What I Wish Obama Had Said

Alternative Debate Speech Text that President Obama Could Have Used at the First Presidential Debate on October 3, 2012[i]

Randall P. Ellis

Boston University, Department of Economics

October 6, 2012

On Taxes

We have heard a lot of talk from the Republicans about the importance of lowering taxes on people earning more than $250,000 which the Republicans like to call the “job creators.” Republicans especially like to link being wealthy with being a small business owners. But let me tell you something else. Small business owners for the most part reinvest their earnings back in their own company, and earn relatively modest incomes. IRS returns show that 97 percent of small business owners earn less than $250,000 per year[ii] , and hence will not be hurt by increasing individual income taxes on the wealthy. Let me repeat that: 97 percent of small business owners earn less than $250,000 per year. It is the overpaid senior executives of large businesses who largely earn more than $250,000, not the small business owners. The Republicans are eager to protect these big guys, the ones funding the Republican campaigns, with tax cuts that favor the wealthy. Less than two percent of all households earn more than $250,000 per year[iii], and they are doing just fine. I want to focus our tax reforms and government investments on helping the other 98 percent of households.

On Social Security

I am glad you asked about Social Security, which is working well: I have no plans to make any changes to this wildly popular program. All Americans earning a paycheck are required to contribute to support this program through a social security payroll tax, which is a type of income tax. The Social Security system provides income to elderly people when they retire, even if they have not been so clever, organized or motivated to save enough for their own retirement. Social Security is a social insurance program, since people who live longer take out more money than people who are less unfortunate and die while young. Social Security also redistributes money a little bit from people who earn more to people who earn less. For example a parent who works hard raising a family still gets some social security even if their spouse dies, or they are divorced, and even if the parent never receives a pay check. Despite it being social insurance and redistribution, Social Security is wildly popular. My republican opponents think social insurance is socialism, and even call it Socialist Security because it is a form of redistribution, which they have made out to be a political no-no to mention. But there it is, a wildly popular, income redistribution program that we should all embrace.

As all of you know who have watched the revealing secret video taken of Mitt Romney speaking to a select group of large donors, Governor Romney discounts this sizable income tax as being unimportant even though it represents more than 35 percent of our federal revenue.[iv] He considers the elderly retired, students working part time while earning a degree, and anyone earning less than about $15,000 for single head of households or about $30,000 for families as being dependents, not worthy of his concern, because they pay no income taxes.  I couldn’t disagree with him more. Social payroll taxes, paid by hardworking citizens generate more than four times the federal revenue as all corporate taxes.[v]

On reducing the national deficit:

I would like to respond to Governor Romney’s correct statement that there are three ways of cutting the national debt: Raising taxes, cutting government expenses, and growing the economy. On the third one, growing the economy, every economist, every politician, and every citizen I have ever met will agree that the third one is the best of the three.  It is American apple pie. But it doesn’t mean anything for Gov. Romney to claim that he will do a better job at growing the economy. In fact, if you look back over the last fifty years, the economy, jobs and the stock market have all grown faster under Democratic presidents than Republican ones. Go check out the facts.[vi] And this is especially true under the disastrous leadership of the previous Republican president, George W. Bush who caused the greatest recession in eighty years with his tax cuts and unfunded spending policies.

The only specific, substantive policies that Gov. Romney has proposed for promoting growth is to cut taxes, particularly on the wealthiest Americans. And that is the same policy that was tried and failed by George W. Bush and the Republicans who tied or had a majority in both Houses of Congress for six of the eight years that President Bush was in office[vii], notably at the time that Congress voted for two unfunded wars and the first of the two enormous Bush tax cuts.

Former president Bill Clinton said it well when he highlighted that republicans, not democrats have a worse record of increasing our national debt. Ronald Reagan nearly tripled the national debt under his presidency, while George W. Bush nearly doubled the national debt.[viii] President Clinton was the only president in the postwar period to hand his successor a budget surplus when he left office. Democrats, not Republicans, are more effective at cutting the national debt.

I am sad that because of the two unfunded wars, the Bush tax cuts, and increased spending necessitated by this Great Recession, the National Debt has also increased greatly during my term. It is not what I wanted. But a reasonable American will agree that I was handed an economy in such serious agony by my predecessor that it would have been irresponsible not to have continued and in many cases increased government spending and tax cuts so as to get us out of this recession.

As our economy improves, I promise to work hard toward implementing elements of the bipartisan recommendations of the 2010 Bowls-Simpson commission, which reflected a balanced reduction in spending together with selective increases in taxes.   In contrast to my willingness to support a balanced approach to deficit reduction that includes both tax increases and in spending reductions, Gov. Romney has stated that he will be unwilling to agree to a deficit reduction even if it involves less than $1 of tax increases for every $10 in spending reductions[ix]. That is not going to solve our budget deficit problem.

On ObamaCare

I thank the former Governor for giving me credit for creating the Affordable Care Act, also known as ObamaCare, since a different candidate would perhaps take pride in something that he himself helped create in Massachusetts. Contrary to what he says, I worked hard to try to get Republican support for this health reform bill, using Romney’s own successful health reform approach from Massachusetts, and embracing concepts from the conservative Heritage Foundation and from Republicans who supported the idea of setting up private exchanges when President Clinton tried to do health reform. Unfortunately the Republicans in congress could no longer support their own approach once it was embraced by me and the Democrats, so we had to move forward without their voting support. It is dishonest to say that I did not try to reach across the aisle and try to get bipartisan support.

Even though some features of ObamaCare remain controversial, the features of ObamaCare that have already been implemented are enormously popular. Let me describe a few of its features that are already in place.

