Obama’s Failing CBO Report Card on Jobs, Debt and Weakening Economic Growth
By Donald Lambro

The Congressional Budget Office gave us a forecast preview Wednesday of the frightening fiscal catastrophe that threatens to engulf the government in a sea of debt.

The CBO report by Congress’s nonpartisan budgeteers reads like one of those disaster movies in which America is under attack by an alien enemy that destroys everything in its path.

But this isn’t science fiction. It’s happening now and it is going to make Europe’s financial crisis look like an empty piggy bank.

CBO said that under President Obama’s out-of-control spending policies, we are running up another $1 trillion-plus budget deficit.

Our monster $15.2 trillion national debt will become a $21.6 trillion debt in 10 years. Medicare’s hospital insurance trust fund will be virtually emptied by 2022, two years earlier than President Obama predicted last year.

Social Security’s disability trust fund will run out of cash in five years, and the Medicaid health care program for the poor will explode under a crush of applicants as a result of a massive expansion under Obamacare.

Medcaid enrollment is now expected to skyrocket from 67 million people in 2011 to about 95 million in 2022.

CBOs economic forecasts, which to a large degree will determine whether Obama is re-elected to a second term, are even gloomier.

December’s ballyhooed 8.5 percent unemployment rate — which some of Obama’s liberal supporters dismissed as “a statistical fluke” — will climb to nearly 9 percent in the last three months of this year and rise to 9.2 percent in the first three months of next year.

Forget all the sugarcoating the nightly news shows are giving Obama’s dismal economic score card. CBO director Douglas W. Elmendorf doesn’t mince words about the looming disaster that awaits us.

“We have not had a period of such persistently high unemployment since the [Great] Depression,” he said.

CBO threw cold water on those rosy growth scenarios that the Commerce Department joyously crowed last week when it reported the economy grew at a 2.8 percent rate in last year’s fourth quarter.

Instead, CBO said that if there is no change in current law, economic growth, i.e. the gross domestic product, would slow down to an even weaker 2 percent rate this year and then to a feebler 1.1 percent next year.

Any GDP rate at around 1 percent or lower would mean that the economy has virtually stopped growing and would be teetering on the edge of another recession.

As a result of the spending policies put in place by the president since 2009, federal expenditures have exploded, and along with it, the deficits and debt.

CBO says the government this year will have to borrow nearly one- third of every dollar it spends. Obama’s 2012 budget will spend about $3.6 trillion, but tax revenue from a still very weak economy will be $2.5 trillion.

When Obama came into office, he said he would cut the deficit in half. But as he enters the fourth year of his troubled presidency, his dismal fiscal record on budget deficits is unprecedented: $1.4 trillion in 2009, $1.3 trillion in 2010 and $1.3 trillion in 2011, followed by an estimated 2012 deficit that will again be over a trillion dollars.

President Bush’s budget deficit, by way of comparison, was $458 billion in 2008 as the economy plunged into a recession. It was a manageable $161.5 billion in 2007 after seven years in office.

At the beginning of 2008, Bush’s last year in office, the government’s national debt was $9.3 trillion. Over the past three years of his presidency, Obama has added $4 trillion to the debt, with another $1 trillion in red ink still to come before next January.

Record deficits, record debt, and a prolonged four years of weak economic growth and high unemployment is not much of an agenda to run on this year.

The White House, however, is still living in a dream world of its own, claiming that the president’s economic policies are working.

“I know that the economic policies that this president has put into place, working with Congress and then, when necessary, without Congress, have had the effect of reversing the most dramatic negative trend in employment since the Great Depression,” said presidential spokesman Jay Carney this week.

In fact, the national unemployment rate when Obama took office in January, 2009 was 7.6 percent, up from 7.2 percent the month before. It has not only risen to well over 9 percent under his presidency, CBO now says that it will resume rising in the year to come.

Obama’s class warfare answer to the government’s looming deficits and debt, is to raise taxes on over-taxed Americans, nearly half of whom say they are struggling in his economy.

The White House and Democrats in Congress are still eyeing the Bush tax cuts that are due to expire at the end of this year. That will put more revenue into the Treasury, but it would also further undermine economic expansion, such as it is, which would weaken long term growth and reduce revenues.

The only answer to the fiscal catastrophe that faces us is to apply the brakes on spending and boost economic growth by keeping taxes low.

Instead of talking about taxing the rich, who are paying most of the income taxes now, Obama should call for tax reforms to lower the rates by eliminating many needless tax breaks, income exemptions and corporate welfare.

The plan to do that is in his own deficit-cutting commission report which he shelved without reading.

Obama’s 2012 Reelection Excuse: Don’t Blame Me, Blame Congress
By Donald Lambro

President Obama and his top campaign officials have mapped out a new 2012 reelection strategy: run against an unpopular Congress.

Obama, whose job approval polls have been relentlessly stuck at around 43 percent for much of last year, thinks he can convince enough voters that Congress is the cause of all the economic ills that still plague our country.

That’s right, the man Mitt Romney has been calling “the great complainer,” “the great blamer,” “the great excuse giver,” will run on a campaign platform that his policies are blameless. Its all the fault of Congress who won’t pass his latest economic stimulus plan to borrow and spend more money and raise taxes on investors, small businesses and corporations.

Forget about those lofty promises Obama made in his 2008 campaign speeches about stopping the bickering and changing the tone in Washington. White House aides told reporters last week that he is going to “double down” on what they call an “outside strategy” — that he is fighting for the middle class against a do-nothing Congress that has become the paymaster of wealthy special interests.

It’s going to get ugly, too, because when you attack the Congress, that includes everyone in it — the Democrats who run the Senate and Republicans who control the House. What will Harry Reid and Nancy Pelosi say about that?

But Obama and his aides think the best politics this year is to stay above the fray on Capitol Hill. He doesn’t exactly say this, but the implied message to his fellow Democrats — who will likely lose the Senate in November — is, “You’re on your own.”

“In terms of the president’s relationship with Congress in 2012… the president is no longer tied to Washington,” deputy press secretary Josh Earnest told the Washington Post over the holidays.

No longer tied to Washington? Does he really think he can just walk away from three years of impotent economic stimulus bills and the voters will forget what he proposed, or that it didn’t work? Or that he will be able to campaign around the country and ignore the economic and fiscal issues Congress will be dealing with over the course of the coming year?

Obama’s legislative war cry last year — “we can’t wait” — apparently has been changed to “You’re gonna have to wait until I’m reelected.”

But if he thinks he’ll be able to convince enough voters that Congress is to blame for what ails us and that he’s kept his promises, Republicans have a lethal counter-offensive strategy ready and waiting to strike back.

For months now, an army of opposition researchers at the Republican National Committee have been digging up every exuberant, exaggerated claim Obama has made in behalf of his policies. Those words are going to be thrown back at him between now and November, reminding the voters that he made over-the-top promises that remain unfulfilled. Among them:

– That his $800 billion spending stimulus bill would lift two million Americans out of poverty. In fact, the Census Bureau tells us that over six million Americans have fallen below the poverty income line during the past three years of his presidency.

– That his home foreclosure assistance program would “help between 7 and 9 million families restructure or refinance their mortgages.” Actually, his administration has spent a great deal less than it promised and helped only 2 million, at best.

– In his 2008 nomination acceptance address to the Democratic national convention, Obama said his plan to invest $80 billlion in clean technologies would create five million new jobs. So far, the money spent on the projects has produced nowhere near that jobs figure and has come under investigation for bankrolling loans sought by wealthy donors to Obama’s campaign.

