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Experts compare the performance of two states with thriving economies California and Texas, but run by governors who are different, one passionately liberal Democrat and the other passionately conservative Republican. The Texas economy is slowing following the drop in oil prices. The Dallas Fed has lowered the forecast for growth in Texas to 0.5%-1% from the 1.5% rate projection. This compares with a growth rate of 3.4% in 2014. During the economic downturn following the financial crisis of 2008, Texas was lucky to have laws that prevented the kind of housing bubble that happened in California. It also benefitted from high oil prices. California has recovered from the worst effects of the crisis with unemployment dropping from 12% in 2011 to 6.3% in 2015, and half million jobs added in the last 12 months. Many of the jobs are in the higher paying tech sector. Critics point to the weakness in education and lower paying jobs in Texas. Texas has diversified ite economy since the 1980's, with about 13% of the state's GDP from the oil and gas industry in 2015 compared to 19% in the earler period. ...

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Difficult conditions for public sector unions as state governors work to reduce deficits. A weak economy leads to concessions by private sector unions in 2010-2013. This is one of the most difficult periods in union history following the financial crisis of 2008 and large job losses in many industries, especially the auto industry. Maher describes conditions in different industries including telecom, auto, airlines oil, retail,and rail.

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U.S. President Lyndon Baines Johnson was committed to spending on a war overseas and domestic priorties for the Great Society program at home. Johnson struggled with Congress to meet the costs of both. He even suggested a 10% tax surcharge to pay for the war and domestic programs. Dallek says 79% of American opposed a tax increase in 1968. Republican Richard Nixon was elected U.S. president that year.

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Krauthammer cites Congressional Budget Office numbers that show the Obama U.S. health care law continues the spiralling costs of health care with new government mandates at a time of severe budget cuts in education and other areas- for 2013-2022 the costs come to $1.76 trillion. The initial Obama administration figures of 10 year costs of $938 billion announced in 2010 reflected the fact that the new U.S. health care law would take 4 years to fully go into effect. Costs after 2021 are shown to be $250 billion each year in the CBO figures. The law is now before the Supreme Court in 2012, which has to decide on the basis of the limits of the Commerce Clause.

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How the Simpson-Bowles Commission recommendations on reducting tax expenditures and the Romney, Feldstein proposals to limit tax deductions and loopholes to make the rich pay more- at the same time as the tax code is simplified with lower rates- offer a basis for moving towards a deficit reduction plan that has support on both sides of the aisle in Congress, of Democrats and Republicans. Jeb Hensarling and Pat Toomey are the Republican members on the Supercommittee to address deficit reduction, who support a balanced approach to raise revenue from taxes and spending. Obama advisor, Chrisitina Romer sees the Simpson-Bowles approach to limting tax deductions as a good starting point for building an agreement. Romer goes so far as to say let the Republicans in Congress decide on infrastructure project selection as there so many worthy infrastructure improvement projects that getting started would be the main objective.

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Data from the Center on Budget and Policy Priorities that show a Texas budget gap that is worse than New York, and about as bad as California's. The deficit in the Texas budget is expected to be $25 billion for the next two years.

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With 80% of Wisconsin precinct votes counted, Governor Walker had 55% of the vote compared to Tom Barrett's 44% in the recall election of June 2012.

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Even though E-Bay executive Meg Whitman has outspent Jerry Brown by $130 million, much of it her own money, she trails Brown by 8 percentage points in an Oct 20 survey by nonpartisan Public Policy Institute of California. That survey showed Brown leading 44% to 36%. She had a hard line stance on illegal immigration in her ads for the primaries, which changed later in the campaign to attract Latino voters. Her campaign crafted by consultants focussed on three themes- cut government spending, create jobs, and fix education. Brown is a former Governor of the state and current attorney general. Experts attribute the lagging Whitman campaign to voters leery of 2 kinds of politicians- the first is the career politician and the second is longtime corporate executives. In other polls Senator Barbara Boxer is leading Ms Fiorina, former HP executive, 43% to 38%. Because of last minute surges in the polls, a lead of 8 points or more is considered necessary for the governor's campaign, for a candidate to win. Another factor is that Governor Schwarznegger came in with no political experience, and was beset by the state's fiscal troubles, with his poll ratings now at 28%....

