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President Obama’s $3.8 trillion budget plan is just the starting point for what is sure to be a partisan knockdown drag-out fight in Congress.
On the spending side of the ledger:
The plan calls for $476 billion for transportation projects, more money for schools under Obama’s “Race to the Top” and $8 billion to train community college students for high-growth industries. To spur short-term job creation, Obama is proposing $50 billion “upfront” for transportation, $30 billion to modernize schools and $30 billion to help states hire teachers and fire, rescue and police, stimulus-like proposals that Republicans oppose.
On the revenue side of the ledger:
Savings are proposed to come from ending the Middle East wars, cutting back on military and Cabinet agency spending, raising $1.5 trillion primarily by letting the Bush era tax cuts expire for families making $250,000 or more and eliminating tax breaks for oil, gas and coal companies.
The budget also would also impose a new $61 billion tax over 10 years on big banks aimed at recovering the costs of the financial bailout.
Obama ducks the problem of growth in entitlement spending, with Social Security expected to rise 27 percent and Medicare and Medicaid 41 percent over 10 years.
To make this work on paper, Obama, like presidents before him, employed some budget sleight of hand:
- Having savings from ending the wars to spend elsewhere would mean the U.S. would have to keep borrowing — as it has done to finance the wars. Ending war doesn’t necessarily free up money.
- Revenue projections are based on rosy assumptions that Gross Domestic Product will hit 4 percent in 2014 and 4.2 percent in 2015. Private forecasters say a point lower is more realistic.
- A tax increase in an election year is highly unlikely; it’s doubtful oil and gas tax breaks will go away; and cutting programs requires Congress to go along.
Upgrading the nation’s infrastructure is a good place to put money and create jobs, but is it really the federal government’s job to give states money to hire firefighters and teachers for one year? If local governments want to expand their operations, they have the power to raise local taxes to pay for it.
The plan has some merits, but the bottom line is it doesn’t rein in government growth enough and continues kicking the debt can down the road.
This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.
