A Vision Of Optimism And Equal Opportunity: What It Means To Be A Democrat
I’m glad I waited for President Obama’s heralded budget speech Wednesday before criticizing it (such a novel idea); there was much to praise in it and little to challenge. The best news: Obama laid out the kind of sweeping “story” of American democracy, and the bold vision of how we grow together, that I thought was too much to ask for even yesterday. He even talked about the scariest fact of American inequality: The dangerous hold the top 1 percent of Americans has on wealth, income and (he didn’t say this) politics. He pushed back on the cruel GOP deficit plan, made his toughest case yet for tax hikes on the richest, and stayed away from the worst ideas floated by his own deficit commission. The devil will be in the deficit-cutting details, and frankly, there weren’t a whole lot of them in the speech. But the president came out fighting with firmness, and with a rhetoric of social justice and equality, that I haven’t seen enough of these last two years.
Obama acknowledged our American history as “rugged individualists, a self-reliant people with a healthy skepticism of too much government.” But he quickly identified “another thread running throughout our history”:
A belief that we are all connected; and that there are some things we can only do together, as a nation. We believe, in the words of our first Republican president, Abraham Lincoln, that through government, we should do together what we cannot do as well for ourselves. And so we’ve built a strong military to keep us secure, and public schools and universities to educate our citizens. We’ve laid down railroads and highways to facilitate travel and commerce. We’ve supported the work of scientists and researchers whose discoveries have saved lives, unleashed repeated technological revolutions, and led to countless new jobs and entire industries. Each of us has benefited from these investments, and we are a more prosperous country as a result.
Part of this American belief that we are all connected also expresses itself in a conviction that each one of us deserves some basic measure of security. We recognize that no matter how responsibly we live our lives, hard times or bad luck, a crippling illness or a layoff, may strike any one of us. “There but for the grace of God go I,” we say to ourselves, and so we contribute to programs like Medicare and Social Security, which guarantee us health care and a measure of basic income after a lifetime of hard work; unemployment insurance, which protects us against unexpected job loss; and Medicaid, which provides care for millions of seniors in nursing homes, poor children, and those with disabilities. We are a better country because of these commitments. I’ll go further – we would not be a great country without those commitments.
So far, so good. It got even better when Obama took direct aim at Paul Ryan’s cruel and ludicrous budget plan. He laid out its many cuts, and concluded:
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. It’s a vision that says if our roads crumble and our bridges collapse, we can’t afford to fix them. If there are bright young Americans who have the drive and the will but not the money to go to college, we can’t afford to send them. Go to China and you’ll see businesses opening research labs and solar facilities. South Korean children are outpacing our kids in math and science. Brazil is investing billions in new infrastructure and can run half their cars not on high-priced gasoline, but biofuels. And yet, we are presented with a vision that says the United States of America – the greatest nation on Earth – can’t afford any of this.
Then he attacked the Gilded Age social inequality and tax cuts that have helped create our troubles:
Think about it. In the last decade, the average income of the bottom 90% of all working Americans actually declined. The top 1% saw their income rise by an average of more than a quarter of a million dollars each. And that’s who needs to pay less taxes? They want to give people like me a two hundred thousand dollar tax cut that’s paid for by asking thirty three seniors to each pay six thousand dollars more in health costs? That’s not right, and it’s not going to happen as long as I’m President.
Indulge me here, because this is how Democrats should be talking, and rarely do:
The America I know is generous and compassionate; a land of opportunity and optimism. We take responsibility for ourselves and each other; for the country we want and the future we share. We are the nation that built a railroad across a continent and brought light to communities shrouded in darkness. We sent a generation to college on the GI bill and saved millions of seniors from poverty with Social Security and Medicare. We have led the world in scientific research and technological breakthroughs that have transformed millions of lives.
This is who we are. This is the America I know. We don’t have to choose between a future of spiraling debt and one where we forfeit investments in our people and our country. To meet our fiscal challenge, we will need to make reforms. We will all need to make sacrifices. But we do not have to sacrifice the America we believe in. And as long as I’m President, we won’t.