Internal government documents obtained by a House oversight committee found that the program was heavily politicized, and included a fat loan to a solar panel business publicly promoted by Obama that later went bankrupt, costing taxpayers half a billion dollars. A Post investigation last month found that the program “was infused with politics at every level.”

– Appearing on the NBC Today Show in 2009, Obama said that if the economy did not recover within three years, “then there’s going to be a one-term president.”

These and other Obama remarks will be the source for a tidal wave of Republican videos on television and the Internet over the ensuing year. But none will be more ubiquitous than his claims that he’s stablized and turned the economy around since its plunge into the Great Recession.

But official government data draws a starkly different picture: A nearly 9 percent national unemployment rate; a weak economic growth rate that’s barely creeping along at a snail’s pace 1.8 percent; and millions of discouraged workers giving up and leaving the labor force because they cannot find jobs.

That’s the sober reality of the dismal Obama economy: weak capital investment, banks reluctant to lend, home values continuing to decline, college graduates unable to find jobs, and nearly a dozen states permanently stuck in double-digit unemployment.

A recent RNC ad uses Obama’s own words to indict his performance as president. An Internet spot titled “It’s Been Three Years” shows candidate Obama saying the “real question” is whether or not Americans will be better off in four years.

The ad flashes forwards to a one-on-one interview with ABC News analyst George Stephanopoulos last October in which Obama says “I don’t think they’re better off than they were four years ago.”

Solyndra is Simply the Beginning
By Donald Lambro

The White House’s half billion dollar loan to a now- bankrupt solar panel firm is just the first act in an emerging scandal of insider political influence over a deeply flawed, and possibly corrupt, clean energy program.

What has come to light so far as part of a congressional investigation is the administration’s willful order to approve a bad loan, despite dire warnings from a number of federal officials that the Solyndra corporation, a California-based solar panel maker, was in deep financial trouble.

A steady stream of government e-mails released by a House Energy and Commerce subcommittee tell a sordid tale of a company that President Obama turned into an energy showcase for his $40 billion loan program — until it went bankrupt in August, putting 1,100 employes out of work.

One of the people promoting Solyndra’s $535 million loan, which will now have to be paid by federal taxpayers, is Steven J. Spinner, a senior Energy Department adviser, a major fundraiser for Obama, and a Silicon Valley investor who was given the job of guiding the government’s clean technology investments.

He was not only one of Solyndra’s unabashedly inside defenders, his wife worked for the California law firm that represented the solar company and helped it file for the government loan her husband was promoting.

While internal concerns were raised about Solyndra’s shaky finances as early as the summer of 2009, Spinner e-mailed a top aide to then-Chief of Staff Rahm Emanuel that Solyndra was a financially solvent company that fully deserved the administration’s support.

“I haven’t heard anything negative on my side,” he told Emanuel’s aide in an e-mail about the warnings. “I… have no idea what they’re referring [to].”

As the loan deal stalled over internal criticism of the firms’ looming insolvency, Spinner grew more impatient. “How [expletive] hard is this?” he wrote to a career Energy staffer on Aug. 28, 2009 about its delayed clearance by an Office of Management and Budget official.

“What is he waiting for? Will we have it by the end of the day?”

But internal complaints from OMB and Treasury about Solyndra’s dubious finances as well as the favorable terms of its loan persisted.

That sparked further internal debate over the legality of the loan’s revision, though to no avail.

Dismissing warnings that the government’s restructuring of the loan was illegal and should be reviewed by Justice Department attorneys, Energy officials moved ahead with changes in February that required Solyndra’s investors be repaid before taxpayers if the company defaulted on its debt.

Other e-mails released by the House panel last month reveal a politically pressured program that was heavily influenced by powerful special interests who had a stake in its outcome.

“In an administration that said it would curtail lobbyists’ influence, the documents show ardent lobbying by political appointees inside the agencies and significant White House access given to venture capitalists with a major stake in the $40 billion stimulus investment program for clean energy,” the Washington Post reported last month.

One of these venture investors was David Prend, whose company, Rockport Capital, was a Solyndra backer. He met with White House officials about the deal in March of 2009.

“It was great to meet you with [then-White House climate adviser] Carol Browner last week,” Prend wrote. “I look forward to working with you to get the message out and to effect real change in the Energy Industry. I will follow up shortly on 2 of the companies we discussed,” he said. One of them was Solyndra.

But e-mails from government officials to Energy officials, who were responsible for reviewing the deal, were growing increasingly critical of Solyndra’s rising debts and declining revenues.

“DOE… has one loan to monitor and they seem completely oblivious to this issue,” an OMB analyst wrote on April 2, 2010.

“What’s terrifying is that after looking at some of the other [loan guarantee projects] that came next, this one [Solyndra] started to look better,” a budget analyst e-mail said.

“Bad days are coming,” another OMB analyst wrote, referring to other shaky companies the Department of Energy prepared to invest in next as part of Obama’s loan guarantee program.

As news stories proliferated about Solyndra, and the president’s job approval polls sank further last month, House Energy Chairman Fred Upton of Michigan, and Rep. Cliff Stearns of Florida, who chairs its investigating subcommittee, accused the White House of “stonewalling” its demands for further documents about the West Wing’s role in the scandal.

“What is the White House trying to hide from the American public,” the two Republicans said in a statement last week, warning they will be forced to subpoena the requested documents if they were not forthcoming.

Last week, in an effort to blunt the GOP’s demands, White House Chief of Staff William Daley ordered a 60-day review to evaluate the administration’s entire $35 billion loan portfolio. That may be too little, too late. Insiders say that future loans may be in trouble as well.

Meantime, other internal White House e-mails show that there was a growing fear within the Obama administration that Solyndra’s finances were weak when it was given the green light. Indeed, one unusually blunt White House e-mail suggested that the Energy Department was woefully “ill-equipped” to make these kinds of investment decisions.

So hang on to your wallet. Look for more failed loans in the months to come.

Is Obama Losing Party Support?
By Donald Lambro

President Obama was back on his bus this week, promoting yet another job bill in the diminishing hope that it might help him hang on to his own.

Just days after the Democratic-controlled Senate failed to muster enough support just to make his bill the pending business, he was venting in North Carolina, threatening Republicans and blaming Wall Street again for America’s unending recession for which he accepts no responsibility.

Conveniently ignoring that two Senate Democrats voted against his tax and spend bill last week, while others held their nose and voted aye, Obama said Republicans would pay a very heavy price for voting to kill his proposal.

“If they vote against these proposals again, if they vote against taking steps now to put Americans back to work right now, then they’re not going to have to answer to me, they’re going to have to answer to you,” the president said at a campaign rally Monday.

But Obama’s third or fourth jobs bill may be a hard, if not downright impossible sell in North Carolina, a state he barely carried by the skin of his teeth in 2008 by less than 1 percentage point and where unemployment has surged to a hope-crushing 10.4 percent under his presidency.

Obama wasn’t here, though, to win over new voters to his banner but to appeal anew to a wavering political base, especially dispirited black voters

In the Tar Heel state, where Democrats will converge next year to dutifully renominate him for a second term, “Obama’s most ardent supporters in Durham’s black community worry that waning enthusiasm among African-Americans may prevent him from repeating his razor-thin North Carolina victory of 20008,” writes Boston Globe reporter Tracy Jan.

