Posts Tagged ‘Stimulus Package’

Age of Post-Partisanship Ends After 17 Days

Friday, February 6th, 2009

Fans of centrist governance were disappointed this evening as President Barack Obama strongly signaled a return to the polarizing ideological battles of years and campaigns past.  Obama’s first use of Air Force One as President was to travel to the House Democratic retreat in Williamsburg and deliver the most partisan speech of his young presidency.   The President let loose with familiar campaign talking points such as the “failed policies of the past” in reference to Republican opposition to the stimulus package moving through Congress.

Tonights Speech Packs a Punch for the GOP

Tonight's Speech Packs a Punch for the GOP

The Democratic retreat was slated to be closed to the media until this evening, when all the networks were invited in to record Obama’s speech.  The clear intent of the move was to control the media cycle through the weekend and perhaps mark a clean break from the relentless media focus on unpopular aspects of the House and Senate packages.  Whether Obama will succeed with tonight’s speech remains an open question.  However, tonight marks the end of the rhetoric of bipartisanship which played a prominent role in the campaign.

Faced with an erosion of 10-15% support of his stimulus package over the past few weeks, Obama faced his first political crisis and responded by launching into starkly partisan rhetoric while also pushing the virtues of the present make up of the bill.   A bipartisan group of Senators have been discussing the package and trying to work out a compromise, unified by their distaste for some of the questionable spending. Candidate Obama would welcome these bipartisan negotiations on such vitally important issues and also promised to bring such partisans together with a new pragmatic, post-partisan governance.

Instead of speaking out substantively with his vision of a bipartisan compromise in the Senate, Obama has chosen to retreat to partisan talking points coupled with a demand to pass the package immediately or face catastrophe.   By refusing to take a substantive stance of what a bipartisan compromise should look like, yet lambasting any opponents of the present Democrat-written bill, Obama has set a troubling model for future legislation that may require bipartisan cooperation to pass, such as immigration reform.

From this point forward for the Administration, we’ll be seeing less of the GOP-Obama meetings on substantive policy and more Obama speeches geared towards firing up his base and pushing the growth of his 13 Million person email list from the campaign.  Independents and centrists must give Obama credit for at least attempting to change the tenor in Washington over the past few weeks by engaging in outreach to Republicans and bringing GOP Senator Judd Gregg into the cabinet.   Unfortunately, Obama has chosen to avoid spending political capital to support and perhaps lead the bipartisan group of Senators to forge a centrist compromise by laying out a detailed vision of the final bill with input from the bipartisan group.   Instead, the bills written exclusively by ascendant Democratic Speaker Nancy Pelosi and Senate Democratic leader Harry Reid will very likely become law.

Beyond the perhaps inevitable end of the rhetoric of post-partisanship, the sad truth for fiscally conservative independents is that the largest spending bill in American history is going to be passed without the standard, lengthy scrutiny applied to normal appropriations bills and without any serious input from centrist politicians.  Many objective analyses of the present stimulus package recommend substantial reductions in questionable spending and other major alterations to maximize to possibility of actual job creation from the bill.   Rasmussen and Gallup polls show significant public support for such major changes.  Based on tonight’s speech, any such coolheaded, pragmatic reworking of the present package appears off the table, with perhaps a window-dressing compromise to “reduce” the outlay to around 800-850 Billion in the offing.

Obama’s return to partisan attacks on republicans and deployment of his speechmaking greatness to push the present stimulus package will likely blunt the faltering public faith in the entire enterprise.   The application of raw political power by Obama today teaches the moderates of the Senate, some of which formed the bipartisan group of 17 senators, that Obama will not support future pragmatic, centrist compromises but instead push the conventional democratic view.   The new lightening rod in partisan politics is the Democratic stimulus package, and the bill’s effect on the economy will dominate partisan debate for years to come as the Age of Partisanship begins again.

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Paulson vs. Congress live on Capital Hill on Bailout – History in the Making

Tuesday, September 23rd, 2008

Paulson and Bernake testifying today in Congress

Paulson and Bernake testifying today in Congress

Today Treasury Secretary Henry Paulson and others are testifying on Capitol Hill regarding the Bush Administration’s request for authority from Congress to borrow up to $700 Billion Dollars for up to two years to purchase mortgage related assets, almost exclusively of the subprime variety. Both Paulson and Federal Reserve Chairman Ben Bernake urged immediate Congressional action to forestall and reverse the deepening credit crunch across America and the world and potentially avoid a deep recession. Paulson faces a tough sell as US likely voters oppose the bailout 44%-25% and centrist, politically independent voters oppose the bailout 47%-18%. Sensing some popular resistance, DC politicians are aggressively confronting Paulson’s plan.

While packaged and sold to U.S. and international financial institutions as relatively safe and adequately secured investments over the last few years, shares in some bundled subprime mortgage instruments are presently nearly impossible to value. The subprime mortgages are not producing cash flow as predicted because the borrowers cannot make the payments and foreclosures have been rising steadily since 2006. The viral effect of a continued collapse in value of the subprime securities purchased by financial institutions on markets throughout the world may be staunched by the bailout.

Both Democrats and Republicans are pushing for minor alterations of the Administration’s proposal to add oversight and limit executive pay for financial companies that participate in the bailout. Democrats are further battling the Administration directly by attempting to limit the lending authority to a one-year period, reduce the cap on lending to $150 Billion dollars and tack on proposals for a $50 Billion Dollar stimulus package. The risk of the bailout being delayed beyond this week based on partisan wrangling over the legislation is having a dampening effect on the stock market, with the Dow Jones Industrial Average losing over 500 points this week so far, dipping below 11,000.

Nothing less than the survival of the United States as the financial center of the world and the dollar as the world’s currency is at stake this week. No amount of hyperbole can overstate the risks facing the world economic system from the spread of complex financial instruments secured by bundled subprime mortgages on U.S. homes. Indeed, last week the Dow Jones was several hundred trades away from a free fall to 8300 according to insiders at large trading houses. Every American, whether a Democrat, Republican, another party or an independent centrist should read the text of the Administration’s plan, the various changes and additions offered and scrutinize the actions taken in the next few days which will rewrite American financial history.

The risk of inaction by the Democratic Congress is to anger centrist, independent voters who may turn on the Democrats if no bailout is passed and the markets free fall after Congress adjourns. Obama could also suffer if Democrats are perceived as stopping the bailout. The risk of action by the Democratic Congress is two-fold: if the bailout fails, Democrats will be blamed along with Bush and the GOP. If the bailout succeeds and the markets rally strongly before the election, the Presidential election may tip to John McCain. History will be written this week, and the political and economic pressure on Congress, the Administration and the Presidential candidates could not be higher.

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