Politics over policy
ECONOMY | President Obama’s plan goes after the wealthy while leaving entitlements alone | Edward Lee Pitts
WASHINGTON—House Speaker John Boehner and President Barack Obama have now delivered two speeches in five days seemingly aimed at targeting our nation’s economic woes. But what did the two party leaders really accomplish? They bluntly threw down their policy gauntlets ahead of next year’s crucial election.
Obama delivered his speech on Monday in the White House Rose Garden before just as many laughing partisans as reporters. Like a well-trained sitcom studio audience, they chuckled at all the right lines—at least from a Democratic perspective.
In unveiling his $1.5 trillion in new taxes, the president lectured Republicans that raising taxes on the wealthy “is not class warfare. It’s math.” He then threatened to veto any deficit reduction plan that does not include new tax revenue.
“We can’t just cut our way out of this hole,” Obama said. “It’s only right we ask everyone to pay their fair share.”
But rewind to last Thursday when, during a speech to the Economic Club in Washington, D.C., Boehner laid down his own marker. Tax increases, Boehner said, “are off the table. It is a very simple equation. Tax increases destroy jobs.”
These strong lines in the sand place in a pickle the joint congressional committee now meeting to find, by Nov. 23, at least $1.5 trillion in mandatory deficit cuts over the next decade.
“The good news is that the joint committee is taking this issue far more seriously than the White House,” said Senate Republican Leader Mitch McConnell in a statement released soon after Obama’s speech Monday. McConnell attacked the president for the “massive tax hike” and for “punting on entitlement reform.”
Obama’s plan to reduce the deficit by a little more than $2 trillion during the next decade would increase revenue by $800 billion just from letting the Bush-era tax cuts expire for families making more than $250,000. It also adds more revenue to the federal coffers by reducing tax deductions and loopholes available to wealthy earners and corporations.
Republicans have signaled a willingness to pursue an overhaul to the tax code. But Rep. Paul Ryan, the Wisconsin Republican who is his party’s go-to budget guy, warned on Fox News Sunday that “permanent tax increases on job creators doesn’t work to grow the economy.”
Ryan continued, “It’s actually fueling the uncertainty that is hurting job growth right now. And don’t forget the fact that most small businesses file taxes as individuals. So, when you are raising these top tax rates, you’re raising taxes on these job creators where more than half of Americans get their jobs from in this country.”
Republicans also criticized Obama’s plan for largely neglecting mandatory spending.
The plan does reduce spending by $580 billion in entitlement programs such as Medicare and Medicaid. But these cuts go after the medical providers and not the growing rolls of beneficiaries.
Conservatives warn that reimbursement cuts to doctors treating Medicare and Medicaid patients may harm the needy by driving medical providers away from high need areas.
Obama’s plan does not touch Social Security and does not propose erasing the eligibility age for any entitlement beneficiaries—something his own deficit reduction panel last fall suggested.
Republican lawmakers are calling for a greater focus on reforming an open-ended benefit system that does not foster efficiency.
“In a three-and-a-half-trillion dollar budget, two–thirds of which is entitlements, there is enough slop in the system that you can find a trillion and half in savings,” said Sen. John Kyl, R-Ariz., who also sits on the new super committee. “People kid about waste fraud and abuse. But it’s real.”
Obama’s plan has vitally no chance of passing a Republican House. And the president and his White House staff obviously know that.
So Monday’s proposal and speech became more about bolstering Obama’s chances for a second term by reassuring his liberal base. Democrats believe that their storyline of going after the wealthy and protecting entitlements will resonate with voters next fall.
The differences between the two parties are now clear to anyone still confused after nearly three years of Washington partisanship. Obama’s economic-plan-turned-campaign-speech on Monday hammered home the sentiment that solving the nation’s job problems will play second fiddle during the next 14 months to the top goal for all lawmakers, from the White House to Capitol Hill: protecting their own jobs.