How will he pay for it? Fiscal realities put Obama agenda in question

This year there’s an air of unreality about the budget compared to, for instance, 2009 when the president’s Democratic allies controlled both the House and the Senate. Exactly four years ago, when Obama proposed to collect $646 billion in new revenues from auctioning off greenhouse gas emission allowances, there was a reasonable expectation that the proposal would become law and that the $646 billion would flow into the Treasury.

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When Obama does deliver his budget proposal next month, the fiscal path forward will remain in an extraordinarily makeshift and unpredictable state.

Veteran budget analyst Stan Collender wrote this week that even former congressional Budget Committee staffers who have spent their careers assessing budgets find that “the current situation is as complex, hard to read, and even harder to predict than any they’ve ever seen.”…

Illustrating just how unreal the current fiscal situation is, Defense Secretary Leon Panetta said in his farewell address last week at Georgetown University that if Congress passes another continuing resolution and it allows the spending cuts required by the Budget Control Act to take effect, then his department “will have to abruptly absorb in a period of about six months” $43 billion in spending cuts (known as the sequester). This will be on top of what Panetta thinks are inadequate spending levels in the continuing resolution — what he described as “a $35 billion shortfall in operating funds for our active forces.”

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