President Obama is riding a pretty long, unbroken streak of policy victories that is scheduled to come to an end this week. The $85 billion sequester that will reduce spending by a scant 2.4 percent marks the first serious misstep by a president who is overseeing the largest expansion of federal government intervention in the economy in two generations. Mr. Obama has either expanded federal control or protected hard-fought gains during his time in office. He hasn’t gotten everything he wanted, to be sure, but this looks like his first step backward.
The first two years of his presidency showcased a massive failed stimulus program that gave us scandals like Solyndra, a Recovery Summer that never was and the lowest workforce participation since the early 1980s. Our federal budget has still not recovered from this blow. It also spawned a takeover that centralized the health insurance sector, which will disrupt the employer-sponsored insurance that workers have come to know and the doctor-patient relationship that families have come to trust. This president signed a Dodd-Frank financial regulatory bill that will politicize consumer credit like never before, even while failing to address the government manipulation of the housing market -- the true driver of the financial crisis.
After a midterm voter backlash against his legislative agenda, the Obama administration consolidated its Hill victories and kicked the administrative state into high gear. The Department of Health and Human Services began writing hundreds of regulations to implement the health care law. The Environmental Protection Agency moved a climate agenda that Congress never authorized, crippling the coal industry and injecting uncertainty throughout the economy. His Federal Communications Commission ignored a court ruling and twice attempted to regulate the Internet with heavy-handed regulations. His National Labor Relations Board went after Boeing for daring to build a new plant in a right to work state. In 2010 and 2011, Mr. Obama added more than 160,000 pages of regulations, the most ever in a two-year span.
Through it all, the president paid lip service to the runaway government spending that hangs like a shadow over the federal budget and the economy. Without providing any leadership to resolve the problem, Mr. Obama has slipped rhetorically from “balanced approach” to “kicking the can” and blaming the amorphous 1 percent for not paying their “fair share.” The president, instead, focused on reelection. Then, following his November victory, he used the "fiscal cliff" to extract $600 billion in higher taxes from a weary GOP. In so doing, he cramped an already anemic economic recovery. He protected his economic interventions and successfully shifted political blame onto anyone who sought to undo any of it.
But it looks like he’s finally slipped up.
His aides’ proposal to include the sequester in the 2011 debt ceiling deal was a serious miscalculation. The Obama White House honestly believed that Republicans would be so wedded to defense spending that they would never allow sequestration to occur. His goal was to use sequestration to push for even higher taxes. He thought he could just trot out proposals to end “loopholes for big corporations” again. However, after he signed the "fiscal cliff" bill into law, full of carve-outs for the wind industry, Hollywood filmmakers, racetrack construction, asparagus farmers and plug-in vehicles, his diatribe just doesn’t pack the same punch. It appears the president’s strategy was wrong, and at the end of this week we’ll finally begin to see a small but important first step toward fiscal sanity.
The past few weeks have been a sad sight as the president realized he was trapped by his own proposal and began a parade of horribles in an attempt to scare the country and Hill Republicans into bailing him out. The longer the scare tactics failed, the more untenable the president’s antics have become. From docked carrier strike groups, to unbearable lines at the airport, to a farcical backdrop of first responders, the president has tried to make us believe that saving two cents on the dollar means our federal government can’t function and critical services won’t be provided. These strawmen are blowing down as fast as his staff can prop them up. Republicans don’t look like they’re going to take the bait (yet), and there’s no sign that the president’s campaign apparatus is going to move the needle.
It’s clear that the president has no desire to cut spending or rein in the growth of government. Yet a law proposed by his negotiators and signed by his own hand is about to do just that.
Time’s up, Mr. President.
James Valvo is director of policy at Americans for Prosperity.