Discussion: (0 comments)
There are no comments available.
View related content: Free Enterprise
Roadblocks. That’s what Barack Obama has been encountering on the audacious path
toward a European-style welfare state he has set out in his budget and other
He continues to insist that America cannot enjoy real prosperity again
without higher taxes on high earners, a government health insurance program, a
cap-and-trade program that amounts to a tax on energy and the effective
abolition of secret ballots in unionization elections. The fact that there are
large Democratic majorities in both houses of Congress made it seem that the
path was open. But roadblocks have started to appear.
One has been set up by the Senate Budget Committee. Chairman Kent Conrad of
North Dakota, whose concern about budget deficits has persisted even though we
no longer have a Republican president, has apparently decided that cap-and-trade
is off the table for this year. But calculation as well as conviction probably
lay behind his decision.
Cap-and-trade would impose higher costs on coal-fired electric power plants.
In states where most electricity is produced from coal, this would mean higher
utility bills for consumers and industrial users. By my count, there are 25
Democratic senators from states that get 60 percent or more of their electricity
from coal (in North Dakota, the figure is 93 percent). Conrad needs to hold all
but eight of those senators to be sure of the 50 votes he needs for the budget
resolution. So you can see why he was ready to ditch cap-and-trade, which, in
any case, addresses a problem–climate change–whose purported evil effects are
Ditching cap-and-trade, however, may set up another roadblock, since the
money the government was going to take out of the private-sector economy was
slated for Obama’s middle-class tax cut.
Another roadblock was erected, in concrete, by Republican Sen. Arlen Specter
when he announced this week that he would not vote, as he did in the last
Congress, to advance the unions’ card check bill. It was easy enough to support
it and bask in approval from Pennsylvania union leaders when it was clear George
W. Bush would veto the measure. But now that we have a president who would sign
it, Specter took another look.
Card check would effectively abolish the secret ballot in unionization
elections and impose unions on employers when union thugs–er,
activists–persuaded a majority of workers to sign cards backing the union. And
it would impose mandatory federal arbitration after 120 days of bargaining, so
that for the first time federal arbitrators would set wages and working
conditions without any guidelines.
With Specter firmly committed, Republicans now have 41 Senate votes against
card check, enough to maintain a filibuster.
Moreover, many Democratic senators–as many as 15, according to one
count–have expressed qualms about card check. They’ve been hearing loud and
clear from small and large businesses in their states that card check would be a
disaster. And for any Democrat, it’s a little hard to explain what’s wrong about
the secret ballot.
Other parts of the Obama program have, so far, not encountered resistance.
Higher taxes on high earners are scheduled to come into effect in 2010 without a
vote, though high-ranking Democrats like House Majority Leader Steny Hoyer and
Ways and Means Chairman Charles Rangel have expressed doubts about the Obama
proposal to reduce the charitable deduction for high earners. If you’re a
university president courting big donors, you don’t want to see part of their
contributions diverted to the U.S. Treasury.
The prospects for national health insurance look pretty favorable. The
various healthcare lobbies that would be affected are sitting at the bargaining
table, seeking to avoid destruction of their business models and advancing
provisions that would give them an advantage over competitors. But then at this
stage in Bill Clinton’s first term, the healthcare lobbies were sidling up to
the table, too–or as close to it as Hillary Clinton would let them get.
The problem on healthcare, as on cap-and-trade and card check, is that this
is a big and complicated country. America doesn’t have one energy system, one
employee relations system, one healthcare insurance and delivery system–it has
many. Members of Congress from different states and congressional districts have
constituents who are very differently situated, and those differences cut across
Democrats from coal states like North Dakota see energy issues differently
from Democrats from coal-free states like California. Democrats from heavily
unionized Michigan see labor issues differently from Democrats from nonunionized
Arkansas. And let’s not get started setting out the regional differences in
Setting up a welfare state is easier in European political systems, with
their centralized governments and rigid parliamentary party discipline. American
welfare state programs like Social Security and Medicare were set up and
expanded step by step by very shrewd strategists operating over many years.
Obama has the audacity to hope that he can jam things through with sizeable
Democratic majorities at a time of economic crisis and uncertainty. But he has
quickly encountered some roadblocks–and may yet encounter some more.
Michael Barone is a resident fellow at AEI.
There are no comments available.
1150 17th Street, N.W. Washington, D.C. 20036
© 2015 American Enterprise Institute for Public Policy Research