2006 State of the Union speech
Last night, Prsident Bush gave the 2006 State of the Union speech.
Overall, I thought it was as good a speech as a President could give facing a hostile Congress and a fairly hostile nation. Despite complaints by hardcore conservatives like Richard Viguerie, I thought the President's speech was not one which could have come from Clinton or Carter, and overall I'd give him a B+, with the + coming simply from giving the speech in such a difficult environment.
On the subject of the Federal budget, he made only three points, and they were all important and on target: 1) Balance the budget without raising taxes, 2) Cut the number and cost of earmarks and force any earmark to be exposed to "the light of day", and 3) reform our major entitlement programs.
Numbers 1 and 2 speak for themselves. As far as number 3 goes, I wish he had made it clear that he will not accept an increase in payroll taxes, and the he wanted personal accounts to be part of any solution.
Bush spoke about education and asked Congress to reauthorize No Child Left Behind. Education is clearly an area in which there is no Federal authority, and I believe NCLB is unconstitutional. However, to the degree that we are stuck with it, it was good to see him support "flexibility" for local leaders as well as the right of people to switch out of failing schools. It was great to see the Democrats sit stonefaced at a proposal that every American who is not a member of a Teachers' Union should support.
Next, the President discussed health care. He teased the Democrats by starting with this line: "A future of hope and opportunity requires that all our citizens have affordable and available health care." But then he made it clear that private health insurance is the answer for all but the elderly, the disabled, and poor children. (I might quibble with him about the elderly in particular, but I'm glad his list of whom the government should take care of was clearly limited.)
Bush's proposal to reform the tax code in order to level the playing field between employers and the self-employed with a personal income tax deduction for purchasing insurance is a great idea. Additionally, the idea of limiting the tax deduction is also very smart, as it will encourage people to buy much more expensive policies than they need. Indeed, one of the major drivers of excess health insurance cost (probably even more than illegals using emergency rooms and other hospital facilities) are laws that force insurance policies to cover many things which insurance buyers would rather not have covered and not pay for such coverage.
The Democrats' reaction to this proposal demonstrates what a good idea it is. Charlie Rangel said "This is a dangerous policy that ultimately shifts cost and risk from employers to employees and could result in a higher number of uninsured." The "could" part of his sentence is meaningless. It "could" just as easily result in a lower number of uninsured. Indeed it is likely to. But the first part of his statement is critical: it shifts the responsibility of paying for and understanding health insurance to the person who actually is being insured. The idea that employers are rightfully responsible for the health coverage of America is something which is all too easily and wrongly accepted. There is no reason, ethical or economic, that an employer should be responsible for his workers' health care. If there are economies of scale involved in group purchasing, that is one thing, but we must not simply accept people demanding that a personal responsibility as important as one's own health is somehow somebody else's problem.
Bush's statements about allowing Association Health Plans (a form of economies of scale) as well as increasing the use of Health Savings Accounts and passing medical liability reform were also all on target. Again, it was great to see the Democrats not clap when Bush talked about the liability reform. The trial lawyers are probably second only to the teachers in terms of their ability to pull the strings of their Democratic puppets.
The President touched on immigration but didn't say anything of real substance, and it was funny to see (at least on Fox News) Tom Tancredo subtly shaking his head as Bush got into this subject.
Bush next moved into a discussion of energy which I didn't love, as it moved too much away from his market-based approaches to most other things, instead embracing ethanol and alternative fuels which the market would already deliver if they were economically sensible. I support his goal of reducing gasoline consumption, but he didn't even give the smallest hint of how we would do it other than changing CAFE standards. I wish he had given one full sentence to nuclear power. In my view, that is the best source of energy for the future despite the time and cost of building new nuclear power plants.
Bush then spend the second half of the speech talking about the war on terror and Iraq. I won't spend a lot of time discussing it because he really didn't say anything new. He asked Congress and the American people to give his "new strategy" a chance to work. And I appreciated his line regarding when we got into Iraq that "whatever you voted for, you did not vote for failure."
