Blame the Left for Massachusetts

Democrats should be willing to seek common-ground reforms.

By LANNY J. DAVIS

Liberal Democrats might attempt to spin the shocking victory of Republican Scott Brown in Massachusetts by claiming that the loss was a result of a poor campaign by Martha Coakley. Would that it were so. This was a defeat not of the messenger, but of the message—and the sooner progressive Democrats face up to that fact, the better.
It's the substance, stupid!
According to polls, fears about the Democrats' health-care proposal played a prominent role in Mr. Brown's victory yesterday. In the last several months, the minority congressional Republicans have dominated the message on health care—and stamped on the Democratic Party the perception that we stand for big government, higher taxes, and health insecurity when it comes to Medicare.
How is that possible? The Democrats have a simple message on health care that has still not really gotten through: If our bill passes, you never have to worry about getting, or losing, health insurance for the rest of your life. How is it that so few people have heard that message?

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Associated Press

President Barack Obama

Then there were the two "deals" that put congressional Democrats in a worse light than the infamous "Bridge to Nowhere"—as impossible as that might have seemed—as an emblem of the special interest politics Barack Obama ran against. We Democrats had to explain to Massachusetts voters and other Americans why non-Nebraskans and nonunion members have to pay more taxes, while Nebraskans and union members get to pay less. Those two deals seem to have alienated most people across the political spectrum. That's not easy.

Somehow, in the last 12 months, we allowed the party of Bill Clinton and Barack Obama to morph into the party of George McGovern (or more accurately, his most ardent supporters) and Howard Dean, who called for the defeat of the Democratic health-care bill if it had neither a public option or Medicare buy-in. (He couldn't possibly have been speaking for the 31 million uninsured people in taking that all-or-nothing position.)
In 1996, Mr. Clinton was the first Democrat to win re-election since FDR—expanding the electoral map once again into western, southern, and sunbelt states. He did so by creating a new ideological hybrid for a still-progressive Democratic Party: balanced-budget fiscal conservatism, cultural moderation, and liberal social programs administered by a "lean and mean government." This New Democrat combination appealed to Ross Perot independents concerned about deficits, and also to traditional Republican suburbanites who were culturally moderate on issues like abortion and gay rights but opposed to high taxes and wasteful, big-government bureaucracy.
Then, in 2008, Barack Obama added something extra: a commitment to a "new politics" that transcended the "red" versus "blue" partisan divide. He explained this concept clearly in his 2004 Democratic Convention keynote speech and during his 2008 presidential campaign. It meant compromise, consensus and bipartisanship, even if that meant only incremental change. The purists on the left of the Democratic Party who demanded the "public option" or no bill at all apparently forgot that candidate Obama's health-care proposal did not include a public option; nor did it include a government mandate for everyone to either purchase insurance or pay a significant tax approximating the cost of that insurance—the "pay or play provision" in both the Senate and House bills.
Bottom line: We liberals need to reclaim the Democratic Party with the New Democrat positions of Bill Clinton and the New Politics/bipartisan aspirations of Barack Obama—a party that is willing to meet half-way with conservatives and Republicans even if that means only step-by-step reforms on health care and other issues that do not necessarily involve big-government solutions.
That's what Massachusetts Democrats and independent voters were telling national Democrats yesterday. The question isn't just, will we listen? The question is, will we stop listening to the strident, purist base of our party who seem to prefer defeat to winning elections and no change at all if they don't get all the change they want.
Stay tuned.
Mr. Davis, a Washington, D.C., attorney and a weekly columnist for "The Hill" newspaper, was special counsel to President Bill Clinton from 1996-98. He is the author of "Scandal: How 'Gotcha' Politics Is Destroying America" (Palgrave Macmillan, 2006).

