Stephen’s Posterous

Democratic enthusiasm for President Barack Obama's domestic agenda could wane after the results of the gubernatorial elections on November 3, 2009, in Virginia and New Jersey, according to Karl Rove, the former senior adviser and deputy chief of staff to President George W. Bush.

Republican victories in either state will tell Democrats in red states and red districts that support for Obama's policies is risky to their political health.

The more significant is the open race for governor in Virginia.

The Washington Post poll released on October 26, 2009, showed 55% support for Republican Attorney General Bob McDonnell and 44% for Democratic State Senator Creigh Deeds.

Reaction against Mr. Obama and his policies plays a smaller role in the New Jersey governor's race where voters are concerned with whether they should keep incumbent Democrat Jon Corzine.

Neither major party candidate in New Jersey has offered a compelling or comprehensive agenda. At times the independent candidate, Chris Daggett, has appeared the only contender with an agenda to rein in property taxes.

Two other elections on the November 3rd ballot have national implications: the New York Congressional District 23 special election and the Pennsylvania Supreme Court race.

The special election in New York's nominally Republican district 23 was brought about when the White House lured an otherwise unbeatable GOP Congressman, John McHugh, into giving up his seat to become Secretary of the Army.

The contest shows the danger of smoke-filled backrooms in the age of tea parties and town-hall angst. New York law says each party's 11 county chairmen in the district pick their candidate. The local GOP chieftains settled on Dede Scozzafava, a five-term liberal Republican state assemblywoman.

This led one of the disappointed nomination seekers, accountant Doug Hoffman, to mount a red meat campaign for the seat on the Conservative Party line.

With the GOP vote split, the lackluster Democrat standard-bearer, Bill Owens, is likely to win. If that happens, the combined vote of Ms. Scozzafava and Mr. Hoffman will signal what a GOP candidate chosen in a primary could get in the 2010 general election.

Finally, the Republican-endorsed candidate for Pennsylvania's Supreme Court, Judge Joan Orie Melvin, is mounting a strong effort against Democrat Jack Panella. A GOP victory would indicate trouble for Democrats in a state Mr. Obama carried by 10 points.

A year ago, Democrats crowed that Mr. Obama had reshaped the political landscape to their advantage. Voters have lived under Democratic rule for nine months, and many of them, especially independents, don't like what they're seeing.

The November 3, 2009, election will provide the most tangible evidence so far of how strong a backlash is building and just how frightened centrist Democrats should be of 2010.

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Gen. Stanley McChrystal, U.S. top commander in Afghanistan, told CBS's 60 Minutes that he has spoken with President Barack Obama only once since June 2009.

President Barack Obama idea of going on five Sunday morning talk shows was a classic mistake according to Karl Rove, former senior adviser and deputy chief of staff to President George W. Bush.

A politician should not jump in front of a bunch of cameras without having something fresh to offer. Instead of showcasing Mr. Obama's passion, intelligence, and persuasive abilities, it put him on the defensive.

Mr. Rove says that health insurers have a 3.3% profit margin, which is less than the 4.6% average profit margin for all businesses in the U.S.

Drug companies enjoy an average of a 17% profit margin, but software companies average a 22% profit margin. With drug companies paying for ads favoring ObamaCare, it would be ironic if drug companies succeed at increasing their own taxes.

Mr. Rove says that Mr. Obama could look at other options like allowing Americans to buy insurance across state lines, permit small businesses to pool risk to get the same discounts large employers receive, and focus on medical liability reform.

According to recent polls, Americans do not like ObamaCare. Mr. Obama's continuous talking about his plan is making him look boring and stale. This makes him less interesting, according to Mr. Rove

Mr. Obama does not need more television air time. He needs a new health care plan that comes from true bipartisan negotiation and compromise.

Mr. Obama is certainly capable of flooding the airwaves with his eloquence of words, but what he really needs is a message that wins the attention and support of Americans.

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Karl Rove, the former senior adviser and deputy chief of staff to President George W. Bush, writes in his weekly column in The Wall Street Journal that President Obama is now using fear to sell his health care plan.

On the campaign trail last year, Barack Obama promised to end the politics of fear and cynicism, but now he is now trying to sell his health-care proposals on fear.

At his news conference the week of July 20, Mr. Obama said "Reform is about every American who has ever feared that they may lose their coverage, or lose their job...If we do not reform health care, your premiums and out-of-pocket costs will continue to skyrocket. If we do not act, 14,000 Americans will continue to lose their health insurance every single day. These are the consequences of inaction."

