President Obama’s Budget Ideas

I reviewed the President’s speech yesterday at George Washington University, and here is my commentary.

The speech, BTW, is on the White House website.

An observation. The Republican plan introduced last week leaves defense spending unchanged, eliminates Medicare in the next 10 years, cuts taxes more for rich people, and has a number of cuts that target things that conservatives have traditionally hated; mainly things that benefit ordinary people.

The President, as opposed to the Republicans who pitch their plan as “modifying” or “privatizing” existing programs, showed real impacts to people. He said that 50 million Americans would lose their health insurance. In 10 years, a senior citizen (and oh my, I’ll be one of those) will pay $6400 *more* each year for Medicare coverage than is paid now. The very rich will get hundreds of thousands in tax cuts. The Republicans are trying to fix the budget problems (with deficits that were CAUSED by the Republican George W. Bush, let us remember) on the backs of the lower and middle class. And yet they yell “class warfare” at the drop of a tax rate.

There are secondary arguments to this. Why do the very rich pay much less in taxes, and yet do not create sorely needed jobs? Health care, and the insurance it takes to pay for it, ought to be universal, and not part of a for-profit system.

The President, in his speech, took a high-level approach to the budget. He pointed out that 65%+ of the federal budget is Medicare, Medicaid, Social Security, and defense. Family-oriented programs are 20%. 12% is all the stuff for NPR, Planned Parenthood, etc. Oh, and 3% for paying interest on the national debt. According to the President, all of the Republican budget cuts have this far come from the 12%.

The President said that defense has to be subject to the same cutting that the rest of the budget is. As I have been in the defense industry pretty much continuously since 1981, I know there are cuts that can be made there – big cuts. I suggest looking hard at defense subcontract pass-throughs as one option. I also think that we need to be out of Iraq NOW, and out of Afghanistan NOW.

The President wants to lower health care costs to affect Medicare and Medicaid. Bravo! Let’s get the huge amount of fraud out; more inspectors here is an investment with real return. Same, by the way, with unpaid taxes. I like the IRS about as much as anyone, but there are a lot of unpaid and owed taxes that need to be pursued and collected.

Closing tax loopholes for the rich, but are not used by the middle class – right on. But this might be tempered by giving some tax credits back for people who actually create small business jobs, since that helps get the economy back on track.

“But we cannot afford $1 trillion worth of tax cuts for every millionaire and billionaire in our society. We can’t afford it. And I refuse to renew them again.”. Right on, Mr. President. Hold that line!

“In the last decade, the average income of the bottom 90 percent of all working Americans actually declined. Meanwhile, the top 1 percent saw their income rise by an average of more than a quarter of a million dollars each.”. I wish he had been hammering this during the last election! I put a chart on my blog showing this erosion.

The President spent a lot of time talking about bipartisanship. That is going to be the real problem here. The country has problems, without a doubt. Most of the problems were directly, and solely caused by Republicans (in spite of them grumbling about being called out about it, it’s not done enough). Yet they do not want to participate unless their ideas are the only ones considered (remember the first two years of the Obama Administration?).

So I hope the Republicans grow up a little and play ball, and practice compromise. But if they do not… the Democrats in general, and the President in particular, need to call them out forcefully and constantly. Don’t let them spin or lie. And frankly, if it gets to that, use the Republican non-cooperation to take back the house and strengthen the Senate, and them press on getting the economy back on track.

Most of all, don’t let the Republicans fix the problems caused by Bush and company on the backs of the middle class.

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