 

The Once-Appealing Barack Obama

Peter Wehner - 01.18.2010 - 8:46 AM
Wednesday marks the one-year anniversary of Barack Obama’s inauguration. It has been, by almost any measure, a difficult and disappointing year for him and his party.
Mr. Obama now has the highest disapproval rating in Gallup’s history for a president entering his second year in office. According to a new Washington Post–ABC News poll, among independents, only 49 percent approve — the lowest of any of his recent predecessors at this point in their presidencies. (Obama has lost a stunning 18 points among independents in just a year’s time.) In November, Democrats suffered crushing defeats in the New Jersey and Virginia gubernatorial campaigns — and if Republican Scott Brown prevails in his race against Martha Coakley in tomorrow’s Senate election in Massachusetts, it will rank among the most important non-presidential elections in our lifetime.
It has been a staggering collapse by a president who entered office with enormous support and an unprecedented amount of goodwill.
The reasons for this slide include unemployment rates that are much higher than the Obama administration predicted, job growth that never materialized despite the president’s promises, a record-setting spending binge, a massive and hugely unpopular health-care proposal, and an agenda that is far too liberal for most Americans.
But there is another, and I think quite important, explanation that was reinforced to me while reading John Heilemann and Mark Halperin’s book, Game Change, which is a fascinating (and very well-written) account of the 2008 presidential campaign.
One is reminded once again of how the core of Obama’s popularity was an appeal not to policy or to a governing agenda; instead it was an appeal to thematics and narrative. “Obama cast himself as a figure uncorrupted and unco-opted by evil Washington,” the authors write. He was the candidate who “promised to be a unifier and not a polarizer; someone nondogmatic and uncontaminated by the special-interest cesspool that Washington had become.” Obama’s appeal was romantic and aesthetic, built on the rhetoric of hope and change, on his “freshness and sense of promise.” A cult of personality built up around Obama — not because of what he had achieved but because of what he seemed to embody. (”Maybe one day he’ll do something to merit all this attention,” Michelle Obama dryly told a reporter.)
“We have something very special here,” Obama’s top political aide Axelrod is quoted as saying. “I feel like I’ve been handed a porcelain baby.” Axelrod tells Obama — dubbed by his aides as the “Black Jesus” — that voters were looking for “a president who can bring the country together, who can reach beyond partisanship, and who’ll be tough on special interests.”
That was what we were promised. What we got instead is a president who increased the divisions in our nation, the most partisan and polarizing figure in the history of polling, one who is dogmatic and has been as generous to special interests as any we have seen. The efforts to buy votes in pursuit of the Obama agenda has added sewage to the cesspool.
This would hurt any president under any circumstances; for Barack Obama, whose allure was based almost entirely on his ability to convince the public that he embodied a “new politics,” it has been doubly damaging. It was Hillary Clinton of all people who understood Obama best when she said during the campaign, “We have to make people understand that he’s not real.”
Not real indeed. Obama’s stirring call for Americans to reject the “politics of cynicism” was itself deeply cynical. Perhaps none of this should come as a surprise. After all, Heilemann and Halperin write, Axelrod was “a master of the dark arts of negative campaigning.” The first major profile of him, more than 20 years ago, was titled, “Hatchet Man: The Rise of David Axelrod.”
Obama and Axelrod might have been able to get away with this if Obama’s presidency had been viewed as successful and skilled. But it’s not. And when combined with the growing realization that Obama is not up to the task of governing, that he is pursuing policies that exacerbate our problems and takes us down a wrong and even perilous path, it is poison. The toxicity is such that what was once unthinkable now seems more likely than not: Democrats losing the Senate seat held by Ted Kennedy for almost half a century. And even if they don’t, 2010 is shaping up to be a perfectly awful year for Democrats. It’s a safe bet that in response they and their allies will lash out in rage, angry at the perceived injustice of it all, furious at the fate that has befallen them. They will blame Obama’s predecessor, Republicans in Congress, the conservative movement, angry white males, Fox News, Sarah Palin’s tweets, and the wrong alignment of the stars. It won’t work.
Having created a myth, they must now live with its unmasking.

