Obama budget reveals Obama’s core

February 14, 2011

Here’s what President Barack Obama’s new budget tells me: He hasn’t shifted to the center, he’s shifted into 2012 campaign mode, one that let’s him be who is really is.

The budget is a political document that bets voters really don’t care much about deficits. (Over the next decade from 2012-2021, it would add another $8 trillion dollars to the national debt and take the national debt as a share of the overall economy to 77 percent from 62 percent in 2010). As such, Obama will portray himself as the jobs-first, going-for-growth candidate who does a bit of fiscal gardening on the side — just a few prudent budgetary snips here and there.

And on the other side (at least as painted by Team Obama): the fiscally austere Ryan-Rand Republicans who would savage Social Security and Medicare and recklessly slash critical investments necessary to win the future. No wonder his budget calls for cutting expected deficits over the next decade by just $1.1 trillion vs. the $3.9 trillion (including $556 billion in entitlement cuts) advocated by his own debt panel. To support his commission would mean going off message and losing a valuable campaign issue.

Any slight chance that Obama might chart a bold path on debt reduction probably died when the UK recently reported an unexpected economic decline, a drop some economists incorrectly blame on Prime Minister David Cameron’s tough-love budget. No way is Obama going to risk a renewed economic slowdown and his potential reelection. As it is, his budget forecasts average 2012 unemployment of 8.6 percent. That means Obama expects to try and win a second term in the most hostile employment climate since the Great Depression.

Oh, and tax cuts? Not there. This budget adds little to Obama’s vague State of the Union talk of cutting U.S. corporate tax rates, soon to be the highest among advanced economies. Obama only calls only for “beginning the process of corporate tax reform. Overall, he wants to raise a variety of taxes, including $700 billion in income and capital gains tax rates on wealthier Americans.

Of course, that merely circles us back to the driving force (besides ambition) behind the Obama presidency: to redistribute wealth after decades of growing income inequality and to finish weaving the social safety by creating universal healthcare. He certainly didn’t run to become an Eisenhower Republican — as Bill Clinton once referred to his administration — and comfort jittery bond markets. But markets will eventually have their say — and maybe sooner rather than later.

One comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

But the GOP is NEVER in campaign mode, right? This article reveals James Pethokoukis’ core more than anything else.
So let’s talk honestly about the budget. Republicans don’t care if their agenda puts hundreds of thousands of Americans out of work, by design. THey don’tcare if their cuts undermine education, law enforcement, infrastructure, and public safety. They don’t care if their budget plan undermines economic growth, competitiveness, and innovation.
But if the Obama administration wants to cut wasteful spending on military projects the Pentagon doesn’t want, all of a sudden, the GOP not only cares, but they are demanding unnecessary spending that looks, feels, and smells very much like earmarks and “make work projects” that benefit certain Republican districts.
And you have the gall to accuse Obama of being in campaign mode?

Posted by GetpIaning | Report as abusive