Federal Budget Battles – Obama’s Counter-Offer

By YeOldeScribe ~ April 16th, 2011 @ 1:19 am

As we mentioned yesterday, Wisconsin Rep. Paul Ryan of the House Budget Committee and his fellow Republicans beat President Obama to the punch when they announced their “Path to Prosperity, a budget document that will supposedly save our country’s economic future. We reviewed that document yesterday, so if you’d like to read our synopsis of the Republican plan, you can do so here. Today, we’re going to take a look at the Democrats’ proposal – or more specifically, President Obama’s post-Wednesday plan for economic recovery.

First of all, to get a better idea of what we’re talking about, here’s a copy of Obama’s transcript. Please take a look at it – it’ll help you understand what we’re talking about as we continue.

A couple interesting things to note before we jump in:

* Obama never mentions President George W. Bush by name. Daddy Bush gets a shout-out, as does Bill Clinton, but Georgie is never mentioned by name – only by his questionable deeds to the US Economy.

* Since the speech was on a relatively neutral site (George Washington University), there was only one pause for applause – all the other stoppages were for obligatory chuckles from funny quips from Obama’s speech

* Rep. Ryan was in attendance, and was actually seated near to or in the front row.

Well, enough of the small stuff, let’s jump right into the meat and potatoes of the speech. And, like most political speeches, that doesn’t actually come for quite a while.

The first substantive thing Obama says (in our opinion) comes almost halfway through when he says, “We have to live within our means.” This, to us, is a HUGE policy shift for Obama. Our current President built up a lot of programs aimed to keep business in business, keep our spenders spending, and to get healthcare to all who needed it (aka everyone). But in doing so, Obama added to the national debt – by a lot. We’re not going to go through every single policy initiative Obama signed into law and evaluate its relative goodness or badness, but we will say that on the whole, Obama did what had to be done. We’re not really happy that the government owns shares of auto companies, banks and other businesses, but we believe that the county is better off now than if the banks and auto industry of America collapsed. Obama chose the lesser of two evils. That doesn’t mean his decision was right – but it does mean it was less wrong than any other one he could have made. But, like we said, what happened happened. The point is Obama has been a big spender, and this is the first sign that he’s taking a serious look at reeling some of that spending in.

One of our favorite quotes from the speech come just a little bit later – “You see, most Americans tend to dislike government spending in the abstract, but like the stuff that it buys.” We could not agree more with this statement. Everyone bitches about how much the government spends. Everyone. I guarantee you’ve never heard a person say “You know what, I wish the Federal Government took more taxes from me so it could provide more services for me.” Instead, people say “If they could, the IRS would take one-fifty for every dollar I make.” But those same people will complain when the highways aren’t in good condition. They’ll moan if their water isn’t as pristine as a bottle of Evian. And you can bet that if any of them do receive funds from the Federal Government like Medicare, Social Security or Unemployment, it’s not enough. People want, want, want, but don’t “want” to give up anything in return. And that, my friends, is one of the fundamental reasons why we’re in the hole we’re in. (This idea is systemic to both parties. Remember that we sided with the protesters in Madison because their collective bargaining rights were being taken away. Maybe we didn’t make this clear at the time, but we 100% agree that State union workers should have had to contribute more to their pensions and health care. Even the unions agreed to that. Had the only issue been over the money going in, we would have agreed with the state – because if workers want some of the best benefits, they should have to give something back.) Kudos to Obama for not only recognizing it, but calling America out on it.

Another great line comes shortly after that one – “Our politicians suggest that we can somehow close our entire deficit by eliminating things like foreign aid, even though foreign aid makes up about 1 percent of our entire federal budget.” Obama then goes on to prove why this logic is false. Don’t get us wrong, wasteful spending needs to be addressed. We pointed some of it out in our last post, specifically looking at the Department of Defense. Wasteful spending needs to be found and eliminated. But let’s not kid ourselves – targeting wasteful spending alone isn’t going to get the job done. Really, targeting any singular issue alone isn’t going to get the job done. Obama’s stance of everything’s on the table is exactly what we need right now (and when he says everything’s on the table, we really hope he means “everything” and not “everything the Republicans passed”, but only time will tell on that).

Finally, let’s take a look at the differences between Obama’s proposal and Ryan’s:

* Ryan fundamentally restructures Medicare/Medicaid to cut expenditures, Obama wants to keep both programs the way they are and still somehow save money on them.

* Obama wants to repeal the Bush-ear tax cuts on the wealthiest %1 of Americans, Republicans want to keep them, because they’ve enjoyed that %1 percent that should be going to the government in their pockets in the form of campaign contributions instead.

* Obama pushes for Social Security reform, Ryan doesn’t touch it.

* Obama also pushes for Defense cuts while Ryan does not.

So, what do we think of Obama’s proposal? We like it. Don’t get us wrong, we made it very clear that we liked the idea of Ryan’s proposal too – but the inner-workings of his plan were non-existent, for the most part. We’ll concede that Obama doesn’t have every nail hammered in where he plans to make changes and that much of his language was vague at best too. But Obama’s closer to the right track than Ryan is. Putting Social Security and Defense on the table are two huge things that needed to be addressed that Ryan punted on. Same with tax cuts. (Sidenote: This may make us unpopular, but we actually think that most Americans should be paying more in taxes. Yes, especially the wealthy, but even upper and middle class families. Look, it goes back to our earlier argument – now, more than ever, we demand our government to do so much for us, yet we refuse to pay more for it. No one wants taxes to go up, but inevitably according to most economists, in order to corral our massively out of control debt, we’re going to have to cut spending AND raise taxes if we ever want to see the light at the end of the tunnel. And if we chose not to, we will be run over by the proverbial debt train from behind.)

However, we do like Ryan’s plan for Medicare/Medicaid better than Obama’s. In that area, Ryan’s plan is clearer and we feel it’s more effective. All of the entitlement programs the government provides need to be fixed at. That’s the simple truth. Some will need to be reformed, some will need to be scaled back if we want future generations to use them. That’s the reality of the situation. While it’s not going to be popular to do, eventually someone’s going to have to.

At Political Progressives, we’ve learned a lot taking a look at our country’s economic picture this week, and it’s made us very worried, to say the least. But, Ryan and Obama’s plans do give us hope if for no other reason than that for the first time in a long time, prominent members of government are taking a look at deficits and the problems they entail. However our optimism is not unbridled. It’s one thing to discuss these changes. As we’ve learned with the passage of the FY 2011 budget, it’s quite another to pass them into law. And until that happens (and until both sides are willing to compromise for the sake of the future of our great nation), this is all just a philosophical mind exercise that will yield no significant results.

But even that’s a step in the right direction.

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2 Responses to Federal Budget Battles – Obama’s Counter-Offer

  1. Nathan Wright

    “They’d be the first to complain if their mail stopped arriving promptly every day.”

    I feel obligated to remind you that the Postal Service DOES NOT receive tax subsidies. It is the largest self-funding agency in the federal government. I really need to write an article on this…

  2. YeOldeScribe

    We definitely dropped the ball on that one. The post will be updated accordingly. Also, if you would like to write said article, we’d be happy (and honored) to post it. Thanks for keeping us honest!

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