Bush is absolutely right, and most Democrats simply don't get it, that the war against Islamic extremism (or is that an oxymoron?) is the defining struggle of our time and one we absolutely must not lose. The Democrats
not understanding that is at least as big a risk to our country as their economic idiocy, particularly since it's possible eventually to recover from bad economic policies but it's harder to recover from death.
Bush ended by mentioning a few examples of "courage and compassion" among American citizens, to end the evening on a feel-good note. But, as for me, I'd like to just focus on the last 6 words of the last paragraph, and think about that every time you hear the Democrats or almost-Democrats like Susan Collins talk about Iraq, Iran, or North Korea with suggestions like a big group hug and just getting along.
If there is one thing President Bush does and did explain better than any other politician, it is the true importance of the war we are in. I only hope the public realizes it before electing someone like John Edwards or Barack Obama or Hillary "what do the polls say I should belive" Clinton.
All in all, President Bush gave a mostly-fiscally-conservative speech and re-emphasized some truly important precepts, and with only two or three word fumbles and no misunderestimating his audience. B+
| Print article | This entry was posted by Rossputin on 01/24/07 at 02:04:42 am . Follow any responses to this post through RSS 2.0. |
Yours truly
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01/24/07 @ 05:05:05 am
Where to begin? Now that Bush has utterly bumbled the unnecessary war in Iraq he wants to get involved in other important facets of life for Americans. This president is like a dazed elephant in a china shop. I think it would behoove many Americans to label this a "lame duck president" and to limit the amount of damage he can do before we finally get another, more prudent and forthright president in 2008, whether Republican or Democrat (I truly don't care which). How poorly does a president have to perform, on a sustained basis, before one must concede that Bush is out of his depth as president?
Bush's comments relating to the federal deficit are interesting.
(1) He inherited a balanced budget and he went into deficit spending for his entire time as president thus far. Now he is suggesting that the budget should be balanced? Isn't this even slightly duplicitous? He cut federal revenue via tax cuts then promptly entered into a hugely costly war. Now, he wants to balance the budget. One way to help balance the budget is to get out of Iraq which, whether he likes it or not, is soon going to happen.
(2) I have no problem with dealing with earmark legislation. However, this should be dealt with in the Congress and not be a power given to any president. This issue is a fiscal issue and it should be outside the reach of a president, regardless of party. Giving this power to the president would be a huge transfer of power from Congress to the president.
(3) Reformation of entitlement programs is certainly something that should be reviewed for effectiveness and prudence in spending. I agree that taxes shouldn't be raised but I don't agree with creating personal accounts.
With respect to healthcare, I don't believe this president should enter this debate. I say this from the standpoint that he has lost valuable credibility throughout his term in office and this issue is too important to entrust to him. I believe it should be seriously looked at in the next presidential term.
I, too, think we need to do something about our energy dependence. As mentioned above, I don't think alternative fuels were stressed enough. We need to divert serious research money to this issue for the country's future wellbeing.
President Bush's tired line, "whatever you voted for, you did not vote for failure," neglects to mention that what was voted for was a conflict based on some certain assertions made by him. Needless to say, the underlying assertions for this was have continually "morphed" so it's difficult to be sure which excuse is the reason du jour. The American people were sold a bill of goods to attack Iraq, unilaterally. The reasons for war were distorted and the American people now recognize that. It is reflected increasingly in polls of late. The Iraq war has been a monumental and costly blunder.
Sure the outcome in Iraq is important but consider this. He misrepresented the facts about Iraq in the first place. The invasion of Iraq was the result of a unilateral decision made by Bush without regard for our international partners. The decider decided to go it alone. He listened to no one who was against the invasion. The end result is he destabilized the entire mideast...single handedly! Now he scurries about trying to build a consensous after the fact. After he denied that same consideration to others. The American people have been handed a true mess. For a leader who was so sure he knew best, it seems to me appropriate to say, "Bush approaches us with his hat in hand and his tail between his legs." He has lost control but then again he never really had control in the first place. It has just taken this long, through the hideous loss of American lives, to get to the tipping point with the American people. the American people and Congress finally realize that Bush is....how to be kind?....incompetent.
