New York Times Leader

The lead article in today’s New York Times is a news analysis titled, “A Red-Ink Decade.” It describes the limited options for future Presidents in light of the size of the deficit and the necessity to address it.

Apparently, President Obama’s projections call for significant deficits for the next ten years. This makes it highly unlikely that future Presidents will have the opportunity for any domestic programs. It is compared in the article to homeowners whose mortgage is greater than the value of the house; in other words, the American government is “under water.”

The article also makes several astute political observations including the unwillingness of the Republicans to raise taxes and the unwillingness of the Democrats to cut programs, especially Social Security. In light of these limitations, the article paints a very pessimistic picture of their implications.

The article concludes on a somewhat optimistic note, citing Stein’s law. “If a trend cannot continue, it will stop.” In fact, the addressing of the problem on the front page of The New York Times means that even a so-called liberal newspaper is increasing awareness of the situation.

Ideally, President Obama will stimulate the economy in the short run, boosting jobs, and therefore revenue, and will ride that additional revenue to reduce the deficit. Sounds easy on paper …

The lead article in today’s New York Times is titled, “Obama to Seek Spending Freeze to Trim Deficits.” The article describes a topic to be covered by President Obama in tomorrow’s State of the Union address. He is plannng to call for a three-year freeze in programs in the domestic budget, but the Defense Department, Veterans Affairs, Social Security, Medicare and Medicaid will be exempt.

Most announcers are describes the impact as a drop in the ocean, though a White House adviser tried to defend it as a first step. However, the program may upset the Democratic base because of the military exemption and upset Republicans because it isn’t big enough.

This represents a continuing conundrum for President Obama. By trying to accommodate everyone, he ends up pleasing noone. The area of the budget he suggested for initial cuts represents only eight percent of the total budget.

I guess we’re now living post-national healthcare in terms of White House priorities. It seems like they’ve forgotten all their other big programs as well and are focusing on an incremental approach. This is profoundly disappointing, and one would hope that President Obama fights with the House to pass the Senate healthcare bill, with a promise of changes later. But that will require leadership and a willingness to take another major risk ….

The lead article in today’s New York Times is titled, “U.S. Deficit Rises to $1.4 Trillion, Biggest Since ‘45.” It notes that our deficit for the past fiscal year (ending September 30) represents 10 percent of our economy compared to 21.5 percent after World War II.

The article notes that TARP and the two-year stimulus program account for only a quarter of the deficit, and one of the main culprits was the high jobless rate, a major factor in decreasing revenues. It also points out that President Obama was faced with a severe recession and financial crisis when he assumed office, and that dictated his need to provide large infusions of cash.

In my opinion, this topic distracts from the real problems facing this Administration, namely the need to get Americans back to work. Many people are suffering despite the relative boom on Wall Street, and they need immediate relief on humanitarian grounds. Of course, this will add even more to the deficit, but only in the short term.

President Obama has done what he had to do, and many have suggested that the stimulus was too small. In fact, some are suggesting it would be disastrous to try to balance the budget when the economy is still recovering.

Of course, Republicans will try to use this statistic to rally opposition against the health care bill, but this tactic smacks of political opportunism more than anything else.

The recession seems to be hitting the Social Security trust fund pretty hard. At least, that’s what the lead story in today’s New York Times seems to say.

Medicare is supposed to run out of money even earlier, in 2017. That’s despite total spending on the two programs of about $1 trillion, about one-third of the federal budget.

Despite the administration’s claims that runaway health costs are contributing to the situation, it does make it difficult to launch a major new spending program, national health insurance, in light of the new fiscal constraints. And Republicans are bound to play up the situation even more.

Part of the problem: the Congress is timid about providing any new sources of revenue to help fund national health insurance because they will be branded as tax-and-spend liberals and face heated challenges in upcoming elections.

Noone likes to lose their job.

But, as the saying goes, you can’t have your cake and eat it, too. Obama’s plan to tax health insurance plans provided by employers seems like a good, targeted way to pay for national health insurance, and all he needs, for a change, is a leader on Capitol Hill to pave the way.

Stay tuned to see how this developing drama will play out.

Today’s lead story in The New York Times is titled, “Obama’s Budget Faces Challenge by Party Barons.” It describes how President Obama’s consensual approach with Congress may wind up eviscerting many of his proposals when it is translated into actual language by five prominent Democrats: Max Baucus, Chairman of the Senate’s Finance Committee; Kent Conrad, Chairman of the Senate’s Budget Committee, Charles Rangel, Chairman of the House Ways and Means Committee; John Spratt, Chairman of the House Budget Committee; and Henry Waxman, Chairman of the House Energy and Commerce Committee.

Each Democrat is defending special interests from its own committee, interests conflicting with some of President Obama’s signature program. The Democrats are opposing a limitation on tax deductions for the most wealthy Americans and a cut in government subsidies to big farmers and large agricultural businesses. They want to decrease spending on Medicare, Medicaid and Social Security even more than President Obama. And the proposed cap-and-trade system to discourage carbon dioxide emissions may be in trouble, too.

That’s one of the main problems when you have a President proposing legislation for a national constituency while members of Congress are concerned about their local constituencies. This is a natural feature of our democracy since its founding and even led to the creation of a bicameral legislative branch: the House, with short two-year terms, to stay close to the people, and the Senate, with six-year terms, and more “enlightened” leadership.

Hopefully, in a time of crisis, Congressional representatives will be able to suspend concern about their own jobs and act in the national interest. Whether they will end up doing so or not, remains to be seen.