"This administration's tendency has been to soar rhetorically on goals and then compromise heavily on details. Today we were offered few of the latter. The emphasis on reducing medical costs rather than coverage is exactly right. There was a brief allusion to allowing the government to bargain with Big Pharma over drug prices, but the savings figures mentioned strike me as way too low, raising some question about how far reaching the plan really is. One very interesting implication is the late June deadline for having Congress put the package over. That suggests that the administration is not worried about the nominal mid-May deadline for the debt ceiling; instead they are banking on not bumping up against the ultimate debt ceiling until sometime in mid-July, as many have anticipated. But that means the end of June will be tense indeed. Even a temporary default would be an overwhelming event with worldwide resonance. Another critical point: the exact balance between tax rises on the super rich and cuts; along with the "fail safe" mechanism that is supposed to be built in. If I heard him rightly, the idea is for more cuts in 2014 if things aren't going according to plan. That will give people who want more cuts and fewer tax rises a big incentive to hold out for more. And let's not forget that all through 2010 the White House kept saying it would not support an extension of the Bush tax cuts for the wealthy. Then right after the election, the President turned around and agreed with the Republicans to do exactly that. Let's hope this time the President means it."
~Thomas Ferguson is a Roosevelt Institute Senior Fellow and Professor of Political Science at U Mass, Boston
"The battle is now framed: a Republican agenda that balances the budget on the back of the poor vs. a Democratic agenda that brings meaning to the phrase 'shared sacrifice.' What remains to be seen is who will win the test of wills we are about to see play out in Washington D.C."
~Eliot Spitzer is a political commentator and former governor of New York
"It's often said that a budget is a measure of our values, and President Obama's speech did a great job of showing that there are values other than deficit reduction at stake here, like whether we provide the basic foundation of economic and personal security to the elderly, the ill, and poor families. But he also showed that long-term deficit reduction is nothing to be afraid of, that it can be achieved in a way that's compatible with economic recovery and our values. I have two worries, though. One is that the budget outline Obama proposed will be treated as just a bid, subject to negotiations wih other proposals, such as Rep. Paul Ryan's destructive and dishonest scheme. But as long as we remember that budgets are not just numbers, but values, it should be clear that one plan represents our country's best values and the Ryan plan represents the opposite, while reducing the deficit by much less. The midpoint between Obama and Ryan would be far worse than the status quo. Second, I wish the president, or some politician, would acknowledge that it's not just the very rich who will have to pay more taxes. All of us who benefitted from the healthy economy of the 1990s that Obama described, and the low tax rates of the Bush years, will have to contribute something more if we are to have any hope of sustaining a society governed by the values Obama described. The sooner we acknowledge that reality the better."
~Mark Schmitt is Director of the Fellows Program at the Roosevelt Institute
"Being honest about what's causing our deficit means being honest about taxes, and the serious damage the tax cuts for the super rich have had on our society (the President alluded to this but only briefly). It is a relief to see that the President included an increase in revenue in his four steps for reducing the deficit -- but he made it his last point and has shied away from speaking directly about the benefits that accrue to the nation as a whole from progressive taxation. My guess is that most Americans understand we are in a crisis and would support an equitable increase in taxes on the well-off (as was the case in the State of Oregon recently) if the case were put to them in clear terms. To date almost no one has had the courage to address this issue head on. I think the President would do well to lead with this argument. I also think he would do well to speak less about the deficit, and more about what type of society we want to live in. In other words, take a more Rooseveltian approach to the twin crises we face (the Great Recession and the deficit). I may be naive, but I still believe that most Americans are compassionate and would agree with FDR when he said: 'The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.'"
