February 13, 2009

Obama, a Democrat's View

During the presidential election of 2008, Barack Obama enjoyed the backing of just about his entire party (excluding some disappointed Clinton supporters). Now that he has taken office and has proposed his economic stimulus package, the American Recovery and Reinvestment Plan, many moderate Democrats aren’t as supportive.

The American Recovery and Reinvestment Plan is an encompassing plan to create new jobs; enhance technology and energy efficiency; and upgrade/improve roads, bridges and schools. Many economists believe this plan is one of the best ways to pull our economy out of recession. So what’s the problem?

More liberal Congressional Democrats do not believe the plan goes far enough. Unfortunately, many Republicans think the plan goes too far in the direction of social welfare and less in the direction of helping small businesses and allowing the effects to trickle down to consumers. Hence, there’s the problem of trying to please his own party and the opposition party in order to ensure quick passage of a much-needed bill.

The Democrats believe the program should focus more on job creation and infrastructure improvements (particularly in the energy sector) versus tax cuts (which are included in the bill). Senate Democrats also want to include a provision for bankruptcy courts to have the ability to change the terms of home loans - which is opposed by Republicans.

President Obama has stated that quick passage of the bill is necessary to help the economy begin to improve. Unfortunately, it is impossible to please everybody. Conservative Democrats and Republicans are concerned with the amount of spending in the bill leading to an increased deficit. But more liberal Democrats are chiefly concerned that not enough money is spent on social programs and improvements in infrastructure.

Despite opposition from conservative members of the Democratic Party as well as the Republicans, President Obama has some pretty powerful friends. Speaker of the House and fellow Democrat Nancy Pelosi has called for passage of the bill by President’s Day. As a staunch proponent of this bill, Speaker Pelosi has also stated that if the bill is not passed by President’s Day, then the House will not recess for the day.

By and large, though, Democrats view this bill and President Obama favorably. After all, Obama’s economic plan is a far cry from the Emergency Economic Stabilization Act of 2008, which introduced the Troubled Assets Relief Program (TARP), a $700 billion financial market bailout.

TARP got off to a rocky start when former Treasury Secretary Henry Paulson went against the clear intent of the bill (buying up “troubled assets” such as bad loans from banks and other financial institutions) to invest the initial $350 billion directly in the beleaguered institutions. More oversight has been called for, but ultimately, TARP will do virtually nothing to help the average American.

The American Recovery and Reinvestment Plan, on the other hand, adheres to the Democratic ideas of spending federal funds to improve the state of the nation. Democrats are pleased with the infrastructure, electricity (including alternative power sources), education and other means of creating jobs.

Recently, Rep. Barney Frank (Democrat – MA), chairman of the House Financial Services Committee, appeared on Larry King Live to defend the economic package. He pointed out that the plan created jobs in ways many Republicans and conservative Democrats were decrying as adding pork, such as providing money to fight sexually transmitted diseases. Rep. Frank asked pointedly, “[D]o you think people fight sexually transmitted diseases as volunteers?”

His point is valid. Many on the conservative side tend to view those parts of the stimulus package that promote improvements in infrastructure as the only ones that create jobs. However, manual labor is not the only job option out there.

Rep. Frank also pointed out that many Democrats believe the initial $350 billion from TARP was mishandled by the Bush administration. He further supported President Obama by categorically stating the second $350 billion provided by TARP would be spent in better ways.

Later in the same Larry King segment, Paul Begala, a Democratic strategist, also talked up the plan. Begala stated he believes Obama’s plan can be trusted, as many American people, especially many Democrats, trust Obama himself. He also compared President Obama’s plan to FDR’s New Deal in that it calls for greater transparency and oversight of the money being spent.

Transparency from the Obama Administration is reassuring to many Americans. As the Bush Administration was exiting, no one had any real idea how the money was getting spent or where Secretary Paulson was spending it.

The majority of the Democratic Party is standing firmly behind President Obama. Those Democratic detractors of the American Recovery and Reinvestment Plan are mainly opposed to one of two things: tax cuts added to garner Republican votes or too much spending that could lead to a greater deficit. But no matter what compromises he makes in order to engender support, President Obama should not hold out for universal popularity, in either the Democratic or Republican parties.

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Obama - A Republican View

A good deal of President Barack Obama’s campaign support was generated by his roughly 500 campaign promises (see www.politifact.com). But history has shown that politicians are not always the best at keeping their promises.

President Obama will face a certain amount of opposition from Congressional Republicans, especially when it comes to one of his biggest promises: the passage of an economic stimulus package, the American Recovery and Reinvestment Plan.

