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Posted at 10:15 AM ET, 01/25/2011

So much for fiscal leadership from Obama

By Jennifer Rubin

The Post reports:

President Obama has decided not to endorse his deficit commission's recommendation to raise the retirement age, and otherwise reduce Social Security benefits, in Tuesday's State of the Union address, cheering liberals and drawing a stark line between the White House and key Republicans in Congress.

Apparently, the hiring of Bruce Reed, executive director of the commission and author of its recommendations, was a head fake. So too, apparently, is the pledge to get serious about entitlement reform, without which it is impossible to dig ourselves out of the budgetary mess in which we find ourselves.

So much for centrism or bold leadership. Obama is now comfortably back where he started, to the left of Sen. Dick Durbin (D-Ill.). Durbin at least had the nerve to embrace the debt commission's proposal. A senior Senate Republican staffer put it this way, "While I'm not terribly surprised, given all the news about Big Labor yelling at him, it is a mockery of all the press coverage about him moving to the middle and of the Dems blasting Republicans for not offering specifics or being willing to make 'real" cuts.'" In other words, it's all about politics, never good governance.

Aside from liberals, who else is cheering the president's timidity on entitlement reform? To begin with, there is Rep. Paul Ryan (R-Wisc.), who will deliver the response to Obama's State of the Union address. Ryan isn't putting his head in the sand. His Roadmap for America and his co-authorship of the Rivlin-Ryan plan are powerful rebukes to the business-as-usual attitude that apparently will guide Obama. Beyond Ryan, Obama's gamesmanship creates a huge opening for House and Senate Republicans and the 2012 presidential primary contenders, if they dare to level with the American people and refuse to kick the fiscal can down the road.

House Republicans see an opening to seize the high ground. They intend to contrast Obama's rhetoric about confronting challenges with their own solutions for addressing the debt. One House aide notes that there will be some "short-term skirmishes on expiring continuing resolution and debt ceiling," but the real action will come when competing budget documents from the White House, House and Senate are produced. He asserts that Democrats didn't pass a budget last year, and then Obama "punted his 'hard choices' to the debt commission." Obama has apparently "run away from commission's ideas -- but now as run out of road to kick the can down."

As a conservative colleague pointed out to me, Obama is banking on making the Republicans the bad guys -- as if it were 1995 all over again. But it is not 1995. The electorate is savvier, the Republicans are more disciplined, and the budget numbers are scarier. For Obama not to put forth any specific plans is a total abdication of leadership. It is also going to remind the Tea Partyers, independent voters and moderate Republicans why they voted in so many Republicans in 2010. You can only marvel at the lack of seriousness in his approach:

Over the weekend, the White House informed Democratic lawmakers and advocates for seniors that Obama will emphasize the need to reduce record deficits in the speech, but that he will not call for reducing spending on Social Security - the single largest federal program - as part of that effort.

Nor is this an isolated instance of Obama's insincerity on a key issue. Obama is for getting rid of job-crushing regulations, except when it comes to ObamaCare and Dodd-Frank. He's for human rights, except when it comes to standing up to China. He's for fiscal discipline, except when it comes to the main source of our fiscal woes. He's for school reform, except when it comes to the D.C. voucher program. He's for a strong national defense, except when it comes to paying for one.

So the central question remains: is Obama simply play-acting the role of centrist or will he finally rise above politics and show real leadership? Republicans should breathe a sigh of relief that at least for tonight the Obama vision setting the stage for 2012 is pretty much like the old one, only with Jeffrey Immelt hawking goodies for big business.

By Jennifer Rubin  | January 25, 2011; 10:15 AM ET
Categories:  Budget  
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Comments

The American people understand that we cannot kick the can down the road yet again.

On Greg Sargent's WaPo blog he's talking about Obama "selling" some sort of incrementalism. Like we have time for a few more years of Obama and his cronies looting us before we face facts. I hardly think so.

the time to act is now and if Obama lacks the chichibongas to do so, well that's what elections are for.

Posted by: skipsailing28 | January 25, 2011 10:48 AM | Report abuse

"Obama's gamesmanship creates a huge opening for House and Senate Republicans and the 2012 presidential primary contenders, if they dare to level with the American people and refuse to kick the fiscal can down the road.

House Republicans see an opening to seize the high ground. They intend to contrast Obama's rhetoric about confronting challenges with their own solutions for addressing the debt."

Except that their own solutions for the deficit, the RSC cuts just released, didn't mention Social Security at all. LOL

You see the GOP doesn't want to be seen out in front of taking money from the old people. They want Obama to be stupid enough to do their work for them!

