Obama’s Budget: $3.5 Trillion Well Spent?

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President Obama outlined his $3.55 trillion budget (PDF) for fiscal year 2010 Thursday. Not surprisingly, Democrats and Republicans almost immediately began wrangling over the spending plan: House Minority Whip Eric Cantor called it “misguided” and dangerous,” and while Nancy Pelosi applauded the end of the Bush tax cuts for the wealthy, she said she’d prefer to see them ended sooner.

But at least one economist thinks it’s money well spent. Robert Greenstein, executive director of the Center on Budget and Policy Priorities, was almost effusive in his praise of Obama’s budget:

The President’s budget represents a bold and courageous proposal to make progress in restoring fiscal discipline while addressing two central problems of our time—a broken health care system and the threat of catastrophic global warming—and other national needs.

Gone are the gimmicks that have been an annual feature of both Presidential and Congressional budgets, under which policymakers pretended to reduce deficits markedly over time by omitting costs in the “out years” for operations in Iraq and Afghanistan, natural disasters, and continued relief from the Alternative Minimum Tax and the scheduled reductions in Medicare fees for doctors—and by printing in the budget numbers for the costs of discretionary programs in the out years that everyone knew were unrealistically low.

Most interestingly, Greenstein notes President Obama will help pay for health care reform with by borrowing two ideas from Republicans: raising the premiums for wealthy Medicare recipients’ drug benefits, and capping the itemized deduction subsidy at 28 cents on the dollar—the same ceiling we saw under President Reagan.

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