Obama’s Conservative Budget: The White House’s Budget Proposal Should Remove All Remaining Hope That the President is Secretly an Economic Liberal

Posted in: Tax and Economics

A small debate erupted this week about whether President Obama’s defeat in the Senate over even the most minimalist gun legislation demonstrates that the President is a weak leader.  With polls showing that 90% of the public supported a bill to expand background checks prior to gun purchases, but with several Democratic Senators joining Republicans in defeating that and other extremely modest bills, the question arose as to whether the President could have been more aggressive in making the case for the bills to the American public, and putting pressure on the Senate to pass at least one of them.

New York Times op-ed columnist Maureen Dowd offered a strong version of the argument that Obama needs to be more willing to put the squeeze on Senators, saying that he is unfortunately “No Bully in the Pulpit.”  The Times newsroom followed with an article noting that “the president has rarely demonstrated an appetite for ruthless politics that instills fear in lawmakers.”  Naturally, the White House defended the President, and some commentators questioned whether it is even possible to twist arms anymore—or, for that matter, whether any of this mattered at all, given that the legislation was doomed to die in the hyper-conservative House of Representatives.

What is not in question, however, is whether the President really wanted a different outcome.  The evidence is clear that, whatever strategic shortcomings his effort might have suffered, President Obama truly wanted to respond as strongly as possible to the Sandy Hook massacre.  Although he long ago needlessly conceded the argument that the Second Amendment confers an “individual right” to own guns on Americans, the President is now unquestionably on the side of aggressive efforts to control guns and gun violence.

Those of us who most closely follow economic policy, on the other hand, have spent the Obama era facing a more fundamental question: What does Obama really want?  Granted, it is always possible to argue that this President—like all politicians who must deal in the art of compromise—is being pulled to the right by the Tea Party-fueled post-2010 political nightmare, the evidence has been mounting for years that Mr. Obama is no progressive.  He has continually offered House Republicans much more than middle-ground compromises, putting concessions large and small on the table that no one ever thought he would consider.

In some cases, such as his unilateral and gratuitous offer several years ago to freeze the salaries of federal employees, the Republicans have gleefully accepted the President’s offer, yet given nothing in return.  In other cases, as I noted several months ago in a column here on Verdict, Republicans have “saved Obama from himself” by rejecting even the flat-out capitulations offered by the White House.

The White House Runs Away From Its Own Election Victory: The Difference Between Obama the Candidate and Obama the Re-Elected President

It is no exaggeration to say that the President won re-election last year by rallying people to the defense of the social safety net, especially the key progressive accomplishments represented by Social Security and Medicare.  When Republicans nominated Paul Ryan to be Vice President, the Obama campaign had an easy target in a man who obviously is eager to gut those programs, and voters responded to the campaign’s message that these programs should be held sacrosanct.

Even as that was happening, however, liberals were predicting that the progressive Obama whom we were seeing on the stump would disappear soon after the election was over.  On October 1, for example, Paul Krugman argued that Obama might “be talked into snatching defeat from the jaws of victory.”  And that is exactly what happened—except that it is now clear that Obama needed precious little convincing.

Even though the Social Security program is fundamentally sound—needing either no changes at all, or only minor adjustments to its funding system—the White House has been angling to cut future benefits by adopting a flawed statistical adjustment that would understate the rise in the cost of living for future retirees.  The President, indeed, sometimes seems determined to all but force the Republicans to allow him to undermine Social Security, even when he is under no pressure at all to do so.

And sure enough, when the White House released the President’s budget proposal earlier this month, it included that proposal to carve away at future Social Security benefits.

There is no objective reason for the President to propose this change—and I am specifically saying that the President proposed this change, not that he “caved” or “compromised,” given the lack of pressure on him to follow this path. And that raises a key question:  Is there some defensible reason that the President might have done this, and only reluctantly?  That is, is the White House engaged in a broader political strategy that mere mortals (especially, supposedly whiny liberals and progressives) fail to comprehend?  Unfortunately, the answer is no.  On economic policy, the President is proposing what he really seems to believe, not merely what he is being forced to accept.

The Strategic Delusion: People Who Hope That the President Is Feinting and Dodging Are Fooling Themselves

The release of the President’s 2014 budget proposal, which included (as noted above) his proposed giveaway on Social Security, was greeted by some liberal commentators with a combination of a shrug and a knowing wink.  For many, the budget was entirely a matter of political theater, and in their eyes, the President was strutting the stage like a master thespian.

The editorial board of the New York Times, for example, offered the jaded argument that the President not only knew that he would take flak from the left because of his Social Security proposal, but “[i]n fact, he was counting on it. He wanted to show that he was willing to antagonize his supporters to get a budget compromise, putting Republicans on the spot to do the same.”

Of course, as that editorial pointed out in the very next sentence: “Naturally, Republicans refused.”  And why should anyone have doubted that they would?  The Republicans have shown again and again that they are not interested in compromise with the President, and that they will reject anything that he proposes, even when he proposes exactly what the Republicans have proposed.  (See, for example, the creation of the Anti-Deficit Commission in 2009.  And, just for good measure, see also the individual mandate in the Affordable Care Act.)

