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Obama budget: why all the number crunching by OMB may be useless

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Molly Riley/Reuters

(Read caption) President Obama's FY2012 budget proposal sits on a table during an event in which the Office of Management and Budget (OMB) released it at the Government Printing Office in Washington on Monday.

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President Obama on Monday sends to Congress his $3.73 trillion budget proposal for fiscal 2012. Almost certainly, the debate about this massive document will break along predictable lines. Most Democrats will say Mr. Obama’s budget makes tough choices to try to put America on a path of fiscal righteousness. Most Republicans will say it doesn’t cut enough and avoids the sacrifices necessary to keep the United States from turning into Greece, fiscally speaking.

What neither side may admit is this: Presidential budget submissions may not be as crucial as they used to be. Today they’re all dead on arrival, in a way.

Yes, yes, we know that the White House Office of Management and Budget (OMB) puts in hours and hours of overtime coordinating figures from all executive departments and agencies to try to give the nation as accurate an idea as possible about the state of America’s finances. We know bureaucrats fight hard for every last dollar of funding.

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But Obama’s budget proposal is just that: a proposal. It is a suggestion to Congress as to what they should do – as all presidential budgets are.

Moreover, recent trends in the US budget process may have made the White House’s annual budget submission a less crucial part of the nation’s fiscal cycle.

“[T]he president’s budget has been greatly diminished in importance. Whereas it was once the necessary starting point for all budget discussion, since that was the only place the numbers even existed, now it is just one proposal among many,” wrote economist Bruce Bartlett upon the Obama administration’s budget submission last year.

More and more, congressional committees themselves have the staff and number-crunching computer power to put together their own proposed budgets. The Congressional Budget Office has given lawmakers their own organization for tax and spending analyses.

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Much of the federal budget is on automatic pilot anyway and not really affected by the annual presidential budget proposal. Back in 1970, discretionary spending – stuff like education funding and EPA programs that can be altered annually – accounted for about 61 percent of the budget, according to Mr. Bartlett. But now, that’s fallen to 35 percent or so. The big entitlements of Social Security, Medicare, and Medicaid, plus the interest on the national debt, make up most of the rest of the budget. Those are things that for the most part can’t be reduced by just appropriating them less money.

This year, Obama is already drawing heat for not proposing cuts in those entitlements. But doing so almost certainly would entail changing the laws governing those programs – something perhaps best done in separate legislation, instead of via the budget process.

Obama said as much on Monday when he discussed his willingness to work with the GOP to try to put the nation’s fiscal house in order for the long term.

“There’s going to be more work that needs to be done, and it’s going to require Democrats and Republicans coming together to make it happen,” said Obama during his appearance at a middle school in suburban Baltimore County, Md.

Finally, Congress in recent years has proved unable to complete the annual budgeting process that the president’s budget submission starts. Lawmakers are reduced to cramming out continuing resolutions that call for the government to keep running at current budget levels. Precedent, not the president’s numbers, thus may be the most powerful indicator of program funding levels.

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