The president's policy is simple, really. More stimulus now, more fiscal retrenchment later. And there is no way that we can – or should – balance the budget entirely on the backs of the poor and the middle class. There has to be some contribution from those most successful in an economy that continues to reward them more and more generously, even as the country's debt escalates.
The deal is basically this:
$1.5 trillion in tax increases, primarily on the wealthy, through a combination of letting the Bush-era tax cuts expire, closing loopholes and limiting the amount that high earners can deduct. The proposal also includes $580 billion in adjustments to health and entitlement programs, including $248 billion to Medicare and $72 billion to Medicaid. Administration officials said that the Medicare cuts would not come from an increase in the Medicare eligibility age.
Senior administration officials who briefed reporters on some of the details of Mr. Obama’s proposal said that the plan also counts a savings of $1.1 trillion from the ending of the American combat mission in Iraq and the withdrawal of American troops from Afghanistan.
So a Democratic president is prepared to cut Medicare even further than he already has, while taking us back to Clinton era tax rates for the wealthy and ending the Bush-Cheney wars. Isn't this what he was elected to do? And if the alternative is gutting Medicare, or social security, while maintaining historically low tax rates for the super-rich, I just don't see how this isn't a winning argument.
Some believe that's now irrelevant. By allowing the GOP to define his presidency in grotesquely misleading ways and by presiding over continued mass unemployment, Obama is, we are told, toast. But this is political gaming, not policy decision-making. I remain of the view that, in the end, arguments matter and proposals count. A 2-1 spending cuts to tax hikes ratio is substantively what many Americans support. Greg Sargent notes of a recent poll:
* A solid majority, 56-30, favors significantly cutting payroll taxes for working Americans.
* A majority, 52-40, favors Federal aid to state governments to avert public employee layoffs.
* A huge majority, 80-16, favors spending money on the nation’s infrastructure in order to try to create jobs.
* A big majority, 71, favors reducing the deficit through a combination of tax increases and spending cuts; a meager 21 percent favors only spending cuts.
* A solid majority, 56-37, favors reducing the deficit with tax hikes on households earning $250,000 a year or more.
* A solid majority, 56-29, thinks creating jobs should be prioritized over cutting spending.
If these are the terms of the fiscal and economic debate, it seems to me that Obama has positioned himself on the majority side, and the GOP, especially if led by Perry, are on a dangerously long limb. I'd prefer major tax reform on the Bowles-Simpson lines. I'd prefer more Medicare savings. But this is a sensible set of proposals, hard to oppose without resort to hard ideology, and worth trying.
(Photo: Chip Somodevilla/Getty.)