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Can Congress Pass All Obama Wants — and Should It?

President Barack Obama has laid out a breathtakingly bold agenda. The worry is that it’s more than he, Congress and the American political system can possibly accomplish — especially so fast.

[IMGCAP(1)]He did get Congress to pass an $800 billion economic stimulus package in less than a month — but as he noted in his address to Congress last week, that’s barely the beginning.

He’s still got to rescue the financial system from collapse, a task that, as he noted, will require Congress to pass more unpopular bailouts in the hundreds of billions of dollars.

It’s still unclear whether the Treasury and the Fed know how to save the banks, but Obama also plans to rescue millions of struggling homebuyers and also save the domestic auto industry.

He wants Congress to give him — this year — a new financial regulatory system so that collapses like the current one don’t happen again.

It’s not remotely clear that Congress or the administration know how to construct such a system without over-regulating and stifling innovation.

And regulation, if it’s going to be effective, has to be done in coordination with other industrialized nations because modern credit markets are global.

And, on top of all that, Obama proposes to invest massively in health care and education — oh yes, and transform a carbon-based economy to one relying on alternative fuels.

“The only way to fully restore America’s economic strength,— he said to Congress, “is to make the long-term investments that will lead to new jobs, new industries and a renewed ability to compete with the rest of the world.

“The only way this century will be another American century is if we confront at last the price of our dependence on oil and the high cost of health care, the schools that aren’t preparing our children and the mountain of debt they stand to inherit.—

He went on to note, correctly enough, that America has done great things in past times of crisis — build railroads in the Civil War, go to the moon during the Cold War, etc. — but he is calling for all these massive transformations to be done at the same time.

More bailouts, a big budget, new tax cuts and tax breaks, health care down payments and energy changes all will jam Congress at the same time, with each a possible bargaining hostage for another.

And think about this problem: Amid a deep recession, Obama’s environmental czar has served notice that carbon dioxide will be regulated as a pollutant, requiring less use of fossil fuels.

Moreover, Obama plans to impose heavy taxes on carbon — the essence of a cap-and-trade system — both to help pay for health care expansion and to encourage alternatives that have yet to prove themselves economically viable.

But such taxes and regulation will have a depressive effect on a wobbly economy — and also violate his principle that only the rich will pay more taxes. Everyone who drives or heats a home will pay more.

Which is fine in the long run. For too long, as Obama noted, America has been an over-consuming, over-borrowing, under-saving and under-investing country.

But, in the short run, we are going to become even more leveraged, borrowing $1.75 trillion (at least) this year, $1.2 trillion the next year and $900 billion the year after that.

And then, according to Obama’s plans, we will become a fiscally frugal country, cutting the deficit in half by 2012 by raising taxes on the rich, taxing carbon and cutting wasteful spending.

It will be wonderful if it happens. But there are some big reasons to doubt that it will.

One, again, is Congress. Obama declared with some pride that there were no earmarks in the stimulus package and implied there will be none in next year’s budget.

But the House’s 2009 omnibus funding bill contains some 9,000 earmarks and Obama has not — so far — used his influence to get them out as a down payment on fiscal responsibility.

Another problem lies with his economic assumptions, which are rosier than what most experts expect — meaning that he’s counting on more revenue and less expenditure than may actually be possible.

For instance, he’s anticipating just a minus 1.2 percent economic growth rate this year, whereas the Blue Chip survey has it at 1.9 percent. And next year, he’s forecasting a rebound to 3.2 percent growth, vs. 2.1 percent by professional forecasters.

And probably the biggest question of all is: How is he going to get spending on Social Security, Medicare and Medicaid — the long-term threats to the nation’s economic health — under control?

Obama told Congress that he knows this has to be done, but doesn’t say how. Universal health care and indexed Pell Grants for college promise new entitlement obligations before existing ones are brought under control.

And even this isn’t the end of Obama’s plans. He says he will save money by withdrawing from Iraq by 2011 — a risky plan — and by eliminating farm subsidies, ineffective education programs and Cold War weapons systems.

This involves confronting the farm lobby, the military and Democrats in Congress who sponsored various education programs.

And, finally, Obama still has hopes to win bipartisan cooperation for his efforts. On the one hand, that will be necessary. On the other hand, it’s not happening.

It’s necessary because Obama doesn’t have the kind of majorities in Congress that Franklin Roosevelt or Lyndon Johnson enjoyed.

He can’t rely on just three Senate Republicans to allow him to transform the American economy in the face of certain resistance from entrenched interests.

On the other hand, as Louisiana Gov. Bobby Jindal and GOP Congressional leaders have all indicated, Republicans are lined up almost solidly against the Obama agenda.

Polls indicate that the public is rooting for him far more than it supports them, but for that situation to continue, what he proposes has to work — and work efficiently.

Obama wisely switched from talk of “catastrophe— to “renewal.— But his agenda is so vast, so complex and so fast-paced that it makes George W. Bush’s ambition to democratize the Middle East sound simple.

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