President Obama gave notice today that he won’t let Rep. Paul Ryan, R-Wis., get the red badge of courage for his willingness to grab entitlement reform by the horns. Instead, Obama wants to pin Republicans with a scarlet letter.
It’s a "vision" thing. Obama used the word more than a dozen times during his speech unveiling his framework to reduce the deficit by $4 trillion over the next 12 years. His vision for doing that, he said, places a premium on fairness, optimism, and even patriotism: budget cuts are a burden Americans must share.
The other vision, the president said, is Ryan’s -- although he didn’t mention the House Budget Committee chairman by name, instead letting the Republican Party stand in as a foil. GOP spending cuts will lead to a Dickensian future of soot and austerity, Obama suggested.
“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,” Obama declared.
It’s not “serious,” he said. It’s “not a vision of the America I know.” And it’s not generous, he implied.
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Heck, the House Republicans' plan has been panned by President Reagan’s own budget director, Obama noted -- although he took a shot at the 1980s, characterizing them not as a time of Gipperesque optimism, but as the time when America started to live off a credit card.
Where Republicans propose slashing Medicaid and transform the Medicare of the future into a voucher system, Obama said he would preserve the popular entitlements and make them sustainable by restraining their growth. Indeed, he offered a stout defense of the federal social safety net. “We are a better country because of these commitments,” he said. “I’ll go further – we would not be a great country without those commitments.”
Where Republicans refuse to raise taxes, $1 trillion-worth of Obama’s projected deficit reduction would come from allowing the Bush-era tax cuts for the wealthy to expire in 2012. Where Ryan’s plan zeroes in on specific programs and cuts -- some of them politically unsavory -- Obama’s plan is more a series of processes.
That’s deliberate. It gives the president maximum room to negotiate and forces lawmakers in Congress on both sides of the aisle to act in concert. If Ronald Reagan and Tip O'Neil could reform Social Security in 1983, Obama said, "I believe we can and must come together today." This could set up a wedge between Republicans who want to deal and those who don't.
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The president’s speech advanced a stock of alternative deficit-reduction proposals -- some feasible, others less so -- that the administration will draw from during the looming budget battles. Obama's plan proposes $2 in spending cuts for every $1 billion in tax increases; he calls his plan “balanced” (a word White House press secretary Jay Carney used 16 times in a briefing earlier this week.) Translation: The Republican plan is tilted toward the wealthy.
Obama wants Americans to think Republicans would cut spending too quickly, raising seniors’ long-term health care costs, while his approach is slower and more balanced. Republicans want radical reform; Obama wants reasonable reform. The GOP approach would jeopardize the economic recovery; his plan would ensure it continues -- or so he says.
Key to the president's vision is a trigger mechanism that would force across-the-board spending cuts in 2014 if the ratio of the debt to annual output hasn’t started to decline. But Medicare, Medicaid, and Social Security would be exempt.
Obama wants House and Senate leaders to form a bipartisan budget reform committee by May, with Vice President Joe Biden serving as the White House facilitator.
Congress would also be responsible for holding down health spending by accepting or rejecting Medicare payment limits proposed by the independent payment advisory board, created under the health care law. That board would see its powers strengthened and its orbit expanded.
Additional as-yet-unspecified reforms would squeeze an additional $300 billion out of Medicare and Medicaid without changing their fundamental nature, Obama said. Growth per beneficiary would be capped; multiple formulas for allocating funds to insure children would be replaced by one that applies to all states. What's more, Medicare’s size would be used to negotiate with pharmaceutical companies to lower prescription-drug prices.
Without providing details, Obama called for $400 billion in defense and national security-related spending cuts over 12 years, more than doubling the amount he proposed earlier. He’ll make specific recommendations after consulting with the Pentagon.
The president would also cut $360 billion from other mandatory spending, such as farm subsidies and the federal pension system, consistent with the recommendations provided by the deficit-reduction commission chaired by former Clinton White House Chief of Staff Erskine Bowles and former Sen. Alan Simpson, R-Wyo.