Duck and Cover: The New Obama Program

Robert Borosage

“Our government,” wrote Justice Lewis Brandeis, “is the potent, the omnipresent teacher. For good or for ill, it teaches the whole people by its example.” And also by what its leaders frame as important. No one has greater ability to teach than the president with what Teddy Roosevelt called his “bully pulpit.” This is President Obama’s great strength. His is the voice of reason. Amid the noisy clamor of politicians, he is the adult in the room. His clarity and vision can embolden the meek, calm the flighty, and inspire the young.

Yet now, with his young administration facing its first significant political challenge, the president apparently plans in his State of the Union address to offer not vision but distraction. Instead of taking off the gloves and challenging the lies and distortions of his opponents, he is choosing to duck and cover — which will only add to the public’s confusion and his party’s disarray.

This State of the Union address had a heavy burden. The president had to make a compelling case for the jobs program needed to put people to work. He had to show that he was prepared to rein in the big banks, and send them the bill for their bailout. He had to revive his faltering health care bill. And most important, he had to take on his opponents, challenging their unwillingness to learn from their calamitous failures, and to join in the effort to rebuild the nation.

This apparently was not enough. The president will make one centerpiece of the address a three year hard freeze on “non-security” discretionary spending, a self-described “symbolic” measure that is both bad policy and bad politics. In the short term, it ignores the real challenges we face, and emboldens those who have stood in the way of addressing them. In the long term, it mistakes the diagnosis and thus the remedy of our problem.

1. What about jobs?

Right now, we need a bold, big jobs program to put people back to work. One in five Americans are unemployed or underemployed. Foreclosures are up, and soon one in three homes with mortgages will be underwater. States and localities are facing crippling layoffs from budget shortfalls. The human costs — in lost homes, lost hope, lost jobs, broken families, and frightened children — are staggering.

Obama’s initial recovery program has staunched the free fall of the economy, but it has not been big enough nor targeted enough to put people back to work. The slow and halting recovery that is in sight will do little to create the jobs we need. Republicans have argued that Obama’s plan has failed since the day it was passed. They call instead for reducing spending to cut deficits now. This is dangerous nonsense that must be confronted. Cutting spending and deficits now will only sap any growth, add to unemployment and quite possibly tip the country into a new downturn.

But with Democrats apparently hysterical about independent voters going South on them, the president has chosen to duck and cover. He’ll endorse — I hope — a jobs program this year, but simultaneously offer up the three year domestic spending freeze starting in 2011.

How can the president strengthen the spine of the Congress to do something real on jobs when he is catering to the panic on deficits?

The reality is that we aren’t going to reduce the deficit unless we get Americans back to work. And more deficit spending on a large jobs agenda is vital. The budget freeze simply confuses that message.

Given the perilous state of the economy, even a freeze that kicks in next year could be dangerous and doesn’t make much sense. But worse, this year, it is likely to undermine, not build, support for jobs. It will embolden Republicans and the timorous Democrats like Evan Bayh and Ben Nelson.

2. Wrong on debt and deficits

President Obama began his administration having an adult conversation with Americans about our deficits and long term debt challenge. Our long-term problem, he said correctly, was almost entirely a question of soaring health care costs. Get health care costs under control and we have no problem; fail to control them will end up bankrupting families, businesses, and every level of government. And so a centerpiece of comprehensive health care reform was to begin to get on top of costs.

Now Obama suggests that freezing domestic discretionary spending — everything the federal government spends outside of the military, homeland security, veteran’s programs and entitlements like Social Security and Medicare — represents at least a “symbolic” response to the long term debt challenge.

This simply isn’t true. Domestic discretionary spending is about 12 percent of the budget, and it adds nothing to long term deficits and debt. Cutting it through a hard freeze — saving $250 billion over 10 years when added deficits will total about $9 trillion — will do nothing noticeable to deal our long term challenge. The president has gone from educating citizens to distracting them.

