President Obama asserted that “a critical step in winning the future is to make sure we aren’t buried under a mountain of debt.” Yet he failed to offer any proposals that would significantly rein in escalating spending and deficits.
The president’s proposed freeze of non-security discretionary spending would essentially lock in the 25 percent expansion these programs have received since 2007. Yet paring back deficits requires actually reducing runaway spending, starting with the House Republican plan to cut this spending back to 2008 or even 2006 levels.
Furthermore, only 12 percent of the federal budget would be affected by the president’s freeze proposal. Social Security, Medicare, and Medicaid costs are truly driving long-term deficits upward. Yet the president ignored nearly all entitlement reforms proposed by his own commission, and even stated opposition to any change in future Social Security benefits. Additionally, the president again defended his budget-busting trillion-dollar health-care program.
Finally, President Obama sought to rehabilitate the reputation of runaway spending by renaming it “investment.” While investment indeed drives economic growth, politicians have proven to be poor investors. Federal K-12 education spending has grown 219 percent faster than inflation over the past decade, yet student test scores have stagnated. Thirty years of federal energy spending has failed to significantly improve the alternative energy market. And massive increases in federal transportation spending have been diverted into earmarks, bike paths, and museums, or allocated to budget-busting transit programs that governors do not want. If President Obama truly wants to encourage investment, he should focus on reducing the budget deficit — which is crowding out private investment — and should reduce barriers to productive private-sector investments.
— Brian Riedl is Grover M. Hermann fellow in federal budgetary affairs at the Heritage Foundation.