Alan Blinder continues to demonstrate what a tool he is.
On Wednesday morning, President Obama released his proposed budget for fiscal year 2014, which begins this October. The president is supposed to deliver his budget in early February, but hey, given the pace at which Congress works, who’s counting? The important thing is: This is a fine effort.
GOOD JOB OBAMA.
The numbers. A good budget is based on credible numbers, not on rosy scenarios, mysterious budget cuts to be named later, vague promises of more revenue from closing unnamed tax loopholes and the like. It should also make at least some contact with political reality, rather than being a spreadsheet exercise with no hope of enactment—as, for example, the House Republican budget is.
Credible numbers? When in the very next paragraph he says:
Unless there are some unnoticed skeletons buried deep inside closets, the president’s budget scores pretty well on these criteria. The underlying economic assumptions seem only a bit too optimistic, especially since we know that the economy has been underperforming “reasonable” forecasts for years.
Ba haa haa haa …
The underlying economic assumptions “seem only a bit too optimistic.” He said a mouf-full there.
Next, Obama’s budget adheres to the political realities … if only it weren’t for those nasty Republicans.
Of course, Mr. Obama’s tax increases won’t fly in the House, where the prevailing attitude seems to be that additional revenue is permissible only if the money is dedicated to lowering tax rates. So you might say the president’s budget doesn’t make enough contact with political reality. But that is mainly because the Republican position is so extreme. In a more functional Congress, something close to this budget might be where Republicans and Democrats wound up compromising.
So, let me get this straight – Obama’s budget adhered to political realities, but it won’t fly because the Republicans are just so extreme and unreasonable … that I guess they defy reality?
Then after arguing that the Obama budget addresses our deficit issue …
Importantly, the president’s proposed deficit reductions don’t clobber the economy this year or next. In fact, his budget would actually allow for some modest fiscal expansion in 2014 and 2015. Hooray for that.
More SPENDING!! HOORAY! Just what we need. Because all that other spending did such a bang-up job of fixing the economy.
Now, for a bit of reality, from The Hammer:
The 2014 budget is tax-and-spend as usual. The actual deficit reduction over a decade is a minuscule $0.6 trillion — out of a total spending of $46.5 trillion. And every penny of this tiny reduction comes from tax hikes. Nothing from spending cuts, which all end up getting spent elsewhere.
Moreover, where’s the compromise? The Obama budget calls for not only more spending than the GOP’s, but more than the Democratic Senate’s as well. For just fiscal year 2014, it even contains $160 billion more spending, and $128 billion more deficit, than if the budget — that Obama purports to be cutting — were left untouched!
More, from James C. Capretta:
The president has repeated over and over again the slogan that a budget plan needs to be “balanced,” by which he means the spending cuts must be matched with comparable tax hikes. His own budget fails this test miserably. The only deficit reduction in it comes from a net $1.1 trillion tax hike over ten years (on top of the $0.6 trillion tax hike in the fiscal-cliff deal and $1 trillion in Obamacare). There are zero net spending cuts in the budget. Zero. When the “doc fix” for Medicare physician fees and a smaller change in Pell Grant funding are removed, as they should be, from the administration’s current-law baseline and placed instead with the other policy choices the budget reflects, the budget results in a net $10 billion spending increase over the coming decade.
But, as Capretta notes, Republicans will be accused of merely being political if they reject this “reasonable and balanced” approach to deficit reduction.
What the president is offering now can be summed up this way: another massive tax hike in exchange for swapping the sequester cuts with more price controls in Medicare, the “chained CPI,” and other minor tinkering with mandatory spending programs. Total federal spending would not change. Some deal, huh? Congressional Republicans’ acceptance of it would be a political and economic disaster.
Now,one last thing – the Obama schedule:
11:15 am || Receives the Presidential Daily Briefing
2:05 pm || Presents the Commander-in-Chief Trophy to the United States Naval Academy football team; East Room