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Making A Budget Without Making Choices

For pure wishful thinking, or maybe pure silliness, it is going to be tough to top President Obama’s call this week for a federal budget “free of any party’s social and political agenda.”

Oh, and the president declared at the same time that the budget should cut spending and reduce deficits “without damaging economic growth or gutting investments in education, [or] research and development that will create jobs and secure our future.” In other words, it should be free of any party’s agenda except that of Obama’s fellow Democrats. But the president nonetheless insists that a budget be bipartisan — nothing else could get passed anyway — and that it be passed “without delay.”

Sure, Mr. President. Where would you like us to start?

Budgets are about making tough choices. If you can afford everything you want, you don’t need a budget. This president, however, treats tough choices as though they are poison-tipped darts. He refuses to touch them unless somebody else goes first.

He called for health care reform but waited for Congress to write a plan before announcing which elements he favored. He appointed a commission to address federal deficits but ran from its clear-eyed recommendations. He was for oil drilling in the deep Gulf of Mexico, then he was against oil drilling in the deep Gulf of Mexico, then for months (as gasoline prices have moved steadily higher for unrelated reasons) he has had nothing whatsoever to say about oil drilling in the deep Gulf of Mexico. When he finally produced a plan to deal with the government-sponsored mortgage entities Fannie Mae and Freddie Mac, he offered three options, made no recommendation and told Congress to pretty much do whatever it wants.

On and on it goes. While his party waits for him to take the lead on budget negotiations, as it has in many areas before, the president is about as eager to move as a burro looking up at the Grand Canyon’s cliffs on a hot summer day.

Political parties exist because the people who belong to them tend to make choices similar to one another, and different from the choices made by people who belong to other parties. Any budget necessarily reflects an “agenda,” because a budget reflects the priorities of whoever makes it. It might be a single party’s agenda if that party is dominant, as the Democrats were during Obama’s first two years in office. It might be a compromise if the two parties are in closer balance, as they are now after Republican gains in the last election. We should not even be talking about a budget for a fiscal year that is now nearly half over, but Democrats could not bestir themselves to enact a budget when they had overwhelming control of Congress last year.

The good news, such as it is, is that the federal government will not run out of spending authority at midnight tonight. (It would be inaccurate to say that it might have run out of money. There is plenty of cash in the till, thanks to massive borrowing. If you don’t count borrowed funds, the government ran out of money a long time ago.) Obama signed legislation a couple of days ago to keep the government operating for two more weeks. House Republicans got the $4 billion in immediate spending cuts they wanted by focusing on areas that Obama himself had proposed to cut when he submitted his own spending plan, the one a Democratic Congress ignored, 13 months ago.

But the Republicans are coming back for $57 billion in additional spending reductions for the current fiscal year, which runs through Sept. 30. Congressional Democrats now see many of their favorite programs targeted by Republican budget hawks. They are looking to the president for leadership, and they are not getting much of it.

The president, who needs support from independent voters in next year’s election, says he too wants spending cuts — but he says nothing about what to cut.

He says he wants to reduce deficits — a phrase, when uttered by someone in Obama’s party, which is code for raising taxes on businesses and upper-income taxpayers. Just three months ago, Obama signed on to a two-year extension of the Bush-era income tax cuts and a revival of estate and gift taxes at the least onerous rates in decades. Obama could portray this as deficit cutting if he believed, as Republicans do, that lower tax rates and reduced federal spending promote economic growth. But in his comments about “gutting” his favored “investments” in R&D and the teachers’ unions (which is what he means when he says “education”), he hews to Democrat orthodoxy about the economic benefit of higher federal spending.

So does Obama want a bipartisan budget to reflect the agenda of the Republicans or of the Democrats? The apparent answer is yes, he does. He just doesn’t want to say out loud which one, even though it is hardly a secret. Saying it would be making a choice.

This president doesn’t like making choices.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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