Sober, Serious and Smart

President Barack Obama came to the George Washington University with his Presidency besieged by radical right wing proposals and his liberal credentials seemingly in grave doubt to pronounce his long-anticipated views on the nation's fiscal condition. Despite an opening joke, which frankly fell flat, he gave a sober, serious and smart address that was perhaps short on details but long on a vision speaking to values such as fairness and traits such as unbridled American optimism.

While I suspect some on the left may find aspects on which to quibble and I know that most if not all on the right will denounce his proposal to end the Bush tax cuts in the most vehement of terms, this nearly 45 minute speech interrupted only once by applause was at its starkest a study contrasting two diametrically opposed visions for the country.

Without mentioning Rep. Paul Ryan directly by name, the President lambasted the Wisconsin Republican for offering a vision that would "lead to a fundamentally different America than the one we've known throughout our history."

"A 70% cut in 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 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 maintain or commitment to Medicare and Medicaid, 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. Meanwhile, 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."

It was at this point that the President was interrupted by applause. Obama went to chide the Republican proposal as anything but serious or courageous. "There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires," said President Obama adding that he didn't think that "there’s anything courageous about asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill." In perhaps the opening salvo of the 2012 campaign, he hit the Republican proposal as offering a vision that "is less about reducing the deficit than it is about changing the basic social compact in America."

In contrast to the dark and pessimistic approach offered by the Republicans, the President gave his vision for the country remarkably rather succinctly and in upbeat terms:

The America I know is generous and compassionate. It’s a land of opportunity and optimism. Yes, we take responsibility for ourselves, but we also take responsibility for each other; for the country we want and the future that we share. We’re a nation that built a railroad across a continent and brought light to communities shrouded in darkness. We sent a generation to college on the GI Bill and we saved millions of seniors from poverty with Social Security and Medicare. We have led the world in scientific research and technological breakthroughs that have transformed millions of lives. That’s who we are. This is the America that I know. We don’t have to choose between a future of spiraling debt and one where we forfeit our investment in our people and our country.

The rest of the speech outlined what the President considers "a more balanced approach" to achieve $4 trillion in deficit reduction over 12 years. He gave four steps.

The first step in our approach is to keep annual domestic spending low by building on the savings that both parties agreed to last week.  That step alone will save us about $750 billion over 12 years.  We will make the tough cuts necessary to achieve these savings, including in programs that I care deeply about, but I will not sacrifice the core investments that we need to grow and create jobs.  We will invest in medical research.  We will invest in clean energy technology.  We will invest in new roads and airports and broadband access.  We will invest in education.  We will invest in job training.  We will do what we need to do to compete, and we will win the future.

The second step in our approach is to find additional savings in our defense budget.  Now, as Commander-in-Chief, I have no greater responsibility than protecting our national security, and I will never accept cuts that compromise our ability to defend our homeland or America’s interests around the world.  But as the Chairman of the Joint Chiefs, Admiral Mullen, has said, the greatest long-term threat to America’s national security is America’s debt.  So just as we must find more savings in domestic programs, we must do the same in defense.  And we can do that while still keeping ourselves safe. 

The third step in our approach is to further reduce health care spending in our budget. Now, here, the difference with the House Republican plan could not be clearer. Their plan essentially lowers the government’s health care bills by asking seniors and poor families to pay them instead. Our approach lowers the government’s health care bills by reducing the cost of health care itself.

Already, the reforms we passed in the health care law will reduce our deficit by $1 trillion. My approach would build on these reforms. We will reduce wasteful subsidies and erroneous payments. We will cut spending on prescription drugs by using Medicare’s purchasing power to drive greater efficiency and speed generic brands of medicine onto the market. We will work with governors of both parties to demand more efficiency and accountability from Medicaid.

The fourth step in our approach is to reduce spending in the tax code, so-called tax expenditures. In December, I agreed to extend the tax cuts for the wealthiest Americans because it was the only way I could prevent a tax hike on middle-class Americans. But we cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society. We can’t afford it. And I refuse to renew them again.

Beyond that, the tax code is also loaded up with spending on things like itemized deductions. And while I agree with the goals of many of these deductions, from homeownership to charitable giving, we can’t ignore the fact that they provide millionaires an average tax break of $75,000 but do nothing for the typical middle-class family that doesn’t itemize. So my budget calls for limiting itemized deductions for the wealthiest 2 percent of Americans -- a reform that would reduce the deficit by $320 billion over 10 years.

But to reduce the deficit, I believe we should go further. And that’s why I’m calling on Congress to reform our individual tax code so that it is fair and simple -- so that the amount of taxes you pay isn’t determined by what kind of accountant you can afford.

It was a solid speech and one that made the case for the achievements of government and the role that government does play in protecting the lives and security of all Americans. And it made the case for fairness in taxes. Considering the rather dismal year so far for the cause of liberalism, President Obama did show up today to restore his tarnished liberal credentials and to articulate without hyperbole the cause of government investment in our economy and in the American people. I just think we would all sleep more comfortably if President Obama showed up every day to burnish those liberal credentials. 

Tags: President Barack Obama, Rep. Paul Ryan, US Budget Issues, Simpson-Bowles Deficit Commission (all tags)

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