My initial impression is that this looks a lot like the Simpson-Bowles report, but in a good way. It doesn’t go quite as far on defense cuts, but it also doesn’t implement a cap on tax or spending. It goes a lot further than Ryan’s budget does in terms of actually figuring out ways to save money rather than just using caps to shift costs onto states/beneficiaries.
In truth, Mr Obama’s speech today was less a blueprint of how to save America from fiscal ruin than a means to establish a stronger negotiating position. Until last week, Simpson-Bowles had represented the centre of the fiscal debate; it was the basis for the Gang of Six’s deliberations. Mr Ryan’s plan threatened to move the centre of debate significantly to the right. By staking out ground to the left of Simpson-Bowles, Mr Obama may succeed in moving the debate back to the centre.
I could live with this as an end result. 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.
His rebuttal of the Ryan plan was all very well–I agree it's no good–but the administration still lacks a rival plan. That, surely, is what this speech had to provide, or at least point to, if it was going to be worth giving in the first place. His criticisms of Ryan and the Republicans need no restating. And did the country need another defense of public investment in clean energy and the American social contract? It wanted to be told how fiscal policy is going to be mended: if not by the Ryan plan, with its many grave defects, then how?
Not only did Obama fail to resurrect his own deficit commission’s plan, he offered nothing specific in response to the specifics Paul Ryan and the GOP have already laid on the table. It’s almost impossible to present a substantive criticism of the proposal because it contains nothing substantive, an impression that more and more people have of this White House.
The new health care reforms sound very good upon initial inspection–and, particularly when added to cost controls already in the Affordable Care Act, this is far more serious than what Paul Ryan and the Republicans have in mind. And if Obama is more serious about controlling health care costs, then he's more serious about reducing deficits overall.
Obama left other deficit reduction ideas on the table. He does not support raising the Medicare retirement age to 67, as Ryan suggests. A senior administration official was also careful to point out that capping or eliminating the tax exclusion for job-sponsored health benefits has not been proposed. (This was a major proposal in Simpson-Bowles and one that health care economists say should be seriously considered if the long-term health spending crisis is to be addressed.) Simpson-Bowles also recommended increasing cost-sharing for Medicare beneficiaries; Obama said nothing about this.
Essentially, the president declared that he still wants to raise taxes, that he is opposed to any substantive changes to entitlements — oh, and he wants to raise taxes. He did suggest that if somehow he hasn’t been able to cut spending by 2014 (anyone taking bets?), he would appoint a commission to recommend spending cuts and (surprise) tax increases. A commission: Now there’s an original idea.
That speech was not so especially eloquent. It was, however, very effective. It frames the debate in a way that is maximally useful for Democrats. This framing was made possible by the efforts of Republicans themselves, blinded by their own hopes, misdirected by their own messaging.
The Republican approach has been to embrace such radical proposals that they pull the terms of the debate rightward, making the unthinkable thinkable. The weakness of this approach is that it forces the party to adopt wildly unpopular positions. And not just wildly unpopular because they're "bold." Wildly unpopular because, as Obama explained, they benefit the rich and powerful and victimize the powerless, and they violate Americans' basic sense of civic obligation. They only way to force Republicans to abandon their maximalism is to force them to pay a price for their extremism. Today's speech may or may not result in a budget deal–I still prefer for Obama to wait until the Bush tax cuts expire–but it was an important step in that direction.
[T]here was a lot of liberals to love in this speech. Don't think this will shift public opinion substantially — remember the bully pulpit fallacy — but it sends a clear signal to Democrats who have spent the last couple of days wondering whether they were supposed to run around defending everything in Simpson-Bowles now that the battle lines have been drawn.
[I]f Obama had actually offered a multi-decade blueprint, like Ryan did, he would have had to concede that there’s no way he can pay for all his spending over the long term without Washington raisingtaxes on the middle-class and probably instituting a value-added tax. (On that count, one nonpartisan budget expert told me, the Obama plan is “ridiculous.”)
Question: is Obama laying down a marker in hopes of getting a bill that extends only the middle-class [Bush tax] cuts? Or is he laying down a marker knowing that Republicans will refuse to budge and therefore the entire Bush tax cut package will expire?
I fully expected the Democrats to respond to the Ryan budget by simple undiluted demagoguery—that is, with the “Paul Ryan’s America” part of this speech alone. And some Democrats in Congress have certainly done that, with all the usual preposterous dishonesty of the Democrats’ Mediscare playbook. But this speech did not limit itself to that. Its demagoguery was diluted some. It accepted Paul Ryan’s definition of the fiscal problem, and it accepted more or less his broad outline of what a solution would look like in fiscal terms—in terms of deficit and debt reduction. And so it defined the debate going forward as a debate about how best to achieve the Republicans’ fiscal goals.
[T]he president has decided to come off the sidelines and participate actively in the debate. He called for negotiations involving both parties and both houses of Congress as well as the White House to begin in early May. This discussion will be neither short nor easy. While it must reach some concrete agreements prior to a vote to raise the debt ceiling (a linkage the president seems to have accepted), many important issues are bound to be left unresolved by the president’s target date of late June. This momentous fiscal debate will probably dominate the 112th Congress and shape the 2012 presidential contest as well.
Right or wrong, "The People" whom the left extol as the virtuous voice of democratic government voted, in part, for deficit reduction — now. In my view, and obviously that of the president, now is the wrong time. But elections do have consequences. Cutting some spending — now — is one of them. Hence Obama is only accepting the people's wishes, as well as juggling the resulting and rather brutal reality of Capitol Hill.
[T]his was a good first speech of the 2012 re-election campaign. I have no doubt that it will reassure most of the Democratic base and appeal to the independents who are very skeptical of the Tea Party Republicans.
Live-blog of the speech here.
(Photo: President Barack Obama outlines his fiscal policy during an address at George Washington University in Washington, Wednesday, April 13, 2011. By Charles Dharapak/AP.)