Five days before his inauguration, President-elect Barack Obama told the Washington Post that entitlement reform could no longer be kicked down the road. He then spent the next two years kicking — racking up $3 trillion in new debt along the way — on the grounds that massive temporary deficit spending was necessary to prevent another Great Depression.
To prove his bona fides, he later appointed a deficit-reduction commission. It made its report last December, when the economy was well past recession, solemnly declaring that “the era of debt denial is over.”
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That lasted all of two months. The president’s first post-commission budget, submitted Monday, marks a return to obliviousness. Even Erskine Bowles, Obama’s Democratic debt-commission co-chair, says it goes “nowhere near where they will have to go to resolve our fiscal nightmare.”
The budget touts a deficit reduction of $1.1 trillion over the next decade.
Where to begin? Even if you buy this number, Obama’s budget adds $7.2 trillion in new debt over that same decade.
But there’s a catch. The administration assumes economic-growth levels higher than private economists and the Congressional Budget Office predict. Without this rosy scenario — using CBO growth estimates — $1.7 trillion of revenue disappears and U.S. debt increases $9 trillion over the next decade. This is almost $1 trillion every year.
Assume you buy the rosy scenario. Of what does this $1.1 trillion in deficit reduction consist? Painful cuts? Think again. It consists of $1.6 trillion in tax hikes, plus an odd $328 billion of some mysterious bipartisan funding for a transportation trust fund (gas taxes, one supposes) — for a grand total of nearly $2 trillion in new taxes.
Classic Obama debt reduction: Add $2 trillion in new taxes, then add another $1 trillion in new spending and, presto, you’ve got $1 trillion of debt reduction. It’s the same kind of mad deficit accounting in Obamacare: It reduces debt by adding $540 billion in new spending, then adding $770 billion in new taxes. Presto: $230 billion of “debt reduction.” Bialystock & Bloom accounting.
And what of those “painful cuts” Obama is making to programs he really cares about? The catch is that these “cuts” are from a hugely inflated new baseline created by the orgy of spending in Obama’s first two years. These were supposedly catastrophe-averting, anti-Depression emergency measures. But post-recession they remain in place. As a result, discretionary non-defense budget levels today are 24 percent higher than before Obama — 84 percent higher if you add in the stimulus money.
Which is why the supposedly painful cuts yield spending still at stratospheric levels. After all the cuts, Department of Education funding for 2012 remains 35 percent higher than in the last pre-emergency pre-Obama year, 2008. Environmental Protection Agency: 18 percent higher. Department of Energy: 22 percent higher. Consider even the biggest “painful cut” headline of all, the 50 percent cut in fuel subsidies for the poor. Barbaric, is it not? Except for the fact that the subsidies had been doubled from 2008 levels. The draconian cut is nothing but a return to normal pre-recession levels.
Yet all this is penny-ante stuff. The real money is in entitlements. And the real scandal of this budget is that Obama doesn’t touch them. Not Social Security. Not Medicaid. Not Medicare.
What about tax reform, the other major recommendation of the deficit commission? Nothing.
How about just a subset of that — corporate tax reform, on which Republicans have signaled they are eager to collaborate? The formula is simple: Eliminate the loopholes to broaden the tax base, then lower the rates for everyone, promoting both fairness and economic efficiency. What does the Obama budget do? Removes tax breaks — and then keeps the rate at 35 percent, among the highest in the industrialized world (more than twice Canada’s, for example).
Yet for all its gimmicks, this budget leaves the country at decade’s end saddled with publicly held debt triple what Obama inherited.
A more cynical budget is hard to imagine. This one ignores the looming debt crisis, shifts all responsibility for serious budget-cutting to the Republicans — for which Democrats are ready with a two-year, full-artillery demagogic assault — and sets Obama up perfectly for re-election in 2012.
