February 27, 2009
The Obama Steamroller: Is Resistance Futile?By Richard Baehr
The political reality at the moment is that regardless of the wisdom or foolishness of what is or will be proposed by the Obama administration or Congress in the next two years, it will pass. This is the consequence for the GOP of losing elections and losing them big in both 2006 and 2008. The Democratic majority in the House is 257-178. After the 2004 elections, the GOP held a 232-203 edge, so nearly a quarter of GOP held seats are gone.
There is no power of filibuster for the minority in the House, and there won't be any key votes where 40 blue dog Democrats align with the Republicans to stop some piece of legislation from being passed. In the Senate, the Coleman Franken race will likely wind up with Franken being seated, giving the Democrats a 59-41 Senate majority, one seat from the 60 seat filibuster proof majority. After the 2004 elections, the GOP held a 55-45 edge in the Senate, so just over a quarter of the GOP seats are now gone.
The Coleman Franken result is not certain, but Coleman's odds of prevailing are long. In the first critical weeks of the recount he was out-lawyered and out-hustled by the Franken team, which seemed to know better than the Coleman team where they could find additional votes, and insure they were counted. With 59 Senate seats the Democrats will have clear sailing on all votes by turning just one Republican on a filibuster vote.
With Arlen Spector facing re-election in an increasingly Democratic leaning state in 2010, the Democrats have their most likely vote. Given union influence in the Keystone state, will Spector stand with other Republicans and oppose card check? If Spector does not fall in line with the Obama steamroller, then Obama can pick off one of Maine's two Republican Senators. He won the votes of both Olympia Snowe and Susan Collins, as well as Spector for the stimulus bill.
The Republicans have been unlucky, particularly in Senate races recently, but part of the damage was self-inflicted. Would a shift of campaign resources in 2006 have saved the seats of George Allen and Conrad Burns, both of whom lost very narrowly? Might a better use of resources saved Coleman and Ted Stevens last year?
Were the GOP at 44 or 45 in the Senate, they would have a real shot at sustaining a filibuster, and slowing the Obama team's determined effort to greatly expand the role of government. That effort amounts to nothing less than a sustained attack on the free enterprise system in the country, penalizing its winners, and discouraging entrepreneurship. Is it at all surprising that not a single corporate executive found a home among the upper levels of the Obama White House or Cabinet? Obama stated several times during the long campaign that even if some of his policies did not expand the pie, that they were needed for fairness. In essence, this is an administration committed to leveling, that trusts that only government can accomplish this.
The Obama team is relatively honest about the size of the ballooning federal deficit this year and next, due both to a shrinking economy (reduced revenues, and higher social service expenditures), and the new stimulus package and other rescue efforts (TARP 1, TARP II, TARP III?). It is dishonest, however, about where the deficit will likely be after that. If Democrats remain in control of the White House and retain big majorities in the Congress, few or none of the new programs established by the Stimulus bill will be allowed to expire. The budget numbers assume they will all expire. The $800 billion stimulus cost over ten years, becomes more than $3 trillion in ten years, if the new spending becomes a permanent part of the federal spending baseline. This year, total federal spending will rise to around $4 trillion, over 25% of the GDP, for the first time since World War 2.
Obama succeeded in getting elected, in large part by talking down the economy during the campaign (and hence the need for change). Until the financial market meltdown in September, the damage to the economy was limited mostly to a sector of the housing market. Obama was able to get the stimulus bill passed by talking the economy down some more; catastrophe was the supposed alternative to Nancy Pelosi's vision for required federal spending. Is it any wonder that now consumers are holding onto their money and de-leveraging, creating falling levels of activity in most sectors of the economy? And of course, this will require stimulus II later in the year.
Each day seems to bring new federal spending initiatives or plans for higher taxes on corporations and the well off. $660 billion has been announced for new spending on health care, half "financed" with new taxes (only a down-payment for what is really needed, according to the Obama team!), and cap and trade (higher taxes) for carbon emissions will come later in the year.
Addressing the economic slowdown is a bit of a smokescreen for what is really going on, I think. Yes, the "best and brightest" in the Obama team are trying to stabilize the banking system and get credit flowing. But the Obama team understands the political power they now have. And they won't waste it. So they will steamroller their way to victory on every left wing agenda item that is in their playbook -- from national health care, to global warming to card check.
