Obama needs to lead on deficit
President Barack Obama will discuss his deficit plan on Wednesday. Credit: AP
The eleventh-hour deal that averted a disruptive partial shutdown of the federal government on Friday was just a prelude to much bigger battles to come over spending and taxes. Dramatically different views of the proper role and size of government have divided Democrats and Republicans for decades. With federal deficits and debt soaring dangerously, it's time for a showdown.
President Barack Obama needs to lay out a clear vision for the role of the federal government when he unveils his deficit-reduction plan in a speech Wednesday. The public is going to have to decide what it wants from Washington and how much it is willing to pay. To do that it needs specifics from the president on the future of military spending and big-ticket programs such as Medicare and Medicaid, including how to keep them solvent and the taxes needed to do it. He needs to lead on these critical issues that will frame fights over raising the debt ceiling by May 16 and adopting a 2012 budget by October.
Republicans have been very clear about what they want. It was their plan for aggressive spending cuts through the end of the current fiscal year that drove the debate that climaxed with Friday's deal to cut $38.5 billion in discretionary federal spending.
They've been just as clear about their long-range vision for a dramatically smaller federal government. The House Republicans' budget proposal for the fiscal year that runs from Oct. 1 to Sept. 30, 2012, calls for ending Medicare and Medicaid as we know them, while cutting and capping taxes.
Under the Republican plan, Medicare would no longer enroll everyone at age 65 and directly pay their medical bills. Instead the government would provide a subsidy to help the elderly buy medical coverage from the private insurer of their choice. The changes, which would not apply to people already 55 or older, would save the government money by shifting a larger share of the cost to individuals. And it would introduce more competition among insurers, which should help hold down costs. But it would end Medicare's guaranteed coverage and leave seniors who couldn't afford their portion of the premiums without insurance.
Leaving more people uninsured is a step in the wrong direction. But to retain guaranteed coverage, Obama will have to spell out how the federal government would keep the program solvent.
The same is true for Medicaid, the government health program for the poor. Republicans would abandon Washington's current, open-ended commitment to pay about half the cost to insure everyone with an income that qualifies. They would limit Washington's costs by giving block grants to the states instead.
Obama and his party have shown no comparable clarity -- either on spending cuts for this year or on Medicare and Medicaid. They played defense in the shutdown battle, pushing back against Republican cuts. And Obama played the mediator in search of a middle ground. He may relish that image as the adult in the room for his re-election campaign. But in this philosophical fight over the future of government, the nation needs him to lead.
