Monday, April 4, 2016

Will The Democrats Keep The White House?


Some of the American media currently suggests that Mrs Clinton and Senator Sanders may well fight in a contested Democratic Convention. I am no psephologist but I find it difficult to believe that Bernie will garner enough delegates and super-delegates to stop Hillary on the first ballot and prevent her from achieving what she has wanted for so long. Let us assume she wins the Democratic nomination. I have looked at some of the policies advocated by her, as well as where she stands politically.

Let’s start with campaign finance. Mrs Clinton wants to overturn the Citizens United ruling, as well as requiring corporations to disclose donations to Super PACS. There is no mention of placing such a requirement on trades unions. Assuming the Democrats could win control of both Houses of Congress in November, she might get the disclosure issue onto the statute books but to reverse Citizens United, which removes all political donation limits on individuals, corporations and unions, will take more than statute. Legislation will be challenged all the way to the Supreme Court, which will have to reverse its previous decision. This is possible but it will take a lot of time and a huge amount of politics. This is a process issue and I suspect it will be left on the back burner until her administration can see a “slam-dunk.”

On foreign policy, there will probably be a seamless continuation of most of the Obama administration policies. Hillary advocates strong US involvement to defeat ISIS but without the use of American ground troops. She says she would combat terrorism with improved intelligence instead of troops. For example, agencies will use the social media to identify terrorists. Visa applications would require full screenings for those who have travelled to terrorist countries and Operations officers and linguists would be added to U.S. intelligence agencies. I cannot say what discussions she has had with the Joint Chiefs but I would be interested to know whether they approve her stance. Those who know about these things don’t believe ISIS can be defeated by bombing alone. As for terrorism, let’s see what results from the recent conference, hosted by President Obama but I fear Mrs Clinton would have to take much stronger positions than presently advocated.

What of the American economy? Mrs Clinton’s plan focuses more on increasing middle-class incomes than helping the poor. The plan seems to have three distinct stages. First, boost growth. Tax cuts for middle income earners and small businesses, establish an infrastructure bank, and fund more scientific research. Help women enter the workforce by requiring corporations to pay for family leave. The College Affordability Plan would spend $35 billion a year to refinance student debt and pay states to guarantee tuition payments. The National Infrastructure Plan would allocate $27.5 billion annually to improve roads, bridges, public transit, rail, airports, the Internet, and water systems. The Expanded Childcare Plan and the Early Education Plan would spend $27.5 billion a year for states to make pre-school available to all 4-year-olds and expand Early Head Start. Expanded Funding for IDEA would spend $16.6 billion a year to identify and treat children with disabilities. The Energy Plan would pay $9 billion annually to repair oil pipelines, reduce carbon emissions, and fund health and retirements for coal workers.

Next, Mrs Clinton would create fair growth. She wants to raise the federal minimum wage to $15 an hour. She says she wants to protect Social Security but is vague on her plans to expand it. She advocates increases in workers' benefits, expansion of overtime, and will seek to encourage businesses to share profits with employees.

To pay for her initiatives, Mrs Clinton would impose a fair share 4% surcharge on incomes greater than $5 million a year, raising $15 billion a year and affecting 34,000 households. That is in addition to other tax increases that would raise $80 billion a year. However the spending plans amount to $120 billion a year. The gap is significant.

Hillary’s third limb is to support long-term growth by raising short-term capital gains taxes for those earning $400,000 or more a year. Investments held between one and two years would be taxed at the maximum income-tax rate of 39.6%.  Assets held for longer would be taxed on a sliding scale. She would also tax high-frequency traders. She would extend the statute of limitations for financial crimes, and require CEOs personally to pay part of any fines levied on their corporations.

Will a Clinton administration balance the books? My suspicion is that the Democrats will continue the spending deficit, relying on foreign countries and investors to buy American government bonds. I have found no plans from the Clinton campaign to address America’s debt problem. I cannot understand how the mammoth trillion dollar debt can be allowed to rise every year. President Obama inherited a severe banking and manufacturing crisis and after only two years in office faced a Congress so hostile that it would simply not do business with the White House. But the debt has been allowed to rise after several conflicts between the two branches. President Obama did nothing to resolve the problem. Mrs Clinton cannot expect to ignore the debt for another four or perhaps eight years. So, her economic plans may have to be changed. As her husband said famously in his first State of the Union address, “you play the cards you’re dealt.”

Whoever wins the Presidency in November will find a large docket of problems when he or she enters the Oval Office the following January and that’s without considering issues that may subsequently arise. People might argue that security is the biggest issue facing America and that the Taliban, ISIS and other terrorist groups have to be destroyed as a priority, or perhaps there may be more vacancies to fill on the Supreme Court. This would be a very big issue.

But for me, debt is the most pressing issue, not just for America but for the West. Here in the UK, our government practices austerity, a policy followed since 2010, but it will need huge strokes of good fortune to balance the books before 2020. Common sense tells me that nations cannot borrow indefinitely without paying a fierce price for doing so.

Who will contest the Presidency? It looks like Clinton v Trump. I did not think it was possible to unite the pro-life and pro-choice lobbies but last week, Mr. Trump performed this sleight of hand with his stance on abortion, which he has now changed three times. With the Republicans now in disarray and so disunited, it is tempting to assume the Democrats will have an easy ride into the Oval Office. But there are months to go and the saying, “a week is a long time in politics,” will no doubt prove relevant. For me the Presidency is a side-show. The battle for control of Congress has far more importance.


I hope that the next President decides to make reduction of debt a top priority. Will it be Hillary? She is now an experienced campaigner and she seems to be a capable administrator. But will she overcome the 40% problem? She cannot seem to galvanise more than 40% of any sector of American voters to her cause. The black vote, so supportive of Bill, seems to be turning its back on Hillary, as are many women under 40 years of age. Hillary is not liked by many voters and not trusted either. The FBI could put the election process into turmoil should a decision be made to prosecute Mrs Clinton for using a private e-mail server when Secretary of State. However, if she can overcome all these pitfalls, she will likely be the first President to have a First Man in the White House.

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