Undoing Obama

On January 20, President-elect Donald Trump will be sworn into office and he promises to hit the ground running with a flurry of actions that will undo regulations enacted by President Barack Obama.  "Regulations are coming off," he said to the crowd gathered at his New Year's Eve party at Mar-a-Lago, his Florida retreat.  Republican lawmakers, who will soon control both houses of Congress, have made undoing Obama's legacy their top priority.  

Of course, the Affordable Care Act, or Obamacare, is the prime Republican target for repeal.  They have described the law as a disaster, and have charged it has increased health care costs for many individuals and small businesses.  In truth, the ACA track record is more mixed.  Nonetheless, Senate Majority Leader Mitch McConnell said that repeal would not mean that those receiving health care through the law will lose coverage.   "This has to be done carefully," he said, "It has to be done in a phased-in way over a period of time."  However, it is unclear how Republicans plan to replace the ACA.  

Obamacare has remained unpopular with the American public despite all of the benefits it provides.  About 20 million Americans have health insurance through Obamacare exchanges or Medicaid expansion. Senior citizens pay less for Medicare coverage and prescription drugs under the law.  The non-partisan Congressional Budget Office estimates that repeal of Obamacare would increase Medicare spending by $802 billion over 10 years.  Obamacare totally eliminates the donut hole in Medicare prescription drug coverage by 2020.  All of these costs will be passed on to beneficiaries. Repeal may also mean that children up to 26 would no longer be automatically covered by their family policy, and those with pre-existing health conditions can again be denied health insurance coverage.

Democratic Minority Leader Nancy Pelosi said on Twitter Monday, "The GOP wants to dismantle ACA & consequently increase costs.  It's wrong.  It will have an major impact on hardworking families & raise taxes."   She also warned that Republicans want to "dismantle Social Security, Medicare & Medicaid."   Many Republicans are for making changes in all of these programs in order to rein in government costs.  

President-elect Trump and Republicans also want to undo the many regulations President Obama has enacted.   They have their eyes set on the Dodd-Frank financial reform law, which includes the "Volcker Rule" that restricts banks from trading for profits.  Dodd-Frank, which was enacted following the 2008 financial crisis, calls for a series of reforms meant to decrease risk in the financial system.   A Trump administration is likely to slow these regulations and rewrite the law.  

Trump will also go after several environmental regulations.  The Environmental Protection Agency's Clean Power Plan is likely to be repealed.  It calls for a 32 per cent cut in the power sector's carbon emissions by 2030.  The EPA and Army Corps of Engineer's Clean Water Rule is likely to be scrapped.  It makes small waterways, like wetlands and ponds, subject to federal rules much to the ire of many businesses.   The EPA's rule to limit ground-level Ozone, which is largely the byproduct of fossil fuels, is likely not to be strictly enforced under a Trump administration.  And Trump wants to eliminate rules that make hydraulic fracturing more difficult.  

These measures enacted by Obama were all an effort to protect Americans and make the environment safer.  But Trump is a world class self-promoter and businessman whose priority it is to undo Obama's regulations and legacy.  This, he says, will create new jobs and strengthen the economy.  However, many economists say ending regulations has not historically led to a large increase in jobs.  But it sure may help short-term profits for corporations.

This is how Trump will make America great again! 

Global Dimming

The United States is running up record deficits and the world environment is in great peril. This is what my twelve year old daughter will face as an adult, long after I am gone from this earth.

On Wednesday it was announced that the United States budget deficit for fiscal year 2009 is projected at nearly $1.2 trillion; that is t-r-i-l-l-i-o-n. This is almost three times the previous record, also held by President George W. Bush. When President Bush took office the total U.S. debt was about $5.7 trillion. Just eight years later it is now about $10.6 trillion, due to increased government spending (including two wars), tax cuts and the recession.

If you remember, President Bush pledged to balance the budget by 2012. Now, if the Bush recession eases, economists are projecting a $775 billion budget deficit in fiscal 2010. And they don't project a balanced budget until 2019. That's another decade of deficits!

The sizable deficit means that the government has to borrow an enormous amount of money to keep the lights on. Of course, credit markets are such that it is harder and more expensive for the government to raise money. In the past foreign governments and wealthy investors filled the gap, but the worldwide economic collapse is now a major impediment. And the more money we borrow, and the more the deficit grows, the larger the burden for my daughter and her children. Today her share of the deficit is about $35,000!

So, as hard as it is to swallow, Congress has no choice but to pass a stimulus plan to end the recession. The cost will be added to the already approved government bailouts that targeted certain key financial institutions and industries. It is encouraging that President-elect Barack Obama has appointed a "chief performance officer" to look for savings and budget cuts. Nancy Killefer is an experienced hand from the highly regarded corporate consulting firm McKinsey & Company, where they know how to streamline companies and cut waste and fat. Nonetheless, Americans will face a severe challenge for decades to come.

While the world is roiling in the midst of a financial crisis, I recently saw some news that only compounds global problems exponentially. In an outstanding documentary, PBS's science series, called Nova, provided insight into a phenomenon called "global dimming" and its affects on global warming. Global dimming occurs when the sun's energy is partially blocked largely by man-made particulates and then reflected back into space. This reduces water evaporation, alters weather patterns and lowers the earth's surface temperature. Global dimming has accelerated over the past three decades, and now leading developed countries have taken measures to reduce particulate so this growth trend is flattening out.

Meanwhile, most scientists agree that so-called greenhouse gases are causing the earth's temperature to dramatically rise. Greenland's glaciers are melting and the seas are rising. By combining the affects of global warming and global dimming scientists have come to an alarming conclusion. It appears that global dimming has been "masking" the global warming problem, that the earth's surface temperature would be much higher were it not for global dimming. And the more we solve the first problem, the more we may contribute to the other unless both are dealt with equally and urgently. If nothing is done to save the climate, some scientists warn that much of life will be destroyed and the earth will be a very different place by the time my daughter reaches my age.

Up to now long term well-being has taken a back seat to short term gains when it comes to the economy and the environment. Man has played a Ponzi scheme with our children's lives. We are borrowing against their future and quickly destroying their world. Instead of wondering how they will deal with all these problems, today we should be acting with great urgency and courage to assure their survival and happiness. Indeed, this is the time, this is the moment Mr. Obama.