Their vision is less about reducing the deficit than it is about changing the basic social compact in America. [...] It is not going to happen while I'm president.That's what President Obama declared about the Paul Ryan Budget plan in his address on fiscal policy just a while ago. In it, he laid out a bold vision to reduce the nation's debt by $4 trillion over the next 12 years, while pledging to protect our social contracts with our seniors, children and the society's most vulnerable as well as critical investments in our future. He called out Paul Ryan's budget plan as one that transforms us into a fundamentally different country by breaking those contracts to pay for tax breaks for the rich.
But the President also had warnings for the liberal side of this debate. He called out the fearmongering that happens too often on our side centered around the subjects of social security and Medicare, and warned doing nothing at all is not an option, as doing nothing will ultimately result in the collapse of those obligations. The President said:
If we truly believe in a progressive visioin of our country, we have an obligation to prove we can afford our commitments.Precisely. The President made it clear in his speech that we cannot solve our country's fiscal woes either by pretending that even the wealthy should not have to pay a fairer share to protect our social contracts and our investments in the future, nor by pretending that no spending reductions anywhere is needed. That dichotomy is the old debate. The new approach is not about ideological rigidity but about solutions. The President laid down a marker for the country: start answering the question about how we protect our investments in our future and our social contracts while reducing the debt. Because the debt is itself a threat to a progressive vision of the country: the uber-Right would like nothing more than to have an outsized debt and its interest eat up more and more of the federal budget so we have less and less for our priorities, not to mention eventually drive up interest rates as government borrowing crowds out private investment.
Here's the President's speech, in full:
I will soon post a transcript, but below are some notes from the President's speech. But as you read them, it might be helpful to also familiarize yourself with my series posted here on the Fiscal Commission Chairs' Report, as a lot of the President's plan's groundwork came from there. But as you do so, keep in mind that his plan is not a copycat, but rather, it is used as a blueprint.
First, the President laid out a vision of the country that our budget must match. He reminded us that we are all connected and that everyone deserves a basic measure of security and dignity, represented by cherished programs like Social Security, Medicare, unemployment insurance, and Medicaid. "We would not be a great country without those contracts," said the President. He also didn't back away from pointing out that the start of America's debt crisis was during the 1980s, the rein of the great conservative hero Ronald Reagan, and he held up a mirror to the Republican party for its own Russian roulette in the first decade of this century that is responsible for today's conditions.
Obama made no apologies for emergency measures taken to stabilize the economy, prevent teacher and public safety officer layoffs in the state, and protecting unemployment benefits of countless jobless Americans. It was "absolutely the right thing to do," he boldly stated. But the debt problem is not to be ignored, as soon our entitlements, defense budget and interest on the debt alone will consume the entirety of our federal revenues if nothing is changed.
And so, the President said that we must reduce debt in a way that protects our commitments, investments in the future and creates jobs. To do that, tough choices have to be made. The President reminded us that it's time to stop the silly games where we want a strong national defense, to preserve our contract, to protect medical and technological research and advancements, and yet believe that no one should have to pay for it. It's time for that silliness to end and serious discussions to begin, and merely targeting the 12% that is our non-defense discretionary budget will not solve this issue.
The President then called out Paul Ryan's plan as one that will devastate the American dream, destroy the social contract, and essentially tell us that we cannot afford the America we believe in. Obama rejected Ryan's calls to nearly eliminate national investments in clean energy and education, to cut Pell grants for deserving students, and to turn Medicare into a you-are-on-your-own voucher program that will cost the average senior $6400 more. He then made this contrast even more vivid by pointing out that Ryan's plan would give millionaires and billionaires an additional $200,000, each of which would be paid for by kicking 33 seniors out of Medicare and into Paul's voucher plan. President Obama would have no part of it.
In his own solutions, the President proposed a plan to cut the debt by $4 trillion in 12 years, including a saving of $750 billion over that time by continuing to find savings in line with last week's budget agreement, cutting ineffective programs, etc. He also stressed that additional savings in the Defense budget would be integral to his plan, and he pointed out the $400 billion in cuts Secretary Gates has already identified in Defense over the next decade, and said the Administration wants to go further. Quite importantly, such a reworking of the defense budget would involve a review of America's capabilities and role in a new, changing world. That is, the President basically said that we cannot afford to be the world's policeman anymore.
Now, I know there will be a lot of screaming in the Leftopian blogosphere about this next part, so please listen and read carefully. The President is absolutely committed to bending the cost curve of national health expenditures. But he also made it crystal clear that unlike the Republicans, he would not do so by reducing benefits or kicking deserving people off the programs. Instead, Obama wants to focus on the cost of health care itself. Health reform was a great start which would produce a saving of $1 trillion in national health care spending over the next 10 years. A new payment system under Medicare and Medicaid that is based on results and discourages provider mistakes and repeat procedures would be key. The President also advocated for a health care experts panel that would recommend ways to reduce costs with the authority to force Congress to act one way or another.
The President also stood tall to protect social security, to make higher income earners pay more into it, and bring reforms to the system without slashing benefits or succumbing to privatization efforts. The president warned against freakout politics on this too, saying that any talk of reform on this does not automatically equal efforts to cut or gut these valued social contracts.
The President also went after - quite courageously in my view - tax expenditures, both corporate and individual. As I said in my series back in November, tax deductions are a regressive form of taxation - the richer you are, the more exemptions you can take. So the President called for limiting the tax expenditures (i.e. deductions) that can be claimed by the top 2% of income earners. I think that's a great start.
Tax code reform in a progressive way was also on Obama's mind. He pointed out that the wealthy today have the lowest tax burden in the last half century, and that our tax code needs to be reformed so that those at the lower and middle ends of the income spectrum are not left on their own to wade through our tax codes on their own when the rich can hire tax attorneys and accountants.
Now, I know there's going to be firebreathing attacks on the President from the Right for having the courage to take on the deficit in a meaningful way. They will lie, cheat and steal to get their way. But I fear he will also have to suffer unsubstantiated, vile and maybe even racist attacks from some radicals who take the guise of the Left. There's a solution to this - it is that we all have to be engaged as informed citizens, not ideological monoliths. We can solve this problem, ensure the future for this country and protect what is good in America, but only if we take our role as citizens as more important than any fearmongering and misinformation campaigns, no matter from which extreme it comes.