Obama fails ‘Nixon to China’ budget moment
President Barack Obama should get in a New York state of mind. Over the weekend, Andrew Cuomo, the Democratic governor of the Empire State, struck a deal to balance the budget without major tax increases – and five days ahead of deadline. It’s the latest example of how left-of-center politicians, often considered profligate, are better sometimes placed than conservatives to cut spending. Obama is missing a “Nixon to China” moment on dealing with America’s dangerous budget deficit. Consider the following:
1) During the rare times when lawmakers attempt a measure of fiscal responsibility, liberals, generally speaking, prefer to close deficits by raising taxes while conservatives favor reducing spending. But when the spenders do the trimming, it can provide greater confidence to interest groups and voters that the cuts are rational and reasonable. And budget-minded liberal leaders can keep their free-spending legislative allies in check.
2) The phenomenon is global. Starting in 1984, New Zealand’s Labour party slashed the government’s share of GDP by 40 percent over the course of a decade. From the mid-1990s through the mid-2000s, Canada’s Liberals cut federal spending by a third, helping reduce the nation’s debt load from 68 percent of output to 39 percent. Around the same time, Bill Clinton, a Democrat, reached an agreement with congressional Republicans to balance the U.S budget for the first time since 1969.
3) Cuomo could have followed his party’s playbook. In Illinois, Governor Pat Quinn, a Democrat, rammed through dramatic increases in individual and corporate tax rates. Instead, Cuomo opted to eliminate a $10 billion shortfall with a 2 percent spending cut. He may have been worried about his chances for 2016 presidential nomination, but the state’s competitiveness also will have been a consideration.
4) Obama’s decisive moment was last December when his debt commission released its austerity recommendations. But the president has neither embraced that agenda nor given support to a bipartisan group of senators pushing the panel’s plan. Without Obama’s explicit backing, Capitol Hill Democrats will almost certainly kill the effort because it slashes entitlement spending.
When House Republicans come out with their 2012 budget in the coming days, the president may have his final chance to push a comprehensive fiscal reform plan. If Obama’s not careful, it could pass him by in a New York minute.