A hat trick for Obama budgets?

posted at 10:01 am on April 11, 2013 by Ed Morrissey

The last two budget proposals from Barack Obama failed to win a single vote in either chamber of Congress.  In three floor votes over two years, not even a single Democrat would stand in favor of Obama’s budgeting priorities.  In my column today for The Fiscal Times, I argue that Obama is a shoo-in to score the hat trick with his latest, record-breaking spending plan, perhaps this time especially among Democrats:

Earlier in the week, after the White House floated the trial balloon on entitlement reform, Roll Call reported outrage from the Left over Obama’s strategic retreat on Social Security and Medicare.  “I’m well past the point of trying to understand what, if any, strategy is behind anything this administration does,” Roll Call quoted an anonymous Democratic aide. “It most definitely does not outline party priorities, as evident by the reaction from the base.”

The Washington Post reported last Friday that Democrats on Capitol Hill opposed “any cuts to Social Security,” including Obama’s proposed use of chained CPI to calculate cost-of-living increases, and would likely be “furious” over any hint of weakness in this area.

It didn’t get any better for the White House after Obama announced the proposal.  Progressive Senators Elizabeth Warren (MA), Tom Harkin (IA), and Bernie Sanders (VT) sent out messages strongly opposing any attempt to reform Social Security and Medicare.  Sherrod Brown (OH) told reporters that “senior citizens didn’t cause [the 2008 recession],” and shouldn’t have their benefits “cut,” even though chained CPI would only reduce the rate of increase for those benefits.

On the other end of the spectrum, the Democratic candidate in the special election for South Carolina’s open 1st Congressional District blasted the proposal for its lack of seriousness on spending.  Elizabeth Colbert Busch, who will face former Governor Mark Sanford next May for the seat held by now-Senator Tim Scott, objects to both the “cuts” to Social Security as well as higher taxes and increased spending.

Republicans aren’t going to rush to the President’s defense, either.  Obama did give ground by proposing to change the calculations for benefits adjustments with chained CPI, which will slow the rate of growth in Social Security spending (not cut it, as some Democrats claimed).  However, Obama is holding this hostage to a pile of tax increases that the GOP won’t accept, probably ever but certainly not without comprehensive entitlement and tax reform.  Nor should they, given the state of the economy:

Republicans on the Senate and House Budget Committees released a joint statement immediately after the launch highlighting the glaring flaws in Obama’s idea of budget discipline. Among them: $964 billion in new spending over the next ten years, $8.2 trillion in new debt, and more than $1.1 trillion in increased taxes – “on top of $1 trillion in taxes from Obamacare and more than $600 billion from the President’s recent tax hike.”

The inclusion of tax hikes seems especially odd, given the circumstances of the economy.  The last GDP report, from 2012’s fourth quarter, measured US economic growth at an annualized rate of just 0.4 percent.  Friday’s jobs report for March showed only 88,000 jobs added, with a civilian labor force participation rate of 63.3 percent — the lowest in 34 years.  Hiking taxes while adding Obamacare mandates for employment is a recipe for more economic stagnation, if not contraction.

Those aren’t the only labor indicators heading south.  Rick Newman at US News alerts us to a “surprise drop” in pay in a number of industries:

The economy doesn’t usually boom when pay is falling, so a new survey showing a surprising drop in compensation may be yet another sign of a slowdown.

The Payscale index, which measures quarterly changes in pay in 15 broad industries, ticked downward in the first quarter of 2013, the first decline in nearly two years. During most of 2012, pay rose at the fastest pace since before the recession, as the following chart shows. So the first-quarter decline interrupts a pattern that seemed to reflect a healthy recovery.

Income has been a weak spot in the economy and one reason many economists feel a slowdown is inevitable this year. The tax hikes at the start of the year reduced disposable income for nearly every U.S. worker, although the reduction hasn’t yet cut into spending in a measurable way. People have been saving less, though, so at some point they may have to cut spending to rebuild their savings.

