President Obama won't make his official budget request until later this morning, but at this point, the contents aren't a secret: as a first step toward addressing deficits, Obama will propose cuts in several programs -- Pell Grants for summer and graduate students, federal assistance for heating -- and offer a 5-year freeze on non-defense discretionary spending. He'll propose a 5-year, $78 billion reduction in Pentagon spending, adopting a proposal from Defense Secretary Robert Gates, and reduce spending for community block grants and environmental clean up.
In addition to cuts, Obama would allow the Bush tax cuts on high income to expire and eliminate subsidies for oil and gas companies. Moreover, as part of his "cut-and-grow" strategy, some savings would be reinvested in larger programs, and provide the base for spending increases in education, high-speed rail, clean energy and research. In total, thanks mostly to these spending cuts (with a small assist from higher revenues), Obama's budget would reduce the deficit by $1.1 trillion over the next decade. By 2015, deficits would drop from 9 percent of gross domestic product, to just over 3 percent.
Depending on your perspective, this is either good, or terrible. If you expected Obama to fully stand up for liberal priorities in the face of an anti-government Republican majority, then you'll probably be disappointed by the budget's contents. By weighting his budget toward spending cuts and away from tax increases, Obama has all but adopted conservative framing of the issue: we spend too much, and we need to stop. On the other hand, if you took spending cuts as a given, then this doesn't look to bad. The stated cuts are relatively small, entitlements are left mostly unscathed, and Obama has recommitted to activist government, with important spending in several areas. Indeed, as Ezra Klein points out, if its major elements are left to progress as designed, this budget stands as a testament to the efficacy of activist government, "It's an odd turn of events, but for all that this budget, and the various Republican proposals, attempt to actually do for the deficit, the biggest single thing we could do would be to do, well, nothing: Let the Bush tax cuts expire and let the health-reform law and the associated Medicare cuts and excise tax get implemented as planned."
In other words, for all of its moderation, this is still a liberal document, and an important rebuttal to the Republican vision of small, indifferent government. Of course, whether progressives understand as such is a different question.
