In some ways, the Republicans had both the easier and harder task in their response to President Obama’s State of the Union address. Easier in the sense that they didn’t have to go into specific on the various issues, but harder because they had only a limited amount of time to respond and that they were following the President himself. Taking a look at Virginia’s Governor Bob McDonnell’s speech, I come away with the following thoughts.

McDonnell opens his response by addressing the history of Virginia and his political lineage to Thomas Jefferson (the second Governor of Virginia). Speaking from the Congressional Hall designed by Jefferson, McDonnell quotes Jefferson from his first Inaugural address, saying “a wise and frugal Government … shall leave [men] free to regulate their own pursuits of industry … and shall not take from the mouth of labor the bread it has earned.” The purpose of these constant references to Jefferson, other than to highlight the position Jefferson had about a limited Federal government as well as his history to Virginia, is because Jefferson remains one of the Democratic Party’s icons. By linking himself to Jefferson and to small government, he is creating an image of how the Democrats have drifted away from their historical positions.

The first main topic McDonnell discusses is the current unemployment rate in the country. Chastising the currently Democratic-led Congress and the President over their economic proposals, he stresses that the best way for the economy to recover and for jobs to be created is by easing the burden on US companies. With proposals such as the $1 Trillion Health Care Reform proposals in Congress and the economic stimulus packages that will increase our national debt, McDonnell stresses how the economic burden will become too great for the nation. He highlights the Republican proposals on Health Care Reform that achieves similar goals as the Democrats without the large cost or complex legislation.

Switching the topic to energy, McDonnell references Obama’s comment on domestic energy production and Obama’s obstruction for nuclear power and oil exploration expansions. This expansion will lead to more jobs, meaning the need for a new educated workforce. He segways into discussing the need for student choice in schools and the need to award teachers for their “excellent performance.”

He concludes by addressing national security last. There were concerns about the President being too soft on national security when he entered office. McDonnell applauds Obama’s decision to provide additional support to the troops in Afghanistan as well as the successes of our troops in Iraq. Some recent events however, such as the Detroit plane bomber and the decision to try terrorists in the shadow of the World Trade Center, have justified some of their doubts about his ability to protect the nation.

It was a brief speech, but I think it was the best State of the Union response we’ve seen in quite some time. Bobby Jindal’s comedic response last year, as well as Tim Kaine’s head-scratching “there is a better way” mystery from four years ago have taken the credibility of the response away until the other night. The decision to hold the response in front of a live audience (even though they were all McDonnell supporters) was a good choice, especially since it gave the impression of a similar forum that the President enjoyed. However, as with all responses, the speech was light on details and over-generalized.

One of the best aspects of covering these speeches is to hear the give-and-take between the various parties. While debating political issues with people of all stripes, we can identify when someone is trying to spin an issue and when someone is being serious trying to resolve the issue. Both Republicans and Democrats are guilty of spinning, as Obama did with discussing the debt and McDonnell with national security. However, both are also serious about seeing the nation improve. While political ideologies are hard to work with, there is enough common ground on issues where I think the politicians can work together to leave our nation in a better condition than they found it. Small, targetted reforms will achieve this goal, but only if the politicians are willing.

As I start this, I’m staring at a 7,446 word, 11-page speech that lasted 70 minutes last night during primetime. For every word, I could probably write ten of my own, so I am going to tackle some of the major points rather than go piece by piece. That and I don’t think you want to read a 74,460-word article.

The first portion of President Obama’s speech focused on the economy. Highlighting the unpopularity of the bank bailout program that was started under President Bush, Obama sites the anger and frustration many had over spending government funding to keep the banks open. Noting how most of the funds used in the bailout have been recovered, he stressed how he has proposed a fee to recover the rest. According to Reuters, $545 Billion of the original $700 Billion was allocated to various financial institutions, with $375 Billion actually being distributed.

Many banks have already repaid part or all of their loans, and the nation is gaining interest and dividends on outstanding holdings. The fee in question will be 0.15% on covered liabilities for banks with more than $50 Billion in assets (approximately 35 banks at the moment). Projections show a return of $90 Billion over 10 years. However, with the government receiving returns on current investments, why do we need to institute the fee? And, what if we recoup all of the losses in 5 years, especially if more banks cross the $50 Billion threshold? Will the government cancel the fee? I doubt it.