A by-the-numbers look at Obama's first year

Highlights of Obama's first year, by the numbers: ___
7,949.09—Dow Jones Industrial Average close on Jan. 20, 2009.
10,609.65—Dow Jones Industrial Average close on Jan. 15, 2010.
13 million—Number of people 16 and older unemployed as of January 2009.
14.7 million—Number of people 16 and older unemployed as of December 2009.
7.7 percent—Unemployment rate January 2009
10.0 percent—Unemployment rate December 2009
$787 billion—Cost of economic stimulus approved by Congress.
$10.6 trillion—Outstanding public debt Jan. 20, 2009.
$12.3 trillion—Outstanding public debt Jan. 14, 2009.
$296.4 billion—Federal spending from the financial crisis bailout fund before Jan. 20, 2009.
$173 billion—Federal spending from the financial crisis bailout fund after Jan. 20, 2009.
$165 billion—Amount of bailout funds repaid by banks and automakers.
139—Bank failures between Jan. 20, 2009, and Jan. 14, 2010.
274,399—Number of properties that received forclosure-related notices in January 2009.
349,519—Number of properties that received forclosure-related notices in December 2009.
34,400—U.S. troops in Afghanistan in January 2009.
70,000—U.S. troops in Afghanistan as of Jan. 12, 2010.
319—U.S. military deaths in Afghanistan from January 2009 through Jan. 15, 2010.
139,500—U.S. troops in Iraq in January 2009.
111,000—U.S. troops in Iraq as of Jan. 12, 2010.
152—U.S. military deaths in Iraq from January 2009 through Jan. 15, 2010.
539—Appointments to top federal policy positions submitted to the Senate
352—Appointments confirmed by the Senate.
180—Appointments in top policy positions carried over from the Bush administration.
12—Formal news conferences.
21—Foreign countries visited.
29—States visited.
10—Visits to Camp David.
2—Vacations.
___
Sources:
AP reporting and analysis
Bureau of Labor Statistics
Treasury Department
Federal Deposit Insurance Corp.
RealtyTrac Inc.
Defense Department
White House Transition Project

PROMISES, PROMISES: Many Obama pledges unkept

By PHILIP ELLIOTT

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WASHINGTON (AP) - President Barack Obama ends his first year in office with his to-do list still long and his unfulfilled campaign promises stacked high.

From winding down the war in Iraq to limiting lobbyists, Obama has made some progress. But the president has faced political reality and accepted - sometimes grudgingly - compromises that leave him exposed to criticism. Promises that have proven difficult include pledges not to raise taxes, to curb earmarks and to shut down the Guantanamo Bay detention facility in Cuba by the end of his first year.

"We are moving systematically to bring about change, but change is hard," Obama told a town hall crowd in California. "Change doesn't happen overnight."

That was in March.

During his two-year campaign, Obama thrilled massive crowds with soaring speeches, often railing against an Iraq war that now is seldom mentioned. His presidential comments now are often sober updates on issues like terrorism and the economy, a top priority now that emerged as a major issue only in the campaign's final weeks.

Obama's campaign ambition has been diluted with a pragmatism that has been the hallmark of Year One - without much of the progress he had hoped.

A look at some of the promises:

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THE ECONOMY, TAXES AND DEFICITS

Obama inherited an economy in severe distress that has since shown marked improvement. With the crisis developing so close to last year's election, it wasn't the focus of his earlier campaign promises. But Obama managed to craft his main anti-recession measure to address one of the top political commitments.

He campaigned on a pledge to provide a $1,000 tax credit to 95 percent of all working families, and almost delivered.

The $787 billion stimulus bill included an $800 tax credit for couples making up to $150,000, and a declining credit for those making up to $190,000. The Tax Policy Center estimates that 90 percent of taxpayers qualified for a tax cut under the stimulus package.

In a Dover, N.H., campaign stop, Obama pledged that "no family making less than $250,000 will see their taxes increase - not your income taxes, not your payroll taxes, not your capital gains taxes, not any of your taxes."

True, unless you're a smoker.

Obama, himself an occasional smoker, signed into law a 159 percent increase in the tax on a pack of cigarettes. Other tobacco products were hit with similar or much steeper increases to help pay for a children's health initiative, enabling him to keep another promise to make sure all kids have health insurance.

Obama also promised to cut the federal budget deficit by more than half in his first term. That now appears unlikely, given the spending on the stimulus and the billions of dollars spent on bank and auto company bailouts. The 2009 federal budget deficit hit a record $1.42 trillion, and the red ink in the first two months of fiscal 2010 was nearly 6 percent higher than the same period in 2009.

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FOREIGN POLICY

As a candidate, Obama touted his early opposition to the Iraq war and pledged to pull all U.S. combat troops out within 16 months. As president, he pushed that deadline back two months, to August 2010.

Even then, he will leave 35,000 to 50,000 military personnel in Iraq through 2011 to train, equip and advise Iraqi security forces, and to help in counterterrorism missions.

