Considering Congress has gone more than 1,000 days without passing a budget, the very act of a president submitting a proposed annual budget becomes little more than a political statement, a bound volume of things the public would get if it voted for the president and his party in the fall.
A Congress unwilling to compromise in off years is not likely to do so during an election year. The irony, however, is that, politics aside, budgeting really has taken on a sense of urgency in light of the prolonged economic slowdown and a burdensome deficit that led one bond rating agency last year to reduce the nation's credit rating for the first time.
Given the stakes and the current state of political gridlock in Washington, this would have been a good time for the president to come out with a budget that radically overhauls programs and tax structures, providing what would amount to his version of a way to save the nation without sacrificing programs for the poor and needy. Instead, he offered little more than a variation on a theme Monday, with no discernible decrease in the nation's mounting debt burden.
Much of his budget seems aimed at his likely opponent in the fall, Mitt Romney. Obama would raise taxes on dividends and capital gains on anyone earning more than $250,000 as a couple or $200,000 filing individually. By one estimate, Romney's 2011 tax bill would have jumped by 133 percent if such a budget were in place. The president obviously wants to paint his likely opponent in a certain light.
He also is basing part of his strategy on a New York Times op-ed by Warren Buffett, proposing a 30 percent minimum tax on anyone earning at least $1 million, which would replace the unpopular alternative minimum tax. But the plan has no clear philosophical underpinnings other than a desire to collect a few hundred billion dollars more from the rich over the next decade — not nearly enough for serious deficit reduction.
And yet the president makes grand claims about his budget's ability to cut the deficit. For this, he relies on a politician's best friend, Rosy Assumptions. Relying on Rosy, he assumes an annual growth in gross domestic product of 3.7 percent. He also assumes Congress will reduce discretionary spending on defense and other items. In other words, peace and prosperity are just around the corner. We can all hope he's right.
We wish Republicans would offer something in response to cheer for. But their antipathy toward tax increases seems as calcified as Democrats' determination not to reform entitlements. Republicans are expected to present an alternative written by Rep. Paul Ryan of Wisconsin. His bold but somewhat flawed proposal last year ought to have been the start of a negotiated budget. Instead, it has been used to dig a stronghold by one side in the budgeting trench warfare.
Meanwhile, automatic spending cuts are scheduled to begin next January — a part of the agreed consequences for failing to reach a compromise on debt reduction. The Bush-era tax cuts also are scheduled to expire then, resulting in a $4 trillion across-the-board tax hike. Absent a real budget, Congress soon will begin allocating money based on a $1.047 trillion figure that was part of a debt-ceiling compromise last summer.
That's no way to save an economy that needs a strong dollar backed by a reliable government. Americans deserve better.
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