President Obama’s speech really brought home how confused and disoriented liberalism is today, and how very difficult it will be for the Left to accept that the social-democratic welfare state is collapsing and something else must take its place. Yet the very fact that he felt compelled to make such a speech does offer some hope.
As recently as February, in his budget, Obama essentially denied that we had a fiscal crisis. Today, he admitted it and described it, or at least parts of it. It is certainly unorthodox for a president to renounce his own budget two months after proposing it, but that is just what the president did—implicitly dismissing even the goals set out by his budget in its own terms (let alone its potential to achieve them, as measured by the Congressional Budget Office) as totally inadequate. In that sense, the only immediate practical implication of the speech is that it throws the 2012 budget process into disarray. Are the cabinet agencies supposed to be defending the president’s now-repudiated formal budget request before congressional committees in the coming months, or does the administration now expect Congress to ignore its budget? If so, will the administration be offering some particular alternative requests, with details that (unlike this speech) can be scored by CBO?
The other implications are less direct, because the president mostly laid out ends without means. He accepted much of Paul Ryan’s definition of the problem we face, but insisted that it could be solved by trimming our welfare state at the edges, rather than reforming and restructuring it. He held up past examples of such trimming as his model—arguing, preposterously, that the budget agreements of the 1990s, which offered slight adjustments without reforming the institutions of our welfare state, were successful and that we only face a crisis today because George W. Bush cut taxes. In fact, those budget agreements bought a little time while ignoring the basic problem—especially the entitlement problem. That’s why we are where we are, and Obama now proposes to just put the blindfolds back on and make the same mistake again.
Obama offered a kind of “Robert Bork’s America” description of the Ryan budget, filled with ludicrous distortions, and then argued that he could achieve the same fiscal goals by different means. What means? Apparently there are four: First, discretionary spending cuts that amount to an extension of the cuts in this year’s budget. Second, defense cuts that will be decided after yet another review. Third, health-care cost reductions that will be achieved by giving even more power to the panel of experts created by Obamacare to make one-size-fits-all rationing decisions and by assigning that panel even more ambitious goals than the ones that the actuary of Medicare and Medicaid says the panel is already very unlikely to meet. And fourth, greatly increasing taxes.
A fact sheet put out by the White House offers a few more details, though no clearer sense of how the president expects these steps to add up to the kind of savings he says they will achieve. It includes some fairly silly gimmicks. For instance, the president defines his near-term goals using a 12-year budget window, to give the illusion that he would achieve savings on the level of the fiscal commission and the Ryan budget (both of which use the usual 10-year window required by the budget process). He guarantees long-term budget reductions (and therefore on paper guarantees the achievement of his goals without specifying particular means) through a “trigger” that would go into effect at the end of Obama’s second term, forcing arbitrary budget cuts upon his wretched successor when the Obama “framework” has failed to reduce spending. The fact sheet speaks in glittering generalities about such things as “a target of $360 billion in savings from other mandatory programs by 2023,” and commitments to “enact anti-fraud measures.” It implicitly acknowledges that Obamacare would fail to control health-care costs and yet proposes to control those costs by just doing more of what Obamacare would do—tighter rationing within the current program, rather than a fundamentally different approach to helping seniors pay for health insurance.
And yet, for all of its profound inadequacy—its dearth of self-awareness and excess of self-righteousness, its distortions of facts, its contortions of language (“spending reductions in the tax code”? really?), its lack of specificity, its unseriousness—this speech is on the whole a good sign. I fully expected the Democrats to respond to the Ryan budget by simple undiluted demagoguery—that is, with the “Paul Ryan’s America” part of this speech alone. And some Democrats in Congress have certainly done that, with all the usual preposterous dishonesty of the Democrats’ Medicare playbook. But this speech did not limit itself to that. Its demagoguery was diluted some. It accepted Paul Ryan’s definition of the fiscal problem, and it accepted more or less his broad outline of what a solution would look like in fiscal terms—in terms of deficit and debt reduction. And so it defined the debate going forward as a debate about how best to achieve the Republicans’ fiscal goals.
President Obama’s answer to that question is that we can achieve those goals by slight technical modifications of the welfare state we have had since the mid-1960s. Paul Ryan’s answer is that we can achieve those goals by reimagining the welfare state for the 21st century—for an age when the legitimacy of capitalism, the efficacy of markets, the capacity of consumers to make sensible decisions, and the value of choice and variety are hardly questioned; for an aging society that for too long has spent its economic and human capital without giving thought to how they might be replenished and now wants to correct its mistakes. That debate will be the essence of our domestic politics in the coming years. It is a debate about how to fix the terrible mess created by the Great Society—a debate we have put off for too long, and that most on the left would still like to avoid at all costs. It is a debate for which (thanks especially to Ryan) Republicans are suddenly unusually well prepared, and for which (as Obama’s speech demonstrated) Democrats are dismally unready.
It is a good sign that President Obama has judged that he can’t simply avoid this debate, even if he intends to engage in it in such an unserious way. It won’t be a calm, civilized dispute among wonks, and it shouldn’t be. It will be a political struggle, fought out over several elections and no doubt beset on all sides by gimmicks, distortions, and posturing. There is no getting away from that in our democracy. But it is a debate the country could really use and which, in the long run, if we’re lucky, might even allow us to find for ourselves again the path of shared prosperity and constitutional government. And we’re Americans, so we already know we’re lucky.
Yuval Levin is Hertog Fellow at the Ethics and Public Policy Center and editor of National Affairs.