~David Woolner is a Senior Fellow at the Roosevelt Institute
"The speech exemplifies the policy disasters that arise from incoherent economics. The President embraced and gave further credence to two of the most harmful economic myths -- that because governments are supposedly just like households, deficits signify excess and coming crises. He said: 'Now, at certain times – particularly during periods of war or recession – our nation has had to borrow money to pay for some of our priorities. And as most families understand, a little credit card debt isn’t going to hurt if it’s temporary.' Governments with sovereign currencies are not like households and are not like Greece. Unlike Greece, America has a sovereign currency. Nations typically run deficits, e.g., large ones,like that run during the supposed golden age of the 1950s. During the two decades of the "Great Moderation", nearly every developed nation ran a deficit. The deficits did not cause inflation in either period. When nations run budget surpluses, they soon fall into severe recessions. Severe recessions produce substantial increases in budget deficits -- due to automatic stabilizers. The automatic stabilizers are counter-cyclical -- they reduce the length and severity of the recession. Cutting governmental spending while a nation is suffering from a recession is lunacy. It is a destabilizing policy. The automatic stabilizers and stimulus are nothing like 'a little credit card debt.' The stabilizers not only don't 'hurt', they make the recession hurt far less. The Republican strategy of federal and state budget cuts is twice cursed. First, it harms the economy, the recovery, and unemployment. Second, by cutting, for example, useful education programs it harms our children and our future competitiveness."
~William K. Black teaches economics and law at UMKC and is a former regulator
"The President, like the Republican leadership, is choosing to ignore the costs and extent to which the irresponsible behavior of our largest financial institutions led to over borrowing and over lending in both public and private sectors. Now they are talking about cutting deficits without addressing or even acknowledging the fact that they have created a reality in which our fiscal future will always be tied to a new risk of diverting monies from key services for our citizens for the potential support of bank creditors. Have they heard about the austerity being forced on the Irish for this wrongheaded choice?"
~Joshua Rosner is Managing Director at independent research consultancy Graham Fisher & Co.
"The President appears to be drinking from the same Kool-Aid as Congressman Ryan. Just a different flavor."
~Marshall Auerback is a Roosevelt Institute Senior Fellow
"I didn't get the opportunity to catch the President's speech because I was on the phone with a General Electric worker who is being asked to give concessions to General Electric who paid nothing in taxes last year despite making $14 billion in profits. From what I can tell of skimming his speech it was full of the usual rhetoric about shared sacrifices. Perhaps the President should get on the phone with that same GE worker and find out the devastating effect shared sacrifices are having on his family and then take a look at the profits of GE."
~Mike Elk is a labor journalist with In These Times.
"The President mentioned Social Security as if there was something about the program that needed to be 'fixed.' Why? Despite the efforts of conservatives to suggest otherwise, the program is remarkably successful and in excellent fiscal shape, as the Trustees' Report shows. Some minor tweaks may be needed down the road, but there is no justification to tampering with the program now. Obama should draw a line in the sand on America's best-loved program and not be swept into the distortions generated by those who oppose Social Security for ideological reasons or by financial institutions who would like to get their hands on all that retirement money and charge fees for private accounts. When we talk about 'compromise', why is it that the only thing that really gets compromised is the future of ordinary, hard-working people? Let's face it, cutting Social Security while big corporations and billionaires do not pay their share is upside-down economics."
~Lynn Parramore is Editor of New Deal 2.0 and Media Fellow at the Roosevelt Institute
"President Obama's focus on 'winning the future' through an emphasis on better education, 21st century infrastructure, and a renewed commitment to affordable health care for all is right on target. It's what Millennials and rest of America need for a shared future. But the President can't forget to 'win the now' too. That means he must recommit to the recovery of the American economy and working class, who are still suffering terrifyingly high unemployment. Now is not the time to roll back spending on domestic priorities, simply to appease the rabid conservatives that dominate Congress."
