Monthly Archives: February 2013

Predictions following the State of the Union

I was twittering away during the President’s State of the Union speech last week.  In the course of it I made several predictions.  Although it is easy to get carried away during the event, I think the predictions hold up pretty well.  In the interests of posterity I have copied them down here with a brief explanation of each.

1. Despite what he said, this President will never agree to cuts in Social Security and Medicare. Although the president made about as an explicit commitment as possible, I still do not think he has any intention of actually agreeing to cuts. If Obama were serious about entitlement cuts he could have struck a deal with Republicans during his first term.  Instead he raises hopes but repeatedly moves the goal posts anytime there is a hint of compromise from Republicans.  I think his statements were mainly an attempt to convince voters that he is not the one standing in the way of a deal.

2. Tax reform will not be an Obama priority. That means it will not get done. In the best of circumstances comprehensive tax reform would be an exhaustive undertaking. Because it entails great complexity, high stakes, and inevitable disagreement, it cannot be done without strong presidential leadership. There is no sign that Obama is willing to spend significant capital on this issue.

3. The President’s budget will not contain many details on how to pay for the many initiatives he proposed in his speech.  To be fair, he can make others pay the cost of some of them such as the higher minimum wage and pre-K education. But many inevitably will require federal spending. The budget will not indicate how this should be done.  Nor will it indicate which entitlement cuts the President supports.

4.Within 5 years of leaving Afghanistan, the Taliban and Al Queada will have a significant presence in the country. The President has bragged about withdrawing troops from both Iraq and Afghanistan.  He does not talk about the chaos that is likely to grow in both countries once U.S. forces are gone. The Karzai government perhaps does not deserve any further American support, but there is little indication that it can maintain national unity in the absence of significant outside involvement. There is no reason to think that it will be able to maintain national unity in the face of continued opposition from the Taliban based in Pakistan. Iraq is already splintering. Whether this has security implications for America remains to be seen.

5. The President will not make a serious effort to conclude a major trade agreement.  There seems to be little chance of reviving Doha anyway.  But despite the current talk of trade agreements involving Asia and Europe, nothing will get done.  The President did not show any interest in trade negotiations during his first term, although he did finally support free trade agreements that had been negotiated by Bush. Nor has he requested trade promotion authority even though he would likely get it. The Democratic party remains opposed to bringing down trade barriers, even when economic studies show that doing so would boost growth. Even if Obama feels differently, he will not exert energy over the tough concessions that are inevitably required to complete a major deal of this kind.

Lets see how well these predictions stand up over the next four years.


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