President Obama didn't pull any punches today in his speech on the nation's budget and our path out of the massive debt and deficit we face today. Fully one-third of our budget is deficit spending yet only 12% of it is discretionary spending so, Houston, we have a problem.
Eliminating spending on war or in foreign aid or "waste" aren't going to do it. Fundamental shifts are needed. The Republicans think it can be done on the backs of senior citizens, the poor, the middle class and other politically powerless groups while retaining the massive tax cuts that are largely responsible for the hole we're in right now.
President Obama has a different view.
He laid out multi-part plan. One part reduces spending. Another part reduces defense spending. A third part reduces health care spending. A final part involves letting the budget-busting Bush tax cuts expire.
The President laid out his case magnificently and took the Republicans to task for their absurd budget proposal. This, to me, was the most pitch-perfect part of the speech.
A 70% cut to clean energy. A 25% cut in education. A 30% cut in transportation. Cuts in college Pell Grants that will grow to more than $1,000 per year. That’s what they’re proposing. These aren’t the kind of cuts you make when you’re trying to get rid of some waste or find extra savings in the budget. These aren’t the kind of cuts that Republicans and Democrats on the Fiscal Commission proposed. These are the kind of cuts that tell us we can’t afford the America we believe in. And they paint a vision of our future that’s deeply pessimistic.
It’s a vision that says if our roads crumble and our bridges collapse, we can’t afford to fix them. If there are bright young Americans who have the drive and the will but not the money to go to college, we can’t afford to send them. Go to China and you’ll see businesses opening research labs and solar facilities. South Korean children are outpacing our kids in math and science. Brazil is investing billions in new infrastructure and can run half their cars not on high-priced gasoline, but biofuels. And yet, we are presented with a vision that says the United States of America – the greatest nation on Earth – can’t afford any of this.
It’s a vision that says America can’t afford to keep the promise we’ve made to care for our seniors. It says that ten years from now, if you’re a 65 year old who’s eligible for Medicare, you should have to pay nearly $6,400 more than you would today. It says instead of guaranteed health care, you will get a voucher. And if that voucher isn’t worth enough to buy insurance, tough luck – you’re on your own. Put simply, it ends Medicare as we know it.
This is a vision that says up to 50 million Americans have to lose their health insurance in order for us to reduce the deficit. And who are those 50 million Americans? Many are someone’s grandparents who wouldn’t be able afford nursing home care without Medicaid. Many are poor children. Some are middle-class families who have children with autism or Down’s syndrome. Some are kids with disabilities so severe that they require 24-hour care. These are the Americans we’d be telling to fend for themselves.
Worst of all, this is a vision that says even though America can’t afford to invest in education or clean energy; even though we can’t afford to care for seniors and poor children, we can somehow afford more than $1 trillion in new tax breaks for the wealthy. Think about it. In the last decade, the average income of the bottom 90% of all working Americans actually declined. The top 1% saw their income rise by an average of more than a quarter of a million dollars each. And that’s who needs to pay less taxes? They want to give people like me a two hundred thousand dollar tax cut that’s paid for by asking thirty three seniors to each pay six thousand dollars more in health costs? That’s not right, and it’s not going to happen as long as I’m President.
If we were worried about messaging from the White House on the budget battles ahead, those worries should be largely alleviated after his speech today.
I was privileged to be on a national bloggers' conference call today with White House adviser David Plouffe, Macon Phillips, and Brian Deese (of the National Economic Council.) After reviewing the President's proposal, they opened it up for questions. Five bloggers were permitted to ask questions:
Chris Bowers - Daily Kos
John Aravosis - AMERICAblog
Jed Lewison - Daily Kos
Sam Stein - Huffington Post
Chris Savage - Eclectablog
Some of the questions involved specifics about the President's budget plan. For example, Chris Bowers asked if the President would allow ALL tax cuts to expire to ensure that the Bush tax cuts for the wealthy would die. Plouffe unequivocally stated that the President would not allow the Bush tax cuts on the wealthiest Americans to be extended again. Period.
Lewison and Stein both asked about a proposed 1:3 ratio of tax cuts to spending cuts that had been discussed on an earlier media briefing. Plouffe made it clear that this ratio did NOT include the Bush tax cuts for the wealthiest Americans (which are about $1 trillion dollars over the 12 years being discussed today. Rather, those cuts would be in addition to additional $4 trillion in cuts President Obama is proposing, which brings the overall ratio to more like 40% tax cuts.
My question was this: Given that Republicans are already taking the stance that tax cuts are off the table, how does the Administration plan to avoid the hostage-taking situation the Republicans have created several times over the past year?
The answer was illuminating. David Plouffe made it clear that they are actually quite pleased with the deal that was struck last week. Despite all their crowing, the amount of actual NEW cuts the Republicans obtained were, in truth, quite minimal. Many of the cuts were already planned and most of the essential items that the Obama administration prioritized were maintained unharmed. It was clear that they feel pretty confident in their ability to negotiate with the Republicans, something supported by their success last week. They are also quite comfortable having a public debate in the year prior to the Presidential election about who should pay for deficit reduction and who should start making a sacrifice. When the debate comes down to seniors and the poor and middle class versus the top 1% wealthiest Americans, they are in a very good negotiating position.
The Republican plan asks that 33 seniors pay $6,000 more per year in Medicare costs to fund the $200,000 per year average tax cut for a single millionaire. When he spoke today, President laid that on the table and dared the Republicans to defend it.
I'm just sayin'...
Cross-posted at Eclectablog.com.