Obama’s 2013 Budget More Campaign Strategy Than Policy

Though President Barack Obama will unveil his annual budget for the 2013 fiscal year next month, it will probably reveal more about his re-election strategy than spending and tax policies to be adopted in the coming year, as a gridlocked Congress focuses on their own campaigns and the contest for the White House in November 2012.

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Republicans in the House of Representatives will likely use Obama’s budget as another chance to paint him as a big spender and blame him for the massive deficit and mounting national debt. Mott Romney, the front-runner in the race for the Republican ticket, has already focuses his campaign on a balanced budget, saying it is not “moral” for the U.S. to keep spending more than it is taking in.

Meanwhile, Democrats will likely lambaste Republicans for President George W. Bush’s huge tax cuts and costly wars in Afghanistan and Iraq, which turned President Bill Clinton’s $128 billion surplus into a deep deficit. And as each side tries to blame the other for the huge deficit, while claiming to have the best remedy, the White House will likely use the budget to …

try to gain an advantage over Republicans in the debate.

Obama is expected to renew his call for an end to the Bush-era tax cuts for wealthier Americans that are set to expire in December, setting himself up in opposition to Republicans who say higher taxes, even on the rich, will constrain the economic recovery. When Republicans defend Bush’s tax cuts, Democrats will be able to paint them as a party for the rich — a small minority of voters — while distinguishing themselves as proponents for the middle class.

“What the president will be providing in his budget will be more of a campaign document than it will be a real budget,” said Stan Collender, a former congressional budget aide who is now a partner at Qorvis Communications, as Congress will likely remain gridlocked on any budget legislation until after the November elections.

Obama’s proposal is expected to revive his long-term deficit-cutting plan, which he first presented to a congressional panel last September. The plan would cut $4 trillion over 10 years, with higher taxes on the wealthy offsetting near-term stimulus spending. The administration describes it as a “go-big” plan to tame the national debt, but so far, it’s gone …

nowhere since deficit-reduction talks collapsed last year.

The government’s trillion dollar-plus budget deficit will be one of the central issues in most election campaigns this year. In fact, it was the second most important issue for voters in the New Hampshire Republican primaries last week, according to polls.

Of particular interest will be the administration’s plans for achieving $1 trillion in spending cuts to domestic and defense programs that the White House and Republicans agreed to last year as part of deal to raise the country’s debt limit. A further $1.2 trillion in automatic spending cuts are due to take effect at the start of next year, unless Congress can agree on another long-term deficit reduction plan that would cut the same amount or more.

The White House does not plan to give specifics on how it would implement the potential across-the-board cuts, a political move lauded by analysts. “In an election year, Obama will have great motivation to keep those cuts as abstract and unclear as possible,” said Ron Haskins, a budget expert at the Washington-based Brookings Institution.

With so much up in the air and so much at stake, Congress is highly unlikely to craft a comprehensive spending plan to keep government agencies operating beyond October 2012, which means Obama’s budget will be dead on arrival.

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To contact the reporter on this story: Emily Knapp at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com