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A few important steps: Obama addresses fiscal policy

<nesday President Obama laid out in clearer terms than he ever had before his vision for fiscal policy and the role of government in society. I was impressed, for he said quite a few things that I had been waiting for him to say for a long time.

His first big statement was one about government’s role itself. In speaking about vital investments that American governments have made throughout the nation’s history, he made the argument that although we have a capitalist system of free enterprise, that system has always been complemented by an active government that has invested in its people. Dispelling the myth that government involvement is anti-American, he said that in fact, the country would not be so strong if it were not for government being there all along the way.

Second, Obama explained that people actually like government programs. While being against government spending in the abstract, he said, people support the programs that require most of the spending. He then laid out for people how much of the budget is spent on popular priorities like Medicare, Medicaid, Social Security, and defense, while at the same time saying that focusing on things like foreign aid and waste and abuse were simply not serious critiques of government spending.

Third, the President explained the real implications of the Republican budget proposal—a document with ideas that would fundamentally alter the way American society works, and always has. Previewing a message that is tailor made for the upcoming presidential campaign, he presented Americans with a clear choice: we can either have a country that says you’re on your own or a country that is there for those who need help and support.

Fourth, in laying out that choice, he made the its consequences clear. By saying that the country’s fiscal situation is simply unsustainable, he implied that people would have to decide if they want to pay for the programs they say they support. Not paying results in the Republican version of government, and paying would give Americans the government they have always had, and that they say they want.

Lastly, Obama finally put Democrats in a decent negotiating position moving forward. By rejecting the Republican budget proposal outright and presenting a compelling idea of what it would entail, he began to lay the ground for compromises based on his demands. By defending Medicare, demanding that defense spending be cut, and that taxes be raised on the wealthy, he articulated strongly held progressive goals that mean the inevitable budget compromises would not end up right of center.

During the debate over the government’s funding that ended last Friday in a last minute budget deal, many Democrats complained that Republicans dictated the negotiations on their terms while only controlling the House. This time around, as political leaders begin the much larger arguments about raising the debt ceiling and passing a budget for next year, Obama and the rest of the Democratic Party will be in a much better position.

Now, there are without a doubt things people can criticize about the speech. Policy wonks will complain, for instance, that the President did not talk specifically about how he plans to cut Medicare spending while maintaining the program’s current form and that he completely left out any talk of reforming Social Security. Regarding Medicare, my guess is that he did not get into specifics because the health care reform bill did that for him. The Affordable Care Act already aims to lower health care costs and its supporters expect that that will have a profound impact on Medicare spending. Reducing costs further in the short run will likely mean accelerating and strengthening aspects of the already existing bill. Moreover, it makes little sense to propose completely new solutions when we do not yet know if the bill’s ideas work or not. And in terms of Social Security, he did not discuss it because it isn’t even a medium-term threat to our budget; the program’s board of trustees project it will be able to pay all benefits until 2037.

If there is one complaint I would endorse, it is that the speech’s very existence accepts the narrative that the deficit, and not jobs, is currently the country’s primary challenge. The fact that we are worrying so much about debt when borrowing costs are incredibly low and unemployment remains persistently high is disconcerting on many levels.

However, shifting that debate would have required action a long time ago. In the situation our political discourse currently finds itself in, the deficit has become a primary issue, Obama had to weigh in. He needed to make a powerful counter punch in the argument over how to handle the deficit, and on Wednesday, although imperfectly, he took some important steps in moving that conversation forward.

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