Tomorrow is budget submission day for the president. This will test the notion that something can be better late than never. With House and Senate leaders having already produced and adopted budget resolutions, President Obama is so late to the game that his budget might be irrelevant. He has already leaked parts of the plan to friendlies and gotten the headlines he wants, including the same old lines about his budget taking a “balanced approach” and containing the perennial favorite, “more investment.” Investment is just the new word for government spending, i.e. the massive growth in food stamps is an “investment” in better nutrition or some such nonsense.
Anyway, by “balance” the president means he wants more taxes in exchange for a modicum of spending restraint. The “balance” is between harming the economy and helping the economy. The offer to Republicans is, “I will help the economy by slowing spending if that is balanced by you letting me hurt the economy by raising taxes.” Obama says that job creation is our priority, but I’ve yet to hear a good explanation of how raising taxes will create one private-sector job. But I completely understand how tax increases keep businesses from hiring and consumers from spending — just look at the March 2013 unemployment report for proof.
In Hilary’s post this morning, she quotes the White House saying that Obama’s budget will cut $1.8 trillion over ten years, but what she doesn’t mention is that these spending cuts replace the $1.2 trillion of sequester cuts. That means the president’s budget only slows the growth of the deficit by $600 billion over ten years. And as Speaker Boehner’s office reminds us, the deficit for this year alone is projected to be $845 billion.
Also, let’s not forget that the tax increases Obama insisted on at the end of 2012, which went into effect in January, are projected to raise more than $600 billion in revenue over the next decade. That’s $60 billion a year, or about 1 percent of the deficit over ten years. These tax increases are punitive. They do not make any real contribution to deficit and debt reduction. Obama is once again trying to make a small group pay for his spending increases through higher taxes, without making any meaningful cuts that will address our spending problem.
For Boehner, it would be easy to dismiss this budget out of hand, with a shrug or an insult, and move on. Instead, he needs to try and find something positive in Obama’s baby step toward entitlement reform and try to make our system work. Boehner is right to ignore the president on taxes, since Boehner is as puzzled as the rest of us by the president’s desire to hurt job growth via tax increases.