Online at: http://politicalaffairs.net/article/articleview/8202/

Obama's First Budget and the Battle of Ideas

By Joel Wendland
Archives - Dates and Topics 2009 online March 1 – 31, 2009 click here for related stories: democracy matters

3-02-09, 10:29 am



(White House photo by Pete Souza.)

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Taking his first bold steps to reverse the Bush administration's budget priorities, President Barack Obama released his administration's initial budget outline last week, which proposes to end Bush's tax cuts for the wealthiest Americans and corporations, create a reserve health care fund, curb growth in military spending and dramatically improve funding for the needs of working families.

Battle of ideas

The Obama administration sees the budget as not just numbers on a page but rather as a social document that outlines policy goals. On a basic level, this budget reflects this point of view as well as the shift in the main ideas that shape American society.

With the collapse of the financial system and the economy and with them the crisis of conservative ideology that celebrated free-market fundamentalism and denounced the government's role in preventing abuses in the market, a vacuum in the realm of ideas emerged. Into that breach, the Obama administration has reintroduced the concept of an efficient and caring government that aims to look after the needs of all of society's stake-holders, including the millions of working families ignored or disparaged by conservative ideologues and politicians.

In his campaign and in his actions and speeches as president, Obama has asserted the basic concept of the link between the individual and the common good. He has repeated, almost like a mantra, the need for shared sacrifice and mutual responsibility of all people to help recover from the economic crisis and as the basis for building a "more perfect union." Further, both in the realm of ideas and in practical policy, Obama has linked the soundness of the economy with a more just social policy like universal health care, energy and environmental policies that prioritize human and global survival over corporate profits, and get the ball rolling toward peace.

Most importantly, this budget in this general social context and climate of ideas opens space for a discussion of how to restructure of the economy along more productive and just lines with large-scale investments in an alternative energy-based economy.

On another refreshing level, the Obama administration proposes to introduce a measure of honesty into the process by including war funding in the budget. Previously, the Bush administration funded the wars in Iraq and Afghanistan through supplemental requests outside of the budget process, hiding the true financial cost of war and the extent of the federal budget deficit.

The first Obama budget, if passed into law, would also streamline spending waste, provide a tax cut for 95 percent of working families, boost investments in renewable energy and fund dilapidated but necessary programs like OSHA and other Department of Labor programs that protect workers. While the entire budget will set a new record in size at $3.6 trillion, it also sets in motion basic revenue and spending principles that could halve the size of the deficit by the end of President Obama's first term.

Perhaps that most significant new investments earmarked in the budget are for health care and the energy sector. In his speech to Congress on Feb. 24th, President Obama pointed to health care and energy as among the fundamental pillars of the new economy he envisions. "Now is the time to jump-start job creation, re-start lending, and invest in areas like energy, health care and education that will grow our economy, even as we make hard choices to bring our deficit down," he said.

The military side of the budget opens a new arena of political struggle for peace, the shifting of budget priorities to human needs and the demilitarization of American society.

Health care

This budget creates a $634 billion fund over the next ten years to promote affordable access to health care and to help control the cost of skyrocketing prescription drug prices. On the other hand, the budget does not promote a model for health care reform. Administration officials have hinted that they would like to leave those details to Congress and the legislative process.

In a teleconference with reporters, Deputy Director of the White House Office of Management and Budget (OMB) Rob Nabors said that working with Congress on the details of the budget's proposed health care policy is administration policy. "I see this process being a very collaborative effort with Congress," he said. "It's the beginning of a conversation with Congress."

"What we're talking about is a significant down payment on the single biggest issue that affects the fiscal future of this country," Nabors said. This fund will not cover the whole cost of health care reform, he added, but it is "a significant start."

According to the new OMB blog, the fund will be created by curbing Medicare overpayments created under the Bush Medicare privatization plan, eliminating the Bush tax cuts for the wealthiest Americans and corporate tax loopholes, capping Social Security benefits for the wealthiest Americans and eliminating tax breaks for major oil companies.

According to the Alliance for Retired Americans (ARA), privatized Medicare Advantage plans, the plans targeted by the Obama budget for streamlining, cost between 12 percent and 19 percent more than traditional Medicare for the same services, draining the Medicare Trust Fund and hiking out-of-pocket expenses for retirees and other Medicare beneficiaries. The White House estimates that $176 billion over ten years can be saved from this action alone.

“The President declared unambiguously today that Medicare’s top priority should be the health of our nation’s seniors, not the big drug and insurance companies. This is a refreshing change for our country,” said ARA President Barbara Easterling upon the announcement of the plan.

In a statement, AFL-CIO President John Sweeney added, "It is a real health care reform approach with real money to start things rolling."

A statement released by the Center for American Progress welcomed the announcement of the health care fund, but added, "The budget must be followed by comprehensive reform legislation that, in addition to making affordable care available to all, will help reorient the health care system so it offers quality care geared towards prevention and wellness, not just treating us when we are sick."

Energy and the environment

A second area that will see dramatic new attention from the White House is the energy sector. The Obama budget proposes to invest $15 billion each year over the next ten years in wind and solar energy as well as in developing energy efficient vehicles.

Some of these resources will be raised by implementing a "cap-and-trade" system of selling permits for emitting greenhouse gases that cause global warming. Heavy polluters will purchase these permits. If they emit an amount of pollution under the amount capped by their permit, they will be allowed to sell the surplus to another firm that needs additional permits.

Many independent environmental experts believe that a cap-and-trade system will provide the financial resources needed to develop new energy efficient green technologies as well as an incentive for polluters to change their production processes by adopting those green technologies. While some environmentalists prefer a "carbon tax" as the speediest method of forcing polluters to change their habits and cap emissions, political will in Washington for such a step will not exist without additional public pressure.

