The White House budget has leaked to Jackie Calmes of the New York Times and various other outlets. Here are the details, as far as I can make out:

1. It will incorporate the deal that Obama offered John Boehner during the fiscal cliff negotiations. $600 billion in new revenue, mostly from capping deductions for rich people at 28%. $400 billion out of health care spending, mostly from provider payment cuts.

2. The big news is that administration continues embracing "chained CPI", which would lower the inflation rate that is used to calculate cost-of-living adjustments for Social Security benefits. This has been very unpopular with the party's left wing

3. The president is continuing to emphasize pre-K education, which looks to be the signature progressive project of his second term. He wants more money for states to fund pre-K, paid for by higher taxes on tobacco.

4. The boldest move is an attempt to limit the amount that can be accumulated in retirement accounts to about $3 million (though this amount will grow, slowly, over time). This would raise about $9 billion over the next 10 years.

5. The biggest surprise, "didn't see that coming" item: a proposal to end a "loophole" whereby people can (theoretically) collect unemployment and disability at the same time. No dollar value on this proposal yet.

6. Total claimed deficit reduction is about $1.8 trillion over 10 years, which the administration says will add to $2.5 trillion of alread-completed deficit reduction to stabilize the debt over the next decade.

To some extent, we're guessing at what this really looks like; these are verbal descriptions of the plan to reporters, not hard figures. So the analysis below is preliminary.

First Thoughts:

The health care spending cuts are unlikely to be passed, or to work. Obamacare already included large Medicare cuts. Most of them haven't gone into effect. And as the cuts get closer, the government is busily undoing them. After the administration spent years complaining about "overpayments" to Medicare Advantage plans, regulators just announced that they would be boosting the reimbursement rates. Despite the president's promises that they were just going to cut payments, not benefits, it turns out that payment cuts mean benefit cuts. And politicians are afraid of benefit cuts. It seems silly to count on another $400 billion worth of provider payment cuts, when we don't yet know if we can make the ones we already have stick.

Chained CPI would work, and it is going to happen eventually Progressives don't like it. But non-progressives don't like huge tax hikes. Chained CPI is exactly the kind of change that the government actually can make stick: a very, very slow decline in benefits that gives people ample time to plan around it. By one estimate, chained CPI would reduce benefits by about 3% a couple decades from now. The corollary, of course, is that this does not raise much money in the short term: about $130 billion over ten years. But since the long-term is where the biggest problem is, chained CPI remains a good idea.

Pre-K may be a good idea, but tobacco taxes are a bad way to fund it. Smoking continues to decline, and it will probably fall further if we slap more taxes on its sale. That may be great for the health of the people who never start smoking, but it means that we'll end up with a budget gap between an expensive new program, and the tax revenue we're raising to pay for it. Long-term spending committments require stable long-term revenues, not temporary fixes that look good for the purposes of 10-year budget forecasts, but dump a huge budget problem in the laps of future legislators.

The president continues to hammer symbolic tax hikes for the wealthy that raise little revenue. Add "overstuffed retirement accounts" to the list of the president's favorite loopholes, along with accelerated depreciation for corporate jets, expensing of oil-and-gas exploration, and capital gains treatment for capital gains. What do these things have in common? They are more complicated than the president's sound bytes suggest, and raise very little money. But I doubt this one will stay on the list very long. Americans don't like special treatment for the rich--but they don't necessarily like special treatment against the rich, especially when the wealthy are doing something they approve of. That's why the estate tax remains unpopular despite the best messaging efforts of the Democrats: people want to leave a little something to the kids, and they think rich people should be able to do so too. Likewise saving. Romney's massive 401(k) never caught on as a campaign issue because people believe in saving for retirement. Corporate jets seem flagrantly unnecessary. 401(k)s don't.

There's less to the disability proposal than meets the eye. It takes a long time to get on disability for most people. The number of folks who succeed in collecting unemployment and disability at the same time are likely to be low. What this may do is reduce the retroactive awards that folks get when they finally manage to get their disability claim approved. This will be a problem not so much for the beneficiaries as for their lawyers, who are typically paid based on how much back pay they secure you.

The deficit reduction is also somewhat underwhelming. The administration has a fondness for double-counting things that were already going to happen (or cutting things that weren't) as "deficit reduction". And stabilizing the debt over the next 10 years is not a heartening goal, because unless something further is done, the debt will start growing again just outside the 10-year window. Without a serious committment to making the numbers add up, in the not-so-distant future, we'll be spending as much on interest on the national debt as we are on national defense.

Overall takeway

With this budget, the president is retreating to territory that has proven safe for him in the past: position himself as a middle of the road compromiser faced with the intransigence of Republicans who only care about tax breaks for the wealthy. His budget places him as the compromise position between the Democratic budget released by Senator Patty Murray, and the Republican proposals.

Democrats are worried that seizing the middle weakens his bargaining position, but it likely reflects his frustrations at a lackluster start for his second term. He hasn't convinced the public that the sequester is a disaster, much less succeeded in blaming the Republicans. The public doesn't even seem to know that the payroll tax cut existed, much less that it expired. Gun control is stalled in congress and unlikely to go somewhere, given that its popularity is declining at the polls. With this budget, the administration is moving back into a fight they think they can win: offer a compromise, and win the messaging war.

Or rather, win the messaging battle. This is probably a fight that the president can win, unless Republicans come up with a strong response that positions them as something other than simply a permanent veto. It's unusual for a budget to leak so far ahead of its actual release. The administration is clearly trying to seize the initiative, getting a few days of talk about their budget while the Republicans, who don't have the actual budget yet, are unable to mount a real attack on it.

But it's not clear to what end he is fighting. Winning the budget messaging war is not going to get us a sound budget, and probably not going to open up much movement on the rest of his policy agenda. The president is defending his flanks while the advance grinds to a halt.

What to look for when the budget is released

Republicans complain that Democratic Senator Patty Murray's budget has double-counted savings from the sequester: first she counts the sequester as deficit reduction that has already happened; then she repeals the sequester and replaces it with a different set of revenue raisers . . . which get counted as additional deficit reduction. Watch for this sort of move in the president's budget. With money tight, baseline games are the natural alternative to enraging constituencies by actually cutting spending or raising taxes.