Jan quotes an unemployed, 52-year-old black woman standing in line at the employment office, saying she “can’t muster the will to support Obama for a second term.”

“I don’t see what he’s done. I’m not even going to waste my time and vote,” this Democrat said.

In Durham County, where the president spoke, nearly 20 percent of its black voters are jobless and Obama’s job approval rating has dropped, even among this most loyal constituency who have suffered under his rule more than any other segment of the state’s electorate.

Nationally, black unemployment has surged to 16.7 percent, the highest since 1984, and a front page story in Tuesday’s Washington Post is ominously titled, “Can Obama hold on to black voters in 2012?”

Many hardpressed North Carolina Democrats must be asking if his first $800 billion-plus jobs bill failed to ignite the U.S. economy, why will this latest tax and spend bill, at roughly half the price, be any different? Or is this bill just another taped-together, repainted campaign prop for the 2012 election to give the president some cover?

Obama headed into the weekend before his three-day bus tour began, dogged by a lengthening list of Gallup polls that painfully illustrated why surveys show that 75 percent of Americans say the economy is “getting worse.”

Among Gallup’s findings:

– 19 percent of Americans say they are struggling just to afford food and, overall, “fewer Americans had access to basic life necessities in September.”

– Thirty percent of 18-29-year-olds are unemployed or underemployed, forced to to take temp or part-time jobs. Thousands of college graduates say they cannot find any jobs at all.

– If the plethora of “Where Are The Jobs?” signs among the Occupy Wall Street protesters accurately reflect their anger, these young people are also among the victims of Obama’s failed economic policies and his empty promises that unemployment would be below 8 percent by now.

– The Washington Post reported Monday that recently returning military veterans “have an unemployment rate of 11.7 percent,” well above the national 9.1 percent jobless rate.

These and other survey numbers are more than tragic human statistics, they are the sad story of a great nation in a decline, led by an incompetent administration whose ill-fated policies have worsened an economy that should be on a sharp upward trajectory by now.

The network news shows keep downplaying Obama’s troubles by reporting his job approval numbers are in “the low to mid-40s.” In fact, Gallup’s daily polls showed his approval numbers dropping to a low of 38 percent for the first time Friday and again on Saturday, with a high of 54 percent disapproving his presidency.

Throughout the first half of this year as the mediocre Obama economy grew weaker and unemployment rose, much of the news media took comfort in reporting that, while the president’s polls were falling, the Republicans’ were worse in generic surveys.

But at the end of last month, Gallup asked voters this simple and apropo economic question: “Looking ahead for the next few years, which political party do you think will do a better job of keeping the country prosperous?”

The response: 48 percent answered “the Republicans,” 39 percent said “the Democrats,” and 13 percent had “no opinion.”

Notably, Gallup asked the same question about which party would do a better job of “protecting the country from international terrorism and military threats?” The GOP led that one by an 11 point margin.

Obama’s taxpayer-paid bus trip took him into Virginia on Tuesday, a state he won in 2008 but now appears to be the underdog. In a further sign of his weakness, Obama’s former Democratic National Committee chairman Tim Kaine, who is running for the Senate, was expected to be noticeably absent on the tour, according to the Associated Press.

A further embarrassment for the president: prominent Democrats in the state urged the White House to readjust his scheduled campaign stops so that Obama would not be visiting battleground districts where local Democrats face tough elections.

Forget for the moment the coming political battle with Republicans, Obama is now struggling just to win back the support of his own party.

Obama’s Zig Zags Reflect Lack of Strategy
By Donald Lambro

President Obama’s job approval score sank to nearly 40 percent this week in the midst of a budget and debt-limit crisis that threatens to further weaken our economy and America’s future.

With the nation’s capital embroiled in a political standoff over how to deal with a looming $15 trillion debt and a line of trillion-dollar-plus deficits stretching as far as the eye can see, the president’s prospects of winning a second term are extremely problematic at best.

The Gallup Poll reported that its daily tracking poll Wednesday showed Obama’s job approval numbers have fallen further in the budget battle, with only 42 percent approving of the job he’s doing and 48 percent expressing disapproval.

“This is the sixth straight quarter Obama has received less than majority approval. As a result, his average job approval rating has been below 50 percent for more of his presidency than it has not,” Gallup said.

As a satisfactory solution to the government’s crisis grows more remote with each passing day, Obama’s problems are piling up faster than his excuses.

Three-fourths of Americans polled by Gallup this month said the economy was their top concern, including rising unemployment and meager job creation, and the unprecedented deficits and debt that will worsen between now and the 2012 presidential election.

Obama is getting pounded almost daily by an unending string of bad economic news. Major financial credit agencies are preparing to downgrade our country’s AAA bond rating, which would drive up the cost of future borrowing, along with other interest rates for home mortgages, credit cards, college and business loans, and just about everything else. Economists said it would be the same as imposing higher taxes on every sector of our economy.

If you think last month’s 9.2 percent unemployment rate was bad, brace yourself. The jobless rate will likely climb higher in the months to come, according to new economic data.

The Labor Department reported Thursday that new claims for unemployment benefits shot up more than economic forecasters expected last week. Initial claims rose by more than 10,000 to a seasonally adjusted 418,000, showing that declining job creation remains a severe problem in the Obama economy. And it’s only going to get worse.

“Over the next decade, the picture is even less rosy, because Treasury Secretary Timothy Geithner tells us the economy is likely only to grow at its present slow pace for many years,” University of Maryland economist Peter Morici writes in his analysis this week.

The Wall Street Journal reported Thursday that “companies are laying off employees at a level not seen in nearly a year, hobbling the job market and intensifying fears about the pace of the economic recovery. … The increase in layoffs is a key reason why the U.S. recorded an average of only 21,500 new jobs over the past two months, far below the level needed to bring down unemployment.”

As for dealing with the government’s burgeoning debts, most if not all of the pending proposals to cut spending and shrink the deficit would postpone the heavy lifting much later in this decade for future Congresses that could reverse course.

Even if the House-passed constitutional amendment to require a balanced budget (which I support) were to be adopted by Congress (though it is presumed dead in the Senate), it would likely take years to win three-fourths of the states needed for ratification.

Obama is changing or abandoning his positions and political strategies almost weekly as he erratically bobs and weaves his way through the crisis without a consistent strategy.

He began the debt battle by demanding that he be sent a clean bill raising the debt ceiling, without any spending curbs. Democrats who ran the last Congress with huge majorities never adopted a budget of their own, and without a bit of complaint from the president. His tax-and-spend budget proposals in February made no serious dent in the deficits.

Then, as Republican leaders escalated their demands for deep spending cuts in exchange for raising the debt limit and weekly polls showed growing voter concern about the deficits and debt, Obama suddenly turned into a born-again budget cutter. He appeared to talk tough at George Washington University in April, but never offered a specific budget proposal.

When there was talk in Congress about a limited debt-limit bill of a few months at most, Obama said he would veto any short-term bill. It was all or nothing, he huffed.

His theatrical threat disappeared into hot air Wednesday when he said he was now open to a short-term deal to give both sides time to work out a comprehensive deal.

A president who lurches one way and then lunges another, tossing out empty political threats and pronouncements, only to retreat from them when he finds himself in a hole, isn’t a leader.

He’s the artful dodger, trying this and then that in the hope that something will work in the absence of a well-thought-out plan of action.

A new Washington Post-ABC News found that a full 80 percent of Americans now disapprove of the way the government is working. No, make that, the way it ISN’T working.

