The Charm Offensive & The Obama Budget, What It Portends

The President failed.  His turn around to engage Congress portends that a rude political education is taking place while on the job.

Let’s explain.

First, whoever runs the House runs Washington.

Secondly, the differences between both political parties budgets are philosophical.  However, Team Obama has badly read its own moment in the historical arc that has become his Presidency.  The longer this goes on, the weaker and less capital base the President will have.  His staff should expect to be encircled in an ever increasing political, fiscal vortex, concentrically tightening his ability to politically maneuver.

Why?  Because without a budget, his entire Presidency is held hostage, thrown from one impending crisis to another.  This will wear down both his own and his staff’s perceptions and strength to endure and adjust.  This grind will exact its own toll.

Budgets are political documents.  They set priorities.  They implicitly remove the intrinsic necessity to demagogue; and it is this poisoned rhetoric that is the appealing tonic to all passionate politicos.

Obama’s budget is to propose ratification of the status quo with only token spending cuts and no entitlement reform.

Here’s the specifics:  Medicare’s unfunded liability is $42 TRILLION.  That means without structural changes it will go bankrupt.  Medicare’s structure and operations must be narrowed if it is to survive.

What does Obama do with Medicare?  He slows the pace of its insolvency.  That’s it!

These aren’t solutions, especially given how Obama-care will hurt both Medicare providers and hospitals; all American health care networks will be destroyed with the arrival of Obama-care.

And Social Security?  He want’s to change the metric from Consumer Price Index (CPI) to a Chain Weighted Index, which means that given inflation, peoples spending habits have changed; the govmint wishes to reduce it payout liabilities, so it wants a much lower metric in calculating payouts.  The CWI does this.

Obama doesn’t even cut one govmint program.  He want’s to keep the entire edifice going even if its on the path toward insolvency.  More will be required to put the govmint fisc on a sustainable path.

Where should he start?  He should begin with pro-growth business agenda including tax and entitlement reform.  That would leave room to begin addressing the insolvency of American pensions.

Without growth, the Union is severely damaged.  Our problems are growing, but we don’t have the requisite leadership addressing the moment.