Wednesday, November 28, 2012

The Greatest Salesman of All Time

I saw this headline in USA Today this morning.

Obama sells budget plan to middle class, biz leaders

I consider myself to be a pretty well-informed individual but I didn't remember seeing that President Obama had proposed a "budget plan" to deal with the looming fiscal cliff.  Since we are just over 30 days from going over the cliff I thought there was big news in the article.

Perhaps I missed the major announcement yesterday of the "balanced plan" that he talked about during the campaign.   The article mentioned that the President was going to meet with selected members of the middle class and leaders of the business community today to discuss his "balanced approach to reduce our deficit."  On Friday, the President will be in full campaign mode when he travels to a Pennsylvania toy factory near Philadelphia to "sell his budget plan" according to the article.

I kept reading article to find the plan.  Nothing was mentioned except he wants to eliminate the Bush tax cuts for the rich.  We all know about that.  Nothing new there.  I was looking for the other side of the "balanced plan".  What was he proposing in spending cuts?  What was he proposing on entitlement reform?  There was no mention of anything except increasing taxes.

What kind of sales job is needed to convince people that somebody else ought to have their taxes increased?  What type of selling is that?

We elect a President to be a leader.  We are one month away from the largest tax increase in the country's history.  We are one month away from massive cuts to the Defense budget and other discretionary programs.  We are one month away from the Alternative Minimum Tax being extended to entrap over 28 million taxpayers for the 2012 tax year (that's right, this year!).  We are one month away from the expiration of $112 billion in payroll tax cuts.  We are one month away from the expiration of extended unemployment benefits.  We learned this week that we are also expected to hit the debt limit ceiling by the end of the year.

All of this is coming down on us in a month and the President of the United States is spending time selling a tax on the rich that would only solve less than 1/10 of our deficit spending problem?

It is utterly incomprehensible that we have utterly incompetent Presidential leadership at this point in our history.

What is also utterly incredible is that Barack Obama has been re-elected and he has the most political capital he will ever have right now.  At the same time he should not be constrained by any political considerations as he will never run for any office again.  If there was ever a time and place for a President to lead it is now.

A real President would have already proposed a complete balanced plan to do what is needed to avoid the fiscal cliff and be selling the sacrifices that are going to have to be made by Democrats, Republicans and all of the American people to solve the problem.

There seems to be no indication that this President is ever going to lead on this issue when he is more interested in doing campaign trips to Pennsylvania and photo ops in the Oval Office.

Therefore, I must conclude that this President has no real interest in avoiding the fiscal cliff.  He seems to be only interested in playing a blame game.

My view is that the Republicans are wasting their time trying to negotiate anything with Obama and position themselves to win the blame game.

They need to state that they agree to the tax increase on the rich (approx. $1 trillion over 10 years) based on a balanced plan of $3 in cuts for every $1 in taxes.  This is the ratio of spending cuts to tax increases used by the President's Simpson-Bowles Commission. The first item in the cuts must be the repeal of Obamacare which would be the least disruptive thing that can be done to save money as it largely has not taken effect.  It also would have the most positive effect on the economy in the near term.  We see this every day as companies start to respond to the impending mandates.

The Republicans should then sit back and say they compromised and gave the President what he asked for and wait for the President and the Democrats to propose all of the spending cuts.  The President can then "sell" those cuts to the American people.  We then will really see what kind of salesman he is.

What are the advantages to this approach?  First, it might actually get Obama to do something in the few days left.  Second, even if it does not, it will shift the blame for going over the cliff to Obama and the Democrats.  Third, it reinforces Republican opposition to Obamacare.  Obama and the Democrats would undoubtedly never agree to this condition but the majority of voters still oppose Obamacare.

I see dark clouds on the horizon ahead for supporters of Obamacare as it takes full effect over the next year.  The implementation of the exchanges look very risky to me and could very well turn into a disaster for the Administration and the politicians tied to the state exchanges later this year. The Wall Street Journal does a good job of explaining the risks.

Barack Obama-The Greatest Salesman of All Time?  We will find out soon enough.

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