It's Show Time for Obama

One of the most coyly ambiguous lines in President Obama's Inaugural Address was his pledge to "end to the petty grievances and false promises, the recriminations and worn-out dogmas that for far too long have strangled our politics."

That sounds high-minded, but you can read the promise two ways. Some heard it as a reproach to Republican ideology and to President Bush, who was seated nearby. Others heard it the latest reiteration of Obama's desire to move beyond dogma per se and to achieve a new synthesis.

We will soon learn which it was. Obama, the president who would be post-ideological, is at last having his first encounters with the realities of polarized politics. Exhibit A is the stimulus package.

Obama has been more than generous in offering the Republicans far more tax-cutting as part of the recovery program than sound policy warrants. Will they reciprocate and support the rest of the package?

At Obama's meeting last Friday with Congressional Republican and Democratic leaders, Republican Congressman Eric Cantor of Virginia was making the case that more tax cuts would be more stimulative than public spending. Obama replied in a jocular way according to those present, that the issue had been settled by the election, and "I won."

Nothing post-ideological about that assertion.

More important, perhaps, was Senate Republican Leader Mitch McConnell's reported statement that Senate Republicans would not filibuster against the stimulus package. But this may have been short-lived. In the official Republican response to the President's remarks Saturday urging passage of the plan, House Republican leader John Boehner scoffed that the plan would "spend a whopping $275,000 in taxpayer dollars for every new job it aims to create, saddling each and every household with $6,700 in additional debt."

On the Sunday talk shows, Republicans turned up the rhetoric. Even John McCain, who Obama went out of his way to court, called for more tax cuts and indicated he would vote no unless they were included.

The bill can squeak through without Republican votes, assuming no filibuster. But a more difficult balancing act may come within the Democratic Caucus. Obama needs not only some Republican backing or at least a Republican agreement not to filibuster. He also needs the support of the fiscally conservative Blue Dog Democrats. Their mantra has been that deficits are far too large. They were calling for spending cuts (and some tax increases) back when the deficit was less than 3 percent of GDP.

Even without Obama's proposed $820 billion recovery program, the Congressional Budget Office's latest budget projection shows a deficit of $1.2 trillion this year, or 8.3 percent of GDP. The sharp increase in the deficit is the result of the recession, which reduces economic activity and hence tax receipts. With enactment of the stimulus, the deficit temporarily rises to over 10 percent of GDP--the biggest deficit since World War II.

Most of the Blue Dogs, who include House Budget Committee Chairman John Spratt of South Carolina, acknowledge the need for a temporary increase in public spending. Spratt's opposite number, Senate Budget Chairman Kent Conrad (D-ND), warned at a recent hearing that the United States was headed for a fiscal catastrophe. Conrad acknowledged "the need to have an economic recovery package that will add to deficits and debt in the short-term." But he went on to sound the alarm about the "unsustainability of our current fiscal condition."

This also suggests an ideological division that will be hard to paper over. After four decades of bipartisan assaults on government, many progressive Democrats (this writer included) hope to use the stimulus as a down-payment on an expansion of government services such as affordable housing and early childhood education that have been chronically under-funded, as well as long term investments in green energy and smart infrastructure.

But the 49-member Blue Dog Coalition in the House and Senate fiscal conservatives such as Conrad see the stimulus as a one-shot. They want sharp spending cuts as soon as the immediate crisis is past, to pay for the fiscal sin of a temporary deficit hike.

If you look at the details of the Obama recovery plan, however, it includes a lot of outlays that don't look like one-shots: laying more than 3,000 miles of electric transmission lines; installing 40 million "smart" utility meters to help reduce energy use; weatherizing 2 million homes and most federal buildings. Among the other infrastructure investments are improving security at 90 major ports and modernizing the nation's water system. These needs and others like them don't end after two years.

Obama said Saturday in his first radio and video address, "This is not just a short-term program to boost employment. It's one that will invest in our most important priorities -- like energy and education, health care and a new infrastructure -- that are necessary to keep us strong and competitive in the 21st century."

