‘A Weak Horse in the White House’

Lee Smith’s latest column may be among the best of the commentary regarding the Obama administration’s foreign policy during the recent Middle East uprisings. The title of the column is consistent with that of Smith’s book, The Strong Horse (linked in our reading section), which borrowed from a quote from bin Laden.

President Obama and the White House have been almost inexplicably timid in responding to Libya, and Lee Smith explains the effect the White House’s reactions to Egypt and Libya have had:

Regardless of how the political landscape of a post-Mubarak Egypt takes shape—the military regime holds on to power, or the Muslim Brotherhood gets a larger share of power, or a newly elected president embarks on a series of much-needed liberal reforms—the fact is that the Obama administration’s treatment of the former Egyptian president rattled Arab allies. Of course, the White House could have played that to its advantage, leaving even friendly Arab regimes with the impression that the Americans are serious about pushing democracy and dangerous when crossed. That is, if you step out of line, Washington has the knives out for you, even if you’ve kept the peace  with Israel for 30 years.

But the comparison between Obama’s strong words for Mubarak, a one-time pillar of American Middle East strategy, and his near absolute silence on Qaddafi, whose hands are dripping with American blood after four decades of terrorism, shows the Arabs that the White House is not serious but incoherent. The president cannot even abide by the one principle that has seemed to guide his Middle East policy since his 2009 Cairo speech—his personal public outreach to the Muslim masses.

Read the entire column. It’s hard to disagree with Smith’s conclusion.

Suspected Saudi Terror Plotter Arrested in Texas

A Saudi student studying in Texas was arrested by the FBI Wednesday on charges that he was attempting to construct improvised explosives and was compiling a list of possible targets that included the home of former President George W. Bush. The suspect, Khalid Ali-M Aldawsari, has a student visa and seemingly botched his own plot.

Is this a case of “man-caused disaster?”:

In one journal entry, the suspect said the Sept. 11, 2001, attacks produced a “big change” in his thinking and that he was inspired by Osama bin Laden, according to the FBI.

Another journal entry cited by the FBI is alleged to read in Arabic: “I excelled in my studies in high school in order to take advantage of an opportunity for a scholarship to America, offered by the [Saudi] government and its companies….Now, after mastering the English language, learning how to build explosives, and continuous planning to target the infidel Americans, it is time for jihad.”

Andy McCarthy has highlights from the DoJ press release.

The Illinois and Wisconsin Budget Proposals

There are two contrasting approaches to budget woes on display between neighboring states Wisconsin and Illinois. The story that caught the nation’s attention this week was the budget fight in Wisconsin, where Republican Governor Walker has proposed that some public sector employees contribute more to their benefits and that union bargaining power be reduced. Considering state liabilities to public sector employees, such debates are probably necessary, yet Wisconsin state Democrats have fled the state to avoid a vote.

Contrast Governor Walker’s proposal to that of Democrat Governor Quinn’s in Illinois. Illinois state Democrats have already passed massive tax increases, and now Governor Quinn is asking to borrow another $8.7 billion to help pay for a huge deficit. Instead of making the tough choices about cutting spending like Governor Walker is doing next door, Governor Quinn is daring Republicans to try to cut spending in Illinois. Meanwhile, Governor Quinn is pushing the tax, spend, and borrow approach.

We’ll see which idea works better.

Framing the Entitlement Debate

New Jersey Governor Chris Christie made a specific suggestion today – raising the retirement age for Social Security – and he did so while imploring his audience to consider entitlement reform (see video in the link). While he joked about still standing there after making such a suggestion, it’s no secret that entitlement reform would be one heck of a political battle. And it’s a battle that has to begin; President Obama is clearly not going after entitlements, and the political mood is unlikely to change in 2013 even if the Republicans control Congress and the White House. So let’s frame the issue.

Heritage has some very useful charts to display the problem. This one shows the unfunded liabilities of Social Security and Medicare, which were $7.7 trillion and $37.9 trillion respectively in 2010. What does that mean? Defenders of the entitlements as they are might say that the money is taken care of, but that would be incorrect.

