· “Bad” Big Screen TVs Banned in California
· Economy In Chaos
· Is Obama Tough Enough : National Journal
The Consumer Electronics Assn. is fighting what appears to be a losing battle to dissuade California regulators from passing the nation’s first ban on energy-hungry big-screen televisions. On Tuesday, executives and consultants for the Arlington, Va., trade group asked members of the California Energy Commission to instead let consumers use their wallets to decide whether they want to buy the most energy-saving new models of liquid-crystal display and plasma high-definition TVs.
But those pleas didn’t appear to elicit much support from commissioners at a public hearing on the proposed rules that would set maximum energy-consumption standards for televisions to be phased in over two years beginning in January 2011. A vote could come as early as Nov. 4.
California already limits the amounts of power that appliances like refrigerators can consume or they can be banned from sale in the state.
Critics say that more regulations in the state where nearly 18% of residents are either unemployed or underemployed will put more pressure on family budgets and cost more jobs. Business groups point to an unwholesome overregulated business climate as an important reason for the state’s record high unemployment, and lose of businesses to neighboring lower taxes and less regulated states.
“The United States can be counted on to do the right thing, after having tried all other conceivable alternatives.” Winston Churchill.
The U. S. Census Bureaus’ Population clock projects total populations at 307,726,048 and those 307 million Americans are having record deficits piled onto them to the tune of $4,700 for every man, woman and child for a massive $1,420,000,000,000 – that’s ONE TRILLION FOUR HUNDRED TWENTY BILLION DOLLARS.
That is more than three times the most red ink ever amassed in a single year which was $450 billion.
The federal government spent $46.6 billion more in September than it took in. September is usually a month that records a surplus.
“The rudderless U.S. fiscal policy is the biggest long-term risk to the U.S. economy,” says Kenneth Rogoff, a Harvard professor and former chief economist for the International Monetary Fund. “As we accumulate more and more debt, we leave ourselves very vulnerable.”
Forecasts of more red ink mean the federal government is heading toward spending 15 percent of its money by 2019 just to pay interest on the debt, up from 5 percent this fiscal year.
Friday’s report showed that the government paid $190 billion in interest over the last 12 months on Treasury securities sold to finance the federal debt. Experts say this tab could quadruple in a decade as the size of the government’s total debt rises to $17.1 trillion by 2019.
Without significant budget cuts, that would crowd out government spending in such areas as transportation, law enforcement and education. Already, interest on the debt is the third-largest category of government spending, after the government’s popular entitlement programs, including Social Security and Medicare, and the military.
As the biggest borrower in the world, the government has been the prime beneficiary of today’s record low interest rates. The new budget report showed that interest payments fell by $62 billion this year even as the debt was soaring. Yields on three-month Treasury bills, sold every week by the Treasury to raise fresh cash to pay for maturing government debt, are now at 0.065 percent while six-month bills have fallen to 0.150 percent, the lowest ever in a half-century of selling these bills on a weekly basis.
The risk is that any significant increase in the rates at Treasury auctions could send the government’s interest expenses soaring. That could happen several ways — higher inflation could push the Federal Reserve to increase the short-term interest rates it controls, or the dollar could slump in value, or a combination of both.
The Congressional Budget Office projects that the nation’s debt held by investors both at home and abroad will increase by $9.1 trillion over the next decade, pushing the total to $17.1 trillion decade under Obama’s spending plans.
Tax revenues fell 16.6 percent, the biggest decline since 1932.
Government debt will reach 76.5 percent of gross domestic product — the value of all goods and services produced in the United States — in 2019. It stood at 41 percent of GDP last year. The record was 113 percent of GDP in 1945.
Much of that debt is in foreign hands. China holds the most — more than $800 billion. In all, investors — domestic and foreign — hold close to $8 trillion in what is called publicly held debt. There is another $4.4 trillion in government debt that is not held by investors but owed by the government to itself in the Social Security and other trust funds.
