Judd Gregg: "Elections Have Consequences".
Judd Gregg
'Elections Have Consequences'
Obama's would-be commerce secretary on the president's big-government agenda.
By BRIAN M. CARNEY
Sen. Judd Gregg is perhaps best known for something he didn't do. Two weeks into the Obama administration, he announced that he was leaving the Senate to become commerce secretary. Two weeks later, he withdrew his name, drawing a testy jab from the administration for denying it a bipartisan feather in its cap.
[The Weekend Interview] Zina Saunders
It's hard to reconcile the man who nearly boarded the Obama express with the tough-minded Republican senator who sat across from The Wall Street Journal's editorial board at our offices earlier this week. As for the lessons he learned from his dalliance with the administration, he reserves his criticism for himself: "I should have been smart enough to see the daylight before I walked in the door. . . . I don't think there's any big lesson here for anybody but myself, which is the obvious: It would have been impossible for me to be with the president 100% of the time, which is what a cabinet secretary has to be."
Just how obvious that should have been became clear in the course of our interview. Also obvious, Mr. Gregg said, was that the Obama administration is filled with "really capable, dedicated, smart, sharp people with an agenda that they intend to pursue aggressively."
The kind words mostly stop there. From health care to global warming, financial regulation, spending and tax policy, Mr. Gregg doesn't pull any punches in his criticism of the new president. He may be "a charismatic person" with "a very strong understanding of who he is and what he wants to do," but when it comes to the substance of what Mr. Obama seeks to accomplish, Mr. Gregg is less charitable. "They have a goal," the senator says, "and he's very open about it. They are going to grow this government."
Mr. Gregg believes the stakes are high. "This is the first time a budget's had real meaning in a long time," he says. In recent years, presidential budgets have been formulaic exercises. Even if Congress went on to adopt them, they would only serve, at best, as rough guidelines for the real work of crafting the appropriations bills that actually set discretionary funding levels. But this budget "is real, and he [Mr. Obama] intends to push it."
That's bad news, in Mr. Gregg's view, because "We're headed on an unsustainable path. The simple fact is these [budget] numbers don't work and the practical implications of them are staggering for the nation and the next generation."
His "main concern," he says, "is that if you look at the Obama budget, it projects on average about a $1 trillion deficit [every year] over the next 10 years." And as a result of all that spending, "You see the size of government growing from 21% [of gross domestic product] to 22%, to 23%, 24%, 25% . . . toward 30%."
Set against this spending growth, Mr. Gregg points out, "the revenue base is only so big. Granted, right now it's way down because of the economic situation. But even if you took it back to an economy that's performing extremely well, say [revenues of] even 19% [of GDP], you can't close that gap under the present projected situation. And so we're in trouble. And the policies of this administration are driving that to an even more acute situation." Spending and deficits are both heading skyward, and government debt held by the public is heading toward 80% of GDP.
For Mr. Gregg, this is like living a nightmare. He has been a hard-nosed advocate for government spending restraint since his days as a Congressman (1981-87) and governor of New Hampshire (1987-93). At times, his commitment to fiscal responsibility led him to oppose tax cuts when they weren't matched by spending restraint. Those stances incurred the ire of his Republican colleagues, but he always stuck to his fiscal-responsibility guns. Now he's staring down a spending explosion that makes those battles look picayune.
One of the big drivers of government spending in the Obama budget is universal health insurance. And on this point, Mr. Gregg says, "At least Obama was half-way honest about how much he was going to spend on health care. He had it at $600 billion. And the real number . . . is $1.2 trillion." But that's better than Senate Budget Chairman Kent Conrad. "What Conrad did was take the entire amount off-budget and not account for any of it." Mr. Obama's budget, therefore, "was honest to a higher degree. It held itself to a higher degree of integrity than the Senate budget or the House budget."
Well, except for one point: "the huge savings that they claimed on defense spending, which was a total fraud." Mr. Gregg refers to the fact that the administration's budget builds the full cost of the surge in Iraq into the budget baseline. Under that assumption, we would continue to appropriate money for the surge every year for the next 10 years. That allows the administration to "find" $1.6 trillion in savings, "all of which is spending we would never do," according to Mr. Gregg.
