Research Briefing

While Obama Admits Spending Problem, He’d Prefer Independent Commission Take Responsibility For Dems’ Actions

OBAMA ADMITS DEMS ARE SPENDING TOO MUCH, BUT WANTS COMMISSION TO DEAL WITH THEIR FAILINGS

Obama: “Well, We Are Out Of Money Now.” (“C-Span Interview Transcript: President Barack Obama,” C-Span, 5/22/09)

• Obama Said U.S. Debt Could Lead To “Double Recession.” “‘It is important though to recognize if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the U.S. economy in a way that could actually lead to a double-dip recession,’ he said.” (“Obama: Too Much Debt Could Fuel Double-Dip Recession,” Reuters, 11/18/09)

Now Obama Wants To Create Commission To Deal With Rising Deficit. “CNN has learned President Obama is seriously considering an executive order to create a bipartisan commission that could weigh sweeping tax increases and spending cuts to popular programs like Social Security and Medicare in order to try slash the soaring federal deficit.” (Ed Henry, “CNN Exclusive: Obama Weighs Ordering New Debt Commission,” CNN’s “Politicalticker” Blog, 12/15/09)

COMMISSION WOULD MEAN HIGHER TAXES, NOT AN END TO THE BINGE

Commission Could Recommend Higher Taxes, Cuts To Medicare And Social Security. “The commission would draw up prescriptions for reducing the nation's long-term debt. They could recommend raising taxes or cutting spending on entitlement programs like Social Security or Medicare, or a combination of both.” (“Deficit Hawks Want To Force Vote on Debt Commission Plan,” CQ Politics, 12/9/09)

• “Any Solution To Bring Down The Debt Would Almost Certainly Include A Combination Of Tax Increases And Spending Cuts.” (Corey Boles, “Lawmakers Push Commission To Tackle Fiscal Challenge,” The Wall Street Journal, 12/9/09)

When Asked If Taxes Would Be Raised On The Middle Class, Head Of Obama’s National Economic Council Says “It Is Never A Good Idea To Absolutely Rule Things Out.” “Bob Schieffer asked National Economic Council Director Lawrence Summers if taxes could be raised for middle-income Americans. ‘There is a lot that can happen over time,’ Summers said. ‘It is never a good idea to absolutely rule things out no matter what.’” (Michelle Levi, “Larry Summers: Tax Increases Possible, CBS News, 8/2/09)

Chair Of Obama’s Council Of Economic Advisers Refuses To Rule Out New Taxes. “When asked about a tax increase for middle-class families, Romer jokingly asked if she could leave now. She went on to say that health-care reform will lower the deficit, thereby reducing the need to tax middle income Americans. But -- like Treasury Secretary Tim Geithner and chief White House economics adviser Larry Summers did over the weekend -- she didn't entirely rule out a middle-class tax increase.” (Betsy Cline, “Romer Emphasizes Stimulus Is Working,” NBC News’ “First Read,” 8/6/09)

Obama’s Budget Chief Refuses To Answer Questions About Higher Taxes In An Effort To Reduce Deficit. “White House budget director Peter Orszag, in an interview Tuesday, said the deficit projections are higher than desirable’ and the administration is working to bring them down in the 2011 budget proposal due early next year. Asked if that meant tax changes affecting families earning below $250,000 -- something Mr. Obama has pledged he would avoid -- Mr. Orszag replied: ‘We're in the midst of putting together the 2011 budget, and we'll have more to say about that later.’” (Jonathan Weisman and Deborah Solomon, “Decade Of Debt: $9 Trillion,” The Wall Street Journal, 8/26/09)

INSTEAD OF TRYING TO CHANGE, DEMOCRATS PLAN TO CONTINUE BINGE SPENDING

House Will Vote Today To Raise Debt Ceiling. “Hoyer said the agreement with the Senate called for raising the debt ceiling ‘'in excess of a couple hundred billion dollars,’ lasting about two months.” (“Congress Rushes to Finish Work for Year,” The Associated Press, 12/15/09)

• Even Though Debt Ceiling Was Already Increased By $789 Billion This Year. “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 And Patrick Yoest, “Lawmakers Urged To Raise Nation's Debt Limit,” The Wall Street Journal, 8/10/09)

House To Vote On $150 Billion Stimulus II Today. “House Democrats said they will vote tomorrow on a $150 billion jobs package along with a two-month increase in the $12.1 trillion U.S. debt limit. … The $150 billion jobs component will include infrastructure spending and money to help state and local governments avoid firing teachers, firefighters and police officers…” (James Rowley and Brian Faler, “House to Vote on Jobs Bill, Extending U.S. Debt Limit (Update1),” Bloomberg, 12/15/09)

Obama, House Dems Pushing Through $1.2 Trillion Government-Run Health Care Experiment. “The health care bill headed for a vote in the House this week costs $1.2 trillion or more over a decade ... While the Congressional Budget Office has put the cost of expanding coverage in the legislation at roughly $1 trillion, Democrats added billions more on higher spending for public health, a reinsurance program to hold down reti ree health costs, payments for preventive services and more.” (David Espo, “AP Sources: House Health Bill Totals $1.2 Trillion,” The Associated Press, 11/2/09)

• Senate Dems’ Version Of Health Care Experiment Bill Costs $940 Billion. “As everyone knows by now, the Congressional Budget Office (CBO) estimates that the bill would spend $848 billion to expand coverage over the next ten years, reducing the number of uninsured in 2019 by about 31 million. …To get a fair read on the total cost of the health bills, we should therefore add together the gross cost of coverage expansions and the cost of the other provisions that increase spending (or decrease revenues). I estimate, for example, the real gross cost of the Senate health bill is $940 billion over ten years…” (Donald Marron, “How Much Does The Senate Health Bill Cost?” Donald Marron’s Blog, 11/19/09)

In December, Congress Passed $450 Billion Omnibus Despite Americans Concerns About Deficits.  “Congress gave final approval to a $450 billion spending bill for government agencies providing an average 12 percent budget increase for many programs amid what polls show is mounting public concern over federal deficits.” (Brian Faler, “Congress Sends Obama Measure With 12% Average Budget Increases,” Bloomberg, 12/14/09)

MEANWHILE, DEMS’ CONTINUE TO EXPECT TAXPAYERS TO PICK UP THEIR TAB

FY 2009 Saw A Record Deficit Of $1.42 Trillion, Three Times More Than Previous Record Last Year. “The Obama administration has released new deficit numbers, and they are not pretty. The deficit for fiscal year 2009, which ended Sept. 30, came in at a record $1.42 trillion, more than triple the record set just last year.” (David Jackson, "Obama Team Makes It Official, Budget Deficit Hits Record. By A Lot," USA Today's “The Oval” Blog, 10/16/09)

Obama’s Deficit In 1^st Month Of 1^st Full Fiscal Year: $176 Billion; Deficit During Bush’s Entire 1^st Full Fiscal Year: $159 Billion. (Monthly Budget Review: Fiscal Year 2002: A Congressional Budget Office Analysis, Congressional Budget Office, 11/8/02; Jeanne Sahadi, “October Deficit $176 Billion,” CNNMoney.com, 12/10/09)

Obama's Budget Creates $9.1 Trillion Deficit Over Next Decade, Nearly The Amount Of Debt America Has Accrued In Its Entire History Up To July 2008 ($9.5 Trillion). (“An Analysis Of The President's Budgetary Proposals For Fiscal Year 2010,” Congressional Budget Office , June 2009; Public Debt, www.treasurydirect.gov, Accessed 7/20/09)