What, then, is the point of having the President demonstrate yet again that he is willing to be “reasonable” and move from his presumed liberal starting point to compromise far to the right of the center?  Anyone who still harbors any doubts at all that the President is willing to give the Republicans nearly all of what they want—especially after the fiasco of the debt-ceiling battle in 2011, as well as the so-called fiscal cliff negotiations and the sequestration battle this past Winter—is simply never going to be convinced.

Moreover, this is not the stage of the debate when a progressive President should be standing in the middle.  Even in less polarized times, a President’s budget proposal is always “dead on arrival” on Capitol Hill, with everyone knowing that it represents merely the first bid in a poker game that will last for months.  If Barack Obama were ever going to make a statement about his true liberal values, this would have been the time: In a highly publicized document that everyone knows will be watered down, but that constitutes the farthest left that the President has any intention of moving the country.  (If the Republicans simply agreed with his proposal, after all, the negotiations would end where Obama began.)

A good political cartoon often captures an idea better than any writer ever could.  Last week’s entry of the incomparable Tom Tomorrow isolated the delusion that afflicts commentators like the Times’s editors.  The comic strip has Obama (in his alter ego as “Middle Man”) explaining with evident exasperation that he has been saying for years that he wants a center-right “grand bargain” on the budget.  When he is asked, “So—it’s not eleventh dimensional chess?  Some sort of clever negotiating ploy?” Obama answers: “I don’t know how to be any clearer!”

Barack Obama has been saying for years that he wants to adopt a fiscal policy that is fundamentally retrogressive.  He started his presidency by refusing to propose a stimulus proposal that was adequate to the task of recovering from the Great Recession.  Every time he has had a chance, he has tried to find ways to cut the budget, including cuts that are currently not only unnecessary but also downright counterproductive.

Therefore, when a Times article stated as accepted fact that Obama’s budget proposal forces Democrats to ask “what it means to be a progressive Democrat in an age of austerity,” the important point to remember is that Obama himself is a big reason why this is an age of austerity.  There is certainly no good economic reason for the country to have followed Obama’s budgetary strategy for the last four years—and, indeed, every reason for the country to follow the opposite course.  If we are faced with a narrow range of choices, it is because the President has never proposed to widen that range in a way that would do some real good for the economy.

Is Obama’s Budget Actually Progressive?  The Remnants of Progressivity Are Not Obama’s Doing

Is it, however, possible to claim that the analysis here is wrong on a fundamental level—not to argue over whether the President is proposing center-right policies reluctantly, but to argue that he is actually proposing progressive policies in the first place?  Some have tried to make just that argument.

The centrist liberal commentator Bill Keller, for example, lauded “Obama’s Progressive Budget,” arguing that the President’s proposal, among other things, “would pump money now into job creation, would stabilize the long-term deficit problem, would help alleviate the growing inequality in the country, [and] would make some important investments in our future (including a universal pre-K program).”

That is a pretty appealing list.  Keller lets the cat out of the bag, however, by applauding Obama for, “finally, [facing] up to the crisis in entitlements before it becomes truly alarming.”  The problem with this argument is that there is no “crisis in entitlements,” and never has been.  The problem is in health care spending, public and private, which left unchecked could certainly destroy the economy.  I have recently argued here on Verdict that even this long-term problem might already be correcting itself; but if there is a long-term problem at all, it is going to be driven by health care spending, not a Baby Boom-driven budget nightmare that includes Social Security.

Even on its own merits, however, Keller’s list of progressive elements in Obama’s budget is deeply misleading.  If his argument is that there are elements in the President’s budget that a liberal or progressive would find pleasing, then yes, the President’s budget is “progressive.”  But that was true of every budget ever offered by Presidents Reagan, Bush I, and Bush II.  The idea that we should “make some important investments in our future” is obviously important, but that is simply inherent in every federal budget of our era.  The fact is that the government has not yet been prevented from investing in the future, with money still being spent (directly and indirectly) on basic scientific research, education, and so on.

Similarly, the federal income tax is still progressive, but it is clearly less so than it used to be—in part, with Obama’s blessing.  Even the President’s agreement to increase the threshold on who would pay the restored Clinton-era 39.6% top marginal tax rate was watered down after negotiations in which Obama held virtually all the cards.

Beyond the mere existence of programs that the President’s defenders can call progressive, however, is a matter of degree.  I certainly like the idea of “pumping money now into job creation,” but exactly how much money are we talking about?  Again, the proper comparison is not with what Republicans are willing to approve, because that would turn anything short of a zero-dollar federal budget into a liberal victory.

The fact is that the President’s proposals simply do not add up to much.  Even though a proposal like universal pre-K is truly commendable, that does not make the budget progressive.  With states continuing to cut back, the Obama proposal continues to constitute a too-little-too-late approach to economic policy.  Being able to point to the job-creating effects of specific parts of the proposed budget does nothing to change the overall austerity that such a budget represents.

Obviously, the Presidents’ Republican opponents represent a new breed of extreme conservativism.  Compared to them, nearly anything looks progressive.  But it is simply no longer possible to say that the White House’s overall economic policy is anything other than warmed-over old-fashioned centrist conservatism.  It is not “eleventh dimensional chess.”  It is also not what the President campaigned on in 2012.  But it is what he is now offering, because it is what—as the evidence overwhelmingly shows—he truly believes in.

Posted in: Tax and Economics

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