Democratic Hypocrisy on Deficit Reduction

As Republicans will vote to repeal ObamaCare in the House of Representatives this week, Democrats are condemning the measure as fiscally irresponsible. Repealing their health care reform bill, liberals say, would add some $230 billion to the federal deficit over the next decade.

The numbers come from the Congressional Budget Office and while some Republicans dispute them, I don't really care. For a decent and concise summary, I recommend this blog post though.

What matters are two things:

1) During Speaker Nancy Pelosi's tenure (2006-2010), Democrats have almost doubled the national debt, running trillion dollar deficits each year. Now they're worried about deficit spending? I doubt it.

2) The notion that Republicans should favor any measure that reduces the deficit and oppose any measure that increases it is nonsense. Republicans have reinvented themselves as fiscal conservatives but fiscal conservatism is not an end in itself. It stems from principle: the principle that government should be limited and people free.

Even if repealing ObamaCare increases the deficit, Republicans should favor it because the law infringes on individual liberties and expands the role of government in an industry that is already far too heavily regulated.

America’s Looming Entitlement Disaster

After billions in stimulus spending and bailing out banks and automakers, America's public finances are in dire straits. Last year, the federal deficit reached almost $1.5 trillion while the debt has grown to $14 trillion, equaling the total annual economic output of the United States. Americans may need to brace for austerity but plans to rein in spending are few and controversial.

Republicans have pledged austerity in the new Congress. Several incoming Tea Party conservatives have promised to cut spending by up to $100 billion but this would not solve the country's budget woes for the long term. Entitlements, which account for approximately a third of federal spending and will likely swallow up half of the budget by the end of this decade, have to be abolished or reformed in order to restore fiscal balance. But neither party likes to take away benefits from low income families and seniors.

That is not to say that lawmakers don't recognize the problems. According to Republican Congressman Phil Gingrey of Georgia, thirty-eight states across the country are already taking funds from other programs, including education, to continue to pay for Medicaid. On the Fox Business Channel last month, he lambasted the Democrats' health care reform bill which prohibits states from making any changes to Medicaid for the next three years. "In 2014," he added, "every state has to cover individuals up to a 138 percent of the federal poverty level." Currently only Americans with incomes below the poverty line are eligible for health care benefits.

Another congressman who has warned against runaway entitlement spending for many months is Wisconsinite Paul Ryan. He expressed concern in February of last year about Americans being "more worried about their material support from goverment than they are about their own liberties." Many lawmakers in Washington believe that it is their job not merely to equalize opportunity, but to equalize the outcomes of peoples' lives, he said. "The more we ask government to do for us," Ryan warned, "the more government can take from us."

Ryan has designed deep spending cuts and entitlement reform, including a privatization of Social Security for those who are under the age of 55. Medicare would be similarly dismantaled if Ryan had his way. Current recipients and those enrolling over the next ten years could continue to enjoy today's program whereas in 2021, the system should become voucher based for new recipients.

On NBC's Meet the Press last November former Federal Reserve chairman Alan Greenspan expressed support for Ryan's plans, noting that with government borrowing over a third of what it spends, to find spending cuts, lawmakers have to look for "not individual, piecemeal cuts or taxes," but reconsider whole programs instead.

As incoming chairman of the House budget committee, Ryan will be at the helm of trimming federal expenditures for the next two years. Democrats, who maintain a majority in the Senate, have already announced that they will "protect" public pensions against reform efforts however.

When the chairmen of the president's debt commission released their recommendations last November, then Speaker Nancy Pelosi professed that entitlement reform "must do what is right for our seniors, who are counting on the bedrock promises of Social Security and Medicare." The president himself has pledged to preserve Social Security "forever". He denounced privatization as "an ill conceived idea that would add trillions of dollars to our budget deficit while tying [people's] benefits to the whims of Wall Street traders and the ups and downs of the stock market."

Raising the retirement age by one month every two years after it reaches 67 under current law would achieve nearly $4 trillion in deficit reduction through 2020, according to the debt commission. The pension age would reach 68 around 2050 and 69 by 2075. But even under those circumstances, Social Security remains a "Ponzi scheme," said Texas Governor Rick Perry in an interview with Newsweek. He advised congressmen who aren't willing to cut spending to "just go home."

