Obama's Economic Lifesaver

by John M. Curtis
(310) 204-8700

Copyright Feb. 2, 2010
All Rights Reserved.                    

                President Barack Obama owes recently minted Sen. Scott Brown (R-Mass.) a vote of thanks for torpedoing his $1-trillion, 2,000-page health reform bill, a costly boondoggle that would have set back economic recovery for years.  While Democrats groaned Jan. 19 when the 51-year-old former Playgirl centerfold won the late Sen. Ted Kennedy’s (D-Mass.) seat, defeating Obama’s costly health care reform plan might save the U.S. economy and the president’s prospects for a second term.  With the economy sputtering, the stock market teetering and unemployment at 10%, Barack can’t afford any economic mistakes.  He must turn around the economy or almost certainly face stiff headwinds en route to reelection in 2012.  Only 10 months away from the midterm elections, Barack may not have enough time to save already worried Democratic elected officials and turn things around in 2010.

            Former President George W. Bush’s economy hit the skids in Dec. 2007 when credit markets seized and the economy headed south.  While the White House denied any recession during the 2008 campaign, U.S. government statistics said otherwise, confirming the nation slid into recession.  Bush’s recession hurt GOP presidential candidate John McCain’s (R-Ariz.) hopes in 2008, together with picking former Alaska Gov. Sarah Palin for his running mate.  Recognizing the economic mess, Obama pushed for a $787 economic stimulus plan, hoping to turn things around in 2009.  When the year ended, the president watched the U.S. economy contract 2.4%, the poorest showing since 1946.  Despite 2009’s fourth quarter showing 5.7% growth, most economists expect the economy to grow between 2.5%-3.0%, not enough to change the high unemployment dragging down the economy.

            Obama has been learning the hard way that bipartisanship is no easy goal.  He was reminded by Sen. Joe Lieberman (I-Conn.) that he can’t take for granted one single vote.  It was Lieberman, Jan. 14 that told the White House there was no deal unless they dropped the Medicare-at-55 provision.  It was Lieberman that told Barack his health care bill would bust the budget and break the economy.  Brown’s election broke the Democrats’ supermajority with which they would have passed a potentially fiscally insane piece of legislation.  Looking a the big picture, it’s far more important for Barack to heal today’s sick economy to get the opportunity to prevail on the nation’s most important issues.  There’s linkage between the Pentagon’s decision to add costly Patriot Missile batteries to the Gulf States and showing some restraint in domestic spending, a lower priority than national defense.

            No matter how ambitious Barack’s domestic agenda, he knows that defending then nation takes precedence.  Sending Patriot Missile batteries to the United Arab Emirates underscores the dangerous back-story currently underway with a more aggressive Iran pursuing atomic weapons.  At any point, Obama must be prepared to defend U.S. interests or those of its allies, something independent of his domestic agenda.  He knows that nothing hurts U.S. national security more than a weak economy.  Turning the economy around takes precedence over well-intentioned domestic programs, including national health care.  Scaling back his health care ambitions could pay rich dividends for the U.S. economy by meeting a key objective of reducing soaring budget deficits.  National health care reform could have busted the budget and set the economy back for years.

            Barack acknowledged Friday, Jan. 29 that reducing federal budget deficits was his new priority.  With Federal Reserve Board Chairman Ben S. Bernanke given a second four-year term, Obama subscribes to the Fed chairman’s belief that the government must do something about soaring deficits.  Estimated at over $1.3 trillion by the Congressional Budget Office for fiscal 2010, Barack’s costly national health care initiative would have made matters worse.  Obama also knows unexpected military emergencies can also throw the budget out-of-whack.  Refocusing priorities on a $100 billion jobs program should help reduce unemployment and provide stimulus to the sluggish economy.  Only by recycling cash into domestic spending can the U.S. crawl out of its current economic mess.  As long as unemployment remains high and consumers don’t spend, the recession continues unabated.

            Whether Democrats know it or not, Scott Brown saved the Party from a costly health care boondoggle that would have stretched out an already interminable recession.  When Barack met with House Republicans Jan. 29, he engaged in too much one-upmanship and not enough listening.  House Minority John Boehner (R-Ohio) and Senate Minority Leader Mitch McConnell (R-Ky.) have some low cost alternatives for lowering insurance premiums and increasing accessibility.  Barack’s bottom line on health care or anything else should be based on what’s good for the economy.  His $1-trillion health plan would have added to already intolerable budget deficits, causing more long-term damage to the U.S. economy.  Going back to the drawing board, Barack should consider ending the insurance industry’s antitrust exemption, banning them from excluding preexisting conditions and opening up interstate commerce.

John M. Curtis writes politically neutral commentary analyzing spin in national and global news.  He’s editor of OnlineColumnist.com and author of Dodging The Bullet and Operation Charisma.