Earlier this week, the Washington Post editorial board blasted the Obama administration’s foreign policy as “fantasy”-based for the past five years. This week, we finally saw the long-overdue budget proposal from the White House, and discovered that the fantasy extends much farther than just the State Department. Even the New York Times described it as a populist “wish list,” which means the fantasy world has become even more noticeable for outsiders.
In my column at The Fiscal Times, I point to at least a few reality checks:
The budget claims to cut publicly held national debt over a projected ten-year period to 69 percent of GDP, and annual budget deficits to 1.6 percent of GDP. The CBO, on the other hand, sees publicly held debt rising from its current 72 percent to 79 percent of GDP and budget deficits going back up to 4 percent of GDP in the same period. What creates this difference?
For starters – literally — the Obama administration assumes a growth rate of 3.1 percent in 2014, when CBO expects 2.7 percent and the private sector consensus comes in at 2.5 percent, according to Investors Business Daily. The actual GDP growth rate for 2013 was 1.9 percent, according to the Commerce Department , down from 2012’s 2.8 percent, and leading indicators for 2014 offer little hope for any kind of sharp rebound from stagnation.
Most of the disconnect from reality comes in revenue assumptions based on “tax reform.” The budget assumes that Congress will pass what the proposal euphemistically calls “transition revenue from pro-growth business tax reform.” What that actually means istax increases, as Orrin Hatch explained on the Senate floor Wednesday. “The budget envisions well over $1 trillion of additional taxes,” Hatch said, “in the face of a persistently sluggish economy.”
How likely is the GOP-controlled House to give Obama one trillion dollars in tax hikes? As likely as they are to cut defense spending while Vladimir Putin is on the roll in Ukraine. But that’s exactly what Obama proposes:
Also, the budget projects massive spending cuts as part of the claimed cost savings – more than one trillion dollars, representing half of the supposed savings in the Obama proposal. Put aside the likelihood of a Republican House cutting Pentagon spending by another trillion dollars, after two rounds of significant defense cuts over the Obama presidency. With Russia invading Ukraine and China threatening its neighbors with exaggerated air-defense claims, the idea that either party will get on board with massive cuts to defense spending now is sheer fantasy.
Why publish such a laughable proposal when Senate Democrats are refusing — again, as they have for four of the past five years — to actually produce a budget? David Graham at the Atlantic agrees that this is a stunt budget, but suggests that Republicans are to blame for it:
“Our budget is about choices,” Obama said at a D.C. school Tuesday, in remarks about the budget. “As a country, we’ve got to make a decision if we’re going to protect tax breaks for the wealthiest Americans, or if we’re going to make smart investments necessary to create jobs and grow our economy, and expand opportunity for every American.”
Meet Election-Year Obama. If 2013 was the year of Eternal-Optimist Obama, who felt residual buzz from his reelection and held out hope Republicans might go for a compromise, Election-Year Obama’s attitude is blunter and bleaker:Fine, if you don’t won’t meet me halfway, I’m not going to put my neck out. I’ll just ask for what I want. After all, this budget is dead on arrival. Republicans showed no interest in compromising last year, and they’re even less inclined to partner with the president in an election year.
That might be a good argument, except that this budget isn’t an exception. It’s part of a pattern from Obama. When was the last time an Obama budget won a floor vote, even in the Senate controlled by his own party? In fact, when was the last time an Obama budget won a single vote in either chamber? It’s not exactly a coincidence that the Democrat-controlled Senate has produced exactly two budgets — one for FY2010 and the other last year — in the last six years. Even Harry Reid can’t sell an Obama budget to Democrats, let alone expect Republicans to climb aboard.
Obama budgets are always fantasies, in which no one but the White House indulges. That’s true this year, too, and it’s painfully obvious to everyone except the President and his staff.