Predictably Misleading

Via-NRO

By  Victor Davis Hanson

The one requisite in a presidential speech is honesty. Without it, nothing else matters. The president’s speech last night was incoherent in its call to be ready at some future day to use force that he just recently insisted must be used immediately.

But more disturbing, aside from the true nature of the Putin gambit, Obama simply did not tell the truth about the role of Congress in his self-created debacle.
In fact, not long ago, Obama said that he did not “believe it was right . . . to take this debate to Congress.” In truth, he was forced to, after resisting such a move, because public opinion was not in his favor. Or, in the words of his own cynical political guru, David Axelrod, he wished the congressional dog to catch the car and share some responsibility for the self-induced mess.

Moreover, last decade was not characterized by a president who engaged in “sidelining the people’s representatives from the critical decisions about when we use force.” In truth, George W. Bush obtained authorizations from both Houses of Congress before using force in both Afghanistan and Iraq. In contrast, Barack Obama bypassed Congress — but not the Arab League — in bombing Libya.

Nor did the president simply ask the leaders of Congress to postpone the vote. Congressional officials came to him, hence last night’s address, to warn him that, in a historical first, he would be rebuffed by both houses of Congress.

As in the case of the Libyan bombing, Obama initially sought to bypass Congress, could not given sinking public opinion, reversed course and went to Congress, then was faced with a rebuke, and finally ended up doing nothing. This leaves the country with the precedent of a president going to Congress when desperate, then announcing that he will not necessarily abide by the vote should it be negative, and then postponing a vote that he knows will be negative — taking the country in a futile 360-degree path back to where he started.

Again, Obama warns about those who bypass Congress and leave a mess after taking out dictators — with no mention that he alone in the last decade has done both.

Finally, there were the usual Obama-speech bullet points that ensure it is a presidential speech:

The tired usual emphatics? Check: “Let me make something clear.”

Straw men on the edges with sober and judicious Obama in the middle? Check: “friends on the right” and “friends on the left.”

First person overload? Check: “especially me,” “my judgment,” “I determined,” “I possess,” “I’m also,” etc.

Bush did it? Check: “. . . after a decade that put more and more war making power in the hands of the president.”

Iraq ad nauseam? Check: “we learned from Iraq,” “an open-ended action like Iraq,” “terrible toll of Iraq and Afghanistan,” “our troops are out of Iraq,” etc.

Growing the (now shrinking) middle class? Check: “growing our middle class.”

Toon

Dems extol facts and science but act on ideology

Via-Washington Examiner

By: Byron York

President Obama recently fretted that our politics has become so rough-and-tumble that "facts and science and argument do not seem to be winning the day all the time." Speaking at a Democratic fundraiser just before the election, the president worried that Americans were so rattled by economic anxieties that they might lose their heads and choose Republicans over Democrats -- a fear that became a reality on Nov. 2.

But his larger point was that Democrats are guided by facts and science and argument while Republicans act on ideological or even irrational motives. As liberals and Democrats are fond of saying, they are part of the "reality-based community."

Except when they're not.

In the course of the Obama administration we have seen examples of Democrats in the White House, Congress and across the government pursuing ideological goals that are not only not based on facts and science and argument but actually fly in the face of facts and science and argument. Some examples:

» Offshore oil drilling. Recently the inspector general of the Interior Department discovered that White House officials altered a report to claim that the administration's six-month moratorium on offshore oil drilling had the approval of the nation's foremost engineering experts. "The recommendations contained in this report have been peer-reviewed by seven experts identified by the National Academy of Engineering," the administration declared. In fact, the experts had not reviewed, nor did they approve, the proposed drilling moratorium. The administration insists it was all a mistake.

» The "clean energy economy." President Obama speaks frequently about "accelerating the transition to a clean energy economy." Neither Obama's promises of breakthroughs in solar, wind, and other alternative energy sources -- which can supply only a tiny fraction of the nation's energy needs -- nor his claims that his policies will create hundreds of thousands of "green jobs" in a new clean energy world, are supported by solid economic analysis. Numerous studies found that the president's favored cap-and-trade program would not have led to economic growth, and the concept of "green jobs" is so fuzzy as to be almost useless.

"They are ignoring the fact that subsidized green jobs destroy jobs elsewhere and direct capital and resources away from their most efficient use," says Nick Loris, an analyst at the conservative Heritage Foundation. "If these technologies were economically competitive and profitable, they wouldn't need the subsidies and mandates the administration is supporting."

» High-speed rail. The administration wants to build high-speed rail links in 13 densely populated areas around the country, at a price tag that could reach into the hundreds of billions of dollars. The president touted high-speed rail at no fewer than five campaign appearances in October. But there is virtually no hope that such projects, even if built exactly as the administration hopes, would bring the progress Obama claims. Recently Newsweek economic columnist Robert Samuelson concluded that the rail lines would not result in "any meaningful reduction in traffic congestion, greenhouse-gas emissions, air travel, or oil consumption and imports. Nada, zip."

The disregard of facts and science and argument when they contradict ideological goals is nothing new for some key figures in the Obama circle. For example, back in 1996, while an aide in the Clinton White House, Obama Supreme Court pick Elena Kagan rewrote the opinion of an expert board of the American College of Obstetricians and Gynecologists on the subject of partial-birth abortion. The board found that it could "identify no circumstances under which this procedure ... would be the only option to save the life or preserve the health of the woman." But Kagan, eager to aid the White House fight against a partial-birth abortion ban, refashioned the experts' opinion, saying the procedure "may be the best or the most appropriate procedure in a particular circumstances to save the life or preserve the health of a woman." She just made it up.

During the Bush years, liberals and Democrats often accused the administration of ignoring science and expert opinion if it conflicted with conservative ideological goals. That would change, we were told, if rational, pragmatic Democratic leaders were given a chance to run the government.

Now we have had two years in which Democrats, with cherished ideological objectives of their own, have been fully in charge of Washington. Given what has taken place, can the president really claim that his is the party that values facts and science and argument above all?

Bush team attempts to preserve Bush administration's success in Iraq

Via-Power Line

President Obama hasn't had much to brag about lately. So today he bragged about bringing troops home from Iraq and ending combat missions there:

By the end of this month, we'll have brought more than 90,000 of our troops home from Iraq since I took office; more than 90,000.

Politico calls this the first step of a victory lap on the war in Iraq. Whether there will be an actual victory to correspond with the lap remains in doubt. July was the deadliest month in Iraq since 2008, with 535 people killed and more than 1,000 wounded, and Iraq has been unable to form a government in the six months since its parliamentary elections.

But if there is a victory (or even just an absence of civil war) it will be down to the Iraq surge that President Bush instituted and Senator Obama vehemently opposed. For that matter, as Politico acknowledges, it was Bush who, for better or for worse, instituted the troop withdrawal policy for which Obama today took credit.

