Moody’s Warns of Credit Downgrade if Congress Doesn’t Address Deficit

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Moody’s Investors Service announced Thursday that a compromise to avoid the “fiscal cliff” is not enough to protect the nation’s AAA rating, calling for further action from policymakers.

It said a deal over raising the debt limit, which could include new spending cuts, tax hikes and entitlement reforms, could determine whether the nation’s credit rating is downgraded.

“The debt trajectory resulting from this process is likely to determine whether the Aaa rating is returned to a stable outlook or downgraded to Aa1,” the agency said.

The Treasury Department said the U.S. reached its $16.4 trillion debt limit on Dec. 31, but that extraordinary measures can be taken for roughly the next two months to keep paying the nation’s bills.

The credit rater said the deal hammered out by Congress and the White House on taxes is merely a first step, and the U.S.’s credit rating could be affected “negatively” if Washington fails to take further steps to rein in the deficit. In fact, it said it was “necessary” for policymakers to adopt further measures to bring down the deficit to keep the U.S. rating intact.

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We Already Gave Up on the Constitution

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photo credit: chuck coker

Two and a half cheers for Louis Michael Seidman, the Georgetown law professor whose “Let’s Give Up on the Constitution” was a dead fish wrapped in the New York Times op-ed page.

Seidman calls the Constitution “archaic, idiosyncratic and downright evil.” He’s wrong, but at least he expresses his contempt for the rule of law openly and honestly, instead of insulting our intelligence with insincere twaddle about a “living document.”

The people who pretend to venerate our Constitution as a living document are most responsible for it being a dead letter. They are like parents trying to soften the blow of telling their children that Santa Claus isn’t real by saying he lives on in their hearts.

Imaginary Santas give no gifts and imaginary Constitutions protect no rights.

Seidman exercises his constitutional right to miss the point when he blames the fiscal cliff on the fact that revenue bills must originate in the House, or a “grotesquely malapportioned Senate.” But those are the Constitution’s procedural restraints, the equivalent of Robert’s Rules of Order. We got into this mess precisely by flouting its substantive limits on federal power.

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Bait and Switch: In Face of Fiscal Cliff, Obama Demands Spending Boost for 2013

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President Barack Obama smashed a completed fiscal-cliff deal with a last-minute demand for increased spending in 2013, according to an e-mail from the GOP’s Senate leader, Mitch McConnell.

Under the deal, planned tax increases on middle-class Americans would be cancelled, but Obama insisted on raising tax rates on Americans earning more than $400,000 per year.

“They’re holding that [deal] hostage” to boost 2013 spending, GOP Sen. Bob Corker said shortly after Obama lauded the pending agreement.

“The tax piece is complete and done as of last evening at 1:45 a.m. I thought the entire deal was sealed. Early this morning, the White House called demanding that we also turn off the sequester,” said the email, signed “Mitch.”

The sequester refers to scheduled cuts in spending during the first nine months of 2013. Half of the $109 billion in cuts are to be imposed on the Pentagon.

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Video: Ted Nugent Tells Gun Control Advocates to ‘Drop Dead . . . You Can Suck On My Machine Gun’

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In a recent appearance on the Piers Morgan show on CNN, Rocker Ted Nugent delivered a clear and unequivocal message to the British advocate of gun control and other foes of the Second Amendment. It’s not going to happen.

Petitions have been circulating regarding Morgan’s status in the US after his harsh criticism of Second Amendment Rights after the Sandy Hook school shooting two weeks ago.

Nugent warned that anyone seeking to take his guns away would face a backlash in the next election, or something worse.

See video below:

The Tea Party Has Not Yet Begun to Fight

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If the Tea Party has been weakened by the November election, why are the mainstream media expending so much effort attacking it?

The latest attempt is today’s front-page article by the New York Times, which alleges that the Tea Party is turning to “narrower” issues and suggests, none too subtly, that Congress should stop paying attention to it.

As proof, the Times offers the fact that Republican leaders “have embraced raising tax revenues in budget negotiations, repudiating a central tenet of the Tea Party.” It ignores the fact that Republican leaders could not muster the votes in the House to pass those proposals.

To the great frustration of the mainstream media and the GOP establishment alike, the Tea Party continues to hold the line against tax hikes and new bailouts. It also won a significant victory with the recent passage of right-to-work legislation in Michigan.

These are not “narrower” issues: they are the most fundamental issues concerning the nation’s fiscal health and economic future. It is the Times and the liberal gentry that it serves who cling to narrow, often contrived issues such as the co-called “war on women” to maintain their political clout. The ailing, indebted Times hates the Tea Party precisely because it is serious about economic realities the left would prefer to deny.

