Thursday, April 14, 2011

Obama's Deficits: The Speech And What Comes Next

President Obama laid out his long-term deficit strategy in a televised speech yesterday afternoon.  As described by The Times, Obama laid out a "mix of long-term spending cuts [and] tax increases," and rejected "the fundamental changes to Medicare and Medicaid proposed by Republicans."

It feels like the Republicans have pushed Obama and the Democrats into making the dreaded long term deficit the great issue of our time, one that requires immediate attention and drastic solutions.  It seems to me that a major presidential speech about the economy should have focused more on unemployment than the deficit, but what do I know?  In any event, the general consensus from the left/progressive community appears to be relief that Obama did not compromise with himself by staking out a more centrist position on budget priorities, pleasant surprise that he actually stood up for core progressive values, and concern about what happens next. 

Obama's speech did include, as Steve Benen put it, a "full throated condemnation" of the Republican's budget plan, rejecting the widely held notion that there was anything serious or courageous about it.  Obama also gave us "a progressive vision of government."  Benen pointed out that with "passion and conviction," the President, "made a point of reminding his audience that government, the institutions of the modern welfare state, and the modern social compact are worthy of a spirited defense."

Paul Krugman's take was that it was "much better than many of us feared."  He liked the way Obama "made a case for government," and "accused Republicans of pessimism" and "of abandoning a hopeful vision of America."  E.J. Dionne wrote that Obama finally laid out principles for which he was willing to fight.  Dionne praised four things about the speech:  (1) it called out the reactionary Republican plan as "an effort to slash government programs, in large part to preserve and expand tax cuts for the wealthy"; (2) it spoke "plainly about raising taxes" and on restoring the Clinton-era tax rates for the wealthy; (3) it called for cuts in defense spending; and (4) it  "was eloquent in defending Medicare and Medicaid," and it proposed "saving money by building on last year’s health-reform law."

So, the speech was good, but what really matters is what comes next.  Krugman said he could live with the plan if it were the end result, but not as a start in negotiations:  "If this becomes the left pole, and the center is halfway between this and Ryan, then no — better to pursue the zero option of just doing nothing and letting the Bush tax cuts as a whole expire."  Dionne pretty much said the same thing:   That "a good speech is only a first step," and that given Obama's negotiating style, which is to "concede, concede and concede again — and then compromise from an already heavily compromised position," his proposed cuts in domestic spending are "worrying."  Dionne, like Krugman, is concerned that this plan "comes to be defined as the 'left' pole in the negotiation.  As he wrote, it isn't; "a truly progressive budget would include more revenue raised in more progressive ways."

Such a budget has, in fact, been proposed by the Congressional Progressive Caucus.  The People's Budget, as Fuzzyone wrote, would: (1) eliminate the Bush tax cuts; implement Congresswoman Jan Schakowsk's millionaire's tax; (2) provide a public option for health care and let Medicare negotiate with drug companies; (3) raise the taxable minimum on Social Security; and (4) cut defense spending and withdraw our military from Iraq and Afghanistan.  Now, that's what I call a left pole, and that would have been a good place to start.


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