Health-care reform is not just about the price tag. How it gets done matters too. And in Mr. Gregg's view, the Obama administration's goal is crystal-clear. "This is a single-payer government. . . . It doesn't want to say that publicly and it rejects it publicly. But the goal is to push that substantively. Because that's what they believe." In other words, what Mr. Obama bills as a "public option" for those who need health insurance but can't get it through their employer or in the private market would soon become the only option -- even for those happy with their current insurance.
Before you cry "conspiracy," Mr. Gregg argues that he has history on his side. The Democrats, he says, pulled the same public-private switcheroo before with student loans for college. Back in the late 1990s, "there was a huge debate in the committee . . . between myself and [Senator Ted] Kennedy over a private plan versus a public plan." In the end, they compromised -- the government would offer loans directly to students, but that program would have to compete with private-sector lenders. "And the agreement was very formal, and the record shows this very clearly. We agreed to level the playing field, put both plans on the playing field at an equal status and see who won. Well, private plans won. Big time."
Given the choice, most borrowers went to the private sector for their loans. But the Democrats who wanted to nationalize the student-loan market did not take defeat in the marketplace gracefully. "They didn't like that," Mr. Gregg says. "So ever since then they've tilted the playing field back and now they're going to wipe out the private plans in their budget."
When it comes to health insurance, Mr. Gregg expects more of the same. "That's the scenario that you're going to see if you have a public plan for insurance that competes with the private plans. That's the game plan" -- call it competition at first, but tighten the screws until the private insurers leave the market or get forced out. But with health-care spending representing 17% of GDP and climbing, the stakes are much, much larger. "Everyone in this country is affected by these policies."
And while the aspiration for universal coverage may be noble, the practical realities of getting there may prove harder for the American public to swallow. "There's no question," the senator says, "that this is a debate about rationing to a large degree. All your single-payer systems are rationing systems. It's also a debate about technology and innovation. Because you will not have capital pursuing technology, innovation and science if it's health-care related, because the return on capital won't be there. And these things are so expensive, especially on the pharmaceutical side and the biologic side, that you'll dramatically slow improvements in the quality of health care through science with a single-payer plan." Mr. Gregg thinks that critique will resonate with the public.
Even so, given the balance of power in Washington, Mr. Gregg gives the Democrats good chances of success in nationalizing our health-insurance market. "I think the odds are pretty good that it's going to happen -- that you'll have a major health-care reform bill pass." As he says, "Elections have consequences."
That said, Mr. Gregg doesn't necessarily think the American people will be happy with those consequences if the Democrats succeed in pushing through a "stalking horse" for a single-payer health-care system. "If they produce a partisan bill and pass it on a party-line vote, it's their baby," he warns. "They're going to have to defend it in the next election cycle and it's likely that it's not going to be perceived as fair by the American people."
Moreover, he says, "I don't think the American people want unilateral government control over the entire health-care system. I think most people understand that we've got a pretty good health-care system. It doesn't reach as many people as it should, and that has to be corrected. But it's innovative, it gives you decent health care for most Americans, and it's a lot better than any of the other countries that have these massive national plans."
That, together with the runaway spending and growing pile of debt, could yet set the stage for a Republican comeback, and sooner than most pundits would predict. Mr. Gregg will not run for re-election when his current term ends next year. Republicans, he says, "became very clouded as to what we stood for under the Bush presidency." But now they're getting their "definition" back.
"We're beginning to speak in a much more definitional voice on issues that were historically Republican issues: fiscal responsibility, giving individuals the opportunity to go out and create a better life for themselves, American exceptionalism, viewing America as a special place, not apologizing for our nation. These are things that we've always, as a party, resonated around. And I think we're starting to do it again." He corrects himself: "I know we are."
The Republican excesses during the Bush administration "haven't been forgiven and they haven't been forgotten" by voters. But if the president and his majorities in Congress get their way, voters will, Mr. Gregg believes, be ready for an alternative. "And we're the only show in town."
Mr. Carney is a member of the Journal's editorial board and the coauthor of "Freedom, Inc.," forthcoming from Crown Business in the fall.
