Wednesday, November 28, 2012

Over the Edge of Reason

We've all been anxiously awaiting that moment when Washington gets out of its own way and proclaims that they've solved this whole fiscal cliff thing. It seems as if we are gripped in a fever of uncertainty about a rather ambiguous benchmark that few level-headed people think we have any chance of actually passing. In all likelihood Congress will push the matter further down the road and breathe easily in the time they give themselves.

The problem, as you may have heard, is that there are a whole lot of people with a whole lot of opinions and views on the issue of deficit reduction and tackling our national debt, and they don't seem to agree on much of anything except that we have to deal with it NOW. But how we go about it, and whether we will have compromise in Washington, seem to be the hot topics these days.

One school of thought, which mostly covers Republicans, is that we just need to cut spending and reform our entitlements. Reduce the size of government, and the deficit will take care of itself. There's also a prominent arm of this philosophy which says that we can simultaneously lower tax rates to boost economic productivity, further helping out the debt issue.

The other side of the coin, of course, is that we can raise revenues by increasing taxes. Those who support this view, mostly Democrats, believe that we can raise rates on the wealthy and solve all the issues.

There are those on the Left and on the Right who say that the other is wrong. There are those who are in this for themselves. Truth is, the answer lies in the middle.

For one thing, raising taxes won't solve the issue. At least, not on its own. Everyone knows that. Similarly, closing tax loopholes, as Republicans like to pretend is useful, would do nothing except harm the middle class. Slashing spending to get rid of our deficit is not a solution on its own either. Besides, no lawmaker in their right mind would cut our way out of debt, especially now.

Truth is, we need a balance. It's not going to be nice, but it will be successful. Keep in mind, this is my view of what we can do to cut our spending, boost revenues, and balance our budget without the pain and suffering that will be imposed by other programs.

First, we have to raise taxes on those who can afford it. That can't be avoided, but we can do it smart. For one thing, we can diversify that top tax bracket so that those who make $250,000 a year are paying a lower rate than those making $250,000,000.

Second, we clean out regulations and beuracracy, and streamline the system. That means we combine offices, make the system smoother and easier for companies and individuals to navigate through, and save time and money in the process.

Third, we cut spending on programs that are overfunded, and relegate those funds to programs that need it. We also make sure that our social programs (Social Security, Medicare, etc.) are appropriately funded. While we do that, we look for ways to streamline the red tape that prevents those programs for their full effectiveness.

Fourth, we reinvest in American infrastructure. Putting people back to work repairing and building new roads, bridges, power grids, and so on. We can bring our failing system of mass transit into the 21st Century. I know it would cost money up front, but it would save much more in the long run.

Fifth, we invest in our future: education, green energy, new technologies, research, etc. We make America the place to do business and research again. We turn ourselves into a producer nation, not a consumer one.

Finally, we keep the ball rolling. That means, we get this plan moving, and we don't let political extremists from either side of the aisle hijack it and turn it into a piece of political artillery. We make sure that we elect common-sense, even-minded representatives who are willing to work together for the benefit of everyone.

That's it in a nutshell. Sure, there's a lot to do, and it seems insane in our current political climate. But you know what? We can do it. All we have to do is begin.

Monday, November 26, 2012

Grover's ugly twin

There are two famous Grover's out there in the world. One is the lovable puppet who resides on Sesame Street. The other is the conservative school-yard bully that has, until recently, been strong-arming our Republican party into adopting his no-tax pledge. This would be Grover Norquist, and he's been a very interesting force in our politics for the last twenty years or so.

In general, the no-tax pledge is an abysmal idea. What it does is forces an entire branch of our political spectrum to disregard 50% of the balanced budget equation. Without tax increases, the only way to balance the budget is to cut, which means a slow (or sometimes quick) dwindling of our social programs, education, health care, and retirement. The other part of Norquist's pledge is that, whenever there is a budget surplus, it must be turned into further tax breaks. Sound familiar? That's exactly what Bush II did in the early 2000's, eliminating a budget surplus in order to slash taxes on the rich.

If anyone has ever doubted Norquist's ability to manipulate Republicans, they would have to look no further than Bush I's second term campaign. The first Bush was elected on the promise that he would follow Norquist's pledge to the letter. When push came to shove, though, Bush did the sensible thing and raised taxes. Norquist and his organization strung Bush up on that, and it cost him the election (some believe).

