So the official release-date for the president’s FY 2014 budget is April 10. You can expect to hear lots of GOP yammering about the budget being “two months late,” which is more than a little meaningless since the document has no force of law and no inherent impact on actual taxing and spending, particularly at a time when the odds of an actual congressional budget resolution are virtually nil.
But what will get the most attention from across the partisan and ideological spectrum is how this document deals with “mandatory spending,” i.e., the entitlement programs. Insofar as Obama’s budget will incorporate the guts of the “grand bargain” he has been offering Republicans for much of the last two years, it will probably include proposals to constrain long-term spending on Medicare and perhaps Social Security. On the former topic, you can expect the president’s budget to contain long-range estimates of Obamacare’s capacity to “bend the curve” of health-care costs, as reflected in reduced projections of spending on Obamacare subsidies, Medicaid and Medicare. Republicans will attack these estimates as loudly and as often as is humanly possible.
But the budget will likely also include additional “entitlement reforms” like a switch to a “chained CPI” method of calculating cost-of-living adjustments for Social Security (and perhaps government employee salaries and pensions), which would slowly and surely reduce benefits in the far out-years, and maybe even some additional means-testing measures for Social Security and/or Medicare. Much as such proposals will be greeted with modest joy by Beltway deficit hawks (who will nonetheless press Obama to be even “bolder” on this front), they will be savaged from two directions: by Democrats who deplore any “surrender” on mandatory spending, and from Republicans who will be eager to minimize their significance particularly as a justification for the revenue increases the president will again ask for as part of any “grand bargain.”
It’s not easy to decide how seriously we should take the firestorm that will break out before, on and after April 10. On the one hand, this is all Kabuki, since there will be no real budget agreement, much less a “grand bargain.” On the other hand, the positioning of the two parties on the major elements of fiscal policy, with all the economic and social freight they carry, going into the 2014 and 2016 elections is indeed a big deal.