Finally, it is to Bush's team that the Obama administration is now turning to attempt to preserve the success brought about through Bush's surge. In response to the inability of Iraq's political class to form a government, and the resulting jump in violence, Brett McGurk, Bush's point man on Iraq policy at the time of the surge, is now in Baghdad advising U.S. officials. Moreover, Sadi Othman, described by the Washington Post as General Petraeus's "main interlocutor with Iraqi politicians during the surge," has been asked to return. And Ali Khedery who was an adviser to Ryan Crocker, the Bush administration's ambassador to Iraq, will work temporarily for James Jeffrey, the next ambassador.

Jeffrey will replace Chris Hill, Obama's odd selection to be ambassador. Hill had never served in the Middle East and he did not serve with distinction in Iraq. Rather, as Max Boot says, he "took a curiously hands-off attitude toward the Iraqi political process." The fruits of that attitude have been bitter.

It is far from clear that Bush's Baghdad "Dream Team" (Boot's phrase) can repeat its past success in the context of an ever-diminishing U.S. military presence. If it cannot, Obama's "first step" in his "victory lap" might be his last.

In any case, it's telling that Obama is relying just about entirely on Bush era policies and personnel as he tries to find something in the world to brag about.

"Notable Quotes"

One of two things is true, here.

Either the mandate is a tax, as the Obama Justice Department now asserts in court, and President Barack Obama lied to the American people -- loudly, firmly, repeatedly, as he worked to get this massive federal power grab enacted -- or else Barack Obama was telling the truth last year, the penalty is not a tax, and the Justice Department (directly answerable to the president) is lying in court today when it asserts no one can challenge the mandate because it falls under the wide-ranging "taxing authority" ... that it's a tax.

Someone's lying: either Barack Obama or Barack Obama.


Las Vegas Review-Journal

Obama's Economic Fish Stories

On unemployment, the president claims that the stimulus bill was several times more potent than his chief economic adviser estimates. Such statements hurt his credibility.

Via-WSJ

By MICHAEL J. BOSKIN

A president's most valuable asset—with voters, Congress, allies and enemies—is credibility. So it is unfortunate when extreme exaggeration emanates from the White House.

All presidents wind up saying some things that make even their own economists cringe (often the brainchild of political advisers unconstrained by economic principles, facts or arithmetic). Usually, economic advisers manage to correct these problematic statements before delivery. Sometimes they get channeled into relatively harmless nonsense, such as President Gerald Ford's "Whip Inflation Now" buttons. Other times they produce damaging policies, such as President Richard Nixon's wage and price controls. The most illiterate statement was President Jimmy Carter's late-1970s plea to the Federal Reserve to lower interest rates to combat high inflation, the exact opposite of what it should do. Not surprisingly, the value of the dollar collapsed.

President Obama says "every economist who's looked at it says that the Recovery Act has done its job"—i.e., the stimulus bill has turned the economy around. That's nonsense. Opinions differ widely and many leading economists believe that its impact has been small. Why? The expectation of future spending and future tax hikes to pay for the stimulus and Mr. Obama's vast expansion of government are offsetting the direct short-run expansionary effect. That is standard in all macroeconomic theories.

So, as I and others warned in 2008, the permanent government expansion and higher tax rate agenda is a classic example of what not to do during bad economic times. Worse yet, all the subsidies, bailouts, regulations and mandates are forcing noncommercial decisions on the economy, which now awaits literally thousands of new diktats as a result of things like ObamaCare and the financial reform bill. The uncertainty is impeding investment and hiring.

The president does not say that economists agree that the high future taxes to finance the stimulus will hurt the economy. (The University of Chicago's Harald Uhlig estimates $3.40 of lost output for every dollar of government spending.) Either the president is not being told of serious alternative viewpoints, or serious viewpoints are defined as only those that support his position. In either case, he is being ill-served by his staff.

Mr. Obama's economic statements are increasingly divorced not only from competing viewpoints but from those of his own economic advisers. It is surprising how many numerically challenged pronouncements come from this most scripted and political of White Houses. One slip is eventually forgiven, but when a pattern emerges, no one believes it is an accident.

For example, on the anniversary of the stimulus bill, Mr. Obama declared, "It is largely thanks to the Recovery Act that a second Depression is no longer a possibility." Yet his Council of Economic Advisers just estimated the stimulus bill's effect on GDP at its trough was 1%-2%.

The most common definition of a depression is a long period in which GDP or consumption declines at least 10%. The decline in GDP in the recent recession was 3.8%, in consumption 2%. No one disputes the recession was severe, but to reach a 10% GDP decline requires tripling the administration's estimate (three times their 2% effect) added to the actual 3.8% decline. On the alternative consumption standard, the math is even more absurd. The depression statement isn't credible. The stimulus bill has assumed certain mystic powers in administration discourse, but revoking the laws of arithmetic shouldn't be one of them.

The recession would have been worse if not for the Fed's monetary policy and quantitative easing. Also important were the unmentioned automatic stabilizers—taxes falling more than income, cushioning declines in after-tax incomes and consumption—which were far larger than the spending and tax rebates in the stimulus bill. Arguing that all these policies (including injecting capital into banks, which was necessary but done poorly) may have prevented a depression is perhaps still an exaggeration but at least is within hailing distance of plausibility. On that scale, the effect of the stimulus was puny.

On his recent "Recovery Tour," Mr. Obama boasted, "The stimulus bill prevented the unemployment rate from "getting up to . . . 15%." But the president's own chief economic adviser, Christina Romer, has estimated that the stimulus bill reduced peak unemployment by one percentage point—i.e., since the unemployment rate peaked at 10.1%, it prevented the unemployment rate from rising to just over 11%. So Mr. Obama claims that the stimulus bill was several times more potent than his chief economic adviser estimates.

Perhaps the most serious disconnect concerns the impending expiration of the 2001 and 2003 tax cuts, which will raise the top two income tax rates and the rates on dividends and capital gains. If these growth inhibiting tax increases occur—about $75 billion in tax increases next year, $1.4 trillion over 10 years—there will be serious economic damage.

In the most recent issue of the American Economic Review, Ms. Romer (and her husband David H. Romer) conclude that "tax increases are highly contractionary . . . tax cuts have very large and persistent positive output effects." Their estimates imply the tax increases would depress GDP by roughly half the growth rate in this so-far-anemic recovery.

If Mr. Obama is really serious about a second stimulus, by far the best thing he can do is have Congress quickly extend the expiring Bush tax cuts, combined with real spending cuts set to take effect as the economy improves.

The president badly needs to make more realistic pronouncements. No one expects him to say his policies have failed (although most have delivered far less than claimed at large cost). A little candor about the results of experimentation in uncharted waters would go a long way. But at the very least, his staff needs to avoid putting these exaggerations on the teleprompter. It undermines confidence and raises concerns about competence. It's doing nobody any good—not the economy and certainly not Mr. Obama.

