Enter your e-mail address to receive occasional updates and previews from The New Atlantis.
Fall 2012 • Brendan Foht reviews Jonathan D. Moreno’s The Body Politic
Fall 2012 • Adam J. White on how President Obama killed the planned nuclear-waste repository
Summer 2012 • Yuval Levin on how prioritizing health shapes our politicsNext
April 12, 2013 •
The president has repeated over and over again the slogan that a budget plan needs to be “balanced,” by which he means the spending cuts must be matched with comparable tax hikes. His own budget fails this test miserably. The only deficit reduction in it comes from a net $1.1 trillion tax hike over ten years (on top of the $0.6 trillion tax hike in the fiscal-cliff deal and $1 trillion in Obamacare). There are zero net spending cuts in the budget. Zero. When the “doc fix” for Medicare physician fees and a smaller change in Pell Grant funding are removed, as they should be, from the administration’s current-law baseline and placed instead with the other policy choices the budget reflects, the budget results in a net $10 billion spending increase over the coming decade.
Read the rest of the piece here.
April 11, 2013 •
Over at the US News Debate Club blog I have a post arguing that the administration’s 2014 budget proposal is not the compromise that the president and his supporters are trying to sell it as.
To sum it up, the president's 2014 budget would result in massive tax and debt increases over the next decade, with no serious entitlement reform. The ten-year tax hike is $1 trillion, on top of the $0.6 trillion enacted in January and $1 trillion in Obamacare. But even with massive new taxes, the debt would still rise to $19 trillion in 2023, up from $5.8 trillion at the end of 2008. That's not the basis for striking any kind of deal with the GOP.
Read the rest of the post (and don’t forget to up-vote it!) here.
March 27, 2013 •
In the Spring issue of National Affairs I have an essay on what Republicans need to say about the economic issues that matter most to American voters.
Normally, political candidates and parties are far better off looking forward, not backward. But the two cannot really be separated, and Republicans need to improve their economic message by looking forward and backward at once. The prevailing understanding of what caused the economic collapse of 2007-2009 — and of how best to respond to such events — is so distorted and so damaging to the advancement of conservative economic principles that it can no longer be ignored. It has not only saddled Republicans with the blame for a terrible economic crisis, but has also made it difficult for them to explain the elements of their economic agenda in the aftermath of the crisis.
Before they can regain their footing in presidential politics, therefore, Republicans will need to recast and revitalize their basic economic message — helping voters see what conservative economics has and has not involved in the past, and what it can offer them in the future.
Those interested can read the rest of the article here.
February 27, 2013 •
Tevi Troy and I have a new column at National Review Online on how President Obama has ignored sensible strategies for limiting the impact of the budget sequestration, opting instead to create a politically advantageous panic over the impending cuts.
It seems clear that the administration has the capacity to make sequestration’s impact excessively unpleasant, and these statements could make one wonder whether the administration is determined to do so. But does a sequester have to be disastrous? Could the White House wield the scheduled cuts in such a way as to minimize the impact felt by the American people? Our experience inside the executive branch suggests that this is indeed the case: The administration could have prepared for the sequester in ways that would steer cuts toward less sensitive programs and activities. In fact, it still has the capacity to adjust some, although certainly not all, of the ways in which the sequester is applied.
You can read the rest of the column here.
February 13, 2013 •
Earlier today I participated in a short video produced by the American Enterprise Institute with reactions from scholars and fellows to some of the statements made by the president in his State of the Union Address. The full video is available here. I also have a brief post up at National Review Online with some of my thoughts on the president’s (predictably) disappointing speech.
He said we can never pull back on promises made in the form of entitlement commitments — without ever mentioning that those promises have never been fully funded and will lead, at some point, to a fiscal and economic crisis. There’s nothing more fiscally irresponsible than to suggest that entitlement commitments can never be revised — but that’s essentially what the president said in his speech tonight.
You can read the rest of the post here.
January 7, 2013 •
Over at National Review Online I have a column on how conservatives should approach the debate over entitlements and taxes in the aftermath of the fiscal-cliff resolution.
The main criticism, and an accurate one, of the fiscal-cliff agreement is that it secured a tax hike for the president that was not paired with any spending restraint whatsoever. The bill includes spending increases (an extension of unemployment compensation and another one-year undoing of the scheduled cut in Medicare physician fees), but not nearly enough cuts to offset them. Nothing has been done to address the real problem in the nation’s finances: the ballooning costs of entitlement programs.
