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04.13.11

Obama's Fiscal Rescue Rhetoric Isn't Serious

In his budget speech, the president called on the nation to share sacrifice, but only the rich are being called upon to bear that burden—his $4 billion deficit reduction depends on touchingly optimistic savings from Obamacare, not cuts to entitlements.

In his budget speech, the president called on the nation to share sacrifice, but only the rich are being called upon to bear that burden—his $4 billion deficit-reduction plan depends on touchingly optimistic savings from Obamacare, not cuts to entitlements.

President Obama's speech about America's fiscal future was replete with the rhetoric of "shared sacrifice." Yet it was only "the wealthiest Americans" who were directly notified of their forthcoming sacrifices. While claiming that his approach to America's dire fiscal situation "puts every kind of spending on the table" for possible cuts, Obama immediately clarified that his plan also "protects the middle class, our promise to seniors, and our investments in the future."

Politicians need to win elections, and elections are won by pandering to those groups with the most electoral heft, so it is not surprising that Obama failed to admit that any realistic plan that continues to deliver the many and varied goods required by his "generous and compassionate" vision of America would also require meaty middle-class tax hikes. But this means the president was far less honest than he claimed to be. While he deserves credit for forthrightly explaining that America's fiscal woes follow almost entirely from military spending and the unsustainability of the major entitlement programs—Social Security and Medicare—he failed altogether to lay out a scheme of truly shared sacrifice.

While the president deserves credit for forthrightly explaining that America's fiscal woes follow almost entirely from military spending and the unsustainability of the major entitlement programs, he failed altogether to lay out a scheme of truly shared sacrifice.

Just look at the president's proposals. Of the $4 trillion Obama pledged to reduce the deficit over the next 12 years, $1 trillion comes from a touchingly optimistic estimate of the savings and efficiencies of Obamacare; the president went out of his way to assure us that this savings does not require anyone to sacrifice anything. Precisely who would bear the brunt of $400 billion in proposed cuts in military spending was left indeterminate. As for "discretionary" domestic spending, Obama conceded the necessity of "tough cuts" to some "programs I care about," but again he was careful to leave these sacrifices unspecified. That leaves $1.3 trillion in deficit reduction to come from allowing the Bush tax cuts to expire, and by imposing a fundamentally different tax code on the top 2 percent of income-earners, removing their eligibility for itemized deductions.

In sum, the president's approach to the budget is guided by two substantive principles. First, the rich ought to pay more. Second, altering the structure of Social Security and Medicare is absolutely out of bounds—even though marginal tweaks to the big entitlements simply won't suffice to make them sustainable. Sacrifice for the few; consoling untruths for the many. In the end, Obama's fiscal rescue plan isn't really serious.

Will Wilkinson blogs about politics for The Economist and about the science and politics of human nature for Forbes. He lives in Iowa City, Iowa.