- The Washington Times - Thursday, January 29, 2009

ANALYSIS/OPINION:

The economic stimulus package moving through Congress is President Obama’s first legislative test, and it is one he will likely fail due to his predilection for gentility, when hardball is necessary. In time, and with enough education on the stark fiscal reality the country is facing, he will surely pass the presidential leadership test (letting the reality of his office, rather than an ideology, shape his presidency) and become the domestic spending and tax reformer that President George W. Bush wanted - but failed - to be.

Mr. Obama’s commendable efforts to reach out to Republicans to get their input and support for a stimulus package is a clear indication that he wants to get the economy growing again and stop having jobs hemorrhage. House Minority Leader John Boehner, Ohio Republican, after a meeting the president had with the Republican caucus, said Mr. Obama is “concerned about some of the spending” House Democrats have added.

As well he should be, considering the Christmas tree approach the process has taken, with Democrats filling the bill with all sorts of goodies for each and every liberal girl and boy. Mr. Obama also said that “in some cases the [Republicans] are not as informed on parts of the plan as I would like,” meaning he is uncomfortable with the secretive process Democrats have taken in crafting the bill. But in order to get the best bill, Mr. Obama is going to have to do what Mr. Bush did at times in his presidency - buck the will of his party’s congressional leaders and mold their thinking to his, not vice versa.

President Bush started his presidency bent on reforming Social Security and Medicare, streamlining the budget, and cutting taxes, but felt forced in the aftermath of the September 11 attacks to focus almost exclusively on security. He had to go against his party to create the office of Homeland Security, the largest government expansion in history. He had to fight with his party to reform the intelligence system - removing the barriers between defense (Defense Intelligence Agency), foreign (Central Intelligence Agency) and domestic institutions (FBI) to track terrorists abroad, on the battlefield, and here at home. It wasn’t easy. It took until 2005 to get it all done. But it was necessary. Alas, he flew the flag of surrender on virtually all other spending, almost never even threatening a veto or challenging excesses that too often were committed by fellow Republicans.

The state of America’s finances is in such disarray - $56 trillion in debt, unfunded mandates and liabilities - that Mr. Obama will be forced to do what Mr. Bush could not or would not.

While Mr. Obama has included tax cuts for small businesses in his stimulus, he will at some point have to lower the corporate tax rate to make America a more competitive market generating more revenue and tax receipts. He has already said he will work to reform Social Security, which represents $7 trillion of unfunded mandates. He will have to establish a clear funding stream that doesn’t require tax increases and that cannot be touched by a covetous Congress. He will have to reform the healthcare system, with Medicare alone representing $36 trillion of unfunded mandates from a variety of various state, federal and private applications. He will have to reform the tax code in a way that encourages and increases revenue, collects it more efficiently, and simplifies tax requirements, making it easier for taxpayers to understand.

But, most importantly, the president will have to cut domestic spending to a degree that allows the nation to begin paying down the $13 trillion national debt by establishing statutory budget controls (Democrats for six years squawked about pay-as-you-go budget rules requiring that new spending either be budget neutral or offset with savings from existing funds, and there has not been even a whisper of them in this Congress so far).

Democrats don’t want to do any of those things. Their actions with respect to the stimulus package are proof positive that they are perfectly willing to conduct business as usual - spend wildly, demagogue issues until they go away unsolved, and let future generations pay the price. Mr. Obama must decide next month when he convenes his “fiscal responsibility summit” which of these issues, if not all of them, he is willing to fight for to achieve, no matter what effect this has on the naysayers in his own party. He may not want to do battle, but he has to. The alternative is fiscal ruin.

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