Barack Obama is accepting the Democratic nomination Thursday night with a lofty vision for the nation’s future that is far easier to articulate than to accomplish.
The next occupant of the White House will inherit a half-trillion-dollar budget deficit that will severely crimp any plans for spending on new programs, as well as the messy endgame of the war in Iraq and growing energy and health-care challenges. A look at Obama’s promises and the realities he would confront:
THE ECONOMY AND DEFICITS
The promise: Obama has pledged to attack the weak economy with another stimulus plan to follow the $168 billion package of tax rebates for individuals and tax breaks for businesses that Congress passed last February. Obama’s stimulus would include tax rebates, aid to state and local governments and increased spending for infrastructure projects. He would also increase spending in other areas such as alternative energy programs.
The problem: Obama’s spending plans and middle-class tax relief will collide with the hard reality of exploding budget deficits. The Congressional Budget Office projects this year’s deficit will hit $400 billion, driven higher by the weak economy and the stimulus program Congress has already passed. And the Bush administration is forecasting that next year’s imbalance will hit an all-time high of $482 billion. Deficits will remain high because of the costs of extending the Bush tax cuts and growing demands on big government benefit programs such as Social Security and Medicare as the baby boom generation retires.
The promise: Retain President Bush’s tax cuts for families making less than $250,000 a year and provide more relief to the squeezed middle class by creating new tax breaks for lower-income families; extend the current "patch" that keeps the Alternative Minimum Tax, designed to make sure the wealthy pay their fair share of taxes, from hitting more middle-class families; exempt seniors making less than $50,000 per year from paying income taxes, expand the tax credit for college and provide incentives to encourage savings, and help pay for child care and pay mortgage expenses.
The problem: Obama’s tax proposals come with a hefty price tag. The nonpartisan Tax Policy Center, a joint effort of the Urban Institute and the Brookings Institution, estimates that Obama’s tax proposals would reduce projected tax revenue by $2.95 trillion over the next decade, compared to an estimate of what would happen if Bush’s tax cuts were to expire as scheduled at the end of 2010. By comparison, the center estimates that the tax proposals of Obama’s rival, Republican Sen. John McCain, would cost an even larger $4.17 trillion in lost revenue because, unlike Obama, McCain would extend all of Bush’s tax cuts, including those benefiting higher-income taxpayers.
The promise: A short-term rebate of $1,000 per couple to help with rising energy costs; release of up to 70 million barrels of oil from the Strategic Petroleum Reserve, and investment of $15 billion a year over the next decade to encourage renewable energy, clean-coal technology and electric cars.
The problem: The next president will take the oath of office in January and confront an immediate crisis: The cost of heating homes is likely to be at record levels. Obama’s promised rebate relies on enactment of a windfall profits tax on big oil companies, which could take months and is by no means sure to get through Congress. The last time the nation had such a tax, from 1980 to 1988, U.S. reliance on foreign oil went up. His longer-term solution, encouraging alternative energy by creating a $150 billion clean energy fund, relies for financing on a program of selling pollution allowances to combat global warming that is even more uncertain. Under political pressure because of high gasoline prices, Obama has reversed course and said he would support limited lifting of a ban on offshore oil drilling — but that wouldn’t produce any oil for seven to 10 years.
The promise: Obama would increase the number of people with health insurance by having the government subsidize the cost of coverage for low- and middle-income families. To help pay for that expense, Obama would increase taxes for those families earning more than $250,000. He also would require employers not offering health coverage to pay a percentage of their payroll toward a national health plan. And he would mandate that children have health insurance, and expand who can participate in Medicaid and the State Children’s Health Insurance Program.
The problem: While the plan would help millions of people obtain health insurance, some health analysts say it falls short of universal coverage. The Tax Policy Center says the Obama plan would reduce the number of uninsured by 18 million in 2009, from the current figure of 45 million. That still would leave millions uninsured.
Obama’s plan would let people choose a public, Medicare-like plan or browse a shopping center of sorts for private insurance plans. The National Health Insurance Exchange would create rules and standards for participating private plans, and insurers would have to issue every applicant a policy regardless of pre-existing health conditions. Similar guarantees of coverage have been tried by a handful of states that let residents buy coverage directly from insurers, but it hasn’t always worked. Kentucky and South Dakota dropped their guaranteed-coverage mandates after insurers fled the market and premiums soared for younger, healthier individuals. It has worked better in Massachusetts, whose plan Obama’s resembles in many ways.
The promise: Obama says he would engage both allies and adversaries to repair the U.S. image abroad and regain leverage and leadership that he says Bush squandered. He says he will marshal international pressure against Iran, boost U.S. efforts against extremists along the Afghanistan-Pakistan border and get a faster and firmer start on Middle East peacemaking.
The problem: The United States has already reversed many policies other nations saw as isolationist or bullying — for example, by joining international diplomatic efforts with "axis of evil" nations Iran and North Korea. Obama would continue those efforts and others without any greater guarantee of success. Any U.S. administration wanting to step up activity in Pakistan will face strong resistance from Pakistani authorities and probably pay the price for violating its sovereignty by seeing cooperation cut back.
The promise: Pull all U.S. combat forces out of Iraq within 16 months, send more combat troops to Afghanistan and provide better care for wounded troops and veterans.
The problem: A troop pullout is feasible and conforms roughly to a withdrawal timetable advocated by the Iraqi government. But a 16-month timetable risks shifting responsibility to Iraq’s security forces before they are ready, and it gives the insurgents an explicit target date for waiting out the Americans.
Until forces are pulled from Iraq, there are none to bolster the force in Afghanistan. Balancing needs in those two countries will be an immediate challenge for the next president. There is a broad consensus on the need for more troops to combat an emboldened insurgency in Afghanistan and to train government troops there, but the trick is to accomplish that without giving up gains against the insurgency in Iraq and without robbing combat-weary soldiers and Marines of the rest periods they need.
Caring for veterans and the wounded entails enormous costs, and the scope of the health care requirements for returning troops is not yet fully known. The Pentagon got caught by suprise at the wave of health care demands — physical and mental — triggered by the Iraq war, mainly because it had not anticipated such a long and bloody conflict.
The promise: An $18 billion plan that would encourage, but not mandate, universal pre-kindergarten; teacher pay raises tied to, although not based solely on, test scores; an overhaul of President Bush’s No Child Left Behind law to better measure student progress, make room for non-core subjects like music and art and be less punitive toward failing schools, and a tax credit to pay up to $4,000 of college costs for students who perform 100 hours of community service a year. Obama would pay for his plan by ending corporate tax deductions for CEO pay and delaying NASA’s moon and Mars missions.
The problem: With the budget stretched thin, a huge infusion of cash for early childhood education or college costs seems unlikely. Federal spending on education has already been rising for more than a decade. Congress and the White House will be in no hurry to tackle No Child Left Behind, which was due for a rewrite in 2007; the economy, the war and health care are stickier and more pressing concerns. Moreover, when it is revisited, NCLB will have strong support from both parties on Capitol Hill; likewise, it has been embraced by civil rights groups and big-city leaders because of its goal to eliminate the disparity between the performance of white and minority students. Obama may have more success with his ideas for teacher pay and other issues of teacher quality; those issues have been attracting attention in Congress.
Associated Press writers Martin Crutsinger, Kevin Freking, Robert Burns, Matthew Lee and Libby Quaid contributed to this story.