Everything you wanted to know about the Obama budget and more from the Center for American Progress policy teams:

1. Dan Weiss on the climate and energy elements.
2. Cindy Brown and Melissa Lazarín on education.
3. Larry Korb on defense.
4. Michael Ettlinger on the big picture.

It’s not Obama’s style to actually say this, but were this budget to be enacted it would be by far the most significant progressive step in over forty years.

Part of Barack Obama’s budget is his plan to go after the special tax break enjoyed by hedge fund and private equity fund managers. This is an obvious idea, since there’s no good reason for this special treatment. But it didn’t manage to get done last year because Republicans love rich people and this particular class of rich people has given a lot of money to a few key Democrats. Indeed, Tom Edsall’s article on the subject includes these charts showing the Democrats are the main beneficiaries of the fund managers’ largess:

and

One noteworthy thing about this is that these guys weren’t just following the political winds and backing the majority party. It’s typical for Democrats to do well with certain industries when they’re in power, but not-so-well when they’re out of power. But these guys were Democrat-friendly even through the lean years. Thus:

When the hedge and private-equity fund industries faced a similar challenge to their capital gains tax break in 2007, most of them entered the ring expecting defeat, only to emerge victorious. In addition to campaign contributions, the individual companies and their trade associations sharply escalated their lobbying activities, pulling out the stops to beat back the tax reformers. [...] One of the factors working to the funds’ advantage is that the Senate Finance Committee works in mysterious ways, unexpected decisions abruptly emerging from private deal-making that can radically transform the impact of tax legislation. Anyone assuming that the special treatment of hedge and private-equity fund managers will be scrapped by a populist Democratic majority should hold the champagne until Obama signs the bill into law.

Of course the wild car here to some extent is the Republicans. I thought the quiet death of hedge fund loophole repeal during the last congress would have been a great opportunity for the GOP to steal a bit of the Democrats’ populist mojo while at the same time punishing a class of people who mostly finance the opposition. Certainly that political tactic would have seemed more likely to broaden the parties appeal than a lot of “Joe the Plumber” antics. And it would have been better for democracy, too. You need real competition between the parties.

Sari Nusseibeh, the Palestinian philosopher, academic, and moderate leader has a joint initiative with former Shin Bet chief Ami Ayalon called “The People’s Voice.” It’s basically a fleshed-out version of the Arab Peace Initiative from 2002 that gets more specific on the refugee front. It calls for:

• A return to the 1967 borders.
• 1:1 land swaps that deviate from the ’67 borders if those can be agreed to.
• A connection between the West Bank and Gaza.
• Removal of settlers from the new Palestine.
• Establishment of Palestine as a demilitarized state.
• Return of Palestinian refugees only to Palestine, with financial compensation and international community support for refugees who wish to permanently settle in their current country of residence.
• Shared control of Jerusalem.

The Arab Initiative is very fuzzy on the refugees, but as an Arab League Initiative carries with it the significant sweetener that all the Arab League states are promising full normalization of relations with Israel. But the point is that the basic outline of this framework is not especially novel—this is basically what everyone agrees a mutually acceptable settlement would more-or-less have to look like. What’s provocative is this idea relayed by Jonathan Zasloff:

Nusseibeh noted that neither side’s leadership is prepared to make the compromises for peace at this stage, either because of weakness, ideological rigidity, extremist vetoes, or a combination of all of these. Thus, his proposal is to allow the Israeli and Palestinian publics to take the matter into their own hands. How could this be done?

George Mitchell, Nusseibeh suggested, should take an American peace plan (and he made it clear that it should be the People’s Voice framework) to both Netanyahu and Abbas.

He should then publicly challenge Netanyahu to place this plan on the Israeli ballot as a referendum. Netanyahu would not have to endorse the plan, but rather allow the voters to decide whether they would accept it as long as the other side does.

On the Palestinian side, he should publicly challenge Abbas to call for new elections (due in the PA thus year in any event) and run on that platform for his presidential campaign — accepting the plan as long as the Israeli electorate does.

Nusseibeh believes — and I agree with him — that such a public offer would be difficult for either side to refuse. It would not require Netanyahu to endorse the plan, but would undermine him politically if he refuses to allow the voters to decide. It would give Abbas a concrete platform and plan to rid the Palestinians of the occupation.

If the Obama Administration starts another round of negotiations, Nusseibeh argued, it will be drawn into an endless labyrinth. He’s right.

Both sides will have very strong incentives to vote yes — the side that votes no will very clearly be at fault for refusing an end to the conflict.

What Nusseibeh didn’t say is that the United States must send a strong signal about how important a yes vote is, and how difficult it will be to maintain strong political support for Israel in the US if it is seen as the obstacle. The Arab League must do the same for the Palestinians. The EU must do the same for both sides.

In the real world, it’s a bit hard for me to imagine an American president rolling the dice like this. Among other things, what do you do if one side votes yes and the other side votes no? Agree that this proves they’re the unreasonable ones and the other side now has license to deal with them through brute force? On the other hand, there are compelling elements to the logic. But I dunno . . . to really advocate putting all the chips on the table . . . it just sort of seems like too much. I dunno, I’ve got to think more.