Though Obama’s budget requests have been dead on arrival in Congress since Republicans took control of the House two years ago, the blueprint remains an important political document. That’s particularly true this year as lawmakers gird for showdowns over automatic spending cuts, a government shutdown and the federal debt limit.
“The budget at least will tell us . . . whether Obama really seriously wants a grand bargain or whether it will be more marginal adjustments like last year,” said Rudolph Penner, a budget expert at the Urban Institute. “It will tell us a lot about just what he wants to do over the next four years.”
As policymakers grapple with record budget deficits, Obama has repeatedly called for a grand bargain to bridge the partisan divides over taxes and federal entitlement spending. In an interview Sunday with CBS News, he made another pitch for a “balanced approach” that would pair reductions in health-care costs with an overhaul of the tax code that would generate fresh revenue by limiting tax breaks for the wealthy.
“The average person doesn’t have access to Cayman Island accounts. The average person doesn’t have access to carried-interest income, where they end up paying a much lower rate on billions of dollars,” Obama said. “So we just want to make sure that the whole system is fair, that it’s transparent and that we’re reducing our deficit in a way that doesn’t hamper growth.”
Republicans insist that they will not vote for additional revenue on top of the roughly $600 billion to be gained over the next decade from a Jan. 1 deal to avert the “fiscal cliff,” in part by raising tax rates on income over $450,000.
Instead, House Budget Committee Chairman Paul Ryan (R-Wis.) is at work on a budget plan that would wipe out deficits by 2022 entirely through spending cuts — starting with the “sequester,” nearly $1.2 trillion in automatic cuts set to hit agency budgets on March 1.
“We spend $1 trillion more than we take in each year. In fact, we spend $3 for every $2 we take in. And we can’t keep that up,” Ryan said in a statement. “In the past two years, we’ve offered our solutions to the country’s fiscal challenges. Now the President must do the same.”
Under pressure from House Republicans, leaders of the Democrat-controlled Senate have also agreed to write a budget bill for the first time since 2009. The shape of that document, as well as the general strategy for the fiscal fights ahead, will be under discussion Tuesday at a retreat in Annapolis.
Senate Democrats have a multitude of problems to resolve, including an internal dispute over whether to use tax reform to raise additional revenue. But a consensus appears to be emerging that Democrats should strive to replace the sequester with $600 billion in more-targeted spending cuts and $600 billion in new taxes.
Neither chamber can move forward with its budget plan, however, until lawmakers see the president’s request and the nonpartisan Congressional Budget Office has a chance to check the administration’s math.
In a letter to Ryan last month, acting White House budget director Jeffrey Zients blamed the delay on the late enactment of the fiscal cliff deal, which had far-reaching effects on taxes and spending.
On Monday, White House press secretary Jay Carney dismissed questions about the missed deadline, urging reporters to focus on “substance over deadlines.”
Obama, he said, “has put forward consistently budgets that achieve what the American people overwhelmingly support.”
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