That’s the president I voted for.
On the meat of the president’s plan to cut the deficit: He deserves credit for rejecting Medicare vouchers, for turning aside specific talk about Social Security (even though it has nothing to do with the federal deficit, the privatizers and Obama’s friends on his deficit commission wanted it thrown on the table in a grand bargain that can only be bad news for Democrats and working people; Obama seemed not to be willing to do that); for promising that reforms and innovations already part of the Affordable Care Act will bring down the costs of Medicare and Medicaid; and for saying we need bigger defense cuts than so far proposed.
(Small point: I liked the way Obama trashed Ryan without mentioning him — you don’t fight down — but I wish he’d been a tiny bit more confrontational on exactly what Ryan’s “Medicare vouchers” would do; if seniors could afford insurance at all, which is debatable, they’d certainly be at the mercy of privatized “death panels” refusing care over its costs. I say that because I’m sure some GOP prevaricator will bring back the “death panel” lie now that Obama has committed to curbing costs in Medicare. I hope I’m wrong.)
My quibbles? I’m still concerned that Obama has agreed to freeze the 12 percent of the budget that goes to “discretionary spending.” And I’m assuming that freeze includes the cuts made this week. I don’t like his promise of $3 in spending cuts for every dollar raised in revenue via tax hikes. In a statement, AFL-CIO president Richard Trumka praised the speech but added: “President Obama does not yet have the balance right between spending cuts and new revenue.” I also never like it when Obama undermines himself by saying things like:
I don’t expect the details in any final agreement to look exactly like the approach I laid out today. I’m eager to hear other ideas from all ends of the political spectrum.
I know, I know, he thinks it makes him sound reasonable to independents; I worry he sounds weak to Republicans. If Obama thinks the plan he laid out is as far to the left as Ryan’s plan is to the right, and that the answer is to meet in the glorious middle, we’re all in trouble.
But for today, I’ll take him at his word. After the speech, pundits called it the opening salvo of the Obama 2012 reelection campaign, as though there was something wrong with that. If these are the founding principles of the president’s 2012 campaign, Democrats and the country will be better off than we’ve been in a while.
By: Joan Walsh, Editor at Large, Salon, April 13, 2011
The Long Game In The Budget Battles: Advantage Obama
Late last year, when President Obama overhauled his economic team, some people complained that the departure of Larry Summers and Christina Romer left the White House short of first-rate economists. That may have been true, but what the White House lost in intellectual sparkle it more than made up for in Washington know-how. With Gene Sperling as head of the National Economic Council and Jack Lew as budget director, it boasts two veterans of the Clinton-era budget war—two men who know how to outmaneuver right-wing Republicans.
In the past few months, Sperling and Lew have been playing from the nineteen-nineties playbook. Initially, they produced a budget for 2012 that didn’t do very much at all about long-term deficits, and was instantly proclaimed dead on arrival. Budget hawks cried foul. But the White House was playing a long game, and its budget proposal was merely an opening gambit. Then came Congressman Paul Ryan with his radical “roadmap” to budget balance over the next ten years, which featured slashing reductions in domestic spending, more big tax cuts for the rich, and the conversion of Medicare to a voucher program. I irked some readers by saying that Ryan deserved credit for at least making a specific proposal, but I still believe liberals everywhere should be grateful. By spelling out what the Republicans would do to Medicare and Medicaid, he may well have deprived his party of the White House for the foreseeable future.
If you want to know why Ryan’s “budget-cutting” plan makes no financial sense, the Financial Times’ Martin Wolf spells it out very clearly in his latest column, which is based on an analysis by the non-partisan Congressional Budget Office analysis. If you want to know why Ryan’s plan is political poison, look at Ezra Klein’s blog, where he cites a recent opinion poll showing that a plurality of Republicans—yes Republicans—think the best option for Medicare is to not cut it at all. To say the very least, Ryan presented President Obama with a big opportunity to occupy the center ground. And despite the jibes about him being a covert socialist, this is clearly the ground on which the President feels most comfortable.
