In July 2009, in an article in this space entitled “2010,” I
wrote:
Next year’s elections are going to produce a political
earthquake. That is because we currently suffer the most left-wing
government in our nation’s history. After just 6 months in office,
the flower children that rule Washington in overwhelming numbers
are already smashing through all records regarding federal taxes,
spending, deficits, and debt. Obama and his ultra-left Democrats
adopted a so-called stimulus bill raising spending a trillion
dollars that never had a prayer of actually creating jobs and
promoting long-term economic growth, because it was based entirely
on old-fashioned, brain dead, proven to fail, Keynesian
economics.
Among the specific political predictions in the article:
“Turncoat Arlen Specter from Pennsylvania will also be retired next
year, when he will find that an 80 year old, opportunist, RINO
Republican is not going to appeal to Democrat primary voters any
more than Republican primary voters.”
In October, 2009, in an article in this space
entitled, “Acting Like a Bunch of Christies,” I
wrote,
“I know they don’t know it yet. But the Democrat Party is
in a death spiral similar to the last days of the wooly mammoth
during the Ice Age. Forget about 1994 and 1980. There is no
precedent for what is coming….By next year, the disasters will not
be here yet, but enough Americans will see what’s coming to produce
the first political earthquake.”
In a column a month later I
argued that the greatest danger for Republicans for this year
is that they will underestimate their strength and as a result not
win all the races they could have won. See now, e.g., New
York.
Notice that I got both today’s politics and today’s
economics right in these articles well over a year ago. I bring
that up so that you will know where to go to find out what’s
happening next.
Losing Control
The first implication of what happened yesterday is that
President Obama has lost control of the Democrat party. Don’t
expect any Congressional Democrats to blindly follow Obama any
longer where their political instincts sense danger. This opens
enormous opportunities for conservatives and
Republicans.
One of those opportunities is on the budget, where
President Obama also lost control yesterday. The locus of power on
federal budget policy now lies in the office of House Budget
Committee Chairman Paul Ryan (R-WI). Budget resolutions are not
subject to veto, or even to filibuster. In this new political
environment, it is not going to be politically viable for President
Obama to veto Republican budget bills because they do not spend
enough. If those bills are sufficiently well crafted, such vetoes
can be overridden now.
Republicans would commit grievous policy and political
errors by compromising with Obama on the budget. They need to do
what the voters have now elected them to do, and this is exactly
what Ryan plans to do. They need to adopt sharp reductions in
spending, following the models of Governor Christie in New Jersey,
Governor McDonnell in Virginia, and the new Conservative Party
government in Great Britain. The Democrats will not go down with
Obama fighting what the people are obviously demanding on
spending.
On December 1, President Obama’s Deficit Commission will
issue its report. This Commission was not elected by the people to
do anything. The new Republican majorities were. Republicans should
just pocket all the recommended spending cuts, and thank the
Commission for its work, ignoring anything else. I predict Ryan and
the Republicans will do just that.
Pundits on the right as well as the left have drawn the
wrong conclusions about the similar budget confrontation between
President Clinton and Congressional Republicans in 1995. Clinton
won the cosmetics, but Gingrich and the Republicans won the
substance, enacting sharp spending restraint with pro-growth tax
cuts that soon resulted in large budget surpluses. In the current,
far stronger, anti-spending, anti-government political environment,
President Obama is far weaker than Clinton was.
Republicans just need to be careful not to get stuck
promoting spending cuts that will lose the political base that
catapulted them into the majority. That can be done with the
current plan to return spending to 2008 or 2007 levels except for
Social Security and Medicare, along with repealing Obamacare and
President Obama’s crony capitalism, green energy, corporate
welfare, and other bailout spending.
The other big opportunity for Republicans now even with
President Obama and his veto pen is on extending the Bush tax cuts
for all. The political momentum from yesterday will likely be
sufficient to extend those tax cuts at least for another two years,
leaving the 2012 election to decide more fundamental tax reform.
Enough Democrats will not want to increase taxes for anybody in
this bad economy to force Obama to accede or face the serious
prospect of another veto override.
The Democrat Left will argue that with the huge budget
deficits we cannot afford to extend these tax cuts for upper income
earners. But with the top 1% of income earners already paying more
in federal income taxes than the bottom 95% combined, no
significant revenue is going to be generated by trying to raise
taxes on them still more. On capital gains taxes alone, every rate
increase over the last 40 years has resulted in less revenue rather
than more, and Obamacare already raised capital gains taxes for the
future. If Obama’s comprehensive, across the board rate increases
cause a renewed, double dip recession, the result will be far less
revenue overall, rocketing the deficit past $2 trillion.
Republicans would win with these arguments. At best,
Obama’s tax policies if not stopped would just add to the capital
strike and capital flight, meaning extended if not worsening high
unemployment. The American people have just said they do not find
that acceptable.
