The Budget's Real Winners: Obama's Base
The Obama budget is just one piece in the president's reelection effort, designed to reward those voters who backed him in 2008.
The Obama budget is not about fiscal rectitude. Rather, it is the first fiscal document of the president's reelection campaign. It is an attempt by the White House to cobble together Obama's 2008 electoral coalition. The budget's clear winners are the pieces of America that voted to elect Obama - namely high-end America and urban America. The budget also attempts to reach Middle America by increasing spending on infrastructure. But at this juncture, it is unclear whether the administration's gambit can or will work.
Obama won in 2008 by winning young, minority and wealthy voters. If the Reagan coalition was middle and upper class, Obama won by winning both the rich and the poor. He struggled with the middle class, lost the white working class by 18 points, and yet won a clear majority of the popular vote, a major accomplishment.
Obama's budget rewards those who voted for him the first time. First, despite Obama's professed desire to spread the wealth, this budget proceeds from the premise that the Bush tax cuts stay in place for the near future. Although the budget proposes the sunset of those cuts, under the president's proposal they would only vanish after the 2012 election. In other words, Obama is seeking to rent high-end America in his reelection bid.
A second a winner in the budget is NIH, whose funding will be increased. Increased funding for NIH is a message to academic America that while Obamacare will seek to ration healthcare, the Obama administration cares about cures. Academic America overwhelmingly voted for Obama. And while the American middle class is hostile towards Obamacare, the middle class is also rightly scared of Alzheimer's. Increased NIH funding is a twofer.
Another budget winner is education. High-end Blue America went out and watched Waiting for Superman and is rightly appalled by the state of urban public schools. High-end Blue America is also open to increased federal funding for education, notwithstanding the fact that America's educational outputs don't equal its inputs.
Increased funding for education also has a constituency in the African-American middle class. One legacy of the 60s and 70s was the departure of white ethnics from the ranks of urban public school teachers, and the emergence of minority teachers. Increased funding for education takes the sting out of the critique of urban public schools.
The Obama budget is just one piece in Obama's reelection effort. Obama will have to deal with a hostile House and the critiques of the Bipartisan Budget Commission.
Reelection will likely hinge over the state of unemployment. Recent presidents do not get reelected with unemployment over 8 percent and only Ronald Reagan was reelected with unemployment over 7 percent.
Right now unemployment sits at 9 percent. Reelection is no certainty.