POLITICS: President Obama’s 2013 Budget

Posted on by Ken Ackerman

A Viral History first: 
Rather than giving you a long, complicated post about President Obama’s 2013 budget, with lots of confusing charts and small print, this time I decided simply to ask a friend to hold his i-Phone camera while I just told you what was up, face to face.  So here it is, our first video. 

Please humor us on the rough edges.  Over time, we’ll get sharper with our production values.  But for now, let us know if you think the experiment a successs — and don’t be shy about constructive criticisms!  This is new territory for us.  And, of course, special thanks to our excellent cinematographer, Peter Matz.

By the way, the source for all the charts I’ve used here is the Historical Tables section of President Obama’s 2013 budget, straight from the OMB web page.   Enjoy.  Just click on the image above.

   

Politics: On Obama’s budget battle, advice from Machiavelli.

Posted on by Ken Ackerman
Nicolo Machiavelli, the original “budget hawk,” author of The Prince.

Here’s some quick advice for President Barack Obama, from someone who knows  politics–

For Obama, the new year 2011 promises a specular early fight with newly-swaggering Republicans on Capitol Hill over US government spending.  As soon as early March (when the current $14.3 trillion debt ceiling and government-funding Continuing Resolution both expire), Obama will face ultimatums from Republicans demanding massive, perhaps draconian budget cuts, backed by threats to shut down the government, default on US bonds, or worse.   If Obama gives in, liberals will hate him.  If he refuses, the country could suffer.

What should a President do — or a Prince — faced by such blackmail?

This issue of government spending is old — very, very, very old.  Two thousand years ago, Emperors in ancient Rome curried favor with the mob by serving them bread and a circus.  Government-funded “social safety nets” are a 20th century invention, but even in 15th century Italy, local kings and warlords agonized over whether to shower their people with bribes and gifts to make themselves popular, or to pinch their pennies for a rainy day.

Nicolo Machiavelli, the great political maven, spoke directly to this point in his classic portrait of 1520s Italian hard-ball politics, The Prince.  To Machiavelli, to answer was clear: pinch your pennies:  

  • “[A] prince thus inclined [to spend lavishly on his subjects] will consume in such acts all his property, and will be compelled in the end, if he wish to maintain the name of liberal, to unduly weigh down his people, and tax them, and do everything he can to get money.”

Sound familiar?  Generous spending, leading to expectations for more spending, leading to high taxes, leading to resentments all around?

  • “This will soon make him odious to his subjects, and becoming poor he will be little valued by any one.”

Better to be a miser.

To Machiavelli, rather than spend his Kingdom into poverty, a Prince was better off to be a miser.  Not only was it cheaper, but it will actually made him more popular:

  • “[A] prince… if he is wise he ought not to fear the reputation of being mean.  In this end, people would respect him….   [F]or in time he will come to be more considered than if liberal, seeing that with his economy his revenues are enough, that he can defend himself against all attacks, and is able to engage in enterprises without burdening his people…. [H]e exercises liberality towards all from whom he does not take, who are numberless, and meanness towards those to whom he does not give, who are few.”

And today? 

Barack Obama’s 21st century post-industrial America is a far cry from Machiavelli’s pre-Enlightenment cloak-and-dagger Renaissance Italy.  Governments today no longer stand aside and let people sink in bad economies.  Still, the point remains:  What would Machiavelli do, confronted by Republicans today demanding budget cuts?  What would he advise Obama?

Certainly, he’d tell Obama to never show weakness — always dangerous then and now.  But I think he’d also tell him this:  Seize the budget-cutting mantle for yourself.  Steal the Republican’s issue, put your own stamp on addressing out-of-control spending, and take credit.  Be more like the miserly Prince (or at least a 21st century progressive version thereof), popular and rich at the same time.

Click here to see Machiavelli’s full chapter on the issue.  It’s a good quick read.  Enjoy.

Politics: Congress’ game of Budget Chicken. Does it matter? Yes!!!

Posted on by Ken Ackerman



Bill Clinton and Newt Gingrich before closing the government in 1995.

