Does President Obama’s Approval Rating Mean Anything?

President Barack Obama’s approval rating has been hovering just below 50 percent this week. According to Gallup’s three-day rolling average, only 49 percent of Americans approve of the job he is doing as President.

Symbolically, it is somewhat significant. Historically, it might not matter at all. Addressing the latter first, it should be duly noted that although President Obama is the fourth fastest President to fall below 50 percent, every President but John Kennedy since Harry Truman has done so.

Although the current decline below 50% has symbolic significance, most of the recent decline in support for Obama occurred in July and August. He began July at 60% approval. The ongoing, contentious debate over national healthcare reform has likely served as a drag on his public support, as have continuing economic problems. Americans are also concerned about the Obama administration’s reliance on government spending to solve the nation’s problems and the growing federal budget deficit. Since September, Obama’s approval rating had been holding in the low 50s and, although it has reached 50% numerous times, it had never dropped below 50% until now.

Of the post-World War II presidents, Obama now is the fourth fastest to drop below the majority approval level, doing so in his 10th month on the job. Gerald Ford dropped below 50% approval during his third month in office, and Bill Clinton did so in his fourth month. Ronald Reagan, like Obama, also dropped below 50% in his 10th month in office, though Reagan’s drop occurred a few days sooner in that month (Nov. 13-16, 1981) than did Obama’s (Nov. 17-19, 2009).

Of all the Presidents who dropped below 50 percent, Truman, Richard Nixon, Reagan, Clinton and George W. Bush were all re-elected. Only Ford, Jimmy Carter and George H.W. Bush were not.

Which way will things go for President Obama? The answer probably depends on health care and Afghanistan.

If Congress is able to work through health care reform, with or without a public option, the President may be able to claim victory and use this as a spring board in the 2010 mid-term elections and then in 2012. Also, if his Afghanistan decision is well received with the public, his numbers could rebound.

These are only two of the issues President Obama will have to address and it is still early in his term. But, the President’s opportunity to get his agenda passed is slowly waning. Next spring will be his last opportunity with this Congress. After elections in 2010, he’ll have the early part of 2011, but after that campaigning will begin again for 2012.

In sum, the trend for President Obama probably means little, if anything at all. Nonetheless, it has to be troubling for a President who was so popular just 10 months ago to have fallen this far.

On U.S. Fiscal Responsibility

President Obama is expected to make fiscal solvency the focus of his presidency in 2010, beginning with his State of the Union Address in January. This is a step in the right direction for his presidency and the country, but it is not enough. If we are honestly interested in solving our “debt problem,” then it is not enough to merely make fiscal solvency the focus of the Administration. Rather, sustainability will need to be the primary objective of the White House and Congress on every policy issue presented.

The Congressional Budget Office called the federal budget, in its current form, “unsustainable.” A working paper from the American Enterprise Institute highlights the CBO’s projections, with a concluding analysis.

According to several recent reports issued by the Congressional Budget Office (CBO), the U.S. federal budget is on an unsustainable path. In fiscal years 2009 and 2010, the federal government will record its largest budget deficits as a share of GDP since shortly after World War II. As a result of those deficits, federal debt held by the public will soar from 44 percent of GDP at the end of fiscal year 2008 to 61 percent at the end of fiscal year 2010. The current deficit is due in part to the stimulus legislation and efforts to stabilize financial markets. CBO (2009a) projects that spending related to such economic weakness will push primary spending (defined as all spending, except interest payments on federal debt) up to 26 percent of GDP this fiscal year, the highest since World War II.

The long-term budget outlook is equally troubling. The CBO report (2009b) projects that under the Obama Administration proposals, the cumulative deficit for the period 2010-2019 will be approximately $9.1 trillion. In other words, the average deficit per year will approach $1 trillion. After 2019, the situation is expected to worsen with deficits (under certain scenarios) projected at 17 percent of GDP by 2040.

These projections raise serious concerns about the long-term sustainability of U.S. fiscal policy. If spending grows as projected and revenues do not rise at a matching rate, annual deficits will climb and federal debt will grow significantly. As debt increases, a higher and higher share of national output will be devoted to interest payments, and the level of taxation needed to sustain government becomes historically unprecedented. Large budget deficits would reduce national saving, lead to more borrowing from abroad and also lower domestic investment. If such a path is to be averted, then changing policy sooner reduces the size of the problem significantly.

Fiscal solvency is the most-pressing long-term issue faced by the Obama Administration and the current Congress. Our fiscal recklessness undermines our economic future, the position of our currency in the world and threatens our position as the world’s pre-eminent economic superpower.