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Glenn Hubbard, Professor at Columbia University and Bush adviser who helped design the Bush tax cuts, has an uneasy sense about the tax cuts today. He says the tax cuts have been undermined by years of deficit spending. The Bush tax cuts expire Dec 31st 2010 in the USA if Congress does not act. Macroeconomic Advisors estimates that letting the tax cuts expire will take 0.9% off the growth rate. Nobel Prize winning economist Paul Krugman prefers to let the tax cuts expire and provide more help to state and local governments to preserve jobs that are being lost due to budget shortfalls. But becuase of the political climate he prefers to let the tax cuts go on for a limited period. The Obama administration may decide to continue with the tax cuts rather than fight the serious battles for deficit reduction, after spending much of its political capital on health care reform. Hubbard also thinks in the current situation its best to keep the tax cuts even with the concern for the deficits. He says the spending during the Bush administration, especially the Medicare prescription drug benefit, which is estimated to cost $400 billion from 2004-2013, was a major problem. The incentives to business and investors for productive effort in the Bush tax cuts is uncertain, if it becomes clear that the price for these cuts is higher taxes later on to cover growing deficit spending. Hubbard does not see any serious action on the deficit till the next Presidential term and sees it better to keep the tax cuts till then, when some serious discussion can take place....

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Romney promises to focus on everyday concerns of jobs, family, and budget deficits with his 5 step plan to revive the economy. He says he will not raise taxes on the middle class. The 5 step plan is to make America energy independent by making full use of domestic oil and gas resources, create jobs and provide skills for new jobs, make trade work for America, support small businesses with fewer regulations and smaller tax burden and smaller burden of healthcare, and reduce the deficit. His plan he says will create 12 million new jobs.

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WSJ reporters tell the story of Chuck Hagel of Nebraska from his early days in Vietnam, a cellphone business venture, Senator during the Iraq war, gradual shift to opposing the Iraq war, serving on the Senate Foreign Relations Commitee with Senator Obama, and the bond established with Obama over American involvement in the Middle East.

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Chuck Hagel answers questions in the U.S. Senate about his views on the Iraq and Afghanistan surge, on sanctions against Iran, and nuclear disarmament. Hagel says the U.S. must engage not retreat in the world, and discussed his world view without getting drawn into details about policy issues. He faces a difficult nomination for U.S. Defense Secretary with skepticism from Republicans. Hagel opposed both surges and says the right approach is bilateral disarmament for nuclear weapons.

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This article in the NYT provides a look at the features of the Republican House Health Care Plan- Both the Affordable Health Care Act and the House Plan provide incentives for buying insurance- the ACA bases these incentives on income levels whereas the House Plan does not provide additional help for low incomes or elderly. Incomes at $20,000 would see a loss greater than  $2000 under the House Plan and as many of the elderly poor living in high cost areas may not have the resources to make up for this loss of subisidies they may forgo buying insurance or have insurance coverage that protects only in a limited way. President Trump has given assurances that all will be covered. For people with incomes of $50,000 or $75000 the loss of $2000 subisidies would also have some impact. At larger incomes or the well to do the subsidies are not handed out under either plan. Under the ACA the emphasis was on income levels and high cost insurance areas the subsidies were greater, under the House Plan the subisidies would be higher for the elderly compared to the young but very low income levels are not given additional help.     ...

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Romney emphasizes that he supports some of the popular parts of the Obama Healthcare Law such as coverage for people with pre-existing conditions. He tells voters he got everybody in his state insured. He also says there will not be a huge cut in taxes that would worsen the deficit. He would close loopholes and deductions to offset any deductions as shown by his advisor Harvard economist Martin Feldstein. The idea is to get a message across that will resonate with women, minorities, the middle class, workers, and business- the 100%, something he is able to do with some credibility having come from Massachusetts, a liberal state in the eastern United States.

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Most Americans pay less in taxes, including state, local and federal taxes, today than in 1980 in inflation adjusted dollars. The taxes have gone down by 2-3% for incomes in the range of $50,000 to $150,000, and gone down by 3-4% for incomes between $150,000 and $350,000. Taxes have gone down over 7% for incomes above $350,000. The main reason is the decline in federal income taxes.Tax rates increased in the period to 1990 and declined from 1990 to 2010. The Democratic party and president Obama are pushing for increase in taxes for incomes above $250,000. Republicans are resisting the changes citing disincentives to investment and growth for small business which generates a large proportion of new jobs created in the U.S. economy. The New York Times study shows the percent of the U.S. population that makes between $200,000 and $350,000 almost doubling in the period 1980-2010 and at the same time its share of the U.S. income remaining the same - many small business owners who hire employees would fall into this income category. Republican's response is for tax reforms that reduce loopholes, deductions and other tax expeditures that disproportionately help the wealthy. Democrats say this cannot create enough revenues to address the deficit, when mortgage deductions, charitable deductions are excluded. The back and forth is leading to stalemate but also opening up discussion for the first time on whether the mortgage and charitable deductions make sense in today's environment. A significant portion of revenues lost in the mortgage deduction goes to affluent households, subsidizing larger borrowings to build larger homes than otherwise, according to the Brookings Institution. Politicians have resisted changes that would go against powerful lobyying groups in the past, yet the impasse has opened up new thinking outside the box because of the pressing need to come up with a solution....

