Obama fails to deliver on deficit promise
Now that President Obama has gotten the platitudes out of the way, let’s see the real budget — one that combines necessary fiscal discipline with selected spending that will move the United States forward.
The spending end of his budget shows vision on the latter. His $3.8 trillion proposal also claims to reduce the deficit in the short run, assuming it is based on numbers that even come close to reality — a broad assumption; this is politics — and also cut it as a percentage of the gross domestic product within five years. But the national debt would continue to grow to $19.2 trillion by 2022. That’s the wrong direction.
The budget aims to increase spending for education, job creation and infrastructure improvements, all of which are connected on some level. He is right that we cannot “cut our way to growth” and that we must not allow our roads, bridges and institutions to deteriorate. But …
Obama promised to cut the deficit in half by the end of his first term, a promise this budget does not keep. It does cut the deficit to $901 billion next year and to $612 billion by 2017 (down from this year’s projected $1.3 trillion). His budget aims to do that in part by raising taxes, especially on people with the highest incomes.
In a column published below, Washington Post columnist Dana Milbank calls it a nonstarter — even Senate Democrats, who sit in the majority in that chamber, are balking. Republicans, pushing back against anything that could be construed as a tax increase, have effectively declared the plan dead on arrival.
Critics have a point that Obama’s budget recommendation is more than likely a campaign platform than a spending proposal with a realistic chance of getting through Congress. The Republican budget effort, led by Rep. Paul Ryan of Wisconsin, may have more than a hint of election-season flavor, too, and neither is likely to stand much chance of passage as written.
The budget fight promises to be contentious, pitting Republicans’ stated mission to slash government spending — the consequences of which would fall hardest on the lower and middle classes — against Democratic pressure and widespread public support for measures to increase taxes on the wealthiest Americans. Neither side has shown willingness to consider the reality that reducing the debt will take a combination of spending cuts and new revenue, including possible tax increases or expiration of President George W. Bush’s tax cut for the wealthy.
And there has been little if any movement toward meaningful debt-reduction talks since the issue came to a head last year over Obama’s proposal to increase the debt ceiling. A similar confrontation looms just around the corner.
The Bowles-Simpson commission provided a road map for cutting the debt, even if almost every American might have found something unpalatable in it. But this was a serious attempt to address a problem that, uncorrected, will pose a real risk to our economic and, possibly, national security. We may not be Greece, but we got a wake-up call when Standard & Poor’s downgraded the U.S. credit rating last year.
In an election year, when Republicans’ No. 1 goal is to make Obama a one-term president and his goal is to win another four years in the White House, it’s hard to imagine that any progress is possible.
In a small step in the right direction, it does appear that House and Senate negotiators have reached a compromise on extending the payroll tax. It would be good to see that cooperation extend into other areas where the two sides share some common ground.