The CBO’s 10-year deficit projections already have raised alarms among big investors such as the Chinese. If those investors started dumping their holdings, or even buying fewer U.S. Treasurys, the dollar’s value could drop. The government would have to start paying higher interest rates to try to attract investors and bolster the dollar.
A lower dollar would cause prices of imported goods to rise. Inflation would surge. And higher interest rates would force consumers and companies to pay more to borrow to buy a house or a car or expand their business.
“We should be desperately worried about deficits of this size,” says Mark Zandi, chief economist at Moody’s Economy.com. “The economic pain will be felt much sooner than people think, in the form of much higher interest rates and much higher rates of inflation.”
If all that happened rapidly, it could send stock prices crashing and the economy tipping into recession. It could revive the pain of the 1970s, when the country battled stagflation — a toxic mix of inflation and economic stagnation.
Paul Volcker, then the chairman of the Federal Reserve, responded by raising interest rates to the highest levels since the Civil War in a determined effort to combat a decade-long bout of inflation. His campaign pushed banks’ prime lending rate above 20 percent in 1981 and sent the country into what would be the longest post-World War II downturn before the current slump. Unemployment jumped to a postwar high of 10.8 percent in December 1982.
That and the chaotic foreign policy of then President Jimmy Carter lead to a seismic political shift ending his presidency after one term. More and more see close parallels now to then. Except with the new element of massive foreign owned debt.
Is Obama Tough Enough?
Neither foreign leaders nor U.S. lawmakers fear the vengeance of the president, critics say.
A year ago, vice presidential candidate Joe Biden offered up one of his classic off-script observations that pained Barack Obama’s political advisers. “Mark my words, it will not be six months before the world tests Barack Obama like they did John Kennedy,” he predicted. “Watch, we’re gonna have an international crisis, a generated crisis, to test the mettle of this guy.”
His comments raised anew the question that Hillary Rodham Clinton had tried to exploit in her “3 a.m. phone call” ads: whether this youthful senator, with limited experience on the world stage, would be tough enough to handle the high-stakes challenges that he was sure to face.
Nine months into his term, President Obama has still not settled that question, but a narrative is emerging among some columnists, pundits, and academics across the political spectrum that Obama’s low-key, cool, cerebral style, while reassuring on many levels, lacks the punch that is sometimes needed to advance an agenda in Washington, and in a perilous world.
Neither foreign leaders nor U.S. lawmakers fear the president, according to this critique. They are comfortable defying Obama’s wishes and pursuing their own agendas without concern for the consequences. Even when the president has made it clear — publicly and privately — that he strongly favors a certain course of action, others sometimes appear to find it easy to reject his appeals.
“Obama has created an atmosphere of no fear,” says Douglas Brinkley, a history professor at Rice University and the author of several presidential biographies. “Nobody is really worried about the revenge of Barack Obama, because he is not a vengeful man. That’s what we love about him — he is so high-minded, and a conciliatory guy, and he tries to govern with a sense of consensus — all noble goals, but they don’t get you very far in this Washington knifing environment.”
“He has been all carrots and no sticks so far,” observed a veteran Senate Democratic aide, speaking on condition of anonymity. Obama’s style “has to be more Lyndon Johnson. Half, ‘I love you, but I’ll stick this screwdriver right through your heart in a second if it is to my advantage.’ On the fear question, I don’t think he or his team is feared.”
Brinkley agrees: “He needs to be more like LBJ or Theodore Roosevelt. He has to change his tactical framework, if his personality will allow it, to being a much more in-your-face, cutthroat, high-minded nationalist, pushing the country’s agenda to the people.”
