Behind Bill Clinton’s smile

Share via

You’ve got to give Barack Obama credit. His learning curve gets steeper and steeper, but he continues to climb.

“I’m going to let him speak very briefly,” Obama said Friday before making the fateful decision to allow a smiling Bill Clinton a none-too-brief moment in front of the cameras. He might as well have said, “I’m going to let this grizzly bear have just one lick of my ice cream cone.”

That Clinton is a camera hog, or that he puts the lie to Obama’s reputation as the most eloquent Democrat, are easy lessons to learn compared to accepting the need to embrace George W. Bush’s tax cuts and ask Clinton for help selling the decision.


You have to think Obama is wondering where he took a wrong turn.

The answer is easy: the stimulus. “I guess we’re not supposed to use that word anymore,” Clinton joked, highlighting the political radioactivity of the term.

But that’s not how it was when Obama took office with an approval rating near 70% (83% of Americans approved of his transition efforts). Contrary to the spin, many congressional Republicans were either eager to work with the new president or terrified of opposing him. They weren’t opposed to a stimulus bill either.

But the White House decided to sign on to the pork-heavy stimulus crafted by Nancy Pelosi and Harry Reid, without GOP input — “We won the election. We wrote the bill,” explained Pelosi — thus blowing up Obama’s still-plausible image as a bipartisan president and emboldening the Republicans to oppose the stimulus, which also left them free to run against the “Obama economy.”

The Republicans discovered that opposing Obama’s partisan agenda was good politics. During the healthcare debate, independents flocked to the GOP, delivering electoral victories throughout 2009, and delivering a House majority last month. That new reality is why we got the Clinton rerun Friday.

What if Obama had gone another way? What if he had rejected both the Democratic and the Republican stimulus bills and gone for a one-year payroll tax holiday of some kind, as many economists suggested at the time?

No bells, no whistles. No too-clever-by-half tax credits or subsidies. Just a straightforward suspension of some or all of the roughly $625 billion the government collects in payroll taxes. A 50% cut in the payroll tax, economist Lawrence B. Lindsey wrote in a Wall Street Journal column nearly two years ago, would have put $1,500 in the pocket of the typical worker making $50,000 a year. And it would have made hiring or keeping workers less expensive for employers.


After all, if you want more of something, tax it less. If you want less of something, tax it more.

Such a stimulus would have been very progressive because payroll taxes are decidedly regressive, hitting the working and middle class harder than they hit the wealthy. According to American Enterprise Institute economist John Makin, payroll taxes amount to the primary taxes paid by the 60% of Americans who pay comparatively little or nothing in federal income tax.

Ironically, this is exactly the argument the White House is making these days. As Clinton said Friday, “Every single unbiased economic study says the best thing you can do if you’re going to take a tax-cut path to grow the economy is to give payroll tax relief.”

Lord knows how much money — and time — was wasted on the original Obama stimulus. Shortly before the election, Obama himself admitted that he learned the hard way that there’s “no such thing” as a “shovel-ready job.” That’s an awfully expensive lesson.

I think the initial appeal of the stimulus for many liberals, Obama included, is that it dovetailed with progressive hubris and Democratic resentment, the two defining characteristics of the Democratic Party that nominated and elected Obama president. The experts, with Obama as first among equals, insisted that all of the answers were obvious for the smart set. Meanwhile, the partisans insisted they deserved unfettered rule after enduring the Bush captivity. Obama was elected by exploiting and exemplifying both sentiments. In his arrogance, he even disparaged the Clinton presidency as too mincing and modest. On Friday, Obama asked Clinton to save Obama’s. You could see it in Bill’s smile.