ObamaCare allows all young people to remain on their parent’s health insurance policy up until age 26, which resulted in immediate coverage for over 2 million young people in 2010.[x] This feature is enormously popular.

ObamaCare prohibits health insurance plans from dropping coverage for anyone just because they became sick. This feature is enormously popular.

Obama prohibits health insurance plans from denying coverage to any family just because they have a child with a serious or expensive preexisting health condition. This feature is enormously popular.

ObamaCare helps reduce the donut hole gap in Medicare’s prescription drug coverage, whereby Medicare enrollees have to pay 100 percent of their prescription drug costs once annual drug spending exceeds $2800.[xi] This reduces prescription drug costs by an average of $250 in 2012. This benefit is enormously popular among the elderly.

ObamaCare creates a reinsurance pool for uninsured retirees aged 55 to 64, which is very popular with this highly vulnerable group.

ObamaCare creates a high risk pool to help insurance companies be more willing to insure people with expensive preexisting conditions.[xii] Very few insurers have taken up this program, suggesting that insuring people with expensive preexisting conditions is less expensive than they sometimes lead us to believe.

ObamaCare forces insurance companies to give rebates to enrollees whenever claims costs are less than 80 or 85% of premium revenues. This very popular program has already forced plans to pay back more than a billion dollars to commercially insured enrollees in 2012. It is likely that even plans not paying rebates have been motivated to not raise premiums as much as they would of, and hence this is likely one reason why health insurance premiums have grown so slowly in the past two years.

So from my point of view, Obamacare is already proven to be highly popular among the Americans already benefiting, which includes most of our elderly, our young adults, people with sick children, and everyone at risk of high cost illnesses. You should ask yourself whether you think these changes I just mentioned are something you yourself support, and keep an open mind about your support for the changes yet to come in future years.

Closing remarks

We have heard a lot of new statements from Gov. Romney tonight, as he tries to “reboot” his image. But Americans should not be voting based on the marketing image that the Republican Party has chosen to broadcast in the final months of this long campaign. Instead they should base their voting on facts. The fact is that Gov. Romney has gone out of his way to align himself with a relatively extreme group of Republicans, exemplified by his choice of a vice presidential partner, that represents a radical change in how our society and government operates. Today’s Republican Party is not the party of Ronald Reagan, it is now the Republican Party of Negativity.

Today’s Republican Party of Negativity is assaulting women’s rights, trying to undo women’s access to birth control, right to humane treatment when raped, or right to equal pay.

Today’s Republican Party of Negativity is in denial that global warming is largely caused by the actions of humans and will have disastrous consequences if we don’t begin to take notice and do something about it.

Today’s Republican Party of Negativity is repeatedly voting to obstruct legislation in the Senate. The Senate leadership said this bluntly shortly after I was elected, and has proceeded to filibuster and delay legislation repeatedly. The democratic majority has had to invoke cloture, which is a vote to try to end a filibuster hundreds of times during my term, an intentional Republican strategy.

Today’s Republican Party of Negativity wastes its time voting 33 times to repeal  ObamaCare in the House even when it knows the legislation has no chance of making it through the Senate or being signed by me.

Today’s Republican Party of Negativity repeatedly asserts that ObamaCare reflects a government takeover of health care, while even any fool can look at Massachusetts reforms on which it is based and see that ObamaCare does precisely the opposite, building upon private health care provision, private insurance plans and individual consumer choice  of health plan options.

Today’s Republican Party of Negativity needlessly held our country hostage by refusing to raise the US debt ceiling, even after many of the same Republican senators  voted 17 times to raise the debt ceiling under Ronald Reagan, and voted seven times to raise the debt ceiling under George W Bush.

Today’s Republican Party of Negativity and new chief spokesman Governor Romney says that they care about everybody, but their own votes, their own private speeches, and the words of their corporate sponsors tell us the truth.

I urge you to vote for me, Barack Obama and for others in the Democratic party this November, and show today’s Republican Party of Negativity that theirs is not the direction that our country should go in.

God Bless America.


[i] http://www.youtube.com/politics?feature=etp-pv-ype-b54f6ff011

[iv] http://www.youtube.com/watch?v=Ge03Sys8SdA, http://www.youtube.com/watch?v=rBj0joyCeag&feature=relmfu

[v] http://www.taxpolicycenter.org/briefing-book/background/numbers/revenue.cfm

[viii] http://treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm

2 Comments

Peter Lenk posted on October 14, 2012 at 1:33 pm

Hi Randy:

Regarding tax policy, what should the federal tax rates be, in your opinion?

Randy Ellis posted on October 14, 2012 at 4:25 pm

Interesting question. My belief is that once we are out of the recession, we could easily roll federal tax rates back to the levels that they already were under Clinton when the economy was growing well. Before the first of two Bush tax cuts they ranged from 15 to 39.6% federal. In 2012 they are 10 to 35% for earned income.

There are several taxes that matter besides these federal income taxes.

I prepared a summary tax table using available tax documents, which I will post to my blog. In Massachusetts, with its 5.25 state income tax, a couple filing jointly with a taxable earned income of $71,000 pays a marginal tax rate of 43.35%, which is higher than the marginal tax rate paid by someone with earned income of $389,000 or more (43.15%), or the tax on business income (40.25%) or long term capital gains income (20.25%). Since tax codes are complex, I could be wrong, since I am not a tax expert. But they highlight that overall tax burdens on lots of middle income people exceed those of the wealthy and the the rate on capital gains, bonuses, and business income.

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