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Posted at 12:13 PM ET, 03/ 1/2011

Obama officials praise those who support them

By Jennifer Rubin

Wisconsin Gov. Scott Walker on Monday finally had enough of President Obama's hectoring. (Obama at the National Governors' Association meeting on Monday pronounced, "I don't think it does anybody any good when public employees are denigrated or vilified or their rights are infringed upon.")

In a statement, Walker reminded Obama -- and the country -- of some key facts:

"I'm sure the President knows that most federal employees do not have collective bargaining for wages and benefits while our plan allows it for base pay. And I'm sure the President knows that the average federal worker pays twice as much for health insurance as what we are asking for in Wisconsin. At least I would hope he knows these facts.

Furthermore, I'm sure the President knows that we have repeatedly praised the more than 300,000 government workers who come to work every day in Wisconsin.

I'm sure that President Obama simply misunderstands the issues in Wisconsin, and isn't acting like the union bosses in saying one thing and doing another."

It's odd how the left and the mainstream media speak of public employee unions' "rights." These "rights" are a function of statue in some but not all states. Do taxpayers in Texas have a "right" -- unassailable and unamendable -- not to pay state income tax? It would be nice for Texans to have that assurance, but Texans know full well that elections and new elected officials can change the tax structure. (I suspect that is one reason why they keep voting Republican.) By pronouncing something a "right," the implication is that those seeking to change the system are doing something untoward. Poppycock. For an ideological group that constantly wants to change existing laws and arrangements, liberals should be wary of defending the status quo with such vigor.

Now, Obama's comments were not the only indication of the degree to which this administration is beholden to and biased in favor of Big Labor. Byron York of the Washington Examiner reports on the cheerleading by the secretary of labor, Hilda Solis:

"The fight is on!" Solis told a cheering crowd at the Democratic National Committee's winter meeting over the weekend in Washington. Giving her support to "our brothers and sisters in public employee unions," Solis pledged aid to unionized workers who are "under assault" in Wisconsin and elsewhere.

This is appalling. She is not the secretary of unions. She is the secretary of a department that is, theoretically, supposed to be a neutral umpire between labor and management and promote employment. No wonder her outburst made her subordinates nervous:

In response to an e-mail inquiry, department spokeswoman Evangelina Garcia directed any questions about Solis's speech to the DNC. When asked whether Solis was speaking in her role as labor secretary -- after all, she began the relevant part of her DNC speech by saying, "As your secretary of labor, I've been following the developments in Wisconsin ..." -- Garcia did not respond.

Asked whether Solis supported the actions of Wisconsin Democratic state senators, who have fled the state to prevent a debate and vote on Walker's proposal, Garcia again did not respond. Later, another spokeswoman also directed inquiries to the DNC. Reached by phone, a DNC official said, "I'm going to let the speech speak for itself." In other words, no comment all around.

During Solis's confirmation hearings, Republicans raised strong concerns about her ability to enforce the law in a neutral fashion. She assured the Senate -- under oath -- that her days as a union advocate were over. They plainly are not. She should, accordingly, resign. That's not going to happen, but an oversight hearing would be illuminating.

The degree to which the Democratic Party, including the president, has become dependent on organized labor has been apparent for some time. Despite the caterwauling in 2010 from Democrats about undisclosed campaign donors, a large public employee union (American Federation of State and Municipal Employees) was the top third party donor. Also in the top 10 were the Service Employees International Union and the American Federation of Teachers. These unions give almost exclusively to Democratic politicians.There is little wonder then that Democratic legislators and governors have shoveled rich benefits into the laps of public employee unions.To be blunt, you get what you pay for.

Perhaps there should be a choice: Public employee unions can retain their bargaining rights OR their ability to make campaign donations. But not both. Really, the current system by which unions provide tens of millions of dollars to Democratic politicians who in turn "negotiate" uber-generous contracts with those same unions would be, in any other context, called bribery.

By Jennifer Rubin  | March 1, 2011; 12:13 PM ET
Categories:  Governors  
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Comments

The relationship between the public employee unions and the Democrats who negotiate sweetheart contracts for them is blatant public corruption. The taxpayers, who are the chumps in this cozy arrangement, are finally wising up.

