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Obama’s True Position on the Budget

President Obama, with a tremendous assist by many within the media, is attempting to portray himself as a born-again budget cutter, a Man of the Center, a person willing to make a reasonable, grand compromise in the public interest. And the supposed proof of this is the negotiations to raise the debt ceiling.

But what Obama is putting forth is, as Yuval Levin points out here, essentially his budget, only this time with a few new rhetorical bows and ribbons attached. The main source of confusion is about Obama’s supposed willingness to cut entitlement spending in return for higher taxes. In fact, as best as we can tell, what Obama is offering in the main is several hundred billion dollars in Medicare and Medicaid cuts of the kind already embodied in the Patient Protection and Affordable Care Act (e.g., regulatory tinkering of payment rates). That is not structural entitlement reform that Republicans have in mind; it is, in fact, an old and bad Democratic idea (for example, as payment rates to doctors are lowered, volume increases and quality goes down). If Obama were serious about entitlement reform, he would embrace, at least directionally, the Medicare and Medicaid reforms in the budget put forward by House Budget Committee Chairman Paul Ryan.

What Obama wants, in other words, is Republican approval of his previous proposals – though this time it would be accompanied by (a) more than a trillion dollars in tax increases; and (b) raising the debt ceiling. This is hardly a compromise, and Republicans would be fools to accept it.

I should add, by the way, that I for one would favor some increases in taxes for genuine reform of entitlements. I would even agree to some higher taxes if Obama agreed to pull the plug on his monstrous health care plan. But that is not what Obama is offering. He’s not giving ground on entitlement programs, and the GOP is not giving ground on taxes. The 2012 election will need to be a debate about what the nation wants to do on those two matters.

In the meantime, the outlines of a deal are fairly clear: after a staggering spending binge, in exchange for some caps on discretionary spending, Obama will get what he says in a moral imperative, raising the debt ceiling, without structural reforms of entitlement programs or tax increases.

It’s not a “grand bargain” or a perfect deal by any means. But it’s a fairly reasonable one, given where we are. And it has the added virtue of taking into account what President Obama’s true position is, as opposed to the mythological one being advanced by some reporters and commentators.


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