President Obama


How Obama Killed the Grand Bargain

The prospects for a “grand bargain” on the budget finally seem dead, and as I explain at National Review Online, the fault lies with tactical blunders made by President Obama.

There was a period when the prospects for a “grand bargain” were on the rise — right after President Obama’s reelection in November 2012. The president was riding high and had campaigned on a “balanced approach” to deficit reduction, by which he meant any deal to reform entitlements and cut spending must also increase taxes, especially on the rich. In the weeks after his reelection, the president might have been able to press a demoralized congressional GOP into agreeing to a large, multiyear budget framework along these lines.

That certainly would have been in his interests. Based on where things now stand, his presidency will be defined in part by the $7 trillion in debt he will run up during his time in office. A “grand bargain” on the budget at the beginning of his second term could have fundamentally altered the legacy of his budgetary performance in office, turning what is sure to be viewed as a rather large failure into perhaps a modest achievement. Moreover, a multiyear budget deal would have taken fiscal issues, including the sequester the administration despises, off the table for the remaining years of the president’s time in office, freeing up his administration to press for agenda items he clearly is more passionate about.

But for some unfathomable reason, the president decided to pursue a different strategic approach. Instead of moving quickly to do what was necessary to create the conditions for a budget deal, he chose instead to pursue a two-part strategy on taxes and spending. That was a huge mistake.

You can read the rest of the column here.

posted by James C. Capretta | 12:47 pm
Tags: President Obama, budget
File As: Politics, U.S.

It’s Obama’s Economy

I have a new article at National Review Online showing why Paul Krugman is wrong to blame the Republicans for the state of the economy:

No doubt it would be impressive if the president managed to convince the electorate that three years’ worth of anemic job creation is all the GOP’s fault. And certainly one can’t blame Krugman for making the suggestion (desperate political times call for desperate political evasions). But the odds of this working for President Obama are near zero.

For starters, there’s the problem of who has actually been in charge of economic policy since 2009. The president came into office with commanding Democratic majorities in the House and Senate. He could have done anything he wanted during those years, without even consulting with Republicans. And, in fact, he did do pretty much anything he wanted in those years, in spite of GOP objections. Which is why, as Douglas Holtz-Eakin has already noted, we got the $800 billion stimulus spending plan, very substantial spending increases in the 2009 and 2010 appropriations processes, Dodd-Frank, the auto bailout, a state- and local-government bailout bill, Cash for Clunkers, and much else — not to mention the huge tax hikes, including tax hikes on labor, contained in Obamacare. This was the president’s activist economic agenda, and it’s all been implemented or is in the process of being implemented. The fact that it hasn’t worked to spur a robust economic recovery is no one’s fault but the president’s.

You can read the rest of the article here.

posted by James C. Capretta | 6:22 pm
Tags: President Obama, Paul Krugman
File As: Health Care

The Democrats’ Budget Blame Game

I have a new column up at National Review Online rebutting the Democratic Party’s recent efforts to cast themselves as the party of fiscal restraint:

The numbers speak for themselves. At the end of 2008, the federal government’s cumulative debt stood at $5.8 trillion. In 2009, the federal government ran its first-ever trillion-dollar deficit. And then did it again in 2010 and 2011. Over those three years, the government borrowed an additional $4.2 trillion. This year will be no better. The Congressional Budget Office expects another trillion-dollar deficit. During Obama’s four-year term, the federal government will have added nearly $5.5 trillion to the government’s cumulative debt total — nearly as much as was accumulated from 1789 to 2008!

You can read the rest of the article here.

posted by James C. Capretta | 2:08 pm
Tags: deficit, President Obama, Democratic party
File As: Health Care

The President’s Incoherent Economic ‘Philosophy’

I have a new article up at National Review Online on how President Obama has abandoned his original stimulus-based approach to the economy, but failed to replace it with anything resembling a coherent, positive economic philosophy:

...the president has chosen to define his “plan” (if it can be called that) mainly by saying what it isn’t: He wants it known that his approach to the economy most definitely bears no resemblance to the plan he claims his GOP adversaries favor. Indeed, the primary purpose of these speeches has quite clearly been to tear down the straw man of a plan the president says the GOP supports in the hopes that the public will look more favorably on the president’s miserable economic record.

