White House Budget as Political Manifesto: Obama’s $3.8 Trillion Plan for American Revival

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Jason Reed / Reuters

President Barack Obama delivers remarks on his administration's 2013 budget at Northern Virginia Community College in Annandale, Virginia, Feb. 13, 2012.

With a divided Congress still standing at the other end of Pennsylvania Avenue, the annual White House budget isn’t a policy proposal destined for markup in the subcommittee rooms of the Capitol. It’s a statement of principle. And in an election year, it’s something more: Obama’s $3.8 trillion fiscal year 2013 budget, unveiled on Monday, marked the debut of his re-election platform. In among the bar charts and bullet-points was the President’s story about why he needs a second term.

The first thing the White House wanted voters to know about its budget was what it’s not: “We can’t cut our way into growth,” Obama told a crowd at a community college in northern Virginia on Monday. “I think there is pretty broad agreement that the time for austerity is not today,” Budget Director Jack Lew said on Meet the Press the day prior. After 2011 was consumed with debate over swelling deficits and debt, culminating in large cuts to discretionary spending as part of the debt-ceiling deal, Obama has largely put those issues aside. The first bullet point of a budget fact-sheet distributed by the White House notes the cuts agreed to last year and states that this year’s budget “reflects that decision.” In short, they already did their cutting.

There are other savings in the document–$4 billion over ten years in total, according to the White House’s numbers–but it’s not the spiritual heart of the document. Nor is it, as Republicans will quickly point out, a road-map to balanced budgets or evaporating debt. The White House projects a budget deficit of $901 billion or 5.5% of GDP in 2013, down from $1.33 trillion, 8.5% pf GDP, in 2012. As in previous years, there is no big rethink of federal entitlements, one of the largest contributors to long-term red ink.

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Rather than grim austerity, Obama’s budget story is one of revival: $8 billion for community colleges over three years; a core expansion of spending on manufacturing, infrastructure and R&D taken from his now defunct American Jobs Act; a 55% increase for Race to the Top, Obama’s competitive education grant program; $770 million to promote democracy in Arab Spring countries. The Pentagon would see cuts, but that’s its own kind of optimism if the military has fewer missions to undertake. NASA’s budget and the EPA’s would be trimmed, and the NIH’s frozen, but those are minor asides in Obama’s tale of economic rejuvenation.

“We can’t have Washington stand in the way of America’s comeback,” Obama said Monday, delivering a pep talk to college kids worthy of a Clint Eastwood Super Bowl commercial. “You believe in yourselves,” he said. “You believe in the future of this country.” Even the technical details of Obama’s budget took on an air of swaggering optimism. It projects a 17.5% year-over-year increase in tax revenue, which would mark the 3rd-largest bump since 1953, according to the Wall Street Journal, and robust 3% growth in 2013.

It wasn’t all sunny estimates and stimulus retreads: The budget’s tax section is Obama’s most biting to date, and staked out new ground for the President to fight the GOP, likely led by Mitt Romney, later this year. The proposal calls for $1.5 trillion in new revenue over a decade, in large part from the expiration of top-tier income breaks from the Bush tax cuts at the end of 2012. It would also raise taxes on dividends income from the wealthiest earners and enshrine the much ballyhooed Buffett Rule, which would tax yearly incomes of $1 million+ at no less than 30%, in law.

The actual 2013 budget that Obama eventually negotiates with Congress will look nothing like this. Republicans are staunchly opposed to most of Obama’s flourishes and a divided legislature, especially in an election year, will almost certainly preserve the status quo, taking no radical steps in either short-term spending, as Democrats want, or long-term cuts, as Republicans favor. But Americans aren’t pleased with the current state of things, and Obama is trying to give them a reason to pull the lever in November: a promise of something more, a halftime comeback. The status quo he hopes to maintain is the occupancy of the White House.

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