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Brandeis University's Community Newspaper — Waltham, Mass.

Altered Consciousness: Serious fiscal solutions needed

Published: April 29, 2011
Section: Opinions

During the last couple of weeks, I have become extremely disappointed in regards to President Obama’s domestic policies and general behavior.

First of all, he just does not appear to be serious about addressing our current fiscal situation. This year we face a $1.6 trillion deficit and a more than $14 trillion federal debt, which is nearly equivalent to 100 percent of GDP. If current trends persist, we could very well experience a debt crisis within the next decade that could potentially dwarf, in terms of sheer magnitude, the 2008 financial crisis. Yet what are the president’s proposals to address these daunting problems?

Firstly, he wants to raise taxes on the richest Americans. But this policy will only raise at most $100 billion per year. Therefore, does he want to increase taxes on everyone and completely stifle economic growth? Also, the fact is that federal tax revenue has never exceeded 21 percent of GDP, which equates to approximately $3 trillion, in comparison to a current budget that is equal to approximately $3.8 trillion. Unless we pass a VAT, which is a regressive sales tax that would further depress the economy, Obama will have to cut spending.

And on spending, Obama’s main proposal is to cut defense. Obama says that his savings can come from eliminating the magical quartet of waste, fraud, abuse and duplication. But that can only take him so far. At this point, the United States cannot truly allocate fewer resources for national security purposes without significantly affecting things like weapons maintenance, force structure and deployment, which in turn impacts major overseas operations.

In regards to the latter point, currently our troops are performing the following functions abroad: They are in Libya, Iraq and Afghanistan; fighting wars against terrorism and piracy; containing China, Russia, Iran and North Korea; keeping the sea and air lanes open for trade and commerce; and providing collective security benefits to the world. Which of these roles for the military does Obama want to do away with? Judging by the fact that the United States just got involved in Libya, I would assume none of them.

I’ve gathered Obama’s third key proposal is that he seeks to grant more power to the Independent Payment Advisory Board (IPAB). Essentially, the IPAB consists of a group of 15 unelected bureaucrats who would make arbitrary cuts in Medicare spending, most likely through rationing care and reducing reimbursement rates to providers. Optimistic projections of savings from the IPAB amount to approximately $30 billion, which is less than what the federal government spends in a week. Congress disapproves of the IPAB, however, because it takes away its power to regulate Medicare. So much for that policy.

And what of economic growth? The president’s main theme seems to be investments in clean energy, high-speed rail and education. Certainly this spending can help the country somewhat in the long-term but it won’t make a major impact in the short-term.

I’m also disappointed in Obama’s recent rhetoric. As I’ve stated, we face a potentially dire fiscal scenario and looming national insolvency. Yet Obama, for all intents and purposes, accuses Republicans of being un-American and of robbing grandma and autistic children to give tax cuts to the rich. Regardless of the accuracy of these charges—and I think it’s demagoguery—Obama is going to have to deal with the other side of the aisle to solve the country’s problems. His present approach poisons the well.

What makes the president’s hyper-partisan attitude all the more unfortunate is that Obama actually has a real potential partner in the form of Congressman Paul Ryan. I emphasize that Ryan’s budget is far from perfect.

At the same time, Ryan is intelligent, genuine, sincere and a patriot who is truly concerned about the fiscal issues we face. When he attended Obama’s speech a few weeks ago expecting an olive branch, however, all he got was a tongue-lashing.

Hopefully, Republicans and Democrats can forge a compromise that can simultaneously lower the deficit and maintain the economic recovery. But right now, this seems like a dubious prospect.