Streams

Budget Challenge: Can Obama Shift From Crisis Management to Fiscal Philosophy?

Tuesday, April 12, 2011

As President Obama launches his campaign for a second term, he’ll be sharpening his talking points about his record. His speech on Wednesday will lay out exactly the way he wants to position the country on fiscal issues.

Leading up to the speech, he’s given mixed messages, depending on the audience. He's been both a big stimulus spender and a shrewd budget cutter. But the lack of a unifying economic philosophy - as well as any unity on the part of Democrats - has given him little room to maneuver when trying to retain his base and avoid scaring off independents. And while some Democrats are criticizing him for lacking political courage, most of them are out of office.

Just two days after announcing his reelection, if his opening salvo to his base at the Rev. Al Sharpton’s civil rights convention is any indication, he’ll focus in his reelection campaign on the auto industry turnaround, new financial regulations, and health insurance reform.

In that speech, the president made no mention of his budget positions over the last six months: His deficit commission’s recommendations. The deal with the Republicans to extend Bush era tax cuts while extending unemployment benefits. Introducing a budget that freezes federal worker’s pay and non-defense discretionary spending. He only mentioned "tax" once, but that was in reference to the earned-income tax credit, not about bringing in more government revenue.

His radio address on Saturday took a totally different tack. Just hours after the deal that averted a shutdown, the president touted “the biggest annual spending cut in history.”

Reducing spending while still investing in the future is just common sense. That’s what families do in tough times. They sacrifice where they can, even if it’s hard, to afford what’s really important.

Former Labor Secretary Robert Reich sees the contrast, and he pins it on a shift in Obama’s position around February of last year, when he convened the deficit commission.

“The government has to spend more right now, even now,” Reich said. During the depths of the economic crisis, “the president had the courage to say all of that, but then, somewhere along the line, and I think because the Republicans kept beating him up, the president just didn’t want to go on taking the heat.”

Calling the economic recovery anemic, Reich said the president could still make the case that pulling back government spending is the wrong economic strategy. “Right now is the worst time to cut federal spending,” he said.

Since the president started focusing less on stimulus and more on the deficit, Reich said there’s been no effective rebuttal to what he calls the Republicans’ “big lie” that bringing down the deficit will create jobs, and that the only way to bring down the deficit is to cut spending.

“By stating these untruths over and over again, and not having to worry about the president or Democrats telling the real truth, they’ve planted in the public minds these fabrications. The president has to very clearly take them on.”

And for Reich, taking them on means talking taxes. “It’s only fair that the very wealthy, the super rich, pay more.”

Former New York governor David Paterson, who knows something about governing in a time of fiscal crisis, has also chimed in with criticism of the president.

“As a nation right now in this crisis, we’re going the wrong way. The political winds are forcing the current administration to do things that we don’t want to do, I understand that. But we’re going the wrong way,” Paterson said on Monday while speaking at a forum at Columbia University. “We have a revenue crisis, and we have to generate the types of revenues that will get us out of it.”

In fact, Obama included higher taxes in his budget proposal this year, calling for ending the Bush-era tax cuts for earners making more than $250,000 – but he hasn’t talked about that much so far.

The Congressional Progressive Caucus went further in its own “People’s Budget,” called for resuming Clinton-era tax brackets, but it got little traction in the shadow of the sweeping spending plan from Rep. Paul Ryan (R-WI).

The proposal is sweeping and far-reaching – it also calls for a care “public option” and a “financial crisis responsibility fee” – but it focuses its ire on the Republican calls for cuts and does not critique president’s budget proposal.

The progressive caucus has 75 House members – including three New York lawmakers: Charles Rangel, Jerry Nadler, and Carolyn Maloney. (On Monday, Rangel called it Obama’s spending cut compromise a “lousy deal” and questioned its morality.) On the Senate side, there are just two progressive caucus members: Vermont’s Bernie Sanders and New Mexico’s Tom Udall.

New York’s Kirsten Gillibrand, who’s been branded “the liberal senator from New York” for often positioning herself to the left of Schumer, had no criticism of the president.

“We all need to be able to cut spending. We have to tighten our waist belts and make sure that we cut the waist and the fraud and the excess out of government, and the president has been doing that hard work over the last several months,” she told WNYC on Monday.

She praised the president for bringing people together, and aimed her critique squarely across the aisle.

“Those who are sticking a wrench in this process are these Tea Party new Congressional members, because they do not seem to care about shutting down the government and I think that shows a lack of judgment and a grave irresponsibility,” she said.

It does show, however, unity and clarity on message. And without that from his colleagues on the left, the president has little cover for a bold alternative.

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Comments [2]

Michael Meltzer

Liberals and conservatives can argue "till the cows come home," they are only posturing about how to distribute the leavings of the carcass of the economy, after the lion, which is the oil industry, has eaten.
Until petroleum is taken out of the hands of what has become a ruling class, nothing can change. Stop the hemorrhage, and there will be plenty to go around, we really are very productive.

Apr. 14 2011 12:33 PM
normanjung from us


In fact, under new health care reform your health insurance company will no longer be allowed to cancel your policy if you get sick, we should be doing this already! search online "Penny Health Insurance" it is a good place to find insurance if you have illness like me.

Apr. 13 2011 02:19 AM

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