Posted by: eoniii | March 1, 2011 12:43 PM | Report abuse

How to handle the unions? Michael Barone points us to Ironman’s analysis comparing the president to Roger Smith (of Roger and Me):
http://www.thenextright.com/ironman/barack-and-me-or-why-gop-governors-wont-sign-suicide-pacts%20%20

Barone’s excerpts of Ironman's piece:
//If there is to be pain, better it be dealt with now while the public instrumentalities across the nation are still going concerns, rather than later when actual insolvency turns our state governments into little Irelands and Greece.

The Democratic Governors claim their approach is "more pragmatic" In the short term it will be more popular to keep labor peace and give bond money away. The GM management would have been excoriated in the short term by Wall Street had they pressed hard enough to cause a strike by the UAW. But in the long run, one or two bad quarters would not have caused the firm to fail. Kicking the can down the road did.//

Barone adds:
http://washingtonexaminer.com/blogs/beltway-confidential/2011/03/why-barack-obama-resembles-gm-ceo-roger-roger-and-me-smith
//Ironman's point is that in his posture toward labor unions and the costs they impose, Obama today is following the same strategt that Smith did at CEO: trying to preserve an unsustainable status quo by throwing money at it. Smith propelled his company toward bankruptcy. Does Obama want to do the same?//

Posted by: SCMike1 | March 1, 2011 1:16 PM | Report abuse

There's a budget crisis. When are the teachers and the janitors going to accept that?

Of course we can't raise taxes on 15% carry-trade hedge funders or ask the Kochs to kick in a bit more. That's punishing success. We must take it out of the hide of the people trying to educate working-class children.

We must keep them in their places so that the successful hereditary billionaires and Wall Street royalty aren't inconvenienced.

Divine right is the natural order of things. Who are these organized-laborists who demand their 'rights'? Only the rich should live!

Posted by: member8 | March 1, 2011 1:59 PM | Report abuse

member8, have you looked at the budget numbers? Do you think raising taxes by $80 billion or so on the top ten percent of taxpayers -- who already pay 60% of all income tax -- is going to solve a one and a half trillion dollar deficit? That's about $5,000 borrowing for every American, just for one year.

States that have raised taxes on the "rich" have all found that the expected revenues don't materialize. The rich didn't get that way by being suckers. It's the same way with raising marginal rates nationally. The Dems understand this. They just talk about raising taxes on the rich so that chumps like you will think that someone else will be picking up the tab for their wild spending.

Posted by: eoniii | March 1, 2011 2:53 PM | Report abuse

Obama keeps shrinking in the job of President. He now looks completely foolish in comparison to a governor who has been in office for two months. Obama is the Cheshire cat without the grin.

Member8 continues with his non sequitur. He is now claiming, probably without any understanding, the problems with state budgets is due to federal tax policy. Member8 is a continuing example of how a person must be misinformed to be a liberal.

Posted by: RickCaird | March 1, 2011 2:57 PM | Report abuse

member8, I mispoke. The top 10% of taxpayers pay almost 70% of income taxes. It's the top 5% that pays about 60%. We have one of the most progressive tax systems in the world. The Bush tax cuts actually made it MORE progressive. If you don't believe me, check out the IRS tables linked below.
http://www.taxfoundation.org/news/show/250.html

Posted by: eoniii | March 1, 2011 2:59 PM | Report abuse

"According to this chart, most income groups have barely grown richer since 1979. But the top 1 percent has seen its income nearly quadruple:"
http://tinyurl.com/48pz7u8

The top one-hundredth of one percent made 27 million dollars, while the average of the bottom 90% was 31,200.

Now while there are all these calls for the pain to be borne by people like teachers, exactly what pain is the guy at the richest 0.01% expected to bear? None? In fact, is he to be showered with tax cuts?

Back when this nation was confident, assertive, rational and successful the top tax rate was over 90%. Now it's down to 32%, and we're 'broke'. So who are the first ones hauled to the chopping block? Public school teachers of course.

eoniii, you're not the first person to come down the pike trying to sell me the morality of robbing the poor to pay the rich. Don't feel bad, no one has succeeded yet.

