The Elmendorf Rules

· Friday, July 8, 2011

WASHINGTON -- 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 97-0.

-- 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.

(c) 2011, The Washington Post Writers Group


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Comments

Jeremy

"Let's see if Obama can suspend his 2012 electioneering long enough to keep the economy from going over the debt cliff."

I have my doubts. First, Mr. O (or is that, Mr. 0?) has made it abundantly clear that hi is more interested in his reelection than governing. Second, even if Mr. 0 suddenly decides it's time to govern, cutting/trimming/reducing anything government does is way outside his ideological leanings.

Personally, I think Obama will play the looming crisis for all it's worth, since it might eventually lead to grand "compromise" that includes a massive tax increase. How do you spell "VAT"?

Posted July 8, 2011 at 11:14:20 AM


TJS

President Zerobama. Making Jimmy Carter look good.

Posted July 8, 2011 at 12:02:12 PM


SJvet

For what it's worth, Obama, in about 2.5 years, has played more golf than any president, even those who were in office for 8 years.

Posted July 8, 2011 at 12:12:17 PM


Robert A. Hall

Great column; I will link to it from my Old Jarhead blog. I fear we are so close to going into the abyss that 2012 may be too late.

Robert A. Hall

Author: The Coming Collapse of the American Republic

(All royalties to a charity for wounded veterans.)

Posted July 8, 2011 at 12:13:33 PM


Ricker

1) BO plays golf and goes on vacation because his handlers know that the less he does officially on his own (i.e., without a teleprompter), the less frequently he will put his foot in his mouth and chew on it. He is an empty shell, a receptacle for the bidding of those who own him.

2) Corporations do not pay taxes; they merely collect them for the gov't by increasing prices to us, the consumers.

Posted July 8, 2011 at 12:27:49 PM


Abu Nudnik

You have to give him credit all right. He's a political master. Your analysis of the moves he'll play to demonize Republican is bang on. Never underestimate your opponent. You'll lose if you do.

Posted July 8, 2011 at 1:03:31 PM


Holmes Simons

Listening to 1) Obama, obviously a pathological liar and fraud; 2) members of his illegal, fairy-filled, czarist administration; and 3) the corrupt, inept, and cowardly members of Congress constantly running their overworked mouths about getting our "financial house" in order, is becoming tiresome. I will bet you that not one of these dishonorable cretins even owns a calculator into which he can input $14,000,000,000,000. I know that I don't, nor can I find one. $1 Trillion = $1,000 Billion. An overly simplified solution to the debt crisis would be to restructure the debt and amortize it at, say, @3.0% for 50 years. Based on the grossly underexaggerated debt balance of $14 Trillion, the annual payment for such a scheme would cost about $528 Billion, and the debt balance at the end of 50 years is zero - paid off - zippo. @5% the annual cost is about $730 Billion.

However, a first suggestion is cancellation of all interagency government debt and debt which was expended for any purposes that are unauthorized by the Constitution. Yes, the US Constitution, the legal foundation of America, that generations of Ivy League, egocentric morons, in cahoots with the robed rubes of the judicial oligarchy, have all but destroyed in violation of their OATHS OF OFFICE. Next swap any debt of US creditors owned by the US for US debt owned by the creditors.

This absurd level of Federal incompetence cannot be allowed to continue without perilous consequences. To continue spending the hard-earned tax money paid by US citizens without a budget, a plan, or an accounting is TYRANNY, and every politician that continues that practice should be prosecuted. The situation is SICKENING! SAVE THE BABIES FROM THE SCHACKLES OF SOCIALISM.

Posted July 8, 2011 at 2:09:23 PM


Bernita Purdy

I had a great deal to say until I read that profane language would not be allowed. How else could I describe the way that I feel about this worst president that any country has ever had?

Posted July 8, 2011 at 4:43:25 PM


DavidMac

Obama's budget plan is to keep politicking and campaigning. Charles K. is right: the Democrats didn't produce a budget AT ALL, yet keep denigrating the Republican's budget.

Does ANYONE really believe Obama cares about the budget or the US economy?

Posted July 10, 2011 at 12:44:31 AM


Merry Colin

Now, if we could only get everyone in Congress to READ this column...nah, I was going to suggest we send it to all of our Reps and Sens but, why bother? They are just too damn stupid and buried in BS to see the simple facts spelled out here.

Maybe we could get them to understand Holmes Simons' solution but, alas, could we expect a bunch of scumbag lawyers to get it? Nope!