Once the Social Security and Medicare trust funds run out, as they are supposed to by 2018 (EDIT: One fund will run out then, and others soon after), the money will have to come from more tax revenue. Without more revenue to pay for Social Security and Medicare benefits, the trust funds are essentially IOUs. So, how much more tax revenue would be needed to pay for the trust funds? By 2050, tax rates would have to (EDIT) double, according to Heritage. The other options include reducing benefits of these programs and lowering the cost of the services they fund. Unfortunately, there is not enough spending to be cut elsewhere that could pick up the slack.

So we need to reform entitlements. The question is not when, but how. Governor Christie offered one idea today on Social Security. Congressman Ryan has offered a comprehensive plan that could put us on a better path. We need to allow people to keep more of their money to save for healthcare and retirement so that the government can reduce its liabilities that threaten our financial future. The real leaders can step up for this fight that must be won, or we’ll be explaining to future generations why the government has to take so much from them.

President Obama’s Budget Dare

Playing not to lose is an effective strategy when you only need to prevent your opponents from making a big play that can get them back in the game. In the case of the budget, President Obama can play not to lose, and he is doing so because he only needs to run out the clock for the 2012 win. That’s what he’s doing with his 2012 budget proposal. Here are some highlights:

$3.73 trillion — total spending this year (25 percent of GDP).

$46 trillion — total spending over the next decade.

$8.7 trillion — total new spending over the same period.

$26.3 trillion — Total new debt, including entitlement obligations, predicted by 2021.

$7.2 trillion — Total deficit predicted by the end of the decade.

$1.1 trillion — How much the White House estimates the proposal will reduce the deficit over the next ten years.

So that’s $1.1 trillion in reduction over 10 years when our current annual deficit is over $1 trillion. In other words, we’re talking peanuts for cuts. In fact, the proposal is to raise taxes and dramatically increase spending in areas like energy and environmental protection. Looks like the president still thinks high-speed rails and green jobs are going to get the economy moving again.

This is cynical politics. The president wants to increase spending under the not so subtle name of investment, while proposing some cosmetic cuts that don’t include entitlements. Why? Because he believes that no one will be able to sell entitlement reform to voters, and that if he highlights some minor cuts and some investments in popular areas, he’ll look reasonable even if our budget remains a disaster. Why should he risk 2012 by suggesting serious budget reform?

On the other side, Republicans have mostly offered only general support for entitlement reform. Only a handful of Republicans like Paul Ryan have made specific proposals. As I’ve suggested, waiting for cover to make a reform case is not going to be helpful because it’s unlikely a GOP candidate is going to win the White House in 2012 on entitlement reform, and it’s obvious that President Obama is not going to take the lead.

How is this debate going to start? I’m suggesting Paul Ryan’s Roadmap. Is it perfect? No. Do we have to agree with every specific proposal? No. But it’s consistent with the pledge that Republicans signed on their way to winning back the House in 2010, and it provides specific proposals to discuss as a baseline. There have been several Republicans and Democrats who have cited the Roadmap as having some decent ideas, but there has hardly been any specific discussion about its provisions. It’s time to use the Roadmap as a starting point: either back it, or propose something different.

Obfuscation would be akin to taking the president’s position of avoiding the problem in favor of an election dare. Such a dare to the opposition may serve politicians in the short-term, but is no indication of the leadership we need.

Pivotal Moment in Egypt

A friend of mine who has spent considerable time in Egypt assured me this week that Mubarak had to step down, and that this is indeed a pivotal moment there with an uncertain outcome. While some would suggest that the United States should not meddle in this affair, or that American influence would be minimal in this situation, there is no denying that the result of what happens in Egypt is of significant importance to the United States. As Michael Gerson writes:

The outcome of this confused struggle matters greatly to American interests. The emergence of a Sunni version of Iran in Egypt would be a major blow. A democratic transition, even a messy and partial one, might eventually isolate or domesticate the extremists and defuse hatred for America. But the course of events in Egypt is determined by an internal contest of fear and hope that intensifies daily and that America can influence only on the margins.

