By Dick Morris
To quote the esteemed Rev.
Jeremiah Wright the chickens that were hatched in the stimulus package are coming home to roost in the healthcare proposal. The budget deficit
Obama racked up paying for the massive federal spending passed in January is now having a real economic and political impact which is forcing the president and his congressional allies into hard choices as they face his healthcare legislation.
Of course the prudent thing to do is postpone healthcare changes until the economy generates some revenues and trims the deficit. But the socialist in the White House cant do that. Hes got to strike while his congressional majority is hot. So he is forcing his administration and his party to choose among unpalatable choices to finance his program. His demand may be a bridge too far endangering his popularity with the American people.
First of all the very fact of a focus on healthcare reform inevitably stirs discussion of the deficit. Americans are allergic to deficit spending and worry the more the deficit grows. As interest rates rise and the government finds it more and more difficult to borrow enough to cover Obamas massive spending the economy is likely to show the negative effects. It is a matter of a few months certainly no more before voters start to realize that it is the deficit not the pre-existing conditions Obama inherited which is causing the prolongation of the recession. Already the jump in mortgage rates has slowed the refinancing which was the only aspect of the Obama economic program that was working well.
But the foreign and domestic focus on the deficit has a harsher political impact: It forces the Democrats to come up with money to fund healthcare reform. In other words it makes them raise taxes. The Democratic Party is good at fooling itself that tax increases dont matter and are politically palatable but they do and they are not.
The massive spending healthcare will require dwarfs the capacity for the rich alone to pay the bill no matter how confiscatory Obama chooses to become. Only broader taxes will do the job. Obama faces two practical choices: a value added tax or taxing health insurance benefits.
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*This story is from www.TheHill.com
