How to Think About the 2012 Budget

Read The Atlantic's first take on the president's 2012 budget here.

The president's 2012 budget, which aims to create $1.1 trillion in savings over ten years, isn't really a budget.

A budget, as defined by the dictionary, is an estimate of future expenses. But the White House can't produce an estimate of 2012 spending because appropriations will be determined by a bitterly divided Congress with a Republican House and Democratic Senate. As a result, 2012 spending might look nothing like the document they published this morning. It's best to think of this plan as an opening argument or a statement of purpose. This is the president's chance to say: I might not get what I want, but here's what I want, anyway.

The 2012 budget is austerity lite, deficit reduction lite, progressive lite, and conservative lite

So what does the budget say about the president? Here's the number one takeaway I see: The White House scooped up President Clinton's budget director, and then it scooped up President Clinton's budget slogan. This is a cut-and-invest budget. But the same way a spork makes a incomplete fork and an ineffectual spoon, this compromise budget provides for both incomplete investment and ineffectual deficit reduction.

To maintain a record increase in Pell grants to students, the budget cuts grants for summer school and accelerates interest payments for graduate students. To make room for a new infrastructure bank and clean energy research, the budget eliminates tax breaks for oil and gas companies. On top of that, the budget freezes non-security discretionary spending for five years and federal salaries for two years. Defense gets a relatively light shaving -- $78 billion in cuts over 10 years, or $8 billion a year from a $700 billion budget.

The always-pithy Daniel Gross writes of the 2012 budget, "This is austerity lite. And, like lite beer, it is less satisfying and may leave a bad aftertaste."

He's right! In fact, the 2012 budget is everything lite. It's austerity lite, deficit reduction lite, progressive lite, and conservative lite. The ten year cuts are too meager for conservatives, the few cuts that are specified are abhorrent to liberals, the long-term debt drivers (Medicare and Social Security) are left totally untouched, and clean energy still doesn't have the top-down signal progressives want, like a renewable energy standard or carbon tax.

The administration tried to cut smart, invest strategically, and make a "downpayment" on deficit reduction all at once. But it's hard to meaningfully be both an investment budget and a deficit reduction budget all at once in one year. So the outcry is predictable. Republicans said they didn't cut enough. Democrats said they cut too much. Deficit hawks said they didn't deal with the main drivers of debt. They're all right, maybe. The White House tried to half-please everybody and mostly pleased nobody. This budget isn't dumb. It's just everything lite.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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