With Democrats adamantly opposed to entitlement reform and Republicans similarly hostile toward the notion of cutting defense spending, there wouldn't seem to be much reason to assume that Washington will be able to avert the looming entitlement crisis.

Originally published at the Atlantic Sentinel, January 7, 2011.

Debt Commission Proposes Deep Budget Cuts

Members of the president's debt commission have proposed deep budget cuts in order to rein in government spending in the United States. Entitlement programs as Medicare and Social Security, which are responsible for the brunt of federal spending, would be hit especially hard.

The National Commission on Fiscal Responsibility and Reform, created by President Barack Obama in January of this year, was not supposed to release its recommendations for several weeks yet. Its two chairmen however, former Republican Senator Alan Simpson and Democrat Erskine Bowles, who was President Bill Clinton's White House chief of staff in the 1990s, came out with proposals this week already. They have stressed that theirs are personal recommendations, not the findings of the commission as such which includes eighteen members in total, among them Congressman Paul Ryan of Wisconsin who has previously proposed entitlement reform in order to balance the federal budget. Partisan deadlock may have compelled the chairmen to publish their own ideas after almost ten months of discussion.

Although the president has promised to preserve Social Security "forever", describing privatization as "an ill conceived idea that would add trillions of dollars to our budget deficit while tying your benefits to the whims of Wall Street traders and the ups and downs of the stock market," America's pension system is in dire need of reform. Medicare as well as Social Security will bankrupt without intervention.

In order to save the programs and achieve "nearly $4 trillion in deficit reduction through 2020" while reducing the deficit to just over 2 percent of GDP by 2015, the chairmen of the debt commission, in a draft put out by them Wednesday, suggest to raise the retirement age by one month every two years after it reaches 67 under current law. The retirement age would then reach 68 around 2050 and 69 by 2075. There would be a "hardship exemption" however for those unable to work beyond the age of 62. Other proposals include:

• Granting retirees the choice of collecting half of their benefits early and the other half at a later age to support phased retirement options;
• Asking doctors and other health care providers to slow the increase in health care costs;
• Reducing farm subsidies by $3 billion a year;
• Freezing federal salaries and government employee bonuses;
• Eliminating congressional earmarks

Several of the Democrats who sit on the commission have already voiced their opposition to these supposedly radical proposals. They warn that there will be no fourteen vote majority for many of these notions.

Several dozen of Democratic legislators immediately released a joint statement after the commission chairmen released their findings, urging the president to protect Social Security. "If any of the commission's recommendations cut or diminish Social Security in any way, we will stand firmly against them," they have pledged.

Democrat Raúl Grijalva of Arizona, who is considered one of the most liberal of congressman, complained that "we have waited through nine months of backroom negotiations only to be told that the American people will have to tighten their belts another notch while defense spending continues to grow and corporate bonuses continue to expand." Congress should have a "realistic, productive conversation" about deficit reduction, he believes. "Instead, we're debating a proposal from a commission dedicated to cutting crucial social programs and reducing corporate and upper income taxes at the same time."

The commission chairmen have proposed to reduce income tax rates but attest that the losses in revenue can be offset by closing tax loopholes and eliminating scores of tax deductions which currently make the US tax code incredibly complicated.

According to Speaker of the House Nancy Pelosi, who will lose her job next year since Republicans regained control of the lower chamber of Congress in this November's midterm elections, pension reform as considered by the commission is utterly unacceptable. "Any final proposal from the commission," she has declared, "must do what is right for our seniors, who are counting on the bedrock promises of Social Security and Medicare."

Conservatives on the commission, including Paul Ryan, have cautiously praised the chairmen for their suggestions. Although Republicans are divided on entitlement and earmark reform, fiscal hawks as Ryan would rather reform be more comprehensive. His "Roadmap for America's Future," which is a detailed plan to restore balance to the federal budget, represents, as then Office of Management and Budget Director Peter Orszag put it in February of this year, a "dramatically different approach in which much more risk is loaded onto individuals." Congressman Jeb Hensarling of Texas and Senator Tom Coburn of Oklahoma are also renowned for their opposition to deficit spending but the other five Republican members of the commission may be more inclined to compromise. They have all spoken out against raising taxes however.