George Bush needs to go home and pull weeds at his ranch in Crawford and mull over what has happened and why. The last thing you want to do is to allow him to be involved in any serious legislation or governmental program that affects the American people. He really has lost his credibility. I give him a D-....enough already.
01/24/07 @ 07:42:43 am
There is no federal authority for tort reform and Bush should allow the states to do what they do best. In fact, most states have already reformed medical liability.
I am surprised to see you applaud such a thing.
01/24/07 @ 10:54:49 am
Whether we like it or not, some people are much better about saving than are others. Some people are much better at investing funds than are others. Hence, the reason that I oppose private investment accounts. My belief is that every citizen who reaches retirement age should have SOME guaranteed income. This income should not be dependent on their financial savvy. Even financially astute people lose money in the stock market.
President Bush has said that individuals will do better with personal investment accounts but, as is usual with President Bush, it is a distortion of the truth. The fact is the current social security arrangement offers far better retirement benefits for the elderly given their income levels throughout their working career than they could achieve by investing the same level of base funds they contributed to the retirement system. What President Bush is proposing is a cut to their potential retirement income. He just tries to explain it in as innocuous language as he can find. With his plan revisions President Bush is looking to screw the youngest citizens of our country by cutting entitlements levels. Young people think they will never die and think they will never become old. They are an audience that is too distracted to really listen to what Bush and company advocate when speaking about their retirements.
Should this issue be looked at? Yes, definitely. This is a very complex issue. I don't think private investment accounts, however, are the answer. We have to provide some minimum guaranteed level of support for retirees. I certainly wouldn't have President Bush anywhere near the table when those negotiations take place. He really hasn't earned the trust and confidence of the nation with regard to such an important benefit for citizens. Let a less distracted and more caring president take the issue on.
01/24/07 @ 11:02:01 am
Bob, you are frighteningly wrong for a guy who is usually somewhat sensible. I'll respond in more detail some day soon.
01/24/07 @ 11:25:23 am
Ross, I'll look forward to it. Just understand that what I am saying is that any society has to care about their elderly. Sure those people have a responsibility to help provide for their own retirement but you know that things do not always go as planned. Just as healthcare should be a benefit enjoyed by all to differing degrees. But, most importantly, at the bottom of that range we, as a nation, need to provide some safety net for our citizens. I believe that spending on our elderly citizens is much more beneficial to the country than blowing potentially a trillion dollars in Iraq. It boils down to spending the government's money judiciously.
01/24/07 @ 11:36:11 am
Hey Bob,
Society does not have to care about the elderly. Now I'm not saying we should abandon them, but we must not have policies in place which encourage people not to take care of themselves. Healthcare is something else entirely: We should almost never be responsible for providing health care for others unless they truly can not take care of themselves. It generates a massive (and massively expensive) free-rider problem as well as most of the other problems you see in our health care system now.
Health care vs. Iraq war money is not a choice. They are separate decisions.
It does not boil down to "the government's money" because the government doesn't have its own money. It has our money.
RGK
01/25/07 @ 04:18:52 am
Bob, every major initiative regarding personal savings accounts has made them optional. If you prefer SS the way it is now, you would not have to switch.
I don't appreciate the AARP, you, or anybody else telling me what's best for me to do with my own money for my own retirement.
Willing to provide minimal sustenance for the very poor. Not delighted to provide for wide-scale social security. Time to make SS a safety net, as you put it, rather than an entitlement for all.
Oh, by the way, I'm middle aged. My hair (what's left of it) is grey.
01/25/07 @ 05:05:17 am
Poor George! What's a president on the outs to do? On Tuesday night he addressed the nation and three groups listened to his version of the state of the union. Republican politicans, Democratic politicians and the American public listened to how our nation fared under his enlightened leadership and what new heights we could achieve under his benevolant guidance. Oh, the thrill of it!
