Talk about a successful budgetary proposal: House Budget Committee chairman Paul Ryan’s budget would cut 46 percent and $4.4 trillion from proposed deficit spending under President Obama’s budget, reform Medicare and Medicaid to put these programs on solid financial footing, and repeal Obamacare. And, within a fortnight, Ryan's proposal caused the sitting president of the United States to abandon any real attempt to defend his own budget, to give a major speech attacking the Republican budget, and to pick a fight that he likely cannot win.
If President Obama had more pride and less vanity, he’d likely feel rather sheepish about these developments. He’d likely feel self-conscious about jettisoning his own budget so quickly, offering almost nothing tangible to replace it, regressing from a budget to a budgetary “framework,” proposing yet another commission to do the work that he should be doing himself, and blatantly demagoguing the Republican plan.
Obama’s proposed budgetary “framework” amounts to a mostly vague, 3-pronged approach: raise taxes on the “rich” (and thus on many small-business owners), gut defense, and empower Obamacare’s already frighteningly unaccountable Independent Payment Advisory Board (IPAB) to exercise even more power over health care spending.
This is a political loser on all three fronts: The tax battle already played out—with a Democratic Congress—and Obama lost. Even the White House’s own messaging is incoherent on this point. Three days before Obama’s speech, White House senior advisor David Plouffe, who ran Obama’s campaign in 2008, praised the bipartisan agreement reached in December to extend the Bush tax cuts, characterizing it as a moment “when the parties came together, with the president’s leadership, to cut taxes for everybody in America.” In his speech, Obama criticized the tax cuts and said, “I refuse to renew them again.” So which is it?
The White House press release in connection with Obama’s speech also called for a “debt failsafe,” which, if Congress and the president were to refuse to act responsibly, would “trigger an across the board spending reduction, including on spending through the tax code.” Obama apparently thinks that when Americans are allowed to keep their own money, this constitutes government “spending,” which also suggests where he thinks the money originates. Moreover, his proposal would mean that, if Congress and the president failed to act, “spending” would automatically be reduced by raising taxes.
The respective names of Ryan’s and Obama’s proposals — “The Path to Prosperity” versus “Shared Prosperity and Shared Fiscal Responsibility” — also say a lot. The former offers a road to economic growth; the latter proposes that we share that which we already have. The former proposes to increase our wealth; the latter aims to redistribute the wealth.
As for Obama’s desire to gut national defense, over the past 50 years, the average share of federal spending that has gone to defense has been 26 percent. In 2012, under Ryan’s proposal, only 20 percent of spending would go to defense, and that figure would decline to only 16 percent in 2021. The American people are not going to buy that this constitutes profligate defense spending.
As for Obama’s desire to give the IPAB the authority to make additional savings by, as he puts it, “further improving Medicare,” it hardly seems to be politically savvy for Obama to draw attention to one of the most egregious parts of Obamacare or to the cuts that he wants to empower it to make. The IPAB’s decisions would go into effect automatically, with the full force of law. Those decisions not only wouldn’t have to be approved by Congress but couldn’t even be overridden by a congressional majority and the concurrence of the president.
Such unconstitutional quasi-legislative power would be exercised by 15 unelected bureaucrats—not exactly the kinds of folks that most seniors want to have “improving” Medicare. And unlike Ryan’s reforms, which wouldn’t affect anyone who is at least 55 years old, the IPAB’s mandates would affect current Medicare beneficiaries. While Ryan’s reforms wouldn’t be implemented until 2022, Obama’s IPAB would go into effect in 2014—if Obamacare isn’t repealed first.
The only thing that Obama’s “framework”—not a budget—really succeeds in doing is showing his true political colors. It more plainly shows him to be an across-the-board liberal whose solution to rising debt—a greatly disproportionate share of which has been amassed on his watch—is to soak the rich, weaken our nation’s defenses, and further centralize and consolidate power (and control) in Washington.
Moreover, his budgetary “savings” are almost completely unbelievable. Without having produced a budget to this effect, Obama claims that his “framework” would cut deficits by $4 trillion. But he also says that his framework “builds on the roughly $1 trillion in deficit reduction [he] already proposed in my 2012 budget.” The Congressional Budget Office (CBO), however, says that Obama’s 2012 budget would add almost $3 trillion to our deficits, even on top of the roughly $7 trillion in deficits that we are already set to accrue under current law. So Obama’s claim about his current budget is off by about $4 trillion. To put it otherwise, Obama already thinks his budget would reduce deficits by about $4 trillion in relation to the CBO’s scoring of his budget. How believable does that make his projections for his “framework”?
Ryan has already shown his willingness to fight back and to defend his well-conceived proposal. Within hours of the president's speech, Ryan said, “When the president reached out to ask us to attend his speech, we were expecting an olive branch. Instead, his speech was excessively partisan, dramatically inaccurate, and hopelessly inadequate to address our fiscal crisis.” He added, “When the president is ready to get serious about confronting this challenge, we'll be here.”
On the larger point of Obama having given a speech of this nature at all, one wonders what he was thinking. On some level, it is understandable that with no one to the right of the New York Times respecting his current budget, and with Ryan’s budget gaining substantial, if often grudging, praise from mainstream media outlets, Obama would want to be in the game. But the last thing that one should do is choose to go head-to-head on budgetary matters with the person who perhaps knows more about such matters than any other prominent elected official in America—especially when you have nothing particularly worthwhile of your own to offer. In challenging Ryan, Obama has merely highlighted his own inadequacies.
One gets the sense that, despite the clear verdict that the American people registered in 2010, Obama greatly underestimates how attuned voters are to the issue of the debt and how well aware they are that serious leadership is needed to address it. This was perhaps one irresponsible, partisan, disingenuous, misleading, and inaccurate speech too many. Increasingly, Obama is looking like a charlatan, and it’s becoming progressively harder for Americans not to notice.