Peggy Noonan: O is Deceitful - Devious - Dishonest

Not-So-Smooth Operator

Obama increasingly comes across as devious and dishonest.

• By PEGGY NOONAN 

Something's happening to President Obama's relationship with those who are inclined not to like his policies. They are now inclined not to like him. His supporters would say, "Nothing new there," but actually I think there is. I'm referring to the broad, stable, nonradical, non-birther right. Among them the level of dislike for the president has ratcheted up sharply the past few months.

It's not due to the election, and it's not because the Republican candidates are so compelling and making such brilliant cases against him.

That, actually, isn't happening.

What is happening is that the president is coming across more and more as a trimmer, as an operator who's not operating in good faith. This is hardening positions and leading to increased political bitterness. And it's his fault, too. As an increase in polarization is a bad thing, it's a big fault.

The shift started on Jan. 20, with the mandate that agencies of the Catholic Church would have to provide services the church finds morally repugnant. The public reaction? "You're kidding me. That's not just bad judgment and a lack of civic tact, it's not even constitutional!" Faced with the blowback, the president offered a so-called accommodation that even its supporters recognized as devious. Not ill-advised, devious. Then his operatives flooded the airwaves with dishonest—not wrongheaded, dishonest—charges that those who defend the church's religious liberties are trying to take away your contraceptives.

What a sour taste this all left. How shocking it was, including for those in the church who'd been in touch with the administration and were murmuring about having been misled.

Events of just the past 10 days have contributed to the shift. There was the open-mic conversation with Russian President Dmitry Medvedev in which Mr. Obama pleaded for "space" and said he will have "more flexibility" in his negotiations once the election is over and those pesky voters have done their thing. On tape it looked so bush-league, so faux-sophisticated. When he knew he'd been caught, the president tried to laugh it off by comically covering a mic in a following meeting. It was all so . . . creepy.

Next, a boy of 17 is shot and killed under disputed and unclear circumstances. The whole issue is racially charged, emotions are high, and the only memorable words from the president's response were, "If I had a son he'd look like Trayvon" At first it seemed OK—not great, but all right—but as the story continued and suddenly there were death threats and tweeted addresses and congressmen in hoodies, it seemed insufficient to the moment. At the end of the day, the public reaction seemed to be: "Hey buddy, we don't need you to personalize what is already too dramatic, it's not about you."

Now this week the Supreme Court arguments on ObamaCare, which have made that law look so hollow, so careless, that it amounts to a characterological indictment of the administration. The constitutional law professor from the University of Chicago didn't notice the
centerpiece of his agenda was not constitutional? How did that happen?

Maybe a stinging decision is coming, maybe not, but in a purely political sense this is how it looks: We were in crisis in 2009—we still are—and instead of doing something strong and pertinent about our economic woes, the president wasted history's time. He wasted time that was precious—the debt clock is still ticking!—by following an imaginary bunny that disappeared down a rabbit hole.

The high court's hearings gave off an overall air not of political misfeasance but malfeasance.

All these things have hardened lines of opposition, and left opponents with an aversion that will not go away.
I am not saying that the president has a terrible relationship with the American people. I'm only saying he's made his relationship with those who oppose him worse.

In terms of the broad electorate, I'm not sure he really has a relationship. A president only gets a year or two to forge real bonds with the American people. In that time a crucial thing he must establish is that what is on his mind is what is on their mind. This is especially true during a crisis.

From the day Mr. Obama was sworn in, what was on the mind of the American people was financial calamity—unemployment, declining home values, foreclosures. These issues came within a context of some overarching questions: Can America survive its spending, its taxing, its regulating, is America over, can we turn it around?

That's what the American people were thinking about.

But the new president wasn't thinking about that. All the books written about the creation of economic policy within his administration make clear the president and his aides didn't know it was so bad, didn't understand the depth of the crisis, didn't have a sense of how long it would last. They didn't have their mind on what the American people had their mind on.

The president had his mind on health care. And, to be fair-minded, health care was part of the economic story. But only a part! And not the most urgent part. Not the most frightening, distressing, immediate part. Not the 'Is America over?' part.

And so the relationship the president wanted never really knitted together. Health care was like the birth-control mandate: It came from his hermetically sealed inner circle, which operates with what seems an almost entirely abstract sense of America. They know Chicago, the machine, the ethnic realities. They know Democratic Party politics. They know the books they've read, largely written by people like them—bright, credentialed, intellectually cloistered. But there always seems a lack of lived experience among them, which is why they were so surprised by the town hall uprisings of August 2009 and the 2010 midterm elections.

More Peggy Noonan

If you jumped into a time machine to the day after the election, in November, 2012, and saw a headline saying "Obama Loses," do you imagine that would be followed by widespread sadness, pain and a rending of garments? You do not. Even his own supporters will not be that sad. It's hard to imagine people running around in 2014 saying, "If only Obama were president!" Including Mr. Obama, who is said by all who know him to be deeply competitive, but who doesn't seem to like his job that much. As a former president he'd be quiet, detached, aloof. He'd make speeches and write a memoir laced with a certain high-toned bitterness. It was the Republicans' fault. They didn't want to work with him.

He will likely not see even then that an American president has to make the other side work with him. You think Tip O'Neill liked Ronald Reagan? You think he wanted to give him the gift of compromise? He was a mean, tough partisan who went to work every day to defeat Ronald Reagan. But forced by facts and numbers to deal, he dealt. So did Reagan.

An American president has to make cooperation happen.

But we've strayed from the point. Mr. Obama has a largely nonexistent relationship with many, and a worsening relationship with some.
Really, he cannot win the coming election. But the Republicans, still, can lose it. At this point in the column we usually sigh.

PegNot-So-Smooth Operator Obama increasingly comes across as devious and dishonest. * By PEGGY NOONAN * Like this columnist Columnist's name * Article * Comments (538) more in Opinion | Find New $LINKTEXTFIND$ » * Email * Print * Save ↓ More * * * * smaller * Larger Something's happening to President Obama's relationship with those who are inclined not to like his policies. They are now inclined not to like him. His supporters would say, "Nothing new there," but actually I think there is. I'm referring to the broad, stable, nonradical, non-birther right. Among them the level of dislike for the president has ratcheted up sharply the past few months. It's not due to the election, and it's not because the Republican candidates are so compelling and making such brilliant cases against him. That, actually, isn't happening. What is happening is that the president is coming across more and more as a trimmer, as an operator who's not operating in good faith. This is hardening positions and leading to increased political bitterness. And it's his fault, too. As an increase in polarization is a bad thing, it's a big fault. Enlarge Image noonan0331 Close noonan0331 Getty Images The shift started on Jan. 20, with the mandate that agencies of the Catholic Church would have to provide services the church finds morally repugnant. The public reaction? "You're kidding me. That's not just bad judgment and a lack of civic tact, it's not even constitutional!" Faced with the blowback, the president offered a so-called accommodation that even its supporters recognized as devious. Not ill-advised, devious. Then his operatives flooded the airwaves with dishonest—not wrongheaded, dishonest—charges that those who defend the church's religious liberties are trying to take away your contraceptives. What a sour taste this all left. How shocking it was, including for those in the church who'd been in touch with the administration and were murmuring about having been misled. Events of just the past 10 days have contributed to the shift. There was the open-mic conversation with Russian President Dmitry Medvedev in which Mr. Obama pleaded for "space" and said he will have "more flexibility" in his negotiations once the election is over and those pesky voters have done their thing. On tape it looked so bush-league, so faux-sophisticated. When he knew he'd been caught, the president tried to laugh it off by comically covering a mic in a following meeting. It was all so . . . creepy. Next, a boy of 17 is shot and killed under disputed and unclear circumstances. The whole issue is racially charged, emotions are high, and the only memorable words from the president's response were, "If I had a son he'd look like Trayvon" At first it seemed OK—not great, but all right—but as the story continued and suddenly there were death threats and tweeted addresses and congressmen in hoodies, it seemed insufficient to the moment. At the end of the day, the public reaction seemed to be: "Hey buddy, we don't need you to personalize what is already too dramatic, it's not about you." Now this week the Supreme Court arguments on ObamaCare, which have made that law look so hollow, so careless, that it amounts to a characterological indictment of the administration. The constitutional law professor from the University of Chicago didn't notice the centerpiece of his agenda was not constitutional? How did that happen? Maybe a stinging decision is coming, maybe not, but in a purely political sense this is how it looks: We were in crisis in 2009—we still are—and instead of doing something strong and pertinent about our economic woes, the president wasted history's time. He wasted time that was precious—the debt clock is still ticking!—by following an imaginary bunny that disappeared down a rabbit hole. The high court's hearings gave off an overall air not of political misfeasance but malfeasance. All these things have hardened lines of opposition, and left opponents with an aversion that will not go away. I am not saying that the president has a terrible relationship with the American people. I'm only saying he's made his relationship with those who oppose him worse. In terms of the broad electorate, I'm not sure he really has a relationship. A president only gets a year or two to forge real bonds with the American people. In that time a crucial thing he must establish is that what is on his mind is what is on their mind. This is especially true during a crisis. From the day Mr. Obama was sworn in, what was on the mind of the American people was financial calamity—unemployment, declining home values, foreclosures. These issues came within a context of some overarching questions: Can America survive its spending, its taxing, its regulating, is America over, can we turn it around? That's what the American people were thinking about. But the new president wasn't thinking about that. All the books written about the creation of economic policy within his administration make clear the president and his aides didn't know it was so bad, didn't understand the depth of the crisis, didn't have a sense of how long it would last. They didn't have their mind on what the American people had their mind on. The president had his mind on health care. And, to be fair-minded, health care was part of the economic story. But only a part! And not the most urgent part. Not the most frightening, distressing, immediate part. Not the 'Is America over?' part. And so the relationship the president wanted never really knitted together. Health care was like the birth-control mandate: It came from his hermetically sealed inner circle, which operates with what seems an almost entirely abstract sense of America. They know Chicago, the machine, the ethnic realities. They know Democratic Party politics. They know the books they've read, largely written by people like them—bright, credentialed, intellectually cloistered. But there always seems a lack of lived experience among them, which is why they were so surprised by the town hall uprisings of August 2009 and the 2010 midterm elections. More Peggy Noonan Read Peggy Noonan's previous columns click here to order her book, Patriotic Grace If you jumped into a time machine to the day after the election, in November, 2012, and saw a headline saying "Obama Loses," do you imagine that would be followed by widespread sadness, pain and a rending of garments? You do not. Even his own supporters will not be that sad. It's hard to imagine people running around in 2014 saying, "If only Obama were president!" Including Mr. Obama, who is said by all who know him to be deeply competitive, but who doesn't seem to like his job that much. As a former president he'd be quiet, detached, aloof. He'd make speeches and write a memoir laced with a certain high-toned bitterness. It was the Republicans' fault. They didn't want to work with him. He will likely not see even then that an American president has to make the other side work with him. You think Tip O'Neill liked Ronald Reagan? You think he wanted to give him the gift of compromise? He was a mean, tough partisan who went to work every day to defeat Ronald Reagan. But forced by facts and numbers to deal, he dealt. So did Reagan. An American president has to make cooperation happen. But we've strayed from the point. Mr. Obama has a largely nonexistent relationship with many, and a worsening relationship with some. Really, he cannot win the coming election. But the Republicans, still, can lose it. At this point in the column we usually sigh.gy Noonan : O is Devious and Decietful

