Make Your Case on the President’s Budget: Agree or Disagree?

Posted by Marvin on February 15, 2012 at 9:31 am

President Obama’s proposed budget is a framework that encompasses many positive elements. However, if a budget does not receive the blessings of Congress it remains just that–a framework for discussion only.

One thing for certain, the coming months discussion of the president’s proposed budget will get massive media attention. Why not voice your opinion(s) here?

As I’ve often stated, I am neither an accountant, an economist, nor a financial adviser. I read what you read and hear what you hear. It’s my sense that, since everyone is in agreement that this budget will never receive the light of day, it could have been crafted more aggressively–leading, perhaps, to compromise.

The president’s rationale for the framework is that many of the cuts included in the budget are necessary–that the economics of the next several years demands tough choices in order to put this country back on a more sustainable fiscal path.

I’ve selected four broad areas of the budget and, off the top of my head, offer some initial reactions. With that in mind, consider the major constructs of Obama’s budget proposal and click on any or each of the areas below to put in your two cents worth.

On Taxes: President Obama’s budget is what many progressives had been expecting. Its focus on greater fairness via revisions to the tax code include a proposal to rescind the Bush tax cuts for households with incomes of more than $250,000. It would tax dividends for stockholders in the high earner sector as ordinary income. This goes to the question, Why should someone pay a higher tax rate for constructing a house, providing nursing care, molding steel, or teaching children than someone who sits at a desk investing other people’s money while benefiting from tax loopholes such as carried interest?

Tax Me: The Agenda Project: Patriotic Millionaires’ Open Letter to John Boehner

On taxes: Agree or disagree?

On the Deficit: Short term, there is no major deficit or debt problem. Less than 1 1/2% of the gross domestic product goes to (net) interest. My reading informs that this is about the lowest it’s been over the past six decades. Long-term the deficit problem is rooted primarily in rising healthcare costs. I read recently an article which argued that if per-person health care costs in America matched those of other high income nations, our nation’s long-term budget forecast would show a surplus.

According to the Center for Economic and Policy Research (Joseph Stiglitz is on its board), our health care system is possibly the most inefficient in the world: We spend twice as much per person on health care as other advanced countries, but we have worse health outcomes, including a lower life expectancy. The government, through programs like Medicare and Medicaid, pays for approximately half of the country’s health care, almost all of which is actually provided by the private sector. Thus, the bulk of our projected rising budget deficits are due to skyrocketing health care costs.

On the deficit: Agree or disagree?

On Jobs: The proposed budget reduces spending (adjusted for inflation) in fiscal year 2013. A leaner budget logically does not lend itself to aggressively resolving the unemployment crisis. Down eight to ten million jobs and given the recent rate of job growth (a quarter million per month), it will take until 2020 to overcome the existing employment shortage. Although the new budget includes almost $19B for transportation projects and $10B for school construction and modernization, these numbers are below current allocations.

On jobs: Agree or disagree?

On Budget Cuts: The president’s budget avoids significant reduction of the military budget. If we have learned anything over the past twenty years it should be that unnecessary and prolonged wars, declared or otherwise, do not make America more secure. The military budget is being pared but remains a huge drain on taxpayer dollars. Would dollars from the defense budget not be better spent on job creation?