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Obama's Own Economic Advisor Criticizes Budget Plans

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Obama's Own Economic Advisor Criticizes Budget Plans

Martin Feldstein, an economic advisor to Obama, criticized “ObamaCare’s Crippling Deficits” in Monday’s Wall Street Journal, noting that “the higher taxes, debt payments and interest rates needed to pay for health reform mean lower living standards.”

Obama probably chose Feldstein as an adviser because of Feldstein’s support for big stimulus packages during recessions. But selecting him was politically unwise, since Feldstein has a history of candidly criticizing Presidents for allowing deficit spending to continue after recessions end (as an economic adviser to President Reagan, he unsuccessfully warned against Reagan’s budget deficits), and Obama’s proposed budgets would result in massive, unprecedented budget deficits long after the current recession is over — despite major tax increases. The Congressional Budget Office estimates that Obama’s plans would produce an eye-popping $9.3 trillion in deficits, double the baseline left by the Bush Administration.

Earlier, Feldstein warned that the cap-and-trade energy-rationing scheme backed by the “Obama Administration and Congressional Democrats” would “have a trivially small effect on global warming while imposing substantial costs on all American households. And to get political support in key states, the legislation would abandon the auctioning of permits in favor of giving permits to selected corporations.” He notes that “the Congressional Budget Office recently estimated that the resulting increases in consumer prices” from capping the amount of carbon dioxide energy users can emit “would raise the cost of living of a typical household by $1,600 a year,” a figure that “would rise significantly” from year to year.

Unlike Feldstein, who sees Obama’s stimulus package as poorly-designed but nonetheless providing a modest short-term boost to the economy, I think that the stimulus package destroyed jobs even in the short run. The Congressional Budget Office predicted that the stimulus package would shrink the economy “in the long run,” by burdening the economy with increased national debt, but increase the economy in the short run, i.e., by the next election. That’s why Congress and Obama passed it: short-run political gain.

ObamaCare is full of special-interest giveaways and constitutionally-dubious provisions like racial preferences and set-asides, which has led to ObamaCare being criticized by the U.S. Commission on Civil Rights.

The Obama Administration is also full of left-wing ideologues who can’t be counted on to competently manage something as vast as a national health-care system. (Recently, Obama’s Green Jobs Czar, Van Jones, resigned after revelations that he signed a petition alleging that George Bush may have been behind the 9/11 terrorist attacks. Jones was hired despite the fact that Obama was well aware that he had been a “self-avowed communist,” and had defended Al Qaeda and repeatedly engaged in race-baiting). And it has mismanaged things like the $60 billion in auto bailouts, which ripped off taxpayers and non-union retirees to enrich the UAW union, and the cash-for-clunkers program, which cost far more than predicted and ran out of money after just a few says.

Feldstein earlier called into question Obama’s claims about how ObamaCare will supposedly let you keep your health coverage while cutting costs. “ObamaCare is all about rationing,” says Feldstein. Feldstein also noted that Obama’s health-care plan would harm people with insurance, and massively raise taxes.

Feldstein, a Harvard professor, warns that “For the 85 percent of Americans who already have health insurance, the Obama health plan is bad news. It means higher taxes, less health care and no protection if they lose their current insurance because of unemployment or early retirement.” Obama’s plan would “cost more than $1 trillion,” and raise the top federal “income-tax rate from 35 percent today to more than 45 percent,” he notes.

Fact-checkers say Obama is lying about health-care.

ObamaCare is likely to be a costly boondoggle like his stimulus package, which funds waste like a $15 million border-crossing facility for a deserted area on the Canadian border that only 3 people cross per day.

I’ve criticized Obama Administration officials like Van Jones because they are wacky, not because they are liberal. Elections have consequences, and President Obama, being duly elected President, is entitled to pick liberal nominees to carry out his policies. Some conservatives seem to have forgotten this, in attacking even well-qualified liberal nominees to head executive branch agencies, like Obama’s nomination of leading liberal law professor Cass Sunstein to head the OIRA and be the Administration’s “regulatory czar.” There is no point in defeating his nomination; any replacement for Sunstein will be just as liberal, just less competent. In that sense, it would be as pointless as the filibuster that blocked the appointment of Henry Foster to be Surgeon General under Bill Clinton.