President Barack Obama’s plan for a $3.78 trillion, 10-year budget to rejuvenate the nation’s economy by investing in education, manufacturing, clean energy and research while shrinking entitlement programs and reducing the deficit has already sparked debate.
The president’s blueprint, released Wednesday, drew initial criticism from both sides of the aisle. Democrats are against the budget’s funding cuts to Medicare, Medicaid and Social Security, while Republicans continue to fight Obama’s initiatives that raise taxes and increase the debt.
Despite the opposition, University of Wisconsin political science professor David Canon said the plan presents a moderate method of spending in the next decade, without being entirely a stimulus package or austerity plan.
“The budget as a whole is a good position in terms of trying to have a balanced approach, [which] Obama talked about in the presidential election campaign and since then, to reduce the deficit,” Canon said. “The best way to do that is by a combination of reducing spending and increasing taxes. That’s what this budget does.”
He added the chained consumer price index, a part of the budget, is receiving the most attention. This initiative reduces hikes in Social Security costs by making these program payments reflect an inflation rate that is more realistic than what is currently used, Canon said.
U.S. Rep. Mark Pocan, D-Madison, said in a statement he endorses many policies laid out in Obama’s budget, including plans to create jobs and boost Wisconsin’s economy through research and public works spending, as well as tax credits to small businesses.
However, Pocan said he opposes the proposed change to a chained CPI system, which he said would reduce an 85-year-olds’ benefits by more than $1,100, according to the Social Security Administration.
“Social security is a moral promise of economic security we make to our seniors, our veterans, people with disabilities and our children, and it is a promise we cannot break,” Pocan said. “Social security has not contributed to our current fiscal problems, and cuts of any kind, including a chained CPI, should not be on the bargaining table.”
Canon said he supports the budget’s chained CPI reform, saying it is a modest compromise the Democrats need to concede to ensure substantial spending reductions. He said the measure is a better way to cut entitlement budget cuts that increasing the retirement age.
Canon, an expert on the U.S. Congress, added the budget would not help Wisconsin in terms of its lagging private sector job growth and limited senior care spending because it is not a stimulus plan.
“This budget is like Wisconsin’s budget that truly was an austerity budget. A lot of the reason Wisconsin is 44th in the country is we cut our budget by cutting spending and laying people off and having a reduction in public sector jobs. I don’t think this budget will jumpstart the economy,” Canon said.
However, U.S. Rep. Paul Ryan, R-Janesville, said the budget takes more money from taxpayers “to spend more in Washington.” He said in a statement the budget has $1.1 trillion in tax increases, a $964 billion spending hike and a $8.2 trillion contribution to the national debt.
Ryan said that he and other Republicans have offered a different approach to Obama’s plan which would create jobs, foster a stronger economy and balance the budget in 10 years.
“I’m disappointed by the president’s proposal because it merely ratifies the status quo,” Ryan said. “It doesn’t break new ground; it goes over old ground. It takes more from families to spend more in Washington.”
