ANALYZING OBAMA'S BIG GOVERNMENT BUDGET

February 16, 2011

Barack Obama submitted his budget for fiscal year 2012 to Congress on Monday. I guess it was some kind of sick Valentine's Day joke, because Obama sure isn't showing the love. More importantly, he's not showing that he learned anything from the American people who voiced their concerns at the ballot box that spending was too high and that America is in too much debt. The Obama budget gives us more of both.

Let's look at the numbers. According to an analysis by Dr. J.D. Foster at the Heritage Foundation, under this new proposed budget, "the deficit in 2011 will hit a new record of $1.645 trillion, and the national debt held by the public over the next 10 years would nearly double, rising by $7.2 trillion." That's right. Despite the rhetoric, the Obama plan gives us more deficit spending and more debt.

From 2009 to 2011:

  • Total discretionary spending soared from $1.2 trillion to $1.4 trillion, an increase of over 16 percent.
  • Total mandatory spending jumped from $2.1 trillion to $2.2 trillion, an increase of almost 4 percent.
  • The national debt jumped from $6.6 trillion to $9.5 trillion, a whopping increase of 43 percent.

Now here's a very interesting fact. In Obama's speech on Monday in which he talked about his new budget, he actually talks about how it has spending restraint.

Obama: As I start -- as a start, I've called for a freeze on annual domestic spending over the next five years. This freeze would cut the deficit by more than $400 billion over the next decade, bringing this kind of spending -- domestic discretionary spending -- to its lowest share of our economy since Dwight Eisenhower was President.

Now, back to reality. Dr. Foster points out that after having ramped up discretionary spending over the last two years, Obama proposes to cut it by 5 percent in 2012. But how? Simple. You just redefine what discretionary spending is. Foster describes them as "three simple and obvious budget gimmicks:"

  1. Redefining Pell grants as mandatory spending. Stripped of this gimmick, discretionary spending jumps by $14 billion in 2012.
  2. Reclassifying $54 billion of surface transportation spending from discretionary spending to mandatory spending.
  3. Spending the peace dividend. The budget proposal includes spending for military operations in Iraq and Afghanistan, referred to as "overseas contingency operations," as discretionary spending and reduces funding for these operations by $38.2 billion in 2012.

In short, as noted in the Wall Street Journal, Obama proposes a budget totaling $3.73 trillion. Of that, $1.1 trillion is deficit spending. That's around 30% of the budget. It must be nice to spending 100 bucks when you only have 70!

Senate GOP Leader Mitch McConnell summed up the situation perfectly by saying: "This is not an 'I got the message' budget. It's unserious and it's irresponsible." The Hill quotes House Speaker John Boehner as saying, "By continuing the spending binge and imposing massive tax hikes on families and small businesses, it will fuel more economic uncertainty and make it harder to create new jobs."

Now is the time for Republicans to lead. This proposed budget increases spending, adds to the debt, and raises taxes. Fortunately, the new crop of House freshman are pushing for even more cuts. We must be serious about rejecting this budget and showing the American people that their newly-elected office holders "get it." I certainly hope they do.


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