WASHINGTON’S NEW era of divided government began in earnest yesterday when President Barack Obama defended his proposed 2012 budget.
The president’s tentative defence of his budget showed how much the exuberance of his presidency has ebbed. Instead of “Yes we can,” Mr Obama concluded a press conference with his belief that the American people “just want some confirmation that this place can work”.
Pointing to areas of broad consensus, Mr Obama said, “I don’t think anybody wants to see our recovery derailed. And all of us agree that we have to cut spending, and all of us agree that we have to get our deficits under control and our debt under control. And all of us agree that part of it has to be entitlements.”
The budget which Mr Obama published on Monday was criticised by Republicans and some Democrats for not presenting any proposals to tackle entitlements – the 40 per cent of the US budget that is spent on Medicare, Medicaid and social security. Such cuts would be risky in the run-up to the 2012 presidential election.
Mr Obama referred twice to the way the Republican president Ronald Reagan and the Democratic Speaker of the House Tip O’Neill worked together to “save social security”.
Medicare and Medicaid – not social security – would be the most difficult elements of deficit spending to reduce, because the US population is ageing and healthcare costs continue to rise, Mr Obama said. He noted that the Healthcare Bill he signed in March 2010 – and which the Republicans are trying to rescind – would save $250 billion (€185 billion) in the first decade, and $1 trillion in the second decade.
Mr Obama repeatedly said that the US government, “just like every family in America”, must “live within its means while still investing in the future”.
After his budget was presented, the ranking Republican Senator Mitch McConnell mocked it as “railroads and windmills”. John Boehner, the Speaker of the House, said Mr Obama’s budget was about “spending the future”.
Yet Mr Obama, ever the consensus-seeker, made subtle positive allusions to Mr McConnell and Mr Boehner. In the aftermath of last November’s midterms, “the assumption was there’s no way we were going to end up getting a tax deal that got the majority of both Democrats and Republicans,” he said, referring to his December 6th agreement with Mr McConnell which launched an extremely productive end to the lame duck session.
Mr Obama twice used Mr Boehner’s analogy that “this is a matter of everybody having a serious conversation about where we want to go, and then ultimately getting in that boat at the same time so it doesn’t tip over”.
The president expressed frustration with the impatience of the media and Washington, and said he was tackling the deficit and debt crises in stages, the first of which is to stabilise government spending. To that end, he intends to freeze domestic discretionary spending – only 12 per cent of the budget – for the next five years.
Critics such as Dana Milbank of the Washington Post called Mr Obama’s budget “a remarkably weak and timid document” that will cut only $1.1 trillion from federal deficits over 10 years. The deficit for this year alone will be approximately $1.5 trillion.
The third budget of Mr Obama’s presidency marked a shift from stimulus spending to cutbacks. The president said twice that he wants to attack deficits and debt with “a scalpel, not a machete”. The first stage was to “get control of our discretionary budget”.
But Mr Obama has postponed the more important, mammoth undertaking until such time that Democrats and Republicans are able to agree. That second stage “is going to be how do we make sure that we’re taking on these long-term drivers and how do we start whittling down the debt,” he said. “And that’s going to require entitlement reform and it’s going to require tax reform.”
To prove his good will to Republicans, the president included cuts which he said pained him, including subsidies for heating fuel for the poor, grants for community workers and scholarships for summer courses.
Mr Obama warned that attempts by the Republican House to cut tens of billions of dollars from this year’s spending “could endanger the recovery . . . If the steps that we take then prompt thousands of layoffs . . . or core vital functions of government aren’t performed . . . that could also have a dampening impact on our recovery.”
