Most of the deficit plans circulating around Washington, whether from Paul Ryan or the Senate’s Gang of Six, call for “shared sacrifice,” yet promote anything but. In reality, these plans allow the rich and powerful to keep what they have while asking those who depend on government—the poor, the elderly, the working and middle class—to make do with less.
President Obama has, at times, reluctantly exacerbated this deficit inequality by acquiescing to spending cuts, flirting with paring back the social safety net and winning no corresponding revenue increases from those who can afford to pay more. The president also made a terrible mistake by prioritizing deficit reduction over job creation for the past year, and bizarrely embracing the Republican fantasy that cutting government will somehow create jobs (in fact, the opposite has occurred—the larger the cuts to government, the more jobs lost).
In recent weeks, however, Obama has sought to change the conversation in Washington away from austerity and toward job creation and real shared sacrifice. His jobs plan, though not big or bold enough, represented an important step in the right direction. And the plan he introduced today to reduce the deficit struck a populist chord, asking the rich to pay their fair share. “We shouldn’t balance the budget on the backs of the poor and middle class,” Obama said in the Rose Garden this morning.
A few of the key lines:
“Middle class families shouldn’t pay higher taxes than millionaires and billionaires.”
“I reject the idea that asking a hedge fund manager to pay the same tax rate as a teacher or a plumber is class warfare.”
“This is not class warfare. It’s math.”
Ezra Klein summarizes the plan:
Let’s start with what’s in President Obama’s deficit plan: $1.5 trillion in higher taxes, $1.1 trillion in reduced war spending, $1 trillion in non-defense discretionary spending cuts from the debt-ceiling deal, $600 billion in cuts to mandatory spending (of which more than $300 billion will come from Medicare and Medicaid), and $430 billion in reduced interest payments.
Now let’s look at what’s not in President Obama’s deficit plan: There are no cuts to Social Security. There’s no rise in the Medicare retirement age. Instead, the headline policy is so-called the “Buffett rule,” a tax reform principle that holds that millionaires should not pay lower tax rates than their secretaries. Moreover, says a senior administration official, Obama issue a veto threat against “any bill that takes one dime from the Medicare benefits seniors rely on without asking the wealthiest Americans and biggest corporations to pay their fair share.”