Sounds good to me, but he will face ideological qualms from the fiscal conservatives within his own party, as well as from most Republicans. So the bipartisan honeymoon is unlikely to last, and I'd say, good riddance. Obama's real challenge is to mobilize public opinion--not just to win general approval ratings but to make it very hard politically for anyone in either party to oppose his recovery program or to demand crippling budget cuts down the line as the quid pro quo. That's what leadership is all about.

It's show time. Call me out of date and ideological, but it's reassuring when President Obama reminds himself and his opponents that "I won."

Robert Kuttner is co-editor of The American Prospect. His best-selling book is "Obama's Challenge: America's Economic Crisis and the Power of a Transformative Presidency."

Comments

[priscianusjr]

"Republican Congressman Eric Cantor of Virginia was making the case that more tax cuts would be more stimulative than public spending. Obama replied in a jocular way according to those present, that the issue had been settled by the election, and 'I won.'
Nothing post-ideological about that assertion."

Nothing particularly ideological about it, either. He's stating a fact: I was chosen by the people and I'm going to do what the people want and expect.

[tonydon]

Remember Repugs, Bushies tax cut got into this mess. shut up and listen t o the people we need help

[Wake-up]

Come-on... Tax cuts (and restrained spending) have proven (from Kennedy till today) have proven that they are the most effective way of stimulating the economy short and long-term... let's break this current bill up into sections - rather than the usual PORK that leaches on to a bill like this that might make it through and hold our representatives accountable!!

[ThomH]

Yes, deficit spending is necessary, but an increase in the national debt is not.

Why exactly do we fund deficits with debt--money we borrow at interest, money we allow the banks to create from nothing? (Like the counterfeiters they are, albeit legal ones, they own the money we allow them to create by issuing loans. And then they also own the interest they collect on the money they create from thin air.)

Why not do what Lincoln did: finance necessary deficits with Treasury-issued Greenbacks. Non-interest bearing Greenbacks. Yes, fiat money issued by the government.

Inflationary, you say? Why is fiat money issued by the government more inflationary than fiat money issued by banks? The Fed is there to protect us from inflation? Then why does a 3 cent stamp cost 42 cents?

And isn't the Fed now trying to induce modest inflation to counter feared deflation? And failing to do so--"pushing on a string", they call it.

Actually, as has long been known, issuing new money to employ otherwise idle resources does not produce inflation. And that is precisely what the stimulus package is all about.

So why not fund it with Greenbacks?

[winnie47]

When will The GOP get off this endless "tax cuts are the answer to everything" kick? First of all, tax cuts will only go to people who are currently employed, since if you have no job, you have no income, and you pay no taxes. Therefore, it does nothing for the unemployed. Secondly, giving tax breaks to businesses so they will hire people will be a short term fix at best. Those businesses will hire a few people, who will manufacture a few thousand things. Those things will sit in a warehouse because Americans still have no money to spend. Since there is no demand for the product, the new workers will get laid off. What a pointless waste of time! And tax cuts to the very rich are what got us this $1.3 trillion deficit, with nothing to show for it. The top down, supply-side economics of the last eight years have been proven a failure. The GOP needs to come up with some new ideas, or just shut the He** up. 80% of Americans approve of the Obama stimulus plan, and we want it passed YESTERDAY. So screw bipartisan support. If they won't go along, ram it through without them. There's no time to waste!

[1liberalconspirator]

I know-exactly...

[americanalien]

The GOP is washed-up, old, and out of ideas. If they continue on that path they'll be in the minority for generations to come.

[Thevail]

"Secondly, giving tax breaks to businesses so they will hire people will be a short term fix at best."

And if was going to work..with all those Bush tax cuts in place..where are all the jobs?!

It never does work except for very small flourishing businesses in their beginning growth stages.
Once a business is mature..they cut employees and employee wages to better the bottom line..ask Home Depot..ask Caterpillar..ask GM. No tax cuts have been repealed yet, so why aren't they working?

[atrivera15]

Tax cuts are not the way. Accountability is what is lacking. Rebublican mouthpieces have brain washed a segment of the population who are easily swayed and convinced of nonsense. No matter how bad things get republicans will blame it on democrats even if they were not in charge, amazing. You on the far right which is virtually all republicans anymore don't get it. The country is changing and electing officials more in line with their true values. Get used to it, things are only going to get worse for you people.

