Tag: Barack Obama

So This Is Freedom? They Must Be Joking.

That’s the title of my latest Kaiser Health News column, which addresses President Obama’s offer to accelerate the waiver process that would allow states to replace many of ObamaCare’s most offensive provisions:

If you think that means the president was himself exhibiting flexibility, you would be wrong. Despite the rhetoric about compromise, what the president actually did was offer states the option of replacing his law with a single-payer health care system three years earlier than his law allows…

HHS Secretary Kathleen Sebelius has written that ObamaCare gives states “incredible freedom” to implement the law. We now know what she meant: states are free to coerce their residents even more than ObamaCare requires. What’s incredible is that she calls that freedom.

Apologies to to the Housemartins.

President Obama’s Rhetoric on Libya

The prospect of the United States intervening in Libya is uncertain.  Yesterday, Secretary Gates and Adm. Mullen appeared to downplay the possibility of military action, while not clearly taking a position.  But lost in much of the reporting is President Obama’s Executive Order declaring a national emergency, and the accompanying letter to congress, issued last Friday.

Obama claimed that the overall situation constituted “…an unusual and extraordinary threat to the national security and foreign policy of the United States.”  Over at The Skeptics, I examine why it is a mistake for the president to lump together national security and humanitarian considerations:

Obama should be ashamed of this language. Muammar Qadhafi is a despicable man without basic decency, but this fuzzy rhetoric is wrong and possibly harmful. Not just a “threat” to U.S. national security, but an “extraordinary” threat? What would constitute a trivial threat or a non-threat, then? And what is the rhetorical purpose of adding the clause “and foreign policy” to the sentence? To fuse the argument about national security threat to one claiming that Muammar Qadhafi’s slaughter of his own citizens might influence our foreign-policy decisions, it seems. But writing in that way leads a casual observer to believe that the president is emphasizing what he believes to be a threat to U.S. national security posed by Libya, which does the English language a disservice. For some reason the phrase “giving the appearance of solidity to pure wind” is coming to mind.

I understand that the same clique of neoconservatives and New Republic people and other liberal imperialists who got us into the Iraq war are urging Obama to act and salivating at the prospect of accusing him of being “weak,” but even they did not use the sort of hyperbolic rhetoric that Obama did in his Executive Order and letter to congress.

 Whole thing here.

Romney and Huckabee, What a Choice

You know you’re really wrong when Mike Huckabee can call you out. But that’s the situation Mitt Romney finds himself in, as Michael Cannon points out below.  Huckabee says Romney’s government-run health care plan with an individual mandate is a bad idea, Romney says he’s still proud of his plan, which is totally different from President Obama’s government-run health care plan with an individual mandate. But really, what can he do? In 17 years of seeking high political office, he is known for two things: changing his position on a surprisingly large number of issues, and his Massachusetts health care program. Which was of course the forerunner of Obamacare, as Michael Cannon and I pointed out in the video that Michael linked. So Romney is still defending a position I think we’ve already refuted.

Meanwhile, in speeches and interviews this week, Mike Huckabee continues to make the untenable connection between gay marriage and family breakdown that I discussed two weeks ago in the Los Angeles Times. Huckabee told reporters:

Huckabee opposes gay marriage on the grounds that, according to him, it destroys traditional families.

“There is a quantified impact of broken families,” Huckabee said. “[There is a] $300 billion dad deficit in America every year…that’s the amount of money that we spend as taxpayers to pick up the pieces because dads are derelict in their duties.”

But what’s the connection? As I wrote:

One thing gay couples are not doing is filling the world with fatherless children. Indeed, it’s hard to imagine that allowing more people to make the emotional and financial commitments of marriage could cause family breakdown or welfare spending….

Social conservatives point to a real problem and then offer phony solutions.

But you won’t find your keys on the thoroughfare if you dropped them in the alley, and you won’t reduce the costs of social breakdown by keeping gays unmarried and preventing them from adopting orphans.

One might add that, as Huckabee knows very well, rates of divorce and unwed motherhood soared decades before anyone started agitating for gay marriage.

If Huckabee and Romney are the Republican frontrunners, President Obama must be sleeping well these days.

Republicans Punt on Farm Subsidies. Again.

While I fully agree with my colleagues that President Obama “chickened out” in general in his FY2012 budget proposal, in one area he had the courage to propose some cuts that have proven controversial for ages: farm subsidies.  His plan would lower the income eligibility limits for subsidies (from $500,000 to $250,000 for off-farm AGI per farmer, and an on-farm AGI limit of $500,000, down from $750,000.) It would also lower the cap on annual direct payments that individuals can receive – from a maximum of $40,000 to $30,000.

The administration’s proposal would affect only about 2 percent of the total recipients of direct payments – subsidies that flow every year regardless of prices or farm output to owners of land that may or may not still be used for farming – and it does not by any means go far enough. But at least it is a start.

On the other side of the aisle, the Republicans followed their Republican Study Committee colleagues in failing to propose any cuts to “farm subsidies” as we typically understand them in their FY2011 budget proposal.  To be sure, 22 percent of the $60 billion in cuts they propose would come from the “agriculture function,” and they indeed get rid of entire programs, but they are mainly to the nutrition and conservation areas of the USDA’s responsibilities. Nothing, so far as I can tell, from the commodity programs.

