MONDAY, APRIL 19, 2010

JACKSON DIEHL

Obama, lost in the Mideast

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iming is everything in life,” George Mitchell said this year while discussing his daunting

job as a Middle East envoy. It’s a piece of wisdom that applies perfectly to the Oba- ma administration’s troubles in the re- gion — and one that, curiously enough, Mitchell and his boss have willfully ignored. The United States faces three big stra- tegic challenges in the Middle East. One is the threat of Iran. The second is the Israeli-Palestinian conflict. And the third is the corrupt and crumbling Arab autoc- racies of Egypt, Saudi Arabia, Yemen and half a dozen other states, which fuel Is- lamic extremism and provide almost all of al-Qaeda’s recruits. U.S. diplomacy can have an impact on all of those problems — but Washington can’t impose solutions by itself. It has to seek or create moments of opportunity and then use them well. Policy has to be based on not only what the White House aspires to do but also what conditions on the ground make possible. In the Middle East, the conditions on the ground make a comprehensive Arab- Israeli peace settlement impossible to ac- complish in the short term. They make anything more than delay and contain- ment of Iran’s nuclear ambitions similarly far-fetched, unless military force is used or a domestic revolution takes place. But they offer what may be a golden opportu- nity for democratization. The Obama administration is pressing ahead on the first two issues, setting im- possibly ambitious goals and ignoring the unfavorable conditions. And it has put on a distant back burner the one place where opportunity beckons. That would be Egypt, the region’s bell- wether — where an 81-year-old strong- man, Hosni Mubarak, is ailing; where a grass-roots pro-democracy movement has gained hundreds of thousands of sup- porters; and where a credible reform leader has suddenly appeared, in the form of the Nobel Prize-winning former nuclear inspector Mohamed ElBaradei. The movement he leads is pressing Mu- barak to lift an emergency law — imposed 28 years ago — that blocks political orga- nizing and freedom of assembly, and to change the constitution so that next year’s presidential election can be genu- inely democratic. Here is a real chance for groundbreak- ing change in the homeland of Mohamed Atta and Ayman al-Zawahiri. As hap- pened before democratic transitions in other countries, there is a strong public movement with responsible leadership making reasonable demands. American leverage, including $2 billion in annual aid, is powerful — as George W. Bush demonstrated in 2005, when he induced Mubarak to change the constitution be- fore the last presidential election so that opponents could run against him. There are some in the administration who can see the opportunity. But Obama and Secretary of State Hillary Rodham Clinton have shown almost no interest. Officials tell me that Obama has raised the democracy issue with Mubarak in pri- vate. But there have been no public state- ments; no special envoys; no angry phone calls in which demands have been con- veyed to the recalcitrant leader. Instead, Obama has focused most of his personal energy and diplomatic cap- ital on the Arab-Israeli conundrum — where, for a variety of reasons, there is no immediate opportunity. The administra- tion knows it, or should: The current Is- raeli government is not disposed toward peacemaking; the Palestinians are hope- lessly divided into two hostile camps; Arab states are reluctant at best to make their own concessions — and Iran, via its proxies in Lebanon and Gaza, can trigger paralyzing violence at any time. Yet the president has persisted; he ar- rived in office imbued with a passion to promote an Israeli-Palestinian settlement and so disregards the bad timing. In his own way, Bush made the same mistake. Seized with the conviction that democra- tization was central to combating Islamic extremism, he pushed for free elections in Egypt at a time when conditions were not ripe — the mass movement and capable leadership of 2010 didn’t exist in 2005. Obama suggested at his news confer- ence last week that he understands his problem. “I know that even if we are ap- plying all of our political capital,” he said, Israelis, Palestinians and Arab states “may say to themselves, we are not pre- pared to resolve this — these issues — no matter how much pressure the United States brings to bear.” He went on to quote the famous maxim of former secre- tary of state James Baker: “We can’t want it more than they do.” Yet the president, according to my col- league David Ignatius, is seriously consid- ering putting forward a comprehensive U.S. plan for an Israeli-Arab peace, at the urging of some internal and outside ad- visers. That would fly in the face of Ba- ker’s maxim — and invite a diplomatic disaster. It would also bypass the real chance for change in Egypt. This is not to say that Obama should abandon all diplomacy on Middle East peace or Iran. Incremental progress is possible, and should be pursued. But the big challenge for the president is to set aside his preconceived notions about what big thing he can or should accom- plish in the region — and seize the oppor- tunity that is actually before him.

