“For years, the debate in this town has raged between reducing our deficits at all costs and making the investments necessary to grow our economy,” the president said in a speech at the White House. “And this budget answers that argument, because we can do both. We can grow our economy, and shrink our deficits.”
The compromise plan isn’t a vision document as all his other budgets have been. Rather it resurrects the last “grand bargain” offer he made during the “fiscal cliff” negotiations, trading cuts to Social Security and Medicare that secure the program’s long-term future for the closing of loopholes for the rich.
The president made it clear that despite public perception otherwise, the deficit is falling. But he wants to do more.
By offering $1.8 trillion in deficit reduction, preemptively adopting concessions he says he would rather not have to make, he clearly wants to position himself as being serious about tackling the debt. By doing this he hopes to make it clear that Republicans are not willing to end any tax breaks on the rich in order to close the deficit.
With the sequester in effect, threatening as many as 750,000 jobs, and another debt limit crisis coming as soon as May, the president is hoping to preempt the standard argument that both sides are to blame for the impasse.
The responses to the budget have been sharp from both Democrats and Republicans.
Senator Elizabeth Warren (D-MA) has already sent out an email to her supporters saying that she cannot support the “Chained CPI” reform the president has adopted. “We can’t chip away at America’s middle class and break the promise we make to our seniors,” she wrote.
From the right, tax pledge overlord Grover Norquist said that Chained CPI would violate his “no new taxes” pledge, which has been signed by vast majorities of Republicans in the House and Senate, because it would push taxpayers into higher brackets via “bracket creep.”
Senate Minority Leader Mitch McConnell (R-KY) dismissed the president’s proposal as “not serious.”
“It’s hard to see what the White House plans to accomplish here,” he said on the Senate floor, adding that it was “another left-wing wish list.”
Despite a ratio of cuts to new revenues of 2 to 1, progressives may find a lot they like in the president’s budget. He calls for a cigarette tax to pay for universal pre-kindergaten. The plan restores cuts to Medicaid and requests $2.4 billion to begin a round of base closures, leading to about $100 billion less in military spending over the next decade.
The plan also includes investment in infrastructure, particularly in areas of the country most hit by globalization.
The Washington Post’s Ezra Klein points out that the president is putting $4.6 trillion into strengthening Medicare, Social Security and other government programs, while Republicans would spend that amount on lower taxes, especially for the rich, and deficit reduction.
Comparing it to Paul Ryan’s “magical” budget that saves the rich, forgets the poor and spares the old, The Atlantic‘s Derek Thompson sums up the president’s budget in nine words: “Tax the rich; Spare the poor; Remember the young.”