and especially on entitlement programs—toward a balanced budget while protecting America and without raising taxes. Properly done, this would lead to economic growth, more jobs, less government, and a restoration of the nation's credit rating. It can be done.

It can be done.