[Charlie M]

There never was a bipartisan honeymoon. The Republicans have always been intent on making the President fail no matter what that might do to the country . Their cries of to much spending , to high a deficit ,etc Are phony at the start ; We never heard them while they wasted money and young men and women in Iraq . While they allowed our heavy industry to leave the country . While they allowed the banks and stock companies to rape us. I hope Obama runs rough shod over them in the next year.

[COkid]

You mean fail like the Democrats wanted Bush to fail?

[pecospedro]

Golly gee whiz! Now you reminded me what elections are about...to the victor goes the spoils, right? Mr. Obama has indeed begun to lead the country, to the left as fast as he can. So I have just as fast derived my position, I oppose him and everything he stands for. He must fail.

[1liberalconspirator]

Do you think we care or are you just here for "intellectual handouts"? I am glad you made up your mind after such a short period of time it just screams open-minded and non-partisan. Enjoy being a dinosaur attached to false and failed ideology. Don't worry my Republican friend we'll fix the country without you-after all we are already paying for it.

[Clavis]

Yes, because there's nothing more "liberal" than qualified civil servants who do their jobs well and aren't just talentless cronies and crooks. I suppose you'd prefer President Obama repeated the successes of the Bush Administration? Oh, wait, there weren't any...

[Hugh-Leighton]

Let's get a couple of things straight here. On November 4 the country expected that the politics was done and the statesmanship started, at least for the office the president. Those who are elected need to understand that the promise of reform citizens voted for applies also to them, whether they have just won (or rewon) their office or not. What these people need to understand is that they ALL are there to look after the needs of the entire country. Regional issues rightly belong to State and local government bodies and the feds need to keep their hands off unless invited to help.
The other thing these boys and girls need to understand is the difference between ideology and rationality. The first may get you elected, but you need huge doses of the second to get the job done that you were "hired" to do. If the Government was a corporation and Obama was the newly elected CEO, i believe that many in the house and the senate would be reading their letters of dismissal right about now, considering the performance of the last eight years.
To all those, both in and out of the present government, I have one simple message: PUT YOUR IDEOLOGY AWAY AND GET TO WORK!!

[winnie47]

The only way they will understand it is if they have thousands of their constituents calling/wr­iting/emai­ling and DEMANDING action. There are only two things that get a politician's attention- a campaign contribution and an irate constituent. They don't want to lose their cushy job with all the benefits and perks. If enough of the voters in their state start screaming bloody murder at them, they will listen!

[Groover]

We absolutely cannot "TAX AND SPEND" OURSELVES INTO PROSPERITY. Look at Japan back in te 90's. 92 through 97 they were in a mess---taxing and spending themselves into the PO' HOUSE! They finally got a clue and cut taxes and spending , PRESTO CHANGO, they came out of the recession.

[TomTheAlmostUgly]

"We absolutely cannot `TAX AND SPEND' OURSELVES INTO PROSPERITY."

R-i-ght, we should BORROW FROM THE CHINESE COMMIES like we've done the past eight years. That's worked out so much better for us.

And FYI, "taxing and spending our way into prosperity" is EXACTLY what FDR did. Look it up.

Japan was in a recession from '92 to '97 because their housing market went bust. Peddle your Republican propaganda elsewhere. You lost.

[Wake-up]

Nice... if only you were even close to the truth...

FDR prolonged the suffering by 6-7 years why you ask... because he raised the taxes after Hoover cut them, he left office in 1933)... look it up.

Japan did keep taxes high and they stagnated till they lower them for everyone... look that up while you're at it.

Go ahead and give on example where increased Gov. spending = economic recovery? Even 'slick-willy' cut taxes to grow the economy...

Schooled...

[1liberalconspirator]

I know and they still don't get it. It's the S&L crisis all over again and they don't accept responsibility for it all over again.

[Wake-up]

THANK YOU!! Great reminded about Japan... it's true!

[JudgeMoonbox]

I think that Boehner & co. share Limbaugh's "I hope he fails" attitude, but don't have the guts to come out and say it. Look at the Reaganomic and Dubyanomic tax cuts: both were passed in the respective President's first year in office. Both had big rate cuts in that first year. Yet, the Republicans claim they didn't take effect until the 3rd or 4th year, which by sheer coincidence was the year the unemployment rate started to come down.

