I don’t approve of framing this as winners vs losers because that’s an oversimplification, but I do believe Ezra Klein at the Washington Post has a decent summary of what is and isn’t included in President Obama’s budget proposal.
You’ve probably already heard about elements of the budget that solicit reflexive condemnation from those of us on the left, but there are also many positive things that, in my opinion, far outweigh the bad.
Here are a couple things that caught my attention:
Low-income taxpayers: Back in 2009, the stimulus bill expanded two tax credits for low-income workers and families — the Earned Income Tax Credit and the Child Tax Credit. The EITC, for instance, was increased for families with three or more children. Both of these expansions are set to expire in 2017, but the White House wants to make them permanent. That will cost an additional $161 billion over 10 years.
Highway pavers: The White House wants an extra $40 billion to repair aging highways, bridges, transit systems and airports across the country. There’s also an additional $10 billion for newer infrastructure, such as expanding the nation’s seaports.
Preschool: The White House is proposing a large expansion of preschool to cover all low- and middle-income 4-year-olds across the country. This would be done in partnership with the states and cost the federal government $66 billion over the next 10 years, paid for by new taxes on cigarettes.
Tobacco companies: The federal tax on cigarettes would increase from $1.01 to $1.95 a pack under the White House proposal. This would raise some $78 billion over 10 years, with the revenues used to finance universal preschool and child-care programs.
Pharmaceutical makers: The Obama administration is proposing to change the rebates that drug companies have to offer low-income Medicare beneficiaries. (The rebates would be similar to those offered under Medicaid.) That would save the government an estimated $123 billion over a decade and is generally considered a big loss for pharmaceutical makers.*
Oil, gas and coal companies: The White House budget would raise $44 billion over the next 10 years by eliminating various tax breaks and deductions for fossil fuel companies. That includes repealing the manufacturing credit for coal, oil and gas, and changing the tax code so that oil and gas companies could no longer expense all of their drilling costs.
The president’s proposal also includes an alternative minimum tax for high income earners and boosts funding for scientific research by 9 percent. It also includes a program that would create incentives for state and local communities to develop and implement clean energy projects.
There are those who are describing the president’s budget as an “austerity budget,” but I don’t think that’s fair or helpful. Because if we are to judge a budget based on one or two elements rather than as a whole, we’re no better than the Republicans who came out against this budget earlier this week before even a single detail was known.
I also don’t believe the proposed implementation of Chained CPI is as egregious as it has been made out to be (and for a detailed account of why read the Center on Budget and Policy Priority here and Jared Bernstein here) considering that President Obama made it perfectly clear today that such a change would only be acceptable, but still not preferable, if it protects those who are most vulnerable.
But I also don’t believe that element of his budget has any chance of becoming law. Furthermore, I don’t believe any element of the president’s budget has much of a chance of becoming law. It primarily serves as a rhetorical document that solidifies the president’s image as someone who is willing to compromise and follows up on proposals he made during his State of the Union Address.
The chances of anything other than the current status quo, which includes a baseline established under sequestration, being signed into law during this session of congress seems extraordinarily low to me. And if we want that to change we have to retake the House of Representatives.
The passage of a series of continuing resolutions and piecemeal federal funding between now and fiscal year 2016 seems far more likely to me. The “grand bargain” is dead and buried, but it serves the president’s political interests to continue proposing one as long as Republicans in congress remain adamantly opposed to their own ideas. Because as long as they reflexively oppose anything proposed by the president, none of it will become law. That means there is little risk in him courting some of their ideas if it makes them look unreasonable in the process.
Not everyone agrees with that, and that’s okay, but that’s how I see it.
I would warn against accepting any framing of this issue that is touted, simultaneously, by congressional Republicans and very serious pundits or concern trolls. Handing them a rhetorical “win” while none of this goes on to become law would be a mistake.