Budget Bolero

By mw | Related entries in Barack, Budget, Deficit, Fiscal Responsibility, health care reform, Obama

Anyone familiar with Ravel’s Bolero will instantly recognize the simple musical phrase that is repeated throughout the entire piece. It begins slowly with a snare drum establishing a military march-like rhythm, then joined by a solo woodwind, then a flute, then more instruments are added with every iteration until the entire orchestra is engaged. The piece was written for ballet, is simplistic and highly repetitive, yet as the increasing musical voices repeat the same monotonous refrain, it becomes oddly compelling. The composition was popularized in the movie “10″ when Bo Derek declared it as the perfect musical accompaniment for getting screwed. Which, when you think about it, makes the Bolero a perfect analogy for the political process surrounding the federal budget.

On Monday, as the President’s proposed budget was released, the right and left executed a familiar pas de deux. On Tuesday the President introduced the budget in a Press conference:

“Just like every family in America, the federal government has to do two things at once. It has to live within its means while still investing in the future. If you’re a family trying to cut back, you might skip going out to dinner, you might put off a vacation. But you wouldn’t want to sacrifice saving for your kids’ college education or making key repairs in your house. So you cut back on what you can’t afford to focus on what you can’t do without. And that’s what we’ve done with this year’s budget…

We also know that cutting annual domestic spending alone won’t be enough to meet our long-term fiscal challenges. That’s what the bipartisan fiscal commission concluded; that’s what I’ve concluded. And that’s why I’m eager to tackle excessive spending wherever we find it -– in domestic spending, but also in defense spending, health care spending, and spending that is embedded in the tax code.”

The president is absolutely right. Like the family in his example the US has been overspending for a long time. In fact our extended American family is now spending $5 every year for each $3 of revenue we bring in (H/T KK). Anyone with basic arithmetic skills can easily understand this as problematical and unsustainable.

If one was to quibble with the President’s message, it would be with his measured tone and not the words themselves. I’m just not sure that skipping a few dinners out and cutting back on vacations is going to cut it when the family debt is greater than the gross economic output of the entire fracking planet. Just sayin….

The problem is not with what President Obama says. His message is spot on. The problem is with what he does. The problem is that despite what he says, the budget he is proposing does not reduce spending. He says we need to “live within our means”. This budget does not. He says we need to “cut back” on spending. This budget increases spending.

Chris Edwards at Cato:

The chart shows Obama’s proposed spending for FY2012 from last year’s budget, and his proposed spending for the same year from his new budget. His new budget proposes slightly more discretionary and entitlement spending for next year than did his last budget!
  • Last year, Obama planned to spend $1.301 trillion on discretionary programs in FY2012, but now he plans to spend $1.340 trillion.
  • Last year, Obama planned to spend $2,107 on entitlement programs in FY2012, but now he plans to spend $2,140.

So take that Tea Party!

Obama claimed in his “Budget Message” yesterday that “taking further steps toward reducing our long-term deficit has to be a priority,” but looking at his actual budget numbers shows that isn’t true.”

I am going to cut President Obama some slack here. I assume that this budget is a tactical non-serious opening offer in what the administration expects to be a protracted, knock-down drag-out no-holds-barred steel cage match negotiation with Congress. Given the slings and arrows the President suffered from his left flank attacking his negotiating posture on Obamacare and the lame duck tax compromise, we should expect a different opening gambit now.

The administration knows that whatever they put on the table, the need to compromise with the GOP will force deeper cuts into the final budget. So why not start with a budget that makes no cuts whatsoever? It is a good negotiating posture, but I just can’t believe he has the cajones to describe this budget as if it represents any fiscal belt-tightening at all. Even the press corp had a hard time finding anything resembling fiscal responsibility in the proposed budget.

This glaring credibility gap between what the President says and does is the defining characteristic of his first term. This budget may be the worst example yet. Remember when President Obama said there would be no more budget gimmicks to hide the real cost of programs and the impact on the deficit? Remember when President Obama claimed that Obamacare will lower costs and reduce the deficit? Well, meet the Mother of all Budget Gimmicks, used to disguise the fact that Obamacare is not paid for and does not reduce the deficit. Not even close. This is not a credibility gap, this is a credibility Grand Canyon.