At a press conference Wednesday afternoon the two commission chairmen acknowledged the difficulty of reforming entitlement programs, something that has long been anathema to lawmakers from both sides. "We'll both be in a witness protection program when this is all over," joked Simpson. Bowles added that they weren't asking anyone to vote for their plan. "This is a starting point," he explained.

Originally published at the Atlantic Sentinel, November 10, 2010.

Democrats Confounded by Voter Frustration

Mere weeks ahead of the congressional midterms elections in November, many Americans are no longer able to "think clearly" because of the economic malaise they are suffering. According to President Barack Obama the burden is on Democrats "to break through the fear and the frustration people are feeling."

"Part of the reason that our politics seems so tough right now and facts and science and argument does not seem to be winning the day all the time is because we're hardwired not to always think clearly when we're scared," Obama said on Saturday during a fundraiser event, Politico reports.

The president and his party have been lambasting the opposition for supposedly tapping into that fear. "The biggest mistake we can make right now," said Obama, "is to go back to the very same policies that caused this mess in the first place." With the economic recovery stalling and Democratic candidates across the country distancing themselves from the administration's landmark legislative achievements---health care and financial reform---its new message of "hope" is apparently that Republicans will do even worse if elected.

There is certainly a lot of anger on the right. The huge electoral defeats of 2006 and 2008 left the Republican Party rather without direction, allowing loud and controversial opinion makers as Glenn Beck, Rush Limbaugh and Sarah Palin to fill an ideological void.

What restored coherence to conservative America was the interventionist economic agenda of the Obama Administration. Tea Party activists rallied against health care reform. Stalwart Republicans once again championed constitutional conservatism. Libertarian candidates and congressmen as Rand Paul of Kentucky and Paul Ryan of Wisconson won primary elections and crusaded for less government in the immediate aftermath of a crisis that Democrats blamed on the free market.

Presuming that unbridled greed and unregulated capitalism caused the downturn, it is difficult for Democrats to understand why millions continue to oppose their Big Government solutions. Even BP's oil spill in the Gulf of Mexico this summer wouldn't convince tea partiers. White House chief of staff at the time, Rahm Emanual alleged that Republicans saw BP as the aggrieved party under the circumstances, not local fishermen. "They think that the government's the problem," he exclaimed in disbelief.

The whole Tea Party phenomenon was not taken very seriously by Democrats initially. Since it became evident that the Tea Parties were a force to be reckoned with however, as they marched by the hundreds of thousands and helped elect populist candidates in GOP primary elections, the left has been quick to label them as radical and extremist.

Since the start of this year, different commentators and lawmakers have alleged or suggested that the Tea Parties are racist. A recent study by the Institute for Research and Education on Human Rights, which is an organization critical of fringe and racist movements, entitled Tea Party Nationalism, "found Tea Party ranks to be permeated with concerns about race and national identity and other so-called social issues," contrary to the movement's self proclaimed focus on government excess. "Tea Party organizations have given platforms to anti-Semites, racists, and bigots," according to the report. The MSNBC documentary Rise of the New Right further tied anti-government protests to militias and fanatics, conveying the notion that the whole of this "new" right is inclined to violence or at least willing to sanction it.

On the campaign trail in April 2008, Obama said that he understood how people could become embittered and "cling to guns or religion or antipathy to people who aren't like them" in times of economic hardship. Since then, millions more Americans have lost their jobs while government stimulus measures have delivered little more than trillion dollar deficits.

Democrats meanwhile continue to blame Republican policies for the "mess" America is in and warn that their return to power will only herald greater inequity and despair. The White House is now theorizing that "secret foreign money" is paying for Republican campaign advertisements and the president himself doesn't even talk about health care anymore.

Less than two years after promising "hope and change," Obama and his party don't appear to have much of a message, let alone vision, for the upcoming elections anymore---which are a referendum on the presidency whatever the administration may like to pretend. Democrats' inability and unwillingness to defend their own policy record of the past two years is a dismal sign of weakness and failure, one Republicans eagerly exploit. Democrats don't seem to understand why people are so upset. The president said it best in April of this year when he talked about Tea Party protesters. "I think they should be saying thank you."

Originally published at the Atlantic Sentinel, October 9, 2010.