O Care

ObamaCare: Costs, Constitutionality And Contraception

By CHARLES KRAUTHAMMER



ObamaCare dominated the 2010 midterms, driving its Democratic authors to a historic electoral shellacking. But since then, the issue has slipped quietly underground.

Now it's back, summoned to the national stage by the confluence of three disparate events: the release of new Congressional Budget Office cost estimates, the approach of Supreme Court hearings on the law's constitutionality and the issuance of a compulsory contraception mandate.

Cost: ObamaCare was carefully constructed to manipulate the standard 10-year cost projections of the CBO. Because benefits would not fully kick in for four years, President Obama could trumpet 10-year gross costs of less than $1 trillion — $938 billion to be exact.

But now that the near-costless years 2010 and 2011 have elapsed, the true 10-year price tag comes into focus. From 2013 through 2022, the CBO reports, the costs of ObamaCare come to $1.76 trillion — almost twice the phony original number.

It gets worse. Annual gross costs after 2021 are more than a quarter of $1 trillion every year — until the end of time. That, for a new entitlement in a country already drowning in $16 trillion of debt.

Constitutionality: Starting March 26, the Supreme Court will hear challenges to the law. The American people, by an astonishing two-thirds majority, want the law and/or the individual mandate tossed out by the court.

In practice, however, questions this big are generally decided 5 to 4, i.e., they depend on whatever side of the bed Justice Anthony

Kennedy gets out of that morning. Ultimately, the question will hinge on whether the Commerce Clause has any limits.

If the federal government can compel a private citizen, under threat of a federally imposed penalty, to engage in a private contract with a private entity (to buy health insurance), is there anything the federal government cannot compel the citizen to do?

If ObamaCare is upheld, it fundamentally changes the nature of the American social contract.

It means the effective end of a government of enumerated powers — i.e., finite, delineated powers beyond which the government may not go, beyond which lies the free realm of the people and their voluntary institutions.

The new post-ObamaCare dispensation is a central government of unlimited power from which citizen and civil society struggle to carve out and maintain spheres of autonomy. Figure becomes ground; ground becomes figure.
The stakes could not be higher.

Coerciveness: Serendipitously, the recently issued regulation on contraceptive coverage has allowed us to see exactly how this new power works. All institutions — excepting only churches, but not excepting church-run charities, hospitals, etc. — will be required to offer health care that must include free contraception, sterilization and drugs that cause abortion.

Consider the cascade of arbitrary bureaucratic decisions that resulted in this edict:

(1) Contraception, sterilization and abortion pills are classified as medical prevention. On whose authority? The secretary of health and human services, invoking the Institute of Medicine.
But surely categorizing pregnancy as a disease equivalent is a value decision, disguised as scientific.
If contraception is prevention, what are fertility clinics? Disease inducers? And if contraception is prevention because it lessens morbidity and saves money, by that logic, mass sterilization would be the greatest boon to public health since the pasteurization of milk.

(2) This type of prevention is free — no co-pay. Why? Is contraception morally superior to or more socially vital than — and thus more of a "right" than — penicillin for a child with pneumonia?

(3) "Religious" exemptions to this edict extend only to churches, places where the faithful worship God, and not to church-run hospitals and charities, places where the faithful do God's work. Who promulgated this definition, so subversive of the whole notion of godliness, so stunningly ignorant of the very idea of religious vocation?

The almighty HHS secretary. Today, it's the Catholic Church whose free-exercise powers are under assault from this cascade of diktats sanctioned by — indeed required by — ObamaCare.
Tomorrow it will be the turn of other institutions of civil society that dare stand between unfettered state and atomized citizen. Rarely has one law so exemplified the worst of the Leviathan state — grotesque cost, questionable constitutionality and arbitrary bureaucratic coerciveness.

Little wonder the president barely mentioned it in his latest State of the Union address. He wants to be re-elected. He'd rather talk about other things. But it can't be escaped. Oral arguments begin Monday

Paul Ryan : The Sun also Sets

The Sun Also Sets

By Mark Steyn

March 24, 2012 4:00 A.M.

I was in Australia earlier this month and there, as elsewhere on my recent travels, the consensus among the politicians I met (at least in private) was that Washington lacked the will for meaningful course correction, and that, therefore, the trick was to ensure that, when the behemoth goes over the cliff, you’re not dragged down with it. It is faintly surreal to be sitting in paneled offices lined by formal portraits listening to eminent persons who assume the collapse of the dominant global power is a fait accompli. “I don’t feel America is quite a First World country anymore,” a robustly pro-American Aussie told me, with a sigh of regret.

Well, what does some rinky-dink ’roo-infested didgeridoo mill on the other side of the planet know about anything? Fair enough. But Australia was the only major Western nation not to go into recession after 2008. And in the last decade the U.S. dollar has fallen by half against the Oz buck: That’s to say, in 2002, one greenback bought you a buck-ninety Down Under; now it buys you 95 cents. More of that a bit later.

I have now returned from Oz to the Emerald City, where everything is built with borrowed green. President Obama has run up more debt in three years than President Bush did in eight, and he plans to run up more still — from ten trillion in 2008 to fifteen and a half trillion now to 20 trillion and beyond. Onward and upward! The president doesn’t see this as a problem, nor do his party, and nor do at least fortysomething percent of the American people. The Democrats’ plan is to have no plan, and their budget is not to budget at all. “We don’t need to bring a budget,” said Harry Reid. Why tie yourself down? “We’re not coming before you to say we have a definitive solution,” the treasury secretary told House Budget Committee chairman Paul Ryan. “What we do know is we don’t like yours.”