Obama Must Meet GOP Deal, Or No Deal
By Donald Lambro

The debt limit battle is heating up, the second of three 2011 heavyweight budget fights whose outcome could have a major impact on the 2012 presidential election.

The national debt will near its statutory limit of $14.3 trillion next week unless Congress allows the Treasury to continue borrowing enough money to pay the government’s bills. House Speaker John Boehner said Monday that Republicans would let this happen only if President Barack Obama and the Democrats agree to major budget reductions, with no tax increases.

The GOP’s demand: $2 trillion in spending cuts or it’s no deal.

The American people are justifiably fed up with deepening deficits and debts that have weakened our economy and undermined future prosperity. They don’t like the out-of-control spending of the past two years, nor the gimmicks that have permeated budget policies. They want the political game-playing to stop and the adults to take charge of reining in spending without endangering economic growth and new job creation.

President Obama has been lurching all over the place on budget strategy, throwing down the gauntlet against Republican budget cuts in last month’s speech, which was dripping in presidential politics and offered little in the way of significant budget cuts.

The spendthrift budget plan the president submitted in February for 2012 was dressed in nice-sounding words that hid its true intent. “Rather than fight the same tired battles that have dominated Washington for decades, it’s time to try something new. Let’s invest in our people without leaving them a mountain of debt,” he wrote in his budget.

“Fine words. Unfortunately, his budget is almost a line-by-line repudiation of this policy,” Heritage Foundation economist J. D. Foster wrote in a budgetary analysis then. Under Obama’s budgets, the deficit this year will swell to a record $1.645 trillion, and the national public debt over 10 years would rise by $7.2 trillion, Foster says.

The president’s words are “couched in terms of fiscal restraint and fiscal discipline. The numbers tell a different story,” he adds.

But then Obama’s polling numbers, giving him poorer marks on budget policy, forced a change in tone if not in strategy.

This week, in an hour-long strategy session with Democratic leaders in Congress, Obama urged them to cool their rhetoric in the negotiations to come and warned them not to “draw a line in the sand.”

From the White House’s perspective, the debt limit is nothing to fool around with. Without borrowing authority, Treasury Secretary Timothy Geithner would have to forgo payments on our debts, though he has tools at his disposal that allow him to keep paying the bills through Aug. 2.

Still, just the hint that the debt limit would not be lifted would send domestic and international financial markets into turmoil along with our own economy, plunging the dollar and threatening another recession, which would end Obama’s prospects for a second term.

Obama is now caught between his own spend-like-there’s-no-tomorrow policies and his leftist political base, which opposes any cuts in spending. The far left Moveon.org is urging all Democrats not to agree to any deal that includes cutting Medicare.

Meantime, several dozen business groups, including the U.S. Chamber of Commerce and some of the nation’s largest banks, sent a letter urging lawmakers to raise the debt ceiling in “timely” steps but said nothing about spending cuts.

“Raising the statutory debt limit is critical to ensuring global investors’ confidence in the creditworthiness of the United States,” they said.

In the end, the debt limit will be raised — perhaps in incremental steps — with an agreement to cut spending by some amount over the next 10 years.

However, it isn’t exactly clear how much that debt-limit agreement will govern the third battle to come this summer over the size and shape of the 2012 budget and the appropriations to put it into effect.

My guess is that Boehner and the House Republicans have the upper hand in this titanic struggle over the size and cost of our government.

The Democrats have a firewall in the Senate that can kill any bill that comes from the House. But Obama also understands there will be no agreement on the debt limit or next year’s budget unless his side meets the House at least halfway or more. And that he cannot afford to head into the 2012 election year without putting the nation’s fiscal house in order.

Obama said, “Showing an unwillingness to compromise would not only limit the ability to reach a deal with Republicans but could also have a negative impact on financial markets,” the Washington Post reported Wednesday.

Geithner has painted an ominous picture of what would happen to the economy if the debt limit isn’t raised, but Obama’s political advisers have crafted an even bleaker outlook of his bid for a second term if the country descends into economic turmoil again.

Boehner’s tough no-budging stance on spending cuts speech in New York this week came at the right time. Obama got the message.

Obama’s Failing Fronts
By Donald Lambro

Can President Obama be defeated in his bid for a second term? It depends, of course, on whom Republicans choose as their candidate, but it’s clear that Obama is vulnerable on several major fronts.

His overall job approval polls, which had sunk into the 40s, rose after U.S. Special Forces killed Osama bin Laden. The latest Gallup poll puts his job approval/disapproval rating at a tenuous 51 percent to 40 percent. But the weak, high unemployment economy remains his Achilles heel and his lowest job approval number. Just 37 percent approve of Obama’s handling of the economy, according to an NBC News poll out this week. That’s down from 40 percent in January.

This is the pivotal issue on which Obama will win or lose a second term, and right now the American people and most economists do not see things improving anytime soon. Just 31 percent expect the economy to get better in the next year, and economists at the Fed do not see unemployment falling to normal levels until 2013.

Two bleak numbers tell the story about the Obama economy. The unemployment rate last month rose to 9 percent, despite the 268,000 private sector jobs created in April. The economy barely grew in the past three months, with the nation’s economic growth rate falling from a modest 3 percent in the fourth quarter of 2010 to this year’s anemic 1.8 percent from January to March.

Economic growth that falls below 2 percent is not enough to make even a dent in the jobless rate, which rose last month because many long-term unemployed workers who dropped out of the workforce began looking for jobs again and were counted in the labor pool.

Nearly 14 million Americans are unemployed and more than 40 percent of them have been jobless for 27 weeks or more. Nearly half the states, including the largest industrialized states, have been struggling with unemployment rates of 9 percent or more. Nearly a dozen states are in the double digits.

In recent weeks, new unemployment claims have skyrocketed as high as 474,000 in a single week. Little wonder that most Americans do not expect the jobs picture to improve under Obama’s hands-off approach to economic issues — from over $4 a gallon gas prices, to his failure to act on pending trade agreements that would open up new job-creating export markets for American products.

The other front where Obama is seen as irresponsible and weak is government spending.

In 2007, the year before the economy plunged into the recession, the federal budget deficit was a tame $151 billion, federal revenues rose to a record $2.6 trillion, unemployment was at a low 4.7 percent, and the Dow had soared to over 14,000.

By 2011, the third year of Obama’s presidency, federal spending has soared to nearly $4 trillion and the yearly deficit has skyrocketed to $1.6 trillion. “That means 40 percent of what Washington spends is borrowed,” says Heritage Foundation president Ed Feulner.

The government’s debt has dangerously ballooned to more than $14 trillion or nearly the sum total of our gross domestic product, or all of the goods and services we produce. An economic analysis by Standard and Poors warns that the United States could lose its AAA bond rating as a result.

Americans correctly see the poor fiscal health of our government as part and parcel of our economy’s troubles. The “lack of resolve to deal with federal budget woes is curbing businesses appetite for risk taking and hiring,” says University of Maryland economist Peter Morici.

More than any other political issue, Americans tend to vote first and foremost on the economy. Obama won on that issue in 2008, but he could lose on that same issue if there isn’t an improvement on the jobs front as he heads toward 2012. But that seems unlikely under his anti-growth policies and the specter of the Bush tax cuts expiring at the end of next year that could keep employers from hiring now.

Who could beat Obama?