That kind of influence leaves an impression, and since then, Norquist has been the man behind the curtain, silently forcing his pledge onto hopeful young Republicans, giving them a leg up when they agree and shutting them down when they don't.

But Grover Norquist's time may be coming to an end with the latest batch of Congressional Republicans. While many of them have signed the pledge, there have been recent discussions where many of them question the pledge and whether it's the right course for the GOP.

Of course, Norquist's legacy won't die out thanks to the rumblings of a couple of freshman congressman. He's been an institution in Washington since the 80's. That's why it's also important to note that congressman such as John McCain are also denouncing Norquist's pledge.

While this doesn't necessarily mean a change is in the works for the GOP, it shows that there may yet be hope for the Right to come back to the center a bit, and compromise our way out of a financial crisis.

Monday, November 19, 2012

Fairly Unbalanced

The recent attacks in Gaza have been canvassed by news agencies from all over the world. Here in the US, most of the coverage has been about Israel's retaliation to Palestinian aggression. In other words, we're victimizing Israel....again.

I've put the question of our support for Israel out there before. Why do we continue to support a nation that so blatantly disregards our values? They violate treaties, kill innocent people, and are engaging in social discrimination against an entire civilization. In the past, when countries have done things like this (Iraq in the '90s, and currently Libya come to mind), we've been very outspoken in our contempt for their decisions and have gone so far in some cases to put boots on the ground to stop the hostilities.

But Israel is different.

Let's look at this most recent round of attacks. It was sparked when the military leader of the Hamas movement was killed. He was killed while reviewing a draft of a peace treaty between Palestine and Israel. Despite discussing peace between their cultures, Israel was still conducting air strikes. In these most recent attacks, three Israelis have been killed and about a dozen injured. Many of the missiles have been stopped by Israel's missile defense system, which was bankrolled by the US. By contrast, over 90 Palestinians have been killed by Israeli attacks, and over 700 injured. Many of the dead and injured include families with children.

Considering these numbers, and the amount of violence, the US would normally condemn the aggressor. In this case, most of our lawmakers, political pundits, and media groups are defending Israel in their continued attacks. And while most are still watching the death toll rise, it's largely being ignored that we are supporting the side that is butchering innocent civilians.

Israel, to their credit, has stated that they want peace rather than a prolonged military action against Palestine. Meanwhile, Palestine has demanded that a cease-fire include the ending of the blockade of Palestine. The whole thing is being worked out by Egypt, it seems, who appears to be playing referee at this point. So, when the smoke clears and the dust settles, will anything have changed?

I hope that we use this as a learning experience. We can be as nice and supportive to our allies as we want, but we can't turn a blind eye to genocide. Because the continued persecution of Palestine by Israel is just that. And if we blindly support a country engaging in genocide, doesn't that make us complicit in that?

Out of the Ordinary

The Benghazi, Libya attack is certainly out of the ordinary. For one thing, it's received a lot of media attention. For another, it's sparked a kind of arbitrary and wholly unnecessary witch-hunt in Washington as Republicans seek a way to blame Democrats and the POTUS for the fact that four Americans were killed.

But the attack in Benghazi was not in and of itself unique. It wasn't the deadliest, wasn't the most coordinated, and possibly not even the largest attack that our foreign embassies have endured in recent years. In fact, here's a list of attacks that were just as deadly, if not more so, from the previous administration.

What makes Benghazi unique? The fact that we lost an ambassador? Yes. The fact that it occurred under a Democratic President? Sure. But do those factors make it worse than the attacks listed in the linked article? Not in my opinion.

Oh, and as an aside, keep in mind that 9/11 happened under Bush's watch as well. He was briefed on the attack several times in the weeks and months leading up to it, and did nothing. He was told about it the morning it happened, and didn't act for over an hour. Now, was that a failure of our intelligence community, or our leadership? Sure, but no one ever seems to point that out anymore.

Certainty is the Key

Recently, American Public Media (APM) interviewed UPS CEO Scott Davis on their Marketplace program. You can read the short transcript here. The discussion centered primarily around how Davis sees the fiscal cliff issue in Washington, how UPS is likely to respond, and what he would like to see in a deal and moving forward after the new year.

Davis makes some interesting points that seem to fly in the face of what is traditionally heard about and from CEOs. For example, Davis says he thinks a balanced agreement that includes revenue increases, whether through raising rates or shutting loopholes, is important. That's something we've often heard the wealthy do not want. And, seeing has how UPS works with about 6% of the US GDP, you can imagine that Davis has a lot of interest and money invested in this.

