Barack Obama is not a serious man, and the speech he gave today did not outline a serious proposal to deal with the country’s debt crisis. In the first place, as ranking Senate Budget Committee member Jeff Sessions has emphasized, a speech by itself is meaningless. If Obama wants to make a serious debt reduction proposal, it has to be presented in detail, in budgetary form, so that it can be analyzed properly and scored by the Congressional Budget Office. Obama hasn’t done that; instead, he purports to shave trillions off the national debt with breathtaking insouciance:
My budget calls for limiting itemized deductions for the wealthiest 2% of Americans – a reform that would reduce the deficit by $320 billion over ten years. But to reduce the deficit, I believe we should go further. That’s why I’m calling on Congress to reform our individual tax code so that it is fair and simple – so that the amount of taxes you pay isn’t determined by what kind of accountant you can afford.
So Obama wants our tax code to be “reformed” so that it is “fair and simple.” What does that mean? A flat tax? Just kidding. It means nothing at all until we see a proposal. And, by the way, itemized deductions for the wealthiest 2% of Americans are already limited.
I believe reform should protect the middle class, promote economic growth, and build on the Fiscal Commission’s model of reducing tax expenditures so that there is enough savings to both lower rates and lower the deficit.
Time out! Is Obama endorsing the recommendations of the Bowles-Simpson commission? Well, no, he didn’t say that. He wants to “build on” those recommendations. And in case it wasn’t clear, “reducing tax expenditures” means “raising taxes.”
And as I called for in the State of the Union, we should reform our corporate tax code as well, to make our businesses and our economy more competitive.
What on earth does that mean? Has Obama finally figured out that we have the highest corporate tax rates of any developed country? (If it is any consolation, corporate income tax rates are higher in Ivory Coast.) How, exactly, does he want to “reform our corporate tax code?” He doesn’t say.
This is my approach to reduce the deficit by $4 trillion over the next twelve years. It’s an approach that achieves about $2 trillion in spending cuts across the budget. It will lower our interest payments on the debt by $1 trillion. It calls for tax reform to cut about $1 trillion in spending from the tax code.
Sure. Until we see an actual budget, it is useless to talk about numbers. Numbers are, after all, just that–numbers. They are specific and quantitative, a fact that Obama may or may not understand.
One blindingly obvious fact about Obama’s speech is that it almost completely ignored the fact that he submitted a budget for FY 2012 just 60 days ago that included projections for the next decade. That budget has now been torn up and thrown into the wastebasket in favor of whatever ultimately emerges from today’s speech. Today, Obama twice referred, obliquely, to his own FY 2012 budget, both times to explain that he is now proposing something different. But what are we to make of the fact that a 60-day-old budget proposal is now on the scrap heap? Why did our President change his mind? Why is he now purporting to reduce our debt by trillions more than he claimed just two months ago? He offers no explanation, but I will suggest one: Obama’s FY 2012 budget was an irresponsible joke. Today’s speech was an irresponsible joke too, but, after the battle over the FY 2011 continuing resolution, the political environment–the only thing that Obama actually understands or cares about–is different. So his supposed blueprint for the next decade is yesterday’s news.
This section of the President’s speech is deeply ironic:
Now, before I get into how we can achieve this goal, some of you might be wondering, “Why is this so important? Why does this matter to me?”
Here’s why. Even after our economy recovers, our government will still be on track to spend more money than it takes in throughout this decade and beyond. That means we’ll have to keep borrowing more from countries like China. And that means more of your tax dollars will go toward paying off the interest on all the loans we keep taking out. By the end of this decade, the interest we owe on our debt could rise to nearly $1 trillion. Just the interest payments.
Yes–under his budget! It is quite remarkable that Obama thinks he can get away with explaining the need for today’s proposals (whatever they may turn out to be) by contrasting them with the unacceptable alternative–his own FY 2012 budget.