Republican politicians stood and clapped in unison at the expected times. But what were they really thinking of their party leader? I would wager they were thinking that George was radioactive! He was on a roll in Iraq. Many of their political pals had been unceremoniously dumped in the 2006 elections because of Iraq and....Iraq, "The Issue of Our Time," just wouldn't go away! The nation is slowly but surely heading for the 2008 elections and George just won't let it go! Iraq, Iraq, Iraq...a political nightmare. So they continued to clap on cue, as expected, but many Republican politicians were clapping with teeth clenched tightly, especially those up for reelection.
Democratic politicians, on the other hand, did not stand and clap at the expected time. Although the national mood relative to "The Issue of Our Time" was somber at best, from a political standpoint they were actually....happy. Here was George, most importantly from the other party George, attempting to entice them to join the fun in Iraq, his most pressing indulgence at the moment. But Democrats were having none of it. It is just too enjoyable to see George and the aforementioned Republican politicians stew in their own juices. Democrats have ascended to majority status but make no mistake, they are not stupid. Why ever would they even remotely tie their raft to George who was, metaphorically speaking, thrashing about in the middle of the sea? No, Democratic politicians were content to watch with no intention of throwing George a lifeline. The Decider was on his own! They wanted no part of "The Issue of Our Time." George was not going to get them to assume any responsibility for his decision.
And then there was the American public at large. All those who George had often assured that he knew what was best for them in all matters of note. They watched George address the Congress and saw the Republicans clap appropriately and that was only right. But then they noticed, gee the Democrats aren't giving George the time of day! Then they thought, boy George really must have seriously pissed some people off. But generally they were pissed off too, as the polls were continuing to emphasize. The public has riden a roller coaster on "The Issue of Our Time" and they now wanted off that ride. They were perplexed, why exactly did we go there? Was Osama living there? No. Did they have WMD? That turned out to be wrong. To kill terrorists? No, there weren't any terrorists in Saddam's backyard. George always had a different reason so it's kind of tough to quite nail him down on that. But basically, theyed want out. We're over it, they thought.
But there was one common thought among the Republican politicians, the Democratic politicians and the American public. The only one who doesn't get it is poor old George. You see, George is no longer relevant. He will sit as president until 2008 and then Republican politicians, Democratic politicians and the American public will breathe a huge sigh of relief. Boy, are we glad he's going home to Crawford. The only people who have to worry about George will be the folks at SMU, where things are heating up at the thought of George building his presidential library there. It will be the first concrete step to getting George and his "Issue of Our Time," hopefully off center stage. And then perhaps Republican politicians can have a serious shot at the White House again. But, of course, that's true as long as the Democrats are prone to not bringing up George's "Issue of Our Time." But after many long years of brutal Republican Congressional leadership, what are the chances of that?
01/25/07 @ 05:53:22 am
Bob,
While I mostly agree with you that Bush is less and less relevant every day, I think you're wrong about the clapping/not clapping thing, particularly when it came to the first half of the speech, before he started talking about Iraq.
It was notable to see them Dems not clap for not raising taxes, and for giving kids the chance to move out of failing schools for example. It showed their true economic colors (as if we didn't already know them).
Ross
01/25/07 @ 08:18:54 am
Hello Freak,
I appreciate you comments concerning personal savings accounts.
It has been my experience that when the government offers something as an option to a program it is like the army establishing a beach head at Normandy. It is the first step in ultimately changing a system altogether. First the choice is made optional and then it begins to overtake other options until the first introduced option is the only option.
I fully agree with you that a person's retirement is a very personal thing. But, trust me, once you acquiesce to let them (politicians) make one change to the social security program more changes will follow over time. Eventually, the social security program will have been completely altered.
Perhaps we disagree about what social security should be for the general public. I happen to like the system as it is more or less. Without question, many people do not prepare properly for their retirement. They spend every cent they get as soon as they get that cent. However, it is very difficult for a family of five (I took this as an average family size, I think the actual number is 2.5 kids/family) to save an adequate sized nest egg to retire on exclusively especially after they pay to raise their family. Remember, pensions from companies are virtually a thing of the past. When a couple reaches age 65 they need to have a good chunk of change saved in order to provide for their living expenses. Assuming they live another 15-20 years, this could be a big number. Therefore, I believe the government should be there with social security as it always has been.