The Environmental Protection Agency, which has already begun the process of reversing many of the lax standards the Bush administration adopted toward environmental protection, announced last week that Obama budget boosts that agency's budget by $3 billion for clean-up and public health protection.

EPA Administrator Lisa P. Jackson said, “We are no longer faced with the false choice of a strong economy or a clean environment. The president’s budget shows that making critical and responsible investments in protecting the health and environment of all Americans will also lead to a more vibrant and stable economy."

The president's environmental and energy proposals won praise from environmental activists such as Carl Pope, head of the Sierra Club. In a recent blog post, Pope described the proposals and their scope as "bold" and "almost incomprehensibly exciting."

Military spending

A third important area of the budget that deserves careful scrutiny and will no doubt be an ongoing point of political struggle is the military side of the budget. The Obama administration predicts savings will be found by scaling back on military spending and on the war in Iraq. According to the initial outline provided by the OMB, the Obama budget plans a total of $662.1 billion in 2009 for the military spending, including the wars in Iraq and Afghanistan. This would be almost $4 billion less than in 2008. Although 2010 would see a slight bump of around $1 billion over 2009, the military budget for that year would stay below 2008's level.

The fact that all military spending has been lumped together in the Obama budget suggests a radical change from past policies that separated Iraq and Afghanistan spending from the military budget, hiding its total cost and its impact on forcing cuts in other vital programs or increasing the total debt.

In a press conference this week, Defense Secretary Robert Gates told reporters that he believes the president's projected funding is enough to provide for national security and to keep Americans safe. He added, however, that Obama's budget turns off "the spigot" of military spending turned on by the Bush administration since 2001.

One important area of savings involves the Iraq war. Obama pledged to end "no-bid" contracts there that have encouraged wasting tens of billions of dollars without producing the desire product. Obama also set two timetables for withdrawal from Iraq. Obama has ordered that the largest group of "combat forces" to be pulled out by August 2010, and within one year of that date, the residual force of between 30,000 and 50,000 troops to be brought home.

The budget also projects savings by eliminating Pentagon waste. In his speech to Congress earlier in the week, Obama proposed the elimination of wasteful Pentagon spending and "Cold War-era weapons programs we no longer need."

The proposed cap on military spending is a courageous political move. There is no single entity, perhaps other than Wall Street (or the financial sector of capitalism), that currently gets uncritical government spending than the Pentagon, or the military industrial complex, as former President Eisenhower described it.

With the aid of the right-wing media, President Bush created a climate that exploited terror and false patriotism to give the Pentagon and military contractors unchecked cash for almost eight straight years. As a result the Pentagon's budget grew to such a level that it is now higher than all of the military budgets of all of the countries in all the world combined.

Though the president as commander-in-chief has ultimate Constitutional authority over the Pentagon, in many ways that entity, military contractors and their networks of lobbyists have usurped that power. In conjunction with the right-wing media that have joined the pro-war cause, this collection of politicians, ideologues and business leaders have held far too much sway over US foreign policy, especially its militaristic aspects.

The administration's announcements about its broad proposals for military spending met with mixed reviews. An initial analysis from the Friends Committee on National Legislation, a peace organization that lobbies Congress against military spending hikes, welcomed Obama's plan to "hold the line" on military spending, but also noted that the plan proposes to pay for a dangerous troop build-up in Afghanistan.

“If President Obama gets the budget he requested today, we’d be spending 13 times the money engaging the rest of the world through the military as by any other means,” added Miriam Pemberton, a research fellow at the Institute for Policy Studies.

The Council for a Livable World praised the budget proposal for eliminating new nuclear weapons programs that are unnecessary and wasteful.

Other activists have pointed out ways the Obama administration could find savings in the military budget by reducing the US nuclear arsenal. For example, Joseph Cirincione, head of Ploughshares, recently opined in the Boston Globe that the US nuclear arsenal could be reduced from more than 5,400 nuclear weapons to about 1,000, saving about $20 billion annually in storage and maintenance costs. Even with that scaled down arsenal the US would still possess the capability of destroying the world many times over. In addition, Cirincione wrote, the US should eliminate the $13 billion spent each year on the failed "star wars" anti-missile program.

So far, few details on the exact nature of the military budget have been released. The White House noted that more will be made public after each department and agency finalizes its proposals for the administration's April report on the budget.

Additional progress on this side of budget matters cannot be made solely by holding President Obama responsible for it. A movement for demilitarization can be built that is based on traditions of patriotism and legitimate (as opposed to trumped up) concerns for national security along with the broad American rejection of dominance by large corporations over the government and our lives and the waste and corruption they cause. Recovery from the economic crisis will not be hastened by using taxpayer dollars to ensure high profits for corporations that rely on militarism and war for their business.

Companies that are capable of producing useful goods and services for non-military uses can be turned to peaceful goals. Corporations that exist solely to profit from war and militarization, like Blackwater USA (now known as XE), should simply be allowed to go out of business. Companies that have done nothing but rob taxpayers, like KBR, a subsidiary of Halliburton, should be prosecuted and dismantled by a bankruptcy judge.

In sum

The Obama administration's first budget marks the general points of political struggle in key arenas this year. It reflects the general shift in American ways of thinking about how society should be organized and the priorities our resources should be invested in. The budget's strengths – new energy and health care policy – should be fought for, keeping in mind that President Obama's decision to keep the details open to discussion and debate means that the people's movements have a chance to help forge the best, most progressive policy possible. The weaknesses in the budget should not cause us to pit the people or working families against President Obama, but rather against those corporate and right-wing forces that are still powerful enough to impose their self-interested limits on the pace and scope of change.


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