Davis makes another really great point, right at the end. He points out that UPS, like many big companies, are sitting on huge sums of cash. The reason they aren't investing it, Davis says, is that they don't know what's going to happen in Washington over the next several years. There's no clear way forward, with both parties refusing to work with the other. That uncertainty is forcing companies like UPS to keep their money close rather than spreading it out into the economy.

This same trend is probably why our markets and overall economy are stagnating. Investors, CEOs, and entrepeneurs have no way of knowing what Washington is going to do in the next few years. It doesn't really matter all that much who is in charge and what they do. They could raise or lower taxes, regulate or deregulate, spend or save, and it wouldn't matter as long as it was a clear and consistent pattern.

Companies don't need more money, as Davis points out, they just need an environment where they feel safe spending what they have. Consistency and certainty are the things that Washington should be producing right now. Gridlock bogged down our economy and our country, and led to a credit downgrade. Now, as we're in the midst of round 2, we need real compromise and real solutions that will work from here unto the ends of the fiscal year.

Friday, November 16, 2012

Filibuster Frenzy

In the classic movie "Mr. Smith Goes to Washington," James Stewart's character stands on the floor of Congress and talks for eight hours to prevent a vote that he knows is wrong. The fictional portrayal of a representative of our country standing up and speaking nonstop for hours on end is a powerful image and a testament to one's test of will.

Back in 2010, Bernie Sanders (I-Vt.) stood on the floor of the Senate for over eight hours to give a rousing speech on many issues, from political corruption to corporate power.

These examples are definitely exceptions to the rule. Most times, when a group in one of the houses of Congress wants to stop a bill, they will simply declare a filibuster and that will be it. They can sit back down and carry on with their game of solitaire. Based on the rate that filibusters and clotures (movements to break filibusters) have been increasing over the years, anything more than that is simply not feasible.

The problem is that the filibuster has become the standard response when either party tries to produce a piece of legislation. Even when something passes the House with solid, sometimes bipartisan majority, it can die in the Senate if one party decides to filibuster. That's because the only way to successfully break that is to have a 60-vote majority, which neither party has. It is the source of that insidious gridlock that we've all complained about the last two years. As usual, both parties are complicit in this, but seeing as how Republicans have been much more aggressive in their disruption of Senate business, the blame largely falls on them.

But Senate Democrats are trying to change the rules of the filibuster by making it into a...well, a filibuster. The proposed rules would force any congressman or woman to stand up and actually speak for the length of their filibuster. No more quick motions to block a bill, no more five-minute complaining sessions. If a senator wants to filibuster a bill, they have to do it properly.

It could slow things down even more, perhaps dramatically so. But the Democrats, ironically, are banking on the laziness of their fellow senators and the hope that filibuster rates would drop off if people had to actually work at them rather than simply say a few words and get their obstructionism going.

Of course, the new rules are unlikely to pass, even if they would make for real live debate and discussion. Rather, the new rules would likely be, dare I say, filibustered.

Perhaps in the future, we will see more Mr. Smith's passing out on the floor of Congress after literally standing up for their beliefs for so long that they can't see straight. That kind of pure, unadulterated conviction would certainly be inspiring. And reforms to the filibuster would make it more a tool against corruption than a hyper-partisan big stick for political idealists. We need checks and balances against corruption and abuse of power, not obstruction at the expense of a working government.

Tuesday, November 13, 2012


I haven't posted in a while, mostly because all the attention is still on the election aftermath, and analysis of late results and recounts. There's little real news going on right now, so it's been hard to find interesting things to discuss.

One of the pervasive feelings about these election results is that people who opposed Obama are upset that there is no doubt he was re-elected. His margins were so big that there can be no question who won. For the extremists on the Right, they have no complaints of tampering or fraud to console themselves. So, instead of trying to fix their party, they're just going to walk away. And by walk away, I mean secede.

You may remember a guy out of Texas by the name of Rick Perry, who became infamous when he said, "When we came into the nation in 1845, we were a republic, we were a stand-alone nation. And one of the deals was, we can leave anytime we want. So we’re kind of thinking about that again."

This latest push is not coming from a politician, however, but from citizens themselves, who have petitioned the White House to secede from the union. These petitions have surfaced from more than two dozen states, each presented by individuals who refuse to use their last name. However, the theme is consistent: The United States has failed its citizens, and the people are fed up with federal power.

