Barack Obama’s second term as the 44th President of the United States began on Sunday, and we’re now in the second term of arguably the most liberal president in 40 years. With comprehensive health reform, student loan reform, extensive deficit cutting, a more progressive tax code, and smart foreign policy, his legacy and accomplishments are permanent and the American people will face a difficult campaign to replace him with an equally able leader. Yet, Obama is not finished; the president and his advisers will debate immense issues that will shape the future of the United States including gun control, comprehensive immigration reform, true tax reform, and the reduction of the U.S. national debt.
The Obama administration is in a unique position to fundamentally reform the federal government using modern telecommunications to involve Americans in government and rebuild trust in our social contract. The president was not re-elected by the razor-thin margin assumed by the seemingly endless field of political pundits. Over 51 percent of Americans voted for Obama in 2008 and 2012, the first time since Dwight Eisenhower in the 1950s. Almost 66 million Americans supported the vision of a government that levels the playing field for all classes and stops advantaging the rich at the expense of the middle class and the poor.
Obama began his second term with a victory on the fiscal cliff. While going off the cliff would have provided the significant deficit reduction needed to substantively reduce the national debt, the U.S. avoided the inevitable recession brought about by the ill-defined spending cuts known as sequestration. This president has cut the projected deficit by $2.4 trillion since the beginning of fiscal year 2011. Congress and the president have enacted and signed $1.5 trillion in spending cuts and $630 billion in new revenue that will lead to $300 billion in interest savings over the next 10 years. The 2011 budget alone included almost $600 billion in spending cuts and the Budget Control Act enacted another $900 billion in cuts. Spending was cut through cost control, structural reform and waste reduction, but by specifying what would be cut and when, the impact on lower- and middle-income Americans has been limited.
After the fiscal cliff deal, Senate Minority Leader Mitch McConnell said, “The tax issue is behind us … Now it’s time to pivot and turn to the real issue, which is our spending addiction.”
That is not the reality of our budgetary situation. The initial fiscal cliff proposals included between $1.2 and $1.6 trillion in tax increases, yet the deal included only $600 billion. Any Republican that believes the tax issue is settled is fooling the country.
According to the Tax Policy Center, revenue collected by the federal government as a percentage of GDP has remained around 15 percent during the first Obama term. Historically, this is an abysmally low figure and does support government programs demanded by a strong majority of Americans. From the first data point in 1934 to 2008, government revenue dropped below 15 percent of GDP only twice, and averaged 19 percent of GDP. During the only years of government budget surplus, revenues exceeded 20 percent of GDP. The data shows that a balanced budget derives from a balanced plan that includes significant revenue increases (up to 19 percent or 20 percent of GDP) and spending cuts (down to 19 percent or 20 percent of GDP).
Politicians must learn from history, specifically the last president to balance the budget, Bill Clinton. At the 2012 DNC, Clinton said, “People ask me all the time how we delivered four surplus budgets. What new ideas did we bring? I always give a one-word answer: arithmetic.”
The discussion of how to balance the budget is simple; there is no calculus, trigonometry or linear algebra. Representatives and senators do not need to write doctoral dissertations in mathematics. Our politicians just need to go back to elementary school arithmetic and realize that a positive difference (budget surplus) needs a larger first number (revenue) than the second number (spending). Taxes must be high enough to pay for what we spend. The occasional deficit that builds debt is essential during times of economic downturn, and these recent $1 trillion deficits protected American jobs and economic security. The issue is that during good economic times, the Bush tax cuts reduced revenue and created deficits. Increased war spending and decreased revenue move the budget away from surplus, not towards it.
I am continuously amazed at the intransigence of the Republican Party. Decades ago, when a party failed as spectacularly as the Republicans, they admitted defeat and worked with the other party so their ideas were not completely ignored. In the Senate, the Republicans realized this and attempted to pare down the tax increases that they disliked. In the House, however, the Republicans abdicated responsibility; they threw a temper tantrum and refused to work when they could not get their way. Government does not work when a negotiator acts like a toddler.
The simple solution to this issue is to ignore the House Republicans. The public already blames them for the brinksmanship over the fiscal cliff. The public will blame them if they hold the country hostage over the debt ceiling. The public will blame them if they block new gun legislation, immigration reform or tax reform.
Obama’s negotiating position has not been better since before the 2010 elections. If House Speaker John Boehner refuses to hold votes on the issues facing our nation, that position improves. Moderate Republicans will work with Democrats to do the work of government. It has happened in the Senate, with the leadership, and it has happened in the House, without the leadership. If the House Republicans truly moderate their positions, they will not lose influence. If they do not moderate, then liberal legislation, supported by only Democrats and the most liberal Republicans, will become the law of the land.
That sounds like progress to me.
Zac Bears is a Collegian columnist. He can be reached at firstname.lastname@example.org.