 
Remember how they played “chicken” back in the 1950s?  Two guys in hot-rod cars drove toward a cliff.  The first to jump out was Chicken.  His friends all laughed.  Click here to see how it played out in the classic film Rebel Without a Cause.   Notice how the winner got to celebrate by being killed while his friends drank beer.  



James Dean with Corey Allen before
Allen drives off a cliff in Rebel Without a Cause.


What a perfect game for politicians: pointless, self-destructive, with big headlines.  Not surprisingly, playing chicken with American finance has become a favorite sport of the US Congress.  And  2011 seems destined for a spectacular crash, with a choice of two on-rushing cliffs to drive off:

  • First, on March 4, the Continuing Resolution (CR), the law that funds most of the US federal government, expires.  This is no accident: Republicans last December insisted on the short fuse. Unless the CR is extended or replaced, the government must shut down that day.  

  • Second, in late March, the Debt Ceiling, which limits the total amount of money the Federal Treasury can borrow — set last year at $14.3 trillion — is scheduled to be reached.  Since Treasury borrowing is needed not just to fund the government but also to replace expiring bonds and pay interest, failure to raise the ceiling could cause the US government to default on its bills.  

Government shut downs?  Defaults?   The last time Washington shut down was in 1995 when then-House Speaker Newt Ginrgich insisted then-President Bill Clinton accept a list of spending cuts, which Clinton refused.   For a full week as the polticians jockeyed, offices closed, benefit checks froze, and national parks and monuments went dark.  The public cringed at the whole futile exercise.  As for defaulting on bonds, the US government has never done this in its entire 213-year history (with a partial exception in 1933 when FDR eliminated the “gold clause” in US obligations, allowing debt paid in paper currency.( Click here to see Alex Pollock’s take on this from the American Spectator. )

US “full faith and credit” — its commitment to pay bills — is enshrined in the Constitution as the basis of our national ability to borrow.  It is as close to sacrosanct as anything in finance, and the only thing that separates us from Greece and Ireland in the eyes of lenders.

So why are Congressmen and Senators — particularly Republicans of the Tea Party stripe — threatening once again today to play chicken with America’s global fiscal standing by refusing the raise the debt ceiling or extend the CR?   Is it really just simple, self-serving, annoying politics-as-usual?   

Take a look at this chart:  It shows the US national debt since 1940, in constant dollars.  Notice the explosions starting in 1980 (Reagan tax cuts), in 2002 (Bush tax cuts plus two wars), and the near-vertical climb since 2007 (Wall Street financial melt-down).  Today, US debt is nearly 80 percent of our gross domestic product.   Almost nodoby disagrees that, unless reversed soon and sharply, this trend threatens to swamp our economy, our national security, and our future. 

For years,  politicians have gabbed about cutting the debt, but almost never do anything about it.  Just last month, President Obama and Senate Republican leader Mitch McConnell negotiated a tax cut deal increasing the debt by a projected $900 billion in two years, while solemnly promising to “get serious” about the debt “next year.”  The fact is, nothing can be done to save money in Washington — not spending cuts, not taxes increases — unless some politician on one side or the other agrees to surrender. 

He or she has to agree to jump out of his car and be called “chicken.”  And unless the car is careening toward a cliff, nobody will jump.

This is why, as much as I hate to admit it, the Tea Party crowd has a point.  IF the goal really is to force Washington to do something serious about the debt, then playing chicken with the CR and Debt Ceiling is a bold way to do it.  Presumably, the Republicans will refuse to relent until Obama agrees to big spending cuts. And then, their egos protected, a few of them will jump from the car and let everyone avoid the crash.

If Obama refuses, the government will close or default on its bonds.  Or, if Obama reciprocates, using the Tea Party gambit as an excuse to put forward his own set of perhaps-more-reasonable cuts and modest revenue enhancers, all sides could walk away with a victory.

This is a dangerous game.  Remember James Dean in Rebel Without A Cause.  His rival, Corey Allen, got his sleeve jammed in the car door and, as a result, when he needed to jump, he couldn’t.  Off the cliff he flew.  So too could Obama or the Tea Party if they play this wrong, and the big loser will be the US economy.  Knowing when to jump, when to refuse, and how to open the door, are key.

