How Obama Should Respond to Ryan
Paul Ryan’s new budget is now out on its shakedown cruise, as they did with Broadway plays in the old movie musicals about Broadway shows, playing New Haven and Providence before hitting the Great White Way, as it were, when he officially unveils it Wednesday. Early reviews are deservedly brutal, because Ryan assumes the repeal of Obamacare and reverses his position from last year on the $716 billion Medicare savings, over which he and Mitt Romney used to savage Barack Obama but which Ryan now assumes. Even so, something tells me that when the plan is released in full, the “serious” people will applaud the effort and will implore the president to mimic Ryan’s alleged sincerity about deficit reduction. And that makes this week probably the most important week in his presidency for Obama to stand up and refuse to do that.
You’ve probably followed what has happened so far. These two Ryan assumptions—about the repeal of Obamacare and his inclusion of the Medicare cuts that only last year he and Romney were calling brutal—expose his entire exercise for what it is: a wholly political act designed to do two things. The first is to maintain Ryan’s viability on the hard right as a 2016 presidential candidate. As I mentioned in a blog post yesterday, failure on his part to assume the repeal of Obamacare could have exposed him to vicious attacks from other wannabes and from the Limbaugh caucus. So there’s no way he could risk that.
Ryan’s second purpose with this budget is more substantive, and it’s the same purpose that drove his first two budgets. He wants to kickstart a process that leads to monstrous cuts in domestic discretionary programs and in entitlements. That’s what he’s really about. He certainly isn’t about balancing the budget. Ryan Budget I achieved balance in 2047. When that was laughed out of the park, he came back with Ryan Budget II, which achieved balance about a decade earlier. Mind you these “achievements of balance” were entirely chimerical anyway, because he wouldn’t say in either budget exactly what he was putting on the table in the realm of revenue, so it was actually impossible to say when they’d be balanced. But in any case, the point is that budgets that achieved balance in 25 or 30-odd years weren’t about attacking the deficit. What he really sought with those first two budgets was not to egg Washington toward deficit hawkery, but to egg it toward cuts to programs he doesn’t like—Social Security, Medicare, Medicaid, other projects that assist poor people, keep the air clean, and perform all those bothersome functions that keep America’s potential Galts in chains.
That’s Ryan’s game. But give him points for catching on, however slowly. Now it’s finally dawned on him to put forward a budget that balances in 10 years. And so what we’re likely to see Wednesday and Thursday, despite the laughingstock that his budget already is to those who’ve been watching him closely, is a thunderous round of harrumphs from the likes of Pete Peterson, Maya MacGuineas, The Washington Post’s editorial page, Alan Simpson, Erskine Bowles, Alice Rivlin, and all the other folks who go around insisting that the budget deficit is our biggest problem.
It’s not. Jobs are still are our biggest problem. As Paul Krugman documented in his Monday column, the deficit is actually decreasing quite rapidly. It’s still high. But it’s tumbling down. And one thing that will make it tumble downward even further, of course, is putting more people to work, spurring more economic activity, leading to more investment and spending. The February jobs numbers were great, but a 7.7 percent unemployment rate is still too high. That’s what we need to be attacking. But the serious people think otherwise, and by Wednesday afternoon, Ryan will have set their hearts aflutter, and pressure will mount on Obama to develop a 10-year plan of his own.
That is the one thing he absolutely must not do under any circumstances. He has to acknowledge that the deficit is out there and is a problem; I don’t go as far as Krugman and some others do. The deficit is a political reality, and long-term it’s a substantive reality. Obama needs to take some steps toward bringing it down even more. But he can say that while also saying, and saying forcefully: I will not hop on the deficit hysteria bandwagon. I still believe the most important order of business for me is to create more jobs, first for the obvious reason that we want more people working and second because a stronger economy will lower the deficit more quickly and reliably than anything else. So yes, I want to get the deficit under long-term control, but I’m the president, I was reelected handily, and no combination of people is going to bully me into accepting their agenda or timetable.
And then he ought to add: And let me remind everyone again. I have put deficit-reduction proposals on the table that bite on my side of the political aisle: pegging Social Security benefits to the so-called chained CPI, and asking higher-income seniors to pay more for Medicare. Those are real offers, and I expect to get something in return for them—some revenue from the Republican side. But of course they won’t budge an inch on that. So my advice to the people who are pushing me to cut the deficit on the Republicans’ terms is to also go to the GOP and implore them to play some ball, because they’re not.
Obama can’t spend the last three years of his presidency playing ball on Paul Ryan’s home field. That’s a recipe for political weakness and policy disaster. This is the week to draw his line in the sand and tell the deficit-hawk establishment who’s in charge.