Compromise on Obama’s budget plan

Published 8:45 am Thursday, February 12, 2015

The Star Tribune

Distributed by Tribune Content Agency

In an age of hyperpartisanship, it’s no longer noteworthy when Congress pronounces a president’s budget “dead on arrival.” But last week’s breezy dismissal of President Obama’s budget doesn’t — or shouldn’t — make the document irrelevant. Sprinkled throughout its 2,000 pages are opportunities for compromise that Republican majorities should seize if they want to prove that they’re as good at governing as they are at complaining. As for Democrats, Obama’s budget offers a structure from which they can seek to frame the terms of debate for the 2016 presidential season.

Email newsletter signup

Let’s take the Democrats first. After the licking they suffered in the midterms — losing the Senate and dropping another 13 seats in the House — the party needs a rock to grab onto. Obama’s budget correctly defines the nation’s central problem, one that could play well for them in 2016: the lack of opportunity and mobility for middle- and lower-income Americans who find it harder and harder to keep up with the economy’s top earners.

Obama effectively kicked off the debate last month: “Will we accept an economy where only a few of us do spectacularly well? Or are we going to build an economy where everyone who works hard has a chance to get ahead?”

Using the tax system to restore some measure of equilibrium seems, to Democrats at least, a logical correction. They will try to portray the “inequality” trend as a product of tax cuts and free-market policies that took hold in the early 1980s, producing a trickle-down economy that never trickled down. Obama’s budget reckons that those who have benefited most over the last 35 years should now pay for the education, job training and child care that ordinary people need to start catching up. A surge in infrastructure investment should help, too, they argue. A massive rebuild of the transportation system would provide jobs over the short run, while adding value to the nation’s goods and services over the longer term.

While the president’s budget fails directly to address future shortfalls in the Social Security system, it makes an important indirect connection: a healthy system will depend on immigrants. Without comprehensive immigration reform, older Americans won’t have the workers and taxpayers needed to support them. That’s a connection that many Republicans won’t be happy to acknowledge.

Reacting to the Obama budget last week, Senate Majority Leader Mitch McConnell, R-Ky., called it “another top-down, backward-looking document that caters to powerful political bosses on the left and never balances — ever.”

Still, there are a few morsels in the document that the GOP would do well to consider, among them: a revitalized Pentagon budget, an expansion of the earned income tax credit for the working poor and Obama’s infrastructure proposal, financed by a corporate tax restructuring. Republicans have championed versions of those ideas in the past.

Sen. John McCain, R-Ariz., among others, has called for lifting spending caps on the military. One reason is all too obvious: U.S. forces have demonstrated repeatedly (most recently in Afghanistan and Iraq) that new strategies are needed to win against insurgencies.

On tax credits, Rep. Paul Ryan, R-Wis., has proposed expanding credits to low-income workers without children, albeit on a smaller scale than Obama’s plan. And on transportation, Sen. Rand Paul, R-Ky., has urged a similar plan to Obama’s, offering a one-time tax break to corporations willing to move offshore profits back to the United States as part of a broader plan to lower and restructure corporate taxes.

Compromise is rare in Washington, but cynical voters would delight in a serious give-and-take effort by both sides on areas of possible agreement. Transportation would be a good place to start. All agree that roads, transit and ports are a public responsibility — and that Republicans and Democrats have to drive on the same crummy highways.

Obama’s critics are right to point out that his budget fails to make much progress against the deficit; annual interest payments would rise from 1.3 percent of gross domestic product next year to 2.8 percent by 2025. Then again, with neither party willing to chop spending on the military or on entitlements, deficits are unlikely to disappear anytime soon.