The message of the budget
the Obama administration released today is the same as the message the president delivered in his State of the Union address: All is well, full speed ahead, and let’s invest a little more in solar panels and high-speed rail.
This message seems clearly to be a function of a political calculation: that voters do not want to face the coming debt crisis, and so it would be bad politics to force them to do so. I tend to think that’s not entirely true, and that voters will judge this kind of blindfolded budget to be unserious and inadequate to the moment. People know we’ve got a major fiscal problem that will get worse as more of the baby boomers retire, and while obviously no one wants to make avoidable sacrifices, Americans do seem increasingly to understand that some change of course will be required. But that’s hard to say, and maybe the Obama team is right about the politics.
Whether they’re right or not, however, the substantive result of their political premise is a willful blindness that makes for a budget that is completely detached from reality. No entitlement reform, no tax reform, no significant spending reform, indeed no meaningful change of direction of any sort — the budget does nothing to lessen the burdens with which we now stand to saddle the rising generation, and which will stifle growth and prosperity along the way.
Of course, the budget assumes this won’t stifle growth at all — in fact, with no clear justification, it assumes significantly stronger economic growth than the CBO expects and counts on an extra $1.7 trillion in revenue over ten years as a result, asserting that the deficit will be that much lower by just assuming it will happen. That is perhaps the most egregious of the numerous assumptions tucked into the baseline of this budget, and therefore not presented as policy choices but as premises taken for granted — among the others are a tax increase on upper-income filers that results in more than $800 billion of revenue, and an almost $200 billion increase in spending on Pell grants.
Until the last few weeks, there might have been room to wonder whether President Obama might respond to the 2010 elections by moving to the center and seeking some politically advantageous but meaningful middle ground — offering tax reforms, perhaps even some Social Security reforms, and orienting the next two years around the question of who can provide a more appealing, more optimistic, and less painful set of solutions to our enormous fiscal challenge and the coming debt crisis. This budget puts an end to that possibility. The president appears to have decided to spend the next two years pretending there is no problem to solve, and therefore that Republican proposals to rein in spending are just mean-spirited cuts offered up for kicks.
This is, above all, an appalling failure of leadership. When we look back on this period a decade or two from now, I think we’ll identify this moment — the president’s decision about how to approach the budget battle of 2012 — as the last real opportunity we had for a gradual bipartisan course correction. That option now seems closed off, and it is up to Republicans to decide if the alternative is to march off the fiscal cliff in order to avoid political risks or to propose a gradual course correction to voters and make the case for why it is sensible, responsible, and essential.
Neither of these options would be easy. But one of them would be both difficult and irresponsible, while the other would be difficult and right.