This is the greatest attempt at public deception since the invention of ethanol. SS is NOT going bust or insolvent. It's probably the most successful government program of the 20th century. With a few tweaks around the edges, changes to disability requirements, and perhaps removing or raising the wage cap, SS has another 45-50 years of foreseeable stability in it.

This is really nothing less than big money GOP financial interests who want to get their hand on some of the SS money by diverting it to private investment. It's just a giant PE firm trying to figure out how to takeover a company, lay off workers, replace the pension, and steal the cash on hand. No difference whatsoever.

Let's call it GOP crony capitalism!

(now if you had said Medicare or Medicaid or health care in general, that's a horse of a different color. it really is a huge problem for the future)

Posted by: johnmarshall5446 | January 25, 2011 10:55 AM | Report abuse

Jen - Excellent analysis. Ryan will effectively draw the contrast on domestic issues. Who will do the same for human rights around the world?

Posted by: CitizenWest | January 25, 2011 10:57 AM | Report abuse

Ms. Rubin writes, “[Paul Ryan’s] Roadmap for America and his co-authorship of Rivlin-Ryan are powerful rebukes to the business-as-usual attitude that will apparently guide Obama.”

Except that they aren’t.

If one reads Matt Miller this morning (http://voices.washingtonpost.com/postpartisan/2011/01/paul_ryan_is_not_what_you_thin.html), one finds the CBO’s assessment of Ryan’s Roadmap won’t balance the budget for over 50 years. And there will be massive debt accumulation along the way. Sounds pretty business-as-usual to me.

Both parties are simply posturing. The sooner bloggers and columnists of all ideological stripes get this and put Congress’ collective feet to the fire, the sooner we’ll see real movement to reduce the deficit.

Given the hyper-partisanship of so many bloggers these days, I’m not holding my breath.

Posted by: MsJS | January 25, 2011 11:08 AM | Report abuse

But as I recall the Ryan Rivlin plan does speak about SS. And contrary to john's rosy picture many of us are gravely concerned about the ability of SS to carry on with promises made by FDR and other Democrat stalwarts. Tales of the unfunded liability represented by SS are quite frightening indeed.

I suggest that John use the massive power of the internet, before his BFF's in the regulatory Raj destroy it, and read the Ryan roadmap.

there is a significant difference between the Republicans and Democrats just now. The Democrats have the white house and its occupant is generally viewed as the leader of the party.

The Republicans, on the other hand, have the opportunity to put forth any number of ideas. Open-minded review of these ideas, coupled with a healthy debate is the essence of good governance. This is a far cry from walking in lock-step with Obama, right off the fiscal cliff.

The derision of America's lefties, as so clearly illustrated in John's comments, did not serve them well in the last election. Unless they learn to embrace the American people they will suffer another shellacking in 2012. I, for one, can hardly wait. Leopards don't change their spots and liberals will continue thier rude and snobbish ways.

Here's a perfect description of how America's liberals acted toward the tea party:
"In the past two years, we’ve had national leaders, who represent the institutions of government, essentially tossing rhetorical tear gas into a crowd of peaceful protestors, demanding that they disperse and go home. Calling dissenting citizens “un-American” “evil-doers” who are part of an “angry mob” tells those citizens their views are illegitimate. This rhetoric has been vastly more corrosive to our civil discourse than talk radio and cable chatter. The good news is that the American people responded peacefully and fired many of the politicians who were making this ridiculous charge."

Senator Coburn got it right, of that there is no doubt.

So I response to the need for serious discussion about a serious issue we can see the liberal play unfold: Stall and deny while engaging is sneering, cynical calls for "civility".

Posted by: skipsailing28 | January 25, 2011 11:08 AM | Report abuse

Obama is just a politician looking to the next election. His deficit commission was just a dodge. His strategy is to re-name irresponsible spending on his key interest groups as "investment" and to portray Republicans as heartless. If it works and he's re-elected, this country will go bust sometime this decade.

Posted by: eoniii | January 25, 2011 11:22 AM | Report abuse

skip:

There is NO unfunded liability in SS! Don't believe me, look it up at a site you trust. What exists is a POTENTIAL shortfall occurring somewhere between 20-25 years from now.

It's VERY difficult to get a handle on these things because there are so many balls in the air, related to inflation, employment, etc. That's why there can never be any one and done "fix" for SS.

For instance let's say we all agreed on cuts and changes that today seem perfect for SS. If unemployment is 1% higher each year than projected, your fix goes right out the window!

That's why raising the cap on wages or eliminating it is a better idea than cuts, because it fluidly compensates better for these fluctuations.