BRYNJAR GAUTI/ASSOCIATED PRESS

Iceland’s Eyjafjallajokull volcano continues to send ash into the air on Saturday.

ANNE APPLEBAUM

Europe’s time warp

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warsaw

id you know that volcanic ash can bring down airplanes? I didn’t know. Nor did I know that there were volcanoes in Europe capable of spew- ing so much of the stuff into the atmos- phere. But since last week, when airports in Britain — and then Germany, France, Poland, Austria, Switzerland and Scandi- navia — began to shut down because of the ash emitted by Eyjafjallajokull, an unpro- nounceable volcano in Iceland, an army of experts has arisen to explain how floating lava dust damages engines. Suddenly, almost everyone else seems to

have become an expert, too. A friend with no previous interest in airline mechanics explained how two planes had already been affected. Another proffered a de- tailed description of the scientific process by which ash enters the engine, melts and turns back into stone — not what one wants inside airplane engines, really. Others have become mystics. A British friend sees this as “judgment for the bad things we have done to the Earth.” Another thinks this is the beginning of many years of volcanic activity, thus heralding the end of civilization as we know it. Poles are un- surprisingly spooked by the coincidence of the ash cloud with the funerals of their president and other leaders who died in a strange and sad plane crash April 10. The Icelandic volcano prevented President Obama, among others, from attending President Lech Kaczynski’s funeral in Kra- kow on Sunday. German Chancellor Ange- la Merkel also called to make her apolo- gies, from Italy, whence the leader of the largest European economy was slowly making her way home across the Alps by car.

Of course I do understand why some want science to explain this odd event, and why others see the revenge of the volcano gods. I live in Poland and have spent the past several days at funerals and memorial services, listening to people trying to make sense out of a pointless airplane tragedy. This dust cloud isn’t that kind of tragedy. Nevertheless, the eruption of Eyjafjallajo- kull could continue, apparently, into next week, next month or next year. That would

turn the volcano into one of those natural events that, like earthquakes and tsuna- mis, change the economics and politics of an entire region. No wonder we feel the need to focus on the scientific and mystical significance of wind patterns, magma and dust.

Already, the past several days have re- vealed that we rely on air travel for far more things than we usually imagine. Things such as supermarkets — all that fresh fruit — and florists. Things such as symphony performances, professional soccer matches and international rela- tions. In fact, “European integration,” as we have come to understand it, turns out to be utterly dependent on reliable air trav- el. Over the past two decades — almost without anyone really noticing — Euro- peans have begun, in at least this narrow sense, to live like Americans: They move abroad for work, live for a while in one country and then move to another, even- tually going home or maybe not. They do business in countries where they don’t know the language, vacation in the Medi- terranean and in the Baltic, visit their mothers on the weekends. Skeptics who thought the European single market would never function because there would be no labor mobility in Europe have been provedwrong. But if, as some are predicting, European

air travel were to become unreliable indef- initely all of this would change. The Eng- lish Channel and the Atlantic Ocean would suddenly seem deeper, the Euro- pean continent wider and longer — almost as if we had gone back in time a century. Within living memory, things were very

different. By coincidence, I recently visited Ellis Island with my son and was struck by the photographs on display. They showed the courage, fear and determination on the faces of people who had arrived in 1890 or 1900 from faraway places like War- saw, knowing they might never return. A few days later, we hopped a plane to

Warsaw, thinking nothing of it. What a dif- ferent world it would be if that kind of travel suddenly became impossible, or even unreliable, once again.

