|
New
York Times...
Obama’s Debt Plan
Sets Stage for Long Battle Over Spending
By Mark Ladnler and Michael D. Shear
April 13, 2011
WASHINGTON — President Obama made the case Wednesday for slowing the
rapid growth of the national debt while retaining core Democratic
values, proposing a mix of long-term spending cuts, tax increases and
changes to social welfare programs as his opening position in a fierce
partisan budget battle over the nation’s fiscal challenges.
After spending months on the sidelines as Republicans laid out their
plans, Mr. Obama jumped in to present an alternative and a
philosophical rebuttal to the conservative approach that will reach the
House floor on Friday. Republican leaders were working Wednesday to
round up votes for that measure and one to finance the government for
the rest of the fiscal year.
Mr. Obama said his proposal would cut federal budget deficits by a
cumulative $4 trillion over 12 years, compared with a deficit reduction
of $4.4 trillion over 10 years in the Republican plan. But the
president said he would use starkly different means, rejecting the
fundamental changes to Medicare and Medicaid proposed by Republicans
and relying in part on tax increases on affluent Americans.
The president framed his proposal as a balanced alternative to the
Republican plan, setting the stage for a debate that will consume
Washington in coming weeks, as the administration faces off with
Congress over raising the national debt ceiling, and into next year, as
the president runs for re-election.
Mr. Obama named Vice President Joseph R. Biden Jr. to lead the
negotiations with Congress, which the administration hopes will produce
the outlines of a deal by the end of June, though a detailed agreement
might have to await the outcome of the 2012 election. Mr. Biden played
a similar role in talks that averted a government shutdown at the 11th
hour, over issues far less thorny than those on the table now.
In a 44-minute speech to an audience at George Washington University
that included Representative Paul D. Ryan of Wisconsin, the author of
the Republican plan, Mr. Obama was often combative and partisan, saying
the Republican approach would hurt the elderly by driving up the cost
of medical care, deprive millions of health insurance and starve the
nation of investments in its future.
“These are the kind of cuts that tells us we can’t afford the America
that I believe in,” he said. “I believe it paints a vision of our
future that’s deeply pessimistic.”
“There’s nothing serious about a plan that claims to reduce the deficit
by spending a trillion dollars on tax cuts for millionaires and
billionaires,” the president continued, as Mr. Ryan sat stone faced.
“There’s nothing courageous about asking for sacrifice from those who
can least afford it and don’t have any clout on Capitol Hill.”
Yet Mr. Obama acknowledged that the rising medical costs and the
mounting debt required action. And he warned Democrats that his
administration would have to cut cherished programs and strictly limit
the growth of Medicare and Medicaid. “If we truly believe in a
progressive vision of our society,” he said, “we have the obligation to
prove that we can afford our commitments.”
Mr. Obama said he would meet his $4 trillion deficit-reduction target
by cutting spending across a range of government programs, from farm
subsidies to federal pension insurance.
He called for cutting $400 billion more in military spending — twice
what his defense secretary, Robert M. Gates, told Congress was the
largest cut he could recommend.
In a sign of the tensions the plan may cause within the administration,
officials at the Pentagon said Mr. Gates was not told of Mr. Obama’s
proposal until Tuesday. In a statement, a Pentagon spokesman, Geoff
Morrell, said that “further significant defense cuts” would reduce the
military’s capability. “It is important that any reduction in funding
be shaped by strategy and policy choices, and not be a budget math
exercise,” Mr. Morrell said.
Republicans criticized the plan, both for the cuts in military spending
and for what they said was an overall lack of detail.
“Republicans, led by Chairman Ryan, have set the bar with a jobs budget
that puts us on a path to paying down the debt and preserves Medicare
and Medicaid for the future,” Speaker John A. Boehner said in a
statement. “This afternoon, I didn’t hear a plan to match it from the
president.”
Mr. Boehner repeated a threat to refuse to raise the $14.3 trillion
ceiling on the national debt, which the government is likely to breach
in early July, unless the administration agrees to rein in spending and
deficits. The administration has sought to keep the debt ceiling issue
separate from the broader budget debate, and Mr. Obama addressed it
only indirectly on Wednesday.
“If our creditors start worrying that we may be unable to pay back our
debts,” Mr. Obama said, “that could drive up interest rates for
everyone.”
Still, in what some analysts said was a gesture to Republicans, Mr.
Obama said his plan would contain a trigger to require across-the-board
spending cuts if, by 2014, the federal debt was still projected to be
rising as a percentage of the total economy.
The trigger would apply not only to spending but also to what the
administration calls “tax expenditures” — essentially payments to
taxpayers for deductions for charitable donations or home mortgages.
The use of the phrase “tax expenditures” allows the administration to
lump tax-related issues into the spending category. Mr. Obama was more
direct in his call for allowing the Bush-era tax cuts for higher-income
Americans to expire in 2012.
The president agreed to extend the cuts last December, as part of a
budget deal with the newly elected Republican majority in the House.
Now, with the economy getting back on its feet, Mr. Obama attacked the
demand by Republicans to make the lower tax rates permanent as
emblematic of their plan to enrich the wealthy on the backs of the
elderly and poor.
“They want to give people like me a $200,000 tax cut that’s paid for by
asking 33 seniors to each pay $6,000 more in health costs? That’s not
right, and it’s not going to happen as long as I am president,” Mr.
Obama said, his only line that drew applause.
While Mr. Obama’s plan does not detail specific cuts, analysts said it
offered enough detail to set off a substantive debate with Republicans.
Some said the proposal for capping the annual cost increase in Medicare
and Medicaid to just above the economic growth rate was surprisingly
conservative. Others said they were pleased that Mr. Obama had called
for overhauling Social Security, even if he was vague and said it was
not a leading culprit for the deficit.
“It looks like Ryan smoked him out, so to speak,” said Rudolph G.
Penner, a senior fellow at the Urban Institute.
Mr. Penner said Mr. Obama’s plan hewed closely to the recommendations
of his commission on deficit reduction. Mr. Obama did not explicitly
endorse those recommendations when the commission submitted its report
in December — a decision that fueled criticism from Republicans and
some Democrats that he was not facing up to the tough choices in the
budget debate.
The co-chairmen of that commission — Erskine B. Bowles, who was a chief
of a staff to President Bill Clinton, and former Senator Alan K.
Simpson — were in the audience Wednesday, along with Mr. Biden. At one
point, Mr. Biden appeared to nod off, closing his eyes for 30 seconds.
Jackie Calmes, John Harwood and Thom Shanker contributed reporting.
Read it at the New York Times
|
|
|
|