(Hey in an aside, you and I are poles apart politically but I enjoyed the heck out of the hell you raised yesterday! stirring the pot isn't always a bad thing)

Posted by: johnmarshall5446 | January 25, 2011 11:26 AM | Report abuse

"For Obama not to put forth any specific plans is a total abdication of leadership."

Abdication of leadership - the one thing that Obama is good at.

Posted by: johnhiggins1990 | January 25, 2011 11:39 AM | Report abuse

So much for his leadership period. Read this:
http://www.wnd.com/index.php?fa=PAGE.view&pageId=255297
and this:
http://www.wnd.com/index.php?fa=PAGE.view&pageId=254401

Posted by: Orientalist | January 25, 2011 11:47 AM | Report abuse

I am eagerly awaiting the Republican House holding a vote on raising the retirement age to 67 as a way of controlling the deficit. I can wait eagerly for years if need be.

Posted by: willows1 | January 25, 2011 11:47 AM | Report abuse

"There is NO unfunded liability in SS! Don't believe me, look it up at a site you trust. What exists is a POTENTIAL shortfall occurring somewhere between 20-25 years from now."

John, Isn't there a relative pittance of a dollar amount "in" the SS fund because the politicians decided to spend that money elsewhere? And if so, doesn't that constitute an enormous problem in regards to the solvency of the entire program? Those dollars, promised to seniors, that have been spent on bike paths and greenhouses have to come from somewhere else now, don't they? Doesn't that put us in a terrible fiscal hole?

I'm a big fan of having personal accounts to replace the current SS system. Besides getting SS off the federal books, it would have the added benefit of prohibiting the politicians from having access to that money. That, in and of itself, would be one of the biggest favors we could do for our country.

Posted by: RitchieEmmons | January 25, 2011 11:48 AM | Report abuse

johnmarshall5446 - Just what we need. Another investment bubble as hundreds of billions of dollars are transferred from Social Security into the murky world of financial derivatives.

Posted by: willows1 | January 25, 2011 11:52 AM | Report abuse

ritchie:

So seeing what the financial firms of Lehman Brothers, Bear Sterns, et al, did with their investing in the last ten years you would still rather have money with them than the Federal government?

Be honest, it was the government that saved the financial firms, not the other way around.

Now if you want to talk the SS "trust fund", we agree that there is no such thing. But what people don't understand is that SS is a general obligation of the US government independent of the money in the "trust fund".

If tomorrow the money all disappered, the US would still owe everyone, absent a change in legislation. So yes the SS trust fund covers up the size of the deficit in a real sense. No, using it elsewhere doesn't mean that SS is broke.

Similarly on an individual level there are certain obligations that can be discharged in bankruptcy and those that can't.

Thanks for the reply.

Posted by: johnmarshall5446 | January 25, 2011 12:36 PM | Report abuse

Please note: In spite of what Obama has to say about it the Democrats (Sen. Mark Warner and pals) are talking the Republican line to make the necessary cuts - the very cuts Obama says he will not approve. They hope to beat the Republicans to the punch because they know what the next election can do to them if they don't. And knowing that Obama will veto what they propose they can play the save the economy game without any harm to their leftist agenda. This is the type of nonesense we are going to see for the next two years. Buckle your seat belts. It will be difficult to differentiate the phonies from those who are truly trying to fix the system. They are counting on this.

Posted by: mlbduffy | January 25, 2011 1:01 PM | Report abuse

SKIP/the time to act is now and if Obama lacks the chichibongas to do so, well that's what elections are for.
Posted by: skipsailing28

The issue that won't go away is the elephant/room///Fiat Money*. No one,except for the Pauls,has the chichibongas to even whisper about the elephant. Do you want our currency to consist of Real money,or monopoly money? As long as it's monopoly money,all attempts to restore our economic health will remain chimeric.
*You challanged my bonafides as an old school conservative yesterday. Old school conservativism is all about asset backed money with convertability,liberals hate asset backed money as much as they hate Israel.

Posted by: rcaruth | January 25, 2011 1:20 PM | Report abuse

RC:

Good to see you back on your home turf!

I'm waiting until gold hits $1275 or so to jump back in again. I'm guessing the first week of Feb if not sooner.

Posted by: johnmarshall5446 | January 25, 2011 1:26 PM | Report abuse

Nice balanced column on fiscal responsibility. I was gratified to read your assessment of the Republican role in establishing fiscal responsibility over the last decade or three . . . it was particularly satisfying to see you reference the vast tax cut passed by Bush, the two unfunded wars, the drug benefit . . . oh, wait, that must have been in a publication which actually cared about balanced. Cough cough (hack)

Posted by: scientist1 | January 25, 2011 1:50 PM | Report abuse

The primary difference between 1995 and today is that the Social Security Trust Fund IOUs will start becoming due soon without money to repay the IOUs, just as Republicans said they would back in 1995.

