Death panels for diplomacy: Why does Paul Ryan hate American leadership?

Congressman Paul Ryan, chairman of the House Budget Committee, deserves considerable credit for violating the "no leadership zone" that has seemingly been imposed on Washington without even benefit of a vote of the U.N. Security Council. His proposed 2012 budget is misguided in parts, inadequate in others, and would be laughed out of any serious discussion about getting America's fiscal house in order -- if such a discussion were actually taking place in Washington. But it's not, of course. The White House has been frustratingly passive on the subject, failing to address America's deficit in any meaningful way and treating their own deficit commission's recommendations as though they were created in the radioactive bowels of a Fukushima reactor rather than by a bipartisan panel of experts. Meanwhile, the right and the left have been engaged in their usual childish political games in which both sides are far more focused on criticizing their opponent's manifold and inarguable shortcomings than they are in addressing their own craven shallowness, pandering to their bases and inability to do simple arithmetic.

Overshadowed by this debate that makes Muammar al-Qaddafi's rants look like the crystalline rationalism of Spinoza or Descartes have been some of the details of Ryan's plan and their implications. While much of the discussion of the proposed budget has centered on potential cuts to health care for older Americans and its complete dodge on seeking new revenue or seriously looking at defense budget cuts, there has not been enough discussion of one of its most egregious -- and stunningly wrongheaded and dangerous -- components: the utter evisceration of the U.S. international affairs budget.

As White House Budget Director Jack Lew has accurately observed, a "budget is not just a collection of numbers, but an expression of our values and aspirations." Thus, Ryan's budget -- which clearly has been vetted carefully by his fellow Republican leaders -- can be seen as a manifestation of Republican views on everything from how we should treat our parents to what America's role should be in the world. I'll leave it to others to continue the debate on health care. Instead, I would just like to point out that according to the summary of the budget in today's Washington Post, Ryan is proposing spending $27 billion less than the administration's figure of $63 billion on international affairs -- the portion of the budget covering diplomacy and U.S. foreign assistance programs. That 43 percent whack is by far the most draconian of all Ryan's cuts when measured in terms of the contrast between the White House's and Ryan's 2012 proposals.

Meanwhile, on defense, Ryan is proposing spending $26 billion less than Obama … but out of a much, much larger base so the Republican proposal is just 3.5 percent less than that of the administration. What this suggests is that Ryan and company feel that in the world in which we live today, the tools of American foreign policy should almost exclusively be those of force and hard power and that we should effectively unilaterally disarm in terms of soft power and diplomacy.

At just the moment when aid is most critical on initiatives of vital national security from fighting terrorism to stabilizing the Middle East to winning support for the U.S. in regions where our rivals are spending furiously to tip the scales in their favor, Ryan would effectively shut off the lights in Foggy Bottom and say that America will now do less, be less engaged, be less influential -- right up until the point at which any issue must be resolved with force. And of course, removing the tools of diplomacy and persuasion virtually guarantees we will be required to use the military and coercive tools that are all we have left.

Think about it … this is a budget that says the developed country that spends less than any other on aid will shrink that amount dramatically while still maintaining its status as the country that spends more on defense than every other significant power in the world combined. More $9 billion dollar next-generation aircraft carriers? Check. Less aid to ensure Egypt follows through on its reforms and the Middle East is stabilized? Check. Them's our values, says Ryan: We're cutting all programs for "speaking softly" and only maintaining those for "carrying a big stick."

And, while he's at it, underscoring that this budget shows a lack of national security awareness that is as breathtaking as it is frightening, Ryan throws in a whopping $7 billion cut in proposed Energy spending levels just to help ensure the country remains dependent on foreign sources of energy from dangerous places. Tax cuts for the rich? Intact … actually, let's make them and corporate tax cuts bigger. Spending to ensure America's energy security and create jobs doing it? Cut.

Add all this up and what do you get? A powerful statement by Ryan and the Republicans that they don't understand foreign policy and that they don't want America to continue to play a leadership role in the world. Appalling as that is, it pales in comparison to the even greater threat to U.S. leadership that is posed by the fact that no one has dared to do what is sensible and required and offered up a budget that solves America's fiscal problems the only ways it can be done: by sensibly cutting both defense and entitlement spending and by increasing revenues.

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David Rothkopf

Rethinking what it means to be a 'U.S. company'

When the United Kingdom's prime minister stands up in front of an elite audience and slams an old friend alongside of whom Britain is fighting the war on terror for its government waste and because too many of that country's richest are getting away without paying much tax at all, it's got to sting. But fortunately for Jeff Immelt and the rest of us here in the United States, David Cameron was in Islamabad and the broken, favoritism-ridden, inefficient system he was excoriating was not the one in Washington but the one that, at least nominally, is responsible for Pakistan.

That said, Cameron is among a rapidly shrinking number of folks who have yet to pile on to the revelations of GE's protracted tax holiday and, by extension, President Obama's appointment of Immelt to be his competitiveness advisor. In fact, my guess is Immelt will not be able to survive indefinitely in his capacity as an informal consultant to the president. When I spoke to two different senior economic officials in the administration about him this morning, they both rolled their eyes and wondered aloud what the White House was thinking when he was picked.

America has produced few better respected senior executives than Immelt. And for an administration that needed better ties with the business community in a hurry, he seemed like an excellent choice. But as one of the officials observed to me, he was a disaster waiting to happen even before the tax hubbub and GE's ties to the Fukushima nuclear calamity became hot topics. Why? Because with so much of GE's revenue coming from outside the United States, it was only a matter of time before the company made a decision to invest in an overseas project that would be seen as sapping American jobs or at least failing to create them.

It's hard to minimize away such concerns. Sooner or later a GE corporate decision will spin up into a little firestorm among the punditerati and ... with these other two problems already on the board ... it'll be strike three. Frankly, at that point or even before then the GE CEO will probably make the determination himself that the advisory role is a losing proposition for him. It's too exposed and the interests of a big multinational like GE and those of the United States government are much less aligned than they have been at any time in the past.

Thus this seemingly small issue associated with one individual and with Washington's insatiable appetite for controversy is actually related to a bigger issue that few policymakers have a good answer for. The U.S. government is charged with advancing national interests, that is to say, the interests of U.S. citizens and America's peace and prosperity. Just because a company is based in the United States or employs lots of U.S. citizens doesn't mean that it regularly or dependably acts in the U.S. interests. It doesn't matter where a company is headquartered therefore but whether it employs Americans or contributes tax revenue to the U.S. government or invests in the United States or generates economic activity here. Businesses and business groups may argue to the contrary and wrap themselves in the flag but the reality is that the U.S. is competing for the economic favor of those companies. The United States needs the companies and on many issues the companies need the United States, but this is a relationship that should be seen as one between potential and impermanent partners not between automatic allies.

That means companies like GE will seek to minimize their tax burdens and sometimes they will locate factories someplace else. The American people shouldn't be surprised by that and neither should be presidents nor CEOs working with the government. After all, as the scorpion said to the frog after first hitching a ride across a pond on his back and then poisoning him with a strike from his tail, "it's in my nature." It's the incorrect expectations that result in the fatal sting, not something fundamentally flawed in either of the participants.

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