Wednesday, October 29, 2008

The first 100 Days of Barack Obama

The First 100 days of Barack Obama
by the editors of National Review Online

Barack Obama leads in the national polls and in the Electoral College count.

If elected, he can be expected to work manically to exploit the short window of opportunity that greets every new president, a period that could prove especially fruitful for a charismatic young president borne to the White House on a tide of idealism.

Some of the items that a President Obama would like to accomplish probably would remain beyond his grasp during the first 100 days of his administration: A radical overhaul of the American health-care system replicating the state-dominated model of France or Canada, for instance, would probably take much longer. On the other hand, a number of items — ranging from important domestic concerns (taxes, energy, financial turmoil) to foreign affairs (foremost the Iraq war, but also trade with Asia and Latin America) — are susceptible to early action.

Here’s what we might expect from the first 100 days of an Obama administration.Hoisting the White FlagThis is Obama’s plan for Iraq: “The best way to protect our security and to pressure Iraq’s leaders to resolve their civil war is to immediately begin to remove our combat troops. Not in six months or one year — now.” He plans to begin drawing down our forces at a rate as brisk as two brigades a month — “about twice as fast as American commanders in Iraq have deemed prudent,” according to the New York Times.

Notwithstanding the success of the surge, Obama’s plan has not changed since he made the above statement in September 2007. The retreat presumably begins on Day One. Neither Obama nor Biden (who once hoped to ethnically partition Iraq into three autonomous states, not understanding that Iraq’s ethnic groups are quite inconveniently mixed together) has made a single credible statement about how to keep our progress in Iraq from being reversed.

As America retreats, remnant al-Qaeda in Iraq elements will have the opportunity to surge, as will those forces backed by the ayatollahs in Iran and others supported by Sunni Arab neighbors. The strategic advantages we have won in the heart of the Middle East — purchased at a terrible price — will be tossed away. The military that could not be defeated by al-Qaeda will be defeated by its own commander-in-chief’s folly.

Raising Taxes to Pay for New Spending
One of the first things any new president does is draft a budget and submit it to Congress. If elected, Obama will face a problem: He has promised mind-boggling spending increases — $1.6 trillion for health care alone — and proposed no serious way to pay for them. He would increase tax rates on capital gains, dividends, and individuals making more than $250,000. But these hikes would be more than offset by new tax credits for an array of targeted groups. Credits for childcare and college tuition would be expanded, and one for mortgage payers would be created. Low-income workers who pay little or no income tax would get a credit that refunds most of their Social Security taxes as well. The Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution, estimates that Obama’s tax credits would amount to $600 billion in new spending over the next ten years.

His tax hikes on high earners would cover only about half that amount, and that’s before the economic downturn is factored into the equation. There will be a gaping hole in the budget before Obama even starts talking about health care, energy, or any of the dozens of other big-ticket spending items he promised during the campaign.

Obama says he’ll pay for all his new spending by “closing corporate loopholes and tax havens.” This is the same magic wand politicians have been waving for years, but they never manage to pull the rabbit out of the hat. Obama has not revealed a plan for succeeding where others have failed, but he has promised to produce the biggest rabbit ever: nearly $1 trillion in revenue over ten years from “as yet unspecified” sources, according to the Tax Policy Center.

Of course the trick is quite simple to perform in practice: Congress reaches into its hat and pulls out our wallets. Obama’s new Great Society will require broad tax increases to sustain it. As the bills come due, those “as yet unspecified” sources are going to become painfully obvious.Enacting Another Pointless Stimulus Last winter, Congress passed and Bush signed a $168 billion economic-stimulus package, consisting mostly of tax rebates.

The rebate checks failed to have much of an impact, because the concept underlying all such stimulus is flawed: The government cannot put money into the economy without first taking money out of the economy, through either taxing or borrowing. The economy is stimulated when tax policy encourages people to work, save, and invest; rebate checks merely redistribute wealth.

But House speaker Nancy Pelosi now says she wants another $300 billion. In addition to rebate checks, the new stimulus package would include funds for bridges and highways, extended unemployment benefits, and a fiscal bailout for states whose budgets are in the red. Bush has signaled his willingness to sign a stimulus bill, and at this point he and Pelosi are merely haggling over the size.

If Obama wins, size won’t matter. Pelosi could split the package in two, send Bush whatever he’s willing to sign, and let Obama enact the rest.