Mr. Boskin is a professor of economics at Stanford University and a senior fellow at the Hoover Institution. He chaired the Council of Economic Advisers under President George H.W. Bush.

Health Care Rationing Obama Believes In

Via-CATO

By Nat Hentoff

As a reporter, I do not use euphemisms - such as calling murderous terrorists "militants" or "activists." And as an American, I can exercise my First Amendment right to say plainly that President Obama is a liar with regard to our new health-care law, often referred to as Obamacare.

When a number of critics of Obamacare, including myself, warned that it would bring the rationing of treatments, medications and research into new procedures, the president said to the American Medical Association (June 15, 2009) that this rationing charge was a "fear tactic."

The next month, he said flat out: "I don't believe that government can or should run health care" (firstthings.com, May 31, 2010).

But in May of this year, the president nominated Dr. Donald Berwick, a professor at Harvard Medical School, to head Health and Human Services' Centers for Medicare and Medicaid Services (CMS) - the most powerful health-care position. As Hal Scherz underlines (RealClearPolitics.com, May 26): "CMS covers over 100 million Americans, has an annual $800 billion budget that is larger than the Defense Department's and is the second-largest insurance company in the world."

Unlike Obama, Berwick is enthusiastically, openly candid in his support of Britain's socialistic National Health Service. In a 2008 speech to British physicians, our new health czar said: "I am romantic about National Health Service. I love it (because it is) 'generous, hopeful, confident, joyous and just.'"

That "just" National Health Care Service decides which care can be too costly for the government to pay. Its real-time decider of life-or-death outcomes is the National Institute for Health and Clinical Excellence (NICE). Here is how "nicely" it works, described by Michael Tanner, senior fellow and health-care expert at the Cato Institute (where I, too, am a senior fellow):

"It acts as a comparative-effectiveness tool for the National Health Care Service, comparing various treatments and determining whether the benefits the patients receives - SUCH AS PROLONGED LIFE - are cost-efficient for the government" (lifenews.com, May 27).

So listen to our very own decider of how the Obama administration will lower our national debt by cutting inefficient health-care costs. After declaring his ardent romantic attachment to the British system, Berwick said: "All I need to do to rediscover the romance is to look at health care in my own country." He will, of course, be too busy to attend the funerals of the sacrificial Americans whose lives - not only those of the elderly - may thereby be cut short.

Tanner makes a grim point as Berwick rediscovers the romance of government cost-effectiveness: "Recent reports suggest that the recently passed health-care bill will be far more expensive than originally projected. As it becomes apparent that Obamacare is unsustainable, the calls for controlling its costs through rationing will grow louder. With Donald Berwick running the government's health-care efforts, those voices have a ready ear" (dailycaller.com, May 27).

By then, Berwick will be involved in the government-controlled health of more than 100 million Americans and - notes Michael Tanner - "Maybe those worries about death panels weren't so crazy after all."

Keep in mind that already, in May, "the Congressional Budget Office updated its cost projections (of Obamacare). It found that the new health legislation would cost $115 billion more than estimated when it was enacted ("ObamaCare's Ever-Rising Price Tag," Wall Street Journal, June 3).

How soon will the romantic rhythms of health rationing follow?

Wesley Smith, an invaluable investigative reporter on the dangers of government-controlled health care, describes the consequences if Obamacare is not repealed by the next Congress after the midterm elections:

"Once the centralized planning of medical delivery is complete - with cost-containment boards controlling the standards of care and the extent of coverage for both the private and public sectors - insurance companies, HMOs and the government will be able to legally discriminate against the sickest, most disabled and most elderly in our country. In other words, those whose care is most expensive."

For what to watch for during the reign of Berwick, whom Secretary of Health and Human Services Kathleen Sibelius recently glorified as "absolutely the right leader for this time" (CNSNews.com, May 26), I bring back Michael Tanner:

In the British Health Service Berwick loves, "750,000 patients are awaiting admission to NHS hospitals. ...The latest estimates suggest that for most specialties, only 30 to 50 percent of patients are treated within 18 weeks. For trauma and orthopedic patients, the figure is only 20 percent. ... Every year. 50,000 surgeries are canceled because patients become too sick on the waiting list to proceed."

And, again unlike the president, Berwick tells it like it frighteningly is in a June 2009 interview for the magazine, Biotechnology Healthcare:

"It's not a question of whether we will ration health care. It is whether we will ration with our eyes open."

There are many reasons why it is vital for Americans to vote in the midterm elections - and, of course, in 2012, to prevent a second term for the most dangerous and incompetent president we have ever had - but for many Americans, it is particularly important this year to vote against supporters of Obamacare. The question for many voters should be whether, in the years ahead, they will be in condition to vote if they are on waiting lists for government-controlled health care.

More of us are learning that during the Obama administration, it is essential to continually keep our eyes open on all it does.

Nat Hentoff is a nationally renowned authority on the First Amendment and the Bill of Rights. He is a member of the Reporters Committee for Freedom of the Press, and the libertarian Cato Institute, where he is a senior fellow.

OK, So It’s Not True

Via-Commentary

Jennifer Rubin

Over the last year or so, Obama has repeated dozens — perhaps hundreds — of times that his health-care ”reform” would allow you to keep your existing insurance plan. It’s quite apparent now that this was false. Time magazine is the latest to report:

Now that regulations about existing employer-sponsored plans have been issued, it’s becoming clear that many of the 160 million Americans with job-based coverage will not, in fact, be able to keep what they currently have.

Republican critics of the Patient Protection and Affordable Care Act point to the Obama Administration’s own estimates that by 2013, 39% to 69% of employer plans will be subject to new regulations and not grandfathered in, or exempted from the new rules. House minority leader John Boehner issued a press release about the new regulations with the headline “New ObamaCare Tagline Should Be ‘If You Like Your Health Care Plan, Too Bad.’ “

While the reporter feels compelled to call GOP rhetoric “overheated,” she readily concedes that conservative critics have the facts on their side:

The truth is that employer-based plans, which many assumed would easily be categorized as grandfathered, will be subject to the full regulatory thrust of the new law if they are altered in ways that are standard practice in the industry. Plans that increase the percentage of costs patients must pay out of pocket — known as co-insurance — lose their grandfathered status. The same is true for plans that significantly decrease the percentage that employers contribute to premiums or those that significantly increase deductibles or co-payments. An employer that switches health-insurance providers also loses its grandfathered status. These kinds of changes are common year to year in the current marketplace, since employers are constantly looking for ways to limit their expenses in the face of rising costs.

The “keep your plan” hooey was as deceptive as the claim that ObamaCare would reduce the deficit. In short, ObamaCare was sold under false pretenses. In contract law, such a deal would be rescinded. In politics, the solution is for lawmakers to explain that the bill doesn’t do what it promised and repeal it so that they can start over. And what if Obama decides to veto the repeal of his handiwork? Well, there will be an election in 2012 and a campaign to debate just how misleading were Obama’s assurances.

