This morning Michael Gerson predicts that a weak economy will sink President Obama’s energy and healthcare reform plans:
Initially, Obama counted on an atmosphere of economic crisis to grease the passage of any legislation he pronounced an economic need. But it hasn’t worked out that way. Whatever their virtues, restricting carbon emissions and expanding the health entitlement do not constitute a direct response to America’s financial and economic failures. No economic theory suggests that a round of new federal regulations and entitlements would result in a burst of economic growth.
More typical is the recent reaction of Colin Powell, a close Obama ally. “We can’t pay for it all,” said Powell. “I’m concerned at the number of programs that are being presented, the bills associated with these programs, and the additional government that will be needed to execute them.”
Gen. Powell’s concern is my own.
Can President Obama steer clear of the iceberg?
To pass his health proposal this year, Obama would first need to violate his word. As a presidential candidate, he pledged that “no one making less than $250,000 a year will see any type of tax increase” — the most memorable number of the 2008 campaign. Taxing health benefits would certainly cross this very bright line and add to the public stock of cynicism.
Second, Obama would need to abandon economic common sense — adding debt to debt or new taxes to a struggling economy. Either way, it would be a sad story.
Or maybe the captain could wake the passengers, end their dreams and announce the obvious: Because the economy has not improved, ambitious health reform must wait.
I don’t think that Mr. Gerson appreciates the enormity of the problem that confronts President Obama and us. In 2012, the last year of President Obama’s term, there won’t be enough in the “Medicare trust fund” to meet the program’s need for funds. It will either need to be curtailed, it will take funds away from other program, it will add to the deficit, or some combination. It’s a problem that can’t wait any longer.
Violating his version of the “no new taxes” pledge, will not create the same difficulties for President Obama as those that plagued President George H. W. Bush. It won’t cause dissension in his base, most of whom don’t have any problems with tax increases. My guess is that President Obama will view the situation optimistically, believing he can bring moderates back into the fold.
The only way he can go is full speed ahead. Icebergs be damned.
And which economist suggests we should raise taxes during the worst recession since WWII maybe since the Great Depression?
Obama is running into a problem many people run into who don’t plan carefully, taking on more obligations than they can pay for.
Politically it might be doable in the short run. But if a tax increase prolongs the recession and in particular a recovery in unemployment then he may very well go down with the ship–be a single term president. It is what killed George H. W. Bush’s re-election.
I imagine this will probably lead to some tax increases, plus nibbling around the edges of the program’s spending. The elderly do tend to vote in large numbers.
That said, I don’t find Medicare’s funding particularly shocking. It’s heavily subsidized health insurance for the costliest sector in terms of needing health care (one which continues to grow in absolute numbers, if not in percentage of society), so rises in costs are to be expected.
Yeah, damn those iceburgs. We’ll just ram through like the Titantic. No, wait a minute, that was a disaster too. Even if Obama keeps his base he loses because he’s quickley lost the independents and right . Like Carter, he came in with high ratings but that was simply euphoria of the fickle voters, who also pulled the lever on Carter after six months. He’s broke the bank recklessly with political stimulis he turned over to Pelosi and Reid, lost steam similarly on his signature programs unless he breaks all campaign promises and taxes the middle class, tied himself to Afghanistan which cannot be won, and other than three teenage pirates hasn’t been rally challenged yet in the international arena, and when he is will look like the inexperienced political hack he is. He’s screwed, and the problem is he is us and will be punished along with all democrats.