POLITICAL CONNECTIONS
Burdens That All Should Share
Obama's Best Guide While Navigating Troubled Waters Is A Commitment To Common Sacrifice.
In hard times like these, a president's most reliable compass is a commitment to shared sacrifice. Barack Obama prominently embraced that idea during his recent appearance on "Meet the Press." The "notion of shared benefits and burdens is something that I think has been lost for too long," the president-elect insisted, "and it's something that I'd like to see restored."
That's a stirring sentiment. But it will be credible only if Obama applies it as forcefully to Democratic constituencies as to those usually aligned with the GOP. Nothing will be more valuable to Obama, as he tries to steer the nation through troubled waters, than proving he believes allies and opponents alike must grab an oar.
The auto bailout provides Obama one opportunity to display that instinct. The loans President Bush approved last week required General Motors and Chrysler to produce a long-term viability plan by March 31. No blueprint from the companies will be plausible without reductions in labor costs.
That doesn't mean Obama must accept the demand from Southern Senate Republicans to lower wages at the unionized American firms to those paid by non-union Japanese manufacturers. That would effectively enlist Washington in busting the United Auto Workers union and empower foreign corporate executives to set pay levels for American workers -- an odd position for conservatives usually exercised about protecting U.S. "sovereignty." And after years of meager median income growth under Bush, no president wants to compel wage reductions. But unless labor joins management and creditors in meaningful concessions, the companies' prospects will dwindle further -- as will the public's tolerance for their federal lifeline.
Nothing will be more valuable to Obama than proving he believes allies and opponents alike must grab an oar.
Tax policy will similarly test Obama. He has proposed to provide families through the middle and upper-middle class a tax cut up to $1,000 annually, effectively to offset their Social Security taxes. That idea was always among Obama's most questionable. When the federal budget faces record deficits, as it does now, it's misleading even to call such a reduction a tax cut; it really amounts to forced borrowing from the next generation, who will pay for our consumption through higher interest payments on an enlarged federal debt. And such a tax reduction would also make Obama the only president besides Bush to cut taxes during wartime, dishonorably passing the bill for the conflict to the generation fighting it, again through an increased debt.
Even so, Obama couldn't completely abandon his middle-class tax cut now. Politically, he saw the cost Bill Clinton paid for abandoning a similar proposal in 1993; substantively, short-term tax cuts could complement the public investments in his developing economic stimulus agenda. But given how much that massive stimulus plan already will swell the debt future generations must repay, it's difficult to justify an open-ended tax cut that will cost Washington yet another $710 billion over the next decade, according to the nonpartisan Tax Policy Center. In the spirit of shared sacrifice, Obama could argue that such long-term fiscal pressure on coming generations will require middle-class families to surrender their new tax break after, say, two years -- when they could be allowed to expire along with Bush's tax cuts for the highest earners.
Health care will raise similar choices. Candidate Obama proposed to provide universal health coverage by demanding more responsibility from employers (who would be required to contribute to coverage for their workers), government (which would provide subsidies for the uninsured) and insurers (who would be mandated to sell to all applicants regardless of previous health problems, a reform known as guaranteed issue). But Obama blinked at mandating responsibility for individuals by refusing to require that all uninsured Americans purchase coverage.
If Obama holds to it, that position could undermine his plan. Substantively, it means individuals could wait until they were sick to buy insurance, confident that the guaranteed issue rule would require insurers to sell to them; insurers would then raise premiums on everyone else to guard against that risk. Resisting a mandate would also greatly complicate the politics, ensuring fierce opposition from a health insurance industry that has signaled it would otherwise accept a guaranteed issue requirement if all Americans were required to buy insurance.
Obama can make historic progress toward fulfilling his party's decades-old dream of universal health coverage. But, as in so many of his crucial choices, the key will be asking all Americans to share the burdens as well as the benefits.
Previously in Political Connections
- A Dangerous Imbalance For The GOP (12/20/2008)
- With Detroit, Trust But Verify (12/13/2008)
- Three Questions For Clinton (12/06/2008)
- Obama's Declaration Of Independence (11/26/2008)
- The Bush GOP's Fatal Contraction (11/22/2008)
