Who Won the Budget Battle?
Meanwhile, as the public gets increasingly antsy about the spasm of government expansion, Obama is at risk of losing the populist battle. Following in the wake of the AIG debacle, his scheme for allowing a handful of firms to buy toxic assets from banks (with little downside risk to anyone but the taxpayer) is continuing to draw fire from the Left. Now mainstream reporters are onto the scam. Mara Liasson noted:
Look, they said, and you heard David Axelrod say, they don't want to be in the car business, they're not in the car business, this is kind of a way to get a fast-track, perhaps, orderly bankruptcy, if that's what it's going to take, of the car companies.
I think the bigger issue that was raised this week in terms of the auto industry is why did they get a kind of shove towards bankruptcy, where the Wall Street bankers get bailed out?
And when you read this week about the huge payouts that a lot of these Obama administration officials are getting from Goldman Sachs or from other hedge funds and banks where they worked before they came into the administration, and other complaints from some hedge funds that feel they're being cut out of the public-private investment funds that they're setting up to take the toxic assets off the balance sheets because they don't meet these very strict criteria that the administration has written that seem to allow only Goldman Sachs and Blackstone and some other hedge funds to apply, I think that cronyism is going to be something that they have to -- that's a potential problem for them.
So where does this leave us? A very possible outcome in the budget battle may be a gigantic increase in domestic spending and debt, but no substantial progress on the president's two main policy initiatives, global warming and health care. It is once thing to "get something" for all that spending, it is quite another to run up the debt and wind up with, well, a lot of debt.
Democrats and media pundits are now hinting that cap-and-trade may be off the table and health care reform may simply amount to some "incremental" changes but not the far-flung redesign once envisioned by the victorious Democrats. That would be meager results indeed for the agent of change, especially at a time he is thought to be at the height of his popularity and facing probable congressional losses in 2010.
Meanwhile, Republicans are making the most of what little they have. They have united around a new sense of fiscal conservatism. They have beaten back card check and likely cap-and-trade as well. They are the ones with public support for an anti-bailout, anti-crony capitalism platform.
Yes, Republicans have received hugely negative media coverage which has sought to paint them as the party of "no" and hobbled by internal dissension. But fawning media coverage was never in the cards for the GOP.
The focus for Republicans will remain on the staggering deficit, the growing unemployment figures, and the political extremism of Obama's agenda. If the economy makes a stunning turnaround, all of that won't amount to much. But if the economy doesn't bounce back and indeed the escalating spending results in 1970s-style stagflation, then that opposition will become a badge of honor and the starting point for a platform for the future: less government pork, more support for private sector job growth, no crony capitalism, and an end to government bailouts. In that sense, the Obama budget may be good news indeed -- for Republicans.