Keystone Pipeline: What’s Obama’s Plan for Canada?

Does Barack Obama care that thousands of decent Canadians—as well as Republican House Speaker John Boehner—get up these mornings wondering what he’s planning to do about them? It’s impossible to know.

Canadians don’t cry in public like Republican Congressmen or have an American television network to flesh out their feelings. They don’t also fear that Obama wants to "annihilate" them by springtime. Actually, they can’t frighten like Republicans because they suspect he has other more exciting concerns on his mind.

Intelligent life up here in Canada is cold and unfair; Canadians are infatuated by an utterly inscrutable President. In his inaugural address, Obama could speak of the love Oscar Wilde could not name. Yet he couldn’t offer a wink, even a whisper, of solidarity for his starstruck northern friends. (These are friends, incidentally, who’ve more than simply offered themselves up in lopsided opinion polls that count for nothing in US elections. Canada’s government has echoed Obama’s every move as a world leader. Does he think the Government of Canada has been playing the field? Benjamin Netanyahu yesterday, Libya today, North Africa tomorrow? Anyone in the Royal Family, anytime? Does he really think Stephen Harper wants to fly his F-35s or co-own his auto companies?)

Sure, Canadian politicians—like forward-thinking American business leaders ever since Richard Nixon was President—constantly talk about globalization and quarterly trade statistics that report that Canada is a little “less dependent” on the US market.  But, they don’t ever say they want to be free, with no way home.

Seriously. In that speech, Obama made a significant statement about America’s more realistic place in the world:

“America will remain the anchor of strong alliances in every corner of the globe.”

After the lobby against the Keystone Pipeline fails to persuade Obama’s officials that there’s an intolerable American environmental objection to going ahead, and after all those American states directly affected endorse the line, what is the American anchor to do?

The anchor of our North American alliance—the author of that fine statement—can’t blithely decide that he doesn’t like northern Alberta oil and that he owes it to the World and Hollywood to determine how Canadians develop their economy—all while meeting their international greenhouse gas obligations.

As a writer, a lawyer, and as a secure second-term President, Barack Obama will have no choice but to say yes. They’d be no mystery around this question if loyal Canada weren’t politically impotent.  

Cliff Jumping: today’s wicked liberal temptation

Barack Obama is strong in the polls and is enjoying his second honeymoon in Washington. Once again, he’s Time Magazine’s “Person of the Year”.

However, this lovely year is dying and, as in 2008, the year approaching is killing the holiday spirit. Rather than boast about the last campaign or act as though it holds all the cards, Obama’s White House keeps trying to compromise with Republicans.

Rather than only exempting income under $250,000 from higher tax rates, he now proposes to exempt income under $400,000. Furthermore, he’s agreed to constrain the growth of Social Security payments. Overall, he’s offered a plan that is less liberal than many Democrats would like, but sufficiently conservative to rally the support of business and moderates. Overwhelmingly, they see their interests best served by incremental restraint, incremental deficit reduction, and incremental revenue enhancing tax changes—whatever a majority of legislators and the President agree is necessary to sustain the recovery and avoid another crisis that would make America look stupid.

Obama doesn’t talk about bi-partisanship anymore; he just scorns extremists and those who avoiding making a deal. Also, he says he’s prepared to keep negotiating. This is making some influential liberals very uncomfortable.  Are Democrats reverting to Wimps? Timothy Noah asks in today’s post for The New Republic.

Calling a politician a “wimp” can be dangerous. Remember George Bush’s first term? However, this isn’t Obama’s first crisis, nor is it his first term. Politically and legislatively, he’s done quite well settling for what often appeared at the time as less than half a loaf.

Daredevil liberals presume that Obama finally has sufficient political capital to intimidate the more pragmatic Republicans and shouldn’t be compromising anymore. If those blockhead Republicans don’t give in voluntarily they can be bullied into after Washington, Wall Street and American self-confidence goes over the “Fiscal Cliff”. Whoopee!

If only politics was only theatre and its artists controlled the scripts. Winning on fiscal policy, however, isn’t ever clear-cut or permanent. New Deal Democrats didn’t get through their agenda before they were thrown out. Reagan and Thatcher conservatives didn’t undo big government or even change the public’s habit of turning to the state for help and solutions.

