Research Briefing

Signing PAYGO Is Obama’s Futile Attempt At Hiding His Embarrassing Binge Spending Habit

OBAMA’S PRESS SECRETARY ROBERT GIBBS, TODAY: “I just got word that the debt limit/PAYGO [bill] will be signed later today.” CBS NEWS’ CHIP REID: “Behind closed doors?” GIBBS: “It’s not on my note.” (Briefing By White House Press Secretary Robert Gibbs, The White House, 2/12/10)

WHY IS OBAMA SIGNING PAYGO BEHIND CLOSED DOORS ON A FRIDAY AFTERNOON?

BECAUSE HE KNOWS PAYGO IS JUST A “FIG LEAF” …

Economist At Bipartisan Committee For A Responsible Federal Budget, Says Obama’s PAYGO Scheme “Is Like Quitting Drinking, But Making An Exception For Beer And Hard Liquor.” (Lori Montgomery, “Some Democrats Warn Of Loophole In Obama’s Pay-As-You-Go Rules,” The Washington Post, 6/10/09)

Obama’s PAYGO “Little More Than A Fig Leaf For Washington To Keep Spending Money It Doesn’t Have.” “The Obama/Hoyer plan, which is intended to make PAYGO the law of the land … faces several problems: First, implementing it. Second, preventing it from becoming shot full of holes, to the point that it would be little more than a fig leaf for Washington to keep spending money it doesn’t have.” (Paul West, “PAYGO A MEGO But Obama, Hoyer On Board,” The Baltimore Sun, 6/9/09)

Obama's Budget Director Peter Orszag Admits PAYGO Has Loopholes. "But briefing reporters, White House Budget Director Peter Orszag conceded some of PAYGO's limitations. It doesn't cover discretionary spending.  In addition, about 40 percent of the federal budget, programs for education, energy, the military, etc., would not be covered by PAYGO ... As for existing deficits and the National Debt, which today stands at an all-time high of $11.39 trillion, PAYGO has no effect ..." (Mark Knoller, "Would PAYGO Really Limit Spending?" CBS News' "Political Hotsheet," 6/9/09)

• $1.5 Trillion In Loopholes Over Ten Years To Be Exact. “Congress agreed Thursday to revive the pay-as-you-go budget rules … although the new version includes a long list of exceptions that would permit Democrats to add at least $1.5 trillion to the nation’s tab over the next decade.” (Lori Montgomery, “House Votes To Revive Pay-As-You-Go Budget Rules,” The Washington Post, 2/5/10)

And PAYGO Gives Obama, Dems Excuse To Raise Taxes. ”PAYGO sensibly says that renewing an existing entitlement program is not ‘new’ spending and therefore does not need to be offset. However, PAYGO applies a different standard to tax cuts. It classifies tax cut extensions as ‘new’ tax cuts that violate PAYGO and must be offset … The blatant double standard of allowing entitlement spending policies but not tax policies to be extended constitutes a major bias towards higher taxes and spending.” (Brian Riedl, “Obama’s PAYGO Law Would Not Slow Spending Or Budget Deficits,” Web Memo #2312, Heritage Foundation, 2/26/09)

THAT BARELY HIDES HIS RECORD-BREAKING INCREASE IN AMERICA’S CREDIT CARD LIMIT …

Congressional Dems Passed $1.9 Trillion Increase To Debt Limit Last Thursday, The Largest One-Time Increase In American History. “The House on Thursday voted to allow the government to go $1.9 trillion deeper in debt -- or about $6,000 more for every U.S. resident. The measure, approved 217-212, would raise the cap on federal borrowing to $14.3 trillion.  … Already, the accumulated debt amounts to roughly $40,000 per person. And the debt is increasingly held by foreign nations such as China.” (“House Agrees To $1.9 Trillion More Debt,” The Associated Press, 2/4/10; White House Office Of Management And Budget, “Table 7.3 - Statutory Limits On Federal Debt: 1940 To Current,” President’s FY2011 Budget, Accessed 2/8/10)

Even Though Dems Passed $290 Billion Debt Limit Increase On Christmas Eve. “The U.S. Congress passed legislation increasing the U.S. debt limit by $290 billion before recessing for the year.” (Jonathan D. Salant & Brian Faler, “Senate Votes To Increase Debt Ceiling By $290 Billion (Update1),” Businessweek, 12/24/10)

• As Well As A $789 Billion Increase Earlier In 2009. “If Congress agrees to the Treasury’s request it would mark the second increase in the debt ceiling this year. The economic stimulus package passed by Congress earlier this year increased the debt ceiling by $789 billion to $12.1 trillion.” (Michael R. Crittenden & Patrick Yoest, “Lawmakers Urged To Raise Nation’s Debt Limit,” The Wall Street Journal, 8/10/09)

ALL TO PAY FOR HIS EMBARRASSING BINGE SPENDING HABIT

President Of National Bureau Of Economic Research Says Budget Enters Into “Uncharted Waters.” “‘We’re in territory that’s essentially uncharted waters,’ James Poterba, president of the National Bureau of Economic Research, said in a Bloomberg Radio interview ... ‘The long-term prospects in U.S. fiscal policy is rather daunting,’ said Poterba ...” (Roger Runningen and Brian Faler, “Obama Proposes $3.8 Trillion Budget Focused On Jobs,” Bloomberg, 2/1/10)

Obama’s FY2010 Deficit Will Grow To Record-Breaking $1.6 Trillion. (White House Office Of Management And Budget, Table 1.1 - Summary Of Receipts, Outlays, And Surpluses Or Deficits (-): 1789-2015, Historical Tables, President’s FY2011 Budget, 2/1/10)

• Obama Will Own Three Largest Deficits In American History: $1.4 Trillion In FY2009, $1.6 Trillion In FY2010, And $1.3 Trillion In 2011. (White House Office Of Management And Budget, Table 1.1 - Summary Of Receipts, Outlays, And Surpluses Or Deficits (-): 1789-2015, Historical Tables, President’s FY2011 Budget, 2/1/10)

Obama’s Budget Director Says Budget Deficits Over 3 Percent Of GDP Would Be Unsustainable. ANDY SERWER: “Peter what about the budget deficit? 11% of GDP. What do you consider to be sustainable? What is the target? It’s got to be a lot less than that.” ORSZAG: “The target is something in the range of 3% GDP, which would balance the budget outside of interest payments on the debt.” (Peter Orszag And Andy Serwer, MSNBC’s “Morning Joe,” 2/1/10)

• But Obama’s FY2010 Deficit Will Be 11 Percent Of GDP, Highest Since World War II. “A $1.6 trillion deficit for this fiscal year, which ends Sept. 30, would be about $150 billion greater than the shortfall in 2009, which was the highest since World War II. It would equal almost 11 percent of the gross domestic product.” (Jackie Calmes And Jeff Zeleny, “In $3.8 Trillion Budget, Obama Pivots to Trim Future Deficits,” The New York Times, 2/1/10)

• Obama’s Deficits Over Next Decade Will Average 4.5 Percent Of GDP. (White House Office Of Management And Budget, Table S-1. Budget Totals, Summary Tables, President’s FY2011 Budget, 2/1/10)

Obama’s Budget Will More Than Double National Debt Held By Public, From $9.3 Trillion In FY 2010 To $18.6 Trillion In FY2020. (White House Office Of Management And Budget, Table S-1. Budget Totals, Summary Tables, President’s FY2011 Budget, 2/1/10)