I was planning on writing an omnibus mega-post on the Obama budget, but instead I think I’ll parcel it out over several posts. There’s a lot of ground to cover and I don’t want to let the perfect be the enemy of the good.
Through the transition and stimulus fight, the one concern I had about President Obama was that he seemed reluctant to use his mandate for change to, well, enact change. After doing some research about his proposed budget, no more. Obama is using his political capital to take on contentious issues that have gone unaddressed for far too long.
The biggest problem with an strong central government is regulatory capture — the idea that policies will ultimately be determined by those with established power and a vested interest in specific policy outcomes. For example, the defense policy in the USA is disproportionately set by the defense lobby and the Congressmen who use defense projects as pork. If you know where to look, you can find out-of-the-way pockets of the economy where lobbyists have carved out niche industries that consist of collecting taxpayer dollars. The Obama budget goes right after two lobbies in this situation, agribusiness and student loan providers. The always smart and usually awesome Matt Yglesias explains why Obama’s student loan reforms are a good idea. Obama is also proposing that we cap farm subsidies at $250,000.
It’s not just that these ideas are good policy. It’s that nobody is clamoring for reform in these areas. Without any big interest groups having his back, Obama is going toe to toe with groups that will fight tooth and nail for their continued free ride. This is the clearest sign yet that Obama is serious about change.