And so to today’s budget speech, in which Obama presented his own eminently centrist plan to reduce the deficit without privatizing Medicare, without slashing domestic spending to the point where many government programs won’t be able to operate, and without introducing any big tax increases. I wouldn’t sweat the individual numbers that Obama presented, such as his claim that his proposals would cut the budget deficit by four trillion dollars over twelve years. Forecasting the budget deficit next year is a challenge. Forecasting the deficit three years out is extremely difficult. Ten-year budget projections are largely meaningless.
What is important is the big picture. Where Ryan proposes radical changes to taxes and spending that would alter the social contract between government and governed, President Obama is arguing that we can trim our way to fiscal sustainability. Some cuts here, some tax breaks eliminated there, and, lo and behold, the deficit will be down to two per cent of G.D.P.
To be fair, the President isn’t saying it will be easy. If by 2014 Congress can’t come up with enough cuts to stabilize the debt-to-G.D.P. ratio, he is calling for a “debt failsafe” trigger that would involve spending reductions in all programs except Social Security, Medicaid, and low-income programs. To slow the growth of entitlement spending, he is proposing to beef up the Independent Payment Advisory Board, which the health-care reform act created, and setting it at a target of keeping Medicare growth to the rate of G.D.P. growth plus half a per cent. Even the Pentagon, which has been largely exempted from budget pressures since 9/11, would have to find some (overly modest) cuts. But compared to what Ryan is proposing, these are all relatively minor changes.
Is the plan credible? Without seeing the details, it is hard to say. In the fact-sheet it circulated today, the White House avoided saying which tax loopholes it is in favor of eliminating—the mortgage interest deduction?—and it also failed to provide any projections about, say, the level of federal spending and debt as a percentage of G.D.P. in 2020. That vagueness was certainly deliberate. At this juncture, the White House still doesn’t want to reveal all of its hand. Rather than placating the budget hawks with a definitive and fully worked out set of proposals, the Administration is betting that the bond market will give it more time—time in which the American people can learn more about the specifics of Ryan’s proposals, and get even less enthusiastic about them.
This game still has a long way to run. But if I were a betting man, and occasionally I am, I would wager on Sperling and Lew coming out on top rather than the congressman from Wisconsin.
By: John Cassidy, The New Yorker, April 13, 2011
State Budget Crises And The New Language of Deceit
For most of history, we had undebatable definitions of words such as “bailout” and “bankruptcy.” We understood the former as an undeserved public grant, and the latter as an inability to pay existing bills. Whatever your particular beliefs about these concepts, their meanings were at least agreed upon.
Sadly, that’s not the case during a deficit crisis that is seeing language redefined on ideological terms.
“Bailout” was the first word thrown into the Orwellian fire. As some lawmakers recently proposed replenishing depleted state coffers with federal dollars, the American Conservative Union urged Congress to oppose states “seek(ing) a bailout” from the feds. Now, Rep. Paul Ryan, R-Wis., says, “Should taxpayers in Indiana who have paid their bills on time, who have done their job fiscally be bailing out Californians who haven’t? No.”
Ryan, mind you, voted for 2008’s TARP program — a bank bailout in the purest sense of the term. But one lawmaker’s rank hypocrisy is less significant than how the word “bailout” is being used — and abused. Suddenly, the term suggests that federal aid would force taxpayers in allegedly “fiscally responsible” Republican states to underwrite taxpayers in supposedly irresponsible Democratic ones.
Aside from stoking a detestable interstate enmity, this thesis ignores the fact that state-to-state wealth transfers are already happening. According to the Tax Foundation, most Republican-voting states receive more in federal funding than they pay in federal taxes, while most Democratic-voting states receive less federal money than they pay in federal taxes.
