By Jonathan Bydlak, Rare Contributor
During a Monday morning press conference at the Department of Homeland Security, President Obama released the White House’s annual budget proposal, an eye-popping $3.99 trillion document.
Controversial programs abound in this lame-duck request, while easy opportunities for savings go untouched. It includes everything from a $60 billion effort to provide subsidized community college nationwide to around $11 billion for 57 new F-35 Joint Strike fighters. In addition, nearly half a trillion dollars will go to new infrastructure projects.
The White House presents this budget as being fiscally responsible, and the reason it cites is rooted in a long-running economic debate: how much do the deficit and debt matter right now?
Monday’s budget suggests “not much.” Assuming economic growth remains consistent, debt and deficit as percentages of GDP will fall slightly and steadily over time, helped along by changes in tax policy, among other things. It’s worth noting that the previous administration held strikingly similar views on deficits and debt.
That the president often heralds short-term deficit reductions as fiscal victories is not pulled from nowhere. He and those on his side are coming from a well-established economic school of thought, wrong though it might be.
Remember, this budget still spends massively. As critics were quick to point out, it would spend $50.3 trillion between 2016 and 2025. Overall, spending, deficits, and debt will continue to rise to enormous levels. This budget never balances.
And that’s where those of us on the other side raise concerns. It’s no secret that the Congressional Budget Office and other nonpartisan sources consistently project skyrocketing deficits and debt not far into the future, even to the point where those levels could drag down the economy.
And while annual budgets typically do not deal with the largest drivers of those shortfalls, entitlements, ignoring looming shortfalls and future economic troubles is a risky gambit indeed.
While it might be easy to stabilize debt-to-GDP ratios in the short term thanks largely to healthy economic growth, it’s also inescapably true that no budget plan that focuses only on tax increases at the expense of spending reductions can ever balance or begin to pay down the debt.
And that’s not even touching the trillions in unfunded liabilities, which all but maybe the Paul Krugmans of the world acknowledge to be troublesome.
Essentially, the president wants us to trust him on a wing and a prayer, assuming he has the magic power to make the economy hum along and avoid any negative impacts from what we know are serious risks.
Instead of fiscal responsibility now, we’re to simply wait for some undetermined point in the future—when problems could be far more severe, potentially even too big to handle.
Fortunately, despite Monday’s sound and fury, the request is likely to signify nothing, since it’s all but dead on arrival. Both Democrats and Republicans view the president’s proposal as little more than a starting point to long and difficult negotiations.
However, it’s worth noting that, at least when it comes to one chunk of spending, both sides are largely in agreement. While the White House and many in Congress disagree on how high debt and deficits should be, too many seem to agree that the types of policies that got us here in the first place should continue.
In his press conference, the president celebrated a proposed 7 percent hike in domestic and military spending and the end to sequestration, the most meaningful restriction on discretionary spending we have.
The administration made the incredibly dubious claim that these new overseas funds are needed in the fight against Islamic State militants, as well as to support European allies in the face of Russian aggression. Meanwhile, domestic spending increases are being sold as necessary support for the economy and infrastructure.
When it comes to big-ticket items like the barely working F-35 or the continually massive Overseas Contingency Operations slush fund, neither side seems to want cuts, while tiny sequester limits are treated as doomsday.
While Congress and the president may disagree on domestic expenditures, they continue to be in lockstep agreement about Pentagon spending, foreign policy disagreements aside. And we can’t forget that many in both parties would prefer to punt on the politically risky challenge of reforming entitlements, too.
In the end, this budget is as audacious as it is politically doomed. It’s perhaps the most upfront manifestation of the flawed economic policies driving the administration and many in Washington.
But while the ideological extremes may never see eye-to-eye, fiscal responsibility advocates would be well-served to highlight the countless examples of egregious waste and general lack of willingness to even consider cuts that most Americans would find more than reasonable.