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Obama and the White House’s ‘halfway’ fixation with the budget

at 02:39 PM ET, 03/08/2011


(White House)
“My administration has already put forward specific cuts that meet congressional Republicans halfway. And I’m prepared to do more.”

— President Obama, weekly radio address, March 5, 2011

The White House was not happy last week when we gave two Pinocchios to Democrats for persistently saying they have gone “halfway” to GOP proposals on cutting the 2011 fiscal year budget. We also suggested that the “halfway” phrase would be worth more Pinocchios if President Obama began to use it.

He did so in his weekly radio address, but not before the White House gave the Fact Checker a bunch of data and charts trying to make the administration’s case for using the phrase. So let’s review the issue again, and see how persuasive their argument is.

The Facts

It really comes down to where you draw the line — the budget baseline. Democrats like to draw the line at the president’s proposal for 2011, even though it was never enacted. Under that measure, Republicans would cut about $100 billion and Democrats some $50 billion. That’s where the “halfway” comes from.

Republicans — and much of the news media — measure the cuts from the 2010 budget, the last one signed into law. Under that scoring, the Republicans have cut $60 billion and the Democrats about $10 billion. The two sides are still $50 billion apart, but under this scenario, the Democrats have barely budged.

White House officials have argued that it makes sense to compare one proposal — the president’s 2011 budget request — with another proposal, the House 2011 bill. But that argument has gained little traction in official Washington.

The White House has now come up with a third way of drawing the line: the 2010 budget, adjusted for inflation. This is not unreasonable, since inflation means a dollar one year does not buy as much as the next year. (This “inflated baseline” provided by the White House has an additional wrinkle — an extra $5.5 billion to ensure Pell grants for college remain at a full $4,850 award — but that is a bit complicated to explain, so we will leave that aside for the moment.)

Under this scenario, the discretionary budget for fiscal 2011 would have been $1.117 trillion, all things being equal.

Here’s how the different budget proposals compare when adjusted for this new line:

President’s original 2011 proposal: +$12 billion

Latest Democratic proposal: -$39 billion

House Republicans: -$91 billion

These numbers show that the president’s proposal certainly would have been an increase over inflation. But they also appear to show that the Democrats have moved even more toward the GOP position, though not quite “halfway.”

To some extent, this is all semantics. No matter how you measure it, the two sides are always about $50 billion apart.

However, we are not convinced by the White House presentation. The inflated baseline helps demonstrate that even a “freeze” would mean a cut in some spending, but it still makes more sense to compare the 2011 proposals to the 2010 numbers.

Certainly, cuts along the lines of what the House Republicans have proposed would be substantial. The Center on Budget and Policy Priorities, a left-leaning group respected for its number-crunching, recently tallied up a list that documents the potential impact on poorer Americans.

We also did some rough calculations to compare the current GOP plan to the $16 billion in budget cuts (known as recissions) made by congressional Republicans in 1995. All things being equal, the current House bill appears to be about three times as large as the bill that President Bill Clinton signed into law (after first vetoing an earlier version). That bill cut the budget by about 3 percent, or 0.2 percent of the gross domestic product; this proposal would reduce the budget about 8 percent, or 0.75 percent of GDP.

But has the White House offered “specific cuts,” as the president asserted? That’s not quite accurate, especially compared with the detailed cutbacks in the House bill. In fact, that’s where the White House’s arguments breaks down. The specific trims offered by Democrats amount to just $10.5 billion.

The president made a number of other questionable comments elsewhere in his radio address.

Obama said the 2012 budget “will reduce our deficits by $1 trillion over the next decade.” That’s only through a number of dubious accounting gimmicks, which we have previously documented. The president’s proposals would actually increase the deficit in 2012, the year that counts.

Obama also claims “the cuts I’ve proposed would bring annual domestic spending to its lowest share of the economy under any president in more than 50 years.” Again, that would be at the end of the budget period — after Obama finishes what he hopes would be a second term. He neglected to mention that in 2010 he brought annual domestic spending to its highest share of the economy — 4.5 percent — in three decades. Even you buy the president’s claim that he wants to cut discretionary spending, mandatory spending and net interest in 2016 would amount to the highest share of the economy in history.

The Pinocchio Test

The Democrats’ posturing that they have met Republicans “halfway” on budget cuts does them no credit. Either they should take a stand and say they won’t accept any further cuts, or they should begin a real negotiation that leads to a higher number. Obama signaled he was willing to deal when he said he was “prepared to do more.” But the persistent claims of going “halfway” when in fact Democrats have done little to engage Republicans on the issue will only hurt their credibility in the long run.

Three Pinocchios

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    About the Blogger

    Glenn Kessler has covered foreign policy, economic policy, the White House, Congress, politics, airline safety and Wall Street.

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