Posted by BH 12:45 pm 2-14
President Obama loves to talk about how he was open to painful changes in entitlement programs in last year’s private budget talks with Republicans. Oddly enough, his bragged-about courage behind closed doors disappears every time he has to put his vision to paper in the light of day.
His latest budget is built on gimmicks and cheery assumptions that support a massive superstructure of new taxes and new debt. It is a blueprint for national decline, a budget worthy of Elysee Palace in its fiscal indiscipline, its squeeze on defense and its assumption of ever-increasing centralized bureaucratic power
The headline number is $4 trillion in alleged debt reduction over 10 years. This figure includes about $1 trillion for the wind-down of the wars in Iraq and Afghanistan that is happening regardless. Only in Washington do you take credit for cutting money you were never going to spend.
The budget gets some more deficit reduction through playing games with the so-called baseline, the assumption of what spending will be in future years. All of the legerdemain is tissue for a continued spending spree.
The budget proposes slightly more in spending in fiscal year 2013 than the administration requested in its last budget for the coming year. Over 10 years, spending will increase from $3.8 trillion to $5.8 trillion, for $47 trillion total. Spending doesn’t decline in any year.
As recently as the end of the Clinton years spending was about 18 percent of GDP. President Obama plans to spend more than 22 percent of GDP every single year of his hoped-for two terms in office.
In 2022, spending will be almost 23 percent of GDP. The increase in spending that we were told was an emergency response to the recession becomes the new normal.
The president wants to chase the new spending with almost $2 trillion in new taxes — higher taxes on income, on dividends, on capital gains and on sundry other targets. Tax receipts will double from $2.5 trillion to $5.1 trillion and hit a little more than 20 percent of GDP in 2022, well above the average since 1940 of 17.4 percent.
While spending grows overall, defense gets cut back. It is the area that the Obama administration considers most deserving of a dose of Greek-style austerity. Overall security spending — a broad category that includes more than just defense — will go from 5.2 percent of GDP to 3.4 percent. At the same time we are told we are pivoting toward an Asia threatened by a rising China.
The administration assumes the growth of Medicare will be kept under control by its king’s cure, the Independent Payment Advisory Board. The budget envisions investing the board with new powers and clamping down further on its goal for controlling Medicare. The experts populating the board are limited to cuts to providers that either won’t happen or will drive many of them out of the program.
The bottom line is that even with the assumptions of healthy economic growth, of high taxes, of a peace dividend and of a ruthlessly efficient team of bureaucratic masters for Medicare, the debt picture is still bleak. On its own terms, the Obama budget would add another $11 trillion in gross debt, taking us to an astonishing $26 trillion. And that’s if nothing goes wrong.
This budget won’t be passed by Congress or even the Democratic-held Senate, because Democrats got out of that business.
President Obama inveighs against a do-nothing Congress even though his own party hasn’t passed a budget in the Senate, as required by law, in more than 1,000 days. His chief of staff, Jack Lew, asserted the other day that Democrats can’t do it because Republicans won’t let them get 60 votes — when all they need is 51.
Given how much worse he looks whenever he puts something down on paper, the president should himself take the next logical step and stop offering budgets altogether.