The Economist: "I understand the arguments from supporters... this is a political gambit... it won't actually amount to much... a tool with which to co-opt the president's moderate antagonists.... If this is the best the president can do, Democrats, and the country, are in for a very long few years":
RA: There really is no good way to interpret this turn of events. From the standpoint of the purely economical, this is a huge mistake. Even if we assume that the economy will be strong enough in 2011 to handle budget balancing, this proposal is practically worthless. The administration has said this will produce $250 billion in savings over ten years, but as The Economist noted in November, the fiscal deficit will be over $700 billion in 2014 alone, and will grow from there. Non-defence discretionary spending is nothing; those who are serious about long-term budget sustainability talk about defence, they talk about entitlements, and they talk about revenues. In other words, this will do very little about the deficit, and it will do even less to convince markets of the credibility of the American effort to trim the deficit.
So perhaps this is all about politics? Well, maybe, but there are two enormous problems with that. One is that the campaign trail version of Barack Obama railed against John McCain's proposal for a spending freeze, rightly, as using a hatchet where a scalpel was needed. It's unlikely that Mr Obama's political opponents will let him forget that. The other is that this is a complete betrayal of the political ideal Mr Obama seemed to espouse from the beginning of his political career—the rejection of the argument by the lowest common denominator in favour of a more reasoned and argued approach. This is yet another move toward the infantilisation of the electorate; whatever the gamesmanship behind the proposal, Mr Obama has apparently concluded that the electorate can't be expected to handle anything like a real description of the tough decisions which must be made. I sympathise with Mr Obama's position—would that American voters were patient enough to hear and consider a detailed policy discussion on a complex issue—but it's unreasonable to expect that Americans can be hoodwinked into major policy shifts.
And this is an incredibly risky political gamble for the president. Much of the liberal base of the Democratic party was already prepared to mutiny after the overreaction to the Massachusetts defeat and the abandonment of the health care reform bill. This may well drive them over the edge. If it weren't enough that the proposal treats voters as children and a serious problem as a political football to be kicked around, the president's plan also appears to endanger an economy that hasn't meaningfully raised employment in over a decade and it solidifies defence spending as the untouchable budget category, when in fact it should be anything but.
I understand the arguments from supporters of the president that this is a political gambit, that it won't actually amount to much but a sound talking point and a tool with which to co-opt the president's moderate antagonists. What's the difference? Seriously. How does the president move from this to any important policy goal? What room does this leave him to deal with either the jobless recovery or the long-run budget deficit?
Through bad times and good times for the president, there was one word I never associated with him and his approach to the challenges facing the country: gimmick. But this is a bright shining gimmick that advertises a lack of seriousness to both near-term economic weakness and long-run budget problems. This is decidedly not what is needed right now. If this is the best the president can do, Democrats, and the country, are in for a very long few years.