Under Reagan, that unemployment rate was 3/10ths of a point better in Nov. 1984 than it was the month he was first elected. George W. Bush came close to being the first President since Hoover to have fewer people employed when he was up for reelection than at the first election day. Of course, the deficit shot up under both presidents.

Supply Side Economists had argued that there is a point beyond which increased tax rates burden the economy so much that cuts will spur more economic activity and revenues will actually increase. The experience of the 1990s show that the tax increases of George Aitch Bush and Bill Clinton did not push us to that far side of the Laffer Curve. Supply Siders don't address that fact, but dro the Laffer Curve from their rhetoric--they reduce themselves to the absurd position that we should just abolish taxes and more money will just drift into the government's nets than they'll know what to do with it.

[1liberalconspirator]

Yes! I've said the same thing over and over!

[alumtrix]

"I won" = "mission accomplished". Of course these words will fade over the next two weeks or so but I don't see a thing that indicates he wants to unite and reach across the isle with those words.
Obama giving in to tax cuts is similar to when Bush had Kennedy over for the weekend at the very beginning of his first term to work out the "no child left behind" agenda. That turned out to be a big flop because I don't think many liberals remember that Kennedy was a major sponsor of that bill. Oh well.
Early childhood education programs - the only thing a toddler needs is a caring parent. Read to your child and talk to them. That should be free by my standards.
I will agree with you about the infrastructure concerning a new grid and the water supply system. That's an investment that I think is worth the price tag. I've never understood why the government didn't reach out to the refineries and plants and invest in cleaner technology. Every government building should be the model for energy efficiency and then move that technology to inner city housing.
Affordable housing - Isn't that what caused the bubble and bust. The government and banks did what they were suppose to do, well except collect payment from the new home owners.

[TomTheAlmostUgly]

"I don't see a thing that indicates he wants to unite and reach across the isle with those words."

The Republicans demanding tax cuts is just plain stupid. TAX CUTS DON'T WORK.

By "reaching across the aisle" I suppose you mean "Reid-Pelosi bipartisanship" (appeasement). Since 2001, the Republicans have learned that they yell and scream loud enough, Democrats will cave in. So I suppose you mean that Obama should ignore the 52 percent of Americans who voted AGAINST McCain, who voted AGAINST tax cuts to "fix" our economic problems -- all so Washington Republicans don't pout. Well, BLEEP Washington Republicans!

[idest]

You forgot that Kennedy had no control over the funding allocated to NCLB. It was the lack of proper funding that really turned that bill into a stinker.

[winnie47]

If by "reach across the aisle" (isle is a small piece of land surrounded by water) you mean Prez Obama should just let the Rethugs write the stimulus plan and perpetuate the failed economics of the last eight years, then you'll never see THAT. Americans overwhelmingly voted for CHANGE. That means no more Republican voodoo economics. President Obama said he would accept any idea that would work. The Rethug two term economic train wreck was not the solution, it was the problem. Is the GOP capable of coming up with any new, original ideas? Hmmmmm. That's what I thought.

[lagumbo]

PRESIDENT OBAMA should stop waiting for a bi-partisanship approval of his stimus package, it will never happen.These Republicans don't care about the country, they only care about their party and pockets.
They will stonewall until every business is shut down. The PRESIDENT can go over their heads, and that's what he needs to do. The RNC just wants him to fail. Rush has already given them their orders.

[Star2000dancer]

Well, we already lost with Tom Daschle as head of healthcare.. He'd rather genocide the entire middle class & the people who got knocked out of the middle class to poverty.

[Star2000dancer]

Iraq is the only occupation or war that the people had to pay for. Wars were always paid by the rich. Why is this never brought up? We have to fight them & pay for them?

[Groover]

Hey Magumbo, How dare you think that the Democrats are the only ones that love their country. You want to talk about lining your pockets, look at what Barnie Frank did for his bank who had broken every rule in the book. He gave them 12 million to get out of hock with the Fed.
You needn't be painting with such a broad bruch.

