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News and analysis on the global poultry
and animal feed industries.
on October 7, 2009

Obama: Too much, too soon?

The president has already approved more than a trillion dollars in spending during his nine months in office.

Barack Obama has been president of the United States for only nine months, so it is way too early to predict if he will be successful. But I think it is fair to say that in his first year, he has tried to do too much, too soon.

He had been president for only a week when the House of Representatives passed the mammoth stimulus bill. When passed by the Senate and signed by the President on February17, the bill’s price tag was $787 billion – one of the largest spending programs, if not the largest, in American history.

On top of that, Obama has signed an expansion of the State Child Health Insurance Program (SCHIP) worth $33 billion; approved an additional $330 billion in bank rescue money; and put $30 billion into General Motors, and $6.6 billion into Chrysler, as part of the auto bailout. In other words, he has tossed more than a trillion dollars onto the deficit pile like so many logs on a fire.

Stimulus sidetracked?

Although the stimulus program was sold to the public as an investment in infrastructure – roads and bridges and the like – in fact, most of the stimulus money ($432 billion of the $787 billion) consists of tax relief or fiscal aid to the states. Getting ready to build a road takes time, but cutting checks is quick and easy.

That’s why, after the first several months of the program, the Department of Transportation had managed to spend only $1.5 billion of $24 billion it had available.  But the Department of Health and Human Services spent $26 billion of the $42 billion it had available, nearly all of it in payments to the states to help pay for the joint federal-state Medicaid program.

Health care, climate change

Obama fervently wanted to reform health care. Unfortunately, as with the stimulus package, he ceded control over the contents of the program to his allies in Congress. They came up with a program that the bipartisan Congressional Budget Office estimated would cost a trillion dollars over ten years – a very heavy burden for any legislation to bear. One of Obama’s signature initiatives stumbled right out of the gate.

The president has also joined with his allies in Congress to push for legislation on “climate change.” Since the government will have no money left after stimulating the economy and getting into health care, the cost of trying to stop climate change will fall on the private sector. Businesses and consumers will be paying a lot more for their energy. For this reason, I’m guessing that Congress will give up trying to stop global warming in its tracks and will focus instead of “green energy” development and “green jobs.”

Who’s in the lead?

Obama is also having trouble attracting Republican support for his initiatives. The stimulus package got no Republican votes in the House and only three in the Senate; the health care reform bill had no GOP votes coming out of committee; and the “climate change” bill  had only eight Republican supporters in passing the House by a mere seven votes.

One problem for the president is that he let Democratic leaders in the House of Representatives take the lead on these issues. Unfortunately the House is the most partisan place in the country, where almost everything significant is decided on a party-line vote. That works in the House, but it isn’t smart politics in the nation as a whole, which the President is uniquely supposed to serve.

President Obama came into office on a tidal wave of hope and good will. Yet he learned politics as a Chicago Democratic organization politician and is still figuring out how to lead the nation at large. He will have to work hard to command trust and respect over the long term.

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