Wednesday, February 16, 2011

Obama's Budget: A Bad Result of Bad Strategy

First off, thanks to lovechilde for inviting me to post here. Since I lack his knowledge of music and we have irreconcilable differences on the subject of baseball, I will likely post mostly on law and politics. So here goes.

President' Obama's budget proposal is terrible on many levels and plenty of people have already pointed that out. It cuts programs that help the most vulnerable while doing essentially nothing to cut the budget deficit. Rather than rehash that I want to take a longer view of the way in which this is the result of bad decisions made very early in the administration.

One of those bad decisions is the mistake, which Obama keeps repeating, of negotiating with himself. There is no way to know if he could have obtained a stronger stimulus or the public option, but what is clear is that he never tried. In a misguided attempt to capture the magic of bipartisanship he tries to meet the Republicans halfway. Of course they have no interest in reciprocating and simply pull him further in their direction.

So what brought us to the point where a democratic president is proposing to cutting things like heating assistance for the poor and community block grants? One could start with the failure to pass a stimulus that any reasonable person though was adequate to the task, but there is a fair counterargument that Obama got the best he could. (I'm not sure this is true since he is the one who set the limit on the stimulus, but there is no way to know.)

What Obama did not have to do is wholeheartedly adopt a Republican framing of the economic situation in which the deficit and not jobs (or rather the lack thereof) is the main problem. Not only is this framing wrong, particularly in the short term, it shifted the focus from how to get the economy going to the much narrower question of how to cut the deficit. So now, two years into Obama's term, a "good" budget becomes one that cuts things like heating assistance and community block grants. And given his record, there is no reason to think that Obama will be able to limit the damage to his bad opening bid because the Republican plan is even worse. It would be great to believe that Obama could reframe the debate in a more sane way, but I don't know that he could even if he wanted to, and there is no indication that he does.

And the weakness of the administration's plan is already clear. While the White House claims that the budget is "shared sacrifice" when Chris Bowers asked in a conference call for progressive bloggers with the White House what the rich were doing to help OMB communications chief Ken Baer pointed to the reduction of itemized deductions for wealthier Americans. Of course there is little chance that what Republican's will characterize as a tax increase will pass, especially after the President's epic fold on tax cuts in December.

And of course those tax cuts are what the budget cuts are paying for.


Lovechilde said...

Great post. I could not have said it better myself.

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