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John Wayne's Holster: Grading the President’s Speech
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Friday, April 29, 2005

Grading the President’s Speech

President Bush held a prime-time press conference last night - only the fourth one of his presidency - in which he laid out his ideas on two issues, Social Security and Energy. Read the TRANSCRIPT here.

Addressing Social Security, the President reiterated the message he had put forth on his 60-day road tour - that Social Security is heading towards bankruptcy and needs to be fixed. Although his road tour has not been successful in selling his privatization plan to the public, I think it has been successful to the extent that the public is convinced that Social Security needs to be fixed. Although the President spoke only in generalities he did offer a glimpse of the plan he was putting forward.

According to the Bush plan, the payout of benefits would be based on a sliding scale, wherein benefits would be progressively reduced for those in higher income brackets. In addition, the President stated that the system should be set up in such a way that “benefits for low-income workers will grow faster than benefits for people who are better off”. The President also continued to push his privatization plan saying that workers should have “the opportunity…of putting a portion of their payroll taxes into a voluntary personal retirement account”. He added that investing in treasury bonds should be included as an option for those who have reservations about the safety of investing in the market. Following the speech, Republican strategist Ken Mehlman challenged critics of the Presidents’s plan to stop playing politics and show up at the negotiating table with their own plans. This seems to me to be a reasonable request.

Personally, I am in favor of taking more control of my own money rather than have the government control it for me; however, I must say that I am not a big fan of the President’s plan. I feel it is too risky (see my previous post on this topic). However, to his credit, the President has put something on the table. Despite the shortcomings of his plan, it offers a starting point for negotiating a workable solution to the problems that lie ahead for Social Security. The President has stated multiple times that he is open to any options that do not include a tax increase.

Those opposed to the plan have been critical of what the President has put forward, but they have not offered any proposals of their own, and in some cases appeared to be obstructing the President’s attempts at negotiating a solution. For example, House minority leader Nancy Pelosi refused to allow other Democratics to attend a bipartisan meeting with the AARP to discuss possible reforms. Perhaps someone in her party should tell Ms. Pelosi to lead or get out of the way.

Addressing Energy policy, the President reminded us that our consumption has grown forty times faster than our production over the past 10 years. As such, we have become more reliant on foreign energy sources to satisfy our energy needs. To address this problem, the president suggested four key steps we need to take: conserve more energy, make to most of our existing energy resources, develop new sources of energy, and help growing energy consumers to become more efficient.

Personally, I think the President struck out here. Despite the lip-service he gave to developing new energy sources, he seemed to be focused on oil – how to get more of it both at home and abroad, and how to keep the oil price down. This is OK for today, but is short-sighted in the long run. This bypasses the very problem the President is attempted to address – our reliance on foreign energy. Negotiating with the oil shieks to step-up production and put more crude on the market may affect the prices we pay at the gas pump, but they do nothing to reduce our reliance on foreign energy.

In the Q&A following the speech, the President suggested that drilling in the Alaskan Nation Wild Refuge (ANWR) would help to reduce our reliance on foreign energy. Yes – but for how long? By all estimates that I have seen, there is really not much oil there to begin with. This is not a long-term solution. At best, it does very little to solve our energy problems and only serves to help the oil industry turn a quick buck. What about increasing the number of terminals that will allow us to import liquefied natural gas? While natural gas is more environmentally friendly than oil, and domestic energy resources such as the so-called “clean coal”, it does not address the problem of our reliance on foreign energy!

If the President is really concerned about decreasing our reliance on foreign energy, he has to get out of bed with the oil industry and get serious about developing alternative energy sources. The President briefly mentioned that we need an active nuclear energy policy. On this I agree with him. Rather than get into a lengthy discussion on the topic, I suggest that the interested reader check out an insightful article on nuclear energy penned by Nicholas Kristof, OpEd columnist for the NYTimes.

At the end of the day it comes down to this - China and India are on the rise, and are after the same energy resources we currently rely on. Those resources won’t last forever and are likely to become more expensive as the supplies dwindle and demand escalates. The US needs to develop new energy resources! We are more than capable of doing so, but are we willing? Do our leaders have their hands in the pockets of the oil industry? It seems so. If not, then why are we moving so slowly in developing new resources. Developing them will not happen overnight - it will take time. I am not sure what the President is waiting for.

1 Comments:

At 8:45 PM, Anonymous Todd B. said...

Once again, impressive and balanced analysis. Read my latest post Joe, for the well-deserved kudos.

 

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