Sperling Says Obama Budget Will Be More 'Pro-Growth'
Policy + Politics

Sperling Says Obama Budget Will Be More 'Pro-Growth'

iStockphoto/Vallarie Enriquez

The White House budget proposal, scheduled for release on March 4, will focus on spurring economic growth and creating long-term savings. Itwill include a “responsible mix” of tax revenue and spending cuts, a senior White House adviser said in a public appearance Thursday. 

Appearing at a breakfast meeting hosted by Politico, National Economic Council Director Gene Sperling said observers will see “constant movement toward a more pro-growth budget and a more pro-growth fiscal posture than I think we’ve had.” 

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Sperling gave a nod to deficit reduction, but said that given the current economic situation, it is important to “get the savings in the long term” rather than cutting spending now.  

“Compared to what the status quo is right now we would have a mix of future mandatory savings and future revenues that could be used to deal with the long-term situation but would put less of a drag on the economy now and allow for more investment in the things that we think are the most important for growth and productivity,” Sperling said.

He said the administration was not prepared to cut things like health research, early childhood development programs and Pell Grants. “What we don’t want is for our deficit reduction to come at the expense of our investments in the future,” he said.

After Sperling’s appearance Thursday, the Associated Press released a story, relying on information from an unnamed White House official, providing more information on the administration’s planned budget. 

Among other things, the official told the AP, the White House will not offer to trade cuts in cost-of-living adjustments to benefit programs for other spending. The COLA cuts, which would have been achieved by changing the way the Consumer Price Index is calculated, were a major concession by the administration in failed budget talks in 2011, and reappeared in last year’s budget proposal. 

According to the AP, the administration will also propose doing away with $56 billion in automatic across-the-board spending cuts scheduled for 2015, and offsetting them with targeted spending cuts and closure of unspecified tax loopholes. 

Of course, even in a normal year, a president’s budget proposal is as much a political document as a real fiscal plan and is largely ignored by the House and Senate Budget Committees as they do their work. But this year, there’s an extra twist: Congress had already passed, and the president has signed, a federal budget that lasts through fiscal 2015. 

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The deal, brokered by Sen. Patty Murray (D-WA) and Rep Paul Ryan (R-WI), sets federal spending levels through 2015, and loosens mandatory spending cuts, known as the sequester, enacted as part of a previous budget agreement. This means that the president’s budget request will have little or no ability to affect overall spending levels.

However, experts said, that doesn’t mean the exercise of creating the budget proposal is just empty theater.

“I think it’s a mistake to think that the budget doesn’t really have any impact at all,” said David Wessel, director of the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution. “There is a kind of discipline to having to put out a budget.”

Rather than making piecemeal spending recommendations that are never presented in the context of the full budget, Wessel said, “There is some merit to showing the whole. It is a statement of the president’s priorities. And even though these days Congress often ignores those priorities, the effort is worthwhile.”

Related: White House Attacks CBO Over Minimum Wage Report

The administration’s fraught relationship with Congress was another topic Sperling addressed Thursday. The NEC director, who has said that his last day with the administration will be March 5, was not optimistic about the possibility of budget-related cooperation between the White House and Congress, particularly the Republican-led House of Representatives – a situation he blamed on Republican recalcitrance.

“The president has shown he is willing to compromise…that he is willing to do some things that he doesn’t personally support in his ideal budget. But as we’ve seen, we were very close to having that type of compromise twice, but…we did not see reciprocity in 2013, in seeing equal movement to reach an agreement,” he said.

Sperling, who has built a career on conducting high-profile negotiations, including international trade agreements and the controversial Gramm-Leach-Bliley Act of 1999 that cleared the way for banks to get into the investment business, said that right now he believes the Republican Party is too weakened by internal divisions to be a reliable negotiating partner.

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Saying that he has a certain amount of sympathy for House Speaker John Boehner, Sperling said, “I think that the fact that there was a significant faction of his party…that has so not wanted to work things out with the president, that made it hard for people to stay at the table. When you’re in a negotiation, if you’re making progress, you stay at it until you stall. We had two different times when we were very close and we were still making progress and we were still talking and they just left.

“I think that reflects not having enough strength and unity to allow your person to stay at the table. And I think that has been not a good thing for the country.”

For their part, Republicans have blamed President Obama for the failure to reach a so-called Grand Bargain in past budget talks, similarly criticizing him as an unreliable negotiating partner.             

Sperling went on to say that the same dynamic in the House makes it difficult to envision significant progress on other major issues, including immigration reform and infrastructure improvement.

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