I don't know how old you are, I'm in my late 50's. But I am going to depend to some degree on social security for my retirement. I have saved in an IRA for over 25 years and have done well but still if I only had that available for retirement my standard of living would be adversely affected.
I don't want to sound militant, and please don't take it that way (I don't want to make enemies, just engage in a thoughtful discussion) but some people take a stand about an issue but don't actually choose to live by their convictions in actuality. An example might be someone with a religious belief that bars the use of a blood transfusion regardless of reason. If a situation arose where their only hope of survival was to have a blood transfusion would they stand by their religious convictions and die or would their position collapse and opt for life? (By the way, I am aware of this situation having happened. The wife found herself in such a situation but the husband stuck by his religious conviction. Needless to say, the wife did die. Hope this isn't too dramatic an example but it serves the purpose.) So my question to you is, would you be willing to forgo your social security payments that are due you to affirm your position that it shouldn't be available to others generally? My guess is that you will take what is available to you based on your contributions because everyone else will take them. I know that I certainly plan to.
I know that some people have a belief that government should be out of social responsibilities altogether. No unemployment benefits, no free healthcare, no retirement benefits, no nothing. Is that where we really want our government to go?
01/30/07 @ 11:25:41 am
Hi Bob.
First, let me state that I don’t take personal offence at what people write unless they make personal attacks. Opinions are just that and we can disagree and remain virtual friends.
Let me begin by answering your last question: yes, I do wish all the programs you list would, by and large, disappear. I am very keen that government provide a minimal safety net, but it should be just that – minimal and restricted to those who truly need it. There are many, many reasons for this wish. I will try to list several of them (the list, whilst not exhaustive, may provide useful).
First, any government program requires funding. Funding requires taking the fruits of production of some and redistributing them to others. Since taxation is not optional, it is – in a very real way – a forceful taking by the majority. Since force and tyrannies of the majority are dangerous (some might find them to be abuses of power or even infringement of human rights) they must be kept to a minimum.
Second, government social programs change behaviour. This can be as benign as shifting investment choices towards less efficient vehicles (for instance, I invest much of my children’s college savings plans in a state sponsored 529 plan because it makes the contributions deductible from state taxes – even though the yield is somewhat worse than comparable plans). At the other end of the spectrum, people’s decision to have children (or not) may be linked to what benefits are available. At the far, far end of the spectrum, people might end up working against those very people they mean to save (like the physicians who refused to resuscitate my grandfather because he failed to meet government “viability” criteria – in a country with a glorious universal health plan; more on that later).
Third, government social programs rob people of accountability to themselves. I am an estate planning attorney and I am continually shocked by the number of people who consider reliance on social security a retirement strategy; you are right, people spend their money the moment they get it – but I think you may be missing (at least part of) the causal nexus.
Fourth, government social programs rob individuals of social conscience and altruism. The perception builds that taking care of one’s neighbour is the government’s job. This has devastating consequences for the social fabric of society. I give you the charitable giving rates for most European countries, compared to the US. Even within the US, fiscal conservatives give more to charity than liberals (if you don’t believe me, I’ll need 3 months to get to my US house where I have the source of that statistic – I’m currently living in the UK).
As an aside, I consider it a personal responsibility to take care of my neighbour and give about 10% of my yearly income to various charitable causes. Paying a total of about 50% of my income to the government (federal, state, local, excise, and sales taxes) makes this pretty painful (I also have 5 children I support, one of whom is attending a private university). Am I the only one whose charitable gifts would increase if the forced ones (for charities I would never support if I had the choice, like most HUD programs) decreased dramatically? I doubt it.
Fifth, government programs don’t work well, particularly as it pertains to social security and universal health. This is an area I want to expand quite a bit, since I have significant experience across many different countries (note: advocates of these programs consistently acknowledge failures, but they seem to think that “this time, it will be different – we can learn from the scores of failures before us”; this, I think, is sheer madness).
