ANALYSIS

With Debt Plan, Obama Portrays Himself as Reasonable, Courageous

The president doesn’t mention Rep. Paul Ryan by name, but savages his proposal.

US President Barack Obama speaks on fiscal policy April 13, 2011 at George Washington University's Jack Morton Auditorium in Washington, DC. Obama was poised Wednesday to unveil a $4 trillion dollar deficit reduction plan, seeking to define a fevered economic debate crucial to his 2012 reelection bid. Obama met key congressional leaders ahead of a showpiece speech on his vision for constraining the fiscal gap as fresh political battles over spending escalated less than a week after the dramatic climax to a 2011 budget fight.AFP PHOTO/Mandel NGAN (Photo credit should read MANDEL NGAN/AFP/Getty Images)
Mandel Ngan / AFP / Getty Images
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Marc Ambinder
April 13, 2011, 12:08 p.m.

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. 

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.

Per­suad­ing Amer­ic­ans to ac­cept the pro­pos­als Obama out­lined should be easy, be­cause they are pop­u­lar in the ab­stract. When polled, ma­jor­it­ies have said they fa­vor end­ing the Bush tax cuts for the rich (in­clud­ing half of self-iden­ti­fied Re­pub­lic­ans) and that they don’t want spend­ing re­duc­tions to come at the ex­pense of eco­nom­ic growth. By rights, he should eas­ily win the ar­gu­ment.

But Obama has re­peatedly found it quite dif­fi­cult to sell the pub­lic on policies that they already en­dorse. Re­pub­lic­ans law­makers are more united around the goal of de­fi­cit re­duc­tion than Demo­crats are, which might ex­plain why 46 per­cent of Amer­ic­ans think the Re­pub­lic­ans have a bet­ter chance of fix­ing the coun­try’s de­fi­cit woes com­pared to only 33 per­cent for Demo­crats.

Voters who back the pres­id­ent — and Demo­crats in gen­er­al — tend to as­so­ci­ate spend­ing cuts with Re­pub­lic­ans and are sig­ni­fic­antly less will­ing to voice sup­port for de­fi­cit-re­duc­tion policies in the form of cuts. As Obama has pivoted in that dir­ec­tion, Demo­crats have not showered the pres­id­ent with ap­plause. Some pro­gress­ive elites have cas­tig­ated him for even con­ced­ing to the Re­pub­lic­an idea that the debt is a ma­jor prob­lem.

In many ways, this il­lus­trates a fun­da­ment­al frus­tra­tion of his pres­id­ency: Obama has been forced to own policies that many in his party’s base do not like.

But the pres­id­ent had an an­swer to that on Wed­nes­day.

“I say that if we truly be­lieve in a pro­gress­ive vis­ion of our so­ci­ety, we have the ob­lig­a­tion to prove that we can af­ford our com­mit­ments.  If we be­lieve that gov­ern­ment can make a dif­fer­ence in people’s lives, we have the ob­lig­a­tion to prove that it works ““ by mak­ing gov­ern­ment smarter, lean­er and more ef­fect­ive,”  he said.

Obama’s ad­visers think he suf­fers prob­lems with in­de­pend­ents when he’s pulled in­to mushy, gruel­ing Wash­ing­ton policy battles. That’s one reas­on why he waited un­til the last minute to pub­licly weigh in on the fisc­al 2011 budget res­ol­u­tion. It’s also one reas­on why he is punt­ing on many of the spe­cif­ics, leav­ing those to his col­leagues in Con­gress: His time frame is much longer than theirs.

A seni­or ad­min­is­tra­tion of­fi­cial said that the White House will be di­li­gently draw­ing dis­tinc­tions between it­self and Re­pub­lic­ans for the next 18 months, up to Novem­ber 2012. By that point, Obama hopes that in­de­pend­ents will be per­suaded that his vis­ion for rein­ing in gov­ern­ment spend­ing is ser­i­ous — and that he’s not, as po­ten­tial GOP pres­id­en­tial hope­ful Tim Pawlenty of Min­nesota put it on Tues­day, “in over his head.” 

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