That means traditionally blue states like California are now perpetually subsidizing — or in Ryan’s parlance, “bailing out” — traditionally red states like Indiana. Thus, federal aid to states could actually reduce the state-to-state subsidies conservatives say they oppose.
Congressional Republicans will undoubtedly ignore these facts. Their proposed solution to the budget emergency could instead be a Newt Gingrich-backed initiative letting states default on outstanding obligations by declaring bankruptcy. Again, the word is fraught with new connotations.
Whereas sick or laid-off individuals occasionally claim a genuine inability to repay debts and thus a need for bankruptcy protections, states can never legitimately claim such a need because they are never actually “bankrupt.” Why? Because they always posses the power to raise revenue. The power is called taxation — and destroying that authority is what the new bankruptcy idea is really about. It would let states avoid tax increases on the wealthy, renege on contractual promises to public employees and destroy the country’s creditworthiness.
Blocking state “bailouts” and letting states declare “bankruptcy” are radical notions, especially in a bad economy. One would result in recession-exacerbating public layoffs; the other would institutionalize an anti-tax zealotry that destroys tomorrow’s middle class in order to protect today’s rich. That’s why advocates of these ideas have resorted to manipulating language. They know the only way to make such extremism a reality is to distort the vernacular — and if we aren’t cognizant of their scheme, they will succeed.
By: David Sirota, Creators.com, Originally Published 3/4/11
Grave Consequences: Wall Street Tells John Boehner To Back Off The Debt Ceiling
Republicans are growing increasingly concerned about the impact a bruising fight over raising the nation’s $14.29 trillion debt ceiling could have on U.S. financial markets.
House Speaker John Boehner (R-Ohio) has had conversations with top Wall Street executives, asking how close Congress could push to the debt limit deadline without sending interests rates soaring and causing stock prices to go lower, people familiar with the matter said. Boehner spokesman Michael Steel said Tuesday night that he was not aware of any such conversations.
Treasury Secretary Timothy Geithner has warned Congress that without new borrowing authority, the federal government could hit the statutory debt limit by May 16.
Treasury could then implement emergency measures to continuing making interest payments on existing debt until around July 8. After that, the U.S. risks going into default, an unthinkable idea to many economists and market participants who say such an event could drive scores of large banks into failure, send interest rates skyrocketing as foreign investors abandon U.S. securities and crush the already slow-going economic recovery.
Republicans and even some fiscally conservative Democrats want to use the debt limit fight as leverage to wring more significant spending cuts out of the White House. Politicians of all stripes are worried about how independents will react to a vote — or multiple stop-gap votes — to raise the debt ceiling. Many executives on Wall Street believe Washington is playing an enormously dangerous game with what is typically a non-controversial vote.
Sen. Chuck Schumer (D-N.Y.), who leads the Senate Democrats’ messaging efforts, expressed anger that Boehner was searching for leeway on the debt limit.
“The speaker seems to be testing out how far he can venture onto a frozen lake before the ice breaks. He should listen to business leaders who are telling him to watch his step. Messing around with the debt ceiling just to satisfy the tea party will lead to higher interest rates and an economic cataclysm.”
The Wall Street executives say even pushing close to the deadline — or talking about it — could have grave consequences in the marketplace.
“They don’t seem to understand that you can’t put everything back in the box. Once that fear of default is in the markets, it doesn’t just go away. We’ll be paying the price for years in higher rates,” said one executive.
Another said that “anyone interested in ‘testing’ the debt ceiling should understand the U.S. debt traded wider [with a higher yield] than Greek debt roughly five years ago. Then go ask CBO what happens to our deficits/public debt to GDP, if the 10-year [Treasury bond] goes from 3.5 percent to 5.5 percent to 7.5 percent.” The executive said such an increase would result in a downgrade of U.S. debt by ratings agencies and an end to the dollar as the standard global reserve currency.
By: Ben White, Politico, April 13, 2011
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