Wednesday, April 13, 2011

Obama's Speech: In Conclusion

President Barack Obama made a resounding case for an active government in his speech at George Washington University today and he forcefully responded to the Republicans' attempt to privatize our entitlement programs by replacing social security and medicare with private vouchers. He rigorously defended the role which government plays in providing unemployment insurance to those who unexpectedly lose their jobs, college loans to middle class families who want to ship their children off to college, the paved roads which we drive to work on, and the social security and medicare entitlement programs that allow us to retire without losing our access to affordable health care. In this respect, the president offered a vision for our country that is far more preferable to the one offered by his Republican counterparts in the House of Representatives.

To pay for this vision, a vision once shared by Republicans (like President Dwight D. Eisenhower) and Democrats alike, Obama proposed to shift the tax burden back onto this nation's "millionaires and billionaires." I don't know if we can limit any tax increase to America's "millionaires and billionaires" in order to pay down our debt but no plan that does not include such tax increases can be treated seriously if we want to preserve those governmental programs that provide middle and working class Americans an opportunity to "live the American dream."

The president's failure to hold the line in December, however, raises some questions about his commitment to pay the debt off with a tax cut. The president could have let the Bush tax cuts, which primarily benefit the wealthiest Americans, expire last December.

At that time, Obama said that he did not want to burden the middle class taxpayers with the increase they would have felt in the midst of a slow economic recovery had those tax cuts expired. The Republicans, he said would not offer a clean bill that preserved the tax cuts for those earning $250,000 a year or less while letting the tax cuts expire for those who earned more. A measure to let the tax cuts expire on millionaires and billionaires was defeated as well. There is no reason, however, to believe that the Republicans' negotiating tactics will change within the near future and there is no reason to believe that the economic recovery will be strong enough to withstand the increase in middle class tax cuts within the next two years. President Barack Obama, once again, will have to decide whether he will let the tax cuts for all Americans expire or whether he will let the filthy rich keep the tax cut that would allow them to purchase a sixth home.

The president did not specifically offer any cuts in Medicare. He presumably would find some savings from a shift from a fee-for-service payment plan to a fee-for-results payment plan, with a stronger emphasis on preventive medicine. He would also find some savings by opening the market for more generic drugs and using Medicare's purchasing power to drive down costs. It is a credible plan, but one that would require the hard-balling negotiating skills that the president isn't known for. Doctors, health insurance companies, hospitals, and pharmaceutical companies presumably would see their profit margins cut drastically by this approach so one can expect their lobbyists to fight against this plan vigorously. I believe we may need to means-test medicare as well. What's good for the goose is good for the gander. CEO's should have to pay their own way.

The president should have used his time to offer his plan for saving social security from insolvency as well. Yes, it isn't in trouble now and so yes, reforming it can wait a year or two, but at some point this will need to be addressed and his failure to offer up a plan exposes him to some opportunistic yet warranted criticism from the Republicans who will inevitably claim that he is pushing this problem down the road. The president could have proposed to either lift the cap on the payroll tax and/or offered to increase the retirement age. He did not.

Obama and Defense Cuts

"So just as we must find more savings in domestic programs, we must do the same in defense. And we can do that while still keeping ourselves safe.

Over the last two years, Secretary Bob Gates has courageously taken on wasteful spending, saving $400 billion in current and future spending. I believe we can do that again.

We need to not only eliminate waste and improve efficiency and effectiveness, but we're going to have to conduct a fundamental review of America's missions, capabilities, and our role in a changing world.

I intend to work with Secretary Gates and the Joint Chiefs on this review, and I will make specific decisions about spending after it's complete."
President Barack Obama on Defense Spending

Well, all very well and good if the president could get the Department to back deeper cuts and if he could follow his own advice and reconsider our "role in a changing world." To date, the president's commitment to fundamentally "review" our missions and capabilities does not seem promising. We are still fighting two wars in the Middle and Near East (with no end in sight) and he committed us to a third (Libya).

Obama and That Vision Thing

"Think about that.

In the last decade, the average income of the bottom 90 percent of all working Americans actually declined. Meanwhile, the top 1 percent saw their income rise by an average of more than a quarter of a million dollars each. That's who needs to pay less taxes?

They want to give people like me a $200,000 tax cut that's paid for by asking 33 seniors to each pay $6,000 more in health costs.

That's not right, and that's not going to happen as long as I'm president.

(APPLAUSE)

This vision is less about reducing the deficit than it is about changing the basic social compact in America. Ronald Reagan's own budget director said there's nothing serious or courageous about this plan.

OBAMA: 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. That's not a vision of the America I know.

"The America I know is generous and compassionate. It's a land of opportunity and optimism. Yes, we take responsibility for ourselves, but we also take responsibility for each other, for the country we want and the future that we share.

We're a nation that built a railroad across a continent and brought light to communities shrouded in darkness. We sent a generation to college on the G.I. Bill and we saved millions of seniors from poverty with Social Security and Medicare.

We have led the world in scientific research and technological breakthroughs that have transformed millions of lives.

That's who we are. This is the America that I know.

We don't have to choose between a future of spiraling debt and one where we forfeit our investment in our people and our country."
President Barack Obama, in that same speech

I'm sensing a comeback. After all this time. What the president said this afternoon could have been said by any number of Republican predecessors: Abraham Lincoln, Theodore Roosevelt, Dwight D. Eisenhower, and yes, even Richard Nixon

Obama on the Republican Plan

"These aren't the kind of cuts you make when you're trying to get rid of some waste or find extra savings in the budget. These aren't the kind of cuts that the fiscal commission proposed.

These are the kind of cuts that tell us we can't afford the America that I believe in and I think you believe in.

I believe it paints a vision of our future that is deeply pessimistic. It's a vision that says if our roads crumble and our bridges collapse, we can't afford to fix them; if there are bright young Americans who have the drive and the will but not the money to go to college, we can't afford to send them. ...

... It's a vision that says America can't afford to keep the promise we've made to care for our seniors. It says that 10 years from now, if you're a 65-year-old who's eligible for Medicare, you should have to pay nearly $6,400 more than you would today.

It says, instead of guaranteed health care, you will get a voucher. And if that voucher isn't worth enough to buy the insurance that's available in the open marketplace, well, tough luck; you're on your own.

Put simply, it ends Medicare as we know it. ...

... It's a vision that says up to 50 million Americans have to lose their health insurance in order for us to reduce the deficit. ...

... And, worst of all, this is a vision that says even though Americans can't afford to invest in education at current levels or clean energy, even though we can't afford to maintain our commitment on Medicare and Medicaid, we can somehow afford more than $1 trillion in new tax breaks for the wealthy.

Think about that.

In the last decade, the average income of the bottom 90 percent of all working Americans actually declined. Meanwhile, the top 1 percent saw their income rise by an average of more than a quarter of a million dollars each. That's who needs to pay less taxes?

They want to give people like me a $200,000 tax cut that's paid for by asking 33 seniors to each pay $6,000 more in health costs.

That's not right, and that's not going to happen as long as I'm president."
President Barack Obama, speaking today about the Republican plan to save $4 trillion in ten years... President Barack Obama, responding to the Republicans' plan to cut the deficit

Well, he kind of already did (with respect to the tax cuts), albeit for the indefinite (as opposed to the permanent) future.

But otherwise, dead-on

Saturday, April 02, 2011

Medicare Plan Expected

Purchase medicare from whom? the Insurance companies that try to deny us coverage when it gets too expensive for them? Fabulous.