Wednesday, April 13, 2011

Obama's Deficit Speech

What struck me about Barack Obama's speech today is that it was very much targeted to liberals, both in what it offered and in what it asked.

Liberals have wanted a full-throated affirmation of why government is a good thing? Obama delivered, with perhaps his strongest case for a liberal vision of government that he's given so far during his presidency.

Liberals wanted some strong pushback against the substance of Paul Ryan's budget? That's what Obama delivered, describing what will soon be the House GOP budget as a tradeoff between health care on the one hand (for seniors, the disabled, the poor) and tax cuts for the wealthy on the other.

Liberals like to think of themselves as the grown-ups of the budget debate? Obama gave both a budget history lesson and some facts about the composition of the budget that positioned himself -- and liberals -- as serious, compared to those who talk about waste, abuse, and foreign aid.

And then, liberals are paranoid highly suspicious that any changes at all in Medicare, Medicaid, and Social Security put those programs on a slippery slope to, basically, full repeal? Obama challenged them to, basically, knock it off, and buy into the idea that reform doesn't mean weakening those programs.

That's what I heard.

I'm not sure it was the right way to go; my advice beforehand was to pitch it not to liberals, but to deficit idealists -- to try to separate deficit idealists from Paul Ryan's plan by emphasizing the importance of real numbers. I believe that's something that Obama really had -- perhaps still has -- a chance to accomplish. He could have tried to appeal to the center by talking about good ideas in various different plans, lauding specific provisions in various liberal, centrist, and conservative proposed budgets. But he didn't do either of those things. This was a speech, at least as I heard it, to rally liberals to his side as he prepares for the fight to come.

I'm not sure, however, what that really says about his plans for that fight. The budget plan itself isn't particularly what liberals would want (it seems to be, at first look, a version of Simpson-Bowles modified by eliminating a few things that liberals really hated about that plan -- not a liberal alternative to Simpson-Bowles). So do liberals get the rhetoric, while budget idealists get the substance? Or is this the start of a real liberal campaign against Ryan and the House GOP?  It's certainly going to be an interesting year for budget wonks.


  1. Good analysis, Jonathan. I don't know that it's an either/or choice between Obama rallying liberals and Obama persuading moderates. I think it's a more a both/and speech.

    Moderates get the opening tip of the hat to rugged individualism, entrepeneurial spirit and limited government. Liberals get the New Deal and Great Society defended.

    Moderates get deficit reduction. Liberals get tax hikes for the wealthy and defense cuts. Everyone gets Medicare protected.

    By the way, this is another "Ali coming off the ropes" type moment for Obama. (Obligatory plug for the great documentary "When We Were Kings" about the Ali-Foreman fight in Kinshasa.) He does seem to have a good instinct for when to do that---although it can be kind of nerve-wracking to watch.

  2. I sometimes think this president's single greatest asset is that he's capable of patience.

  3. Is the substance good for liberals? No. At most, Obama's substance aligns with the median Senator (Max Baucus?). The median Democrat in Congress wants more infrastructure spending, and wants the cuts in discretionary spending to come mostly from defense; Obama's speech is even to the right of that.

  4. Taking away itemized tax deductions for the rich is pretty good substance for liberals like me.

  5. Jonathan,

    I quarrel with your focus on "liberals" vesus Obama's focus on anyone that isn't hell-bent at ripping to shreds our collective institutions.  If you must divide things in terms of partisans, maybe.  But aren't there more people beyond "liberals" who, when reminded that we don't just collectively buffer the least fortunate but also collectively invest in our future, want government to do more than just go on defense?  The business community can only make money for so long without certain investments and external forces that provide opportunities.  In a world in which only liberals benefit from the long-term investments our country makes as a collective is a world in which everyone is "left" or "right" first and American second.  This is less an issue of ideology than of education to point out that what conservatives want is hard to get, over the long haul, without strong collective institutions.  Let me add that when I say "conservative" I mean those with some interest in conserving like a Bob Dole type or a George HW Bush type of the past amongst independents, isolated amongst Republicans, but still persuadable if you don't dismiss him/her out of hand from the left.

  6. Jonathan, if Krugman is right about a key detail, the plan is a lot more liberal than it looks, well left of Bowles-Simpson:

    progressives upset by the claim that there are three dollars of spending cuts for every dollar of tax increases should be aware that there’s a bit of creative labeling going on. As I understand it, they’re counting both interest savings and reductions in “tax expenditures” — subsidies through the tax code — as spending cuts. It’s a much more balanced plan if you look at the balance between revenue increases and non-interest outlays.

