First Conservative - Political Humor and Obamatudes

President Obama stepped into the world of automobile manufacturing yesterday by firing the CEO of General Motors and slapping an ultimatum on Chrysler Corp. to seek a merger with Italian automaker Fiat.  When asked what his credentials were to make such moves, Obama simply replied “we have to do something.”  Obama now has two central themes that run through all public appearances.  One, blame George W. Bush for all problems, and justify all decisions with the philosophy that “we have to do something.”

In taking action at General Motors though, Obama may have significantly overstepped both his expertise as well as his political will.  By stepping into this mess with taxpayer dollars, the President Himself is now the de-facto CEO of the company.  And the shareholders – read voters – will hold him accountable.  He will learn to hate being in this position.  The President’s background as a community organizer certainly positions him to understand the intricacies of automobile manufacturing. 

The interesting part of the GM saga will unfold in a couple months when a new restructuring plan will be revealed.  Prior to receiving additional public money, GM was required to produce a plan for its survival.  Obama judged the one already received to be insufficient, so he fired Wagoner and sent Interim CEO Fritz Henderson back to work on another plan.  That gives Team Obama more time to make recovery impossible.

Survival plans generally focus on producing products that the public wants more efficiently or at greater profitability per unit.   Apparently understanding consumer tastes and preferences better than GM staff, Team Obama immediately mandated that GM focus more manufacturing capacity on production of higher numbers of fuel efficient cars and fewer numbers of trucks.  As displayed in the Stimulus package, the Team also displayed financial management skill by making these mandates without regard to potential retooling or plant modification costs.  Also giving US consumers great cause for concern is the reasoning that trucks will be in relatively lower demand while gas-sipping, shoulder crunching small cars will be in greater demand should gasoline exceed $4.00 per gallon.  Obama certainly has plans to drive oil to this price level by strangling production, providing pretext to seize oil companies.

The interesting part of Obama’s GM recovery plan will occur at the point where the public as well as the administration realize that GM is a lost cause in current form.  Customers simply will not purchase small cars unless they absolutely have to.  And even then, they may prefer to hang on to their current vehicles.  This will leave Team Obama with a massive revenue shortage on top of taxpayer expenditures that were supposed to tide the company over until recovery. 

At this point, Obama can throw more taxpayer money into the organization to prop it up for another period of time.  He could lay off tens of thousands of UAW workers himself to cut necessary costs.  A third option would be to let the company go bankrupt and reorganize under Chapter 11.  In that instance though, he will be severely pressured to keep UAW contract agreements in place.  The President probably doesn’t have the backbone to lay off UAW workers himself.  He wouldn’t mind if someone else did it so he could lead the chorus of outrage, but he wouldn’t do it himself.  Since union agreements are a significant part of why GM has failed, Obama may have to revert to option 1 – throwing another huge taxpayer bailout before congress.  

Another bail out would occur well past Obama’s 100 day honeymoon period.  The public is already sick of expanding spending.  Opponents have already targeted key Democrats who will be looking for a way to tell constituents in their main-street districts why their government signed over a huge amount of their money to save the United Auto Workers from being laid off – after many constituents themselves have been put out of work.  It will be a tough sell.

President Obama seems adept at dodging responsibility for his actions.  His intervention in GM though, will be too high-profile to ignore.  Since the President can’t take meaningful action without upsetting taxpayers or key constituents like the UAW or other Michigan Democrat groups, he will have to figure out which course is the least damaging and which elements can be blamed on someone else.
Obama’s speechwriters will be significantly challenged to find a way to blame this on Bush.   At least that part might be entertaining.

A battle is brewing between House Speaker Nancy Pelosi and Sen. Max Baucus, Chairman of the Senate finance Committee over whether or not to use a procedural maneuver to limit debate on President Obama’s health care reform initiatives.  Pelosi is pushing for a tactic that allows the Senate to limit debate and move health care through the same legislative channel as budget action - requiring only a 50% majority for passage.  This would eliminate the possibility of Republican filibuster and guarantee passage. 

Health care legislation is so sweeping, that Baucus is rightfully concerned that lack of debate will mean that the Democrats are completely responsible for all associated political liabilities.  Health care legislation is so expensive, that Democrats alone will have to justify the costs to the country in the midst of a severe recession.  Not wanting his party to sail dangerous waters alone, Baucus is looking for Republican allies.  Pelosi on the other hand only answers to a handful of lunatic San Francisco voters and couldn’t care less about any political downside. 

One would hope that Baucus’ main reasons for opposing using finance rules to pass health care reform would be found in understanding that voters are entitled to be equally represented and those representatives are entitled to be heard.  Ramrodding something as major as health care reform through the Senate with limited debate and without bipartisan support is akin to passing a declaration of war without discussion.  Democrats have grown fearful that Republicans have just enough votes in the Senate to block major legislation through filibuster.  As Sens. Specter, Snowe and Collins faced the wrath of conservatives over their support of the Stimulus legislation, they are somewhat less available to again turn their coats and support another exceptionally expensive Democrat initiative.   This leaves very few opportunities for Democrats to achieve the magic number of 60 votes in the Senate required to cut off debate and move the health care measure to a vote.  And as the Obama Honeymoon is winding down Pelosi is watching the window of opportunity close for passing major legislation such as health care reform, so called ‘cap and trade’ energy policy, and union card check.

Utilizing a procedural move to forever change the US health care system would forever modify Senate rules and protocol.  Republicans would never forgive being completely cut out of the discussion and would have no problem overturning or overhauling Democrat measures using the same tactic should they ever regain the majority.  Use of this tactic would effectively make all future legislation budget and tax oriented and therefore not subject to the 60 vote rule.  Achieving a 60 vote threshold nearly always requires bipartisanship and cooperation.  This is the balance the Senate was looking for when the 60 vote rule was established.  Budget votes are not subject to the 60 vote rule as the Senate sought to avoid shutting the government down should one side use a filibuster to prevent passage of a given budget.  Pelosi now wants to exploit this loophole in the 60 vote rule to take over a huge part of the US economy.

The concept of violating established rules and procedures for one particular action (although it should be noted that Baucus is under similar pressure to include ‘cap and trade’ in the budget process) would defeat the fundamental relationship of taxation and representation.  One of the principle claims going back to establishment of the nation was that taxation was imposed without a process by which the people could voice objections and have a reasonable opportunity to defeat the proposed tax.  Should Democrats use a parliamentary move to take over a significant part of the economy without a reasonable opportunity to discuss and defeat it, voters will have a legitimate claim that they are being taxed for health care costs without their consent or the reasonable consent of their elected representatives.  For Democrats, this is a sure ticket out of power.

If Pelosi and Obama were so sure that the country supports health care reform, a full and open debate would not be anything they would object to.  If health care reform proposed by Pelosi is so good for the country, the 60 vote threshold will not be a problem to achieve.  Should Democrats do an end run around Senate rules, the country will vocally object and Republicans will have a head start on the 2010 and 2012 elections.