Nor do some of Ryan’s fellow conservatives. Texas congressman Louie Gohmert, for whom I have a high regard, was among those representatives who appeared at the Heritage Foundation to express misgivings regarding the Ryan plan’s timidity. They’re not wrong on that: The alleged terrorizer of widows and orphans does not propose to balance the budget of the government of the United States until the year 2040. That would be 27 years after Congressman Ryan’s current term of office expires. Who knows what could throw a wrench in those numbers? Suppose Beijing decides to seize Taiwan. The U.S. is obligated to defend it militarily. But U.S. taxpayers would be funding both sides of the war — the home team, via the Pentagon budget, and the Chinese military, through the interest payments on the debt. (We’ll be bankrolling the entire People’s Liberation Army by some point this decade.) A Beijing–Taipei conflict would be, in budget terms, a U.S. civil war relocated to the Straits of Taiwan. Which is why plans for mid-century are of limited value. When the most notorious extreme callous budget-slasher of the age cannot foresee the government living within its means within the next three decades, you begin to appreciate why foreign observers doubt whether there’ll be a 2040, not for anything recognizable as “the United States.”

Yet it’s widely agreed that Ryan’s plan is about as far as you can push it while retaining minimal political viability. A second-term Obama would roar full throttle to the cliff edge, while a President Romney would be unlikely to do much more than ease off to third gear. At this point, it’s traditional for pundits to warn that if we don’t change course we’re going to wind up like Greece. Presumably they mean that, right now, our national debt, which crossed the Rubicon of 100 percent of GDP just before Christmas, is not as bad as that of Athens, although it’s worse than Britain, Canada, Australia, Sweden, Denmark, and every other European nation except Portugal, Ireland, and Italy. Or perhaps they mean that America’s current deficit-to-GDP ratio is not quite as bad as Greece’s, although it’s worse than that of Britain, Canada, France, Germany, Italy, Spain, Belgium, and every other European nation except Ireland.

But these comparisons tend to understate the insolvency of America, failing as they do to take into account state and municipal debts and public pension liabilities. When Morgan Stanley ran those numbers in 2009, the debt-to-revenue ratio in Greece was 312 percent; in the United States it was 358 percent. If Greece has been knocking back the ouzo, we’re face down in the vat. Michael Tanner of the Cato Institute calculates that, if you take into account unfunded liabilities of Social Security and Medicare versus their European equivalents, Greece owes 875 percent of GDP; the United States owes 911 percent — or getting on for twice as much as the second-most-insolvent Continental: France at 549 percent.

And if you’re thinking, Wow, all these percentages are making my head hurt, forget ’em: When you’re spending on the scale Washington does, what matters is the hard dollar numbers. Greece’s total debt is a few rinky-dink billions, a rounding error in the average Obama budget. Only America is spending trillions. The 2011 budget deficit, for example, is about the size of the entire Russian economy. By 2010, the Obama administration was issuing about a hundred billion dollars of treasury bonds every month — or, to put it another way, Washington is dependent on the bond markets being willing to absorb an increase of U.S. debt equivalent to the GDP of Canada or India — every year. And those numbers don’t take into account the huge levels of personal debt run up by Americans. College-debt alone is over a trillion dollars, or the equivalent of the entire South Korean economy — tied up just in one small boutique niche market of debt which barely exists in most other developed nations.

“We are headed for the most predictable economic crisis in history,” says Paul Ryan. And he’s right. But precisely because it’s so predictable the political class has already discounted it. Which is why a plan for pie now and spinach later, maybe even two decades later, is the only real menu on the table. There’s a famous exchange in Hemingway’s The Sun Also Rises. Someone asks Mike Campbell, “How did you go bankrupt?” “Two ways,” he replies. “Gradually, then suddenly.” We’ve been going through the gradual phase so long, we’re kinda used to it. But it’s coming to an end, and what happens next will be the second way: sudden, and very bad.

By the way, that decline in the U.S./Australian exchange isn’t the only one. Ten years ago the U.S. dollar was worth 1.6 Canadian; now it’s at par. A decade ago, the dollar was worth over ten Swedish Kroner, now 6.7; 1.8 Singapore dollars, now 1.2. I get asked with distressing frequency by Americans where I would recommend fleeing to. The reality is, given the dollar’s decline over the last decade, that most Americans can no longer afford to flee to any place worth fleeing to. What’s left is the non-flee option: taking a stand here, stopping the spendaholism, closing federal agencies, privatizing departments, block-granting to the states — not in 2040, but now.

“Suddenly” is about to show up.

 — Mark Steyn, a National Review columnist, is the author of After America: Get Ready for Armageddon. © 2012 Mark Steyn

Jimmy Carter's Bible

Jimmy Carter’s Bible

By Michael Potemra

March 25, 2012 6:34 A.M.

Did you know that the former president has just released his own study Bible (the New International Version, with his comments and reflections)? I haven’t seen a copy yet, but he gave an interview about it to the Huffington Post in which he said some interesting things. Asked whether he thinks the Bible, overall, should be approached literally or metaphorically, he responded: “When we go to the Bible we should keep in mind that the basic principles of the Bible are taught by God, but written down by human beings deprived of modern day knowledge. So there is some fallibility in the writings of the Bible. But the basic principles are applicable to my life and I don’t find any conflict among them.”
That last part, I really struggle with. The Bible has been, all my life and still today, my favorite book, and the more I read it the more complex and provocative and contradictory it seems to me. In my experience, there are two sorts of people who can look at the Bible and declare breezily that they “don’t find any conflict” among its “basic principles”: 1) Holy men and women who are so suffused with love that they can really view the Bible synoptically, with a God’s-eye view, and so contextualize all the difficult parts that these no longer pose a problem. 2) Men and women who bring to the Bible a strong external standard of judgment — philosophical or, often, political — that enables them with great ease to declare merely human, and thus erroneous, any of the problem passages. As someone who belongs in neither of these categories, I make no judgment as to which category includes the former president. In either case, I envy his dogmatic certainty.
“Blessed the one who seizes your children and smashes them against the rock” (Ps. 137:9). Reading a passage like that one, it’s easy enough to leap to a condemnation of fundamentalism.  (As should be clear from the following, I don’t use the word “fundamentalism” invidiously, but merely as shorthand for Bible literalism/inerrantism.) But earlier this weekend, I was reminded of the original reason I personally was attracted to fundamentalism — of the kind Carter is rejecting — a few years ago, and left the Catholicism of my youth to travel in that direction. I was leafing through the new edition of the Oxford Catholic Study Bible and saw some of the types of assertions that were commonplace when I was a boy: “Some aspects of the [Exodus] story cannot be historical.” “Many of the stories of David and Solomon are either legendary tales or creations of the Biblical writer.” You get the idea. The problem with this is that it is dramatically corrosive of the foundations of Jewish and Christian religious faith, as historically understood. If we reduce either of these religions to some metaphysical or ethical essence (an attempt commonly referred to, usually invidiously, as gnosticism), there is somewhat less of a problem; but even then, the problem remains that one is basically trying to interpret the religion against the grain of its original claims. Judaism and Christianity are historical religions, claiming specific intersections of the divine and the human. If these are “myths” in the religious-studies-department sense, these are intended to be myths of a very specific kind: true myths, ones that actually took place in the real world of history. But if these assertions are false, how trustworthy can the overall literary work, and the faiths based on it, be?
The most common argument I encountered among Catholics was that most of the problems were in the Old Testament, and that this should not affect my faith in the New Testament (and thus in the Church): an attitude that one might call neo-Marcionism. (Which I would summarize, with a certain degree of hostility — and, no doubt, unfairness — as follows: “The part of the book about some fellow named Moses crossing a lake is pure fanciful invention, but the part about some other fellow named Jesus rising from the dead is sober historical fact.”)
So I know, from personal experience, the attraction of fundamentalism. Been there, done that: I rebelled against the de-historicizing that was prevalent in Catholicism and mainline Protestantism, and moved toward the fundamentalist approach.
Since then, I have gone in another direction, trying the variety of interpretative strategies afforded by my mushy-moderate Anglicanism. But here’s the thing: I cannot let go of the text, in all its frustrating complexity. I know I don’t have the answers, about which part is true, and in which sense — and I just want to say that, for most of us, these questions are a lot more difficult than they appear to be to our 39th president.
Another point: At a time when the phrase “religious liberty” is on everyone’s lips, it’s encouraging to know that such an iconic Left politician as Carter is expressing a solid understanding of this principle. Asked about gay marriage, he says: “I personally think it is very fine for gay people to be married in civil ceremonies. I draw the line, maybe arbitrarily, in requiring by law that churches must marry people. I’m a Baptist, and I believe that each congregation is autonomous and can govern its own affairs. So if a local Baptist church wants to accept gay members on an equal basis, which my church does by the way, then that is fine. If a church decides not to, then government laws shouldn’t require them to.” This is, for the most part, exactly right — churches are entitled to their own rules, and that’s the core of the First Amendment. But the phrase “maybe arbitrarily” troubles me: I think there’s nothing arbitrary about religious liberty. The First Amendment means you’re allowed to build a mosque, not that you’re allowed to build a mosque unless it hurts somebody’s feelings and they assemble an angry mob against you. The First Amendment says your church can marry whom it chooses, not that your church can marry whom it chooses until political correctness makes the arbitrary decision that you’re no longer allowed to. I hope that if push comes to shove on this, President Carter will stick by the principle.