The reason I doubt that the fee will be cancelled comes from Obama’s next major point. He wants to redirect $30 Billion from bank repayments to use infuse community banks so they can make loans to small businesses. If you remember, the TARP funds were to help banks make loans initially, with some banks forced by the government to accept funds even though they didn’t need it. So if the government is going to repeat the same process, will there be a different end result than now? In addition to the $30 Billion, the President calls for tax credits for small businesses who hire new workers or raise wages, eliminate capital gains taxes on small business investments, as well as tax incentives to businesses to invest in new plants and equipment. While no specifics were provided, the total for these initiatives could reach $50 Billion in the first year (no time frame was provided, so I don’t know if this is a one year or multi-year proposal). With such an expense, the bank fee would have to remain in place if the government is going to slow/reduce the growing national debt.

Towards the end of his speech, he went back to talking out the economy and the debt. Outlining his goals to repay the debt he amassed in 2009, he started by calling for a freeze on discretionary spending starting in 2011 (based on the impression that the economy will be better in one year). The cap on spending is based upon the current budgetary levels which are already much greater than where they were when he entered office. Because of this, the spending cap won’t make much of a difference in the bottom line. If he were to cap it at where the 2009 budget was when he entered office, he would make a much larger cut in the debt, especially with the costs associated with the Iraq war come to a close, meaning there is more than enough money for the government to operate.

He continues by noting $20 Billion has been identified in savings for this year, but when you consider that he wants to spend $30 Billion for small business loans (as noted above), he’s already in the red on his cost savings proposal. To off-set this, he wants to end the tax cuts on people making $250K which he campaigned on in 2008. Additionally, he wants to end tax cuts on oil companies. However, he said earlier in the speech that he would provide tax incentives to businesses that invest in new plants and equipment, so the net savings would probably be offset. Lastly, he calls on the reinstatement of PAYGO, which he credits as “a big reason for why we had record surpluses in the 1990s” (though the tech bubble leading to record tax receipts as well as savings from the ending of the Cold War had more to do with it than government spending). I won’t go deeply into PAYGO since I’ve already written how it is an inferior policy in a prior article.

Moving from the economy to national projects and infrastructure, the President called for the next generation of domestic energy production and high-speed rail service. In regards in energy, Obama said the nation needs new nuclear power plants, opening new offshore locations for gas and oil development, investments in biofuels and clean coal technologies. Much of this has been the rally cry for Republicans as well as many states for some time, and the President was obviously playing up to that side of the hall. However, he was also setting up the right by going right into calling for the passage in the Senate of the cap-and-trade legislation that the House passed last year. Obama has constantly said he was open to increased nuclear power, especially since he wants to expand the electric car market during his time in office, though he has been reluctant of actually allowing expansion to begin. On the other hand, he strongly supports taxing emission-producing power plants while creating an artificial “carbon credit” market. He misses the point that you can simply change the emission regulations and offer tax incentives to companies to modify existing power plants (which will increase jobs as well as tax revenues).

He continued by stating how the country needs to move from a bystander on the global warming debate to the global leader. Citing how there is debate over the climate change “evidence,” he attempted to change the discussion simply to the need to transition to the next generation of energy, especially if it can lead to a good that can be exported. This has been position that most people (Democrat, Republican, and Independent alike) have shared for years, but the political debate has held back progress. If the President would drop the cap-and-trade portion of the energy regulation reform and became more proactive about allowing nuclear and oil/gas production expansion, both he and the nation can realize the end of dependence on foreign oil.

In regards to transportation, the President highlighted the need for high-speed rail service here in the United States. Comparing us to Europe and Asia, where they have taken advantage of high-speed rail for decades, he notes how our transportation infrastructure has allowed us to be competitive in the global markets and lead to business growth. There is a high-speed rail project proposed in Florida linking Tampa to Orlando (approximately 80 miles), with a future connection to Miami (approximately 230 miles) by 2017.