Before risking another recession that—in advance—looks manageable, liberals should recall why they feel like winners, and why that feeling could be fleeting.

They won, in large part, because millions of Americans decided that Obama offered a more careful Presidency than the alternative. And they want a careful President because the economy and America’s stature are recovering.

Maybe there is no honorable deal to be had over the next ten days. However, insisting Obama win big in this lame duck Congress carries immeasurable risk. Historically, economic prosperity has been good for liberal incumbents. And retrenchment has been very tough.

Avoiding another recession and the scorn of the world are not only the responsibility of wimps. Obama’s extraordinarily liberal agenda—immigration reform, now gun control, implementing universal healthcare, advancing gay rights, and possibly, securing election finance reform—needs the climate of generosity and confidence that economic prosperity inspires.

Going over the “Fiscal Cliff” could destroy John Boehner. However, returning to mean times could save the Tea Party in 2014. 

Presidents lead because others don’t have to.

If you ever read a one-pager on the division of powers in the US Constitution and halfway accept the theory that Washington is the Establishment’s water-boy, you’d think Obama’s office has been swamped with outside advice on how avoid the “Fiscal Cliff”. 

You’d think his job was straightforward: make tolerable compromises out of clear proposals—proposals other politicians, eminent Americans, and powerful interests are championing, in public or in correspondence.

Yet, Obama has effectively been working alone since the November election.

Republicans pleaded to voters: “Choose America” and now they plead: “You choose, Mr. President”. They complain that Obama won’t flesh out what Republicans meant when they promised to “save” Medicare and Social Security, and “reform” the Tax Code. 

The only hint of precise thinking from John Boehner’s side of the “Fiscal Cliff” negotiations was a leak last weekend in the Wall Street Journal. It suggested that he’d accept higher taxes on those who take home over one $million annually—in return, of course, for a little restraint on future Social Security payments and healthcare entitlements.

Boehner’s concession could satisfy those who assume that the top 0.0l percent of income earners have all the cash the President needs, that Social Security is a military euphemism, and that ‘entitlements’ are for the privileged. Most everyone else, unfortunately, might think Mitt Romney actually won the election.

Nevertheless, we can still be hopeful, and cynical about the leadership of the Republicans at the same time. After all, there are plenty of other smart, experienced, tough people out there—in the real world—telling the President what has to be done, what they will help him sell.  Aren’t there?

Not writing in yesterday’s New York Times.

An entire page in the governing class’s must-read newspaper was purchased by the Peter G. Peterson Foundation to convey the advice of eight distinguished, retired giants of US public service. They acknowledged, in the first sentence, that they’d served eight presidents. They know how to be useful and still like being heard.

Under the headline: “Addressing Our Debt is a National Security Imperative”, they called on Washington to make a three-part deal to eventually balance the budget and avert the “Fiscal Cliff”. Here’s their message on taxes:

“◊ Tax reforms to raise more revenues, encourage growth and enhance progressivity — and it must be decided how much should be done through eliminating deductions, increasing rates and/or more fundamental changes to our tax code.”

If you find this rather vacuous, at this late date, imagine what Obama thought.

The “longer document” on their website offered no further details. They didn’t volunteer how much new revenue they think is needed, let alone exactly how that money would best be raised. They didn’t endorse Obama’s proposal to raise $1.4 trillion in new taxes; or say whether it’s too much or too little. They didn’t press conservatives in Congress to be precise about any of their generalities either.

Eminent Americans are very worried, but not enough to cause offence. They love their country, but aren’t responsible.

It’s possible that Gridlock in Washington will not be resolved by the ‘grown-ups’ taking collective responsibility for solving the problem.

There is, ultimately, a rather ugly nuclear scenario: The crisis gets big enough for Obama’s coy adversaries to just get out of the way.

Are Boehner, McConnell and the other debt-fighters just waiting for one of those glorious American emergencies that allow Washington’s stout survivors to give the President of the day what he wants?

Has John Boehner joined the “War Against Christmas”?

Calling Mitt Romney stupid hasn’t made other Republicans any smarter. John Boehner is already making the same mistakes.

For a while, the House Speaker was careful to match Obama’s explicit call for higher tax rates for the top 2% with pleasing generalities: Please, higher revenues not higher tax rates; and, yes, special interests should give up their loopholes and deductions.