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4 Best Arguegents Against OCare

The 4 Best Legal Arguments Against ObamaCare

Why the president's sweeping health care overhaul should be struck down by the Supreme Court.

Damon W. Root | March 24, 2012

When a reporter asked then-Speaker of the House Nancy Pelosi (D-Calif.) back in October 2009 “where specifically does the Constitution grant Congress the authority to enact an individual health insurance mandate?”, Pelosi's response was to dismiss both the reporter and the question. “Are you serious?” she sneered. Nadeam Elshami, Pelosi’s communications director, later amplified his boss’s response, telling CNS News, “You can put this on the record. That is not a serious question.”

 The U.S. Supreme Court thinks that it is. On Monday March 26, the Supreme Court will begin hearing three days of oral arguments devoted to the constitutionality of the Patient Protection and Affordable Care Act, including its controversial "requirement to maintain minimum essential coverage." This requirement, also known as the individual mandate, forces all Americans to buy or secure health insurance under what Congress claims is its power "to regulate commerce...among the several states."

Twenty-six of those states, plus the National Federation of Independent Business and several individuals, are challenging the health care law, claiming it is an illegal power grab by the federal government that tramples the Constitution and undermines the principles of federalism.

Contrary to what Nancy Pelosi would have you believe, these challengers have a strong and serious case. Here are four of their best arguments against the individual mandate.

4. The Individual Mandate Threatens the Foundations of Contract Law
American contract law rests on the principle of mutual assent. If I hold a gun to your head and force you to sign a contract, no court of law will honor that document since I coerced you into signing it. Mutual assent must be present in order for a contract to be valid and binding.
 This view was widely shared by the framers and ratifiers of the U.S. Constitution. Here’s how Pennsylvania lawyer James Wilson, a signer of both the Declaration of Independence and the Constitution, put it in one of his legal lectures:

The common law is a law of liberty. The defendant may plead, that he was compelled to execute the instrument. He cannot, indeed, deny the execution of it; but he can state, in his plea, the circumstances of compulsion attending his execution; and these circumstances, if sufficient in law, and established in fact, will procure a decision in his favour, that, in such circumstances, he did not bind himself.

The individual mandate turns this longstanding legal principle on its head. After all, there’s nothing mutual about the government forcing you to enter into a binding contract with a private company. As the Institute for Justice, the public interest law firm that pioneered this argument, explains in the powerful friend of the court brief it filed in the case, the framers of the Constitution “would never have given, and in fact did not give, Congress, through the guise of the Commerce Clause, the power to gut the foundation upon which the entirety of contract law rests.”

NEXT: The individual mandate cannot be justified under existing Supreme Court precedent.


3. The Individual Mandate Cannot Be Justified Under Existing Supreme Court Precedent
Defenders of the individual mandate will tell you that of course Congress has the power to compel every American to buy health insurance from a private company. “Under an unbroken line of precedents stretching back 70 years,” argues liberal University of California law professor Erwin Chemerinsky, “Congress has the power to regulate activities that, taken cumulatively, have a substantial effect on interstate commerce.”

It’s true that the Supreme Court has greatly expanded Congress’ regulatory powers. In the 1942 case of Wickard v. Filburn, the Court held that the Commerce Clause allowed Congress to forbid an Ohio farmer named Roscoe Filburn from growing twice the amount of wheat permitted by the Agricultural Adjustment Act and then consuming that extra wheat on his own farm. In 2005, the Court reinforced this decision, holding in Gonzales v. Raich that medical marijuana cultivated and consumed entirely within the state of California still counted as commerce “among the several States” and was therefore open to federal regulation.

Yet neither of those precedents stretched the Commerce Clause so far as to allow Congress to regulate inactivity—such as the non-act of not buying health insurance. As the National Federation of Independent Business argues in its brief, “uninsured status neither interferes with commerce or its regulation nor constitutes economic activity. Instead, the uninsured’s defining characteristic is their non-participation in commerce.”

The Supreme Court has never before granted Congress the unprecedented power to regulate inactivity under the Commerce Clause. If the Court sticks to its own precedents, it won’t do so now.



NEXT: The individual mandate rests on an unbounded and unprincipled assertion of federal power.

2. The Individual Mandate Rests on an Unbounded and Unprincipled Assertion of Federal Power
 Does the Commerce Clause allow Congress to do anything it wants so long as an economic activity is remotely involved? Under the government’s theory of the case, yes, congressional power is essentially unlimited. As the D.C. Circuit Court of Appeals remarked in its ruling on the individual mandate:

The Government concedes the novelty of the mandate and the lack of any doctrinal limiting principles; indeed, at oral argument, the Government could not identify any mandate to purchase a product or service in interstate commerce that would be unconstitutional, at least under the Commerce Clause.

Solicitor General Donald Verrilli will need to come up with something better than that when he argues the case before the Supreme Court. As the multi-state challengers put it in their Supreme Court brief, "there is no way to uphold the individual mandate without doing irreparable damage to our basic constitutional system of governance." At a minimum, the Court's conservatives will expect the solicitor general to lay out a plausible limiting principle for congressional power under the Commerce Clause. If Verrilli does not—or cannot—do that, the individual mandate is in big trouble.

NEXT: The individual mandate violates the original meaning of the Constitution.

1: The Individual Mandate Violates the Original Meaning of the Constitution
Article 1, Section 8 of the U.S. Constitution grants Congress the power “to regulate commerce...among the several states.” The framers and ratifiers of the Constitution understood those words to mean that while congress may regulate commercial activity that crossed state lines, Congress was not allowed to regulate the economic activity that occurred inside each state. As Alexander Hamilton—normally a champion of broad federal power—explained in Federalist 17, the Commerce Clause did not extend congressional authority to “the supervision of agriculture and of other concerns of a similar nature, all those things, in short, which are proper to be provided for by local legislation.” In other words, the Commerce Clause was not a blank check made out to the federal government.

Yet in its decisions in both Wickard v. Filburn and Gonzales v. Raich, the Supreme Court held otherwise, allowing Congress to regulate the wholly intrastate cultivation of wheat and marijuana, respectively. Those decisions cannot be squared with the original meaning of the Commerce Clause. As Justice Clarence Thomas remarked about the majority’s reasoning in Raich, “If Congress can regulate this under the Commerce Clause, then it can regulate virtually anything—and the Federal Government is no longer one of limited and enumerated powers.”

Unfortunately for constitutional originalists, Thomas is unlikely to persuade a majority of his colleagues to wipe the slate clean by overturning Wickard and Raich. But as I explained earlier, the Supreme Court already has sufficient reason to strike down the individual mandate without touching any of its existing precedents. That approach—which targets the mandate's unprecedented regulation of inactivity—could satisfy both Thomas and his faint-hearted originalist colleagues on the bench. If five or more justices are interested in expressing at least some fidelity to the text of the Constitution, the individual mandate is finished.

Damon W. Root is a senior editor at Reason magazine.

SCOTUS Examines Ocare

The Supreme Court Weighs ObamaCare

Congress's power to regulate interstate commerce is broad but not limitless.

By DAVID B. RIVKIN JR. AND LEE A. CASEY

On Monday, the Supreme Court will begin an extraordinary three-day hearing on the constitutionality of ObamaCare. At stake are the Constitution's structural guarantees of individual liberty, which limit governmental power and ensure political accountability by dividing that power between federal and state authorities. Upholding ObamaCare would destroy this dual-sovereignty system, the most distinctive feature of American constitutionalism.

ObamaCare mandates that every American, with a few narrow exceptions, have a congressionally defined minimum level of health-insurance coverage. Noncompliance brings a substantial monetary penalty. The ultimate purpose of this "individual mandate" is to force young and healthy middle-class workers to subsidize those who need more coverage.

Congress could have achieved this wealth transfer in perfectly constitutional ways. It could simply have imposed new taxes to pay for a national health system. But that would have come with a huge political price tag that neither Congress nor the president was prepared to pay.

Instead, Congress adopted the individual mandate, invoking its power to regulate interstate commerce. The uninsured, it reasoned, still use health services (for which some do not pay) and therefore have an impact on commerce, which Congress can regulate.
Congress's reliance on the Commerce Clause to support the individual mandate was politically expedient but constitutionally deficient. Congress's power to regulate interstate commerce is broad but not limitless.

First among the limits is the very nature of congressional authority, which is based on specifically enumerated powers. As the Supreme Court has consistently acknowledged, the Constitution denies the federal government the type of broad public health and welfare regulatory authority known as a "general police power," which is reserved exclusively to the states. The court has also repeatedly held that preservation of this division between federal and state authority is a matter for supervision by the courts, and its precedents make clear that congressional Commerce Clause regulation must be subject to some judicially enforceable limiting principle.