The initial route is projected to cost $2.6 Billion, though concerns are that the line won’t generate enough revenue to repay the investment. There are other high speed projects in the nation as well. Unfortunately, there is a problem with this program, which is why it hasn’t been implemented in the past. High-speed rail service would be difficult to bring to the New England states because of the lack of space. It would cost billions to purchase land rights through crowded 200-year-old cities for new lines, since these trains cannot run on existing tracks. Additionally, there are two mountain chains the divides the nation into thirds, making transcontinental high-speed rail service financially impractical. The Acela service offered by Amtrak (a government funded, financially insolvent company) is about as fast of a practical passenger rail service that our nation can imagine while being cost effective. For faster service, regional air carriers are the better option.

The President commented on other issues, such as the stimulus bill, national security, and health care, but I think the last item I’ll cover in this article is education. In what is probably the most interesting proposal of the night, the President wants to end the practice of funding financial institutions to offer/manage financial aid loans. Instead, he proposes a $10,000 tax credit for families for a four-year college education as well as capping how much they have to pay on their student loans. Limiting the maximum payment to 10% of the students income for 20 years (10 years if the student enters public service), he proposes that any remaining balance on the loan be written off. It will be interesting to see the details on this proposal, since I don’t know if the annual/total loan limits will be increased or decreased, nor do I know if there will be changes on who will be eligible for PELL grants and how much they will receive. In the end, there is a possibility this becomes another unsustainable program such as Social Security, meaning that it will continue to add to the debt of the nation (but only 20 years from implementation, and long after he is out of office).

There wasn’t much about this speech that surprised me, and the majority of it was a rehash of his campaign and public speeches from the past two years. He did make many references to the Senate since they have not acted as fast as the House. As a former Senator, he should understand that the Senate’s role is to help temper the frenzy of the house, which is why a Senator’s term is six years while a Representative’s term is only two. Additionally, this focus on the Senate has to do with the loss of the 60-seat super majority the Democrats enjoyed over the past year. Obama is now in a position where if he wants major pieces of legislation to pass, he has to have Republican support. Up till now, he had a hard enough time simply getting all of his party members to fall in line, meaning that if much of his proposals in last nights speech fail to come to fruition, he can blame the Republicans for obstructing his vision of progress.

Overall, I give the speech a B, since the overall theme of the speech was on the economy, and he linked most of his points to jobs or the economy in one way or another. He lost points for his inappropriate chiding of the Supreme Court (who sits in these speeches out of courtesy) and for being too long. It will be interesting to look back to this speech in December to see what he has or has not achieved over the next 11 months.

I will address the Republican response tomorrow.

Earlier this week I received a link to a very unusual piece of art.  It is a picture depicting Washington, DC with a slew of historically important people from our nation and what role they played in the pass as well as the present.  When you scroll your mouse over each individual and symbol in the painting, a magnified view of the selected area appears on the right-hand side of the page giving you a description of the person and why they are included.  I am proud to say that Thomas Payne is one of over 40 people highlighted in the work of art.

While the painting is religious in nature, I think everyone will find the site interesting and informative.  Take a few moments and explore the picture and see if you can find all of the symbols the artist chose to include.

The following is the text from the e-mail that came with the link:

Powerful New Piece of Art…..

McNaughton: “One Nation Under God”

As you run your cursor over each person, their name and a brief description will be revealed. This may be the most timely and powerful new piece of art that Jon McNaughton has done. It has over 40 patriotic heroes speaking to us from the dust as Jesus Christ holds the US Constitution. See if you can identify each of the patriots. There is a link to the detailed description of the 57 symbols and an interview with Jon.

With the the election for the next Virginia Governor coming up next week, I have been spending time looking at campaign ads and the candidates make if they are elected.  One of the campaign ads that caught my attention was one named “Priority” by Creigh Deeds.  Take a moment and view the ad.

In this ad, Deeds is proposing his “Virginia Forward Scholarship Plan.”  This plan is designed to pay half of the tuition for in-state students if they graduated high school with a “B” average or better.  While this sounds like a good deal, I questioned the campaign and asked them how it will be funded.  I was directed to their website where they discuss the plan.  The website states:

To pay for the program, Creigh will initiate a full, comprehensive review of all state surplus sales, including state land and personal property and equipment, and sell whatever is not needed to support essential state operations. Each year, Virginia sells in excess of $10 million in state owned land and buildings, plus millions more in surplus equipment. A full review will generate approximately $28 million in annual revenue from surplus property sales that will be deposited in the Virginia Forward Scholars Trust Fund. In addition, Creigh will revamp the state’s debt collection process and redirect enhanced state debt collection, currently valued at about $12.5 million per year, to the Virginia Forward Scholars Trust Fund. By streamlining the operations for debt collection and by more aggressively selling off state surplus property, Creigh will provide dedicated funding for the Virginia Forward Scholars Trust Fund without raising taxes.

