Government Spending

Obama Slams 'Mindless Austerity' of Budget Caps His Administration Proposed

The sequestration process was the White House's idea in the first place.

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President Obama is selling his latest budget plan as an end to "mindless austerity."

Via USA Today

President Obama submitted his $4 trillion budget wish-list to a Republican Congress Monday, calling for a return to increased domestic and military spending to be paid for in part by higher taxes on the wealthy.

The plan includes a $478 billion public works infrastructure program for roads, bridges, and transit systems, to be financed by taxes on overseas earnings. The budget calls for new tax credits and other initiatives devoted to education, child care, paid leave, and infrastructure, with tax hikes resulting from the closure of tax loopholes. The president also wants to put an end to the automatic across-the-board spending cuts known as sequestration, calling for a 7% increase in spending over the budget levels he agreed to in a 2011 compromise with Republicans.

"I want to work with Congress to replace mindless austerity with smart investments that strengthen America," Obama said in a speech at the Department of Homeland Security. "I'm not going to accept a budget that locks in sequestration going forward. It would be bad for our security, and bad for our growth."

The Department of Homeland Security makes a perfect backdrop for Obama's call for more federal spending; it's a perfect symbol of the sort of bloated, mismanaged, costly operation that our ever-expanding federal budgets give us. 

Obama's campaign against "mindless austerity" is a campaign against sequestration, a form of budget cap that was agreed to as part of a 2013 budget deal. The White House explainer on sequestration refers to it as a program of "harmful budget cuts" that will make it harder to "grow the economy and create jobs."

What Obama tends to mention less is that his own administration proposed sequestration in the first place, although he has tried repeatedly to pin its origin on Congress.

To be fair, it wasn't exactly supposed to go into effect. The theory was that the caps would prove so unacceptable that they would be nixed before they hit. That didn't happen. In fact, the caps turned out to be fairly tolerable, with the primary complaints coming from big-spenders on the left and the military and the defense hawks who basically refuse to accept any limits on Pentagon spending. Budget restraint is rarely as painful as its critics warn. 

Obama's warning about the economic perils of sequestration similarly ring hollow. What economic recovery we've seen so far has come in the context of budget caps and shrinking deficits. The administration has, of course, been happy to remind people that the economy seems to be improving, and to take credit, but not so enthusiastic about noting the budgetary context in which the improvements have taken place. But maybe the White House should take some credit for sequestration, which so far seems to be working pretty well.

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