Obama fancies his happy talk, debt-denial optimism to be Reaganesque. It’s more Louis XV. Reagan begat a quarter-century of prosperity; Louis, the deluge.
Moreover, unlike Obama, Louis had the decency to admit he was forfeiting the future. He never pretended to be winning it.
How does one stop the juggernaut from rolling over our nation?
President Obama and his "comrades" are sending us into the abyss. As a constitutional lawyer, he of all people should understand the Oath of Office he swore to uphold: "I do solemnly swear (or affirm) that I will faithfully execute the Office of President of the United States, and will to the best of my Ability, preserve, protect and defend the Constitution of the United States."
The word "execute", Mr. President, is not synonymous with "kill". How can anyone consider President Obama's budget and his redistributive plan for Change acts that "preserve, protect and defend the Constitution"?
The clinical definition of "delusional" is an apt word for the President and for those who follow the Pied Piper off the cliff.
However, several months ago, when you were touting the "Obama reversal", the "he's beat Clinton to the pivot-to-the-center punch" (let's call it a left hook for polemic purposes) in an earily Chris Matthews way, I was wanting to yell "Stop!" at the television. Now, here, I will say I didn't tell you so, but wanted to. You might be surprised at this, but alas, I am not.
Nonetheless, I will continue to read and listen to your otherwise witty and wise commentary.
Nice article, Charles. I do seem to recall in January that you were trumpeting Obama's resurgence and his rebirth as a moderate. You must be conflicted in your bactracking.
Mr. Krauthammer, thank you.
Louis XV!!! That's funny stuff for as we know when "Louie" began his reign he was known affectionately as "le Bien-Aimé" ("the Beloved")...it did not end so well as he was tried 12-11-1792 and executed 1-21-1793 for being a tyrant, an enemy of liberty...one of the charges was "you apparently accepted the Constitution; your speeches announced a desire to maintain it, and you worked to overthrow it before it even was achieved."
Guillotine? NO...but let's throw him out of office!!!
This administration is dismissive, dishonest and delusional. They are hellbent on transforming this country into a social democracy (or something along those lines) regardless of opposition or outcome and will stop at nothing to advance their agenda. The considerable damage that they have done in two short two years is most likely beyond repair. And for those who keep advancing the notion that BO is an intellectual giant, I ask: Where’s the evidence? Is he incapable of seeing what is clearly in front of him? Is he an ironclad ideologue who is unwilling/unable to moderate/deviate? Is he too weak to confront it or too politically oriented to try? Either way, are what we are witnessing the actions of a gifted, serious man? And what’s even more alarming? The very people who elected this man and gave him carte blanche to reshape the country are the ones who will have to stop him. Not an encouraging proposition.
Thank you, Dr. Krauthammer. Great column. Yours is the type of calm, fact-laden argument that can hopefully convince a few centists and undecideds of your point, and not just merely gratify those of us in the choir.
I don't recall Charles ever indicating he really believed Obama was moving to the center, but that he believed Obama had been good at looking as though he was moving to the center, ala Clinton.
"Now, here, I will say I didn't tell you so, but wanted to. You might be surprised at this, but alas, I am not."
It's about the perception of moving to the center and Charles knows that. Obama is picking and choosing the his battles; people all noticed and acknowledged the tax cuts as a rightward move, but with a situation like this the masses will get sucked into believing that he really did cut spending therefore still appearing to have moved to the center.
It appears that Mr. Krauthammer may finally be awakening to the fact that Obama and most of the Democrats are completely indifferent to the financial destruction of the country.
Obama and his cohorts are only interested in obtaining power and enriching themselves and their government "employee" union allies at the expense of the taxpayers through grossly unrealistic budgets inflated by "emergency" measures.
Obama took the "one time" measures and baked them into the budget, taking advantage of the misplaced trust the public put into the feds to solve the financial crises they created with terrible housing policies.
The collapse of the society we've spent two plus centuries building, and the economic and human misery that will accompany that collapse matter not to him, apparently.
