Obama’s shift from ‘mindless austerity’ derided by GOP as ‘envy economics’

The Washington Post explains…

President Obama’s latest budget is a bet that the country has moved closer to his way of thinking just three months after an election in which both he and his party were roundly rejected by the voters.

After years of fighting with the GOP over how to rein in spending, Obama on Monday pronounced his intentions to start a new debate over how to pursue expensive new initiatives aimed at boosting the middle class as the economy finally revs up.

The $4 trillion budget proposal marked a major shift for the president from just four years ago, when he put forward a plan to slash deficits by cutting domestic and defense programs. “We will all need to make sacrifices,” he said at the time.

This go-round, Obama is proposing tax credits for working parents, new early-education programs and pay raises for federal workers. He wants to repair long-neglected roads and bridges and offer free tuition to community college.

Gone are his previous calls for major reforms to popular entitlement programs to find savings.

“I want to work with Congress to replace mindless austerity with smart investments that strengthen America,” Obama said Monday in an appearance at the Department of Homeland Security.

The Republican response was predictable. They see in this “new Obama” the return of an old “tax-and-spend” liberal who had been forced into hiding by the recessionary economy and big budget deficits. Three years ago, Obama agreed to a series of across-the-board spending cuts — known as sequestration — that were mandated by Congress as a last-ditch effort to curb deficits and spark the economy.

That would be the “mindless austerity” in question.

Obama’s plan to pay for his proposed new spending with taxes on the wealthy prompted House Ways and Means Committee Chairman Paul Ryan (R-Wis.) to brand the president’s approach “envy economics.”

The competing catchphrases could set the parameters of Washington’s financial debate in the last two years of the Obama presidency and play a central role in campaigns to replace him.

Obama was under no illusion that his 2,000-page spending blueprint would be embraced and enacted by Congress — that has not happened since 2009, his first year in office, when he had a Democratic-controlled legislature. Rather, Obama’s proposal is an opening bid that seeks to put his political rivals on the defensive and frame the debate on the country’s future ahead of the 2016 presidential election.

“We’ve got some fundamental choices to make about the kind of country we want to be,” he said. “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?”

The full debate will begin when Republicans in the House and Senate offer their budget proposals in the coming weeks. But the White House’s aggressive rollout of Obama’s plan — most of the proposals were leaked ahead of time — was designed to keep the president at the forefront of the conversation at a time when GOP leaders in Congress are under pressure to prove they can govern effectively.

House Speaker John A. Boehner (R-Ohio) quickly labeled Obama’s proposal as “a plan for more taxes, more spending, and more of the Washington gridlock that has failed middle-class families.”

The White House emphasized that Obama’s plan aims to continue reducing the deficit, which last year reached the lowest level since he took office.

Deficit hawks pronounced themselves disappointed with the president. Maya MacGuineas, president of the Committee for a Responsible Federal Budget, agreed with Obama that the sequester cuts were “mindless.” But, she said, the president has shown no willingness to offer the public the tough choices he talked about by making a serious effort to restructure entitlement programs.

“The real risk here is for politicians eager to sweep tough issues under the carpet,” she said Monday. “Politicians of all stripes, frankly, are quite willing to walk away from the real issue and not talk about entitlement reforms, not talk about real revenues. You’re not going to fix this by taxing billionaires. No one is eager to do much of that. As soon as there is a plausible excuse to deny the issue, bipartisan denial can kick in.”

Although Obama’s budget was viewed as a nonstarter on Capitol Hill, Republicans quickly were confronted with a dilemma over elements of the president’s plan — in particular, his call to raise Pentagon spending by ­$38 billion above the sequester limits set by Congress in 2011.

The House GOP, driven by the tea party, has been focused on slashing spending, but Senate Republicans have shown greater interest in boosting spending on defense at a time when the nation faces new conflicts in Eastern Europe and the Middle East, as well as growing concerns about terrorist organizations.

Robert L. Bixby, executive director of the nonpartisan Concord Coalition, suggested that Obama might wind up with more influence than expected if defense hawks carry the day on increasing Pentagon spending, because that would allow Obama to make the case that the nation should balance additional military spending with new investments in other areas.

Obama’s budget calls for an additional $37 billion above the sequester caps on domestic programs.

“The Republican House budget has been relatively easy to do the past couple of years because there was no chance the [Democratic-controlled] Senate would adopt it,” said Bixby, whose organization promotes responsible fiscal policy. “Now, they’re both on the hook if a budget might actually be adopted. It would be an incredible embarrassment for the Republican-controlled Congress if it fails to do a budget. I do not think [Senate Majority Leader Mitch] McConnell and Boehner will let that happen. But it begs the question of how will they do it.”

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