The Obama Budget Has Something for Everyone to Hate
By offering to raise taxes and cut entitlement spending at the same time, the new formal budget proposal from the Obama administration should sufficiently upset just about everyone who will have to vote on it.
By offering to raise taxes and cut entitlement spending at the same time, the new formal budget proposal from the Obama administration should sufficiently upset just about everyone who will have to vote on it. While the full details of the 2014 budget plan will be released later today, most of the major themes and policy changes are starting emerge, including a return to some familiar, but previously neglected ideas, like itemized deduction caps, the end of the carried interest loophole, and the formal introduction of the "Buffett Rule."
Those are the types of revenue proposals that have typically been shot down by Republicans in Congress, but the President has offered his opponents some carrots in a continued pursuit of the mythical "grand bargain." The biggest and most controversial of those is a change to Social Security that would alter the method for calculating inflation adjustments, while also cutting spending for Medicare, the military, and other big programs.
Among the new spending proposals being added are a universal preschool proposal (to be paid for by an increase in federal tobacco taxes,) and $50 billion in new infrastructure spending. The budget also factors in savings from the withdrawal of troops from Afghanistan and Iraq.
The White House says this new proposal would cut more than $1.8 trillion from the deficit over the next decade, not counting deficit reduction that's already been carved out through previous compromises and the new tax rates that went into effect in January. However, it would override the automatic spending cuts that slashed this year's budget via the sequestration.
The new budget proposal, which is actually two months late, is the opening salvo of what promises to be a summer-long battle over the 2014 budget, which takes effect on October 1. It remains to be seen if this opening offer will move the needle at all on the usual budget debates that divided the government for the last several years. Republicans in the House are already reiterating their usual stance that they won't vote for more taxes increases, a point that the administration is "insisting" on. Senate Minority Leader Mitch McConnell also complained on Tuesday that the President's proposals offered nothing new, saying "it sounds like the White House just tossed last year's budget in the microwave."
President Obama will introduce the budget later today and then host several leading Republicans at a White House dinner to begin his sales pitch.