Megan McArdle explains

“Obama’s budget includes a two-year, paid for fix. But how it’s paid for is pretty worrying: as Cannon’s graph shows, the spending is all done in the first two years, but the cuts needed to pay for them take place over 10 years.
  • Limit the taxes that states can place on Medicaid providers, which has had the effect of increasing the federal contribution to state Medicaid budgets: $18 billion over 10 years
  • Claw back “erroneous payments” to United Healthcare under Medicare Advantage: $6 billion one time
  • Limit the ability of brand name pharmaceutical manufacturers to cut side deals with generic manufacturers to end patent challenges: $8.8 billion over 10 years
  • Shorten the market exclusivity period for biologic drugs from 12 years to 7: $2.3 billion over 10 years
  • Lower Medicaid reimbursements for home medical equipment: $6.45 billion over 10 years
This is a dog’s breakfast. First of all, as I noted yesterday, many of these things are having trouble getting through Congress as it is; and second of all, why on earth would you use this motley grab-bag of long-term pay-fors to cover short term spending? The answer, I suspect, is that the cupboard is bare. They don’t have any better revenue mechanisms left–everything that anyone even thought was plausible went into ObamaCare. And yet, they can’t simply cut doctor’s reimbursements by one fifth. So they scrambled for anything at all–and the only way they could come up with the necessary revenue was to stretch the cuts out over ten years, while covering the spending for only two years.

Obviously this is not a sustainable strategy, any more than I can simply pay for an increase in my annual restaurant budget by cutting back on my movie budget for the next ten years–eventually, you’ve zeroed out the rest of the entertainment budget, and the tab at Komi is still growing. Yet this seems to be the only plan the administration has to pay for the doc fix–a problem that wasn’t addressed during health care reform, as far as I can tell, precisely because it was too expensive.”

The music plays on.



Despite my problems with President Obama (and they are legion), I would like to see him re-elected, as I distrust One Party Republican rule even more than I distrust President Obama. But President Obama is not going to get re-elected if he continues to treat American voters like they are complete idiots. He cannot tell us that a spending increase is really a spending cut, and that a massive new entitlement program will save money when it will actually cost money and expect to maintain any credibility.

If he wants to get reelected he needs to outflank the Republicans on fiscal responsibility by supporting the bipartisan recommendations of the deficit commission he sponsored. If he puts the full weight of the Presidency behind the Simpson-Bowles Plan and pushes it to a floor debate, the American people would put their electoral weight behind him.

Shall we dance?

X-posted from Divided We Stand United We Fall


This entry was posted on Thursday, February 17th, 2011 and is filed under Barack, Budget, Deficit, Fiscal Responsibility, health care reform, Obama. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

11 Responses to “Budget Bolero”

  1. gerryf Says:

    [blockquote]Anyone familiar with Ravel’s Bolero will instantly recognize the simple musical phrase that is repeated throughout the entire piece. It begins slowly with a snare drum establishing a military march-like rhythm, then joined by a solo woodwind, then a flute, then more instruments are added with every iteration until the entire orchestra is engaged. The piece was written for ballet, is simplistic and highly repetitive, yet as the increasing musical voices repeat the same monotonous refrain, it becomes oddly compelling.[/blockquote]

    Unintentionally ironic…to be sure.

    Like Bolero’s simple musical phrase the highly repetitive, yet same monotonous refrain on the budget deficit becomes oddly compelling, until you recognize that the monotonous refrain only comes from deficit hawks when Democrats are in power.

    Where were they when Reagan was in power driving up the deficit? Where were they When Bush I was in driving up the deficit? Where were they when Bush II was driving up the deficit?

    Oh, yes. To paraphrase Dick Cheney: Deficits don’t matter.

    But, after years of fiscal abuse in which Republicans run up spending and reduce revenues with irresponsible tax cuts, a Democrat gets elected president. Suddenly, the Deficits matter. A LOT!

    So, Republicans (and apparantly divided government fans) gin up a lot of noise to agitate people and scream CUT SPENDING,CUT SPENDING, CUT SPENDING and find a whole bunch of programs that help the poor and middle class, but somehow ignore their own sacred cows and woe unto him who suggests a tax increase.

    The result is conservatives get to govern as they wish and progressibes are irresponsible unless they abandon their own agenda and devote their every moment in power to cutting the deficit created by the conservatives.

    You want to cut the deficit? Let the Bush tax cuts expire. That would count for more than anything the GOP has put forward so far.

    Until you say, “Let’s talk about the revenue side of the equation” you’re not to be taken seriously.

