The White House just held a ‘progressive media and bloggers teleconference’ with Peter Orszag, the Director of the Office of Management and Budget to discuss just released “New Era” budget. Now, this budget has many changes, new elements with money from a cap and trade program going, in part, to support new energy programs. There is much to talk about, in the coming weeks and months, in this budget.
This is part of the White House’s reach out to new media, such as the earlier bloggers call with Jared Bernstein from the Office of the Vice President.
Jesse Lee, White House new media outreach
A bold budget
Shifts priorities to the future
Doesn’t try to have our cake and eat it too, but makes tough choices.
Peter Orszag, Director of Office of Management and Budget:
1. OMB is starting a blog as of today, with a post today (Discipline, Efficiciency, Prosperity) associated with the budget. Hoping that I will have the time to be blogging in the future. In part because I found it such an effective for communicating with those engaged with budget policy. [See this White House video interview with Orzag about blogging.]
2. Basic theory is that we need to get our medium term deficits to a sustainable level, we need to do it in an honest way, and we want to make investments for the future in energy, education and, most importantly for fiscal reasons, health care.
3. Investments in enforcement of the tax code and clamp down on inequities of the tax code. Examples: Budget will significantly restrict ability to avoid paying taxes on foreign earning and constrains ability to tax deduct non-economically substantive activity. And, cleaning up loophole that allows financial executives to claim that their bonuses are ‘capital gains’, which has application especially to hedge fund.
Chris Hays, The Nation: “What is the top item that merits attention, that hasn’t gotten popular attention yet?”
Orszag: A fantastic idea that has gotten no attention yet. There is a proposal for automatic savings. Outside Social Security, the evidence is quite clear that the best way to get people to save for retirement to make it easy and simple. The Econ 101 mod … If people are in a retirement plan unless they opt out, the participation rate is much higher. A good percentage of people don’t work in a place with 401(k). If a company doesn’t offer a plan, they will have to create an automatic deduction plan toward an IRA. … Nearly comprehensive for everyone who receives a W-2, with an automatic enrollment on employment. This is the single best thing we can do to help build up nest eggs.
To make things simple and easy. Pell Grants are perhaps the most important path for making funding available for moderate income people. There are two problems. (1) funding is not guaranteed. (2) Dramatically simplify the form, which is currently more complex than a tax return. One of the reasons we don’t have enough college participation is that they incorrectly believe that there isn’t aid available and the process of getting aid is so complicated that they simply don’t apply.
A Wiener, Washington Independent: Cap & Trade. How did you come up with the revenue projections? Did you discuss this with Congress?
A: We put in a Cap & Trade target for reducing below 2005 levels by 14% by 2020. [Note this is 1990 levels and falls short of the IPCC science-based recommendation for 25-40% below 1990 levels by 2020. And, that figure is low by many scientists best estimates of the situation.] None of the details and paths is specified at this point in time.
Under any plausible cap to achieve these targets there is enough revenue to do the $15 billion of energy efficiency investments [Note: the $15 billion that President Obama speaks of is not generally discussed as energy efficiency. We can hope that Peter misspoke.] and to continue to pay for tax cuts that are in the stimulus package.
Assuming that Cap & Trade raises at least $600 billion, but that is likely significantly under what the revenues will be.
Yes, there has been Congressional outreach.
Matt Yglesias, CAP: Budget has proposals for cutting back farm subsidy payments.
A: This is an area where the President was quite clear when campaigning.
We are making investments in greening farms, in improving energy efficiency in farms, and other investments in rural America. The President spoke of our long-term structural deficits and, if anything, the situation has only gotten worse. Nobody should be surprised at his putting these firmly on the table.
Q …
A: We have been in office for just five weeks, this is a 132 page overview, but not the full 500-page document that you don’t want to drop on your toes. That will come out in April, with more detail on sub-agency budgets.
John Aravosis, AmericaBlog: What is the most expensive policy initiative that the Administration is planning? Has the deficit situation changed anything that the Administration was planning?
A: Investing heavily in health care for efficiencies that will show up in cost savings that we are partially using for We are seeking to have the health care we favor being revenue neutral 5 to 10 years out, but this will be a positive savings over the long term.
John Aravosis, AmericaBlog: It seems to me that the White House is much more focused on the deficit. What has been left out due to growing concerns about the deficit?
P Orszag: I would say that the situation is more dire than when the President was running the campaign and we’ve had to scale back on what we’re doing.
Jill, Write like she talks: Question about education: From what I’ve seeing right now, I don’t see how NCLB funding shortfalls will be addressed?
P Orzag: Remember that the Stimulus package has significant funding for state stabilization funding, which has significant resources for education. But, again, this is the top line budget and you will see the details in the April budget.