Obama's reasonable approach to deficit reduction

Our view: President Obama's plan for taming the deficit keeps the social safety net intact but demands lawmakers on both sides of the aisle compromise on taxes, health care and defense spending

April 14, 2011

The budget proposal President Barack Obama laid out Wednesday offered a thoughtful, balanced plan for tackling the nation's debt crisis that both acknowledged the threat posed by spiraling federal deficits and honored the country's promises to its most vulnerable citizens. In the current atmosphere of partisan hysteria and sniping, the nation needed to hear a reasoned discussion of the problems confronting us, and Mr. Obama delivered by framing his proposals in terms of the core values and governing philosophy he ran on during his campaign for the presidency.

In outline, Mr. Obama described his blueprint for managing the national debt, which now stands at about $14 trillion, as a four-pronged approach that calls on all Americans to make sacrifices but doesn't unfairly force the middle-class and the poor to absorb the brunt of the pain.

Under the president's proposal, the government would restrain annual discretionary spending to near current levels and cut about $400 billion from defense spending over the next 12 years through reductions that don't threaten America's security or ability to defend its interests around the world.

At the same time, it would curb rapidly rising health insurance costs through changes in how health providers and drug companies are reimbursed that were put in place by last year's health care reform law. Finally, Mr. Obama urged lawmakers to restructure and simplify the tax code for individuals and corporations, while allowing Bush-era tax cuts for the nation's wealthiest families to expire.

The president said his approach would cut some $4 trillion from the deficit over the next 12 years. That's roughly comparable to the $4.3 trillion in cuts over 10 years envisioned in the budget proposal introduced by Republican congressman Paul Ryan last week. But although the dollar savings in the two budget blueprints are similar, they would achieve those cuts in sharply contrasting ways, and they offer radically different visions of America's future.

The Republican budget plan would slash funding for the kinds of investments in the future that no great nation can afford to ignore — education, medical and scientific research, rebuilding roads and bridges and developing new, clean energy sources to reduce our dependence on foreign oil and cut the carbon emissions that cause global warming.

In addition, it would shove a disproportionate share of the burden of deficit reduction onto the backs of those least able to bear them — the elderly, the poor and the unemployed — by forcing seniors to pay thousands of dollars more annually in Medicare premiums and turning the Medicaid program, which pays medical costs for the poorest citizens, into state block grants. Both changes would, as Mr. Obama rightly noted, effectively end those programs as we know them.

Under the Republican plan, the president said, their cuts would take place while the country was spending a trillion dollars to give tax breaks to millionaires and billionaires who don't need them. There is something obscene about asking retired seniors living on fixed incomes to pay $6,400 more a year in Medicare costs to subsidize the second homes, luxurious yachts and foreign vacations of the top 2 percent of the nation's earners. That's not an appeal to class warfare; it's just a decent regard for the basic principle of fairness.

No one expects either Republicans or Democrats to get everything they want when all the dust has settled. But by joining the debate with his own forceful vision of how the nation should move forward, Mr. Obama has rebutted criticism that he has been a sometimes reluctant participant in the rough-and-tumble of fashioning national policy. And by waiting until a Republican alternative was on the table, he made its shortcomings the perfect foil for his more expansive vision of where America needs to go, while at the same time positioning himself to accept some spending reductions in programs like Medicare and Medicaid that might have been difficult for him to propose himself.

Now that the battle lines have been drawn, however, there's always the danger the two sides will find themselves in another high-stakes game of political chicken like the recent face-off over the 2011 budget that nearly caused a government shutdown.

Republican House Speaker John Boehner has already called Mr. Obama's demand for raising taxes on the wealthiest Americans a political nonstarter. If he sticks to that, it could set the nation up for a protracted period of congressional gridlock that prevents anything from getting done and might not be resolved until the 2012 presidential election, if then.

But if there's one thing politicians of both parties know, it is that the American people expect them to solve the country's problems, not make them worse. No matter how far apart they are on the issues, they've got to work together if they are to make any progress on taming the deficit, and that means both sides will have to compromise. To extremists in both parties, compromise is almost a dirty word. Yet it's also how democracy works, so lawmakers on both sides of the aisle now will just have to roll up their sleeves and try to find a way to resolve their differences.

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