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Obama's $3.9 Trillion Budget Takes More Realistic Approach

Ryan ripped the budget as a missed opportunity. “It would demand that families pay more so Washington can spend more. It would hollow out our defense capabilities. And it would do nothing to preserve or strengthen our entitlements ...This budget isn’t a serious document; it’s a campaign brochure.”

State of the Union Priorities

The budget includes many of the bits that Obama emphasized in his State of the Union address, including 45 new manufacturing institutes, a doubling of the Earned Income Tax Credit for childless adults, a recycled version of the president’s plan for universal preschool paid for by a tobacco tax hike, revamped job training programs, an Early Head Start initiative for toddlers and infants and an extension of emergency unemployment insurance.

The EITC plan could actually get traction in Congress, after Ryan praised the EITC as boosting work incentives in his massive Budget Committee report on poverty programs on Monday. Several Republicans have praised the president’s Promise Zones initiative, and his plan to revamp spending on wildfires.

But many of the other proposals have been perennially proposed by Obama only to be ignored by Congress. Ryan’s report dismissed Head Start, for example, as ineffective. And an extension of emergency unemployment insurance hasn’t gone anywhere yet more than two months after they lapsed.

The president does take credit for a dramatically reduced budget deficit in his blueprint — with the deficit shrinking to 1.6 percent of GDP by 2024. The plan would also put the debt on a path of shrinking as a share of the economy after 2015.

However, the budget gets there with $402 billion in 10-year savings in Medicare, Medicaid and other health programs and $650 billion from tax changes that would shrink deductions for the wealthy and enact the “Buffett Rule” setting a 30 percent minimum effective tax rate for millionaires after charitable contributions.

“As a country, we’ve got to make a decision if we’re gonna protect tax breaks for the wealthiest Americans or if we’re gonna make smart investments necessary to create jobs and grow our economy and expand opportunity for every American,” Obama said in remarks this morning. “At a time when our deficits are falling at the fastest rate in 60 years, we’ve got to decide if we’re gonna keep squeezing the middle class or if we’re gonna continue to reduce the deficits responsibly while taking steps to grow and strengthen the middle class.”

But that long-term budget blueprint isn’t going to be enacted by this Congress — something the administration readily admits — with its revenue raisers a nonstarter with House Republicans.

The one-year agency numbers, however, will be where the rubber hits the road.

The wish list, meanwhile, includes a host of items that will appeal to Democratic constituencies and represent in many ways a list of the cost for Obama of losing the House in 2010.

The list would bolster basic research, restore parks, renovate veterans’ hospitals and invest in job skills, reduce maintenance backlogs and improve customer service. It would also allow the Department of Defense to modernize weapons systems, restore readiness and invest in facilities.

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