WASHINGTON — After eight years of budget practices that often camouflaged federal spending, President Obama is planning a new strategy of putting on the books as many costs as possible to demonstrate the extent of the nation's economic troubles, senior White House officials say.
Obama's first budget, scheduled to be released in broad outline Thursday, will include at the outset money for the Iraq war, the military buildup in Afghanistan and other expenditures. The approach is in contrast to that of the previous administration, which often tucked such costly commitments into separate spending requests that would go to Congress later.
"The president is determined to treat the American people as adults and be straight up about what we're facing and what we need to do to move forward," said David Axelrod, senior advisor to the president.
The new approach, which is likely to be set out in the president's address to Congress tonight, follows up on Obama's repeated campaign pledges to make government more transparent.
It also could make it easier for him to keep his promise to cut the federal deficit in half by the end of his first term. By starting with a huge deficit now, he could slash spending in his fourth year. By then, costs, such as stimulus spending, war appropriations and others, would likely be gone or sharply reduced.
For years, the White House and Congress have engaged in a kind of Kabuki theater around the federal deficit. The president would release a budget in February that would show declining deficits into the future. But that budget would exclude most war costs and use several unrealistic assumptions, including over-optimistic predictions of economic growth and rising federal revenue.
"There were significant costs that were excluded from the budget because the Bush administration pretended that certain policies that everyone knew would continue wouldn't continue," said Jim Horney, a budget expert with the nonpartisan Center on Budget and Policy Priorities.
One practice was including revenues from the alternative minimum tax in the projections. Congress passed the AMT four decades ago to prevent millionaires from escaping taxes. But because lawmakers neglected to index the income levels for inflation, the higher tax rate would now hit a large swath of middle-income taxpayers unless lawmakers pass AMT relief -- which they do every year.