The selling of surplus items is nothing new. In fact, California made news this Summer when Governor Schwarzenegger announced that he would post some of the state’s surplus items on eBay and Craigslist. So Deeds proposal to use the revenue generated for the surplus sales towards his plan is OK. Additionally, the redirecting of funds obtained through debt collection to the plan is also a decent proposal. But I do have a few problems with this proposal.

The selling of state land to fund a reoccurring education plan isn’t very smart. As the state’s population continues to grow, land will become more valuable (and scarce) to the state. Hawaii is a perfect example where land is a scare resource. This land should be retained where it can be used for future development projects, even if it is used as a land exchange when eminent domain transactions are necessary for key road projects or other service projects. Additionally, the quantity of land for sale will vary from year to year, so it is an unreliable source of income.

On the same note, the campaign projects that the plan will cost $40 Million. The campaign is assuming that the state will earn $28 Million from the sales of surplus land and supplies plus another $12 Million from debt collection on an annual basis. While they don’t state how many students they project for this to cover each year, it is fair to say that over time, the number of students qualifying for this plan will increase. According to their website, they cite a 4-year period – being the length of time it will take for four graduation classes to populate the university system. But what happens after four years?

If the cost of the plan rises due to increased tuition rates and eligible students, and the proposed revenue streams remain constant, there will be another source of funding required to offset the plans deficit. And if the “streamlining the operations for debt collection” becomes too efficient, then the proposed revenue from that streamlining will decrease, widening the revenue shortfall for the plan. This wouldn’t be an issue for Deeds though, since Virginia Governors are limited to a single term of four years. That means, he will be out of office when the fiscal problems begin.

Even if all of the financial models for this plan were to be true, there is one overwhelming problem that this plan doesn’t address. Virginia faces a significant bugetary shortfall in their transportation funding. Deeds has made a series of proposals to pay for this shortfall to include raising taxes to generate the needed income. According to the Deeds website, there will be a projected “$100 billion shortfall over the next two decades, or an average of $5 Billion per year. Why would you establish an open-ended “entitlement” program such as the Virginia Forward Scholarship Plan that the campaign anticipates to cost $40 Million a year when the state would need to generate an additional $5 Billion on top of that to pay for necessary road improvements?

Like most domestic proposals made during a campaign, the promises made are more about enticing people to vote the candidate. Many of these campaign promises never come to fruition, such as President Bush’s urban-recreational development projects that he cited during his 2004 campaign. But if the plans are enacted, the impacts the plans have well into the future are not a worry to the candidate since they will be out of the office when problems arise. This reckless practice leads to open-ended obligations that become bloated and a financial burden on the tax payers.

I think if Deeds were to win the election, he should get his priorities in order. A 50% educational subsidy is not an necessity to the state, especially if the transportation shortfall is the most important issue in the campaign (as stated by the Washington Post). Making campaign promises with disregard to the economic fallout associated with them is not the sign of an effective manager of the states’ budget.

If you recall the nation-wide protests Iran earlier this year, social networking services such as Twitter played a major role in helping the protestors organize and coordinate their events.  Last year, social networking was one of the tools credited for helping Obama win the Presidential election.  So it isn’t surprising to find Twitter and Facebook being used in the Governor’s race in Virginia.

Today was the second in a series of four debates between candidates Bob McDonnell and Creigh Deeds, and both camps had staff members “Tweeting” from the event.  As a non-Twitter user, I decided to check out their Twitter pages to see what information the staff members were sending out for their followers to read.  The following is ALL of the Tweets from both camps during the debate (the items in italics are from the McDonnell camp): 

@bobmcdonnell open statement – claims he’s from nova – you sure you don’t mean va beach?

@creighdeeds – open statement – reminds @bobmcdonnell that in 04 he opposed progress made by Gov. Warner

—- @CreighDeeds opening statement: brags about supporting higher taxes.

