Two years ago, who would have thought that the Huffington Post, a liberal-minded news source, would have headlined a story with this:
Here’s the opening paragraph:
WASHINGTON – President Barack Obama, less than two months after signing tax cuts for the wealthiest Americans into law, is proposing a budget to congress that attacks programs that assist the working poor, help the needy heat their homes, expand access to graduate-level education and undermine that type of community-based organizations that gave the president his start in Chicago.
And who would have thought two years ago that a Republican—Ron Paul—would appear on television and in the context of the budget call our Democratic president a “warmonger”?
All weekend I heard Jack Lew, Obama’s budget director, on the cable shows trying to explain why the President’s cuts were not only necessary, but courageous. Well, okay. But they certainly aren’t representative of the Democratic Party I used to know. I’ve never heard of a Democrat arguing, for instance, that we should cut $100 billion from Pell Grant programs, have you?
Mr. Lew, who was President Clinton’s last budget director, was on CNBC’s Squawk Box this morning, again defending the President’s budget, due to be released today. He did make one good point:
I left this job ten years ago with a surplus of $5.6 trillion over the next ten years; I came back with deficits of $10 trillion over the next ten years.
I suppose it’s bad manners these days to point out why Mr. Lew found things in such bad shape, or maybe it’s simply that everyone has forgiven the Bushies for their tax-cutting frenzy, since Mr. Obama seems to have partially embraced their strategy, too.
But I find it bad manners to talk about massive budget cuts—domestic discretionary spending, as Obama bragged this morning, will go back to Eisenhower levels—without talking about the enormous revenue short fall, brought on by a starve-the-government-beast philosophy. I never heard Mr. Obama mention that in his short budget speech this morning.
Such a philosophy used to be the property of the Republican Party, but it is increasingly being embraced, to some degree or another, by Democrats.
The federal government is spending about 25.3% of GDP. But it is taxing the country at about 14.4% of GDP. What’s wrong with that picture? Why should all of the pressure be on the spending side, especially when Democrats—which is supposed to be a goverment-friendly party—control the White House and the Senate?
To be fair, the budget projections in the President’s new budget do show that in ten years, revenues would be 20% of GDP, and spending will decrease to 23.1%. But no one believes House Republicans will agree to raise revenues so responsibly. There mission is to kill government, not fund it.
In any case, the President’s $3.73 trillion budget contains some $1.1 trillion in budget cuts over the next ten years, which according to The Wall Street Journal, amounts to about a 14% reduction in the projected debt over that time. About one-third of the savings would come from tax increases, including some on the wealthy, but not nearly enough to make up for the tax-cut deal Obama made with Republicans at the end of last year.
Besides the cuts noted at HuffPo, the budget does manage to offer up $78 billion in defense cuts, even as we are spending somewhere around $2 billion a week—that’s every week—in Afghanistan and another $ 1 billion a week in Iraq.
On both issues—tax hikes for the wealthy and defense budget cuts—Obama would have the American people with him if he were to go farther. A poll at the end of last year showed that 61% of Americans prefer tax increases for wealthy Americans as a “first step” toward tackling the deficit. Next in line was cutting defense spending, at 20%. So, there is room to act responsibly on the revenue side, as well as the spending side.
Predictably, the Right says Obama’s budget doesn’t go far enough. Speaker John Boehner said Obama’s budget “continues to destroy jobs by spending too much, borrows too much and taxes too much.” He also falsely claimed, “We’re broke.”
Congressman Paul Ryan, budget guru for the fiscal-sky-is-falling Republican Party, said,
Presidents are elected to lead, not to punt. And this president has been punting.
Even deficit hand-wringers on the Democratic side are chiming in with criticism, not of the President’s dramatic cuts, but of his failure to do more. Erskine Bowles, the Democratic co-chairman of Obama’s debt commission, said:
The budget goes nowhere near where they will have to go to resolve our fiscal nightmare.
Republican Joe Scarborough said this morning on his show that the whole thing was “depressing.” He complained that the administration is “slashing like crazy” the relatively small discretionary part of the budget—about 15% of federal spending—while “they don’t the courage to go after the part of the budget that causes the debt crisis.”
By courage, of course, Scarborough means going first on offering cuts in Social Security, Medicare, and Medicaid. But why would Obama want to do that? Tea Party Republicans claim they were elected as serious budget cutters, pledging to change the game in Washington. Why not let them offer up their “courageous” plan first? So far, they have offered nothing on entitlements, hoping, I suppose, that Obama would take the bait and offer up something first.
But I can still remember the last campaign in which many Republicans demagogued cuts in Medicare Advantage, which cuts were used as a partial funding instrument of the health care reform act. They tried to sell senior citizens on the idea that Democrats were jeopardizing Medicare. So, this time, Republicans get to go first.
John Boehner did pledge that “it’s all coming,” speaking of the GOP’s long-term deficit-reduction strategy. And when it gets here, Obama’s budget cutting, which doesn’t look all that good right now to many liberals, may suddenly look pretty good. And the President may be able to take advantage of the division in the Republican ranks between the kill-government-at-all costs wing and those who just want to wound government so severely it will never walk again.
That is if he doesn’t cut another deal with them.