The defining characteristic of a general police power is the states' ability to regulate people simply as people, regardless of an individual's activities or interaction with goods or services that might themselves be subject to regulation. Thus, the Supreme Court has ruled that states, exercising their general police power, can require all resident adults to obtain a smallpox vaccination. Only this type of authority could support ObamaCare's individual mandate, which applies to all Americans as such, regardless of any goods they may buy or own, or any activities in which they might choose to engage.

Congress has crossed a fundamental constitutional line. Neither the fact that every individual has some discernible impact on the economy, nor that virtually everyone will at some point in time use health-care services, is a sufficient basis for federal regulation. Both of these arguments, advanced by ObamaCare's defenders, are flawed because they admit no judicially enforceable limiting principle marking the outer bounds of federal authority.

On the left and right, legal thinkers too often forget that Congress has no constitutional power simply to regulate the economy. Rather, that power comes from a series of discrete authorities—to regulate interstate and foreign commerce, to tax, spend and borrow, to coin money and fix its value and so forth—that together allow it broad control over the nation's economic affairs. As a result, congressional efforts to address national problems may well be less economically efficient than would a more straightforward exercise of police power. The Constitution subordinates efficiency to guarantee liberty.

The Constitution divides governmental power between federal and state governments so that one may check the other. This requires that the electorate be able to tell, especially on Election Day, which government is responsible for which policies and regulations with which we live.

As Justice Anthony Kennedy explained in one leading Commerce Clause case, United States v. Lopez (1995): "The theory that two governments accord more liberty than one [emphasis added] requires for its realization two distinct and discernible lines of political accountability: one between the citizens and the Federal Government; the second between the citizens and the States." Congress's use of its commerce power in passing ObamaCare eradicates those "discernible lines of political accountability."
Even so, Congress's enumerated powers support a vast and ever growing regulatory state, much of it based upon the Commerce Clause.

Neither that Leviathan, nor the Supreme Court's precedents upholding it, is now at issue.
Justice Antonin Scalia explained in another of the Supreme Court's recent Commerce Clause cases, Gonzales v. Raich (2005), that the power to regulate interstate commerce, especially in conjunction with the power "to make all laws which shall be necessary and proper [emphasis added] for carrying into execution" its enumerated powers, gives Congress broad authority to reach even local and non-commercial activities when necessary to make legitimate regulatory schemes effective. Raich upheld federal control of purely local cultivation, sale and use of marijuana, and it is often incorrectly cited as support for the individual mandate.

But the Necessary and Proper Clause does not guarantee Congress whatever power it would like to reach its policy goals. That provision supports only otherwise legitimate exercises of Congress's enumerated powers. So under the Commerce Clause, Congress can try to achieve universal coverage through regulating the interstate health-care insurance market, as ObamaCare does, by requiring insurance companies operating in that market to cover pre-existing conditions. Then under the Necessary and Proper clause, Congress could also require employers to collect data on pre-existing conditions from new hires so insurers can better plan.

Requiring all Americans to have health insurance may well create a new revenue stream for insurance companies so as to lessen these new burdens on them, but it does nothing to make these new coverage requirements effective regulations of interstate commerce as the Supreme Court uses that term. In particular, the individual mandate does not prevent avoidance or evasion of these new insurance regulations. Nor does it make compliance easier to police, as was the case in Raich. There, the ability to regulate local marijuana production and use was necessary to make its interstate regulation effective because, as Justice Scalia noted, the homegrown variety "is never more than an instant from the interstate market."

Unlike the regulations at issue in Raich, the individual mandate applies regardless of anyone's interaction with a commodity, service or other activity, like the interstate sale or transport of marijuana, that Congress can legitimately regulate. Put another way, the Controlled

Substances Act is about the regulation of drugs, not people. It affects individuals only to the extent that they interact with the substances it proscribes, and it can be avoided by simply avoiding those substances.

Americans cannot escape the individual mandate by any means because it regulates them as people, simply because they are alive and here. That requires police power authority. Permitting Congress to exercise that authority—however important its ultimate goal—is not constitutionally proper and would forever warp the federal-state division of authority.
 
Messrs. Rivkin and Casey are lawyers who served in the Justice Department during the Reagan and George H. W. Bush administrations. They represented the 26 states in their challenge to ObamaCare before the trial and appellate courts.
A version of this article appeared Mar. 22, 2012, on page A15

Rhode Island Dem - Reforms State Pensions

The Democrat Who Took on the Unions

Rhode Island's treasurer Gina Raimondo talks about how she persuaded the voting public, labor rank-and-file and a liberal legislature to pass the most far-reaching pension reform in decades.

By ALLYSIA FINLEY

Providence, R.I.


So this is Gina Raimondo? The state treasurer who single-handedly overhauled Rhode Island's pension system and has unions screaming bloody murder? I had imagined her a bit, well, bigger. If not larger than life like New Jersey Gov. Chris Christie, then at least life-size. Ms. Raimondo couldn't be much taller than five feet, which may have caused some to underestimate her. That isn't the only thing that may have surprised people.

The former venture capitalist is a Democrat, which means that she believes in government as a force for good. But "a government that doesn't work is in no one's interest," she says. "Budgets that don't balance, public programs that aren't funded, pension funds that are running out of money, schools that aren't funded—How does that help anyone? I don't really care if you're a Republican or Democrat or you want to fight about the size of government. How about a government that just works? Put your tax dollar in and get a return out the other end."

Yes, that would be nice. Unfortunately, public pensions all over the country are gobbling up more and more taxpayer money and producing nothing in return but huge deficits. It's not even certain whether employees in their 20s and 30s will retire with a pension, since many state and municipal pension systems are projected to run dry in the next two to three decades.

That included Rhode Island's system until last year, when Ms. Raimondo drove perhaps the boldest pension reform of the last decade through the state's Democratic-controlled General Assembly. The new law shifts all workers from defined-benefit pensions into hybrid plans, which include a modest annuity and a defined-contribution component. It also increases the retirement age to 67 from 62 for all workers and suspends cost-of-living adjustments for retirees until the pension system, which is only about 50% funded, reaches a more healthy state.

Several states have increased the retirement age or created a new tier of benefits for future workers, but reforms that only affect not-yet-hired employees don't save much money. A lot of "people say we've done pension reform when all they've done is tweaked something," Ms. Raimondo points out. "This problem will not go away, and I don't know what people are thinking. By the nature of the problem, it gets bigger and harder the longer you wait."

The problem was particularly acute in Rhode Island since there are more retirees collecting pensions than workers paying into the system. Plus, as Ms. Raimondo says, "it's a small state with not a lot of growth, an expensive cost structure in government, and it's not a good combination." Making the state even more expensive by raising taxes would have caused many Rhode Islanders to leave. When the now-bankrupt town of Central Falls raised property taxes to finance worker pensions, many residents fled, sending the city into a tailspin.
Because there has been little legislative or public support for raising taxes, the Ocean State has been cutting public services to pay its pension bills. A few years ago Ms. Raimondo read "an article in the paper about libraries closing and public bus service being cut nights, weekends and holidays, and I just thought it doesn't have to be this way." The story made her consider a bid for treasurer.
In the last 15 years, Ms. Raimondo, who is 40 and the mother of two children, has helped found two venture-capital firms, Village Ventures and Point Judith Capital. She was a Rhodes Scholar at Oxford and has a bachelor's in economics from Harvard and law degree from Yale. Still, serving as treasurer of the smallest state in the country probably wouldn't be the next career step for someone with such impressive credentials and ambition.

Ms. Raimondo campaigned principally on her biography—her experiences growing up in the state and her decision to return and establish its only venture-capital firm. Her Republican opponent, Kerry King, laid out a pension-reform plan and ran against what he once called "the conspiracy that exists today between the public-sector unions and the General Assembly." Not surprisingly, the Rhode Island Laborers' District Council endorsed Ms. Raimondo, and she won 62% of the vote.

Soon after she set to work on fixing the state's pension system, flouting the advice of her Democratic colleagues. "Candidly, most people in my political circle told me not to do it because it is politically challenging and it's kind of the third rail," she says. "So most political advice I got was: 'Don't own the issue. Stay away from the issue. Put it on somebody else.'"

Her progressive peers seem to have underestimated her political savvy—and the public's demand for change. In April, she convinced the state pension board to cut the discount rate by which the state calculates its pension liability to 7.5% from 8.25%. She claimed that 7.5% was a more honest number since the actual investment return rate over the last decade was 2.28%.

"I could have cranked up our discount rate to 10% and dropped our unfunded liability by half—except in 10 years someone wouldn't get a pension check," she says. "You saw that in Central Falls."

