As President Obama continued his nine-day tour of Pacific Rim countries on Tuesday, he also continued to push his “We Can’t Wait” campaign back home to try to boost the economy and reduce waste – while also blasting Congress for sitting on its hands.
White House Budget Director Jack Lew, Health and Human Services Secretary Kathleen Sebelius, and Education Secretary Arne Duncan jointly announced in Washington, D.C., that the government had cut nearly $18 billion of wasteful or improper spending on Medicare, Medicaid, Pell grants, food stamps and other programs in the past fiscal year while recovering $1.2 billion of erroneous payments to contractors. Lew stressed in a conference call with reporters that Congress was still sitting on administration budget proposals that could lead to much larger savings in the coming decade, and that “we can’t wait for Congress to act.”
The press event was part of a flurry of announcements and executive orders aimed at helping returning war veterans find jobs, making it easier for distressed homeowners to refinance “underwater mortgages,” making it easier for distressed home owners to refinance their “under water” mortgages, offering grants to health-care providers with creative new approaches to providing services to patients in federally funded insurance programs, and other measures. In all, Obama and his team have rolled out nearly a dozen executive initiatives and pronouncements aimed at spurring the economy and cutting wasteful spending.
The President began charting this more independent and combative approach after concluding he had no alternative in light of the political gridlock on Capitol Hill. The crowning blows for Obama came last summer, when Republicans forced him to make humiliating concessions in order to pass debt ceiling legislation, and again early last month when Senate Republicans delivered a stinging rebuke to his $447 billion jobs package of tax incentives and infrastructure projects.
“This approach is a recognition of [the] reality [of a political stalemate], plus an attempt to take lemons and make lemonade,” Larry Sabato, a University of Virginia political analyst, told The Fiscal Times. “Obama is hoping that he can share the blame for the bad economy and other ills with Congress, George W. Bush, and the eventual GOP presidential nominee. If he's going to be reelected, some finger-pointing may well be necessary. It is far from certain to work.”
Ron Bonjean, a Republican strategist and former congressional aide, said, “So far, President Obama has not been able to make a dent towards improving unemployment, so his strategy is to show that at least he is trying. However, current polls suggest that this approach has not paid off with Americans who still don't approve of his handling of the economy or his own job performance.” Obama has suffered from dreadful job approval ratings this year, although he began inching i up in the polls since the administration adopted the “We Can’t Wait” strategy in early October. An NBC-Wall Street Journal poll last week showed Obama defeating former Massachusetts governor Mitt Romney, one of his most formidable GOP opponents, 49 percent to 43 percent. Last month, the same poll had the President leading Romney by just two points; in August, Obama was only one point ahead.
Also, the President’s job approval ratings have gone up slightly in the past month, from 42 percent in early October to 45 percent as of Nov. 13, according to a Real Clear Politics composite average. The Gallup Organization shows that the President’s approval rating rose from 41 percent as of Oct. 2 to 43 percent last weekend.
The President’s numbers may be moving in a positive direction, but strategist Bonjean is unimpressed. “It is going to be impossible to win reelection with 43 percent approval,” he said yesterday. “It is a good strategy to take single issues and campaign around them, but it isn't really moving the dial."
Obama and his campaign team devised his Trumanesque, go-it-alone approach after concluding that he stood to lose more than he would gain politically by repeatedly seeking compromise with House Speaker John Boehner, R-Ohio. The President’s efforts last August to try to secretly negotiate a major $4 trillion deficit reduction package with Boehner, including spending cuts and new tax revenue, blew up in Obama’s face after Boehner abruptly pulled out. The GOP out-of-hand rejection of his new jobs package was the last straw.
“We can’t wait for an increasingly dysfunctional Congress to do its job,” Obama told a small group of people in East Las Vegas early last month after announcing his first solo-action, a program to help underwater mortgage holders. “If Congress won’t act, I will.”