GOP "Don't Ask, Don't Tell" Filibuster Makes Some Sense

I complained of Republicans blocking a vote on the repeal of "Don't Ask, Don't Tell" yesterday -- something I'm strongly in favor of. But as it turns out, that's not the whole of the story.

Over at Redstate, Dan McLaughlin explains how Democrats tied a vote on immigration reform onto a vote on defense appropriations -- which included "Don't Ask, Don't Tell." The so-called DREAM Act is somewhat related to defense in that it would allow illegal aliens to earn citizenship by serving in the military or enroll in college, but it's understandable that Republicans didn't appreciate having to say "yes" to both at once.

I'm all in favor of freer immigration as well and the DREAM Act sounds like a smart idea but this unnecessary trick on part of the Democrats makes no sense. If they want to repeal "Don't Ask, Don't Tell", why attach it to a vote on immigration reform which they could perfectly expect Republicans to filibuster?

But now, they have a chance to portray Republicans as both anti-gay and anti-immigration, all that just a few weeks before the midterm elections which are likely to turn out disastrous for them anyway.

Pelosi: Still Blaming Bush

From The Foundry:

In January 2009 after it became clear that the leftist majority in Congress would pass President Barack Obama's $862 billion economic stimulus bill without a single vote from a Republican, Speaker Nancy Pelosi (D-CA) defended her partisan approach, telling Politico: "Yes, we wrote the bill. Yes, we won the election." Last Friday, some 19 months after the stimulus bill became law, the Labor Department issued its monthly jobs report showing the US economy shed 131,000 jobs and unemployment tread water at 9.5% as 181,000 workers left the workforce entirely. [...] Desperate to shift blame away from her economic policies, Speaker Pelosi released a statement Friday blaming President George W. Bush for the economy's anemic recovery: "Today's report shows our teachers, police officers, firefighters, and nurses are still feeling the worst of the Bush recession."

Madam Speaker, it's been seventeen months. (Even more when you factor in that during the last two years of the Bush Administration, the Democrats were already in the majority in Congress.) Perhaps it's time to start taking responsibility?

Yes, President Bush's housing policies caused the financial crisis but it's disingenuous of Democrats to keep blaming him because they supported those efforts. They defended Fannie Mae and Freddie Mac and they continue to believe that government has a role not just in providing "affordable" housing, but in regulating the entirety of the economy.

Meanwhile, unemployment continues to hover near 10 percent, businesses are still failing, the Democrats are preparing to raise taxes, and billions in "stimulus" money is still forthcoming while the economy is waiting for the part that's been spent already to yield any significant, long term results. But, hey, this is all Bush's fault, remember?

Obama's War on Capitalism

Barack Obama inherited two Middle East wars from his predecessor and countless of struggles labeled as such from the many presidents that came before him, ranging from a critical War on Terror to an endless and largely futile War on Drugs. His administration has so far added one notable campaign to this list---a war on capitalism.

One and a half year into to the Obama Presidency, it seems evident that this administration's economic policy is guided by a deep seated mistrust of private business. Whenever an economic problem arises, it is capitalism that takes the blame. Whenever a social questions begs action, it is Big Government that is prescribed. Health care, financial reform and BP's oil spill in the Gulf of Mexico are three recent examples of how the Obama Administration has chosen to deal with the supposed shortcomings of the free market.

Still on the campaign trail, then Senator Obama lambasted insurance companies for failing to provide adequate, affordable health care to all Americans. The medical insurance business, he complained, was “driven from a business mentality instead of a mentality of, how do we make patients better?” He even suggested later that greedy doctors needlessly cut out children’s tonsils! The rights and opinions of doctors and nurses were obviously completely forgotten in the health care debate; good for the administration, for an overwhelming majority of them opposed reform.

While crusading for passage of his health care bill, the president reiterated time and again that private insurers had had their chance and failed while constantly finding news ways to blame them for what were really the faults of excessive government interference. He quoted the tens of millions of Americans currently uninsured, conveniently neglecting to mention that under the Democrats’ overhaul, just a few more million would get insurance, albeit against massive costs and necessitating a bureaucratic experiment quite unprecedented in the American experience. Private insurers, said Obama, were solely concerned with profit making. Government, instead, would truly care. Two months after ObamaCare was enacted, Americans found out once and for all just what government health care really means: rationing.

