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The President's Deficit Speech: Time to Keep Up the Pressure

The president's speech marked a brilliant return to what might be called his "holographic" style. Like a hologram, his speech was evocative and shimmered with light. But like a hologram, what you see depends on where you stand.
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The President speech on the Federal deficit marked a brilliant return to what might be called his "holographic" style. Like a hologram, the President's speech was beautiful and evocative and shimmered with light. But like a hologram, what you see depends on where you stand.

Many progressives will hear a brilliant defense of government's role in the economy, and of the role that progressive taxation plays in a fair-minded economic system. Conservatives(those who aren't absolutely nuts) will hear a ringing endorsement of a plan that would downsize government and benefit the wealthy. And they'll love the President's "debt triggers," which could force the government to enact drastic cuts if targets aren't met.

This holographic quality, the ability to present himself as all things to all people, is the President's unique gift - unless, in the end, it turns out not to have been a gift at all.

What were the positives in the President's speech? It made a long-overdue case for government's vital role in society. It skewered the conservative notion that taxing the rich is unfair. And it took the right approach to Medicare by emphasizing the need to cut costs, not benefits.

Here's what the speech didn't do: It didn't emphasize the fact that we're in the middle of an ongoing jobs crisis, one that's left entire regions and social groups in a full-scale depression with no end in sight. It didn't explain why we urgently need short-term investment to reinvigorate the stagnant economy and avoid a double-dip recession. And the speech didn't tell us where the President stands on the most contentious budget issues..

Most of all, the President's speech failed to shift our national debate away from its obsessive focus on deficits - an obsession that's crowded out even more urgent problems like joblessness and the decline of the middle class. Polls show that the public considers the stagnant economy and unemployment to be much more pressing problems than the deficit. The President didn't move our national priorities toward these concerns, which are our greatest economic challenges. As long as deficits continue to dominate the debate, neither the President nor the public can win.

In the end, the President's actions will outweigh the impact of any speech he might give. The President's ambiguity means that his positions are still a work in progress. In one sense that's good news. It means they can still be molded by political pressure. The public still has time to call on the President to do what's needed: protect Social Security, preserve Medicare, assist the needy, and rescue the dying American middle class.

Here's an overview of the speech: the good, the bad, and the holographic.

The Good

President Obama gave as brilliant a defense of government's role as we've seen in a generation. After decades in which paying taxes, even for billionaires, has been characterized as "oppression," these Presidential words were refreshing and urgently needed:

As a country that values fairness, wealthier individuals have traditionally born a greater share of this burden than the middle class or those less fortunate. This is not because we begrudge those who've done well - we rightly celebrate their success. Rather, it is a basic reflection of our belief that those who have benefitted most from our way of life can afford to give a bit more back. Moreover, this belief has not hindered the success of those at the top of the income scale, who continue to do better and better with each passing year.

President Obama also explained the real causes of today's deficits in clear, direct terms:

We increased spending dramatically for two wars and an expensive prescription drug program - but we didn't pay for any of this new spending. Instead, we made the problem worse with trillions of dollars in unpaid-for tax cuts - tax cuts that went to every millionaire and billionaire in the country; tax cuts that will force us to borrow an average of $500 billion every year over the next decade.

To give you an idea of how much damage this caused to our national checkbook, consider this: in the last decade, if we had simply found a way to pay for the tax cuts and the prescription drug benefit, our deficit would currently be at low historical levels in the coming years.

The speech included a number of moments like these, and President Obama is to be commended for them. Most of all, he deserves credit for this important observation about Republican budget proposals: "Their vision is less about reducing the deficit than it is about changing the basic social compact in America. "

The Bad

It was a bad sign when the President gave an unscripted shout-out to Erskine Bowles and Alan Simpson, praising them for the brilliance of their work in co-chairing the Deficit Commission. They led a divided and contentious Commission, missed important deadlines, sowed public confusion, and violated the terms of their own Commission's charter. Both Bowles and Simpson were hobbled by their shared, long-standing animosity toward Social Security - an animosity that made them less than credible as unbiased arbiters of our Federal budget.

Worse, Mr. Simpson proved to be an ongoing public embarrassment for the President and the Commission, offering vulgar, offensive, and intemperate remarks (remember "310 million tits?" ?) that made him a likelier candidate for court-ordered anger management than Presidential praise. During his tenure, Simpson managed to offend older Americans, women, veterans, and any other demographic group that came into his mind.

The President's praise for their leadership was a jarring and odd moment, even as a tactical move, especially since the Commission became hopelessly deadlocked under their leadership and failed to produce a report (although the President, like others, continues to cite that non-existent document when referring to a proposal issued by co-chairs - one which merely states their own opinions, rather than those of the Commission.)

The President suggested that he would "borrow" from Bowles' and Simpson's personal suggestions in crafting his own deficit reduction plan. But the President's rhetoric was inconsistent with the personal ideas of these two gentlemen,which came to be widely - and falsely - described as the "Deficit Commission proposal" by the careless reporters (and by the President today). That proposal would impose harsh benefit cuts on the elderly (elderly women would be hurt most of all). It would result in millions of lost jobs and would have a racially discriminatory impact. For Medicare, our gravest financial challenge, it would merely shift exploding healthcare onto older Americans, rather than actually controlling them.

The Simpson/Bowles proposal shrugs off the cleanest, most effective, and most publicly-supported solution to its long-term actuarial imbalance: lifting the payroll tax cap. Instead, the two individuals offer Draconian cuts that are neither humane nor necessarty. These cuts are sugar-coated - slightly - with a slight boost in benefits for the deeply impoverished (although Social Security is a self-funded form of insurance, not an antipoverty program) and a very slight benefit boost for the "very old" - a boost that would favor those wealthier (and whiter) recipients who live much longer on average.

In his gravest omission, the President failed to mention the 24 million Americans who are unemployed or under-employed. That mean he failed to shift the political center of gravity away from deficits and toward the millions of Americans who might be helped by short-term government spending.

The Holographic

By appearing to embrace the Simpson/Bowles proposals, the President stirred the hearts of those who want to see their conservative (marketed as "centrist") agenda imposed on the nation. But his rhetoric also gave encouragement to those who see that agenda for what it is: A rollback of the American dream and a vehicle for transferring even more national wealth to the already-wealthy. The President spoke stirringly about vital government programs, yet didn't indicate how deeply he would fight for them.. He offered "debt triggers" that would force additional spending cuts or tax increases, but the impact of those triggers remained cloaked in vagueness and the uncertainty of the future.

The White House seems to have floated quite a few trial balloons before the speech, which led to contradictory news stories that either suggested he would make a bold pro-government stance or embrace the draconian cuts in the Simpson/Bowles plan.

In the end he did both. If you're concerned about preserving our social compact, it's more important to make your feelings known now than it has ever been. The President has spoken. Now it's your turn.

See "10 Reasons the Deficit Commission Proposal is Still Unconscionable and Unacceptable" (it was still a draft Commission proposal, rather than the co-chairs' personal recommendations, hence the title).

For more on public opinion and the public's priorities, see:

Richard (RJ) Eskow, a consultant and writer (and former insurance/finance executive), is a Senior Fellow with the Campaign for America's Future. This post was produced as part of the Curbing Wall Street project and the Strengthen Social Security campaign. Richard also blogs at A Night Light.

He can be reached at ""