Republicans See Obama’s Budget as Election Manifesto

Spending proposals seem designed to help Democrats win the election.

American president Barack Obama has apparently giving up hope of striking a budget deal with opposition Republicans. The $3.9 trillion spending plan he unveiled on Tuesday seems primarily designed to help fellow Democrats in the upcoming congressional elections.

Obama’s budget increases infrastructure spending and expands early childhood education and pays for it by cutting tax breaks for the wealthy.

“Our budget is about choices, it’s about our values,” the president told reporters during a visit to an elementary school.

The plan signals a shift from last year’s emphasis on deficit cutting to reducing poverty and income inequality, themes that Democrats are campaigning on as they struggle to keep control of the Senate in November’s midterm elections.

Republicans were quick to point out that Obama’s proposal does nothing to rein in the rising costs of entitlements, such as food stamps, health care for the elderly and poor, public pensions and unemployment insurance, which already account for more than two-thirds of federal spending and are projected to increase further as the population ages.

“After years of fiscal and economic mismanagement, the president has offered perhaps his most irresponsible budget yet,” Republican leader John Boehner said in a statement. “Spending too much, borrowing too much and taxing too much, it would hurt our economy and cost jobs.” The Republican majority in the House of Representatives is almost certain to reject the plan, if it even comes to a vote.

Wisconsin congressman Paul Ryan, who chairs the House budget committee, added, “This budget isn’t a serious document. It’s a campaign brochure.” Ryan is expected to present a Republican counterproposal in the coming weeks.

The president largely ignored the deficit, which is expected to come in at $649 billion, equivalent to 3.7 percent of gross domestic product, this year, in both his second inaugural address and January’s State of the Union. Under his plan, the shortfall would nevertheless fall to $564 billion, or 3.1 percent of GDP.

The first year of Obama’s presidency saw a huge expansion of federal spending. His economic stimulus plan, “cash for clunkers” scheme, unemployment insurance extensions and bailouts for banks and carmakers raised the deficit to $1.4 trillion. The federal debt has grown $6 trillion since he assumed office.

Spending hit a postwar record of 26.5 percent in 2009. Last year, the percentage was down to 23.5 percent. Even in real terms, spending dropped: from $3.9 trillion in early 2011 to $3.8 trillion in 2013.

The turnaround came when Republicans retook control of the House of Representatives in the 2010 elections. They leveraged their support for budget deals and debt limit increases on austerity measures which should reduce deficit spending up to $2 trillion through the rest of the decade.

Rather than Obama’s proposal, the budget that will likely govern federal spending for the next fiscal year is one Democrats and Republicans in Congress agreed to late last year. The compromise, which was negotiated between Democratic senator Patty Murray and Congressman Ryan, does not raise taxes and cuts discretionary spending by $85 billion, amounting to $23 billion in net deficit reduction.

The Murray-Ryan plan, however, does not cover mandatory spending, which includes entitlements.