Posted July 11, 2011 at 1:27:07 PM


Inmybackyard

I agree with the POTUS: Politicians should tax the rich. I propose that one class of Rich Income that is currently exempt and should be taxed is "Campaign Contributions". It's not counted as Income, yet Campaign Contributions can be spend just about any way the political candidate see fit-(even 'donate' it to a political friend who needs help at election time) - with zero tax due on this Disposable Untaxed Income (DUI). Lets ask Con gess and Our State Rep's to change the laws to tax all Politicial Campaign Contributions so each "Committee to re-elect Blood sucker X" would pay the tax(1st time candidates would be EXEMPT) Political Campaign Income could have a modest tax - Perhaps a 33%rate- on every dime every politician raises with no loop hole deductions. If POTUS raises $1B for the 2012 campaign,just think how much Hope & Change that can be accomplished with $333 Million in additional tax revenue. Let's have the people responsiable for raising our taxes chip in just a little of their fare share. This 'free' money they 'earn' each campaign cycle should be taxed at the State level as well. Start with Senators and Con gress, and work all the way down to any local school board member who has the power to raise your taxes.

Posted July 11, 2011 at 2:18:00 PM


Inmybackyard

I agree with the POTUS: Politicians should tax the rich. I propose that one class of Rich Income that is currently exempt and should be taxed is "Campaign Contributions". It's not counted as Income, yet Campaign Contributions can be spend just about any way the political candidate see fit-(even 'donate' it to a political friend who needs help at election time) - with zero tax due on this Disposable Untaxed Income (DUI). Lets ask Con gess and Our State Rep's to change the laws to tax all Politicial Campaign Contributions so each "Committee to re-elect Blood sucker X" would pay the tax(1st time candidates would be EXEMPT) Political Campaign Income could have a modest tax - Perhaps a 33%rate- on every dime every politician raises with no loop hole deductions. If POTUS raises $1B for the 2012 campaign,just think how much Hope & Change that can be accomplished with $333 Million in additional tax revenue. Let's have the people responsiable for raising our taxes chip in just a little of their fare share. This 'free' money they 'earn' each campaign cycle should be taxed at the State level as well. Start with Senators and Con gress, and work all the way down to any local school board member who has the power to raise your taxes.

Posted July 11, 2011 at 2:44:06 PM


Inmybackyard

I agree with the POTUS: Politicians should tax the rich. I propose that one class of Rich Income that is currently exempt and should be taxed is "Campaign Contributions". It's not counted as Income, yet Campaign Contributions can be spend just about any way the political candidate see fit-(even 'donate' it to a political friend who needs help at election time) - with zero tax due on this Disposable Untaxed Income (DUI). Lets ask Con gess and Our State Rep's to change the laws to tax all Politicial Campaign Contributions so each "Committee to re-elect Blood sucker X" would pay the tax(1st time candidates would be EXEMPT) Political Campaign Income could have a modest tax - Perhaps a 33%rate- on every dime every politician raises with no loop hole deductions. If POTUS raises $1B for the 2012 campaign,just think how much Hope & Change that can be accomplished with $333 Million in additional tax revenue. Let's have the people responsiable for raising our taxes chip in just a little of their fare share. This 'free' money they 'earn' each campaign cycle should be taxed at the State level as well. Start with Senators and Con gress, and work all the way down to any local school board member who has the power to raise your taxes.

Posted July 11, 2011 at 3:04:51 PM


MY TAKE

I also agree with POTUS. When I was young we had a saying, "a penny saved is a penny earned". For government purposes a million or billion saved is a million or billion saved. Added up all these savings and it could be a lot. I'm from Iowa, and subsidies such as ethenal and farm could add up to some savings. How about revamping Senator and Representitive salaries and retirement packages to reflect the private sector. They are there to serve not get rich. These CEO's that got the average 23% increase in salaries could add a little to reduce the budget. I'm retired and haven't seen a raise in 2 years while everything I buy has gone up.

Posted July 12, 2011 at 1:37:29 PM


Don Davison

It has taken us some time to get into our current debt problem and until recently many people did not understand the insidiousness of the concomitant circumstances related to a budget that in large measure is designed to purchase votes. What we need is a budget that provides only that which this country really needs to take care of itself. Let us hope that the new information transparency will help to inform the general population so that we can participate in an informed consent of the governed.

Posted July 12, 2011 at 8:47:51 PM


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