applebaumletters@washpost.com

KLMNO

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A15

claiming that his policies are based on their work. But when President Obama tries to sell his health-care law as a moderate approach that borrows ideas developed by the Heritage Foundation, we get incensed. The Obama health-care law “builds” on the Heritage health reform model only in the sense that, say, a double- quarter-pounder with cheese “builds” on the idea of a garden salad. Both have lettuce and tomato and may be called food, but the similarities end there. This is why we at the Heritage Foun-

dation respectfully ask President Oba- ma and his acolytes to stop misrepre- senting our research. We think this massive health law is abominable and should be repealed. And until Congress repeals it, lawmakers should starve this monstrosity of taxpayer funds. Heritage has a long history of non-

partisanship. President Bill Clinton signed a welfare reform package whose key provisions did originate at Heri- tage. But in congressional testimony and elsewhere, we have been crystal clear about our position on this health- care law since Day One. So every time the president and his amen corner say that the Heritage Foundation engen- dered provisions of the law, Americans should realize that it’s not an attempt to share credit but a disingenuous effort to sell this unpopular law. Why does Obama still need to do

that? The Associated Press had the an- swer last week when it reported that opposition to the health-care package, already high, jumped after the presi- dent signed it into law. But let me answer the charges that

central elements of the health-care law came from Heritage. It began when President Obama told

“Today” show host Matt Lauer on March 30 that “a lot of ideas in terms of the exchange, just being able to pool and improve the purchasing power of individuals in the insurance market, that originated from the Heritage Foundation.” First, Heritage did not originate the concept of the health insurance ex- change. Furthermore, the version of the exchange we did develop couldn’t be more different than that embodied in this law. For us, the health insurance ex-

change is to be designed by the states. It is conceived as a market mechanism that allows individuals and families to choose among a wide range of health plans and benefit options for those best suited to their personal needs and cir- cumstances. People would have a prop- erty right in their health policy, just like auto or homeowners’ policies, and be able to take it with them from job to job.

E.J. DIONNE JR. ROBERT J. SAMUELSON

The VAT is no easy fix

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“There is always an easy solution to every human problem — neat, plausible and wrong.”

—H.L. Mencken

he value-added tax has become the des- ignated panacea for massive federal budget deficits. It’s touted by think-tank economists and mentioned by congressional leaders. A VAT could, it’s said, raise stupen- dous amounts of money, which, Lord knows, are needed to cover projected deficits. A VAT is likened to a “national sales tax,” so once in place, most Americans would barely notice it — just as they barely notice state and local sales taxes. How’s that for friendly politics? A VAT would also discourage consumption and encourage saving and investment, making America richer in the future. What’s not to like? Mencken (1880-1956), one of America’s

great wits, would chuckle. Almost every pro- VAT argument is exaggerated, misleading, in- complete or wrong. The VAT is being mer- chandised as an almost-painless way to avoid deep spending cuts. The implicit, though often unstated, message is that a VAT could raise so much money it could eliminate future deficits by itself. This reasoning, if embraced, would create staggering tax burdens and exempt us from a debate we desperately need. How big a government do we want — and

what can we afford? In closing deficits, what’s the best mix between tax increases and spend- ing cuts? What programs are outmoded, in- effective or unneeded? How much should we tax the young and middle-aged to support the elderly? Should wealthier retirees receive skimpier benefits? Should eligibility ages for benefits be raised? The basic budget problem is simple. For decades, the expansion of Social Security, Medicare and Medicaid — programs mostly for the elderly — was financed mainly by shrinking defense spending. In 1970, defense accounted for 42 percent of the federal budg- et; Social Security, Medicare and Medicaid were 20 percent. By 2008, the shares were re- versed: defense, 21 percent; the big retirement programs, 43 percent. But defense stopped falling after Sept. 11, 2001, while aging baby boomers and uncontrolled health costs keep retirement spending rising. Left alone, government would grow larger.

