Obama Budget Proposal Gets In Line Behind Last Year's

02/14/2011 06:19 pm ET | Updated May 25, 2011

WASHINGTON -- When President Obama's 2012 budget arrived on Capitol Hill on Monday, it had to contend for space on the desktop with a document that's still floating around: the 2011 budget.

Obama last signed a budget into law in spring of 2009, just months after taking office, making it tough for a 2012 budget to gain traction while Congress is still divided over last year's. Since the fiscal year 2010 package expired, the two chambers have been unable to agree on a new spending plan. Instead, Congress has passed a series of what are known as CRs -- continuing resolutions -- which authorize enough money to keep the government running at its current levels for anywhere from a few days to a few months.

The current CR expires in just a few weeks. If nothing takes its place, the government shuts down. That makes Obama's budget released today little more than a symbolic distraction. "They'll be damn lucky just to get a CR right now for the rest of this year. The far right is going to have to make real compromises to get anything through the Senate and signed into law, and they aren't showing any signs of being willing to work with their own leadership, much less across the aisle," said a former House Democratic staffer on the Appropriations Committee, who has seen his share of spending bills dissolve into CRs.

But forget the rank-and-file: Even GOP leadership is slamming Obama's budget, packed full of cuts to popular social programs, as insufficiently frugal.

"The White House still isn't listening to the American people -- they've said, loud and clear, that they want us to end the Washington spending spree," a House GOP leadership aide told HuffPost. "The President's budget just locks it in place. If they don't get serious, it's tough to see how we make progress to get our economy moving and creating jobs again."

If the budget is useless as a practical matter, it does have political import, signaling to the country what the Democratic Party's priorities are (or are not).

Republicans are particularly troubled that the budget doesn't propose to cut Social Security, with the leadership aide saying that Obama "totally punted on entitlement reform. Is the new White House plan just to agree with Sen. Reid's 'remain calm, all is well' strategy until the system collapses?"

If the president's budget doesn't get implemented, the government will end up running on a CR for roughly three straight years, a policy outcome few find optimal. But the closer politicians get to the 2012 elections, the less interest there is in governing.

"I find it hard to believe that they're actually going to be able to come up with a budget resolution that will pass both the House and Senate," said federal budget-watcher Stan Collender, a partner in the Washington, D.C. office of Qorvis Communications.

The House Republican leadership might conceivably be willing to find some common ground with the White House, but they've got the Tea Party to contend with, he said.

"Unlike Gingrich in '95 and '96," Collender said, referring to then-House majority leader Newt Gingrich, "these guys don't have the permission to compromise." The Tea Party "defines compromise as collaborating with the enemy.

"So I think there's going to be a shutdown," he said.

The current continuing resolution extends through March 4 at midnight. If there isn't new funding legislation passed by both houses and signed by the president before then, the government won't be able to spend money, and its nonessential parts will closed for business.

All that leaves Obama's fiscal 2012 budget proposal looking relevant "only in the macro sense," Collender said. The five-year freeze on domestic discretionary spending, for instance, certainly establishes a ceiling for funding.

But beyond that, he said, "this is a year when the individual proposals just won't be important."

If Obama's budget proposal dies a quiet death, it'll have few mourners. It has so far been savaged by liberals for slashing social programs and conservatives for raising taxes and not cutting enough.

"Despite his promises to make the U.S. a more attractive place to business in and do business from, President Obama is proposing $129 billion in tax increases on American firms doing business abroad. Not only will these tax hikes make U.S. businesses less competitive, but they would threaten jobs back home as well," complained Scott Hodge, president of the conservative Tax Foundation.

John Irons, research and policy director for the liberal-leaning Economic Policy Institute, had the opposite reaction. "The president's top economic priority should be job creation, but the proposed budget does too little and turns too quickly toward deficit reduction," he said. "The economic context -- unemployment at or above 9 percent for 21 months, unemployment that is expected to remain elevated for years -- demands a stronger response."