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Obama's cynical, unpassable budget
The president knows the tax hikes in his spending plan have no chance of passing the GOP House. But that could still give him a great campaign argument
Paul Brandus
Paul Brandus
H

ere's a Barack Obama sound bite, from Feb. 23, 2009, that you're likely to hear oh, about a zillion times this fall — but not from the Obama team:

"Today I'm pledging to cut the deficit we inherited in half by the end of my first term in office. This will not be easy. It will require us to make difficult decisions and face challenges we've long neglected. But I refuse to leave our children with a debt that they cannot repay — and that means taking responsibility right now, in this administration, for getting our spending under control."

When you see this clip, it will end with, "I'm [insert GOP nominee's name here], and I approved this message." 

Obama seems to have forgotten that he's dealing with Republicans who won't raise tax rates — period. Or has he?

With the release Monday of Obama's proposed 2013 budget, just how close has the president come to cutting the deficit in half? You be the judge: The deficit he inherited from George W. Bush in 2009 was huge: $1.3 trillion. Obama's goal, then, was to reduce this to $650 billion by 2013. If he had gotten reasonably close, it would be one thing. But the deficit in 2010 was also $1.3 trillion and will be around $1.15 trillion this year. The 2013 budget appears to show progress: $901 billion. But even that gargantuan figure is based on assumptions that may not come to be — like the expiration of the Bush tax cuts, and a new 30 percent tax on those earning more than $1 million annually (the so-called "Buffett rule"). The White House thinks these tax hikes could bring in $1.5 trillion over a decade. 

But Obama seems to have forgotten that he's dealing with Republicans who won't raise tax rates — period. Or has he? 

The president is no dummy. He knows Republicans will balk at these tax hikes. But he knows something else: Most Americans are fine with higher taxes on the upper crust. Obama also knows that polls show House Republicans get more of the blame for Washington's dysfunction than he does.

Thus the president's cynical budget strategy: Ask for the moon. Wait for Republicans to shoot it down. Obama will then have more campaign ammo to attack what he calls the "do-nothing Congress." He also gets to portray himself as a defender of the middle class — and the Republicans as defenders of the 1 percent. The strategy, along with a drop in the unemployment rate these last few months, has given the president a modest bump in the polls. Even the Rasmussen poll, which tends to lean GOP, now puts the president's approval rating at 50 percent, the highest since the bin Laden raid. 

The president's budget is still a risky gambit, of course. Obama can expect a steady barrage of attacks from Republicans, who paint him as just another tax-and-spend liberal who has had trillion-dollar deficits every year of his presidency (conveniently forgetting the $1.3 trillion hole Bush dug). And as for that "do-nothing Congress" line, Republicans are quick to point out that the Democrats control the Senate  — where Majority Leader Harry Reid hasn't passed a budget in three years, and has already said there won't be one this year either. Do nothing indeed. Of course, Reid claims that Senate rules being what they are, and obstructionist Republicans being who they are, he can't muster the 60 votes needed to end those pesky GOP filibusters. 

But just how important is cutting the deficit, anyway? Politically at least, it's more important to the party that doesn't control the White House. During the Bush years, for example, Vice President Dick Cheney dismissed concerns over the rising tide of red ink: "Reagan proved deficits don't matter," he declared in 2002. And now President Obama has moved it down his to-do list. "There's pretty broad agreement that the time for austerity is not today," his new chief of staff, Jack Lew, said Sunday on Meet the Press. "We need to go on a path where, over the next several years, we bring our deficit under control."

So instead of a clearly defined goal — cutting the deficit in half in four years — the new goal is to bring it "under control… over the next several years." By "under control," the administration means a budget shortfall that drops to $575 billion, or 2.7 percent of GDP, by 2018. Only in Washington can spending half a trillion dollars more than you have constitute "under control." 

Do voters care? A recent Pew Research Center poll says 69 percent of Americans think cutting the deficit is a top priority, right behind the economy, jobs, and terrorism. 

Let's square the circle here. Until the president gets serious about cutting entitlements (Medicare, Medicaid, and Social Security consume two-thirds of he federal budget) and Republicans get serious about raising taxes (which haven't been this low since Eisenhower was president) and cutting defense, you can expect this gusher of red ink to continue. Sorry folks, it's that simple.

But expect no movement on either front until after election day. That's when the real game begins. The president (or president-elect) will have to decide what to do about the Bush tax cuts, which end on New Year's Eve. He'll have to assess $1.2 trillion in automatic spending cuts (Republicans are trying to roll back some $600 billion in defense reductions) and decide whether to raise the debt ceiling for the umpteenth time. Then there's a 30 percent Medicare pay cut for doctors, unless Congress changes the formula for their payments. Each of these will be a mega battle, and both Democrats and Republicans will wait for the electoral dust to settle before putting their cards on the table.

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