If Obama wanted to stabilize the economy, create new jobs, and preserve others, his plans for health care and energy might be deferred, as well as some of the pro-union legislation and executive orders. For many of these initiatives will prove to be job killers, and counter some of the positive impact that may come from the stimulus package . The stimulus package will not save or create 3.5 or 4 million jobs, and most of the jobs that are saved will be public sector jobs, an area of the economy with virtually full employment. The jobs created will likely be union jobs, which means higher wages and higher costs for both companies and government. In the private sector, this will mean fewer employees over time.
Above all, the Obama team wants to satisfy all the constituency groups that helped elect Democrats -- unions (SEIU), trial lawyers, unions (NEA), environmental groups, unions (AFSCME), ACORN, racial and ethnic minorities, and did I mention unions? The enemies of the left -- drug companies, insurance companies, high earning corporate and banking employees, coal companies, oil companies, those with incomes over $250,000 (or maybe a bit less than that), entrepreneurs, doctors, companies with profitable foreign operations -- all will feel the pain, in large part through higher taxes, estimated at a trillion (so far).
Obama means to create a permanent Democratic majority, and he is well on his way to doing it. One of the problems of being in the minority in Congress, especially a small and weak minority, is that it is not much fun. This is why there are usually more retirements among the party in the minority. Open seats are the easiest to be turned, and so GOP retirements helped solidify Democratic gains in 2008, and may do so again in 2010.
In the Senate, where the Democrats are close to a filibuster proof majority today, Republicans are offering more bounties with open seats in 2010 in Florida, Ohio, Missouri, New Hampshire, Kansas, and maybe Texas. Throw in a few vulnerable incumbents in Kentucky, North Carolina, and Pennsylvania, and it is not hard to see the Democrats expanding their majority in 2010, rather than seeing a GOP bounce-back , as usually occurs after two straight poundings and an off year election with a new party in control of the White House.
The GOP may do better in the House, but is unlikely to get anywhere near winning back control of that body in 2010. In the House, the power of the majority, especially if there is strong party discipline, is near total, even with small majorities. The GOP's best shot may be to win control of some Governor's races, and state legislative bodies in 2010, since unhappiness with the economy may hurt the incumbent party in power at this level. This can help the GOP with redistricting for Congress after the 2010 census, assuming Rahm Emanuel surprises us, and decides to play fair.
And then there is Obama. The President is a gifted politician and an even better candidate. And he will remain in candidate mode for all of the next four years. It is what he does best. So he will appear in swing states for announcements and speeches, as he has done already in Colorado, Virginia, Ohio, Florida, Indiana and Arizona. Expect to see him in North Carolina, Nevada, New Mexico, Iowa, Wisconsin, Pennsylvania, Michigan, New Hampshire and Minnesota too. I do not expect to see him in New York or California much, except to raise money. The wealthy who deliriously write checks for Obama and the Democrats remind me of the character played by Kevin Bacon in the movie Animal House. As he is being paddled on the behind on his fraternity's pledge initiation night, he keeps shouting out: "Thank you sir, may I have another?"
Americans may grow weary of all the new programs, spending and elevated deficits. And most Americans do not hate the wealthy, even with all the populist bashing of bankers and corporate executives now going on. Obama's team has no problem per se with wealthy folks of course -- they like and depend on Hollywood liberals, K street lobbyists, trial lawyers, and union executives. Obama's team will counter any criticism of its burgeoning deficit by saying: "We inherited the problem, we inherited the problem".
Over time, the refrain may wear thin, but no one should assume this is or will be a fair fight in terms of the power of the messaging, and the messengers. By 2012, the GDP will likely be growing again, and Obama will take credit for the magnificent turnaround. Obama will be a strong favorite for re-election, given his personal likeability and a campaign war chest that will almost certainly be bigger than the $800 million he spent in 2008.
America may also not be recognizable by then, and even less so by 2016, with a greatly expanded public sector share of the economy -- maybe 30% on the federal level and close to 50% with states and localities added in. The federal bureaucracy will have been inoculated into every facet of the economy. There will be much higher tax rates on success (whether it be earned or investment income) and with this, the number of risk-takers and entrepreneurs will drop rapidly.
Obama will have succeeded in turning the US into a more European like economy, with much slower growth prospects, crushing deficits, and increased entitlement spending as far as the eye can see (and neither more nor less manmade global warming, regardless of what the Congress and Obama do in this area). And of course, there will be the need for ever higher tax rates on the diminishing share of the population who pay income taxes, and for ever larger amounts of debt to be financed mostly by foreigners.
Europe will have arrived. Or would it better to say of the increasingly foreign owned, debt laden nation, "Don't cry for me, Argentina"?
Richard Baehr is chief political correspondent for American Thinker.