After the deficit deal passed a month ago, I made this prediction about the jobs pivot:
If I had to put money down, I’d predict that if any jobs bill moves forward, it will consist of more than 50% tax cuts, and probably more likely, a four or five to one ratio of tax cuts to stimulative spending measures.
Of the $447 billion in the jobs segment of Obama’s proposal, we have this breakdown:
O.K., about the Obama plan: It calls for about $200 billion in new spending — much of it on things we need in any case, like school repair, transportation networks, and avoiding teacher layoffs — and $240 billion in tax cuts.
Keep in mind that Obama is rolling out a two-part plan here. First, he previewed the American Jobs Act as a largely job creation piece of legislation. But within that preview, the President also made clear that he will pair this with a deficit reducing agenda that exceeds $1.5 trillion. From the speech:
The agreement we passed in July will cut government spending by about $1 trillion over the next 10 years. It also charges this Congress to come up with an additional $1.5 trillion in savings by Christmas. Tonight, I am asking you to increase that amount so that it covers the full cost of the American Jobs Act. And a week from Monday, I’ll be releasing a more ambitious deficit plan — a plan that will not only cover the cost of this jobs bill, but stabilize our debt in the long run.
Given that the GOP mantra, albeit wrong, has been that tax cuts reduce the deficit, it’s not hard to imagine there being further tax cuts emerging from the Super Committee. So at minimum, I was right about the lower bounds of the jobs pivot being at least 50% tax cuts. But this is just the proposal and what is passed (if anything passes) will likely look very different from what we heard last night. Obviously there’s plenty of time and space for the ostensible jobs bill to end up with an even greater majority going towards tax cuts.
The larger issue is that while I strongly support action around job creation (particularly in infrastructure spending and aid to states), the idea of paying for it by cuts to Medicare and Medicaid, let alone other federal social spending programs, is intensely unacceptable to me. While the President may have delivered the most forceful and passionate speech of his tenure in office, replete with genuine historical praise of past accomplishments of liberal governance, using it as a jumping off point for more deficit reduction and cuts to the social safety net is not only bizarre but dangerous. Cutting Medicare to save it is as intellectually honest and persuasive as bombing for peace or fucking for virginity. It just doesn’t work like that. And I can’t say playing the role of Cassandra makes me feel good, either.