Wednesday, April 13, 2011

The Devil’s in the Details

Barack Obama today offered up his vision of America and surprise, surprise, it stood in stark contrast to the one offered up by Paul Ryan and the Republicans. For the first time since he became president, Obama was the progressive his voters thought they were voting for in ’08. If that was a smile on your face, you weren’t alone.

For a change, the nation saw a combative Obama. Gone was the amenable, pragmatist. Instead this president, who never met a cause he couldn’t compromise on or an opponent he couldn’t capitulate to, seemed to draw a line in the sand and, in Clint Eastwood fashion, dared the Republicans to “Go ahead, make my day.”

One look at the transcript is all you need to realize this president meant business. He threw down the gauntlet and in the process defined what the 2012 election will end up being about. Finally, this president woke up and decided to create his own narrative instead of having it created for him by his opponents. I, for one, was pleasantly surprised.

There were several highlights worth noting.

First off, Obama drew a contrast between the Clinton years and the Bush years, something conservatives just hate being reminded of and something many voters tend to forget.

“Our leaders came together three times during the 1990s to reduce our nation’s deficit. They forged historic agreements that required tough decisions made by the first President Bush and President Clinton; by Democratic Congresses and a Republican Congress. All three agreements asked for shared responsibility and shared sacrifice, but they largely protected the middle class, our commitments to seniors, and key investments in our future.

“As a result of these bipartisan efforts, America’s finances were in great shape by the year 2000. We went from deficit to surplus. America was actually on track to becoming completely debt-free, and we were prepared for the retirement of the Baby Boomers.

“But after Democrats and Republicans committed to fiscal discipline during the 1990s, we lost our way in the decade that followed. We increased spending dramatically for two wars and an expensive prescription drug program – but we didn’t pay for any of this new spending. Instead, we made the problem worse with trillions of dollars in unpaid-for tax cuts – tax cuts that went to every millionaire and billionaire in the country; tax cuts that will force us to borrow an average of $500 billion every year over the next decade.

“And so, by the time I took office, we once again found ourselves deeply in debt and unprepared for a Baby Boom retirement that is now starting to take place. When I took office, our projected deficit was more than $1 trillion. On top of that, we faced a terrible financial crisis and a recession that, like most recessions, led us to temporarily borrow even more. In this case, we took a series of emergency steps that saved millions of jobs, kept credit flowing, and provided working families extra money in their pockets. It was the right thing to do, but these steps were expensive, and added to our deficits in the short term.”

But the President wasn’t done with just a history lesson. In typical Obama fashion he spoke to what government must do to put its economic house in order. He did not sugar coat the challenges ahead nor the threats they pose.

“Now that our economic recovery is gaining strength, Democrats and Republicans must come together and restore the fiscal responsibility that served us so well in the 1990s. We have to live within our means, reduce our deficit, and get back on a path that will allow us to pay down our debt. And we have to do it in a way that protects the recovery, and protects the investments [spending/taxes] we need to grow, create jobs, and win the future.

“Ultimately, all this rising debt will cost us jobs and damage our economy. It will prevent us from making the investments we need to win the future. We won’t be able to afford good schools, new research, or the repair of roads and bridges – all the things that will create new jobs and businesses here in America. Businesses will be less likely to invest and open up shop in a country that seems unwilling or unable to balance its books. And if our creditors start worrying that we may be unable to pay back our debts, it could drive up interest rates for everyone who borrows money – making it harder for businesses to expand and hire, or families to take out a mortgage.”

Then Obama did something unusual in politics; he got honest about what’s causing the deficit in the first place.

“You see, most Americans tend to dislike government spending in the abstract, but they like the stuff it buys. Most of us, regardless of party affiliation, believe that we should have a strong military and a strong defense. Most Americans believe we should invest in education and medical research. Most Americans think we should protect commitments like Social Security and Medicare. And without even looking at a poll, my finely honed political skills tell me that almost no one believes they should be paying higher taxes.

