Political Animal


April 05, 2013 10:11 AM The Obama Budget: Less Than Meets the Eye

By Ed Kilgore

On Twitter this morning I observed the irony that after an anemic jobs report the chattering classes would spend the rest of the day talking about whether the president’s budget (a summary of which was leaked today; the actual document is due to be released next Wednesday) offered enough spending cuts to be taken seriously.

The big news, if you want to call it that, is that the budget will formally propose what Obama has offered hypothetically as part of a “grand bargain” in exchange for significant new revenues: a shift to a “chained CPI” for Social Security COLAs (and other federal pensions and benefit programs, it seems), and some additional means-testing of Medicare benefits.

Whether or not chained CPI (which assumes consumers will switch to lower-price alternatives in purchases as overall prices rise) is a more accurate estimate of inflation, there’s no doubt utilizing it would operate as an across-the-board benefit cut—albeit one that occurs very slowly over time—something Obama and virtually all Democrats have opposed as a matter of principle in the past. There will be howls of outrage from Democratic members of Congress and progressive advocacy groups about this fresh Obama endorsement of the idea, some based on categorical rejection of Social Security benefit cuts, some based on the argument that Obama is offering a crown jewel and getting very little if anything in exchange from Republicans.

What may temper this reaction is the knowledge that this budget is entirely symbolic, and that it is certain to be rejected and denounced by House Republicans immediately for its inclusion of new revenues and its failure to project an actual balanced budget. It appears the White House is again trying to show a willingness to compromise for purposes of strengthening his hand in future fiscal battles, though some think it’s related to Obama’s effort to kick-start “grand bargain” negotiations with those Senate Republicans who are willing to consider some new revenues in exchange for “entitlement reform.”

For the record, there is actually some new spending in Obama’s budget: a pre-K initiative and this week’s “brain research” proposal, both paid for by a tobacco tax increase and a cap on the size of Individual Retirement Accounts. But there’s little in the way of “stimulus.” While the budget would cancel the appropriations sequester, it would in other ways achieve even lower defense and non-defense discretionary spending. Aside from the “offsets” just mentioned, new revenues in the budget—the usual reductions in “loopholes” theoretically supported by some Republicans—come in at $580 billion, a pretty low figure.

How you view this budget depends almost entirely on how you view Obama’s overall fiscal strategy. Is he maintaining the “high ground” on the budget, or making unilateral concessions to an opposition that is just going to pocket them without making any of their own? And is this budget connected to the forced fiscal negotiations that might occur in May or June if House Republicans decide to make a play on a new debt limit increase, despite warnings from the business community not to do so?

In any event, there’s zero that is self-executing about this budget, so it will mostly just represent another maneuver in a budgetary chess game that now seems increasingly disconnected from the economy.

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.


  • c u n d gulag on April 05, 2013 10:25 AM:

    What worries me, is, if this is really just another example of President Obama using 11th Dimensional Chess to make the Republicans continue to look intransigent, what's the back-up plan just on the off-chance the Republicans say, "OK, we'll take that!"?

    We need to INCREASE SS benefits in the future, now that pensions are about as extinct as the Dodo Bird, and the 401K Plan idea has proven, if not exactly disasterous, completely inadequate!

    Instead of "Chained CPI," THIS IS WHAT WE NEED TO DO:

    But, of course the ones supporting these ideas are all DFH's, who were right about everything for the past 3+ decades, so, WHAT THE FECK DO THEY KNOW?

    No, according to the "Serious People," you know what we need to do to that patient over there, the one who's seriously ill from anemia?


  • T2 on April 05, 2013 10:42 AM:

    once again, the President (any President) is not required to produce a "budget". That is the job of Congress. Certainly a president can suggest what his Administration would like to see in a budget, or not see (symbolic, in Ed's words). In this case, Obama realizes that the stuff the House doesn't like will be discarded and the stuff the Senate doesn't like will be discarded (we hope).But since the TeaParty types like Cruz and Cantor have demanded Obama produce a budget, he has. It is entirely possible that they do not know that a President is not supposed to be the branch that writes the budget.
    And as far as the CPI goes, everyone not in the Tea Party realizes that SocSec should not
    be part of any "bargain" as it's not part of the problem.

  • scott on April 05, 2013 10:43 AM:

    So the head of my party is either a guy who wants to starve grannies or (according to you) doesn't really but wants to LOOK like he does in order to position himself well in the 972-dimensional chess game. Do you guys, when you're defending this, even listen to what this sounds like, or is it just defending My President Right or Wrong! all the way down? Pathetic.