'Elections Have Consequences'
Obama's would-be commerce secretary on the president's big-government agenda.
By BRIAN M. CARNEY
Sen. Judd Gregg is perhaps best known for something he didn't do. Two weeks into the Obama administration, he announced that he was leaving the Senate to become commerce secretary. Two weeks later, he withdrew his name, drawing a testy jab from the administration for denying it a bipartisan feather in its cap.
[The Weekend Interview] Zina Saunders
It's hard to reconcile the man who nearly boarded the Obama express with the tough-minded Republican senator who sat across from The Wall Street Journal's editorial board at our offices earlier this week. As for the lessons he learned from his dalliance with the administration, he reserves his criticism for himself: "I should have been smart enough to see the daylight before I walked in the door. . . . I don't think there's any big lesson here for anybody but myself, which is the obvious: It would have been impossible for me to be with the president 100% of the time, which is what a cabinet secretary has to be."
Just how obvious that should have been became clear in the course of our interview. Also obvious, Mr. Gregg said, was that the Obama administration is filled with "really capable, dedicated, smart, sharp people with an agenda that they intend to pursue aggressively."
The kind words mostly stop there. From health care to global warming, financial regulation, spending and tax policy, Mr. Gregg doesn't pull any punches in his criticism of the new president. He may be "a charismatic person" with "a very strong understanding of who he is and what he wants to do," but when it comes to the substance of what Mr. Obama seeks to accomplish, Mr. Gregg is less charitable. "They have a goal," the senator says, "and he's very open about it. They are going to grow this government."
Mr. Gregg believes the stakes are high. "This is the first time a budget's had real meaning in a long time," he says. In recent years, presidential budgets have been formulaic exercises. Even if Congress went on to adopt them, they would only serve, at best, as rough guidelines for the real work of crafting the appropriations bills that actually set discretionary funding levels. But this budget "is real, and he [Mr. Obama] intends to push it."
That's bad news, in Mr. Gregg's view, because "We're headed on an unsustainable path. The simple fact is these [budget] numbers don't work and the practical implications of them are staggering for the nation and the next generation."
His "main concern," he says, "is that if you look at the Obama budget, it projects on average about a $1 trillion deficit [every year] over the next 10 years." And as a result of all that spending, "You see the size of government growing from 21% [of gross domestic product] to 22%, to 23%, 24%, 25% . . . toward 30%."
Set against this spending growth, Mr. Gregg points out, "the revenue base is only so big. Granted, right now it's way down because of the economic situation. But even if you took it back to an economy that's performing extremely well, say [revenues of] even 19% [of GDP], you can't close that gap under the present projected situation. And so we're in trouble. And the policies of this administration are driving that to an even more acute situation." Spending and deficits are both heading skyward, and government debt held by the public is heading toward 80% of GDP.
For Mr. Gregg, this is like living a nightmare. He has been a hard-nosed advocate for government spending restraint since his days as a Congressman (1981-87) and governor of New Hampshire (1987-93). At times, his commitment to fiscal responsibility led him to oppose tax cuts when they weren't matched by spending restraint. Those stances incurred the ire of his Republican colleagues, but he always stuck to his fiscal-responsibility guns. Now he's staring down a spending explosion that makes those battles look picayune.
One of the big drivers of government spending in the Obama budget is universal health insurance. And on this point, Mr. Gregg says, "At least Obama was half-way honest about how much he was going to spend on health care. He had it at $600 billion. And the real number . . . is $1.2 trillion." But that's better than Senate Budget Chairman Kent Conrad. "What Conrad did was take the entire amount off-budget and not account for any of it." Mr. Obama's budget, therefore, "was honest to a higher degree. It held itself to a higher degree of integrity than the Senate budget or the House budget."
Well, except for one point: "the huge savings that they claimed on defense spending, which was a total fraud." Mr. Gregg refers to the fact that the administration's budget builds the full cost of the surge in Iraq into the budget baseline. Under that assumption, we would continue to appropriate money for the surge every year for the next 10 years. That allows the administration to "find" $1.6 trillion in savings, "all of which is spending we would never do," according to Mr. Gregg.