This approach united Republicans. It would likely work as firm policy in another presidential television debate. However, it didn’t go far enough as a compromise formula for actually legislating a package of tax changes with Obama. And Republicans insist that the voters want them to lead too. So Boehner, in a letter to the President last week, went further: He’d agree to raise $800 billion by cutting the deductions and loopholes of the “same people” Obama would tax at higher rates.

If you insist on negotiating, not just campaigning in public, you have to get specific. However, Boehner has bought himself a world of trouble. The reaction to what he’s proposed, in fact, may be enough to force him to work within the revenue formula Obama has long proposed.

Konrad Yakabuski in today’s Globe and Mail neatly summarizes Obama’s response and, more importantly, the alarm of the unintended, lovable victims of Boehner's counter-proposal: America’s charities and its fragile housing recovery.

“The United Way and other non-profit organizations held a 'Hill Day' on Wednesday to press members of Congress not to change the tax deduction for the $200-billion Americans donate to charities each year.

“The deduction costs the federal treasury more than $50-billion in foregone tax revenue annually. Charities worry donations would dry up without it.”

Boehner can’t find his $800 billion without taking away that $50 billion of offsetting tax relief for those who give most generously to charities.

Yet it’s Republican orthodoxy—and widely accepted—that significantly raising taxes on work and consumer activities alters what taxpayers do with their time and money. Raise marginal income tax rates too high and many will stay home longer and putter in the basement. Make gasoline considerably more expensive and they’ll drive less.

It defies faith and common sense to believe that taking away $50 billion in targeted tax relief for charitable giving will not materially dampen support for charities.

If Boehner thinks the rich will carry on as if nothing happened, then what’s the problem with Obama’s modest across-the-board increase in the top tax rates on their incomes? They’ll lay off their workers while giving more to charity?

Taxing the top 2%: Borrow from Bush, as well as Clinton

If you ignore the partisans on the evening news and embrace this morning’s Politico—“Inside talk: Fiscal Framework Emerges”—you can stop worrying about the “Fiscal Cliff” and start thinking about bigger problems, like climate change, nuclear proliferation, and the scarcity of well-paying jobs. Washington insiders say: In private, Obama’s winning; in private, he’ll get his tax increase; in private, they’ll agree to cut entitlement later.”

Still, legislating is, above all, a public activity. And so far, the Republican leaders who must publicly consummate the deal are hardly clouding over their differences with the President. Boehner and McConnell continue to chant: America has a spending problem, not a tax problem.

Agreeing to a framework that puts taxes first and entitlement cuts later asks Republicans to turn their rhetoric inside out.

Logically, this shouldn’t be very hard. After all, Mitt Romney and his running mate Paul Ryan promised to "save" not cut entitlements. In fact, Ryan disowned his own budget cuts and told his mother and her nervous friends that Barack Obama was going to steal money from Medicare.

However, in this populist age, it’s not easy to survive in Congress as a hypocrite.

Furthermore, Obama needs far more than a wee tax rate increase on the most affluent. Economic confidence needs a fiscal framework that (1) restores faith in the financial soundness of the biggest federal government in the world and (2) eliminates the threat on another debt-ceiling showdown next spring.

Fixing Washington’s finances, however, is not at all what a good number of Republicans and conservative watchdogs want to do. They’d probably prefer being right-wingers in Greece than in Sweden.

It’s tempting to take a vow of silence now, to leave the President alone. This time, they say, he’s winning by not negotiating with himself—allegedly something America’s legendary negotiators never do.

Nevertheless, no one else seems able to stop the spinning that’s paralyzed the US government for over two years.

Without pretending he’s just another backslapping, good ol' boy, Obama could put himself in Republican shoes. Conservatives read history too. They fear that new revenues get spent, that government grows when it can, and that government only cuts when unelected bankers say they must.

Concern that robust revenues were leading to ongoing federal surpluses largely justified George Bush’s first round of time limited income tax cuts. And those cuts were widely accepted by moderate Democrats.

Why not offer a time limit on the income tax increases Obama is proposing?

If a future Congress and President were faced with an automatic vote in, say, 2020 to continue or discontinue the higher tax rates, both Democrats and Republicans would feel greater pressure to keep the growth of entitlement spending under control.

The present would be more secure; conservatives and liberals wouldn’t be so scary when they’re fighting about the future.