From 1970 to 2009, federal spending averaged 20.7 percent of the economy (gross domestic product). By 2020, it could reach 25.2 percent of GDP and would still be expanding, reckons the Congressional Budget Office’s estimate of President Obama’s budgets. In 2020, the def- icit (assuming a healthy economy with 5 per-

cent unemployment) would be 5.6 percent of GDP. To cover that, taxes would have to rise al- most 30 percent. AVAT could not painlessly fill this void. Ap- plied to all consumption spending — about 70 percent of GDP — the required VAT rate would equal about 8 percent. But the actual increase might be closer to 16 percent because there would be huge pressures to exempt gro- ceries, rent and housing, health care, educa- tion and charitable groups. Together, they ac- count for nearly half of $10 trillion of con- sumer spending. There would also be other upward (and more technical) pressures on the VAT rate.

Does anyone believe that Americans

wouldn’t notice 16 percent price increases for cars, televisions, airfares, gasoline — and much more — even if phased in? As for a VAT’s claimed benefits (simplicity, promotion of in- vestment), these depend mainly on a VAT re- placing the present complex income tax that discriminates against investment. That’s un- likely because it would require implausibly steep VAT rates. Chances are we’d pay both the income tax and the VAT, making the overall tax system more complicated. Europe’s widespread VATs aren’t models of simplicity. Among the European Union’s 27 members, the basic rate varies from 15 percent (Cyprus, Luxembourg) to 25 percent (Den- mark, Hungary and Sweden). But there are many preferential rates and exemptions. In Ireland, food is taxed at three rates (zero, 4.8 percent and 13.5 percent). In the Nether- lands, hotels are taxed at 6 percent. An Amer- ican VAT would stimulate ferocious lobbying for favorable treatment. Higher consumer prices from the VAT could also slow the economy. The Federal Reserve would face policy dilemmas. If it tried to pre- vent businesses from passing along the tax to consumers, it would have to raise interest rates and risk a recession. If it tried to blunt the effect of higher prices on spending, its easy credit policy might trigger a new wage-price spiral. AVAT is no panacea; deficit reduction can’t be painless. We’ll need both spending cuts and tax increases. A VAT might be the least bad tax, though my preference is for energy taxes. But what’s wrong with the simplistic VAT ad- vocacy is that it deemphasizes spending cuts. The consequences would be unnecessarily high taxes that would weaken the economy and discriminate against the young. It would become harder for families to raise children. VAT enthusiasts need to answer two ques- tions: What government spending would you cut? And how high would your VAT rates go?

he Tea Party is nothing new. It represents a relatively small mi- nority of Americans on the right end of politics, and it will not deter- mine the outcome of the 2010 elections. In fact, both major parties stand to lose if they accept the laughable notion that this media-created protest move- ment is the voice of true populism. Democrats will spend their time chas- ing votes they will never win. Repub- licans will turn their party into an an- gry and narrow redoubt with no hope of building a durable majority. The news media’s incessant focus on

the Tea Party is creating a badly dis- torted picture of what most Americans think and is warping our policy de- bates. The New York Times and CBS News thus performed a public service last week with a careful study of just who is in the Tea Party movement. Their findings suggest that the Tea

Party is essentially the reappearance of an old anti-government far right that has always been with us and accounts for about one-fifth of the country. The Times reported that Tea Party support- ers “tend to be Republican, white, male, married and older than 45.” They are also more affluent and better educated than Americans as a whole. This is the populism of the privileged. And the poll suggested something

that white Americans are reluctant to discuss: Part of the anger at President Obama among Tea Partiers does appear to be driven by racial concerns. Saying this invites immediate denun-

ciations from defenders of those who bring guns to rallies, threaten violence to “take our country back,” and mouth old slogans about states’ rights and the Confederacy. So let’s be clear: Opposi- tion to the president is driven by many factors that have nothing to do with race. But race is definitely part of what’s going on. The poll asked: “In recent years, do you think too much has been made of the problems facing black people, too little has been made, or is it about right?” Twenty-eight percent of all Americans — and just 19 percent of those who are not Tea Party loyalists — answered “too much.” But among Tea Party supporters, the figure is 52 per- cent, almost three times the proportion of the rest of the country. A quarter of Tea Partiers say that the Obama admin- istration’s policies favor blacks over

