A View From The Press Box

Appreciate Sam's compliment on my column, but I doubt this will prove to be the defining issue (even for Florida) in this election.

NAMIC recognizes that some type of backstop for the mega-cat ($100 billion range) may be prudent policy, but that's not the proposal Gov. Crist supports.

Having lived in Florida for a number of years, I don't think insurance will make or break the candidate, no matter whom it turns out to be.

Too many people remember hollow promises by candidates that never materialize, and while many might not appreciate McCain's position, you at least have to appreciate his candor in not selling you a bill of goods that you'll never see.

Unlike the current tax "prebate" issue that so many think is some rebate program, which is actually a draw on their 2008 tax rebates. A lot of people haven't figured that out yet. And unless you're a senior or disabled and pay no taxes, or never get a tax refund where this will be a windfall, you'll be howling come next April when the IRS grabs back the 2007 "prebate" money from your pocket.

For Floridians and for everyone else, there "aint no such thing as a free lunch."

SAM RESPONDS:
The cat fund idea passed the House. If the Dems achieve a bigger Senate majority in November, the bill could clear that hurdle next year as well. If McCain is sure to pick up Bush's veto pen on this item, but the Dems vow to sign the cat fund into law, I could see it swaying some voters with coastal exposures and soaring insurance premiums.

One more point, I believe BJ is mistaken on the tax rebate under the stimulus package. We checked with the Senate and received the following:

MEMORANDUM
To: Reporters and Editors
From: Carol Guthrie for Finance Chairman Max Baucus, D-Mont.
Re: Misinformation regarding rebates and 2008 tax refunds

Please be aware that there have been erroneous reports that stimulus rebate checks are an advance on next year's tax refund, so that any refund a taxpayer might normally receive would be reduced by the amount of the 2007 stimulus check. This is not correct.

The economic stimulus bill creates an additional tax credit for 2008 that decreases eligible Americans’ 2008 tax liability by the amount of the rebate check--and that money is being advanced to tax filers this year.

Please disregard any materials or reports indicating otherwise.

Wow, Sam, you amaze me!

As long as there is someone with a "D" after their name, they're good for you.

As long as it's an "R," it's all bad. I keep hoping you will be more objective....Hope springs eternal.

SAM RESPONDS:
Actually, while I hate to "disappoint" you, I am quite independent in my voting. In fact, I voted twice each for Republicans Rudy G and Mr. Bloomberg as mayor of New York.

I used to respect Republicans more for their fiscal responsibility, but the current President Bush blew that out of the water by running up immense deficits--in large part by cutting taxes during a war!

That's more the M.O. of the Democrats, yet it was Mr. Clinton, was it not, who not only balanced the budget and generated rising surpluses (since squandered by the current administration), but who also presided over quite a bit of economic growth, since his balance budget lowered interest rates and sparked a boom?

It's usually the social issues that separate me from the GOP. Since Rudy and Mike are pro-choice, pro-gun control and pro-gay rights, I had no trouble with their law-and-order emphasis and love their business-like management styles.

On this particular posting, I am merely observing that McCain's adamant opposition to a cat fund could come back to haunt him in cat-prone Florida, given that the Dems are gung-ho for the fund. It's an objective statement, not a rooting interest.

Sam, I have to comment on your reply back to Jan.

Former President Clinton was forced to balance the budget by the Republicans, who in 1994 took control of the House for the first time in like 40 years. What is best is that a great deal of it was a projected balanced budget and projected surplus.

As for economic growth, what did Bill Clinton have to do with any of that? He signed all kinds of legislation and executive orders that really hindered business.

He raised taxes, which has been proven to bring in less money to the economy. After the so-called Bush tax cuts, more money has come into the Treasury, but because of the out-of-control spending, the country gets nowhere and both sides are to blame.

The Clinton administration, it seemed, allowed a great deal of corporate corruption to go unchecked, and that had to be dealt by President Bush.

This put some pressure on the economy right around the time of the 9/11 attacks, which cost this country a great deal and still does to this day. No matter who was President in 2001, the cost to the economy was huge.