I’m under no illusions that cutting farm subsidies are the key to our ever-growing fiscal mess. But it is telling that the Republicans can find not one dime in our bloated, distorting, regressive, corrupt farm programs to cut, even as farmers’ incomes and wealth soar. 

On the upside,  a group of  legislators is proposing amendments to limit direct payments and put an end to the disgraceful deal on cotton subsidies cooked up by the administration last year. So maybe some reform can come from there.

(This hardly needs to be said, but the farmers’ groups are, of course, maintaining their position that farm programs should be subject to cuts no greater than the cuts to other areas of federal spending.)

Fixing the Economy Demands More Than a Stroll across Lafayette Park

President Obama’s visit with the Chamber of Commerce this week has infuriated the anti-business Left.  But short of expropriation and nationalization, what doesn’t? 

Robert Reich and NPR and the scribes at the Huffington Post just don’t get it.  Their man may be in the White House, but business holds the keys to the kingdom.  Whether the president’s priority is job creation or reelection, nothing matters more than sustained economic growth. And without business having confidence that policy in the United States will become more hospitable and predictable, investment and job creation will remain tepid.

The president doesn’t have nearly the leverage assumed in the delusions of groups like Public Citizen, which wrote: “What America needs is not olive branches to giant corporations but controls over the companies that sank the economy.”  Back here in reality, businesses have options.  Many can choose to produce and operate in other countries, where the economic environment may be more favorable.  In that regard, globalization has produced a veritable Galt’s Gulch, which serves as an important check on bad economic policy.  Governments are now competing with each other to attract the financial, physical, and human capital necessary to nourish high value-added, innovation-driven, 21st century economies.  Gratuitously punitive anti-business policies will only chase away the companies that the president exhorts to invest and hire.

According to a survey of 13,000 business executives worldwide, conducted by the World Economic Forum, 52 countries have less burdensome regulations than the United States.  Add to that the fact that the United States has the highest corporate tax rate among all OECD countries and it becomes less mysterious why U.S. businesses shift more operations abroad.

As I wrote in a December 2009 Cato paper:

Governments are competing for investment and talent, which both tend to flow to jurisdictions where the rule of law is clear and abided; where there is greater certainty to the business and political climate; where the specter of asset expropriation is negligible; where physical and administrative infrastructure is in good shape; where the local work force is productive; where there are limited physical, political, and administrative frictions.

This global competition in policy is a positive development.  But we are kidding ourselves if we think that we don’t have to compete and earn our share with good policies.  The decisions we make now with respect to our policies on immigration, education, energy, trade, entitlements, taxes, and the role of government in managing the economy will determine the health, competitiveness, and relative significance of the U.S. economy in the decades ahead.

The president is beginning to get it – though grudgingly.  He acknowledges the burdens of excessive and superfluous regulations and bureaucracy (remember his SOTU story about the jurisdictions entangled in the salmon’s journey from salt water to fresh water to the smoker?).  The president has hinted that he would like to see the corporate tax rate lowered.  He knows that businesses have options to invest, produce, and hire abroad—and that oftentimes U.S. policy chases them there.  But, so far, rather than push policies to encourage domestic investment, production, and hiring, the president has done the opposite, while demonizing businesses that follow the incentives to go abroad.

The president’s position during his exchange at the Chamber of Commerce was that he has made concessions to business by moving toward the center on tax and trade policy, and that now it is time for business to show good faith by investing and hiring.  But Obama’s small steps toward the center come after two years of sprinting to the left on economic policy.  After ObamaCare, Dodd-Frank, taxpayer bailouts, unorthodox and legally-questionable bankruptcy procedures, subsidies for select industries, Buy American and other regulations governing how and with whom “stimulus” dollars could be spent, and the administration’s tightening embrace of industrial policy, businesses want a more quiet, less intrusive, less antagonistic, predictable policy environment before they will feel comfortable playing the role Obama wants them to play.

Until that happens, the president shouldn’t expect torrents of investment and hiring from the business community.

Rep. Hanna’s Corporate Tax Cut

Rep. Richard Hanna is one of the many new members of Congress with a no-nonsense business background. He is determined to move the GOP in the direction of major tax and spending reforms. When I chatted to the congressman, he told me that he had already read my Global Tax Revolution, so he will be well-armed in tackling business tax reform!

Hanna is off to a good start with his “American Competitiveness Act,” which would chop the federal corporate tax rate from 35 percent to 25 percent. He notes that “the average rate in the Organization for Economic Cooperation and Development countries is just over 25 percent, meaning the effective U.S. corporate tax burden, when state and local taxes are considered, can be 50 percent higher than some of our developed competitors, rendering our companies and workers less competitive.”

In his State of the Union address, President Obama said that he is willing to cut the corporate tax rate. So corporate tax reform could be the 2011 version of the Clinton-GOP welfare reforms of 1996. That is, a major pro-market success made possible by a liberal president moving to the pragmatic center.

Upcoming: On February 23, Cato will release new estimates of corporate “effective” tax rates by tax scholars Jack Mintz and Duanjie Chen. The study will shed further light on the dangerous uncompetitiveness of the U.S. corporate tax system.