Democratic pollsters argue that the president had to do something to reassure voters that he is serious about deficits. But then why not be serious? Why not go back to the true case — that health care costs drive our long term deficit challenge — and that is why passing comprehensive health care reform is so important?

3. Wrong on priorities

When the president laid out his economic sermon on the mount at Georgetown, he told Americans we had to build a new economy on a solid foundation. The centerpiece was investment in education and training, in 21st century infrastructure, and in research and development. And he argued that we must capture the leadership in the new green industrial revolution in order to rebuild manufacturing in this country, and revive a broad middle class. Great stuff.

Only none of this is possible if there is a hard freeze on domestic discretionary spending. The reality is that we need to invest much more, not less on these areas. And despite the posturing about earmarks and waste, there isn’t enough that can be cut from other domestic programs to pay for the investments we need.

The largest source of waste, fraud and abuse in the federal budget isn’t even in domestic spending. It is the Pentagon, which is so out of control it can’t even audit its books. We spend virtually as much on the military as the rest of the world combined — but the military is not only not part of the freeze, spending on it is going up beyond the excesses of the Bush years.

A hard ceiling opens a fierce battle among domestic programs. This sounds good: poor programs get discarded; good ones funded. But in reality what occurs is that programs for the weak — who can’t afford the $1000 suit lobbyists — get cut, and weak programs, like our egregious farm supports, pay for their protection.

4. Wrong on spending

Conservatives rail about big government, while signing risible pledges opposed to any and all tax hikes. Over the last thirty years of conservative domination, taxes on the wealthy have been reduced, even as inequality has reached Gilded Age levels. That’s why Warren Buffett, one of America’s wealthiest men, reports that he now pays a lower percentage of his income in taxes than his secretary.

At the same time, every American suffers the growing investment deficit that increasingly cripples this country. Aged bridges collapse; leaking sewers poison waters; unrepaired schools hinder teaching; slow trains and crowded roads waste hours. We have neglected core investments in America for a generation. In comparison to Europe, America increasingly looks like, and runs like, a second rate country.

We need to rebuild America, to make the public investments vital to our future. Yes, conservatives decry government waste, and call for draconian cuts in both spending and taxes — as if thirty years of their politics weren’t enough. This is a fundamental argument about our future that Barack Obama must take on. Few are better equipped to make the case. Obama had the courage to call for raising taxes on the affluent in the campaign. He has made the clear case for investing in our future. Once the economy comes back, he should be pushing for comprehensive tax reform that provides the revenues we need to invest in America.

A domestic spending freeze gives away the game to the right. Democrats will argue a freeze; conservatives will argue for greater cuts. The compelling reality — that spending should rise and top end taxes should rise to pay for it — will go unheard.

5. Wrong on politics

Mid-term elections are dominated by the angry, the organized and the aged. The base of the right is mobilized and passionate. The new electorate that forms Obama’s base — the young, minorities, single women — generally do not turn out in large numbers in bi-elections. Now they have been hit the hardest by the economic downturn. Unionized workers, core to the organized Democratic base, are battered by job losses, and angered by the effort to tax their health care benefits. Liberal activists are dismayed by the escalation in Afghanistan, the retreats on civil rights, and the backroom health care deals.

A bold jobs program combined with a populist stance to curb the big banks would inspire that base, and draw a clear contrast with Republicans. Make the election a choice. Let Democrats argue for jobs and curbing the banks, while Republicans rail about deficits and regulation. That is an argument that Democratic candidates can win. But embracing a freeze will dismay activists and weaken the argument for jobs while emboldening conservatives in both parties.

And independents? Would independents be as upset about deficits if jobs were coming back? No, folks are angry about deficits because they think the money went to bail out Wall Street, not Main Street. Do the right thing on jobs and on the banks is the strongest argument for Democrats. The freeze simply gets in the way.

Perhaps we should consider the proposal a clever dodge. Domestic spending has increased because of the recovery spending; let’s freeze it at these levels and go forward. No, the administration is boasting that by 2015 domestic discretionary spending will drop to the lowest percentage of federal spending in fifty years. That is not a victory; it is a tragic defeat.

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