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The Big Fail: Not A “Net Spending Cut”

- May 17, 2012

Obama Promised A Net Spending Cut, But Instead Has Racked Up Government Spending To Unsustainable Levels

CANDIDATE OBAMA PROMISED A NET SPENDING CUT BY GOING THROUGH THE BUDGET “LINE BY LINE”

PROMISE: In 2008, Obama Promised A “Net Spending Cut” To The Federal Budget By Going “Through The Federal Budget Line By Line, Page By Page.” OBAMA: “But there is no doubt that we've been living beyond our means and we're going to have to make some adjustments. Now, what I've done throughout this campaign is to propose a net spending cut.” (Third Presidential Debate, Hempstead, NY, 10/15/08)

But Under Obama Spending Has Skyrocketed Well Above Historical Norms

BROKEN: Federal Outlays Have Increased By 20.4 Percent Since Obama Took Office. The federal government spent $3.1 trillion in FY2008 in inflation adjusted dollars. Under Obama, in FY2012 the federal government spent $3.8 trillion dollars. (“Table 1.3 – Summary Of Receipts, Outlays And Surpluses Or Deficits In Current Dollars, Constant (FY2005) Dollars, And As Percentages Of GDP: 1940-2016,” Office Of Management And Budget, Accessed 5/16/12; “Budget Of The United States Government, Fiscal Year 2013,” Office Of Management And Budget, 2/13/12)

  • Obama Proposed FY2013 Budget Calls For Increasing Government Spending Well Above Historical Norms. From 1969 To 2008 The Federal Government Spent An Average Of 20.6 Percent Of GDP, Obama’s Proposed FY2013 Budget Calls For Spending 22.8 Percent Of GDP By FY2022. (“Table 1.2 – Summary Of Receipts, Outlays And Surpluses Or Deficits As Percentages Of GDP: 1930-2016,” Office Of Management And Budget, Accessed 5/16/12; “Budget Of The United States Government, Fiscal Year 2013,” Office Of Management And Budget, 2/13/12)

“Government Spending As A Share Of The Economy Has Hovered Around 24% During The Obama Administration…Elevated From The Historical Average Of 20.7% Over The Past 40 Years.” “Government spending as a share of the economy has hovered around 24% during the Obama administration, several percentage points higher than under President Bush, according to Congressional Budget Office data. It's also elevated from the historical average of 20.7% over the past 40 years.” (Tami Luhby, “Did Obama Really Make Government Bigger?” CNN Money, 1/25/12)

Since President Obama Took Office, The Federal Government’s Workforce, Excluding The Postal Service, Has Increased 6.8 Percent, Adding 140,700 Jobs. (Bureau Of Labor Statistics, Accessed 5/8/12)

Once In Power, “The White House And The Pelosi Congress Then Blew Out The American Government Balance Sheet.” “In the name of saving the economy from panic, the White House and the Pelosi Congress then blew out the American government balance sheet. They compounded the problem of excessive private debt by adding unsustainable public debt. They boosted federal spending to 25% of GDP in 2009, 23.8% in 2010 (as TARP repayments provided a temporary reduction in overall spending), and back nearly to 25% this fiscal year. Meanwhile, debt to GDP climbed to 53.5% in 2009, 62.2% in 2010, and is estimated to hit 72% this year—and to keep rising. These are all figures from Mr. Obama's own budget office.” (Editorial, “America Gets Downgraded,” The Wall Street Journal, 8/8/11)

“Obama's Spending Blueprint For The Budget Year That Begins Oct. 1 Projects A Deficit For This Year Of $1.33 Trillion. That Would Mean Four Straight Years Of Trillion-Dollar-Plus Deficits.” (Martin Crutsinger, “The Fight Begins: Obama’s Budget Going To Congress,” The Associated Press, 2/12/12)

OBAMA PUSHED A HEALTH CARE PLAN WHICH WILL CAUSE SPENDING TO “SHOOT UP RAPIDLY”

CBO: ObamaCare Mandates Will “Significantly Increase” Mandatory Health Care Spending “From $26 Billion This Year To $161 Billion In 2022.” “Provisions in the Affordable Care Act will significantly increase the scope and scale of such benefits in the coming decade. In CBO’s baseline projections, federal spending for mandatory health care programs other than Medicare and Medicaid rises from $26 billion this year to $161 billion in 2022.” (“The Budget And Economic Outlook: Fiscal Years 2012 To 2022,” Congressional Budget Office, 1/31/12)

  • ObamaCare Increases Entitlement Spending On Medicaid And CHIP $168 Billion By 2021. “According to CBO and JCT’s projections for the 2012–2021 period, spending for Medicaid resulting from the coverage provisions of the ACA will be $160 billion more than estimated last year, and such spending for CHIP will be $8 billion more.” (“Updated Estimates For The Insurance Coverage Provisions Of The Affordable Care Act,” Congressional Budget Office, 3/13/12)

