Investments vs. cuts
In Obama's state-of-the-union message last month, he set down his policy priorities for this fiscal year, calling for more spending on education, clean energy and infrastructure.
The GOP's response is contained in the spending bill the Republican-led House just passed, which contains $61 billion in cuts, the largest in history. Democrats argue that the cuts jeopardize the fragile economic recovery, imperils the environment and puts at risk the country's most vulnerable citizens, including homeless veterans.
The two contrasting visions of the federal budget lay out in stark terms the choices we face as a country over the next 12 months and, indeed, next two years.
In his state-of-the union speech, Obama emphasized competition and innovation. He constantly reiterated throughout the speech that America now competes with the rest of the world and that we need to invest in innovation to maintain the excellence that made us the envy of the world in education, industry and science. These policy choices are contained in his proposed 2012 budget.
The Republicans did not wait long to rip into his budget and spending priorities. The core of the GOP message -- spending must be reduced across-the-board and the new health care law repealed -- were the central planks in their 2010 platform to recapture Congress. In his response to the president's speech last month, Rep. Paul Ryan, one of the Republicans' Young Guns, tried to recast Obama's talk of new investments as just so much wasteful spending. Then he argued that this additional spending was what would tip the country into a catastrophic fiscal crisis. He raised the alarm that the U.S. was already down the road to becoming another United Kingdom, Greece or Ireland; all of which are experiencing dire fiscal circumstances.
The GOP's spending bill speaks volumes about their policy priorities. While taking an axe to domestic spending from education to environmental protection, they show little inclination to slice even the smallest amount from defense, which has led critics to observe that the GOP seems primarily concerned with cutting the Democrats' favorite programs while protecting most of their own from the budget axe.
Clearly, only one side can prevail in this battle over the budget. The party that can sway public opinion its way will carry a major political advantage into the 2012 presidential election, which is why both parties are willing to put so much at stake. The stakes in this case include the potential shutdown of the federal government, which could happen as soon as early March, when the government's financing extension expires.
An analysis of the positions of the Democrats and Republicans reveals a few key dimensions often overlooked in the partisan debate. First, despite the Democrats' assertions, not all new spending initiatives are necessarily investments. The idea of investment carries a strong presumption of an expected return. This average return must be higher in value than the initial outlay to warrant the label investment. Otherwise, it is a form of spending, which may or may not be wasteful, depending on its outcomes.
It is up to the president and his allies in Congress to prove to the American people that his proposed spending on education, energy and infrastructure is truly an investment and not merely pouring billions of dollars down a hole.
By the same token, the Republicans assume that all federal spending is wasteful and will burden future generations with crippling debt. If an attitude like this dominated earlier Congresses, we would have had no Erie Canal, interstate highway system, public higher education, Internet or manned space flights. So while the burden of proof is largely on the Democrats to show how their proposed spending will help grow the economy in both the short-and long-term, the response of the GOP should not be to say "no" to everything the Democrats propose.
Finally, neither side has addressed the question of entitlements or, for that matter, defense spending, which taken together make up the bulk of federal expenditures. The Obama administration, to its credit, did bring together a blue-ribbon commission on fixing the debt, which issued its recommendations in December. However, none of the commission's controversial recommendations found its way into the president's proposed budget. Many of the debt-cutting panel's recommendations focus on Social Security and Medicare, the two biggest entitlement programs.
Despite all their outrage over the deficit, the GOP has also remained silent on entitlement spending, fearing that any attempts to reduce Medicare and Social Security, would alienate their senior support. Republicans, as noted previously, have also so far failed to consider cutting defense spending, except for a second engine for a fighter aircraft, allowing a disproportionate amount of cuts to fall on domestic programs.
The best way forward would be to have a real debate in Washington over the budget. That would entail replacing all the mud-slinging -- like calling the health-care law "Obamacare" -- with a civil deliberation over our national priorities and what is the most efficient, effective means to achieve them. In short, it requires that our elected officials behave like statesmen and stateswomen. Let's hope the mindset brought into being by the Arizona tragedy goes beyond Democrats and Republicans sitting next to each other in Congress and includes actually doing the hard work of compromise that is needed to pass a federal budget that works for all Americans.
Robert A. Cropf chairs the Department of Public Policy Studies at Saint Louis University. To reach the author of a Voices article, contact Donna Korando, Voices and Features editor.