Some conservatives have taken heart in the fact that the agreement did not raise the debt limit, setting the stage for a more successful budgetary confrontation in another 60 days or so, when federal borrowing is expected to bump up against the current statutory ceiling. The argument is that raising the debt limit is so unpopular with the public that Republicans will have substantial leverage to extract meaningful spending cuts from the president. Unfortunately, this is more wishful thinking than a sound assessment of the political landscape.
Read the rest of the article here.
December 11, 2012 •
This morning Isabel Sawhill from the Brookings Institution and I debated the merits of domestic spending cuts for dealing with the fiscal cliff on C-SPAN’s Washington Journal. For those who are interested, you can watch the video (about 45 minutes) on the C-SPAN website here.
December 4, 2012 •
This morning, I was interviewed by WNYC (public radio in New York City) on the fiscal cliff negotiations, focusing especially on the latest Republican offer. For those who might be interested, the full interview (about 20 minutes) can be heard here.
March 25, 2009 •
After months of delay, Treasury Secretary Tim Geithner finally unveiled the Obama administration’s plan for jump-starting a marketplace for “troubled” real estate-backed assets held by banks.
As noted in an editorial in Tuesday’s Wall Street Journal, a more direct, Resolution Trust Corporation-type facility, if initiated months ago as some had advocated, would have worked better, faster, and with more transparency for taxpayers than what Geithner is now planning. But we are where we are, and this plan is much better than no plan. It is long past time to remove the uncertainty hanging over the markets.
And, to be fair, the Geithner approach also seems to stand a reasonable chance of working, too. Some troubled assets should begin changing hands again fairly soon, thus pulling back the curtain on their true value, which should finally allow a bank “work out” to get underway in earnest. There’s no value at this point in Republicans pushing for an alternative approach. It is much better for the country to just get on with the plan that has been presented.
Still, it’s worth noting why the Geithner plan looks as it does. By all accounts, a primary motivation for its complex financial flows is the desire to avoid going back to Congress for funding and approval. Hence the use of FDIC reserves, loan guarantees, Fed money, and the last resources available from the $700 billion in TARP funding. This patchwork approach may work, but it also may leave the administration without any ability to deal with other contingencies—not a good position to be in with a crisis of this magnitude still unfolding.
Indeed, it’s a lamentable state of affairs when, in a true crisis, a Congress controlled by the same party as the president is not trusted by the administration to produce sound emergency legislation when it’s really needed. But that seems to be where we are. And the Obama team really has no one to blame but themselves for this particular box they now find themselves in. The constant drumbeat which has laid the entire blame for the turmoil on private-sector “greed” and “de-regulation” simply reinforces the worse instincts in a left-leaning Congress. What the public needs to hear from President Obama is that this crisis has complex origins, but it would not have occurred if there weren’t massive public-policy failures too, with many powerful Democrats and Republicans to blame, including himself. The flawed corporate structures of Fannie and Freddie which privatized gains and socialized losses. The excessively expansionary monetary policy earlier this decade. Long-standing tax policy which encourages ever larger mortgages. The flow of foreign reserves, driven by excessive U.S. consumption of imported goods, into U.S. credit markets. And the structural federal budget deficits that have fueled more consumption than our incomes could really support. Economists have been warning policymakers of the dangers of each of these policies for years—and far too few in positions of power ever lifted a finger to reduce the risks.
But it is almost too late now for the Obama team to change their tone and start treating the economic crisis with the intellectual seriousness it deserves. The damage has been done. Most members of Congress think they know why we are in this position, and it’s because profit-seeking firms, well, sought profits.
In this environment, the Obama team would be well advised to scuttle the idea of seeking new powers for the Treasury to seize non-bank institutions deemed too big to fail. If the Congress cannot be trusted to provide the financial resources needed in an emergency, can it be trusted to judiciously write a new law allowing the seizure of just about any private sector firm in the country? The same impulse that pushes members toward simplistic explanations for the crisis would surely lead them to support to ill-advised interventions we would regret for decades.
There needs to be a sober discussion of what kind of regulatory approach will prevent a recurrence of this disaster. But this is not the way to go about it. The Obama folks are playing with fire if they ask for sweeping seizure authority now, with this Congress and in this environment.
[Cross-posted at the Corner]