Obama’s New Budget

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[by Andrew Pollack]

On February 26th, Obama unveiled a 10-year budget proposal. Most of its provisions won’t kick in until 2010 or even later, and are clearly not designed to deal with the current effects of the crisis.

Instead it was designed to showcase his grand plans for restructuring the US economy, which consists largely of new subsidies to corporations while using rhetoric about fighting climate change, achieving “universal” healthcare coverage, etc.

Following in the footsteps of FDR, whose fiscal conservatism meant doling out public funds in drops even during the worst of the 1930’s Depression, Obama’s budget promises to sharply cut the US deficit. And to prove he’s not kidding about this, he chose as keynote speaker to his February 23rd “Summit on Fiscal Responsibility” private equity billionaire Pete Peterson, whose main hobby these days is demanding that Social Security and Medicare be drastically cut or even eliminated.

In the same spirit, Obama’s new budget continues to ignore majority sentiment for single-payer government insurance. It cuts some of the Medicare subsidies to private insurers, and seeks further savings by tinkering with the quality of, and payment for, care under Medicare and Medicaid. But it won’t touch the real source of waste: the profits and administrative expenses of insurers, for-profit hospitals and equipment manufacturers. Even the mild reforms it will finance, based as they are on taxes for the rich that don’t begin until 2011, won’t take effect until 2012.

Similarly his budget addresses catastrophic climate change by selling carbon credits to manufacturers as part of a cap-and-trade plan – universally recognized by climate scientists and activists as a barrier to the real conversion needed to slow climate change.

The basic military budget in 2010 would increase to $534 billion in 2010. And this doesn’t even include spending on the wars in Iraq, Afghanistan, and Pakistan, which will certainly not drop, as some troops are shifted from Iraq to the latter two, and tens of thousands remain permanently in Iraq. What’s more, the increase in the basic military budget, which will shift spending from some high-tech systems to smaller programs “focused on fighting insurgents in Iraq and Afghanistan,” will likely mean many more troops called up to use existing weapons.

The budget also included a cut in itemized tax deductions for those in top tax brackets earmarked to pay for his healthcare “reform.” This would still leave the US ruling class the least-taxed of any in the world.

Socialist Action News

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