Whoops, We Were Wrong...
SEPTEMBER 9, 2009 | Commentary by NATHAN BENEFIELD
One of our goals at the Commonwealth Foundation is to predict the effect of proposed public policies. Most of the time, we are proven correct, and humbly announce, "We told you so!"
For instance, we predicted the federal "stimulus" legislation would do little to spur economic growth; today, unemployment is substantially higher than proponents predicted it would be without the stimulus. We said a minimum wage increase would result in lost jobs - which we saw, beginning with younger, low-skilled workers, before spreading to the rest of the economy. We argued that the federal government would not sign off on the plan to toll I-80, which the FHWA rejected. And last July, we warned lawmakers that the 2008 budget would end in a huge deficit, and voilà, Pennsylvania legislators are still in a stalemate on resolving this crisis of their own making.
But sometimes, our predictions miss the mark. Case in point: in a November 2008 commentary, we predicted "Obama's presidency will likely be less radical than his primary campaign proposals and more like the moderated views he unveiled after winning his party's nomination ... He will avoid controversy and not make [Bill] Clinton's mistake of immediately pushing the most controversial, liberal parts of his agenda." Whoops!
We were not surprised that a stimulus was near the top of the agenda. But the magnitude of the spending plan was staggering. As a candidate, Obama had been critical of the massive debt accrued under President Bush, and pledged to work toward deficit reduction. Instead, he offered a spending plan that led to a $1.8 trillion deficit-four times Bush's record-resulting in a series of "tea parties" across America.
We did predict Obama would push "card check" to appease Big Labor, though we would have thought he would have backed down when many members of his own party expressed concern with it. And we knew Obama would try to help unions with an auto-maker bailout, but did not foresee a federal government takeover of General Motors.
Candidate Obama did endorse federal "cap-and-trade" legislation under which, in his words, "the price of electricity will necessarily skyrocket." But that quote was before the primaries, and in liberal San Francisco. Cap-and-trade was little discussed in the general campaign, when Obama pledged not to raise taxes on anyone making under $250,000 a year (a pledge "cap-and-trade" would violate).
Of course, President Obama broke that pledge when he raised the federal tax on cigarettes, which disproportionately affects low-income households. Obama has also retreated from his promises to make government more transparent - failing to post legislation online before it was voted on and signed, shielding eavesdropping programs from public scrutiny, and hiding information about those lobbying on health care.
But on health insurance reform, Obama has surprised us the most. Obama attacked John McCain for suggesting taxing employer health care benefits and creating an individual tax credit, but now Obama embraces a tax on benefits-but without the offsetting tax credit. During the primary, Obama criticized Hillary Clinton for proposing an individual mandate to buy insurance. But the congressional proposals Obama now supports all contain an individual mandate.
And Obama's campaign tax pledges would be blown away by health care proposals. The current bills would tax the uninsured, tax employers not complying with a government mandate, and impose a "fair share" fee on all private insurance plans for comparative effectiveness research (i.e. rationing) - all affecting those earning under $250,000. While candidate Obama admitted he would raise taxes on the "rich," he said top rates would not exceed those under President Clinton, because doing so would hurt the economy. But the "surcharge" in the House health care bill, combined with already-scheduled tax increases, would put the top tax rate closer to 50 percent of income, far above the top rate of 39% under Clinton.
In one aspect, though, Obama did stay true to his general election persona. As a candidate in the primary, Obama was the most outspoken critic of the Iraq War and Bush's foreign policy. But as president, Obama has stayed the course in Iraq, retained Bush's Secretary of Defense, and escalated troop levels in Afghanistan. For the record, that was not part of our prediction.
Rather than learn from Bill Clinton's first-term mistakes, Obama has repeated them, pushing government-run health care, higher taxes, and a far-left agenda. Whoops, we were wrong. But in taking this course, like Clinton, President's Obama's job approval is plummeting - and thus, we told you so!
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Nathan A. Benefield is Director of Policy Research with the Commonwealth Foundation, an independent, nonprofit public policy research and educational institute based in Harrisburg.
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