While perhaps the United States could have been more successful in promoting freedom and human rights in Egypt and could have helped avoid the current situation there, we must look forward for how to best promote those values now. A more free Egypt could be a stronger American ally and could help counter oppressive extremism in the Middle East. An Egypt that falls into the hands of extremists, however, could shift the balance of power in the Middle East and could pose a significant threat to the United States and the world.

This is not a situation in some far away country that we should simply avoid in favor of focusing on our problems at home. It’s naive and irresponsible to believe that we don’t have a vested interest in the transfer of power in Egypt, and that there are forces of tyranny and extremism we must tolerate. This is a time to be very clear to Egypt and the world about the consequences of choosing freedom versus choosing oppressive extremism. We will support the former, but must challenge the latter.

The President’s Misguided Offer to the Private Sector

President Obama, speaking to the Chamber of Commerce today, seemingly invoked JFK in what seems to be his new offer to the private sector:

But ultimately, winning the future is not just about what the government can do for you to succeed. It’s also about what you can do to help America succeed.

(emphasis mine)

Add that to his remarks in his weekly address:

Our government has an obligation to make sure that America is the best place on Earth to do business – that we have the best schools, the best incentives to innovate, and the best infrastructure.  Next week, I’ll see that kind of infrastructure when I visit Marquette, Michigan – a place where high-speed broadband is connecting a small town to the larger world.

Supporting businesses with this kind of 21st century infrastructure and cutting-edge innovation is our responsibility.  But businesses have a responsibility, too.  If we make America the best place to do business, businesses should make their mark in America.  They should set up shop here, and hire our workers, and pay decent wages, and invest in the future of this nation.  That’s their obligation. And that’s the message I’ll be bringing to American business leaders at the Chamber of Commerce on Monday – that government and businesses have mutual responsibilities; and that if we fulfill these obligations together, it benefits us all.  Our workers will succeed.  Our nation will prosper.  And America will win the future in this century just like we did in the last.

(emphasis mine)

We all want the economy to grow and for unemployment to go down, and the president obviously has a vested interest in such improvement. The offer here is to allow businesses to prosper in exchange for hiring employees, paying them a subjectively fair wage, and investing “in the future of this nation.” Yet the business and investor community wants to know what is the cost of doing business so it can profit, and without the president threatening to raise taxes or regulate the flow of income. Deal or no deal? I’d say no deal.

President Obama said some nice things in his State of the Union address and in this address to the Chamber of Commerce, but his philosophy remains clear in regards to the government sparking the economy. Take this citation and description of the Great Depression:

And I’m reminded, toward the end of the 1930s, amidst the Depression, the looming prospect of war, FDR, President Roosevelt, realized he would need to form a new partnership with business if we were going to become what he would later call the “arsenal of democracy.” And as you can imagine, the relationship between the President and business leaders during the course of the Depression had been rocky at times. They’d grown somewhat fractured by the New Deal.

So Roosevelt reached out to businesses, and business leaders answered the call to serve their country. After years of working at cross purposes, the result was one of the most productive collaborations between the public and private sectors in American history.

We didn’t get out of the Great Depression because “business leaders answered the call to serve their country.” We won’t do that here either, because employers and investors don’t hire and invest because it’s good for the country or for politicians. They have no obligation to hire or to invest in what is purportedly good for the country. The president acknowledges the profit motive that is reality, but he doesn’t get it despite claiming the contrary:

I understand the challenges you face. I understand you are under incredible pressure to cut costs and keep your margins up. I understand the significance of your obligations to your shareholders and the pressures that are created by quarterly reports. I get it.

But as we work with you to make America a better place to do business, I’m hoping that all of you are thinking what you can do for America. Ask yourselves what you can do to hire more American workers, what you can do to support the American economy and invest in this nation. That’s what I want to talk about today — the responsibilities we all have — the mutual responsibilities we have — to secure the future that we all share.