As a candidate, he vowed to prosecute the war against al-Qaida in Afghanistan, arguing that Iraq had distracted the U.S. from its anti-terror priorities. By the end of his first year, he had retooled the Afghan war strategy, replaced the U.S. commander there, doubled the number of U.S. troops in the country and ordered another 30,000 there by the middle of this year.

He also promised to "end the use of torture without exception" in U.S. anti-terror campaigns and to close Guantanamo Bay, which he called "a recruiting tool for our enemies." He signed an executive order outlawing torture, cruelty and degrading treatment of prisoners. A companion order closing the Guantanamo prison has proven more challenging.

Congress refused to fund the transfer of any Guantanamo detainees to U.S. prisons, and foreign countries are reluctant to accept them. Obama did order the purchase of an Illinois prison to house up to 100 Guantanamo detainees. Still, Guantanamo cannot be closed until the disposition of more than 200 remaining detainees is resolved. A failed attempt at bombing a Detroit-bound airliner on Christmas has made that more difficult.

Obama also campaigned to restore U.S. prestige abroad by engaging allies and adversaries alike, a direct swipe at George W. Bush, his predecessor. Now, he's finding that rhetoric tough to live up to.

He vowed to use "tough, direct diplomacy" to keep Iran from obtaining nuclear weapons. Once in office, he offered dialogue to Tehran, made direct appeals to the Iranian people and included Iran in multinational discussions, while insisting that Iran not be permitted to develop nuclear weapons.

The power centers in Tehran have largely shrugged, and Obama so far has been unable to unite a coalition of countries behind new economic sanctions intended to block Iran's development of nuclear weapons.

A solution for North Korea's nuclear program also remains elusive. Its envoy to the United Nations said his nation is willing to conduct talks, but only if all sanctions against it are lifted.

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TERRORISM

On his 2008 campaign Web site, Obama declared that "we must redouble our efforts to determine if the measures implemented since 9/11 are adequately addressing the threats our nation continues to face from airplane-based terrorism," including screening all passengers against "a comprehensive terrorist watch list."

The verdict on that promise came last month, when an alleged terrorist known to authorities boarded an airliner bound for Detroit from overseas carrying explosives in his clothes. Disaster was averted when he botched an attempt to ignite the bomb.

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HEALTH CARE

During his political run, Obama said he would increase the number of people covered by health insurance and pay for it by raising taxes on families making more than $250,000 a year and by taxing companies that do not offer coverage to employees.

Although lawmakers have taken steps toward the broad outline Obama promised, it remains unfinished. The House and Senate have passed versions of the plan, but major differences remain. And Obama's left flank is none too pleased with the compromises to this point, which have all but eliminated a government-run insurance option, something he called for in the campaign.

Even the process has violated one campaign pledge.

"We'll have the negotiations televised on C-SPAN, so that people can see who is making arguments on behalf of their constituents, and who are making arguments on behalf of the drug companies or the insurance companies," Obama said.

That hasn't happened. Instead, Democrats in Congress and the White House have made multibillion-dollar deals with hospitals and pharmaceutical companies in private. C-SPAN asked to televise the negotiations between the House and Senate versions; the White House insists it hasn't seen the request.

---

OTHER ISSUES

On other domestic promises, from energy to education, Obama has been faced with a tight budget, a struggling economy and a deficit-conscious public that he will need to court if he seeks another term in 2012.

Early on, he had to recant his pledge not to sign legislation that includes lawmakers' pet projects. "When I'm president, I will go line by line to make sure that we are not spending money unwisely," Obama had said in September.

But Congress controls spending, and Obama hasn't been willing to veto bills approved by his Democratic allies on Capitol Hill. For example, he signed what he called an "imperfect" $410 billion spending bill that included 7,991 so-called "earmarks" totaling $5.5 billion. He had little choice. The measure, a holdover from the Bush presidency, was needed to keep government from shutting down.

Obama also promised to require lawmakers seeking money for earmarks to justify their requests in writing 72 hours before they're voted on in Congress.

That hasn't happened yet. Nor has his pledge to post legislation online for five days before acting; he broke that pledge with his first bill, a non-emergency measure giving workers more time to bring pay discrimination lawsuits. A promised ban on lobbyists serving in his administration hasn't been absolute; a few former lobbyists were granted exemptions.

