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04.15.11

Budget Fight: Obama Needs to Stop Playing Politics

Instead of posturing for his 2012 campaign, the president needs to offer some bold ideas for the budget—and so do Republicans. Mark McKinnon on how the parties’ stubborn battle hurts Americans.

As a fiscal tsunami imminently hurtles this way, our political parties this week drew lines in the sand. Meanwhile, it seems obvious to almost all of America that the answer is not "no,” and the answer is not "either/or." The answer is "and."

With the public debt doubling under the president's 2012 budget proposal, with entitlement programs verging on insolvency, we are long past either/or solutions. It’s the power of “and” that will save us: spending cuts and revenue increases. Democrats reflexively rail at the first; Republicans, the second.

In remarks unbecoming a president, President Obama crossed the line this week in a speech unveiling his deficit plan. It seems his campaign to save his presidency has taken precedence over a campaign to save America. In stark political terms, it may be a good strategy for the former, but it's a lousy strategy for the latter.

The president sacrificed an opportunity for bold leadership, choosing clever politics instead.

Forced by Rep. Paul Ryan’s (R-WI) leadership in tackling the toughest issues threatening our future, the president called a “mulligan” this week, a do-over of his 2012 budget proposal that increased government spending to $3.7 trillion but did little to attack the exploding deficit and debt. But the president sacrificed an opportunity for bold leadership, choosing clever politics instead. And in doing so, he pitted one party against another, one public against another.

The economic challenges we face as a nation require new thinking. “My taxes are going to go up,” Sen. Tom Coburn (R-OK) admitted during the recent continuing resolution skirmish. With those seven simple words, once politically fatal for a Republican leader to utter, the gauntlet was thrown.

But President Obama answered Ryan’s challenge and Coburn’s admission by calling for yet another commission to study the problem. The president is yielding hard decisions to commissions and future triggers.

He doesn’t need another commission’s plan. Two proposals already have been offered with varying tension between spending reforms, including entitlement reforms and tax reforms. The best tax-reform ideas from Ryan’s Path to Prosperity and the previously ignored bipartisan Simpson-Bowles fiscal commission report include a shared framework:

· Simplifying the tax code

· Consolidating tax brackets

· Eliminating credits, deductions, and loopholes

· Lowering tax rates.

Both plans are growth-oriented. Both seek to balance the budget. Ryan’s is revenue-neutral; the Simpson-Bowles plan increases revenue. But the key variable to focus on is the overall tax-revenue goal. Ryan’s proposes a revenue goal of 19 percent of GDP; Simpson-Bowles, 21 percent. And Charles Krauthammer offers the obvious solution: a compromise agreement of 20 percent of GDP.

There is a rational balance somewhere in those ideas that will broaden the tax base and increase tax revenue without further strangling future growth.

But we have to be willing to debate honestly, without challenging others’ ideas as not “the America we believe in.”

Whether it is through cuts to the defense budget, the elimination of subsidies and loopholes, or tax reforms that are revenue positive, Republicans need to put something on the table. So, too, do Democrats. But it’s going to take more than “tax the rich.” Democrats need to put something else on the table, more than the modest modifications to Medicare and Medicaid offered by the president.

The previous occupant of the Oval Office was willing to lead with bold new ideas for Social Security reform. He knew it wouldn't be popular. He knew it would be demagogued by his opponents. But he also understood the moral compact we have made as nation—for the welfare of our parents and for our future grandchildren as well. President Bush knew it was the right thing to do regardless of the political consequences. Thanks to the distortion of the debate, I doubt that 10 percent of Americans actually understood that the program proposed by Bush was entirely voluntary. Let me repeat, if anyone didn't want to control and invest in their own accounts rather than have the government do it for them, they could maintain their Social Security accounts exactly as they had been. So, if you didn't like the idea of "privatizing" your Social Security—meaning investing some of your own money rather letting the government do it for you, you didn't have to.

“This debate over budgets and deficits is about more than just numbers on a page, more than just cutting and spending,” President Obama said in his address. “It’s about the kind of future we want.” I agree with the president on this; I just wish he was thinking about the future beyond the next election.

And when it comes to revenue, Republicans better learn to say "and." Or the narrative battle will be lost because Obama will paint the Republicans as intransigent, uncompromising, unrealistic, and looking out only for the elites.

As vice chairman of Hill & Knowlton and Public Strategies, and president of Maverick Media, Mark McKinnon has helped meet strategic challenges for candidates, corporations and causes, including George W. Bush, John McCain, Ann Richards, Charlie Wilson, Lance Armstrong, and Bono. McKinnon is co-founder of No Labels and co-chairman of Arts & Labs.