BEYOND THE NUMBERS
Greenstein on the Obama Budget
CBPP President Robert Greenstein just issued a statement on the President’s fiscal year 2016 budget. Here’s the opening:
President Obama is proposing a surprisingly ambitious budget that would make progress — in some cases modest, in others large — in various areas in which policy sclerosis has prevented the nation from addressing significant problems. It would expand opportunity, especially for children; reform various programs and tax incentives to make them more effective; and help large numbers of middle- and low-income families while scaling back inefficient tax shelters that mainly benefit those at the top.
The budget should also strengthen economic growth. It would curb tax-driven economic distortions and invest part of the savings in initiatives that should make the labor force larger and more productive, such as pre-school education and child care, improved college access, stronger tax incentives for people to work, and much-needed infrastructure investments.
Along with financing such investments, the plan would use some of the new revenue and program savings for deficit reduction. It would make modest but useful progress here, providing more than $1 trillion in deficit reduction over the next ten years (not counting the savings from winding down overseas wars). In essence, the plan reflects the judgment, with which we concur, that the nation faces two kinds of serious deficits — in the long-term fiscal arena, but also in crucial areas that need resources.
Despite its investments, however, this is not a “big-spending budget,” contrary to some claims. Total federal spending over the next ten years would average 21.75 percent of gross domestic product (GDP) — identical to the average for the Reagan years. In fact, despite the budget’s proposals to ease the sequestration budget cuts, discretionary spending would fall by 2019 to its lowest level on record as a share of GDP, with data back to 1962. So would non-defense discretionary spending.
Overall, the budget is rather bold, with an unusual number of major new proposals for a President’s seventh budget. It includes major reforms in such programs as unemployment insurance and crop insurance, as well as in the tax code and immigration, and measures to push federal agencies to conduct more evaluation, collect more data on program effectiveness, and make more evidence-based decisions.