It seemed no one bothered to ask why America’s health care was broken. No one bothered to consider, it seemed, that for decades, government has already been involved, through Medicare and Medicaid, mandates and price controls and employer-based insurance schemes incentivized and regulated by state and federal law. With no free market and an entitlement mentality slowly taking the better of the American people, no wonder health insurance costs skyrocketed.

Rather than considering this, the administration circumvented states’ rights and assaulted individual liberties by demanding that all Americans carry insurance and by forcing all medical insurers and professionals to go along with this program in its noble effort to deny a few more million Americans the responsibility of caring for their own health.

When the price of ObamaCare turned out to be higher than expected---as a few congressman, like Paul Ryan, had predicted---Democrats would not back down. Rather, they ridiculed those companies who dared question their judgement and threatened to hail them in for congressional hearings. As The Wall Street Journal put it at the time, “Democrats don’t like what their bill is doing in the real world, so they now want to intimidate CEOs into keeping quiet.”

Intimidation has become this administration’s natural response when its anti-business rhetoric and measures don’t seem to pay off. The president’s reaction to the BP oil spill in the Gulf of Mexico has unsurprisingly been an exceedingly aggressive one. He stressed, many times, that the oil giant would be held accountable for the accident, as though anyone were pretending otherwise, and wondered out loud “whose ass to kick.” So fervent has the president’s rhetoric been that companies in the United Kingdom are worrying about a possible backlash against British business in general.

Some offhand remarks made by the president in the wake of the crisis have been revealing as to his state of mind. In an interview with NBC broadcast on June 8, Obama not only suggested that BP Chief Executive Tony Hayward should be fired; he noted that he hadn’t actually spoken with Hayward because, as he put it, “when you talk to a guy like a BP CEO, he’s gonna say all the things right to me.” The president said that wasn’t interested in words. “I’m interested in actions.”

Evidently, Obama hadn’t spotted Hayward extensively touring the Gulf area in recent weeks to do exactly that: take action. The only times Hayward was seen talking exhaustively was when Congress demanded his presence on Capitol Hill to testify about the accident and its necessary cleanup.

What’s more troubling though is just how easily Obama dismissed BP’s CEO as “one of those kind of people.” Such choice of words was similarly employed while the administration attempted to enact financial reform earlier this year. Wall Street bankers were not only blamed for leading the world into economic turmoil; they awarded themselves “excessive” bonuses for directing their companies to operate, as one Democratic congresswoman put it, like “casinos”.

Except for a very few Republican legislators, no one on Capitol Hill bothered to wonder whether series of government interventions in the American housing market might not have played a role besides supposedly erratic risk taking on the part of a few large private banks. Similarly, no one seemed willing to ask whether bailing out these banks---and later, automakers---was part of their job description. The president was one of the few to state that it wasn’t, as much as he had previously described the move as “necessary.” In an interview that aired on CBS on December 12, Obama bluntly attested that he “did not run for office to be helping out a bunch of fat cat bankers on Wall Street.” He went on to suggest that after driving the US economy to the brink of collapse, these same fat cats were handing out multibillion dollar bonuses and actually profiting from the downturn. Most congressmen and senators played it safe and equally blamed business where they should have looked at their own records. Just as a few lawmaker began to dissent and question the consensus, the Gulf oil spill happened. It couldn’t have come at a better time.

President Obama knows it. In an interview with Politico conducted early in June, he professed that Republicans would undoubtedly have blocked efforts to curb the influence of Big Oil if he had tried. “If six months ago, before this spill had happened, I had gone up to Congress and I had said we need to crack down a lot harder on oil companies and we need to spend more money on technology to respond in case of a catastrophic spill, there are folks up there, who will not be named, who would have said this is classic, big government overregulation and wasteful spending.” And they would have been right. Already, oil companies are subject to extensive oversight and regulation, deepwater drilling in particular, and it didn’t stop an accident from occurring. No amount of legislation ever can.

