obama budget

Obama Budget: Let It Bleed

U.S. President Barack Obama released his proposed 2013 budget this week – a $3.8 trillion spending plan which his administration claims will trim $4 trillion from the deficit over the coming decade.

Bear in mind that Obama isn’t proposing any spending cuts, he is merely proposing to modestly scale back future spending growth – and to pay for this “deficit reduction” almost exclusively with tax hikes.

Obama also claims that his 2013 budget would – for the first time in four years – keep the federal deficit below $1 trillion ($901 billion to be precise), although once again this figure is achieved through tax hikes.

As for actually reducing the size and scope of government? Not so much …

“there is pretty broad agreement that the time for austerity is not today,” Obama’s budget director Jack Lew said on Meet the Press. “We need to be on a path where, over the next several years, we need to bring our deficit under control.”

Um … actually we should have been on that path several years ago.

Don’t believe us? Take a look at this telling graph published by the Washington Post:

(Click to enlarge)

Yeah … ouch. And bear in mind that the current debt is $15.35 trillion – about a trillion dollars more than the amount published in the Post‘s graph.

Making matters worse, Obama’s budget proposes absolutely nothing by way of entitlement reform – guaranteeing that the unsustainable expansion of these programs (which is fueling most of our deficit spending) will continue wreaking havoc on future budgets.

Since taking office, Obama has presided over deficits totaling $1.4 trillion (2009), $1.3 trillion (2010), $1.3 trillion (2011) and a projected $1.1 trillion (2012). That’s $5.1 trillion in new deficit spending in just four years.

The only thing positive we can say about Obama’s budget? at least he bothered to produce one … which is more than some in Washington, D.C. can say.

Obama’s Budget Can Be Seen As “Borderline Delusional”

Written By : William Teach

Those aren’t my words, but those of Politico writer David Rogers

He ran on hope, governed through despair and now, with his election-year budget, President Barack Obama is trying to light the old spark, fleshing out a political narrative for America that can inspire with its romance but also seem borderline delusional to his critics given the debt accumulated by Washington.

For those on the Right, I’d suggest we are think more in terms of “irresponsible”, “foolish”, and “a campaign statement, not a budget”, rather than “borderline delusional.” I’d also wonder how his budget can be seem as “romantic”

An $8 billion community college job-training initiative, which Obama will address at a Virginia campus Monday morning, is part of the picture, together with major investments in roads, energy and manufacturing — all part of the president’s promise to construct an economy “built to last.”

Blue collar jobs re-paving roads, painting bridges, and digging turtle tunnels (gee, if only we had spent almost a trillion dollars to do this early in the recession) is “romantic”? I suppose “erecting” windmills and “spreading” solar panels can be “romantic”, except to the wildlife killed and land that is ruined. And standing on an assembly line watching machines build Chevy Firestarters, er, Volts, which few will buy surely gives the workers time to think “romantic” thoughts.

But even as Obama is speaking, the budget rollout in Washington will show a fourth year of $1 trillion-plus deficits and a 2013 shortfall of $901 billion — nearly twice the share of GDP that Obama predicted four years ago.

All Obama promises have expiration dates. This one expired on January 21, 2009.

“The time for austerity is not today,” (White House Chief of Staff Jack) Lew told NBC News “Meet the Press.” “If we were to put in austerity measures right now, it would take the economy in the wrong way.”

Really? Spending obscene amounts of taxpayer money borrowed from China sure didn’t help. The recession officially ended in June, 2009, before the Stimulus truly kicked in. The economic conditions remained terrible, and, in some areas, got worse. interestingly, now that the Stimulus has mostly ended, and Team Obama isn’t spreading tons of cash to campaign donors, the economy is slowly getting better. Dumping more money into building roads that people can’t afford to drive and training people for jobs that do not exist doesn’t help.

Don’t worry, though, because, even though Obama is pairing back funding for the EPA, NASA, and freezing biomedical research, he’s pumped to increase funding for the Food Police

…And all the real growth in the Food and Drug Administration’s $4.48 billion budget would be dependent on new industry user fees, including a proposed $220 million food establishment charge that could prove controversial.

But, no worries, because Senate Majority Leader Harry Reid, Democrat, has already stated that there is no reason to pass a budget, they already deemed one during the budget debates. Will the Senate even take up Obama’s budget, which also plays games with raising taxes on “the rich”? Doubtful. And, like so many Democrat budget offerings, this budget offers savings 5-10 years down the road for tax increases now. Said savings never appear.

Crossed at Pirate’s Cove. Follow me on Twitter @WilliamTeach.

0

Obama’s budget: A play for the center?