Ms. Raimondo spent most of last year crisscrossing the state, educating people about the magnitude of the problem. "I would talk to social workers or social-service agencies who, when I started to talk about pensions, would ask 'Why should I care about pensions?' And I said, 'Because if you don't, your whatever it is, homeless shelter, is going to lose X thousand of dollars of funding.'"

Republicans often threaten to slash funding for charities and foundations, but Democrats pride themselves on being more compassionate. So when the Democratic treasurer warned "foundations that you're going to get a cut if we don't reform," people believed she was speaking in good faith.

She even traveled around with charts, a la Paul Ryan. "I don't know how you can look at a slide like that," she says, pointing to a series of pie charts in a pamphlet, "which shows that in 2002 we spent three cents of every tax dollar and now we're on our way to 20 cents of every tax dollar—and not care."


And she wasn't afraid to "walk into the belly of the beast" and tell the unions point-blank that "you were lied to [by former politicians] and the system is broken. Today we're arguing about whether you get a COLA [cost-of-living adjustment], tomorrow we'll be arguing about whether you get a pension." Exhibit A was Central Falls, where many retired police officers and firefighters have had their pensions cut in half.

In June, Ms. Raimondo formed a 12-member commission to study potential solutions, which included four union representatives as well as several accountants and consultants. Over the next three months the group met periodically, culminating in the pension-reform legislation that Ms. Raimondo and Gov. Lincoln Chafee introduced in October.

For several weeks the legislature met in the basement of the statehouse, debating and hearing testimony from the community. She recalls "some guy in blue jeans who waited all day to testify," taking the stand at 11 p.m. "I wondered, what is this guy going to say? And he gets up there to testify and was like 'I'm just a regular Rhode Islander trying to pay my bills. If you raise my property taxes, I don't know how I'm going to survive.'"

Although thousands of union members turned out at the capitol to protest, it was an open-and-shut case. The public so overwhelmingly supported the reforms that Ms. Raimondo warned lawmakers who opposed them that they wouldn't be re-elected. She knew she was connecting with the public when the clerks at Home Depot began noticing who she was and offering support. By mid-November, her legislation became the law of the land in Rhode Island with minor modifications. Seventy-seven of 94 Democrats voted for it.

Ms. Raimondo downplays the opposition from her former union allies. As she tells it, the reforms passed because she conducted "a huge, long, relentless public-education campaign," and there was no "rushing to a solution." Plus, the unions were at the table the entire time, she says. "Yes, there was a big protest. They weren't entirely supportive, but we had a reasonably productive dialogue the entire time—which we still have."

The unions tell a different story. In their version, the legislation was a done deal in the spring when Ms. Raimondo cut the discount rate and first floated the reforms. The commission and hearings were merely formalities to give the pretense of transparency and due process.

"This was all about politics for the treasurer," Paul Valletta, president of the Cranston firefighters union, tells me. "This was just a steppingstone for her to run for higher office."

Are the unions so cynical that they can't countenance a politician who's intellectually honest and sincere about reforming government?
According to a Brown University poll of Rhode Island voters last month, Ms. Raimondo enjoys a 58% approval rating—the highest of any statewide elected official and 36 points higher than Mr. Chafee's. Should she seek the governorship in 2014, as some speculate, many unions have vowed to run a no-holds-barred campaign to defeat her.

Ms. Raimondo poses a greater threat to the labor movement than any Republican, because she undercuts its narrative that pension reform is merely a cause célèbre for conservatives who want to stick it to unions. While the unions had an easy time vilifying New Jersey's pro-reform Republican governor, Chris Christie, the petite, pro-government Democrat will be more of a challenge.

"I'm generally upset and saddened by all the antigovernment rhetoric that is in our country today," Ms. Raimondo says. "I respect public employees and school teachers. They deserve a secure retirement."

Shhh. That's not what union bosses want people to hear.
 
Ms. Finley is assistant editor of OpinionJournal.com.
A version of this article appeared Mar. 24, 2012, on page A13

Karl Rove - The Road We've Traveled (w/O)

'The Road We've Traveled' With Obama

Three dismal years are spun into 17 minutes of fact-challenged campaign film.

By KARL ROVE

This month, Barack Obama's re-election campaign released a 17-minute film, "The Road We've Traveled," that previews the Democratic general election narrative. Directed by Academy Award winner Davis Guggenheim and narrated by actor Tom Hanks, the film explores Mr. Obama's most important decisions.
Viewers are told Mr. Obama deserves re-election for restoring America to prosperity after a recession "as deep as anything . . . since the Great Depression." He accomplished this in part, so the film says, by bailing out the auto companies—deciding not to just "give the car companies" or "the UAW the money" but to force them to "work together" and "modernize the automobile industry." The president, we're told, also confronted "one of the most worrisome problems facing America . . . the cost of health care."
Abroad, Mr. Obama ended the Iraq war and, in the "ultimate test of leadership," Osama bin Laden was killed on his watch. The film heralds Mr. Obama as a leader committed to "tough decisions" and as someone who "would not dwell in blame" in the Oval Office.

YouTube

Still shot from 'The Road We've Traveled'

Where to begin? Perhaps with the last statement: Mr. Obama has spent three years wallowing in blame. His culprits have ranged from his predecessor, to tsunamis and earthquakes, to ATMs, to Fox News, to yours truly. If you Google "Obama, Blame, Bush" and "Obama, Inherited," you'll get tens of millions of hits.

As for inheriting the worst economy since the Great Depression: Perhaps Mr. Obama has forgotten the Carter presidency, which featured double-digit inflation, double-digit interest rates, and high unemployment.
The film is riddled with other inaccuracies and misleading claims. For example, the United Auto Workers may not have gotten "money" in the bailout, but as an unsecured creditor, the union received a 17.5% ownership interest in General Motors and 55% of Chrysler, while the companies' bondholders got hosed.

The film asserts that the auto companies "repaid their loans." But they still owe taxpayers $26.5 billion, and the Treasury Department's latest report to Congress noted that nearly $24 billion of the bailout money is gone forever.

Related Video

Assistant editorial page editor James Freeman on Jeb Bush's endorsement of Mitt Romney. Plus, how President Obama reckons that he's only responsible for 12% of the deficit and George W. Bush is to blame for 59%.

The film includes Mr. Obama's 2008 claim that the death of his mother, Stanley Ann Dunham, from cancer "could have been prevented" if only she "had good, consistent insurance." But earlier this year, a biography of Dunham by Janny Scott, "A Singular Woman," revealed that she had health insurance that covered most all her medical bills, leaving only a few hundred dollars a month in deductibles and uncovered costs. For misleading viewers, the Washington Post fact checker awarded this segment of the film "Three Pinocchios."

The film also offers up numerous straw men. For example, opponents of Mr. Obama's auto industry bailout, we're told, just wanted to "let it go," as if an orderly bankruptcy of GM and Chrysler in the courts rather than by presidential fiat was never an option. It was.

Almost as important as what the film says is what it doesn't. There's not a word about the failure of the president's stimulus to produce the jobs he pledged—according to the Bureau of Labor Statistics, fewer Americans are working today (132.7 million) than when Mr. Obama was sworn in (133.6 million).

There's nothing about his promise to cut the deficit in half by the end of his term—according to Treasury's Bureau of Public Debt, the administration has piled up more debt in three years and two months ($4.93 trillion) than his predecessor did in eight years ($4.8 trillion).

About Karl Rove

Karl Rove served as Senior Advisor to President George W. Bush from 2000–2007 and Deputy Chief of Staff from 2004–2007. At the

White House he oversaw the Offices of Strategic Initiatives, Political Affairs, Public Liaison, and Intergovernmental Affairs and was Deputy Chief of Staff for Policy, coordinating the White House policy-making process.

Before Karl became known as "The Architect" of President Bush's 2000 and 2004 campaigns, he was president of Karl Rove + Company, an Austin-based public affairs firm that worked for Republican candidates, nonpartisan causes, and nonprofit groups. His clients included over 75 Republican U.S. Senate, Congressional and gubernatorial candidates in 24 states, as well as the Moderate Party of Sweden.
'
Karl writes a weekly op-ed for the Wall Street Journal, is a Fox News Contributor and is the author of the book "Courage and Consequence" (Threshold Editions).

Email the author atKarl@Rove.comor visit him on the web atRove.com. Or, you can send a Tweet to @karlrove.
Click here to order his book, Courage and Consequence.

Nothing is said about the centerpieces of last year's State of the Union—green energy jobs (Solyndra anyone?) and high-speed rail (fizzled). Nada on the president's promises about how ObamaCare would lower premiums and lower the deficit while allowing people to keep their existing coverage (all untrue).