Every dollar the Government pays to repay an IOU is a dollar of spending cuts in other programs, unless Republicas increase taxes, which won't happen.

Republicans should wait for the Dems to start screaming and demanding Social Security cuts when repaying the trust fund IOUs starts impacting spending programs for Dem voter groups.

Dem voters want more the Government to spend more money.
Republican voters want the Government to spend less money.
The side that wants the least usualy wins the most.
Republicans will win a standoff with Dems, if the Republicans stand their ground.

Posted by: jfv123 | January 25, 2011 2:02 PM | Report abuse

johnmarshall, the Social Security Trustees report $7.9 trillion in unfunded liabilities, the excess of promised benefits over projected revenues. Also, the program, long a cash cow for other government spending, has already turned cash negative due to the recession. After 2015, these annual deficits will increase steadily, reaching about $78 billion in 2020, according to the Trustees. Social Security will have enough Treasury bonds to redeem to cover it's negative cash flow until about 2037. However, these bonds are an accounting fiction. it makes no practical difference whether the Treasury is redeeming its bonds or covering the Social Security shortfall directly.

Social Security isn't nearly as ugly actuarially as Medicare. However, it's dishonest to pretend, as some liberals have done, that the program is fully funded. It's own trustees say otherwise, and, on a cash flow basis, it is already turning negative. There is no "lockbox" full of money, only an empty promise from one part of the federal government to another.

Posted by: eoniii | January 25, 2011 2:16 PM | Report abuse

The author writes "get serious about entitlement reform, without which it is impossible to dig ourselves out of the budgetary mess in which we find ourselves".

This is standard rushpublican misdirection. Entitlements have been in the black the entire time the Supply Side Liars have been building up massive debt. Yes, entitlements are a problem in the future. But NO, they have nothing significant to do with the current debt, which was accumulated by undertaxing the rich on the lie that "Tax cuts pay for themselves" The Tea Baggers are only making it worse, along with Obama's capitulation to the strong arm tactics of the rushpublicans in extending the disasterous Bush era tax cuts.

This can only lead to another big down turn in the economy, with a few mega winners and the destruction of the middle class (what's left of it).

Posted by: Fiscal-Conservative | January 25, 2011 2:34 PM | Report abuse

"So seeing what the financial firms of Lehman Brothers, Bear Sterns, et al, did with their investing in the last ten years you would still rather have money with them than the Federal government?"

John, In a word, Yes. For starters, if more money in these firms means less money with the federal govt, I'm for it. It has to do with liberty more than anything else. My liberty isn't going to be reduced when money/power is in the private sector. It will be though if that money/power resides in the state. However, I know that isn't the gist of your question.

Your question is of the fiscal nature of course. Like most conservatives, I prefer strong but limited regulations on the private sector. Ideally, these institutional regulations will prevent private (financial) companies from getting reckless and collapsing, but not be so overbearing as to unnecessarily restrict the business practices of these companies and cost them tons of money to be in regulatory compliance.

I reluctantly supported the bailout of the financial firms because they were, indeed, of a financial nature. A collapse of the financial sector would have a huge negative impact on every sector of the economy. In contrast, I did not support the auto bailout. In essence, the financial industry is the hub of the wheel and something like the auto industry is merely a spoke.

In an ideal world to me, with these bailouts would be an assureance from the govt that such a thing will never happen again. Next time, the companies will be allowed to go under. That would incentivize the companies to be more careful, thus reducing the chance of failure in the future.

Also, I think your "either/or" scenario of having money in Lehman "or" the federal govt is a little off the mark. If I knew that Lehman was going to collapse, then yes, of course I'd rather have my own individual money somewhere where I knew my balance sheet wasn't going to suffer. But that "somewhere" doesn't have to be the
federal govt in order for me not to not lose money. It can be in a bank CD or a money market fund or some other type of investment.

More over, if I recall correctly from the battle over "privatization" of the SS fund during the Bush years, there is no 20 year period in our history where the SS rate has outdone the stock market. Which includes the Depression. Much better in my mind to take the short term hits from the volatility of the private sector, in exchange for the long term benefits.

Anyway, nice to be able to have a level headed chat with you over the topic.