Business's Buyer's Remorse

For cooperating with the White House, member companies of the Business Roundtable gets socked with higher taxes and more regulations.Via-WSJ

By KIMBERLEY A. STRASSEL

To listen to President Barack Obama, corporate America is a juggernaut, a force of calculating capitalists who ceaselessly plot against his national reforms. To listen to Ivan Seidenberg is to wish the president were even a little right.

Mr. Seidenberg, officially Verizon's CEO, moonlights as chairman of the influential Business Roundtable, the "association of chief executive officers of leading U.S. companies." That would be the same Business Roundtable that woke up this past month to discover the White House has been playing it for a patsy. It turns out that actively supporting a pro-tax, pro-regulation Democratic majority on issues like health care doesn't really get you anything save more taxes and more regulation.

This has clearly come as a shock to the Business Roundtable, as Mr. Seidenberg made clear this week with his newsy and newfound criticism of the White House. The chairman revealed in a speech to the Economic Club of Washington that he'd become "somewhat troubled" by a "disconnect between Washington and the business community." Here he and his fellow CEOs had "worked closely with policy makers"—they'd even pushed ObamaCare. And yet! "We see a host of laws, regulations and policies being enacted that impose a government prescription" on private actors. Truth was, Washington had created a downright "hostile environment" for job creation!

Obama Admin. Argues in Court That Individual Mandate Is a Tax

Via-The American Spectator

By Philip Klein


In order to protect the new national health care law from legal challenges, the Obama administration has been forced to argue that the individual mandate represents a tax -- even though Obama himself argued the exact opposite while campaigning to pass the legislation.

Late last night, the Obama Department of Justice filed a motion to dismiss the Florida-based lawsuit against the health care law, arguing that the court lacks jurisdiction and that the State of Florida and fellow plaintiffs haven't presented a claim for which the court can grant relief. To bolster its case, the DOJ cited the Anti-Injunction Act, which restricts courts from interfering with the government's ability to collect taxes.

The Act, according to a DOJ memo supporting the motion to dismiss, says that "no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed." The memo goes on to say that it makes no difference whether the disputed payment it is called a "tax" or "penalty," because either way, it's "assessed and collected in the same manner" by the Internal Revenue Service.

But this is a characterization that Democrats, and specifically Obama, angrily denounced during the health care debate. Most prominently, in an interview with ABC's George Stephanopoulos, Obama argued that the mandate was "absolutely not a tax increase," and he dug into his view even after being confronted with a dictionary definition:

OBAMA: George, the fact that you looked up Merriam's Dictionary, the definition of tax increase, indicates to me that you're stretching a little bit right now. Otherwise, you wouldn't have gone to the dictionary to check on the definition. I mean what...

STEPHANOPOULOS: Well, no, but...

OBAMA: ...what you're saying is...

STEPHANOPOULOS: I wanted to check for myself. But your critics say it is a tax increase.

OBAMA: My critics say everything is a tax increase. My critics say that I'm taking over every sector of the economy. You know that. Look, we can have a legitimate debate about whether or not we're going to have an individual mandate or not, but...

STEPHANOPOULOS: But you reject that it's a tax increase?

OBAMA: I absolutely reject that notion.

At the time Obama made that statement, the Senate Finance Committee had just released its own health care bill, which clearly referred to the mandate penalty as an "excise tax." But in later versions, the word "tax" was stripped, because it had become too much of a political liability for Democrats. The final version that Obama signed did not describe the mandate as a tax, and used the Commerce Clause -- not federal taxing power -- as the Constitutional justification for the mandate.

""This is an about face from what is laid out in the law," said Karen Harned of the National Federation of Independent Business, which joined the Florida lawsuit against ObamaCare. "In the text of the healthcare law, the findings for passing an individual mandate specifically rely on the effects of individuals on the national economy and interstate commerce. Nowhere in the findings is the mandate referred to as a tax. The Justice Department is now calling it a tax to try and convince the court not to rule on whether or not Congress exceeded their authority under the Commerce Clause by legislating that all citizens must purchase private health insurance or face a penalty."

Put another way, the administration is now arguing in federal court that Obama signed a massive middle-class tax increase, in violation of his campaign pledge.

PROMISES, PROMISES: Obama tax pledge up in smoke

As a former smoker I find this line to be both funny and telling "..Obama, who stopped smoking but has admitted he slips now and then..." You have not quit anything if you still do it, The old "a little bit pregnant " line comes to mind. Americans are about to learn how many ways they can pay taxes without ever seeing it come out of their paycheck.
_Jer
Via-AP

WASHINGTON (AP) - One of President Barack Obama's campaign pledges on taxes went up in puffs of smoke Wednesday.
The largest increase in tobacco taxes took effect despite Obama's promise not to raise taxes of any kind on families earning under $250,000 or individuals under $200,000.

This is one tax that disproportionately affects the poor, who are more likely to smoke than the rich.

To be sure, Obama's tax promises in last year's campaign were most often made in the context of income taxes. Not always.

"I can make a firm pledge," he said in Dover, N.H., on Sept. 12. "Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes."

He repeatedly vowed "you will not see any of your taxes increase one single dime."

Now in office, Obama, who stopped smoking but has admitted he slips now and then, signed a law raising the tobacco tax nearly 62 cents on a pack of cigarettes, to $1.01. Other tobacco products saw similarly steep increases.

The extra money will be used to finance a major expansion of health insurance for children. That represents a step toward achieving another promise, to make sure all kids are covered.

Obama said in the campaign that Americans could have both—a broad boost in affordable health insurance for the nation without raising taxes on anyone but the rich.

His detailed campaign plan stated that his proposed improvement in health insurance and health technology "is more than covered" by raising taxes on the wealthy alone. It was not based on raising the tobacco tax.

The White House contends Obama's campaign pledge left room for measures such as the one financing children's health insurance.

"The president's position throughout the campaign was that he would not raise income or payroll taxes on families making less than $250,000, and that's a promise he has kept," said White House spokesman Reid H. Cherlin. "In this case, he supported a public health measure that will extend health coverage to 4 million children who are currently uninsured."

In some instances during the campaign, Obama was plainly talking about income, payroll and investment taxes, even if he did not say so.

Other times, his point appeared to be that heavier taxation of any sort on average Americans is the wrong prescription in tough times.

"Listen now," he said in his widely watched nomination acceptance speech, "I will cut taxes—cut taxes—for 95 percent of all working families, because, in an economy like this, the last thing we should do is raise taxes on the middle class."

An unequivocal "any tax" pledge also was heard in the vice presidential debate, another prominent forum.