Another big opportunity for Republicans is legislation to
remove EPA authority to regulate carbon dioxide, which is not a
pollutant but a natural substance essential to all life on the
planet. As the EPA proceeds with this Obama plot, its threat to the
economy and jobs and burdensome unnecessary costs will become
overwhelmingly unpopular, drawing enough Congressional Democrat
support to overwhelm Obama here too.
Much more difficult will be repealing Obamacare.
Republicans here should move to enact in one ideal bill repeal of
the Obamacare policy atrocity, and replacement of it with the
Patient Power alternatives, which would be quite popular. That
would include a health care safety net leaving no one without
essential health care, and coverage of pre-existing conditions with
high risk pools. This legislation would amount to a big spending
cut over the long run. Even if Obama successfully vetoes it, this
will frame the issue correctly for 2012.
Republicans should also promote bills to frame the issue
on long term fundamental entitlement reform. Personal accounts for
Social Security and sending the remaining 184 federal welfare
programs back to the states would be popular long term initiatives.
Careful Medicare reforms based on personal accounts, and health
insurance vouchers tantamount to Medicare Advantage for all,
similar to the Ryan Roadmap reforms, would be politically
seaworthy.
This afternoon, President Obama will come out and
graciously offer to work with the Republicans in compromise. No one
should be fooled by this calculated deception. The President will
just be trying to save his political bacon for a renewed surge to
the Left, and will agree to no compromise in the interim. The
Republicans should graciously respond that they would be glad to
work with him too, and insist on his support for the above
agenda.
Why They Lost
President Obama and his Democrats lost so badly yesterday
because voters on the Right, the Left, and in the middle felt so
badly misled in 2008. Obama sent the message in 2008 that he was a
centrist moderate. But he has governed since the election as the
most left-wing President in history, and laid the foundation for
worse. Obama offered the nation starting all the way back in 2004 a
new, post-partisan politics ending the squabbling in Washington.
But he has governed since the election along strictly party lines
with no significant compromises, more recently telling an Hispanic
radio audience that it is time to “punish our enemies and reward
our friends.”
In one debate with John McCain in 2008, Obama promised “a
net spending cut” for the budget overall. After the election, he
delivered a wasted, ineffective, trillion dollar stimulus bill, and
increased federal spending by a fourth relative to GDP in just two
years. During the 2008 campaign, Obama promised a tax cut for 95%
of Americans. The American people do not believe that his
temporary, $400 per year, $8 per week, “Making Work Pay” tax credit
delivered on that promise.
The Democrats won control of Congress with “Blue Dog”
Democrats promising that they would be more conservative than the
Republicans, especially on fiscal issues. Those supposed
conservative Blue Dogs then voted into power the most left wing
Congressional leadership in American history, who produced record
shattering deficits and debt.
But President Obama’s own liberal base also felt misled
and betrayed, as working people suffered near double digit
unemployment for almost two years, with no end in sight. Hispanics
suffering extended unemployment well over 10%, and African
Americans suffering extended Depression levels of joblessness, were
not going to turn out in large numbers to vote for more of the
same. Nor were those suffering record poverty, food stamp
dependency, and foreclosures, or liberals in sympathy with them.
Those who felt the Obama hype meant they would no longer have to
pay their rent, and would enjoy goodies out of the Obama “stash,”
naturally were not going to show up to vote this year when none of
that panned out.
The more ideological on the left felt betrayed by the
continuation of the Bush War on Terror policies, with thousands of
troops still in Iraq, a Bush style surge in Afghanistan, Gitmo
still not closed, and aggressively expanded drone attacks. This
reflects a fundamental long-term problem among Democrats. The Left
feels Obama has been too conservative. The American people said
yesterday he has been way too far left. Can the Democrat Party,
including millions of “Blue Dog” conservatives, even hang together
and remain viable in this political environment?
Obama’s Future
If Republicans are successful in enacting the above
agenda, the economy will boom. No doubt Obama and his propagandists
will take credit for that. But the public will not be easily
fooled. The economy boomed with the Kennedy tax cuts in the 1960s
as well. The Democrats were massacred in 1966 nevertheless, and
Nixon was elected in 1968, defeating the liberal
Humphrey.
President Obama is rigidly ideological, and he is going to
fight until he goes down with the ship. But the Democrat Party is
not going to go down with him anymore. If his polls do not improve
quickly, he will have a fight on his hands for renomination. Only
the above-described, Republican-engineered change of course on
economic policy can save him. If the Obama agenda persists,
however, the Democrats will not renominate him.
An articulate Republican who can project a vision for
roaring prosperity and fundamental reforms empowering working
people would be unstoppable in 2012 in any event. My prediction:
Gingrich-Rubio 58%, Obama-Biden 40%.