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U.S. Speaker Paul Ryan and Senator Tim Scott describe the event on poverty organized by the Jack Kemp Foundation in Jan. 2016, in which both Congressmen are moderators. Ryan and Scott point out the importance of upward educational and economic mobility for working class and middle class people. The 2 Republican leaders say education, work, opportunity and accountability for federal spending in anti-poverty programs are critical parts of their program for addressing the problem. They suggest trying different solutions by giving states more opportunity to try different solutions.

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Lawrence Summers, former U.S. Secretary of the Treasury, writes on August 2, the day the debt ceiling deal passed the U.S. Congress. His reaction to the deal is one of relief, cynicism and economic anxiety. Relief that the deal does no immediate damage to the economy, which he says is no small achievement. This comes from not denting the U.S. safety net of Medicaid, Social Security and other social programs in the midst of high unemployment. And raising the debt ceiling through 2012 avoids a repeat of the kind of tense negotiations that took place recently. Cynicism because with the revised information from the Commerce Department of 0.4% growth in the first quarter and 1.4% growth in the second quarter of 2011, the new forecast of U.S. budget deficits would be much higher in the years further out. A mere loss of one half percentage point in the annual rate of growth could add $1 trillion dollars to the national debt in 2021. Summers points out that Congress votes annually on discretionary spending and a current Congress cannot control what a future Congress does. Caps and sequester deals can be reformulated in 2013 by a new Congress. This deal says Summers has only confirmed the lower levels of spending already negotiated for 2011 and 2012, even though the estimates show $1 trillion in deficit reduction. For the remaining $1.2 trillion in reductions to be negotiated by the "super-committee" there is no baseline for these cuts- it is not stated whether this baseline is with the Bush high income tax cuts included or excluded. His economic anxiety comes from the low rate of growth in the first half of 2011 which suggest an economy at close to a standstill. He sees a one in three chance of a U.S. recession in the absence of any efforts to spur growth. Martin Feldstein was quoted on television business channels on August 2, saying he sees a 50% chance of the economy slipping back into a recession. Steps Summers advocates are a non-extension of the Bush high-income tax cuts which would add $1 trillion to deficit reduction, some entitlement reform, extension of the payroll tax cut, extension of unemployment insurance, and infrastructure maintenance....

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Republicans held onto 4 of 6 seats in recall elections following Governor Walker's spending cuts and restrictions on the collective bargaining rights of public sector unions.

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Barney Frank, of the Dodd-Frank Wall Street Reform and Consumer Protection Act, is interviewed by the New York Times one year after the passage of the legislation. He says we did not punt anything, it was because the legislators couldn't get everything right that they set up the provision for extensive rule making. He would rather forget financial matters as they are not his strong point, he has learnt more about repos and derivatives than he ever wanted. Critics have pointed to the extensive rule making delegated to regulators in Dodd Frank as a major weakness. It makes Dodd-Frank as effective as the regulators want it to be, something that goes back to an earlier period before 2008 when lack of regulatory discipline led to the financial crisis. He gives the regulatory agencies CFTC and the S.E.C. good grades for writing some of the rules because of the difficult conditions they face. His main fear is the stalling by Republicans in Congress and efforts to weaken the law by crimping resources for the agencies. And he fears the Republicans with support from the banking industry see the 2012 presidential elections as an opportunity to reverse the legislation....

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Krauthammer tells U.S. presidential candidates stop saying that Social Security is a Ponzi scheme, because by its very definition it is a Ponzi scheme. Instead exercize common sense and take the simple steps to update Social Security for today's longer life expectancy, aging population and way fewer workers to support a retired person. In a Ponzi scheme payments by people joining currently are paid to those who joined earlier, with not enough to pay future entrants- which is what is happening to Social Security. In 1940, after Roosevelt signed Social Security into law, there were 160 workers for each retired person. That dropped to 16.5 in 1950, today there are 3 workers. In 1940 the life expectancy was 62, today it is closer to 80. Krauthammer says the writing is on the wall- simply have the courage to make the changes by raising the retirement age, means testing the rich for benefits, and adjust the cost of living measure.