STORY HIGHLIGHTS

• Obama’s new $3.7 trillion budget calls for a series of targeted spending cuts and tax increases
• Some liberals say the cuts go too far; conservatives say they don’t go far enough
• Obama’s proposal may position him in the political center — ideal for 2012
• But he risks alienating his base; Republicans may scare away voters afraid of deep cuts

Washington (CNN) — the plan wasn’t even officially out before the criticism started rolling in.

President Obama’s proposed $3.7 trillion budget was slammed by the left and the right Monday. Outraged liberals called it a callous assault on the poor; dismissive conservatives labeled it a debt-riddled assault on future generations.

Which raises the question: is Obama’s budget blueprint exactly what the president needs to capture the broad political center in the runup to 2012?

The president’s fiscal year 2012 budget would cut deficits by $1.1 trillion over the next decade, according to White House estimates. Two-thirds of the deficit cuts would come from spending reductions; a third would come from tax hikes.

The plan includes a five-year freeze on nonsecurity discretionary spending. Some programs, such as low-income heating assistance, would face the budget knife. New limits would be placed on deductions for home mortgage interest and charitable contributions.

Who’s punting on budget cuts? Budget not from ‘Operational reality’ Obama vows earmark vetoes Armey: ‘Just let Medicare be voluntary’

But the most expensive and politically popular programs — including Medicare and Social Security — would remain largely untouched, against the recommendations of Obama’s own deficit reduction commission.

While it trims annual deficits, the president’s budget would still add $7.2 trillion to the nation’s publicly held debt by 2021.

"Every cut to necessary programs … needs to be judged in the context of the unnecessary tax cuts for Wall Street millionaires that passed at the end of last year," the Progressive Change Campaign Committee said in a statement, referring to Obama’s deal extending the Bush-era tax cuts for two more years.

"we must make bigger investments in America’s future starting now — and ask the Wall Street millionaires who got us into this mess to do more to help pay for it."

The committee counts hundreds of 2008 Obama campaign staffers among its members.

Obama "says that he wants to work with us to begin reining in spending, but … (his budget goes) in exactly the opposite direction," said New Jersey Rep. Scott Garrett, a top House Budget Committee Republican. "Today is Valentine’s Day, but I don’t know if this is the card that America was hoping to get from the administration. It’s a card that says you owe more to the federal government."

The president’s proposed cuts are not nearly deep enough, Sen. Jeff Sessions, R-Alabama, told CNN’s "American Morning." his planned "reduction is insignificant and does not get us off on the right course. we are facing a fiscal crisis."

Obama responded by characterizing the plan as a successful balance of sorely needed new investments and long-term spending reductions.

"while it’s absolutely essential to live within our means … we can’t sacrifice our future in the process," he told reporters while touting some targeted new education spending. "we have a responsibility to invest in those areas that will have the biggest impact in our future" while "demanding accountability."

The president called his plan a "down payment" on greater long-term fiscal responsibility.

Top congressional Democrats rallied to Obama’s side. Rep. Chris Van Hollen, D-Maryland, called the president’s plan a "tough love budget" that "strikes the right balance."

Van Hollen said it stands in "stark contrast" to the "blind budget slashing" of House Republicans, who have proposed cutting more than $60 billion from spending for the remainder of the current fiscal year.

Are there echoes in Obama’s maneuvering of former President bill Clinton’s shift to the political center after Republicans captured Congress in 1994? Clinton famously declared an end to "the era of big government" while launching a high-profile defense of popular spending on Medicare, Medicaid, education and the environment, among other things.

Clinton’s so-called triangulation — taking credit for the most popular aspects of each party’s agenda — helped to position him between Democratic liberals and Republican conservatives heading into the 1996 campaign.

Safely ensconced in the political center and bolstered by a strengthening economy, he rolled to an easy re-election.

One difference between Clinton in 1995 and Obama in 2011 is that "Clinton sacrificed his agenda-setting powers to engage in triangulation — looking responsive more than proactive," said Wendy Schiller, a Brown University political science professor.

Obama "needed to present a tough budget, and depending on how it’s managed, the larger the Democratic outcry over it, the more credible he will seem to the fiscally concerned independent voters that are key to his re-election in 2012," she said. the risk for Obama, Schiller said, is angering his party’s base voters "so much that they stay home in 2012."

Schiller also warned of a backlash against Republicans calling for deeper cuts. there may be a large number of voters "who did not realize how much they needed federal spending until it was taken away from their communities," she said. "Not only will that help Obama in 2012, it may do damage to the longer-term Republican goal of shrinking the size and scope of the federal government."

As for the unwillingness of either party to address Social Security and Medicare, Schiller said the day could come "when they will squeeze out almost all other domestic federal spending. Obama and the Republicans just hope to delay that day of reckoning as long as possible."

"the glaring omission of any significant entitlement reforms … does not help to advance the conversation," added Maya MacGuineas, head of the Committee for a Responsible Budget.

