With Democrats crying for a jobs bill they can bring to voters before the November elections, it looks like President Obama may be about to...

The president has been attacked from the left and the right for his proposal to freeze non-security discretionary spending. The left feels betrayed that their leader would apply a scalpel (the administration’s term) to favored programs. The right whines that the freeze would amount to a drop in the overflowing bucket of red ink, and the quarter trillion in savings pale in comparison to the $10 trillion in deficits expected over the next decade.

It has been an interesting day for us fiscal policy wonks. Over my morning muffin, I digested President Obama’s plan to freeze some domestic spending for the next three years as well as his package of aid to the middle-class. Then, I spent a few hours chewing over the CBO’s latest budget projections. Finally, I watched the Senate trash the bipartisan budget commission.

The Earned Income Tax Credit (EITC) is the nation’s largest cash assistance program for low-income workers. In 2007, 24.5 million families received $48.5 billion. But while childless families accounted for nearly a quarter of tax units claiming the credit, they got less than three percent of the tax benefits.

Can we fix our budget problem by raising income taxes alone? With deficits as far as the eye can see, Rosanne Altshuler, Katie Lim, and I presented a paper at last week’s TPC/USC budget conference that came up with a fairly straight-forward answer: No.

George Bush could have proposed the Senate health bill. If he had, those Republicans who now loathe the measure would be at the barricades defending it. And those Democrats who backed Obama-care for the past year would have been hoisting their pitchforks and demanding its demise.

I worry whether the recent hearings with the CEOs of the major Wall Street banks, with their focus on blame and personality, will draw attention away from the more important issue: how we can best insure that money flows from savers to those investors who can produce the highest returns for society. Certainly bank reform is required. But we’ve got a huge problem with bad incentives, and they apply not just to banks, but to other corporations and even to households. These incentives make it possible for corporate managers to make big bucks while running losses, allow households to borrow beyond their means, and permit auto companies to pass highly leveraged auto loans to the government.

In a rare bit of bipartisanship, Democrats and Republicans on the House Ways & Means Committee have introduced legislation to allow people who contribute to Haiti relief in 2010 to take a tax deduction against last year’s taxes. Well-intentioned as it may be, the measure is wrong-headed and likely to create more problems than it solves.

Should the Joint Committee on Taxation cede its key role as scorekeeper for tax bills to the Congressional Budget Office? A former boss of JCT suggests that maybe it should, at least for a big chunk of the tax code. To outsiders, these arbiters of the budget implications of tax and spending bills are something of a mystery. CBO tracks the costs of spending bills and, as we've seen in the debate over health reform, its influence can be enormous. At the same time, JCT performs a parallel task by doing revenue estimates of tax bills (JCT also has a staff of lawyers who provide lawmakers with technical tax-writing advice) . But behind the scenes, the two offices have been rivals for many years.

Here in Washington you can feel it in the air: We are about to have one of our periodic donnybrooks over deficit reduction. And, Washington being Washington, the antagonists are already choosing sides. The White House drops broad hints that its upcoming budget will include some first steps towards much-needed budget-cutting. Republicans are trying to say, at once, don’t mess with Medicare, our new cause célèbre; don’t dare raise taxes; and—by the way—you should be ashamed of the debt you are leaving our children. Interesting bit of triangulation.