Economy Politics

Assessing the Obama Deficit Plan

In a very lengthy speech, filled with impassioned rhetoric about American values, President Obama laid out what the White House’s plan for reducing the deficit is. The passion, while appreciated, leaves me a little cold: he’s said all this stuff before, but will he fight for it? For now, I’d prefer to concentrate on the actual policy changes as outlined in the speech.

President Obama’s first point is, honestly, a bit of jargon-laden nonsense. He says we will “make the tough cuts that are necessary,” but that we will invest in, “new roads and airports and broadband access… education and job training.” While I can agree with the sentiment expressed in these words, this first point is basically just that: sentiment. To the extent that this is a statement of beliefs and an opening bid for negotiating with Republican leaders, it lays down the marker on these specific investments. Maybe I just want more detail than he can really give before a negotiation of that type. But we know what happens when this White House “negotiates” with Republicans, so this does not fill me with confidence.

The second part of President Obama’s plan is equally noncommittal and definitely a missed opportunity: he simply says we have to find savings in military spending. Great. But when he says that he will simply “work with Secretary Gates and the Joint Chiefs,” that’s effectively saying, “don’t worry. We got this.”

Where are the required cuts to military spending that have to be made by Congress? You know: the people he’s “negotiating” with? Where is the challenge to reduce spending by defunding useless military spending? Why is he taking all the responsibility for himself when Congress holds the purse strings?

His third point is on health care reform and its where he lays down the biggest and most important marker: allowing Medicare to negotiate the price of prescriptions for its patients. This is, really, a shot across the bow of Republicans that should have been made much more loudly: it is precisely because the Medicare “reform” measures of the Bush era eliminated this ability that the cost of Medicare has skyrocketed, adding to our deficit.

So, while Republicans aim to kill the Health Care Reform Act, President Obama looks to undo the damage of the Medicare Reform Act. I won’t say which is more “likely” a success owing to the fact that I’m getting a bit cynical. But I will say that undoing HCR is going to be hugely unpopular, whereas the MRA was a loser from the get-go. Hard to see how Republicans argue against this, except to bald-face lie. And they wouldn’t do that, would they?

The fourth point in the plan is a bit of finesse: he’s actually talking about raising a lot of people’s taxes, but doing so in a way that makes it seem like he’s talking about rich people. He says that, in order to reform the tax code, we should eliminate a lot of the write-offs that are in the system. Ones which, it is true, certainly benefit the rich in larger sums than the middle class; ones that affect the poor not a whit.

But to be clear: we’re talking about increasing the tax liability for most upper-middle income families by a significant amount. This, as a middle-income DINK, strikes me as just fine: my tax burden and that of most middle-income families has decreased by half over the last fifty years. We can probably afford a little less in tax returns, which most of us are just going to spend on a new television anyway.

So, the entire speech could probably have been pared down to the last two points, though I realize that’s not now it works in Washington. The question now becomes: what parts of this is Obama going to cave on? If he can manage to get even a little bit of those last two points into the final package, he will have done the country a world of good, but at what price?

By Tommy Belknap

Owner, developer, editor of DragonFlyEye.Net, Tom Belknap is also a freelance journalist for The 585 lifestyle magazine. He lives in the Rochester area with his wife and son.