Budget battle lines drawn as Obama will present plan to Republican Congress

http://www.theguardian.com/us-news/2015/feb/01/budget-battle-obama-republican-congress

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If President Barack Obama earned $1bn each time he mentioned the middle class in speeches, he would have more than enough money to cover the part of his latest budget that will call for spending over federal limits.

Unfortunately, Obama does not have that kind of sponsorship. Instead, on Monday he will present his budget to a Congress divided on whether it wants to fight against the automatic spending cuts known as sequestration and suspicious of a president who has barraged it with veto threats.

Welcome, again, to the annual unveiling of the budget – better known as the beginning of fiscal brinkmanship season – when the president puts forward what effectively amounts to his wish-list of budget proposals to be raked over by Congress, which then comes up with its own spending plan.

In a preview of the budget on Thursday, the White House said it wanted limits of $530bn on non-defense discretionary spending and $561bn in discretionary defense spending. This means spending $74bn above the sequestration cap, which was set by the Budget Control Act of 2011.

Republicans are expected to propose spending below the caps. Their plan, however, will require the president’s signature. This increasingly seems like a hard get: Obama has issued the most veto threats in the first month of a new Congress since Ronald Reagan introduced the process of formal veto threats in 1985.

Obama’s proposals are cast as middle-class-centric – the president used the phrase 13 times while promoting the plan in a speech at a Democratic retreat on Thursday – but it will be hard for Republicans to accept measures to increase taxes on the wealthy, which are distinctly left-tinged.

Responding to accusations that Obama is “veering left”, White House press secretary Josh Earnest on Friday said the budget proposal was geared toward middle-class families, where the administration believes economic growth begins.

“If supporting middle-class families means that you’re more oriented to the progressive end of the ideological spectrum, so be it,” said Earnest.

Republicans are also facing internal divides. The party is fundamentally opposed to increasing government spending, but its military hawks are keen to end sequestration.

The White House is pushing the fact that the deficit is at the lowest levels since the beginning of the recession in 2007, but the Congressional Budget Office has warned that the deficit will likely go up again after 2018.

Cory Fritz, a spokesman for House speaker John Boehner, said the party’s priorities were deficit reduction and avoiding tax increases.

“Republicans believe there are smarter ways to cut spending than the sequester and have passed legislation to replace it multiple times, only to see the president continue to demand tax hikes,” said Fritz. “Until he gets serious about solving our long-term spending problem it’s hard to take him seriously.”

Senate armed services committee chairman John McCain said on the first day of the 114th Congress that “sequestration, sequestration, sequestration” was his top concern. He is adamant that cuts will be harmful to US defense.

“It’s time to put an end to this senseless policy, do away with budget-drive strategy, and return to a strategy-driven budget,” McCain said on Wednesday.

War funding is exempt from the spending cuts, but military leaders are concerned how other defense cuts would impact the country’s ability to respond to the Islamic State (Isis) and the conflict between Russia and Ukraine.

Groups like the Bipartisan Policy Center have also warned about the long-term effects if the sequester is to be kept in place.

“Cutting defense and non-defense discretionary spending will diminish our future economic capacity and degrade the readiness of our fighting forces,” said BPC policy analyst Alex Gold in a blog post.

A bipartisan deal reached in late 2013 – orchestrated by Democrat senator Patty Murray, of Washington, and Republican senator Paul Ryan, of Wisconsin – paused some of the spending cuts, which will resume when the new fiscal year begins on 1 October if a new deal isn’t reached.

“I know that there are Republicans in Congress who disagree with my approach, and I look forward to hearing their ideas for how we can pay for what the middle class needs to grow,” Obama said in a blog on The Huffington Post on Thursday.

“But what we can’t do is simply pretend that things like child care or college aren’t important, or that there’s nothing we can do to help middle class families get ahead.”