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Belmont Club

Ye Olde Shell Game

May 27th, 2010 - 3:41 pm

When you can’t solve a problem, change the terms of reference so that you can.

President Obama in a newly released document has redefined national security policy in terms of domestic policy.  Blaming the Bush administration for relying on “military might”, Obama declared that what was important was the home front. David Martin of CBS News writes “if you had to pick one sentence in this 52 page document which defines President Obama’s National Security Strategy it would be this: “the foundation of American leadership must be a prosperous economy.”  By implication President Obama is going to give America that prosperous economy in order to defend it. But can he do it?

If the Massachusetts is any indicator, the path back to a robust economy may depart from the President’s world view. The Bay State Senate [see correction suggested in comments below] recently passed a bill cracking down on illegal immigrants.  Boston.com reports:

With one lawmaker citing President Lincoln’s respect for the rule of law, the Massachusetts Senate passed a far-reaching crackdown this afternoon on illegal immigrants and those who would hire them, going further, senators said, than any immigration bill proposed over the past five years. …

The measure, which passed on a 28-10 vote as an amendment to the budget, would bar the state from doing business with any company found to break federal laws barring illegal immigrant hiring. It would also toughen penalties for creating or using fake identification documents, and explicitly deny in-state college tuition for illegal immigrants.

The amendment would also require the state’s public health insurance program to verify residency through the Department of Homeland Security, and would require the state to give legal residents priority for subsidized housing.

It was an extraordinary action for the Bluest of Blue States and reflected the pressure on the American job market, which is unabated. A proposal “to extend jobless benefits for people who have been out of work for more than six months” ran into trouble with conservative Democrats as legislators found that deficit spending was the only alternative to continuing even politically important programs.  “Thousands of people are set to begin losing jobless benefits when an extension of unemployment insurance expires next week. A 65 percent subsidy for health insurance benefits for the unemployed under the COBRA program also expires.” But the fear that borrowing had gone too far was enough to give even Democratic legislators pause.

The expanded jobless benefits provide up to 99 weeks of payments in many states, at a cost of nearly $40 billion. The benefits are part of a bill that includes a one-year extension of about 50 popular tax breaks that expired at the end of last year and a delay in scheduled cuts in Medicare payments to doctors.

The cost of the bill would be partially offset by tax increases on investment fund managers, oil companies and some international businesses. The tax increases total about $57 billion over the next decade. Changes giving underfunded pensions more time to improve their finances would raise $2 billion.

The original package unveiled last week would have extended unemployment benefits through December and delayed a 21 percent cut in Medicare payments until 2014. The pared-down bill would delay the Medicare cuts until 2012, when lawmakers would have to address the issue again.

The troubles of the jobless benefits bill are indicator of how serious the potential economic challenges are. Not only do they threaten the livelihoods of millions, they threaten political careers. And that must, on no account, be allowed to happen. One interpretation of the President’s new National Security Strategy is to signal that he will sacrifice military might abroad to keep back irate voters at home. The North Koreans may have nukes, but the North Koreans don’t vote. At least not yet. The belated realization of the seriousness of the situation may be behind the President’s decision to not not endorse the boycott of Arizona for its new immigration law. “I’m the president of the United States, I don’t endorse boycotts or not endorse boycotts,” he replied when asked about it. Caught at the fork in the road between his liberal constituency and the public mood, Obama decided to take both roads.

In a CBS News poll released Tuesday, 52 percent of Americans said the Arizona law was “about right” in its approach to illegal immigration.

The desire to remake America along the lines of a European-style welfare state is running into the hardest of all possible obstacles: the lack of money. Obama’s new national security stance sends the message that all available resources are going to be shifted to saving his domestic agenda or at least keeping the domestic economic troubles from spinning out of control. That will be problematic because cutting costs must run counter to the concept that government is a solution to ‘problems’. Cap and trade, immigration reform, a vast expansion of health entitlements by definition now become national security issues. At the very least they become political job security issues. Any sufficiently effective effort to create a prosperous economy will require Obama to liquidate his ‘solution’s. But they are the point of his presidency, the goal of his legion of spoils-seekers. The President is in the impossible position of standing in his own way.

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