WASHINGTON — Politically, there’s a lot of red meat for both parties in the 2013 federal budget President Obama proposed on Monday.
Democrats will like the tax reform measures, which would raise $1.5 billion through a tax on high-income earners, helping the package reduce the federal deficit by $4 trillion over 10 years. The budget invests heavily in areas Democrats consider to be jobs engines, such as infrastructure ($476 billion over six years) and education. Obama and Democrats will be able to point to the budget and tell voters that they’re focused on job creation.
Republicans, meanwhile, have already cried foul over the proposal’s high taxes and not-steep-enough spending cuts, painting Democrats as unwilling to cut the budget in the face of high debt. Under Obama’s budget, the federal government would increase federal spending by $700 billion by 2017 (though as a percentage of GDP, discretionary spending falls from 8.7 percent in 2011 to 5 percent in 2022, with entitlement spending continuing to balloon), and even with Obama’s deficit reduction plan, would still run deficits higher than $600 billion annually between 2014 and 2017. By then, the national debt will hit $21.3 trillion.
In the end, Obama’s budget will be more about teeth gnashing than actual policy making. The proposal will go nowhere in Congress, which has already established spending limits for the 2013 fiscal year. Since the House is controlled by Republicans, it wouldn’t have come anywhere close to adopting Obama’s budget anyway. It’s a purely political proposal in a year set to be defined by how the parties present their platforms to the American people.
Only three Minnesotans in Congress put out formal statements about the budget on Monday: Republicans John Kline, Michele Bachmann and Erik Paulsen. Democrats were largely silent: look for them to make hay of whatever Republican budget plan is introduced in the coming months.
Key provisions
Obama was proposing, in one neat package, what he’s been trying to pass through Congress for months: targeted increases in government spending to spur the economy now. Much of it is borrowed from the American Jobs Act, a jobs proposal Obama introduced in September that has seen few of its provisions enacted, including:
• $50 billion in immediate spending on infrastructure repair.
• $60 billion to modernize schools and invest in teacher and first responder jobs.
• A full-year extension of the payroll tax cut (which it looks like Obama will get, without strings attached).
Only one Minnesotan, Democrat Betty McCollum, sits on the budget-writing appropriations committee, but Obama did propose budget items that have involved other Minnesotans. For example, he proposes a six-year, $476 billion transportation bill that’s larger than ones under consideration in both the House (five-years $260 billion) and the Senate (two-years, $109 billion).
That’s in addition to the $50 billion immediate infrastructure investment, which is similar to one the Senate voted down in October. Minnesota Sen. Amy Klobuchar, who sits on the Senate Transportation Committee, introduced that bill on the White House’s behalf.
“These initiatives are the kind of bold action we need to create better opportunities for our businesses so they have the network they need to move goods to market,” Klobuchar said in a statement to MinnPost. “I will continue to work to strengthen our nation’s infrastructure and ensure our competitiveness in the 21st century economy.”
When it comes to agriculture, Obama proposes cutting direct subsidies to farmers and replacing it with a crop investment system, saving up to $32 billion over the next 10 years. The plan is very similar, (only about $9 billion more expansive) to one nearly reached by the leaders of the House and Senate Agriculture committees during the payroll tax cut extension debate in November. Minnesota Democrat Collin Peterson, the ranking member of the House committee, supports such a proposal, though he wasn’t available to comment on Obama’s plan Monday.
Meanwhile, Obama’s budget provides more federal money for early education and incentive programs meant to reward states that are able to keep down the cost of both K-12 and higher education. Like his callbacks to the AJA, many of these are inspired by previous Obama proposals that have been batted back by Congressional Republicans.
'Short-term gain'
Kline, who heads the House Education and the Workforce Committee, called the budget proposal a “political document for Obama’s own short-term gain.” The budget expands the government’s role in education, running antithetical to the proposals Republicans on Kline’s committee have advanced.
“We all want to support better education opportunities for students, but we must also be wary of grand schemes that lead to empty promises,” Kline said in a statement.
Another nonstarter for Republicans: higher taxes on the rich, a key component to Obama’s deficit reduction plan. Obama would roll back the high-income 2001 and 2003 Bush-era tax cuts and push to increase taxes on those making more than $1 million to at least 30 percent. Republicans have resisted the proposal in the past and are unlikely to waver any time soon — Paulsen, for one, called it a nearly $2 trillion tax increase.
“Adding trillions of dollars in new debt to fund wasteful Washington spending is not a viable solution to our nation’s problems,” said Paulsen, a member of the tax-writing Ways and Means committee. “Minnesota families deserve better than more budget gimmicks and broken promises.”
More reading
The Star Tribune looks at how Obama’s budget would affect Minnesota, if it were to be enacted.
The New York Times visualizes the budget.
The Associated Press takes an agency-by-agency look at the budget.
For those willing to wade through it, the budget itself (as well as links the White House’s general overview).

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