It’s time to entertain the possibility that President Barack Obama is a right-wing extremist. After all, look at where he’s taking the country over his second term.
We’re living in a country where 53 percent of children born to women younger than 30 are born out of wedlock, according to government data. Millions of people, especially men, are dropping out of the labor force. Nearly half the students who begin college are unable to graduate within six years. The social fabric for people without college degrees is in shambles.
Yet Obama is not offering proposals commensurate with those problems. Under his budget, domestic discretionary spending would be lower as a share of GDP than it was under Reagan, both Bushes and Nixon. When it comes to this category, Obama’s budget would take us back to Eisenhower levels.
The president is increasing total revenues to a historically high 20 percent of GDP by 2023. Federal spending would remain at a way-above-average 22 percent of GDP. But Washington still can’t seem to devote enough money to address the challenges faced by the less-educated and ease the segmentation of America. That’s true even after you account for the domestic programs that are outside the discretionary budget category and have their own funding stream, like the new early childhood initiative.
I generally come to celebrate, not criticize, this budget. Obama has the guts to take on special interests in his own party. He works hard to reduce inequality. He understands that entitlement programs represent a fundamental threat to the sustainability of the welfare state. He understands that politics can only work if the president transcends his base and builds a majority coalition. His budget should put to rest those crazy claims that he is some sort of Norwegian socialist.
But being moderate means throwing away ideological blinders and facing reality. Right now, America faces two giant problems: social unraveling today and cataclysmic debt tomorrow. This budget takes small steps to address both problems when big strides are needed.
So where do we go from here? That’s easy. First, we have the same kabuki debate we’ve been having for the past few decades. This debate is organized around the following trade-off: more revenue in exchange for more spending cuts.
This debate will probably go nowhere. Republicans feel as if they’ve already given away the store on new revenue, so they are not going to be compromising. Obama needs to show Democrats that this budget is the endpoint, not a starting point, for a further rightward drift. He doesn’t have much room to compromise either.
The kabuki debate will probably end, as it usually does, with gridlock and name-calling. But then we can move on to Debate B. This debate would be organized around a different trade-off — not a balance between taxing and spending, but a balance between greater discretionary spending in exchange for structural entitlement reform.
In this framework, Democrats would get a lot of the good ideas that are in the Obama budget, but they’d be bigger and more aggressive. We’d take the pre-K initiative, the spending on scientific research and the infrastructure spending. But then we’d throw on top other programs. Make more men marriageable (by helping them earn a reliable wage). Rebind the social fabric in atomized communities (social entrepreneurship funds). Maybe expand a national service program to give more young adults discipline, orientation and connections.
Republicans would get structural entitlement reform. Here, too, we could build on the ideas in the Obama budget, like chained Consumer Price Index for Social Security and the expansion of means-testing for Medicare. Then we could throw on other modest structural reforms: Combine Medicare Parts A and B and further limiting Medigap plans in order to induce seniors to make more cost-conscious decisions. Repair federal pensions and the disability system. Means test Social Security and raise the Medicare eligibility age for affluent workers.
This deal wouldn’t represent the moderation of the mushy middle. It would represent muscular moderation that is bold on both ends. Persuade majorities that discretionary spending is not just foreign aid and earmarks. It’s the government’s best shot at boosting social mobility. Remind Americans that their country can’t be a rising nation if we have an entitlements system fit for an aging and declining one.
Right now, we are the North Korea of fiscal policy. We’re living under the insane sequester that cuts those programs we should be increasing and spares exactly those old-age programs we should be reforming. Both parties should have incentive to get to a new fiscal regime.
Party leaders could postpone the debate about tax revenues. They could accept higher deficits short term. Most important, they could embrace a deal-making framework that would direct attention toward urgent needs: discretionary programs for now, structural entitlement reforms that accumulate over time.