Written by William Smith for RHRealityCheck.org – News, commentary and community for reproductive health and justice.

In September 2008, then-Candidate Obama, in his first Presidential debate with Senator John McCain, pounced on his rival when McCain raised the hard-hearted suggestion of freezing all government spending with the exception of defense, entitlement programs, and veteran’s affairs, to reduce the deficit.

Obama countered with a now-famous and punchy one liner: “The problem is you’re using a hatchet when you need a scalpel.”

This week, the President seems to have taken up the hatchet and embraced the McCain approach. It’s not quite his “read my lips” moment, but it has – at best – the potential for the most fundamental of disappointments.

The issue is that the President’s retort was not just a really well constructed and pithy punch to McCain’s cold-as-steel demeanor – an appeal from the compassionate candidate who knew and understood the challenges of the everyday American. No, it was, first and foremost, a profoundly moral statement. It was meant to underscore that the President viewed domestic needs as not just important, but a fulfillment of the social contract we have with one another as Americans and he saw a federal government shirking its responsibilities at home. It was the modern equivalent of President Lincoln’s line that the role of government is “to do for the people what needs to be done, but which they can not, by individual effort, do at all, or do so well, for themselves.”

Obama’s quip underscored that the government was not performing its primary function in the way Lincoln described. In fact, Obama went on to say that “There are some programs that are very important that are currently underfunded,” Obama said.

The real truth is that the President has not really, fully taken up the McCain proposition. Not fully. The President will not propose that everything – every line in the federal budget – get frozen in time for his proposed three-year timeframe. Instead, there will be a mixture of things that are cut, flat funded, or even given increases. And while such outcomes are always the product of the budget process, the 2011 federal budget he will propose next week is unique in that wherever programs fall along the fault lines of the top line spending freeze, it will say volumes about the moral vision of the President and his Administration.

For those of us who work on behalf of sexual and reproductive health who have one hand in public health and the other in social justice, we’re nervous. We’re nervous because the issues we care about most have languished for the better part of a decade as the federal government failed to meet the unmet need to secure sexual health in our country. Instead, STD prevention and services funding has stalled, causing clinic closures and impacting the ability of people to access prevention and treatment. HIV funding has fared a bit better, yet people with HIV or AIDS are once again on lists across the country waiting for government support to access live-saving medications. Family planning funding has limped along but its increases – when they came – paled in comparison to the billion dollars spent on wasteful programs like abstinence-only-until-marriage during the same time period. This has created the most striking lack of adequate services from coast to coast. So no one should wonder why we have 19 million new cases of STDs every year, or an HIV epidemic worse than we ever thought possible, or rising rates of teen and unintended pregnancies.

This week, the President also made one of the most remarkable statements of any President in recent memory when he said, “I’d rather be a really good one-term president than a mediocre two-term president.” I don’t think it was the insincere gesture of a politician struggling for purpose or seeking consolation. This is the real thing. It is character in the truest sense of the word and the same type of self-sacrifice that forces this good man to make the tough decisions for a nation that, in the end, may ultimately cost him another term – including his decision to fix the fiscally bankrupt house of government he inherited from a previous Administration.

But that tough decision needs to recognize that our public health system in states across the country, as well as our sense of social justice, demands that the budget the President proposes not shirk from the moral obligation to do the right thing on sexual health. Sure, discretionary spending is rather small in the overall picture, but it is the critical source of funding for sexual health programs. We simply cannot afford a cut from the budget scalpel anywhere on sexual and reproductive health programs.

Anywhere.

President Obama may be joining the populist crusade against Wall Street. In the span of one week he opened up a three front war: a tax on big banks, full support for a new Consumer Financial Protection Agency, and the embrace of Paul Volcker’s plan to break up the big banks.

It’s about time. Or has the time already passed?