~Zachary Kolodin is Director of the Future Preparedness Initiative at the Roosevelt Institute
"My little brother liked to play Monopoly and I wanted to do other things so I sought to lose as quickly as I could. I spent like crazy -- houses, hotels, railroads -- hoping that I would go bankrupt as quickly as possible. My brother played a more cautious game until he landed on one of my purchases and I wiped him out. President Obama's speech does a good job of pointing out that only investment -- in infrastructure, education and jobs -- can provide a prosperous future. He finally called the Republicans on their bluff: no one can claim to be serious about the deficit without acknowledging that Bush tax cuts are a major part of the problem. What President Obama didn't do is to point out how much of the current budget hysteria is manufactured. The Republicans created the current financial crisis by deregulating Wall Street, slashing taxes, multiplying loopholes for their cronies and starting unnecessary wars. They have made it impossible to restrain health care spending by fighting tooth and nail against every effort to rein in the insurance companies. Now, they plan to replace Medicare, which delivers more benefits with fewer administrative expenses than other part of the health care system, with a free market nightmare that invites insurance companies to bilk seniors the same way they are bilking the rest of us. Government is not the problem; slashing the foundation of effective government is. Stop the disinvestment in our children's future."
~June Carbone is the Edward A. Smith/Missouri Chair of Law, the Constitution and Society at the University of Missouri-Kansas City.
"The President missed a golden opportunity to explain why the wealthiest should be taxed at a higher rate -- they tend to hoard their savings instead of spending or investing it. Lowering taxes as per the Ryan 'plan' will lead to greater inequality and have no stimulative effect. This is a very basic Keynesian argument that far too many contemporary Democrats seem incapable of making."
~Frank Cocozzelli is a director of the Institute for Progressive Christianity
"In his address, Obama said we have to 'put everything on the table.' But when asked whether a carbon tax would be part of the mix in closing the deficit during the White House press call, the official said it was not. When asked why Obama was calling for more modest defense cuts than many analysts say is necessary, he replied that, as Commander-in-Chief, Obama had to be more cautious. Despite the doubling of defense spending since 9/11, Obama promised only to hold future increases to some figure beneath the rate of inflation. 'Winning the future' is definitely on the table, as is some vaguely articulated fiddling with Medicare, Medicaid and Social Security. Promising not to balance the budget on the backs of the neediest, the president pledged to control drug costs without imposing a burden on seniors or the poor, but it's unclear how that might happen."
~Joshua Holland writes for Alternet
"President Obama reaffirmed that America at its best is about our being connected to each other and that we can only build prosperity and security with a government that works to bring us together, not tear us apart. He stated what every American knows, that in the past decade the rich have gotten rich while the rest of us have been squeezed. And he made it clear that he wants to set our nation on a new course, that invests in a future of opportunity and hope, and rejects the idea that our best days are behind us. President Obama identifies the problem with the health care system; it's not that people are consuming too much for care, it's that we're paying too much for the care that we are consuming. Instead of telling people they have to pay more for less care, he's proposing that we pay less for better care."
~Richard Kirsch is a Senior Fellow at the Roosevelt Institute
"The speech was an impressive defense of the idea of social insurance, of the promises we make to ourselves as a society. That vision contrasts well with the Ryan plan, which was appropriately called out for both its dishonesty and its viciousness. I think the President is wrong that our recovery has hit a self-sustaining recovery firing on all engines, and poor economic conditions on the horizon could make his dismissal of short-term stimulus and the impact of short-term cuts look foolish in retrospect. It would have been wise for President Obama to emphasize that the path we are on brings us close to where we need to be. Ending the Bush tax cuts, getting more aggressive with health care costs already embedded in the health care bill, will get us far in where we need to go. Because if the proposal moves further to the right, will be far worse than if we did nothing at all. The emphasis on cutting discretionary spending as an ends is disappointing; a lack of discussion of a carbon tax and a financial system tax also takes partial solutions to two of our bigger problems off the table."
~Mike Konczal is a Fellow at the Roosevelt Institute
"In terms of American history, and accepting broad strokes as key to speechifying, I think the President's budget speech was fair enough, if characteristically ponderous. I've been tough before on Obama's use of history, but in this case, making appropriate respect for government as a fundamentally American value, and associating national greatness with the welfare state, links founding values to the New Deal in a pretty defensible way. There are all sorts of things to dissent from here (the founding, for example, was accomplished largely by taking on immense public debt), but this was liberal history in a nutshell -- banal but far from entirely wrong, and highly germane to the case the President wants to make."
~William Hogeland, "Founding Finance" columnist and author of The Whiskey Rebellion