White House Press Secretary Robert Gibbs explained that by saying:

"Even the toughest rules require reasonable exceptions."

Obama 'strengthened America' in first year: White House

The White House Tuesday argued President Barack Obama's "steady diplomacy" had made America stronger and renewed its moral authority despite "unprecedented challenges" in his first year in office.

But the assessment, posted on the White House website, did not dwell on the lack of success garnered by one of Obama's top priority foreign policy drives, peace moves in the Middle East, and reflected a tougher tone on Iran.

"A year later, America is stronger because of the president's leadership," said Ben Rhodes, deputy national security advisor for strategic communications, in a White House blog post.

"The global economy has been pulled back from the brink of catastrophe. We are responsibly winding down the war in Iraq, and increasing our focus on Afghanistan and Pakistan."

Rhodes argued Obama that had quickly got to work refocusing the fight against Al-Qaeda, restoring US alliances, committing the United States to confronting climate change and nuclear proliferation.

He said Obama's 30,000 strong troop surge in Afghanistan proved the strategy and resources were now in place "that this urgent challenge demands" and noted Obama was on track to get combat troops out of Iraq by the end of August.

"By prohibiting torture and working to close the prison at Guantanamo Bay, we are denying Al-Qaeda a recruiting tool," said Rhodes, who has played an instrumental role in many of Obama's biggest foreign policy speeches.

He said domestic terror plots had been disrupted and terrorists had been caught, but added in a reference to the thwarted bid to blow up a US airliner "as we learned over Christmas, more work has to be done."

When he came to office in January 2009, Obama offered a hand of dialogue to Iran but has been rebuffed and now the administration is working with international partners on a toughened sanctions regime over a nuclear showdown.

"After a year of American engagement, the international community is more united than ever before in calling on Iran to live up to its obligations, while Iran is more isolated," he said.

It remains unclear however if permanent five UN Security Council members Russia and China will sign up to tough sanctions being developed for Tehran.

Rhodes drew an analogy between the Iranian and North Korean nuclear crises.

"President Obama continues to present a clear choice: if nations abide by their obligations, the door is open to a better relationship with the international community; if they don't, they will be isolated."

The Obama administration is currently trying to revive its efforts to open peace talks between Israel and the Palestinians, but so far has seen little success, a factor on which Rhodes did not chose to comment.

But he said that Obama's decision to "reset" ties with Russia had enabled the two former Cold War foes to work towards a new nuclear arms reduction treaty.

He also said that Obama's "steady diplomacy" with nations like China and India had helped to convince nations to embrace their responsibilities to cut greenhouse gas emissions at the Copenhagen summit last month.

The treaty however did not forge an agreement for binding deal with legal force.

Obama and the 'Fat Cat Bankers'

Surprise! Banks with government guarantees take the biggest risks, make the most money, and pay the highest bonuses.

By JONATHAN MACEY

President Obama said last month on "60 Minutes" that he "did not run for office to be helping out a bunch of fat cat bankers on Wall Street." This assertion may mollify his constituents, but it is not consistent with his administration's own policies.
We are on the cusp of what is going to be the most highly visible and contentious bank bonus season in history. Bonuses are predicted to run into the billions of dollars, and many of the banks that got the most bailout money are paying the biggest bonuses. The two issues are intimately related—and as long as the administration continues down its too-big-to-fail regulatory path, Mr. Obama will stay in the business of paying huge bonuses to fat cat bankers. Here's how it works.
All of the banks in which the bonus-driven employees work have highly leveraged balance sheets. This leverage greatly magnifies bank profits in good times and causes their losses to mushroom in bad times. The public shareholders of these companies tend to be highly diversified against the risk of failure at any particular financial institution, so they have a strong personal interest in seeing the bankers who manage their leveraged investments swing for the fences.

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Corbis 

 

On the other hand, these institutions are considered vital to the national interest, and therefore can't be allowed to fail because they are allegedly too big or too interconnected. So the managers of these banks are assured that the government will bail them out if they falter.