Imagine business executives explaining to investors that profits are down, but that’s because they are trying “to support the American economy and invest in this nation.” Sorry, Mr. President, you don’t get it.

This president’s downfall may be his refusal to accept basic economic reality. If he wants the economy to improve, we need to reduce the cost of doing business and reduce uncertainty so that businesses and investors can maximize profit and minimize risk. We need to do those things without the government trying to control the outcomes, as doing so often makes matters worse (see Amity Shlaes for a much more convincing argument against the New Deal than the one President Obama made in favor of it).

The president’s philosophy is misguided. Profits don’t belong to the government, as is implied by suggestions that tax cuts are a form of government spending that adds to the deficit. Businesses don’t exist simply because the government allows them to, and then allows them to make a certain amount of money. And businesses don’t hire or pay taxes out of patriotic duty. Fortunately for him, when businesses grow, it’s good for politicians too. Until this president accepts that and becomes comfortable with individuals seeking profit that may not be distributed to his liking, there is no reason to believe he will implement effective economic policies.

UPDATE: Case in point, the White House is proposing unemployment tax increases on employers. I heard some people suggest that the temporary payroll tax holiday in the tax deal might lead to increased taxes on employers. The White House is now proposing income tax increases in 2012, and unemployment tax increases on employers in 2014. Those aren’t exactly pro-growth proposals.

Only One Side Is Serious About Improving ObamaCare and Entitlements

We finally had a repeal vote in the Senate this week to go along with the one in the House. As expected, the Senate vote was party-line, with all Republicans voting for repeal and all participating Democrats voting to keep ObamaCare. The choice for 2012 is now very simple on healthcare: If you want to keep the new law, vote for the Democrats, and if you want to change or replace it, vote for Republicans.

The debate and votes over the 1099 form requirement of ObamaCare were indicative of who is serious about amending or replacing the law. Some Senate Democrats admitted the law is not perfect and claimed they are open to amending it, yet 17 of them in an 81-17 vote went against the bipartisan amendment to repeal the burdensome 1099 requirement. That provision has a significant impact, but it’s only a small part of the large law, and Congress has been debating such an amendment for months. If it’s that difficult to change a small provision, how likely is it that Democrats will agree to amending more significant parts?

During the repeal debate, there was also a lot of posturing on the Senate floor about entitlements. Senate Democrats claimed that Social Security has been a big success and is under no short-term danger. They indicated no willingness to tackle the entitlement programs that are major sources of our debt, just like they are not serious about actually changing ObamaCare.

But there are some people who are serious about these problems, and who have actual ideas. There is a bipartisan model supported by Congressman Paul Ryan that could reform Medicare, and the individual mandate that might bring down the entire law could be replaced with a finite enrollment period for plans that allow preexisting conditions (Republicans should offer such an amendment to call the bluff of Democrats who pretend to be willing to make significant changes). Or we could make sure that Senate Republicans get to 50 in the next election with a Republican White House so that they could repeal ObamaCare.

The current Democrats are not going to lead the charge on these issues. They keep claiming that the policies are fine, even though more and more parties are asking for waivers and our entitlement programs are driving up our debt. We need to choose in 2012 if we want serious leaders who will attempt difficult reforms or if we want more people who will tell us what they think we want to hear, regardless of how detached from reality.

Is Lebanon More Pivotal for Middle Eastern Democracy than Egypt?

John Bolton believes that what happens in Lebanon may be more indicative of democracy’s chances in the Middle East than what is happening in Egypt. The impact of failing to protect Lebanon from Hezbollah would be significant:

The West must insist on enforcing the Security Council resolutions in support of Lebanese sovereignty and peaceful, representative government, or stop engaging in meaningless gestures. This is our last opportunity before Hezbollah’s armed capabilities swallow democracy in Lebanon, perhaps permanently, and dramatically increase the risk of renewed hostilities throughout the region.