The fiscal agenda Obama should seize

By Fred Hiatt
Tuesday, December 7, 2010; 8:00 PM

At this decisive moment of his presidency, Barack Obama has an opportunity to be not Bill Clinton, not Harry Truman, but - well, Barack Obama.

Not small-ball, like Clinton, but big-picture. Not a partisan warrior, like Truman, but a national leader. Not on the defensive, rocked by his 2010 defeat and calculating for 2012 advantage, but setting a pro-growth, job-creating, optimistic agenda for decades to come.

It would be good for the country. It might even be good politics.

Such an agenda would start with - but only start with - the estimable product of the Bowles-Simpson deficit reduction commission. That was Obama's commission, after all - he created it when Congress balked - and its report attracted majority support, from Democrats and Republicans alike.

The country is heading for fiscal disaster. The commission plan would put the nation back on a responsible path, without which nothing else is possible: not national defense, not economic growth, not government help for the most vulnerable.

I don't think it's perfect, but no plan capable of winning majority support is going to make everybody happy. On the contrary: Every good plan will make everyone unhappy in some way.

The Bowles-Simpson plan would begin to put entitlement programs such as Social Security on an affordable track. It would simplify the tax code and lower rates by getting rid of the deductions and credits that have glommed onto the code year after year like barnacles. This won't be easy. Most deductions were adopted for rational policy reasons (yes, even farm subsidies), and each is fiercely guarded by its own interest group, most of whom (homeowners, charities) are more sympathetic than rich Mississippi cotton growers. Every entitlement has its advocates, just as fierce.

That's why Obama can't win by being partisan, attacking subsidies that Republicans like while defending those Democrats favor, or even by being bipartisan, trading one against the other in a political game where good policy is bound to lose. He has to be nonpartisan: taking his case to the country, explaining how if everyone gives up something, there will be a bigger prize for all down the road.

To do that, the president can't sell his program as just debt reduction. God bless the sirens of fiscal doom such as Judd Gregg and David Walker, who have long spoken truth to spur the political system to action. Editorial pages like The Post's also love to tell readers why they need to eat their spinach and to lecture politicians who won't tell voters the same.

But let's not pretend that counseling a spinach diet is a winning political strategy. Millions of voters care about the debt but believe, wrongly, that it can be made to go away without tax hikes or spending reductions of consequence. Explaining that they have to endure pain now so that Chinese bondholders won't pull the plug in five years isn't likely to get anyone reelected.

So Obama would have to go beyond Bowles-Simpson. He could draw a 10-year plan that invests richly in science, education and infrastructure - in America's future, in other words. He could argue, correctly, that America isn't in decline and that - if it does the right things today - it doesn't have to cede its role as global leader.

No, it would not be easy to bring Washington along. Republicans are riding high and determined to deny Obama a second term. Democrats are in no mood to give more ground.

But if Obama rises above the pettiness, he could reframe the debate. He could help demonstrate that the U.S. government can, in fact, still do difficult things - that the system can work, that the country isn't ungovernable, that Washington isn't going to wait until crisis and depression force action, by which time rational action will be impossible.

The president has dropped hints that he's heading in this direction. In North Carolina on Monday, he talked about "our generation's Sputnik moment" - a moment of international competition in which the nation has to step up its game.

Those in Washington have a choice, he said. "We can focus on what's necessary for each party to win the news cycle or the next election. We can do what we've been doing. Or we can do what this moment demands, and focus on what's necessary for America to win the future."

If he carries through on that strategy, it would reassure investors and workers. It would spur growth and prosperity. It would, in time, create an economic pie large enough to allow the government to do the things Democrats think are important without taxing at a level Republicans think is dangerous.

It would also vindicate the people who voted for hope and change in 2008 and give them a reason to reenlist in 2012.

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