Where Obama Feared To Tread

The president’s walking away from the deficit commission he set up was, to my mind, one of those moments when his caution was not about the substance of the issue but the politics. He knows we need to cut entitlements and defense or face fiscal collapse. And yet he has allowed Paul Ryan to move into the vacuum Obama created on the most important domestic issue of the day. Ryan’s proposal, whatever you think of it, is serious. His proposal for Medicare looks to me like an extension of the Romney/Obama healthcare exchanges. His proposal for Medicaid – block grants to the states – will inevitably cut down on sky-rocketing healthcare spending. His tax reform is straight out of Bowles-Simpson. Alas, his op-ed is needlessly partisan in its initial lashing out at Obama. That’s not the way to start a real dialogue, which is what we desperately need. But the good news is that we finally have a political party being honest about what it takes to avoid falling off a fiscal cliff. It means sacrifice. And my objection to the Ryan plan really comes down to the injustice of imposing major sacrifices for the poor and elderly, while exempting the wealthy from any sacrifice at all. This is because of Ryan’s and the GOP’s intransigent, doctrinaire refusal to bring taxes back to their Clinton-era or Reagan-era levels, even as they have given themselves a great opportunity to raise revenues as painlessly as possible.

All the GOP has to do is make tax reform revenue-positive rather than revenue-neutral. Income tax rates would come down – but not quite as low as they might have. The money left over could reduce the burden on the poor. If he advocated serious cuts in defense, rather than the minor measures backed by Gates, he’d be on much firmer ground as well.

But this is clearly an opening bid – and a powerful rebranding of the GOP, after the Bush years, as fiscally serious. As David Brooks wrote this morning, we shall soon see what Obama is made of by how he responds. We were told that Obama did not embrace long-term fiscal reform in his State of the Union this year because he needed political cover from the right. Well, he’s got it now. Will he react by demagoguing the issue as the liberal blogosphere is doing – or by seeking a way to build on it, to trade cuts in Medicare and Medicaid for a revenue-positive tax reform and deeper defense cuts?

I don’t accept the logic that this cannot be done in the year before a general election. The massive debt and deficits can be ducked no longer. While I’m sure there are many legitimate complaints about Ryan, in this proposal at least, he gets real points for seizing the initiative on honest debt-reduction, and pushing it forward as a principal issue for the elections in 2012. For the first time, the Tea Party seems genuine and serious in its fiscal goals.

And the Democrats and Obama now have to offer a response. The question I’ll be asking is quite simply: how would they save $5.8 trillion from the federal budget over the next decade? Tell us, please.

(Photo: Getty Images).