The Republican presidential bench is still coming together, though slowly, in the belief that Americans are turned off by long, two-year election cycles. The leader of the pack is still former Massachusetts Gov. Mitt Romney, who won 11 Republican presidential primaries in 2008 and came in second in 11 others. Romney, a venture capital business leader who helped a number of start-up companies before entering politics, has made it clear that the major issue of our time is the economy and that he knows how to fix it.

Other governors or former governors make up the first tier of the GOP’s potential lineup, including Tim Pawlenty of Minnesota, John Huntsman, Jr., of Utah, and possibly Indiana Gov. Mitch Daniels. All of them know how to cut spending and balance a budget, and all have turned their states’ economies around.

There are other GOP contenders, but this is a time when I think the voters will be looking for someone with proven executive experience who knows how to squeeze the fat out of government and create a climate for economic expansion and job creation. Let the games begin.

2011: The Republican Congressional Agenda
by Donald Lambro

he new Republican-leaning Congress will get down to business in a few days to deal with the concerns of voters who were unhappy with the gang who ran the last Congress.

“Republican-leaning” may be an insufficient term for the incoming Congress. The Republicans, who crushed the Pelosi Democrats with a net gain of 63 GOP seats, now rule the entire House, its legislative machinery, oversight powers, and all tax-revenue measures, which must originate in the so-called lower chamber.

No legislation becomes law without the consent of the House, and those 63 largely rock-ribbed conservative members are in no mood to pass the rest of President Obama’s big-spending, liberal agenda. Indeed, they want to repeal major parts of his earlier agenda.

The Senate, on the other hand, is still controlled by the Democrats, though Republicans have six more members now, shrinking Senate Democratic Leader Harry Reid’s liberal majority to a tenuous three-vote margin. But several members of Reid’s army, who come from conservative states, are on the ideologically endangered-species list in 2012 and might not be so eager to vote the party line next year.

If the White House hopes to pass anything in the Senate over the next two years, it will first need the approval of Republican Leader Mitch McConnell of Kentucky, and Obama will be the first to admit that McConnell’s approval is hard to get. Color the Senate reddish.

But what are the Republicans planning to do with their newfound power? They ran on a campaign pledge to grow the economy, put Americans back to work, apply the brakes on reckless spending and spiraling debt, because that’s what the voters told them they wanted done.

“In short, the Pledge is the plan,” Brendan Buck, chief spokesman for incoming House Speaker John Boehner, told me. “This fall, we laid out our Pledge to America, an agenda that reflects the people’s priorities: creating jobs, cutting spending, and repealing the job-killing Obamacare law. Without tipping our hand too early on tactics, those will be our priorities in the new year.”

How will they create more jobs? By boosting economic growth through new tax incentives to unlock needed venture-capital investment for start-up firms, and lowering tax burdens for all business, workers and investors. Don’t expect more of Obama’s spending stimulus plan, which dumped hundreds of billions of dollars into government spending that disappeared into a black hole and created few jobs, as 10 percent unemployment clearly confirms.

The late, great tax-cut crusader Jack Kemp used to say that you couldn’t have more employees without more employers.

Starting or expanding businesses takes money from risk-taking entrepreneurs. We need to enact tax policies that offer incentives for new capital formation, like cutting the capital-gains tax, as President Clinton did in his second term when the economy soared, jobs were plentiful and incomes rose.

Obama not only condemned tax-rate reduction to get the economy growing again (until he and his party got a shellacking in the midterm elections); he wanted to raise taxes on investors, capital gains, corporations and Wall Street.

He has rarely sought the advice of top business leaders during his presidency, and you won’t find one among his advisers or in his Cabinet. But if you ask business leaders, they will tell you the new Congress needs to do just the opposite of what Obama has been doing.

“We have heard candidates on both sides of the aisle talking about the importance of economic recovery, growth and job creation,” says Jay Timmons, the incoming president of the National Association of Manufacturers.

“The way to ensure these important goals are met is to adopt lower tax rates, open new markets through free-trade agreements, lower energy costs by expanding domestic access … and curtail burdensome and overreaching regulations that stifle growth,” he said.

For the past two years, as unemployment climbed steadily higher, Obama sat on the South Korea, Colombia and Panama free-trade agreements. He finally embraced the agreement with Seoul but has sought no new bilateral-trade pacts that would risk offending powerful union bosses.

Wonder why gasoline is so expensive? U.S. moratoriums on offshore drilling have pushed gas prices to over $3 a gallon.

The incoming Republican-leaning Congress is already at work on these and other issues.

House Republican leaders say they are combing the budget for big spending cuts to come as soon as Obama submits his spending proposals. Over at the House Financial Services Committee, they’ve already begun going through the Dodd-Frank financial-regulation law “provision by provision.”

An economic-growth and job-creation bill is being worked on as well and will be one of the first pieces of legislation Republicans will bring to the House floor early next year.

Obama now says he’s willing to work with Republicans in the new Congress. They’re going to give him plenty of opportunities to do so.

Obama Outmaneuvered in Tax Cut Battle
by Donald Lambro

President Obama went before the White House press corps Tuesday, blaming the Republicans for boxing him into a very difficult position that forced him to cut a deal to extend the Bush tax cuts.

He betrayed the irritated tones and combative rhetoric of a sore loser who got the raw end of the deal that he wished he didn’t have to make. He accused Republicans of engaging in hostage taking, and said they worshiped the “holy grail” of tax cuts for the rich.

The latter charge is pure demagoguery. Republicans, to quote the late tax-cut crusader Jack Kemp, “worship at the altar of economic growth” and lower tax rates for everyone. Like President Kennedy, who cut taxes across the board, they believe “a rising tide lifts all boats.”

But it was the Democrats, not Republicans, who were responsible for the end-of-the-year, lame-duck bind that Obama found himself in, and Republicans were forced to play the restricted legislative hand they had been dealt by the party in power.

Nowadays it takes 60 votes to make controversial legislation the pending business in the Senate, where the rights of the minority are zealously protected and, yes, exploited by both parties when it serves their interests.

But with his party’s congressional liberals, whom Obama called “sanctimonious,” accusing him of caving on his campaign pledge to raise taxes on the rich, the president fell back on a lame excuse: I was outmaneuvered by the Republicans.

Legislative maneuvering is an art form that Senate Republican leader Mitch McConnell has mastered almost to perfection. It is quite remarkable that, with a little more than 40 GOP senators on his side of the aisle, he has managed to hold his party together through many difficult votes — and attract some Democrats to his side, which isn’t easy to do.

Liberals complained that Obama wouldn’t have been put in this position if Democrats had acted on the tax extension earlier in the year. But Senate Majority Leader Harry Reid kept putting it off. Why? Tax-happy Democrats like Sen. Barbra Boxer of California and others, who were in tough re-election fights, begged him not to schedule a vote until after the election because they did not want to be seen voting to raise taxes on anyone. Reid complied and the result was a one-month deadline that gave the Republicans a strategic advantage and boxed in the president, forcing him to hold his nose and go for a quick compromise or else see taxes rise on every American.

So Republicans not only got a two-year extension of the Bush tax-rate cuts, instead of making them permanent as they wanted, but also something more.

Legislative statecraft is sort of like a chess game in which you have to think several moves ahead of your opponent, and the Republicans appear to have done that in this deal, which could give them a strategic advantage once again in the coming presidential election cycle.

Now, if the deal is approved, the Bush tax rates will expire at the end of 2012, a year when 23 Senate Democrats, many vulnerable to upsets, will be up for re-election. A number of them will not be eager to vote to raise taxes, especially in those states where Democrats got a drubbing in 2010.

