Obama And The Debt

Apr 17 2012 @ 1:32pm

Spending:scottolson:getty

Like David Brooks, I feel whip-sawed a lot of the time. The gamble of Obama's re-election message seems so far to be a mix of personal popularity and tax fairness. I can see the logic of this. Obama is hated by a resilient part of the population, but pretty well liked as a human being by many. As the CNN poll yesterday showed, he has real strengths but one obvious weakness:

Obama has double-digit leads over Romney on likeability, honesty, confidence, values, leadership and almost every other characteristic tested, with one important exception."Obama and Romney are essentially tied on who is more likely to get the economy moving again, and that may provide Romney an opening to chip away at Obama's current overall lead," says Holland.

And my view is that worries about the economy may not be assuaged by tepid, sustained growth this year alone. Obama hasn't gotten into my head yet how he plans to stabilize the debt or reform taxes. And yet both those issues seem to me to be crucial to seeing where Obama wants to take us. Here's what David Brooks has learned:

During Obama’s presidency, domestic spending topped out at 4 percent of G.D.P. But, in the Obama budget, over the next 10 years, that spending would fall to 2.2 percent, much lower than anything Reagan achieved … Annual federal deficits, which are at about 8 percent now, would come down to around 3 percent between 2015 and 2022. The total federal debt is now at about 74 percent of G.D.P. Under Obama’s plan, it would rise to 78.4 percent of G.D.P. in 2014 and then stabilize at about 76.5 percent from 2018 to 2022.

Basically, what we’re looking at is a period of stability, administration officials say, which would soothe credit markets and give us time to make further adjustments. This, they conclude, is responsible prudence.

There is indeed responsible prudence in this, as there was prudence in avoiding the debt trap that premature and excessive austerity has brought to Europe. But to present a budget proposal that never sees a balanced budget over a decade means the debt will grow and grow, unless it is inflated away. And at this moment in US history, we are facing a huge fiscal drain from the baby boom retirement. If anything, we should be running surpluses now.

The gap between Obama's plans and this reality unsettles me. I look at Romney and see much, much more debt – because of his massive defense increases, even further tax cutting, and refusal to specify which deductions will be ended to pay for it, and the political implausibility of the massive cuts to Medicare and Medicaid that he needs to keep the debt from spiraling.

But that shouldn't let Obama off the hook.

The president says he wants tax reform and debt reduction but is still playing politics in pushing the GOP out front on the issues. He may regret it. If he cannot show how he will cut the debt, not just slow its exponential growth, and if he cannot embrace a simpler, clearer tax system, he is ceding two central issues to the GOP. He may get away with it. But he once offered something more.

(Photo: Scott Olson/Getty)