Let me give you some personal background. I immigrated to the United States from Italy when I was 12 years old and spoke not a word of English (in fact, Ross was one of the first folks who befriended me at a time I still had a strong accent). I studied in the US, went to college and law school in the US. However my professional career allowed me to experience living and working in a number of countries besides the US, to wit: United Kingdom, Switzerland, Italy, Greece, and Mexico (amazingly, Ross has visited me in most of those places).
Most of these countries have very broad infrastructure for public provision of retirement and health care. In each case, they are utter failures. I won’t bore you with outcome statistics for public health care along objective measures (and since you read Ross’ blog you’re smart enough to look them up yourself). You could, if you were inclined, learn that 53% of UK public hospitals are infected with MRSA, that Italy and Greece have a circa 20% iatrogenic disease and illness rate, that all countries have tremendous waiting lists throughout, and that all health care takes longer to obtain at the public hospitals (and these, by the way, sap the productive power of the countries – time is money) etc. So I won’t mention any of these and let you look them up yourself.
I will, however, attempt to put a human face on the consequences by relating real anecdotes I’ve had to face during my life. Like the fact that I visited one of my employees in Greece, a young man of 23. He was in a public hospital following a car crash waiting for his right leg to be amputated because the hospital lacked the vascular surgery facilities to save it; he was lucky that I was able to work within our company to find him a private facility and his leg was saved.
Or my grandfather in Rome (see story above) who was old and not considered “viable” by the public hospital that treated him for pneumothorax. So when he went into cardiac arrest, the doctors (not his desire) declined to resuscitate him.
Or my grandmother who was crippled at the age of 68 because she broke her hip in Rome, but since the public hospital had no operating rooms available she sat waiting for 2 days until bone marrow fragments caused embolisms. She’s 97 now, but she never walked independently again.
Or a friend of mine who lost his leg (no joke) because he had a compound fracture on August 14th (huge holiday throughout Europe) and all the public physicians were on vacation and nobody could bother to deal with the fact that his femoral blood flow had been interrupted until two days later.
The beat goes on. Talk to any individual European and, if they feel comfortable, they will share similar stories with you.
Fortunately, in some of these places, private care is springing up, of very high quality, and very expensive. So my mother was able to have private surgery for a lung tumor rather than wait several months in the public facility in Rome – the family pitched in and we paid for it. Where that’s not readily available or too expensive, offshore treatment is an option. Lots of Englishmen are able to travel to private facilities in a number of countries to obtain the treatment the NHS won’t pay for (if you fly Ryanair sometime, look at the in-flight magazine for the score ads for “offshore clinics, avoid the waiting lists!”
This, of course, is all ridiculous. I’m all for health coverage for the poor, those who truly need it. But please, please, please spare me from having to sign up for universal coverage for all. I pay for private insurance that will airship me to the US on a dime….and I value it dearly.
Social security in these countries is similarly flawed – more than in the US (not surprising, since it started with a more generous presumption). I won’t go into detail, but stupid fiscal policies coupled universal coverage, coupled with stupid population policies, led to an upside down demographic pyramid in most of Europe that inexorably leads to diminishing benefits offset by increasing burdens on the working. Great – let’s get some more of that!
By the way you also asked me whether I would take my social security benefits. Well, of course I would. I’ve been robbed blind for some 25 years (I’m in my mid forties) on the promise that I’d get some of it back, so I’ll take whatever I can. I doubt I’ll break even. Let me do some math….
Each year I’ve worked I’ve put away the maximum I’ve been allowed in my employer’s 401K plans (or IRAs before then). This works to about the same amount that social security costs (about 15% on the first $60K-$80K – don’t forget to factor in the employer portion of the tax. My 401K is worth about $500K. I figure I’ll work another 20-25 years, so I figure I’ll have $1M in my 401K in today dollars. If I’d had that same money that I paid to social security, I would another $1M in today dollars (give or take). If I lived 25 years post retirement (unlikely) social security would have to pay me $40K per year for me to break even.
So, you see, I would love the option of taking the money and minding it myself. I would also love to see the whole program go away and be replaced by a straight forward, much smaller, and much cheaper program for the very poor.
Cheers.