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Monday, March 2, 2009

(Associated Press)

let's try to wrap our minds around this budget, shall we? The New York Times has a slew of articles on the subject so we'll start there:


Proclaiming a “once in a generation” opportunity, President Obama proposed a 10-year budget on Thursday that reflects his determination in the face of recession to invest trillions of dollars and his own political capital in reshaping the nation’s priorities.

Mr. Obama would overhaul health care, begin to arrest global warming, expand the federal role in education and shift more costs to some corporations and the wealthiest taxpayers.

In a veiled gibe at the Bush years, Mr. Obama said his budget broke “from a troubled past” and attributed the current economic maelstrom to “an era of profound irresponsibility that engulfed both private and public institutions from some of our largest companies’ executive suites to the seats of power in Washington, D.C.”

The budget that President Obama proposed on Thursday is nothing less than an attempt to end a three-decade era of economic policy dominated by the ideas of Ronald Reagan and his supporters.

The Obama budget — a bold, even radical departure from recent history, wrapped in bureaucratic formality and statistical tables — would sharply raise taxes on the rich, beyond where Bill Clinton had raised them. It would reduce taxes for everyone else, to a lower point than they were under either Mr. Clinton or George W. Bush. And it would lay the groundwork for sweeping changes in health care and education, among other areas.

More than anything else, the proposals seek to reverse the rapid increase in economic inequality over the last 30 years. They do so first by rewriting the tax code and, over the longer term, by trying to solve some big causes of the middle-class inc


President Obama’s new budget represents a huge break, not just with the policies of the past eight years, but with policy trends over the past 30 years. If he can get anything like the plan he announced on Thursday through Congress, he will set America on a fundamentally new course.


Whatever else it is, President Obama’s budget is a political gamble of the first order.

In his ambition to put his own stamp on liberalism and to move domestic policy leftward, Mr. Obama has much going for him.

The nation seems to be yearning for leadership, and his political standing is strong. In an era where taxpayers and markets are confronting bad numbers in the trillions, the price tags on some of his initiatives do not seem quite so breathtaking, and, in any case, good economic policy demands that the fiscal floodgates remain open for a while. Populist anger could render Republican arguments against taxing the rich less powerful.

But Mr. Obama faces many constraints. He is asking Congress to take on a wide-ranging set of complicated issues all at once, after years during which it had trouble grappling directly with almost any of them. His own party remains seared by the last time it followed a new Democratic president on a course of tax increases and ambitious social engineering. Interest groups, while demonized by the White House, have hardly fled from Washington and are already mobilizing for battles that could have big winners and losers.

So yeah, Obama's throwing long. Universal health care, cap and trade on carbon emissions, shifting the tax burden toward the rich, etc., etc. If he can get anything resembling this budget passed it will be huge. I also think they've learned not to negotiate with themselves, as the saying goes. They've laid out what they want to see, and if Republicans want to use their votes as leverage to make certain changes, so be it. But they're not trying to build in concessions to the right before the negotiations have even begun.

Newsday says the proposal is notable for treating us like adults:

President Barack Obama gambled big Thursday when he unveiled his first budget. He treated taxpayers like grown-ups. His extraordinary candor about what Washington spends, and what he thinks it will cost to get the economy out of the tank and on course for a sound future, is refreshing.

The figures are huge - $3.6 trillion to be spent in 2010, with almost $1.2 trillion of it to be borrowed. And the spending plan signals a sharp, maybe even historic, change of direction on taxes and the role of government. By baldly laying his cards on the table, Obama is betting that the public can handle the truth. It needs to.

The economy is in a tailspin. It contracted at a 6.2 percent pace in the last three months of 2008, the Commerce Department reported Friday - its worst performance in decades. The White House announced the same day that it will take a 36-percent stake in Citigroup. Those are ominous reminders that the nation has critical decisions to make in order to turn things around. Obama's truth in budgeting will help to make them informed ones.

First, he ditched Washington-style budget sleight-of-hand and honestly laid out what the government will actually spend. It has been common for presidents from both parties to employ gimmicks to make their choices appear more palatable.

Obama explicitly rejected some of the more egregious budgeting practices of his immediate predecessor. President George W. Bush never included the cost of the wars in Iraq and Afghanistan in his budgets, for instance, opting instead to treat those military campaigns as emergencies and fund them off the books. He took a similar approach with the entirely predictable $60 billion it cost the Treasury for each year that Congress spared 20 million taxpayers the expensive bite of the alternative minimum tax. Bush also budgeted nothing for federal disaster response, though natural disasters invariably occur. Obama included all three things in his 10-year budget.

Next, he made it clear that laying the groundwork for a strong economy down the road won't be free. Want to kick fossil fuels for a green future? How about reforming how we pay for health care, so we can get more for our dollars and reduce the ranks of the uninsured? Want to keep Medicare solvent? Get a bigger federal contribution for our schools? Repair and maintain roads, bridges, airports and mass transit? Build a modern energy grid?

It will all cost money, a fact Obama didn't sugarcoat. He budgeted funds as a down payment for those priorities. And he proposed taxes and identified savings to help cover the tab.

The message to taxpayers and Capitol Hill? Quit the magical thinking. These things won't pay for themselves. And we can't just continue to borrow and spend and pass the bill to our kids.

We can argue about the larger role for government that Obama envisions for the nation. And we can argue about whether high earners should pay higher taxes. But by putting his ideas into budgetary black-and-white, Obama has challenged taxpayers to make realistic choices about what they want from government - and then to pay for it.

It's what grown-ups do.

So the next order of business is trying to get this thing passed. Expect at least a month of debate before Congress starts voting. It's going to be clash of the Titans in Washington as every interest group and it's mother comes out of the woodwork to fight tooth and nail one way or the other. The consequences of this debate will likely reverberate for the rest of our lives.

Here's some good news and some bad news:

As this WSJ article notes, the voting rules work a bit differently for budgets than other items: The fillibuster can't be used, so you just need 50+ votes.

Now for the bad news: the Byrd rule.

The obvious and most tantalizing option for congressional Democrats for moving Obama’s agenda is the budget process known as reconciliation. Under this system, legislation that affects tax revenue and mandatory spending needs only 51 votes to pass the Senate, meaning it negates the threat of filibusters.

But moving either the emissions cap-and-trade legislation or a health care overhaul through this process wouldn’t be easy either, because of what is known as the Byrd rule. Named for Democratic Sen. Robert C. Byrd of West Virginia, the rule allows policy language that has no effect on spending or revenue to be struck from reconciliation bills when they come to the floor.

It takes 60 votes to waive the point of order, meaning that if Senate Republicans stay unified, they could blow holes through any reconciliation bill that attempts to implement new policies.

So the fillibuster rears it's head after all. This also complicates Obama's efforts to pay for tax cuts with revenue from cap and trade, if that has to be considered in a separate bill.

I agree with this guy that it's time Harry Reid made Republicans actually fillibuster if it's so damn important to them. Let's let everybody see where everybody stands.

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