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Time for an ‘American Reset’

Posted By Alan W. Dowd On June 13, 2012 @ 12:18 am In Daily Mailer,FrontPage | 17 Comments

The Obama administration made a big deal about its “Russian Reset”—a policy aimed at emphasizing U.S.-Russian relations by basically starting over. The fact that the Russian Reset yielded little more than some embarrassing moments for the secretary of state is a subject for another essay. What’s relevant here is that after some 40 months of President Barack Obama, it’s time for an “American Reset.”

Reset federal spending

President Obama has added $5 trillion in debt. The federal government has spent more than 24 percent of GDP in each of President Obama’s years in the White House, far above the historic average of 20 percent. The federal debt, as a share of GDP, is the highest it has been since World War II—when we had a much better reason to run up record debt. And each and every year he has been in office, President Obama has carried a deficit above $1 trillion—an unprecedented feat.

Not even the president’s friends in the mainstream media can ignore the reality that the Obama administration has engaged in the most profligate spending spree in American history. The Washington Post, for instance, notes that “the compound annual growth rate for President Obama’s spending starting in 2009 is 5.2 percent” and “in every case, the president wanted to spend more money than he ended up getting.”

In other words, Congress actually reined the president in—but not before he spawned the Affordable Care Act. According to his own numbers, the president’s healthcare behemoth will cost $1 trillion. That number will surely grow larger than his actuaries predict. It pays to recall Washington’s poor track record when it comes to out-year projections. The Wall Street Journal reminds us that in 1965, Congress estimated Medicare would cost $3.1 billion in 1970. The actual cost was $6.8 billion. Two years later, Congress predicted that Medicare would consume just $12 billion in 1990. In fact, it was $110 billion.

Given that the president found a way to grow the federal government by 25 percent—with little to show for his stimulus programs, bailouts and government takeovers—returning spending to 2008 levels seems eminently sensible.

Reset regulations

Contrary to the president’s recent slip of the tongue, the private sector isn’t doing fine. One of the reasons is the vast web of regulations he has spun in the banking, financial, healthcare and energy sectors. A Heritage Foundation study found that the Obama administration has issued four times as many major regulations—regulations costing $100 million or more—as its predecessor. The result: taxpayers and industry have been forced to cough up $46 billion to comply with new regulations—more than five times the cost of Bush-era regs.

Some of President Obama’s most costly regulations are not even fully realized yet. Take the EPA’s regulations on coal, for instance. As The New York Times reports, 100 of the 500 coal-burning power plants in the United States will be closed in the next few years largely “because new pollution rules have made coal plants more costly.” Retrofitting a coal-electricity plant in Kentucky in order to meet the Obama administration’s coal-killing regulatory requirements will cost $1 billion and has triggered a 30-percent increase in electricity rates, according to the Times.

“This EPA is fully engaging in a war on coal,” as Sen. Joe Manchin (D-W.Va.) argues. The EPA’s war is killing coal-derived electricity, which will have a long-term effect on consumers and their pocketbooks. “Coal-fired power plants,” the pro-market group American Commitment reports, “are now generating just 36 percent of U.S. electricity, versus 44.6 percent just one year ago”—thanks to regs handed down during the Obama administration.

Speaking of long-term effects, the drag ObamaCare will place on the economy is only now beginning to show. The CBO projects that the IRS will need 17,000 new employees to enforce elements of the healthcare law. The president’s healthcare entitlement creates 159 new sub-agencies, committees, bureaus and commissions, each with a regulatory role. All told, according to a Washington Post analysis, between 100,000 and 250,000 new government employees are needed to meet the growing demands of President Obama’s supersized government.

Reset the social contract

The Heritage Foundation reports that “more people than ever before—67.3 million Americans, from college students to retirees to welfare beneficiaries—depend on the federal government for housing, food, income, student aid or other assistance once considered to be the responsibility of individuals, families, neighborhoods, churches and other civil society institutions.” Government dependence didn’t start under President Obama, but it has certainly accelerated. The Heritage Foundation’s Index on Government Dependency concludes that dependence on government has jumped 23 percent since 2008.

