Editorial

Obama's budget plan seeks to reframe the spending debate

With his budget plan, Obama is trying to put the federal government to work on the right issues

President Obama's $4-trillion budget proposal includes a slew of spending and tax initiatives the GOP-controlled Congress will find about as appealing as 3-day-old sushi. But as he did with his State of the Union address, Obama used his budget to tee up issues that Congress ignores at its peril. These include crucial questions about how to adapt the American workforce to the demands of today's businesses, provide more upward mobility for the working class, address the country's infrastructure needs and remove perverse incentives from the corporate tax code.

With lawmakers holding the federal purse strings, presidential budget proposals have always been largely aspirational and political. Obama's budget for fiscal 2016 is that to an extreme, calling for an expanded — and more expensive — federal effort to boost the fortunes of Americans at the lower end of the economic ladder. In particular, Obama would have Washington provide more tax breaks to low- and moderate-income workers; do more to improve the performance of schools and students at virtually all levels, with an eye particularly on preparing people for 21st century careers; invest significantly more in roads, bridges and mass transit; and spend more on national defense and cybersecurity. He also would end the “mindless austerity” of the automatic spending cuts Congress enacted in 2011. Those proposals would raise federal spending by $1.6 trillion over 10 years, which the president would more than offset by trimming Medicare and Medicaid growth while raising taxes on inherited wealth, capital gains and foreign earnings by U.S. multinational corporations.

Although Congress has already rejected a number of those ideas, Obama is right to press lawmakers to reframe the budget debate. The economy has recovered some of its lost mojo, yet median incomes are barely higher than they were 20 years ago. New businesses aren't being launched as rapidly as in the past, and a higher percentage of the workforce is toiling in lower-paying service industries. Meanwhile, the growing cost of federal healthcare programs and other entitlements is leaving a diminishing pot of funds for other federal priorities.

Obama's budget seeks to slow the growth of Medicare and Medicaid, but his cost cutting wouldn't solve the long-term problems in federal entitlements or end the year-in, year-out accumulation of debt. That's a real shortcoming. Nor are Republicans likely to warm to Obama's proposed tax hikes. Nevertheless, the president is trying to put the federal government to work on the right issues. Now that the economy is back on its feet, it's time for Washington to find a way to address those neglected priorities as it continues to shore up its finances.

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