Such observations are prompted in part by Obama’s public setbacks. Even when such incidents are small, their sheer number costs the president political capital, critics say. He has been rebuffed, for example, on matters that are not likely to have lasting significance, such as his call for the Scottish government not to release the Lockerbie bomber; his involvement in state political campaigns, which included trying to talk New York Gov. David Paterson out of running in 2010 and lobbying former Virginia Gov. Douglas Wilder to support Democratic gubernatorial candidate Creigh Deeds; and his trip to Copenhagen to make a personal plea for Chicago to host the 2016 Olympics.
In each case, those to whom Obama made his pitch rejected it. The Scottish authorities released the bomber, Paterson said he’s running, Wilder went public with his decision not to endorse Deeds, and Chicago’s bid was denied in the first round.
On larger issues, Obama has faced challenges from within his party, such as on the disposition of detainees in the Guantanamo Bay prison. In the House, 88 Democrats recently deserted the administration’s position and joined Republicans on a nonbinding recommendation to instruct the conferees on an appropriations bill to forbid relocating the detainees on U.S. soil; the move complicates the White House’s efforts to close the facility. The conferees managed to find compromise language to tamp down the controversy, while skirting such nettlesome issues as the disposition of dangerous detainees whose prosecutions are difficult.
Even Obama’s friends on Capitol Hill privately grumble that he foolishly set a deadline to close Guantanamo by January without first developing a plan to pull it off. That failure invited Democratic lawmakers to jump ship on what has become a hot political issue as Republicans whip up fears among constituents that keeping detainees in prisons in their communities will invite terrorist attacks.
“He should not have put a timetable on it,” said Simon Serfaty, who follows global affairs at the Center for Strategic and International Studies and has written many books on international relations. “He is now finding out it’s harder than he thought.”
Meanwhile, on his top domestic priority — the most sweeping health care legislation since LBJ’s push for Medicare as part of his Great Society — Obama is faulted in some quarters for his mixed signals on the importance of the so-called government-run insurance program, or “public option,” to compete with the private sector.
Is it important as a counterweight “to keep insurance companies honest,” as he said in his September 9 speech to a joint session of Congress, or is it “just one sliver of [reform], one aspect of it,” as he commented at a town hall meeting in August?
At the same time, Obama’s efforts are complicated by Congress’s rock-bottom poll numbers — a recent Gallup Poll put voters’ disapproval at a whopping 72 percent. Those numbers, along with a recent uptick for Republicans, have made Democrats increasingly nervous about the fallout from contentious issues such as health care reform and climate change.
The efforts of Senate Majority Leader Harry Reid, D-Nev., to push Obama’s agenda is colored by the fact that he is facing a difficult re-election fight next year. And House Speaker Nancy Pelosi, D-Calif., is finding it a big challenge to keep her ideologically diverse caucus together.
Obama clearly hoped that in choosing as his chief of staff Rep. Rahm Emanuel, D-Ill., a Chicagoan with a take-no-prisoners reputation who helped his party regain the House in 2006, he would have an enforcer with credibility on Capitol Hill. True to his oft-quoted saying, “You never allow a serious crisis to go to waste,” Emanuel clearly has his fingerprints on all of the White House’s major initiatives. But his no-nonsense style doesn’t always play well, especially in the Senate. As one longtime Democratic Senate aide put it: “Rahm is effective but not supereffective — not that magic touch.” When pressed on why that is the case, the staffer paused, and said: “He doesn’t give enough deference; there is sort of the whippersnapper thing.”
As if the challenge of dealing with worried Democrats is not enough, the president has struggled in the international arena with recalcitrant friends as well as determined enemies. U.S. allies have provided only modest support for the Afghanistan war; entreaties to other countries to take custody of Guantanamo Bay detainees have had limited success; and Israel summarily rejected Obama’s repeated public demands to freeze its settlements in the West Bank as an inducement to Arab leaders to engage in the peace process.
“There are moments when fear is useful, when people have to realize who’s in charge and there may be consequences for bucking the person in charge,” said Bruce Buchanan, a professor of government at the University of Texas (Austin).
Style or Substance?
