BIPARTISAN COWARDICE

Last July Erskine Bowles, the Co-Chair of President Obama’s Debt Commission, said, “This debt is like a cancer.  It is truly going to destroy the country from within.”  He was right, and now President Obama has before him the painful and necessary recommendations that the Debt Commission believes must be put in place.

But it appears that President Obama either doesn’t agree or doesn’t have the guts to follow the Commission’s sober warning. 

Almost two years ago the President called for the enactment of Stimulus legislation.  Rather than working out a bill on a bipartisan basis, Obama allowed Nancy Pelosi and Harry Reid to create a bill that drew no Republican support, that added over $800 billion to the debt, and that has had little effect.  No wonder it became known as “Porkulus”.

Six weeks ago the American people registered their discontent with Obama and the Congressional Democrats.  Immediately following the election the President said, “we got shellacked”.  The question is has he learned the lesson?  The answer is yes and no.

In a genuine effort to reach out to the Republicans on Capitol Hill, the President negotiated the broad outlines of the new tax-cut legislation.  He deserves credit for this welcome and abrupt course correction.  But the substance of what he and the Republicans have created is fundamentally flawed.

Make no mistake about it; this new legislation is really Stimulus II.  It will add another $800+ billion to the national debt.  The only way it can be implemented is for the Federal Reserve to keep the printing money we don’t have.  Like most of the rest of our soon to be $15 trillion dollar debt, China will be called upon to finance it.

Don’t get me wrong.  There are provisions in this legislation that will stimulate our economy and should be enacted.  Most importantly, these include the temporary Payroll tax reduction for employees and the extension of unemployment benefits. 

But, consistent with the recommendations of the Debt Commission, efforts like this need to be paid for.  And there was a way to do just that.  What President Obama should have done, and didn’t do, was to oppose the extension of the Bush tax cuts—all of them.  He should have told the American people that we can’t afford them, and, if Congress sent him a bill extending them, he would veto it.

Had he done that he would have ushered in a new day for the nation and for his beleaguered Administration.  Of course, such a statement would have been met with cries of anguish from the nation and from Congress.  But that’s the bind we’re in.  And there is no escape without real pain.  Instead we got bipartisan cowardice.

LeRoy Goldman

December 16, 2010

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