Yes, there is enormous popular anger against Wall Street and the bailouts. However, the deepest anger is rooted in the enormous fears and hardships caused by the lack of jobs. Obama is responding with a call for another stimulus in the form tax breaks for small businesses and for the weatherization of homes. Not good enough. The scale and scope of his proposals are unlikely to alleviate enough of the pain and suffering experienced by jobless Americans. Unfortunately, the Administration does not realize how deeply the crisis of employment is built into our billionaire bailout society.

So what should Obama do?

Declare a national jobs emergency. Then tie taxes on Wall Street’s bonuses directly to job creation on Main Street. Make it simple. Make it fair. Make it fast.

Instead of taxing the banks through his proposed complex asset liability tax which most Americans really don’t understand (and which will be lobbied into Swiss cheese), he should slap a windfall profits tax on the $150 billion record bonus pool, which every American can grasp. (Rep. Dennis Kucinich’s bill for a 75 percent bonus tax is waiting for Obama’s support.)

It’s not hard to connect the dots: That bonus money comes directly and indirectly from taxpayer bailouts to Wall Street. That’s our money. Take it back and create jobs with it.

At the same time, President Obama should announce the creation of a million-person weatherization corps to insulate every American home, business and public building. The energy efficiency benefits would be wonderful to reduce carbon emissions, global warming, and oil imports. (Do the math: 75 percent windfall profits tax on $150 billion bonus pool equals $112.5 billion. At $100,000 per job including benefits, administration and supplies, you could create more than one million green weatherization jobs.)

But the key is putting one million people to work on this vital national security task before November – that is before corporate donations unleashed by the Supreme Court make a mockery of elections.

Let’s keep in mind how we got here. For thirty years the financial lobbyists and their willing partners in Congress and the White House engaged in an orgy of deregulation and tax reform, resulting in wealth accumulation in the hands of a few. So much money accumulated with the wealthy, that they literally ran out of investments in tangible assets in the real economy. Wall Street solved that problem by creating a menagerie of deregulated fantasy finance instruments that sucked up the surplus wealth and earned Wall Street more profits that ever before. (Summers and Geithner were avid cheerleaders for this process.) The process of securitization and derivatives was creating an upside down pyramid of synthetic instruments leveraged on top of risky assets like subprime loans, which in turn created an enormous housing bubble. (And before that the dot.com bubble, the savings and loan crisis, and so on–it should be clear by now that we’re dealing with a distended financial sector that inherently builds bubbles.)

The one clear plus was that the artificial housing bubble also created jobs in the housing supplies, construction, and financial industries, even as our manufacturing sector was dismantled piece by piece and moved to low-wage areas around the world. Average wages stagnated and declined, but Americans, overall, were working.

It’s now clear that that these jobs and faux prosperity were built on financial rot. As soon as housing prices stopped rising, the entire upside down pyramid of leveraged assets came crashing down. The financial sector froze and threw the world economy to the brink of another Great Depression. The real economy, starved for credit, went into an immediate tailspin and unemployment shot through the roof. There are now nearly 30 million Americans without jobs or forced into part-time work.

The theory of recovery adopted both by the Bush and the Obama administrations was this: stabilize the financial sector with enormous bailouts to stop the financial implosion and provide stimulus bills to kick-start the real economy. This combination was supposed to lead to a rapid recovery both for financial assets (including our 401ks and pensions) and for the creation of real jobs.

It didn’t quite work out that way. The financial sector, which is still living off an array of hidden government guarantees, asset purchases, and cheap money, is making enormous profits again. (If you want to see clearly how TARP is just a small part of the Wall Street bailout package, take your blood pressure pills and go look at Nomi Prins’s excellent accounting.) Meanwhile the real jobless rate is well over 17 percent.

And just to rub it so it really stings, Wall Street has the chutzpah to award itself a record bonus pool of $150 billion during the worst economic year since the Great Depression. This pool would be a negative number were it not for trillions of dollars of taxpayer welfare for Wall Street. In our new billionaire bailout society,

Wall Street’s elites have the ability to restart its speculative money-making games without loaning money to Main Street’s businesses. They have a slew of ways to game the system so that the federal money and support flows into their bonus pools. Loan making is still declining even as their profits rise, making a mockery of their role as distributors of capital to the real economy. It is highly questionable if these non-lending financial firms are producing any economic worth at all for our economy.

