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Obama budget is preview of election battle

The president's plan, due out Monday, aims to cast him as a guardian of the middle class. Republicans say it's too light on deficit reduction.

February 13, 2012|By Kathleen Hennessey and Christi Parsons, Washington Bureau
  • Copies of President Obama's budget for fiscal year 2013 are prepared for distribution at the U.S. Government Printing Office in Washington.
Copies of President Obama's budget for fiscal year 2013 are prepared… (Derrick Harris, Bloomberg )

Reporting from Washington — President Obama's 2013 budget, scheduled for release Monday, offers a preview of the November election as both parties angle to refine the vision they hope to sell to voters.

Obama's plan and the House Republicans' answer, due in the spring, are aimed as much at offering voters a choice as at promoting policies destined for enactment.

For the president, the budget is another opportunity to try to position himself as a defender of the middle class, a leader willing to ask the wealthiest to pay more in taxes and to use government spending to spur job growth. It will give a nod to the president's call for balanced deficit reduction, while also aiming to preserve Democrats' brand as guardians of the social safety net.

Over the last year the conversation was about "How much do we cut?" Obama's budget will try to shift to more politically advantageous questions: "Who should pay more?" and "What is fair?"

"In the long term, we need to get the deficit under control in a way that builds the economy that can last for the future," White House Chief of Staff Jacob Lew said Sunday on ABC's "This Week." Obama wants to do that "in a way that's consistent with American values so that everyone pays a fair share."

Republicans are set to offer a competing vision guided by a call for smaller government, lower taxes and an overhaul of entitlement programs.

As word of Obama's budget plan spread, Republicans cast it as light on serious deficit reduction. They have opposed Obama's call to increase taxes on top earners and called for more drastic cuts in spending.

House Republicans are expected to offer a budget that renews their call for a major overhaul of Medicare, although it is not clear whether they will endorse the voucher program proposed last year by House Budget Committee Chairman Paul D. Ryan (R-Wis.).

"We do not plan on retreating," Ryan said. "We feel we owe the country a solution, a plan, to lift the burden of debt to get us back to prosperity, a fiscal policy to grow the economy and get our debt under control."

Obama will try to turn the spotlight on his spending priorities, beginning with a visit Monday to a community college in Annandale, Va., to talk about his plan for boosting community colleges to train workers for manufacturing and technical jobs. An $8-billion fund is designed to help forge partnerships between community colleges and businesses to put 2 million workers in high-demand industries.

The president's goal is to give the economy a shot in the arm now while laying long-term plans to deal with deficits, Lew said during appearances on several morning talk shows. The Obama blueprint would cut spending by $2.50 for every dollar it raises in taxes, he said.

Unlike past years, there is little mystery about the details of Obama's spending plan. The August budget accord forged during the debt ceiling debate set spending caps for the year, and administration officials say the president's plan will adhere to them.

That law also required steep spending cuts to defense and domestic programs — a result of the failure of a congressional "super committee" to agree on a plan for $1.2 trillion in deficit reduction. Obama's budget will propose heading off those cuts by adopting a deficit reduction proposal similar to the one the president submitted to the super committee in September, administration officials said.

The proposal will call for more than $4 trillion in deficit reduction over the next decade. That reduction would be achieved with savings from the end of the wars in Iraq and Afghanistan; expiration of the President George W. Bush-era tax cuts for upper-income Americans; other tax increases targeted at top earners; closing tax loopholes; and cutting costs for Medicare and Medicaid.

The plan calls for an overhaul of the tax code guided by the so-called Buffett rule, the principle that no household earning more than $1 million should pay less than a 30% tax rate. The rule has become a staple of the president's economic speeches, accompanied by reminders that billionaire Warren Buffett's secretary is taxed at a higher rate than her boss.

But the budget will not include specific details on whether the rule would generate significant revenue, administration officials have said.

Though Republicans and Democrats have expressed concern about the looming budget cuts, it's unlikely that Obama's proposal will get much of a second look. Republicans on Capitol Hill have repeated their opposition to raising taxes on the top income earners, a position echoed by GOP presidential candidates.

Former Massachusetts Gov. Mitt Romney has embraced aggressive spending cuts through an overhaul of Medicare, as have House Republicans.

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