With the Republicans soon in control of the House and in de facto control of the Senate, a well-timed vote just before the 2012 elections could result in making the tax cuts permanent, possibly with additional GOP tax cuts to boot. Will Obama, with his re-election on the line, dare to veto a bill that will effectively raise taxes on everyone? Unlikely.

Clearly, he has suffered significant collateral damage among his base in the party’s dominant liberal wing since he gave away the Democrats’ holy grail: raising taxes on the rich.

“Watching the tax-cut negotiation has been like watching a car crash in slow motion … The president’s commitment to bipartisanship should not mean leaving principles behind,” Justin Ruben, executive director of the far left MoveOn.org, said in a statement.

Labor unions are in rebellion, too. “This tax-cut deal rewards Republican obstructionism by giving the wealthy the tax breaks they demanded,” said AFL-CIO president Richard Trumka.

You would think the labor leader would be cheering the one-year extension of unemployment benefits and 2 percent cut in the federal payroll taxes for workers, which would result in an extra $120 billion in their take-home pay next year, and would have its heaviest impact on low to middle-income Americans.

But no. “The gains for the middle-class and jobless workers in the deal come at too high a price,” Trumka said in a statement.

In the real world outside of Washington, though, where an anemic economy makes for daily struggle, Democratic governors like Michigan’s Jennifer Granholm and big-city mayors like Detroit’s Dave Bing were endorsing the deal.

The latest count shows a growing number of Senate Democrats were getting behind it, too, making a threatened filibuster by Vermont socialist Bernie Sanders futile.

America’s experiment in bigger government, higher spending and draconian tax rates is coming to an end.

It’s the Economy, Dems
by Donald Lambro

The economy is tanking. Economists say it has slowed to a near comatose 1.5 percent growth rate, unemployment claims were at a nine-month high and jobs are scarce, yet President Obama is focusing on corporate campaign donations.

While the economy is the clear overriding issue in the midterm elections, threatening to topple Democrats from power in Congress, Obama was devoting his weekly radio address last Saturday to an issue far from the real concerns of workers, families and employers struggling to survive.

If anyone is looking for signs Obama is completely disconnected from the failing economy, his radio address blaming Republicans for blocking his legislation to place restrictions on corporate campaign donations delivered that in spades.

With polls showing Obama’s job approval rating slipping to 43 percent last week because of the economy, Democratic strategists grumble privately that the White House has a “tin ear.” Republicans said Obama’s focus on campaign politics instead of policies to get the economy growing again showed how much he wanted to change the subject in this year’s elections.

“Americans want us to focus on jobs, but by focusing on an election bill, Democrats are sending a clear message to the American people that their jobs aren’t as important as the jobs of embattled Democrat politicians,” said Senate Minority Leader Mitch McConnell in response to Obama’s remarks.

But the Obama administration remained in deep denial about the declining health of the U.S. economy, insisting that it was “moving in the right direction,” dubbing it the “Recovery Summer” and declaring that economic growth was “growing at a good clip.”

A few weeks ago, Vice President Joe Biden predicted the creation of between 250,000 to 500,000 jobs was just around the corner.

But as the summer draws to a close, and with the elections a little more than two months away, those jobs are nowhere to be seen. If anything, the economy’s health was worsening, and this administration didn’t seem to have a viable plan to pull the country out of its economic decline.

Among recent developments:

– Last week the government reported that more American workers had filed for jobless benefits than at anytime since last November. Unemployment-benefit claims rose by 12,000 to 500,000 for the third straight weekly increase — the first time claims had hit the half-million mark in nine months.

– While the official unemployment rate stood at 9.5 percent in July, the real jobless rate is much higher than that. Factor in the 1.2 million unemployed who have given up looking for work and have dropped out of the labor force, plus those who want full-time work but can only find part-time jobs, and the national unemployment rate is 16.5 percent.

– The housing industry has sunk into a deeper slump, with nearly half of homeowners who enrolled in Obama’s mortgage relief plan dropping out — raising fears that foreclosures may increase in the second half of the year.

– Other troubling signs point to growing economic desperation in the workforce. Longterm unemployed Americans are forced to apply earlier than they planned for Social Security benefits in an attempt to make ends meet. And a record number of workers are withdrawing funds from their 401(k) retirement accounts to pay their household bills and put food on the table.

Meantime, the Obama administration is planning to slam the U.S. economy with the largest tax increase in American history by letting President Bush’s 2001 and 2003 top income tax rate cuts expire at the end of this year.

Beleagured businesses, both large and small, have been saying all year that this will deeply hurt the economy, risk-taking investors and job creation, but the White House and Democratic leaders are stubbornly determined to go ahead with their big-spending tax-hike plan.

It isn’t just the business community saying higher taxes will weaken the economy: the nonpartisan Congressional Budget Office is saing it, too.

A CBO analysis released last week said permanently extending the Bush tax cuts would give the country a “considerable” economic boost over the next few years.

“Under that… scenario, economic growth would be stronger next year; unemployment would be lower next year,” said CBO director Douglas Elmendorf, who was appointed to his post by Democratic leaders in Congress.

Moreover, “under current law, both the waning of (Obama’s) fiscal stimulus and the scheduled increases in taxes will temporarily subtract from growth, especially in 2011,” CBO added.

Notably, a growing number of Democratic candidates are also urging Obama and their party to keep the lower tax rates in place, saying it would be the height of economic folly to raise income taxes on the people who create jobs at a time when the economy is in a steep decline.

Some of the don’t-raise-taxes Democrats are Senate candidates in critical battleground contests, including Missouri Secretary of State Robin Carnahan, Rep. Brad Ellsworth of Indiana and Rep. Charlie Melancon of Louisiana.

When Ronald Reagan cut tax rates across the board in the 1981-82 recession, the economy surged into a spectacular recovery, with quarterly rate increases of between 4 percent and 9.3 percent over the next several years.

There’s a message there somewhere for the stubborn Obama Democrats to consider.

For GOP, Hearings Will Bring Opportunities
by Donald Lambro

After all is said and done in Judge Sonia Sotomayor’s confirmation proceedings, the fact of the matter is that she will not change the ideological makeup of the Supreme Court.

The appeals-court jurist will replace retiring Justice David Souter, one of the high court’s four reliably liberal members. Many, if not most, of the cases heard by the conservative-leaning body are decided by 5-4 votes, and that ratio will remain unchanged.

For that, conservatives have President George W. Bush to thank. He is responsible for choosing Chief Justice John Roberts and Justice Samuel Alito Jr., who shifted the court decidedly to the right. Both are still relatively young men and are expected to be on the court for many years to come. If further vacancies occur during Barack Obama’s presidency, it’s more than likely they will be among the older, much more liberal side of the bench than among its conservative warriors.

Sotomayor’s confirmation is certainly not in doubt, especially with the number of Democratic senators pushing dangerously close to the 60 mark; nor is her mark in the court’s history as the nation’s first Hispanic justice and her compelling life story that has taken her from public-housing projects to the pinnacle of judicial achievement.

But her left-wing record and controversial remarks have raised deeply troubling concerns about legislating from the bench and racial prejudice that will give the Republicans plenty of ammunition in the testy confirmation debate to come.

Republicans won’t be able to block her confirmation, expected in early August, if not before, but they will be able to exploit a number of issues that cut across all political lines — especially the issue of reverse discrimination in the workplace.