The bankers, in short, face a massive conflict. They have a great responsibility to the public which arose as soon as the politicians decided to guarantee the survival of their businesses. They also have a legal responsibility to their owner-shareholders, whose diversified investments in these highly levered companies makes them eager to take on as much risk as they possibly can.
It isn't hard to figure out how the bankers are likely to act in the face of this conflict between the government's interest in avoiding future bailouts and the shareholder's interest in the rewards associated with significant risk-taking. They will follow their paychecks.
These paychecks are highly rational from the shareholders' perspective. The basic pay structure is the same at all of these banks. The bankers make relatively modest base salaries and receive most of their compensation in the form of bonuses. The average bonuses will be around $500,000—$595,000 at Goldman Sachs, $463,000 at JP Morgan Chase—but some will make far more (as much as eight figures). These bonuses are big and they are unremittingly linked to performance.Together a mere five banks—Citigroup, Bank of America, Goldman Sachs, JP Morgan Chase and Morgan Stanley, all of which got billions of bailout dollars—have allocated about $90 billion for overall compensation, with bonuses comprising more than half.
What Mr. Obama and others apparently fail to understand is that the banks' own shareholders benefit from these huge performance bonuses. The bonuses are paid to those who make large profits for their employers—that is, they are linked to performance.
In our "heads the shareholders and bankers win, tails the U.S. taxpayers lose" world, neither the public's supplicant pleas for restraint nor the politicians' bursts of outrage is likely to change banker behavior. This is why the banks are doing so little (and most are doing nothing) to reduce the size of their bonuses. On Wall Street the din of populist outrage is drowned out almost entirely by the sonorous jingle of bonus money.
People say that shareholders have no control over executive compensation. In fact, it appears that a clear rule of thumb about executive compensation has emerged on Wall Street. When banks make profits, the managers keep 40%-50% of the take, and the rest goes to the shareholders, either by being re-invested in the company or paid as dividends.
John S. Reed, a former CEO of Citigroup, said a few days ago that the banks won't regain the public's trust until they reduce bonus payments. He contends that the bankers have learned nothing from the crisis, and that "They just don't get it. They are off in a different world."
Mr. Reed is mistaken. It is the government, not that the shareholders, that is incapable of making a win-win deal with our financial institutions. And it is the government, not the banks, that has lost the public's trust. The public has been giving the banks credible and convincing votes of confidence all year by bidding up the value of their shares. It cannot seriously be argued that investors are ignorant of bonus arrangements.
Politicians are frustrated because they are virtually powerless to stop the flow of bonus payments to bankers. Rep. Dennis Kucinich (D., Ohio) thinks that the U.S. should follow the lead of Britain, France and Germany and levy heavy taxes on bonuses. While such action might placate some people, it is the shareholders, not the banks, who will end up paying this tax. Worse, this sort of tax will not affect banker behavior, because it will not reduce (and probably will increase) the government's proclivity to bail out banks that have made bad bets.
There is only one way to resolve the bonus problem. We should continue to let shareholders pay their managers whatever and however they want. But we must get out of the business of guaranteeing against failure. The bankers and the shareholders who enjoy the rewards of risk-taking should be made to act like real capitalists: They should be required to assume the risks that go along with the banks' business activities.
Banks that are considered too big to fail should be dismantled into smaller pieces that the economy can digest. And the government should make it clear that it will allow these institutions to fail. When this happens, the shareholder-owners of these banks will pay their managers much more sensibly—and Mr. Obama will be able to wash his hands of the business of helping out the fat cat bankers on Wall Street.
Mr. Macey is a professor at Yale Law School and a member of the Hoover Institution Task Force on Property Rights.

 

Obama's Fiscal Fantasy World

Spending is up nearly 24% since Bush's last full budget year.

By KARL ROVE

After President Obama devoted much of 2009 to health care and global warming—two issues far down Americans' list of concerns—the White House says he will pivot to jobs and deficit reduction in his State of the Union speech in a few weeks. The White House is considering dramatic gestures, perhaps announcing a spending freeze or even a 2% or 3% reduction in nondefense spending.
But Americans shouldn't be misled by the election year ploy: Mr. Obama rigged the game by giving himself plenty of room to look tough on spending. He did that by increasing discretionary domestic spending for the last half of fiscal year 2009 by 8% and then increasing it another 12% for fiscal year 2010.
So discretionary domestic spending now stands at $536 billion, up nearly 24% from President George W. Bush's last full year budget in fiscal 2008 of $433.6 billion. That's a huge spending surge, even for a profligate liberal like Mr. Obama. The $102 billion spending increase doesn't even count the $787 billion stimulus package, of which $534 billion remains unspent.
Mr. Obama can placate congressional Democrats by arguing that all that extra spending he has already crammed through can cover their spending desires at least through the 2010 congressional elections.

