The release of President Obama’s proposed fiscal 2014 federal budget on Wednesday morning may seem a little anticlimactic. After all, we learned last week about its big news, the president’s controversial idea of reducing Social Security payments to help reduce the deficit.
But even a budget that’s going nowhere gives a president the chance to state priorities and place dollar amounts next to them.
“Don’t forget, every president’s budget is part political statement, part accounting document. This one is more of a political statement than most others,” said federal budget expert Stan Collender in an interview.
A president’s budget also gives analysts a chance to see the economic assumptions a president’s economic team is working with. Just how fast or slowly do they expect the economy to grow?
Collender, who was a top congressional aide for decades and now works for Qorvis Communications, is particularly keen on seeing what the president’s economic team is predicting on that score.
“Understand,” Collender said, “that with any president’s budget, not just this one, you have to take the economic forecast with a grain of salt, if not a shaker of salt. Because no president ever forecasts things are going to get worse. The question is how much better is it going to get, and how much quicker.”
The president’s budget will underline Obama’s insistence that deficit reduction be done in a “balanced” way.
So it’s likely to include some of the investments he mentioned in his State of the Union address in February, like added spending on regional manufacturing “hubs.” The idea is that the Defense and Energy departments, working with the private sector, can bring new advanced manufacturing jobs to parts of the U.S. suffering from globalization-related job losses.
And the proposal is likely to include Obama’s plan for a federal and state effort to expand preschool to all the nation’s four-year olds. New federal spending would obviously be needed to underwrite such a program.
Expect to see a plan for new revenue that would be derived by changes to the tax code that now benefit the nation’s wealthiest and its big corporations.
In the past, the president has called for raising the tax rates currently used by hedge fund managers and other investment professionals that allow them to pay taxes on millions in income at far lower rates than less wealthy Americans.
While many of the proposals are unlikely to fly with Congress, Obama will use it to send a message, says Collender.
“He’s going to try to make himself look a little more bipartisan, a little bit more centrist, a little bit more willing to compromise. And to do that he’s going to submit a budget that Republicans and Democrats are going to hate equally,” Collender said.