President Obama sent his budget for the 2012 budget year, which begins October 1, to Congress on Monday, and the numbers shouldn’t surprise anyone. His budget includes $3.73 trillion of federal spending for that budget year, and would reduce the deficit by $1.1 trillion over 10 years, a third of which would comes from $1.6 trillion in tax increases. You might notice the words “reduce the deficit” and a trillion dollar figure in that sentence and say “well that sounds great!”. But you have to dig a little deeper to find the real story. This new budget would increase spending by $8.7 trillion and add $13 trillion to the debt over 10 years, according to the Republican analysis. The current national debt, which is approaching the statutory debt ceiling of $14.3 trillion, would be almost doubled to $26.3 trillion after 10 years if this budget were to be approved by Congress without changes (which is unlikely).
Following the trouncing the Democrats sustained in the November 2010 elections, particularly in the House, Obama has been making a number of public statements insinuating that he views the national debt as a top priority and wants to address it just as badly as the newly elected House conservatives. Obama even formed a debt commission in 2010 with the goal of identifying “…policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run.” This is great, but the problem is that this commission released its budget recommendations at the end of 2010 and this new budget sets discretionary spending at $353 billion above the commissions recommendations. What is the point of creating a debt commission if its findings are just going to be ignored?
Noticeably absent from Obama’s budget is any mention of cuts to entitlements such as Social Security and Medicare, which are projected to account for 64% of all federal spending by 2020. Any economist will tell you that anyone who mentions debt or deficit reduction without mentioning entitlements is just blowing hot air, but that is what most politicians are good at right? Obama has claimed that “tough choices and sacrifices” are needed to remedy our fiscal crisis, but he doesnt seem to be willing to make those tough choices himself.
So the question becomes: is the GOP willing to make those choices? The Republicans have yet to release their budget, but there are some early positive signs that they are willing to cut what needs to be cut, even though it might anger a lot of people. “We have to tackle entitlements or they will tackle us”, Budget Committee Chairman Paul Ryan (R-Wisc.) said following Obama’s budget proposal. House Majority Leader Eric Cantor (R-Va.) also criticized President Obama for failing to address entitlement reform in his budget, telling CNN that “We’re going to have to have some reforms to these systems in order to save them.”
Senate Budget Committee Chairman Jeff Sessions of Alabama summed up the general Republican reaction pretty well today, saying “Now we’re faced with taking on something as complex as entitlements, as deeply emotional as entitlements, and the president of the United States is not even in the game? Doesn’t even suggest it has to be done?”
It appears that President Obama wants to continue “talking the talk” while refusing to “walk the walk” on entitlements, thus kicking the can down the road for the next administration to handle. But his strategy seems clear — avoid the incredibly controversial issue of entitlements, forcing the Republicans to be the perceived “bad guys”, and then, as they did with Obamacare, claim that the GOP is out to help you “die quickly”, as so eloquently stated by former Dem. Rep. Alan Grayson, and steal your Social Security checks. It’s a relatively smart political move when it comes to coming off to the country as the “knight in shining armor”, but it does absolutely nothing to defuse the ticking time bomb that is our national debt, which Chairman of the Joint Chiefs Admiral Mike Mullen called the single biggest threat to our national security.
But as Rep. Ryan put it, Obama’s budget is “Debt on Arrival”.