Thursday, April 14, 2011

Obama's deficit reduction plan only a little more sensible than the Republicans'

There was a snap poll on the MSNBC website following President Obama’s deficit reduction speech on Wednesday. Readers were asked to grade Obama’s plan; about 35 percent gave it an “A,” while about 45 percent gave it an “F.” Such a poll hardly reflects critical thinking on the part of the graders; more likely it is a reflection of a voter’s personal attitude toward the president, and the degree of partisanship in today’s political discussion. It would appear that Obama was trying to reach that twenty percent who were at least “thoughtful” enough to refrain from a wholly oppositional attitude. I certainly would not have given Obama’s plan an “A,” particularly given the fact that he once more chose as his starting point a position of weakness. Obama and his advisers are apparently under the delusion that you can put forth a proposal that everyone should think is sensible, because you are dealing with sensible people. He isn't, especially when they call themselves the Tea Party. Hasn’t he learned his lesson after the struggle to get a health care reform bill passed? Rather than propose a Medicare-based public option as a starting point, Obama initially only proposed a health care exchange along the Massachusetts model; only under pressure from the left did he half-heartedly propose a public option, but by then it was an empty gesture. Republicans and Blue Dogs simply brushed it aside, because they knew it wasn’t a serious proposal.

This time, instead proposing an equal split between budget cuts and increasing tax revenue—not just doing away with the Bush-era tax cuts for the wealthy, but other options like raising the income threshold for Social Security withholding—Obama’s plan envisions a three-to-one ratio of cuts to tax increases. With more Americans reaching retirement age or eligible for Medicare than ever before, this is just barely more functional than the Republican alternative, the work-till-you-die program, which is just dandy for those who are not rich enough to afford to retire, ever. 85-year-olds can keep working at $9-an-hour jobs because we just can’t have those pesky immigrants around here to do those jobs and pay the taxes so the old folks don’t have to worry so much about Social Security running out too soon (that’s another thing Thom never did get right—because of declining birth rates for the “natives,” you have to find younger workers elsewhere). The problem is that life costs will inevitably go up—and there is only so much “fat” in entitlement programs whose pay-outs are not enough to begin with. Given the intransigence of the Republicans and Blue Dogs, Obama had to start from a higher tax increase proposal than the one he is offering, and forcefully defend it—unlike what he did concerning the public option. Of course the Republicans would deride it; that’s what they are programmed to do. But with a Gallup poll showing a solid majority in favor of a tax increase on those making over $250,000, a plan to increase tax revenue by $2 trillion instead of $1 trillion is just a point from where to start a discussion. In the end he would at least have a fighting chance to get that 25 percent he is aiming for now. But because he started with a lower number, he will inevitably get a lesser number than what is necessary, if any tax increase at all.

On the other side, the Republican deficit proposal by Rep. Paul Ryan, embarrassingly from “progressive” Wisconsin, deserves an “F,” but I’ll give it a “D” for chutzpah. It is “bold” and “courageous”—if your frame of reference is a first-grade civics class. The Republican plan envisions no tax increases at all, claiming that this is the path to “prosperity.” How long are Americans going to allow themselves to be gulled by this rhetoric? The Bush tax cuts didn’t create jobs—we lost a net of 3 million manufacturing jobs during the Bush years, and any increase in GDP was a hopeless fraud, based upon unregulated financial and real estate bubbles. All through the Bush administration years, every year at the sports apparel warehouse where I worked the question was the same: When was the economy going to improve? Every year just seemed worse than the last. Wasn’t it supposed to be the well-off types who got the big tax cuts who were supposed to be the demographic into soccer and tennis in this country? They certainly were not spending their money on consumer items that kept the foundation of the economy going. The only certain job creation scheme to get us out from bad to far worse was that by government spending. A lot of people still don’t get it, thanks in no small part to corporate-paid propaganda on the airwaves.

One may recall that the fate of the Bush tax cuts was postponed until after the mid-term elections. The question that Democrats were asking Republicans was “How are you going to pay for allowing tax cuts for the rich to continue?” They never did answer the question, and in return for a few knick-knacks from Republican senators, Obama forced Democrats to accept the tax cuts’ continuation. The CBO states that the Republican plan of making all the tax cuts permanent will not be sufficiently covered by their proposed budget cuts in the short-term, in fact leading to increased budget deficits. Any subsequent decrease in the debt is dependent on several factors that are far from a sure thing. One is the assumption that Republicans will succeed in privatizing Medicare and abolishing Medicaid. The Republican plan is to pass out vouchers to the elderly to pay for private insurance plans—or a fraction of one. I know an over-65 woman who is still working because she can’t afford not to, and who is deathly afraid of what the Republicans plan on doing with Medicare, and she should be. There is a reason why 61 percent of Americans don’t want their Medicare touched; the Republican plan “insures” one thing: That Americans will get less coverage for their money than they would under government-run Medicare, and they will pay much, much more out of pocket.

If the Obama plan is short on specifics, the Republican plan dispenses with them altogether. This is no surprise. Another assumption in the Republican plan is that they say they will reduce non-entitlement programs (like the defense and social safety net programs) by a certain percentage of GDP, kind of like picking a number out of hat. In order to come up with their $4.4 trillion or $5 trillion or whatever it is tomorrow, they simply say, um, 6 percent of GDP will go to those non-entitlement programs, to eventually fall to 3.5 percent. It’s hilarious, and sad all at once. And infuriatingly absurd, showing great contempt for the intelligence of ordinary people. The assumption is that the economy will rise dramatically through that now discredited but-still-warping-Republican-minds snake oil theory of “trickle down economics,” and the cost of everyday living will either stay the same or decrease. It is ludicrous. It is more than ludicrous, it is belongs in an institution for the mentally-challenged. Of course, we haven’t begun to talk about how health care costs will spiral into the space without reform; the only thing certain in the Republican plan is uncertainty about a future where allowing private insurers—shorn of the last vestiges of competition—to not just crush people into utter despair and hopelessness, but virtually dictate to the federal government how much money they require to stay contented with honoring a voucher program. Imagine: Not just corporations, but private health insurers controlling the government, thanks to Republican scheming, short-sightedness, and incompetence.

As Paul Krugman recently opined, the Republican plan should in no way be considered a serious proposal. It is nothing more than everything else House Republicans have done to appease the even more ludicrous Tea Party element—you know, the people who don’t want the government to touch their Medicare—which, of course, is what the Republicans want to do. And much worse, as it turns out. Who will pay the ultimate price? The most vulnerable people in this country, not the rich and powerful that the Republicans are playing for.


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