The White House Delays Its Budget
Dec 28th 2010 6:45AM
Updated Dec 28th 2010 9:16AM
President Obama will delay the release of his budget for the government's 2012 fiscal year by about a week. It should be sent to Congress and the public on or around Feb. 14, according to the Administration.
The White House said a delay in the confirmation of the new budget director, Jack Lew, was partially to blame. Another reason given was that Congress was late to make government funding decisions at the end of this year.
The President may have a difficult time getting his budget passed as Republicans will try to block a number of spending proposals in the name of reducing the deficit.
At the core of the budget debate will be whether government spending can continue to stimulate the economy. The extension of previous tax cuts, which follows the government's huge stimulus package of two years ago, may help rebuild GDP growth, but many economists are doubtful of that. They say chronic unemployment and a stumbling housing industry will undermine long-term improvements.
These issues will cause both parties to examine again which spending cuts are prudent to trim the budget deficit and which will harm an economic recovery. Any improvement in consumer and corporate activity, in turn, will eventually increase tax receipts to the IRS from both businesses and individuals. That, in theory, will bring the federal budget gap down.
It hardly matters whether the budget is late. What does matter is how the wrangling over its content turns out.