After the Souter announcement, Obama said he wanted a Supreme Court nominee who has an empathetic “common touch” on the bench. That suggests someone who is an “activist judge,” who is willing to look beyond the law, or perhaps, in some cases, disregard it altogether in order to reach a socially desired decision.

Sotomayor seemed to suggest that she was one of those judges when she said at a 2005 forum at Duke University that the appeals court is “where policy is made.” She quickly tried to soften that remark by joking that she knew she should not have uttered such words at an event that was being recorded, adding that judges should never say they “make law.”

Sen. Orrin Hatch, the ranking Republican on the Judiciary Committee who voted for her confirmation to the appeals court in 1998, said that if such comments “mean what they look like they mean on the surface, it means you’re going to get an activist justice on the Supreme Court.”

But the most politically volatile remark Sotomayor has made could be when she said a Latina would often “reach a better conclusion than a white male who hasn’t lived that life.”

That not only raised eyebrows among Republicans but also among some Democrats who feared it sent a troubling, racially charged message to the white working-class base of their party that the GOP could effectively exploit in next year’s midterm elections.

Last week, Hatch jumped on her remarks in a statement, saying that in the confirmation hearings to come, “I will focus on determining whether Judge Sotomayor is committed to deciding cases based only on the law as made by the people and their elected representatives, not on personal feelings or politics.”

But Sotomayor’s troubles don’t end there. She will also have to defend her reverse-discrimination vote in a race-based employment-promotion case that is now before the Supreme Court and will likely be decided — and get a lot of media attention — shortly before her confirmation hearings.

In 2003, some white New Haven, Conn., firefighters brought a lawsuit against the city; in Ricci v. DeStefano, they claimed to be the victims of racial discrimination when promotion tests they had passed were thrown out after finding that none of the black firefighters had qualified for promotions.

Sotomayor, in an unsigned three-judge appeals-court opinion, upheld the lower court’s ruling that denied a lawsuit by the white firefighters.

Liberal activist judges making policy from the bench, personal prejudicial empathy trumping constitutional law and reverse-discrimination rulings — all of these are highly explosive, deeply emotional issues that have the potential to hurt Obama and the Democrats in future elections.

There is no doubt they are going to be front and center in the Senate confirmation drama about to unfold in the coming weeks.

A reading of Sotomayor’s earlier confirmation hearings shows that she is more than able to handle the toughest senatorial interrogation and she knows how to defuse troublesome issues with ease.

Asked in 1997 about liberals who argue that the Constitution has to be reinterpreted in the modern age, she told Sen. Strom Thurmond that she did not agree with those who believe the nation’s governing document should be read only in terms of what “the words and the text mean in our time.”

But the issues that bother Republicans and many Americans will not go away when the questions are over and the vote is taken. They will be the political fodder in future elections.

Is the stimulus superfluous?
by Donald Lambro

The biggest unasked question in today’s economy is whether it has started turning around before President Obama’s spending-stimulus program has fully gotten under way. There is growing evidence that the U.S. economy is showing signs of life amid increasing reports that Obama’s nearly $800 billion economic stimulus is trickling into the economy at an ever-slower pace. We’ve had two back-to-back months of increased existing-home sales. Banks are making a comeback as the administration’s stress tests largely acknowledged. Bank of America’s stock rose by nearly 10 percent Monday after a favorable recommendation from Goldman Sachs, as did other financial equities. Bank deposits are up, mortgage loans are rising, suggesting that credit has begun flowing again, and we are seeing an uptick in construction.

This week, the National Association of Home Builders (NAHB) put out a report saying that builders’ confidence in the market for new homes climbed for the second straight month. David Crowe, NAHB’s chief economist, said the renewed confidence level “indicates that home builders feel we’re at or near the bottom of the market.” And the decline in housing prices appears to be slowing.

Consumer confidence is rising, too, though retail sales remain sluggish and unemployment, now at 8.9 percent, continues to rise, but the signs suggest the economy clearly has begun bottoming out.

Federal Reserve Chairman Ben Bernanke, who has been the unsung hero in the Fed’s heavy lifting in this recovery, predicted as much. “We continue to expect economic activity to bottom out, then to turn up later this year,” he told lawmakers earlier this month. “The pace of contraction may be slowing.” The White House maintains, of course, that all of this is the result of the administration’s economic stimulus and its other recovery policies. But there are reports to the contrary that suggest the flow of infrastructure spending to the states has been slow and that much of the critical decision-making at the U.S. Treasury has been “on hold” because of bureaucratic snafus, White House micromanaging and unfilled job slots in key positions.

Late last month, the Government Accountability Office (GAO) released a report on Obama’s infrastructure spending that estimated that only $49 billion of the nearly $300 billion being sent to the states would be spent by the end of fiscal year 2009.

The report, said Brendan Buck of the House Republican Study Committee, “reveals that stimulus dollars are mired in typical glacial bureaucratic processes.”

Among the GAO’s findings on the stimulus act’s Highway Infrastructure Investment spending: Only “two of the 16 states (studied) had agreements (with the Department of Transportation) covering more than 50 percent of their states’ apportioned funds, and three states did not have agreements on any projects.”

In a front-page article last week, the New York Times elaborated on the GAO’s findings under the headline, “Stimulus Aid Trickles Out, but States Seek Quicker Relief.”

The Times’ findings: “Nearly three months after President Obama approved a $787 billion economic-stimulus package, intended to create or save jobs, the federal government has paid out less than 6 percent of the money, largely in the form of social-service payments to states.”

While the White House and the president say that the program is right on track and creating jobs, “they have actually spent relatively little so far,” the Times said.

Over at Treasury, decision-making has slowed to a crawl or delayed altogether. While Secretary Timothy F. Geithner and the White House have made dramatic proposals, “carrying out those policies has bogged down because critical decisions about how to do so aren’t being made,” the Washington Post’s David Cho reported Monday. Nearly four months into Obama’s presidency, the department is without a deputy secretary and other top people are missing from its senior ranks.

The result: After announcing a plan to relieve banks of toxic assets, it isn’t clear who will carry out its details. After announcing a $15 billion plan in March to open up credit for small businesses, “it is still struggling to get off the ground” after officials said it would not work.

The trouble is as much Geithner’s inability to manage a bureaucracy as large as Treasury as it is the White House’s propensity to micromanage all of its decision-making — right down to the design of the department’s Web site.

Meantime, the economy seems to be making a comeback of its own, and some economists are suggesting that maybe much of Obama’s stimulus-spending plan isn’t needed.

When I asked American Enterprise Institute economist Kevin Hassett whether he thought that a lot of the stimulus spending may come too late and may not be needed at all, he replied, “You raise a good point, if the third quarter starts out strong after a good second quarter, then we might well have too much stimulus.”

But the political reality is that if the economy begins to improve in the second half of this year, as many predict it will, the administration will claim that it is due to its stimulus spending — even when very little of it has been spent.

History Points to GOP Gains in 2010
by Donald Lambro

Signing the Republican Party’s post-election death certificate is risky business, but Democratic strategist Simon Rosenberg did so last month — predicting the GOP will remain in the political graveyard for many years to come.

Perhaps one can forgive the head of the New Democrat Network (NDN) a moment of irrational exuberance when you consider that until Barack Obama’s decisive victory, Democrats had won just three of the previous 10 presidential elections. Simon has suffered a lot of Democratic defeats, so when his party scored big on Nov. 4, well, let’s just say his euphoria flowed over the top.