There's nothing about the crumbling situation in Afghanistan, strained relations with allies like Israel, Mr. Obama's unpopularity in the Islamic World, the rise of the Muslim Brotherhood in Egypt, multiple missteps with Iran (from failing to protest the stolen Iranian elections in 2009 to the mullahs' unchecked pursuit of nuclear weapons), and Mr. Obama's flip flops on closing the Guantanamo Bay detention facility and providing civilian trials for terrorists.

As for the killing of Osama bin Laden, Mr. Obama did what virtually any commander in chief would have done in the same situation. Even President Bill Clinton says in the film "I hope that's the call I would have made." For this to be portrayed as the epic achievement of the first term tells you how bare the White House cupboards are.
 
Mr. Rove, the former senior adviser and deputy chief of staff to President George W. Bush, is the author of "Courage and Consequence" (Threshold Editions, 2010).
 
Editor's note: An earlier version of this column included an incomplete quote from Bill Clinton in the last paragraph.
A version of this article appeared Mar. 22, 2012, on page A13

The Buffett Ruse

Obama's ploy means the highest capital gains tax rate since 1978.

Remember the moment in 2008 when Charlie Gibson of ABC News asked Senator Barack Obama why he would support raising the capital gains tax even though "revenues from the tax increased" when the rate fell? Mr. Obama's famous reply: "I would look at raising the capital gains tax for purposes of fairness." Well, we were warned.
Here we are four years later, and President Obama on Tuesday night linked the term "fair" to U.S. tax and economic policy seven times. The U.S. economy is still hobbling out of recession, real family incomes are falling and 14 million Americans are unemployed, but Mr. Obama declared that his top priority is not to reform the tax code to promote growth and job creation. His overriding goal is redistributing income.

Enlarge Image

Close

Mr. Obama endorsed the political ruse he calls the Buffett rule, which asserts as a matter of moral principle that millionaires should not pay a lower tax rate than middle-class wage earners. Specifically, Mr. Obama is proposing that anyone earning more than $1 million pay at least 30% of that income to Uncle Barack. The White House says that if a millionaire household's effective tax rate falls below 30%, it would have to pay a surcharge—in essence a new Super Alternative Minimum Tax—to bring the tax liability to 30%. For those facing this new Super AMT, all deductions and exemptions would be eliminated except for charity.
The Buffett rule is rooted in the fairy tale that taxes on the wealthy are lower than on the middle class. In fact, the Congressional Budget Office notes that the effective income tax rate of the richest 1% is about 29.5% when including all federal taxes such as the distribution of corporate taxes, or about twice the 15.1% paid by middle-class families. (See "How Much the Rich Pay," January 23, 2012.)
This is because wealthy tax filers make most of their income from investments. Such income is taxed once at the corporate rate of 35% and again when it is passed through to the individual as a capital gain or dividend at 15%, for a highest marginal tax rate of about 44.75%.
This double taxation is one reason the U.S. has long had a differential tax rate for capital gains. Another reason is because while taxpayers must pay taxes on their gains, they aren't allowed to deduct capital losses (beyond $3,000 a year) except against gains in the current year. Capital gains also aren't indexed for inflation, so a lower rate is intended to offset the effect of inflated gains.
One implication of the Buffett rule is that all millionaire investment income would be taxed at the shareholder level at a minimum rate of 30%, up from 15% today. The tax rate on investment income from corporations would rise to 54.5% from 44.75%, a punitive tax on start-up or expanding businesses.
The new 30% capital gains rate would be the developed world's third highest behind only Denmark and Chile, according to the American Council for Capital Formation. This is on top of the 35% corporate rate that is already the second highest rate in the world after Japan. That giant sucking sound you hear come January 2013 would be hundreds of billions of investment dollars fleeing to China, India, Korea and other U.S. competitors. Lower capital investment in the U.S. means less wage growth, and so the people hurt most by this tax hike would be workers, according to a study by the Institute for Research on the Economics of Taxation.

Mr. Obama conceded on Tuesday that the high U.S. corporate tax is an economic loser. Yet he misses the crucial point that business owners assess the combined corporate and capital gains tax on those business profits. Lowering the corporate tax rate makes the U.S. more competitive, but the tax change is self-defeating if it is combined with an even larger rise in investment income taxes on capital gains and dividends.
Mr. Obama isn't setting himself apart merely from conservatives with this Buffett ploy. He is rejecting 35 years of bipartisan tax policy that began with the passage of the Steiger Amendment by a Democratic Congress that cut the capital-gains rate to 28% from 35% in 1978.
As the nearby chart shows, the rate has never since risen above 28%, and the last time it moved that high was in 1986 as part of the Reagan-Rostenkowski tax reform that also cut the top marginal income tax rate to 28% from 50%. With income-tax rates so low, a differential was arguably less necessary—though it's worth noting that capital gains revenues fell dramatically after that rate increase.
A decade later Bill Clinton agreed to cut the rate back to 20% as part of the balanced-budget deal with Newt Gingrich. Capital gains revenues soared, helping to balance the federal budget. Nearly every study estimates that the revenue-maximizing tax rate from the capital gains tax is between 15% and 28%. Doug Holtz-Eakin, the former director of the Congressional Budget Office, says that a 30% tax rate "is almost surely above the rate that maximizes tax revenues." So it's likely the Buffett trick would lose revenue for the government.
Yet in a time of the highest deficits since World War II, Mr. Obama wants to double the capital gains tax rate even as he raises the top income-tax rate to 42% or so. Mr. Obama really is taking us back to the worst habits of the 1970s. And not because he thinks higher rates will raise revenue, but merely so he can score points against Mitt Romney and stick it to the successful.
This isn't tax fairness. It's tax folly.
Printed in The Wall Street Journal, page 16 A version of this article appeared Jan. 26, 2012, on page A16

Fannie & Freddie - Set the Record Straight

The Fannie and Freddie Hate Storm

A dubious prosecution but it helps set the record straight.

• By HOLMAN W. JENKINS, JR.

Like amoebas feuding in a drop of water, pundits have been savaging each other all year over whether Fannie Mae and Freddie Mac "caused" the financial crisis. Lately the argument has become apoplectic.

But the question is phrased badly. Three things happened: a housing bubble, a collapse in lending standards, and a global liquidity panic when markets lost trust in the solvency of financial institutions.

Now comes a Securities and Exchange Commission complaint against former Fannie and Freddie executives. The complaint makes plain that Fannie and Freddie held a lot more subprime loans than they publicly called subprime. It makes plain that Fannie and Freddie were co-sponsors with the private sector in driving down underwriting standards. Case in point: Fannie's backing in 1999 of Countrywide's

"Fast and Easy" program to give buyers loans without proof of their income or assets.
So why do these SEC actions leave us queasy? The lawsuits don't aim to do justice for the American people, but—very nominally—for Fannie and Freddie's shareholders, who were supposedly misled by their disclosures. In fact, the complaints utterly miss the target in this regard.

Fannie and Freddie were under political pressure to underwrite loans to poor and minority borrowers. They were eager to do any business that appeared profitable. But investors knew what was going on. Investors' biggest concern, as the duo's losses mounted, was their political status. And right up to the moment it seized them, the Bush administration was insisting both were solvent and well capitalized. die "held loans squarely within the public definition of subprime" that they didn't call "subprime," in the SEC's language. True, but both also published detailed tables showing investors a more realistic picture of their huge holdings of nonconventional mortgages made to people with low credit scores, low down payments or both. It was in a public forum, after all, that Barney Frank called on them to "roll the dice . . . towards subsidized housing." To add to the pathos, the two former CEOs named in the SEC complaints, Fannie's Dan Mudd

Fannie and Freddie's Richard Syron, were brought aboard after accounting scandals and sought to appease Congress by upping loans to less-capable borrowers.

Yes, we had a housing bubble. Yes, we had deterioration in lending standards. Fannie and Freddie had a role in both. And bordering on lunatic is the claim that Fannie and Freddie came late to subprime so are innocent of the consequences. Even if the premise were true, by definition the last money in, not the first money in, defines a bubble.

But these things did not lead inexorably to the panic of 2008. The housing losses should have been manageable by the financial system.

A systemic meltdown came instead because a handful of giant financial institutions in the U.S. and Europe had leveraged up with short-term and even overnight borrowings in order to hold complex mortgage derivatives that suddenly became illiquid and hard to value.

This was the recognized threat to the global financial system from the beginning, the reason for Hank Paulson's abortive "super SIV" fund, the reason for the Fed's interventions on behalf of Bear Stearns, the reason for several other inadequate Band-Aids until Lehman's unraveling finally produced a full Monty panic response from governments around the world.

The role of Fannie and Freddie in all this? Very little, except that their seizure accelerated the unraveling of equity values across the banking system as investors feared nationalization would be the fate of other large and flailing financial institutions.
But here's the relevance today: We still don't have consistent and coherent stabilization of the financial sector or fixing of its bad incentives. And don't kid yourself that these lawsuits are the beginning of such an effort.