[LibXman]

I have to tell you, as a Liberal, The idea of giving 100's of billions of dollars to Banks that failed is not right. With a bit more planning we could have guarantee the same loans and sold them to hundreds of small community banks that use sound judgment. The war in Iraq also has so much graft and corruption it should be call the war for selfish greed. The big dig is another project that cost hundreds of billions of dollars and for what? Is the population in Boston so large that it would justify the biggest public works project in the history of the US? Republicans are always touting smaller government and deregulation and in a healthy capitalistic country that would be mantra for all. So, what is happening. There is a difference between a healthy capitalism and corrupt system of oligopolies and monopolies. We are not capitalist if we only have a dozen companies capturing 90% of a thriving markets. Corrupt companies elect corrupt officials which feed corrupt companies. The Republicans take their simple mantra of deregulation and over use it. The Democrats are all to eager to take advantage of the deregulation and the Republicans will not be out done. A high tide will lift ships with holes in them only when we pump increase amounts of dollars in them. We really do need to work together to plug the holes.

[Punchumgum]

Amen to that.

[ChelseaC]

We need to spend money to make money--but it needs to be done right--no more bailing out banks/indu­stry--look at Citibank with their new jet.
I'm all for spending if we have new infrastructure that's needed to show for it, green energy and passing HR-676 to fix health care(though I won't hold my breath on HR-676 being passed--not even enough of the Dems have the balls to pass this bill).
The Republican's time has come and gone to remedy this situation--the last eight years have been a disaster. I agree, Obama should not have to beg for Republican approval. HE WON, as did many new Dems.

[lastar84]

In view of my own ambivalent support for him, I've always suspected that Obama's reticence to take a fierce stand comes from 50 percent confidence in his own ability to work things out, and 50 percent shear gutlessness when it comes to a knock down drag out fight.

His gushing friendliness towards the right wing comes off as a bit needy to me, and I still cannot imagine what would make him (among other things) select a bigot from the other side to do his inaugural invocation. Well, a "friendly" bigot, anyway.

Whenever Reagan didn't get what he really wanted from congress (Democrats), he made a charming and forceful public broadcast, winning enough of the public over to knock off his opponents. While it really isn't that hard to emasculate Democrats -- whose fortitude seems to fall away like overripe fruit -- Reagan's leadership style was especially effective when bushwhacking the Dems. Couldn't stand the guy, but had to give him credit.

I'm curious whether Obama has anymore in him than a terse little "I won."

[Star2000dancer]

I do'nt understand why no one is going after all these monopolies that are being made right under our noses. Last time I looked, a monoploy was illegal.

[lastar84]

If liberal economist Robert Reich is right, maybe the backlash from this economy will bring an end to "anything goes" permissiveness towards powerful big monopolies.

People have been hoodwinked into believing that business should regulate itself in order for our economy to thrive. Put that B.S. into hyperdrive, like Bush and his cronies did, and we end up like this.

There was a political party -- last time I remember -- that was supposed to work to keep the robber barons at bay and protect the average citizen...oh yeah, the Democrats. As I said, they seem to drop their fortitude like overripe fruit. And their integrity has been for sale over the past couple of decades. Seems like any drug company, bank, or oil company that wanted to own either party simply had hand over a wad of cash.

[doneright]

I just might be that Obama does not believe in the virtues of a knock-down-drag-out fight. That would be advocating a war like attitude toward political leadership. The South Koreans are the only political body that seems to advocate knock-down-drag-out tactics.

Neither do I see his ovations to the republicans as needy. He stated in one of his speeches before the election that those in power were not going to relinquish it without a fight. I believe he is capable and willing to engage them in their opposition which does not mean a knock-down-drag-out fight.

[winnie47]

If Reagan was so brilliant, why are the GOP not emulating him? Why do they not have control of the House, Senate, and Presidency? I'll tell you why. They are a bunch of greedy, self-serving tools. Obama is being conciliatory because he ran on the promise that he was going to change the tone in Washington. He is making a very public effort. If he doesn't get some cooperation by President's Day, look for a press conference where he says "I have made every effort to work with the Republican Party, but they are uninterested in setting aside ideology to do what is best for the country. It is with great regret that I and the rest of the Democratic Party will have to solve these problems on our own. We cannot let the country be held hostage by ideologues." Presto! Obama is off the hook with voters. He pushes through his legislation. Rethugs are marginalized and shown to be impotent. God's in His Heaven, and all's right with the world.

