DAVID GREENE, HOST:
President Obama is sending a $4 trillion budget proposal to Congress today. He's calling for tens of billions of dollars in new government spending. We're going to spend some time talking about this budget blueprint - what's in it, what has the best chance of getting support in Congress and the political backdrop for all of this. We begin with someone very involved with crafting this budget. It's Shaun Donovan, director of the White House Office of Management and Budget. He's on the line. Mr. Donovan, good morning.
SHAUN DONOVAN: Good morning. Great to be with you.
GREENE: Great to be with you as well. Did you get to watch the game or too busy putting the finishing touches on this?
DONOVAN: I have to admit that I was sneaking a few peaks here and there while getting ready for today.
GREENE: Well, that's good. Well, let's talk about today. I mean, this budget proposal that's coming from the president, there are a lot of reasons to think it might not go anywhere. I mean, this is a lame-duck president. This is a Republican-controlled Congress. Tell me something that will convince us that this is going to be different.
DONOVAN: Well, first of all, let's just start with the fact that a president's budget is the president's vision for what this country ought to do. And as the president made clear in his State of the Union Address, the defining challenge - economic challenge that we face is our growing wage gap. And middle-class economics is the right way to attack that. And so, as he said, he's not going to trim his sails in terms of that vision.
But we should also remember - you now, dead on arrival's kind of an easy talking point. It was the same talking point they used last year. But in fact, what you see is that many of the proposals in the president's budget from last year have made real progress, whether it's a universal pre-K - we see now significant increases in funding in the federal budget for universal pre-K - and we've seen mayors and governors around the country take up that charge and start moving that issue forward. Minimum wage is another good example.
And so, you know, it's easy to say dead on arrival, but in fact, when you look at the facts and you look at the fact that there's a lot of Republican support for many ideas that are in this budget, I think what we'll see is, you know, we won't get everything we want. That's what a negotiation is. But I think we will see real progress in a number of areas that are in the budget.
GREENE: Give me just one example of a place where you really see hope for common ground with Republicans.
DONOVAN: Well, one real focus that we have in this budget is around child care. And we know that for too many - particularly women in married couples - they're struggling to find ways to get to work. And so whether it's our proposal to cut taxes for two-earner families, to increase investment in paid leave and child care, those are ideas where not only do we know there's Republican support, but in fact there are pieces of legislation on Capitol Hill that Republicans have supported.
GREENE: Just to be clear, I mean, an idea like that, you see common ground, you might work for it. You're saying, though, that the president would be at some point in the negotiations willing to give up on some of the things like tax increases on the wealthy that have not made Republicans very happy.
DONOVAN: Well, taxes and another area where - look at Dave Camp's plan. There was a proposal for a financial fee on big banks that's quite similar to what the president proposed. There was a proposal to use the proceeds from international tax reform to invest in infrastructure funding and the Highway Trust Fund.
GREENE: That's just one plan. I mean, there are many Republicans who have said that, I mean, the idea of increasing taxes on the wealthy is basically dead on arrival.
DONOVAN: Well, again, look - many of these ideas are not just Democratic ideas. And it's easy to say dead on arrival. It's a talking point. But the fact is this is beginning a real conversation where we think there are lots of areas that we can make progress. And we're going to take that conversation seriously.
GREENE: Let me ask you about one specific proposal, Shaun Donovan - making two-year community college free. Some over - as this idea has been debated in previous years - have criticized this saying that giving free education to people who can afford it actually takes money away from the neediest people who want an education. How do you respond to that?
DONOVAN: Two things I would say - and again, this is an example where there is Democratic and Republican support at the local and state level and at the federal level as well. But specifically what the president's plan does is it's what you call a first-dollar-in plan, which is structured in a way that can be particularly helpful to lower-income families that want to afford - that need to afford college by making sure that it's not just tuition that's covered, but that can also help to cover the other expenses - the living expenses and other - books - all the things that often keep the lowest-income families out of community college.
A second thing that's critical here is that we're not just increasing this support for community colleges directly. We have significant increased support for Pell Grants, which are available to the lowest-income families and targeted that way, as well as important changes in the way we help middle-class families save for college through the tax system. So you really have to look at this in a range of proposals that really are targeted at middle-class families broadly, but increase the level of support the lower the income.
GREENE: Let me finish with just one question. We have about a minute left. I mean, there's a larger tension here. The president talks about his approach as middle-class economics, but there's a study from the Tax Policy Center that found that the president's plan would make the rich pay more and the poor would see more benefits. But for the middle 60 percent of earners, it would basically be a wash, these tax proposals in this budget. Does that give you some pause?
DONOVAN: Well, you know, the Treasury Department has done the definitive study on this. And if you really look at this analysis that you're talking about, there are some fundamental flaws. For example, they actually assume that all of this income from capital gains isn't really income. It sort of defies logic to say that a family that had $500,000 of capital gains - that isn't income. So if you look at this in the correct way, 99 percent of the revenue we raise from this proposal comes from the top 1 percent of American families - 80 percent of it comes from the top .1 percent, so it isn't accurate to say that this is something that's targeted at middle-class families.
GREENE: All right, Shaun Donovan is director of the White House Office of Management and Budget, speaking to us about the budget proposal from the president that comes out today. Mr. Donovan, thanks for your time, appreciate it.
DONOVAN: Thank you. Transcript provided by NPR, Copyright NPR.
