SCHATZ: Frozen spending only a start

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In fact, the White House and Congress are not taking any of the blame for the nation’s problems; they think the solution remains more government and more control over the economy. In the days after the jubilant inauguration festivities last year, the president immediately enacted the American Recovery and Reinvestment Act (ARRA), the $787 stimulus package, to jump-start the economy. Like the well-known ad for a certain beverage, it was too light on creative tax breaks and too heavy on programmatic spending. Now the administration is discussing small-business tax breaks, one of the very few steps that should have been taken in the first place.

Leaks of the contents of the president’s upcoming speech indicate that he and his team have failed to internalize the lessons of the past year’s failures and the loss of the “Kennedy seat” to Republican Sen.-elect Scott Brown. The president will instead continue to push his castor oil to the people and drive the country even deeper into the mire with more wasteful, job-killing policies. There are plans for a complete government takeover and liberalization of the student loan program, including potential forgiveness for loans to students who hold certain jobs after graduation; more handouts for weatherization and energy-related projects; a cap-and-trade climate-change bill; card check for the unions; and yes, health care reform.

On a small positive note, Mr. Obama will announce that his budget will include a freeze on non-defense, non-entitlement domestic spending, which accounts for 17 percent of the budget and will save $15 billion in the first year. This follows up on congressional approval of $6.9 billion in spending cuts in fiscal 2010, or 60 percent of the $11.3 billion that Mr. Obama requested in his budget last year.

While the freeze is worth supporting, its limited scope means the president apparently thinks there is no waste in entitlement programs or in international affairs, Homeland Security or the Department of Defense. If he were truly serious about cutting spending, the freeze would cover the entire government with a list of specific programs and entitlements. A good place to start that effort would be Citizens Against Government Waste’s 2010 Prime Cuts report, released this week, which has 763 recommendations that would save $350 billion in the first year and $2.2 trillion over the next five years.

In his remarks, the president is not likely to acknowledge that he and his advisers have been schizophrenic vis-a-vis the financial services industry, publicly bashing bankers one minute, cajoling them to do more to help rescue the economy in the next minute, and then, last week, announcing a big new regulatory and tax regime to “rein them in.” There is populism, and then there is politics, and the people can see through the “populism” in these attacks on Wall Street.

The president told ABC News’ George Stephanopoulos that he thinks a lot about what he does. Apparently he’s thinking so much that he’s not hearing what the American people are saying.

Despite warnings from advisers on both sides of the aisle that his “damn the torpedoes” strategy will mean a certain thrashing of his party in the midterm elections, similar to the one President Clinton experienced, Politico reported Monday that a retiring Congress member was told by the president that the one difference between 1994 and now is that the force of his personal popularity will insulate vulnerable Democrats from any harm. The nation doesn’t need a cult of personality - it needs fiscally prudent leadership.

Any happy talk over the past week of a dramatic policy pivot by the president toward more centrist, pro-free-market policies designed to get government out of the way and rev up the nation’s entrepreneurial engine to create jobs will be revealed tonight as wishful thinking. The president’s State of the Union address is likely to continue to attack opponents and demonize particular industries or groups in order to prepare the ground for his big-government solutions, which have become more distasteful to Americans than castor oil. They are not buying what he is selling, and if the president does not provide higher-quality goods, the no-sale sign will remain through November.

Tom Schatz is president of Citizens Against Government Waste.

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