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Andrew Sullivan is unhappy with the budget:
If you believe, as I do, that withdrawing from Iraq won't happen as promised, then there is close to no actual spending restraint anywhere in sight. We are being presented with what can only be described as a massive increase in government spending and power with the only fiscal balance being wringing much more money from the successful. The president predicted a tight budget and spending control in his non-SOTU, and he appealed to fiscal conservatives by promising a long-term attack on entitlement spending. I see nothing here yet that fulfills that promise.Well, for starters, I'd call this $4 billion per year savings a spending restraint. But I don't really get Andrew's surprise. McCain was the spending freeze candidate, not Obama, and cutting spending programs now would be counter-productive to the president's economic agenda of counter-cyclical spending. Most of the increase in deficit comes from the temporary stimulus package or was inherited from the last president. As Ambinder notes, non-defense discretionary spending is targeted to drop 1 percent in 2011 and 5 percent in 2012, a part of the deficit reduction plan that aims to have the shortfall at 3 percent of GDP by 2013. And, while Sullivan may not agree, the health care reform structure contained within the budget is a long-term attack on entitlement spending that would be more effective than any other. The really ironic thing is that though Sullivan premises his complaint on the idea that we will not withdraw from Iraq, in my estimation we are more likely to withdraw from Iraq quickly than see the optimistic levels of GDP growth that the budget forecast contains in 2011 and 2012.The funniest part is Sullivan's criticism of the tax increases on high-income Americans. Was Sullivan not listening when Obama repeatedly said he'd roll back the Bush tax cuts during the campaign? Some provisions, like the dividends tax rate, aren't even being taken back to Clinton-era levels but instead merely upped from 15 percent to 20 percent, rather than being taxed as income. Does Sullivan really have a problem with the itemized deduction rate returning to Reagan era levels so that the middle-class and the wealthy get the same break on charitable contributions? This is my question: where would Sullivan like to see spending restraint in keeping with Obama's long-stated positions and the context of the economic times?
-- Tim Fernholz