Populism of privilege

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This isn’t our health law

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by Robert Moffit

hink tank analysts usually brim with pride when the president of the United States goes around

Under the Heritage design, individu- als could choose the health plan they want without losing the tax benefits of employer-sponsored coverage. The ex- change we propose would be open to all state residents and — very importantly —be free of federal regulation. Under the president’s law, however, the congressionally designed exchang- es are a tool imposed on the states en- abling the federal government to stan- dardize and micromanage health insur- ance coverage, while administering a vast and unaffordable new entitlement program. This is a vehicle for federal control of state markets, a usurpation of state authority and the suppression of meaningful patient choice. Heritage finds this crushing of state innovation and experimentation repugnant. This law constitutes a massive alter-

ation of the constitutional balance of power between the federal government and the states, and strikes at the heart of American federalism. This is prob- ably not something President Obama gives a whit about, but we at Heritage do.

The other charge — repeated on this

page and elsewhere — is that the feder- al individual mandate in Obama’s health-care plan came from us. For the record, we think that the

law’s federal mandate is unconstitu- tional. Our legal center, led by former attorney general Edwin Meese III, notes that Congress has no authority to force an American to buy any good or service merely as a requirement of be- ing alive. Yes, in the early 1990s, we, along with other prominent conservative econo- mists, supported the idea of such a mandate. It seemed the only way to solve the “free-rider” problem, in which individuals can, under federal law, walk into any hospital emergency room na- tionwide and rack up big bills at taxpay- er expense.

Our research in the ensuing two dec- ades has led us to realize our initial idea was operationally ineffective and legal- ly defective. Well before Obama was elected, we dropped it. In the spring 2008 edition of the Harvard Health Pol- icy Review, I advanced far better alter- natives to the individual mandate to ex- pand coverage, relying on positive tax incentives and other mechanisms to fa- cilitate enrollment in private health in- surance. This is what researchers and fact-based policymakers do when they discover new facts or conduct deeper analysis. The president and his supporters in-

voke the Heritage Foundation to con- vince the American people that his health bill is somehow a middle-of-the- road approach. It isn’t. So please, Mr. President, stop it.

The writer, a deputy assistant secretary in the Department of Health and Human Services during the Reagan administration, is director of the Center for Health Policy Studies at the Heritage Foundation.

whites, compared with only 11 percent in the country as a whole. So race is part of this picture, as is a tendency of Tea Party enthusiasts to side with the better-off against the poor. This puts them at odds with most Americans. The poll found that while only 38 percent of all Americans said that “providing government benefits to poor people encourages them to re- main poor,” 73 percent of Tea Party par- tisans believed this. Among all Amer- icans, 50 percent agreed that “the fed- eral government should spend money to create jobs, even if it means in- creasing the budget deficit.” Only 17 percent of Tea Party supporters took this view. Asked about raising taxes on house- holds making more than $250,000 a year to provide health care for the un- insured, 54 percent of Americans fa- vored doing so vs. only 17 percent of Tea Party backers.

This must be the first “populist” movement driven by a television net- work: Sixty-three percent of the Tea Party folks say they most watch Fox News “for information about politics and current events,” compared with 23 percent of the country as a whole. The right-wing fifth of America de-

serves news coverage like everyone else, and Fox is perfectly free to pander to its viewers. What makes no sense is allowing a sliver of opinion to dom- inate the media and distort our politi- cal discourse. Democrats face problems not from right-wingers who have never voted for them but from a lack of energy among their own supporters and from dispir- ited independents and moderates who look to government to solve problems but have little confidence in its ability to deliver. A Pew Research Center study re- leased Sunday is thus a better guide than the Tea Party’s rants to the real na- ture of this nation’s discontent. It found that only 22 percent of Americans say they can trust the government almost always or most of the time, “among the lowest measures in more than half a century.” This mistrust extends beyond government to banks, financial institu- tions and large corporations. So, yes, there is authentic populist

anger out there. But you won’t find much of it at the tea parties.

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