On Tuesday afternoon, at an Associated Press luncheon in Washington, President Obama criticised the Republican budget, passed on a party line vote 228-191 in the House of Representatives last week. Doing so, the President outlined the basic message of his re-election campaign, contrasting his "fair share" economic plan for America's future with the radical Social Darwinist politics of the GOP.
Every Presidential campaign yearns to find a short and catchy phrase that captures the appeal of its candidate. Obama's "Hope and Change" from 2008 is the most recent example, but "I Like Ike" was credited by some Robert Taft supporters in 1952 for delivering the Republican nomination to his rival Dwight Eisenhower, and well before that, "Tippecanoe and Tyler Too", was turned into a song that was “in the political canvas of 1840 what the 'Marseillaise' was to the French Revolution. It sang [William Henry] Harrison into the Presidency.”
That brings us to Obama and a "Fair Share". Here is the opening statement from his weekly address from the White House on Saturday:
Over the last few months, I’ve been talking about a choice we face as a country. We can either settle for an economy where a few people do really well and everyone else struggles to get by, or we can build an economy where hard work pays off again – where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same rules. That’s up to us.This is the blurb from the White House website that introduced Obama's remarks on his proposed "Buffett Rule":Today, I want to talk to you about the idea that everyone in this country should do their fair share.
In this week’s address, President Obama calls on Congress to pass the Buffett Rule, a principle of fairness that ensures that millionaires and billionaires do not pay less in taxes as a share of their income than middle class families pay. The President believes our system must ask the wealthiest to pay their fair share, while protecting 98 percent of Americans from seeing their taxes go up at all. That is why the President proposed the Buffett Rule, which will help make our system reflect our values so that all Americans get a fair shot, play by the same rules, and pay their fair share.
After the President concluded his speech in Washington on Tuesday, White House Communications Director Dan Pfeiffer released "Three Charts Illustrating Two Different Visions For Our Nation":
The President believes this is a make or break moment for the middle class and those working to reach it. That’s why he has put forward a blueprint for an economy built to last - one where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same rules.
Pfeiffer concluded, “At this critical moment for our economy and the middle class, the President will continue to stand by a policy of fairness that reflects our core values as a nation.”
"Fair Share' rhymes; always a good start for a campaign slogan, and it echoes the punchier "Fair Deal", used by President Truman in 1948. The slogann needs some work to catch the imagination of voters, but that's what well-paid advisers are for. And, if the health proposals of Obamacare are overturned by the Supreme Court, there will be a few of those advisers striving to capture the essence of "Fair Share and Obamacare" in a mantra that propels Obama to a second term.
It was this "fair share" contrast that Obama highlighted Tuesday as he lambasted the Republican budget, inspired by Representative Paul Ryan. Last year Obama took on Ryan's plans to reform Medicare in a "Path to Prosperity". This time Obama also seized the opportunity to berate Ryan, and all the Republicans who passed their budget, for their smoke and mirrors proposals for tax reform.
The Ryan budget would eliminate the six current income tax brackets, and replace them with two lower bands of 10% and 25%. To maintain the revenue needed to finance government programmes and services, the budget would reform the tax code by “closing loopholes, and putting hardworking taxpayers ahead of special interests". These tax deductions, or preferences, cost $1 trillion a year, and in Rep. Ryan's words “were lobbied for and are mainly used by a relatively small group of mostly higher-income individuals". Unfortunately, he does not suggest which of these subsidies should be ended, preferring to leave this to the House Ways and Means Committee.
Here are the big ticket tax breaks enjoyed by Americans which contribute to that $1 trillion a year in tax preferences. Ryan argues, “[They[ were lobbied for and are mainly used by a relatively small group of mostly higher-income individuals"; however, tax-free employer provided health insurance costs $2 trillion in lost income tax over a 10-year period. Tax subsidies that encourage retirement planning take up $1.8 trillion, and the deduction for mortgage interest takes $1.6 trillion from the budget.
Ryan would argue that these deductions currently enjoyed by many middle-class Americans would not be needed with a lower income tax rate of 10%. But that is not the picture President Obama painted. He concentrated on a Republican future where the wealthy enjoy massive tax cuts, funded by an end to the help that the middle class receives to build a secure lifestyle.
And the tax cuts for the wealthy are massive. As The Hill #http://tinyurl.com/cjpy3we, “A Tax Policy Center analysis of the Ryan budget in the year 2015 found that those making $1 million or more would enjoy an average tax cut of $265,000 and their after-tax income would increase by 12.5 percent. By comparison, half of those making between $20,000 and $30,000 would get no tax cut at all.”
Liberals might not like it, but there is a case that tax cuts on that scale for the wealthy are justified. They already pay their "fair share" towards he cost of government through the application of progressive tax rates, and these tax cuts merely allow them to retain more of the property that they have earned.
Meanwhile Republicans like Ryan and Mitt Romney, who has expressed his support for this budget, may hide behind the argument that tax cuts are designed to encourage growth in the economy. Fundamentally, however, their case for reducing taxes relies upon their ideological interpretation of the fairness of redistribution of wealth.
In plainer words, why should the wealthy, with their high tax rates, pay to subsidise the home ownership aspirations of those who could not afford it without the mortgage interest deduction? Or, for that matter, why should someone who has succeeded pay for the food stamps of millions who have failed?
President Obama would disagree, as he did on Tuesday, as he did in the State of the Union Address earlier this year, and as he did in the first of his populist firebrand speeches in Osawatomie, Kansas, in November 2011. For the next seven months he will continue to bludgeon the Republican Party for their law-of-the-jungle economic theory, where the successful and the fittest survive and the less fortunate fail.
As Obama declared in Tuesday's speech:
Can we succeed as a country where a shrinking number of people do exceedingly well, while a growing number struggle to get by? Or are we better off when everyone gets a fair shot, and everyone does their fair share, and everyone plays by the same rules?
This is not just another run-of-the-mill political debate. I've said it's the defining issue of our time, and I believe it. It's why I ran in 2008. It's what my presidency has been about. It's why I'm running again. I believe this is a make-or-break moment for the middle class, and I can't remember a time when the choice between competing visions of our future has been so unambiguously clear.