In his deficit speech, President Obama sent a clear signal that he is still not willing to spend political capital on resolving the debt problem. Although Rep. Paul Ryan has already taken the lead on addressing the deficits by submitting a spending-only debt reduction plan, Obama failed to follow up by proposing a liberal plan. Instead, he chose a safe but unsustainable middle position by recommending a less aggressive version of the Bowles-Simpson deficit commission plan.
Obama himself gave the deficit commission instructions to devise a plan to balance the budget within five years, and the commission came back with a strategy to cut $4 trillion from the debt within 10 years. Yet Obama’s own plan would fall short of his own mark, cutting that same amount, but only in 12 years. His plan falls further short of the Ryan proposal, which would cut over $4.4 trillion from deficits over the 10-year period.
More importantly, Ryan’s recommendations include a strategy to reform health care so that the costs of Medicare, Medicaid, and Obamacare don’t overrun the government’s balance sheet. Obama’s vague outline includes neither a plan for controlling health care spending, beyond the strengthening of already-dubious mechanisms already established by Obamacare, nor a promise to raise taxes to the necessary levels to prevent a fiscal collapse.
More’s the pity: Ryan has laid out the conservative vision, with all the unpopular and politically risky policies it entails. Presenting the liberal ideal — essentially, the European model — would greatly aid the the necessary public debate about how to resolve the looming fiscal problems. It would especially be helpful to see, for example, the Congressional Budget Office’s reports on the distributional impact of letting all the Bush tax cuts expire, including for the lower brackets. We already have those figures and charts for the Ryan plan, which is the realistic alternative to massive middle-class tax hikes. Instead of giving a point of comparison, Obama has simply dodged the issue by pretending that the situation can be resolved merely by raising taxes on high earners.
While Obama hasn’t followed Ryan’s leadership, it has to be noted that he has had no choice but to drastically improve on his opening bid. His 2012 budget, release just two months ago, included a planned $1.1 trillion of debt reduction. This plan has nearly quadrupled that goal. That massive increase illustrates two facts: one, that Obama’s budget was not adequate even by his own estimation. Two, that Ryan’s courage opened up space for Obama to triangulate, something he wouldn’t have been able to do on his own.