Have we really come to this?  I’ve given up on trying to find the adults.  Let’s just hope the children don’t burn down the house.

Is this Obama’s “Read my Lips” Moment?

Posted on by Ken Ackerman

Way back in the last Century, in 1988, 22 years ago (Gasp! Am I really that old?), George H. W. Bush convinced the voters of America to elect him President, defeating Democrat Michael Dukakis in an electoral college landslide, 426 to 111. Central to Bush’s campaign, however, was a single memorable promise that made him a hero with conservatives coast to coast: that he would never, ever, ever raise taxes.

Bush immortalized this pledge in his acceptance speech to that year’s Republican Convention in New Orleans, uttering his most-ever-cited statement, as follows: “Read my lips! No New taxes!” — taken from the Clint Eastwood tough-guy movie “Dirty Harry.” Here’s the video in case you’ve never seen it. It’s a beauty: Click here.

The irony, of course, is that in 1990, just two years later, Bush broke that pledge. Facing soaring deficits and a sinking economy, Bush decided to compromise with Democrats and sign a deal cutting Washington government deficits by $500 billion over ten years. Though it contained many spending cuts painful to Democrats, it also raised many key taxes, including the Federal gas tax.

The photo above shows Bush as President siging the 1990 deal. Not much of a smile on his face.

Not surprisingly, conservatives erupted in anger. “Read my lips. I Lied!” headlined the New York Post. The Cato Institute called it the “Crime of the Century,” and the Heritage Foundation quickly tagged it a failure. Most Republicans in Congress voted no (or Hell No!!) on the package; Bush had to rely on Democratic votes. Then, in 1992, when Bush stood for re-election, the pigeons came home to roost. Despite his widely-admired leadership during the 1991 Persian Gulf War that sent his popularity soaring to near 90 %, Bush’s budget deal and a worsening recession soured his prospects. Television pundit and former Nixon speech-writer Pat Buchanan managed to embarrass him by winning 40% of the vote in the New Hampshire Primary, running largely on Bush’s violation of his tax pledge. In the general election, Democrat Bill Clinton cited it too, and won a comfortable victory in a three-way contest that also included businessman Ross Perot. (click here for 1992 election results.) By the next January, George H.W. Bush was out of a job.

All of which brings us to today’s president, Barack Obama, and his decision this week to join in a deal with Congressional Republicans to extend the large, due-to-expire, Bush Junior-era tax cuts for the wealthiest Americans. The deal contains other things, but none more important. As with Bush Senior in 1990, this too violated a position central to Obama’s candidacy and presidency. Obama has made his opposition to continuing the Bush tax cuts for Americans with incomes above $250,000 per year a matter of basic principle, one widely shared with his supporters. Already, many Democrats are calling it a betrayal or worse.

Will this be the beginning of the end of the Obama presidency, just as the 1990 budget deal marked the beginning of the end for George H.W. Bush? Obviously, it is way too soon to say. Obama still has time to win back his critics, and perhaps even win on the tax-cuts-for-the-wealthy issue itself when it comes up again in two years. Still, the parallel is hard to ignore. Stay tuned. This will be very good drama.

Stop the gag order. Lobbyists are protected by the First Amendment.

Posted on by Ken Ackerman

Free speech would be easy if it only applied to popular people saying popular things. But that’s not the case. Our First Amendment protections are most urgent and fragile when they apply to the unpopular, the dissident, and the public villain of the day. Which brings me to lobbyists.

It’s easy to dislike lobbyists. (Full disclosure: I happen to be one. Here’s a link to my public registration.) Politicians vilify them, blame them for lots that is wrong in Washington, many times justified. Crooks like Jack Abramoff and the occasional bribe-taking Congressman smear the profession. The public hates inside influence-peddling, sees the potential for abuse, and insists on limits. So, as a lobbyist, I am happy to be regulated, and I’m ready to comply with all the disclosures of clients, contacts, and interests, and don’t even mind the political pokes.

