Yesterday, the White House finally released its proposed budget. The media promptly touted it as a major step forward, one that can produce a grand bargain on deficit reduction if only Republicans will respond in kind. The gushing first paragraph’s of the Washington Post’s story (by Lori Montgomery) are typical.
But Obama’s proposal cannot serve as the basis for a grand bargain. Although it contains some useful steps forward on entitlement reform, it isn’t serious about spending — or at least about cutting spending. In effect, Obama proposes to continue expanding the government and to pay for some of it by raising taxes and tweaking entitlements.
Democrats used to say that Republicans want to balance the budget on the backs of the elderly. Obama doesn’t balance the budget on anyone’s back, but he proposes to rest a massive, expanding welfare state on the backs of the elderly and, primarily, the well-to-do.
In the build-up to the release of Obama’s budget, the White House wisely focused on its adoption of “chained CPI,” a more accurate way of measuring inflation for purposes of adjusting Social Security benefits, that the leftist base nonetheless opposes. This fed the narrative that Obama is serious about reducing the debt, serious enough to take on his base.
Chained CPI is a step in the right direction, as are some other tweaks on the entitlement side, most notably additional means testing in Medicare. But these measures alone hardly constitute the major concessions that might induce Republicans to accept more tax increases, even in the form of altering deductions.
To have any chance of inducing a deal with Republicans, the entitlement reform would have to be more substantial than what Obama has proposed. It should also be accompanied by serious spending cuts.
As to spending, however, Obama proposes to increase it by $150 billion next year.
When all is said and done, the president has, in the words of Yuval Levin, “proposed an almost $3.8 trillion budget for next year which offers less deficit reduction than either of the budget resolutions already passed in Congress and effectively reaches what little reduction it does propose entirely through tax increases.” Moreover, as Rich Lowry says, Obama is “proposing a higher deficit than under current policy until 2017.”
That’s neither grand nor a bargain.