The most immediate challenge concerns Obama’s very public reassessment of U.S. strategy in Afghanistan. Somewhat stunningly, Gen. Stanley McChrystal, the top U.S. commander in the region, publicly and bluntly dismissed a course of action under consideration by the White House (and reportedly favored by Biden) that would reduce the scale of the U.S. effort in Afghanistan.
That alternative, McChrystal opined, would lead to “Chaos-istan.” When asked if it could work in practice, the general said, “The short answer is no,” and he called it “a shortsighted strategy.”
Those comments sparked glee among conservatives and provoked push-back in the form of editorial commentary and headlines about the effrontery of the military commander.
McChrystal’s frankness startled experts in international relations. “I find it amazing that McChrystal would be speaking out the way he is at the very moment when the White House is engaging in a review of his recommendations, and [McChrystal is] explaining that there is no alternative to what he is suggesting,” Serfaty said.
But Sen. Carl Levin, D-Mich., the Armed Services Committee chairman, downplayed the significance of McChrystal’s comments and even said they could help Obama. “He gave an honest answer to a question that was asked in public, and I don’t think that is a confrontation at all with the president,” Levin said in an interview. “As a matter of fact, that may be reinforcing the president’s view that that particular alleged approach of Biden is not the way to go. [McChrystal] was being asked about a point of view which may not represent at all the president’s point of view, so his saying that he doesn’t agree with what Biden allegedly has said may as a matter of fact be very helpful to the president.”
Helpful or not, an inevitable question arises: Would such a high-ranking military officer have been so publicly dismissive of military options under consideration by previous presidents?
James Thurber, director of the Center for Congressional and Presidential Studies at American University, said he could not imagine such a scenario during the George W. Bush administration. Referring to Bush’s vice president and Defense secretary, Thurber said, “Cheney and [Donald] Rumsfeld were feared, and [Bush] went along with them. Then, once they made a decision, they didn’t [mess] around.”
Despite all of the questions about whether Obama might be more successful if he had the element of fear to go along with the goodwill toward him, nobody can doubt the president’s willingness to tackle some of the most difficult issues, from pressing for health care reform despite obvious political risks to intervening in the economy in ways unfathomable a few years ago.
“He is having problems for just one reason — he is trying to do big things,” said David Rohde, a political scientist at Duke University. “He is trying to make big changes. If he were to propose a health bill that made just a little, incremental change, it would have flown through the House and Senate with no trouble at all. Very few presidents of recent vintage have tried to do big things. When they did try, except at the very beginning of their administrations, they often failed. Lyndon Johnson didn’t face anything like this when he was doing his big things.”
Defenders insist that Obama’s understated approach, as contrasted with the blunt style of his predecessor, has produced some positive results. These political observers say that the president’s tough stance toward Iran after its secret uranium enrichment plant was revealed has yielded promising, albeit preliminary, results as Tehran has agreed to allow international inspectors to examine the facility.
The unexpected announcement on October 9 that the president had been awarded the Nobel Peace Prize might help boost his stature in the international arena as he presses the case to make Iran come clean. But it will likely do little to enhance his domestic political standing. Republicans and other critics immediately characterized the honor as premature, a symbol of Obama as a global rock star, the darling of political elites, who has failed as a leader to deal with the pressing economic problems of average Americans.
Others say that Obama is hardly a political lightweight and will flex his muscles when he feels that a tough stance is warranted. As proof, they cite his ouster of General Motors CEO Rick Wagoner in March and his threat in July to veto an important Defense spending measure if it contained funding for additional F-22 fighter jets that the president argued were not needed.
“He got his way on the Defense bill,” Levin said. “He issued a veto threat, and it worked. I don’t know if you call that twisting arms — I don’t. I call it being forthright in public. He wasn’t twisting arms behind the back or threatening people’s projects back home.”
