President Obama is right to take steps to address our nation’s runaway deficit spending, so we bristle at the knee-jerk criticism coming from some quarters regarding his decision to leave all options open — including raising middle- class taxes.
It is important that Obama refocus his presidency on reforming the way our national government collects and spends our money.
The size of our national debt, at more than $12 trillion, amounts to $40,000 per citizen. Underscoring the economic dangers was a surprise report this past week that Social Security dug nearly to the bottom of its reserves in 2009 for the first time in 25 years. Experts told USA Today that the high numbers of retiring baby boomers by 2017 would create annual Social Security losses.
The coming disaster is real and needs to be addressed now.
While on the campaign trail, and before the Wall Street meltdown, Obama promised not to raise taxes on families making less than $250,000. But in an interview with Bloomberg Business News this week, he said he wanted “to be completely agnostic, in terms of solutions.”
No one wants higher taxes, but the hard truth is the president has to be open to extra taxes. As Bloomberg notes, many economists — conservative and liberal alike — contend that any broad set of reforms meant to rein in the deficit must include tax increases. And taxing only the rich won’t be enough.
When you factor in our country’s future obligation for Medicare, Social Security benefits and other commitments, economists gauge the total liability and unfunded future obligation at more than $56 trillion. That’s $483,000 per American household.
Recognizing this, Obama has acted responsibly by setting the framework for a bipartisan panel that is to present recommendations for a fiscal fix by year’s end.
“What I can’t do is set the thing up where a whole bunch of things are off the table,” Obama said. “Some would say we can’t look at entitlements. There are going to be some that say we can’t look at taxes, and pretty soon, you just can’t solve the problem.”
The president correctly pointed out that the recent spike in spending by his administration is only a part of the problem. Incremental changes over decades by both Democrats and Republicans have brought us to the point that mandatory programs like Medicare and Medicaid have swallowed up the majority of the nation’s yearly tax revenue.
Many Republicans are criticizing the president over his sober analysis, saying he is flip-flopping on his tax promise. And yes, if Obama does choose that path, he will pay a political price.
President George H.W. Bush broke his no-new-taxes pledge and lost re-election. But his increases are routinely credited, along with the mix of reduced spending and good economic timing during the Clinton years, for erasing federal deficits and producing a surplus, which is exactly what is needed now.
Obama needs to weather the criticism and continue to lead on this critical issue as we await the panel’s findings.
