Obama and the Deficit Paradox
Filed under: President Bush, Republicans, Barack Obama, John McCain, Featured Stories, Economy, Taxes, Social Security
When he took office on Janurary 20th, President Obama was given a few unwanted gifts from his predecessor. Among them was a record federal deficit of $1.3 trillion dollars. Yes, lowering taxes and expanding government, while simultaneously waging two wars certainly has a way of running up the bill. Not that Congressional Republicans seemed to mind very much while George W. Bush controlled the levers of power. Now that Obama has taken the reigns, however, fiscal conservatism has made a sudden, roaring comeback. But here’s the problem for the all-or-nothing critics shouting at the president: Obama’s ideas aren’t as easy to peg as they’d like. While it’s true that Obama’s stimulus plan will pour nearly a trillion dollars of taxpayer money into our sagging economy, he has also enacted one of the largest tax cuts in American history. And even though he plans to attack health care, and the equally thorny issues of Social Security and Medicare, Obama has announced his intention to cut the deficit in half by the end of his first term.
Exactly how does the president intend to accomplish this Herculean task at this difficult time in our history? The AP explains:
…the deficit will be shrunk by scaling back Iraq war spending, ending the temporary tax breaks enacted by the Bush administration for those making $250,000 or more a year, and streamlining government.
Of course, that’s all pretty iffy stuff. The war could be harder to end that Obama envisions, and pledges of streamlining government are as old as dirt. Yet, as Obama convenes his “Fiscal Responsibility Summit” today, and prepares to roll out a preview of his first budget on Thursday one has the sense that the president is serious about the challenges before the country, and is less apt to follow a purely liberal approach as to how to solve them.
Entitlement reform has been the 300-pound gorilla sitting in the Oval Office for the past few administrations. Mercifully, W. Bush (and John McCain) failed to convince Congress that we should privatize Social Security–playing the stock market with the money–or we’d be looking at an unimaginable future of poverty and despair for the baby boom generation.Entitlements will be front and center at today’s White House gathering. The fact that Obama is talking up the looming problem is enough for some Republicans (and some Democrats, too) to wonder just how far the president is prepared to go in order to fix what seems so unfixable:
One has to give Barack Obama at least half a point for political courage. In warning that Social Security and Medicare are ticking fiscal time bombs, the president-elect took on one of his party’s most prices shibboleths-the idea that there is nothing wrong with those programs that repealing the Bush tax cuts won’t fix. After all, hardly any Democrat anywhere campaigns without attacking his Republican opponent for wanting to destroy Social Security and Medicare.But to get full courage points, Obama would have to come up with an actual plan to reform the two troubled programs. So far, he hasn’t.
So, as ever, the devil will be in the details, and Obama knows full well that he’ll have a tough time with his own party when it comes to entitlement reform. More and more, it seems that the president is trying to occupy the middle ground and govern not from left, as so many of his critics have feared, but from the center. With the partial unveiling of his budget, which will certainly contain more specifics on how he plans to start reducing the deficit, this promises to be an interesting week in Washington.
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