And so we hear from the president that the GOP favors creating a “you’re-on-your-own economy,” wants to “end Medicare as we know it,” seeks to revert to “social Darwinism,” and plans to eviscerate the social safety net to pay for a tax cut for the rich. None of this is true. No matter. The president has decided that the only path to electoral victory is to become attack-dog-in-chief.

But what about the actual substance? Is there anything at all to what the president is saying?

All is answered here.

posted by James C. Capretta | 1:12 pm
Tags: President Obama, stimulus, economic philosophy
File As: Health Care

Unsubstantiated Budget Attacks, the Sequel

I have a new article up at National Review Online on the president’s volley against the Ryan budget:

In April 2011, President Obama went to George Washington University and delivered a highly publicized and very political attack on the budget plan put together by House Budget Committee Chairman Paul Ryan. In that speech, the president called the Ryan plan, and especially its Medicare-reform component, an unconscionable attack on the elderly. He also accused it of being, effectively, un-American.

Fast-forward to April 2012. Congressman Ryan has again assembled a budget plan to head off national insolvency. He has again rallied his colleagues to take up this budget blueprint and pass it through the full House, despite the political risks associated with doing so. And, like night following day, the president has again delivered an incredibly partisan attack on the House’s handiwork, denouncing it with some of the most over-the-top political rhetoric ever heard in a presidential address.

In that regard, yesterday’s “address” was very similar to last year’s highly political budget speech. It was sort of like a movie sequel, trying to capture that same partisan magic that fired up his electoral base a year ago. Unfortunately for the president, his speech today was about as imaginative and interesting as most big-budget movie sequels....

Details on what President Obama got wrong in his speech here.

posted by James C. Capretta | 1:01 pm
Tags: Ryan budget, President Obama
File As: Health Care

The President’s Bad Budget Moves

I have a new column up at National Review Online on why the president’s actions on the budget are bad for himself and the country:

...inexplicably, the president has decided once again that he would rather preserve his political talking points for 2012 than achieve bipartisan legislation. There is no other way to interpret his highly partisan proposals on jobs and the budget. Once again, his speeches and legislative initiatives have earned hallelujahs from the liberal faithful, but they have doomed the prospects for bipartisan compromise. Indeed, it’s clear from the president’s threat to veto any deficit-cutting legislation that doesn’t raise taxes that he wants the supercommittee to fail. And the demise of the supercommittee would almost certainly mean there won’t be any jobs package either....

You can read the whole piece here.

posted by James C. Capretta | 11:33 am
Tags: President Obama, budget, jobs
File As: Health Care

On the President’s Speech: Got Jobs?

National Review Online has convened a panel to respond to the president’s jobs speech last night. Here was my response:

Let’s get this straight: The president, now in his third year in office, is worked up with righteous indignation because Congress hasn’t done enough on jobs. Really?

During his first two years in office, he had commanding majorities in the House and Senate. He could have passed just about any kind of economic agenda he wanted. What did he do? He passed an $800 billion stimulus bill that didn’t work and then spent a year and a half passing the most controversial and burdensome entitlement expansion in half a century. That’s pretty much the entire Democratic economic agenda.

Now he has the audacity to suggest that Congress is to blame for not doing more? And, in the middle of yet another highly partisan presidential lecture, that anyone who opposes his failed approach to job creation is somehow doing so for partisan reasons?

That kind of speech may make the president and his partisan supporters feel better for a week or two, but it won’t produce bipartisan legislation that might actually help the country. What the president should be aiming for is real results for voters. That’s the only thing that can save him now. Instead he chose more partisan posturing. The result is that he will almost certainly go into 2012 with the worst economic record for a first-term president in modern history. Good luck with that.

You can read the whole panel here.

posted by James C. Capretta | 2:13 pm
Tags: President Obama, jobs
File As: Health Care

Yes, It Is Obama’s Fault

The downgrade, though questionable, is a richly deserved rebuke for the president.

Let’s start by partially agreeing with Paul Krugman’s weekend column in the New York Times, in which he correctly calls out Standard and Poor’s for displaying an unusual degree of chutzpah in downgrading the creditworthiness of the United States government. After all, this is the same firm that was — at best — asleep at its lookout post during the worst wealth-destroying financial calamity in 75 years. Now, just days after Congress and the president agreed on a ten-year $2.1-trillion spending reduction plan, we are supposed to listen to S&P’s political prognostications ... because why?

