EVENTS

Date:	Tuesday, January 13, 2009
Time:	2:00 PM -- 4:30 PM
Location:	Wohlstetter Conference Center, Twelfth Floor, AEI 1150 Seventeenth Street, N.W., Washington, D.C. 20036

 

AEI Scholars Preview Obama's Early Agenda

 

WASHINGTON, JANUARY 15, 2009--President-elect Barack Obama campaigned on change, but his administration may find its foreign policy options limited by obdurate adversaries abroad, even as the recession gives it a free hand to implement drastic economic changes. On January 13, AEI scholars assessed the prospects for Obama's foreign and domestic policy initiatives in a preview of his anticipated message to Congress.

The foreign policy panelists, led by Danielle Pletka, discussed areas in which the Obama administration will be tested. Russia and China, for example, draw their legitimacy at home from their ability to deliver economic growth. But as the worldwide economic crisis deepens, these governments may find their popularity waning. Leon Aron and Dan Blumenthal predicted Moscow and Beijing will clamp down further on political opposition in response. Whereas the Bush administration abandoned early efforts to hedge against murky intentions in Moscow and Beijing, preferring engagement, Obama will have the opportunity to promote democratic reform to help fully integrate these nations.

But change will not come easily. The Obama administration's grand strategy in the Middle East revolves around the ideas of direct negotiation with Iran over its nuclear program and attempts to tear Syria away from the Iranian camp, according to Pletka. Thus far, however, Iran has shown little interest in abandoning its nuclear ambitions. Although Syria has conducted secret talks with Israel, abandoning its recidivist behavior could threaten the Damascus regime's survival.

But even if an overarching redirection in foreign policy is unlikely, the deepening economic crisis will offer political cover for Obama to increase government spending massively and expand the federal government's role in the economy.

AEI's economists enumerated a number of areas in which the Obama administration might seek to expand the government's role. Kevin A. Hassett expressed concern that Democrats would use the proposed stimulus as political cover for future spending increases, such as funding universal health care. Alex Brill predicted that the economic downturn will offer the political space to implement many of the questionable tax provisions proposed during the campaign. Lawrence B. Lindsey repeatedly warned during his presentation, "We're about to frivol away $800 billion on a stimulus package that isn't really stimulus."

All agreed that the spending increases associated with the stimulus will be anything but temporary. "This increased spending is going to be $400 billion a year, not for two years, but forever," Lindsey concluded. "They are not going to be cutting back aid to states; they are not going to be cutting back medical programs in 2011. This is a permanent $400 billion increase in spending."

--PHIL ALITO and SCOTT GANZ

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