President Barack Obama offers little in the way of policy proposals for a second term, yet his most ardent supporters continue to spin wistful fantasies about the great changes an Obama second term will bring. Obama has declared inequality in the United States to be the signature issue of the times; however, he has virtually no program to address that inequality. Many of his supporters, who see the Affordable Care Act as falling short of their hopes and dreams, still tout it as a waystation to much more significant change. Obama's supporters pay much more attention to what he says than to what he does.
The tax rate system with a high top marginal tax rate could reduce the concentration of wealth and income among the top few percent of Americans, much as it did after World War II, when the top marginal tax rate ranged from 70.45 percent to 91 percent. Obama, at best, will restore the top marginal tax rate to 39.6 percent for those earning over $250,000 a year by not extending the Bush tax cuts for these high earners. It is unlikely that the Republicans in the House and Senate will agree to end the Bush tax cuts only for high earners.
Obama's only other tax proposals for the future are enacting the Buffett rule and ending some tax preferences and loopholes for the very well-off -- he has specifically called for an end to tax breaks for private airplane owners and oil and gas subsidies/credits. The Buffett rule enactment would bring in revenue of about $47 billion over ten years and would affect only a small percentage of millionaires and billionaires. Ending the tax breaks that Obama has specifically mentioned would not raise significant revenue. Moreover, in a pamphlet in which President Obama defines what "CHANGE IS," he calls for even more tax cuts to help create jobs. When you combine the real likelihood that Obama will not get much additional revenue in a possible second term, with the calculations of economists at the Center for American Progress that Obama has already cut taxes by $900 billion to $1 trillion, he will not have the money to do great things in a second term. And yet with all that has been said above, Obamas still proposes to increase revenue by $1.5 trillion over ten years.
The kind of wistful thinking referred to in the title of this blog, which limits the chances of getting fundamental change, was illustrated at a New Mexico Sierra Club event I attended last week. The speaker was Eric Griegos, a Democratic candidate for the First District U.S. House seat. I asked Mr. Griegos why he supported the Buffett rule, since it would not bring in much revenue and would probably make it more difficult in the future to get a tax structure with rates reminiscent of those in effect from the 1950s to 1980. Eric Griegos acknowledged the small revenue impact of the Buffett rule and also admitted that even with very high tax rates, there was great economic prosperity after World War II, but then said it would be remarkable if anti-tax Republicans -- and some Democrats -- would accept very wealthy people actually paying 30 percent of their income. Setting such a low taxation cap will cripple raising future revenue.
It is going to become apparent in the not-too-distant future that much more revenue must be raised to fund largely locked-in budgetary imperitives; therefore, responsible political parties must begin to prepare the public for needed financial sacrifices.
The focus to this point has been almost exclusively on taxation matters; however, the same kind of wishful thinking as with taxation prevails with health care reform. Many of those who wanted a single-payer plan or at least a robust public option, support the Affordable Care Act on the basis that it is a big step on the way to more fundamental reform. The more likely future reality is that a limited reform will make it less likely that a single-payer can be enacted, because some of the pressure for it has been vented away.
In looking at what an Obama second term might look like, it is more important to focus on what he has done, rather than rely on the generalized, unspecific things he might do in the future. Based on his record, he is not likely to: significantly deflate a bloated Pentagon; reduce our capacity to build nuclear warheads and delivery systems; trim and make more transparent a sprawling intelligence complex -- promised in the 2008 presidential campaign -- abandon his adherence to George W. Bush's positions on civil liberties; build a renewable energy future by cutting back on fossil fuel energy production; and substitute a law enforcement/diplomatic approach for the largely military force approach now being followed in the War on Terror.
Very recently, the Obama administration completed negotiations on a 10-year commitment to Afghanistan security after the tentative 2014 deadline for the withdrawal of the bulk of U.S. troops. We don't yet know the details of that agreement -- not yet formally signed -- but it portends a large drain on U.S. resources until at least 2114. An early report on the agreeement is that the United States will supply Afghanistan with at least $2.3 billion in funding each year. If this is true, it would be unconstitutional, as the executive branch cannot commit unappropriated funds. Moreover, the word is that the agreement will be submitted to the Afghan parliament but not to the U.S. Congress, meaning that the Afghanistan government will be acting in a more democratic way than will the U.S. government. Coupled with this commitment to Afghan nation-building, President Obama says in "CHANGE IS" that the U.S. "remains committed to Iraq's long-term security...."
Overall, than, looking ahead to what Obama will likely do if elected to a second term, the public motto should not be "Yes We Can" but 'No We Shouldn't."
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