Still, it’s hard to escape the conclusion that there is an element of justice in what has transpired because the S&P downgrade is such a clear and richly deserved public rebuke to President Obama. He and his allies have filled the airwaves since last Friday’s decision with their blame-game spin, trying to pin the downgrade on anybody but themselves. It won’t work. This happened on the president’s watch and was entirely preventable. But it happened because, at every crucial juncture over the past two and a half years, the president has cynically put his own political fortunes above what would be best for the country.

Recall that in February 2009, the White House convened a “Fiscal Responsibility Summit” at which the president pledged a new era of discipline and promised to tackle the problem of rising entitlement costs. He could have done so in 2009 or 2010 without the need for any Republican cooperation, given the huge Democratic majorities in both the House and the Senate. But, instead of making fiscal consolidation a priority, the president chose instead to use his once-in-a-generation Democratic majorities to secure an activist agenda that liberals had been dreaming of for years. First, there was an $800 billion “stimulus” bill that was loaded with inefficient public spending projects. Then came the $1 trillion health care plan that included the largest expansion in entitlement spending since the 1960s. These efforts, both highly controversial, exhausted all of the energy in the Congress. Deficit reduction never happened, and never really came up.

Meanwhile, to fend off questions about how exactly he planned to head off the fiscal crisis that most experts could see was rapidly approaching, the president appointed a debt commission, led by Erskine Bowles and former Senator Alan Simpson. Conveniently, the commission was given a reporting deadline after the November 2010 election, allowing the president and Democratic candidates to deflect questions about the deteriorating budget outlook during the election season until after the commission issued its report. In the end, this ploy did them no good, as Democrats were routed in an election dominated by mounting fiscal concerns around the country. The landslide put Republicans back in control of the House of Representatives.

In response to the election, the White House had a rare opportunity to create a political environment conducive to bipartisan compromise, especially on entitlements. But again the president chose otherwise. He completely ignored the Bowles-Simpson recommendations in his 2012 budget submission to Congress, and indeed avoided proposing anything controversial at all in what he submitted. The result was a budget request that called for an astonishing $11 trillion in deficit spending over the period 2011 to 2021, with federal debt rising to nearly 90 percent of GDP — well past the danger zone.

At the time, some speculated that the president submitted such an irresponsible plan because he wanted to preserve his ability to attack the inevitable Republican counter and thus boost his re-election prospects. Others said No, that couldn’t possibly be. Obama isn’t that cynical. Oh yes he is!

Led by Budget Committee Chairman Paul Ryan, the House passed a budget plan that cut spending by $6 trillion over a decade, stabilized federal deficits and debt on a permanent basis, and kept federal taxation at its historic average. If this plan had been adopted, there would have been no downgrade by S&P or anyone else. It was a serious plan, with fundamental and structural changes in the health entitlement programs — Medicare and Medicaid — to move away from the failed command-and-control model toward one in which the programs’ participants would call the shots.

Once again, the president could have used passage of the Republican budget in the House to move toward bipartisan compromise. But again he chose otherwise. In a stunningly partisan speech, the president launched a barrage of demagogic attacks on the Ryan budget. He essentially called it un-American and unworthy of any consideration whatsoever. And he pledged to fight to maintain the entitlement status quo, no matter the consequences.

It was plain from the president’s words that April day that he had no intention of ever working with Republicans on serious entitlement reform. What he planned to do was to relentlessly attack their plan — the one and only plan on the table that would actually fix the problem and reduce the risks of a debt-induced calamity — in the hope that such attacks would boost his chances of re-election. If his partisan political maneuvering meant that it would be near impossible to work with Republicans on the budget, and thus more likely that he was putting the nation at greater economic risk, so be it.

Democratic political operatives everywhere were ecstatic with the president’s choice. They sensed they were on their way to 2012 success.

But a funny thing happened on the way to a second term. It turns out that the presidency can’t always be just about cynical political games. At some point, the leader of the country must actually lead and solve problems, even if that means cooperating with his political opponents.

Since taking office, President Obama had had multiple opportunities to steer the country away from the fiscal abyss. But at every point, he has had other priorities — passing a massive health care entitlement, satisfying his liberal base, and most especially protecting his chances for re-election. In normal times, he might have gotten away with such self-centered governance. But these aren’t normal times. In 2012, the president could very well find that what seemed like clever maneuvering on the budget has hurt his re-election effort as much as it has hurt the country.

