In his State of the Union address, Barack Obama threaded the needle by calling for new investments in technology, education and infrastructure and a five-year domestic spending freeze. But those were just words. The president's budget for 2012, released today, is the true reflection of what his priorities are.
The New York Times has posted a quick summary of what the budget does and does not do. The budget includes additional funds for education, high-speed rail, a national wireless network and a national infrastructure bank, which Democrats and Obama supporters will like. The document also rejects the advice of the administration's deficit commission and does not tinker with Social Security or Medicare, which will no doubt anger deficit hawks in both parties. At the same time, the president is proposing painful cuts in heating assistance for low-income families, block grants for community development and Pell Grants for needy students — all things that Democrats would no doubt criticize if a Republican president proposed them.
Taken together, the budget outlines $3.73 trillion in spending for fiscal year 2012 and $1.1 trillion in cuts over the next ten years. "If all goes well, that'll take the deficit down from the 10.9 percent of GDP we're projecting for 2011 to 3% of GDP in 2017," reports Washington Post columnist Ezra Klein.
Obama's budget is unlikely to satisfy either critics or supporters of the president. Deficit hawks and House Republicans — who've suddenly become proponents of fiscal conservatism (as long as it doesn't include raising taxes) after eight years of rubber-stamping George W. Bush's big government corporate conservatism and dramatic expansion of the national debt — are already saying these cuts don't go far enough. Progressive supporters of the president, meanwhile, are quick to point out the irony of Obama, a former community organizer, proposing cuts to community block grants that help community organizers.
The cuts the president has outlined barely offset the tab of temporarily extending the Bush tax cuts, which added $858 billion to the deficit over two years, including $125 billion for Americans making over $250,000 and slashing the estate tax. If Obama ends up once again extending the Bush tax cuts in 2012, the savings he envisions in the current budget will be completely nullified. Meanwhile, his unwillingness to play hardball with the GOP last year will result in increased hardship in real time for millions of Americans who are struggling to survive this recession. We're living in odd times when a Democratic president is okay spending billions of dollars on an unpopular and seemingly unwinnable war in Afghanistan but has no problem cutting heating aid for poor Americans in the midst of the coldest winter in memory.
The budget proposal is as much about politics as policy. This plan will have to pass a divided Congress and marks the first step in a long game of political jujitsu with the GOP. "The White House is trying to reframe the debate as the GOP's 'cut and grow' versus Obama's 'cut and invest,' " argues Washington Post blogger Greg Sargent.
Yet the president is playing on the GOP's turf. The debate is over cuts vs. cuts. At a time of 9 percent unemployment, neither party is laying out a roadmap for how to put people back to work and lift the country out of its economic morass.
As I wrote in a recent article for The Nation, "Obama: Triangulation 2.0?":
"The president's relentless attachment to "pragmatism," which has become an ideology unto itself, has allowed the GOP's dominant narrative about the economic crisis — that big government, once again, is to blame — to go unchallenged, especially when Obama sides with Republicans thematically on issues like deficit reduction and freezes on discretionary spending and federal pay. "In the absence of an alternative narrative the Republican story is the only one the public hears," Robert Reich, Clinton's labor secretary and a onetime Obama economic adviser, noted on his blog. Hence the rise of the Tea Party and the potency of antigovernment right-wing populism nowadays."
The media, which have lately become major cheerleaders for fiscal austerity (as long as they are not the target), ain't helping much, either. In an interview with Obama budget director Jack Lew yesterday, CNN anchor Candy Crowley was aghast that the Obama administration had not proposed steeps cuts to Social Security or Medicare. "Where are the big ideas for the big programs that suck money out of the economy?" she asked incredulously. Crowley didn't even bother to ask Lew about the administration's plan for creating jobs — and whether they have one. And we wonder why the public thinks the country is headed on the wrong track.