The third thing that jumps out at one about Obama’s speech is its contemptible tone. Its real object, and the topic on which he spent the most time, was Paul Ryan’s budget proposal. His attack on Ryan’s plan was eerily reminiscent of the most disgusting political speech in American history, Ted Kennedy’s vicious caricature of “Robert Bork’s America.” Obama launched a similarly dishonorable assault on Paul Ryan and the House Republicans:
[T]he way this plan achieves those goals would lead to a fundamentally different America than the one we’ve known throughout most of our history. …
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.
It’s a vision that says America can’t afford to keep the promise we’ve made to care for our seniors. …
This is a vision that says up to 50 million Americans have to lose their health insurance in order for us to reduce the deficit. And who are those 50 million Americans? Many are someone’s grandparents who wouldn’t be able afford nursing home care without Medicaid. Many are poor children. Some are middle-class families who have children with autism or Down’s syndrome. Some are kids with disabilities so severe that they require 24-hour care. These are the Americans we’d be telling to fend for themselves.
Worst of all, this is a vision that says even though America can’t afford to invest in education or clean energy; even though we can’t afford to care for seniors and poor children, we can somehow afford more than $1 trillion in new tax breaks for the wealthy.
This, like Kennedy’s vicious smear, is sheer demagoguery. Skillful demagoguery? I don’t know; the polls will tell us that. But it is not leadership, and it is beneath contempt. Barack Obama is a mean-spirited, small-minded man. Jake Tapper reminds us of Obama’s plea for bipartisanship in 2010. That was then, and this is now.
We’re not going to be able to do anything about any of these entitlements if what we do is characterize whatever proposals are put out there as, ‘Well, you know, that’s — the other party’s being irresponsible. The other party is trying to hurt our senior citizens. That the other party is doing X, Y, Z.”
But that is, of course, exactly what Obama did today. It was a sorry, cowardly performance. Not least because the ever-political Obama couldn’t resist blaming George W. Bush, once again, for the problems that he has only made worse:
But after Democrats and Republicans committed to fiscal discipline during the 1990s, we lost our way in the decade that followed. We increased spending dramatically for two wars and an expensive prescription drug program – but we didn’t pay for any of this new spending. Instead, we made the problem worse with trillions of dollars in unpaid-for tax cuts – tax cuts that went to every millionaire and billionaire in the country; tax cuts that will force us to borrow an average of $500 billion every year over the next decade.
To give you an idea of how much damage this caused to our national checkbook, consider this: in the last decade, if we had simply found a way to pay for the tax cuts and the prescription drug benefit, our deficit would currently be at low historical levels in the coming years.
Of course, that’s not what happened. And so, by the time I took office, we once again found ourselves deeply in debt and unprepared for a Baby Boom retirement that is now starting to take place.
This account is absurd on a number of fronts. The federal budget was briefly in surplus when the Republican Congress reined in spending during the 1990s, but there was never a plan to deal with entitlements, which were always a looming fiscal disaster. The Bush tax cuts account for only a small proportion of our current deficit, even if you discount the economic growth that they obviously helped to produce. But what is most dishonest is Obama’s complaint that the ballooning deficit was somehow in place when he took office.
At least three points should be made about this. First, federal spending exploded when the Democrats took control of Congress in 2007. Barack Obama was in the Senate then, and he enthusiastically supported that uncontrolled spending and the budget deficits that resulted. Second, once Obama became President, the deficit metastasized further in response to his policy initiatives, in particular the failed “stimulus” program. This chart shows how federal spending went viral when the Democrats took control in Washington, and how the Democrats’ spendthrift policies devastated job creation:
For Obama to blame Republicans for his own party’s spending spree is the kind of dishonesty to which we have all resigned ourselves over the last two years. The final absurdity is that when Obama took office, he not only exploded the deficit but proposed a ten-year budget that contemplated increased debt as far as the eye could see. This screen shot from Obama’s FY 2012 budget shows how it planned to add more than $7 trillion in debt, even on Obama’s optimistic assumptions:
It is hard to imagine how a president could give a more mean-spirited and less substantial speech on a grave national crisis than Obama delivered today. Obama appears to be a man who understands little or nothing about business or the economy. For him, partisan politics is everything. We saw that today. It was a sad moment for our country.