Yesterday, the media went on and on about how the president’s budget was an attempt at seeking “a middle ground.” For instance, this morning in the Wall Street Journal, David Wessel writes:
This year’s arrives House Republicans have passed a budget outline (heavy on spending cuts) and Senate Democrats have passed an alternative (lighter on spending cuts, heavier on tax increases).
Mr. Obama steers between them, a Clintonesque attempt at “triangulation.”
But I don’t see it. Sure, the president does put entitlement reform on the table in a way that the Murray plan doesn’t. Yet if we look at the path of spending — as expressed in the various FY 2014 plans out there — one can see that the Obama budget is not positioning himself in the middle — at least not in the middle on the Murray and Ryan plans. See the following chart:
As you can see, on spending levels, there is almost no difference between the Murray and Obama plans. In fact, Obama proposes to spend more than Murray in FY 2014. Also, while the president’s budget ends the decade spending at a slightly lower level ($5.68 trillion vs. $5.66 trillion), Obama’s cumulative spending over the ten year period is slightly higher than Murray’s. These are just projections, of course, and they should be taken with a grain of salt.
Based on this chart, you can also see that Obama hardly changes course from the CBO’s projected spending path from February 2013. There is, however, a clear contrast between the spending pattern of President Obama and Chairman Ryan, and an ever bigger contrast between his plan and the one proposed by Senator Paul (there, Ryan is the one right in the middle).
Looking at tax revenue in each budget (I will have a chart up shortly) is interesting too. Here is what you get if you look at the numbers on the revenue side:
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Obama: $3.034 trillion in FY2014 growing to $5.220 trillion in FY2023
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Murray: $3.002 trillion in FY2014 growing to $5.120 trillion in FY2023
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Ryan: $3.003 trillion in FY2014 growing to $4.961 trillion in FY2023 (exactly as projected by CBO)
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Paul: $2.455 trillion in FY2014 growing to $4.946 trillion in FY2023
As I mentioned yesterday, the FY 2023 projections can’t be taken seriously since they are more grounded in wishful thinking and pretense of knowledge than they are in reality. But the similarities and differences are interesting. Both Obama and Murray raise taxes on high income earners, while Ryan and Paul want fundamental tax reform. (Senator Paul’s budget is proposing a 17 percent flat tax.)
The bottom line is that, contrary to the numerous media reports on the issue, the Obama budget doesn’t tax or spend less than the Murray plan, it just spends and taxes differently. And while it is true that Obama pays some lip service to the idea of reforming entitlement in the future, his plan is not a middle ground between the House and the Senate, or Republicans and Democrats. It’s just a very different plan from the Ryan plan, and a radically different plan than the Paul one.
Update: The Wall Street Journal has some good charts illustrating my point that the Murray and Obama plans look quite identical. The three charts show spending, revenue and deficit as a share of GDP. Even though the line at the top of the charts reads “Three Budget Approaches, Budget Plans Show Competing Philosophies,” implying–I think–that we have three different visions which lead to three different outcomes, these charts don’t show Obama striking a middle ground between Ryan and Murray, at least when it comes to spending, revenue and deficit levels.
