Don’t Expect to See Obama’s Gigantic Wish List Become Law

The budget proposals unveiled Tuesday by the White House lay out a more progressive view of government. But not even Democrats are going for it.

President Obama sits with students during a tour of a Pre-K classroom at Powell Elementary School prior to speaking on the Fiscal Year 2015 budget in Washington, D.C., March 4, 2014.
National Journal
Catherine Hollander and Sarah Mimms
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Catherine Hollander Sarah Mimms
March 4, 2014, 4:50 p.m.

The White House sent a massive, 1,650-page doc­u­ment in­to the world Tues­day to lan­guish.

Pres­id­ent Obama’s fisc­al 2015 budget was im­me­di­ately dis­missed by con­gres­sion­al Re­pub­lic­ans as a “cam­paign bro­chure” provid­ing massive in­creases in spend­ing for Demo­crat­ic pro­grams while off­set­ting the costs with tax-loop­hole clos­ures that Re­pub­lic­ans have re­peatedly in­sisted they will not ac­cept.

The White House ac­know­ledged the wish-list nature of the doc­u­ment. “In light of con­gres­sion­al Re­pub­lic­ans’ un­will­ing­ness to ne­go­ti­ate on fun­da­ment­al is­sues and agree to a bal­anced plan to deal with our long-term fisc­al chal­lenges, this year the ad­min­is­tra­tion is re­turn­ing to a more tra­di­tion­al budget present­a­tion that lays out the pres­id­ent’s vis­ion,” the pro­pos­al said.

Demo­crats wel­comed the budget, which builds on the pres­id­ent’s Jan. 28 State of the Uni­on speech and of­fers new pro­grams to boost the middle class and provide as­sist­ance to lower-in­come Amer­ic­ans ahead of a midterm-elec­tion fight that the party hopes will fo­cus on in­come in­equal­ity.

But even Demo­crats ad­mit that the budget as a whole — or even as a half — isn’t likely to go any­where, even if some of the more bi­par­tis­an bits and pieces find their way over to the Cap­it­ol through sep­ar­ate talks. Al­though Sen­ate Ap­pro­pri­ations Com­mit­tee Chair­wo­man Bar­bara Mikul­ski praised Obama’s fo­cus on the na­tion’s “val­ues,” she quickly re­jec­ted the White House pro­pos­al that Con­gress spend an ad­di­tion­al $56 bil­lion on Demo­crat­ic pro­grams this year. The 2015 ap­pro­pri­ations pro­cess should ad­here in­stead to the $1.014 tril­lion top line that Con­gress agreed to — and Obama signed — in Decem­ber, she ar­gued. “We have a budget agree­ment for fisc­al year 2015, and the Sen­ate Ap­pro­pri­ations Com­mit­tee will ad­here to the spend­ing caps in that deal,” Mikul­ski said in a state­ment.

The ad­min­is­tra­tion had little fund­ing to work with when craft­ing its pro­pos­al. The budget deal reached by Con­gress in Decem­ber provides $1.014 tril­lion in dis­cre­tion­ary spend­ing for fisc­al 2015, only $2 bil­lion more than the cur­rent year, for­cing a spend­ing cap onto the pres­id­ent’s budget pro­pos­al for the first time in years.

Giv­en just a few bil­lion dol­lars to work with and no de­sire to make massive cuts to cur­rent pro­grams, Obama laid out sev­er­al tax loop­holes he would close for cor­por­a­tions and the wealthy (in­clud­ing those af­fect­ing private jets, golf courses, and over­seas in­vest­ments) to off­set the $56 bil­lion in new pro­grams he pro­posed.

That work-around isn’t go­ing over well with con­gres­sion­al Re­pub­lic­ans, who ac­cused Obama Tues­day of at­tempt­ing to renege on the budget deal. Those charges aren’t en­tirely true. The pres­id­ent’s 2015 budget does spend more than Con­gress agreed to, but that spend­ing is fully off­set by a series of tax-loop­hole clos­ures and rev­en­ue-raisers.

Con­gres­sion­al ap­pro­pri­at­ors have in­sisted in the past that any changes to the tax code be left up to a lar­ger tax-re­form over­haul, which is un­likely to hap­pen this year. Already, House Ap­pro­pri­ations Com­mit­tee Chair­man Har­old Ro­gers is sig­nal­ing that his com­mit­tee will res­ist mak­ing any of the pres­id­ent’s re­ques­ted changes. “Con­trary to the pres­id­ent’s wish-list of ad­di­tion­al spend­ing, my com­mit­tee will abide by the budget caps for fisc­al year 2015 put in­to place by law, which total $1.014 tril­lion,” Ro­gers said in a state­ment con­cur­ring with Mikul­ski.