Buchanan of the University of Texas has his own list of high-risk stances where the president has shown strength. “Near as I can tell, Obama is willing to make calls that aren’t necessarily popular. He may be about to do so in connection with Afghanistan. He made some calls that were challenging, to say the least; remember the pirate hostage situation [in April, when Obama authorized Navy snipers to shoot Somali pirates who were holding an American captive], which was a high-risk call because if it backfired, it would have been a messy, sticky situation.”
Looking at that action and the firing of Wagoner, Buchanan said, “I don’t think there is a failure of nerve; I think there is a departure from comfortable conventional wisdom. But that is how most presidents that we now regard as worth their salt operated in their times.”
Several political operatives also say that comparisons with Lyndon Johnson are misplaced and that, at any rate, it’s premature to draw conclusions about Obama’s toughness, given his short time in office.
“He ought to be judged not by his style but by his results,” veteran Democratic strategist Bob Shrum contends. If, in addition to the far-reaching $787 billion stimulus legislation that passed in February, Obama wins passage of a health care bill and financial reform legislation and ultimately “something” on climate change, “it would be a massively significant presidency even if he doesn’t choose to knock people’s heads around,” Shrum says.
As for taking a page from LBJ’s book, Shrum noted that Johnson benefited from the legacy of John F. Kennedy during a period of national reconciliation after the president was martyred, and from the lopsided partisan margins that Democrats had amassed in the 1964 elections when they wound up with 68 seats in the Senate and a 295-140 advantage in the House. “If we had 67 seats [instead of 60] in the Senate right now, the public option wouldn’t even be discussed. It would just be enacted,” Shrum said. “I don’t buy the analogy to Johnson.”
Afghanistan Test
The debate over Afghanistan became personal when Sen. John McCain, R-Ariz., took to the Senate floor on October 1 to push his proposal to require McChrystal and Gen. David Petraeus, the top U.S. commander for the wars in Iraq and Afghanistan, to testify before Congress no later than November 15. His move was obviously designed to increase pressure on Obama to grant McChrystal’s request for as many as 40,000 more troops for Afghanistan.
Levin led the charge against McCain’s amendment to the Defense appropriations bill and proposed an alternative — that the generals testify “promptly” after Obama makes a decision rather than by “an arbitrary deadline.”
“To put a commander in the field at a public hearing to try to pressure a commander-in-chief to reach a certain result is unacceptable, inappropriate,” Levin declared.
Such arguments did not deter the senator from Arizona, last year’s GOP presidential nominee, who has been increasingly blunt about the high-stakes nature of this decision. McCain said during the Senate debate that unless the effort in Afghanistan is “properly resourced” — that is, as McChrystal recommended — “we are doomed to failure.”
McCain then unloaded on Obama’s top advisers, charging that they were reluctant to send more troops out of political caution. The administration was “trying to find the exit sign” out of Afghanistan, he said. “It has been broadcast all over television that there are individuals — including the vice president; now, unfortunately, the national security adviser [James Jones]; the chief political adviser to the president, Mr. Rahm Emanuel — who don’t want to alienate the left base of the Democratic Party. That is what this is all about.”
“I fear that domestic political considerations are impacting a decision which has to do with the future security of the United States,” McCain concluded.
Jones responded bluntly on CNN’s State of the Union on October 4: “I worked for Senator McCain when he was a [Navy] captain. I’ve known him for many, many years, and he knows that I don’t play politics, and I certainly don’t play it with national security and neither does anyone else I know. The lives of our young men and women are on the line. The strategy does not belong to any political party, and I can assure you that the president of the United States is not playing to any political base. And I take exception to that remark.”
Still, the fact that McCain, a Vietnam War hero and the top Republican on the Senate Armed Services Committee, would level such a charge is telling. When asked whether the accusations showed a lack of respect for the White House, Levin was adamant that Obama is focused on the difficult issues in Afghanistan and would not be distracted. “I don’t think the president is going to be worried about who he alienates and doesn’t,” he said. “I think he is going to be and is concerned about what is the most effective policy for Afghanistan for America’s security.”
