U.S. Fiscal Groups Calls Obama's New Budget Cautious, Political

Published Mar 5, 2014. By John Shaw.

WASHINGTON (MNI) - Treasury Secretary Jack Lew and White House budget director Sylvia Burwell spent most of their Wednesday mornings defending President Barack Obama's fiscal year 2015 budget before congressional panels in which lawmakers largely exchanged partisan talking points about the budget.

Burwell, in testimony before the Senate Budget Committee, heard fiscal comments from lawmakers that largely reflected partisan perspectives.

Senate Budget Committee Chairman Patty Murray praised the Obama budget as a "balanced approach" that is both "fiscally responsible" and appropriately focused on economic growth.

"The President's budget is a strong proposal for a long-term plan to build on our two-year budget deal, create jobs and broad-based growth, and expand opportunities for families and communities across the country," Murray said.

She also praised the administration for withdrawing last year's proposal to adopt the Chained CPI. "I personally believe there are better ways to create jobs, grow the economy, and tackle our long-term fiscal challenges than this policy, and I am glad it was not included this year," she said.

Sen. Jeff Sessions, the ranking Republican on the Senate Budget Committee, took a very different view of Obama's budget.

"I was really surprised and stunned that two months after the President signed the Ryan-Murray spending caps into law--which validates the spending limits we all agreed to, and which he signed--his budget proposes to dramatically burst through those statutory limits and spend an additional $791 billion. Remarkably, in FY15, the President's budget calls for spending $56 billion more than the Ryan-Murray limits," Sessions said.

He was referring to the administration's request for $56 billion in additional discretionary spending for FY2015--funds which the administration says would be offset with other spending cuts and the closure of tax loopholes.

"The President's budget then calls for another huge tax increase of well over $1 trillion and to increase spending by almost a trillion," Sessions charged.

Several budget groups have examined Obama's budget and have concluded that it falls short of the steps needed to tackle long-term fiscal challenges.

"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. This is a campaign-year document and should be assessed as that," said Bob Bixby, executive director of the Concord Coalition in a statement.

"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," he added.

Bixby expressed disappointment that the administration withdrew its Chained CPI proposal of last year, saying it's a more accurate measure of inflation that should be used in the federal budget.

The Committee for a Responsible Federal Budget also expressed regret the administration backed off its Chained CPI proposal. "Securing our entitlement programs will require more structural reforms that build on the President's prior proposals, not subtract from them," the group said in a paper.

"We hope the President will keep these policies on the table and that his budget can serve as an opening for further discussions to improve the fiscal situation...Given the looming insolvency of the Social Security system and growing long-term debt levels, we wish the President had instead proposed additional reforms to secure the country's entitlement reforms, rather than fewer," it added.

The Peter G. Peterson Foundation said in its review of the Obama budget that not enough attention is placed on "the fundamental drivers of long-term debt: high and rising health care and retirement costs and an inefficient tax system."

It said that it is especially concerned that the nation will rack up a "staggering $5.6 trillion" in debt service costs over the next decade. It added that in 2020, debt service costs will become the federal government's third largest spending category for the first time, trailing only Social Security and Medicare.