Research Briefing

As He Unveils His Budget, Here’s How Obama Will Sell His Binge Spending As “Fiscal Responsibility”

WHITE HOUSE CLAIMS “TOUGH CHOICES” MADE WHEN MAKING “CUTS” TO FY2011 BUDGET

White House Communications Director Claims Obama Made “Tough Choices” Through Budget Process Just As American Families Do With Household Budgets. “American families are forced to make tough choices about what they can spend money on and what they need to cut from their household budgets. Through the course of the budget process we did the same thing.” (Dan Pfeiffer, “Tough Choices,” The White House Blog, 1/30/10)

And Claims Obama Will Make $20 Billion In “Budget Cuts” For FY2011. “This year, we are proposing more than 120 terminations, reductions, and savings for approximately $20 billion in savings this year … These choices are never easy, but the President never expected that governing during tough economic times with rising deficits would be easy.” (Dan Pfeiffer, “Tough Choices,” The White House Blog, 1/30/10)

BUT OBAMA WILL USE MONEY FROM “CUTS” FOR OTHER BINGE SPENDING PRIORITIES, INSTEAD OF REDUCING THE DEFICIT

Last Year, Obama Claimed $17 Billion In “Budget Cuts” For FY2010. “President Obama on Thursday will unveil nearly $17 billion in additional budget cuts for the coming fiscal year …” (Jackie Calmes, “Obama Proposes $17 Billion In New Budget Cuts,” The New York Times’ “The Caucus“ Blog, 5/6/09)

But Obama’s “Budget Cuts” Would “Automatically Be Plowed Into Other Programs,” And Did Not Reduce Level Of Spending. “The President already proposed a specific discretionary spending level, and Congress has already approved a budget that would spend $1,086 billion on regular discretionary spending in FY 2010. The discretionary savings proposals affect only the composition of such spending … the savings would automatically be plowed into other programs to maintain discretionary spending at that level. So this exercise is about reorganizing – not reducing – government.” (Brian Riedl, “President’s Budget ‘Cuts’ Should Go Towards Deficit Reduction Rather Than New Spending,” The Heritage Foundation’s “The Foundry“ Blog, 5/7/09)

OBAMA WILL USE “PAYGO” AS FIG LEAF TO HIDE HIS BINGE SPENDING

Obama Claims To Support Fiscal Responsibility By Endorsing “PAYGO” Legislation. “There are certain core principles our families and businesses follow when they sit down to do their own budgets … They don’t spend what they don’t have, and they make do with what they’ve got. It’s time their government did the same.  That’s why I’m pleased that the Senate has just restored the pay-as-you-go law … Reinstating this law will help get us back on track, ensuring that every time we spend, we find somewhere else to cut.” (President Barack Obama, Weekly Address, The White House, 1/30/10)

But 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)

And Maya MacGuineas, President Of Committee For A Responsible Federal Budget, Says Obama’s PAYGO “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 WILL USE “SYMBOLIC” SPENDING FREEZE TO LOCK IN HIS BINGE SPENDING HABIT

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)

White House Admits So-Called Spending Freeze Purely “Symbolic.” “It is the growth in the so-called entitlement programs — Medicare, Medicaid and Social Security — that is the major factor behind projections of unsustainably high deficits, due to rapidly rising health costs and an aging population. But one administration official said that limiting the much smaller discretionary domestic budget would have larger symbolic value.” (Jackie Calmes, “Obama Seeks Freeze On Many Domestic Programs,” The New York Times, 1/25/10)

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 WILL PUNT “TOUGH CHOICES” TO A “TOOTHLESS” FISCAL COMMISSION

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)