He's the mother of all deficit spenders, who talks about being "fiscally responsible", while accumulating more debt than all other presidents--combined.
He's the deregulation savior who wrote in the Wall Street Journal about the importance of cutting red tape, after creating tens of thousands of pages of red tape with Obamacare.
He's the job-creator who passes every kind job killing tax and regulation he can, then holds a "summit" with business leaders to ask them, "What can I do to help you create jobs?"
He's the constitutional "scholar" who has pivoted away from legislative solutions and toward executive and unconstitutional "administrative" ones now that the public has revolted against against his congressional accomplices.
He's the anti-Reagan who drapes himself in Reagan comparisons.
Obama knows that as long as he can get people to focus on his words with the help of his media allies, and draw attention away from his ACTIONS, the public may continue to be misled about the pernicious nature of his incredibly destructive agenda.
@Mr. Freeman: Only Rush Limbaugh claims to be correct 99.6% of the time. Mr. Krauthammer makes no such assertion. Cut the Dr. some slack, certainly you've never been incorrect about an issue before?
@Mike B.: Good morning comrade! Why must you be such a hater? lol...Yes, Lex Luthor. Do you deny that the self-proclaimed omniscient one is not prepping himself for first world emperor?
Deed, not words, correct? Indeed!
@Dr. Krauthammer: Keep the faith sir, you do us all service.
One quibble with Dr. Krauthammer's excellent column today, Obama didn't inherit the debt of this country, he actively campaigned for the job. Like every President before him he gets what he gets and leaves his successor the results of his (hopefully limited) time in office.
Bush NEVER complained about what he inherited from Clinton, though certainly the 9/11 plot was set in motion long before GWB took office. Reagan never complained about the mess he ran to correct what Jimmy Carter did to the country either.
I believe that Charles Necker was Louis quinzieme's (or was it seizieme's?) finance minister.
His daughter was Madame de Stael who once said "The more I see of men the more I like dogs."
How about that for a piece of Gallic non sequitor esoterica! Charles Krauthammer's erudition is inspiring.
This action by Obama should surprise no one. His words cannot match his deeds, or he would never win the next election--he must continue to hide his core beliefs under "hope and change" words while moving the country toward European type social democracy.
Unfortunately, I have lost my faith in the American people to figure this out--the Democrat strategy of addicting the populace to entitlements and handouts has worked up to now, and there's no reason to believe it won't work in the future. I fear Obama will be elected quite easily in 2012.
Also--are we really keeping a democracy if the majority of the people are reliant on government for their income and means of support? The Democrats are almost through building their base of unshakable support through largesse and graft--if we don't turn the ship soon, we will find that no one is willing to move the rudder at all. Regardless of the size of the icebergs ahead.
I agree Mekebby, but I'm saying that the fake "left hook" (or maybe it was a right, didn't even see it coming) was completely unconvincing to me, and as a political move I didn't think it would work. You and I both knew the POTUS would revert to form soon thereafter, if you consider his tax "compromise" an overture to the center or right. A little rope-a-dope doesn't undo last November.
So, Obama is threatening to veto a spending bill that cuts $60 billion from last year's budget; if my calculator is correct, he's threatening to veto a spending bill that cuts 0.017% of last year's budget. Could someone please clarify my above math because logic tells me that I can't be right in assuming the President would actually veto that.
My own (cynical) take is that Obama and the democrats will threaten and bluster, but in the end, they'll accept the Republican budget. The reason is that they want to have it both ways. They know that the budget is in crisis mode, they know it needs to be fixed, but they also know that a lot of people, especially people who vote for them, will be very angry at what it takes to fix it. So they'll let the Republicans do the fixing, complain loudly, but not veto or block it in the end. That way they can tell their constituents that they did all they could, but could not prevent the heartless Republicans from making Draconian cuts.
Then, when things do get better, they'll try to take credit.
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