- Grove City, Pennsylvania

March 23, 2012

Any real budget work may come after election

The Free Press, Mankato, Minn.

— The good news of President Obama's proposed 2013 budget: It increases spending only 0.2 percent. The bad news: There is no reform for long-term fiscal problems like Medicare.

The proposed $3.8 trillion budget would cut the federal deficit by $4 trillion over 10 years. This year's deficit is expected to come in at $1.33 trillion, and that deficit would be cut to $901 billion by Sept. 30, 2014.

But about a third of that deficit is cut by a $1.5 trillion increase in taxes on families making over $250,000 year as the budget calls for letting Bush tax cuts expire for that group. Obama's plan also contemplates closing other corporate tax loopholes for revenue increases.

Republicans in the House will certainly disagree with much of that revenue plan.

While some compromise may come on that score, Obama's budget does not address the fundamental structural problem of major entitlements like Medicare. His plan calls for cuts in Medicare spending upwards of $360 billion, but most of it is in reductions to health care provider fees.

Both parties have not been willing to cut those fees by any significant amount, so Obama does not appear to be putting out a serious plan for Medicare reform.

House Budget Committee Chairman Paul Ryan, R-Wis, took Obama's budget to task for that very reason. Ryan is working with Democratic Sen. Ron Wyden of Oregon to develop a bipartisan plan to reduce Medicare costs that would introduce elements of competition among insurance providers.

Obama should be working with Ryan and Wyden on this plan. It's unrealistic to say Congress is going to accept 20 to 30 percent cuts to health care providers. . .

The bottom fifth of the income ladder received 54 percent of entitlements in 1979 and now receive only 36 percent.

Political observers are calling the Obama budget more of a "campaign" budget to back up talking points in an election year, and that any real work on agreement may come in the lame duck session after the election.

Obama would have done better by submitting a budget that has a realistic chance of passing and that addresses some long-term fiscal challenges.

The Free Press, Mankato, Minn.

Published March 3, 2012, in Allied News. Pick up a copy at 201 A Erie St., Grove City.