CBO: With ObamaCare, Medicaid Spending Will “Shoot Up Rapidly” Totaling $605 Billion In 2022. “Spending for the program will climb again in 2013 and will shoot up rapidly in 2014, 2015, and 2016 as a result of provisions in the Affordable Care Act. By 2022, under current law, federal outlays for Medicaid are expected to total $605 billion, more than twice the 2012 amount; spending will equal about 2.5 percent of GDP, compared with 1.7 percent this year.” (“The Budget And Economic Outlook: Fiscal Years 2012 To 2022,” Congressional Budget Office, 1/31/12)

CBO: Spending On Social Security And Other Health Care Programs Will Rise Outstripping “Growth In Nominal GDP In 2022.” “CBO projects that the costs per enrollee for Social Security and the major health care programs also will continue to rise, albeit at different rates because of differences in the laws that govern them. Altogether, spending on those programs will increase at an average annual rate of nearly 7 percent between 2013 and 2022, a pace that will outstrip growth in nominal GDP.” (“The Budget And Economic Outlook: Fiscal Years 2012 To 2022,” Congressional Budget Office, 1/31/12)

  • CBO: Federal Health Care Spending Will Double To $1.8 Trillion Over The Next Decade. “The cost of government health care programs will more than double over the next decade, the Congressional Budget Office said Tuesday. CBO’s economic outlook predicts that federal spending on Medicare, Medicaid and other health care programs will climb to $1.8 trillion — or about 7 percent of the entire economy — by 2022.” (Sam Baker, “CBO Expects Health Spending To Double,” The Hill, 1/31/12) 

OBAMA WASTED BILLIONS ON A $831 BILLION STIMULUS FILLED WITH BOONDOGGLES

The Latest Estimate Of The Cost Of The Stimulus Is $831 Billion. “When ARRA was being considered, the Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation estimated that it would increase budget deficits by $787 billion between fiscal years 2009 and 2019. CBO now estimates that the total impact over the 2009–2019 period will amount to about $831 billion.” (“Estimated Impact Of The American Recovery And Reinvestment Act On Employment And Economic Output From October 2011 Through December 2011,” Congressional Budget Office, 2/22/12)

Obama Bought The Advice Of Economists Who Said Any Spending, “Even The Worst Kind Of Boondoggle” Was Stimulative. “For the Obama transition teams and their allies on the Hill, three questions loomed large in designing the package. The first was whether the proposed spending was economically stimulative: Did it save or create jobs, and thereby put money in people’s pockets? It turned out that economists believed almost any spending met this criterion. In a recession even the worst kind of boondoggle is stimulative, a fact that critics had a hard time comprehending.” (Jonathan Alter, The Promise, Simon & Shuster, 2010, p84)

At The Energy Department Alone, Over 100 Criminal Investigations Have Been Launched Into The Way Stimulus Money Was Spent. “The Energy Department's inspector general has launched more than 100 criminal investigations related to 2009 economic stimulus spending. In written testimony prepared for delivery to the House Oversight and Government Reform Committee today, Inspector General Gregory Friedman said the investigations have involved ‘various schemes, including the submission of false information, claims for unallowable or unauthorized expenses, and other improper uses of Recovery Act funds.’” (Darius Dixon, “DOE IG: 100+ Stimulus-Related Criminal Probes,” Politico, 11/2/11)

  • $2.7 Billion Went To Projects That Began Construction Before The Stimulus Measures Started. “Of the 50 highest dollar grants awarded, 64 percent -- worth a combined $2.7 billion -- went to projects that began construction before the stimulus measures started, a Greenwire analysis of the program found. That portion represents more than half of the $5.2 billion total given so far under the renewable energy grant effort.” (Anne C. Mulkern “Stimulus Cash Flowed To Completed, Under-Way Renewable Energy Projects,” The New York Times, 10/14/10)

 And Proposed A Second $477 Billion Stimulus Even Though The First One Didn’t Work

Obama Proposed A Second $477 Billion Stimulus In September 2011. “President Barack Obama will send Congress his new $447 billion jobs bill on Monday and urge lawmakers to quickly pass it, a White House official says. Obama will also travel across the country to build public support for the package he unveiled last week in attempt to jump start the economy and turn around his worsening political fortunes as he heads toward the 2012 presidential election.” (Erica Werner, “Obama Sending $477 Billion Jobs Bill To Congress,” The Associated Press, 9/12/11)

  • Obama’s Second Stimulus Was “As Much A Political Gambit As A Policy Proposal.” “Obama’s decision to visit Apex, which on first glance appears to have escaped the worst of the economic downturn, was a tacit acknowledgment that his $447 billion jobs package is as much a political gambit as a policy proposal.” (David Nakamura, “Touting Jobs Plan, Obama Visits Apex, N.C., Where Locals Are Frustrated With Him,” The Washington Post, 9/14/11)
  • New Hampshire Union Leader: Obama’s Strategy Was “Tried In The First Stimulus Bill.” “Even if these measures were fully funded, would they do much good? We already have the answer: They were tried in the first stimulus bill. And yet our unemployment rate remains above 9 percent.” (Editorial, “Stimulus Jr.: Obama Tries Again,” New Hampshire Union Leader, 9/11/11)

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