    In fact, Krugman seems to have missed that the WH fact sheet claims there are three dollars of spending cuts *and interest payment reduction* for every dollar of tax hikes. That means the spending cut--tax hike ratio is 2:1 -- and actually far less, maybe 1:1, if a good portion of the "spending cuts" are reduced tax expenditures.

  7. David,

    I don't mean that only liberals would agree with the Democrats' position on this; in fact, I think the Democrats are very much on the popular side (and the frame of Medicare vs. tax cuts for the rich probably polls something like 75/25 or better). Obama's going to make that argument regardless. But in this speech, I think he was selecting arguments and topics that were designed especially to resonate with liberals, not swing voters and especially not deficit idealists.


    You're too modest -- both of your posts are worth reading:

  8. ASP,

    I was surprised by how much of Obama's deficit reduction was from tax increases when I looked at the actual numbers. Essentially, he's eliminating tax deductions, but not lowering rates to compensate as Bowles-Simpson does. If you toss out his notional "Medicare savings," well over half of his deficit reduction is accomplished by tax increases.

  9. House Democrats have spoken (half-throatedly?), and the 25th percentile Democrat actually said what I guessed the median Democrat would say:

  10. Obama's been going on and on about more infrastructure spending for months now, from his "infrastructure bank" proposal to flogging the hell out of the Chamber of Commerce's supportive letter to trying to butter up Republican governors to call their delegations. Of course, Congress being where it is now, he's been unsuccessful in such lobbying efforts. But it's a pretty massive distortion to indicate that infrastructure hasn't been part of his vision.

  11. Colby,

    I'm sure infrastructure spending is in Obama's vision, I just don't see it in his budget. He proposes to cut non-defense discretionary spending by 11% (= $75 bn per year / $660 in 2010.) So "I will not sacrifice the core investments that we need" just means that infrastructure spending will see small cuts; it won't grow.

  12. Perhaps needed this speech to understand Obama and his vision. I'm glad it was a "full throated affirmation" for so many people about his liberal vision for our country. The truth is, however, he has always been promoting this vision and has never strayed. He has had to compromise, yes, but his ideals are firmly grounded and going over past speeches and statements will prove this. Maybe this is the speech so many liberals (and they are only words) needed to hear to regain their faith in our president. I on the other hand have been sympathetic to the struggles and culture he has had to fight with and through and have always believed in Obama because of his genuine character and because of the person he is. A person who has strong ideals, but will always do what is best for the country. On that note, I am still a little confused with what exactly is going on in Guantanamo Bay. Still waiting for a thorough explanation of that.

  13. Even if those numbers proved that Obama's cutting infrastructure spending (And they don't; see the budget news today for how much the numbers in budget legislation are "neighborhood plays"), the fact remains that Obama still "wants" the same thing that you claim the "median Democrat in Congress" wants- more infrastructure spending.

  14. And just to help you, since you said you can't see the infrastructure spending in Obama's budget...

    Key graf: "The administration wants to spend $53 billion over the next six years on high-speed rail, and proposes spending $15.7 billion to build a nationwide wireless network for emergency workers and to widen access to mobile high-speed Internet. Obama also included his plan for a National Infrastructure Bank, seeding it with $50 billion intended to lure private investment for specific projects."

    And look, they even trotted out their pet Republican to sell an INCREASE in infrastructure spending!

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  16. Jonathan,

    Appreciate your reply. My point was that to me a liberal appealing strategy would be to go full force at the conservatives rather than also try to make the case for collective investments that seems to so easily get ignored by the distractions of Republicans posing as "pro-business" when they are really pro-short-sighted, ceo profit-taking business but anti-growth (given that without investments growth is challenging). Michael Porter, preeminent authority on competition (and one of the most influencial business thinkers of his generation -- no flaming anti-corporate liberal -- makes this case at the harvard business review site currently viewable. What I see as a big problem for Democrats is that the Republicans posing as pro-business and leaving the Democrats as appearing to divert wealth from the productive to the unfortunate makes the Democrats look bad and distorts the picture beyond recognition. This is baloney but makes it incumbent (which Obama is good at when he's not portrayed as "liberal" but rather as someone interested in investing in America which sounds pro-business even if it means an imporrant government role) to focus on how we improve our lot instead of what should be cut. To me the other side is less "conservative" and genuinely "pro-business" than anarchistic like those I recall from my youth many years ago. Then the fervent anarchistic anti-government side was on the left and was anti-military spending and anti-suppression, but the views on the value of government versus the value of the individual free from those said shackles was the same. Hardly "conservative."


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