@creighdeeds – @bobmcdonnell never wrote a bill to create a job or expand edu. opportunity. Voted against Gov Opportunity Fund

1st question – @bobmcdonnell thesis – “working women / feminists are detrimental to society.” Question what has changed?

@bobmcdonnell answer: a lot of my close friends are women

follow-up for @creighdeeds – why is thesis an important topic now?

@creighdeeds A: i didn’t write when i was 34 that workig women are detrimental, that the state should be involved in contraception, etc.

@creighdeeds – the thesis puts @bobmcdonnell’s record in perspective. introduced 35 bills to limit a women’s right to choose

Transpo. question: 1. what is your plan for funding 2. what leve of funding 3. drain of $5million/year from trust fund?

@creighdeeds A: 1. will bring together ds/rs 2. a fund of new $ in excess of a billion $/year dedicated to transpo

—-@CreighDeeds the astronomer…talks about “space”

@creighdeeds: @bobmcdonnell will take $5.4 billion from our schools. he will rob peter to pay paul

—-@bobmcdonnell: “With 47 days to go I’m shocked my opponent (@CreighDeeds) still has no transportation plan” #vagov

@bobmcdonnell – attacks @creighdeeds for his realistic approach to solve our trans. problems. wants his liquor store on every corner plan

—-@CreighDeeds bashes Gov. Wilder’s ABC plan

@bobmcdonnell – “we need to improve the environment” – but does he believe in global warming?

@bobmcdonnell – “drinkable fuel” – not sure i like your green energy ideas

@creighdeeds – energy technology is the next economy. we need an energy based research triangle. check out deedsforvirginia.com for more

—-@CreighDeeds getting angry ~staff #vagov

—-@CreighDeeds called for cap and trade at the Fed. level and bragged about it this Spring ~staff #vagov

Question – Gitmo detainees

@creighdeeds – if we are going to close down gitmo – i would encourage other parts of USA than VA. I can work with Pres. Obama

@bobmcdonnell – i agree with Creigh

—-@CreighDeeds wanted to triple med mal cap ~staff #vagov #2009

Q: VA Gun show loophole?

@creighdeeds – i support 2nd amend. April 16, 2007 changed a lot of things for a lot of people. I felt the need as a human being

to close it. As Governor i will work to close it.

@creighdeeds – it’s going to take someone like me, with my record to close the gun show loop hole

@creighdeeds – i’m not sure where @bobmcdonnell is from. Nova/VA Beach/Henrico?

—-@CreighDeeds angry at Bob’s Fairfax roots and Virginia Beach home ~staff #vagov #2009

@creighdeeds – the people of nova have created unprecedented prosperity for the state – that’s why we have to help solve transpo

@creighdeeds – some of our rules are antiquated – we may have to rethink our rules to make sure they make sense for the 21st century

rt @seanholihan Ireland’s own @bobmcdonnell (hah!)

—-@CreighDeeds opposes 287g ~staff #vagov #2009

—-@CreighDeeds confuses audience, mass hysteria ~staff #vagov

on warner’s signature accomplishment – @bobmcdonnell why did you oppose it in 2004

“i can be better than Mark Warner” – @bobmcdonnell you opposed his accomplishments and his overall philosophy!

I know Mark Warner, I’ve worked for Mark Warner – @bobmcdonnell you are no Mark Warner

—-@CreighDeeds, you’ve really shared these concerns with @BarackObama? prove it ~staff #vagov

@creighdeeds – i know you’re against working women, but what do you have against working people @bobmcdonnell?

bob’s insulted? no bob the working women and families are insulted by your record and your blueprint for va

—-Bob’s for charter schools. @CreighDeeds is not. ~staff #vagov #2009

rt @MoElleitheeMcDonnell said he told Republicans they were wrong on spending. But he also said Bush economic policies would be his model.

—-Bob ends positive, @CreighDeeds ends angry – staff #vagov

As you can see, there really isn’t a lot of content with these Tweets.  Most of the content are merely jabs at both sides, while sometimes mentioning a key word indicating where they are during the debate.  Unfortunately, I come away disappointed.  If Tweeting is suppose to provide followers with information about an event, both the McDonnell and Deeds camps failed in this instance.  This just reinforces my stance that if you want information, go to the source and read/listen/view it for yourself. 

Bob McDonnell’s Twitter page – link
Creigh Deeds’ Twitter page – link