Barack Obama leads in the national polls and in the Electoral College count. If elected, he can be expected to work manically to exploit the short window of opportunity that greets every new president, a period that could prove especially fruitful for a charismatic young president borne to the White House on a tide of idealism. Some of the items that a President Obama would like to accomplish probably would remain beyond his grasp during the first 100 days of his administration: A radical overhaul of the American health-care system replicating the state-dominated model of France or Canada, for instance, would probably take much longer. On the other hand, a number of items — ranging from important domestic concerns (taxes, energy, financial turmoil) to foreign affairs (foremost the Iraq war, but also trade with Asia and Latin America) — are susceptible to early action.
Here’s what we might expect from the first 100 days of an Obama administration.
Hoisting the White Flag
This is Obama’s plan for Iraq: “The best way to protect our security and to pressure Iraq’s leaders to resolve their civil war is to immediately begin to remove our combat troops. Not in six months or one year — now.” He plans to begin drawing down our forces at a rate as brisk as two brigades a month — “about twice as fast as American commanders in Iraq have deemed prudent,” according to the New York Times. Notwithstanding the success of the surge, Obama’s plan has not changed since he made the above statement in September 2007. The retreat presumably begins on Day One.
Neither Obama nor Biden (who once hoped to ethnically partition Iraq into three autonomous states, not understanding that Iraq’s ethnic groups are quite inconveniently mixed together) has made a single credible statement about how to keep our progress in Iraq from being reversed. As America retreats, remnant al-Qaeda in Iraq elements will have the opportunity to surge, as will those forces backed by the ayatollahs in Iran and others supported by Sunni Arab neighbors. The strategic advantages we have won in the heart of the Middle East — purchased at a terrible price — will be tossed away. The military that could not be defeated by al-Qaeda will be defeated by its own commander-in-chief’s folly.
Raising Taxes to Pay for New Spending
One of the first things any new president does is draft a budget and submit it to Congress. If elected, Obama will face a problem: He has promised mind-boggling spending increases — $1.6 trillion for health care alone — and proposed no serious way to pay for them.
He would increase tax rates on capital gains, dividends, and individuals making more than $250,000. But these hikes would be more than offset by new tax credits for an array of targeted groups. Credits for childcare and college tuition would be expanded, and one for mortgage payers would be created. Low-income workers who pay little or no income tax would get a credit that refunds most of their Social Security taxes as well.
The Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution, estimates that Obama’s tax credits would amount to $600 billion in new spending over the next ten years. His tax hikes on high earners would cover only about half that amount, and that’s before the economic downturn is factored into the equation. There will be a gaping hole in the budget before Obama even starts talking about health care, energy, or any of the dozens of other big-ticket spending items he promised during the campaign.
Obama says he’ll pay for all his new spending by “closing corporate loopholes and tax havens.” This is the same magic wand politicians have been waving for years, but they never manage to pull the rabbit out of the hat. Obama has not revealed a plan for succeeding where others have failed, but he has promised to produce the biggest rabbit ever: nearly $1 trillion in revenue over ten years from “as yet unspecified” sources, according to the Tax Policy Center.
Of course the trick is quite simple to perform in practice: Congress reaches into its hat and pulls out our wallets. Obama’s new Great Society will require broad tax increases to sustain it. As the bills come due, those “as yet unspecified” sources are going to become painfully obvious.
Enacting Another Pointless Stimulus
Last winter, Congress passed and Bush signed a $168 billion economic-stimulus package, consisting mostly of tax rebates. The rebate checks failed to have much of an impact, because the concept underlying all such stimulus is flawed: The government cannot put money into the economy without first taking money out of the economy, through either taxing or borrowing. The economy is stimulated when tax policy encourages people to work, save, and invest; rebate checks merely redistribute wealth.