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State Governments To Share the ‘Death Tax’ Loot If Feds Go Over Fiscal Cliff

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Falling off the “fiscal cliff” is a bad thing, right? Not necessarily for some state governments that could begin collecting more in estate taxes on wealth left to heirs if the United States goes over the “cliff,” allowing sharp tax increases and federal spending cuts to take effect in January.

In an example of federal and state tax law interaction that gets little notice on Capitol Hill, 30 states next year could collect $3 billion more in estate taxes if Congress and President Barack Obama do not act soon, estimated the Urban-Brookings Tax Policy Center, a Washington think tank.

The reason? The federal estate tax would return with a vengeance and so would a federal credit system that shares a portion of it with the 30 states. They had been getting their cut of this tax revenue stream until the early 2000s. That was when the credit system for payment of state estate tax went away due to tax cuts enacted under former President George W. Bush.

With the return of the credit system next year as part of the “cliff,” states such as Florida, Colorado and Texas — which have not collected estate tax since 2004 — could resume doing so. California Gov. Jerry Brown has already begun to add the anticipated estate tax revenue into his plans, including $45 million of it in his 2012-2013 revised budget.

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Holiday Sales Growth Tanks Amid Economic Fears, Hits Lowest Level Since 2008

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WASHINGTON (AP) — U.S. shoppers spent cautiously this holiday season, a disappointment for retailers who slashed prices to lure people into stores and now must hope for a post-Christmas burst of spending.

Sales of electronics, clothing, jewelry and home goods in the two months before Christmas increased 0.7 percent compared with last year, according to the MasterCard Advisors SpendingPulse report.

That was below the healthy 3 to 4 percent growth that analysts had expected — and it was the worst year-over-year performance since 2008, when spending shrank sharply during the Great Recession. In 2011, retail sales climbed 4 to 5 percent during November and December, according to ShopperTrak.

This year’s shopping season was marred by bad weather and rising uncertainty about the economy in the face of possible tax hikes and spending cuts early next year. Some analysts say the massacre of schoolchildren in Newtown, Conn., earlier this month may also have chipped away at shoppers’ enthusiasm.

Retailers still have time to make up lost ground. The final week of December accounts for about 15 percent of the month’s sales, said Michael McNamara, vice president for research and analysis at MasterCard Advisors SpendingPulse.

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Obama Gives Cold Shoulder to Egypt’s Secular Democrats

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Last July when Secretary of State Hillary Rodham Clinton visited Egypt she was met with widespread protest from Coptic Christians and secular activists objecting to what they all believed was the Obama administration’s role in helping the Muslim Brotherhood (MB) ascend to power in Egypt.

The secretary had requested to meet with ten Christian leaders, myself included. All of those invited refused to meet with her and boycotted her visit. Most of us had been both publicly and privately warning members of Congress and the administration of the danger the Muslims Brotherhood poses and about their desire to turn Egypt into a theocratic Islamic fascist country. Yet we were ignored.

Going back to April 2007, Democrats made special efforts to link up with the MB when visiting then-House Majority Leader Rep. Steny Hoyer, D-Md., met with Dr. Saad el-Katatni, the MB’s parliamentary leader, at former U.S. Ambassador Francis Ricciardone’s home, at a time when then-Secretary Condoleezza Rice has publicly refused to meet with the Brotherhood.

Mr. Ricciardone, who I can call a friend, once told me that his friendship with another MB leader, Essam El- Erain, extended for close to 30 years. Perhaps that was the catalyst for this meeting and subsequent meetings that took place at his residency.

A stream of meetings as well as public and private contacts followed between current U.S. Ambassador Ann Paterson and members of the Brotherhood since her arrival to Egypt shortly after the revolution. The ambassador seemed to favor the Brotherhood and the hardliner Salafis over the rest of the secular players in Egypt.

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Report: Syrian Chemical Weapons Appearing in Hezbollah Caches

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photo credit: wilhelmja

(H/T: Instapundit) I am back-and-forth on how seriously to take this particular story:

“Two days after a mysterious explosion at a Hezbollah weapons depot in southern Lebanon, the Kuwaiti website Al Jarida is reporting that Israel bombed the site because Syria had transferred missiles there that were capable of being equipped with chemical warheads. The missiles had been moved into Lebanon from Syria in the last several months and were being held inside warehouses owned by farmers in the area.

The report also claimed that Hezbollah has many additional warehouses across Lebanon that are used for the same purpose. In October another weapons storage facility in the town of Baalbek was destroyed after an explosion. The AFP said that four Syrians were killed in the blast.”

…given that I’m not familiar with either the website in question, or the site that it’s drawing its story from. On the other hand, reports that Syria is using Hezbollah as a storage facility for its weapons of mass destruction have been circulating for years. Haaretz reported something similar happening in 2009; the Washington Post, of course, had a column on the subject a couple of days ago. On the gripping hand, if I was running the Syrian regime right now I’d want to have my WMD stockpiles under the control of somebody reliable…

Read more from this story HERE.