The Corner

Obama Scolds Republicans for ‘Radical’ and ‘Secret’ Budget Plan

This afternoon, the president gave his first major public statement on the federal budget since he released his budget proposal in February. In a speech at the annual AP luncheon, he spent much of his time scolding House Republicans for putting forth a “radical,” “secret plan” (which can be found here, or in an extended version here) which breaks from America’s past by refusing to “acknowledge our obligations to each other,” unleashing “Social Darwinism” on the public. Some important points:

  • The president accused the House Budget Committee of breaking the Budget Control Act agreement by allocating $1.028 trillion for discretionary spending, $19 billion (or 1.8 percent) below the BCA cap. But, as Speaker Boehner noted a few weeks ago, according to Webster’s Dictionary a “cap” indicates “an upper limit” or “ceiling.” Apparently some interpreted this BCA maximum spending level as a minimum.

  • Obama said that, if the House budget passed, by the middle of the century we would have to cut spending on non-military discretionary spending (characterized as teaching, law enforcement, etc.) by 95 percent by the middle of the century, assuming that cuts are spread evenly. But this is not what the Ryan budget proposes. The House Budget details specific cuts which can be made to achieve its overall budgetary target.

  • The Ryan-Wyden Medicare plan “is a bad idea and it will ultimately end Medicare as we know it,” according to the president. Of course, this prediction is recycled from last year, even though it was named the “Lie of the Year” by Politifact. And, as Yuval Levin pointed out, the new Ryan budget is even less vulnerable to this charge than it was last year.

On the other hand, the president framed his budget proposal as a moderate, balanced approach, which combined tax increases with significant, painful cuts to spending. He said that:

  • Discretionary spending as a percentage of the economy is now at a lower point than at any time since Eisenhower. But this is no large feat. As more and more items have been counted as mandatory spending (such as, say, Obamacare), discretionary spending has decreased from 67.5 percent of the federal budget in 1962 to 37.8 percent in 2010. Discretionary spending as a percentage of GDP has actually been going down since the mid 1970s.

  • Medicare doesn’t need to be restructured. It can be preserved by “finding efficiencies” in the system. As his budget implied and as Secretary Geithner made clear, the president does not think that we need a “definite solution” for at least another decade to the widening gyre of increasing entitlement commitments matched by unfavorable demographic shifts. Whereas the president is committed to what he calls an all-of-the-above energy policy because we face an energy crisis in only 20 or 30 years, he essentially supports a none-of-the-above entitlement-reform policy because we face an entitlement crisis in as much as 20 or 30 years. 

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