This would be a colossal waste of money at a time when we have little to spare. New infrastructure spending might create some jobs, but taking money out of the economy would delay private-sector job creation and could exacerbate job losses. Moreover, our roads and bridges aren’t deteriorating for lack of funding. They are in bad shape because members of Congress would rather build monuments to themselves (see “Don Young’s Way” in Alaska) than set national transportation priorities. And bailing out states that indulged in politically popular but unaffordable spending would only encourage them to do it again.

Taking Over the Banks
Another of Obama’s early-action items might be the imposition of new terms on any bank that accepted a government rescue this year. Already he has suggested that any bank participating in the Treasury Department’s stock-purchase plan be made to observe a 90-day moratorium on foreclosures. What he expects to accomplish with this is unclear; lenders already have incentives to work out mortgage write-downs in all but the most hopeless of cases. Such a move wouldn’t stop inevitable foreclosures, but it would set a troubling precedent of government interference in the banking system.

Treasury secretary Henry Paulson tried to structure the stock-purchase plan so that the government’s ownership share in participating banks would not come with government control of them, but he is out of a job in less than three months. Obama, backed by Democratic majorities in both houses of Congress, could quickly rewrite the rules.

In the worst-case scenario, the Obama administration acquires the ability to dictate lending decisions to any participating bank. Much like Fannie Mae and Freddie Mac (which should be broken up and privatized, but which an Obama administration would probably restore to "government-sponsored" status), the nation’s biggest banks would have a government mission, a profit motive, and taxpayer backing in case of failure. What could possibly go wrong?

Reinstating the Offshore-Drilling Ban
“There is no better potential driver that pervades all aspects of our economy than a new-energy economy,” Obama recently told a reporter. “That’s going to be my No. 1 priority when I get into office.” Obama’s enthusiasm for renewable energy — and the fact that congressional Democrats already have energy legislation teed up and ready to go — makes this issue all but certain to be addressed in the first 100 days. Adding to its urgency, from Obama’s point of view, is the fact that Democrats lacked the votes to renew the offshore-drilling ban before it expired last month. The Democrats are eager to get something resembling the ban back into place as soon as possible, before oil producers can clear the many regulatory hurdles that remain and start producing oil. To this end, they will try to pass legislation on the model of what the “Gang of Ten” in the Senate proposed last year.

Under that proposal, a few areas off the East Coast and some parts of the Gulf would have been opened to drilling, but 80 percent of the nation’s offshore oil reserves would have remained off-limits. The proposal would also have increased subsidies for renewable energy by $84 billion and repealed several tax breaks for oil producers. It was a bad deal.Last month, Pelosi passed a bill very similar to the gang’s proposal, but Senate Majority Leader Harry Reid decided to wait. Bush had pledged to veto the bill, and the Senate’s close margin made any attempt to pass energy legislation a risky proposition.

If Obama wins and the Democrats pick up a few Senate seats, however, Reid should be very safe. Handouts for the ethanol industry would splinter Republican opposition, and Congress would pass Obama’s dream energy bill — one that limits offshore drilling, provides vast new subsidies for renewable-energy boondoggles, and raises taxes on domestic oil producers.

Assaulting the Culture of Life Obama has promised to review every executive order issued by the Bush administration — and he will very likely start with one regarding federal funding of research that destroys human embryos.

Bush’s executive order makes two important ethical claims:
The destruction of nascent life for research violates the principle that no life should be used as a means for achieving the medical benefit of another. Human embryos and fetuses, as members of the human species, are not raw materials to be exploited or commodities to be bought and sold.It is important to note that none of Bush’s orders have prohibited stem-cell research. They even permit federal funding of stem-cell research if it uses cells that come from preexisting lines, or from sources that do not require the destruction of embryonic human beings. (Such sources include, for example, umbilical-cord blood.)

In his first 100 days, a President Obama would likely revoke these executive orders and any other administrative hurdles that displease the abortion lobby. Executive policies that seek to protect the conscience rights of pro-life pharmacists and physicians would also be undone. Meanwhile the groundwork will be laid for a Freedom of Choice Act that puts all the branches of the federal government on record in support of late-term abortion and makes all levels of government pay for abortion. Obama will be pro-choice, so long as you choose abortion.

