Photo: White House Flickr
Tonight Obama delivers The State Of The Union, and naturally everyone is chiming in with advice on what he says.
If he read the Washington Post, he’d get some conflicting advice on what to say about the deficit.
Chris Cilizza says that the deficit is THE issue of the day, and encourages Obama to devote the majority of his speech to it, basically on the grounds that it polls well.
It’s the deficit, stupid. A look back at Obama’s first three State of the Union speeches, plus the address to a joint session of Congress in 2009, suggests a similar thematic pattern: He starts with the economy, moves to education and then, in the middle section of the speech, addresses the deficit. (The exception was in 2011, when Obama began his speech with a riff on partisanship.) In 2012, Obama spent just five minutes on the debt — less time than he spent on partisanship (51/ 2 minutes) or foreign policy (six minutes).
He should flip that script in this State of the Union and spend the bulk of his time talking about the deficit. Here’s why: In January 2009 polling by Pew Research centre, 53 per cent of respondents said reducing the deficit was a “top priority.” In January 2013, that number soared to 72 per cent, by far the biggest increase of any issue over that time. (By contrast, 85 per cent said strengthening the economy was a top priority in 2009, while 86 per cent said so at the start of this year.)
The debt is the issue of the day, and one that, if Obama is beginning to eye his legacy as president, could go a long way toward shaping how history remembers him. Make this speech a deficit speech.
Jamelle Bouie argues that the focus must remain on growth, and that creating growth will take care of the deficit.
With growth, the economy can deal with high debt and deficits, at least in the medium-term. Continued commitment to austerity, on the other hand, will threaten our economic trajectory and harm our effort to reinvest in the United States. If Obama wants to do the prudent, serious thing, he’ll ignore the hawks, and stop worrying about the deficit.
Bouie is certainly right on substance, that the priority needs to be growth, and not austerity.
But the key thing is that it’s not enough to make growth the focus. The deficit discussion needs to be avoided entirely. Not one word.
In an interview earlier this year with Business Insider, Rep. Jerry Nadler explained that when Obama talks about “balanced approach” to dealing with the economy, he’s already losing the argument, because he’s making the implicit acknowledgment that deficits are a problem. Sure, liberals might have a different idea about how to close the deficit than conservatives do, but it’s still not helpful to buy into the deficit hawk frame.
I think the problem is, it’s practically impossible to get the public to buy that, as long as the president doesn’t. If the president buying into the notion that the deficit is a big problem or that we’re going to have a grand bargain… Do we revenues as well as cuts, but still do cuts.
I think the president seems to have ceded the basic argument. And that’s a problem for all of us. Because when the presidents sets the basic terms of the argument, that defines sort of the outer limit to a lot of extent.
Nadler’s comments echo the line of thinking from Nomura economist Richard Koo, who even cautions against long-term deficit reduction talk:
The insistence that fiscal consolidation is necessary in the longer term is like the doctor who, faced with a patient who has just been admitted to the intensive care ward, repeatedly questions the patient about his ability to afford the treatment. This is both lacking in decency and irresponsible.
If the patient loses heart after learning the cost of the treatment, he may end up spending even longer in the hospital, leading to a larger final bill. Completely ignoring the policy duration effect of fiscal policy and constantly insisting on longer-term fiscal consolidation was what prolonged Japan’s recession
The deficit is shrinking at a pace faster than any period since WWII, as Jed Graham notes in a brilliant chart at IBD.
The deficit is shrinking rapidly. But growth isn’t happening fast enough. Rather than talk about a balanced approach to deficit reduction, Obama needs to ignore the issue completely.
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