Obama's second Inaugural address should put to rest any doubts that he has no interest in real negotiations to curb government spending. In the 18-minute speech, the word "deficit" was used once and only in relation to bringing down health care costs. The rest of it was a blueprint for an expanded government and hinted at additional stimulus spending. The GOP needs to wake up from its dream that it can negotiate a package of real spending cuts with the White House.
The GOP's foundational mistake in budget talks over the last year and a half has been to assume that they were engaged in a serious negotiation with Obama. In their minds, each side offers some compromises and they strike a deal. If past history isn't enough to betray this myth, yesterday's speech telegraphed it to the nation. For Obama, any talks over the budget are a political opportunity to further marginalize the GOP. His interest isn't in curtailing spending but making sure the GOP seems on the other side of public opinion.
Obama's address was built on his collectivist view of the economy and nation. Any success of the private sector is pre-conditioned on robust government activity.
But we have always understood that when times change, so must we; that fidelity to our founding principles requires new responses to new challenges; that preserving our individual freedoms ultimately requires collective action. For the American people can no more meet the demands of today’s world by acting alone than American soldiers could have met the forces of fascism or communism with muskets and militias. No single person can train all the math and science teachers we’ll need to equip our children for the future, or build the roads and networks and research labs that will bring new jobs and businesses to our shores. Now, more than ever, we must do these things together, as one nation and one people.
In Obama's worldview, there is a direct relationship between government action and economic prosperity. There, of course, can be a relationship, but Obama seems to think it is the only one. Obviously infrastructure is an important component of economic growth, but Obama extends government's economic engine even to entitlement programs:
The commitments we make to each other through Medicare and Medicaid and Social Security, these things do not sap our initiative, they strengthen us. (Applause.) They do not make us a nation of takers; they free us to take the risks that make this country great. (Applause.)
In such a framework, any changes to entitlement programs weaken our entrepreneurial spirit. I have heard many arguments against entitlement reform, but I had never before heard that it would weaken individuals' capacity to take risks in the marketplace. A belief in this level of intertwining between government and the economy is unprecedented in American politics. It was decidedly not a modest speech from the head of state.
But, it is also a belief that doesn't countenance much in the way of spending cuts. Moreover, Obama made clear that he plans to increase government spending, believing that it will help economic growth.
But we reject the belief that America must choose between caring for the generation that built this country and investing in the generation that will build its future.
Hopefully, Obama's speech yesterday will be the wake-up call the GOP needs as it navigates the coming budget battle. It cannot "cut a deal" with Obama to solve our spending addiction and stave off our looming insolvency. Obama clearly is emboldened by his election victory and interprets it as a mandate for his policies. It is possible he gives up some level of future increased spending he is planning, but he isn't going to agree to any real cuts from current levels. And, as his speech made clear, he still believes the wealthy need to pay more in taxes.
The GOP must go directly to the American people. It must reengage the grass roots that largely went dormant during the presidential campaign. The public is generally in agreement with the GOP on restraining government spending and bringing down the deficit. In fact, just about the only people who oppose cutting spending are the very ones with whom the GOP is negotiating. The GOP should quit negotiating with Obama and talk with the public instead. That conservation could achieve a real solution and mandate.
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