The Obama "Strategy"

Kevin Drum quotes Ross Douthat, who thinks he sees a grand strategy at work in the Obama administration's spending:

What you see in his budgeting proposals, I think, is the liberal equivalent of the conservative attempt to "starve the beast." In both the Reagan and Bush eras, Republicans passed tax cuts and ran up large deficits while hoping that by starving the federal government of revenue they would curb its long-run growth. Obama's spending proposals would effectively reverse that dynamic — they would create new spending commitments and run up large deficits, in the hopes that the dollars poured into health care and education will create a new baseline for government's obligations, which in turn will create the political space for tax increases on the middle class. Like the starve-the-beast approach, the Obama strategy puts off the hard part till tomorrow: Give them tax cuts today, conservatives said, and they'll swallow spending cuts tomorrow; give them universal health care, universal pre-K, subsidies for green industry and all the rest of it today, liberals seem to be thinking, and they'll be willing to pay for it tomorrow.

Kevin Drum agrees with this assessment, and thinks this explains why Republicans in Congress are utterly opposed to every spending bill. But as I was explaining to Nat-Wu and Adam in an email, I don't think this is a strategy so much as a description of events. To quote myself:

Liberals think these things are good and that people will want to pay for them. We enact them and lo, we are right! It seems more a description of events than a plan for them.

That doesn't meant that Douthat isn't on to something about putting off to the future necessary tax increases. Given a choice I think most people will pay more in taxes rather than see substantial cuts to programs they like. I suppose you can deride this as salesmanship, but it's also out of political necessity. If you tried to enact these programs at the same time that you substantially raise taxes on the wealthy and marginally raise them on the middle class, you're pretty much ensuring the death of your proposal. I suppose that's political strategy, but it's not really a conspiracy to enact vast social safety programs that people don't know they want yet. It just happens to make it very difficult for Republicans to stop these programs from getting enacted, though that's largely because most Americans agree on the need for the programs.

Taxes Must Go Up

In the wake of Obama's speech, outlining proposals to get the economy back on track and expand the social safety net, this articles serves as a handy reminder that eventually we're going to have to pay for all of this progress:

Americans have made it clear that they want a certain kind of government, one that can field a strong military and also maintain popular programs like Medicare. Yet we are not paying nearly enough taxes to maintain those programs. Even major changes to the health care system — the single most important step for closing the budget gap — will not close it entirely. Taxes must rise, too.

This is a point on which serious Democrats and serious Republicans agree, even if they do so with euphemism. “We are on an unsustainable path,” says Peter Orszag, Mr. Obama’s budget director. Judd Gregg, the ranking Republican on the Senate Budget Committee, has said, “Revenues are going to have to go up.” Douglas Holtz-Eakin and Dan Crippen, budget experts who advised the McCain campaign, have quietly acknowledged the same.

Fortunately, the coming tax increase does not have to be economically ruinous. Despite all the scary stories you’ve heard, the evidence that higher taxes necessarily cripple an economy is somewhere between thin and nonexistent.

When over the past 60 years did the American economy grow fastest? The 1950s and 1960s, when the top marginal tax rate was a now-unthinkable 90 percent. And when over the past generation did the economy grow fastest? The late 1990s, when President Bill Clinton briefly took federal taxes to 20 percent of the G.D.P.

The real uncertainty is how, in the current political climate, Mr. Obama will manage to persuade people that taxes must go up. In his speech on Tuesday night, he didn’t even try. But he doesn’t have forever to do so.

It's probably safe to say that Grover Norquist flipping out somewhere. But to paraphrase Holmes, I like our civilization, I'd like more of it, and I'm willing to pay for it.

UPDATE: By the way, by all nearly accounts, Obama hit it out of the park lats night (h/t Adam.)

Legislative/Policy Update

-Unfortunately, a bill that would have given District of Columbia residents their first-ever member of Congress (their representative to Congress is a non-voting delegate and residents currently can only vote in presidential races) was blocked in the Senate today. Senators voted 57-42, just three votes short of the 60 needed to overcome a GOP filibuster threat (which will simply cement their inability to get Africa-American voters for a few more generations). The bill actually would have created two new House seats: One for Washington, D.C. and one for Utah, which narrowly missed out on a fourth seat after the last census and was needed to get what bipartisan support it had. Many had thought they might have enough votes for passage. However, the White House had also threatened a veto anyway.

-According to Congressional Quarterly, the leaders of the Senate Budget Committee unveiled legislation Tuesday that would require the next Congress to address the long-term budget strain associated with Social Security, Medicare and other entitlement programs.

The bill would create a 16-member task force that would make recommendations by Dec. 9, 2008, on how to address soaring costs of programs such as Medicare, Medicaid and Social Security. The bill calls for the recommendations to be introduced as legislation in the 111th Congress, and both chambers would have to consider it soon after that Congress convenes in January 2009. Debate would be limited, and the proposal could not be amended. It would require a three-fifths majority vote in both chambers to pass.

The legislation was unveiled Tuesday by Senate Budget Committee Chairman Kent Conrad, D-N.D., and Judd Gregg of New Hampshire, the panel’s ranking Republican. The task force would be charged with looking at all aspects of the budget, including tax policy. “Everything is on the table,” said Conrad, D-N.D.

“We tried to take the politics out the runup to this work,” Conrad said, by putting off the task force’s recommendations until after the 2008 elections.

Conrad said he was not sure if the Budget Committee would mark up the legislation or whether he and Gregg would try to take it straight to the Senate floor. Gregg and Conrad said they had briefed the Senate leadership and several members.

House Budget Committee Chairman John M. Spratt Jr., D-S.C., and Paul D. Ryan of Wisconsin, that panel’s ranking Republican, have not said whether they plan to introduce similar legislation.

Sounds like an interesting idea.

-Lastly, Sen. Hillary Clinton unveiled her health care proposal this week which resembles not her proposal in the early 90s but rather those of fellow presidential candidates John Edwards, Sen. Barack Obama, and others. All contain provisions to expand federal programs to cover all children, offer subsidies to the poor, a cadre of business tax incentives and ultimatums, rolling back the Bush tax cuts to get the money, and both Edwards' and Clintons' plans have a Massachusetts-style "individual mandate" that requires everyone have health insurance as they do auto insurance.

All get us closer to the goal of "universal health care" but are pretty complicated for the average voter to understand. And as Michael Moore's "Sicko" pointed out, "universality" guarantees only that everyone has health insurance but doesn't prevent insurance companies in a for-profit system from denying care. Interestingly, a new CBS News poll shows a majority of Americans support the single-payer, national health system espoused by Moore: 55% supported "having one health insurance program covering all Americans that would be administered by the government and paid for by taxpayers." Just 29% favored the current system.

Given this level of support, why are none of the major candidates supporting such a system? None of the Republicans do, of course, and only two third-tier Democrats - Rep. Dennis Kucinich and former senator Mike Gravel - do. No doubt they fear the same insurance companies and special interests that went after "Hillarycare" and no doubt some are getting money from those interests. True health care reform will come only when a grassroots movement stands up and demands change from our elected leaders.