There are prominent names in the Republican party who are denouncing these petitions, including Rick Perry himself. Then again, there are those who support the idea (see the comments on this one, though some certainly disagree). What's clear is that there are a lot of people out there who have signed these petitions for some reason. How do we react to that?

What bothers me the most is how many people signed these petitions, and in so many places. Do all of these people really believe that separating from the United States is a reasonable option? Despite the fact that it is considered treason by the government, it is a ridiculous notion that we would separate at all. Especially over a political election.

I've read a lot of articles and posts from people who seem to think that we have lost our democracy, that somehow the voice of the people is not being heard. Well, Obama won the election. The people voted for him. And these petitions for secession were signed by citizens. Their voices are being heard. But this kind of thing is not democracy. This is a temper tantrum. The GOP lost big, and the core Republicans in the party are learning from their loss. But the fringe is not. Instead, they're doubling down, distancing themselves, and creating another alternate reality for themselves, where they are being oppressed, and they alone hold the key to freedom and liberty.

I truly hope that nothing comes of these petitions. I hope that those who sign them come back to the table of American democracy and talk about our issues. I hope they can compromise. They are citizens, and are entitled to their opinion. But as soon as they demand to secede from the nation, they have crossed a line.

Wednesday, November 7, 2012

Now, let's begin...

The election is over. Obama has been re-elected by a comfortable margin, and Congress has largely stayed the same. As I've said in previous posts, there will certainly be more analysis than anyone truly cares about coming out of this one. For one thing, the demographics that went for or against the POTUS were not surprising except for how much they helped him.

Anyway, I don't want to get into too much polling analysis on here. We'll all be sick of it by the time it's over. What I want to say now is that, even though nothing has really changed in Washington, everything's changed.

Back in 2010, when the GOP took control of the House in a big way (which they've retained, despite losing a few seats), Mitch McConnell spoke his infamous words about their priority being to deny Obama a 2nd term. We now know that they failed in this. It may not be enough to jumpstart our Congress, but it should give Republicans pause. No doubt they'll be poring over the results to see where they messed up, and how they can do better next time.

The status quo was maintained, for better or worse. I think for the better. There is no 2nd term to worry about for Obama. He can get tougher with Republicans and his poll numbers don't matter as much. Republicans, on the other hand, still have to contend with their constituents, and apparently need to make themselves more appealing to more voters. In their effort to appeal to a wider bloc of voters, they may see fit to start doing a good job in Congress. They may decide that cooperating and compromise for the good of the nation looks better on a resume for re-election than "we stuck to our guns and the whole ship sank, but we stuck to our guns just the same."

On the other hand, things could go a different way. Many of the most conservative, especially those in the Tea Party, have been expressing their belief that they failed in this election because they were not conservative enough with their ticket. This is a belief that seems to have come out of a lack of enthusiasm for the candidate and a feeling that the establishment GOP was selling out to the moderates, whom the TP despise.

So, nothing changed, but everything is different. A 2nd term Obama has nothing to lose and a whole lot to gain. Republicans in the House still have reputations to protect, and are looking at the 2014 senate races and 2016 generals as a way of taking back control of government. I think, and hope, that they realize what hyper-partisan has cost them, and I hope that they are willing and able to reconcile with their extremes and come back to the bargaining table. It will be a benefit to our nation, and to our world, to have them working together again. Time will tell.

Monday, November 5, 2012

How things are supposed to work

The election is officially over tomorrow. No doubt there will be analysis, discussion, and disagreement. More than one person will cry foul, say it was rigged, say something went wrong. There will be long, drawn out, and pointless dissemination about the effects of Sandy, of voter ID laws, of early voting rights and restrictions, among much else. This is all a given. It should surprise no one whichever way this thing goes. It's so close (on paper, anyway) that either candidate is in a good position. It all comes down to the numbers.

There are certain overtones to this campaign that we all recognize: negativity, hope, prosperity, different paths to the future. We are living, as we do every four years it seems, on the cusp of a new age in our history and a great change for the future.

In this cycle, unlike in many others, we have a very different political climate. From our founding, there has been the debate between federalism and American statism. Who should hold the power? Who should make the choices? How should those decision makers be appointed? Who gets to decide? These are fundamental questions about our governance that it is in our best interest to debate in a healthy and open way.