Responding to a White House proposal to create an independent panel to recommend Medicare cuts, the Congressional Budget Office (CBO) said on July 25, 2009, that the probability is high that no savings would be realized in the next decade, while entitlement spending would rise $1.042 trillion. The CBO did say there might be $2 billion in savings in the second decade of the program.

White House Budget Director Peter Orszag reponded to the CBO with a blog posting on the White House’s Web site saying that the point of the proposal was never to generate savings over the next decade. But yet, the White House rolled out the proposal hoping to give cover to Blue Dog Democrats in Congress complaining about the cost of overhauling health care.

Mr. Rove says that the House version of ObamaCare adds to the deficit even though the new taxes to pay for part of it begin two years before the program itself kicks in. That head start puts ObamaCare in the black through 2013, but net new spending after that overwhelms future revenue to add to the deficit each year.

Keith Hennessey, who was a National Economic Council director for George W. Bush, estimates the annual deficits in Mr. Obama’s plan will grow to $64 billion a year by 2019. This assumes that Mr. Obama gets all the tax increases and Medicare cuts he wants.

On July 26, 2009, the CBO reported it would "probably generate substantial increases in federal budget deficits during the decade beyond the current 10-year budget window." The CBO does not believe that Mr. Obama’s proposal bends health-care spending down, as the president has repeatedly claimed it would. The CBO says it escalates above today’s rate.

By 2029, Mr. Hennessey estimates that new taxes will bring in $143 billion a year, while net new health spending will have increased by $348 billion a year.

Mr. Rove says that nine out of 10 Americans would likely get worse health care if ObamaCare goes through. Of those who do not have insurance, approximately one-fifth are illegal aliens, nearly three-fifths make $50,000 or more a year and can afford insurance, and just under a third are probably eligible for Medicaid or other government programs already.

Mr. Rove says that for the slice of the uninsured that is left, about 2% of all American citizens, Team Obama would dismantle the world’s greatest health-care system. That’s a losing proposition, which is why Mr. Obama is increasingly resorting to fear and misleading claims. It’s all the candidate of hope has left.

According to a new Wall Street Journal/NBC News poll, support for President Barack Obama's health-care effort has declined over the past five weeks, particularly among those who already have insurance.

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Karl Rove, a former senior adviser and deputy chief of staff to President George W. Bush, writes in his weekly editorial article in The Wall Street Journal that the polls are turning against President Barack Obama’s health-care plan as well as his political agenda.

Mr. Rove extracts some statistics that shows that those who strongly disapprove of the president’s approach on health care now outnumber those who strongly approve by 33% to 25%. And 49% of independents disapprove of the president’s approach, up from 30% in April 2009.

Those who strongly disapprove now outnumber those who strongly approve of his handling of the economy by 35% to 29%, and of deficits, 38% to 19%, and of unemployment, 31% to 26%.

The Gallup showed Mr. Obama’s personal approval was 55%, down from more than 60% a few weeks ago and lower than the 56% George W. Bush had at this point in his first term. Mr. Rove says that the polls are crumbling because of a flood of bad news about Mr. Obama’s health-care proposals.

A July 17, 2009, study by the Lewin Group projects that if the House bill becomes law, 83.4 million people will lose private insurance as employers drop their plans.

Democratic governors from Colorado, Tennessee, New Mexico and Washington joined GOP colleagues at the National Governors Association summer meeting to challenge the Obama administration on plans to shift millions of families into Medicaid.

Congressional Budget Office (CBO) Director Douglas Elmendorf said in a July 17, 2009, letter that the House’s health-care bill would result in a “net increase in the federal budget deficit of $239 billion” over 10 years. Mr. Rove says that this is a low-ball estimate because it assumes that Congress will increase taxes by $583 billion over the next decade.

Ways and Means Committee Chairman Charlie Rangel says he’ll pay for the Obama health proposal by raising taxes on Americans making $280,000 a year or $350,000 for couples.

Mr. Rove ends by writing:

Democratic leaders, including the president, are now backing away from a vote on health care before August. But that’s not likely to decrease voter angst. Americans for Prosperity and others are already organizing voters to attend public meetings with members of Congress this summer. My guess is that members of Congress are about to hear a lot from their voters on the government takeover of health care, new energy taxes, the failed stimulus, record deficits, and growing joblessness.