  2. mw Says:

    It was purely intentional Gerry, but I was pointing to the monotonous refrain from both sides. Including the monotonous refrain from the left that only tax hikes matter. Which is exactly as true a generalization to exactly the same degree as your complaint about the right. Which is not to say that either statement is true.

    However, to debunk one of your contentions. This is what I was saying about Republicans in 2006 when they held all the cards – May 2006, Aug 2006, Sep 2006 – and was still pissed about it well into our last divided government in 2007.

    The September 2006 post links to a Washington Monthly article featuring a bevy of Conservatives calling for Republicans to lose the 2006 mid-terms over their spending and fiscal irresponsibility. I wasn’t seeing anything similar on the left in 2010 – although Hamsher and Greenwald are unabashed in their criticism of Obama.

    Finally, I am calling explicitly for the support of the Simpson-Bowles recommendations, which does include revenue hikes and serious spending cuts.

    So, net-net. You got nothing.

    Except that same old monotonous knee-jerk, partisan Democrat refrain.

  3. kranky kritter Says:

    If only the deficit could be honestly spun as a partisan issue in the way you so dearly would like it to be viewed, Gerry. If only our fiscal problems were merely a matter of affixing blame.

    As stated elsewhere, the fed’l gov’t has been generally been spending between $105 and $120 for each $100 collected since the 60s. And it sort of was able to get away with it.

    But with the last 2 budgets, the feds spent $166 for each $100 collected, and then $172 for each $100 collected. I don’t care who should be blamed for that. I only care that we move away such practices right now.

    I for one intend to take seriously anyone who has reasonable proposals for bridging the gap. I expect all the non-dunces to join me. If you have some great ideas for increasing revenue, let’s hear them, along with some great ideas for cuts.

    Or can we simply expect you to keep complaining over, and over, and over, and over that President Obama and some democrats agreed to extend the Bush tax cuts on the top bracket? What else you got, besides anti-Republican rants?

  4. gerryf Says:

    Boys, boys, boys,

    First Simpson bowles does not have a serious recommendation–indeed, it is not even a recommendation. Fact: the committee could not come to a conclusion. Simpson and bowles released their own list because what they were proposing was the same old, same old GOP/blue dog claptrap.

    There was no Simpson/Bowles Recommendation. The catfood commission was dead in the water and they knew it so they tried to circumvent the process by going public relations campaign to confuse the issue. The two committee chairman’s scheme’s revenue increases and program cuts do nothing to address the real issues of upward wealth distribution that has been going on for 30 years–in fact, it enhances it.

    If you support it, shame on you.

    And KK, as usual you’re missing the point, probably intentionally as you continue to hide behind your “I’m a centrist, reasonablist dang it why won’t anyone believe me!” nonsense.

    My point is that the conservative is pushing ITS plan that is purely partisan in nature and is only intended to deliver what it always does–a kick in the chops to the lower and middle class and a fat check to the wealthy.

    I’ll support a reasonable plan, but you are not going to get a reasonable plan from anyone associated with the conservatives who are a wholly unreasonable group.

    They drove the bus off the cliff because they are unreasonable. They sat in the ditch complaining while the adults tried to pull the bus out of the ditch and now they are acting like we should left them get behind the wheel again so they can enact more bad policy so it goes right off the road again (but while it goes off the road, don’t mind us if we help ourselves to the proceeds in the fare box).

    It’s a suckers game–create the problem, enrich ourselves, demand that others fix the problem while we are not in power so loudly that all the country can do is work on that rather than address some real inequities and other problems, and then con the public into putting them in power all over again.

    It’s not complaining KK, it’s keeping ‘em honest.

    I am sure you would prefer that we just pretend the right didn’t cause this mess so they can get back to the pillaging…

  5. Bob Terrell Says:

    “The problem is not with what President Obama says. His message is spot on. The problem is with what he does. The problem is that despite what he says, the budget he is proposing does not reduce spending. He says we need to “live within our means”. This budget does not. He says we need to “cut back” on spending. This budget increases spending.”

    I’m honestly not sure if you could have said it any better. I completely agree. Now if only we could get him to practice what he preaches, then we would be set.

  6. mw Says:

    “What else you got, besides anti-Republican rants?”- kk

    Heh. Reading Gerry’s reply, I think you got your answer.

    @Gerry
    Go for it! Fly that partisan flag proudly! Like I said before, you and all the reflexive partisans on the right and left have an important role to play.

    @Bob
    You are obviously a very discerning and intelligent person.