But the latest missive from President Obama’s White House, a Memorandum dated March 20, 2009 on “Ensuring Responsible Spending of Recovery Act Funds,” is a literal gag order to be carried out by Federal agency officials. It truly crosses the line.

Let’s be clear. Lobbying is not a social evil. It is a public good protected by the First Amendment — both as “freedom of speech” and as the right of the people “to petition the Government for a redress of grievances.” By recent count, there are over 50,000 registered lobbyists representing a dizzying range of causes and interests, from good government and safe drugs to individual corporations and local governments. Bad actors aside (see Joseph Keppler’s classic view, “The Bosses of the Senate,” above), they keep Congress informed, give groups around the country an effective voice, and engage in public discourse essential to decision-making in a democracy.

In modern Washington, a competent lobbyist is as essential to navigating the complex maze of bureaucracy and politics as a competent lawyer or accountant is to any individual trying to run a business, buy a home, or file their taxes. Denying people access to a lobbyist amounts to stripping them of their voice.

And that’s precisely what the new Obama memo does. In so many words, it requres agency officials, in any meeting or phone call regarding the Stimulus Package, to tell any lobbyist in the room or on the call to get out, hang up, or shut up — “the lobbyist may not attend [the meeting] or participate in the telephonic or in-person contact, but may submit a communication in writing.” (See Section 3(b))

Message to the public? When it comes to seeking Stimulus Package funds, you are on your own. You are denied representation. You have no right to have someone speak for you. The impact? Big corporations, with high-paid, experienced advocates on their payrolls as officers or in-house staff (not subject to any rules on lobbying), will easily roll over any small business that gets in the way.

This is overkill, taking a popular concept and extending it to a destructive conclusion. I hope the Obama White House will re-think it. To my mind, even speaking as a lobbyist, change is still good.

Gasp! Where are the leaders?

Posted on by Ken Ackerman

My chief reaction to Hillary Clinton’s stunning wins in Texas and Ohio, which have now extended her epic race with Barack Obama for the Democratic presidential nomination for at least six more weeks (not unlike the groundhog seeing his shadow) until the Pennsylvania primary on April 22, was this: Fear.

Will so much more of this increasingly ugly campaign help Democrats ultimately defeat John McCain in November to re-take the White House? Or is this turn of events now setting up Democrats to lose all the marbles once again in what otherwise should be a sure-win year?

No, I am not suggesting that Clintin should drop out. She has won her right to compete fair and square by her clean primary wins last week. That’s not the point. The issue is quality.

No, Barack Obama does not deserve a free ride to the nomination. He has a duty to answer questions about the Tony Rezko trial, his views on NAFTA and Israel, his recent staff gaffes, and all the rest — just as Hillary Clinton has a duty to disclosure her tax returns, funding sources for the Clintin library, presidential papers, and explain the basis of her 3 am phone calls. Yes, a tough campaign can make them both tougher fighters in the end, and help clear the air on thorny issues. And yes, this ongoing contest has worked wonderfully so far to build interest, enthusiasm, and turnout.

But all these positives are fragile. And lately, the trend is ominous. We Democrats have a history of bloodying ourselves in internal battles producing weakened, losing candidates. Think Jimmy Carter 1980 or Hubert Humphrey 1968 (and for the historians in the room, Al Smith 1928, James Cox 1920, or even Stephen Douglas 1860).

What bothers me about the Hillary Clinton campaign today is that it seeems to smell blood and has chosen to base its strategy on simply tearing down its opponent. Turning loose dogs of war is always brings risks of the unknown. (See Iraq.) The more she attacks, the more Obama will need to attack back. And if she loses the contest and Obama becomes her collateral damage, losing to McCain in November, this seems to bother her circle less than losing the nomination itself.

And that galls the hell out of me. Because priority number one in 2008 is to win back the White House. Otherwise, this whole terrific primary contest has all been one big banal waste of time.

