“[Republicans] run up these wild debts and then when we take over, we’ve got to clean it up.”
-- President Obama speaking to donors in Denver touting the fact that federal spending has increased less than 2 percent since 2009.
The economy is the greatest area of concern for President Obama’s re-election bid because it is the greatest area of concern for the electorate. If the economy flat lines or slips in the coming weeks, it will be hard for Obama, despite his many advantages, to win re-election.
But Obama’s most persistently poor marks have been on his handling of the federal budget deficit. A long-standing consensus in the electorate is that Obama spends too much. For a president struggling to defeat the notion that he is too liberal, that’s a dangerous notion.
One of the watershed moments of Obama’s presidency, the first-ever downgrade of U.S. creditworthiness, casts a long shadow over the campaign.
The president’s re-election pitch is based on a “stimulus now, austerity later” plan in which he argues that another round of increased federal spending, partly offset by higher taxes on top earners, is the key to reviving the nation’s saggy economy while simultaneously narrowing the gap between the haves and have-nots.
Obama argues that once the economy is chugging along, deficits can be peeled back as government receipts increase as American incomes rise and higher tax rates kick in. Obama echoes the famous prayer by Augustine of Hippo: “Grant me chastity and continence, but not yet.”
Republican Mitt Romney, meanwhile, is arguing for simultaneous cuts in taxes and spending. The tax cuts, he says, will spur growth, but also argues that a move toward fiscal restraint will encourage the economy by boosting confidence in long-term economic stability.
With Americans so worried about the deficit, this is a perilous perch for the president. Romney, a fiscal hawk as governor of Massachusetts who has grown more hawkish in his two runs for the presidency, is looking to maximize the pressure on Obama.
Democrats say Romney’s plan is itself a budget buster, predicting that decreased government spending would hurt the economy and compound the budget shortfalls. Republicans say that Obama’s plan would be a fiscal calamity, simultaneously slowing growth and increasing outlays.
But this, like much of economic forecasting, depends on one’s philosophy. Romney believes tax cuts and spending restraint will spur the economy. Obama believes more spending and tax increases will spur the economy.
These wars fought over cherry-picked fiscal data points don’t likely do much to change voter views. Both sides spout their preferred economic jabberwocky and voters tune out, assuming that politicians spouting statistics are lying. Not tuned out, though, is the belief that spending is way out of control in Washington.
To combat this dangerous sense, Obama is going on the aggressive, blaming the policies of the Bush administration for four straight years of deficits of over $1 trillion since 2009. George W. Bush and Republicans, Obama says, destroyed the economy and spent unsustainably, problems that he has only begun to be able to deal with. The unsustainable spending of the current era, Obama says, is necessary to reverse the problems of the former era.
Obama further claims that if House Republicans were not blocking his plans for more stimulus and higher taxes now, deficits would already be smaller.
On Wednesday, White House Press Secretary Jay Carney called reporters who pressed on the subject of deficit “lazy” and biased while Obama blamed Bush in campaign speeches.
In truth, Bush and Democrats in Congress jacked up deficit spending dramatically starting in 2008 in a bid to head off the worsening recession. The Panic of 2008, however, blew away these efforts. Obama’s February 2009 stimulus, the largest single spending bill ever, was really the third stimulus effort in a yearlong bid to slap some life into the economy.
Since 2010 when the economy shifted into neutral from reverse and Republicans took the House, deficits, but not spending, have shrunk. In the first two years of his presidency with total Democratic control of Washington, Obama kept up the 2008 spending pace. And Obama’s signature accomplishment, his 2010 health law, is the largest expansion of federal obligations in generations.
Obama doesn’t need to win the argument, he just needs it to become very complicated. He will never be known as a small-government kind of guy, but Obama can hope at least to reinforce the belief that the problem was beyond his control. This is more of Obama’s Gingrichian approach: campaign as voter re-education.
But Obama’s line of being a frustrated deficit hawk comes with risks.
Today, Obama will campaign at a wind-turbine plant in Iowa calling for an extension and expansion of stimulus programs to boost the industry. This is good politics in Iowa, where federal subsidies for wind power have been a boon to the local economy.
For a larger national audience, though, any reminders of the 2009 stimulus are probably bad politics. Obama’s attacks on Republican fiscal policy are intended to give him operational space in which to tout his own spending programs. This may work with some in the press corps, but Obama may want to hold off on the windmill photo-ops for a while longer yet.
The Day in Quotes
"S&P's downgrade on us was right. Matter of fact, we're going to get another downgrade. I can tell you right now… If you look what's getting ready to happen to us, in another five years, we're going to have $22 trillion worth of debt. We're going to have 120% of our total GDP in debt. If you look at historic interest rates, we're going to be paying $800 billion a year in interest. Where are we going to get that money?"
-- Sen. Tom Coburn, R-Okla., in an interview with CBS News.
“Do not buy into the b.s. that you hear about spending and fiscal constraint with regard to this administration. I think doing so is a sign of sloth and laziness.”
-- White House Press Secretary Jay Carney chiding reporters aboard Air Force One.
“I can tell you that over a period of four years, by virtue of the policies that we’d put in place, we’d get the unemployment rate down to 6 percent, and perhaps a little lower.”
-- Presumptive Republican presidential nominee Mitt Romney talking to Time Magazine.
“Those of us who spent time in the real world know that the problem isn't American people aren't productive enough.”
-- President Obama talking to donors in Denver about what he said was Mitt Romney’s unfair “economic textbook” understanding of the economy.
“President Obama has decided to attack success. It's no wonder so many of his own supporters are calling on him to stop this war on job creators.”
-- Mitt Romney speaking at the Latino Coalition's 2012 Small Business Summit in Washington, D.C.
"[Education] is the civil rights issue of our time. President Obama has been unable to stand up to union bosses and unwilling to stand up for kids."
-- Mitt Romney speaking at the Latino Coalition's 2012 Small Business Summit in Washington, D.C. Romney will campaign today at a charter school in Philadelphia.
The (Really) Big Numbers
-- Size of the federal budget deficit last year if obligations for entitlement benefits are included, according to a USA Today study.
-- Size of the federal budget deficit last year according to government accounting practices.
And Now, A Word From Charles
“It shows how much of game all this is and how unserious it is. If the Democrats can't agree among themselves what is the threshold for hiking taxes, there is not going to be any agreement on anything with anybody. That is why you have elections. The entire election is over the argument between the left and the right over higher taxes or less spending. The country will decide one way or the other in November.”
-- Charles Krauthammer on “Special Report with Bret Baier.”
Chris Stirewalt is digital politics editor for Fox News, and his POWER PLAY column appears Monday-Friday on FoxNews.com.
Chris Stirewalt joined Fox News Channel (FNC) in July of 2010 and serves as digital politics editor based in Washington, D.C. Additionally, he authors the daily "Fox News First" political news note and hosts "Power Play," a feature video series, on FoxNews.com. Stirewalt makes frequent appearances on the network, including "The Kelly File," "Special Report with Bret Baier," and "Fox News Sunday with Chris Wallace." He also provides expert political analysis for Fox News coverage of state, congressional and presidential elections.