On the White House driveway after he and other congressional leaders met with Obama on October 6 to discuss military strategy in Afghanistan, McCain continued to drive home his concerns. “I’m very convinced that General McChrystal’s analysis is not only correct but should be employed as quickly as possible.”
When a reporter asked McCain if this decision was a test for Obama as commander-in-chief, McCain was quick to respond. “Of course it is,” he said.
No Marching Orders
When Obama spoke to a joint session of Congress last month on his priorities for health reform, he took a markedly different approach from that of Bill Clinton 15 years before. In 1994, Clinton issued a blunt warning in his State of the Union address.
“If you send me legislation that does not guarantee every American private health insurance that can never be taken away, you will force me to take this pen, veto the legislation, and we’ll come right back here and start all over again,” he said.
Clinton later reflected that his threat was a mistake. “I did it because a couple of my advisers had said that people wouldn’t think I had the strength of my convictions unless I demonstrated that I wouldn’t compromise,” he wrote in his memoir, My Life. “It was an unnecessary red flag to my opponents in Congress. Politics is about compromise, and people expect presidents to win, not posture for them.”
In contrast to Clinton, Obama has not tried to dictate to Congress the details of the legislation; instead, he has provided general principles that he favors. That strategy has prompted plenty of second-guessing
“It’s hard to march if you don’t have marching orders,” said Charles Jones, a political science professor emeritus at the University of Wisconsin who has written several books on presidents’ relations with Congress. “If it’s ‘We may go this way or we may go that way,’ it is hard to go back to the office and say, ‘We know what we are doing here.’ “
But Sen. Sheldon Whitehouse, D-R.I., says that the more hands-off style does not show weakness but rather reflects a strategic decision by the White House about the best way to get major legislation passed.
“Once the White House made the decision to let Congress try to work out these issues, certain consequences followed,” Whitehouse said. “One was to keep a certain amount of hands-off to let us do our thing. People who have a particular cause or purpose in the debate would love to see the president, who obviously has the biggest voice in town, speak out and draw hard lines on issues that are important to them. There are a lot of people who are disappointed that he hasn’t. But I think that speaks more to the strategic decision to let us try to work this out through that period than it does to any lack of toughness on the part of the man himself.”
Even as he stayed out of the nitty-gritty, Obama weighed in to prod legislators to move the process along. Shortly after Sen. Jay Rockefeller, D-W.Va., chairman of the Finance Committee’s Health Subcommittee, signaled in early September that he was not going to support the measure that the so-called Gang of Six members of the full committee had produced, Obama met with him at the White House.
Rockefeller, a staunch proponent of the public option, had made no secret of his unhappiness that six panel members had been calling the shots. “The rest of us are sort of sitting there blinking,” he told reporters. “So it’s an unusual process. And I don’t think it’s a good one.”
Obama, a source said, made the case that the measure would be shaped more to Rockefeller’s liking as it wended its way through the legislative process. But he suggested, according to this source, that unless Rockefeller voted with him on the first step — to get the bill out of committee — they may never get to the final step.
Essentially, Obama’s message was that Rockefeller could trust him to improve the bill, though it would not be 100 percent of what the senator wanted. It was, the source said, both the carrot and the stick. Those efforts paid off when, on October 13, the senator from West Virginia supported the bill as the committee approved it. (Rockefeller was unavailable for an interview.)
Ultimately, the verdict on the efficacy of Obama’s style will depend in significant part on whether health care legislation passes, said Larry Sabato, a professor of politics at the University of Virginia. “Health care could be his hammer — if he gets it, he will have proven that his style works, that you don’t have to be an in-your-face LBJ type to get significant health care reform. But if it falls apart or he gets a tiny piece of it, then there will be criticism that he is ineffective and not tough enough.”