"No one making less than $250,000 under Barack Obama's plan will see one single penny of their tax raised," Joe Biden said, "whether it's their capital gains tax, their income tax, investment tax, any tax."

The Democratic campaign used such statements to counter Republican assertions that Obama would raise taxes in a multitude of direct and indirect ways, recalled Kathleen Hall Jamieson, director of the Annenberg Public Policy Center at the University of Pennsylvania.

"I think a reasonable person would have concluded that Senator Obama had made a 'no new taxes' pledge to every couple or family making less than $250,000," she said.

Jamieson noted GOP ads that claimed Obama would raise taxes on electricity and home heating oil. "They rebutted both with the $250,000 claim," she said of the Obama campaign, "so they did extend the rebuttal beyond income and payroll."

Government and private research has found that smoking rates are higher among people of low income.

A Gallup survey of 75,000 people last year fleshed out that conclusion. It found that 34 percent of respondents earning $6,000 to $12,000 were smokers, and the smoking rate consistently declined among people of higher income. Only 13 percent of people earning $90,000 or more were smokers.

Federal or state governments often turn for extra tax dollars to the one in five Americans who smoke, and many states already hit tobacco users this year. So did the tobacco companies, which raised the price on many brands by more than 70 cents a pack.

The latest increase in the federal tax is by far the largest since its introduction in 1951, when it was 8 cents a pack. It's gone up six times since, each time by no more than a dime, until now.

Apart from the tax haul, public health advocates argue that squeezing smokers will help some to quit and persuade young people not to start.

But it was a debate the country didn't have in a presidential campaign that swore off higher taxation.






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FACT CHECK: Obama's words on home aid ring hollow

WASHINGTON (AP) - President Barack Obama knows Americans are unhappy that the government could rescue people who bought mansions beyond their means.

But his assurance Tuesday night that only the deserving will get help rang hollow.

Even officials in his administration, many supporters of the plan in Congress and the Federal Reserve chairman expect some of that money will go to people who used lousy judgment.

The president skipped over several complex economic circumstances in his speech to Congress - and may have started an international debate among trivia lovers and auto buffs over what country invented the car.

A look at some of his assertions:


OBAMA: "We have launched a housing plan that will help responsible families facing the threat of foreclosure lower their monthly payments and refinance their mortgages. It's a plan that won't help speculators or that neighbor down the street who bought a house he could never hope to afford, but it will help millions of Americans who are struggling with declining home values."

THE FACTS: If the administration has come up with a way to ensure money only goes to those who got in honest trouble, it hasn't said so.

Defending the program Tuesday at a Senate hearing, Federal Reserve Chairman Ben Bernanke said it's important to save those who made bad calls, for the greater good. He likened it to calling the fire department to put out a blaze caused by someone smoking in bed.

"I think the smart way to deal with a situation like that is to put out the fire, save him from his own consequences of his own action but then, going forward, enact penalties and set tougher rules about smoking in bed."

Similarly, the head of the Federal Deposit Insurance Corp. suggested this month it's not likely aid will be denied to all homeowners who overstated their income or assets to get a mortgage they couldn't afford.

"I think it's just simply impractical to try to do a forensic analysis of each and every one of these delinquent loans," Sheila Bair told National Public Radio.

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OBAMA: "And I believe the nation that invented the automobile cannot walk away from it."

THE FACTS: Depends what your definition of automobiles, is. According to the Library of Congress, the inventor of the first true automobile was probably Germany's Karl Benz, who created the first auto powered by an internal combustion gasoline engine, in 1885 or 1886. In the U.S., Charles Duryea tested what library researchers called the first successful gas-powered car in 1893. Nobody disputes that Henry Ford created the first assembly line that made cars affordable.

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OBAMA: "We have known for decades that our survival depends on finding new sources of energy. Yet we import more oil today than ever before."

THE FACTS: Oil imports peaked in 2005 at just over 5 billion barrels, and have been declining slightly since. The figure in 2007 was 4.9 billion barrels, or about 58 percent of total consumption. The nation is on pace this year to import 4.7 billion barrels, and government projections are for imports to hold steady or decrease a bit over the next two decades.

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OBAMA: "We have already identified $2 trillion in savings over the next decade."

THE FACTS: Although 10-year projections are common in government, they don't mean much. And at times, they are a way for a president to pass on the most painful steps to his successor, by putting off big tax increases or spending cuts until someone else is in the White House.

Obama only has a real say on spending during the four years of his term. He may not be president after that and he certainly won't be 10 years from now.

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OBAMA: "Regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn't afford from banks and lenders who pushed those bad loans anyway. And all the while, critical debates and difficult decisions were put off for some other time on some other day."

THE FACTS: This may be so, but it isn't only Republicans who pushed for deregulation of the financial industries. The Clinton administration championed an easing of banking regulations, including legislation that ended the barrier between regular banks and Wall Street banks. That led to a deregulation that kept regular banks under tight federal regulation but extended lax regulation of Wall Street banks. Clinton Treasury Secretary Robert Rubin, later an economic adviser to candidate Obama, was in the forefront in pushing for this deregulation.

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OBAMA: "In this budget, we will end education programs that don't work and end direct payments to large agribusinesses that don't need them. We'll eliminate the no-bid contracts that have wasted billions in Iraq, and reform our defense budget so that we're not paying for Cold War-era weapons systems we don't use. We will root out the waste, fraud and abuse in our Medicare program that doesn't make our seniors any healthier, and we will restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas."

THE FACTS: First, his budget does not accomplish any of that. It only proposes those steps. That's all a president can do, because control over spending rests with Congress. Obama's proposals here are a wish list and some items, including corporate tax increases and cuts in agricultural aid, will be a tough sale in Congress.

Second, waste, fraud and abuse are routinely targeted by presidents who later find that the savings realized seldom amount to significant sums. Programs that a president might consider wasteful have staunch defenders in Congress who have fought off similar efforts in the past.

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OBAMA: "Thanks to our recovery plan, we will double this nation's supply of renewable energy in the next three years."

THE FACTS: While the president's stimulus package includes billions in aid for renewable energy and conservation, his goal is unlikely to be achieved through the recovery plan alone.

In 2007, the U.S. produced 8.4 percent of its electricity from renewable sources, including hydroelectric dams, solar panels and windmills. Under the status quo, the Energy Department says, it will take more than two decades to boost that figure to 12.5 percent.

If Obama is to achieve his much more ambitious goal, Congress would need to mandate it. That is the thrust of an energy bill that is expected to be introduced in coming weeks.

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OBAMA: "Over the next two years, this plan will save or create 3.5 million jobs."

THE FACTS: This is a recurrent Obama formulation. But job creation projections are uncertain even in stable times, and some of the economists relied on by Obama in making his forecast acknowledge a great deal of uncertainty in their numbers.

The president's own economists, in a report prepared last month, stated, "It should be understood that all of the estimates presented in this memo are subject to significant margins of error."

