Maybe it was major after all. Although President Obama did not announce any new policy today in his speech at Georgetown, he did go back and explain, in great detail at times, the origins of the financial crisis and how the administration has been trying to respond. And Obama implied that he's going to tackle two major issues that have felled his predecessors at the White House: entitlement reform and re-jiggering the tax code. Although he didn't offer many details, that's big news.
But first, when we say “go back,” Obama did literally explain, in several paragraphs, what caused the current recession, which he says was prompted by a “perfect storm of irresponsibility and poor decision-making stretched from Wall Street to Washington to Main Street.” “Our most urgent task has been to clear away the wreckage, repair the immediate damage to the economy and do everything we can to prevent a larger collapse,” Obama said. “Since all the problems we face are all working off each other to feed a vicious economic downtown, we’ve had no choice but to attack all fronts of our economic crisis at once.”
Obama spent a significant portion of the speech defending his actions against critics of his proposals, including Republicans and some Democrats who have accused the administration of throwing money at the problems and leaving the bills for future generations. “The last thing a government should do in the middle of a recession is cut back on spending,” Obama said. He said he was concerned by long-term deficits but insisted the government investments in energy, education and other industries would actually lower the deficit in the long run.
On banks, Obama pushed back on criticism that the federal government should step in and take over major financial institutions. The reason they haven’t, the president said, has nothing to do with ideology or political judgment, but that in the end it would cost taxpayers more and would not create confidence in the system. “Governments should practice the same principal as doctors,” Obama said. “First do no harm.”
But as we noted, Obama mentioned several political landmines near the end of the speech. He brought up entitlement reform, saying that he viewed his push to control health care costs as crucial to reforming Medicaid and Medicare. He pledged to work on Social Security reform and implied he's like to tackle a re-write of a the tax code. Here's the speech:
Along with defense and interest on the national debt, the biggest costs in our budget are entitlement programs like Medicare, Medicaid, and Social Security that get more and more expensive every year. So if we want to get serious about fiscal discipline – and I do – then we are going to not only have to trim waste out of our discretionary budget, a process we have already begun – but we will also have to get serious about entitlement reform.
Nothing will be more important to this goal than passing health care reform that brings down costs across the system, including in Medicare and Medicaid. Make no mistake: health care reform is entitlement reform. That’s not just my opinion – that was the conclusion of a wide range of participants at the Fiscal Responsibility Summit we held at the White House in February, and that’s one of the reasons why I firmly believe we need to get health care reform done this year.
Once we tackle rising health care costs, we must also work to put Social Security on firmer footing. It is time for both parties to come together and find a way to keep the promise of a sound retirement for future generations. And we should restore a sense of fairness and balance to our tax code by shutting down corporate loopholes and ensuring that everyone pays what they owe.