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The 2014 President's Budget explained

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  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    We've been talking about pieces of President Obama's proposed budget in other forum posts. The Center on Budget and Policy and Priorities has analyzed the budget piece by piece.

    April 11, 2013: President Obama’s Deficit-Reduction Package and Other Proposals in the 2014 Budget

    You can browse through the analysis and pick the parts that most interest you. I'll extract one part that will bother many:

    "...the budget also reduces funding for discretionary programs by $200 billion below the already austere caps set in the 2011 Budget Control Act (BCA). The $200 billion in proposed cuts are evenly split between defense and non-defense programs, consistent with the President’s December offer to Speaker Boehner. Non-defense discretionary programs include a broad set of government functions, such as education, public health, law enforcement, veterans’ health care, housing supports for low-income families, and scientific and medical research.

    "The cuts in non-defense discretionary program funding are ill-advised. The BCA funding caps already significantly constrain this area of the budget. In fact, under the BCA caps, spending for non-defense discretionary programs is on track to reach, by 2016, its lowest level on record as a share of the economy (these data go back to 1962). This area of the budget, which has been cut significantly in recent years and is not a driver of longer-term deficits, would be cut still more deeply under the President’s budget.

    That said, the additional cuts in the President’s budget do not take effect until 2017, by which time the economy is expected to have recovered."


    This will drive the MMTers nuts. These austerity measures, if allowed to go ahead, will be crippling not only for the economy, but hit many areas that President Obama has traditionally championed. My only hope is that this is a political ploy that can be undone before 2017...if it is even approved by Congress.
  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    I'm all for cuts to the bloated defense budget. But that means we either need more government spending in other programs/areas or tax cuts. There's a higher spending multiplier associated with government [expenditure] spending than with tax cuts, as government spending is all spent by definition, so if you do tax cuts, you probably need to do them near $2 for every $1 cut from the spending budget. FICA payroll tax might do the trick, but given you're offsetting cuts, we would still have an output gap to fill in.

    Plenty of things we need done in the public sector, recession or not. The purpose of the people's purse is public purpose!
    So, I favor FICA cuts and the same level of government spending, just redirected towards public purpose, with cuts and increases of particular programs as appropriate. I'd also like to add to SSI and Medicare benefits, not cut them.

    Long-term, still need a Job Guarantee. Too many have been out of work too long, and we need a transition program to get people back into employable shape, otherwise we could still end up with a labor shortage, even with millions still unemployed.

    Unfortunately, Obama seems more concerned with and disabled by the politics than with transcending the politics, per his own presidential vision.

    All attempts at reasoning with the WH have failed. FICA payroll tax cut would offer him a chance to break out of the box and outflank Republicans on tax cuts. A full FICA payroll tax suspension would be the largest tax cut in history, and from the bottom-up!

    At this point, Republicans against deficit spending are against the broad point of capitalism, which is sales, output, and employment.

    I've taken the FICA payroll tax cut idea to both Tea Party and Occupy groups and have had a warm reception.

    As I see it, MMTers are to the right of the Republicans on tax cuts, and to the left of the Democrats on government spending.
  • Independent
    Ft.myers, FL
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    BB, I repeat what you did say: " I'm all for cuts to the bloated defense budget." May be I'm simple minded but what stuff we have for defense can just about blow the whole world to pieces; why add to that? No there should be very drastic defense cuts; these funds should then be used for infrastructure, like high speed rail, bridges, roads the environment etc. This would put a lot of people to work especially the nonskilled workforce.
    My feeling is Obama is already too long in the closed loop environment and is affected by the disease in that town.
  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    CBB and Dutch --

    Good observations...I feel the frustrations and I'm sure President Obama feels the frustrations in trying to put together any kind of budget deal that won't be politicized in some manner.

    We all agree that adding jobs should be the number 1 priority, and the path to get there is a "no brainer." Invest big time in infrastructure, education and research, and everything else will start falling in place. With low interest rates, now is the time to borrow and spend. When Europe is engaged in austerity, now is the time to rebuild America.

    However, the reality is that Obama is dealing with certain Republicans in Congress whose objective is to "stop government" and shrink it down to the size of a bathtub drain. They are wedded to that ideology and don't give a damn how many Americans are hurt in the process. The absurd Sequestration Law, instead of acting as a deterrent to partisanship, has instead been embraced by the Tea Party Republicans. Some of that is a result of the "Hate Obama" faction that cannot engage in any kind of critical thinking and would just as soon destroy America than give Obama a "victory" on anything. They are in a minority...but they are a vocal minority. And Boehner is hand cuffed by them.

    President Obama is trying to walk a fine line in appeasing these Republicans while trying to also put together a plan that will undo many of the harmful effects of Sequestration. However, the Republicans have the upper hand because Sequestration IS the law of the land. They will never negotiate in good faith...everything will have a political motive. Even now as President Obama has acquiesced to Republican demands to cutback on long term Social Security benefits with the chained CPI, some Republicans are now using that against him..."Obama's plan attack's seniors!" These guys are pathetic.

    They did the same thing to him on Obamacare individual mandate. Obama put that Republican idea, the individual mandate into the Affordable Care Act to get Republican votes and they used it against him. Republicans have been screaming for cuts in Medicare, but when he puts $716 billion in cuts in Medicare waste into the Affordable Care Act they used that against him.

    Now it's the same with Sequestration and the 2014 Budget. President Obama is seeking compromise and a Grand Bargain, but all the Tea Party Republicans can do is look at how this can be turned against him. How do you deal with people that are not acting in good faith? How do you deal with people who hate you?

    The sad fact is that their strategy is working. The more they undermine Obama's initiatives, the more the populace turns against him. Obama's poll numbers are dropping and along with it his ability to get anything done.
  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    Got turn it around on them, e.g. Republicans are against capitalism; Republicans are for central planning (Austerity); and you outflank them on Tax Cuts.

    You get out there and fight. Rightwingers only respect strength. You have to bully them. You have to get in their face. You have to size them up and look them in the eye and show no fear.