So now is the time for the Democratic leaders — Al Gore, Nancy Polosi, Joe Biden, so on — to act like leaders. They should step in and restore order. I’d like to see them call a big summit meeting, bring Clinton and Obama together, make them sit side by side, and read them the Riot Act. The message should be simple: Campaign your hearts out, but keep this civil. Strike a deal: Whoever has the most elected delegates once the primaries are over (with whatever special arrangement is made for Florida and Michigan) should be deemed the winner, and the loser should promise to concede then and there.

The Party should refuse to support either one of them who conducts himself or herself in a way to undermine a victory in November.

Personally, I happen to like both of our semi-finalists and think either one would make a terrific candidate. Maybe I’m just over-reacting, being in a grumpy mood from having a skin cancer removed this week. (How about that. I buried the lead. Don’t worry, by the way. It went fine.)

In any event, that’s my rant for this pretty Sunday morning here in Washington. Tonight I fly to Minneapolis (11 degrees and snow) to visit a very likeable client in the very likeable Midwest.

Hope things are well. I’m off for more coffee. –KenA

Awakening

Posted on by Ken Ackerman

Gasp!!! It’s been five months now since I last posted anything on this Blog. Is that pathetic, or what? Well, if you thought I was gone, you were wrong. I have not dropped off the face of the earth. You are not rid of me. I have decided to come back.

The truth be know, I have largely shelved my writing-historian life the past five months and happily returned to my first profession, practicing law. Yes, by day, I am a registered, card-carrying Washington lawyer-lobbyist. You can look it up. Here’s a link to my latest public report at OpenSecrets.Org: http://www.opensecrets.org/lobbyists/lobbyist.asp?txtname=Ackerman%2C+Kenneth&year=a&txttype=l ) The work has been interesting and productive and — no apologies here — it’s been lucrative too. Writers have to eat and pay bills, and I like to eat well. And a few months of hourly billings certainly helps.

But so much water has run under the bridge these past few months: Hillary, Obama, McCain, easily the most exciting Presidential sweepstakes in memory, not to mention the ongoing drama between George Bush’s last gasp White House and Nancy Pelosi’s stumbling Congress, and now the economy bumbling over, of all things, subprime mortgages. And that’s not even counting the New York Giants. What woeful, thrilling times we live in. How can a historian be silent?

Yet here I am, sitting silently all these months, a mere spectator. No, I haven’t given up being a fervid political junkie. I continue to read my three newspapers each day (the Washington Post, NY Times, and Roll Call). I listen to POTUS 08 on XM radio, check the DrudgeReport and other internet sites, and tune in pundits for hours on end. No excuses. I like it, and wouldn’t have it any other way. But every time I sit down to try and write a Blog post or an article, about politics, history, or anything else, I get distracted. Words dry up. I find other things needing attention. Writer’s block? Perhaps. But these blocks don’t come out of thin air.

Since my last book was published in May 2007 (Young J. Edgar: Hoover the Red Scare, and the Assault on Civil Liberties, 1919-1920), I admit that I’ve researched at least half a dozen good ideas for next topics, including possible narratives about figures as diverse as Emma Goldman, Supreme Court Justice Louis Brandeis, American socialist founder Eugene V. Debs, long-time autocratic House Speaker Joe Cannon, feminist pioneer Victoria Woodhull, John Adams and the Boston Tea Party, and even the adventures of a once-famous British ocean deep-sea diver from the 1880s named Alexander Lambert. All these ideas have great promise, real keepers. But here too, the writers block sets in. I find problem at every turn, and no path out of the forest.

So I’ve made a decision. To start writing again, I need to write. And be published. That’s the only way to beat writers block. And in this modern world of cyberspace, the way you do it is through a Blog. So here I am Blogging — and in this initial effort, I am Blogging in the worst stereotypical way: with a self-absorbed, nascissistic, whiney, inconclusive essay about nothing but myself. But I guess that’s how you start. It doesn’t become literature overnight.

So expect to see me posting more often on this space. What I’ll write about, what shape it will take, ony time will tell. But plan to spent time having Coffee with Ken. I am going into writer’s training. Any encouragement would be appreciated.

So that’s it from the home front. Hope you’ll put up with me in the meantime.

Thanks, and all the best. –KenA