They are just another political action. Notice that when their shareholders brought private lawsuits alleging the same disclosure violations the SEC now alleges, the Federal Housing Finance Agency, Fannie and Freddie's regulator, rushed to their defense and even succeeded largely in quashing the cases on grounds their disclosures were approved by their overseer.
Yet now, when their former executives are being hung out to dry, FHFA guided Fannie and Freddie to sign bizarre "nonprosecution agreements" that basically commit them to support any claim the SEC cares to make against the execs.
FHFA's motive is no mystery. It wants to protect its wards from further political blowback. FHFA obviously has plans for the pair that don't involve their wind-down and the eventual privatization of their functions, the avowed goal of President Obama as well as most Republicans.

So where ultimately do Fannie and Freddie rank amid the confluence of ridiculous subsidies, private-sector opportunism and ungovernable global capital flows that contributed to the crisis? Who knows exactly, but the exaggerated ferocity of the debate lately is a reliable Washington hallmark of an argument fading into irrelevancy. The financial crisis isn't over, and around the world the problem is not housing but governments whose commitments far exceed their resources.

Geitner on the "Priveledge" of Bein American

Geithner and the 'Privilege' of Being American

The Founders argued that life, liberty, and the pursuit of happiness were rights that preceded government—not things to be granted by it.

By LAWRENCE B. LINDSEY

Last week Treasury Secretary Tim Geithner said that the "most fortunate Americans" should pay more in taxes for the "privilege of being an American." One can debate different ways of balancing the budget. But Mr. Geithner's argument highlights an unfortunate and very destructive instinct that seems to permeate the Obama administration about the respective roles of citizens and their government. His position has three problems: one philosophical, one empirical, and one logical.

Philosophically, the concept that being an American is a "privilege" upends the whole basis on which America was founded. Privileges are things granted to one individual by another, higher-ranking, individual. For example, in my house my children's use of the family car is a privilege. One presumes Mr. Geithner believes that the "privilege" of being an American is granted by the presumably higher-ranking, governing powers that be.

This is an age-old view that our Founding Fathers rejected. First, they argued that the basic rights of life, liberty and the pursuit of happiness (i.e., economic liberty) were natural rights, endowed by our Creator, not by government. Second, the governing powers do not out-rank the citizens. Rather it is the citizens who grant government officials their "just powers." As Jefferson wrote in the Declaration of Independence, governments are instituted among men based on their consent in order to secure the rights of life, liberty and the pursuit of happiness. The notion that a governing authority grants privileges to those it governs directly contradicts Jefferson's declaration.

But it is this same notion that recently allowed the Health and Human Services Department to order religious institutions to pay for things they find abhorrent. Religious freedom is presumably a "privilege" that can be revoked for some transient and novel public-policy reason.

The Obama Justice Department felt the same about religious institutions being able to give preference in hiring to those who shared their faith, and was unanimously overturned by the Supreme Court last month in the Hosanna-Tabor case.

Last year, the Obama National Labor Relations Board also seemed to believe that it was a privilege for an American company, in this case Boeing, to open a new plant in a right-to work state of its choosing, thus upending even the most rudimentary notion of economic liberty.

And of course the whole idea of ObamaCare is that we must buy a product from a private business that our betters in government have deemed necessary for our well-being.

Close

This philosophical point is fundamental. But even if you accept Mr. Geithner's case that the well-to-do must pay more for their presumed "privilege" of being governed, his story ignores the empirical fact that they already do pay a record share of income taxes, even relative to their share of income. According to the Census Bureau, the share of income received by the top 5% of American households is now 21.5%, up from 21.4% in the 1990s. Their share of income taxes has risen to 59% under President Obama from 52% under President Clinton. This despite the fact that the top tax rate was five points higher in the Clinton years.

If you go further back to the pre-Reagan days, when the top tax rate was 70%, the story becomes even more dramatic. Under the four presidents of that era, the income share of the top 5% was 16.8% and their share of the income tax was 36%. In other words, the share of income received by the top 5% has risen 28% and their share of income taxes has risen 64%.

Stated differently, based on the data provided by the Census Bureau and the Internal Revenue Service, the relative tax burden of the top 5% of American earners compared with the remaining 95% has grown from roughly three-to-one prior to 1980 to almost six-to-one today.

One can always argue that this ratio should be 10-to-1, that the "privilege" of being governed is worth 10 times as much per dollar of income to someone who is rich than to someone who is middle-class. Once we give up our moral compass of government deriving its powers from the people. we must also give up any empirical compass of how much we must surrender to government. When you begin the argument that being a citizen is a "privilege" for which one should pay ever more, you very quickly find yourself on Friedrich Hayek's "Road to Serfdom."

This brings us to the third problem with Mr. Geithner's argument, a fundamental logical inconsistency. If being governed, or over-governed, is a privilege for America's citizens, shouldn't everyone pay for the privilege? Why are more than half of all American workers paying nothing at all in income taxes? And if the issue is the need to "pay more" for our privilege, why should only those making over $250,000 be the ones who pay more? If being an American really is a privilege, then certainly all who are thus privileged should pay something.

Still, the real problem with this whole privilege argument goes back to what the Founding Fathers were thinking. Being an American is a right, not a privilege. The privilege belongs to those who are temporarily allowed to serve this great nation in a decision-making capacity.

When they turn this privilege into a right to distribute government largess in ever larger quantities—and in ways, to use Jefferson's phrase, a "wise and frugal government" would not—it is those in government, and not the governed, who bear the responsibility for our budgetary problems.
 
Mr. Lindsey, a former Federal Reserve governor and assistant to President George W. Bush for economic policy, is president and CEO of the Lindsey Group.

A version of this article appeared Feb. 29, 2012, on page A21 in some U.S. editions of The Wall Street Journal, with the headline: Geithner and the 'Privilege' of Being American.

O's New Budget

Obama Budget Boosts Spending More Than $1 Trillion, CBO Says

INVESTOR'S BUSINESS DAILY

Federal Spending: If you want to know why Washington can't get spending under control, this week provided a prime example, when the Congressional Budget Office said President Obama's "budget-cutting" plan would actually boost spending $1 trillion.

When Obama released his budget last month, he said the spending cuts contained in it would "generate approximately $1 trillion in
deficit reduction over the next decade."

"Every department will feel the impact of these reductions," he said, "as they cut programs or tighten their belts."
But this week, the Congressional Budget Office released its analysis of Obama's budget.

And lo and behold, rather than cut spending by $1 trillion over the next decade, the CBO says it would increase it by more than $1 trillion.

So just what explains this shift of more than $2 trillion? Welcome to the world of "baseline budgeting."

You see, Obama simply assumed that spending would go up faster if the government were left on autopilot. Then he lowered the spending levels a bit in his budget and — voila! — he's cutting spending.

The Congressional Budget Office, however, uses a more conservative baseline projection.

So whereas Obama said baseline spending would total $47 trillion over the next decade, the CBO said it would be $44.3 trillion.
If you ignore the baseline and just look at the spending levels, what Obama is proposing is obvious — more spending, year after year.

We and others have exposed this baseline budget sleight of hand many times, yet politicians — on both sides of the aisle — continue to use it. The temptation is no doubt tough to resist.

After all, Democrats can use baseline budgeting to make their spending proposals look smaller and to exaggerate the size of any proposed spending cuts.

At the same time, Republicans use baseline budgets to burnish their image as fiscal hawks.

When Republicans took over control of the House last year, for example, the GOP passed a bill that, they said, would cut spending by $38 billion over the remainder of the 2011 budget year.
After it passed, the Congressional Budget Office released a report saying that the bill wouldn't cut spending at all. In fact, the opposite.

"Total discretionary outlays in 2011 will be $3.2 billion higher as a result of the legislation," the CBO said.
Likewise, President Bush each year issued budgets containing "deep" spending cuts that, when you looked at the actual numbers, simply didn't exist.

Nevertheless, Democrats bemoaned the inhumanity of it all, and the press dutifully reported that Bush was taking a meat ax to the budget.

The deal Republicans hammered out last summer with a recalcitrant Obama suffers the same problem. It's supposed to cut spending more than $2 trillion over 10 years.
But you will look in vain to find any spending cuts. Each year, federal outlays climb to the point where the budget in 2022 will be 52% bigger than it is this year.

And keep in mind that this year's budget is itself massively bloated — 22% higher than in 2008.
If you want to see what real spending cuts look like, check out the budget plan put together by Sens. Rand Paul, Mike Lee and Jim DeMint. It would slash federal spending — in the real sense — by more than $400 billion next year, eliminate four agencies and balance the budget by 2017.

But as long as reporters keep falling for the baseline budget magic trick, politicians will go on claiming to cut spending while the country falls deeper and deeper into the fiscal abyss.