Tag: cnn

Obama’s Dilemma

Today Politico Arena asks:

State of the Union:  What Should Obama Say?

My response:

Obama’s in a difficult spot:  His head tells him to tack right, but his heart’s not in it – and he’s not the first Democrat to be in that spot.  That’s brought out today in a CNN Opinion piece, “When liberals revolt,” written by Arena’s (and Princeton’s) Julian E. Zelizer.  Tracing similar dilemmas that Johnson, Carter, and Clinton faced, Zelizer shows how they all paid a price for tacking right, which it looks like Obama may do.  Johnson faced primary challenges that led him to withdraw from the 1968 race.  Carter was challenged by Ted Kennedy.  He prevailed; but weakened, he then lost to Reagan in 1980.  And Clinton’s move to the center after the disastrous 1994 midterm elections helped him win reelection, Zelizer argues, but it also left him with a thin legislative record on domestic policy.

In short, moving right has its costs, Zelizer claims.  Many liberals are “deeply unhappy with the president, believing that he has already drifted too far away from the promises that animated his supporters in 2008.”  He’ll need those liberals in 2010 and 2012.  Pointing to the “long tradition of Democratic presidents taking the left for granted at a cost to their administrations,” Zelizer notes that they learned “that the ire of the left – a constituency that is very vocal, highly mobilized and politically engaged – can cause enormous damage.”

That it can.  But can the left do more than cause enormous damage?  In particular:  Can it govern?  Zelizer cites Ted Kennedy castigating Carter, saying that ”the Democratic Party needed to ‘sail against the wind’ of conservative public sentiment by using the federal government to help alleviate social problems.”  Fine speechifying.  But will it get you (re)elected – much less enable you to govern?  The evidence is not encouraging.  In fact, the deeper problem the left is facing is that self-identified conservatives in America outnumber liberals by better than two to one.  Cambridge may have voted against Scott Brown by 84 to 14, but that just shows how out of touch Harvard is with the rest of Massachusetts – to say nothing of the rest of the country.  Obama won not because the country was enthralled with his vague message, but because his opposition, like Clinton’s in 1996, was so uninspiring.  In sum, the left’s problem – and Obama’s – is that the country isn’t buying the message, now that it’s clearer.  And that’s the heart of the matter.

Homebuyer Tax Credit Complications

Most people would agree with Chris Edwards that the federal tax code is insanely complicated. The IRS Commissioner doesn’t do his own taxes, the Treasury secretary and other Washington policy experts haven’t paid what is owed, and the already overwhelmed IRS would be given an expanded role under the Democrat’s health care legislation.

A key problem is that the social engineers on Capitol Hill have run amok. Recently, they have been enamored with home-buying tax credits, and CNN.com notes how it is further overwhelming the IRS bureaucracy:

On Thursday, CNNMoney revealed that buyers who purchased their properties after Nov. 6 were unable to claim the refund because the Internal Revenue Service had yet to release a new form and instructions. But on Friday, the IRS finally posted the new form 5405.

Claiming the credit now requires sending paperwork to the IRS – no e-filing allowed:

And these new buyers can no longer file electronically. They have to mail in paper forms, including the new 5405, whether they are amending their 2008 taxes or claiming it on the 2009 taxes that are being filed this spring. That is going to dramatically slow refunds, but taxpayers can’t blame the IRS. Instead, it’s people scamming the system who are at fault. For example, in October tax preparer James Otto Price III was the first person convicted of this crime. He falsely claimed the credit for 15 clients. So buyers must now file documentation with their taxes – including proof of residency, a signed mortgage statement and drivers license – which the e-file system is not equipped to handle.

The original homebuyer tax credit, which became available in April 2008, generated a nightmare of fraud. In one case, the credit was claimed by a four-year-old. Even IRS employees filed “illegal or inappropriate” claims for the credit. As a result, when Congress extended and expanded the credit in November, the IRS began requiring extra documentation.

Thus, micromanagement through the tax code is a bureaucratic Catch-22. If the IRS streamlines the paperwork, tax breaks get riddled with fraud and abuse. If it tries to cut down on the fraud and abuse, taxpayers and federal workers get bogged down in a pile of wasteful paperwork.

The solution to the problem is for the government to get out of the social engineering business. Federal attempts to foster homeownership are a perfect example of why such attempted engineering can ultimately cause more harm than good. The homebuyer tax credit should be allowed to expire at the end of April, and the federal tax subsidies for homeownership should be ended.