President Obama’s Budget Hits the Mark

Earl Ofari Hutchinson


From New America Media


The great fear a year ago when President Obama unveiled his budget for 2012 was that he caved to the GOP and Tea Party hardliners, and axed dozens of vital programs and agencies. They included community service block grants that fund an array of community education, health and social service programs in poor, underserved, largely inner-city neighborhoods, cut programs in science, technology, youth-mentoring programs, and employment and training assistance. The screams were long and loud from liberal Democrats that the budget slashes would tar Obama as the first Democratic president to do what no Democrat or GOP president had dared do and that was to slash and restructure Medicare, Medicaid and Social Security.


The fears have mostly proved groundless. But Obama had to walk a perilous line. He had to downplay the surge in poverty that has dumped nearly 50 million Americans in or near poverty and who, without government subsistence programs, would sink deeply beneath the poverty line. But he was under relentless pressure from the GOP budget hawks and a big chunk of the public to make the cuts in these vital programs or risk sinking the federal government in a deeper pool of debt and deficit spending.


The pressure on him to slash and burn domestic programs is still just as great. But this time, Obama moved away from the danger line with three crucial budget moves. He slashed the endless runaway military spending on the two wars that he inherited from Bush. The overall projected defense cuts total a half trillion dollars spread out over a decade. Though military officials grouse and GOP presidential contenders Mitt Romney, Newt Gingrich and Rick Santorum saber-rattle Obama with the claim that the cuts will render America’s military impotent, the cuts are only a small percentage of the over-bloated defense budget; a budget that exclusive of Medicare, Medicaid and Social Security, dwarfs spending on health, education, and social service programs. Despite the mostly public relations posturing from some military brass and the GOP, the projected defense budget cuts are those that the military can comfortably live with.


Obama moved further from the danger line by stepping up his campaign to make the corporations and the wealthy pay their fair share. This is an easy call. In polls and surveys, a majority of the public -- and that includes a significant number of conservatives -- say that the wealthy should be taxed more. Corporate tax rates are obscenely low, and corporate evasions of them are obscenely high. Obama has held firm that the Bush tax cuts that amounted to a budget-killing giveaway to the super rich must go. The tax hikes on the rich will not eliminate the still high federal deficit, but it will dent it. This would bring the deficit under $1 trillion and more importantly, reduce the need for the more draconian cuts in other health and education, and infrastructure maintenance programs.


There will be cuts to Medicare and Medicaid. But they will be stretched out over a decade, and there will be no major structural reforms in the program, which is what the GOP demands and which is wildly at odds with what the majority of Americans want, especially those who are dependent for their health coverage on the programs.


A year ago, the GOP gave Obama little room to maneuver. Much of the public bought into the GOP's bogus line that Obama's alleged reckless spending was hopelessly drowning the government in a sea of red ink. Nervous foreign investors, as well as a slew of financial experts and economists, endlessly claimed that the budget deficit--projected to soar to nearly $1.6 trillion in the last fiscal year, a post-World War II record-- would saddle the nation with higher taxes; deeper cuts in education, health and social services; staggering permanent debt; and possibly even bankruptcy.


That doomsday scenario was part political hyperbole, part financial panic. Even then, many economists noted that the claim of financial Armageddon was way overblown. The projected deficit was about 10 percent of gross domestic product. This would be great enough to threaten economic growth if it were sustained for decades. Yet, even that supposedly doomsday estimate was proportionally far smaller than the deficits that the United States ran during and immediately after World War II.


In the past year, the Occupy Wall Street protests awakened the nation to the outrageous feed at the taxpayer trough by the rich, the financial industry and corporations. There's been a greater recognition of the crucial role Social Security, Medicare and Medicaid and other government-funded programs play in bolstering the economy and Americans’ living standards.


There are tenuous signs of an economic recovery, and a modest upswing in the number of Americans who approve of his handling of the economy. This has strengthened the president's budget hand. The budget is far from perfect. There are still proposed cuts in Community Development Block Grants and spending freezes in other areas that hurt the poor. But the 2013 budget that Obama proposes does not slam the poorest and neediest and it preserves programs that have been lifelines for millions for decades. This is a budget that hits the mark despite the GOP.


Author Bio:

Earl Ofari Hutchinson is an author and political analyst. He is a weekly co-host of the Al Sharpton Show on American Urban Radio Network. He is the author of How Obama Governed: The Year of Crisis and Challenge. He is an associate editor of New America Media. He is host of the weekly Hutchinson Report Newsmaker Hour heard weekly on the nationally network broadcast Hutchinson Newsmaker Network.

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