The real problem with tax hikes isn’t so much the bite in consumer spending (although that will eventually be a problem, as Newman writes), but a lack of capital investment that creates jobs and increases pressure to lift wages.  The drop in pay isn’t coincidental to the labor-force decline.

Jim Tankersley at the Washington Post says Obama’s budget has “12 million losers” — people looking for work:

Last month, the Labor Department reports, 11.7 million Americans were looking for a job but couldn’t find one – an unemployment rate of 7.6 percent. Another 2.3 million people said they wanted a job but did not count as unemployed because they haven’t actively looked for work.

That unemployment rate is at least 2 percentage points above the rate that economists have historically considered “full employment” – the level at which the economy is operating most efficiently. And it’s going to take a while to get back there.

It’s actually worse off than that, thanks to the drop in the civilian labor force participation rate to a 34-year low.  But Tankersley’s pointing out that even with that poor context, the White House keeps extending the time to get back to even a false sense of “full employment”:

According to the projections in Obama’s new budget, America won’t return to full employment until about 2018. That assumes the projections are correct; in recent years the Obama administration’s forecasts have proven to be overly optimistic, forecasting that the economy would soon enter a period of speedier growth that has still not arrived.

Every president includes unemployment forecasts in the annual budget document. In his first budget, the FY2010 budget released in the midst of the 2009 recession, Obama predicted unemployment would fall below 5.5 percent by 2013. Two years later, he predicted full employment around 2016.

Now it’s 2018. That’s not a trend the millions of unemployed Americans like to see.

With tax hikes in mind, Investors Business Daily explains why Obama’s budget is actually worse than everyone thinks:

• Vastly exaggerates spending cuts. The press has widely reported that Obama’s budget would cut spending a total of $1.2 trillion over the next decade. But Obama’s own budget shows that he actually cuts spending a mere $186 billion. (The relevant tables can be found at http://www.whitehouse.gov/sites/default/files/omb/budget/fy2014/assets/tables.pdf on Pages 187-190.)

Obama inflates his claimed savings by first canceling the automatic sequester spending cuts he previously signed into law, then reclaiming them as new savings, and by adding in cuts in interest payments on the debt.

• Relies almost entirely on tax hikes. Obama’s budget shows his plan would increase revenues by $1.14 trillion over the next decade. That means his budget proposes $6 in new taxes for every $1 in spending cuts.

• Cuts the deficit less than claimed. “My budget will reduce our deficits by nearly another $2 trillion,” Obama said Wednesday. But his budget shows total deficit reduction over the next decade would be just $1.4 trillion. Plus, deficits start rising again after 2018.

So far, there isn’t much to recommend this from either side of the political divide, huh?  While some would have us believe that this is a feature and not a bug in Obama’s budget, David Harsanyi isn’t buying  the “all sides hate it so it must be centrist” pitch:

Nearly every story stresses that the budget has drawn critics from both the left and the right. Obama, you see, is so moderate he’s willing to wrangle with the socialist Sen. Bernie Sanders from Vermont (and his petition signed by a couple of million folks who wouldn’t know the difference between a “chained consumer price index” and a Chick-fil-A chicken sandwich) and Republicans. So, balance.

President Obama’s budget would spend $160 billion more in 2014 than the Congressional Budget Office’s base line had even imagined. No tax reform. No genuine entitlement reform. His 10-year, $1.8 trillion “deficit reduction plan” is predicated on doing away with $1.2 trillion in sequester cuts and making it up by taxing us directly or allowing tax hikes to pass through various industries. It is a massive zero-sum fallacy masquerading as a budget.

Nearly every piece of journalism means to frame Obama as a rational broker residing somewhere between Senate Democrats and House Republicans, when in fact, he offers only meager concessions — or, more precisely,  a meager concession — meant to compel impotent Republicans into surrender. …

Inevitably, Republicans will have to reject Obama’s budget — which was, incidentally, delivered two months late — because it is stuffed with tax increases that would mean political suicide. Republicans will be cast as obstructionists, when in fact, there sit Senate and House budgets entirely ignored by the White House. Maybe the president is offering voters the type of spending they desire — though, looking at polls of their attitudes on taxes, that’s debatable — but the media do the public a disservice by framing his proposal as moderate or, even more dishonestly, casting Obama as a great compromiser.

