The Great Big Budget Blowup Isn't.

When Office and Management and Budget director Peter Orszag pronounces himself "very pleased" about the budget resolutions marks released by the Congressional budget committees. Given the headlines -- Democrats Take Knife To Obama's Budget  -- is he spinning?  Sort of.  One assumes that Orszag has some pride of authorship for his own document, and so a few redlines here and here might be annoying.  The hasty rollout of the President's tax reform (or revenue enhancing) search committee suggests that the White House anticipated a less-than-complete endorsement.  But on the fundamentals, the White House has every reason to be confident. The House and Senate budget resolutions share as many genes with the White House blueprint as humans do with chimps -- in excess of 98%.   Most Obama priorities are funded.  Since it's the budget resolution for just one year -- and remember, this broad outline that will be filled in by appropriators -- that's nothing to sneeze at.  The reality is that Democrats aren't revolting against Obama; they're giving him as much as they can, given their own institution and political prerogatives. Collectively, Congress is merely acting as Congress does, and has done, ever since the inception of the modern budget process in 1974. 


The caveats: the budget contains no money for a cap-and-trade emissions credit trading system and therefore does not assume any money dervied from the selling of credits -- but if you'll notice, the President's budget proposal doesn't assume any revenue until 2011, the bulk of which would go towards offsetting an extension of the President's "Make Work Pay" tax credits. (Two years of those credits were funded by the stimulus package.)  On cap-and-trade, one can make an argument that a downpayment in the budget would have been helpful to the administration.  But the political reality is a standalone bill -- which would include, as the President himself hinted last night, money to account for regional differences in energy production and measures protecting Americans from spikes in electricity bills -- would have a better chance at passage.   So far as I can tell, other major difference is that where the White House provided guidance about how to fund and structure a 10-year $684 billion health care reserve fund; Congress provides for a similar facility, but does not specify gross savings -- the White House was more specific. Under both proposals, appropriations committees will be tasked with coming up with legislation that nets to zero. That's kind of exactly what the White House had hoped for.  A minor difference: the farm-state senators won't go along with the President's agriculture subsidy cuts.