“Absent huge Democratic mistakes in the next few years, the Republican Party’s road back could very well be a long one,” he wrote in the GOP’s obituary.

“Their coalition no longer works in the changing demography of the day, and is dangerously old; their Southern strategy, so critical to their ascension, has become a relic of the past; their tech and media tools have not kept up with the times; their ideas have become spent and discredited; their leaders, particularly in Washington, seem content to ankle bite rather than lead. They are an aging and frayed bunch, living off the fumes of a day and politics gone by,” he said. Phew! That’s quite a mouthful. But the wish may be father to the thought. As Winston Churchill once said, “In war, you can be killed only once, but in politics, you can be killed many times.”

Many Democrats have predicted the Republicans were finished after some devastating defeats, only to see them quickly recover and win again.

No one gave the Republicans a snowball’s chance in hell after Lyndon Johnson crushed Barry Goldwater in a landslide in 1964. Democrats said the GOP was finished, perhaps for a generation. But the Democrats’ archenemy, Richard Nixon, took back the White House in 1968 and won re-election in a landslide four years later.

Then came the Watergate scandals that pundits said would sweep the Democrats into power by a landslide in 1976, but Jimmy Carter defeated Gerald Ford by an eyelash, though the elections swept an army of Watergate Democrats into Congress.

Democrats said the Watergate scandals had consigned the Republicans to the wilderness for many years to come. In their dreams. Ronald Reagan rode out of the West four years later to easily beat Carter and recapture the White House for the GOP, which made significant gains in Congress.

But Rosenberg and his fellow Democrats think this time it’s going different. “I really believe there is a strong argument to be made that the GOP is further from power, more discredited and more out of touch with the American people than any time since the days of FDR and Truman,” he wrote in his coroner’s report.

Well, maybe not. In politics, timing is everything. It can work for you or against you. Barack Obama was running in a perfect storm that gave his candidacy three things that would have swept any challenger to power: a deeply unpopular president, an unpopular war in Iraq and an economic catastrophe of a very high order.

But his presidency still remains a high-risk work in progress. He is one of the most inexperienced presidents in U.S. history. Economists say his Old Deal, pump-priming, big-spending prescriptions for economic recovery haven’t worked anywhere. He is about to enter the White House at a time when global terrorism is flexing its muscles and plotting to strike again.

The Republicans, meanwhile, are going back to square one, focusing on controlling spending, reducing the size of government, and cutting tax rates to get the engine of the economy running again.

The 2008 election resulted in a change in administrations, but recent polls show it didn’t change the nation’s ideological balance, which is still very much right of center.

A post-election Pew poll finds that while the Democrats’ advantage in party identification has risen, “the share of Americans who describe their political views as liberal, conservative or moderate has remained stable.”

Pew says that just one of five Americans say they are liberal (21 percent), while 38 percent call themselves conservative, and 36 percent say they are moderates — a ratio that has remained unchanged over the past eight years. “For the GOP, it sure looks like a long road back,” Rosenberg said in his celebratory analysis.

But it may not be as long as he thinks. About a year from now, we will be in the beginning stages of the midterm-election cycle when the political history books tell us that the party in power almost always loses seats in Congress. That record has been broken only twice in our history. The last time was in 2002 when President Bush was riding high, the Republicans had cut tax rates across the board, and the GOP made substantial gains in Congress.

The chances are extremely high that the GOP will gain congressional seats in November 2010, dealing Barack Obama the first political defeat of his presidency.

Bush’s legacy will be one of protection
Donald Lambro

WASHINGTON — As George W. Bush’s wartime presidency enters its final weeks, there is increasing speculation about his legacy and how his two terms in office will be seen throughout the course of history.

But history is a funny thing that can dramatically re-evaluate past events in a far different light when they are compared in the mists of time to what follows them.

Consider Harry Truman who left office as the most unpopular president in modern history but is now seen as a decisive figure who led the nation in two wars, abruptly ending one of them with a swift decision to use the atomic bomb.

History’s rehabilitation of Truman’s legacy occurred over many, many years, and I suspect that Bush’s presidency, too, will undergo a long-term re-evaluation that will look more kindly on the challenges he confronted as a wartime leader who faced a fiendishly different kind of conflict.

Bush has begun opening up recently about how he sees his legacy — first in an interview conducted by his sister, Doro Bush Koch, as part of an oral-history project for National Public Radio and then in an interview with Charlie Gibson of ABC News.

He is proudest of his $15 billion offensive against AIDS and malaria in Africa that has saved millions of lives and the passage of a market-oriented Medicare prescription-drug program that has lowered medical costs for the elderly.

In national security, he points to his record in the aftermath of the deadly terrorist attacks on Sept. 11, 2001: He toppled two terrorist regimes in Afghanistan and Iraq, liberated some 50 million people, and planted democracies in the middle of the world’s worst terrorist breeding grounds.

His biggest regret on that score is the presumed faulty intelligence that led him to base his invasion of Iraq on the belief that Saddam Hussein had weapons of mass destruction.

No evidence was found to show that such weapons existed, though Hussein used poison gas and other materials to kill thousands of Kurds. And the FBI agent who met with him daily in the final months before his execution said Hussein told him that he had planned to resume a program to produce nuclear materials.

The history of those wars, much of which remains unknown, is still a work in progress. There is still a lot of information, and maybe long-buried evidence, to be learned about the dangers that this Iraqi madman who had started two wars and was still threatening his neighbors.

But what will be most remembered, and I think favorably, about Bush’s presidency is his leadership in the post-9/11 period when it will be said that “he kept us safe” from another attack.

In my recent interview with former Secretary of State George Shultz, Shultz pointed to President Bush’s pre-emptive doctrine as his most important national-security achievement. It was based on a very important idea, Shultz said, namely that in the shadowy threat of global terrorism, we have to be able to uncover plots before they occur and then take pre-emptive steps to prevent them from happening.

Shultz credited Bush with successfully doing just that, while terrorists have carried out attacks in Great Britain, Spain and elsewhere (including the recent attacks in Mumbai). “We are a harder target,” Shultz said, as a result of the elaborate national-security surveillance intercepts that are at the heart of Bush’s pre-emptive defense doctrine.

On the economic front, Bush has been dealt a bad hand. He came into office in 2001 with the economy in the midst of a restructuring slowdown when the technology bubble burst, followed by 9/11 that plunged us into a deeper hole.

Bush came into office on a pledge to cut taxes across the board and, perhaps, no tax cuts were better timed to counter the shock waves that hit the country then. We weathered that storm, and the economy grew again in the midst of a housing boom and a historic global expansion that raised U.S. exports to record levels.

But all expansions run into corrections, and the housing and credit bubbles burst, ending Bush’s presidency in a recession that has plunged his approval ratings to record lows. All recessions end, and the Bush administration has thrown everything but the kitchen sink at this one, including the stimulus tax rebate this summer, followed by unprecedented bailout interventions in the financial markets by the Federal Reserve and the U.S. Treasury. When the economy turns around, it will be on Barack Obama’s watch and, understandably, he will get the credit for it — though Treasury Secretary Henry Paulson and Ben Bernanke at the Fed will have done a lot of heavy lifting under Bush’s direction.

When Bush leaves office next month, it will be said that he governed us through some of the most difficult and turbulent periods in our history — from the war on terrorism to a financial meltdown that was none of his making.

But in the end, it will also be said that “he kept us safe” in the Age of Terror. Now it’s Barack Obama’s turn.