The logic behind president Obama's budget has one extremely sensible feature: it distinguishes between spending that simply adds to consumption, and spending that really does mean investment. His analogy over the weekend – that a family cutting a budget would rather not cut money for the kids' education – is a sound one. We do need more infrastructure, roads and broadband, non-carbon energy and basic science research, and some of that is something only government can do. In that sense, discretionary spending could be among the most important things government could do to help Americans create wealth themselves. And yet this is the only spending Obama wants to cut.
But the core challenge of this time is not the cost of discretionary spending. Obama knows this; everyone knows this. The crisis is the cost of future entitlements and defense, about which Obama proposes nothing. Yes, there's some blather. But Obama will not risk in any way any vulnerability on taxes to his right or entitlement spending to his left. He convened a deficit commission in order to throw it in the trash. If I were Alan Simpson or Erskine Bowles, I'd feel duped. And they were duped. All of us who took Obama's pitch as fiscally responsible were duped.
The cynical political calculation is obvious and it is well put by Yglesias and Sprung. If Obama backs Bowles-Simpson, the GOP will savage him for the tax hikes, while also scaring the wits out of the elderly on Medicare. The Democratic left – just look at HuffPo today – will have a cow. Indeed, if Obama backs anything, the GOP will automatically oppose him. He has to wait for a bipartisan agreement which he can then gently push ahead. But that's exactly why we are in this situation today. Because no president has had the balls to deal with it, and George W. Bush made it all insanely worse. Sprung says the proposal on corporate taxes is a trial balloon. He argues that:
Corporate income taxes account for about 12% of the Federal government's revenue. Obama's core premise for reforming them is structurally similar to the Bowles-Simpson commission's approach to personal tax reform: reduce targeted tax breaks while lowering the overall rate, currently at 35%.
And that's fine if you think we have plenty of time. But in a mere nine years, entitlements will account for 64 percent of all federal spending. And Obama just punted on his promise to cut Medicare payments to doctors, as pledged under Obamacare as a core part of the case that health insurance reform would cut the deficit. So congrats, Megan. We can chalk that up as a cynical diversion (even though Obama pledges to find savings elsewhere in the Medicare budget to make up for this lie – a promise we now have no reason to trust or believe).
There is some hope, as David Brooks has noted. Those who want to save the useful things that government alone can do, while pulling back from the fiscal brink, have to
get behind an effort now being hatched by a group of courageous senators: Saxby Chambliss, Mark Warner, Tom Coburn, Dick Durbin, Mike Crapo and Kent Conrad. These public heroes have been leading an effort to write up the Simpson-Bowles deficit commission report as legislation to serve as the beginning for a serious effort to get our house in order. They’ve been meeting with 20 to 40 of their colleagues to push this along.
They have to lead, because this president is too weak, too cautious, too beholden to politics over policy to lead. In this budget, in his refusal to do anything concrete to tackle the looming entitlement debt, in his failure to address the generational injustice, in his blithe indifference to the increasing danger of default, he has betrayed those of us who took him to be a serious president prepared to put the good of the country before his short term political interests. Like his State of the Union, this budget is good short term politics but such a massive pile of fiscal bullshit it makes it perfectly clear that Obama is kicking this vital issue down the road.
To all those under 30 who worked so hard to get this man elected, know this: he just screwed you over. He thinks you're fools. Either the US will go into default because of Obama's cowardice, or you will be paying far far more for far far less because this president has no courage when it counts. He let you down. On the critical issue of America's fiscal crisis, he represents no hope and no change. Just the same old Washington politics he once promised to end.
(Photo: US President Barack Obama talks to 8th grade students in the school cafateria after a tour of a science class during a visit to Parkville Middle School and Center of Technology on Feburary 14, 2011 in Baltimore, Maryland. By Tim Sloan/AFP/Getty.)