  7. kranky kritter Says:

    Simpson and bowles released their own list because what they were proposing was the same old, same old GOP/blue dog claptrap.

    OK….

    I’ll support a reasonable plan… .

    OK. So everything that conservatives say is is “purely partisan in nature and is only intended to deliver what it always does–a kick in the chops to the lower and middle class and a fat check to the wealthy.”

    And the recommendations that came from a bipartisan commission are claptrap.

    So what remains? Obviously, you think that only that which comes from the left qualifies as reasonable, because you’ve explicitly swept everyone else’s ideas off the table.

    You maintain that you’ll support a reasonable plan, while dismissing all the ideas of republicans and the ideas of blue dog democrats. You offering nothing in the way of ideas except your repeated contention that extending the Bush tax cuts was wrong, and that we’d be better off if we’d let them expire.

    Thanks for “keeping us honest.” it’s a swell schtick. And that’s all it is a schtick. Repetitive, unchanging, without insight.

  8. kranky kritter Says:

    They drove the bus off the cliff because they are unreasonable. They sat in the ditch complaining while the adults tried to pull the bus out of the ditch and now they are acting like we should left them get behind the wheel again so they can enact more bad policy so it goes right off the road again (but while it goes off the road, don’t mind us if we help ourselves to the proceeds in the fare box).

    This would be a far more compelling narrative if anyone felt we had, you know, actually gotten the bus out of the ditch.

  9. Mike A. Says:

    “My point is that the conservative is pushing ITS plan that is purely partisan in nature and is only intended to deliver what it always does–a kick in the chops to the lower and middle class and a fat check to the wealthy.”

    The budget fight going on right now would support this. Reduce, or eliminate funding for most things the right finds objectionable such as abortion (planned parenthood), cap and trade (EPA), financial reform (FTC), etc. Note that this seems like it’s being pushed by the old guard republicans.

    What I find amusing, and to some degree encouraging, is that many republicans, including the tea party, are not going along with the old guard’s plans. The fact that Boehner could not get the votes needed to fund the F-35 jet engine pork program for his home state is indicative of just how interesting the next few months will be.

  10. kranky kritter Says:

    Yeah, I agree Mike. There’s a substantial part of the Republican party that’s trying to focus its cuts on some of the most precious democratic bovines, while preserving its own sacred cows. Meanwhile, that “business as usual” faction is steering clear of any position on the real long-term budget deficit drivers (SS, medicare/caid) and blaming Obama for failing to lead. [Newsflash: it takes two.]

    But then there’s that other faction that still recalls why it came to Washington. To do something. Not to just point fingers.

    I’m with anyone who is suspicious of the Tea party because so many of its members appear ultra-conservative. But I’m observant enough to see that there are also plenty of folks in the tea party who are really fed up regular folks who’d prefer to ignore politics but have become involved from a sense that it had become really necessary.

    The best feature of the new congressfolk is their lack of reverence for business as usual and a commitment to and focus on the narrow range of reasons why they think they got elected, most specifically government irresponsibility and lack of responsiveness.

    The response of the old guard of both parties to the 2010 mid-terms suggests to me that they really don’t get it about popular sentiment. Or else they get it but prefer to disagree and try to outlast it. Or reassert control using the usual methods.

    I think there’s a fair to middling chance that the next year or so shows even more Americans that the problem is the remaining old guard that still doesn’t get it. We could see a fair number of additional successful congressional independent candidates in 2012, and they could be joined by some of this season’s freshman to form a useful independent coalition.

    Also, the jet engine cut story is not just heartening, but perhaps illustrative of the advent of a 21st century politics where successful politicians really must be responsive. By doing, not just saying. Once upon a time anger and disgust at individual political actions was spread out and quickly dissipated. Not so much these days. And probably not simply because people feel differently than they used to, but because they have better tools to gauge and organize and sustain reaction.

    It’s very tempting to me to think that the jet engine cut story shares parallels with spreading unrest in Tunisia, Egypt, Iran, and so on. That doesn’t mean that every case of unrest will lead to successful reform. But it’s harder for politicians to slide by with tricky stuff. Like telling different audiences different things. Like sneaking unrelated stuff into big bills. Like quickly and quietly passing unpopular stuff using timing geared to going unnoticed.

  11. Americo | Who’s Who at Viña 2011: Tuesday | I Love Chile News: Chile’s | Daily Trends Says:

    [...] Donklephant » Blog Archive » Budget Bolero [...]

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