Posted by: RitchieEmmons | January 25, 2011 2:39 PM | Report abuse

"As a conservative colleague pointed out to me, Obama is banking on making the Republicans the bad guys -- as if it were 1995 all over again. But it is not 1995. The electorate is savvier, the Republicans are more disciplined, and the budget numbers are scarier."

And not least, Obama is no Bill Clinton. He just doesn't have those kinds of political skills. No slight intended--Clinton was *awfully* good at the game.

Posted by: shoutingboy | January 25, 2011 3:05 PM | Report abuse

While we need to deal with the SS problem it is NOT the main source of our fiscal problems. Medicaire and the deficit are of immeasurably greater importance. If we're going to kick a can down the road that's the one.

Posted by: kchses1 | January 25, 2011 3:16 PM | Report abuse

Rubin:
Social Security is NOT an entitlement. So please don't lump it with Medicare. We pay into it, all our working lives. If you want to cut "big government" start with our military, our Pentagon, our senseless wars. What do you think Bush kept off the books for 8 years? Answer: Everything! The most irresponsible president and V-P ever, Bush & Cheney got rid of regulations and wrecked our economy, with the middle class paying for years to come. And here you are, cheerleading for a return of such policies in 2011. How vapid of you!

Posted by: MickNamVet | January 25, 2011 3:18 PM | Report abuse

Blah blah blah.

I'm on the right and will call you a lefty pinko unless you come all the way to me.

Blah blah blah.

Nice to know the post has a true believer to read everyday...

Posted by: scott032 | January 25, 2011 3:29 PM | Report abuse

Politics aside, the budget crisis an Obama's election prove two things: First, the entire concept of "entitlements" is an insidious curse on the Republic. Social Security was and is a Ponzi Scheme and (by the way) was intended to be nothing more than an income SUPPLEMENT, not a pension. No one with a functioning intellect ever doubted that at some point we were going to reach a tipping point where SS would absorb the federal budget. Unfortunately, libs cannot see past "Gimme somethin for nothing" or think further ahead than their next handout.
The Second thing we have learned is how gullible the voters are. Using nothing more definite that "Hope and Change" Obama rode public anger at Pres Bush into the White House despite being utterly unqualified for the job. We now have a pseudo- intellectual poseur whose entire philosophy of governance is based upon flower-child posters from the 1960's supported by sophistry and the ability to incite greed.
We return yet again to Thomas jefferson's warning that the average democracy only lasts about 250 years, and always dies when the herd learns how to vote itself money out of the treasury.

Posted by: MARKM2 | January 25, 2011 3:45 PM | Report abuse

Under the Ryan Roadmap millionaires have their taxes cut in half and billionaires don't pay taxes at all, all the typical sources of their income (capital gains, interest and dividends) becoming totally tax free. Not only are billionaires relieved of any theoretical requirement to fund the general welfare, they also get a free pass on funding the common defense. This isn't a serious approach to anything, just Randite Fanboy posturing.
http://www.roadmap.republicans.budget.house.gov/
The tax proposal in brief:
http://www.roadmap.republicans.budget.house.gov/Issues/Issue/?IssueID=8514

Which frankly is why many of us don't take Ms. Rubin seriously, the Roadmap being a pure aspirational joke which for some reason she is taking seriously. So much for fiscal leadership from Ryan.
"Promotes saving by eliminating taxes on interest, capital gains, and dividends; also eliminates the death tax."
Tax freedom for billionaires! And their heirs! Forever!

(Plus Ryan's staff instructed CBO to use phony revenue numbers, something emphasized twice in CBO's scoring letter: making him shall we say a little disingenuous (sounds better than the Anglo-Saxon verb))
http://www.cbo.gov/ftpdocs/108xx/doc10851/01-27-Ryan-Roadmap-Letter.pdf

Posted by: BruceWebb | January 25, 2011 3:47 PM | Report abuse

"He's for a strong national defense, except when it comes to paying for one."

And there it is--the exact moment at which this post became impossible to take seriously.

Posted by: jaycane40oz | January 25, 2011 3:47 PM | Report abuse

I remember the last time Republicans destroyed a surplus. It was just a few years ago. I'm not stupid enough to trust their plans.

Posted by: danw1 | January 25, 2011 4:14 PM | Report abuse

Ryan is classic Republicanism: more tax cuts for those making $200,000 and more, more taxes for the middle class; good luck if you're poor. What's new about that?

Posted by: kwoodgr | January 25, 2011 4:22 PM | Report abuse

Bill Clinton ran a surplus two years in a row. Al Gore had a plan to put $300 billion dollars in a lock box. But Antonin Scalia ...

Oh what's the use.

Posted by: pressF1 | January 25, 2011 5:41 PM | Report abuse

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