Stan To Obama On The Deficit: Do Nothing

Matt Miller is a very smart guy, a friend, and someone whose wisdom on the budget I almost always find worthwhile.  But not this time.

In his most recent post from The Daily Beast, Matt suggests that the White House consider what he admits are largely symbolic proposals so that it can improve its polls on the deficit and put itself in a better position to deal with it when the appropriate time comes.

My suggestion is that Matt and everyone else, especially the White House, just chill.  The president has already done a number of symbolic things on the deficit, including holding a fiscal responsibility summit several days before its budget was released last February and proposing a new pay-as-you-go proposal.  It has that angle covered and then some.

If you look beyond the very short-term, the deficit situation will begin to turnaround next year, that is, before the election.  Under current forecasts, the deficit will fall by a record amount from 2009 to 2010.  It will still be high by virtually anyone's standards -- probably around $1 trillion or so.  But the big change in the right direction will give the White House the breathing room it needs and alter the politics substantially. Anyone want to bet that there will be a cover story somewhere next year calling Obama the deficit killer?

Several other points:

1.  The White House may not want the deficit to go down as fast as some are saying because that will reduce the effectiveness of its argument that health care reform is needed to get the budget under control.

2.  "The deficit" is really not the political problem.  Indeed, the deficit is almost always just a surrogate for something else.  The deficit is an issue now because people don't see what they're getting for it.  As soon as an economic recovery starts to become unambiguously evident, as many expect will happen within the next three months, the deficit as an issue will begin to fade just as quickly.  It will then largely disappear next year as the deficit falls as precipitously as is currently projected.