3/25/09

Last night President Obama made the case for his budget, which includes important action on health care, energy and climate, and education. Taking action on these issues is vital to maintaining America’s position as a global power.  For more than two centuries, much of America's power and influence abroad has come from our domestic strength, specifically the vibrancy of our economy and the respect other countries had for our values. The last eight years’ damage to US economic competitiveness and moral authority abroad was compounded by the Bush Administration’s failure to address healthcare, global warming, and energy security at home.  Some have argued that in the midst of recession now is not the time to advance these issues. This has it backward. During the Great Depression, Franklin Roosevelt signed the Social Security Act that has helped protect and provide for America’s elderly and has become a vital part of America’s social fabric. In this time of crisis, expanding health care, improving education, and modernizing how we use energy are essential to both stimulating the economy in the short term and putting America on the path to sustainable long term growth and prosperity. They are equally essential to rebuilding America’s international competitiveness and prestige, maintaining our power and, in the long run, our national security.

Lack of health care reform affects the U.S. economy, hurts our global competitiveness, and makes rescue efforts more difficult.  In his press conference last night Obama made the case for reforming our broken healthcare system in a time of economic recession.  He said, “We invest in reform that will bring down the cost of health care for families, businesses and our government.” A report by James Kvaal at the Center for American Progress assesses that America’s “far and away the most expensive health care system in the world” has consumed “an increasing share of our nation’s resources,” a share that is expected to grow larger in years to come.  The report also finds that “rising health care costs put a particular burden on U.S. businesses, which have been the primary source of health coverage for nearly 75 years. Today, the majority of Americans—158 million people—receive health coverage from their job or a family member’s job.  Higher health insurance premiums translate directly into higher labor costs, forcing employers to cut back their workforces. A 20 percent increase in health insurance premiums would cost 3.5 million workers their jobs.”  Additionally, “[r]ising health care costs will drive up taxes and premiums, eating up 95 percent of the growth in per capita gross domestic product between 2005 and 2050.”  These findings have clear and troubling implications for the U.S.’ global economic position, when our industrial competitors in Europe, Japan and Canada don’t carry a similar burden, making the need for reform all the more important.  At a time of economic crisis, health care reform is more important than ever. For example, the fact that countries in Europe have stronger social safety nets – especially on health care – provides a built-in stimulus in times of economic crisis.  As Nobel-winning economist Paul Krugman writes, ”The only thing working in Europe’s favor is the very thing for which it takes the most criticism — the size and generosity of its welfare states, which are cushioning the impact of the economic slump.  This is no small matter. Guaranteed health insurance and generous unemployment benefits ensure that, at least so far, there isn’t as much sheer human suffering in Europe as there is in America. And these programs will also help sustain spending in the slump.” [Barack Obama, 3/24/09. Center for American Progress, 12/09/08. Paul Krugman, 3/16/09]

Strengthening America’s energy security and combating climate change are critical priorities for the U.S. both at home and abroad and require urgent action. Last night, Obama discussed the urgent need for the U.S. to confront energy and environmental challenges, declaring: “we've got to have a serious energy policy that frees ourselves from dependence on foreign oil and makes clean energy the profitable kind of energy.” A bipartisan CFR task force headed by John Deutch, Former Director of Central Intelligence, and James R. Schlesinger, Former Defense and Energy Secretary, concluded: “The lack of sustained attention to energy issues is undercutting U.S. foreign policy and national security.” In addition, the National Intelligence Council (NIC) recently warned America and the new President about the impact climate change can have on national security, increasing the possibility of “climate refugees,” unilateral resource wars, and an increase in destructive weather events. The CFR Task Force goes on to suggest that when it comes to energy and the environment, “most of the leverage potentially available to the United States is through domestic policy.”  As former Vice President Al Gore said before the Senate Foreign Relations Committee, “If Congress acts right away to pass President Obama's Recovery package and then takes decisive action this year to institute a cap-and-trade system for CO 2 emissions – as many of our states and many other countries have already done - the United States will regain its credibility and enter the Copenhagen treaty talks with a renewed authority to lead the world in shaping a fair and effective treaty.”  Finally, US action on climate change would confer diplomatic benefits as well.  In this week’s meeting with President Obama, Australian Prime Minister Kevin Rudd expressed that “it's great to have America on board” on climate change, highlighting an expectation that the U.S. will become a full partner in efforts to tackle this problem. [President Obama, 3/24/09. CFR, 10/06. Global Trends 2025, 11/08. NY Times, 12/9/05. TIME, 7/21/01. BBC, 4/6/01. NSN, 5/08. Al Gore, 1/28/09. CFR, 3/19/09. VOA, 3/24/09]

An educated population is critical to maintaining American competitiveness.  In last night’s press conference, the president said, “What we can’t do, though, is sacrifice long-term growth investments that are critical to the future. And that’s why my budget focuses on health care, energy, education -- the kinds of things that can build a foundation for long-term economic growth as opposed to the fleeting prosperity that we’ve seen over the last several years.” Most important among these for America’s future competitiveness is education.   John Podesta and Cynthia Brown of the Center for American Progress write that “The intense competition of the global economy demands that all of America’s young people receive the kind of education they need and deserve.”  Fareed Zakaria writes that “This will, over time, translate into a competitiveness problem, because if the United States cannot educate and train a third of the working population to compete in a knowledge economy, this will drag down the country.” In the midst of the current financial crisis, it is crucial that education remain a priority. As President Obama said in the address to Congress, “the countries that out-teach us today will out-compete us tomorrow.” [Barack Obama, 3/24/09. Center for American Progress, 8/1/08. Foreign Affairs, May/June 2008. Barack Obama, 3/10/09]

What We’re Reading

As Secretary of State Clinton begins her trip to Mexico, the Department of Homeland Security announced a new border security plan and steps to combat the drug cartels, including stopping weapons and cash from entering Mexico from the U.S.

The IMF reforms several policies to cope with the economic crisis.  The IMF approved an economic rescue package for Romania.

The GAO found that the Iraq withdrawal is likely to increase Iraq-related costs during the withdrawal and for several years after.

The Czech Prime Minister criticized the U.S. stimulus plan as the “way to hell.”  His government lost a vote of no confidence today.

Benjamin Netanyahu promises to be a “peace partner.”

About 100 Thai troops cross into Cambodia near a disputed temple site.

The Washington Post looks at the Obama administration’s use of state secrets privileges.

A roadside bomb in Afghanistan killed as many as 10 civilians.

Pakistani police clash with protesters displaced by military operations against the Taliban.  The U.S. considers Nawaz Sharif as a possible partner in Pakistan.

China says video footage of police beating Tibetans during the protests last April is “a lie.”

The U.S. military focuses on halting military suicides, which have killed almost as many troops this year as fighting in Iraq and Afghanistan combined.

Commentary of the Day

The New York Times wants President Obama to reform U.S. nuclear arms policy, which is “still mired in cold war thinking.”

The LA Times collects opinions from experts on what should be discussed during Secretary Clinton’s visit to Mexico.

The Wall Street Journal looks at how gasoline sanctions could give Iran “pain it can believe in” and raise the cost of its nuclear program.