On Fiscal Policy, the Country Takes Another Rightward Turn

On Fiscal Policy, the Country Takes Another Rightward Turn

On Fiscal Policy, the Country Takes Another Rightward Turn

 The public loves President Obama’s rhetoric of austerity and responsibility, but it signals a turn away from the liberal project.


It suffices to say that the last several months have been frustrating for liberals. Unemployment hovers at 9 percent and economic growth is anemic, but all of Washington is obsessed deficit reduction and fiscal “austerity.” What’s more, because the Republican Party refuses to compromise—and has actively held the economy hostage to the debt ceiling—the entire policy debate has moved sharply to the right. Moderate ideas, like Senator Kent Conrad’s proposed 50-50 split for deficit reduction ($1 dollar in cuts for every $1 in new revenue), have been pushed off of the table, and liberal ideas, like additional stimulus or a more active Federal Reserve, have been shunned by nearly every participant.

There was early hope that President Obama might use this as an opportunity to take command of the conversation and stress the importance of job creation, but that was discarded as soon as the White House joined the bargaining table. Far from talking about jobs, Obama has emerged as a leading advocate for austerity, adopting conservative rhetoric and chastising liberals for their refusal to join the program, while ignoring their contributions to the debate. As he said in a press conference two weeks ago, in an attempt to explain his position, “If you’re a progressive who believes in the integrity of Social Security, Medicare and Medicaid, then you have an obligation to make those programs sustainable in the long-term.” Likewise, “If you’re a progressive who believes in Head Start and college assistance, we’re not going to be able to do that if we don’t have our fiscal house in order.”

Obama’s commitment to conservative austerity measures might infuriate the left, but most Americans are huge fans. According to the most recent Wall Street Journal/NBC News poll, 58 percent of Americans prefer Obama’s proposal for deficit reduction—a solution that would cut federal spending, increase taxes on corporations and the wealthy and reduce the level of spending on Medicare—to the Republican proposal, which would slash spending without raising new revenues. Likewise, by a 52-to-38 margin, people say that Democrats shouldn’t compromise on cuts to Social Security and Medicare. By contrast, a whopping 62 percent of respondents say that Republicans should compromise on tax increases. That the public is on Obama’s side is a fact that will help as he works through the poor economy and begins his uphill struggle for re-election against a dangerous and radicalized Republican Party.

Even still, win or lose, we will have to live with a status quo that has moved sharply—and maybe irrevocably—to the right. Even the “moderate” proposal for deficit reduction, produced by the Senate’s bipartisan “Gang of Six,” calls for immediate cuts to discretionary spending, long-term spending caps, tax reform with a focus on lower rates and cuts to entitlement benefits. This isn’t a great time for progressive politics, and it’s hard to see how it gets better.

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