Obama’s Bad Budget Moves

Published September 22, 2011

National Review Online

In early 2010, President Obama created the Bowles-Simpson commission on debt reduction. It was a shamelessly political move, designed to buy time in the budget debate and give Democrats cover through the November 2010 midterm elections. Throughout the year, Democratic candidates, and the president too, dodged questions regarding what they would do to rein in ballooning federal deficits and debt by saying they eagerly awaited the recommendations from the high-profile, presidentially appointed commission.

Well, as requested by the president, the commission issued its report in December 2010, after Republicans had taken back control of the House of Representatives and made significant gains in the Senate in the November election. The presentation of the commission’s recommendations provided the perfect opportunity for the president to move toward the political center as he geared up for his own reelection effort. All he had to do was embrace some sizable portion of the Bowles-Simpson framework, and he would have instantly transformed himself from the activist, big-spending liberal of 2009 and 2010 into the deficit-cutting centrist of 2011 and 2012. That would have put Republicans on the defensive from the get-go.

But that’s not what the president did. Instead, he acted like he had never heard of Erskine Bowles or Alan Simpson. He submitted a budget plan with no serious entitlement reforms, and no end to the spending spree he had started in 2009. The Congressional Budget Office (CBO) estimated that his budget would result in nearly $10 trillion in deficits over the period 2012 to 2021.

This too was a shamelessly political move. The president decided to ignore the recommendations of the commission he himself had appointed because he wanted to launch an assault on the entitlement-reform proposals in the forthcoming Republican budget plan, and that would have been hard to do if he had embraced the reforms to Social Security and other programs that Bowles, Simpson, & Co. had recommended. And so, in April of this year, after Republicans had put forward a budget plan that would actually head off fiscal calamity with even more deficit reduction than was contained in the Simpson-Bowles plan, Obama gave the most partisan presidential speech in memory, in which he essentially called the Republican budget plan un-American.

The liberal groups inhabiting the Democratic political orbit were ecstatic over the president’s speech. Here was the campaign-style call to arms they had been longing for, the ticket to their return to dominance in the 2012 election.

The only problem was that the president is, well, the president. He is responsible for governing the country. Delivering a campaign-style, partisan attack on your opponents 19 months before an election may make your partisan supporters feel great, but it’s not the way to solve the very real problems for which you will be held accountable by the voters.

Indeed, with unemployment still above 9 percent and bad economic news piling up by the day, you’d think the president and his advisers would realize that what they desperately need at this point is actual accomplishments that improve the lives of ordinary Americans—before the end of 2012. As matters stand, the president has almost nothing he can point to in this regard. He can’t run on the stimulus effort, which is now widely viewed as an abject failure. And he can’t run on Obamacare, because, despite all the big talk, hardly anyone gets coverage before 2014, even as the mandates and taxes already loom large over millions of American households and businesses.

Which brings us to the president’s latest moves. There is still time to pass meaningful, bipartisan legislation before the end of 2011. That would certainly be in the president’s interest, as the country is yearning for action to get the economy moving in the right direction again. To make that happen, though, the president would need to tack to the political center and work with Republicans on a plan that would be heavy on genuinely stimulative tax cuts, not more spending, as well as on longer-term reforms of entitlement programs. If such a plan were enacted in, say, December of this year, it would benefit President Obama tremendously—certainly far more than it would help House Republicans.

And yet, inexplicably, the president has decided once again that he would rather preserve his political talking points for 2012 than achieve bipartisan legislation. There is no other way to interpret his highly partisan proposals on jobs and the budget. Once again, his speeches and legislative initiatives have earned hallelujahs from the liberal faithful, but they have doomed the prospects for bipartisan compromise. Indeed, it’s clear from the president’s threat to veto any deficit-cutting legislation that doesn’t raise taxes that he wants the supercommittee to fail. And the demise of the supercommittee would almost certainly mean there won’t be any jobs package either.

It’s hard to believe that this is the White House’s game plan for reelection. Unemployment remains high. Government finances are in shambles. The economy is slowing to the point that another deep recession is not out of the question. And what will the president be doing for the next three months? Campaigning, apparently, and claiming that it’s all the Republicans’ fault.

If the president thinks this is a strategy for victory, he is listening to advice that has never worked before.

James C. Capretta is a fellow at the Ethics and Public Policy Center. He was an associate director at the Office of Management and Budget from 2001 to 2004.

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