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Sunday, January 11, 2009

Note to President Obama: Trying to Please Everyone Pleases No One

President Designate Obama wants to craft stimulus legislation that will win bi partisan support. For this reason, he has included hundreds of billions of Dollars worth of tax cuts along with hundreds of billions of Dollars worth of spending increases. One of the criticisms of President Designate Obama is that he is far too arrogant. Obama definitely believes that he can create a new Democratic majority, and I believe this bill maybe a confluence of his arrogance and belief in this new majority.

President Bush's first piece of signature legislation was his 1.3 trillion Dollars in tax cuts over the next ten years. This legislation was overwhelmingly supported by Republicans and received the necessary number of Democrats to pass. Rather than creating legislation that pleased everyone, he created legislation that pleased his base and got just enough from the other party to pass. Bush didn't pepper the tax cuts with a bunch of spending in order to get Democrats on board.

Obama could do the same thing. Obama isn't a tax cutter. He believes in government spending. He has the mandate to do this, and he has the legislative support to pass it. Yet, simply passing a bill he wants is not enough. Instead, he wants a bill that will win bi partisan support. Such a notion is frankly, in my opinion, ludicrous. It is impossible to get those of ideological opposites to agree. Obama likely thinks that if Republicans get on board along with Democrats they will all share in any blame if it doesn't work.

Of course, that is nonsense as well. If this bill fails, it will be himself and the Democrats that will be held responsible. Furthermore, any Republican that votes for this bill will face serious challenge from their right in the next primary if it fails.

The problem with trying to please everyone is that ultimately you please no one. Already, Democrats are concerned because of the tax cuts.

President-elect Barack Obama's tax cut plan in his proposed $775 billion budget may be more than some Senate Democratic are willing to allow.

Members on Capitol Hill Sunday indicated they may want less in tax cuts than the president-elect.

Obama said he wants tax cuts that can help stimulate job growth. Lawmakers said Obama senior economic adviser Larry Summers, who was on Capitol Hill Sunday, has been listening carefully to their concerns, and is basing his recommendations on "evidence-based analysis.""Job creation has to be job one," said Sen. Kent Conrad, head of the Senate Budget Committee.Some of the tax cut buzz included in the $775 billion plan a one year patch to the alternative minimum tax, a $70 billion expense, but several Democrats said this might not be a "stimulative" addition.

Democrats want more spending for both energy and infrastructure. At least one change in the proposed economic stimulus plan -- an expanded energy tax credit provision now at $20 billion to $25 billion, up from $10 billion.

So, to appease the Democrats it is likely that Obama will have to beef up spending. If Obama attempts to beef up spending to appease the Democrats, he will lose Republican support.

GOP lawmakers didn't seem to mind enjoying the fruits of government largesse for the past eight years while one of their own was in the White House. Now they're struggling to regain footing at a time of economic rout, a record $1.2 trillion budget deficit and an incoming Democratic president claiming a mandate for change.

It might not be the best time for running against more government spending. But that hasn't stopped Republicans from casting themselves as protectors of the public purse, striving for relevancy as Congress tackles President-elect Barack Obama's stimulus legislation.

"Congress cannot keep writing checks and simply pass IOUs to our children and grandchildren," says Sen. John Cornyn, R-Texas. Asks House Minority Leader John Boehner, R-Ohio: "How much debt are we going to pile on future generations?"

Republicans are already concerned about the current price tag of the stimulus package. What will happen when it is beefed up a few hundred billion Dollars to appease the Democrats? Blue Dog Democrats are also likely to be skeptical of any massive spending.

As such, soon Obama will have to get support the old fashioned way, bribery. Soon, in order to get broad bi partisan support he will have to appease a series of local projects. In other words, he will soon be placing a series of earmarks into the bill. Now, how will he look going back on his pledge of no earmarks only weeks after making it? Furthermore, soon this massive $750 billion stimulus will be well in excess of one trillion Dollars. That is the road he faces if he insists on making this stimulus plan get bi partisan support.

If Obama is to have a successful Presidency, I would suggest to him that he stop being so grandiose. He's planning on health care reform, energy independence, tax reform, pork reform all at the same time that he is trying to stimulate the economy. That's a recipe for disaster. Here too, he has far too grandiose a plan. He isn't going to create some sort of a new legislative majority with this stimulus. He doesn't really believe in tax cuts and this stimulus doesn't really have any tax cuts. Not one marginal tax rate is cut in this plan. Yet, he includes tax cuts anyway hoping to make his stimulus package truly bi partisan.

He has a clear passage to making this stimulus plan law. All he needs to do is create a stimulus package heavy on spending. That's what he believes in anyway and he has the legislative majority to pass it. Instead, he has this grandiose plan to create a stimulus that will please everyone. Instead, he's finding that it pleases no one. If he continues governing in this grandiose manner, soon he will find he's pleasing no one on everything.

1 comment:

Anonymous said...

Very nice my friend, well put. opinions are what make this country beautiful.