The need to save our economy from the brink of collapse and create jobs is, understandably, a top-priority. Beyond that, and beyond the current economic cycle, however, policymakers need to be committed to not only balancing our yearly budgets, but also lowering our debt load. It could even be said that if the United States had maintained over the past three decades a fiscal policy even somewhat resembling that of a responsible one, short-term deficits would not be a problem. Short-term deficits are acceptable if and only if the United States has a responsible long-term fiscal policy.

As our deficits grow and as we leave them unattended, more and more of the burden for repaying our debt will be passed on to my generation and my children’s generation. It will require more resources and a larger part of their economy to make these payments. That could mean a weaker social safety net and higher taxes. It could mean reduced military spending and the sacrifice of strategic security. It could mean cuts to education, transportation and more. The sacrifices we have to make today in order to put ourselves on a path to solvency will be marginal compared to the choices and challenges of the next thirty years, if we allow our fiscal irresponsibility to continue.

McDonnell on Islam

Bob McDonnell, Governor-elect Bob mcDonnell, I should say, did himself  a solid this week and stayed above the fray invovling Pat Robertson and his comments on Islam.

The famous televanglist, who coincidentally founded the University where McDonnell attended law school, said Islam was not a religion but a “violent political system.”

McDonnell didn’t condemn Robertson, but he definitely didn’t defend his remarks either:

“I’ve got probably 15,000 donors to the campaign and I can’t stand and defend or support every comment that any donor might make,” McDonnell said in response to a question from CNN at the Republican Governors Association annual meeting near Austin. “I think people are entitled under the First Amendment to express whatever opinions that they may have, but I can only say that as governor of Virginia, I intend to have an inclusive administration where we bring people across the political and religious system to help us govern.”

This highlights why I like Bob McDonnell. Throughout the campaign he displayed a remarkable ability to stay on message and answer questions in a way that did him no harm and offered his critics no fire power.

President Obama in Asia – What was accomplished?

White House Photograph

Presidential trips like the one President Obama finished up this week aren’t necessarily commonplace. But they aren’t out of the ordinary either.

They offer the U.S. President the opportunity to build personal relationships with foreign heads of state, hammer out important diplomatic compromises and build goodwill around the world. Did President Obama do any of this on his swing through Asia?

An honest answer would be yes, no and maybe. President Obama has developed a working relationship with the President of South Korea, which they both acknowledged in a press conference late Wednesday. The President, however, accomplished very little in the way of details, especially regarding the presence of U.S. troops in Japan, which was taken off the agenda all together because lower-level staffers couldn’t come to terms. Lastly, President Obama was greeted with a mixed reception around the region – cheers in Singapore, censorship in China.

The fruit from a trip like this may take some time to bear out, so it’s hard to say in the end what he really accomplished.

Is the President committed to free trade with Asia?

President Obama has become a vocal supporter of a free trade deal between the United States and South Korea. In his trip to Asia, and in an interview with Fox News (*gasp*), the President said he is committed to the deal and will push for its ratification in the Senate.

U.S. President Barack Obama pledged Thursday morning to ratify a free-trade agreement with South Korea that has been stuck for two years, challenging the U.S. Congress to separate South Korea from other Asian nations enjoying vast trade surpluses with the U.S.

“In the United States, there is a misperception that the [free-trade agreement] once passed will only benefit Korea and will be detrimental to American consumers, which is not true,” Mr. Lee said.

Mr. Lee characterized as “minuscule” the trade surplus that South Korea has with the U.S., a characterization Mr. Obama agreed with. The U.S. president challenged Congress, which is run by his own party, to show more sophistication on trade issues.

“There’s a tendency to lump all of Asia together when Congress looks at trade agreements and says it appears this is a one-way street,” Mr. Obama said.

South Korea’s trade surplus with the U.S. last year was $13.3 billion out of total trade of $81.5 billion, according to U.S. figures.

The free-trade agreement, the largest the U.S. has negotiated since the North American Free Trade Agreement with Canada and Mexico in the early 1990s, is expected to boost that more than $80 billion in annual two-way trade between South Korea and the U.S. by $10 billion to $20 billion about five years after ratification.

Free trade is a good thing. A deal with South Korea will do a lot for the U.S. in a region where they are rapidly falling behind when it comes to trade liberalization.

Economic liberalization has been at the heart of U.S. foreign policy since 1918. We’ve promoted the idea of open markets across the world for almost a century because they bring prosperity and wealth to the masses. It has long been conventional wisdom that the U.S. would prosper most in a world economy where free trade is possible.

Labor unions and protectionist thought has taken over and so instead of prosperity, we’re falling behind at our own game.

Despite the rhetoric, I still question if the President is serious about trade liberalization with Asia. The tariff on Chinese tires earlier this year says a lot about who has his ear.