Beyond that, it's unlikely the nation will ever know how many jobs are saved as a result of the stimulus. While it's clear when jobs are abolished, there's no economic gauge that tracks job preservation. The estimates are based on economic assumptions of how many jobs would be lost without the stimulus.



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Obama’s Doublespeak in Denver

In Denver, last August, standing in front of those stage-set columns to accept the Democratic Party nomination, Barack Obama delivered a speech that included the following promise (boldface is mine):

I will also go through the federal budget, line by line, eliminating programs that no longer work and making the ones we do need work better and cost less - because we cannot meet twenty-first century challenges with a twentieth century bureaucracy.

Today, Obama returned to Denver, and with elaborate ceremony signed the $787 billion “stimulus” bill passed last Friday by Congress, which runs to more than 1,070 pages. That left fewer than 96 hours between passage and signing (thus also violating his promise about posting legislation for five days on the internet before signing, to allow for transparency and comment).

When did Obama even find time to skim this monster bill? Let alone go through it “line by line?”
Obama enjoyed an intervening weekend heavy on R&R. Carbon-emissions-notwithstanding (personally I don’t care how much carbon he emits, but Obama wants all the rest of us to sacrifice on this front), on Friday Obama flew with his family and entourage to Chicago, where he helicoptered in from the airport, to spend time at his Chicago mansion and — as The New York Times put it — see a few friends and “reconnect to the rest of the country.” Over the weekend, he took Michelle out for a Valentine’s dinner at a South Side* restaurant. He got a haircut. He spent two hours playing basketball. He watched the N.B.A. All-Star game. He also gave his weekly video address. He then flew back to Washington, and on Tuesday flew to Denver.

Unless Obama was reading the bill over his Valentine’s dinner, and had it taped to the basketball backboard, when did he go through it line by line?
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Or are we heading into realms of doublespeak and semantic slush so deep that nothing really means what it once seemed to? Obama promised to go through the budget line by line; so maybe by his lights a $787 spending bill, the biggest in history, simply doesn’t count? He promised to eliminate or streamline wasteful programs, but who decides what that means? One man’s waste is another man’s pork? One man’s tax-picked wallet is another man’s free ride?

(The motto of the restaurant Obama chose for his Valentine’s dinner, Table 52, as shown on the dinner-menu page of its web site, is — what else? — “everything tastes better when shared.” That may be true for many forms of voluntary exchange, including a romantic private dinner (Obama’s sharing at Table 52, if any, seems to have been quite private; I haven’t seen any reports that he offered portions from his own plate to the populace). But history records far less happy results when everything gets sluiced by government command through a communal pot.)

Obama promised transparency, careful consideration, and responsible spending. What we have at this point is a monumental new IOU signed by Obama on our behalf, and a web site, Recovery.gov which — when I took a look earlier today — prematurely announced his premature signing of the “stimulus” bill (it was posted as a done deal while Vice President Biden was still effusing over it in introductory remarks in Denver). Recovery.gov now offers us multi-billion-dollar-labeled pastel balloons (with labels such as $144 billion for “State and Local Fiscal Relief” and $8 billion for “Other”) and the text of the bill (which is so huge that it’s been broken into five separate pdf files). Apparently it is not Obama’s job to read what he signs; that falls to the rest of us.

Anyone care to get out the timeclock, start reading, and figure out at what rate Obama would have had to go through it line by line, to fit it into his schedule over the long weekend? More to the point, since Obama’s line-by-line Denver convention promise is clearly down the memory hole, how much work will it take by American taxpayers, who must earn this money dollar-by-dollar, to pay for this $787,000,000,000 extravaganza?

[Ed. - As some Pajamas readers point out in comments below -- Thank you! -- Table 52 is not on Chicago's South Side; it is on Chicago's up-market Gold Coast. More carbon emissions to get there.]

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Stimulus Bill Broke 7 Obama Promises

7 Broken Promises in Record Time

1. Make government open and transparent.
2. Make it "impossible" for Congressmen to slip in pork barrel projects.
3. Meetings where laws are written will be more open to the public. (Even Congressional Republicans shut out.)
4. No more secrecy.
5. Public will have 5 days to look at a bill.
6. You’ll know what’s in it.
7. We will put every pork barrel project online.

Funny, but not one of Mr. Obama’s promises were met with the most expensive spending bill in our nation’s history.

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Obama’s Broken Promises Were Entirely Predictable

Barack Obama swept into office with the limelight at his back. For nearly two years of campaigning, Obama led a nationwide movement for change and became a phenomenon, breaking all sorts of political barriers along the way. People of all demographics used Obama as a vessel in which to invest their hopes and dreams. But today, just three weeks into his presidency, Mr. Obama is on the verge of losing the country’s confidence and the large reservoir of national goodwill afforded to all incoming presidents. There are several reasons for this, all of which should be and have already been explored. I would hate to say “I told ya so,” but …
What could anyone have possibly expected from a young, overtly leftist Chicago upstart who had accomplished precisely nothing of significance throughout his short career — and yet still promised the world, and more, to his loyal adherents?
Consider his campaign pledges: It wasn’t too long ago that Obama promised to “tell the corporate lobbyists that their days of setting the agenda in Washington are over.” Ah, the corporate lobbyist, every candidate’s favorite whipping boy. “They have not funded my campaign, they will not run my White House, and they will not drown out the voices of the American people when I am president,” Barack once swore to his sea of idolizing worshipers.
That was then; this is now. President Obama has allowed seventeen exceptions to the no-lobbyist rule. And remember that “sunlight before signing” pledge, giving citizens enough time to read a bill — and offer their opinions on it — before it is signed into law? Well, that’s gone to the wayside, too.

