#FederalBudget: What is the Point?

It is about an hour or so before the Administration releases its 2013 budget. It is, of course, not a serious document but it does reveal the thinking of the President about his view of the role of Federal Government, the state of the economy and the political determination of his opposition.

Mr. Obama has given up trying to lead or govern the country for some time in my opinion. This budget reflects the situation that re-election is the call to order. Everything is focused on it. Nothing else matters.

 A few of the details of the Budget have been released. It will emphasize new spending, more spending and more government growth and intervention. Deficits at outer space levels already will increase and will continue to increase. Of course, Congress appropriates the actual spending in the end, but this Budget is the political blueprint. No leadership on either end of Pennsylvania Avenue.

The Federal deficit totaled $1.3 trillion in fiscal 2011. The Congressional Budget Office last month projected the Federal deficit would decline to $1.1 trillion in fiscal 2012. Mr.Obama will project even higher deficits than that of the CBO. Under his plan the deficits will modestly decrease after the expiration of the Bush tax cuts. However, they will continue at record levels until Obama leaves office in 2017, assuming he is fortunate enough to be returned for another term

The Federal government borrows roughly an extra $4 billion a day to fund all the income transfer programs, plus defending the country, paying interest on the debt, making sure we all get frisked at the airport, and to write all those ten of thousands of pages of regulations. The sums are staggering. For a President who promised to cut the deficit in half at the end of his first term, the red ink just keeps getting bigger and bolder.

I am interested in of course, the revenue side of the equation. I believe I know what will be in the proposal already--wealth taxes, repeal of the carried interest rules, higher taxes on capital gains and dividends, phase out of deductions to make them almost meaningless, inefficient subsidies for renewable energy, higher taxes on fossil fuels, taxes on multi-nationals, and incentives for this and that favored industry. Most of these have been in the previous Budget submissions, all previously rejected by Congress. Creating this wish list makes the numbers look better, but the reality is that it is intellectually dishonest.

The Budget submission used to be an important part of the political process. It does set a marker of how the Administration projects its plan, where it wants to take the government. But, it is all for the politics, all to game the system. The Budget has become irrelevant in trying to get some kind of hold on the fiscal mess created by both the Legislative and Executive branches of government.

To add even more irrelevance, the Democrat-controlled Senate has no intention in passing a Budget; they have not done so for almost 3 years now.