You're quite right that the rich didn't get that way by being suckers. They got that way by accident of birth, and are kept that way by an army of people who purchase politicians to shower them with privileges, contracts and tax cuts, while trying to whip the public in to a frenzy over the obscene riches being accumulated by public school teachers.

For entertainment purposes, enjoy this depiction of 'starving the beast':
http://tinyurl.com/26rj2or

Posted by: member8 | March 1, 2011 3:14 PM | Report abuse

member8 -

I noticed that the term “hereditary billionaires” is a phrase you and others like, so maybe the House of Saud is on your mind, or perhaps even those who are not quite that well off, like those of the Rockefeller or Kennedy clans. The great majority of the richest folks in the US gained their wealth on their own. Bill Gates, Warren Buffet, Paul Allen, Steve Jobs, Larry Ellison, Michael Dell, and that pimply twit who started Facebook did not inherit their fortunes, they made them. Along the way they made life better for others and made others wealthy too.

So by all means, let’s punish success, that works quite well. Billionaire Tom Golisano finally had it with NY raising his taxes -- at the time he was paying the state $13K per day -- so he moved to Florida.
http://gothamist.com/2009/05/15/tom_golisano_moves_to_florida_over.php

He'll use the money he's saving ($4.75 million) to finance charities and maybe his political action committee. Others have joined in, which is one of the reasons the NJ Governor Christie would not sign a surtax on that state’s wealthiest citizens.

The simple fact is that politicians tend to spend whatever they can in order to buy votes. Walker and others are working against this type of thinking and are trying to encourage wealth-building by not penalizing success.

Posted by: SCMike1 | March 1, 2011 3:53 PM | Report abuse

member8, that guy in the top .01% isn't making his money in salary unless he's LeBron James. It's mostly capital gains from money he saved and invested, maybe from a business he started. Capital gains can be deferred in most cases. Capital can also go overseas or not be formed at all if the expected return is too small due to high taxes.

When government treats the income of top earners as booty and tries to take more than a reasonable share, those top earners change their behavior. That's exactly what happened before the Reagan tax cuts, and it's why high-tax states like New York and California are losing their most productive citizens to places like Florida and Texas.

The top 0.01% of taxpayers is paying 18.47% of all federal income tax, up from 16.06% in 2001. The bottom 75% pays only 13.66%.

Posted by: eoniii | March 1, 2011 4:03 PM | Report abuse

SCMike1, There are many multigenerational family fortunes among the American wealthy, and ownership of wealth is far more concentrated than most Americans think or would like it to be. Wealthy families tend to stay wealthy. Teresa Heinz Kerry is still living off a family fortune made back in the 1860's. The Rockefellers fortune is estimated to be 110 billion, double Bill Gates' at his peak. The fact of the matter is there are lots of hereditary billionaires, and that's where the money is.

Asking the Rockefellers and the Heinz Kerry's to pay higher taxes, or for Gods sake even asking hedge funders to pay 28% federal income tax like I do, instead of 15%, isn't going to kill anyone.

After all, we've got a lot of pain we're trying to spread around, not just spread around to people Republican's don't like.

Posted by: member8 | March 1, 2011 4:12 PM | Report abuse

eoniii, I hear your cries. The truly burdened are the richest 2%, asking them to pay taxes is punishing success which we must never do, and all the pain should be borne by those greedy, selfish 48,000 dollar a year public school teachers.

Let me get a tissue, and I'll join you in a good cry about the terrible sufferings of the superrich.

Posted by: member8 | March 1, 2011 4:16 PM | Report abuse

member8, I didn't say the rich pay too much tax. I happen to think the current federal income tax rates are about right, as is the extremely high level of progressivity that they produce.

I also agree with the president's deficit commission that high corporate rates are putting us at an international disadvantage. With both corporate and personal income tax systems, we could raise more revenue by simplifying the tax code, lowering marginal rates -- as Reagan did -- and by eliminating most of the credits and deductions that the various interests and social engineers have put into the tax code. This could stimulate economic growth as it did in the 80s.

The heavy lifting, though, will still involve cutting government spending, especially on entitlements. We must do this very soon or interest payments will choke out everything else in the next decade. Obama wants to get past the next election before addressing this urgent fiscal crisis, but that is extremely self-serving and irresponsible.