[Teresa Tate]

How about NO tax cuts unless you make uder $100,000 yearly? How about tax increases if you make over $1 million annually? Pretty simple and clear cut. Tax cuts will not "bail" us out of the disaster we're in (hasn't worked in the financial sector), in fact they're one of the reasons for the mess.
Funds should go to infastructure and green energy development. New jobs and eventual self-sufficiency. Good for everyone.

[dianhow]

I think the social security cap should be removed. So that the wealthy pay a bit more-
and it will not impede their standard of living one bit. Those making much less - say 40- 50 K - have less after taxes to live on and still pay the bare necessities. And why give social security payments to those making 1 mil a year / would they even miss it- I wouldn't. OR How about if we ask those making 1 mil a year- if they still need / want their SS check. That seems fair. Am I being unreasonable ?

[Wake-up]

The top 5% already pay something like 70% of the entire bill... any SS $ they paid in, they are supposed to get back. Who cares anyway... these are the people & mostly small businesses that drive this country... Cutting taxes for all is best for all.

[Wake-up]

Why do Liberals hate tax cuts and rich people?

Virtually all economists agree that the only way to stimulate an economy is by cutting (all) taxes. The results also include more Gov revenue. Last recession, W cut taxes and we have 52 straight months of economic growth.

Gov. is an expense... the current $1 Trillion is full of ideological waste and the only thing really being created here is bureaucracy, welfare and deficit... Huge deficit.

[boyfood]

Just what cloud nine are you living under?

[Star2000dancer]

In the 1st speech I ever heard GWB give, he said "he hye, see I do''nt pay any taxes, I make too much money, so I have loop holes to get out of paying any." I thought, great.. we're in trouble.

[TomTheAlmostUgly]

Wake-up parrots worn-out Republican rhetoric:

vvvvvvvv
Why do Liberals hate tax cuts and rich people?

Virtually all economists agree that the only way to stimulate an economy is by cutting (all) taxes. The results also include more Gov revenue. Last recession, W cut taxes and we have 52 straight months of economic growth.

Gov. is an expense... the current $1 Trillion is full of ideological waste and the only thing really being created here is bureaucracy, welfare and deficit... Huge deficit.
^^^^^^^^

Go back to sleep, Wake-Up. You lost, big time.

[idest]

Oh we love tax cuts, but only when they do some good. And we don't hate rich people, only greedy people.

As for your statement "virtually all economists agree...". What a load of crap. Most economists will tell you that some TARGETED tax cuts are a good stimulative measure. Only the fanatical right (whom I have to assume are your only sources of information) will tell you that tax cuts for ALL is a good stimulative measure. If people or business don't SPEND the extra money, there's no stimulus. Get it?

W cut taxes and we also got the worst economic situation since the Great Depression.

[C65]

Wake-up,Maybe you should wake upLiberals as you call them,but of course they are
the GOD fearing people who try to follow the rule of God,care for others.
That's the problem the rich gets rich on the backs of the poor,and once you prevent
them from earnings,you complain about welfare.Which,by the way is your complaint,
but you also want to complain about their right to an obortion.Which is it,WELFARE
OR ORBORTION,?CHOOSE YOUR POISON.

[mnyegele]

Kuttner's article shows that Obama's economic program needs our support. We need to write to our Congressional representatives daily - if need be urging them to support Obama's stimulus pacakage.
The biggest obstacle involves the Republican filibuster and the Senate procedural rule. While Obama's attempt to gain bi-partisan support is admirable, we need to demand that once we have a stimulus package together (which will involve compromises with certain Blue Dog Democrats), the Democratic majority needs to resort to the nuclear option if necessary to get this package passed by February 15.
We also need to demand that the Senate reform or streamline its procedural rules. We need to abolish the filibuster and to eliminate the 60 vote procedural rule. Eliminating these two props will eliminate a lot of last minute amendments and earmarks. It will actually force Republicans to behave in a bi-partisan manner.
We cannot expect Obama to carry this load himself. We must actively support his plans every inch of the way,