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Consider the language of fear: There is another sad element to President Obama’s dialogue, and that is his odd blend of draconian terminology and juvenile platitudes. Obama has said it is “inexcusable and irresponsible” not to pass the bill as soon as possible, or else there will be a “catastrophe” which will cause an “irreversible” recession — all if he doesn’t get his way! What a far cry this is from Reagan’s wish that he “appealed to [our] best hopes, not [our] worst fears.”
Far from titillating or stoking our hopes, Obama has employed that much-maligned “language of fear” — of which he accused his predecessor — time and again, attempting to scare the populace into accepting this ludicrous bill. As Charles Krauthammer put it, “So much for the president who in his inaugural address two weeks earlier declared ‘we have chosen hope over fear.’ Until, that is, you need fear to pass a bill.”
Consider the intellectual dishonesty: Seemingly stunned by his initial inability to bend Washington to his will, Barack has resorted to playground logic to defend his economic proposals. “If nothing is done, this recession could linger on for years,” he forecasts. Well, then … that pretty much wraps up the debate, now doesn’t it? If bad things will happen when nothing is done, then good things might happen if something is done, right?
This kind of threat-forecasting and platitude-dribble is for the sandbox, not a national economic discussion. When Obama talks on and on about “the same failed policies” that “got us in this mess,” this is emotional, populist gibberish — not objective economic contemplation. Where are the philosophical distinctions, the economic arguments, the logical rationalizations?
If this stimulus bill is so urgent, why aren’t most of its provisions — those few which are not absurd and actually have something to do with economic recovery — going to be implemented until years from now? How will these fantastical programs save us from irreversible economic disaster? How will this bill be different from Japan’s experiences with multiple stimulus packages, all of which pretty much failed? And what’s up with that sneaky de facto health care nationalization plan in the bill, going under the public’s radar?
President Obama hasn’t answered or addressed any of this. But he has attacked Rush Limbaugh. This kind of childish behavior is supposed to be beneath the office which Obama now holds. But for Barack, it isn’t.
Consider his executive leadership: Nearly every one of President Obama’s cabinet appointments has undue baggage and closet-skeletons. Attorney General Eric Holder is best known for his role in pardoning Marc Rich. Mark Gitenstein was a corporate lobbyist from 2000 until 2008. David Ogden’s best known for defending child pornography.
The womanizing Bill Richardson had to withdraw his name because a federal grand jury wants to see him for illegal “pay-to-play” violations. William Lynn III, a recent lobbyist for defense contractor Raytheon, will be number two at the Pentagon. William Corr lobbied as an anti-tobacco activist as late as last year. All of this violates Obama’s own ethics rules regarding lobbyists.
Leon Panetta is a fine man, but is he qualified? Do Rangel, Dodd, and Frank — those brilliant overseers of Fannie Mae and Freddie Mac — really deserve presidential exemptions regarding their tax excesses? General Zinni’s been wrong about Iraq for over a decade, but did he and his family deserve to be snubbed and treated in such a dishonorable fashion by the Obama administration? Do I even need to bring up the hypocrisy and audacity of appointing tax policy advisors — Geithner, Daschle, Solis, Killefer, etc. — who cheated on their taxes worse than a gypsy playing a blind man in Scrabble?
President Obama seems to think that just because he wasn’t vetted by the national media prior to his election, his administration doesn’t have to vet its cabinet nominees. Individually, these missteps wouldn’t be news. But the sum total of their parts leads one to believe there is a pattern — just as there was in Chicago with Wright, Ayers, Rezko, Pfleger, Mansour, etc. — and if it weren’t our country, it’d almost be comical. Hardly anyone today, and certainly nobody a year from now, will be able to listen to President Obama’s campaign pledges about transparency, ethics, and change and keep a straight face.
As a reader phrased it in an email, this administration has thus far had all the grace and ease of a teenager learning how to parallel park. Perhaps this is what on-the-job training looks like? He’s losing the message war because he’s not leading the debate. And he’s not leading the debate, may I surmise, because he does not have requisite leadership qualities for an executive. Sure, he’s brilliant at rallies. But so is Bon Jovi.
Consider the future: Iran has launched its own satellite into orbit and is mocking Obama as a weak leader for wanting to have a dialogue with them. North Korea has withdrawn from its non-aggression treaty and is preparing another missile test. Somalia is in tatters. Yemen has released 170 al-Qaeda terrorists. Pakistan has released mad nuclear scientist A.Q. Khan from house arrest. Russia is blocking supply lines into Afghanistan.
During last year’s campaign, critics of Barack Obama contended he was too inexperienced, too leftist, and in a sense, too good to be true. He was, we observed, just another politician — in fact, one uniquely entrenched with Chicago corruption and archaic tax-and-spend philosophies. In other words, a less noble Jimmy Carter.
Less than a month into his presidency, this view of President Obama has been vindicated — until he proves otherwise. Hang on to your hats (and wallets); it might be a long four years.

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Obama, Reid, Pelosi burn billions behind closed doors

For officials who came into office promising to operate the most honest and transparent White House and Congress ever, President Barack Obama, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid seem determined to achieve exactly the opposite result. Their actions in securing passage of the $1 trillion economic stimulus bill – the total cost exceeds $1 trillion when interest is added to the $838 billion Senate or $827 billion House versions - would be laughable were not the consequences for the nation so dire. Take for example the trio’s determination to hustle the Senate-House conference committee to begin meeting within hours of Senate passage of the upper chamber’s compromise version.
Less than 48 hours elapsed between the time the text of the compromise became available for public examination late Saturday evening and yesterday’s 61-37 vote for passage. At that rate, the Senate effectively was spending about $300 million every minute while considering the compromise, and allowing taxpayers a scandalously brief opportunity to discover how the senators were doing it. But even before the votes on final Senate passage were counted, Reid left a White House meeting with Obama and Pelosi yesterday morning promising to convene the conference committee as soon as possible and predicting the “minor differences” between the two chambers’ bills would be worked out within 24 hours, with conferees working into the night.

Republicans demanded the conference committee meeting be televised. Sen. John Ensign, R-NV, observing that “for too long, these conference committees have been the smoke-filled backrooms that frustrate the American people.” The reality is that while the conference committee meetings might be open, the actual negotiations on the stimulus bill have taken place behind closed doors in the leadership offices. Neither Reid nor Pelosi are smokers, but they’ve been writing the biggest single spending bill in American history behind closed doors just as once routinely happened in those smoky Capitol corridor rooms. They are taking care of their favored special interests and handing taxpayers the bill. Sen. Carl Levin, D-MI, provided a suitable illustration here by going public with his request that the conferees add $7 billion in relief for General Motors from a tax liability, a move that will certainly aid, among others, the United Auto Workers. House Democrats also vowed to use the conference to restore billions of dollars in spending reductions approved by senators. No wonder House Democrats rejected House GOP leader John Boehner’s motion requiring the conference report be posted online for 48 hours before a final vote. The Sunlight Foundation's petition for a 72-hour waiting period makes even more sense. And wasn't it Obama who promised to allow five-days of public examination before he signed any emergency bill?



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The Fierce Urgency of Pork

"A failure to act, and act now, will turn crisis into a catastrophe."
-- President Obama, Feb. 4.

