By Jonathan Alter – Apr 14, 2011 7:00 PM ET
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Republicans jumped all over President Barack Obama’s budget speech at George Washington University as political, and they are absolutely right.
It was the old Obama, the one who changed history in 2008, and he is back on his game, both thematically and tactically. The domestic debate now is much clearer and the takeaway for Republicans is out of a horror movie: Be afraid. Be very afraid.
Obama was elected as a story-teller. Beginning with his famous speech to the Democratic National Convention in 2004, he weaved a personal narrative about Africa, Hawaii and community organizing in Chicago into a compelling message of “Change we can believe in.”
His first two years as president brought plenty of change. He responded to the worst economic conditions since the Great Depression with the most legislation since the Great Society. Yet somewhere along the line Obama lost the thread of his narrative. He was no longer telling a story about America, where it had been and where it is going.
The George Washington speech signaled the return of an overarching idea. Obama said that while we’re a nation of “rugged individualists,” this country has always understood that public investments in education, research and infrastructure — what Republicans call “wasteful spending” — helped make us great.
He told a story that national amnesia has somehow erased: that through the combined efforts of the first President Bush and President Clinton, we balanced the budget in the 1990s. It was only in the last decade when Republicans put two wars, a prescription-drug benefit and massive tax cuts on the credit card that we got the trillion-dollar deficits that confronted him when he took office. Most important, the president stressed the fundamental American values of fairness and compassion.
The plan offered by Republican House Budget Committee Chairman Paul Ryan that will likely pass the House by the end of the month would lower the top marginal tax rate to 25 percent, another trillion-dollar windfall for the wealthy. And it would, as the president said, “end Medicare as we know it” by turning that hallowed program into a voucher system that has already proven to be a failure when tried in a few states.
The Ryan proposal would also effectively gut Medicaid, under which the elderly poor get to live in nursing homes instead of in their children’s homes.
While everyone agrees that Medicare and Medicaid must be reformed, the basic programs remain wildly popular. The GOP understood this as recently as last fall, when it took control of the House with the help of scare ads across the country saying “Obamacare will slash $500 billion from Medicare.” Now the same freshmen elected on that message will vote to end Medicare — and in many cases end their political careers.
Older, independent voters that Republicans won in 2010 will despise the Ryan plan once it filters down to them. A Democratic war cry of “They’re killing Medicare!” isn’t demagoguery this time. It’s true.
The president offered few specifics about how to save $4 trillion over 12 years beyond letting the tax cuts for wealthy expire in late 2012. That won’t be enough. But teeing up tax cuts for the rich as a campaign issue will clearly help the Democrats, as it did in 2008.
The president sounded concerned about the deficit but understated the threat. As David Stockman, who served as Ronald Reagan’s budget director, told me last week, the $4 trillion in savings now embraced by both parties is woefully inadequate to the scope of the challenge. He was particularly withering in his critique of what he called the “religious obsession” within the GOP to keep cutting taxes amid terrifying deficits.
Even Republican Senator Tom Coburn, a conservative member of the Bowles-Simpson deficit commission, knows that this part of the Ryan plan is folly.
At George Washington, Obama announced that Vice President Joe Biden would head the effort to negotiate with Congress. Emotions are running too high for any agreement this summer on where to find huge savings. The president made it clear he would veto any bill resembling the House plan.
With the Senate still controlled by Democrats, it’s unlikely anything significant will reach his desk any time soon. The important part of his proposal was a “fail-safe” provision to compel huge savings if Congress can’t reach agreement by a certain date. The idea of adding teeth to budget cutting worked in the 1990s and can work again.
After a lot of posturing and finger-pointing, this might be just enough to get Washington through the treacherous waters of raising the debt ceiling and avoiding a default crisis. The specifics on where to cut will await the results of the 2012 presidential election, which is now teed up by Obama as a referendum on competing visions of what we owe each other as a people.
“One vision has been championed by Republicans in the House of Representatives and embraced by several of their party’s presidential candidates,” the president said, a clear sign that he intends to wrap the Ryan plan around the neck of the eventual Republican nominee.
Ever since he agreed to extend the Bush tax cuts in a deal last winter, some progressives have doubted whether Barack Obama had the intestinal fortitude to stand up for the great social contract of the 20th century — the one most Americans still support. Now we know.
(Jonathan Alter, author of “The Promise: President Obama, Year One,” is a Bloomberg News columnist. The opinions expressed are his own.)
To contact the writer of this column: Jonathan Alter at firstname.lastname@example.org