President Obama’s 2015 Budget sets up many of the right fights
with the right opponents. Republicans who dismiss it out of hand –
“most irresponsible budget yet”
fumed
House Speaker John Boehner – are exposed for what they are: defenders
of privilege and entrenched interests against working Americans. Yet,
the good fights it sets up are waged within a continued long-term
retreat. It is like walking up an escalator headed down.
U.S.
President Barack Obama, left, and Emily Hare, right, watch the press
pool depart during a presidential visit to a classroom of 4 and 5 year
olds at Powell Elementary School on March 4, 2014 in Washington, D.C.
Obama later delivered remarks on the FY 2015 and also took a question on
the situation in the Ukraine. (Photo by Ron Sachs-Pool/Getty Images)
Why Not Common Sense?
Obama’s budget calls for a series of sensible reforms. He’d tax
multinationals to fund the rebuilding of America’s infrastructure at
home, putting Americans to work on good jobs that need to be done. He’d
expand funding for research and development, establish more
manufacturing innovation centers, expand work on renewable energy, while
ending the billions that go in subsidies to Big Oil, the most
profitable companies in recorded history. He’d save money by reducing
the size of the military and winding down the war in Afghanistan. He’d
boost universal pre-school for American children, paid for by hiking
taxes on tobacco. He’d both lift the minimum wage and expand the earned
income tax credit to lift millions more out of poverty, and to reduce
taxpayer subsidies to Wal-Mart’s billionaire owners. He would pay for
the EITC expansion by closing indefensible tax dodges, like the “carried
interest” tax deduction for hedge fund billionaires. He’d protect
Social Security, and continue his efforts to curb the rapacity of health
care insurance companies and providers. He calls once more for
comprehensive immigration reform that would bring millions out of the
shadows, aiding growth and the economy, and thereby reduce deficits.
None of these common sense reforms is likely to become law.
Republicans march in lockstep to block closing loopholes for the wealthy
and multinationals, to defend subsidies to Big Oil and Big Pharma, to
bloat the military while denouncing the president for refusing to offer
up cuts in Social Security, Medicare, Medicaid, food stamps, child
nutrition, education and more. They oppose extending unemployment
insurance to the jobless, or raising the minimum wage for the working
poor. They will rail that poverty programs trap the poor, that a hike
in the minimum wage will cost jobs, that taxing multinationals and the
rich will slow the economy, that global warming is a hoax and Big Oil a
solution. And they will stop the reforms, even as they reveal who they
are.
House Budget Committee Chair Rep. Paul Ryan dismisses the president’s budget as “
an election brochure.” Well, it damn well better be, because no matter what the president put in it, Republicans would pronounce it D.O.A.
This budget, as the president
stated,
frames the choice: ”Our budget is about choices. It’s about our
values. As a country, we’ve got to make a decision if we’re going to
protect tax breaks for the wealthiest Americans, or if we’re going to
make smart investments necessary to create jobs and grow our economy,
and expand opportunity for every American."
The Strategic Retreat
Progressives will stand with the president on that choice, as would
most Americans if they believed it. The president picks good fights
against the right enemies. Yet over the long-term, this budget remains
mired within a deeply conservative and wrong-headed set of assumptions.
America need more public investment, not less
The president makes the case for rebuilding our infrastructure and
investing in areas vital to our growth, but his long-term budget is
focused on reducing deficits, not on expanding investment. The deficit,
which has already fallen faster than anytime since the post-World War
II demobilization crippling the recovery, is slated to decline to less
than 2% GDP over ten years. The domestic discretionary account –
everything the US spends outside the military, shared security
guarantees like Social Security and Medicare and interest on the
national debt – is slated to decline to levels of the economy not seen
since the 1950s.
This is a guarantee that, despite the rhetoric, America’s
infrastructure — the essential sinews of its economy – will continue to
age and decline, growing more decrepit and more dangerous. It accepts
that America’s children will continue to go without the basics in
education – from universal pre-school to affordable college. It accepts
that we will continue to raise the highest percentage of children in
poverty of any industrialized nation.
Corporations and the rich need to pay their fair share of taxes.
The president sensibly calls for limiting some tax breaks on the
wealthy and corporations to invest in primarily in deficit reduction and
some sensible reforms. But he continues to argue that corporate tax
reform should be “revenue neutral,” lowering corporate tax rates while
closing loopholes. In fact, multinationals have grown ever more adept
at avoiding taxes. As Citizens for Tax Justice has
shown,
profitable Fortune 500 companies pay a lower tax rate at home than they
do in other industrial countries. With profits at record percentages
of the economy and the richest few making off with virtually all the
income growth in the society, we need progressive tax reform that raises
resources to pay for the investments we need.
The U.S. Should Lead the Green Industrial Revolution, Not Just Clean Up After It
President Obama pushes for greater investment in renewable energy,
greater controls on carbon, increased efficiency standards for cars,
buildings and appliances. But any real commitment to dealing with
climate change, and to grabbing a lead in the green industrial
revolution that is already sweeping the world has been beaten out of his
budget. His energy budget, for example,
devotes
$11.7 billion for nuclear security, mostly to maintain our nuclear
weapons arsenal. An additional $5.6 billion goes to clean up nuclear
waste at Cold War sites across the nation. In contrast, $2.3 billion is
devoted to efficiency and renewable energy – solar, wind, geothermal
and hydropower. We’ll spend more maintaining a bloated arsenal of
weapons we don’t need and won’t use than in capturing the renewable
energies that will fuel the future. That means we’ll continue to pay
rising costs for cleaning up after the catastrophes wrought by climate
change.
The zombie economy that exploded is back.
The president begins his budget statement, as he began his State of the Union, by
boasting
that "After 5 years of grit and determined effort, the United States is
better positioned for the 21st Century than any other nation on Earth.”
Well, the world is in dire straits, but the reality here is
different: the American Dream is haunted by a nightmare zombie economy
that has come back from the dead.
The old economy blew up in 2008, causing a global economic
calamity. The old economy was plagued by unsustainable imbalances –
growing Gilded Age inequality and a declining middle class, increasing
financialization and the devastation of manufacturing, unprecedented
trade deficits, growing indebtedness, a decrepit infrastructure and
starved public investment in vital areas, an unsustainable commitment to
police the world, a purblind refusal to address increasingly
destructive and costly climate changes.
President Obama managed to rescue an economy in free fall, while
promising to find a new foundation for growth. That effort clearly has
stalled. The old order stymied reforms and now revives to haunt us.
The rich capture even more of the national income. The big banks are
bigger and more consolidated than ever. The trade deficits remain over
$1 billion a day. Public investment remains starved. The national
security state continues to generate crises and consume resources and
attention. Big oil even retains its subsidies. The unsustainable rise of
costs in the health system have been slowed, but the system remains
broken.
Kutusov, if we’re lucky
Perhaps we should see President Obama as pursuing the wily course of
Russia’s famous general Kutusov, who responded to Napoleon’s bold
invasion of Russia by retreating back into Mother Russia, confident that
the Russian expanse, its harsh winter and the survival needs of its
peasants would eventually expose Napoleon’s troops and his folly.
Perhaps, by picking the right fights, revealing the Republican
extremes, pointing the right direction even while in slow retreat, the
president is exposing the right, exhausting their troops, and awakening
Americans to meet the challenges of the day. As fanciful as that may be,
it is much more plausible than expecting this budget’s long-term
direction to take us where we need to go.
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License.
Robert L. Borosage is the founder and president of the Institute
for America’s Future and co-director of its sister organization, the
Campaign for America’s Future.
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