Sterling Weekly for October 10th, 2005

In last week's edition of the Sterling Weekly I let it be known that I was not happy with Senator Charles Grassley defending his pork barrel spending for my home state of Iowa. Well, I think it is safe to say that pork spending is a natural addiction for congressmen. The recent fight over who can propose the highest amount of aid for the victims of Hurricane Katrina is just a prime example of how irresponsible Congress has become with tax payers money. I very strongly believe that the solution to pork barrel spending by Congress is the line-item veto.

The line-item veto is In government, the line-item veto is the power of an executive to veto parts of a bill, usually budget appropriations. This enables an executive to nullify specific provisions of a bill, rather than only being able to approve or veto a bill in its entirety. As of 2005, all but seven states allow the line-item veto. The exceptions are Indiana, Maryland, Nevada, New Hampshire, North Carolina, Rhode Island, and Vermont. The Line Item Veto was a power briefly held by President Clinton before US District Court Judge Thomas Hogan decided on February 12, 1998 that it was unconstitutional. Last November, President Bush asked Congress to bring back the line-item veto. A text of the USA Today article on the subject can be found here. A few Congressmen has acted responsibly on the subject, Senator Elizabeth Dole R-NC and Rep. Bob Andrews D-NJ. have proposed constitutional amendments to give the President the Line Item Veto. Now is the time for responsible members of Congress to move forward with the constitutional amendment for the line-item veto. If you would like to write your Senator or Representative, you can locate them through the web site for the US Senate, or the US House of Representatives. I think I'll write mine and we can all see what happens.

The overall market continues to look weak. I think it is being driven lower by a combination of two things. The first being uncertainty relating to energy production and how higher prices are going to hurt the economy, and the second is the perceived political weakness of the current Presidential Administration. The bottom line is that the market does not like uncertainty. Oh, and don't dismiss that many money managers with big energy related gains may be looking to lock in their bonuses by flattening out their positions.