That’s not the president’s point. What he is saying is that he, and he alone, knew that these people could not be trusted. The fact that just a month before the Deepwater Horizon accident took place, Obama proposed to open vast expanses of water along the Atlantic coastline, the eastern Gulf of Mexico and the northern coast of Alaska to oil and natural gas drilling is something that is once again conveniently missing from the narrative. It shouldn’t be. These regions, along with the states of Colorado and Wyoming, combined hold over two hundred billion barrels of oil and two thousand trillion cubic feet of natural gas that are recoverable with today’s technology. That’s more than most OPEC nations. If fully developed, it would be enough to free America from the import of foreign oil for almost fifty years. Yet, according to the president, “drilling alone cannot come close to meeting our long term energy needs.” Is it really long term vision that’s keeping the administration from exploiting the country’s vast oil and natural gas reserves though? Or is it just that it’s now politically inconvenient to admit that America is addicted to oil and that, for several decades at least, there are no alternative fuels available to take its place?

According to Obama, he’s not the one that’s being hypocritical. In the same Politico interview, he blamed Republicans and Tea Party protestors for all the sudden demanding that government “do something”---the same people who, in the president’s words, “just two or three months ago, were suggesting that government needs to stop doing so much.”

Has the president perhaps forgotten that two weeks after the accident, he stood in front of a crowd in Venice, Louisiana and proposed to do just that---something. Indeed, another few weeks later, on May 27, during a press conference about the incident, Obama insisted that his administration, not BP, was taking responsibility for cleaning up the spill. “It is my job to make sure that everything is done to shut this down,” he declared then. Little wonder, people are expecting him to make true on his promise.

Undoubtedly, the White House is doing everything within its power to expedite the cleanup effort. Rather than letting the mess speak for itself though---which surely, should suffice to convince any sceptic that corporations sometimes do terrible things---the administration is capitalizing on the incident to forward its anti-business agenda.

Most recently, on June 15, in a televised address to the nation, Obama blamed not human failure but regulatory failure for the oil spill. The Minerals Management Service (MMS), which is responsible for regulating deepwater drilling and issuing permits, "has become emblematic," said Obama, "of a failed philosophy that views all regulation with hostility---a philosophy that says corporations should be allowed to play by their own rules and police themselves." That was not really what went wrong at the MMS however. What went wrong, and this he also knew, was that "oil companies showered regulators with gifts and favors," resulting in favoritism or crony capitalism. That is what happens when companies are subject to excessive regulation and see a chance to bribe officials to enjoy a little more freedom of enterprise. They typically lose sight of the common sense necessity of policing themselves because government has taken over that responsibility. The mistake which companies make under those circumstances is not that they view regulation and oversight with hostility; rather, their mistake is to rely on it too much.

According to the president, "one of the lessons we've learned from this spill is that we need better regulations, better safety standards, and better enforcement"---though all existing regulations and safety standards and enforcement mechanisms obviously couldn't prevent a catastrophe from occurring. Indeed, to quote from the president's Oval Office speech once more, "no matter how much we improve our regulation of the industry, drilling for oil these days entails greater risk." Then what reason is there to assume that more regulation will accomplish anything?

Obama began by portraying Republicans as the “Party of No” when they objected to his health care bill. He went on to characterize them as “Wall Street’s allies” when they questioned his financial reform effort. Other leading Democrats were even more aggressive. Speaker of the House Nancy Pelosi in late April complained that banks had imperilled the financial future of many ordinary Americans---“for their own personal gain.” She suggested that lawmakers had to decide whether they were “with America’s families or with the credit card companies and the banks.” Yet not even those words managed to destroy the opposition. In many states, Democrats are still set to lose seats in this fall’s midterm elections.

So now the oil spill is a chance for Democrats to prove once and for all that business is bad and Big Government a godsend. Meanwhile, a year after the president promised to cut billions in wasteful government spending, the deficit is expected to be more than a trillion dollars this year, the national debt is mounting, hovering near 90 percent of GDP, and little effort appears to have been made on actually bringing spending under control. Rest assured though, according to this administration, regulated markets work best and once it taxes just a little bit more and legislate just a little better, all fraud and inefficiency inevitably plaguing government programs won’t matter. After all, it’s business that’s destroying America. Government is trying to make everyone’s lives better instead. No?

We’ll know this November whether the American people agree.

Originally published at the Atlantic Sentinel, June 16, 2010.