  • boatboy_srq on April 05, 2013 10:48 AM:

    Ah yes, the Chained Catfood Price Index. Because seniors don't need USDA Choice (or even Select) proteins.

    This screams of the Reichwing's War on the Poor: who said we could retire, stop working, and still be comfortable?

    Next we'll be hearing how the Job Force Participation numbers (WAY DOWN as of last report) are actually good news because it means all those "working mothers" are transitioning from "executive/professional" to "domestic management" (i.e. housework), which will make all the Entitled White Males' jobs that much more secure and reduce the costs of childcare (since The Wimminvolk will be home with the kids) and education (Because Hoam Schulingô and Shut Up).

  • Don SinFalta on April 05, 2013 11:07 AM:

    "Less than meets the eye" ?

    I don't think it's less than meets the eye, I think it's exactly what meets the eye - a Democratic president leading the charge to cut one of the pillars of our already inadequate social safety net

    If the Democrats can't be trusted to be the defenders of the 99% (and they obviously cannot), then what exactly makes them preferable to their opposition? They aren't the (preferred) party of the plutocrats, and they aren't the party of the rest of us, so who's their constituency?

    The only reason left to support them in any way is that they're not totally disconnected from reality (for the most part) like their opposition. Which is why in the last presidential election, I voted against Romney, not for anybody. And why I donate only to individual candidates (not including Obama) and not Democratic party organizations ever since Obama reneged on his opposition to retroactive telecom immunity during the 2008 campaign.

  • JMG on April 05, 2013 11:14 AM:

    Dear Ed: As a two-time Obama volunteer and contributor, I regard this budget as a personal betrayal and of course as incredibly stupid politics. A better way to lose the Senate in 2014 could not have been created. It's a screaming declaration that Americans who are not wealthy have no representation in their government, and that the Democratic Party is as much a threat to their economic security (not to mention civil liberties) as the Republican Party. That's not entirely true, of course, but it's not entirely false, either.

  • boatboy_srq on April 05, 2013 11:22 AM:

    @scott: The alternative is a bunch of moralizing tightwads who are convinced that the only righteous non-DOD spending is a federal tithe to the church of their choice; that the starving and homeless are just unWashed slackers who need more motivation; that anyone Brown or Queer should be deported to Nigeria or Greece (respectively) - or perhaps Guatemala/Liberia or Uganda (respectively); that women should keep their legs crossed and unintended pregnancy is a sign of low morals; that the only thing needed to combat drugs, violent crime, or other social ills is more guns and more/better prisons; that AGCC is a Satanic hoax intended to thward Godly Elect Job-Creating citizens; that Islamofascism is keeping the US of A from its rightful ownership of the world's oil/uranium/iron/coal/whatever; etc etc.

    This is a group whose sole obsession is to prevent any effective policy so long as it's not authored, executed and monitored by one of their own. Look what happened with Cap & Trade and the Individual Mandate: those were both GOP policy proposals pre-2009.

    And the MSM is so wedded to "fair and balanced" that this is deemed reasonable opposition.

    One look at that and anything is preferable to the GOTea position.

    It would be counterproductive in the long run, but highly instructive immediately, if BHO were to embrace the Teahad philosophy JUST long enough to watch the GOP meltdown.

    There is no "My President Right or Wrong" here. There's only the choice between what's defensible policy (better, good, or merely adequate) and the sociopathic ravings of the Reichwing. If you want better public policy from the WH, go find us some better Republicans who won't insist that Granny's cardboard box is sufficient housing for her Golden Years.

  • Dredd on April 05, 2013 12:34 PM:

    What is missing is not knowing that the difference between capitulation and compromise is the common good.

  • Joe Friday on April 05, 2013 12:35 PM:

    The worst part is, any reductions in benefits in Social Security will NOT reduce the federal deficit by ONE PENNY, because Social Security is SELF-FINANCED and not part of the federal budget and not financed with general revenues.

    So, this would be done WHY ?

  • scott on April 05, 2013 12:51 PM:

    We need better Republicans, certainly. But we also need Democrats who fight for programs they ostensibly believe in (rather than weakening them), and we need to hold them accountable when they don't. The "Look, Shiny!" approach of trying to avoid this and point out how horrible the other side is pretty pointless. Horrible as they are, Boehner and McConnell and Ryan didn't put these cuts in the budget while holding a gun to his head; Obama did, and as Digby has been documenting for years, it's something he's had on his mind for a long time. Obama is responsible for proposing them, and we're within our rights to scream and yell bloody murder and call him a brain-dead, insensitive idiot for doing it.

