Commentary

Obama’s “socialist” budget vs. Reagan’s: Some amazing comparisons

obama2Ronald reaganBob Greenstein of the Center on Budget and Policy Priorities is out with a new and, as always, trenchant and fact-heavy take on President Obama’s new budget proposal. Here, however, are two paragraphs that really speak volumes:

“Some critics undoubtedly will castigate the budget for focusing its deficit reduction efforts on the revenue side. But we should keep several facts in mind. First, its $2.9 trillion in deficit reduction for 2017-2026 would come on top of the $4 trillion to $5 trillion in deficit reduction that policymakers have already achieved since 2010, and those savings came heavily on the spending side. With the new Obama proposals, total deficit reduction over this period would fall roughly 50-50 between spending and revenues, OMB estimates.

Also, part of the proposed Obama revenue increases would effectively “pay for” the large year-end tax bill that policymakers enacted in December without offsetting its cost. Under the budget, federal spending would average 22.3 percent of GDP over the coming decade, which isn’t far above the 21.6 percent average of the Reagan years. Moreover, a significantly larger share of Americans is elderly now and receiving Social Security and Medicare than in the Reagan years. In addition, we’ve experienced more than a quarter-century of health care cost growth since the Reagan years, which has boosted the cost of federal health insurance programs, most notably Medicare.”

You got that? Not only has the President made enormous progress in deficit reduction since taking over during a period of economic chaos, the deficit in his latest proposal is essentially on par with those of Reagan years. Indeed, given our aging population and the skyrocketing costs of healthcare in recent decades, its quite arguably more conservative and tightfisted than the ones the country lived under during the presidency of the modern Right’s patron saint.

At a supposedly nonpartisan Locke Foundation event the other day (the one at which the group’s former boss, in truly nonpartisan fashion, lambasted a current candidate for President as a “a charlatan, and just a pathetic, disgusting human being”), a conservative politico attacked President Obama (according to a tweet by a Locke  staffer) for supposedly seeing himself as “the linear heir to continue FDR’s socialist agenda.”

If that’s so, Greenstein’s post makes clear that the “line” ran through Ronald Reagan as well.

Uncategorized

Another reality check on spending and deficits

Dean BakerOne of the country’s keenest economic policy observers, Dean Baker, has an excellent take down of Washington Post columnist Robert Samuelson’s latest demands that the U.S. slash social spending this morning at the Center for Economic and Policy Research website. His message: America’s obsession with near-term deficits remains utterly illogical and counterproductive: 

“First, the budget is only constrained at the moment by superstition. There is no obstacle to the government borrowing more money to meet needs and put people back to work. We are not spending more money because we have superstitious people with large amounts of power who are making claims about the dangers of deficits that they cannot support with evidence. Rather than lecturing seniors, who have a median income of $20,000, on the need for lower Social Security and Medicare benefits, Obama could try to confront the people spreading superstitions about deficits….

…In fact, according to the Social Security Trustees projections, Read more

NC Budget and Tax Center

As Congress avoids default, three budget battles loom

On Wednesday, the US House voted to suspend the federal debt ceiling—the statutory limit on the amount the US Treasury can borrow to finance existing obligations—until May, backpedaling on previous threats to withhold the debt limit increase unless Congress and the White House agreed to significant cuts in federal spending.  As a result, Congress managed to avoid default and a potential financial crisis that risked the nation’s creditworthiness and economic recovery. At the same time, however, House leaders promised to use three additional chokepoints in the budget process as leverage to secure their ultimate objective—deficit reduction based entirely on unspecified but dramatic reductions in federal spending and the transformation of entitlement programs Social Security and Medicare.

Although achieving a sustainable course for the national debt is clearly important to putting our nations’ fiscal house in order, any deficit reduction plan must take a balanced approach that includes new revenues (beyond the first step achieved in the Fiscal Cliff deal) and strategic spending cuts that do not disproportionately impact working families or damage state budgets.

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