Some of the cuts we agreed to will be painful. Programs people rely on will be cut back. Needed infrastructure projects will be delayed. And I would not have made these cuts in better circumstances.I have suggested a couple of times that what's now billed as $39 billion in spending cuts might be seen as part of the price Obama and the Democrats have paid for the stimulative tax cuts they packed into the tax cut deal struck at the end of last year (The Democrats' agenda items in that deal were valued at $336 billion by Mark Zandi). I was thinking then in pragmatic terms: had the Democrats invested the necessary bandwidth in passing a 2011 budget last fall, the tax cut deal may not have been possible. But the president here seems to cast the same exchange as substantively necessary: another huge round of tax cuts necessitated first steps toward fiscal austerity.
But beginning to live within our means is the only way to protect those investments that will help America compete for new jobs -- investments in our kids’ education and student loans; in clean energy and life-saving medical research. We protected the investments we need to win the future.
In economic terms, that's probably wrong. There's little fat in discretionary domestic spending, cutting spending now endangers the recovery, and structural budget reform will require slowing health care spending growth, cutting defense, and tax reform that raises more revenue. But Obama, for more than a year, has accepted the "belt tightening" metaphor and put forth the notion that discretionary domestic spending cuts are an important down payment on more substantive budget reform. He's just written the Tea Party cuts into that prescription.