“Because all this spending is popular with both Republicans and Democrats alike, and because nobody wants to pay higher taxes, politicians are often eager to feed the impression that solving the problem is just a matter of eliminating waste and abuse –that tackling the deficit issue won’t require tough choices. Or they suggest that we can somehow close our entire deficit by eliminating things like foreign aid, even though foreign aid makes up about 1% of our entire budget.

“So here’s the truth. Around two-thirds of our budget is spent on Medicare, Medicaid, Social Security, and national security. Programs like unemployment insurance, student loans, veterans’ benefits, and tax credits for working families take up another 20%. What’s left, after interest on the debt, is just 12 percent for everything else. That’s 12 percent for all of our other national priorities like education and clean energy; medical research and transportation; food safety and keeping our air and water clean.

“Up until now, the cuts proposed by a lot of folks in Washington have focused almost exclusively on that 12%. But cuts to that 12% alone won’t solve the problem. So any serious plan to tackle our deficit will require us to put everything on the table, and take on excess spending wherever it exists in the budget. A serious plan doesn’t require us to balance our budget overnight – in fact, economists think that with the economy just starting to grow again, we will need a phased-in approach – but it does require tough decisions and support from leaders in both parties. And above all, it will require us to choose a vision of the America we want to see five and ten and twenty years down the road.”

Bill Maher, on his Real Time program, said pretty much the same thing when he compared the cuts that Republicans are proposing to basically slicing a tiny sprig of parsley on your plate while ignoring the main entree.

But before moving on to how he plans on dealing with the mounting debt, Obama took aim at Paul Ryan and the Republicans. This is where if you were a progressive listening, you finally had something to crow about. For once you were proud of this president instead of apologetic.

“A 70% cut to clean energy. A 25% cut in education. A 30% cut in transportation. Cuts in college Pell Grants that will grow to more than $1,000 per year. That’s what they’re proposing. These aren’t the kind of cuts you make when you’re trying to get rid of some waste or find extra savings in the budget. These aren’t the kind of cuts that Republicans and Democrats on the Fiscal Commission proposed. These are the kind of cuts that tell us we can’t afford the America we believe in. And they paint a vision of our future that’s deeply pessimistic.

“It’s a vision that says if our roads crumble and our bridges collapse, we can’t afford to fix them. If there are bright young Americans who have the drive and the will but not the money to go to college, we can’t afford to send them. Go to China and you’ll see businesses opening research labs and solar facilities. South Korean children are outpacing our kids in math and science. Brazil is investing billions in new infrastructure and can run half their cars not on high-priced gasoline, but biofuels. And yet, we are presented with a vision that says the United States of America – the greatest nation on Earth – can’t afford any of this.

“It’s a vision that says America can’t afford to keep the promise we’ve made to care for our seniors. It says that ten years from now, if you’re a 65 year old who’s eligible for Medicare, you should have to pay nearly $6,400 more than you would today. It says instead of guaranteed health care, you will get a voucher. And if that voucher isn’t worth enough to buy insurance, tough luck – you’re on your own. Put simply, it ends Medicare as we know it.

“This is a vision that says up to 50 million Americans have to lose their health insurance in order for us to reduce the deficit. And who are those 50 million Americans? Many are someone’s grandparents who wouldn’t be able afford nursing home care without Medicaid. Many are poor children. Some are middle-class families who have children with autism or Down’s syndrome. Some are kids with disabilities so severe that they require 24-hour care. These are the Americans we’d be telling to fend for themselves.

“Worst of all, this is a vision that says even though America can’t afford to invest in education or clean energy; even though we can’t afford to care for seniors and poor children, we can somehow afford more than $1 trillion in new tax breaks for the wealthy. Think about it. In the last decade, the average income of the bottom 90% of all working Americans actually declined. The top 1% saw their income rise by an average of more than a quarter of a million dollars each. And that’s who needs to pay less taxes? They want to give people like me a two hundred thousand dollar tax cut that’s paid for by asking thirty-three seniors to each pay six thousand dollars more in health costs? That’s not right, and it’s not going to happen as long as I’m President.

