Huffpost Politics
The Blog

Featuring fresh takes and real-time analysis from HuffPost's signature lineup of contributors

Pearl Korn Headshot

The President's 2013 Budget Shifts the Focus to Growing the Economy and the Middle Class

Posted: Updated:

The cautionary tale unfolding every day in Greece is giving rise to the grim reality that austerity carried too far can bring a people to near revolt. Unemployment in Greece is at a high of 20.6 percent, and the cuts to services and workers' benefits draconian, while giveaways to corporations remain in full force. That country is in a state of chaos, with fires and thousands taking to the streets in massive, angry protests.

The austerity myth as a means to reduce deficits must be debunked as Greece and other countries -- not to mention our own state governments -- try to dig out from their own economic woes. Austerity does not make economies flourish. Job creation does, and it must remain the top priority, as anything else will merely distract and confuse, which, of course, is what conservatives thrive on.

Last summer, during the most recent go-around on deficit reduction, conservatives controlled the debate and duped our president into sounding like a "deficit hawk" himself. President Obama appears to get it now, but this does not mean that the irrational persistence among conservatives to push less regulation, tax cuts and smaller government as guideposts on the road to prosperity will ever change. The Republicans have suggested that their budget will be released in the coming months, no doubt closer to the election to further divide and confuse voters. Only a few days before the release of the Obama budget, Mitt Romney re-introduced himself to CPAC as having been a "severely conservative Republican governor," a chilling self-identification for someone who is seeking to be president of the United States -- especially when they are widely considered to be the "moderate" candidate from the right.

With the unveiling of O's 2013 budget, we see a more populist and less deficit-hawk president in evidence. The budget consists of four volumes, weighing in at 10 pounds and over 2,000 pages, which should have insiders reading and assessing it for weeks. Offered up is a budget of $ 3.8 trillion, with a cut in the deficit by $4 trillion over the next decade. Good policy proposals were included, including ones that will create jobs, increase research and development, rebuild our manufacturing base, improve transportation, provide training for community college students, eliminate tax breaks for oil and gas companies, close tax loopholes and raise taxes on couples making more than $250,000 a year. Taxes on investment income would also finally be treated like earned income, thanks to the Buffett Rule, and taxed at 30 percent. So Mitt and his ilk would no longer pay under 15 percent in taxes -- a hardship I'm sure he'll try to turn into some sort of class-warfare assault on the so-called "productive class" worshiped by Fox Business.

Infrastructure would also get a significant boost in the Obama budget, while the bloated defense budget would see sensible cuts. Included is a proposed cut in Medicare and Medicaid, which will certainly be a hot button issue, and the rise in revenue after the Bush tax cuts -- hopefully -- expire at the end of this year. Homeland Security would receive grants, which would benefit at-risk cities like New York, which would also receive new funding for housing and education. To arrive at all of this, O's budget would essentially cut $1.50 in spending for every $1 raised in taxes increases. Of course, Boehner and McConnell and their cronies are already crying "foul" that the budget is all election year pandering by the president without a snowball's chance of being passed, since not enough is being offered to reduce the deficit. All smoke and mirrors and accounting tricks is their numbing refrain. Rubbish.

The important thing is that the president is now playing offense instead of defense, and that is a good thing. He must become the fighter and protector for those hard working Americans as he takes his message across the country. He can rally the nation as he builds on these proposals and show he is indeed the People's President. No going back now, Mr. President. Make your case and show the evils of what the conservatives and their Tea Party allies are really all about. You have a winning hand, and it's time to play it.

A few days after the introduction of the budget, our president also began to press the GOP to extend the payroll tax cut and unemployment benefits, along with no cuts in Medicare reimbursements to doctors until the end of this year, all of which were to expire the end of this month. Following significant horse trading and concessions on both sides, a deal was struck. The length of time the unemployed can collect benefits will be cut from 99 to 73 weeks in some states, but that extra $1,000 in payroll tax deductions spread over the course of the year in workers paychecks will continue, aiding the economy. All in all, 160 million Americans will be pleased to actually see their government having a positive impact on their pocketbooks, at least until the end of this year. Doctors will also be able to breathe a sigh of relief until year's end. Indeed, the GOP had three issues representing large constituencies in this package, and they especially did not want to be branded as anti-tax cut for the middle class on the payroll tax issue. Of course, politics were at play. Nonetheless, while the GOP may have gotten a "win," it was the Dems and O that emerged smelling like a rose, with major achievements.

Keep it going Mr. President.

-- with Jonathan Stone