Inevitably, everyone will reject Obama’s budget, just as they did his last two proposals.  The only virtue in this budget proposal is consistency.

Update: I wrote “tax cuts” where I meant to write “tax increases.” I’ve fixed it above.

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When even the brain-dead demorats in Congress are aghast at a tax-raising, high-spending budget then you know the thing is a disaster.

Who could have guessed that a Dog Eating Race Pimp with zero private sector experience could produce a laughable budget plan like this. I mean besides pretty much everyone who isn’t a glaze-eyed liberal.

Bishop on April 11, 2013 at 10:05 AM

I don’t think anyone on here is surprised at how big of a joke Obama’s budget is. But the real question is will any compromise budget actually get passed by Congress or are we looking at yet another 4 years of continuing resolutions?

Doughboy on April 11, 2013 at 10:11 AM

Not that I have a drop of pity for him, but the rat-eared wonder is in tough place that the media can’t extricate him from. After the multi-year bounty of the Porkulus, he cannot put a reasonable budget together without slaughtering a few holy cows of the Left. If he does, he gets whacked by his own party; if he does not, and his party supports what will amount to ~20% increase, they lose any chance of retaking the House.

Archivarix on April 11, 2013 at 10:12 AM

However, Obama is holding this hostage to a pile of tax cuts that the GOP won’t accept, probably ever but certainly not without comprehensive entitlement and tax reform.

Ed, don’t you mean “tax increases”?

Bitter Clinger on April 11, 2013 at 10:12 AM

Let’s hike taxes and spending. That will get the economy going. Then throw in over 10 million additional outside workers to compete for jobs!

Barry will run this nation into the ground yet!

GarandFan on April 11, 2013 at 10:14 AM

He doesn’t have to face the voters again. What we’re seeing now is the true Jugears. We should compare the next few years to the original campaign in order to see exactly how bad he lied.

Maybe, just maybe, somebody somewhere might learn something about avoiding a tornado when one is coming.

platypus on April 11, 2013 at 10:14 AM

you gotta know the GOP is working feverishly behind doors to help Obama acheive his budget goals.

That way they can focus on SSM and amnesty and beat the Democrats to the punch.

renalin on April 11, 2013 at 10:15 AM

Ed, don’t you mean “tax increases”?

Bitter Clinger on April 11, 2013 at 10:12 AM

[headdesk]

Yeah, I fixed it. Sorry about that, and thanks.

Ed Morrissey on April 11, 2013 at 10:16 AM

Ed, don’t you mean “tax increases”?

Bitter Clinger on April 11, 2013 at 10:12 AM

No, I believe the correct term is “revenue increases”.

Doughboy on April 11, 2013 at 10:17 AM

Senior administration officials called the rat-eared devil’s 2014 budget a “sticking point” rather than a “starting point” in negotiations. Which is to say he has no intention of negotiating away from the steaming bowl of crap he delivered yesterday just 65 days late and with a level of detail that suggests that his budget staff shouldn’t be furloughed- they should be fired.

For example, the administration wants to cap how much one can withdraw from their retirement accounts, includes a projected $9M revenue from doing so, but doesn’t ever explain just how not letting people take out more than $250K from their IRA would result in revenue unless there is some kind of hidden tax or penalty included.

This is no way to develop a budget.

Happy Nomad on April 11, 2013 at 10:18 AM

headdesk]

Yeah, I fixed it. Sorry about that, and thanks.

Ed Morrissey on April 11, 2013 at 10:16 AM

Happy to help.

Bitter Clinger on April 11, 2013 at 10:18 AM

Archivarix on April 11, 2013 at 10:12 AM

Except that you know Dog Eater didn’t have much real input into this budget, he got bored about 2 hours in and then threw it all in someone’s face to finish while he went off to golf. The man couldn’t manage a lemonade stand much less the U.S. economy.

Bishop on April 11, 2013 at 10:19 AM

No, I believe the correct term is “revenue increases”.