Catastrophe, mind you. So much for the president who in his inaugural address two weeks earlier declared "we have chosen hope over fear." Until, that is, you need fear to pass a bill.
And so much for the promise to banish the money changers and influence peddlers from the temple. An ostentatious executive order banning lobbyists was immediately followed by the nomination of at least a dozen current or former lobbyists to high position. Followed by a Treasury secretary who allegedly couldn't understand the payroll tax provisions in his 1040. Followed by Tom Daschle, who had to fall on his sword according to the new Washington rule that no Cabinet can have more than one tax delinquent.
The Daschle affair was more serious because his offense involved more than taxes. As Michael Kinsley once observed, in Washington the real scandal isn't what's illegal, but what's legal. Not paying taxes is one thing. But what made this case intolerable was the perfectly legal dealings that amassed Daschle $5.2 million in just two years.
He'd been getting $1 million per year from a law firm. But he's not a lawyer, nor a registered lobbyist. You don't get paid this kind of money to instruct partners on the Senate markup process. You get it for picking up the phone and peddling influence.
At least Tim Geithner, the tax-challenged Treasury secretary, had been working for years as a humble international civil servant earning non-stratospheric wages. Daschle, who had made another cool million a year (plus chauffeur and Caddy) for unspecified services to a pal's private equity firm, represented everything Obama said he'd come to Washington to upend.
And yet more damaging to Obama's image than all the hypocrisies in the appointment process is his signature bill: the stimulus package. He inexplicably delegated the writing to Nancy Pelosi and the barons of the House. The product, which inevitably carries Obama's name, was not just bad, not just flawed, but a legislative abomination.
It's not just pages and pages of special-interest tax breaks, giveaways and protections, one of which would set off a ruinous Smoot-Hawley trade war. It's not just the waste, such as the $88.6 million for new construction for Milwaukee Public Schools, which, reports the Milwaukee Journal Sentinel, have shrinking enrollment, 15 vacant schools and, quite logically, no plans for new construction.
It's the essential fraud of rushing through a bill in which the normal rules (committee hearings, finding revenue to pay for the programs) are suspended on the grounds that a national emergency requires an immediate job-creating stimulus -- and then throwing into it hundreds of billions that have nothing to do with stimulus, that Congress's own budget office says won't be spent until 2011 and beyond, and that are little more than the back-scratching, special-interest, lobby-driven parochialism that Obama came to Washington to abolish. He said.
Not just to abolish but to create something new -- a new politics where the moneyed pork-barreling and corrupt logrolling of the past would give way to a bottom-up, grass-roots participatory democracy. That is what made Obama so dazzling and new. Turns out the "fierce urgency of now" includes $150 million for livestock (and honeybee and farm-raised fish) insurance.
The Age of Obama begins with perhaps the greatest frenzy of old-politics influence peddling ever seen in Washington. By the time the stimulus bill reached the Senate, reports the Wall Street Journal, pharmaceutical and high-tech companies were lobbying furiously for a new plan to repatriate overseas profits that would yield major tax savings. California wine growers and Florida citrus producers were fighting to change a single phrase in one provision. Substituting "planted" for "ready to market" would mean a windfall garnered from a new "bonus depreciation" incentive.
After Obama's miraculous 2008 presidential campaign, it was clear that at some point the magical mystery tour would have to end. The nation would rub its eyes and begin to emerge from its reverie. The hallucinatory Obama would give way to the mere mortal. The great ethical transformations promised would be seen as a fairy tale that all presidents tell -- and that this president told better than anyone.
I thought the awakening would take six months. It took two and a half weeks.

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Same old fudges and loopholes in Obama's new era of ethics

The sheen is already coming off the Obama presidency.

What a difference an election makes. On the campaign trail, candidate Barack Obama vowed to fix Washington's "broken politics", which had become "gummed up by money and influence". In the age of Obama, he promised, government would no longer be "a tool to enrich friends and high-priced lobbyists". The stakes were too high to play the "same old Washington games with the same old Washington players". The slogan was: "Change you can believe in."

Now that he is in office, however, the new dawn is looking like a false one. His administration is crammed to the gills with alumni of Bill Clinton's White House; Hillary Clinton, whom Obama mocked as the epitome of what was wrong with politics, is now secretary of state.

There have been attempts to give lobbyists top jobs in the Obama administration. Tom Daschle, a former senator and the personification of the slick operator richly rewarded for his influence-peddling, was nominated as health secretary. As with two other Obama nominees, it subsequently emerged that he had failed to pay all his taxes, and yesterday he was forced to withdraw his name from consideration.

President Obama still sounds a lot like candidate Obama. On day one in the White House, he announced that he was closing "the revolving door that lets lobbyists come into government freely" and making "a clean break from business as usual". His new ethics and transparency rules were, he ventured, "historic measures".

But the sheen is already coming off, as realities takes its toll. Two days after he had looked Americans in the eye and told them that this was a new ethical dawn, the President waived his "historic" rule. William Lynn, a lobbyist for the defence giant Raytheon, was nominated as the deputy Pentagon chief. There would always be "reasonable exceptions", the White House press secretary insisted.

"If you are a lobbyist entering my administration, you will not be able to work on matters you lobbied on, or in the agencies you lobbied during the previous two years," Mr Obama had said. He neglected to add the footnote: "Except when it suits us otherwise."

Initially, Mr Obama had said he "absolutely" stood behind Mr Daschle, who had already been allocated a plush West Wing office and posed for Vanity Fair as part of the "O Team". However, the former senate majority leader's failure to pay $128,000 (£90,000) – more than most Americans earn in a year – in taxes for a limousine lent to him by Leo Hindery, a private equity fund manager, eventually proved an insurmountable political obstacle.

Eyebrows had also been raised at the $5 million Mr Daschle made in the four years since the voters of South Dakota dispensed with his services. He had earned some $200,000 from health companies that stand to benefit from Mr Obama's promise to overhaul the American health system.

It also emerged that Mr Daschle had been pushing for his patron, Mr Hindery, to become commerce secretary, a slot vacant because the original nominee, Governor Bill Richardson, pulled out after becoming the focus of a corruption investigation.

Mr Daschle issued the standard mea culpa about his taxes, declaring that he was "embarrassed" by his oversight, and Mr Obama's spokesman had conceded that "nobody's perfect". In the end, it was not enough to save him.

White House officials brief that change is hard: that a few veteran Washington insiders will be needed to help dismantle the system that benefits entrenched interests.

The problem is, a pattern is emerging. The new treasury secretary, Timothy Geithner – who oversees the Internal Revenue Service, America's equivalent of the H M Revenue and Customs – apologised profusely for failing to pay $34,000 in taxes and survived. Yesterday, Nancy Killefer, who was to be federal "chief performance officer", stood down for failing to pay employment taxes for her house cleaner. Now Mr Obama has been forced to jettison Mr Daschle, an early supporter who provided key staff and access to an invaluable political network. The loss of two nominees in a single day will inevitably raise questions over his judgment.

Mr Obama is the most popular incoming president since Kennedy in 1961 and his supporters have until now, through gritted teeth, bought the notion that you need to play by the old rules initially in order to change them.

Just after his election, he said, in effect, that "change, c'est moi " – look at who I am, not who I have appointed. "Understand where the vision for change comes from, first and foremost. It comes from me."

At times, Mr Obama's candidacy verged on a cult of personality. As president, however, he will ultimately be judged on actions and results. If he fails to deliver, the corrosive cynicism about politics that he so frequently lamented on the campaign trail will only deepen.

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