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Hullabaloo


Wednesday, April 04, 2012

 
Let's hope we see more of this

by David Atkins

If his speech to the Associated Press yesterday is any indication, the President is starting to figure out that the Republicans are simply never going to work with him in any way, shape or form, and that the press is heavily to blame for allowing them to get away with it. I know it's probably false hope, but it might just mean that there has started to be an awakening on the part of the President and his advisers that they're living in a nakedly partisan world, and that they might as well recognize and embrace the fact that partisanship cannot be transcended at the federal level because one side has gone totally berserk, and the theoretical media constructs that are supposed to punish the guilty party have utterly failed to do their job.

It was a mostly combative and refreshingly partisan speech, but I think the most eye-opening element came when the President defended his own centrist record to the press with some exasperation. Consider this bit from the Q&A section:

MR. SINGLETON: Thank you, Mr. President. We appreciate so much you being with us today. I have some questions from the audience, which I will ask -- and I'll be more careful than I was last time I did this.

Republicans have been sharply critical of your budget ideas as well. What can you say to the Americans who just want both sides to stop fighting and get some work done on their behalf?

THE PRESIDENT: Well, I completely understand the American people’s frustrations, because the truth is that these are eminently solvable problems. I know that Christine Lagarde is here from the IMF, and she’s looking at the books of a lot of other countries around the world. The kinds of challenges they face fiscally are so much more severe than anything that we confront -- if we make some sensible decisions.

So the American people’s impulses are absolutely right. These are solvable problems if people of good faith came together and were willing to compromise. The challenge we have right now is that we have on one side, a party that will brook no compromise. And this is not just my assertion. We had presidential candidates who stood on a stage and were asked, “Would you accept a budget package, a deficit reduction plan, that involved $10 of cuts for every dollar in revenue increases?” Ten-to-one ratio of spending cuts to revenue. Not one of them raised their hand.

Think about that. Ronald Reagan, who, as I recall, is not accused of being a tax-and-spend socialist, understood repeatedly that when the deficit started to get out of control, that for him to make a deal he would have to propose both spending cuts and tax increases. Did it multiple times. He could not get through a Republican primary today.

So let's look at Bowles-Simpson. Essentially, my differences with Bowles-Simpson were I actually proposed less revenue and slightly lower defense spending cuts. The Republicans want to increase defense spending and take in no revenue, which makes it impossible to balance the deficit under the terms that Bowles-Simpson laid out -- unless you essentially eliminate discretionary spending. You don't just cut discretionary spending. Everything we think of as being pretty important -- from education to basic science and research to transportation spending to national parks to environmental protection -- we'd essentially have to eliminate.

I guess another way of thinking about this is -- and this bears on your reporting. I think that there is oftentimes the impulse to suggest that if the two parties are disagreeing, then they're equally at fault and the truth lies somewhere in the middle, and an equivalence is presented -- which reinforces I think people's cynicism about Washington generally. This is not one of those situations where there's an equivalence. I've got some of the most liberal Democrats in Congress who were prepared to make significant changes to entitlements that go against their political interests, and who said they were willing to do it. And we couldn't get a Republican to stand up and say, we'll raise some revenue, or even to suggest that we won't give more tax cuts to people who don't need them.

And so I think it's important to put the current debate in some historical context. It's not just true, by the way, of the budget. It's true of a lot of the debates that we're having out here.

Cap and trade was originally proposed by conservatives and Republicans as a market-based solution to solving environmental problems. The first President to talk about cap and trade was George H.W. Bush. Now you've got the other party essentially saying we shouldn’t even be thinking about environmental protection; let's gut the EPA.

Health care, which is in the news right now -- there's a reason why there's a little bit of confusion in the Republican primary about health care and the individual mandate since it originated as a conservative idea to preserve the private marketplace in health care while still assuring that everybody got covered, in contrast to a single-payer plan. Now, suddenly, this is some socialist overreach.

So as all of you are doing your reporting, I think it's important to remember that the positions I'm taking now on the budget and a host of other issues, if we had been having this discussion 20 years ago, or even 15 years ago, would have been considered squarely centrist positions. What's changed is the center of the Republican Party. And that’s certainly true with the budget.

Let's ignore the argument over whether centrism is the best approach. It isn't, of course, but that's not the point. The point is that the President is finally coming to terms with the fact that he's not about to get credit for it. Which led in turn to this response to the next question about the deficit (notice how obsessed the press seems to be with the deficit?):

I said this a few months after I was elected at the first G20 summit. I said the days when Americans using their credit cards and home equity loans finance the rest of the world’s growth by taking in imports from every place else -- those days are over. On the other hand, we continue to be a extraordinarily important market and foundation for global economic growth.

We do have to take care of our deficits. I think Christine has spoken before, and I think most economists would argue as well, that the challenge when it comes to our deficits is not short-term discretionary spending, which is manageable. As I said before and I want to repeat, as a percentage of our GDP, our discretionary spending -- all the things that the Republicans are proposing cutting -- is actually lower than it's been since Dwight Eisenhower. There has not been some massive expansion of social programs, programs that help the poor, environmental programs, education programs. That’s not our problem.

Our problem is that our revenue has dropped down to between 15 and 16 percent -- far lower than it has been historically, certainly far lower than it was under Ronald Reagan -- at the same time as our health care costs have surged, and our demographics mean that there is more and more pressure being placed on financing our Medicare, Medicaid and Social Security programs.

So at a time when the recovery is still gaining steam, and unemployment is still very high, the solution should be pretty apparent. And that is even as we continue to make investments in growth today -- for example, putting some of our construction workers back to work rebuilding schools and roads and bridges, or helping states to rehire teachers at a time when schools are having a huge difficulty retaining quality teachers in the classroom -- all of which would benefit our economy, we focus on a long-term plan to stabilize our revenues at a responsible level and to deal with our health care programs in a responsible way. And that's exactly what I'm proposing.

And what we've proposed is let's go back, for folks who are making more than $250,000 a year, to levels that were in place during the Clinton era, when wealthy people were doing just fine, and the economy was growing a lot stronger than it did after they were cut. And let's take on Medicare and Medicaid in a serious way -- which is not just a matter of taking those costs off the books, off the federal books, and pushing them onto individual seniors, but let's actually reduce health care costs. Because we spend more on health care with not as good outcomes as any other advanced, developed nation on Earth.

And that would seem to be a sensible proposal. The problem right now is not the technical means to solve it. The problem is our politics. And that's part of what this election and what this debate will need to be about, is, are we, as a country, willing to get back to common-sense, balanced, fair solutions that encourage our long-term economic growth and stabilize our budget. And it can be done.

One last point I want to make, Dean, that I think is important, because it goes to the growth issue. If state and local government hiring were basically on par to what our current recovery -- on par to past recoveries, the unemployment rate would probably be about a point lower than it is right now. If the construction industry were going through what we normally go through, that would be another point lower. The challenge we have right now -- part of the challenge we have in terms of growth has to do with the very specific issues of huge cuts in state and local government, and the housing market still recovering from this massive bubble. And that -- those two things are huge headwinds in terms of growth.

I say this because if we, for example, put some of those construction workers back to work, or we put some of those teachers back in the classroom, that could actually help create the kind of virtuous cycle that would bring in more revenues just because of economic growth, would benefit the private sector in significant ways. And that could help contribute to deficit reduction in the short term, even as we still have to do these important changes to our health care programs over the long term.

If these words are put into action during a second term, it may well be that a disillusioned and chastened President Obama may be the President in his second term that many of us hoped he would be in his first. It's not terribly likely, admittedly, but one can certainly hope. The positive signs are there.


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