President’s Budget: Pre-Compromising Reigns Supreme
The President’s 2012 budget is timed for release at 10:30AM ET. So we’re still waiting to see everything it will contain. Keep in mind that the FY2011 budget never got implemented, so this is not a document that will be immediately put into action but a starting point for the future debate.
Given that reality, you would think that a political document like this would seek to move the conversation away from Republican goals as much as possible so that wherever the debate wound up was that much closer to the desired ends. Instead, this document, at least from the early reports, reads like the wish list for the Administration of where the end product could be as the result of compromise, before the negotiations even begin. As Jon Cohn reports:
Between the administration’s recent statements and a series of calculated leaks, we have a pretty good idea of what Obama is trying to do. He’s going to call for spending more money on education and other public investments, but he’ll also endorse enough cuts to keep overall non-defense discretionary spending at last year’s levels. Elementary and secondary school education, for example, should get a boost. But Pell Grants, for low-income college students, are going to take a hit, albeit a carefully crafted one.* There will be more money for building high-speed rail but less for helping low-income families pay their heating bills.
Is this a good thing? In absolute terms, clearly, the answer is no. The demand for Pell Grants is unusually high right now; among other things, cash-strapped states are raising tuitions at state schools just as cash-strapped students and families have fewer resources to pay them. Energy costs for next winter, when the cut in heating assistance would take effect, are likely to be higher than at any time since 2008. Unless the economic recovery quickens very suddenly, plenty of people will struggle to pay those heating bills. And those are just two examples of program reductions that will leave needy Americans even more needy.
But everything is relative, and that means judging these cuts alongside both the modest increases you’ll find elsewhere in this budget and the much larger increases you saw in previous ones.
It’s also relative to what the economy needs from a macro perspective. You cannot divorce this budget from the fact that at least 14 million Americans are out of work and struggling, and that the economy doesn’t appear to be strong enough to sustain growth without government support. That’s the bet that the Administration is making, that they can pre-compromise with Republicans and make overall cutbacks in the budget in the near term, in a targeted way, without disrupting the economy. Maybe they’re in possession of some data showing they can withdraw from the economy. More likely they’re in possession of a roster of the 112th Congress and figure they have no choice, giving up the game before taking the field.
The other argument you hear is that this brings cuts out of the abstract and into the specific, and forces Republicans to defend their trims relative to what the Administration will put out. That’s true from a political perspective, but it does little for the people whose lives are affected by this. I don’t expect Republicans to be deterred in their desire to eat the future, but even if the White House “wins,” the end result is a passel of cuts in the midst of a jobs crisis.
What’s more, this argument takes place on the Republican’s terms, on territory they’ve covered and know how to traverse. If trouble in the economy should strike – and there are half a dozen potential trouble spots just in the next couple years – there’s no chance that activist government will return to actually solve the problem. The structures of politics are being applied to this budget problem, not the structures of policy. And it’s short-term, narrow politics: on the Pell grant piece, for example, squeezing the younger generation through eliminating grants for summer classes and allowing interest to accrue in graduate school loses the future for students who will remember it, particularly for some of the stronger Democratic constituencies, like public interest lawyers in training.
And if anything is being decided with an eye to the long term, it’s this:
But despite all the confrontational rhetoric between the two parties about budget priorities, the White House and Republican congressional leaders, in private talks, have agreed on the need to try to reach a bipartisan “grand bargain” over the budget—a sweeping deal that could include entitlements and tax reforms as well as budget reduction. A Senate Republican leadership aide confirmed this, saying, “In fact, for anything to happen, it will require such a White House/congressional leadership bargain.” The preferred idea is that, just as they did late last year on the tax bill, they would reach an agreement and then unveil it to the public.
At the same time, a bipartisan group of leading senators have met in an effort to cut the deficit—which could become a part of the debt-reduction puzzle. The thinking is that the Tea Party allies might be brought along in the end, because their primary goal is to reduce the deficit. The details will be difficult, but a surprising sort of deficit-cutting fever has broken out on Capitol Hill, fueled in part by a fear that at some point the bond markets and foreign lenders will call in their loans, setting off a disastrous financial crisis. Right now, there’s a game of chicken going on over who will offer their proposals first, but this should be resolvable.
The relative pain in this budget proposal, and how it leaves government short at a perilous time, is nothing compared to what the bipartisan elites apparently have in store.