Obama's Speech Was a Waste of Breath

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Obama had a difficult assignment in this speech, partly because of the exaggerated hopes for it (see previous post). Even allowing for that, it was weak both politically and substantively. My instant unguarded reaction, in fact, was to find it not just weak but pitiful. I honestly wondered why he bothered.

There was no sign of anything worth calling a plan to curb borrowing faster than in the budget. He offered no more than a list of headings under which $4 trillion of deficit reduction (including the $2 trillion already in his budget) might be found--domestic non-security spending, defense, health costs, and tax reform. Fine, sure. But what he said was devoid of detail. He spent more of his time stressing what he would not agree to than describing clear proposals of his own.

His rebuttal of the Ryan plan was all very well--I agree it's no good--but the administration still lacks a rival plan. That, surely, is what this speech had to provide, or at least point to, if it was going to be worth giving in the first place. His criticisms of Ryan and the Republicans need no restating. And did the country need another defense of public investment in clean energy and the American social contract? It wanted to be told how fiscal policy is going to be mended: if not by the Ryan plan, with its many grave defects, then how?

Bowles-Simpson is the right basic answer. Obama several times said he was drawing on their recommendations, but he did so only partially and incoherently. He has not embraced their overall approach, not by a long shot. Nothing on Social Security. Little of what they propose on Medicare. And on tax reform I think he is actually making it harder for himself to move, eventually, in their direction.

Far from seeking compromise on tax policy, the whole speech was yet again organised around an attack on the evil Bush tax cuts, and a promise to reverse them in part. We would not be in this mess, he said, but for the Bush tax cuts and the Medicare prescription drug benefit. I wondered, as he said that, is he therefore going to call for the drug benefit to be halted and all the Bush tax cuts to be reversed? Stupid question. Of course not. Just the tax cuts for the rich, leaving the much larger part of the Bush tax policy in place. Even now, he is deploring the Bush tax cuts as the cause of all the country's problems while actually proposing to leave most of them alone.

Bowles-Simpson proposes a base-broadening assault on tax expenditures and a lowering of marginal rates, for an overall increase in revenue. Obama picked up the tax-expenditure idea, mentioning Bowles-Simpson as he did so, but combined it with reaffirmed hostility to lower tax rates for the rich. (Again with the millionaires and billionaires.) He is still proposing an increase, not a decrease, in marginal rates on high incomes combined with restricted tax expenditures for those at the top of the income distribution--that is to say, two rounds of increases in high-income tax rates. The rich can pay for it all. That is Obama's tax policy. The whole point and key virtue of the Bowles-Simpson approach to taxes is that it held out the prospect of a deal between Democrats and Republicans: lower marginal rates in return for higher revenues. Obama appears to rule this out on principle.

The speech was more notable for its militant--though ineffectual--hostility to Republican proposals than for any fresh thinking of its own. It was a waste of breath.

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Clive Crook is a senior editor of The Atlantic and a columnist for Bloomberg View. He was the Washington columnist for the Financial Times, and before that worked at The Economist for more than 20 years, including 11 years as deputy editor. Crook writes about the intersection of politics and economics. More

Crook writes about the intersection of politics and economics.

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