Obama’s ad­di­tion­al $56 bil­lion in spend­ing still pro­duced some trade-offs for the pres­id­ent to re­main with­in the con­gres­sion­ally set lim­its. Wall Street-re­form ad­voc­ates balked at the lower level of fund­ing re­ques­ted for the Com­mod­ity Fu­tures Trad­ing Com­mis­sion, which reg­u­lates de­riv­at­ives, than Obama re­ques­ted the pre­vi­ous year (the re­ques­ted level is high­er than the CFTC’s cur­rent budget). “It really is in­ex­plic­able that the smal­lest, least-fun­ded agency with such a crit­ic­al mis­sion, that they would ask for less re­sources for,” said Den­nis Kelle­her, pres­id­ent of the fin­an­cial-re­form group Bet­ter Mar­kets.

An ad­min­is­tra­tion of­fi­cial said that giv­en the con­straints of the Ry­an-Mur­ray budget, the 30 per­cent in­crease in agency fund­ing demon­strated the pres­id­ent’s com­mit­ment to im­ple­ment­ing the 2010 Dodd-Frank fin­an­cial-re­form law, in which the CFTC plays a large role. The White House asked for $280 mil­lion in fisc­al 2015, $65 mil­lion more than the agency’s cur­rent fund­ing but $35 mil­lion less than it re­ques­ted in 2014.

Among Obama’s new ini­ti­at­ives that are sure to go over well with Demo­crats in Con­gress and pro­gress­ive voters are IRA ac­counts aimed at help­ing 13 mil­lion work­ers save for re­tire­ment, lower taxes for par­ents whose young chil­dren are en­rolled in child care, and a broad ex­pan­sion of the Earned In­come Tax Cred­it, a fed­er­al tax cred­it for low- and mod­er­ate-in­come work­ers.

The pres­id­ent’s budget would ex­pand the EITC pro­gram to child­less adults and some young­er work­ers, “lift[ing] about half a mil­lion people above the poverty line,” ac­cord­ing to the White House. The idea is pop­u­lar among mem­bers of both parties and was re­cently touted by Berkshire Hath­away CEO War­ren Buf­fett, an ad­min­is­tra­tion ally, as a bet­ter tool for help­ing lower-in­come Amer­ic­ans than rais­ing the fed­er­al min­im­um wage, an­oth­er of the pres­id­ent’s pri­or­it­ies this year.

In the grander sweep of things, the White House said that if its budget pro­pos­als were im­ple­men­ted, the de­fi­cit would sta­bil­ize at less than 2 per­cent of gross do­mest­ic product and the gov­ern­ment would be op­er­at­ing with a “primary sur­plus,” which ig­nores spend­ing on in­terest on debt, by 2018. Debt would rise to 74.6 per­cent of GDP in 2015 be­fore gradu­ally de­clin­ing to 69 per­cent in 2024.

If it’s all just wish­ful think­ing and a re­hash of pro­pos­als that have been put for­ward be­fore, what are the White House’s ac­tu­al hopes for the budget? Sylvia Math­ews Bur­well, dir­ect­or of the Of­fice of Man­age­ment and Budget, told re­port­ers that the White House is “mak­ing sure that, like last year, this budget in­flu­ences the choices that are go­ing to be made throughout the ap­pro­pri­ations pro­cess.”

Con­gres­sion­al ap­pro­pri­at­ors have un­til Oc­to­ber to pass 12 spend­ing bills through both cham­bers and send them to Obama’s desk.

Gene Sper­ling, the out­go­ing dir­ect­or of the Na­tion­al Eco­nom­ic Coun­cil, ad­ded at the same re­port­ers’ brief­ing that even though the budget re­hashes some pro­pos­als of yore, he hopes it keeps a spot­light on them. “There are some things that have been in the budget that wer­en’t passed, but they were nev­er re­jec­ted,” he said. “They may not have got­ten the at­ten­tion, but their is­sues are get­ting more at­ten­tion now.”

At­ten­tion, yes. But pas­sage? Un­likely.

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