Research Briefing

Obama Claims He’ll Budget Like Any Family Would, But Can Families Budget As He Does?

RNC CHAIRMAN MICHAEL STEELE ON RECORD DEMS’ $1.9 TRILLION INCREASE IN DEBT LIMIT: “Last night President Obama attempted to restore his promise to bring a new era of fiscal responsibility to Washington but after a full year of pushing his misguided agenda it is obvious that this new era isn’t going to happen on his watch.  Today’s vote to increase America’s debt ceiling is just another example, in a year full of examples, that the president has failed to live up to his promise of responsibility. At a time when millions of Americans are desperately struggling to live within their means and survive this economic recession, the fact the President Obama would team together with Congressional Democrats to increase America’s credit card limit is the height of political arrogance and the very definition of irresponsibility. The recent election results should have sent a message to the president, but today’s vote makes it clear he is only interested in finding new ways to finance his out-of-control binge spending.  President Obama and his liberal allies can rest assured that the American people will send them the ultimate message this November.” (RNC Chairman Michael Steele, Statement On Debt Ceiling Increase, GOP.com, 1/28/10)

OBAMA CLAIMED HE WOULD BUDGET “LIKE ANY CASH-STRAPPED FAMILY” WOULD

PRESIDENT OBAMA LAST NIGHT: “Like Any Cash-Strapped Family, We Will Work Within A Budget To Invest In What We Need And Sacrifice What We Don’t … That's How Budgeting Works.” (President Barack Obama, Remarks In State Of The Union Address, U.S. Capitol, 1/27/10)

BUT FAMILIES CAN’T RAISE THEIR CREDIT CARD LIMIT BY RECORD AMOUNTS LIKE SENATE DEMOCRATS DID TODAY TO PAY FOR THEIR BINGE SPENDING

Obama’s Binge Spending Led To Record $1.4 Trillion Deficit In FY 2009, And Will Lead To $1.3 Trillion Deficit In FY 2010, The Two Largest Single-Year Deficits In American History. (“The Budget And Economic Outlook: Fiscal Years 2010 To 2010,” Congressional Budget Office, 1/26/10)

• 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)

So Senate Democrats Voted To Increase America’s Credit Card By $1.9 Trillion, Largest One-Time Increase In History. “The Democratic-controlled Senate has muscled through a plan to allow the government to go a whopping $1.9 trillion deeper in debt. The party-line 60-40 vote was successful only because Republican Sen.-elect Scott Brown has yet to be seated. Sixty votes were required to approve the increase. The measure would lift the debt ceiling to $14.3 trillion. That's about $45,000 for every American.” (“Senate Permits Gov’t To Borrow An Additional $1.9T,” The Associated Press, 1/28/10; “Table 7.3 – Statutory Limits On Federal Debt: 1940 To Current,” Office Of Management And Budget, Accessed 1/28/10)

Which Would Make It The Third Debt Ceiling Increase Of Obama’s Presidency, Nearly $3 Trillion In Total Increases To America’s Credit Card Limit.  “The U.S. Congress passed legislation increasing the U.S. debt limit by $290 billion before recessing for the year.”;  “The economic stimulus package passed by Congress earlier this year increased the debt ceiling by $789 billion to $12.1 trillion.” (Jonathan D. Salant and Brian Faler, “Senate Votes To Increase Debt Ceiling By $290 Billion (Update1),” Business Week, 12/24/10; Michael R. Crittenden and Patrick Yoest, “Lawmakers Urged To Raise Nation’s Debt Limit,” The Wall Street Journal, 8/10/09)

FAMILIES CAN’T PASS THE BUCK TO A “FISCAL COMMISSION” THAT IS “TOOTHLESS”

Obama Will Create Fiscal Commission By Executive Order To Review Ways To Reduce Deficit. “We'll still face the massive deficit we had when I took office.  More importantly, the cost of Medicare, Medicaid, and Social Security will continue to skyrocket.  That's why I've called for a bipartisan fiscal commission … This can't be one of those Washington gimmicks that lets us pretend we solved a problem. The commission will have to provide a specific set of solutions by a certain deadline.” (President Barack Obama, Remarks In State Of The Union Address, U.S. Capitol, 1/27/10)

But Commission “Would Lack Authority” And “Would Stand Almost No Change Of Success.” “Any commission that Obama creates would be a weak substitute for what he really wanted — a commission created by Congress that could force lawmakers to consider unpopular remedies to reduce the debt, including curbing politically sensitive entitlements like Social Security and Medicare. That idea crashed in the Senate this week, defeated by equal numbers of Democrats and Republicans. Any commission set up by Obama alone would lack authority to force its recommendations before Congress, and would stand almost no chance of success.” (Calvin Woodward, “FACT CHECK: Obama And A Toothless Commission,” The Associated Press, 1/28/10)

AND FAMILIES CAN’T JUST “FREEZE” THEIR RECORD SPENDING INCREASES, AND WAIT UNTIL OCTOBER TO DO IT

Obama Says He Will Freeze Non-Defense Discretionary Spending, Spending He Increased By 19.5 Percent For FY 2010, The Largest One-Year Increase In 34 Years. (Office Of Management And Budget, "Table 8.7--Outlays For Discretionary Programs: 1962-2014," Accessed 12/11/09)

But Liberal Economist Brad Delong Says Obama’s Proposal To Freeze Discretionary Spending “Is A Perfect Example Of Fundamental Unseriousness” Of White House To Tackle Deficit. “[T]his is a perfect example of fundamental unseriousness: rather than make proposals that will actually tackle the long-term deficit … come up with a proposal that does short-term harm to the economy without tackling the deficit in any serious and significant way.” (Brad Delong, “Barack Herbert Hoover Grover Cleveland Obama?” Brad Delong’s “Grasping Reality With Opposable Thumbs” Blog, 1/25/10)

And Obama’s Not Starting So-Called “Spending Freeze” Until October Because He Wants To Push Through $150 Billion Stimulus II First. “Administration officials also are working with Congress on roughly $150 billion in additional stimulus spending and tax cuts to spur job creation. But much of that spending would be authorized in the current fiscal year, the administration officials said, so it would not be affected by the proposed freeze that would take effect in the fiscal year beginning Oct. 1.” (Jackie Calmes, “Obama Seeks Freeze On Many Domestic Programs,” The New York Times, 1/25/10)