"Republicans have set up a major confrontation on immediate domestic spending cuts, which are irrelevant to the deficit and debt problem," said Thomas Mann, a senior fellow at the Brookings Institution. "the president has engaged them at that level now. Grappling with (entitlement spending in) the medium and long term will have to await an altered political environment."

That may be fine with most voters.

According to a January 21-23 CNN/Opinion Research Corp. poll, more than seven in 10 Americans say they back an agenda to reduce the size of government. A majority believe it’s very important for the president and Congress to deal with the deficit.

But roughly 80 percent of Americans would rather prevent significant cuts to Medicare and Social Security than reduce the deficit. Overwhelming majorities also shy away from cuts in education, veterans’ benefits, infrastructure spending or aid to the unemployed.

So cut, but not too much. And steer clear of the most popular programs.

On paper, at least, the broader electorate appears to be embracing positions fairly closely in line with an administration now gearing up for a tough re-election fight.

CNN’s Jeanne Sahadi and Mark Preston contributed to this report.

we recommend from around the web

And the Actual Figures Are?

We’ve all heard the Obama budget figure of $3.6 trillion dollars and felt the sticker shock that goes along with that. the Republicans, of course, have jumped all over the figure to say, See how the Dems are going to spend us into oblivion? the Dems have used the figure to say, See how committed we are to deliver on our campaign promises? however, the real impact of the actual 2010 budget is different than the media and both sides in Washington would like you to believe.

What has been lost in the furor is that this is a multi-year proposal describing budget policy and items to be initiated this year, not a blueprint for $3.6 trillion to be spent this year. Many parts of the budget proposal are not set to take place this year at all. the tax increases that have been proposed will not take place until 2011. the $250 billion earmarked for banks is a fund established to be used over time, not an immediate handout. So is the $634 billion to be placed in a fund for health care reform to be paid for over the next 10 years. the $3.6 trillion figure also includes monies promised in previous budgets under previous administrations, including $695 billion for social security. Committed spending on Medicaid and Medicare have a combined price tag of
$743 billion dollars. that makes the total spent in 2010 on guaranteed entitlement spending $1.438 trillion or 41% of the total budget. $164 billion for interest payments on federal debt.

According to the Wall Street Journal, the actual government spending budget proposed for 2010 is just shy of $1.133 trillion, only about a third of what has been touted in the media. Almost half of that, $533.7 billion, is earmarked for the military and is by far the single biggest expenditure. that is only the base budget and does not include the additional $130 billion for the expected war costs for 2010 which is not included in the $1.133 trillion figure. An additional $42.7 billion dollars is earmarked for the Homeland Security department alone. Health and Human Services, the recipient of the brunt of Republicans ire as the funding source for welfare-type programs, is earmarked to receive $78.7 billion dollars. that is less than 7% of the total US government spending budget and less than 15% of the military earmark. Two other priorities, Education and Energy, are earmarked to receive $46.7 and $26.3 billion respectively.

Much has been made by the Republicans, as well, of the projected $175 trillion dollar deficit. Not given quite as much attention by them is the fact that the current administration inherited $1 trillion of that from its predecessor. Considering that $787 billion of that $1.75 trillion is due to the stimulus package, the Obama budget actually reduces the base budget deficit slightly. the $1 trillion deficit is a doubling of the previous year’s deficit, which shows that larger deficit spending was already a trend before Obama stepped foot in the White House.

All of these figures are enough to send your head spinning, but they point out several key facts. One is we need long term reform in our economic policy, with a focus on how to spend money and adopt policies that promotes our future fiscal and national health and make wise investments where necessary. Two is that cutting the government budget here and there according to personal ideology will do nothing if we do not address issues such as Social Security and Medicare/Medicaid. As our population ages, with less people paying into Social Security to support it, these programs will only plunge us deeper in the hole. Three, the federal government has, in the past, spent and promised money without regard to the future consequences and the effects of this lack of foresight are starting to really show. instead of pointing fingers at the Dems for going on a spending spree, the Republicans should accept their responsibility for the current state of our fiscal situation and work together with the Dems to do what’s necessary to get this economy and federal spending on the right course. instead of Congress pointing the finger at a man who just came into office because he can’t set things to right overnight, they should point the fingers at themselves and accept the job of working together to protect this nation and promote its security by making sure it is fiscally healthy.

No one party or administration will be able to fix this right away; it took many years of mismanagement to get to this point. It will take years of concerted and committed effort to get out of this mess and require the development of a long range plan that commands the cooperation of all in Washington, both now and into the future. We can no longer afford to wait for crisis to push us into taking a good hard look at where we actually stand and get angry enough to do something about it.

The time of reckoning we have tried to ignore is finally here, larger than life and twice as ugly. We can get out of this: with careful planning, working together bit by bit, with our eye on the overall goal, and a commitment to the end result we can guide this nation back to solvency and fiscal responsibility.