Many on the right, through words and actions, echo the sentiments of right-wing political pundit Rush Limbaugh: “I hope he fails.” But Limbaugh is more of an extreme example of Republican principles, and the echoes are more from other pundits versus conservative politicians.

In the same vein as Limbaugh, columnist Michelle Malkin (www.michellemalkin.com) refers on her blog to the proposed economic plan as the “Generational Theft Act of 2009.”

Mainstream Republicans are more than willing to work hand-in-hand with President Obama and the Congressional Democrats for the benefit of the country; they would not dream of stating a wish for the failure of the administration and/or its economic plan. The majority of Republican politicians will not come right out and say they hope President Obama and/or his economic plan will fail.

The main problem Republicans have with the American Recovery and Reinvestment Plan is that pet projects of Congressmen/Congresswomen are being attached to the bill, or, in politispeak: Pork is piling on. In an attempt to return to fiscal conservative policy, some Republicans are threatening to oppose the bill if the pork is not eliminated.

For example, House Minority Leader John Boehner of Ohio stated in a recent interview (see below) with NBC’s “Meet the Press,” “Right now, given the concerns we have over the size of this package and all of the spending in this package, we don’t think it’s going to work … put me down in the ‘no’ column.” However, he made the point for bipartisan cooperation, noting that failure to pass a stimulus package would do nothing to help the ailing economy.

That admirable sentiment aside, on January 28, 2009, the House passed the American Recovery and Reinvestment Plan. None of the 178 House Republicans voted in favor of it. They did propose their own bill - one that utilized tax credits and tax cuts versus additional government spending - which was soundly defeated in a roll call vote, according to reports in the Miami Herald.

Wanting a fresh perspective on the Republican view of President Obama and his economic stimulus package, we interviewed the local Republican Party chairman, John Salak. His views echoed Republican pundits and politicians alike.

Salak expressed his doubt that government in general can influence something as complex as the American economy. Likening the economy to an ecosystem, he believes there are far too many components to single out any one, or even several, to fix. And, like Phil Gramm, the co-chair of the McCain-Palin campaign, Salak thinks the country is suffering from more of a “mental” recession than an actual one.

Pointing out that 5 percent unemployment is typically considered full employment, Salak stated that allowing the markets to cycle through the downturn with no interference (including bailouts) from the government is a better solution and would allow the economy to recover sooner. Also, allowing supply and demand to dictate who stays in business means a more solid economic future.

Salak isn’t the only one who believes that tax cuts and allowing the American people to “vote with dollars” is the way to salvage the economy.

Rich Lowry, syndicated columnist and editor of the National Review, a conservative news magazine, recently wrote an article on this exact topic. In addition to tax cuts for the American people - which Lowry estimates will allow the average married couple filing taxes jointly to keep an additional $3,400 per year from their salaries - tax cuts for small businesses should figure heavily into Republican proposals.

Salak is in Rush Limbaugh’s camp on one thing: He hopes not only that the American Recovery and Reinvestment Plan will fail, but that the Obama Administration will fail, too. Why? His answer: to prevent the American people from piling on additional debt to pay back debt, to prevent out-of-control spending by Democrats, and to prevent liberals from completely upending the Constitution.

He also pointed to Barack Obama’s record as one of the most liberal members of the U.S. Senate as proof that President Obama and the Congressional Democrats are intent on making America more socialist. Programs such as universal healthcare and giving tax rebate checks to those not paying income taxes are considered entirely socialist by Republicans, who believe that personal responsibility goes hand-in-hand with the preservation of liberty.

Those 500-plus campaign promises are another worry to the Republican Party. If President Obama makes good on most of them, more Americans would pay more taxes and the government would spend every dime of those tax dollars.

We asked Salak what he thought President Obama’s biggest challenge would be. He answered that he believes that the president’s biggest challenge would be convincing the American people that he is doing something to keep his promises. He also thinks that even if President Obama doesn’t make good on all of the promises, the media and the Democratic Party will make it seem as though he did.

Republicans may differ in their expression of what the Obama Administration holds for the country, but they all agree, through word and deed, that the economic recovery plan will do nothing but increase the federal deficit. Even though the House Republicans did not come out and say, “We hope he fails,” their voting said as much.

Many Republicans, like Salak, believe President Obama has no chance of turning around the economy, even if he succeeds in getting his American Recovery and Reinvestment Plan through Congress. And as far as succeeding in all of those 500-plus campaign promises, for the good of the country, they hope he fails.

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