President Obama’s new budget for fiscal year 2015 is almost entirely free of surprises. The Obama administration supports a number of large tax increases, most but not all of which target high-income households, and so the budget assumes that revenues will grow faster than expenditures over the coming decades and that debt levels will decline. One key reason the White House is able to paint so rosy a picture is that its economic assumptions are different from those of the more buttoned-up Congressional Budget Office. Specifically, the Office of Management and Budget, which is responsible for crafting the president’s budget proposal, maintains that the U.S. economy will be 2 percentage points bigger in 2024 than it will be in the CBO’s projection.
One of President Obama’s defining convictions is that he is the most reasonable man in our nation’s capitol. He seems to view opposition to his agenda as a reflection of intellectual or moral failures (my opponents don’t understand the underlying issues well enough, or their hearts aren’t big enough), or as a product of naked cynicism (my opponents are dishonest, and they will do anything to defeat me). To prove his point, the president will occasionally tout an idea from the other side of the aisle, or rather an idea he imagines to be from the other side of the aisle. And when his political opponents don’t embrace the idea, well, that means that they are acting in bad faith.
Federalism’s days appear to be numbered. The reason isn’t so much that the power of the federal government has increased, though that’s part of it. Instead, the slow-motion death of federalism flows from the fact that a wide array of federal programs have seduced state governments into playing Washington’s tune.