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Why Obama’s Big Inequality Speech Missed Out on the Political Realities That Stand in the Way of Progress

Obama's powerful rhetoric didn't get into how Democrats can regain control of the Federal budget and stop a decade of draconian cuts.

On Wednesday, President Obama gave a major speech on reversing America’s growing inequality. Congress and the federal government should do far more to foster economic opportunities and security, he said. And “when it comes to a federal budget, we should not be stuck in a stale debate from two years ago or three years ago.”

“It is important that we have a serious debate about these issues,” Obama  told a friendly audience at a Center for American Progress event, saying Washington had to free itself from gridlock. “If Republicans have concrete plans that will actually reduce inequality, build the middle class, provide more ladders of opportunity to the poor, let’s hear them.”

If Obama really wanted to tackle inequality, it would have been far more useful to hear his ideas on retaking control of the federal budget process. Instead, he spent nearly an hour touting the agenda that progressives love—better schools, safety nets, opportunity—that is now being dismantled by a draconian 10-year federal budget process law that he helped  write in 2011, and has begun to starve almost every need that he cited.

“Even if we get a deal, and that’s debatable based on what you and I have been reading in the media, it’s not a triumph for sanity,” said Matt Dennis, spokesman for Democrats on the House Appropriations Committee, speaking of the House-Senate negotiations on the 2014 federal budget. “There are huge holes to fill, this year and next.” 

Contrary to the president’s big inequality speech, the current budget fight isn’t governed by a debate. It’s following a law, the  Budget Control Act of 2011, whose contours Obama  proposed and was passed by House Republicans and  signed by him. It is turning into his biggest domestic  miscalculation. Why? Unlike every federal budget law before it, which only concerned the next year’s spending, it locked Congress into a 10-year  framework where spending will be specifically capped each year or automatically cut.

Obama and other top Democrats didn’t think that Republicans would ever go along with automatic cuts threatening cherished local projects or Pentagon operations. But they have been proven wrong. Today’s GOP, especially in the House, are driven by the Tea Party and want to shrink government by starving it. The first year that the BCA took effect, in FY 2012, it only cut $22 billion. But now it’s looking at $100 billion a year, without much push back from the Democrats on raising revenues to offset most of the cuts.

“Policymakers in both parties have criticized sequestration as shortchanging important domestic investments—including scientific research, public health, law enforcement, education, and environmental protection—and forcing significant defense reductions,” the Center for Budget and Policy Priorities  said this week, offering a dozen charts that show how the brunt of the cuts are making American inequality worse. 

Most Americans—and pundits were were  misty-eyed over the president’s equality speech on Wednesday—do not realize or have forgotten that the 2011 law is what is driving the House-Senate negotiations over the FY 2014 budget, which began on October 1. When there was no budget deal or a bill to extend the prior year’s funding levels, the 15-day government shutdown ensued. The negotiators are now working toward a December 13 deadline to come up with a deal, but the next hard deadline is January 15, when the funding that ended the shutdown expires.        

“The Budget Control Act of 2011 created spending caps for ten years,” explained Dennis, the House Appropriations Committee’s Democrartic spokesman. “If there is no budget deal, then the sequester kicks in. There’s a $1,058 billion cap for 2014… or $967 billion if there’s no law.” 

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