[Cross-posted to The Corner.]

posted by James C. Capretta | 5:31 pm
Tags: credit downgrade, President Obama
File As: Health Care

The President’s Health Care Predicament

A piece I wrote a few days ago for Kaiser Health News explains why President Obama cannot use the health care law, his signature legislative achievement, as the basis for his reelection campaign. Here's an excerpt:

Having spent so much political capital to secure its passage, one might think that the health law would feature prominently in the president's planned reelection campaign. Certainly other presidents have used early legislative successes, even on controversial measures, to make the case that their policies were working. President Bill Clinton's tax and spending-reduction measure of 1993 was highly controversial and polarizing. It contributed heavily to the loss of Democratic control of Congress in 1994. But Clinton also used it as the foundation of his economic message throughout his presidency, and especially in 1996, when he tied the economic recovery then underway to its passage.

But Obama is not likely to follow that model, because, unlike Clinton's budget program, the health law provides almost nothing that the president can claim he delivered for voters.

The main selling point of the law -- that it will cover everyone, or nearly everyone, with health insurance, at least according to official estimates -- won't be tested until at least 2014, when the "big bang" reforms kick in. That's when the individual mandate, the employer requirements, the Medicaid expansion and exchange subsidies, and the new insurance rules regarding benefit packages and premium-setting all go into effect. Until those changes are actually implemented, they are simply theoretical selling points that may or may not work out as planned. That's not going to cut it with an electorate focused on results in the here and now.

You can read the whole piece here.



posted by James C. Capretta | 9:34 am
Tags: President Obama, Obamacare, 2012 politics
File As: Health Care

The President Can’t Run on Obamacare

On Obamacare’s first anniversary, let’s give the president his due: It wouldn’t be in law today without his persistent push for its passage.

Not that his policy arguments carried the day or were persuasive. They weren’t. No, in the end, Obamacare was passed because the president had so tied his political fate to it that it became quite literally impossible for most members of his party in Congress to oppose it. And so it passed.

Other presidents have staked their presidencies on early legislative initiatives too, and then used their success in securing their enactment to aid their reelection. President Reagan certainly comes to mind in that regard, with his 1981 tax cut featuring prominently in his 1984 campaign. And Bill Clinton made his tax-hike and deficit-reduction plan of 1993 the centerpiece of his economic message in 1996.

The problem for President Obama, however, is that, unlike the Reagan tax cut, Obamacare will do almost nothing worth running on before 2012. The main selling point for the law — the supposed “universal coverage” proponents erroneously say the law will deliver — doesn’t kick in until at least 2014. That’s when the “big bang” of Obamacare comes into play: the individual and employer mandates; the new entitlement expansions; and the one-size-fits-all insurance plans.

Between now and then, there’s a lot of regulation to be issued, but there won’t be any real action on the ground where Americans get their health care (other than some tax increases and Medicare cuts the administration will never mention anyway). And so the law’s apologists are left with nothing to talk about except the supposed “early benefits” of Obamacare, like coverage of 26-year-olds on their parents’ plans and the new high-risk pools for those with pre-existing conditions.

But these provisions are minor matters in the scheme of things. They certainly did not require a 2,700-page bill to address. And so few Americans have benefited from them that they hardly register at all in the public consciousness. Only about 12,000 people have signed up for the poorly constructed risk pools, and no one expects the other insurance regulations to help more than a tiny percentage of the population. For most Americans, these “early benefits” are simply non-events. If the president were to feature them as large achievements of his presidency in 2012, it would strike most voters as the trumpeting of the trivial.

With so little to work with, and intense opposition among those pushing for repeal, the president is unlikely to feature Obamacare at all in his 2012 campaign, and certainly not in the way Reagan touted his 1981 tax cut in 1984. President Obama will no doubt defend the new health law from every attack, even as he tries to deflate the repeal push with minor concessions. But, having exhausted his first term securing passage of Obamacare, the president will have to find some other rationale to justify requesting a second term.

posted by James C. Capretta | 2:21 pm
Tags: 2012 election, President Obama, Obamcare, risk pools, taxes
File As: Health Care

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