Posted by: eoniii | March 1, 2011 4:32 PM | Report abuse

eoniii, we tried doing something about entitlements, but instead of a public system like a certain guy named Obama once talked about, I wound up with a gun to my head to buy expensive private insurance. No cost controls at all, which is what the public system would have provided.

So onward we blunder, enriching medical specialists and the 20 people they have shuffling papers, the insurance company CEO's and their 20 million a year salaries, 33% insurance company overhead costs.

That's where the money was going and is going to keep going because our political system is irredeemably broken.

So I spend my evenings with Rosetta Stone learning German, and plotting my escape.

Posted by: member8 | March 1, 2011 4:47 PM | Report abuse

Member8, you still haven't addressed eonii's point. If you raise the top tax rate to 90%, you won't collect any taxes from that bracket. Why would anyone take the risks to invest or go to work if the resultant earnings are all confiscated?

The revenues collected at that rate were infinitesimal in the 50's and they would be infinitesimal today.

Actually this point speaks to one of the favorite liberal hobbyhorses: the growing "inequality" of income. Our measure of income is basically the internal revenue records, and at the 90% taxation rate, very little income was produced. So yes, the income structure was flattened but only because top earners were producing less. In the 50's entitlements were a tiny fraction of their present day cost so the absence of revenues to pay for them was not an existential threat.

What about now? Given that a historically high percentage of the tax burden is now paid by the top 5% of earners, what will member8 do when confiscatory rates cause revenues to plunge? Who will pay the bills? Try and focus, sport.

Posted by: TYoke | March 1, 2011 5:44 PM | Report abuse

TYoke, I've actually worked around some extremely rich people. I'm familiar with their thinking. Once you get above a certain threshhold, they're not in it for the money anymore. Bill Gates wanted to build a good company, after a certain point, not make money. He gives away money full time now.

Teachers are underpaid. Bankers are overpaid, and can afford to get out of the wagon they're riding in and help pull.

Posted by: member8 | March 1, 2011 6:24 PM | Report abuse

The truly burdened are the richest 2%, asking them to pay taxes is punishing success which we must never do, and all the pain should be borne by those greedy, selfish 48,000 dollar a year public school teachers.

Posted by: member8
-------------------

Member8: No one is is saying that "all the pain should be borne by those greedy, selfish $48,000 a year public school teachers." That's not the issue. Nor is the issue the taxes paid by the rich. The issue are the taxes paid by ME. Now, between federal, state, local and property taxes I pay more than my share of taxes. I have no problems with paying that fair share - and I don't even have any kids in public school. That's irrelevant. I live where I live and it is my responsibility and obligation to contribute money for the common good. And I have no problems with teachers (and other public employees) making a good living.

Here's where I do have a problem. First, most teachers are making more than $48,000 a year. And some are making a lot more. (e.g. New York has 100 school employees making more than $233,000 a year). I have a rather big problem with that. But I have an even bigger problem with the fact that the public employees in my state have benefits that are far more generous than what I have. And they're getting those benefits with my money!

But that's not even the biggest problem I have. The state is required to deduct union dues directly from every public employee. Those dues are used to give significant financial contributions to the politicians (mostly Dems) who negotiate and approve their salaries and benefits. Those politicians pay off their supporters with very generous wages and benefits. That money is used to contribute to the politicians who.....

It's a corrupt, rigged game and they're using my money to fund it. Now I have a real serious problem and I'm looking to change this corrupt dynamic. And I am not alone.

This isn't about how much money the rich aren't paying. It has everything to do with what I'm paying and what I'm paying for. And there are more of me than there are "hereditary billionaires". And we're pissed. And if there are more of me than there are of you - as I suspect - and those from your side of the fence, you're all are going to be getting more and more bummed over the next few years.

Posted by: paco33 | March 1, 2011 6:30 PM | Report abuse

paco33,

I personally have no pity whatsoever for your plight. What’s more, I don’t believe for a second that you do either. I’m calling you a liar when you claim to be an abused taxpayer who is victimized by everyone in sight.

