WASHINGTON — With higher taxes on the wealthy and billions in new spending, President Barack Obama’s no-balance budget lays down an audacious challenge to Republicans who swept to full control of Congress last fall and now claim a mandate to eliminate deficits in the next decade.
Make that the second audacious challenge in the past three weeks — coming after a State of the Union address in which Obama threatened to veto Republican legislative priorities and demanded lawmakers enact his own.
Then, as now, his objective was partly to help Democrats in Congress recover from their election drubbing and partly to position them and his party as the champion of the middle class in advance of the 2016 campaign. To do that, he tars Republicans as apostles of a “mindless austerity” that has set back the economic recovery and was woven into a recent history that includes a partial government shutdown and flirtation with default.
Policies adopted after Republicans took control of the House in 2011 “hurt, rather than helped, the economy,” his budget says, although it fails to mention that Obama once negotiated seriously, if unsuccessfully, with Speaker John Boehner over billions of dollars in savings to Social Security and Medicare.
The word “austerity” appears seven times in a 17-page introduction, none of them favorable and usually attributed to Republicans and described as mindless or needless.
Now, Obama and budget say, those days are over.
To make the point, he called for about $1.5 trillion in tax hikes, mostly on wealthy corporations and individuals as well as smokers. Enacting new immigration policies like the ones approved in the Democratic-controlled Senate last year is estimated to raise an additional $500 million in higher tax revenue over a decade, as immigrants freed from the threat of deportation enter the workforce.
Spending is roughly flat: $50.3 trillion over a decade in the president’s budget, compared with $50.4 trillion the Office of Management and Budget calculates otherwise would be spent. Within those totals, though, Obama proposes hundreds of billions of dollars in cuts to Medicare providers on one side of the ledger and nearly $500 billion in new highway and bridge construction, free community college for two years and other, smaller programs such as a National Park Service Centennial Initiative.
Further irritants to Republicans are embedded in the administration’s tax-and-spending plan, including steps to fight climate change that they have ridiculed and the continued existence of the health care plan the GOP has vowed to uproot.
By Obama’s reckoning, this all adds up to persistent deficits, estimated at $687 billion in 2025 despite what the administration predicts will be relatively strong economic growth and low unemployment.
Obama is at pains to say that’s not so bad after much higher deficits in recent years. “The key test of fiscal sustainability is whether debt is stable or declining as a share of the economy,” he says in his budget message. “The budget meets that test.”
That may be fine for Obama and Democrats in Congress, but Republicans are betting their political election gains on a different test entirely.
“Our budget will balance, and it will help promote job creation and higher wages, not more government bureaucracy,” House Speaker John Boehner said in a statement that also said the president wants to “impose new taxes and more spending without a responsible plan to honestly address the big challenges facing our country.”
GOP Rep. Paul Ryan, the new chairman of the tax-writing House Ways and Means Committee, accused the president of exploiting “envy economics.” Interviewed on NBC’s “Meet the Press,” Ryan said, “This top down redistribution doesn’t work.”
Republicans have passed a 10-year balanced budget through the House each year since they took power in 2011. The Senate, now under GOP control, intends to do the same thing, according to Sen. Mike Enzi, R-Wyo., chairman of the budget panel. In a statement, he and Rep. Tom Price of Georgia, head of the House Budget Committee, said Obama is advocating more spending, more taxes and more debt.
“That approach will yield less opportunity for the middle class and a crushing burden of debt that threatens both our future prosperity and our national security.”
If they succeed in agreeing on a balanced budget plan, House and Senate Republicans will be obliged to pass separate legislation to make it happen, deep spending cuts included.
Judging from his State of the Union speech and his budget, Obama will be waiting — with a veto pen and a talk about the perils of austerity.
Breakdown
Defense • The Pentagon has mapped out a $2.77 trillion spending plan for the next five years, a buildup that would exceed existing budget caps by $155 billion, or 5.9 percent. The latest five-year plan accompanied a $534.3 billion Defense Department request for the year beginning Oct. 1, a 7.7 percent increase over this year’s spending. The one-year request exceeds the caps known as sequestration by about $36 billion.
Veterans • The proposed 2016 budget includes $70.2 billion in discretionary resources for 2016 for the Department of Veterans Affairs, a 7.8 percent increase over 2015 for offering “timely health care,” ending homelessness, getting jobs and earning benefits.
IRS • Spending would increase by 18 percent, providing a significant boost for an agency that has seen its funding decline by more than 10 percent since 2010. President Barack Obama’s proposal of $12.9 billion calls for more than $650 million for tax-enforcement activities and additional money for new digital services.
Education • The education budget seeks new funds to provide for students at both ends of the spectrum — early childhood and community college — as well as an increase in the money spent to educate low-income K-12 children. The president is seeking $70.7 billion in discretionary funds for education, a 5 percent increase over 2015.
Environment • The Environmental Protection Agency would see a jump of nearly 9 percent next year, to $8.6 billion, reflecting new aid to states to help them meet requirements for slashing greenhouse gas emissions from power plants. But it’s far from clear whether the proposed hike will fly with congressional Republicans who oppose the White House’s carbon-cutting plans.
Homeland Security • A 9 percent increase in the department’s budget would include a massive hike in airport security and additional funds for the White House complex following a series of security lapses. The Transportation Security Administration’s aviation security efforts would rise by 18 percent to $5.8 billion.
The Washington Post
