Sen. Rand Paul was not impressed with President Obama's deficit speech. "He's amending his own budget?" Paul asked as he watched in his threadbare temporary Senate office on Wednesday afternoon. "Didn't he just release a budget a month ago?" The president was in fact revising himself, upping his commitment to deficit reduction from the budget he put forth in February. "He's reading the tea leaves," Paul said, grinning at his pun. "Or they're hearing the polls which say we're winning all the battles."
Obama was not speaking to Paul. But if not for the Kentucky senator and the Tea Party movement he represents, the president might not have been speaking at all. Obama was playing catch-up, showing that he could at least keep pace with the government-cutting leaps performed by conservative Republicans. But he was also yelling, "Stop," issuing his strongest indictment to date of budget policies he says would hurt America if enacted.
This was a battle cry in the great budget debate to come—or as near to a battle cry as the pragmatic and careful Obama can offer. The president took a moral stand based on the idea that Americans must maintain their commitment to help the poor and unlucky or else trade away greatness. He defended the good that government can do, putting this speech in the same category as the appeal he made to House Democrats on the eve of the vote on his health care program.
The speech was sweeping in scope and clarified the terms of the debate we'll be having until the 2012 election. It is the discussion of big issues the president and his aides have been waiting for. White House aides have long been saying that Obama did not want to wade into the smaller fight over last year's budget so that he could preserve himself for the bigger fight to come.
Obama claimed that Republicans didn't just want to shrink the budget but wanted to change "the basic social compact." Republicans offer a vision of America in which government gets out of the way to unleash the power of the free market, which in turn allows prosperity to spread for all. Obama acknowledged that this was a part of the American character, but argued that in pursuit of this goal Republicans were abandoning an equally fundamental and historic commitment: to the American belief that "we are all connected."
Republicans have accused the president of insufficiently heralding America's greatness. Obama's aides have long seen the grand budget battle as his opportunity to turn this accusation against Republicans. Obama started the effort in the State of the Union, arguing that his vision was in sync with the concept of America's exceptional qualities. In this speech he turned the idea into a weapon, accusing Republicans of insufficient hope in the nation.
Calling the United States "the greatest nation on Earth," the president said the cuts Republicans posed "paint a vision of our future that's deeply pessimistic" in which the less fortunate and the investments in growth must be abandoned. "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."
"He is so out of touch he just doesn't get it," said Paul after the speech. "If you care about poor people and you care about senior citizens, you can't accept the status quo." Paul's argument is that the budget crisis threatens the government's ability to honor its commitments. Paul would allow the retirement age to rise and would also allow means-testing benefits for the wealthy.
Obama tried to define a framework for a budget agreement, but he also tried to define the political context in which the budget debate would take place. He heralded three previous budget agreements during the last several decades, that were bipartisan and based on shared sacrifice.
Several times the president drew lines he would not let Republicans cross when it came to changing the nature of Medicare or Medicaid or lowering taxes for the wealthy. He savaged Paul Ryan's budget as forcing seniors and the poor to pay more for their health care while giving tax cuts to the wealthiest. "They want to give people like me a $200,000 tax cut that's paid for by asking 33 seniors to each pay $6,000 more in health costs?" he said. "That's not right, and it's not going to happen as long as I'm president."
The president called for bipartisan talks to reach a debt deal to finish by the end of June. He also offered $4 trillion in savings over the next 12 years. $1 trillion will come from tax increases. If the $4 trillion number sounds familiar, that's how much the Ryan budget cuts (though it does so in 10 years). It's likely the Obama savings come from budget tricks (Ryan's uses plenty of tricks, too) that we'll learn about as details become available.
Rather than slashing benefits, the president said he would preserve entitlements by restraining their growth. He also promised unspecified defense cuts. If Congress doesn't follow through, he proposed a "fail safe" mechanism that would require debt as a percentage of the economy to decrease by 2014 or trigger additional spending cuts and tax changes. This has been tried before. These fail-safes have a way of working as well as the ones on the BP oil well.
In the 2010 election the White House often complained that the president and Democrats were being judged in a vacuum. They wanted the election to be a choice between two visions, not a referendum. They never quite got what they wanted. By allowing the Republicans to take the first bold move on significant deficit reduction, the president was making a calculation that any points he lost for not showing leadership would be won back when voters were presented with two stark alternatives.
Liberals will love the president's defense of the welfare state. But Obama's political posture was still aimed at the middle. As the Washington Post's Ezra Klein points out, this is not a liberal budget. The president's approach is founded on the suggestions of his Deficit Commission, which received several Republican votes.
Obama also challenged his own party to be serious about deficit reduction. If Democrats believe that government can play a beneficial role in people's lives, he said, they had to prove it first by showing that government could be "smarter, leaner and more effective."
The president concluded his speech with the story of a letter from a Florida man who, as a swing state voter with qualms sounded almost identical to Ed from North Carolina, a character in the video produced for Obama's re-election campaign who fit the same description. The man said he hadn't voted for Obama and didn't always agree with him but that he still believed in the American Dream and that it would require cooperation to achieve it. The president said he agreed. For the next 18 months Obama will try to convince that man from Florida that he is a good steward of that dream—and that it needs to be protected from people like Rand Paul.
Video: Obama Aims To Lower Deficit by $4 Trillion
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