Obama’s Budget is Dead on Arrival

The president has unveiled his budget, and it contains a great many meritorious ideas. An ambitious public works program, which should have been passed in 2009, is primary among them. In addition, he proposes a one-time tax on foreign profits not repatriated to the US, a tax set of tax credits for the middle class, and a stingy 1.3% increase in federal pay (which includes those the troops as well as the bureaucrats). Unfortunately, it is dead on arrival in the Republican controlled Congress, and it will only serve to demonstrate just how polarized American politics have become.

Congressman Paul Ryan (R-WI) who heads the House Ways and Means Committee stated that the president’s call for taxes on those most able to pay (the rich) is nothing more than “envy economics.” Then, he went on “Meet the Press,” to say “We want to work with this administration to see if we can find common ground on certain aspects of tax reform. And we want to exhaust that possibility. If and when that possibility is exhausted, then we will put out what we think ought to be done. So, we fully intend on the Ways and Means Committee of showing what full, comprehensive tax reform for everybody, individuals and families alike, looks like.”

In other words, Mr. Ryan has proposed a one-sided bipartisan solution. Given the realities of the Tea Party faction within the House, the possibility of common ground will be exhausted quite rapidly because the Tea Party and the Obama White House mean different things when they talk about tax reform. The reactionaries want smaller government revenues over all (the so-called “starve the beast” approach), while the administration is prepared to tinker with the tax code only if the burden of raising government revenues falls on those most able to pay.

According to the Constitution, the budget bills start in the House. That means that the Ways and Means Committee will draft whatever the basic Republican counter-proposal will be. The proposal is due out before April 15, and the big issue will be whether it tries to under the stupid spending caps set in the sequestration folly of a few years ago. The hawks in the GOP want to spend more on the Defense Department than the deal allows, and if Mr. Ryan’s committee proposes breaking those levels, the White House will be in a position to demand elimination of the caps in other areas, as it has already proposed in its budget. If the committee does not, it risks splitting the party between budget hawks and military hawks.

The GOP does have a little wiggle room on this. The deficit has plummeted in the Obama years, in large part to the economy endings its free fall of the Bush years. Since the balance is a bit more balanced, the Republicans can claim, with some truth in their claim, that the budget crisis that spawned the sequestration has passed, and therefore, the caps are unnecessary. Screaming from the Tea Party rearguard, however, might prevent that.

Of course, 2016 presidential politics already loom large in this discussion. Consider the posturing here: “When … he [The president] devotes his time and energy to talking about the new tax-and-spend policies that progressives like and Republicans universally oppose, he signals to Congress that he is once again looking to argue rather than to legislate,” said Keith Hennessey, a former economic adviser to Republican President George W. Bush. And here: “The president’s budget proposal] affords him an opportunity to contrast his vision of helping the middle class with the Republican Congress’ approach of exacerbating inequality, ignoring the middle class and making the burdens of those who want to enter it even greater,” said Neera Tanden, president of the Center for American Progress, which has close ties to the White House.

As usual, the two sides are talking passed one another. Perhaps, the solution is to do as the Roman Republic did; each of the two consuls was in command of the army on alternate days. In this republic, perhaps, the president could govern one day, and the Congress the next. There might be a chance of something useful being done that way.