“I think when you have a hopeless Congress, you want to use the powers of the executive for good, and that’s about what you’re left with in your tool box,” Scott Lilly, of the liberal-leaning Center for American Progress, said yesterday. “But there is a lot that can be done there and I think they’re right to focus on that.”
Obama’s first executive initiative, announced October 24, was meant to aid homeowners owing more on their loans than their homes are worth to obtain refinancing at ultra-low interest rates of around 4 percent. The policy replaces a flawed housing plan that Obama put forth in early 2009, but even this is expected to have only a modest impact on the housing crisis, according to administration officials.
Obama continued his “We Can’t Wait” campaign last Tuesday in Philadelphia when he targeted lawmakers’ failure to act on education issues by issuing executive changes governing the Head Start program. He also ordered federal officials to sharply reduce spending for travel, cell phone use, printing and other “non-essential” activity.
Yesterday’s announcement was the culmination of two years of efforts to get a handle on erroneous government payments, which Lew said could involve anything, including “sending checks to convicted felons or dead people.” These improper government payments had been on the rise for years when Obama took office in January 2009, and have totaled well over $100 billion annually.
In the fiscal year that ended Sept. 30, improper payments totaled $115.7 billion, a “reduction” in wasteful spending of almost $18 billion, according to government officials. Combined with savings from the previous year, the administration claimed to have prevented nearly $21 billion in erroneous payments while recovering $1.9 billion of improper payments to vendors.
Lew said that if Congress were to pass legislation incorporating other administration proposals, “We believe it will produce more than $160 billion in savings to the federal government over the next decade, but we can’t wait for Congress to act.” Instead, he said, the administration is planning to launch some pilot projects that utilize cutting-edge technology to further reduce improper payments.
Obama says he hasn’t given up hope that Congress eventually will adopt many of his economic stimulus proposals, but Republicans say those programs would not create jobs, and they prefer an approach that involves scaling back federal regulations and cutting taxes to boost the lackluster economy. The GOP has blocked some of the President’s more popular proposals, including more federal money for cash-strapped states to keep public school teachers and firefighters on the job, and new spending on roads and bridges.
In a few cases, though, Republicans have had little choice but to embrace Obama’s proposals – especially measures to help veterans returning from war in Afghanistan and Iraq to find work. The Senate last Thursday passed a bill that would award companies a $5,600 tax credit for each veteran they hired who had been unemployed for at least six months.
A smaller tax credit would be offered for bringing on vets who had been jobless for less than six months. Another would offer companies a $9,600 tax credit for hiring out-of-work veterans with service-related disabilities.
Republicans also tried to distract from the administration’s announcement on the big cut in erroneous government payments this week by touting their own job initiatives. House Speaker John Boehner said on his blog: “Republicans continue to focus on job creation this week, with a vote on a bipartisan jobs bill helping veterans find work and repealing the IRS withholding tax, and a vote on a Balanced Budget Amendment. In addition, House Republicans will unveil a jobs initiative linking increased American energy production to critical infrastructure projects.”
The White House reportedly is confident that it will be able to continue a 2-percentage-point Social Security payroll tax cut through 2012 and to extend emergency unemployment benefits to millions of people – if only because Republicans won’t want to accept the political repercussions of letting those popular and much-needed provisions expire.
But most of the rest of the President’s economic agenda has been put on hold, and there is little likelihood congressional Republican leaders will bend much before next fall’s election. Which is why taking the executive order route – with all its limitations – is pretty much all Obama can do at this point.
James Horney, Director of Federal Policy at the Center on Budget and Policy Priorities, said yesterday that “I think there is a limited amount you can do without changes in law.”
“The things that would have a big impact would require changes in law,” Horney told The Fiscal Times. “But I think if you’re in a situation where getting agreement in the Congress to do some of the bigger things –like extending the payroll tax holiday and the unemployment insurance or infrastructure – is very difficult, then it makes sense to do as much as you can on your own.”
