A Story of Two Wars

To get a nutshell view of the American psyche as revealed through the politique américain, think of its being the product of two ongoing wars that are heating up as we speak: the culture war and the class war. I've spoken recently of the culture war, where the forces of the conservative social values -- dominated by male white Christians -- are in decline, while the forces of liberal conservative values -- not dominated by anyone, but rather nurtured by many -- are on the ascendent.

Republicans have their budget...

There's another war heating up, and that's the class war. Two recent and correlated events are making the distinction, and two favorite commentators of mine are putting the sides in stark relief. These events are the new Paul Ryan budget -- same as the old, almost -- and the just released Barack Obama budget. Two more different world views couldn't be more keenly expressed.

...and the Democrats have theirs.

This opens a window on what either man, Ryan and Obama, representing the conservative vs. liberal views, really is saying about the value of government and what government should or shouldn't do.

First, here's Matthew Yglesias, from his piece entitled, not surprisingly, The "Class War Has Begun":

[...] Obama embraces both reductions in Medicare payments and a controversial cost-of-living formula to reduce Social Security benefits while demanding higher revenues. Republicans once again refuse to consider even a small amount of additional tax revenue as their side of a bargain.

But this superficial conflict about taxes hides a much more fundamental dispute about class warfare. The White House wants to substantially redistribute income downward, while the GOP wants to do just the reverse.

On both the tax and the spending side, this fight is really about who gets the money. Democrats want to pare back tax breaks for high-income individuals in order to preserve social services, while expanding a handful of tax credits aimed at the working poor. The GOP concept, by contrast, is to shelter tax incentives for savings and investment from any closure—a move that primarily benefits more prosperous households. The tax loopholes Republicans would close would likely result in higher taxes on many middle-class families in order to finance a big cut in the top marginal-income tax rate—a cut that only helps the wealthy.

On spending, a similar divergence emerges. The Republican budget savages programs for the poor. Medicaid, SNAP, Pell Grants, and other programs serving low-income households are singled out for cuts that are disproportionately large relative to the overall scope of spending cuts. 

Obama’s budget is just the reverse. The Medicaid expansion and health insurance exchange subsidies included in the Affordable Care Act will be the largest shift of economic resources to the lower half of the income distribution in generations. Even high-profile gestures like Obama’s willingness to reduce Social Security benefits are conditioned on protecting low-income beneficiaries from cuts. Both Obama and Ryan would reduce entitlement spending relative to current projections. Obama does it in a way that makes the distribution of benefits more progressive. Ryan not only cuts more, he structures the cuts to make the benefits less progressive.

Ezra Klein, on his WaPo Wonkblog, puts it the same only different:

Budgets are a rare opportunity to cut through the two parties’ rhetoric and see the numbers behind their visions for the country. In this case, the difference between Obama and the House Republicans’ visions for the country is about $4.6 trillion over the next decade.

Here’s where that $4.6 trillion comes from — and where it goes.

The House GOP budget sees tax revenues totaling 18.8 percent of GDP over the next decade, while Obama’s budget puts them at 19.1 percent. The difference over 10 years, using the GOP’s numbers? Three-tenths of a percentage point of GDP, or about $640 billion.

House Republicans see an average deficit of 0.6 percent over the next decade, while Obama’s looking at 2.5 percent. The difference there is 1.9 percent of GDP, or more than $4 trillion.

Put the two together and House Republicans are putting about $4.6 trillion more toward lower deficits or lower taxes than the White House. If you want to know why the House GOP’s budget looks so different from the White House, that $4.6 trillion is the answer. That $4.6 trillion is why House Republicans need to make such deep cuts to social programs. That $4.6 trillion is why the Obama administration can keep Obamacare as well as fund a new pre-kindergarten initiative.

That $4.6 trillion represents a stark choice. If used as Obama hopes, it means tens of millions more Americans with health insurance, a more generous food stamp program, more college aid, and more investments in biomedical research, among others. If used as the Republicans hope, it means less debt and lower taxes on the wealthy.

Both budgets bring the deficit down to more-than-manageable levels. Republicans, of course, are looking to eliminate the deficit entirely. But the White House brings the deficit down to 1.7 percent of GDP. Achieving that goal would mean America’s debt load would be falling as a percentage of GDP, which is the measure most economists look to to see if our finances are stable.

The Republican budget argues that its cuts aren’t so much a choice as a necessity. “Unless we change course,” reads the introduction, “we will have a debt crisis.” But that’s incomplete. The truth of the Republican budget is that it’s only necessary if you refuse to raise taxes and if you insist on balancing the budget within 10 years.
Obama’s budget is meant to expose those premises: It’s a demonstration of how more modest spending cuts, when added to new revenues, can stabilize the debt while leaving room for new investments. In other words, the federal government can do most of the things it’s doing now, and more. Deep cuts aren’t a necessity so much as a choice.

The conservatives want to lower taxes on the rich and lower services to the poor and middle class, not because they have to but because they can. The liberals want to raise taxes on the rich and maintain services for the poor and middle class, not because they can but because they want to.

This may in fact be meaningless because neither budget will ever come to pass. But because someday a budget may pass, these two salvos in the class war are important markers. The phrase "class warfare" has long been dragged out anytime the conservatives see the liberals wanting to raise taxes on the rich in order to finance programs for the needy, but at this point in the long, drawn-out debate, we can finally say, "this shit is real," and mean it. The class war is indeed underway, though not for the first or last time.

I like the Joe Biden quote Ezra Klein cites: “Don’t tell me what you value. Show me your budget and I’ll tell you what you value.”

You said a mouthful, Joe.

Speaking of mouthfuls, here is the Fox take on Obama's budget:

A tax increase on the hyper-rich is a "war on money." Surprise, surprise.