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Obama’s election-year budget
The President set out the economic battle lines for the presidential election with a budget that emphasized spending over austerity and called for new taxes on the rich.
President Obama set out the economic battle lines for the presidential election this week, with a $3.8 trillion budget that emphasized spending over austerity and called for new taxes on the rich. Arguing that the country can’t “cut [its] way to growth,” Obama proposed $350 billion in new stimulus to maintain lower payroll taxes, bolster domestic manufacturing, and fix the nation’s crumbling infrastructure. There would be only modest cuts to federal health-care programs—about $360 billion over the next decade—and no changes to Social Security. Instead, Obama would reduce deficits by raising taxes on corporations and the wealthy by almost $2 trillion over the next 10 years. “We don’t begrudge success in America,” Obama said, “but we do expect everyone to do their fair share.”
Republicans vowed to block the budget, and slammed the president for breaking his promise to cut the deficit in half by the end of his first term. The budget projects this year’s shortfall at $1.3 trillion—down about 15 percent from when Obama took office—and a $901 billion deficit in 2013. “Instead of an America built to last, this is a plan for an America drowning in debt,” said House Budget Committee Chairman Paul Ryan.
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There’s a lot to like about the president’s proposal, said The New York Times. He’s rightly recognized that while it’s important to shrink the deficit over the long term, the “immediate priority is to encourage the fledgling economic recovery.” If Congress were not totally dysfunctional, it would approve this budget. As it is, the plan will go nowhere because of Republicans’ steadfast “refusal to raise taxes on the wealthy and to spend money on vital programs.”
We should be glad this irresponsible document will never be passed, said The Detroit News. Instead of halving the deficit as promised, Obama plans for a fourth straight year of $1 trillion–plus deficits, and “in his next term, should he win one, would add another $3 trillion to the $5.5 trillion in new debt he’s racked up so far.” The budget is based on a flawed philosophy of spend now, pay later. “But as Greece is verifying in the most painful way, at some point the bill must be paid.”
What the columnists said
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What a crass piece of electioneering, said Yuval Levin in NationalReview.com. Obama has tried to please the Democratic base by preserving the bloated entitlement system, even though the administration’s own figures show that Social Security is already in the red and will drain the Treasury of half a trillion dollars over the coming decade. And his few deficit-reduction measures are shams—such as counting $850 billion in savings from the wind-down in Iraq and Afghanistan, even though that money was never requested in the first place. If you need another reminder of “why we need a new president next year,” this budget is it.
Actually, this is smart politics, said Aaron Blake in The Washington Post. Polls show that more than two thirds of Americans favor creating jobs over reducing the deficit. This plan jams a wedge into the presidential race, putting Republicans on the side of budget-cutting and casting Obama as focused on reviving the economy. “As long as the economy does come back, that appears to be a winning political argument.” This budget also gives Obama another weapon for bludgeoning Republican presidential candidate Mitt Romney, said Joshua Green in Businessweek.com. The multimillionaire politician has proposed cutting taxes on the wealthy, rather than raising them—a tough argument to sell to voters, especially since Romney paid just 13.9 percent on income of more than $20 million in 2010.
What a pity that federal budgets are now nothing more than political documents, said Lenwood Brooks in the Chicago Tribune. As families and businesses across America know, real budgets are how we set priorities and plan for the unexpected. Yet for the past four years, bickering Republicans and Democrats have failed to pass a budget, while our national debt has climbed to record highs. “Would it be too much to ask that Congress and the president develop a realistic budget plan and then follow it?” In an election year, the answer, sadly, is yes.
