"God is in the details," is one of those strange aphorisms that has longer legs than it should. I do not suspect to find God going through the details of President Obama’s newly minted budget. But, it is clear that what one will find therein is the other half of the title of his book: If his campaign was about hope, this budget is all audacity.
The most outrageous, and slightly duplicitous, pledge is that he will reduce the federal budget deficit by half by the end of his first term. This is possible only because this year’s bailouts and stimulus package raised the current deficit to an unheard of $1.75 trillion dollars. So, if he brings in a 2012 budget with a $500 billion dollar deficit, he will make his pledge. This does not obscure the fact that a $500 billion deficit is enormous. It is like pledging to cut your chocolate intake in half for Lent, but the week before Lent you start eating ten candy bars a day.
The most honest part of the budget is that it includes the funding for the Iraq war which the Bush administration kept off the books. This made the deficit look smaller than it really was but the GOP defended it because emergency appropriations are usually kept off the books. But, there is a difference between a one-time emergency, like the breaking of the levees in New Orleans, and a war that is both on-going and, so far from being an emergency, was a chosen course of action. The funding should have always been on the books. Now it is.
The largest changes are those we can all applaud. The President has put in large sums for health care reform, education and new energy sources. Most of his spending cuts come from reducing the rate of growth in the Pentagon budget. As Congressman Barney Frank pointed out on Hardball last night, paying for a missile defense system to protect the Czech Republic from an attack by Iran may not be the wisest use of funds, not least because we have no idea if the missile defense system will work and, even more, because there are not a lot of geo-strategic scenarios that foresee Iran attacking the Czech Republic. In the Bush years, money was literally thrown at the Pentagon and they had to find things to spend it on. It is better for all of us if that money gets thrown into health care or education.
I am a bit of a hawk, especially when it comes to the Mideast where some of my more dovish friends attend only to the plight of the Palestinians without looking at their politics or history, which do more to explain their plight than any accusation you can hurl at Israel. And, Lord knows, the threat from rogue regimes like Iran and North Korea are real. Still, there are ways to cut defense spending without harming our national security one iota. Outdated weapons systems, designed for the Cold War, are the single worst way to spend money. A weapon has no long-term stimulative effect: You need people to make the thing but it is built to not be used. Build the high-speed rail Gov. Jindal was complaining about and you not only employ workers laying the new tracks, you end with a train that ends at a terminus, creating a concentration of commuters, which will catch the eye of an entrepreneur who wants to sell bagels to them in the morning.
The other most talked-about feature of President Obama’s budget is the ending of the Bush tax cuts. To be clear, these were set to expire anyway, which is how the GOP made it look like they were not budget-busters. There is no economic justification for maintaining them and a strong policy reason for letting them expire as planned. It sends the signal that there are more important things than becoming fabulously wealthy and that there is no national interest in allowing the few to become fabulously wealthy while the poor and middle class find it impossible to afford health care.
I am sure anyone will find something in the budget with which they disagree. And, overall, the numbers are staggering. But, if the investments in health care, energy and education pay off, then we will be able to pay down the debt as we did in the 1990s. President Obama has put the government’s budget on the right track.