Obama budget likely 'dead on arrival'

David Jackson | USA TODAY

WASHINGTON — President Obama and his aides will outline a plan Monday to spend trillions of dollars in taxpayers' money — and no one expects Congress to pass it.

On Sunday, the White House said that the budget will include a six-year $478 billion program to build and upgrade roads, bridges, and other transit systems, to be financed by a one-time 14% tax on overseas profits.

Obama will also call for closing "loopholes that allow U.S. companies to shift profits to tax havens and avoid paying tax on them for years — or forever" by requiring them to pay a 19% U.S. tax on all of their foreign earnings as they earn them.

The plans call for ending the automatic spending limits known as sequestration, the result of the 2011 stand-off over the debt limit. The budget will call for 7% increases over sequestration limits for national defense and domestic programs.

The proposed federal budget, an annual White House rite, has become more of a political tool, loaded with presidential wish lists and bargaining chips as the Obama administration wrestles with the Republican Congress.

Recent years have seen a government shutdown, near-shutdowns, and a debt limit crisis, ending with the passage of resolutions that fund the government temporarily, as opposed to a specific budget.

Anyone involved in the process "would acknowledge that this is the beginning of a negotiation," said White House spokesman Josh Earnest. "But it's important — budgets are important because they're a way that we can codify our values and our priorities."

For the Obama team, that means new programs for road and bridge construction, tax credits for child care and two-job families, requirements for paid sick leave, and two free years of community college, to be financed by higher taxes on the wealthy via the closing of loopholes in the tax code.

For Republicans, it means higher taxes and higher government spending, and GOP lawmakers have reacted to news leaks about budget details with a familiar refrain this time of year: "Dead on arrival."

In his weekend radio address, Obama said his budget is devoted to "middle class economics." He said, "we'll help working families' paychecks go farther by treating things like paid leave and child care like the economic priorities that they are."

Senate Majority Leader Mitch McConnell, R-Ky., and House Speaker John Boehner, R-Ohio, have said they would block tax hikes that slow the economy, and oppose many new spending programs. "The president said in his State of the Union that the proposals in his budget would be 'filled with ideas that are practical, not partisan,'" said McConnell spokesman Don Stewart. "Turns out that's not the case."

Rep. Paul Ryan, R-Wis., chairman of the House Ways and Means Committee, said Sunday on NBC's Meet The Press that Obama is trying to "exploit envy economics ... .It may make for good politics. It doesn't make for good economic growth."

Obama, Ryan, and other members of both parties have pledged to work together on aspects of the budget, including proposals to simplify the tax code.

In a pre-Super Bowl interview Sunday on NBC, Obama said he is hopeful of getting Republican support for many of his proposals. For example, he said both parties agree on infrastructure spending; the dispute is over how to pay for it.

"My job is to present the right ideas," Obama told NBC, and, if the Republicans have better ideas, "they should present them."

Stan Collender, a private budget analyst, said the president's proposed budget does have an important accounting function. It summarizes federal spending and government activity in recent years, and also offers a number of financial projections. Besides, he said, the president is required by law to submit a budget to Congress.

There is also a political aspect to all budgets, said Collender, executive vice president with Qorvis MSLGROUP. In this case, a second-term Obama doesn't have to run for election again, and he is seizing the opportunity to propose things he wants, whether they are politically possible now or not. "He's clearly trying to create a political platform for Democrats to run on in 2016," Collender said.

Discussing some of his budget plans at a retreat of House Democrats last week, Obama said: "We need to stand up and go on offense, and not be defensive about what we believe in!"

The political nature of the budget roll-out is underscored by the location where Obama plans to make remarks Monday — the Department of Homeland Security.

While the current spending plan funds most of the government to the end of the fiscal year on Sept. 30, it finances homeland security only through February. The reason: A GOP protest against the president's new immigration actions. The Republicans are trying to pressure Obama into changing actions that would defer deportations for some migrants in the country illegally.

In his radio address, Obama said his budget "refuses to play politics with our homeland security, and funds our national security priorities at home and abroad."

One part of the budget document to be presented Monday is unquestionably dead on arrival: A proposal to scale back the tax benefits of a college savings plan. Under pressure from Republicans and Democrats, Obama agreed to shelve that plan, but not before the budget document had been sent to the printer.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said presidential budgets have always been more of a political statement than a policy document because they don't carry for the force of law.

These days, the problem has been compounded by the increased polarization of the political parties. "At this point in our history, everybody just assumes it's absolute gridlock," she said. "It feels like our leaders are going through the motions."