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March 05, 2014 5:26 PM Bragging About Poor Investment Levels

By Ed Kilgore

At Wonkblog today, after reading some administration talking points bragging about how low non-defense discretionary spending levels have become, Zachary Goldfarb asks the White House a question many of us have been wondering about for quite some time:

On Tuesday, I asked White House economic advisers at a budget news conference whether the low rate of discretionary spending represents an achievement or a failure. Sylvia Mathews Burwell, Obama’s budget director, said she thought it was a success. “I think what we think is that the proposed president’s budget is the right level over the 10-year period and that we believe that those levels are the correct level,” she said.
What’s hard to know is whether Obama and his top advisers really believe this. Given their statements on the importance of public investment, it’s hard to think they truly believe reducing discretionary spending to such lows is a good thing. But the politics may be that Obama has no room to maneuver. On his left, liberal Democrats have no appetite for dramatic cuts to entitlements like Social Security and Medicare that might allow for significant boosts in discretionary spending. On his right, Republicans totally reject the idea of raising taxes to fund discretionary spending. And even though investors are willing to lend the Treasury money at extremely low rates, nobody seems to have an interest in borrowing to finance investments.

So is the White House just trapped here? I’m not so sure about that. A lot of Democrats actually do “have an interest in borrowing [e.g., boosting deficits] to finance investments.” Others are interested in deeper defense cuts. Still others think a more forceful position on health care costs could generate savings without messing with the basic benefit structure of Medicare (much less Social Security).

In any event, since the current budget is a political document more than it is a fiscal blueprint, it would be nice if the administration stopped bragging about its budget-battle defeats and just made the case for appropriately robust investments. Someday, it might help Democrats win a few more.

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.

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