TOPICS > Politics

Obama Calls GOP Budget Plan “Prescription for Decline”

April 3, 2012 at 12:00 AM EDT
In a blistering attack on the House-Passed Republican budget Tuesday, President Obama called the plan proposed by Rep. Paul Ryan a "Trojan Horse" and "a prescription for decline." Judy Woodruff, Jared Bernstein of the Center on Budget and Policy Priorities and the CATO Institute's Daniel Mitchell discuss the GOP budget plan.

JUDY WOODRUFF: Budget politics and the 2012 campaign merged today, as President Obama lit into Republicans and their priorities. His main target was the House Republican budget plan. It would cut the deficit by $3.3 trillion in the next decade, over and above the $4 trillion in savings in the Obama budget.

The president addressed the Associated Press annual meeting in Washington.

PRESIDENT BARACK OBAMA: For much of the last century, we have been having the same argument with folks who keep peddling some version of trickle-down economics. They keep telling us that if we convert more of our investments in education and research and health care into tax cuts, especially for the wealthy, our economy will grow stronger.

They keep telling us that if we just strip away more regulations, and let businesses pollute more and treat workers and consumers with impunity, that somehow we’d all be better off. We’re told that when the wealthy become even wealthier and corporations are allowed to maximize their profits by whatever means necessary, it’s good for America and that their success will automatically translate into more jobs and prosperity for everybody else. That’s the theory.

Now, the problem for advocates of this theory is that we’ve tried their approach on a massive scale. The results of their experiment are there for all to see.

Instead of moderating their views even slightly, the Republicans running Congress right now have doubled down and proposed a budget so far to the right it makes the Contract with America look like the New Deal. And yet this isn’t a budget supported by some small rump group in the Republican Party. This is now the party’s governing platform. This is what they’re running on.

One of my potential opponents, Gov. Romney, has said that he hoped a similar version of this plan from last year would be introduced as a bill on day one of his presidency.

This congressional Republican budget is something different altogether. It is a Trojan horse disguised as deficit reduction plans. It is really an attempt to impose a radical vision on our country. It is thinly veiled social Darwinism. It is antithetical to our entire history as a land of opportunity and upward mobility for everybody who’s willing to work for it, a place where prosperity doesn’t trickle down from the top, but grows outward from the heart of middle class.

And by gutting the very things we need to grow an economy that’s built to last, education and training, research and development, our infrastructure, it is a prescription for decline.

JUDY WOODRUFF: The chief author of the House Republican budget rejected the president’s criticism in advance. Congressman Paul Ryan appeared in his home state of Wisconsin with GOP presidential front-runner Mitt Romney.

Ryan accused the president of distorting his plan.

REP. PAUL RYAN, R-Wisc.: We have a president who’s really good at giving big speeches. The problem with our president is he’s not good at leadership.

He’s not good at solving problems. What he’ll do, he will try to characterize those people who do not agree with where he’s taking America as if we’re some kind of villain in a cartoon like the cartoons we watched on Saturday morning growing up.

What he’ll try to do is divide America in order to distract America from the facts that his plan is bringing this country on the wrong path. We don’t want a president to divide us. We don’t want a president who is there to distract us. We want a president that is going to get the American dream back on track.

JUDY WOODRUFF: For more on this national debate over spending and taxes, we’re joined by Jared Bernstein. He’s with the Center on Budget and Policy Priorities, and he was the chief economist and economic adviser to Vice President Biden. And Dan Mitchell, he’s a senior fellow for the Cato Institute. He previously served as a Republican economist for the Senate Finance Committee.

And, gentlemen, we thank you both for being here.

Dan Mitchell, I’m going to start with you.

Strong words from the president. He’s using the term social Darwinism. And I’m just going to give one of many quotes. “This is a budget antithetical,” he said, “to our entire history as a land of opportunity and upward mobility for everyone who is willing to work for it.”

DANIEL MITCHELL, Cato Institute: Well, setting aside some of the inaccuracies, I almost wish Republicans were doing what Obama was saying. I wish they had this so-called radical vision of bringing us back to what the founding fathers envisioned of a limited central government.

But here’s the two things you need to understand. Paul Ryan’s budget allows government spending to increase by an average of 3.1 percent a year over the next 10 years. So all these supposed budget cuts, they are only budget cuts using dishonest Washington math.

Second, what Paul Ryan is proposing to do is bring the federal government, after 10 years, down to 20.25 percent of GDP, which is more than two percentage points of GDP bigger than when Bill Clinton left office. So, if Paul Ryan is a social Darwinist, what does that make Bill Clinton? Hannibal Lecter?


JUDY WOODRUFF: That doesn’t sound at all like what the president was saying today.

JARED BERNSTEIN, former chief economist to Vice President Joe Biden: No, no, I have a very different take on the budget.

And I think it is — I think what the president was doing today is very important, which was he’s using this budget to really show the contrasting visions between Republicans and between, say, where he’s coming from.

And I guess if I were going to bring it down to the kinds numbers that Dan was throwing around, I would say two. First of all, of all the spending cuts and — and this budget really guts government spending — of all the spending cuts, 62 percent of them, over $3 trillion, comes from programs that help low-income people, OK, Medicaid, food stamps, Pell Grants for college assistance, Head Start, things that are critical to the opportunities you heard the president talking about.

Then, on the other side of it, he takes some of those spending cuts and he delivers about 40 percent of his tax cuts to millionaires and billionaires. So, this is as if you looked at the American economy and you concluded, Judy, that the problem is that the poor have too much and the rich have too little, and you’re going to fix it, darn it.

JUDY WOODRUFF: And, Dan Mitchell, that is a big element of what the president was saying today, that it just worsens the inequality that is already there.

