The budget act

Feb 14th 2011, 16:52 by R.A. | WASHINGTON

THIS morning, hundreds of Washington journalists are fanning out across the city to attend briefings on President Obama's 2012 budget proposal. 

Many will take detailed notes and ask remarkably specific questions about the tiniest aspects of the plan, which runs to over 200 pages. I suspect they'll have a tougher time than normal maintaining their enthusiasm for the process, however. Rarely has a budget felt more aspirational, and less relevant.

The basic details are interesting to note. The president has budgeted a deficit for fiscal 2012 of $1.1 trillion, or about 7% of GDP. Deficits fall to 3.1% of GDP by the end of the decade, according to the plan, while debt as a share of GDP will rise to 77% over that time frame. Revenues are forecast to increase substantially from fiscal 2011, while outlays decline. Much of the improvement in the budget picture comes from a strengthening economy, despite the fact that the administration's economic forecasts look, to me, to be a little too pessimistic. I would be surprised if real GDP increased just 2.7%, year-on-year, in 2011. Unemployment forecasts also look too dour. On the bright side (for the administration), a pessimistic forecast will increase the scope for good news surprises down the road.

But while the president proposes budgets, Congress passes budget resolutions and appropriations, and the Republican party controls the House of Representative. That means that many of the specific line items in the budget aren't worth the paper they're printed on. Taxation of carried interest? Forget about it. An end to fossil fuel subsidies? Just like last year, it's dead on arrival. Perhaps saddest of all is the president's proposal to reauthorise the nation's transportation funding law, to be paid for with "bipartisan financing for Transportation Trust Fund". The bipartisan financing plan would raise $140 billion through 2016, if it weren't less likely to be found than a yeti riding a unicorn.

The budget is somewhat valuable as a guide to the spending cuts the president may be willing to tolerate. But here, as with the Republican proposals that have trickled out over the past week, early negotiations between the parties are an exercise in furiously ignoring the nature of the country's real fiscal problems. While the parties bicker over funding levels for non-defence, discretionary spending items, the bulk of the budget—and the part that's reponsible for most of the long-term spending growth—is treated like an afterthought.

The situation is thoroughly depressing. Washington seems to have finally gotten itself in the mood to cut deficits. Unfortunately, the cuts that result are likely to be unhelpful, or possibly counterproductive, as leaders slash useful programmes to the bone because they're too scared to talk about reining in health care spending, or cutting wasteful defence programmes, or raising taxes.

It's hard to imagine something worse than a bruising political battle that threatens to shut down the government or throw it into default. But a bruising political battle that threatens to shut down the government or throw it into default without doing a thing about the long-run budget problem would probably do it.