I believe the President, whoever it is or was, has very little to do with the economy. Contrary to popular opinion, they can't control the price of gas, either. The Congress spends money like it is going out of style--and, yes, both sides are to blame.

The President does not have the benefit of the line-item veto, which would end the stupid needless pet projects called earmarks, and could greatly help the economy. The Fed chairman controls the interest rates, not the president.

As for Senator McCain on the cat fund, he seems not to vote for things that might cost the country money unless there are spending cuts, also. He said he did not vote for the Bush tax cuts because there was not spending cuts with them.

SAM RESPONDS:
You raise some interesting points, Dave. But correct me if I'm wrong (and I am sure my readers will), but Clinton was elected on a platform of increasing government spending, but pulled back after consultation with a sterm Fed chairman, Mr. Greenspan,who warned of interest rate hikes if he followed through on his campaign pledge.

But he saw the light about fiscal responsibility and did not spend us into oblivion.

In addition, in August 1993, notes Wikipedia, "Clinton signed the Omnibus Budget Reconciliation Act of 1993, which passed Congress without a single Republican vote. It cut taxes for 15 million low-income families, made tax cuts available to 90% of small businesses, and raised taxes on the wealthiest 1.2% of taxpayers. Additionally, it mandated that the budget be balanced over a number of years, through the implementation of spending restraints."

Clinton also vastly expanded the Earned Income Tax Credit, which helped many of the poorest families survive.

The key is that he, with a Democratic Congress, imposed spending limits without budget cuts to compensate. Perhaps McCain would go the same sensible fiscal route.

Clinton's loss of Congress was mainly due to his failed health care reform plan, as well as a series of corruption scandals involving Democratic House members, if I recall correctly.

You are most probably right about Presidential influence over the economy being mild in the short term. It's like in baseball--if the team underperforms, you fire the manager, even though he's not the one giving up homers and striking out all the time!

But in the long term, budgetary policy is crucial, and that is largely the president's perogative, although I am with you all the way on line-item vetoes--as long as the authority is limited to budget bills.

Sam, here are some facts about the so called 1993 tax cuts.

The following is from the February 23, 2007 Wall Street Journal.

"Remember the 1993 tax hike that was supposed to fall only on the rich? In addition to raising gas taxes and Medicare payroll taxes and income tax rates, the Democratic Congress that year also raised the alternative minimum tax: from a 24% flat rate to a dual tax rate of 26% on AMT income up to $175,000 and 28% on AMT income above that amount.

It's true that the 1993 bill slightly increased the AMT's family income exemption, but Democrats refused to index those exemptions for inflation. So the combination of the higher rates and the failure to index for inflation has caught more and more middle-class taxpayers in the AMT's maw.

From 1992 to 2002, this Clinton stealth tax hike increased sixfold the number of filers paying the AMT, to nearly two million from 300,000."

Another Wall Street Journal article on October 11, 1996 stated the the tax cuts for 15 million low-income families was not a tax cut but an increase in the Earned Income Tax Credit.

As for the 1994 Republican takeover of the House and Senate, remember the Contract with America. It stated the things they were going to bring to vote. The American voters said finally here are specific things these people will do and they gave them the vote. I believe all the items were brought to a vote in the House.

Back to Florida. Today's USA TODAY has an article and a map that shows all the federal aid given to counties throughout the country from 1998 to 2007.

If everyone would look at this map you would see we are already paying for the National Cat Fund.

SAM RESPONDS:
Dave, excellent point about Uncle Sam (and all us taxpayers) already paying for the cat fund...But that isn't denied by most proponents, who say the insurance market could be stabilized by having a firm, rather than an ad hoc, federal backstop, much like with TRIA.

As for the AMT, as someone who makes a good living, I have yet to be hit by it, and if I'm not hit by it, and I consider myself upper-middle-class, then it doesn't feel to me as if it's unfair! But I agree it should be indexed for inflation rather than this annual confrontation at the 11th hour to raise the bar.