Obama: Electoral Budget

The budget proposal presented yesterday by President Barack Obama marks a turning point in fiscal policy which, over the past six years, has been characterized by maintaining the general outline of his predecessor. After some initial criticism of the greed of big capital, pronounced within the context of the economic crisis starting in 2008, the first African-American president quickly bowed to the neo-liberal orthodoxy, and since then his administration has favored corporations and individual fortunes at the expense of the majority of the population.

The proposed budget for 2016 is instead a document characterized by a spirit of income redistribution, with social programs financed by a tax increase to businesses and higher-income U.S. citizens. The proposed measures include a one-time, 14 percent tax on the profits acquired abroad by U.S. corporations, such as General Electric and Microsoft, and a subsequent rate of 19 percent on such foreign earnings. On the other hand, he proposes the creation of a new infrastructure bank and raising the budget on research and development by six percent.

We must not overlook the fact that while this orientation in public finance of the world’s largest economy is betting on strengthening, to some extent, the middle class and society in general, it also has a clear political, and even electoral, meaning; indeed, the budget proposal aims to corner the Republican majority in Congress, which is against tax hikes and in favor of giving leeway to business conglomerates.

Obama’s budget puts Republican lawmakers in a difficult dilemma: either they yield, even partially, to the presidential initiative, or they expose themselves to the electorate as promoters of inequality.

In the middle of his second and last term, Obama, for his part, does not have a political career to take care of and can afford the luxury of seeking the electoral support of his party without having to worry about big capital’s animosity.

While it is hoped that this proposed budget will obtain the necessary votes in Congress, at least for its most important parts, it is a shame that the emphasis on redistribution was not defended earlier by the White House, when it held the congressional majority and when it could have made the difference between a recession and economic recovery.