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Karl Rove, the former senior adviser and deputy chief of staff to President George W. Bush, writes in his weekly Wall Street Journal editorial that President Obama has not fulfilled his promises about the economic stimulus package.

Mr. Rove writes:

If you're Barack Obama, you redefine your goals and act as if America won't remember what you said originally. That's a neat trick if you can get away with it, but Mr. Obama won't. His words are a matter of public record and he will be held to them.

The effects of the stimulus package was supposed to be immediate, but the promised jobs and growth have not materialized. Mr. Rove writes that Mr. Obama is attempting to lower expectations retroactively by writing in an op-ed in Sunday's Washington Post that his stimulus "was, from the start, a two-year program." Mr. Rove writes that this is misleading.

Mr. Obama said that his goals of the stimulus package were to create or save 4 million jobs and his Council of Economic Advisors issued an official analysis showing that the unemployment rate would top out in the third quarter of 2009 at just over 8%.

Unemployment is now at 9.5%, up from 7.6% when Mr. Obama took office. There are 2.6 million fewer Americans working than there were on the day Mr. Obama was sworn in. Mr. Obama says now that unemployment will exceed 10% in 2009 and his advisers say it will remain high through much of  2010.

The stimulus money was supposed to be spent immediately, but only 7.7% of the stimulus has been spent in 6 months. More will be spent in the program's last eight years than its first year. Mr. Rove believes that Mr. Obama's stimulus bill will force a huge and perhaps permanent increase in discretionary, domestic spending by the U.S. government.

Mr. Rove ends by writing:

While in Moscow recently, Mr. Obama answered questions on whether his administration had misread the economy by saying "there's nothing that we would have done differently." Let me suggest two things: He could have proposed pro-growth policies rather than ones that retard economic recovery with a massive increase in deficit spending. And he could fulfill his promise to speak to us honestly rather than selling his proposals with promises and goals he rapidly discards.

In his 1946 essay "Politics and the English Language," George Orwell wrote about words used in a "consciously dishonest way." "That is," Orwell wrote, "the person who uses them has his own private definition, but allows his hearer to think he means something quite different." Americans are right to wonder if their president is using his own private definitions for the words he uses to sell his policies.

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Karl Rove, the former senior adviser and deputy chief of staff to President George W. Bush, wrote in his weekly commentary in The Wall Street Journal that President Obama can not be trusted with numbers.

In February 2009, President Barack Obama signed a $787 billion stimulus bill making big promises. Today, the unemployment rate today is 9.5%, nearly 20% higher than the Obama White House said it would be with the stimulus in place. There are 2.6 million fewer Americans working than Mr. Obama promised.

Mr. Rove says that the economy takes unexpected turns on every president, but what is amazing about this president is how quickly President Obama backs away from his promises. President Obama rushed the stimulus through Congress saying that the American people could not afford to wait. Now his administration is waiting to spend the money as only $56 billion has been paid of the $279 billion allocated to federal agencies.

President Obama outsourced writing the stimulus to House appropriators who stuffed it with every bad spending idea they weren't previously able to push through Congress. On Sunday, July 5, 2009, Vice President Biden backpedaled from his drop-kick comments and said that "no one anticipated, no one expected that the recovery package would in fact be in a position at this point of having to distribute the bulk of the money."

Mr. Rove says that this this fits a pattern. The Obama administration consistently pledges unrealistic results that it later distances itself from. It has gotten away with it because the media haven't asked many pointed questions. That may not last as the debate shifts to health care.

The Obama administration wants a government takeover of health care. To get it, it is promising to wring massive savings out of the health-care industry. It has already started to make cost-savings promises.

Mr. Rove writes:

For example, the administration strong-armed health-care providers into promising $2 trillion in health savings. It got pharmaceutical companies to promise to lower drug prices for seniors by $80 billion over 10 years. The administration also trotted out hospital executives to say that they would voluntarily save the government $150 billion over 10 years.

Mr. Rove calls this savings an aspirational goal. Mr. Rove continues:

None of this will stop the administration from arguing that its "savings" will pay for Mr. Obama's $1.5 trillion health-care plans. By the time the real price tag emerges, it will be too late to do much more than raise taxes and curtail spending on urgent priorities, such as the military.

Mr. Rove says that the stimulus package is a clear example of how President Obama operates. He is attempting to employ the same tactics of bait-and-switch when it comes to health care.

