To say that expectations are high for the presidency of Barack Obama, would be an understatement. From the economy to Iraq, here are five changes that you can count on happening now that Democrats are back in control of the White House.
1). A Second Stimulus Package – While Congress will be convening a lame duck session to try to pass a second stimulus package, President Bush has already said that the $700 billion bailout was the second stimulus package. If anything does pass Congress, look for Bush to veto it. In his first press conference Obama used the phrase economic stimulus five times. He has made it clear that this is his number one priority when taking office. I would expect expanded unemployment benefits, an increase in energy assistance and food stamps, tax cuts, and possibly another round of rebate checks.
2). Expansion of the State Children’s Health Insurance Program - SCHIP has bipartisan popularity, it was only President Bush’s veto, and House Republican obstruction that prevented the program from being expanded earlier this year. (Republicans balked that the plan was too expensive, and would cover adults. The cost was $35-$60 billion. Adults and illegal immigrants were not covered. States were given the option of covering adults at their own expense).
More unemployed adults mean more children without healthcare. Speaker Pelosi has already cited this bill as one of her top priorities, so look for it to pass quickly and be signed into law by Obama soon after he takes office. The bigger question for me is how this is going to be paid for. The original bill used an increase in tobacco taxes, with tobacco tax revenue on the decline; this is not the best option. The cost is only $7-$12 billion a year for five years, or about the cost of a month in Iraq.
3). Embryonic Stem Cell Research - This is another piece of legislation that has bipartisan congressional support that was halted by a Bush veto. Currently, there is a federal ban on funding for exploration of new embryonic stem cell lines. However, expansion and funding of stem cell research is very popular, and it has been reported that Obama’s team is already reviewing Bush’s executive orders on stem cell research. If Obama is looking to avoid bringing up an issue that arouses passions through, he may reverse Bush’s executive orders. This is likely the route he will choose.
4. Iraq – The Iraqis want us to start getting out of their country, and the United States looks willing to leave. The Iraqi government is already negotiating an agreement with the Bush administration on a timeline for troop withdrawal, and they like Obama’s 18 month phased withdrawal plan. Plans could change if there is an outbreak of violence that destabilizes the country, but it appears that all sides are in agreement that it is time for U.S. troops to start coming home. I would suspect that the withdrawal might take longer than 18 months, but the era of America’s open ended commitment to Iraq is over.
5. Closing GITMO – The AP is reporting that the Obama team is putting together a plan to close the prison at Guantanamo Bay, Cuba. The plan involves releasing some detainees, trying several others in the criminal court system in the United States, and creating a third court that would be designed to handle high risk national security cases. Republicans will oppose any plan that brings detainees to the United States, while some Democrats will oppose any plan that creates a new court that doesn’t give full rights and protections to detainees.
This is by far the trickiest political minefield that Obama will have to navigate, but one thing is clear, the United States can’t be the symbol of freedom if they are running a prison that denies detainees basic protections. This is not the way to set an example of democracy for the rest of the world. GITMO has turned into a national black eye that has to go, but the question is what does Obama replace it with?
If you examine the list that I have laid out, it is clear that Obama is coming into office intent on cleaning up the mess that the Bush administration will leave behind. My list did not even include energy and global warming which are two additional policy areas where changes are certain to be made. Obama will not make everything perfect, or save the world, but he does have the opportunity to get this nation back on the right track, and I think that is all that the American people really want.
Following an historic election, let’s take a moment to examine just what an Obama presidency will mean to the United States – what we have to look forward to, and how he will deal with our current economic issues. According Jim Davidson, some of the numbers just don’t add up:
“One of Obama’s specific proposals is to raise the capital gains and dividend taxes to 25%, which will sharply increase capital confiscation as increasing percentages of “gains” will reflect inflationary depreciation of the currency. In the U.S., an investor must pay tax on the difference between the sales price of an asset and it purchase price, with no adjustment for inflation. Consequently, when the tax rate and inflation are high, a large portion of the “capital gain” is illusory. Any asset that appreciates by less than the rate of inflation will result in its owner losing purchasing power and having to pay taxes on the illusory gains. At Obama’s higher tax rates, (he has suggested that capital gains and dividend taxes should be hiked to as much as 25%,) capital confiscation would result from modest levels of inflation.
And the Great Credit Crunch implies that inflation will be far higher than in recent experience.
Setting aside whether it is moral or equitable to force a small fraction of the population to essentially pay for the whole cost of government, much of which entails the shuffling of checks to purchase votes of various aggrieved groups, there is a bigger question. Can it be wise for the whole fiscal regime to stand on the shoulders of a small group, like a pyramid tottering on its point, so that any tribulation which undermines the prosperity of those who pay would promise to bankrupt the state?”
The Danger Lurking Behind Obama’s Tax Policy
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