Health-care reform is not just about the price tag. How it gets done matters too. And in Mr. Gregg's view, the Obama administration's goal is crystal-clear. "This is a single-payer government. . . . It doesn't want to say that publicly and it rejects it publicly. But the goal is to push that substantively. Because that's what they believe." In other words, what Mr. Obama bills as a "public option" for those who need health insurance but can't get it through their employer or in the private market would soon become the only option -- even for those happy with their current insurance.
Before you cry "conspiracy," Mr. Gregg argues that he has history on his side. The Democrats, he says, pulled the same public-private switcheroo before with student loans for college. Back in the late 1990s, "there was a huge debate in the committee . . . between myself and [Senator Ted] Kennedy over a private plan versus a public plan." In the end, they compromised -- the government would offer loans directly to students, but that program would have to compete with private-sector lenders. "And the agreement was very formal, and the record shows this very clearly. We agreed to level the playing field, put both plans on the playing field at an equal status and see who won. Well, private plans won. Big time."
Given the choice, most borrowers went to the private sector for their loans. But the Democrats who wanted to nationalize the student-loan market did not take defeat in the marketplace gracefully. "They didn't like that," Mr. Gregg says. "So ever since then they've tilted the playing field back and now they're going to wipe out the private plans in their budget."
When it comes to health insurance, Mr. Gregg expects more of the same. "That's the scenario that you're going to see if you have a public plan for insurance that competes with the private plans. That's the game plan" -- call it competition at first, but tighten the screws until the private insurers leave the market or get forced out. But with health-care spending representing 17% of GDP and climbing, the stakes are much, much larger. "Everyone in this country is affected by these policies."
And while the aspiration for universal coverage may be noble, the practical realities of getting there may prove harder for the American public to swallow. "There's no question," the senator says, "that this is a debate about rationing to a large degree. All your single-payer systems are rationing systems. It's also a debate about technology and innovation. Because you will not have capital pursuing technology, innovation and science if it's health-care related, because the return on capital won't be there. And these things are so expensive, especially on the pharmaceutical side and the biologic side, that you'll dramatically slow improvements in the quality of health care through science with a single-payer plan." Mr. Gregg thinks that critique will resonate with the public.
Even so, given the balance of power in Washington, Mr. Gregg gives the Democrats good chances of success in nationalizing our health-insurance market. "I think the odds are pretty good that it's going to happen -- that you'll have a major health-care reform bill pass." As he says, "Elections have consequences."
That said, Mr. Gregg doesn't necessarily think the American people will be happy with those consequences if the Democrats succeed in pushing through a "stalking horse" for a single-payer health-care system. "If they produce a partisan bill and pass it on a party-line vote, it's their baby," he warns. "They're going to have to defend it in the next election cycle and it's likely that it's not going to be perceived as fair by the American people."
Moreover, he says, "I don't think the American people want unilateral government control over the entire health-care system. I think most people understand that we've got a pretty good health-care system. It doesn't reach as many people as it should, and that has to be corrected. But it's innovative, it gives you decent health care for most Americans, and it's a lot better than any of the other countries that have these massive national plans."
That, together with the runaway spending and growing pile of debt, could yet set the stage for a Republican comeback, and sooner than most pundits would predict. Mr. Gregg will not run for re-election when his current term ends next year. Republicans, he says, "became very clouded as to what we stood for under the Bush presidency." But now they're getting their "definition" back.
"We're beginning to speak in a much more definitional voice on issues that were historically Republican issues: fiscal responsibility, giving individuals the opportunity to go out and create a better life for themselves, American exceptionalism, viewing America as a special place, not apologizing for our nation. These are things that we've always, as a party, resonated around. And I think we're starting to do it again." He corrects himself: "I know we are."
The Republican excesses during the Bush administration "haven't been forgiven and they haven't been forgotten" by voters. But if the president and his majorities in Congress get their way, voters will, Mr. Gregg believes, be ready for an alternative. "And we're the only show in town."
Mr. Carney is a member of the Journal's editorial board and the coauthor of "Freedom, Inc.," forthcoming from Crown Business in the fall.
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