In another effort towards achieving some perspective on the largely symbolic Battle of the Budgets, I recommend a reading of Matt Yglesias’ post today on the rather large differences between Obama’s budget and Paul Ryan’s:
— Rich vs. poor: In a way this is cliché, but it’s also quite important. Paul Ryan balances the budget without increasing taxes or reducing military spending or cutting Social Security or cutting Medicare benefits for people aged 55 and older primarily by cutting spending on poor people. Food stamps? Cut. Medicaid? Cut. Pell Grants? Cut. If the idea of the program is to bolster the living standards of the least fortunate, the GOP budget cuts it. By contrast, Obama expands Medicaid, increases EITC and Child Tax Credits, makes the Opportunity Tax Credit permanent, and spares the poor from the cuts involved in adoping the chained CPI. How does he do it? Well, he does it in several ways, but one big part of the story is reducing tax deductions for rich people. Ryan, by contrast, reduces deductions across the board in order to lower rates on the rich.
— Young vs. old: Ryan’s budget is a masterpiece of coalition politics, managing to cut spending a lot while minimizing cuts in spending on people who are old today—i.e., on Republicans. Obama’s budget, by contrast, doubles down on the kind of Medicare “savings” found in the Affordable Care Act and creates headroom for a large expansion of pre-K services. Ryan keeps the sequestration cuts to education, and Obama reverses them.
— Jobs vs. austerity: The Obama administration’s rhetoric has long since abandoned the concept of stimulus, but yet again we have a budget proposal for some meaningful short-term economic stimulus in the form of a $50 billion infrastructure program. Perhaps more importantly, the Obama budget would replace sequestration with alternative deficit reduction that’s phased-in in a more sensible way. The House budget, by contrast, is immediate austerity. I think it’s difficult to gauge the real Federal Reserve policy response function and thus the ultimate impact of this difference, but, broadly speaking, the direction of change is knowable—Obama’s budget would mean more job growth over the next 12-18 months.
Matt didn’t say he was trying to remind progressives that there was more to the budget than Chained CPI, but it does serve that purpose. I’d add another point for those who can’t get beyond the idea that Obama is making unforced concessions while Republicans just come right out offer their maximalist agenda again and again: believe it or not, the Ryan Budget is their idea of a “compromise,” at least in the sense that it points in the direction they want to take rather than leaping there immediately. The Medicaid “block grant,” for example, is a vaguely reasonable-sounding way station to the actual goal of abolishing Medicaid. The Medicare “premium support” proposal is designed (but not advertised) to be the first step towards turning all federal health insurance programs into subsidies for private health insurance, which can then be steadily reduced (along with de-regulation of the insurance products themselves).
Now you can argue all day long, and I often agree with those who do, that the political payoff Obama gets for trying to breach the gap between Ds and Rs is not terribly impressive (particularly in non-election years), but let’s don’t pretend he’s leapt across it himself tout court. Chained CPI may carry all sorts of symbolic freight, but it’s hardly the worst today’s GOP would do to the safety net if given the chance.
