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Pragmatic or populist? Obama's deficit speech gets mixed reviews

This article first appeared in the St. Louis Beacon, April 13, 2011 - WASHINGTON -  Did it present a compassionate and responsible vision for the fiscal future? Or was it a populist "class warfare" speech that offered rhetoric rather than realism?

Those were the two poles of reactions to President Barack Obama's fiscal-policy speech on Wednesday, with most Republicans decrying his insistence on tax increases as an essential element in any long-term plan to narrow the nation's deficit.

Obama's proposed "spread the wealth" tax increases "would punish the very small businesses that fuel our economy," argued U.S. Sen. Roy Blunt, R-Mo. In a statement, the Missouri Republican said, "The president's plan to raise taxes is simply the wrong approach" for many families and businesses.

"This plan puts us exactly where we were two years ago today," Blunt said. "Small business owners still don't know what tax structure they'll face in the very near future, which is creating greater uncertainty for the future of our economy."

But U.S. Rep. William Lacy Clay, D-St. Louis, took the opposite point of view. He said Obama "tackled the budget deficit in an honest and balanced way. He told the American people the truth about how we accumulated the budget deficit and the national debt, and the tough choices that will be required to restore fiscal responsibility."

In a statement, Clay said, "If we're serious about putting our fiscal house in order, then everything, including entitlements and defense spending, has to be on the table." He added that "we are not going to fix this problem by ending Medicare and gutting Medicaid, as House Republicans have proposed."

Clay said he agreed with Obama that "this is about more than just balancing the budget and paying down our debt. This is about what kind of America we want for the future and how we get there together without leaving some of our fellow citizens behind."

In her response to Obama's speech, Sen. Claire McCaskill, D-Mo., focused more on the nuts and bolts of deficit reduction without endorsing or rejecting any specific element of Obama's plan. "Our national debt is a serious problem that demands immediate action," she said in a statement. "The president's proposal furthers the discussion about the tough fiscal choices that we will have to make over the next decade."

Pointing out that she has advocated various measures to try to rein in the deficit and pay down the debt, McCaskill argued for a comprehensive approach to spending reduction - such as the Commitment to American Prosperity (CAP) Act, which she sponsored earlier this year along with Sen. Bob Corker, R-Tenn., and Republican senators including Sen. Mark Kirk, R-Ill. The CAP Act would use historical markers to set enforceable spending limits related to the growth of the nation's economy.

"We have to instill some permanent discipline to make certain that we spend responsibly, and that's why an approach like the CAP Act needs to be part of this debate," McCaskill said.

Taking a harsher view of Obama's speech, Rep. Todd Akin, R-Town and Country, contended that the president "refused to acknowledge economic reality and then went on to criticize Republicans because they proposed a solution." Akin said the speech "was all generalities and no specifics -- sort of a stump campaign speech rather than a problem-solving speech."

Akin, a member of the House Budget Committee, told the Beacon that Obama's call to increase taxes on upper-income Americans "is the usual class-warfare stuff. The problem is that if you drain the lake, you're not going to have any fish in it. They have systematically tried to tax all the small business owners and then wondered why there's a lack of jobs in the economy."

Akin and Clay disagreed on nearly every aspect of the House Budget panel's plan, championed by Rep. Paul Ryan, R-Wisc., that proposed cutting nearly $6 trillion in spending through major cuts or changes in Medicare and Medicaid but also cutting taxes.

Clay called the Republican plan "a complete betrayal of the greatest generation that will harm seniors, destroy American jobs and weaken the middle class. Under the guise of deficit reduction, the House Republican budget would end guaranteed Medicare benefits, gut Medicaid and create a fast track to assault Social Security."

Akin strongly backs Ryan's approach, saying it would slash the deficit without increasing taxes. "The fundamental disagreement in Washington is between those who continue to impose unbearable debt on future generations and those who want to restructure government and reduce spending," he said.

But Rep. Russ Carnahan, D-St. Louis, contends that the House Republicans' budget would "dismantle that American Dream for families I represent in Missouri." He said that the Ryan plan "would end Medicare and gut Medicaid in order to hand over taxpayer money to millionaires, big oil companies and corporations who are shipping American jobs overseas."

Carnahan urged both parties to work together "to find long-term solutions that don't damage job creation efforts or gut critical safety-net programs that Missouri seniors depend on."

Reflecting a similar view, Rep. Jerry Costello, D-Belleville, said Obama "laid out several important principles that are missing in the Republican budget proposal -- the most important being that as we work to reduce our deficit and debt, there must be shared sacrifice."

Costello contended that "the Republican plan to end Medicare while asking nothing from upper-income Americans, corporations and the defense budget is unacceptable. We can find budget savings across all departments of the government, but we must proceed thoughtfully, particularly with regard to programs for our seniors."

Blunt, in his statement, called on Obama to take more of a leadership role to "rein in Washington's out-of-control spending." The senator contended that "we're facing an historic crossroads in our nation's long-term financial health."

'Gang of Six' Tries to Find a Middle Way

Among the members of Congress trying to bridge the wide gap between Republicans and Democrats is Sen. Dick Durbin, D-Ill., a member of the White House's deficit commission who is now part of the "Gang of Six."

That bipartisan group of six senators has been meeting for months to try to develop a long-term approach to tackle the deficit  in a way that might stand a change of being approved by Congress.

Durbin believes Obama is committed to reaching an agreement. "Our bipartisan group of six senators continues to work for a comprehensive solution to our nation's debt," Durbin said in a statement, adding that Obama's speech "makes it clear that he is committed to the same goal."

Earlier this week, Durbin said the group's deficit-reduction plan "could be a game-changer" in the difficult budget debate that -- perhaps by offering a detailed proposal that falls somewhere between the House Republican and White House plans -- "might set the stage for some broad agreement."

The leaders of the fiscal-policy "gang," Sens. Mark Warner, D-Va., and Saxby Chambliss, R-Ga., outlined the need for a bipartisan agreement this week in Atlanta. Aside from Durbin, who is the Senate's second-ranking Democrat, the group's other members are Sens. Kent Conrad, D-N.D., Tom Coburn, R-Okla., and Mike Crapo, R-Idaho.

When it comes to Medicare, Democrats feel they have the public's support. A Gallup poll released Wednesday found that only 13 percent of the 1,004 adults surveyed this week backed a complete overhaul of Medicare; 18 percent would support major changes. A combined 61 percent said they would back only minor changes, or none at all.

While about 62 percent of those surveyed backed the six-month budget deal reached Friday night, only 45 percent said they would back "significant additional cuts" in domestic spending, while 47 percent would oppose further cuts. And 59 percent of respondents said they would support a tax increase for families with incomes of $250,000 or more; 37 percent said they would oppose such a tax hike.

Rob Koenig is an award-winning journalist and author. He worked at the STL Beacon until 2013.

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