The Elmendorf Rule
Here we go again. An approaching crisis. A looming deadline. Nervous markets. And then, from the miasma of gridlock, rises our president, calling upon those unruly congressional children to quit squabbling, stop kicking the can down the road and get serious about debt.
This from the man who:
• Ignored the debt problem for two years by kicking the can to a commission.
• Promptly ignored the commission’s December 2010 report.
• Delivered a State of the Union address in January that didn’t even mention the word “debt” until 35 minutes in.
• Delivered in February a budget so embarrassing — it actually increased the deficit — that the Democratic-controlled Senate rejected it 97 to 0.
• Took a budget mulligan with his April 13 debt-plan speech. Asked in Congress how this new “budget framework” would affect the actual federal budget, Congressional Budget Office Director Doug Elmendorf replied with a devastating “We don’t estimate speeches.” You can’t assign numbers to air.
President Obama assailed the lesser mortals who inhabit Congress for not having seriously dealt with a problem he had not dealt with at all, then scolded Congress for being even less responsible than his own children. They apparently get their homework done on time.
My compliments. But the Republican House did do its homework. It’s called a budget. It passed the House on April 15. The Democratic Senate has produced no budget. Not just this year, but for two years running. As for the schoolmaster in chief, he produced two 2012 budget facsimiles: The first (February) was a farce and the second (April) was empty, dismissed by the CBO as nothing but words untethered to real numbers.
Obama has run disastrous annual deficits of around $1.5 trillion while insisting for months on a “clean” debt-ceiling increase, i.e., with no budget cuts at all. Yet suddenly he now rises to champion major long-term debt reduction, scorning any suggestions of a short-term debt-limit deal as can-kicking.
The flip-flop is transparently political. A short-term deal means another debt-ceiling fight before Election Day, a debate that would put Obama on the defensive and distract from the Mediscare campaign to which the Democrats are clinging to save them in 2012.
A clever strategy it is: Do nothing (see above); invite the Republicans to propose real debt reduction first; and when they do — voting for the Ryan budget and its now infamous and courageous Medicare reform — demagogue them to death.
And then up the ante by demanding Republican agreement to tax increases. So: First you get the GOP to seize the left’s third rail by daring to lay a finger on entitlements. Then you demand the GOP seize the right’s third rail by violating its no-tax pledge. A full-spectrum electrocution. Brilliant.
And what have been Obama’s own debt-reduction ideas? In last week’s news conference, he railed against the tax break for corporate jet owners — six times.
I did the math. If you collect that tax for the next 5,000 years — that is not a typo — it would equal the new debt Obama racked up last year alone. To put it another way, if we had levied this tax at the time of John the Baptist and collected it every year since — first in shekels, then in dollars — we would have 500 years to go before we could offset half of the debt added by Obama last year alone.
Obama’s other favorite debt-reduction refrain is canceling an oil-company tax break. Well, if you collect that oil tax and the corporate jet tax for the next 50 years — you will not yet have offset Obama’s deficit spending for February 2011.
After his Thursday meeting with bipartisan congressional leadership, Obama adopted yet another persona: Cynic in chief became compromiser in chief. Highly placed leaks are portraying him as heroically prepared to offer Social Security and Medicare cuts.
We shall see. It’s no mystery what is needed. First, entitlement reform that changes the inflation measure, introduces means testing, then syncs the (lower) Medicare eligibility age with Social Security’s and indexes them both to longevity. And second, real tax reform, both corporate and individual, that eliminates myriad loopholes in return for lower tax rates for everyone.
That’s real debt reduction. Yet even now, we don’t know where the president stands on any of this. Until we do, I’ll follow the Elmendorf Rule: We don’t estimate leaks. Let’s see if Obama can suspend his 2012 electioneering long enough to keep the economy from going over the debt cliff.