President Obama has already created a river of red ink. His health-care plans will only force that river over its banks. Mr. Rove continues by saying that President Obama's promised savings are a mirage. His proposals to reshape the economy are alarming. And his unwillingness to be forthright with his numbers reveals that he knows his plans would terrify many Americans.

Mr. Rove is the former senior adviser and deputy chief of staff to President George W. Bush.

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Karl Rove, former senior adviser and deputy chief of staff to President George W. Bush, writes in his weekly Wall Street Journal editorial that President Barack Obama's political health is deteriorating, threatened by his ambitious plan for a government takeover of health care.

Mr. Rove writes that Mr. Obama remains slightly more popular than most presidents have been in their opening months, although his job approval rating has drifted down to 60% in the RealClearPolitics.com average and his disapproval numbers have nearly doubled to 33%.

Mr. Rove says that what is more troubling is the growing gap between the President's approval rating and declining support for major items on his policy agenda.

Mr. Rove says Americans prefer getting their health coverage through private insurance rather than the federal government, and Mr. Obama's record-setting spending binge has made Americans more sensitive to deficits and higher taxes.

Mr. Obama's argument that a government-run health-care plan can control costs better than a market-based system is a mistake. This argument is belied by Medicare's experience. A study published by the Pacific Research Institute finds that since 1970 Medicare's costs have risen 34% a year faster than the rest of health care.

Mr. Obama's trashing of American health care as a broken system that must be brought into the 21st century does not resonate with most Americans, according to data from polls that Mr. Rove provides in his editorial.

Mr. Rove says that everyone agrees that some reforms are needed. But he says that it is also vital to protect areas of excellence and innovation. Stanford University professor Scott Atlas points out that from 1998 to 2002 nearly twice as many new drugs were launched in the U.S. as in Europe.

In the end, Mr. Rove says that transforming health care into a government-run system would be difficult to do under any circumstances. Americans are still wary about big government.

Mr. Rove ends by writing:

Health-care reform was said to be "inevitable" a few months ago. Today, its prospects are less certain, even to Democrats. The issue may even turn out to be a millstone for the party.

Americans are increasingly concerned about the cost -- in money and personal freedom -- of Mr. Obama's nanny-state initiatives. To strengthen the emerging coalition of independents and Republicans, the GOP must fight Mr. Obama's agenda with reasoned arguments and attractive alternatives. Health care may actually be an issue that helps resurrect the GOP.

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Karl Rove, former Senior Advisor to President George W. Bush, writes that President Obama's decisions will eventually lead to higher inflation, higher interest rates, higher taxes, sluggish growth, and a jobless recovery.

The Labor Department is expected to report unemployment over 8 percent with 200,000 more jobs lost in May 2009. Congressional Budget Director Douglas W. Elmendorf predicts that unemployment will continue rising into the second half of next year and peak above 10%.

Mr. Rove says that President Obama describes job losses as job gains. The President does this by estimating how many jobs are saved because of his Stimulus Package. The Labor Department does not collect data on jobs saved. Mr. Rove calls this President Obama's, "Clairvoyant ability to estimate."

However, the former National Economic Council Director Keith Hennessey said on his blog that the stimulus will be ineffective because the additional economic growth it spurs will come six to nine months later than it could have. This is due to the fact that only $185 billion of the Stimulus Package will be spent this fiscal year.

Also, much of the Stimulus Package has been saved, not spent, since the national savings rate has risen from 0% to around 5%.

Mr. Rove says for the Stimulus Package to be more effective, it should have been front-loaded into this fiscal year. He thinks that President Obama's Team idea that each dollar spent for the Stimulus Package translates into a dollar-and-a-half in growth is fiction. The costs of stimulus reduces future growth.

Mr. Rove writes:

No country has ever spent itself to prosperity. The price of stimulus has to be paid sometime.

The real improvements in the economy are the result of the expanded money supply by the Fed and the U.S. Treasury helping the financial sector.

Mr. Rove believes that the Fed's actions are risky. Easy money and expansionary policies are not sustainable. Inflation may be just around the corner unless the government can collect the money back. He also belives that government will likely hamper private investment because the government will need a lot of capital to finance its debt.

Mr. Rove writes:

It is becoming clear that the economy is now the top issue. Mr. Obama's presidency may well rise or fall on it. The economy will be his responsibility long before next year's elections. Americans may give him a chance to turn things around, but voters can turn unforgiving very quickly if promised jobs don't materialize.

Mr. Rove says that Obama's honeymoon allowed him to push for the largest expansion of the government in U.S. History.

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