April 11 2013
An Unserious Budget for Serious Times
The president’s base is up in arms because of the budget the president released yesterday.
It is unfortunate that the president chose to enrage his base over something that is not going to happen—the passage of this absurd budget—but hasn’t dared to risk their disapprobation to do something that could almost instantaneously benefit the U.S.: giving the green light to the Keystone XL Pipeline.
On Keystone, the president demurs, even though the pipeline has “overwhelming” bipartisan support and is much desired by the labor unions because it would create jobs. The Keystone pipeline polls well among both Democrats and Republicans.
But a small group of elite environmentalists are against the Keystone pipeline: the president was recently at a fundraiser in San Francisco and you can bet he didn’t want to provoke all the cool, rich people before that evening.
Likely, the president knows that his budget isn’t going anywhere and his sheer coolness will calm the breast of his temporarily rattled base. In a blog post headlined “Dread on Arrival,” AEI economist John Makin explains why this budget is going nowhere:
No one believes the $1.4 trillion phantom savings number [that is claimed in the budget]. The actual net deficit reduction proposed is more like zero. Without the proposed $563 billion in additional taxes on the wealthy, which Republican have already rejected, the deficit actually rises under the president’s budget. Its best parts are a cigarette tax boost of $78 billion, along with savings from re-indexing social security worth $230 billion, both over 10 years. The latter is strongly opposed by liberal Democrats.
The president’s budget is in fact a step backward on the road to sustainable fiscal policy. The $180 billion in annual tax increases already enacted earlier this year coupled with the $120 billion in annual spending cuts embodied in the sequester have put the US budget picture onto a sustainable path that leaves the debt-to-GDP ratio at or below 75%. The budget path already achieved during the first quarter of this year is better than what the president proposes.
The Wall Street Journal points out in an editorial that this budget “ratifies much of the spending increase of the first term and tries to lock it in.” I suspect the few items that anger the president’s base are there so that the president can pretend he offered the GOP some budget-trimming sops.
The Journal notes:
The Obama years have turned much about U.S. politics on its head, such as the fact that Presidents usually restrain Congress on spending. Since 2010, the House has restrained a President who wants to keep spending like it's 2009. The U.S. needs a federal budget that would promote faster growth, but gridlock may be the best we can get.