Our nation is meant to run on argument, the productivity that derives from a respectful and endless debate between two points of view, a kind of politico-Capitalist system if you will. The Liberals are reckless, bleeding-heart spenders. The Conservatives are cold-hearted, calculating tightwads. Together, when compromise, creativity, and partnership are used to achieve common goals, we have thrived. That is the story of our greatest moments in history. We became the greatest nation on earth because we gave power to the people and let their voices mean something in a national discussion for mutual benefit.

Now, that process is failing. There is no one party to blame, really, because all are involved. Whether it is Mitch McConnell saying that the #1 objective of the Republicans in Congress is to make sure Obama is not re-elected, or Maxine Waters saying that the extremists in the Tea Party "can go straight to Hell," we've lost a sense of understanding between our fundamental perspectives on government and politics.

Other observers like me see this trend away from cooperation as a result of extremist leanings to the Right. It is our view that conservatives have moved so far to the ideological extreme that they are unable to compromise, whether it be out of fear of losing support, or out of a misguided conviction that they hold all the answers. Still others believe that it is the Left that is unwilling to compromise, and has thus been the cause of our hardship. Both groups appear to have strong evidence to support their claims, and no one side is right while the other is wrong. Both groups are responsible.

This election, like so many before it, has come to represent this struggle, the argument as old as our nation between two courses of action: federal power vs. private power. It is the push and pull between these that has created such a fantastic web of Democracy in this country. And it is this push and pull that we must consider when we go to the polls each and every time we vote.

In my view, it is Obama that best represents the balance between these two systems of government. His policies have brought much-needed order and regulation to financial markets that brought our economy to its knees. He has laid the groundwork for steady growth, energy independence, strong education, and smart military all while working to balance our budget. His views are not that the government solves everything, but that the government can work to balance the power, keep things safe and fair, and give people a fair shot at leading productive lives.

Romney, on the other hand, has sided completely with the private sector and with state governments. He has advocated for a dismantling of our central government, with the exception of the military. He has called for ambiguous tax policies that, even in their most optimistic rendition would still overwhelmingly benefit the weatlhy and businesses of America. Romney has called for a restructuring of our social programs, which our best experts say would make them less effective. Finally, Romney has presented a vision of America that does not incorporate our legacy of compromise at all. He does not leave room for the ideas of his political counterparts in the Democratic party. Rather, he simply says he will "work with them." He lays out no plans for how he will do this; he seems to simply expect it. If there is anything that our recent experience with extreme, non-negotiable positions tells us, it is that they are no good for compromise.

We often hear from Republicans that Obama has failed to work with them, or that Democrats have refused to work with them. It is a lie. Republicans have been unwilling to bend on their policies (which they have cleverly renamed as "principles"). Time and time again, we have evidence that budgets, jobs bills, energy policies, stimulus programs, veterans support legislation, and much more have died in Subcommittee, or died to Republican filibusters in the Senate. It is part of the GOP plan to deny Obama his second term, as McConnell so eloquently explained for us. But what this does is causes the engine of our Democracy to break down, the wheels of progress to falter and halt, and our country to stagnate. If we are going to get back on the road to the future, we don't just need a strong President, we need a flexible one. And even more importantly, we need flexible lawmakers in Congress who are willing to work with each other.

There is a bumper sticker I have seen several times over the last several years. I don't remember seeing it before about 2010, so I believe it is a new creation. It states quite simply "Tolerance is for people who lack conviction." This simple phrase adequately sums up the problem with our political system, in my mind, and the crux of the issue with this election. More than anything else, we need tolerance of ideas in our government. Calling an opponent a socialist, communist, anti-American, terrorist, etc. does nothing except alienate people. It fuels destructive arguments, not constructive ones. We have to remember two very important concepts and demand that our representatives live by them. First, that every single person who represents their state or their party or America in government loves this nation. There is not a single person in Congress, the White House, or the Judiciary that does not want the best for us. Second, that each and every one of those individuals is entitled to believe what they believe, and cannot be judged for that. They have their worldview and interpretation, and that must be respected and accepted.

I hope that everyone who reads this will be participating in this election. I don't really care who you vote for, but I hope that all of you vote. Vote for whoever you believe will bring this country back to its senses, for the candidate that you think will start the conversation and get us back to who we are when we're at our best. Don't vote for the party, the person, or even the personal positions of the candidates. They don't matter. They're all talking points. Vote for the person that represents your vision of this country, that you believe will make us stronger, and that you believe is best. I respect your decision, and I hope that you respect mine.

