Obama’s own party could cause his un­do­ing

The Washington Times Weekly - - Commentary - Don­ald Lam­bro

Not long af­ter Pres­i­dent Obama was sworn into of­fice, he faced a mon­strous $1.8 tril­lion bud­get deficit that an­a­lysts said would force him to sharply cur­tail his big-spending agenda.

But Mr. Obama saw the eco­nomic re­ces­sion he in­her­ited as an­other Great De­pres­sion (which it’s not) that de­mands en­act­ment of a long list of new so­cial pro­grams, the costs of which will drive to­tal fed­eral spending to more than $3.7 tril­lion in 2010 and add more than $9 tril­lion to to­tal gov­ern­ment debts over the com­ing decade.

Deficits or no deficits, debts or no debts, Mr. Obama sees no rea­son to cut back on his am­bi­tious agenda de­spite the news that an ad­di­tional tsunami debt wave is about to come crash­ing down on his pres­i­dency.

The So­cial Se­cu­rity trustees an­nounced this month that the pro­gram will be­gin run­ning out of money in just seven years, and the Medi­care trustees said Medi­care’s Part A hospi­tal fund will be in­sol­vent one year later.

Sav­ing th­ese pro­grams from fi­nan­cial col­lapse would be a ma­jor task in and of it­self. Mr. Obama, how­ever, wants to do it all — in­clud­ing bail out the econ­omy; cre­ate a gov­ern­ment health care sys­tem; pour bil­lions more into ed­u­ca­tion, in­clud­ing a new col­lege-tu­ition pro­gram; and end the na­tion’s re­liance on fos­sil fu­els. And that’s just for starters.

How­ever, an­a­lysts, in­clud­ing Democrats, have be­gun ask­ing whether his wish list in­volves more spending than a debt-rid­den, weak­ened econ­omy can han­dle without fall­ing deeper into a fi­nan­cial hole.

“He has wa­gered his pres­i­dency on the propo­si­tion that the U.S. bud­get and po­lit­i­cal sys­tem can si­mul­ta­ne­ously ab­sorb” the costs of all that he has set forth in a sweep­ing agenda to ex­pand the size and growth of gov­ern­ment, wrote Pres­i­dent Clin­ton’s for­mer chief do­mes­tic ad­viser, Bill Gal­ston, in Lon­don’s Sun­day Times. “A key ques­tion is whether the pub­lic will sup­port, and Congress will en­act, a pro­gram that re­lies so heav­ily on the ca­pac­ity of the na­tional gov­ern­ment to serve as an ef­fec­tive in­stru­ment of na­tional pur­pose. This is in part a ques­tion of fis­cal ca­pac­ity,” he said.

Nor­man J. Orn­stein, a se­nior an­a­lyst at the Amer­i­can En­ter­prise In­sti­tute, has raised the ques­tion of whether Congress is “even ca­pa­ble of han­dling so many projects at once.”

Mr. Obama’s New Deal agenda is pred­i­cated on the du­bi­ous be­lief that we are en­dur­ing an eco­nomic catas­tro­phe of a kind we have not seen since the Great De­pres­sion and that fu­ture eco­nomic growth can be achieved only by en­act­ing health care, en­ergy re­forms and other pro­grams he has pro­posed.

But Mr. Gal­ston rightly re­minded us — and Mr. Obama — that “cur­rent cir­cum­stances in the United States do not ap­proach the grav­ity of the situa- tion [Franklin D. Roo­sevelt] faced when he took of­fice.” The na­tion’s gross do­mes­tic prod­uct (GDP), the mea­sure of all our econ­omy pro­duces, “has fallen at an an­nual rate of about 6 per­cent from its 2008 peak; by 1933, GDP had fallen nearly 40 per­cent from four years ear­lier.”

Un­em­ploy­ment, though se­vere at 8.9 per­cent, is up from 4.9 per­cent a year ago, while 25 per­cent were job­less in 1933, in­clud­ing 37 per­cent in the farm­ing sec­tor.

The na­tion’s eco­nomic and fis­cal poli­cies need some progrowth fine-tuning, but not an­other and even costlier New Deal.

For­tu­nately, pres­i­dents pro­pose and Con­gresses dis­pose, and there are some early signs that key parts of Mr. Obama’s agenda have run into re­sis­tance, in some cases from the pres­i­dent’s Demo­cratic al­lies.

Demo­cratic leaders have been forced to sig­nif­i­cantly mod­ify parts of the ad­min­is­tra­tion‘s ca­pand-trade en­ergy tax bill be­cause it did not have the votes to pass the House. Even with those changes, an­a­lysts say the plan may not over­come a fil­i­buster in the Se­nate, where Mid­west­ern Democrats fear it will hurt their coal-driven economies.

More than cli­mate change is rid­ing on the bill. Mr. Obama counts on the huge tax rev­enue it is sup­posed to raise to fi­nance his $1 tril­lion na­tional health care plan. That rev­enue has been cut back sharply.

His rev­enue-rais­ing pro­pos­als to cap tax de­duc­tions for char­i­ta­ble con­tri­bu­tions and home­m­o­rt­gage in­ter­est are dead on ar­rival, Democrats say, fur­ther de­priv­ing him of funds for health care re­form.

Even with his party firmly in con­trol of both cham­bers, Mr. Obama ad­mit­ted he does not have the votes to pass the so­called card check bill to make it eas­ier to union­ize busi­nesses and that it will have to un­dergo re­vi­sions.

Mean­time, spending crit­ics say Mr. Obama’s Roo­sevelt-in­spired agenda will bury Amer­ica in his­toric lev­els of new debt on top of un­fath­omable lev­els of un­funded li­a­bil­i­ties that start with $35 tril­lion for Medi­care over the next 75 years.

“Tax­pay­ers can­not even pay for the com­mit­ments we al­ready have made for So­cial Se­cu­rity and Medi­care, and yet he wants to add tril­lions of dol­lars in ad­di­tional spending on top of that,” said Her­itage Foun­da­tion chief bud­get an­a­lyst Brian M. Riedl.

“At the end of the day, his num­bers don’t add up,” said Marc Gold­wein, pol­icy di­rec­tor at the Com­mit­tee for a Re­spon­si­ble Fed­eral Bud­get. “They want to do ev­ery­thing, and it’s just not re­al­is­tic.”

Don­ald Lam­bro is chief po­lit­i­cal cor­re­spon­dent of The Wash­ing­ton Times.

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