Congress should hold hearings on Obama’s budget
The Republicans’ controversial refusal to consider any Supreme Court nominee from President Obama has filled headlines in recent weeks. By contrast, there has been almost no attention to the decision by the Republican-controlled Budget Committee to break a 40-year bipartisan tradition and deny the president a hearing on his fiscal year 2017 budget plan.
The budget contains many of Obama’s big “hope and change” ideas from his first presidential campaign — universal pre-K, major investments in infrastructure and clean energy, federal subsidies for community colleges and minority-serving institutions. True, it is late in the day for the Obama presidency. But the reality is that this is the first year the president’s budget team has been able to work unfettered by the need to address short-term crises — whether it be US financial instability, the unemployment rate, veterans funding, or various congressionally manufactured government shutdowns, debt ceiling limits, and sequestrations. And the administration’s best minds have labored hard to develop proposals that would translate Obama’s vision into reality.
The president’s 2017 budget proposes a fundamental change in the way the nation raises and spends taxpayer dollars on domestic programs. It calls for more than $1 trillion in new investments over the next 10 years, including a $312 billion increase in infrastructure spending, $150 billion for universal pre-K and child care, $60 billion to expand access to higher education in community colleges and minority-serving institutions, $30 billion to fight climate change, and $400 billion in new tax breaks for education, “family-friendly” policies, small businesses, and energy research. To celebrate the centennial of America’s National Park Service, the cover of the budget, which is usually plain, this year depicts America’s tallest mountain — the Alaskan peak that Obama renamed Mount Denali (formerly Mount McKinley).
To pay for these initiatives, the budget proposes to raise taxes on high-earners and corporations and to introduce dedicated new taxes — for example, a $10 tax per barrel of oil to pay for infrastructure projects. The budget raises the top capital gains and dividend rates, enacts a “Buffett tax” (a 30 percent minimum income tax on the wealthy), hikes the estate tax, imposes a $110 billion fee on financial institutions, and closes a number of corporate tax loopholes, especially on companies that have failed to repatriate earnings. The net result of this is that the money coming in offsets the new spending sufficiently to stabilize the national debt around the current level (75 percent of GDP) over the next decade. Even Washington’s biggest deficit scolds have praised the budget, including the bipartisan Committee for a Responsible Federal Budget, who have lauded it for “responsibly paying for new initiatives” and “identifying significant deficit reduction to stabilize the debt.” Most of the real growth in spending predicted in the budget comes from factors outside the proposals, such as rising interest rates and mandatory spending pegged to the aging of the US population.
The president’s effort is certainly not perfect. A major flaw is that it continues to pay for the Iraq and Afghanistan conflicts using “overseas contingency operations” — a slush fund that circumvents congressional budget caps entirely and blurs the lines between regular Pentagon needs and war spending. As a senator and presidential candidate, Obama criticized this approach, but he has never gotten around to changing it. The budget continues to fund windfalls for the Pentagon, including billions of dollars to modernize the nuclear triad ( land-based, sea-based, and aircraft missiles), doubling our cruise missile collection to around 1,000 missiles, and adding more nuclear-tipped missiles, while cutting funding for nuclear nonproliferation programs.
Nevertheless, the congressional decision to reject the president’s $4 trillion fiscal blueprint — sight unseen — cuts short the president’s second term and denies him the chance to propose a legacy for the future. With nearly a year remaining in office, the President deserves a hearing for his budget.
Linda J. Bilmes is a former assistant secretary of the Department of Commerce and a senior lecturer at the Harvard Kennedy School.