I believe that secretly relish you privileged status. If you are a citizen of USA, you enjoy all the benefits of a Constitution for which you paid nothing. You enjoy all the benefits of a country that someone besides you snatched from British tyrants; that was held together during the War of Rebellion by the blood of thousands of people – none of which was you; a country – that is now yours and mine – that was saved from threats of all kinds during the decades after 1865, that prospered culturally and economically to your benefit, no thanks to you; that was saved from corporate tyranny by Theodore Roosevelt; that was saved from destruction during WWI, the great depression, and WWII – all without a contribution of any kind by you. You are the direct beneficiary of all this – as am I – without having paid a dime, or made a sacrifice of any kind.

No, paco33, I call you a liar when you claim the role of abused, overburdened taxpayer. I think you secretly smile at all the benefits heaped on you by USA for which you pay, and have paid, next to nothing.

Posted by: J_B_A | March 1, 2011 7:14 PM | Report abuse

J_B_A: I am reminded of the Groucho Marx line about not wanting to belong to a club that would have him as a member.

Posted by: paco33 | March 1, 2011 7:41 PM | Report abuse

J_B_A you made a lovely list of many of the tremendous sacrifices that our forefathers made for our freedom. However, because of those sacrifices, it is doubly important that we not allow any politician to tread on those hard earned freedoms. My forefathers did not fight and die so that public service employees could earn more than what they are entitled to earn.

And by the way, FDR was a huge opponent of public service employee unions. He understood the implicit conflict between the politicians duty to the taxpayers versus their duty to what he correctly suspected would be eventually be political contributors, i.e. the huge political donations made each year to the Democrats by the public employees' unions. It is a corrupt cartel that needs to be stopped.

Posted by: SameOldTiredThinking | March 1, 2011 7:58 PM | Report abuse

member8

What you’re proposing is against the law, Hauser’s law to be specific, and I quote it as follows:
//Over the past six decades, tax revenues as a percentage of GDP have averaged just under 19% regardless of the top marginal personal income tax rate. The top marginal rate has been as high as 92% (1952-53) and as low as 28% (1988-90).//

Details here: http://online.wsj.com/article/SB10001424052748703514904575602943209741952.html?KEYWORDS=hauser

Spiffy chart of the phenomenon here: http://www.americanthinker.com/blog/2009/09/graph_of_the_day_for_september_9.html

More recent details here: http://keithhennessey.com/2011/02/16/long-term-problem-begins-now/

Raise the rates as you suggest and the GDP nosedives; you get a little less than 19% of a diminished GDP.

Put the rates low as I favor, the GDP soars, you get 19% of a much larger GDP.

Obama acknowledged the point in a sense when asked why he favored raising the capital gains tax rate when he knew that it would reduce revenues (as the 1986 cap gains increase did in 1987); his answer was one word: fairness.

Wow, that tells me too much about the guy. A pragmatist would let the good times roll with lower rates, but his response implies that law and regulation can enforce fairness by preventing successful folks from getting too much from their capital investments, even if the higher rates discourage them from taking the gains. Recall that cap gains are optional in the sense that no tax is due until one sells the asset and realizes the gain. In other words, there’s no “mark to market” rule.

I acknowledge that cap gains cover a broad territory from simple folks passively buying and holding stocks to hyperactive real estate investors trading properties left and right. But that’s okay because it includes folks who buy one asset, hold it and improve it, and then sell it to some schmuck who has a brainstorm and turns it into a gold mine. And I think we can agree that there are a lot of schmucks around, so why not let the savvy among them prosper?

Here in Columbia, SC, there are lots of properties zoned commercial that are empty. Would it not be wise to get some schmuck to buy that god-forsaken failing gas station that’s blighted the neighborhood for years and turn it into a burger palace that generates greater sales taxes, income taxes, SS taxes, property taxes, and all the rest? Since the gas station has been there for years, there was certainly a capital gain on its sale, but the current income and rate were low enough to enable the transformation and offset the tax. (I’ve seen that happen about 1.5 miles away from my home.)

My main point is that any attempt to soak the rich makes them do stupid and smart things to minimize the taxes you’re trying to collect. Why not help folks become rich thru smart taxations?

Posted by: SCMike1 | March 1, 2011 8:07 PM | Report abuse

J_B_A, we've all benefited from the intellectual, moral, political and economic capital created by the generations that went before us. The Boomers are the first generation in American history that will leave the country in worse economic condition than they found it, especially after they finish drawing their Social Security and Medicare entitlements.

