Reps. Maxine Waters, Mazie Hirono (podium) and Raul Grijalva introducing The People's Budget at the Capitol.
Paul Krugman gave President Obama
high marks for his budget speech yesterday. Especially important in this speech was the sharp delineation between the Republican and Democratic visions of America and "the way he accused Republicans of pessimism, of abandoning a hopeful vision of America. Good that he went after the Ryan plan — and good that he went after the cruelty of that plan." He also celebrates the fact that there wasn't much Simpson-Bowles, but does add this caveat:
I could live with this as an end result. If this becomes the left pole, and the center is halfway between this and Ryan, then no—better to pursue the zero option of just doing nothing and letting the Bush tax cuts as a whole expire.
The Center on Budget and Policy Priorities Robert Greenstein echoes that caveat in his assessment of the speech.
...Because the Obama plan relies on budget cuts for two-thirds of its deficit reduction measures, it goes dangerously far in two areas. It calls for $360 billion in cuts in mandatory programs other than Medicare, Medicaid, and Social Security. The large budget-cut target for this part of the budget risks leading to substantial cuts in core programs for low-income Americans, our most vulnerable people. To the President’s credit, his plan states that “reforms to mandatory programs should protect and strengthen the safety net for low-income families and other vulnerable Americans.” And the Bowles-Simpson plan enunciates the same basic principle. But to achieve $360 billion in savings in this part of the budget without cutting programs for low-income families and thereby increasing poverty and hardship will require very tough choices that entail confronting powerful special-interest lobbyists to a degree that neither party has proved capable of doing in the past.
Another significant concern stems from the President’s proposal to limit the annual growth in Medicare costs per beneficiary to the per capita rate of growth in the Gross Domestic Product (GDP) plus only 0.5 percentage points and to require automatic cuts in Medicare if this target would otherwise be exceeded. This goal is laudable. But it may be unrealistic....
Finally, the President’s plan calls for a mechanism to trigger automatic reductions in programs and tax expenditures if the debt would exceed certain benchmarks (measured as a share of GDP). The goal of stabilizing the debt as a share of GDP is precisely the right one. But all triggers like this that have been designed in the past have suffered from a fatal flaw—they required the deepest budget cuts when the economy was weakest and the smallest cuts when it was strongest—the opposite of what sound economic policy entails....
To be sure, the President’s plan represents an important step forward in the debate. But it should be recognized that this plan is a rather conservative one, significantly to the right of the Rivlin-Domenici plan. While we worry about some particular elements of the President’s plan, we worry much more that the deficit-reduction process that’s now starting could produce an outcome that is well to the right of the already centrist-to-moderately-conservative Obama proposal, by reducing its modest revenue increases and cutting more deeply into effective programs that are vital to millions of Americans.
Actually, to that end, Obama got some good advice from Alan Simpson, of all people, in a meeting with the two catfood commission chairs, Simpson and Erskine Bowles.
“The next step is key, the gang of six,” Simpson said,” we think at some point very soon they will put out their plan.”
Simpson said they would all then “mess around” with all the different plans and see what is the best result.
“Mix them all up,” Simpson said, “Paul Ryan’s got a plan. Jan Schakowsky has a plan, we’ll look at them all, and do what you do when you legislative which is like making sausage.”
It's not a ringing endorsement for a truly left, progressive plan, but as Simpson says, it's got to be be in the mix. Yesterday the Congressional Progressive Caucus released its People's Budget, which economist economist Jeffrey Sachs says is the "only budget that makes sense" and "a lot more serious than everything else on the table." It produces a surplus by 2021, and does it by putting people back to work and without jeopardizing vital social services.
It also has the advantage of public opinion: it creates jobs, preserves Social Security and Medicare, brings a measure of equality back to the tax code; all of the priorities Americans identify in all of the opinion polls. If the 2012 election is really going to be about this budget, Medicare and taxes, the administration and Democrats would be foolish to not use the People's Budget in the mix.