Obama proposes budget—and negotiations

What happened

President Obama this week sought to carve out the middle ground on the debate over the federal deficit by proposing a 2012 budget that would freeze some spending and sharply cut home-heating assistance for the poor and other aid programs. His budget would add $1.1 trillion to the national debt—down from an estimated $1.6 trillion this year. The White House said the $3.7 trillion spending plan for 2012 marks a first step in addressing chronic deficits, which Obama’s blueprint would reduce from 11 percent of gross domestic product next year to 3 percent by 2015. But over a decade, the spending plan would add $7.2 trillion in debt—primarily because it avoids restructuring Social Security, Medicare, and Medicaid, the main drivers of long-term deficits. Coming up with a solution to the politically perilous problem of entitlement spending, Obama said, “is going to be a negotiation process” requiring “a spirit of cooperation between Democrats and Republicans.”

Republicans denounced the budget proposal as a dereliction of duty, and GOP House leaders pledged to produce a far more aggressive 2012 budget in April. “We’re broke,” said Speaker of the House John Boehner. “What’s really dangerous is if we continue to do nothing and allow the status quo to stay in place.”

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What the editorials said

“The president punted,” said The Washington Post. Obama likes to say Washington has to make “hard choices,” but this budget reduces the deficit with a lot of gimmicks, such as very optimistically assuming that the economy will grow at 3.9 percent a year, while failing to address the real problem: skyrocketing entitlement spending. “Wishful thinking” is this budget’s theme, said National Review Online. We can’t rack up more than a trillion dollars a year in debt “without driving up interest rates, depressing the dollar, and smothering” growth. Meanwhile, his proposed tax hikes on oil companies would lead to higher gas prices, and he’s irresponsibly “hacking away” at Pentagon spending “while U.S. troops are at war in Afghanistan and Iraq.”

The president is actually walking a fine line here, said The New York Times. “The Obama budget is balanced enough to start the process of deficit reduction, but not so draconian that it would derail the recovery.” To deal with the politically volatile issue of entitlements, Obama will “require a negotiating partner.” But as Republicans indulge an ideological frenzy of “indiscriminate short-term cuts,” it’s not clear that a responsible partner exists.

What the columnists said

Obama is resorting to the 1995 playbook, said Robert Reich in HuffingtonPost.com. Trouble is, in 1995, when President Clinton and the GOP played “a game of chicken over cutting the budget deficit,” the economy was “roaring back to life.” Today, most Americans remain mired in a Great Recession that destroyed millions of jobs and trillions in wealth. Cutting spending now will lead to more job losses, reduced consumer demand, and misery.

If you believe in more deficit spending, said David Malpass in The Wall Street Journal, you should love Obama’s budget. His cuts are minor, and he’s proposing that the government continue to amass enormous debt, while making 10-year projections about economic growth, inflation, and interest rates that are preposterously “rosy.” Nonetheless, it’s a cunning political gambit, said Stanley Kurtz in National Review Online. Positioning himself between liberals whining about cuts and conservatives irate over spending, Obama will claim the center. Then he’ll send “an engraved invitation to provoke a GOP-led government shutdown” when the government hits its debt limit in March. His goal: to portray the GOP as “heartless” and extreme.

It’s true—Obama is trying to put the GOP in a box, said Ezra Klein in WashingtonPost.com. If the firebrand Republicans who came in on the Tea Party wave refuse to raise the debt ceiling or to negotiate on entitlements, they could quickly alienate the public. But if they do cut a long-term deficit-reduction deal with Obama, his re-election campaign gets a lot easier. “Obama has left them in a very tough spot, which is part of the reason they’re so annoyed with him and his budget.”