Will Obama's Budget Cuts Help Us Get Real Health Care Reform?

Perhaps reacting to the sore loser tea party hysteria, Obama has called on ordered his cabinet to cut back on their departmental budgets, He's asking for $100 million in savings in the next 3 months "to help overcome a 'confidence gap' among the American people about the use of their tax dollars."

"In the next few weeks, we expect to cut at least 100 current programs in the federal budget so that we can free up those dollars in order to put them to use for critical areas like health care, education, energy, our foreign policy apparatus... [O]ne of the things that everybody here is mindful of is that as we move forward, dealing with this extraordinary economic crisis, we also have a deficit, a confidence gap, when it comes to the American people. And we've got to earn their trust. They've got to feel confident that their dollars are being spent wisely. We have an obligation... to make sure that this government is as efficient as possible. There are a host of efficiencies that can be gained without increasing our personnel or our budget but rather decreasing the amount of money that's spent on unnecessary things in order to fund some of the critical initiatives."

I like the idea, for example, of rooting out the big corporate farms that cheat on their huge subsidies and Obama is finally making a move in that direction. Even more exciting are the suggestions former Labor Secretary Robert Reich made today about where trimming would be helpful-- and why. Reich says the spending cuts, largely symbolic that Obama called for today, will help calm nervous Blue Dogs as well as members of the public who are being barraged with Republican propaganda about how Obama is stealing from their children and grandchildren. He's right when he points out that Obama "would be mistaken to take more than symbolic steps at this point. The economy is still in a depression because consumers and businesses won't or can't spend, and exports are dead because the rest of the world is in even worse shape. Government spending on a large scale is necessary now, and will be next year as well. Over the longer term, Obama must be careful not to put entitlement programs on the chopping block as part of a "grand bargain" to elicit Republican support for health care and cap-and-trade. Social Security is not in dire straights; it can be made flush for the next 75 years by ever-so-slightly lifting the ceiling on the portion of income subject to Social Security payroll taxes (and if Democrats are reluctant to do that on incomes over $100,000, then they could do so on incomes over $250,000)." Reich's most important point is about health care reform, the death of which the GOP wants more than anything but is unable to figure out a strategy on.

Obama should fast-track health care and stop trying to court Republicans. Every House Republican and all but three Senate Republicans voted against the stimulus; all Republicans in both houses voted against the budget. During the recess they hosted "tea parties" claiming that Americans are over-taxed. Over the weekend, House minority leader John Boehner called the idea of carbon-induced climate change "almost comical." Republicans are already off and running toward the midterm elections of 2010, even starting to run ads against House Democrats in close districts. They seem hell bent on becoming a tiny, whacky minority-- the party that denies evolution, denies global warming, denies Americans need a major overhaul of health care, and denies the economy needs anything more than a major tax cut to get it moving again. The less Obama caters to them the better.

We better hope Obama is listening to voices like Reich (and Peter Orszag) and not just the rumbling from Wall Street he gets every time Emanuel or Geithner or, worse yet, Summers, gets his ear.