Now that President Obama has unveiled his budget, some 65 days late, it’s worth remembering one of the ironies of history. One of the most corrupt presidents--Warren Harding--gave us one of the great reforms, the Budget and Accounting Act that led to the creation of the Office of Management and Budget. After World War I, Republicans were eager to control government spending and the idea of taming it with a department that would review proposals and set a deadline for the president to submit his own budget gained credence. Now as then we’re dealing with the budget woes caused by war. Okay, we have the additional clean up from tax cuts and a financial crisis.
So what’s in this tome? Lots of programs get cut: EPA State Indoor Radon Grants? Gone! High Intensity Drug Trafficking Areas, Office of National Drug Control Policy! Pretty much gone. A bunch of math programs at the National Science Foundation gets cut as does the Presidio Trust that helps preserve and develop the beautiful park in San Francisco. Tons more get hiked or instituted from vocation ed programs to nine-figure sums to get state and local governments to cut electricity use. Do they really need to be bribed to spend less?
Since this budget is going to get worked over and taken apart by a Republican House and sclerotic, filibuster-happy Senate, the budget is pretty much a wish list more useful for what it says about Obama than what we’re going to end up with. You’ll see alot about the aggregate size $3.8 trillion. Here are things worth knowing:
Cigarettes helping kids grow. The president’s budget includes a big preschool initiative paid for by doubling cigarette tax. Can the president get it through? It’ll be tough. Tobacco taxes are high and if Republicans are going to give on various deductions this may be tough to handle.
Hiking taxes on wealthier folk. Well, after raising taxes on individuals making over $400,000 and families making over $450,000 earlier this year, Obama comes back trying to raise $580 billion for deficit reduction by limiting high-income tax benefits. Obama would implement the Buffett Rule, requiring that households with incomes over $1 million pay at least 30% of their income (after charitable giving) in taxes.. He’d limit the value of tax deductions and other tax benefits for the top 2% of families to 28%, reducing these tax benefits to levels closer to what middle-class families get.
There’s Asteroid Money! This gem from the NASA budget: "Pursues Innovative Approach to Visiting an Asteroid. The Budget includes $78 million for NASA to develop needed technologies and study alternative approaches for a robotic mission to rendezvous with a small asteroid—one that would be harmless to Earth—and move it to a stable location outside the Moon’s orbit." Would be surprised if this Bruce Willis movie doesn't get trimmed.
Remember Jack Kemp? The late Republican was the proponent of Enterprise Zones that were aimed at helping poor areas by cutting taxes. Clinton talked Empowerment Zones. Now Obama wants to Creates Promise Zones” to rebuild high-poverty communities across the country by attracting private investment to build new housing, improving educational opportunities, providing tax incentives for hiring workers and investing within the Zones, reducing violence and assisting local leaders in navigating Federal programs and cutting through red tape.” Republicans and Democrats love these policy approaches so this one could get through.
That Social Security This is Big But Not That Big. $230 billion in savings from using a chained measure of inflation for cost-of-living adjustments throughout the Budget. But that’s until 2023. This year’s budget alone is 3.7 trillion so that teeny compared to the tens of trillions that will be spend over the next decade, That’s a lot but it pales compared to the trillions at stake. Democrats are howling but some version of this will get through.
Hillary Didn’t Do So Well. She may have been The Greatest Secretary of State Ever in Our History (according to some) but the State Department takes a 6 percent hit in it’s budget although there are some increases for embassy security which she long championed during her sting as secretary. Eric Holder’s Justice Department sees a 3 percent hike with more money for counter-terrorism and funding state and local crime prevention programs.
TARP Winds Down It’s been over two years since that Troubled Assets Relief Program has issued new loans and guarantees. Now it’s going out of business. Obama brags "TARP’s banking programs have generated a positive return for taxpayers, with over $268 billion recovered for taxpayers as of December 31, 2012, compared to the $245 billion originally invested in banks. The progressing economic recovery and the Administration’s prudent management have resulted in an estimated lifetime TARP cost of $47.5 billion, significantly lower than the $341 billion cost originally estimated for the program in its first year." Hey, loan me a few billion and I'll get you a return. The rest of us weren't so fortunate.