Obama made his speech on the deficit today, and let the Republicans have it with both barrels. First, he restated some basic facts. He pointed out that the wealthy in this country had always paid a larger share of the upkeep of the country. He also mentioned that the USA had regularly runs deficits, mainly during war or recession. His speech also reminded us that much of our debt was caused by two wars and a prescription drug program which barred the US from using its marketing leverage to gain more advantageous prices, both legacies of the Bush administration. He compared this to the expenditures in his term that were necessary to abate the recession and which did exactly that.
Obama’s main thrust was that the Paul Ryan’s budget wasn’t really about fiscal rectitude but about ideologyÂ—an ideology that would throw the elderly to the curb by trashing Medicare and replacing it with a voucher program, and the outlays of which would fall further and further behind the market costs of getting the care they need. Further, such investments in clean energy and education that such programs, like the Pell Grants, provide are essential to keep up with our overseas economic rivals. Those countries, like China and South Korea are somehow are able to find the money for this and don’t seem to suffer economically thereby.
He correctly pointed out the absurdity of tax cuts for the well-off to pay for that, an upper splinter of the wealthy who have made more money while most Americans have suffered. His mathematical example aptly illustrated that. One $200,000 tax cut for him equals 33 seniors paying $6000 more in health costs (the extra they’d have to pay under the Republican plan). He also promised not to renew the tax cuts for the rich again.
He also took a shot at the fawning over the Ryan plan by some in the media:
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. And I don’t think there’s anything courageous about asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill.
Although Obama’s plan still has domestic spending cuts, he also looks to defense cuts, the use of government’s purchasing power to get better drug prices for Medicare. He also challenged the canard that Social Security is responsible for our deficit, although some tweaking is necessary.
Ryan’s assertion that there isn’t a revenue problem overlooks the fact that $136 billion could be saved by bringing most taxes just back to Clinton-era levels. This is not to mention that he wants to reduce the top bracket to a mere 25%, its lowest in 80 years. Having a 0.5% tax on stock transactions could raise $100 billion-plus a year and would put more costs on the people who helped bring about this recession. Obama ought to have mentioned both.