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Associated Press 

 

Mr. Obama is thinking of tapping another pocket of cash. Now that the banks are repaying—with interest and dividends—the $240 billion the Bush administration lent them, the Obama administration is considering recycling those dollars into new spending on "green" technology and more stimulus, despite provisions Congress wrote into the law creating the Troubled Asset Relief Program that requires that repaid TARP funds be used exclusively for deficit reduction.

Meanwhile, defense spending is being flattened: Between 2009 and 2010, military outlays will rise 3.6% while nondefense discretionary spending climbs 12%.
All this leaves Mr. Obama in the enviable position of appearing tough on spending while growing the federal government's share of GDP from its historic post-World War II average of roughly 20% to the target Mr. Obama laid out in his budget blueprint last February of 24%.
There are also those pesky entitlements. This mandatory spending has grown to 66% of the budget, up from 29% in 1965. Serious budgeters understand spending cannot be brought under control unless these mandatory outlays are part of the mix.
One idea on Capitol Hill is to create a commission that would propose a package of entitlement reforms that Congress would have to vote on as a package, up or down, take it or leave it—much like the base closing commission.
The Obama White House likes this idea in part because the proposal calls for including some congressional Republicans but would reserve a majority of the seats on the commission for Democrats. That would put Democrats in charge while also making the GOP share in the political pain that would come with whatever the commission proposes. Conservatives worry, with justification, that a commission's purpose would be to provide Republican cover for tax increases and a permanent increase in the size of the federal government.
What's more, the White House may only be interested in an election-year gesture. White House staff are apparently considering creating a presidential commission that would look like it's working on deficit reduction but that would be established by executive order. Of course, without congressional authorization, there's no way to force Congress to vote on a commission's recommendations.

About Karl Rove

Karl Rove served as Senior Advisor to President George W. Bush from 2000–2007 and Deputy Chief of Staff from 2004–2007. At the White House he oversaw the Offices of Strategic Initiatives, Political Affairs, Public Liaison, and Intergovernmental Affairs and was Deputy Chief of Staff for Policy, coordinating the White House policy-making process.
Before Karl became known as "The Architect" of President Bush's 2000 and 2004 campaigns, he was president of Karl Rove + Company, an Austin-based public affairs firm that worked for Republican candidates, nonpartisan causes, and nonprofit groups. His clients included over 75 Republican U.S. Senate, Congressional and gubernatorial candidates in 24 states, as well as the Moderate Party of Sweden.
Karl writes a weekly op-ed for the Wall Street Journal, is a Newsweek columnist and is the author of the forthcoming book "Courage and Consequence" (Threshold Editions).
Email the author atKarl@Rove.comor visit him on the web atRove.com. Or, you can send a Tweet to @karlrove.

Whatever Mr. Obama says in his State of the Union, Republicans need to be tougher on spending and deficits. Later this month, Senate Republicans are planning to force their colleagues to go on the record on how to spend returned TARP funds by demanding that Democrats vote on the issue. Some House Republicans are also considering calling for a return to the level of discretionary domestic spending that existed when Mr. Obama entered office last January.
Few things focus the attention of politicians as much as approaching elections. Democrats are aware that spending and deficits are big reasons Republicans have a nine-point lead on the Rasmussen Poll's generic ballot.
Independents are particularly sensitive about deficits, spending and taxes, whose growth they see aversely affecting jobs and the economy. They give Mr. Obama only a 21% approval on handling the deficit. Only 10% of independents want to spend unused bank bailout money on other government programs.
At the beginning of his term, Americans believed Mr. Obama would follow through on his campaign promises about "cutting wasteful spending" and going "through the federal budget, line-by-line, ending programs that we don't need" and putting "an end to the run-away spending the record deficits."
After a year of living in his fiscal fantasy world, Americans realize they have a record deficit-setting, budget-busting spender on their hands. Voters are now reading the fine print on all that Mr. Obama proposes and as they do, his credibility, already badly damaged, suffers.
Mr. Rove, the former senior adviser and deputy chief of staff to President George W. Bush, is the author of the forthcoming book "Courage and Consequence" (Threshold Editions).