What we are doing today is putting the rising generations in a fiscal hole that will plague them all their lives with higher taxes and reduced government services. We're adding about $5,000 of debt per American each year. We can't possibly tax our way out of this hole. And once the debt reaches a certain level, rates will be much higher and the debt service will be impossible.

Posted by: eoniii | March 1, 2011 8:29 PM | Report abuse

SameOldTiredThinking,

I'm sorry that you are susceptible to the GOP trick of pitting one group of Americans against another. Presumably you do not like the political impact that unions (public and private) have historically had in USA. I do not like the political impact of profit-motivated mega corporations. So what?

I don't purport to be authorized to speak for my ancestors -- some of whom fought in the American Revolution, and probably every American war since -- but knowing USA history as I do, I very much doubt that my ancestors, or yours, advocated the kind of American against American philosophy now routinely urged by the American political right. I am very sorry that is has come to this.

Posted by: J_B_A | March 1, 2011 8:32 PM | Report abuse

J_B_A -

I for one am pleased as punch that you’re judging the contributions of others such as paco33. I am too old, have too many miles on the personal odometer, too many calluses on too many body parts, to do so. Were I wearing a hat, I’d take it off to you!

Sure, our forebears did their part, and we need to do ours, and a big part of that is to scale back the obstacles to human ingenuity, initiative, and liberty that have arisen over the past century. Conservatives regard taxes, regulation, and “programs” at the national level as obstacles that need to be reviewed and trimmed as needed. Seems reasonable, no?

I know a lot of folks are making fun of the Coburn-request GAO report that found oodles of overlapping federal programs, so much so that even Harry Reid thought there were opportunities for substantial savings. Hmmm. The GAO interim report only surveyed part of the discretionary budget, so there’s more to come.

But there’s a chart that shows the challenge is even greater than discretionary spending, you’ll find it here:
http://www.businessinsider.com/usa-inc-2010-income-statement

Whoa, no?

In the spirit of our forebears, what say we take a look at chopping every program put in place since 1911, to pick an arbitrary year? And let’s recognize Hauser’s Law as we do so, agreed?

Posted by: SCMike1 | March 1, 2011 8:33 PM | Report abuse

SCMike1,

Good post, with which I mostly disagree, but that's another story.

I certainly did not, however, purport to "judge the contributions of others such as paco33." I stated the ineluctable fact of reality that no one has ever contributed to anything that took place before his or her birth, and expressed the opinion that it seems only fair to take this into account in the reckoning.

Posted by: J_B_A | March 1, 2011 8:52 PM | Report abuse

J_B_A -

What you state is obvious, and I apologize if I implied otherwise.

My personal objective has been to sustain, if not augment, the righteous of those who came before me while combating the not-so-good that happened before I came of age and while I’ve been around.

Posted by: SCMike1 | March 1, 2011 9:04 PM | Report abuse

Excellent strategy. If you can pull it off, it must make for very good mental health.

Posted by: J_B_A | March 1, 2011 9:09 PM | Report abuse

SCMike1, The rich are nowhere near the point at which revenues diminish when rates go higher. In fact the idea that they pay more when rates are lower, in addition to being nonsensical, is belied by the fact that they use so much money purchasing lower tax rates from politicians.

http://tinyurl.com/5wzdvju "How the rich soaked the rest of us"

The rich turned this from a country in which the government taxed them to pay for things in to a country that borrows from them to pay for things, and has to pay back the money with interest. Good for them, not so good for the rest of us.

I believe you're not rich, I also believe you're in thrall to propaganda which gets you to speak and act and vote against your best interests.

Your class enemies are not public school teachers with their outrageous obscene high pay. Public school teachers are *underpaid*. If you are looking to your neighbors in search of reasons why real median wages haven't risen for 30 years while the rich have quadrupled theirs, you're looking in the wrong place.

If you're dumb enough to fall for right wing propaganda, you're not particularly bright either. The people who are making that propaganda don't believe it. They just want more and more and more. There is no such thing as enough to them. They want it all.

Unfortunately people like yourself are dragging the rest of us down with you.

Posted by: member8 | March 2, 2011 9:04 AM | Report abuse

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