Budget Reax: Obama’s “Rosy Scenario”


Ryan Avent explains how to read the document:

In the best of times, the budget document is best understood as a political document, used to frame administration priorities in a way that might possibly inform actual legislation, if the president is lucky and controls Congress. Amid a divided Congress and ahead of a presidential election, the budget is both an opening bid and a campaign tool. The White House cannot expect to get much of what it wants, but it can hope to show voters the difference between Mr Obama's goals and those of his Congressional antagonists.

Keith Hennessey is critical:

[T]he President is proposing at least $1.20 of tax increases for every dollar of proposed spending cuts. The President’s budget locks in historically high spending levels and relies more on tax increases than spending cuts for the limited deficit reduction it proposes.

So is Howard Gleckman:

Obama’s fiscal plan is disappointing because it is so vague. There is simply no chance Congress will make the tough votes necessary to enact any serious tax reform without a president who is prepared to take the heat for specific, deeply controversial cuts in popular middle-class tax preferences.

John Cassidy checks Obama's math:

As far as I can tell, the bulk of the deficit reduction comes from higher revenues, partly generated by higher taxes on the wealthy but mainly due to more rapid economic growth. Of the thousands of figures in the budget, what stands out most is the assumption that, over the next five years, G.D.P. will expand at an average rate of more than 3.7 per cent. Without making much of a noise about it, the White House is forecasting that the U.S. economy will finally enjoy a vigorous recovery from the housing and Wall Street busts, during which output growth will rise above the long-run trend determined by increases in population and productivity. In short, Obama is putting his faith in that trusty enabler of lower deficits, a figure many of his predecessors also relied on: Rosy Scenario.

Greg Ip is tired of the accounting games:

The gap between rhetoric and reality shows up plainly in the bottom line. In 2009, Mr Obama laid out a plan that would lower the budget deficit to 3.5% of GDP by this year; he now reckons it will be 8.5% instead. The national debt was supposed to peak as a share of GDP at 67% last year; he now figures it will peak next year, at a much higher 78%.

Lindsey Burke bashes the budget's elimination of funding for DC's school-choice program:

More than 1,600 low-income children are currently enrolled in the D.C. OSP, and receive vouchers of $8,000 ($12,000 for high-school students) to attend a private school of their choice that meets their needs. In a city with the worst-performing and most dangerous public schools in the country, the vouchers have been a lifeline to a brighter future for these children.

Jonathan Bernstein blames Republicans for inaction on the deficit:

Obama’s election year budget, at a time of divided government, is no doubt in large part a campaign document. And it has several items the president is going to press hard on that play well politically, including the “Buffett rule” and returning to taxing dividends at the same rate as ordinary income. The key for any real deficit hawk to understand is that right now, Republicans won’t support anything that raises taxes on the rich — which is to say they’re not supporting a meaningful path to lower long term deficits. They didn’t last year, and they won’t this year. No matter what their initial rhetoric claims.

Isabel V. Sawhill wishes the Republican presidential candidates would release their own budgets:

Republican candidates aren't required to be just as specific about what they would do to create jobs and put us on a more sustainable fiscal course. Governor Romney's fiscal plan, for example, promises expensive new tax cuts with the bulk of the benefits going to the top 1 percent. The lost revenue adds almost $2 trillion to existing deficits over the next decade. To help pay for this and reduce the deficit, he promises to cut spending immediately to 20 percent of GDP and to 17 percent eventually. But with spending currently at about 23 percent of GDP, there is no way to get from here to there without making deep cuts in all parts of the budget-including Social Security, Medicare, and defense. The President's proposals will not please everyone, but at least they are specific and call for broadly shared sacrifice.

Adam Sorensen is more positive that most:

Rather than grim austerity, Obama’s budget story is one of revival: $8 billion for community colleges over three years; a core expansion of spending on manufacturing, infrastructure and R&D taken from his now defunct American Jobs Act; a 55% increase for Race to the Top, Obama’s competitive education grant program; $770 million to promote democracy in Arab Spring countries. The Pentagon would see cuts, but that’s its own kind of optimism if the military has fewer missions to undertake. NASA’s budget and the EPA’s would be trimmed, and the NIH’s frozen, but those are minor asides in Obama’s tale of economic rejuvenation.

And Stan Collender believes the budget is politically smart:

[P]olls now show that the deficit isn’t close to the top issue in the country. In some polls, it’s even close to the bottom of the top 10 and barely in double digits. Therefore, making deficit reduction the top priority in the budget would not be the most astute political move for the White House, and allowing the GOP to claim it as its primary issue will make that party seem out of touch to the majority of Americans.

That is, in fact, what the Obama budget seems to have assumed and is trying to do.

(Photo: Republican members of the U.S. Senate hold a press conference on U.S. President Barack Obama's 2013 budget proposal at the U.S. Capitol February 13, 2012 in Washington, DC. Obama's budget proposes spending of $3.8 trillion in 2013 and requests raising an additional $1.5 trillion over 10 years from the wealthiest taxpayers. By Win McNamee/Getty Images)