President Barack Obama has unveiled his proposed budget, and, as expected, Republicans are crying foul. The New York Times editorial board provides an overview:
President Obama’s fiscal 2016 budget, released on Monday, pulls together the themes and policies set forth in his State of the Union address and other recent speeches and gives them a force and coherence — an ambitiousness — that a more piecemeal delivery does not convey.
As a practical matter, the budget details what Mr. Obama believes needs to be done to help ensure a more prosperous and inclusive future for ordinary Americans, including greater contributions from corporate America and from those atop the wealth ladder. Politically, it seeks to frame the terms of the debate for the 2016 presidential election season. If Republicans simply reject those terms — if they can’t discuss the ideas and act on them — they may find themselves, deservedly, struggling for a response.
The core of the president’s 2016 budget is a plan to boost the middle class by helping low- and middle-income earners pay for education, child care, job training and other needs, and by vastly expanding investment in the nation’s infrastructure. These initiatives would be paid for, in the main, by nearly $1 trillion in tax increases that would fall on the wealthy and large financial institutions over the next decade.
The Los Angeles Times:
President Obama's $4-trillion budget proposal includes a slew of spending and tax initiatives the GOP-controlled Congress will find about as appealing as 3-day-old sushi. But as he did with his State of the Union address, Obama used his budget to tee up issues that Congress ignores at its peril. These include crucial questions about how to adapt the American workforce to the demands of today's businesses, provide more upward mobility for the working class, address the country's infrastructure needs and remove perverse incentives from the corporate tax code. [...]
In particular, Obama would have Washington provide more tax breaks to low- and moderate-income workers; do more to improve the performance of schools and students at virtually all levels, with an eye particularly on preparing people for 21st century careers; invest significantly more in roads, bridges and mass transit; and spend more on national defense and cybersecurity. He also would end the “mindless austerity” of the automatic spending cuts Congress enacted in 2011. Those proposals would raise federal spending by $1.6 trillion over 10 years, which the president would more than offset by trimming Medicare and Medicaid growth while raising taxes on inherited wealth, capital gains and foreign earnings by U.S. multinational corporations.
Although Congress has already rejected a number of those ideas, Obama is right to press lawmakers to reframe the budget debate.
More on the budget below the fold.
Over at Quartz, Tim Fernholz goes over the budget toplines, including a push to end sequestration:
Obama proposes scrapping the sequester—the automatic budget cuts that helped reduce the deficit—at the expense of targeting the smartest possible cuts. It’s not that he’s arguing for a wild expansion of spending; as the Center on Budget and Policy Priorities notes, his average yearly spending—21.75% of GDP—is the same average maintained by Ronald Reagan’s administrations. Simply keeping the deficit under 3% of GDP is sufficient to reduce it relevant to the size of the economy, and Obama’s budget does this, in part by targeting deeper cuts at programs it feels are wasteful, like crop insurance, and in part by raising taxes banks, hedge funds, and the wealthy. Spending on mandatory programs like Social Security and Medicare has been steadily squeezing away discretionary investments in science, infrastructure, education and energy, and something has to reverse this trend if the US wants to remain competitive.
CNNMoney has more on the reintroduction of the so-called Buffet Rule:
First pitched by the White House in 2011, the Buffett Rule (or "Fair Share Tax") would require people making $1 million or more a year to pay at least 30% of their income, after charitable contributions, in federal taxes.
Another encore appearance: A proposal to limit the value of itemized deductions, as well certain tax exclusions, to 28% of the amount claimed. That would affect anyone whose top tax rate exceeds 28%.
Carried interest comes up again, too. Obama would still like Congress to pass a law requiring managers of private equity, venture capital and hedge funds to pay ordinary income tax on the part of their compensation known as carried interest, which is currently taxed at the lower capital gains rate of 20%.
The Washington Post's
Eugene Robinson offers his take on the politics of it all:
Obama has an economic track record that Republicans are going to be hard-pressed to ignore. Unemployment is down to 5.6 percent, the economy continues to grow at a healthy pace and deficits have plummeted. If the GOP wishes to have any credibility, the party will have to stop pretending we live at a time of unrelieved doom and gloom.
Obama has taken advantage of good economic news to play offense with the budget, rather than defense. For most of his tenure, the president has had to work around the margins of federal spending. It is ironic that now, with neither house of Congress in his party’s control, Obama is able to propose what looks like his most progressive budget to date.
The Sacramento Bee:
By immediately declaring the budget dead on arrival and belittling it as merely the same tired “tax and spend” before any real debate, GOP leaders are not keeping their pledge to govern responsibly.
Yes, some of the hyperbole is part of the gamesmanship in budget negotiations, already more pronounced because of the 2016 presidential race. But haven’t voters made clear by now that they’re sick and tired of the unproductive partisanship in Washington, D.C.?
Is it too much to ask for Obama’s proposals to be judged on their merits? There are actually some ideas worth strong consideration.
Finally, probably one of the most historically interesting things you'll read all day:
Robert Spitzer, writing in The Los Angeles Times, makes the case for a strong veto power against Republican opposition:
Today, the presidential veto is viewed as simply granting the power to say “no.” But the founding fathers knew better. To them, the presidential veto was the “revisionary power.” Early drafts of the Constitution referenced “revision” in describing the veto process but that phrasing wasn't in the document's final version. James Madison referred to the veto and Congress' subsequent consideration as “separate revision.” To them, the veto was more than the power to say “no” — it was a final chance for constructive improvement of legislation by both branches.
Americans want their presidents to be leaders, even when they disagree with the paths the presidents are taking. Presidents can use the veto power prolifically and effectively. Historically, presidential vetoes are sustained — that is, not overridden by Congress — about 93% of the time; for major legislation, more than 80% of vetoes stick.
The most prolific user of the veto by total numbers was Franklin D. Roosevelt. The key to his success? He continued to advance a positive agenda, even as he ginned up political veto melodrama, as in 1935 when he announced with great fanfare that he would deliver his veto of a veterans' bonus bill personally to a joint session of Congress. He also read his veto message on national radio.