President Obama unveiled a proposed 2015 budget Monday that falls short of the credible framework he offered last year for comprehensive, bipartisan fiscal reform.
“While there are some positive elements in the President’s plan this year, overall it seems to ratify the consensus in both parties that there will be no far-reaching budget deals in the coming year,” said Robert L. Bixby, The Concord Coalition’s executive director. “This is a campaign-year document and should be assessed as that.”
A proposal last year to use a more accurate measure of inflation known as “Chained CPI,” for example, has been dropped in the new budget plan, although Obama says it is still “on the table” for negotiation. Using Chained CPI would raise government revenue and reduce spending on Social Security and other programs with cost-of-living increases.
The administration proposed roughly $400 billion in additional “investment” spending over 10 years, and suggests ways to pay for it through higher revenues and mandatory spending reforms. But these offsets would then no longer be available to reduce the large federal deficits projected for the years ahead.
The administration is also considerably more optimistic than the nonpartisan Congressional Budget Office on certain economic and revenue assumptions.
Obama continues his efforts to restrain some Medicare spending and suggests reducing costly and inefficient provisions in the tax code that favor some individuals and businesses. The administration’s proposals in these areas have the potential to draw bipartisan interest and support.
In addition, the Treasury Department issued its annual Financial Report on the United States, providing a detailed look at federal spending and Washington’s fiscal challenges. Given the coming elections and the complacency in Washington on the budget, however, any substantial progress on fiscal reform is likely to be extremely difficult in the year ahead.