The President Will Be Running for Re-election as Nancy Pelosi
Last week, in the wake of President Obama’s jobs speech, I wrote that the president seemed poised to campaign for re-election on an essentially centrist policy agenda: A short-term payroll tax stimulus, a plan for tax reform that would close loopholes while lowering corporate rates, and a long-term plan for deficit reduction modeled on the grand bargain that the White House and John Boehner were supposedly close to striking during the debt ceiling negotiations. The president’s goal in 2012, I suggested, would be to try to paint himself as the moderate bipartisan grownup, and dismiss the Republicans as extreme, intransigent, and hyper-ideological.
Based on the actual details of the deficit plan that the administration just released, though, I would like to retract that analysis. Between the size, scope and design of the tax increases and the skimpiness of the entitlement reforms (nothing on Social Security, minimal tinkering on Medicare), it seems that the president will be running for re-election as Nancy Pelosi instead. The White House is essentially proposing to raise taxes on the wealthy (and only the wealthy) in not one but three different ways — higher rates, fewer deductions, and the so-called Warren Buffett tax on millionaires who draw most their income from capital gains — in order to keep our entitlement system almost exactly as it is. Or, more aptly, in order keep our entitlement system almost exactly as it is for a few extra years, since nothing in the proposal is commensurate with the size of our long-term fiscal gap.