Wednesday, September 2, 2009

Is an Obama Administration Implosion on the Horizon?

Kevin McCullough has a long history of accurate Obama predictions and thus feels obliged to share his latest. McCullough who also blogs at MuscleHead Revolution thinks the Obama Administration is heading for implosion when Congress returns from recess.
Never has an administration had more political firepower at their disposal yet been set to so totally fail in the next six to eight weeks. It is nearly a foregone conclusion. It is nearly unavoidable. And it defies all logic given the sizable majority the administration has in both houses of Congress. He cites the following reasons for his prediction.

1. Health Care's Long and Painful Death
2. Cap-and-Trade Will Be the Largest Tax Increase in American History
3. Unemployment Will Remain
4. Obama's Integrity Has Been Tarnished in August
5. A $3 Trillion Dollar Budget (which leads to number 6)
6. A Coming Middle Class Tax Hike

Here's my take. There are reports circulating on the left supposedly coming from the White House the public option is dead. As Shuster's twitter mentions the left is not happy. Daily KOS diarist D Wreck is speculating this could be a trial balloon the left will need to pop. TPM is counting on an ironic strategy of a more radical "robust" public option being jammed through the budget reconciliation process. This is a tea leaf reading, however, of Sen. Judd Gregg's caution on the "nuclear strategy:
Gregg said the only way for the so-called public option to have the necessary budgetary impact to warrant procedural protection would be if the program were “very aggressive in setting rates, price controls and rationing,” an option that might cause conservative Blue Dog Democrats in the House to bolt.

Setting aside for a moment the explosive landmine that the public hates the idea of a Democrat only supported bill, the reconciliation process could lead to passage of a bill without teeth. Losing the confidence of the vast majority in order to gain a worthless bill would be a hollow victory indeed.

Rasmussen notes the most perilous problem for the Republicans in a reconciliation strategy:
If Republicans appear willing to support some reforms while resisting the more ambitious hopes of the president, it could create a difficult situation for the majority party. On the other hand, if the GOP appears unwilling to even consider any reform, the public reaction may be different.
The devil, as usual will be in the details. Taking an unpopular reform through the Senate via reconciliation, hoping to paint Republicans as obstructionists forcing the Administrations' hands is going to pose Herculean challenges, but certainly not impossible.

The White House seems to have scrapped cap and trade in favor of going after Wall Street as a commemorative of the year anniversary of Lehman's collapse and the financial crisis. This could gain some populist support for Obama who has been beaten up in this August recess. The smart strategy would be to reach a consensus with Republicans on reforms that show bipartisan support. The Administration could move to the Wall Street legislation and reclaim some of their political capital spent in vain on health care. This would of course take Obama a bit further to the center than he has governed from thus far. McCullough lists other strategies such as fighting against tax increases and redirecting stimulus money to true job creation. McCullough isn't holding his breath however. I am not planning on holding mine either.

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