Take this budget at face value, and when Mr Obama talks about "a new era of responsibility" he does not mean: "We are all in this together." He means: "The rich are responsible for this mess and it is payback time." Leftist Democrats are thrilled, and rightly so. The budget has three themes: healthcare reform, public investment and unflinching redistribution. This is indeed a new social contract: we get, they pay. Liberals never had it so good.By the way, Robert Reich is quoted in the Wall Street Journal confirming:
Tactically speaking, Mr Obama may have overdone it. If I were advising him, I would say that the elation of his party’s progressive wing is a red flag. It mocks the president’s claim to be a consensus-builder, and tells the centre to watch out. Keep the left unhappy, would be my counsel.
The administration will have many chances to row back, of course, and to succeed it will have to. Despite optimistic assumptions, the budget leaves a full-employment budget deficit of 3 per cent of gross domestic product -- not counting the full costs of healthcare reform, which the budget mentions but fails to provide for, and longer-term demographic and other pressures. Spending cuts and new taxes on the broad middle class are going to be needed; and to get those passed, the president will need support from the political centre.
For the moment, though, this budget reveals Mr Obama with new clarity. He is no Tony Blair, ideologically rootless, as I had previously suspected. He is a conviction politician: a bold progressive liberal. Yet his outreach to Republicans is no sham; his civility, I think, is not a front. He respects people who disagree with him, is capable of liking them, and is always willing to listen -- but then stays true to his beliefs. This is a rare and devastating combination.
For years in the US, the Democratic left, despite a surfeit of brilliant minds, has neutered itself with its own rage. The fixed expression of progressive liberalism has been anger and contempt -- with perplexity at its lack of political success mixed in for comic effect. Cometh the hour, cometh the man. Amid an economic crisis, with capitalism under fire and the country looking to government for answers, the liberal left finally has a leader with brains, who shares its convictions, yet is as friendly and as likeable to the politically uncommitted as anyone could wish -- so appealing, in fact, that the party almost chose somebody else to lead it.
Whether Mr Obama will be good for the country remains to be seen. We can already be sure that he is conservatism’s worst nightmare.
It is the boldest budget we have seen since the Reagan administration, and drives a nail in the coffin of Reaganomics. We can basically say goodbye to the philosophy espoused by Ronald Reagan and Margaret Thatcher.See also Jonathan Chait in the New Republic:
Obama is trying to put his imprint on federal policy. I think he's right to do so. Ronald Reagan governed the country with little worry about its fiscal health. His goal was tilt the structure of the tax code and federal outlays so that conservatives would have an advantage when the bill came due. It worked: when the Democrats recaptured the White House, they mostly played janitor, cleaning up the Republican mess. Not only did Democrats mosty fail to impose their priorities to anything like the degree Republicans had, voters penalized them in 1994 for imposing fiscal pain. And then, when Republicans regained the presidency, they returned to the Reagan strategy.(via reader Doug J.)
Given all this, for Obama to govern like Clinton did would be insane. Clinton's policies were a good way to govern if you assumed that Democrats would hold power forever. But if you assume that Republicans will gain power again, reducing the deficit will do anything but clear up more room for upper-income tax cuts. Given that the GOP is committed to upper-income tax cut maximalism, Democrats can't win by taking the job of fiscal responsibility entirely on their own shoulders. What's more, they can't even effectively control the federal deficit in the long run, since their self-appointed role as janitor only encourages Republians to go hog wild when they have power. What Democrats can do is take some steps in the right direction, and implicitly invite Republicans to drop their supply-side fanaticism and come to the bargaining table when they're serious about governing.