fresh voices from the front lines of change







The President got big things right in his budget speech. He defended Medicare and Medicaid against the Republican effort to end them, and pushed accurately for reforming our health care system, not simply shifting costs to seniors and the disabled. He defended Social Security. He called for top-end tax cuts and savings from the Pentagon, unlike Republicans who want more tax breaks for the richest Americans and give the Pentagon a pass. He makes the case for investments vital to our future.

But his premature embrace of austerity was a sad concession. This economy is in trouble. Americans need jobs. And Washington has turned far too quickly from boosting the economy and putting people to work to cutting the budget and cutting jobs.

Yesterday, we published a guide for citizens to the debate over the budget. It offered a series of common sense standards to measure the various plans that are coming down the pike. Here is the summary of those standards and the president’s plan:

1. Put People to Work

The most effective deficit reduction measure is to put people to work. Immediate cuts in spending will cost jobs.

The president made the case that deficit reduction cannot ignore the need for a strategy to rebuild the economy. He argued for making investments vital to our future – including on education, infrastructure and innovation. But his biggest concession was to the Republican posture that we should turn to deficit reduction now, that there should be no new programs to put people to work. With this speech and with the agreement on cuts in the domestic budget over the next months, the president has embraced a premature turn to austerity.

2. Tax “thems that got”

Given the Gilded Age inequality that we suffer and the top end tax cuts that the wealthiest Americans have enjoyed, any sensible plan for deficit reduction will begin with top end tax increases, and will capture more deficit reduction from tax hikes than from spending cuts. The president makes the case for not extending the Bush tax cuts for those over $250,000. But he embraces the Deficit Commission’s wrong-headed policy of taking more deficit reduction from cutting spending than from tax increases. This makes little sense.

3. No Defense for Defense

Since we spend about as much on our military as the rest of the world combined, cuts in defense must be part of any deficit reduction plan. The President called for another $400 billion in cuts over the next 12 years, as well as a review of missions for the military. This cuts less from Defense than from the much smaller non-security domestic budget, but does far more than the Republican plan which essentially leaves Defense unscathed.

4. If it ain’t broke, don’t fix it

The President stated the simple fact that Social Security has not contributed to our deficit and is not part of its solution. Here the Republican plan agrees. The president sadly did suggest that the parties come together now to address Social Security’s long term trajectory. But with Republicans theologically opposed to the most sensible reform – lifting the income cap on payroll taxes so wealthier Americans pay the same percentage of their incomes as everyone else does – any discussion is a non-starter.

5. Health Care: Focus on the disease, not the symptoms

Here the President was exactly right. He assailed Republicans, accurately, for seeking to end Medicare as we know it, and shift rising costs onto seniors, the disabled and poor children. He vowed to protect the guarantee of care, while focusing on the problem – our broken health care system. He even put using Medicare’s bargaining power on prescription drugs on the table, as a first step.

6. A strategy for our future

The president forcefully defended making investments vital to our future – from education to infrastructure to research and development. He was terrific at evoking an America that has prospered from vital public investment. But there was precious little strategy here beyond that and, worse, the embrace of premature austerity essentially concedes the ludicrous Republican claim that we grow through cuts. With 25 million in need of full time work, massive unused capacity, and interest rates effectively below zero, that just isn’t true. What this economy needs – public investment to create jobs, rebuild our infrastructure, and stave off layoffs of teachers and cops – is now an argument banished to the progressive corners of the public debate.

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