So Obama is stuck with a bailout and stimulus package that only half worked. At an enormous long-term cost, it may have succeeded to stabilize the financial system and to avoid another Great Depression, at least for now. But it failed to create sufficient jobs to make up for the crater in our economy created by Wall Street’s speculative crash. So he needs to directly put Americans to work unless he and the Democrats want to lose their jobs as well. Although the most efficient means to create one million weatherization jobs would be through direct public employment (like a new WPA), the anti-government mood requires that we use as many private contractors as possible. That kind of government funded/private contractor partnership should be able to cut through the ideological barriers because Americans will understand that employing people in useful jobs is fundamentally worthwhile. We need to save energy. We need work. And, we need to make the bankers, who so recently wrecked our economy, pay for it.

This will never happen unless the President stays on message every day. He also needs to act as if we were in a dire national jobs emergency, which we are. It was telling to watch the President at his recent town hall meeting in Elyria, Ohio. Although the session was billed as a jobs event, he revealed his real concerns when he concluded with a call for health care reform and energy legislation. As important as those issues are to all of us, he’ll never get there unless he focuses on jobs, jobs and more jobs until we are working again. At the same time, the President should challenge the “do nothing” Republicans and their blue-dog Democratic cousins to put up or shut up on jobs. If they refuse to pass the needed legislation, the President should redirect unspent funds from other programs to combat the jobs emergency. No one will blame him for playing hard ball on jobs creation.

Is it realistic to create a million jobs in a short period of time? We’ll never know unless someone tries. But if we limit ourselves to advocating only what seems realistic, here’s the sickening reality that awaits us: bankers walking off with record bonuses during a year in which they nearly destroyed our economy, and during a year in which we bailed them out with trillions of dollars of taxpayer welfare. It would be an important morale booster for the country to create green jobs – one million of them -by November.

Isn’t that change we can believe in?

Les Leopold is the author of The Looting of America: How Wall Street’s Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About, Chelsea Green Publishing, June 2009.

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People are getting way too worked up about Nancy Pelosi’s announcement that she doesn’t have the votes to pass the Senate’s health reform bill right now.

“In every meeting that we have had, there would be nothing to give me any thought that that bill could pass right now the way that it is,” Pelosi said yesterday, “There isn’t a market right now for proceeding with the full bill unless some big changes are made.”

Now, maybe Pelosi doesn’t have the votes right now, but such is the life of the Speaker of the House. Just because she doesn’t have the votes in hand doesn’t necessarily mean she can’t get them.

If Pelosi does have the votes right now, she’d be a fool to say so. In the wake of Martha Coakley’s defeat, all eyes are on the House. If health care reform is to survive, the House will have to pass the Senate bill “as is.” But that wouldn’t necessarily be the end of the story. The Senate could still fix some stuff the House doesn’t like through budget reconciliation. In theory, it could even put the public option back.

Pelosi would be foolish announce that the House could pass the Senate bill right off the bat. She’d lose all her leverage with her Senate colleagues. If Pelosi assures them she has this all wrapped up, the Senate won’t change a thing.

Pelosi’s using the oldest negotiating trick in the book: “Sorry, guys, my hands are tied. The yahoos in my caucus will never accept your deal. I guess the whole thing goes down in flames. That is, unless you give them X. Then maybe I can talk some sense into the hoopleheads.”

Pelosi probably needs some major concessions in order to get the votes. For example, there are probably at some hardline House Democrats who would get on board if the Senate first passed reconciliation instructions abolishing the so-called “Cadillac plan” tax.

I’ve been told by several experts on legislative procedure that it is possible to pass the reconciliation instructions first as long as the president ultimately signs the health care bill first.

So, don’t panic. Pelosi has shown no signs of giving up on health reform. She’s just doing her job.

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