The federal budget

The federal budget

Tax and build

  by R.A. | WASHINGTON

WASHINGTON wonks are focused today on the release of the Obama administration's budget proposals for the 2013 fiscal year. We will have in depth coverage following the White House budget briefing. For now, a few things stand out. First, the president's proposals generate a federal deficit of $900 billion in fiscal 2013. If it is verified, that would be America's first deficit of less than $1 trillion since the 2008 fiscal year. It would also represent a reduction in the deficit, as a share of GDP, from 8.5% to 5.5%. Overall, the budget calls for a reduction in the deficit to 2.8% of GDP by 2019, where it is projected to remain through the end of the ten-year budget window. That's close to primary balance—the government's books would nearly balance net of interest costs. The 2013 budget's proposals result in less deficit reduction than the plan produced (but not agreed upon) by last fall's bipartisan budget "Supercommittee".

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Barack Obama's budget

The phony war

  by G.I. | WASHINGTON

TAKEN at face value, Barack Obama’s latest budget is a bold combination of fiscal rectitude, populist tax increases and industrial policy-lite: tax breaks for manufacturers, more money for community colleges, and a dollop of money for infrastructure.
Do not take it at face value. A president’s budget has always been hostage to whatever Congress is in a mood to grant. In the last three years, however, the gap between aspiration and reality has become so large as to be almost surreal.

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Too close for comfort

Afghanistan

In the war in Afghanistan it is not always obvious which side Pakistan is on

PAKISTAN REACTS WITH understandable resentment to criticism of its role in Afghanistan. During the long war there it has provided sanctuary to millions of refugees. It has lost far more troops fighting terrorists than has ISAF. After September 11th 2001 it swiftly repudiated the Taliban and threw in its lot with America and its “war on terror”. In 2004 it was named a “major non-NATO ally” by America. Its territory has provided ISAF with vital supply routes and bases for attacks on suspected terrorists by unmanned drone aircraft. Many of its civilians have also died in those and other attacks. It has provided intelligence that has led to the capture of a succession of al-Qaeda leaders. And the “American” war in Afghanistan has fuelled the rise of violent Islamist extremists in Pakistan itself, the “Pakistani Taliban”, bent on overthrowing the government.

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