Doughboy on April 11, 2013 at 10:17 AM

I keep waiting for the Left to start using the term “revenue enhancements”.

Bitter Clinger on April 11, 2013 at 10:20 AM

They Kenyan Fraud stated “It will not add one dime to the deficit”for the umpteenth time.This quote should be banned forever.

jeffinsjvca on April 11, 2013 at 10:25 AM

The Obama Campaign’s approach to bipartisan compromise is so perfectly balanced and comprehensively centrist not a single hyper-partisan lunatic in Congress can accept it. Maybe it’s time to dissolve the obstructionist Congress. It’s approval ratings stink after all.

forest on April 11, 2013 at 10:29 AM

I keep waiting for the Left to start using the term “revenue enhancements”.

Bitter Clinger on April 11, 2013 at 10:20 AM

I keep waiting for them to start calling tax hikes an investment in society. After all, “you didn’t build that,” your kids are part of the collective, those who make more need to pay a little more, etc.

It is only a matter of time that they equate massive taxation is not related to worthless parasites like Sandra Fluke or the Obamaphone lady. Massive taxation is making a better society for us all.

Happy Nomad on April 11, 2013 at 10:30 AM

They Kenyan Fraud stated “It will not add one dime to the deficit”for the umpteenth time.This quote should be banned forever.

jeffinsjvca on April 11, 2013 at 10:25 AM

Actually, in Clintonian word-parsing, this is correct. It doesn’t add “one dime”. It adds more dimes than any of us can count.

Bitter Clinger on April 11, 2013 at 10:32 AM

According to the projections in Obama’s new budget, America won’t return to full employment until about 2018

The welfare queens agitator projection in 2009 said that by now will be below 5% unemployment…

mnjg on April 11, 2013 at 10:34 AM

jeffinsjvca on April 11, 2013 at 10:25 AM

He is right it doesn’t add one dime to the deficit. It adds roughly 13 trillion dimes to the deficit each year.

chemman on April 11, 2013 at 10:40 AM

How ‘effing hard is it to rationally and in a balanced fashion modernize social security and Medicare, simplify the tax code and remove special interest tailored loopholes(corporate welfare), and come to reasonable accommodations in the hot issues of the day?

Nothing about our government is actually solution oriented anymore. It’s politically oriented. NOBODY has engaged in good faith honest negotiations in years. And if they did, their prospective bases would rip them apart.

Our government has paralyzed itself. And don’t kid yourself. It’s not a good idea or what the founders intended.

Genuine on April 11, 2013 at 10:40 AM

According to the projections in Obama’s new budget, America won’t return to full employment until about 2018

At the rate people are dropping out of the workforce and/or never getting into it we will reach “full” employment long before 2018.

chemman on April 11, 2013 at 10:42 AM

I keep waiting for the Left to start using the term “revenue enhancements”.

Bitter Clinger on April 11, 2013 at 10:20 AM

I once saw a Dim congressman from Florida on t.v. talking about the $716 billion in cuts from Medicare spending that were written into Obamacare (to help fund Obamacare) as “Medicare savings.”

LOL. Medicare savings. Who doesn’t like savings?

The anchor on the other end of that interview never even raised an eyebrow at the term. And this was on Fox News.

And remember, we musn’t use the term “illegal” anymore to refer to illegal aliens, because using words that actually describe peoples’ law-breaking behaviors might offend them or cause others to view them in a less-than-favorable way. And since deliberate law breaking is such a good thing, we certainly want to use language that encourages more of it!

AZCoyote on April 11, 2013 at 10:43 AM

He doesn’t want a budget. That “continuing resolution” works just fine since he gets to keep his fingerprints off of it. That’s why he continues to propose the most unbelievable plans. Although a dangerous tactic, I almost wish the House said “ok”. Let Harry kill it in the Senate (or let him pass it and let Obama own it). Painful outcome but you have to break a few eggs to make an omelette (consider it an investment in the future).

teejk on April 11, 2013 at 10:50 AM

No, I believe the correct term is “revenue increases”.

