Obama bud­get breaks the bank

The Washington Times Weekly - - Editorials -

House and Se­nate Demo­cratic leaders are looking to pass the Obama ad­min­is­tra­tion’s $3.6 tril­lion fed­eral bud­get for 2010, but the law­mak­ers un­der them should take into ac­count the shock­ing deficit im­pact and fight to reign in the pro­posal. We’re not hold­ing our breath that they will do so, de­spite the im­mense deficit pre­dic­tions an­nounced March 20 by the non-par­ti­san Con­gres­sional Bud­get Of­fice.

The CBO has pro­jected the ini­tia­tives pro­posed in Pres­i­dent Obama’s bud­get would in­crease the deficit to over $1.8 tril­lion this year. That is 13.1 per­cent of GDP and sig­nif­i­cantly more than the al­ready stag­ger­ing $1.75 tril­lion deficit pro­jected by the White House. The CBO also found that in 2013 the blue­print will re­sult in $672 bil­lion in deficit spending, $139 bil­lion more than the ad­min­is­tra­tion’s es­ti­mates.

The ram­i­fi­ca­tions of con­tin­u­ing Pres­i­dent Bush’s years of deficit spending will be­come in­creas­ingly rel­e­vant in com­ing years. The re­sult­ing debt will have to be paid ei­ther by higher taxes or mas­sive spending cuts, or both, likely at an in­op­por­tune time.

But just as Mr. Obama’s ethics rules were her­alded as the tough­est in his­tory but then found to have sig­nif­i­cant ex- emp­tions, and the con­gres­sional Democrats’ stim­u­lus pack­age was called a model of trans­parency de­spite not be­ing drafted in a truly trans­par­ent way, there are in­creas­ing signs that the Obama ad­min­is­tra­tion’s idea of fis­cal re­spon­si­bil­ity is not quite what it ad­ver­tises.

Mr. Obama claims $2 tril­lion in sav- war fund­ing will con­tinue at high lev­els de­spite a stated in­tent to re­duce troop lev­els in the near term, and that some Bush tax cuts will not ex­pire in 2010.

Such gim­micks, typ­i­cally re­lied on by ad­min­is­tra­tions, al­low Mr. Obama to claim deficit re­duc­tions — spending less than the pes­simistic “norm” — while ready im­ple­mented this year. Th­ese in­clude over­haul­ing health care, im­ple­ment­ing a cap-and-trade green­house gas emis­sions pro­gram, and shift­ing fed­eral stu­dent loans into the Ed­u­ca­tion Depart­ment’s di­rect-loan pro­gram.

Mr. Obama’s new spending pro­pos­als will also col­lide with huge So­cial Se­cu­rity obli­ga­tions from many Baby Boomers reach­ing re­tire­ment age. While he said his ad­min­is­tra­tion was looking line by line through the bud­get for ar­eas to cut spending, this is typ­i­cally promised by new ad­min­is­tra­tions and the ex­e­cu­tion is of­ten shaky at best.

Se­nate Fi­nance Com­mit­tee rank­ing Repub­li­can Charles Grass­ley of Iowa on March 23 en­dorsed an across-the-board freeze in spending to keep the gov­ern­ment and fed­eral spending from grow­ing. Alas, po­lit­i­cal re­al­ity means that such a pro­posal, much less any real at­tempt to chal­lenge the Obama bud­get, has al­most no real chance of gain­ing trac­tion.

De­spite Pres­i­dent Obama and Demo­cratic leaders’ talk of fis­cal con­ser­vatism, there is lit­tle sign that Congress and the White House are truly rev­ers­ing years of Bush ad­min­is­tra­tion spending in­creases built on the idea that deficits don’t mat­ter. We hope to be proven wrong but, as we said ear­lier, we’re not hold­ing our breath.

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