President Barack Obama sketched a realistic approach to reducing the federal deficit on Wednesday that calls for shared sacrifice and a more balanced mix of spending cuts and additional revenue. While less aggressive than either the House Republican plan or some proposals by his fiscal commission, the president would preserve the nation's social compact and make smart investments in the future even while reducing overall spending. It is a nuanced vision unlikely to be embraced by the most partisan in either political party, but it offers a general path to eventual compromise.
Bolstered by last year's election victories and the tea party movement, Republicans are driving the debate over federal spending. They forced Obama to accept an extension of the Bush-era tax cuts in December, and last week he agreed on spending cuts to this year's budget that are even deeper than what Republicans initially sought. Now energized House Republicans are poised to pass a radical 2012 budget authored by Rep. Paul Ryan of Wisconsin that would reduce the deficit by more than $4 trillion over the next decade, cut taxes even further and end Medicare and Medicaid as entitlements.
Obama has been slow to meet the challenge, and Wednesday's speech was a credible attempt by the president to recast the debate. Yet in tone and substance, he remained on the defensive. He called for cutting the deficit by $4 trillion over the next 12 years with significant cuts in domestic and military spending combined with new revenue from an overhaul of the tax code. He also pledges to squeeze savings from Medicare and Medicaid without embracing significant changes to the entitlements. More intriguing is Obama's call for a trigger that would force automatic spending cuts and revenue increases if by 2014 the nation's debt continues to grow as a portion of the economy. While a real consensus on economic stability is preferable, that sort of hammer may be the only way to force Congress to overcome partisan fighting and reduce the deficit.
Obama was most effective in defining the fundamental differences between his vision and the Republicans'. He would end the Bush tax cuts for the wealthy; the Republicans would make them permanent and make further cuts. He defends the health care reform law that will insure millions of Americans; the Republicans would repeal it. He would preserve Medicare and Medicaid as entitlements; the Republicans would essentially privatize Medicare and cap Medicaid expenses as block grants to the states.
"We will all need to make sacrifices," Obama said, "but we do not have to sacrifice the America we believe in."
Ultimately, that defines the debate over the federal deficit more than fuzzy projections in the trillions of dollars. How far the political ground has shifted will be reaffirmed today as some conservative Republicans vote against even the deep spending cuts for this year and fight raising the debt ceiling in the coming weeks. But a comprehensive approach to reducing the federal deficit cannot be so one-sided that it forfeits America's ideals.