  • Josef K on April 05, 2013 2:46 PM:

    The kabuki play continues.

    I half-suspect/half-hope it results in some real-life seppeku being practiced.

  • gratuitous on April 05, 2013 2:50 PM:

    Interesting, isn't it? Our captains of industry, colossi striding the earth to the wonderment of we mere mortals, are so stricken with uncertainty when it appears their tax rate might rise three pennies on the dollar for every dollar they "earn" above half a million. Oh, the shakiness of it all! Should they take another couple million in compensation for their efforts, knowing that money might be levied an additional $30,000 in taxes? It is no wonder these masters of the universe are paralyzed in their job creation efforts, and shame on us all for toying with their fragile psyches.

    However, you citizens dependent on the princely sum of $1,000 a month can easily watch its purchasing power ebb away thanks to the ministrations of the chained CPI. We're made of much sterner stuff, and besides, it'll never actually be enacted. Probably. So don't you all worry your gray little heads about it. You'll make do, and think of the warm feeling you'll have, knowing that you're helping to pay for the screw-ups of the Ruling Class while they reap all the benefits.

  • Peter C on April 05, 2013 5:00 PM:

    I admit that Iím frustrated with the outline of the Presidentís budget, but I also think that Chained CPI is not very likely to be enacted. It would have to be a part of a Ďgrand bargainí. And, I think the possibility of a Ďgrand bargainí is nil. I donít think there is a single Republican with any interest in agreeing to anything (other than our absolute and unconditional surrender).

    So, I think the offer is just political posturing; I think Obama is selling the narrative that ĎRepublicans arenít willing to negotiateí. And, thatís an important message; itís just not the battle I personally would like to fight.

    I want to go straight to the 2014 campaign; I want to fight hard on the issues, and Obamaís negotiation undercuts that. I canít fight while heís negotiating.

    But, perhaps it is too early to fight the 2014 campaign. Perhaps it would be better to first establish the narrative Obama is selling. But, I donít think we can stick to a negotiation strategy too long. We have to fight for 2014 at some point. What Iíd like to hear from Obama is a quiet word that heís planning to turn and fight at some point in the future.

    You see, I think one of the problems of the 2010 election is that it was never a national campaign and Obama remained in negotiating mode. And, we donít win when we donít fight. If I were convinced that Obama was planning to turn and fight, Iíd bide my time.

    As it is, Iím frustrated and sidelined and consciously aware that Iím so far Ďout of the loopí that I canít even tell if there is a loop. That sort of treatment might work when your objective is to turn out your supporters on an occasional basis (say, once every four years). It might work if we lived in an age of comity where we and the Republicans were content to share power to a greater or lesser degree according to the political balance of the day. But, I think the Republicans dropped that rubric and have adopted a Ďtotal warí paradigm where their goal is no longer dominance but annihilation. And in a Ďtotal warí paradigm, our side needs to be more engaged more of the time.

    Iím not convinced our leadership has noticed the paradigm shift. That makes me very uneasy. The paradigm never shifts back.

  • Doug on April 05, 2013 8:56 PM:

    Joe Friday - to be exact the SS Trust Fund *does* contribute to the deficit. There is, I believe, $2.7 trillion of SS "special bonds" that need to be repaid and are earning interest.

    As for the general idea behind the budget proposed by the WH, I come back to two things - once again demonstrating to anyone outside of the Faux bubble that Republicans are lying with their claims about the deficit/debt being The Greatest Threat To This Country Ever! and second, even if the proposed Budget was accepted and the CPI introduced, it wouldn't get past the President's desk without the increased taxes.
    And once it's seen those increased taxes don't immediately destroy the economy, the Teapublicans are one giant step nearer to only polling their deservedly dead-end 27%. Nationally.
    Which also means that by 2020, at the latest, the CPI will be seen for the error it was and would be dropped.

  • pjcamp on April 06, 2013 1:42 AM:

    Indeed, it is symbolic.

    The symbolic accomplishment is that for the first time ever a Democratic president has accepted the principle of Social Security cuts.

    You can't ever back down from that.

    That precedent is permanent.

    Goddamn, I wish I'd voted for Hillary.