Consider some specific examples: Investor’s Business Daily reports that the number of Americans on food stamps, which now eclipses 45 million, is the highest on record. The Wall Street Journal adds that nearly 50 percent of Americans live in a household that receives some form of government assistance—up from 44 percent in 2008, which was up from 30 percent in the early 1980s. The Washington Post reports that some 4 million out-of-work Americans have stopped looking for work, choosing instead to take early retirement (if they are 62 or older) or to try to ride out the worst of the recession on unemployment (which, at up to 99 weeks, is more generous than it’s ever been).

The very real worry is that America’s great engine of productivity and free enterprise could be nearing a tipping point where so many people depend on government for so many things that the incentive to produce and create and work could rapidly evaporate. Once fully implemented, ObamaCare will accelerate this, which is why it has to be reversed.

Reset the constitutional separation of powers

It’s difficult to keep track of the many times and many ways President Obama has overstepped his constitutional bounds or ignored centuries of precedent and probity. But here are a few of the worst examples.

He assailed a Supreme Court decision during a State of the Union address. He issued veiled threats toward the Court while it deliberated constitutional matters related to the healthcare law, dismissing it as “an unelected group of people” and thus implying its decisions were somehow less legitimate than congressional action or his own fiats. And as the Cato Institute’s Ilya Shapiro observes, the Obama administration has made “increasingly extreme claims on behalf of unlimited federal power”—claims that the Court has repeatedly swatted aside.

In unprecedented fashion, he unilaterally determined that the Senate was not in recess—something only the Senate can do—in order to make illegal appointments to the Executive branch. He packed the Executive branch with dozens of unelected, unaccountable czars, thereby flouting the letter and spirit of Congress’ advise-and-consent role. And he launched a war in Libya without consulting Congress, directing or allowing his staff to describe six months of airstrikes, bombing runs and naval engagements as “a time-limited, scope-limited military action.” Worse, when a Senate committee asked Defense Secretary Leon Panetta to explain the president’s use of military force, Panetta said the administration’s primary goal before engaging U.S. forces in military operations “would be to seek international permission” and then “we would come to the Congress and inform you.” That is, at best, backwards—and at worst unconstitutional.

This imperious approach to the Congress and the Court must be reset, reversed and rebalanced.

Reset America’s global image

Although the president deserves credit for sustaining the Bush administration’s war against al Qaeda and taking down bin Laden—which is no small matter—the hasty withdrawal from Iraq, haphazard, zigzagging approach to Afghanistan, shoddy treatment of longtime allies in Europe and general retreat from global leadership have not helped America’s image. In fact, the United States has regressed from leading coalitions of the willing under previous administrations to leading from behind (the Obama administration’s shorthand for Libya) to following from behind (see Syria).

To reset America’s image abroad, the next administration needs to revive permanent missile defense sites in Eastern Europe, which were abandoned by President Obama in pursuit of some mirage partnership with Moscow; return the United States to its historical leadership role within NATO by leading from the front; remind Russia that if it wants to return to the bad old days of Cold War animosity, America is prepared to meet Putin and his model of autarky on the field of ideas; revitalize the U.S. space program; revisit agreements with Iraq and Afghanistan to ensure that our friends trust us, our enemies fear us and the world respects us; and reacquaint China with the U.S. military’s deterrent strength by reversing efforts to slash defense spending. That would translate into stopping the slide toward sequestration’s $500-billion guillotine, recapitalizing the Navy, reopening the F-22 production line, speeding up development of the Long Range Strike Bomber, and scrapping plans to cut Army and Marine Corps end-strength.

The Pentagon is not to blame for the debt-and-deficit crisis. It has already cut the fat and is cutting into its muscle and bone. Recall that the $487 billion the president recently slashed from projected DoD spending comes on top of $400 billion in cuts which the president ordered in 2010-11. As then-Defense Secretary Robert Gates cautioned in one of his last addresses, “The defense budget, however large it may be, is not the cause of this country’s fiscal woes.” He noted that in 1961 defense consumed half the federal budget, while it accounted for 9 percent of U.S. GDP. Today, defense spending “represents less than 15 percent of all federal spending and equates to roughly three and a half percent of GDP.”

This American Reset won’t solve everything, but it’s a good start.

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