DANIEL MITCHELL: There’s no question — and I think Jared and I would agree — the president has decided that this class warfare approach is his ticket to reelection.

But, again, Jared and I will disagree on whether there are budget cuts. If government spending is growing 3.1 percent a year, and if all these programs that Jared is talking about are actually seeing budget increases, but just not as big of increases as were previously planned, we have to have honest numbers and an honest discussion.

And if you re-categorize increases as cuts, that’s just factually inaccurate.

JUDY WOODRUFF: And, in fact, Jared Bernstein, both Speaker Boehner and Paul Ryan today said that there was dishonesty in what the president said.

JARED BERNSTEIN: Well, look, Paul Ryan himself will tell you: I am cutting trillions of dollars from the federal budget.

Now, I’m not sure exactly what Dan’s point is here. If Ryan says he’s cutting it — he says, I’m cutting far beyond what the president is cutting.

Now it is true that as the economy gets bigger and the population gets bigger, things like Medicare, Social Security, the safety net, they’re going to have to get larger to accommodate the needs of the people. But nobody denies that these are very, very deep cuts.

JUDY WOODRUFF: What about — but what about some of these cuts? I mean, you’re saying, Dan Mitchell, that it doesn’t add up to as much — or that the cuts aren’t as severe as what the president is suggesting.

But he’s talking about — he said there are cuts in education and training, in research and development, in infrastructure. And he characterized it as a prescription for decline for this country.

DANIEL MITCHELL: Well, again, if we’re going under the Ryan budget, the federal government would still be significantly bigger as a share of the economy than it was when Bill Clinton left office.

How exactly is that draconian? And I say that as someone from the Cato Institute. I don’t want the federal government involved in education at all. I actually would make genuine cuts, not phony Washington cuts. I would eliminate the federal government’s involvement in things like transportation and so on and so forth.

I think welfare reform is a good model. Transfer it to the states. And Ryan is talking about doing that with programs like Medicaid, because we’ll get much better results both for poor people and for taxpayers if we get the incompetent federal government out of that business.

JARED BERNSTEIN: So, here’s a way of perhaps squaring this kind of confusing circle.

The president said — and I don’t think Dan would disagree with this — that because of the cuts, relative to what we expect the government to do anyway, 200,000 fewer kids will get Head Start in 2014. About 20 million people will lose Medicaid benefits; 400,000 kids will lose Pell Grants.

Those are real numbers of people getting a particular benefit that is so important in an era of inequality, where the thing we need to do least in this country is disinvest in our children, in our education, in our infrastructure. And if that’s not class warfare, taking from the poor and essentially giving to the rich, Robin Hood in reverse, I don’t know what it is, I don’t know what class warfare is.

JUDY WOODRUFF: How do you respond to that?

DANIEL MITCHELL: We’re talking about federalism, shifting programs from an incompetent federal government back to state and local governments.

And we have seen with welfare reform that that model works. It was good for both taxpayers and good for poor people. And we see that Medicaid is a disaster. The federal government is running it poorly. Now, we can pull out numbers. And we can say, oh, well if the states do it, somehow, X-million fewer people will get access to the programs.

But we saw the real-world results of welfare reform, it works very well.

JARED BERNSTEIN: I actually disagree with that, because the one program that worked quite — really quite terribly as a safety net program in the recession was welfare.

Now, it actually worked well as the economy was generating a lot of jobs. But once you start block-granting these programs to the state, which is what Rep. Ryan, now endorsed by Gov. Romney, wants to do to Medicaid, those programs begin to lose ground.

JUDY WOODRUFF: Just quickly, Jared Bernstein, the president clearly trying to tie Paul Ryan with Mitt Romney. Why not run at Mitt Romney and what Mitt Romney has said, rather than. . .

JARED BERNSTEIN: I think it’s a fair question.

I think it’s because Mitt Romney endorsed this vision. He called this, this budget, he said it was a marvelous budget. He said, this is a budget I would want to adapt, something to that effect. And I think that that really aligns him with this extremely stark and austere vision of the role of government in the lives of people who actually need help.

JUDY WOODRUFF: And speaking of that, Dan Mitchell, we heard the president in effect separating Paul Ryan from — I mean, he talked about the record of President Richard Nixon, President George W. Bush, suggesting that what Paul Ryan is suggesting is much farther right than even these other Republican presidents, what they’ve done.

DANIEL MITCHELL: Well, that’s because both Nixon and Bush were both big-government interventionists.

My biggest problem with Obama is that he’s continuing the failed policies of Bush. Bush doubled the size of the federal government in just eight years. He did bailouts. He did intervention. He did regulation. Obama promised hope and change, but he picked up the baton and he is running in the same direction.

And God knows Nixon was one of the worst presidents we’ve ever had, setting aside Watergate, just looking at his record of. . .


DANIEL MITCHELL: . . . government and intervention and regulation.

So, yes, I am glad that Republicans are trying to claw back their respectability after going way off the reservation during the Bush years.

JARED BERNSTEIN: My problem with that is that that’s a very ideological take on presidents throughout history.

In the real world, Judy, in the real world, people need Medicare, they need retirement security, they need a safety net. This Ryan budget endorsed by Romney loses that.

DANIEL MITCHELL: But, in this real world, we’re bringing government down to where it’s still two percentage points of GDP, bigger than it was when Bill Clinton left office, one of your guys. I’m bipartisan.


JARED BERNSTEIN: I don’t think so.

JUDY WOODRUFF: Two — two different visions. Gentlemen, we thank you both, Jared Bernstein, Dan Mitchell.

And a footnote: Mitt Romney will address the same group of editors and reporters here in Washington tomorrow.