Why this year's Obama budget actually matters

Posted at 1:54 PM, Feb 02, 2015
and last updated 2015-02-02 13:55:01-05

The easy joke is the Obama administration released its 2016 budget on Groundhog Day.  Like the Bill Murray movie, Budget Day has become a perpetual rerun of every other Budget Day: an enormous but useless line-item budget, spin and counter-spin, all irrelevant to the final, negotiated decisions that will come in the fall.

But this year’s Budget Day is more interesting than that and, I believe, more important. The president’s budget this year, really for the first time, reflects a philosophy of governing and economic justice. 

Since Republicans control the entire Congress for the first time in his administration, President Obama has less budget clout than ever.  Despite his diminished powers, his budget might be more important than ever; or, perhaps, his diminished powers are what allowed him to be bolder.  

Because Obama has less power, his budget may have more significance.

All of the administration’s prior budgets had the tight handcuffs of the recession, the financial crisis and multiple foreign wars. Additionally, spending caps that were negotiated with Congress shackled budgets after 2011. On top of all that there’s the perennial quandary of paying for Social Security, Medicare and other entitlements as the population ages.

Nothing in those equations has magically changed. The president’s attitude seems to have, though.

The philosophic nub of this budget is that it directly and explicitly addresses persistent economic inequality and decades long financial atrophy of the middle class.  It is a budget that clearly stands for something beyond centrist pragmatism and balancing the books.

It is significant because Obama the President – as opposed to Obama the Candidate – finally seems to have a clear domestic credo. It is more significant, though, because it seems to be widely shared by many congressional Democrats, prominently by the top Democrat on the House Budget Committee, Rep. Chris Van Hollen of Maryland.

The focus on inequality also reflects the top concerns of the so-called populist wing of the party symbolized by Sen. Elizabeth Warren of Massachusetts. 

Now, will these priorities define the Democratic platform in the 2016 presidential election?  That will probably be Hillary Clinton’s call, but party politics seem to be aligning in that direction.

To simplify, the president’s budget steers benefits to lower and middle income Americans mostly in the form of tax benefits.  It also spends $74 billion more than the negotiating spending caps allow. Some of that additional spending is for infrastructure – roads and transport – that could spur job creation.  Some the increased spending is on causes Republicans also like – national defense, veterans and international aid and security.

To pay for all of that, the Obama budget essentially taxes the very wealthy, business and the financial services sector.

Republicans hate most of this, but not all of it.  Of course, they oppose any tax increases – that is their philosophic nub.  The most prominent congressional Republican on budget issues, Rep. Paul Ryan of Wisconsin, called the Obama budget “envy economics.”

But Republicans aren’t unaware of the potency of rising inequality. “The Obamanomics that we’re practicing now have exacerbated inequality,” Ryan said. “They’ve exacerbated stagnation. They’ve made things worse.”

The “inside game” of the budget this year involves whether the two sides can compromise on some shared goals – military spending, infrastructure, corporate tax changes, for example – to avoid shutdowns, hysteria and maybe pass a negotiated budget.

The “outside game” is a fight over whether the two parties can show the voters two different, coherent approaches to helping the middle class – one based on redistributing government benefits and resources, one based on shrinking government in hopes of empowering markets.

The Obama budget is as clear a proposition for the outside game as he has made.  And his party seems warm to it.

The Republicans at this point may be more divided.

And the inside game, of course, has a way of eclipsing sunshine in Washington.

[Also by Dick Meyer: Is the U.S. government really broken?]

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