Obama's Moderate Budget Has Potential
Wednesday, April 13, 2011 - 5:59pm
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President Obama's speech at George Washington University on Wednesday helped reassure that budget politics will neither be entirely political nor mindlessly focused on the deficit to the exclusion of what government does.
 
The president gave a speech about budget policy: What a sensible goal for the deficit would be, what are good ways to reach it, and what are bad ways to reach it.  He emphasized his views of how measures will affect the economy and most Americans; and his view of what makes a deficit-reduction policy fair.  The plan is as moderate and sensible as a serious plan could be.
 
Does it leave open questions that could make someone nervous?  Sure.  What we have seen is a seven page summary, not legislative language.  But anyone who believes that we can plan precisely for the budget ten years in the future would make me more nervous.  The president has set a direction that makes sense.
 
Are some of the spending cuts uncertain?  Sure.  Any long-term cap on appropriated spending must lack specifics, and we may find out later that we want to spend more.  Former President George W. Bush, for example, spent a lot more on these programs than he expected, because 9-11 caused the federal government to create a whole new bureaucracy - take the Transportation Security Administrationhttp://www.thefiscaltimes.com/Blogs/The-Vault/2011/02/11/The-Vault-Obama..., which replaced private airport security. But it would not be appropriate for the president's critics on the right to say his caps on spending are not specific enough, when they have proposed even bigger caps with less policy specifics.
 
Are the spending cuts for Medicare or Medicaid unreasonable?  Again we will need more specifics, but the basic approach seems close to "just right."  He argued, for example, that one logical area for Medicaid savings is the programs for the elderly; and that part of Medicaid does include all sorts of legitimate issues about long-term care.  He identified the cost of prescription drugs as a concern for Medicare, and it is.  He called for a more ambitious target for Medicare cost control but, unlike the Republicans, at least has some procedure (strengthening the Independent Payment Advisory Board) to improve value for the health care dollar.  Is it perfect?  No, but it's a start and it doesn't involve the kind of magical thinking that says "turn Medicare over to private insurers and everything will be fine."  I'm sorry, private insurers raise Medicare costs NOW; they don't lower costs; the IPAB has to do better.
 
So is it a good plan?  We don't quite have a plan. Is it a reasonable approach, more plausible than anything we have seen from the President before or from Republicans in Congress?  It sure seems to be.

Joseph White is Director of the Center for Policy Studies at Case Western Reserve University.

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