Doughboy on April 11, 2013 at 10:17 AM

I keep waiting for the Left to start using the term “revenue enhancements”.

Bitter Clinger on April 11, 2013 at 10:20 AM

Not even that. Nina Easton on the Fox News panel last night claimed that Republicans were “opposed to revenue”. That’s the new spin.

Tax increases out, “revenue” in. They have stolen the language.

slickwillie2001 on April 11, 2013 at 10:56 AM

These unemployment figures don’t count those on permanent unemployment insurance, aka “Social Security Disability”.

Being unemployed is now a disability.

slickwillie2001 on April 11, 2013 at 10:58 AM

How many votes did he get from fellow Democrats on his last budget?

hawkdriver on April 11, 2013 at 11:00 AM

I’m so glad Americans reelected this incompetent clown to a second term.

RobertE on April 11, 2013 at 11:02 AM

As testament to the strength and resilience of our economy is the fact it remains alive.

I didn’t think it could take such continuous and damaging assaults. I can’t begin to imagine how pleased I will be if we survive the rest of this term.

freedomfirst on April 11, 2013 at 11:03 AM

I predict that the fact that Odumbo’s laughable budget receives zero votes from either side for the third year straight year will be a huge story. It will force the media to re-examine the dog eaters associates as well as his actions regarding Solyndra and Benghazi. There will be protests and the hags from The View will denounce the rat eared wonder for being insanely fiscally irresponsible.

Or….

The butt licking media will not report the story at all and will air an interview with some Kardashian freak instead.

DeweyWins on April 11, 2013 at 11:03 AM

But Jay Carney says that this budget is so awesomely awesome, that it’ll blow our minds. What gives?

I guess, even with all the glowing praise from Carney – and a turd is still a turd.

Hill60 on April 11, 2013 at 11:05 AM

Come on guys, you know Obama is the smartest person in DC. He just presents these budgets so that the $1.25 trillion and growing deficit laden malarkey presented by the Democrats looks good.

LoganSix on April 11, 2013 at 11:09 AM

How many votes did he get from fellow Democrats on his last budget?

hawkdriver on April 11, 2013 at 11:00 AM

Zip. Zero. Nada.

They don’t call him “O” for nothing.

Bitter Clinger on April 11, 2013 at 11:13 AM

Well they told me if I voted for Romney taxes on the middle class would go up and SS and medicare would be cut …. guess they were right

Aggie95 on April 11, 2013 at 11:18 AM

I wonder how the meal with bho and 12 r’s went last night? I haven’t read or heard anything about the outcome.
L

letget on April 11, 2013 at 11:30 AM

First time ever that a president could get any votes on his budget three years running?

Unexpectedly

Cinematicfilm on April 11, 2013 at 12:02 PM

But what about the 100,000 teachers??!2/1?1/2#?

How can we get this economy out of the ditch and over the things we tried in the past that got us in the mess we’re in without moar teachers?12/1

joeindc44 on April 11, 2013 at 12:04 PM

hawkdriver on April 11, 2013 at 11:00 AM
Zip. Zero. Nada.

They don’t call him “O” for nothing.

Bitter Clinger on April 11, 2013 at 11:13 AM

Wow, that is amazing, Bitter Clinger. And the one before that?

hawkdriver on April 11, 2013 at 1:36 PM

“Did I put in too much for vacations and tee times again?” Obama on his third strikeout…

RalphyBoy on April 11, 2013 at 1:40 PM

Kabuki theater. The offer to change to chained CPI is just a token effort to appear to be appeasing his opponents, while simultaneously allowing the progressive standard-bearers to beat their chests and cry NEVER!

Obama, like Reid, is now offering untenable proposals ON PURPOSE, for the express end of having them shot down in Congress so he can perpetuate the “intransigence” meme.

After all, why have a normal-order budget at all when they can just demagogue the Republicans for eight months, pass a crisis bill, claim victory, and keep the 2009 baseline in place for all eternity? They have no REASON to go back to doing things properly.

The Schaef on April 11, 2013 at 4:31 PM