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President Obama's Ambitious, Surprisingly Progressive Debt-Reduction Plan

 
 
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 Given what we’ve seen this year, it’s been tough to know what to expect from the White House when it comes to major policy showdowns with congressional Republicans. As recently as July, President Obama, seemingly desperate to strike a “Grand Bargain” with House Speaker John Boehner (R-Ohio), was willing to give away the store. Fortunately, the GOP refused to accept it.

So when it became clear the president would unveil a jobs bill and debt-reduction plan, we were left to speculate about how ambitious Obama was prepared to be and how willing the president would be to pick a fight over some of the nation’s most important issues.

The answers this afternoon are a lot clearer than they were a few weeks ago.

The American Jobs Act, recently unveiled to a joint session, was refreshingly bold and quite progressive. The president’s critics on the left feared he would aim low, fail to call for major new investments, and might even propose a regulatory moratorium. Those fears proved to be largely backwards.

Going into this morning’s speech on debt reduction, we saw a very similar dynamic, with fears that the Obama plan would cut Social Security and raise the Medicare eligibility age. And again, the president exceeded expectations.

President Obama on Monday called for $1.5 trillion in new revenue as part of a proposal to tame the nation’s rocketing federal debt and find more than $3 trillion in budget savings over a decade.

The proposal draws a sharp contrast with Republicans and amounts more to an opening play in the fall debate over the economy than another attempt to find common ground with the opposing party.

Combined with his call this month for $450 billion in new stimulus, the proposal represents a more populist approach to confronting the nation’s economic travails than the compromises he advocated earlier this summer.

“We can’t just cut our way out of this hole,” Obama said in a speech in the Rose Garden of the White House. “It’s going to take a balanced approach.”

Here’s an outline of the plan, along with the 80-page pdf sketching out the proposal in significantly more detail. The rough sketch is as follows: the White House plan would produce about $3.2 trillion in deficit reduction. When one includes the savings from the cuts achieved during the debt-ceiling talks, the total reaches $4.4 trillion.

About $1.5 trillion over 10 years would come from tax revenue, including new rates for millionaires and billionaires. From there, the administration intends to cut spending through drawing down the wars in Iraq and Afghanistan and changes to Medicare financing, with some additional savings from interest on the debt.

The “Grand Bargain” on the table in July this isn’t — and that’s a good thing. Clearly, there are provisions that will draw fire from multiple angles, but the point to keep in mind is the notion of shared sacrifice — the Republican approach exempts the wealthy from facing any new burdens at all, demanding that everyone else shoulder the costs. The White House refuses to accept this.

Given the larger political circumstances, it’s unlikely the president’s proposal will enjoy much support in the right-wing House, making this more of an opening salvo than a realistic legislative blueprint. But in some respects, that’s the most heartening part of the recent White House shift — Obama and his team aren’t playing by the same rules anymore. Indeed, they appear to have thrown out the old playbook altogether. More on the politics behind the plan shortly.

 

Washington Monthly / By Steve Benen | Sourced from

Posted at September 19, 2011, 6:44am

 
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