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5 Things We Learned From Obama's Speech

Wednesday, April 13, 2011

President Obama wants to cut $4 trillion from the federal debt in twelve years, with tax increases on the wealthy taxpayers, cuts to some defense, Medicare, Medicaid and discretionary spending, with a mechanism called a "failsafe trigger" to finish the job. Here's what else we learned.

1. 2008 Redux: Let Tax Cuts for Wealthy Expire

Remember when Obama ran on a platform of raising taxes on the wealthy? That's back in the talking points in a big way.

Obama drew his only applause line when he right at the tax versus spending calculation. “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."

If that wasn't clear enough, he underscored the point about Bush-era tax cuts a few moments later: “I refuse to renew them again."

The same proposal was in his budget for this year, so it's not new, but his moxy around the question is.

2. What a Failsafe Trigger Is – Sort Of.

Suggest that anything is "failsafe" in politics, and you're asking for heartbreak. Here, this "failsafe trigger" will go off in 2014 if the debt-to-GDP ratio isn't hitting its targets. The mechanism for the trigger is still to be determined, and will be worked out in a bipartisan deal, according to a press briefing before the speech.

So, in other words, if the political process doesn’t work to achieve the cuts necessary now, a political process now will make them happen in the long-term.

It's not the first time the president has championed a "trigger" as a way to reign in costs. It also a concept he floated in his major pitch for the health care legislation in September of 2009.

3. Where His Limit is on Health Care Changes

It's a contrast made for the campaign trail: He's making the case that the Republican plan hurts seniors; his bill that we already passed will save $1 trillion. 

The plan proposed by Rep. Paul Ryan "ends Medicare as we know it." In addition to health care overhaul, Obama will give new enforcement powers to the board created by the health care legislation to bring down Medicare spending.

But while the president said changes are necessary, he dismissed any talk of abandoning its current structure as a public entitlement program. "I will preserve these health care programs as a promise we make to each other in this society."

4. Social Security – We’ll Keep Kicking That Can 

Social Security was mentioned, but the president didn't offer any new proposals beyond what he already laid out in his budget. There, the president called for shoring up Social Security with bipartisan solutions, without reducing current benefits, privatizing, or "an approach that slashes benefits for future generations."

Bipartisan recommendations. Remember how that worked out for the federal deficit?

5. Debt Does Matter

Dick Cheney may have contended that ”Reagan proved deficits don't matter,” but Obama is driving straight at the question. "Doing nothing on the deficit is just not an option," he declared.

It's not a time for more recovery-focused stimulus, as some Obama critics on the left contend. It's time to reign it in, Obama said.

“Our debt has grown so large that we could do real damage to the economy if we don’t begin a process now to get our fiscal house in order." He folllowed with a challenge to his liberal base: “if we truly believe in a progressive vision of our society, we have the obligation to prove that we can afford our commitments.” 

The tax-versus-spend binary is tired -- and a mix is necessary, Obama says,  not just because it's what can get the votes in Congress, or the votes on a deficit commission, but because it's the president's vision.

The real work on all this, of course, will begin in early May, when Obama's asked House and Senate members from both parties to start meeting with Vice President Joe Biden (at least Biden will be rested). That's right around the time, of course, of the debt ceiling vote deadline and the first scheduled debate of the 2012 presidential campaign.

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Comments [3]

Sheen's night of work= a Lifetime for the Avg Joe? from the U.S.A. or just a market ?

Charlie Sheen made $2 million per episode.
This is to say that society views one night of his
work to be worth more than a lifetime of work for
most U.S. citizens. It therefore considers satisfying
his whims (and those of others like him) far more
important than satisfying the basic fundamental
human needs of most normal U.S. citizens.

Like most people on the top, he got to his position
the old fashioned way - his family connections.
No doubt he also has considerable skill in what
he does, but then so do thousands of others - many
of whom are unemployed or unemployed working
as baristas or dog-walkers with sparse wages, no
job security, no health care and no future.

The more the country eliminates government protections,
regulation and services, and the more the country
privatizes the public domain and essential needs - the more
it makes it's average citizens worthless and the more
it exaults the Charlie Sheens of this world.

To his credit, unlike many of his more tasteless and
wealthier counterparts in banking - at least Charlie
Sheen is good at his work and has produced something
that has made many people happier or distracted - if only
for a half an hour. Many of his more tastelss and wealthier
counterparts have done nothing for most people - in fact -
many have become rich mostly by increasing the suffering,
misery and insecurity of the average American citizen,
and by legally stealing from the Treasury and the people
who fund it.

Apr. 14 2011 07:49 PM
Timarie Buhl from Montana

I'm concerned that President Obama is just telling us the American people what he thinks we want to hear as a new election year rapidly approachs. I voted for him and have four children. I'm concerned

Apr. 13 2011 10:01 PM
Anne DeSola Paust from Succasunna, NJ

I'm encouraged that Barack Obama has finally begun to come to his senses and reflect the thinking that got him elected in the first place. We are in a terrible fix by promising everyone everything and then borrowing to pay for it. Some borrowing is good but we have gone disastrously overboard! Who do you think is profiting by all this borrowing? The lenders, of course, who are already in a position beyond subsistence living. This alone is a massive transfer to the folks that already have enough. In my opinion Obama has been too beholden to Wall Street, which demands more and more of our money and its claim on real goods and services, to continue their obscene casino which enriches only the insiders and makes others have a more straitened life. I suggest everyone read David Korten's book, "Agenda for A New Economy - From Phantom Wealth to Real Wealth." Of course we are all involved in this wrong economy, and it will take years to unravel it all.

Apr. 13 2011 07:44 PM

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