The Politics of Deficit Reduction

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Welcome to Politics Bites, where every afternoon at It's A Free Country, we bring you the unmissable quotes from the morning's political conversations on WNYC. Today on the Brian Lehrer Show, Jonathan Alter, MSNBC analyst and author of The Promise: President Obama, Year One, talked about the president's speech and how it will play inside the Beltway and around the country.

The president's speech on Wednesday wasn't just about deficit reduction, it also framed the political conversation leading into the 2012 election. Speaking to a crowd at George Washington University in the capital, Obama railed against the proposed tax breaks for the wealthy saying, "that's not going to happen while I'm president" and called his approach "patriotism" — strong words from the president.

So, what does all this mean?

Touching Medicare is bad politics

MSNBC's Jonathan Alter called the potential approval of Congressman Paul Ryan's plan "a serious political mistake" for the Republicans because it will change Medicare so drastically. According to Alter, this is the opposite tack from part of their midterm campaign platform in 2010 that won them the House. He explains:

The main message of what they used in their attack ads all over the U.S. was, Obama Care will cut $500 billion from Medicare. Now, in midterm elections, elderly people vote disproportionately...and the Republicans very successfully frightened seniors, particularly seniors who are independents, into voting Republican because they convinced them that Obama Care was going to meddle with their Medicare. Medicare is a wildly popular program, so now just a few months after that election, you have the entire Republican party which is about to end Medicare as we know it...that's what the Ryan plan does, it ends Medicare. And that is a very poor platform for the Republicans to use in 2012.

According to Alter, Democrats have historically agitated that Republicans want to end programs like Medicare and Social Security, when Republicans actually haven't taken these steps. Now this is changing, he said.

Now, the Republicans are becoming so radicalized. They actually do want to repeal the social contract of the 20th century so that's what the next election is going to be about, these gains that were made in the 20th century and whether we want to continue with the deal that we make to each other as a people, and I think it's going to be a fascinating election because it really is a referendum on something important.

Both plans are inadequate

Rep. Ryan responded to the president's speech calling it "partisan", "inaccurate" and "inadequate." Alter said the speech was in no way inaccurate, but he agreed it was inadequate, especially considering the crushing deficit, but Ryan's plan is inadequate too, he said.

Both of them cut $4 trillion over a decade and although that sounds like a lot of money, it doesn't really address the problem, it's not enough. So they're in exactly the same place in terms of how deeply they have to cut.

Raise revenue and cut spending, the political way

Ultimately, you have to raise revenue as well as cut spending to deal with this deficit and this is where it gets tough, according to Alter.

Obama, perhaps irresponsibly, is not saying he's going to raise taxes on the middle class. He really can't meet his deficit reduction targets without doing that eventually, but he's smart enough not to do that before the election. So instead, he's making it about more tax cuts for the wealthy which poll very badly so if the Republicans want to plant their standard on that ground, good luck to them. I don't think it's going to work.

Even though Obama hasn't given enough details, he didn't start this mess, Alter said.

We have to deal in the realm of facts here...when Bill Clinton left office we had a surplus of a couple billion dollars. When George W. Bush...left office, we had a deficit of $1.2 trillion, so the idea that Barack Obama created this deficit somehow is just spin of the worse kind. Did he add to it because he had to rescue the economy, rescue the banks, and so forth? Yes. Has he been specific enough about the way he will get us out of it? No. And I think that is a legitimate criticism of the speech.

But looking ahead, Alter argued there's a bigger question:

Will we make adjustments in Medicare so that the wealthy elderly pay more, which will be necessary to get control of our fiscal problems, or will we end Medicare. That's going to be the big choice in the next election.