America 2012.

Friday, November 2, 2012

Let's Do the Numbers

The October jobs report came out today, and it is better than economists expected. If you just look at the raw numbers, and don't listen to the explanation of what they mean, you might expect that things are neutral: 171,000 jobs created, 170,000 more unemployed, official unemployment up to 7.9%. Looks bad for the President, which is what Romney jumped on immediately following the release.

But that is a bit disingenuous. First of all, the report is better than economists expected. They were looking for numbers below 100K for job growth, so this is almost double their expectations. In addition, more people started looking for work, which raised the unemployment rate. Remember that the official rate only counts those who are actively looking for work as unemployed. Since more people are looking, the rate went up. It's not that 170,000 people lost their jobs. No. It means that many people had enough confidence in the job market to go searching again. That's a good thing.

Another point to make. The report also indicates that numbers from previous months have been increased from their original estimations, meaning the average rate of job growth for the third quarter of this year was 170,000/month. Not bad at all. Consumer confidence has also risen. Very good.

And here are some more things to consider going forward. The housing market is showing signs of growth, with more sales, increasing values, easier credit, and more construction. All very good signs. Then, there's the potential from Hurricane Sandy recovery. That clean-up will include renovation and construction for millions. Dozens of towns, not to mention NYC, will need people to clean the place up, and rebuild. That will all mean jobs (paid for by the GOVERNMENT). People have been complaining about the response to the hurricane. The response? Really? Because as far as I can tell, no one who is directly affected by the storm is complaining about the response by the government, not even those who dislike the government.

So, the job report looks good. It will be critiqued, criticized, applauded, dissected, misrepresented, distorted, and analyzed beyond the point of recognition, but it's hard to say what its impact will be on the race. There are a lot of strong signs, though, and many experts are saying that we are starting see things come back a bit. It's still early in the going, and there are a lot of factors to consider, but we can rest assured that things are getting better, no matter how much pundits want us to think otherwise.

Thursday, November 1, 2012

One Last Lie

It seems that Romney still hasn't figured out how information travels. Nor has he figured out that certain audiences in certain states may know something about their area. For example, Ohioans know a little something about the auto industry in America.

So, when Romney decided to make a bald-faced lie about Jeep moving jobs from Ohio to China, Ohioans were swiftly told that this was false. It was fact-checked immediately, statements were produced by Chrysler, who owns Jeep, and everyone settled down. Except for Romney. Instead of walking back his statement, he turned it into a political ad and put it up on their television stations. He then turned it into a radio spot, and another TV ad, all the while knowing it was a lie and knowing that his target audience knew. So, what's the point?

Well, apparently there isn't one. At least, not as far as I can see. It appears as though Romney is either banking on the ignorance of his voting block, or he just doesn't care anymore. He is knowingly lying to his supporters' faces about their own industry, despite repeatedly being countered with evidence and reality. It's amazing, since so many people put so much emphasis on the outcome in Ohio. You'd think Romney would be trying a bit harder to reach these people. I don't know about folks in Ohio, but I don't tend to respond well when someone is lying to my face.

Rachel Maddow does a great story on it.

Poor Timing

It was only a matter of time before Romney flipped again. But in this case, Romney is having to back-track a lot. Since the Primaries, Romney has held strong in his belief that things like disaster aid should be kicked back to the states and, whenever possible, should be handled by the private sector. It is his belief that this will make responses to disaster faster, cheaper, and better. Romney even said it was "immoral" for disaster  relief to be handled by the federal government.

Here's just a few issues with that. If it's handled solely in the private sector, who pays for it? Individual citizens? If that's the case, who is responsible for infrastructure repairs? Does the state pay? If so, how is that cheaper since a private business would be charging enough money to make profit on top of their operation costs, whereas a state government would simply pay the workers?

Then, there's the question of sending it to the responsibility of individual states to begin with. Sure, it would mean less money being spent by the federal government, but it would also mean a greater strain on state and local governments. It would mean more slower responses, less coordination, and no ongoing support except with state and local tax dollars for victims. I know my state couldn't possibly pay for all of the recovery needed on its own without severe tax hikes and spending cuts on everything else. They would have to do nothing else except disaster recovery for a year or more.

For these reasons, I think that Romney is wrong to suggest that FEMA should be a state's issue. Of course, you can't expect him to really get it; he only recently decided, again, where he stands on the issue.