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We Can’t Wait (unless its politically convenient)

November 16, 2011

There is no doubt that President Obama has been forced to deal with intense political gridlock in the Congress, and at some points it has seemed that the country would be better served if Republicans would not be so stridently obstructionist, and more willing to compromise. This is not to leave Obama and the Democratic free from blame, often their strategy has seemed to be to propose things that are designed to score political points with their base and have no chance of passing, content in the knowledge that they can blame gridlock and Republican obstruction for a lack of tangible results. It is in this state of affairs that President Obama’s American Jobs Act has been mired in the divided Congress. The Act has not been passed, and none of the substantial portions that have been broken off have had any more success, save for a small provision promoting the hiring of veterans. In light of the bleak prospect of having any legislative victories, and feeling increasing pressure in the ramp up to 2012, Obama has been touting a series of unilateral actions that his administration says will help the middle class and the American economy. 

These executive initiatives have ranged from mortgage refinancing, to curbing drug shortages, to slashing funding for federal travel, government-issued cell phones and excessive document printing and putting  limits on purchases of “swag” – the clothing, mugs, plaques and other promotional items that agencies acquire with taxpayer money.

 The steady drumbeat coming from the Administration during this time has been “We Can’t Wait”

The catchphrase of this recent initiative implies that the President can no longer wait for a divided Congress to act, and that he will do everything in his power to address the struggling economy and the serious problems Americans are facing.

While Obama uses sweeping rhetoric in carefully crafted public appearances to promote the benefits of his urgent plans, close inspection of the proposals reveals that they will have limited effect in ameliorating widespread socioeconomic woes without Congress’ help.

The new White House order to the FDA addressing drug shortage, for example,

simply “enhances” and “amplifies” steps that are already being taken, officials said.  The agency will hire five new staffers to work on drug shortage issues. It sent a letter to drug companies reminding them to report the discontinuation of drugs

Another initiative dealing with the increasingly important student loan bubble would allow some student borrowers to cap their monthly loan repayments at 10 percent of their discretionary income starting next year, two years earlier than previously expected. It will also forgive remaining debt on federal loans after 20 years. The plan would also help students with multiple federal student loans consolidate their debt at a lower interest rate. The administration says the repayment cap will help 1.6 million students lower their monthly payments, and 6 million students consolidate their lowers under a lower rate

This initiative would seem to be an effective way of circumventing a slow Congress to provide real relief to young Americans, and to begin to address the next looming crisis, mounting student debt. However, like the other initiatives, the practical benefits of the student loan order wilt under closer inspection. As David Indiviglio at The Atlantic observes

the program would save the average eligible student less than $10 per month. Furthermore, the new loan repayment cap only applies to current students who have taken out loans in 2012 and beyond. As a stimulus measure hoping to help the broader economic recovery, this program’s impact will be extremely small in 2012.

This raises questions as to the true intent of these new initiatives, whether the true aim of the new ‘We Can’t Wait’ initiative is to bolster flagging public opinion of his job performance and policy agenda while contrasting it with political gridlock in Congress. All of this takes place in the run-up to the 2012 elections, and it would appear the impending campaign is creeping more and more into the consciousness of the Administration.

Obama’s decision to punt on the controversial XL pipeline until after the elections is the most telling  indication that these initiatives are made motivated by political considerations rather than an actual desire to help the struggling economy finally recover.

While many of the estimates of the economic impact of the XL pipeline are sponsored by the industry and are thus likely to overestimate the amount of jobs the pipeline would generate, there is no doubt that the pipeline would have a greater economic impact than any of the initiatives in the ‘We Cant’ Wait’ narrative. There are some valid environmental objections to the pipeline, and if the President had decided to deny the permit outright in light of these concerns, he could have made a coherent case that the benefits to the economy were outweighed by negative environmental effects, and whispers that everything is decided with an eye towards 2012 would have abated. But to punt the issue and delay a decision until after the election, when the permit has been pending for years, smacks of a President more concerned about potentially alienating environmentalist votes than with doing anything he can to help the economy recover. It seems that a more truthful, if less inspiring, slogan for the recent initiative is  ‘We Can’t Wait, Unless it is Politically Convenient’.

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