Shell Games ...

With a public relations disaster for his administration and party as close at hand as the bulk of the oil spill is to the shoreline, a real economic and political crisis is growing underfoot due to persistently high and unyielding unemployment levels.

Obama, with November elections closing in fast and his party in near disarray, has renewed a call for Congress to pass another so-called jobs bill, to enable the Small Business Lending Fund. This legislation for an additional $30 billion - belatedly to target small business enterprises, enabling them to borrow money that Wall Street has so far been loathe to provide through taxpayer funded TARP bailouts. And he no less proposes to do it with money that we don’t have; exclaims House Minority Leader Boehner, “We’re broke!”.

For Obama there are a number of other problems as well. Significantly, the proposal isn’t timely anymore.

To survive, small businesses already were forced into action much earlier in trimming both inventory and payrolls. Understandably they are now reluctant to take on debt. They’re looking for evidence of a sustainable recovery before increasing capacity and risking capital again; rather they would have reductions in the cost burdens imposed by taxes and ill-devised regulation. Time and again they have expressed those needs as incentives to job creation, and time and again a tone deaf administration and Democratically controlled Congress has accelerated job destruction.

As to the money…Obama proposes that the funding come from unused or repaid TARP money. However, Republican representative Mike Pence of Indiana has inconveniently reminded the Congress and administration to do so would violate the law in that TARP legislation states in Section 106, Part D: "Revenues of, and proceeds from the sale of troubled assets purchased under this Act, or from the sale, exercise, or surrender of warrants or senior debt instruments acquired under section 113 shall be paid into the general fund of the Treasury for reduction of the public debt."

Of course before passage, we can all remember the endless parade of Democrats and Republicans who assured and swore to the public and press that due to the unprecedented financial emergency and the scope of the funding, TARP funds would not be used for the kinds of purposes now contemplated by the administration or others in Congress. Excess funding and repaid money would be used specifically to pay down the national debt.

And the Obama solution to skirt the law … the funds go into the Treasury where they’re co-mingled with other money. Congress will then ignore PAYGO legislation, which requires there be no further deficit spending without offsetting revenues, as it has done all year long, and passes legislation to authorize the new Small Business Lending Fund as further deficit spending. Get ready for it, here it comes …no actual TARP moneys are used out of the Treasury.

Congressional and Presidential resolve to comply with the law, it’s spirit and their own assertions and promises is as substantial and as permanent as an ice cream cone in mid- August on the Washington Mall – it looks appealing right up to the point the sticky mess drips all over the place!

What remains to be seen is how weary the electorate is of more Washington sleight of hand and charades.