Better in their words…

Daniel Henninger: Who Do You Trust? – WSJ.com.

D Henninger is usually spot on – and he is in this article.

========

They say America is politically divided. But in the days following the appearance of Paul Ryan’s GOP budget in the firmament last week, the planets of political debate finally aligned. We were all agreed: The issues before us were the future of federal spending, the future of federal entitlement programs, and the future of federal taxes. The terms set, the debate would proceed—after the president of the United States addressed the subject in a major speech on the nation’s fiscal future.

Instead, Barack Obama at George Washington University poisoned the well. Where is Rahm Emanuel when we need him? Mr. Emanuel was Little Lord Fauntleroy compared to the tone of discourse Bill Daley loosed on the body politic. What Mr. Obama delivered yesterday was a campaign speech, and a petty rank one at that.

After Republicans won the House in November, the question was whether a standard-issue politician named John Boehner had it in him to rise to the responsibility of being Speaker of the House. There’s near universal agreement he has.

As if in some reverse force-field, Barack Obama, who so impressed the nation with his demeanor and stature as presidential candidate in 2008, has suddenly decided to engage the great fiscal debate at the level of a vice-presidential attack dog. Spiro Agnew, the presidency has finally caught up with you.

The expectation in Washington was that the president would offer a kind of “white paper” of his views on spending and deficits. What he delivered instead was an invitation to the Gunfight at the OK Corral. So be it. And maybe just as well.

In all the pages Paul Ryan produced for his budget, its most important five words were: “This is a defining moment.” The president proved that yesterday.

The question voters are going to have to come to grips with between now and November 2012 is, Who do they trust to take the U.S. forward into the 21st century?

After spending about a decade getting a feel for the realities of a new century—itself defined by a constant state of financial and physical vulnerability—Americans next year have to decide which of their institutions are most likely to take the nation forward to a successful result. Is it Democrats or Republicans, Washington or the states, the public sector or private sector?

The Ryan-GOP budget’s core goal is to pare spending as a percentage of GDP to 20%. Mr. Obama, referring obliquely yesterday to his two successive $3-trillion-plus budgets as “emergency steps,” has reset federal spending at 24% of GDP.

With annual national output now at $14 trillion, within those four points of GDP are trillions of dollars of public spending and taxation decisions. Inside those four points, you can define and decide the nation’s future.

At 24%, you are entrusting the trillions to Washington, the Democratic Party and the public sector—a triumvirate Mr. Obama yesterday referred to as “we,” as in, “we will not abandon the fundamental commitment this country has kept for generations.”

At 20%, you’re entrusting that wealth to someone else. That someone else is either the private sector or the 50 separate states. This would expand the meaning of “we.”

The Ryan Medicaid proposal illuminates the choice. He’d allow individual states to decide how to spend their share of federal Medicaid trillions. Nearly everyone agrees that Medicaid needs rehab. It’s destroying state budgets, doctors shun it, and the poor are driven to the mayhem of emergency rooms for routine care.

Someone has to decide how to spend those Medicaid trillions and repair the program. That someone will continue to be whoever shows up for work every day at the offices of HHS’s Centers for Medicare and Medicaid Services at 200 Independence Ave. in Washington—aka “we.” Or it will be 50 different teams assigned to figure out a fix appropriate to their states. The left says that “they,” the states, would throw the poor into the streets. This is 2011. Either you believe that the states are stuck in 1933, or you don’t.

The central trust issue is taxes. The Ryan budget proposes a maximum tax rate of 25% for individuals and corporations. The president dragged the “millionaires and billionaires” onto the stage yesterday for another round of pistol-whipping (three mentions of the shameless duo).

It may be that Mr. Obama is obsessed by this subject, but that misses what he really wants. Since FDR, the Democrats (and Washington) have depended on maintaining a tax system with no identifiable ceiling. Taxes can always “rise.” Simpson-Bowles or anything likely to emerge from Rep. Dave Camp’s Ways and Means Committee would formalize a rate ceiling. Reviling “the wealthiest” is most of all a tactic to prevent what would be a Democratic catastrophe. Simpson-Bowles would reorder economic and political power away from Washington and out toward the states and their millions of non-millionaire citizens.

Simpson-Bowles was clear about that. Paul Ryan was explicit. So yesterday was Barack Obama. “We,” Washington, gotta have that money.

It was a useful speech. A defining moment.

Write to henninger@wsj.com