Obeying the Unions
If the two major free-trade agreements now pending — deals with Colombia and South Korea — have not become law by the end of Bush’s term, they will probably die a quick and painful death under an Obama administration. Obama seems incapable of appreciating that trade is a major driver of the American economy, a boon to low-income consumers, and an essential source of both capital and goods. Obama has resisted the Colombia deal on the grounds that there has been violence targeting labor leaders in Colombia; he argues that no trade deal should be accepted until there is better protection for unionists.

Colombia is, unhappily, a dangerous place to be in any sort of public life, as a labor leader or politician, but its president, Álvaro Uribe, who heads the most pro-U.S. government in Latin America, has been a force for the rule of law, order, and openness. Colombian parliamentarians are currently under investigation for ties to violent paramilitaries, and President Uribe has not exempted his own supporters from scrutiny. His efforts to suppress FARC terrorism and the wanton violence of the cocaine cartels has made Colombia one of the hemisphere’s success stories in recent years. Given that almost all Colombian goods already enter the U.S. tariff-free under existing law, a free-trade deal would primarily grant U.S. firms equal access to Colombian markets — and bolster an important American ally.

A President Obama would also undermine the pending U.S.-Korea trade accord because of resistance to it from Ford, Chrysler, and the autoworkers’ union, none of which apparently think that Americans can build a car as good as a Hyundai at a competitive price. Anti-trade rhetoric plays with the unions, favor-seeking business interests, and the far-left antiglobalists in the Democratic party; Obama would not be likely to overrule them. Obama would probably move to pass one of the most thuggish and anti-democratic initiatives in recent memory, the abolition of secret-ballot elections in union-representation votes. Under the “card check” program, instead of holding secret-ballot elections on whether to be represented by a union, workers would be subjected to visits from the local union bosses — who may also be those workers’ supervisors — in which the bosses asked them to fill out a form indicating that they wished to be represented by the union. Refusing the union bosses could easily bring retaliation, whether that means lost professional opportunities or, in the case of the Teamsters and other more robust negotiators, something a little more vigorous.

If you don’t remember what that looks like, recall the Washington Times report on the Teamsters’ campaign against dissenting members in the wake of the famous UPS strike, which spoke of “beatings, shootings, stabbings, death threats, intimidation and illegal confiscation of union dues.” If anybody deserves a secret-ballot vote, it’s workers facing these guys.

Looking Beyond
Sen. Obama’s agenda goes beyond the priorities we have noted here, but, to summarize, these are a few things he seems likely to do right away: start withdrawing from Iraq; draft a budget that increases spending and taxes; pass a grab bag of handouts in the name of stimulating the economy; seek government control of banks; reinstate the drilling ban; throw billions down the “new energy” black hole; repeal executive orders that protect the sanctity of human life; block further trade liberalization; and sign legislation empowering unions to bully workers. As we said above, it would probably not be possible for Obama to implement his dirigiste health-care goals in the first 100 days, but he could start taking steps toward them.

For instance, last year President Bush vetoed an attempt to cover middle-class children under the State Children’s Health Insurance Program (S-CHIP). Congress could simply pass that bill again, and a President Obama would happily sign it. We wouldn’t expect to see much movement on entitlements during Obama’s first 100 days. The problems facing Social Security, Medicare, and Medicaid would take longer to address, and Obama’s proposed solutions — such as a surtax of 2 to 4 percent on high earners — would be controversial and require negotiations with Republicans.

Nor do we think Obama will seek cap-and-trade controls on carbon emissions right away. Even Democrats seem to realize that the economy is currently too fragile to absorb the massively higher energy costs such a plan would entail. Of course, we could be wrong. If elected, Obama could make the mistake of Democratic presidents before him and overreach during his first 100 days, provoking a backlash and setting his party up for a fall in 2010.

On the other hand, he could be even bolder than we anticipate, claiming a mandate to pursue the far Left’s dream agenda: We cannot rule out the prosecution of Bush-administration officials for “war crimes” or the reinstitution of the manifestly unfair “Fairness Doctrine” to muzzle conservative talk-radio hosts. In any case, we’d rather not take our chances. If Obama accomplished even half of what we’ve outlined here, his first 100 days would feel a very long time indeed. Conservatives have had their differences with Sen. McCain, but their differences with Sen. Obama are fundamental and unbridgeable. Those who have been tepid toward McCain should keep in mind that the first 100 days of an Obama administration would be followed by 1,361 more.

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