“The fact is their vision is less about reducing the deficit than it is about changing the basic social compact in America. As Ronald Reagan’s own budget director said, there’s nothing “serious” or “courageous” about this plan. There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires. There’s nothing courageous about asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill. And this is not a vision of the America I know.”

Wow! You are now free to exhale. Obama hasn’t thrown down like that or been this passionate since his campaign days. Last, but not least, the President spoke about the shared sacrifice we all must make.

Like Ryan and the Republicans, Obama also proposed to cut $4 trillion off the deficit but in a more “balanced approach. It’s an approach that puts every kind of spending on the table, but one that protects the middle-class, our promise to seniors, and our investments in the future.”

Ostensibly, it’s a one/two punch: cuts in domestic and military spending combined with elimination of the Bush tax cuts for the top 2%. He seemed to show regret over the compromise he made with Republicans in the lame duck. “In December, I agreed to extend the tax cuts for the wealthiest Americans because it was the only way I could prevent a tax hike on middle-class Americans. But we cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society. And I refuse to renew them again.”

His bravado notwithstanding, Obama will have a difficult time with House Republicans over that pledge, but it was refreshing to see him show some spine. As for how he will pull off his feat, the devil, as they say, is in the details. For starters, slashing defense spending by only $400 billion over twelve years is peanuts and won’t even begin to deal with the waste that is in the Pentagon. And while eliminating the Bush tax cuts for the wealthy is all fine and dandy, the truth is that only by eliminating all of them will you begin to significantly increase treasury revenues back to where they were during the Clinton Administration. And while Obama is quite correct in saying that at the moment Social Security has not added to the deficit, it must be dealt with at some point. By 2037 the fund will be paying out more than it takes in. He had an excellent opportunity to propose an elimination of the cap on FICA contributions that employees make. He punted.

But overall, I was quite impressed with his demeanor and his boldness. You get the feeling after more than two years of pussyfooting around and hoping Republicans would be reasonable partners, he finally woke up and smelled the caffeine. They are never going to play ball with him, so this time he brought his own ball with him. He looked far more presidential than he has ever looked, and that is a refreshingly good thing for the country to finally see. We were all wondering if this day would ever come to pass. Now that it has, let’s hope it isn’t a temporary faze.

The days and months ahead will test the mantle of this president and tempt him to seek middle ground and compromise. The debt ceiling issue will soon come to a head. Obama must resist his lesser angles with all the earnestness at his command irrespective of what it might cost him temporarily in the polls. He must hold onto this moment and convince the electorate that his plan is not only the best road ahead; it is the only choice possible for the country. Failure would not only spell defeat in 2012; it would mean the ruination of the country as a whole.

In the end Paul Krugman may have summed it up best. “So what we got today was much better than some of the hints and trial balloons; it’s a plan that we could live with. But it’s a center-right plan already; if it’s the starting point for negotiations that move the solution toward lower taxes for the rich and even harsher cuts for the poor, just say no.”


Murk Floobis said...

What do you mean he hasn't sounded like that "since his campaign days"? He was campaigning. That's what he does. That's really about all this empty suit of a politician ever does.

I know you think supporting Obama is a noble and righteous course, but aren't you at all worried about the deficit, the national debt, the unemployment rate, the value of the dollar? How's he doing with all that? What kind of a grade would you give him (I mean, without starting of your remarks with, "... but the Republicans ...")? Honestly, I wonder how you think this guy is following through with his promises to fix this mess.

Murk Floobis said...

Also, I sit here absolutely slack-jawed at your apparent belief that Obama has made repeated overtures to the GOP and offers of sincere compromise ... only to be thwarted by unbending opponents. Are you blind to this man's faults?! He's the most partisan, sniping, petty, divisive president of my lifetime, by a mile. For example, he and the Dems virtually shut the GOP out of the health care process. Seriously, are you kidding?

Confirmation bias is such an overwhelmingly powerful force.